Reputation & Volkswagen: why the internal bleeding will do most damage

As the Volkswagen top brass lose sleep and their buyer communities lose trust, perhaps we should look to two famous Americans who knew a thing or two about reputation for guidance. We need two of them because reputational damage is as least as much about the internal damage felt by employees, as the external damage done to customer trust.

External First. Benjamin Franklin once told us that “Glass, china and reputation are easily cracked and never well mended.” As the Volkswagen emissions scandal tragically takes the business from Hero to Zero as quickly as the speed change in its famous engines, the online meltdown of customers and industry experts is becoming a well-worn pattern. Online discussion of the scandal, we are told, covers everything from fixing the problem to the challenges of buying and selling Volkswagen stock.

But what about the less visible, yet highly damaging pain caused within the business? How do Volkswagen employees themselves about all of this? I don’t meant the big wigs – CEO Martin Winterkorn: “I personally am deeply sorry” or US boss Michael Horn “We have totally screwed up” – but those who don’t have a voice but who will be left to clear up the reputational mess for many years to come.

Time for our second great American. Henry Ford, I’m reminded by my friend Michael Moran’s excellent blog yesterday, said: “The owner, the employees, and the buying public are all one and the same … [and] … one’s own employees ought to be one’s own best customers.” Ford recognised, over a century ago, that the perfect business conceived of no “inside” or “outside” boundaries, no us and them, when it comes to employees and customers. The “internal bleeding” felt by VW employees will be considerable and long-lasting.

A radiant reputation always begins with a radiant workforce. The emissions scandal is already doing enormous damage to the Volkswagen reputation with customers, but when Volkswagen staff all over the world feel ashamed to work for their business, dread being asked who they work for at parties – then the long-term damage becomes far, far greater.

As the Volkswagen top brass lose sleep and their buyer communities lose trust, perhaps we should look to two famous Americans who knew a thing or two about reputation for guidance. We need two of them because reputational damage is as least as much about the internal damage felt by employees, as the external damage done to customer trust.

External First. Benjamin Franklin once told us that “Glass, china and reputation are easily cracked and never well mended.” As the Volkswagen emissions scandal tragically takes the business from Hero to Zero as quickly as the speed change in its famous engines, the online meltdown of customers and industry experts is becoming a well-worn pattern. Online discussion of the scandal, we are told, covers everything from fixing the problem to the challenges of buying and selling Volkswagen stock.

But what about the less visible, yet highly damaging pain caused within the business? How do Volkswagen employees themselves about all of this? I don’t meant the big wigs – CEO Martin Winterkorn: “I personally am deeply sorry” or US boss Michael Horn “We have totally screwed up” – but those who don’t have a voice but who will be left to clear up the reputational mess for many years to come.

Time for our second great American. Henry Ford, I’m reminded by my friend Michael Moran’s excellent blog yesterday, said: “The owner, the employees, and the buying public are all one and the same … [and] … one’s own employees ought to be one’s own best customers.” Ford recognised, over a century ago, that the perfect business conceived of no “inside” or “outside” boundaries, no us and them, when it comes to employees and customers. The “internal bleeding” felt by VW employees will be considerable and long-lasting.

A radiant reputation always begins with a radiant workforce. The emissions scandal is already doing enormous damage to the Volkswagen reputation with customers, but when Volkswagen staff all over the world feel ashamed to work for their business, dread being asked who they work for at parties – then the long-term damage becomes far, far greater.