Buffett Shows Delta Air Lines & HSBC How to Say Sorry

According to a survey in the United Kingdom in 2008, doctors hide their mistakes and stay very quiet about them when they are made.

But they shouldn’t. The practice guidelines from the General Medical Council say that doctors who make an error “should offer an apology and explain fully and promptly… what has happened.” But after surveying junior doctors, they found that “errors were normalized, dealt with through teasing, or minimized.” Patients that died would most likely have died regardless, in their opinion.

A medical ethics lecturer and lawyer named Daniel Sokol, who also cited the survey in an article from BMJ, said that “admitting a mistake is painfully difficult for any self-respecting professional.” He certainly could have said the exact same thing of plenty of business leaders.

Richard Anderson, the CEO of Delta Airlines, just last month made an accusation that Qatar, Emirates and Etihad Airways had received state subsidies.

The carriers in the Gulf then argued that US airlines received help from the government after 9/11, but Anderson then called their riposte a “great irony,” stating that the attacks “came from terrorists from the Arabian Peninsula.”

Defending its chief executive officer, Delta said: “He didn’t mean to suggest the Gulf carriers or their governments are linked to the 9/11 terrorists. We apologize if anyone was offended.”

It goes without doubt that they were offended. It’s hard to read the statement by Mr. Anderson as saying anything other than an association between the attacks, the governments and the airlines.

What would it have cost the CEO of Delta Airlines to speak out for himself? He could’ve said something similar to:

“Sorry about that. I took it too far. No doubt that the airlines had anything to do with 9/11. I was annoyed because people keep saying that we received subsidies. There was a payment that we received once directly in the aftermath of 9/11 due to the closure of airspace in the US. Delta did not receive loan guarantees of any kind.”

Everything said was in the statement by Delta, but since it was a flimsy apology, very few people paid attention to it.

Stuart Gulliver, Chief Executive Officer at HSBC, described his bank’s role in tax evasion as a “source of shame” and did say that he was sorry. He said he was sorry in a letter to customers, the staff and shareholders. He also said sorry to the UK parliamentary committees twice, and even at most recently as this week.

The CEO and the other senior members of HSBC stalled repeatedly when asked about whether they had asked themselves why so many people that were not Swiss had Swiss bank accounts and why they did not have any suspicion about customers withdrawing large amounts of cash. These parliamentary hearings admittedly are merciless and confrontational, with MPs looking for any admission of guilt that they can find.

Regardless, Mr. Gulliver would have not been any worse off if he had said something like: “Things were very different back then. Many private banks, not just ours, operated under the view that it was not our job to ensure that customers paid their taxes. It was their matter to handle, and a matter of their consciences and the tax authorities. But we recognize now that everything is changed since the financial crisis.”

That is exactly what HSBC said, more formally, in an update in January.

Warren Buffett, on the other hand, is one of the business leaders that have no problem talking about the mistakes that he has made. He does it regularly in his annual letter to shareholders. This year’s letter marked the Golden anniversary of Charlie Munger and Warren Buffett taking control of Berkshire Hathaway, and 50 years of mistakes were dredged up in this letter.

Some of the mistakes included seeing acquisition “synergies” evaporate and investing in a textile company that was dying.

The most recent admission from Buffett as a mistake was holding onto Tesco shares when he felt that the retailer and its initial problems were just the beginning of a series of issues to arise. “You see a cockroach in your kitchen; as the day goes by, you meet his relatives,” wrote Buffett.

Buffett’s reasoning for his mistakes was not receiving poor advice or lapses by his managerial staff, but his own “thumb sucking”, “childish behavior” and “I simply was wrong.”

The biggest advantage of highlighting your own mistakes is that it deprives others of the chance to do so and makes it very clear that it’s tough to do business sometimes, and that people are going to make mistakes. And by examining them we have the opportunity to reduce or even eliminate our chances of making the same mistakes again.

Doctors are often afraid of legal consequences when they admit an error. Business leaders sometimes fear the same thing, but more often than not, they will avoid admitting mistakes because of stubborn pride.

If business leaders opened up, they could very well discover that the sky might not fall, but in HSBC’s case, there was no point denying what was obvious because the sky has already fallen.

2 Comments

  1. If that's the case then there are a lot of rich people in this world that Really owe me an apology. My career started in Barrington Hills IL and went on to Scottsdale AZ. I've worked on dozens of custom homes in the last 30 years and now noticed how sick I am due to mold that is in everyone's house. Funny thing is that my first job at 10 years old was pulling weeds on my knees By Hand, the rich guy refused to use chemicals. Haha to me since I can't even support my family and I'm only 40 years old. Just letting you know how money talks! Take care and God Bless You Mr. Buffett !

  2. This is turning into my personal blogging/venting site and I'm loving it! Please don't hate me, this is all out of love. I'm in a family business with my Dad and I haven't taken a check in a few weeks due to my health so I'm Technically unemployed. Long story short I went to a jobsite today to help him out and got sick as heck once again. Not too bad pain wise, but am dealing with burning in my lungs(not fun). This just proves my theories of mold and gas leaks. Believe me, I hope I never drive into that subdivision again. I was told to avoid mold as best as possible but had to give it another shot for him. All I ask is to pray that I recover. Be well to all and take my advise, a bad day of Fishing is always better than a day at Work!

Leave a Reply

Your email address will not be published. Required fields are marked *