The year after Volkswagen faked their emission figures for their diesel cars, their sales went up. In this vlog, Grant explains what happened.
You would have thought that when Volkswagen were found to have faked their emission figures for their diesel cars, they would’ve been in serious trouble. And yet the following year, sales actually went up.
You could explain the upsurge in sales by quoting Oscar Wilde’s; ‘There’s no such thing as bad publicity’, but I don’t think this is necessarily true. However, the success that Volkswagen had the following year does show the limits of authenticity.
You see, Volkswagen never espoused to be a virtuous business. Their value proposition was that they made solid, good quality, affordable cars for the consumer. And even though what they did was wrong – and I certainly don’t want to be a defender of them – nevertheless, it didn’t take away from their core value proposition. In other words, lying about emissions didn’t make their cars bad. Their cars could still be good quality, solid and good performance. Authenticity is about living the values that you espouse. So if Volkswagen had made un-solid cars that proved to be defective, they may have had a real problem, but this wasn’t the case and ironically, the increase in publicity probably contributed to their increase in sales.
So for example, Disney is seen as a family brand. Therefore, if they were to do something that damaged families, it might really damage their position in the marketplace.
Innocent drinks are known to make healthy smoothies. So if suddenly it came to light that they put loads of artificial additives in their drinks, it may cause them a problem.
Authenticity has its limits. People often think of authenticity as being ‘good’ and they’re not the same thing. For example, Amazon has been accused of tax avoidance, which while isn’t a good thing, also isn’t illegal, but Amazon, as far as I know, have never claimed to be a really virtuous business. Instead, Amazon espouses to give a really convenient customer centric service and avoiding tax does not detract from that.
The fact is, that authenticity is not universally good. It has its limits. For example, if you turn up to a meeting at the end of the day with a new customer and you walk in there and say, “I’m really tired and I can’t be bothered to be here, but it’s in the diary so I have turned up anyway”, that might be authentic – it would also be a really stupid thing to do. Instead, you’ll walk in with a big smile on your face and pretend there’s nowhere else you’d rather be than seeing that prospect at that time.
Is that inauthentic? Quite possibly, but it doesn’t go against your value set of wanting to deliver a great product or service to your customers and, therefore, that inauthenticity is not wrong and doesn’t necessarily damage you in any way.