As Volkswagen descends into yet another organisational scandal with the revelation it’s diesel engine emission-cheating technology has been installed in over 11 million cars globally; the lesser-told story remains in their approach to crisis communications.
I’ve read countless media articles since the scandal broke praising Volkswagens’ handling of the crisis, particularly in comparison to it’s DSG automatic gearbox global recall only two short years ago. If you need a reminder of how lack lustre that crisis response panned out: [ insert the sound of crickets here ] followed by the sound of fluent bureaucracy coming from the mouth of a faceless spokesperson after much prodding by Governments.
Yet this time around, we’ve seen their then CEO fall ceremoniously on his sword in such a deliberately scripted way, you’d be forgiven for thinking you were watching the latest Game of Thrones instalment. Like a Lannister scheming up yet another war to retain power over the Iron Throne, isn’t it rather convenient for the crisis narrative to be focused on how well they’ve handled this crisis instead of – you know – the actual crisis?!
Make no mistake; this is not a story about a component failure.
No engineering or design flaw.
No malfunctioning computer.
This is a story about a multi-national company who knowingly and purposefully built and installed technology in their vehicles that would detect when the vehicle’s emissions were being tested with the sole purpose of cheating globally legislated environmental regulations.
This was a crisis that was always going to happen.
Crisis narrative by chance or design?
Volkswagen’s engineered crisis response is a smart, yet dirty, play. By making their crisis narrative about their corporate legacy and comparing their crisis communications to the debacle of 2 years ago, they are successfully retaining control over the lesser of two narrative evils.
Delivering a text-book crisis response with a perfectly timed CEO resignation enabled Volkswagen retain control of both the media narrative and by default, their SEO rankings.
The reason why controlling the lesser of two evil narratives is a smart play is simple: the hit is less damaging. They have a fall-guy. He fell on cue (don’t feel bad for the outgoing CEO he is likely to walk away with an estimated 60 million Euro in severance). The decks are cleared with a soft-corporate- reset. A few days pass so that ‘important deliberations’ can be made before the new guy is paraded in and what do you know! The media are still reporting on the musical CEO chairs at Volkswagen HQ instead of focusing on the actual crisis.
And it’s a strategy that works!
Taking a quick look at the online sentiment around the keyword ‘Volkswagen’ shows audience neutrality toward the brand on social media.
* screenshot taken at the time of publication.
This is good news for Volkswagen as the ‘care factor’ at a consumer level appears to be low.
Sales and share prices however, tell a different story. At the time of the scandal breaking shares in Volkswagen plummeted:
And at the time of publication, they had failed to rally back at a loss of more than some 30 billion Euros. This is bad news for Volkswagen as investors lose confidence and the market devalues their stock as cars sit unsold in yards and warehouses around the world. Worse still is the bleak financial outlook that will last beyond the fines, investigations and loss of sales – meaning investors will not turn a profit in their now-devalued shares over the long term (optimistically years).
While consumers don’t have much of an appetite for this scandal (yet- sales data figures won’t come in for at least another month) shareholders certainly do; making targeted crisis messaging to audience segments extremely important. In this context, Volkswagen have seemingly appeased the public while losing ground with their investors.
Criminality is the actual crisis
As some European countries ban the sale of Volkswagen diesel cars and regulatory investigations are launched around the world, proving the intent to deceive is paramount in this criminal case.
Arguably, how else a technology that was designed, built and installed with the purpose of deceiving regulators (and customers) can be explained is yet to be seen. The reality of “We 100% intended to deceive you” has broad ramifications across the entire business.
What we do know is that years will pass and the battle for narrative supremacy will rage on. Residing in a protracted state of crisis communications will become situation normal for Volkswagen, presenting further challenges to the organisation as they try to “rebuild trust” in a hostile environment. If criminality in this case is proven, it could spell the end for Volkswagen – particularly if they have promulgated a long-term counter-narrative in the interim. Winning back trust with more lies is a strategy leading nowhere.
If you’re up to engineering technology to cheat the world’s environmental regulators, a contrived crisis narrative is a piece of cake. After all, when your audience’s recall point is to an earlier crisis why override that to remind them of your potential criminal culpability?
See how experiential audience recall can work in you favour there?
To be clear, I am not a proponent of deceptive conduct during a crisis or business as usual. In fact, most of the time my advice will be to take the moral high road, apologise, mean it and then start picking up the pieces of whatever remains. That only works however, when an organisation recognises the issues that brought them to their crisis point in the first place. In Volkswagens case, we can recognise the same patterns of crisis deceit and corporate misbehaviour over the long game. 2 years ago instead of issuing a recall on faulty DSG gearboxes, Volkswagen remained silent until Government investigations in countries such as Australia and China led to recalls being enforced.
Which begs the questions:
Why don’t Volkswagen have a solid history of good corporate citizenship?
Why is it that they need to have their hand caught in the proverbial cookie jar (again) before they take action?
For crisis communicators the latest Volkswagen scandal is a timely reminder that during a crisis, perceptions are paramount and fighting fair, is only ever one of many options to consider.
UPDATE: 28 September 2015