What to do when you fail at the one thing you're an expert in
Hint: It's NOT the statement that SHRM (the "world's largest HR group") put out when they somehow LOST an employee discrimination case...
I was about to go to bed, but this news article caught my eye: SHRM, the world’s largest HR group, has been hit with an $11.5 million verdict in a racial discrimination lawsuit. Because what do you mean the world’s largest HR group had an employment discrimination lawsuit brought against it and lost? Isn’t employment discrimination something they’re supposed to be the experts in not doing?
What stood out the most in this article was the fact that SHRM tried to prevent the plaintiff from “introducing evidence or argument that the organization is a specialist in HR best practices”, which was not allowed by the judge, who stated that “asserted expertise in human resources is integral to the circumstances of this case and cannot reasonably be excluded.” Because… well, obviously SHRM’s HR expertise is relevant. They should have known better.
What I’m really interested in is SHRM’s statement and the general concept of an organization going against its own best practices to the extent that it results in a multimillion-dollar lawsuit payout. Because how, if you’re in that situation, do you possibly regain the trust of your stakeholders?
Here’s the statement released by SHRM:
Today, the jury issued a ruling in the Mohamed case that did not come out in SHRM’s favor. We strongly disagree with today’s court ruling and with respect we will continue to move through the process by appealing this decision to the highest courts in the land. The principles at stake matter — not just for SHRM, but for every organization that strives to do the right thing.
All employers should follow a simple, principled approach to the law: If you’re wrong, make it right. If you’re right, stand firm. In this case, we are right — and we will continue to advocate with integrity for the correct outcome.
This claim has no merit. None. Today’s decision does not reflect the facts, the law, or the truth of how SHRM operates. We have acted with integrity, transparency, and in full alignment with our values and obligations. We remain steadfast in our mission, undeterred in our focus, and resolute in our commitment to stand up for what is right.
The fact that SHRM is an expert in HR creates an immediate expectation gap, where the organization’s actions go directly against stakeholder expectations. This statement does nothing to fill that gap. SHRM has “acted... in full alignment with our values.” But the Business Insider article mentions a policy “that penalizes workers who arrive even a minute after 9 a.m.” and the CEO calling staff “entitled” and “sloppy.” So... what values (integrity/expert HR practices?) are being upheld here? A crisis like this reveals an organization’s true character, and the attempt to bolster values in this statement is almost sure to backfire because of… all the hypocrisy.
Also mentioned in the Business Insider article is SHRM’s previous discrimination cases that were settled (and for which it also accepted no responsibility). A history of similar issues is a red flag that intensifies the reputational threat, as stakeholders see a pattern rather than an isolated oversight. This new negative information ‘sticks’ to the organization more in light of previous cases and makes stakeholders less likely to believe the quite forceful denial. The over-reliance on denial in this statement is a mistake. It’s hard to put forward a believable denial without coming across as arrogant and deceptive when there’s a jury verdict demonstrating the opposite. This was ultimately a preventable crisis, per Situational Crisis Communications Theory, and applying a denial strategy with a guilty verdict here is a mismatch that will undoubtedly increase the reputational damage to SHRM.
It’s worth noting that the statement was clearly written by a lawyer and driven by legal strategy rather than PR strategy, so it’s not surprising that there’s no apology or language that suggests acceptance of guilt. But taking that approach and prioritizing the ongoing legal matters absolutely risks alienating the stakeholders the organization presumably needs to maintain operation (its membership base, which it supposedly represents).
Is SHRM’s reputation recoverable? I don’t know enough about the case to say definitively, having just heard about it tonight (yes, I’m tempted to do a deep-dive… BUT it’s 4am….). I will say my initial instinct is “no”.
But what if this happens to YOU?
This type of failure is catastrophic for stakeholder trust and creates a credibility gap so wide it can feel impossible to cross, but it’s not always impossible.
If you or your organization fail at a core competency, it creates a kind of expertise paradox where the more you know about something, the more harshly you’ll be judged when you get that thing wrong. You’re held to a higher standard, and stakeholders will see it as a betrayal of trust if you’re not visibly practicing what you preach. The implicit promise of “we know what we’re doing” is broken, and recovery is more than words in a statement. But the right ones are a good start.
If this happens to you, you’ll need:
Initially (first hour): A brief holding statement that is empathetic toward the concerns of your stakeholders. It should acknowledge the issue without speculation and show that you’re responsive and not hiding from the problem.
Within 24–48 hours: A sincere and human apology from you/a senior leader if it’s an organization that demonstrates actual accountability and outlines the immediate steps you’re taking to address the problem and prevent it from happening again. (Not prevent a lawsuit from happening again, SHRM… prevent the actions that led to the need for one in the first place)
Don’t get defensive. If at all possible, don’t let lawyers entirely dictate your communication… the legalistic language can come across as evasive and insincere to stakeholders and make them trust you even less. The most effective apology (which, tbh, most corporate apologies aren’t) focus on the people affected, not the responsible person/organization. It shows humility, sincerity, acceptance of responsibility…
This excerpt from Maple Leaf Foods’ CEO Michael McCain after a 2008 deadly listeria outbreak is an example of a good statement:
The company has made the decision to expand its product recall to include all production from the Bartor Road facility as a further precautionary measure, notwithstanding the fact that there is no evidence of listeria contamination in product beyond the production lines originally under investigation. Tragically, our products have been linked to illness and loss of life. To those people who are ill, and to the families who have lost loved ones, I offer my deepest and sincerest sympathies. Words cannot begin to express our sadness for their pain. This week our best efforts delivering the highest quality, safe food have failed us. For that we are deeply sorry. We know this has shaken consumer confidence in us. Our actions will continue to be guided by putting their interest first.
What’s Next?
The real work comes after the statement. Rebuilding from an expertise crisis requires a long-term, systematic approach, including a full investigation into what went wrong. You can’t fix a problem you don’t understand, and because you’ve lost the benefit of the doubt, an external investigation is the best approach.
Ask the hard questions:
Where did our processes fail?
What cultural factors allowed this to happen?
Where was the gap between our stated values and our operational reality?
Who was responsible, and what were the accountability breakdowns?
Publicly release the findings, no matter how bad they make you look. Transparency like that will help you move toward rebuilding credibility. What will help more is visible and systemic change resulting from the findings of the investigation. This is where you change the aspects of your processes or your organization that allowed the failure to occur. Bring in a risk assessment expert. You might need to change training and certification programs, reporting lines, accountability metrics, bring in new oversight committees…
Once the problem is addressed, you can begin to start turning it into a strength by sharing how you addressed it and using what happened to advocate for better practices overall. This can help shift the narrative from “expert that failed” to “expert that failed, learned, and is now helping develop something better for our field”.
Absorbing stakeholders’ anger, owning the failure, and channeling that energy into productive change is not an easy process. But if you’re a leader of an organization in a position like SHRM (assuming you’re not going to run away entirely…), it’s the only option if you want to actually rebuild trust and end up stronger and with the organization’s integrity intact.
[NOTE: To minimize reputational damage to myself, I apologize in advance for any typos and awful structure in this article with full acknowledgment of the irony of someone who edits papers failing to edit their own. I could not be bothered to do it. I accept full responsibility for these typos and promise not to write stream-of-consciousness responses to random news articles in the middle of the night too often]