MoneyWatch Tech

Cisco's Apology: Why CEO Mea Culpas Are a Waste of Time

By Erik Sherman

Updated on: April 6, 2011 / 4:22 PM EDT / MoneyWatch

There is something to be said for stating the obvious. And that's what Cisco (CSCO) CEO John Chambers did with his memo on the state of the company after two disappointing earnings reports and a bad outlook. Here's the short version: strategy good, execution bad. It was another CEO mea culpa promising that Things Will Get Better.

Slow decisions, poor anticipation of the obvious, and inconsistency finally drove Chambers to promise changes to make things better. But here's a thought: Why not skip all the talk and just do what's necessary? Why not just fix the problems and keep your mouth closed?

Corporate apologies are nothing new. They are rarely more than lame attempts to dodge an ugly public spotlight while avoiding legal liability and any real change in how a company operates. Often, they don't even include the words "we're sorry." In fact, my BNET colleague Kirsten Korosec noted the recent, egregious example: an empty gesture by Transocean (RIG), who belatedly realized that it wasn't too swift to declare 2010 -- the year their Gulf oil rig went down in flames, causing a huge spill -- their "best year" in safety.

A new form of non-apology
However, the CEO mea culpa has become a new form of non-apology. Instead of addressing a particular unfortunate episode, a CEO mea culpa is the attempt to address systemic failure so drastic that no one could miss it. The format is almost always the same:

The CEO personally apologizes and takes responsibility for everything that has gone wrong.
Mistakes were so pervasive and destructive that you have to wonder how anyone in the company didn't notice there was a problem.
After sufficient damage to employees, investors, and/or customers, upper management decides to take action.
The CEO says that he or she and the entire organization will work to make things right, so people can trust them again.
The company continues to screw up.

It's the typical lack of real change that makes the CEO mea culpa a form of non-apology. Consider some recent examples:

Johnson & Johnson (JNJ) CEO Bill Weldon apologized to Congress in the fall of 2010 for a series of product recalls. In fact, he apologized in front of reporters in August. Did anything change? Nope. New recalls have continued into last month, and no clear end is in sight.
Digg founder Kevin Rose offered a series of apologies last fall over a hated site redesign. Did he fix things? Let's put it this way: he left the company in March 2011.
In February 2010, Toyota (TM) president Akio Toyoda apologized publicly for the concerns customers had about the gas pedal problems. He was going to head a new quality control committee. In August 2010, Toyota recalled 1.3 million vehicles and another 1.53 million in October.

In fact, the only CEO apology that sounded even halfway sincere was that of Nokia (NOK) CEO Stephen Elop, and he had only started with the company and was trying to get insiders to realize how bad things were at the company.

Really, why bother?
Why even bother to say something? Anyone hurt wants to see action, not hear words, and no one else is interested enough to listen. CEOs are paid enormous amounts of money for their expertise in running companies, not running them into walls.

If there are big problems, don't let them fester until they become the corporate equivalent of gangrene. Fix them and understand that you regain your reputation as you change your behavior. If a CEO can't figure out how to fix the problems, then he or she should quit and let the board hire someone who can.

But don't bother to talk about a better future. No one cares to listen to self-servicing PR blather when they have real things to do -- and so does the CEO.

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Image: morgueFile user ferguweb.