Leadership Lessons! What can we learn from the VW Debacle?

Do you trust your leaders? Or do your staff trust you?

Trust is paramount these days. And belief in your brand is now is tested like never before. And this goes for both your customers and your people.

German engineering has been world renowned for generations. Rightly so. So it came as a huge shock when Volkswagen were found to be rigging their diesel emission software. How could this happen? German engineering is solid, honest, and infallible.

In the USA market, diesel does not have a good image. Therefore generally it is not a sought after fuel. It's therefore harder to sell diesel cars. So the efficiency and environmental angle becomes quite compelling. Proving to the market that your emissions are lower than your competitors is useful.  Even if it is untrue...

So VW rigged their software to compete.

But why did this happen?

Does this mean that VW employed a bunch of criminals? No.

The culture was to blame. And culture stems from leadership. A leader that does not tolerate failure and whose focus is purely to be number 1 can be destructive. Hugely self destructive.

Failure, at times, is inevitable even if you are VW. So how did this giant lie exist for so long?  I would contest this was because this kind of behaviour became normal and the culture surrounding it accepted this as being more important than truth. To a VW employee, aligning with unrealistic expectations (and therefore not failing) was more important than truth and reality. Proof indeed that an authoritarian approach underlined with a generous dose of fear is unhealthy to say the least.

The following quote is taken from a Reuters article October 10th and is written byAndreas Cremer and Tom Bergin.

Five former VW executives interviewed by Reuters and industry observers describe a management style under (previous CEO) Winterkorn that fostered a climate of fear, an authoritarianism that went unchecked partly due to a company structure unique in the German motor industry.

"The culture and organizational structure of Volkswagen are not comparable to Daimler or BMW, it is something specific," said Professor Ferdinand Dudenhöffer, automotive expert at the University of Duisburg-Essen. "All you hear when you speak to people is that there is a special pressure at VW."

This episode has hurt brand value in unimaginable terms. The vehicle recall value alone will cost the company $Billions!

A culture that is intolerant of mistakes or so obsessed with an unrealistic definition of success can do strange things to people's behaviour.

For a different example, in an interview on BBC Radio 4, the ex professional tour cyclist David Millar spoke of the drug culture of the tour. Once himself banned from cycling for taking performance enhancing drugs, he explains that he and his peers who were active in the elite sport at that time never got into cycling with the intention of taking drugs. Millar arrived on the scene to find that drugs were the norm. Whilst he didn't want to take them, his want for competitive cycling overrode his moral compass and he conformed to that cultural norm. It seems drugs were tolerated as a normal activity by the riders, coaches, managers and even to some extent by the governing body. The leaders. So why put yourself at a disadvantage? Why be the black sheep?

Incidentally David Millar now helps WADA and has turned his life around.

However both these different examples prove that a culture can do strange things to rational, reasonable and honest people. It can make them behave in a way that does not necessarily reflect upon who they were or are as individuals. But the need to conform, (a basic and possibly impossible human behaviour to break) overrides an individual's own operating software, such is the power of fear of loss.

So what do we learn from this?

It is the responsibility of leadership to inspire. To create cultures where people are challenged to grow, not scared and stressed out to the extent they hide mistakes and lie through fear of failure. Why? Because people who feel safe perform better, are healthier, give more back to the business and stay longer. Those who dictate from afar, need to be a thing of the past, indeed a remnant of a bygone age.