So, farewell then Martin Winterkorn. Another crisis, another CEO gone. This one is a big one though. No one can have failed to miss the story that VW has been embroiled in scandal.
I am slightly furious with VW. The current zeitgeist is cynical enough about big corporates already. I happen to believe that there are some excellent people with integrity in big business, and that they have a role to play in creating wealth, purpose and dignity for their employees. We are a weary world though. Tired of corporate (and political) scandal and as sceptical about leaders of organisations as we are about leaders of political parties. There’s been endless whitewashing and some pretty miserable greenwashing by corporates too (as Kermit knows ‘it’s not easy being green.’) And now this. Carwashing?
I’m feeling frustrated that the whole organisation has been so daft.
This is the thing, dear big companies. A brand is not just a logo and it’s not just advertising. It’s a promise delivered in everything you do. And if your brand is synonymous with reliability and your organisation can’t be relied on to give you the truth about product performance… Then you have let down your organisation and your brand. Sadly you’ve also impacted the entire automotive category as cynicism has a habit of leaking and magnifying. Will VW survive this? I hope so. I feel a latent affection for VW and I’d love to see them rebuild the company with transparency and integrity.
‘We screwed up’ said US CEO Michael Horn. And he took full responsibility for it; which is a tough call and shows a whole other kind of bravery. Screwing up happens. Businesses and CEOs make mistakes. It’s tough at the top and we’ve seen 3 companies lose their CEOs over the summer (Toshiba’s because of an accounting scandal, United Airlines with corruption and of course Ashley Madison’s torrid affair). The corporate world doesn’t want leaders living in fear of mistakes as that will give us a dull, risk free world where the only innovation comes from maverick start-ups. However, fundamentally a leader’s primary purpose is to set the values of an organisation and ensure they are consistently lived, acted on and ‘true’. And Winterkorn puts it perfectly: ‘we acted in a way which wasn’t true to our values.’
The way a company copes with a story like this is highly dependent on its leaders of course, but it’s also about its brand.
There are many reasons why strong brands are such valuable assets to organisations. One of the most important is that strong brands deliver resilience. Look at other examples of this in the car market. Toyota surviving product recalls, Mercedes surviving the A-class tipover. Consumers do understand companies make mistakes and the stronger the emotional connection to the brand, the quicker they will be to forgive. The best, most successful brand propositions and promises though are always based on something quite simple. The truth.
As Andy Milligan and Shaun Smith say in their new book ‘On purpose’… When it comes to behaving in a way which is true to your company’s values: You can’t force it, fudge it or fake it. Brands are short-cuts to trust. But they earn that trust with everything they do right across the organisation.
Quite simply, if customers can’t trust you, they’ll go elsewhere. If only everything is life was as reliable.
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