It all started so well. A US emission-testing centre wanted to see how Volkswagen’s diesel cars managed to achieve such low emission standards. As is now widely known, they achieved the standards with the aid of a “defeat device” that has led to the biggest scandal the automotive industry has ever witnessed.
From a public relations standpoint, the incident can be considered a disaster. From a business perspective it is catastrophic – the share price has plummeted 20% since the news broke. Not to mention the possibility of future fines and customer class actions.
So in responding to this crisis, which has been likened to BP’s Deep Horizon debacle – what has VW done well, and what should it have done better?
Firstly, for a company known for trustworthiness, reliability and high quality, it has broken the confidence of millions of customers – it is believed that more than 11 million cars worldwide are affected.
The company was certainly not prepared for a ‘black swan’ event of this order of magnitude, and while the global CEO, Martin Winterkorn, did apologise and step down, the response in the wake of his departure was sadly lacking.
As Bill McFarlan, author of “Drop the Pink Elephant” suggests, when faced with a disaster, the best approach is a three step one: regret-reason-remedy.
First, you have to show that you are human: show empathy for those people affected and regret for what has happened. Many people fear legal consequences but showing that you understand the feelings of your customers is NOT the same as admitting liability.
Secondly, try and explain in straightforward terms what has happened – the reason. If you don’t yet know then say so but do not hide information that customers need to know.
Lastly, get control of the situation by stating what you are now going to do to remedy the situation – and then do it!
And while you are getting control of the situation, never forget to communicate, communicate, communicate.
Instead, VW closed down many of its communication channels. While it was right to stop marketing its products, the company missed the opportunity to take control of the conversation by reiterating the message delivered by Martin Horn, head of VW’s US operations, who said:
“Our company was dishonest, with the EPA and the California Air Resources board, and with all of you and in my German words, we have totally screwed up.
We have to make things right, with the government, the public, our customers, our employees and also very important, our dealers… we are committed to do what must be done, and to begin to restore your trust.”
Obviously, we hope that you never have to face a similar situation to that of VW, but it is important to be prepared. To learn more about how to communicate in a crisis, why not request our free Crisis Management eBook today – can you really afford not to?