VW’s now infamous dieselgate crisis is far from over, and additional punishments and damages still await in the wings.
But after months of PR efforts to regain the trust of customers, regulators and governments, more bad news for the company was revealed in late January.
VW had also been sponsoring laboratory tests that forced lab monkeys into locked chambers to breathe diesel exhaust from a VW Beetle rigged with the sophisticated dieselgate technology — a scam that made the car’s polluting emissions appear far less in a laboratory test than they actually would be on the road. Similar experiments were also performed on humans. VW’s goal was to support its claims that diesel exhausts on new diesel cars were at safe levels in order to advance diesel-friendly public policies in multiple countries. In 2012 the World Health Organization had classified diesel exhaust as a carcinogen.
As VW continues to hurtle down that low road, here are nine lessons crisis managers can learn from it so far:
- Prepare for the worst, worst-case scenarios. We don’t know if VW’s crisis planners were let in on the dirty secret of the diesel exhaust cheating technologies and related animal and human lab tests. But they never conducted a crisis exercise for such a seemingly extreme and unlikely worst case scenario, and their lack of preparation showed in their initial responses to the crisis that often were ill-considered and obfuscating. “A crisis like this, the company was not prepared for,” said Hans-Gerd Bode, Volkswagen’s communications chief since September.
Since we crisis managers are now cognizant of the VW debacle, does it mean we have a responsibility to anticipate and plan for intentional, widespread criminal and otherwise shameful behaviors from the highest levels of our organizations? The only answer is yes.
However, selling the proposition to senior managers of any organization that they might trigger a crisis because of their criminal behaviors is obviously problematic. Considering the high-minded language of most organizations’ boilerplate on their values (VW’s Code of Conduct now being a particularly ironic example), such a proposed crisis scenario would be taken as an insult.
Planning for such a dire crisis would have to be couched in more palatable terms. For example, it could be pitched as planning for an isolated incident where a senior manager, or group of senior managers, went rogue and inflicted great harm on an otherwise highly ethical organization. Whichever way the sales pitch is made, planning for a VW-type crisis, where widespread, grievous wrong-doing is suddenly discovered and made public, must, as the VW debacle teaches, be part of preparedness.
- Tell the truth and lay out all the facts. End the drip drip of revelations. VW’s main goal, no matter how painful its pursuit, has to be to get this ugly chapter behind it as quickly as possible. To accomplish that, every kind of wrongdoing associated with the diesel debacle has to be acknowledged and resolutely, honestly and humiliatingly revealed. Unfortunately, since the crisis first came to light in September 2015, VW has blatantly lied to the public on several occasions about their deceitful technology, thereby violating the most basic tenet of crisis management.
Sporadically, the company has offered public statements of contrition that could have been helpful had it concurrently provided all the facts of the wrong doing so no new revelations could come back to undermine the apologies. As the monkey and human lab tests now show, the company is a long way from putting this crisis in the past.
- Respond quickly to affected customers. On VW’s rather narrow plus side, one can see the hand of skilled crisis professionals in VW’s communications with its diesel-fuel car owners. The web pages for owners of the affected vehicles to use in order to gain recompense or repairs are exemplary in their clear functionality. However, there are no apologies, abject or otherwise, to customers here.
- Nurture and protect a strong brand. As crisis managers know, maintaining a strong brand is the first line of defense against a reputational crisis. VW’s crisis managers do have this most important factor working in their favor.
So long as customers own non-diesel VW vehicles or cars from VW Group’s subsidiaries (Audi, Porsche, Bentley, and Lamborghini), their purchases remain unaffected by dieselgate. In fact, in 2017 the company nosed out Toyota as the biggest car company in the world in terms of sales. But the crisis has had an effect, both materially and reputationally. In a recent Harris poll on the reputation ratings of the 100 most visible companies in the US, VW Group came in dead last. Rebuilding the VW brand will take some doing.
- Start anew with a clean slate. Heads, and lots of them, must roll. Some already have, including former CEO, Martin Winterkorn, now replaced by Mattias Müller. A new team has to be brought in to make a clean breast of the event, rather than the piecemeal resignations that are happening today, such as this week’s suspension of its head of external relations and sustainability, Thomas Steg, who was shown to have known about the monkey experiments.
Achieving a clean break with the scandal is the board’s grave responsibility. If there were any doubt that anyone even marginally connected with the diesel rigging still remains, the company would risk prolonging the crisis.
- Apologize big. An unprecedentedly public and sincerely made spectacle of contrition must be made, perhaps in the form of a country-specific apology roadshow that introduces the new leadership team to both public and private audiences, including governments.
- Institute independent oversight. Establish an independent, highly respected oversight committee to monitor and publicly report on company behavior. It should be run by an impeccably credentialed team of academicians, Peace Prize Nobelists, health and safety experts, religious leaders, noted ethical business leaders, etc.
- Make consequential donations. The company has already paid billions in fines and will continue to do so, but restitution could also be made in the form of visible and meaningful support to such things as improved air quality or the establishment of an ethics institute in a business school.
- Empower all levels of employees to be whistle blowers. Unless VW can truly change its culture so that every employee, from senior managers on down to the lowest-paid workers, are equipped and permitted to raise red flags with impunity when they see them, the company will be courting another self-inflicted crisis.
VW’s dieselgate appears to have already set a new record for just how destructive a self-inflicted crises can be, and we need to learn from it, even as it’s still unfolding. It’s incumbent now on every organization’s crisis team to consider and plan for worst of the worst case scenarios.