You Made a Mistake — What Should You Say?

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.

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