Last month, Oliver Schmidt, a former Volkswagen executive was sentenced to seven years in prison over 'Diesel-Gate' emissions scam.  As you may recall, the car company had installed secret software in nearly 11 million vehicles worldwide to enable them to falsely defeat pollution emission standards tests.  Of the eight Volkswagen executives charged over the illegal scheme, Schmidt is only the second to be sentenced.

While it's good to see that the former leadership team at the manufacturer is being held accountable for its disgraceful tactics, one must wonder if the Company Culture at Volkswagen will ever change.  I suspect that it won't, for these two important reasons:

1.     An Insider Can't Drive Change

After the scandal broke in 2015, then CEO Martin Winterkorn resigned in disgrace and Matthias Mueller was named Volkswagen's Chief Executive.  As a former VW product strategy head under Winterkorn who was then promoted to CEO of subsidiary Porsche AG, Mueller may not have been the best choice to succeed Winterkorn - especially when driving needed company culture change was near the top of the agenda at the manufacturer. 

After all, any significant paradigm shift is always driven by "outsiders" and not those that are benefiting from the current paradigm. Why would you change something that has made you successful?  Mueller is a VW insider who has benefited by and been quite successful within Volkswagen's current cultural paradigm.  He's not likely to make the tough changes needed to shift the culture.  Yes, he's replaced 7 of the top 10 VW execs that he inherited, but, most of those were implicated in the scandal.  So, those changes aren't indicative of any kind of commitment to change the culture at the company.

2.     Excuses Are Easy

Rueter's reported last year that the CEO says changing VW culture proving tougher than expected.  The piece described Mueller pointing to his middle management team as being resistant to the changes in accountability and transparency that he is trying to make, suggesting that:  

"There are definitely people who are longing for the old centralistic leadership...I don't know whether you can imagine how difficult it is to change the mindset."

But, pointing to problems of resistance by the "clay layer" in an organization amounts to a poor man's excuse for a lack of leadership. Don't these people report up to you through the chain of command?  If they can't learn new behaviors, maybe they need to find other places to work.   The buck stops here, as Truman used to say!

What would you do, if you were VW's CEO?  Here are some modest suggestions:

1.      Inspire Through Story-Telling - Paint a vivid picture of what VW looks like when it sheds a strict command-and-control culture.  Talk about who works there.  Describe how work is done.  Discuss how innovation is created.  Provide a discourse about how service is delivered.  Help people see what you're trying to accomplish within the company.  

2.      Model the way - Show your team what "good" looks like.  Empower them by asking them to get the job done and not micro-managing every decision. Don't criticize poor decisions.  Take time to teach new behaviors so better choices are made the next time. Reinforce successes through praise and calling out important demonstrations of desired behaviors by staff.

3.      Challenge the Status Quo - Is there really only one way to do the job? If you want to promote a more accountable culture, you must allow your people to be creative in the way they get the job done.  That's not to say that goals aren't met and processes aren't optimized.  But, it does mean that it's OK to question how we've been doing things for that last 100 years.

4.      Enable Change Through Your Action - Be fair and consistent.  Be positive and stop making excuses for why things aren't working or moving fast enough. Communicate what you want - early and often - once is not enough for people to take you seriously.  Don't procrastinate!  Just do it!

To close, I doubt that VW will change its culture.  It seems to be born out of a tradition of searching for those that made mistakes over the search for mistakes. Lots of hard work and discipline is needed to change that attitude.  But, I'm willing to be surprised.  If you need some help changing your current company culture, please be sure to reach-out to me.  I have some approaches that I can share that will help.

Published on: Jan 8, 2018
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