Tuesday, February 02, 2010

On the business value of an apology

The February edition of Fortune Magazine brings an article (not available online just yet) titled “Why doing good is good for business”. Amongst many examples of how businesses had profited from making ethical or charitable decisions, there was a small snippet that called my attention.

…several years ago the University of Michigan's hospital system embarked on a major revision of its medical malpractice policies. Departing from the standard industry practice of reflexively "denying and defending" most claims, doctors and hospital officials started sit­ting down with plaintiffs and their lawyers to discuss complaints prior to any formal litigation. In many of these meetings the doctors apologized directly to patients for any harm that their professional actions had caused.

What I found really fantastic was the positive cultural change brought about by the reintegration of ethics into the messy realm of medical lawsuits:

The results were concrete and dramatic: Between 1999 and 2006 malpractice claims against University of Michigan hospitals dropped by more than half, as did total malpractice litigation costs. …with the working atmosphere now free of retribution, doctors no longer have to duck and dodge to avoid the appearance of guilt when errors occur…The culture of transpar­ency ... has brought error rates down throughout the hospital and measurably improved the quality of patient care."

NPR ran the story about the University of Michigan’s hospital a couple of years ago in a piece called Practice of Hospital Apologies Is Gaining Ground. Apologizing, in this case, has become the ultimate exercise of understanding customers, first as human beings, and only then as consumers.

Another point of reflection, lost amidst the numbers, is that Doctors have found the experience uplifting, replacing the fear of retribution by the relief of forgiveness. That we cannot think of a worse mistake than costing someone’s life is evidence that we should never hold back on apologizing for our own mistakes.


MjH said...

Nice blog post! Along this vein...the other day I heard the head of USA Toyota reading his apology comment where he clearly stated that Toyota is "sorry" - a nice piece of PR to hear given that Japanese companies in the past typically state "regret" as opposed to the "sorry" word. I think this humility will help their brand and reputation in the long run.


Denilson Nastacio said...

Until your comment I had not thought much of the difference between a direct apology by a person making a mistake and a collective apology on behalf of a company.

Somehow the first seems to carry much more weight than the second.

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