Volkswagen – Do we need a new why, how, what?

Dave Allen, BrandPie Founder, weighs in on the Volkswagen scandal, and discusses what organisations need to do to regain and retain the trust of the consumer.

Back in 1999 I was working with the leadership team of Arthur Andersen. They were separating from Andersen Consulting (now Accenture) and were concerned that without the 'sexy' Andersen Consulting in the fold they and the Andersen brand would be consigned to being what they called 'Grey Accountants'.

My job was to help them understand and define their evolved why? how? what? - post the demerger. To do this I interviewed a lot of their senior team and got to understand them, their culture and their history very well.

Andersen was an amazing firm and brand, the self-belief it built into its people was incredible. It was hugely admired. Andersen was the Marine Corps of the accounting world - studied by professors, academics and journalists who wanted to codify how it had built such a strong culture and incredible results.

Andersen people were really clever people with a strong ethical code. They saw their role as standard bearers for the profession - this came from their founder Arthur Andersen who was a crusader for higher accounting standards in the 20's and 30's. He was a stickler for honesty. His motto was "think straight, talk straight". He was famous for once refusing to sign off a flawed set of accounts saying that there was "not enough money in the city of Chicago" to make him do it.

In the modern world Andersen people also relished in using their skills to create complex accounting systems that legally benefitted their clients. In many cases these ideas went very close to what they called 'the line of the law'. But they always stressed they never ever went over it.

I called this their 'Maverick Gene' and we talked about it a lot. The good side of the gene was when it challenged and raised accounting standards, the dangerous side was when it created new ideas that pushed too close to 'the line'.

In 2001 the 'Maverick Gene' did sadly take them over the line and in 2002 the Arthur Andersen business and the brand disappeared as a result of the Enron scandal. The partnership dissolved and the different entities around the world were absorbed into the other big accounting firms. The 'Big 5' became the 'Big 4'.

Only a tiny percentage of the their employees took them over the line but the  fall out affected virtually every business on the planet resulting in the birth of Sarbanes-Oxley act in 2002.

There seem to be many parallels between this story and the unfolding Volkswagen (VW) story today.

The belief in VW that somehow they would not be found out. The ingenuity and effort VW must have put into getting around the emission tests. The seeming ability not to see they were doing something highly illegal - I am certain some people at VW will have convinced themselves that what they were doing was actually OK - a sort of 'scope creep' as they crossed that line. For so many people inside a firm to believe they can operate outside of the law is understandably beyond the comprehension of most of us.

As yet we don't know who did this or how many people were in the know. The sacrificial 'C' suite heads are already rolling and there will be more to come. The implications for the rest of us in the world of business are still embryonic. The only thing we know with certainty is that they could again be seismic in nature.

It is no wonder then that consumer trust in big business is at an all time low. Tweet this

Therefore surely now is the time for every business, large and small, to rethink, relook and realise it must always operate within the demands of society and can never operate outside of it. That consumers will now more than ever want to buy products and services from businesses that genuinely build their business model around what society wants, needs and expects. That true leaders can build stronger businesses by tuning into this phenomenon.

There are a number of businesses already trying to do this - my local brewer in Suffolk - Adnams - is a great example. What Paul Polman has been doing at Unilever is much admired and the Unilever 'Sustainable Living Plan' is an impressive model. Patagonia goes to great lengths to make sure its labour practices and supply chain sourcing are in line with their consumers' expectations. No surprise to me that consumers reward these businesses by buying more of their products.

Going forward we need every business thinking and innovating like these. Consumers can't take any more VWs. We need a new Why? How? What?