Would Volkswagen Survive the Integrity Crisis?

Volkswagen, the biggest car-maker worldwide has committed the emission scandal. US regulators found that some of its cars could manipulate official emissions tests.   

In this note I would like to share with you how I would see this from a different perspective.

Psychological butterfly effect

Some actions get reactions much bigger than expected. This effect has been called butterfly effect in the Chaos theory. Even today I believe Volkswagen (VW) is a decent brand with a remarkable quality. Painfully, what has happened in VW is even hard to imagine for many of us. However, it has happened and even admitted by VW officials.

Imagine a very dear friend of yours, whom you love, cheats on you or steals money from you. You might say “I’d have expected this from anybody else, but not from you”. Emotionally and psychologically wise it is hard to forgive people whom we love the most when they commit an unusual sin. I think we feel the pain much more when we get hurt by people we love the most. We forgive a regular guy much easier than our beloved partner when both commit the same fault.  I believe it is more emotional and psychological rather than the real pain itself. The unacceptable fault within VW may happen every day in many other companies. And quite frankly, I  believe it does. Why is it, the faults committed by regular guys (unknown companies) do not get this much public attention, but that of VW does? I would like to say, it could be due to psychological butterfly effect.

The higher you sit the bigger the damage when falling down

Look at the babies and very young children. How often do they fall on the ground crying so hard showing a red/dark face for a few minutes? In some cases they cry so seriously that the adults around them get really worried. They may even call an ambulance. After a few minutes, the same kid starts smiling even forgetting what has happened a while ago. Now imagine, a 60+ years old man falls on the ground unprepared. He will be lucky if he doesn’t break his arm, leg or something else. Pending on injury some never get recovered. At least, this latest was the case for my grandmother. VW has genuinely put itself very high in the ranking of the trusted brands. Therefore, the damage may be huge as result of falling on the ground. Will VW be able to get up and heal?

VW leaders took their responsibility, would it be enough?

Brave leaders confess they have been wrong. They apology and ask for forgiveness. They promise they will recover the damage caused under their leadership. In many cases apologies get accepted and people move on. This is what Prof. Dr. Martin Winterkorn, Chairman of the Board of Management of Volkswagen AG has done too. Would the market appreciate this statement as a proper response? It would depend on the immediate next steps of VW leaders. It is the matter of re-creating trust. First class leadership is required to save VW from this crisis. The golden question would be the following. Having the current situation in mind what can we (VW leaders) do right now?

It’s all psychological and about the feeling the VW leaders can give to the authorities and  their loyal customers.

Huge loss for VW, too bad for ‘Made in Germany’

I believe Germany is a trusted brand itself. Many products which have genuinely been marked by ‘Made in Germany’ guarantee a decent quality. The fatal fault of VW may temporarily make it challenging for the German industry claim that decent German quality. This would be particularly the case for the German car industry. Whether or not VW survives this crisis, in any case this scandal will cost the German economy tens of billions during coming years. I expect the premium German brands such as BMW and Mercedes get really angry at VW. Audi (belonging to VW) may suffer the most among premium brands. Unfairly and beyond their control, other car makers may suffer from the fault of someone else. It may take years before the same level of trust (prior to VW crisis) in ‘Made in Germany’ gets re-created.

No reward for Integrity, serious punishment when it lacks

Think about it for a few minutes. How often have you thanked your (business) partner for not cheating on you? How often have you fired your employees when you have come to the conclusion they’ve cheated on you? It is just a no-brainer that we all are expected to be honest. Usually, we do not get rewarded for being honest and genuine. We do get punished when we lack integrity. Lack of integrity has cost many big leaders their career. Many of them have not survived their integrity crisis, a number have i.e. a former U.S. President Bill Clinton. Those surviving integrity crisis, incl. Mr. Clinton, had other excellent qualities because of which they were forgiven by their clients/partners/voters. Does VW have enough other excellent qualities because of which it may receive forgiveness?

Would VW survive this integrity crisis? I think and I hope it will!

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About the author
Hamid Safaei is the founder of ImOcean Academy. He is a qualified executive coach helping executives and high potentials unleash their potential. Hamid has led successful business transformations for a number of Fortune Global 500.

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