Tuesday 27 October 2015

VW and the never-ending cycle of corporate scandals - how Darwin can help

According to the BBC, after Libor, payment protection insurance, phone hacking and every other scandal, nothing appears to have been learned to stem the tide of bad behaviour from some of the world's largest companies.

And now VW has been caught cheating on emissions tests, having been caught and fined in 1973 for dodging similar tests.

Research by Cass Business School’s Professor Andre Spicer indicates predictable post-scandal behaviour:

First three to six months: high activity, scapegoating, calm restoration, removal of people, evidence, stories and reminders…

More detail in the original article re failure to learn from mistakes via a focus on getting things done rather than how results are achieved, resulting in a culture that encourages recruitment of similar individuals with the same views, rather than a policy of diversity…

Stephen Carver, a lecturer at Cranfield points out that Darwinian survival is not survival of the fittest - he never said that. It's the most able to adapt. And that means diversity…

Impact on the brand
However, we would add that a fixation on complying with the letter, rather than the spirit of the law probably causes more damage in the eyes of the consumer. Considering the years spent building brand equity – that reassurance that it is not necessary to second-guess the quality – or the quantity – in the tin, the essence of branding…

Also we all know that FMCG marketing is built on the premise that the cost of introducing the consumer to the brand and achieving initial trial is so high that it is only on second or third purchase with less spent on having to ‘educate’ the consumer, does the  brand begin to make a profit.  Destroy that trust – by short-changing on contents vs. expectation – and then suffer the cost of re-building that trust.

For instance, if we accept that when a consumer’s needs are exceeded, they tell a friend, when disappointed, they tell ten friends, it might be said that a brand re-build costs ten times the cost of introduction.

Why not try it for yourself, sometime…?

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