Target got scooped. Volkswagen called it controllable. Both paid.
A blogger broke Target's 2013 breach a day before Target did; the CEO resigned in 2014. VW's board called Dieselgate controllable; by 2020 it had cost more than 30 billion euros ($33 billion). Plan for disclosure.
Transcript
Two companies faced a crisis they could not keep quiet for long. One went public after being scooped. The other tried to keep it controllable.
In December 2013, Target confirmed that hackers had accessed as many as 40 million credit and debit card accounts. In September 2015, Volkswagen's board judged its diesel emissions fallout controllable, and comparable to past cases that had been resolved amicably.
Target was not first to tell. On December 18, 2013, security blogger Brian Krebs reported the breach. Target confirmed it a day later. On January 10, 2014, Target disclosed that personal information for up to 70 million customers was also stolen. CEO Gregg Steinhafel resigned effective May 5, 2014.
By the end of fiscal 2016, Target's cumulative gross breach expenses hit $292 million. In 2017, Target agreed to pay $18.5 million to settle with 47 states and the District of Columbia.
Volkswagen's containment did not contain the cost. It pleaded guilty to three criminal felony counts and paid $4.3 billion to U.S. authorities. By July 2020, Volkswagen had repaid more than $9.5 billion to U.S. car buyers. By 2020, Dieselgate had cost Volkswagen more than 30 billion euros, or $33 billion.
Neither case is a clean experiment, and Target's slower start still cost its CEO his job. But both point the same way. A crisis tends to become public before you decide it should. Plan for disclosure, not containment.
The records behind this video
Every figure in the video comes from these Decision Records, each with its sources.
Run this decision
The Crisis Response Strategy Pack. “What is one more quarter of not acting worth?” The framework, a model, a deck and the sourced cases, for running the same call on your own business. See the pack, $499 → Or start with the free guide to this decision →
