by Sean McCoy (@TheRealMcCoyTRM) The well-publicised Volkswagen emission issue has had far-reaching implications for the German motor manufacturer, and the impact of its falsified reporting in the US market had an immediate and significant effect on share price, which reeled under this news.
The local VW managing director has moved to assure South African consumers that all its diesel vehicles comply with the required EU emission standard that applies to this market, and the best-selling vehicle manufacturer in this country has appealed for continued customer belief in the company, its products and its people, whom he claims have a clear understanding of their brands and customers.
What a pity his now-ex global CEO saw things somewhat differently.
Acting locally
While the above local action feels correct and was confidently applied once all facts were made clear, there can be no doubt that this will have long-term repercussions for the international brand. Human error resulting in a global recall such as Toyota experienced a few years back is one thing. Blatant misrepresentation of facts is another altogether, and I suspect the market will be a lot less forgiving in the case of VW.
This once again highlights the critical role of leadership in the internal brand equation. There is simply no way we can expect employees to be highly engaged and deliver to a specified standard or level while leadership does something else entirely. It is a given that the leaders of an organisation and brand set the tone for the standard of behaviours applicable to the rest of the business, and they are accountable for this.
Paying the price
At a global level, the former VW CEO Martin Winterkorn declared that he was ‘deeply sorry’ for breaking customer and public trust is the company, the result of which has seen a drop of almost a quarter of the market value of the group and its lowest share price level in three years, according to Bloomberg at the time of writing this column. Apart from the potential of US$18bn in fines, Winterkorn faces possible criminal prosecution.
If we cast our minds back to the BP Deepwater Horizon spill in 2010, CEO Tony Hayward was unable to survive that and the only solution for him in the end was a resignation. BP agreed to pay US$18.7bn in fines, the largest corporate settlement in US history. VW AG may find itself in similar territory.
Double standards
It is odd, however, when we look at the leadership of South Africa Inc. and see how the same principles of accountability do not apply. We are expected to toe the line as citizens and behave well as business, doing all manner of good things to secure the right social compact and develop a better country for all — while our leadership lives a double standard, where funds are misappropriated and service delivery is compromised at so many levels. This goes unnoticed by the powers that be, or is served through ideological rhetoric and nonsense rather than real delivery.
In a current mining industry project I remain astounded at the government focus and double standards applied to this sector regarding safety. The industry has made significant gains on its safety standards over the last decade, and its current injury and fatality statistics pale into insignificance when compared to the roads in our country.
Last month’s M1 bridge incident has resulted in four parallel processes of enquiry, and significant leadership and share price implications for contractor Murray and Roberts. While this is totally appropriate and correct in every respect, where is the equivalent accountability and investigation for either the minister of transport or the head of the metro police when we look at the horrendous data record of our road accident statistics?
While this has a far greater public component to it, the forces responsible for our roads should be held accountable to this on a similar basis — they are, after all, in public office in order to serve.
Step forward or get out of the way
While internal brand engagement, and the development of this capability, implies unlocking and empowering human potential to drive change and to serve, it is fundamentally impacted by the leadership vision and purpose of the organisation. Leadership precedes every other aspect of the internal-branding process, and it is incumbent upon leaders at every level of business, community and society to stand up and be counted.
Alternatively, get out of the way and let those who are capable take the reins.
Dr Sean McCoy, MD and founding member of HKLM, is a prominent figure in the branding arena, with his expertise centered on client service, brand strategy and business development. He contributes the regular “The Real McCoy” column focusing on internal branding to MarkLives.
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