No one is perfect. And everyone makes mistakes. Sometimes these mistakes are minor, but other times we really mess up. It’s human. Of course, companies mess up, too.
So, what can we do, especially if you and/or your company need to repair the relationship and rebuild trust with a party with whom you want to negotiate a deal?
The number one move to accomplish this goal is to make a sincere, real and effective apology.
Here’s an example from a 2021 Harvard Program on Negotiation Newsletter interview with Jeswald Salacuse, a distinguished professor at the Fletcher School of Law and Diplomacy at Tufts University and a faculty member at the Harvard Program.
“In 2004, after discovering that Citigroup’s private banking division in Japan had deliberately violated the country’s financial laws for some time, the Japanese government closed down the operation, a decision that significantly reduced the bank’s revenues. Charles Prince, Citi’s CEO, flew to Tokyo to try to negotiate a reopening. At a large press conference, he took responsibility for Citigroup’s actions, promised reforms, apologized for the bank’s behavior, and then, in a traditional Japanese act of contrition, bowed deeply from the waist, eyes fixed on the ground.
By that evening, photos of Prince’s bow of apology had created a stir. The New York Times called it “a bow seen around the world” and “an unusually public mea culpa” by a firm that more typically “circled its wagons when criticized or preferred closed-door resolutions.” Certain U.S. executives questioned the appropriateness and dignity of one of the country’s biggest banks “groveling” in front of a foreign audience. But the bow worked: Citi and Japan reached an agreement to reopen the private banking division.”
Professor Salacuse was also asked, crucially, what constitutes an effective apology in a negotiation. He shared the following five elements, with which I wholeheartedly agree, and noted actual language that might have been used by Citi to convey this apology.
1. Acknowledge the offense with a clear statement of responsibility.
“Our private bank helped clients launder funds illegally,” versus “It is regrettable that regulatory violations occurred at our bank.”
2. Explain why the offense happened.
“Our executives failed in their duties to oversee the bank’s compliance with Japanese law.”
3. Express remorse or contrition.
“We are very sorry that we failed to comply with Japanese banking regulations.”
4. Include statements of actions taken or to be taken to correct the situation.
“We have fired the executives involved and are tightening internal controls to ensure regulatory compliance.”
5. Make a strong, clearly stated commitment not to allow similar acts to happen again.
Lawyers may cringe at this apology and its elements, accurately noting that language and apologies like this may open you up to legal liability. However, this is a balancing test that must be evaluated from a legal and a negotiation perspective.
In this particular case, Citi’s CEO obviously felt that the upside negotiation benefit of this type of apology outweighed the downside legal liability that might arise from it. He was right, as reflected in the deal he ultimately consummated with the Japanese government.
Latz’s Lesson: When you mess up and your relationship and trust are at risk, there may be no substitute for a real, sincere and effective apology.
* Marty Latz is the founder of Latz Negotiation, a national negotiation training and consulting company that helps individuals and organizations achieve better results with best practices based on the experts’ research. He can be reached at 480.951.3222 or Marty@LatzNegotiation.com.