Cloudy admissions: Analyzing Volkswagen’s crisis communications

January 20, 2016

Volkswagen crisi communications vs corporate benchmark

When the news broke about Volkswagen’s CO₂ emissions scandal, now-former CEO Martin Winterkorn assured customers, investors and regulators in a video statement that, as Volkswagen worked through the crisis, they would do so “with the greatest possible openness and transparency.”

However, more than three months after Dr. Winterkorn made that promise, Volkswagen is still struggling to communicate clearly about recent events and about the steps the company is taking to allay the crisis.

“The press releases from VW seem almost purposefully designed to infuriate further investors—and probably regulators—with their obscure language.” – Max Warburton, Bernstein Research, as quoted in Financial Times

The chatter about 2015’s emissions scandal had died down around the holidays but renewed last week when, in an interview with NPR, current CEO, Martin Mueller, boiled the whole issue down to “we didn’t understand the question.”

We wondered whether this scandal has become so protracted—and the public’s frustration amplified—in part due to the particular language Volkswagen has used in its statements regarding the emissions scandal. We used our proprietary language analytics platform to analyze the content of six statements from Volkswagen.

We compared these statements to a benchmark built from nearly 30 corporate crisis communications from the past year. Our analytics showed that, while Volkswagen is communicating well in some ways, there is certainly room for improvement.

What Volkswagen’s crisis communications do well

Volkswagen’s statements collectively display 35.5% more confidence than the average crisis communication. This is driven by high levels of vivid, concrete language combined with insight exhibiting a thorough understanding of the situation.

“Based on present knowledge around 800,000 vehicles from the Volkswagen Group could be affected. An initial estimate puts the economic risks at approximately two billion euros. The Board of Management of Volkswagen AG will immediately start a dialog with the responsible type approval agencies regarding the consequences of these findings.” – Volkswagen: Clarification moving forward

Where Volkswagen can improve

1. Clarify the message: follow Home Depot’s lead

The investors and customers who are frustrated with the opacity of Volkswagen’s crisis communications are correct. Volkswagen’s statements collectively demonstrate 16.8% less clarity than the crisis communication analytics benchmark.

Best-in-class crisis communications are designed to ensure that customers understand the situation and the steps the company is taking to rectify it. When Home Depot reported a severe data breach in September of 2014, the company used concrete, active, accessible language that gave customers a clear sense of what had happened and what to expect moving forward.

“We’re looking into some unusual activity that might indicate a possible payment data breach and we’re working with our banking partners and law enforcement to investigate. We know that this news may be concerning and we apologize for the worry this can create. If we confirm a breach has occurred, we will make sure our customers are notified immediately.” – Home Depot: initial alert regarding 2014 data breach

On the other hand, Volkswagen’s complex sentence structures have made its statements difficult to follow and obscured the message the automaker is trying to send.

“To what extent models of previous years are affected continues to be looked into in conjunction with the authorities. Based on what is known at present, the Volkswagen Group continues to anticipate that this will be the previously communicated total figure of around 800,000 vehicles.” – Volkswagen: Next step in clarifying the CO₂ issue

This awkward, evasive language leaves customers and investors uncertain as to what Volkswagen has discovered and what steps the company is taking to get to the bottom of the emissions crisis.

2. Demonstrate accountability to regain favor

Volkswagen’s crisis communications fall short of the benchmark by 64.3% in persuasion and 22.2% in trust. Our research has shown that in order for a company to regain public favor after a crisis, it must take ownership of its message. One way to do so is through the use of personal pronouns, another area in which Home Depot excelled. The company’s crisis communications, which significantly outperformed the corporate benchmark in both metrics, used plenty of “we” statements to clarify that they would hold themselves personally responsible for the data breach and for the steps necessary to repair the damage it caused.

Volkswagen, however, has used very few of these personal pronouns, relying on passive voice instead of first person to outline events without indicating any responsibility. This tactic distances the company from its shortcomings, as in the classic example, “Mistakes were made.”

“Under the ongoing review of all processes and workflows in connection with diesel engines it was established that the CO₂ levels and thus the fuel consumption figures for some models were set too low during the CO₂ certification process.” – Volkswagen: Clarification moving forward

The importance of these personal pronouns isn’t limited to the company as a whole. Even more than general accountability, a clear, confident executive voice is perhaps the most helpful factor in persuading customers and investors to stick with a company. The best crisis communications feature executives speaking to the issue, using “I” and “we” statements to build trust by indicating that the buck stops with them. To Volkswagen’s credit, two earlier statements and, to a certain extent, Mueller’s most recent interview, do exhibit that level of accountability.

“From the very start I have pushed hard for the relentless and comprehensive clarification of events. We will stop at nothing and nobody. This is a painful process, but it is our only alternative. For us, the only thing that counts is the truth. That is the basis for the fundamental realignment that Volkswagen needs.” – Matthias Müller, Volkswagen CEO, Clarification moving forward

However, the executive voice disappeared entirely from the communications Volkswagen released at the height of the crisis, leaving would-be customers and investors in the dark as to the sincerity of Volkswagen’s commitment to rectifying its mistakes.

Ultimately, all the confidence in the world won’t help Volkswagen—or any company—resolve a crisis if their communications aren’t designed to help audiences understand the situation and rebuild their faith in the company. Our analytics show that when it comes to accessible crisis communications, Volkswagen has a lot to learn from its peers in the corporate sphere. Here’s hoping the company can turn their communications—and their reputation—around as they fight to win back consumers’ favor.

To learn more about how we can help your team use analytics to evaluate and strengthen your communications, contact us at info@quantifiedcommunications.com.

Read more about crisis communication analytics from Quantified Communications.

Posted in corporate communications, crisis communication, executive communications, predictive analytics, volkswagen