This year has seen its fair share of corporate disasters, hindered, rather then helped by incompetent PR handling.
The number of high profile cases I’ve watched through my fingers as they stumble from rescueable situation to total implosion, proves yet again that reputational management has little to do with the size of the budget and everything to do with quality of the judgment of people making decisions.
A Euro lotto chunk of cash can be thrown at a communications problem, but if the fundamentals are wrong from the beginning reputational damage will not be repaired, it will accelerate. As ably demonstrated by these howlers.
Volkswagen: Omitting the true emissions
In September, Das Auto themselves, the Volkswagen Group, crashed into the biggest crisis in the company’s history when they admitted to cheating on engine emission results in the US.
They basically lied to customers about how fuel efficient and green their diesel cars are by fixing the emissions test that says how many harmful gasses the engine is pumping into the atmosphere.
It is reckoned to have cost the company around £8 billion and affected as many as 11 million cars Despite saying he knew nothing of the scandal Volkswagen’s CEO Martin Winterkorn resigned as the company scrambled to stem the fallout.
Only months earlier the company at last had taken the top spot as the world’s largest car manufacturing group.
Through an elaborate piece of software their cars could tell when emissions were being tested and send out false readings. When tested independently some cars were emitting 35 times more pollutants than the company officially claimed.
When presented with the findings Volkswagen chose the ‘bury head in sand and it will all go away” approach to communications management. They disputed, belittled and down played the claims. They failed the first test of PR reputational management, cheaters get caught and when the do they need to fess up.
Instead initially they said the results were down to “various technical issues.” After several rounds of half admissions and the CEO falling on his sword the company finally admitted the truth about the extent of the scheme to fix the emissions tests.
Admitting the truth earlier may have left some customers with a little bit of respect left for the company. But obfuscation and denial has left Volkswagen’s reputation in tatters and their share price on a downward spiral.
Regret and remorse early on could have done a lot to at least stop the slide.
As in every crisis swift, accurate, and controlled communication delivered with transparency and sensitivity is crucial.
Unfortunately for Volkswagen, despite the PR resources at hand, they failed to carry this out.
The irony of Volkswagen making fuel efficiency a key part of its US advertising campaign I’m sure will not be lost on those car buyers now leafing through Volvo brochures.
Thomas Cook: a human tragedy that couldn’t get worse, but did
Back in May boss of Thomas Cook Peter Fankhauser gave a masterclass in digging a hole starting out with a modest spade and finishing the job with a JCB.
At a public inquest he refused to apologise for the deaths of two children from carbon monoxide poisoning in a Corfu hotel back in 2006. He said that “there’s no need to apologise because there was no wrong doing by Thomas Cook”
Local employees at the hotel were jailed for negligence back in 2010 but Thomas Cook was never held to account for its role in tragedy.
It was only after fierce criticism during the inquest, the threat of a public boycott of the company and a firestorm of criticism on social media that they began to backtrack.
It also emerged that the company had received £3m in compensation from the owner of the hotel following the deaths, but the parents had only received £350,000 each, further fuelling public fury.
Many employees called as witnesses by the corner were under instruction from the company not to answer any questions. The hurt and pain this must have caused the family desperately looking for answers must have been immeasurable.
In a classic bolting the stable door after the horse had long bolted the company said it was donating its share of compensation to Unicef.
After the inquest verdict a letter of apology from the company to the children’s parents was shown to the family by reporters before they had received it personally.
It was only some weeks later that Mr Fankhauser eventually apologised for the string of “mistakes” made by the company over the nine years since the tragedy and offered an unreserved apology.
The list of basic PR management errors in this case goes on and on. The comment from the parent’s lawyer after the inquest says it all really: ‘the company should hang its head in shame’.
But it didn’t, not until it was dragged to do so by public incredulity at their attitude.
FIFA: Suitcases stuffed with cash but nothing to see here
FIFA, the governing body of international association football was this year caught in one of the largest scandals in the history of sport. This had it all, the FBI, suitcases stuffed with used bills, $6,000-a-month apartments for bureaucrats, corporate sponsors threatening to withdraw and predawn office raids.
The story has more miles to run than a unfit striker in preseason training, but can be summarised by one man, Sepp Blatter. After decades of presiding over the cash cow that many saw FIFA as and in the the face of a mountain of evidence, he was eventually banned from the organisation for eight years. But still he protests his innocence. Communications and PR chiefs at the Swiss based body have been exciting quicker than Scotland at a World Cup as the enormity of the challenge unfolds.
The PR howler winner
And the gong for the most appalling handled? For sheer scale and long term damage to one of the world’s best known and most trusted brands it would have to go to Volkswagen. However, the speed that the top management fell on their sword rather than clinging on to the last will help the rebuilding process begin at least.
So it’s a toss up between Blatter and Fankhauser. Blatter is clearly deranged, so for the clear absurdity of clinging on to a line when everyone in the industry watching was screaming no, it has to go to Thomas Cook and specifically Peter Fankhauser.
I refuse to believe the PR advice he was being given was so bad and thus can only conclude he is a man so conceited, so full of hubris that he is utterly beyond council.
Happy New Year