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From Hero to Zero (and back again?)

Written by Jamie McGregor on 23 Oct 15
From Hero to Zero (and back again?)

Can VW learn the lessons of other high profile corporate PR failures to rebuild its employer brand?

This week, I’ve been running employee workshops, on behalf of a leading FTSE-250 business, which is looking to develop and build a new employee value proposition (EVP) and employer brand.


I started the session as I usually do; with an icebreaker exercise. This week we used one of my favourites: ‘Love/Hate Brands.’  It’s very simple: we break people up into small groups of three or four, and ask half of the groups to discuss and agree on their five favourite and five least favourite brands.

We ask the other half to discuss what five organisations they would most like to work for (if they weren’t already working for our amazing client, of course) and what five organisations they’d hate to work for.

It’s an icebreaker. The point is to try to get delegates engaged in the session. And to get people who’ve probably never worked together before, talking. You get the idea.

Virgin, Apple, Google, and John Lewis nearly always come up in the list of brands people love/would love to work for (forget Universum and Glassdoor, the 4MAT icebreaker survey is real affirmation of the strength of your employer brand).

The banks and a certain low-cost airline always come up in the list of least favourite/least attractive brands.  And hopefully everyone sees the link between corporate brands, employer brands, and leadership brands (somehow we always end up talking about the bearded one).

This week there was a (not-so-surprising) new entrant. Whereas previously VW only ever featured under the five favourite brands list, we saw VW named in the least loved/least attractive company to work for list, by every group in every session we ran. Wow. Talk about going from hero to zero.

So the question is this: “Will VW take its lead from the likes of GlaxoSmithKline and BP, who both overcame terrible corporate PR disasters, and managed to rebuild their corporate reputations (and their employer brands) in the process?”

No-one can fail to forget the magnitude of the PR disaster following the explosion on the Deepwater Horizon oil rig that killed 11 workers on 20 April 2010. This led to an estimated 4.9 million barrels of oil being spilled into the Gulf of Mexico and causing untold environmental damage. And yet BP has rebuilt its reputation.

The company acted swiftly (well, it did after then CEO Tony Hayward’s infamous “I would like my life back” comment to Louisiana reporters. This was when he was meant to be apologising for the disaster). 

Tony Hayward was swiftly despatched and the business showed genuine regret. It mobilised 48,000 people in its response effort and invested over $14billion in its clean-up operations.And today BP is widely recognised as one of the world’s most attractive employers to work for, according to Universum, Glassdoor and - of course - 4MAT’s icebreaker survey.

Meanwhile GSK recovered from a similar PR disaster. In June 2012 (about the same time Bob Diamond had to step down as boss of Barclays), GSK was fined £1.9bn by US authorities (nearly seven times the fine that was imposed on Barclays for the Libor rate scandal),for promoting two of its drugs for unapproved uses, for making unsupported safety claims about another drug, and for failing to provide data to the US Food and Drug Administration (FDA).

Sounds bad.  But there they are again, near the top of league tables of most desirable employers to work for.

Or will VW follow the example of the banks who haven’t been quite so successful at rebuilding their reputation and re-establishing trust?

In fact, at times, one could be forgiven for assuming some that of the banks were intentionally going out of their way to ruin their reputations. Such have been the number of scandals that have affected the industry: the credit crisis/bank bailouts, forex, Libor, ‘dark pool’ frauds, money laundering, and now some banks have even been implicated in the FIFA scandal. 

The public view is, unsurprisingly, suspicion. The occasional resignation/sacking of a CEO and an apology doesn’t really demonstrate real contrition and regret, whilst scandals keep occurring and the executives in charge continue to earn mega-salaries and bonuses.

And all of this impacts on employer brand.Which is why, whilst the banking industry does feature on various most attractive employer league tables, there are far fewer banking names listed and they’re not as high up those lists as they once were.

So whose example will VW follow: BP and GSK or the banking industry’s?

The initial prognosis isn’t good. VW were initially slow to respond, and they didn’t reveal the full extent of the problem when the issue first surfaced in the US (and which other countries were affected). Crucially the company hasn’t yet explained why it dismissed the issue, when the US Environmental Protection Agency first raised it in 2014.

The business needs to quickly learn the lessons of BP and others that have successfully rebuilt their corporate reputation.

This is vital, of course, if VW are going to continue as one of the world’s most successful car companies. But it’s also vital if they are going to continue to compete for the world’s best automotive design, engineering, and manufacturing talent. 

In fact, on both fronts, VW can’t afford not to.

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