When something goes wrong — a delay, a product failure, a public misstep — your instinct might be to deflect or protect your reputation.
But when it comes to building long-term trust, the words you choose after a mistake matter more than you think.
Let’s look at two common approaches:
- #1: “We made a mistake. It’s our full responsibility, and we’re working hard to make it right.”
- #2: “It wasn’t really our fault.”
At first glance, the second one might feel safer. But according to science, that response could actually hurt you more in the long run.
The Study: How Owning Up to Mistakes Builds Trust (and Value)
Social psychologist Fiona Lee ran an in-depth study to understand how companies are perceived based on how they explain their failures.
She analyzed hundreds of annual reports from publicly traded companies — specifically focusing on those that reported poor performance in a given year.
Then she categorized how each company addressed the issue:
- Internal attribution (we made mistakes, poor strategy, bad execution)
- External attribution (market conditions, competitors, regulations — aka “not our fault”)
Then she looked at what happened one year later.
Companies that admitted fault and took responsibility (like Example #1) had higher stock prices the following year than those that deflected blame.
Why Does This Work?
Taking responsibility signals a few powerful things:
- Leadership maturity – You’re not hiding behind excuses.
- Control – If you caused it, you can fix it.
- Integrity – People trust those who are honest, especially under pressure.
- Action-oriented mindset – You’re focused on solutions, not just explanations.
In contrast, saying “it’s not our fault” often makes a company (or person) appear defensive, powerless, or unwilling to improve — none of which inspires confidence.
💡 Real-World Implication: Transparency Builds Reputation
Whether you’re a founder, marketer, leader, or customer support rep, how you handle failure publicly affects how people perceive you. Owning your mistakes might sting short-term — but it builds long-term loyalty and credibility.
Admit the mistake. Take full responsibility. Show how you’re fixing it.
That’s how leaders speak — and it’s how brands earn trust.