Advancement through technology can only get you so far – and for Volkswagen the last seven days has seen their ubiquitous brand identity and reputation shredded to pieces as a result of, ironically, “a sophisticated software algorithm.”
The revelation that dozens of cars in the Volkswagen family have been fitted with a system that deliberately adjusted levels of emissions during environmental testing has plunged the company close to ruin.
The crisis has already cost VW millions of pounds in market value – and on Wednesday, their Global CEO Martin Winterkorn resigned, admitting he was “endlessly sorry” to consumers and that their actions had “permanently tarnished the group’s brand”. With a reported 11 million cars potentially requiring recall, it not only leaves their reputation for green and clean driving shattered, the global Volkswagen brand as a byword for quality and reliability lies in tatters.
Aside from the potentially serious damage Volkswagen’s commercial strategy has had on people’s health and environment on a global basis, the strategic communications activity of VW in the last seven days – and the steps they must now undertake to attempt to regain decades of consumer and investor trust – has also come under close scrutiny from industry experts.
For Tangerine PR’s Jo Taylor, in the immediate days following the revelations, VW’s US CEO and President Michael Horn took the right approach in addressing the accusations directly and apologise in the most public way possible. “His statement was clear, empathetic but reassuring in the right amount, and expertly delivered,” says Taylor. “It was the perfect first step in dealing with what has become a global crisis for the brand.”
Simon Collister, Independent Consultant and Senior Lecturer at London College of Communication, University of the Arts London, also praised the company’s initial response, crediting VW for pulling the plug early on. “Given the enormity of the issue, it was right that the company immediately halted all proactive communication and announced an internal investigation,” says Collister. “It would hardly be appropriate for the media and public to be discussing the allegations against VW while their Twitter and Facebook accounts are still trying to market their vehicles.”
Stuart Bruce, Independent Public Relations Advisor and CIPR Council member believes that the car manufacturer should have been more active online, taking a much more direct proactive approach and owning the issue at hand. “It appears that their initial online strategy was to do nothing,” comments Bruce, “The last story on its corporate newsroom was ironically about sustainability. The only mention is a news release on its investor relations website that it looks like it has legally had to issue. Likewise its @VWUKNews makes no mention of it. These are channels it should have been utilising.”
Taylor agrees that VW missed an opportunity to lead the conversation, “The open, honest and clearly strategic approach as seen through Michael Horn’s statement should have been mirrored across all of the company’s channels. Consistency is key, and the absence of commentary on two of VW’s largest social channels networks showed un-co-ordinated thinking. With allegations surfacing on Monday, there should have been time to create a cross-channel video statement, scheduled for delivery at the same time as the public apology.”
“In every crisis, the organisation responsible needs to own the issue and make itself the centre of information.”
Bruce shares that view, “In every crisis, the organisation responsible needs to own the issue and make itself the centre of information, but it shouldn’t do so on Facebook or its consumer Twitter accounts. In a crisis like this that will go on for a prolonged period it is important to set-up a separate online information centre that publishes the latest news and facts on the issue.”
A company the size of VW also faces some serious challenges when managing communication on a global level. One valid criticism has been that VW released an apology to US customers in German, three hours before it was offered in English.
Collister believes that taking a multi-national audience led approach would have served the company better, “VW could have made more effective use of their global Facebook Page by targeting specific messages to their different international markets.” With the story breaking first in the United States, Collister comments that “rather than continuing to say nothing – VW could have issued a specific message to its US fans.”
“As the story spread further it could have continued to target communications at relevant audiences. This would have helped VW manage and perhaps limit the spread of the issue as well as talking to its stakeholders in the most appropriate way – whether that is addressing specific concerns relevant to individual countries or communicating in a market’s native language.”
The automotive sector at large has also been left reeling, and for Tangerine’s Taylor, continuing business as usual would be ill advised. In Taylor’s view competitors must “firstly, be brave, bold and move quickly; focusing all communications efforts in developing an integrated campaign which proves their own emissions data is accurate; a risky but effective move as long as the brand in question has absolutely whiter than white data to back up its claims.”
“Knowing the potential impact of internal practices on your organisation’s reputation is a vital step in being able to prepare.”
Outside of the car manufacturing bubble, what can public relations professionals of all levels take away from the last seven days? One of the biggest immediate lessons has to be that in order to be on the front foot to head off any crisis – and to be active in preventing such issues arising in the first place – PR advisors must use this as an opportunity to place themselves at the heart of their organisations. “Knowing the potential impact of internal practices on your organisation’s reputation is a vital step in being able to prepare,” says Collister.
Bruce agrees, “It is never too early to do internal due diligence and run risk and reputational audits on every part of the business to ensure that everything you do is above reproach. No audit is fool-proof, but it is important to be able to evidence that you care enough to have tried.”