A company's reputation is everything. And in today's age, news disseminates so quickly that a solid reputation can be destroyed in minutes. Leadership must guard that reputation and when a crisis emerges, executives need to rethink about priorities and develop a right plan to restore the company's reputation.
The recent Volkswagen's scandal is destroying one of the world's leading automotive brands. Volkswagen had a very strong reputation with legendary brand loyalty across the globe. The company has admitted to illegally using software to manipulate exhaust emissions during government testing.
With all the recalls, buybacks and multiple lawsuits, the financial loss will be detrimental to the company. But in the long-term, will Volkswagen restore its reputation and win back the public's trust. It is estimated at $87 billion dollars. Will it be able to recover from this crisis?
It will certainly take a long time and this scandal will forever remain a black spot in their history. There are three key initiatives that Volkswagen can implement in order to overcome this crisis.
Take Immediate Action
Volkswagen needs to demonstrate that they are taking a proactive approach to fixing this problem, immediately. While, they did take responsibility and announced they will cooperate with authorities, it seems like a forced effort not leadership stepping up and taking accountability. Apologies are one thing, but actions are what really matter.
To restore their image, the company needs to prove that they are not only taking the necessary steps to fix the problem but that they want to. They need to demonstrate to the public that they recognize they made a mistake and they will fix it. Consumers have yet to be notified if they were impacted by this problem and they have not presented a comprehensive plan of action.
Implement Processes to Prevent Reoccurrence
Volkswagen needs to implement new company-wide procedures and policies that will prevent this mistake from happening again. They need to roll out a new set of strict rules to instill compliance across the global business.
The company also needs to evaluate its current existing company culture. When teams are under tremendous pressure to deliver, compromises are made, decisions are rushed, and the end product is affected. At Volkswagen, no one spoke up about this problem. The company needs to foster an environment of transparency and openness where know that they will be commended for doing the right thing.
Be Authentic
The key to Volkswagen winning back the public's trust and rebuilding its image is to be genuine. They need to be transparent and show they have nothing to hide.
Currently, one of the biggest challenges they face is getting the public to believe that they truly want to resolve this issue. Saying that they want to get to the bottom of this problem is one thing but they need to demonstrate they are taking action.
Whether companies can recover from scandals of this magnitude largely depends on the company's leadership and other factors that come into play. With time and the right strategy, brands can bounce back. We will have to wait and see. One thing remains certain - Volkswagen has quite the bumpy road ahead.