Making Apologies as a Small Business Owner

After Wells Fargo CEO and Chairman John Stumpf stepped down following news of two million bogus accounts opened by employees under pressure to meet sales goals, a new CEO was culled from the ranks and put in charge. One of Tim Sloan’s first tasks as the new CEO of Wells Fargo was to reassure his employees and customers that things were going to get better. One thing is certain – before offering up his apology and presenting his plans to turn things around, he had legal advice. You may never face a televised congressional hearing evaluating your business practices, but you may someday find yourself making apologies as a small business owner. Here are three tips for getting the apology right, and some thoughts on when you may need legal advice.

1. Fix the Problem

This may seem obvious, but your apology will not have clout if the situation that allowed the problem to occur in the first place still exists. In Tim Sloan’s case, try to imagine that how effective his apology would be if his employees and the public knew customers were still being sold products they didn’t want, need, or authorize. You may need to make difficult choices to make sure you’ve fixed the root cause of the problem that lead to the need for an apology, choices which could include letting people go, changing the structure of your business, or altering your sales practices. If so, make sure you obtain legal advice before you fix the problem. If it’s a simple issue that can be resolved with simple changes to procedure, you may not need to talk to an attorney. But if your solution includes a major change to policy or practice, or a remedy that could expose you to risk, you should consider legal advice.

2. Make Sure Your Employees and Customers Know They Are Valuable

Regardless of what went wrong, even if the mistake that was made was an honest or unintended one, your customers and employees may be wondering if you value them. In the case of outright mistreatment – such as Wells Fargo employees being fired for reporting unethical behavior, or outright fraud – such as Wells Fargo opening unauthorized accounts for their customers – employees and customers will feel used and distrustful. But even if you simply made a mistake, or are facing a situation out of your control, people may wonder if you care about them, or if you carelessly “let this happen.” Make sure your apology includes a confirmation of caring that goes beyond your words if possible. Put yourself in the shoes of those who feel harmed. Is there anything that could make it better? What ever your solution involves, make sure you employees and customers know they are valuable to you and to your business.

This is another good point to consider legal advice. You need to make sure that what you offer in the way of making things right does not expose you to unintended legal consequences. Find a business attorney in Colorado and check in. This is one of those times when legal help in advance can make a big difference.

3. Listen to Employees and Customers

Advising you to listen to employees and customers who are impacted may seem like the first step, but I’ve placed it at the end because this is a two part listening practice:

• You need to listen to all parties to understand what went wrong and why they are upset. Understanding why they are upset is as important as knowing what went wrong. When you make your apology, and you explain your steps to correct the problem, it is essential that you also be able to apologize to people about how they were made to feel. Do people feel they may no longer be able to trust you to keep promises? Are employees afraid you’re not paying attention to issues that could impact their livelihood? Don’t assume you know what they are feeling. Ask, and listen.
• You also need to listen to feedback on your solution before you present it. Find a small group of key individuals and ask for their input as you formulate a solution and before you present it. Their feedback will be crucial to understanding the impact of your apology and how your solution might be viewed by those who are counting on you to make things better.

One final note on listening: make sure your listening process offers anonymity. Some people may not want to tell you what they knew about the problems in your organization before and after they surfaced – they may look at Wells Fargo as an example of what could happen and worry they could be fired. You will not be able to come up with the complete picture, and thus a viable solution, if you don’t get the full story.

Making apologies as a small business owner may not be easy, but if you are well prepared, it can make a real difference. If you need helping understanding the legal ramifications of a less than desirable business situation that may require an apology on your part, or crafting a solution that doesn’t compromise you legally, I can help with business coaching, or a business planning consultation to help you move forward. For any type of Colorado small business legal review, contact me, Elizabeth Lewis, at the Law Office of E.C. Lewis, P.C., home of your Denver Small Business Attorney. Phone: 720-258-6647. Email: elizabeth.lewis@eclewis.com

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