When the Crisis Could Have Been Prevented

Businesses recover from horrible events caused by weather, violence, human error and accident. Customers and investors understand bad things can happen to good companies. But are they as understanding when the crisis results from intentional behavior?

Volkswagen’s Emission Scandal

In late September, the Environmental Protection Agency notified Volkswagen and Audi that it is investigating to see if the manufacturer used “defeat devices” in software so that a vehicle would perform well on a test, but emit up to 40 times more pollutants on the road.

Millions of cars stand to be recalled at a great expense to the German carmaker.

You may not be a car dealer nor own a chain of service repair shops, but your business could still be affected by the rigging of emissions testing. Your customers or employees could drive these cars, own VW stock or be more adversely affected by polluted air. In fact, a statistical and computer analysis by Associated Press shows Volkswagen’s emissions has killed between five and 20 people annually in the United States the last few years.

Why it’s So Wrong

If you think lying and cheating are good ways to get ahead, then you may not be outraged. But you probably wouldn’t be a Vistage member if you thought that way.

Volkswagen violated the trust of its loyal customers. Some owners have been quoted saying they’re worried about resale values; other say they bought the diesel engine for its “clean” performance.

What VW did Right

In terms of crisis communications, Volkswagen has taken a few positive steps. In an easily accessible video clip (https://www.vwdieselinfo.com) on its website, Volkswagen has posted a statement from President and CEO of Volkswagen Group of America Michael Horn. He apologizes, says the company is cooperating with the investigation and reassures owners their cars are safe to drive. He gives a toll-free number for people to call and asks for an opportunity to regain their trust.

Prevention

Reassuring words are important, but it would be best if companies always did the right thing. As a business owner, you can prevent problems in the first place by setting standards, holding managers accountable and placing a premium on doing what your ads or taglines say you do. I urge my clients to conduct an ethics check-up at least once a year by having leaders answer questions like these:

1. Are we doing anything unethical or illegal to jeopardize customers, employees or future business? Are we doing the right thing?
2. Do we have policies, mission/vision statements and hold training classes that prove that we care about obeying laws and treating people right?
3. Do we routinely audit departments to see if we are breaking laws or rules?
4. Do we routinely audit departments to see if we are hurting the environment or offending anyone?
5. If our conversations behind closed doors or in emails were made public, would we be embarrassed, ridiculed or sued?
6. How will we react if we determine an employee or an executive has acted unethically?
7. Do those we do business with conduct themselves appropriately?

Like a dental cleaning, this check-up may be somewhat uncomfortable and dig up a little plaque, but afterward, you’ll feel good about preventing figurative cavities that could cause a lot more trouble in the future.

Volkswagen has a chance to recover from its self-inflicted wounds. Both Toyota and General Motors have survived major recalls in recent years. VW will enjoy the same understanding consumer forgiveness by reacting swiftly, fixing owners’ problems without hassle and remaining contrite.

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The diesel vehicles affected:

• VW Jetta TDI (Model Years 2009 – 2015)
• VW Jetta SportWagen TDI (Model Years 2009-2014)
• VW Golf TDI (Model Years 2010-2015)
• VW Golf SportWagen TDI (Model Year 2015)
• VW Beetle TDI and VW Beetle Convertible TDI (Model Years 2012-2015)
• VW Passat TDI (Model Years 2012-2015)

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Links:

https://www3.epa.gov/otaq/cert/violations.htm

https://www.vwdieselinfo.com/

Articles:

https://www.slate.com/articles/technology/bitwise/2015/10/volkswagen_s_emissions_scandal_has_a_villain_and_it_s_the_not_the_people.2.html

https://www.reuters.com/article/2015/10/04/us-volkswagen-emissions-schulz-idUSKCN0RY01X20151004?mod=related&channelName=businessNews

https://www.reuters.com/article/2015/10/04/us-volkswagen-emissions-poetsch-idUSKCN0RX0GQ20151004

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