Have you ever made a mistake that caused a problem with a customer, prospect, an employee or vendor? It happens. Pseudo-leaders try to cover a mistake. Real leaders admit it and then take care of the mistake. Righting a wrong. Doing the right thing.
Here are a few examples of companies that tried to ignore mistakes in 2016:
- Yahoo had one of the largest hacking breaches known — but took two years to disclose it. At least 500 million user accounts were affected. Really bad PR followed by an acquisition by Verizon — at a reduced price.
- Mylan suffered from unfair, radical price hikes for its pharmaceuticals. A 400% hike for its life-saving EpiPen, plus similar hikes on seven other drugs. Result? Public ire, antitrust lawsuits, and a stock fall of more than 70%.
- Wells Fargo created 2 million unauthorized bank and credit card accounts over 5 years. The Consumer Financial Protection Bureau fined the bank $185 million.
Had these mistakes been admitted and cleaned up quickly, the cost would have been far less — both short- and long-term.
Run, Don’t Walk
As soon as a mistake is known, deal with it. A mess grows like a forest fire and can get out of control. If it is leaked by consumers, employers, vendors or others — and the lightning-like online press picks it up — it can be bad, if not lethal.
Good leaders will reveal the error, tell the truth, explain what happened and offer restitution. Products are recalled, reworks are offered, monetary compensation is provided, substitutes are available — whatever it takes to rectify the situation.
The result? Buyers are more forgiving, the public views the company more favorably and employees are relieved. A sense of fairness and good leadership envelops the organization. Win-win.
When the solid leaders of these example companies took action to rectify a problem, here are some results:
- Johnson & Johnson dumped tainted Tylenol packages at a cost of $250 million. This move saved the brand, which provided 17% of J&J’s revenue.
- Volkswagen could not hide defective diesel engine tests and repaired the problem for $18 billion. After its stock hit a subsequent bottom, it continues to recover.
- Tyson recalled 2.5 million pounds of chicken products. A labeling mistake failed to note that there was milk in the products. The label was fixed quickly. Cost unknown.
The point is that these were massive messes — but the companies involved stepped up at all costs to clean up the situation. Customers saved, jobs saved, reputation saved. In some cases, the company saved.
An organizational culture is established upon the values of the leadership. Good managers might do things right, but great leaders do the right thing. Always.
The bottom lines
Made a mess? Move swiftly to clean it up. Save customers, employees, time and money. Don’t hide a wrong for the wrong reasons. Do the right thing for the right reasons. Make this part of your organizational culture — now and always.