This week Charlie shares five crisis management lessons from the VW incident.
With the VW response to the emissions scandal still headline news, I thought I would share some lessons I have identified from their response.
- Creeping crises are difficult to handle. In other bulletins we have talked about the difficulties of managing creeping crises. These are incidents which slowly build and suddenly reach tipping point when the incident hits the news and the organisation is caught up in a major incident. VW’s incident includes various parties in both the USA and Germany being aware of the cheating on emissions but nobody flagging it up to VW senior managers. Their reaction within the first few days showed that they had not been warned about the possibility of the news breaking. Those below then either purposefully decided not to tell them or they didn’t understand the magnitude of the reaction once the scandal broke. Having an ‘incident aware culture’ would ensure that potential incidents are flagged up to senior managers who can deal with the incident or at least be prepared before it breaks.
- Incidents caused by internal actions are the most difficult to manage, especially if they are caused by a deliberate dishonesty. As many commentators have said, all the organisation can do is to apologise, try and draw a line under the incident and rebuild trust with their customers. This is usually a long haul and may cost billions of dollars.
- Communicate often. In all communications training, including on the Crisis and Incident Management course, they say you cannot communicate enough with your stakeholders and you should always contact them even if it is to tell them there is no new news. I am the owner of a new diesel Golf that we bought in January. I am not sure whether we have the dodgy software in our car or not. I also wonder, if the emissions level for our car changes, will our road tax go up? To date I have not had one communication from the dealer I bought it from. I bet when it comes up for service they will be contacting me to bring my car in. Good crisis management would have the dealers contacting all their customers either to say whether they have the software in their car and what they were going to do about it. Even if they haven’t had the information from VW, at the very least they could have contacted their customers and told them that they would provide the information as soon as they had it.
- In an incident, organisations should not be seen to put their own interests before those of the victims. As I was listening to the news yesterday (1st October), about how VW had agreed not to sell any new diesel cars in the UK, the commentator pointed out that September was the car retailer’s busiest month and the timing was suspicious as they only put a halt on production once their busy sales period was over. This fed into the existing narrative in the news that the company put their own interests before the needs of their customers in a dash to sell more cars. Alton Towers, in responding to their incident where a number of people were injured on one of their rollercoasters, closed their entire park for several days to check every other ride. Although this would have cost them several days worth of admissions, it showed that they put the public's safety before their own financial gain. I’m doing so, they were able to open the theme park confirming they had checked the other rides and they were all safe.
- Information is key in an incident especially where public safety is concerned. Information needs to be put out very quickly explaining which products are affected and which are not. VW has suffered the same fate as a number of companies by saying, from the outset, that only a limited amount of vehicles were affected. They then had to admit bit by bit that their initial estimate was too small and the number continued to get larger. If you change information during an incident, especially if you revise the number affected upwards, at the least, it makes you look incompetent, and at the worst, dishonest. It is sometimes better to wait a little longer and make sure the information is correct rather than putting out incorrect information.
As I have said in many of my bulletins, follow what VW is doing in response to their incident, read their communications, look on their website, see what is being said on social media and come to your own conclusions on how well they are managing the incident and how you or your own organisation could manage it better. You are watching crisis management history.