This week news broke that Volkswagen had lied about the cleanliness of their emissions for their diesel vehicles sold in the US. It was discovered that, since 2009, Volkswagen had installed software that reduced pollution emissions during testing. Once on the road, emissions went up by 5 to 35 times. Number of cars affected? Approximately 11 million. The brand that we knew as solid and safe was broken.

Not only has there been a huge fallout from customers and the auto industry but it has also affected their bottom line – a 23% drop in share price since Monday and a loss of $26 billion USD. Unethical behaviour destroys sales like no other.

But the real issue is not what happened but how it was ever allowed to happen. How did a decision get made internally that was so dishonest and misleading, so contrary to the story they portrayed publicly, that it had the potential to destroy their brand?

What we do know is it wasn’t a mistake or a one-off. When questioned by regulators over a year ago, VW officials claimed the discrepancies between the pollution in the lab and on the road was due to a technical error. Interestingly their Vision was “To become the largest automaker by 2018.” Just two months ago they revealed that they had met their goal, exceeding Toyota for the coveted top spot. It’s now apparent that they way they did that was by lying to their customers.

SO WHAT CAN WE LEARN FROM THIS?

• Have clear Values – Core Values state how the company and its people should operate. If your values aren’t right, or you don’t have Values, it can be easy to make the wrong decision. If Volkswagen had had a Value around ethics/honesty/the customer they would have seen that this decision was contrary to one of their Values. Subsequently, the answer of “should we do this?” would have been “no.”

• Choose your Vision carefully – when you have a growth Vision it can take dominance, driving negative behaviours, as we saw with Volkswagen. Make sure your Vision aligns with your Values and Purpose – this will ensure your Vision builds the culture you want. The strongest Visions are those that are customer focused – instead of stating you want to be the biggest try forming a Vision that meets that goal whilst focusing on something your customers value.

• Have strong leadership – at the end of the day the buck does stop at the top. At Volkswagen it was clearly accepted throughout their management to install this software and lie about it. A strong leader with strong ethics would have stopped this decision and told the team: “find another way.” Leadership makes or breaks a brand so make sure you take the time to develop your leadership talent.