In 2015, the US Environmental Protection Agency (EPA) issued German car giant Volkswagen with a violation notice under the Clean Air Act. The scandal, known as “Dieselgate” caused inflicted enormous damage upon Volkswagen’s worldwide reputation.
In 2019 during a live demonstration of the Tesla Cybertruck’s supposedly shatterproof window technology, the car’s head designer was invited to throw a metal ball at the side window of the vehicle. The window cracked, instantly undermining the Cybertruck’s tough image and raising questions about the car’s perceived durability.
And then there’s perhaps the UK’s best-known example of a single incident destroying a company’s reputation.
Back in the 1990s, Ratners jewellery shops were a familiar sight on high streets up and down the UK.
But then, CEO Gerald Ratner made a speech addressing the Institute of Directors at the Royal Albert Hall on 23 April 1991.
During his speech, Ratner commented: “We also do cut-glass sherry decanters complete with six glasses on a silver-plated tray that your butler can serve you drinks on, all for £4.95. People say, “How can you sell this for such a low price?”, I say, “because it’s total crap.”
In both the VW and Ratners instances, it is easy to see the financial cost of their respective missteps. But what of the unseen cost; the loss of trust; and the incalculable damage to the company’s reputation?
That is a calculation that is probably being done at the Maryland headquarters of ACECO; the demolition contractor that is currently demolishing the East Wing of the White House.
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