After a controversial tax policy that created ten days of market carnage, the newly-appointed British Prime Minister claimed, “It was a decision the Chancellor made.”
These seven words showed the world in technicolor how not to communicate in a leadership crisis.
Admitting mistakes isn’t easy for anyone, whether you’re an executive, business owner or hold a high-profile position where 67 million citizens are struggling with a cost-of-living crisis. But few communications experts ever advocate throwing a colleague under a bus.
The context is essential to consider. Relatively-unknown British MP Liz Truss succeeded Boris Johnson after his fall from power. Two days later, Thrust into the global spotlight, an audience of billions watched Truss hob-nob with world leaders and make a speech at Queen Elizabeth II’s funeral. Promptly after that, a landmark budget was rolled out, giving tax cuts to the rich.
This policy signaled an error of massive proportions. It sunk sterling, cratered the mortgage market, pushed pensions to the edge, and forced a Bank of England bailout. The International Monetary Fund made a rare intervention urging a leadership rethink. Intransigence remained until the predictable U-turn came.
It’s good practice for leaders to change their minds. After all, Wharton Professor Adam Grant urges us to rethink as information emerges. It shows we listen. But there’s a right way and a disastrous way.
As a behavioral scientist, I advise businesses on reputation and communications management. Crises are no different. Political skill is part of any business arsenal. When a leader succeeds another relatively quickly, it’s easy to forget the basic principles, distracted by the neon lights of sudden power and notoriety.
This is precisely when businesses must be most alert. What can you do? When the alarm sounds, executives can learn helpful lessons. Four simple strategies separate the best from the rest.
1. Own Your Mistakes
Even if you privately recognize errors with little face-saving opportunities, own it. When Vladimir Putin invaded Ukraine, he faced an international rebuke. Yes, turning back is hard. Emotionally intelligent leaders find a way and are often forgiven.
For example, Shopify CEO Tobi Lütke made overly-bullish predictions about the e-commerce business and was forced to announce layoffs to 10 percent of the workforce. But he owned it, “I got it wrong.” Similarly, fans were shocked when golfer Tiger Woods was caught in a series of extra-marital affairs. But they forgave him after he expressed remorse.
Apologizing and admitting mistakes are basic signs of character and confidence. Most children are taught this both in school and the home.
2. Never Make Others Your Scapegoat
In many organizations, leaders decide a course of action that proves flawed in hindsight. But ego then destroys judgment. Markets penalize those who not just get it wrong but deny their error and publicly blame others. It’s cowardly and signals a lack of integrity and authenticity.
The scapegoat faces a quandary. To save his boss’s blushes, Finance minister Kwasi Kwarteng had little choice than to say his policy U-turn was made with “humility and contrition.” He told BBC Radio. “We listened to people… I’m happy to own it.”
Ethical organizations promote accountability rather than point fingers at scapegoats. Over time, resentment brews, relationships deteriorate, and the business loses.
3. Obtain Team Buy-in
Announcing a highly-controversial policy or strategy without securing stakeholder approval is a rookie error. No one likes to be surprised or pasted into a corner. When that happens, a high risk of psychological reactance will result. It’s human nature. And we’ve all experienced it.
Always speak to your Board and management team to avoid anarchistic revolt or, worse, a vote of no confidence. Truss failed to consult her party and paid the price. Today her popularity is lower than when she took over from her predecessor, Boris Johnson.
4. Apologize Effectively
In my experience, I find the quality of the apology matters as much as its timing. Professor of Human Resources at Ohio University Roy Lewicki, and co-authors tested how people reacted to apologies using certain key elements. “Our findings showed that the most important component is acknowledging responsibility. Say it is your fault that you made a mistake.”
Offer to repair the damage. As standard, recipients expect to hear an expression of regret, an explanation, and a declaration of repentance. But don’t request forgiveness – it looks weak.
Look Forward, Not Back
We all mess up. Maybe not on a world stage, but to each business, our universe feels like a world stage. Customers, employees, investors, and shareholders will judge personal performance just as much as business performance.
Learn from others’ mistakes about managing mistakes. And remember, human decency wins in most crises. Ultimately, how you treat others will define your leadership legacy.
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