Credibility - Second Chances

The president of a large financial services firm was shocked when she heard the news.

Her office had run a successful public seminar. Countless hours and thousands of dollars had been spent on invitations, mailing and marketing. A hundred people attended; twenty of them marked reply cards asking to be contacted. However, three weeks had passed, and not a single one of these prospects had been called. “It’s like we opened the front door, and showed them the back door,” she said. “Our silence spoke volumes—we don’t really want to help you.”

Can this new business opportunity be saved? Maybe. But there’s a bigger problem. The employees who were supposed to make the calls have jeopardized an important initiative, proven unreliable, and lost credibility with the boss. What should be done?

In theory, most bosses would say they are willing to give someone another shot, according to our credibility survey. However, in practice, we often see that once their minds are made up, it’s over. At best, most senior people tell us a second chance is conditional.

“It takes a lot for me to trust them again,” said the CIO of an asset management company. “I certainly wouldn’t trust them with something critical.”

“If it’s an individual, I will continue to work with him, but no longer give him the benefit of the doubt,” says the managing partner of a law firm, “He will have to prove himself over and over again.”

Why are we so reluctant to put ourselves on the line to give someone a second chance?

Most of the time, it’s because our own reputation is at stake. One financial planner faced heated questions from an employee group when she was giving seminars about the company’s benefits plan. She put herself on the line, assuring them that everyone was getting the same deal. Later she learned there was a secret, more lucrative benefit plan for top managers. Although the client was paying her well, she quit and refused ever to work with them again.

There are some situations where you will never get a second chance. But if you do, here’s what executives say it takes to redeem your reputation:

Our research shows people will give you another shot if they feel they have no alternative, or if you already have credibility “in the bank.” Chances are, in the second situation, your lack of credibility will be written off to a mistake, instead of a character flaw.

A friend of mine had referred business to me, and then, a few weeks later, before I had even started the work, she asked a third party to let me know she was going to take back the client.

I was shocked – my friend had in the same week asked me to attend a concert with her, never mentioning her plan to take back her referral! For awhile, it created a huge rift. But after a couple of months, I realized that she had never before acted with anything but complete integrity. There must be more to the story. When we talked, she explained the client had been involved in an embarrassing situation, and didn’t want to bring in a new consultant. She apologized profusely for not being the one to call. She made amends. We repaired our relationship and moved on.

If you have some credibility with people, they are far more likely to give you the benefit of the doubt. But you still have to follow these simple rules for rescuing your reputation:

• Voluntarily acknowledge the problem

• Provide a full, satisfying explanation

• Offer a sincere apology

• Make appropriate amends

• Articulate a plan for fundamental change

• Execute the plan over a sustained period

A friend of mine who is a lawyer, told me she and her partner realized three months after a closing they had not had all the papers in order. They called the client and owned up to the mistake, even though the client might never have caught it. Her firm also cleared up the matter completely at her expense. The client was so happy, he continued to use her services for years.

“My personal credibility was on the line,” she said. “Owning up to your mistakes is the #1 thing you have to do to build confidence in this current business environment.”

How do top executives repair the damage when they are the offenders? Here are some sample responses:

• “Didn’t try to change our image through advertising – went directly to clients.”

• “made good with the customer and took a hit so we protected our reputation.”

• “Addressed it publicly and explained our intentions through an awkward time period.”

• “Reacted quickly – and dealt harshly with the person inside who created the incident.”

• “Sought new leadership and took action to improve our financial condition.”

• “Cleared it up at no cost to the client, even though it took several months”

• “Chose not to get into a power struggle – the client is always right.”

If you or your employees make a mistake, communication is the key to rescuing the situation.

Remember, you have to create an environment where it’s okay for employees to reveal mistakes. You have to reward full disclosure. When you become aware of actions that have jeopardized credibility, you have to immediately communicate the problem, whether or not it’s likely to be discovered. You must promise and deliver a quick response, both verbally and in writing, with clear wording and no ambiguity about what will happen next. And you have to continue to communicate until and long after the problem is resolved.