Industry News

Will culture kill Volkswagen?

September 28, 2015

There is a large contingent of travel enthusiasts (not all of them ex-hippies) who’ve enjoyed a long-standing romance with the iconic VW bus. Some of them have owned a model of the van for decades; even a former neighbor of mine, now in his retirement years, still fondly reminisces about driving across country in his youth “to find himself” and reluctantly back home again.

I once knew a family that was so obsessed with their Volkswagen bus that they did everything possible to keep it running. Some 20 years into the relationship, however, the bus gave up and announced that the romance was over by catching fire while the owners were driving it across a bridge on a busy city street. The divorce papers were served and the family sadly accepted that there was no chance for reconciliation.

With the recent crisis of integrity, culture and leadership at Volkswagen, fans of the brand like the family I knew might be left with only distant memories of their favorite VW model. CEO Martin Winterkorn has stepped down in disgrace following the company’s admission that some 11 million vehicles are equipped with software that downplays the cars’ actual emissions during testing. In short, Volkswagen cheated in an effort to beat U.S. emissions regulations for its diesel vehicles, but the scandal spread to Europe as well. More disturbing, accounts indicate that they’d been cheating for some time and working diligently to hide it.

While it’s unlikely that a lone VW engineer decided to rig the software to falsify emissions, even if that is the case, one must question what culture is in place at Volkswagen that allowed such a transgression to progress unchecked for so long. Who was asleep at the switch? Who was intentionally looking the other way? Who was aware, and just fine with the cover-up?

A full account of all parties involved has yet to be completed, but you can bet your antique VW Westy that leadership must shoulder the bulk of the blame. Their behavior has erased billions of dollars from Volkswagen’s market value, with the company experiencing a 30% stock plunge since the scandal became public, creating the possibility for ripple effects throughout the industry. Recent news reports indicate that Volkswagen AG has demanded the resignations of top engineers and has brought in Porsche’s CEO Matthias Müller to run the entire company.

Somewhere in the process of growing Volkswagen to its dominant position as Europe’s largest automaker, leadership lost sight of the promise of the brand, and by association, compromised the other iconic brands it now owns, such as Audi, Bentley, Porsche, Lamborghini, Bugatti and Ducati. Perhaps there in lies the problem.

Credit: Volkswagen Credit: Volkswagen

In 1982, the company began expanding outside of Germany and has grown significantly through partnerships and acquisitions since then. There are now 12 brands produced under the Volkswagen AG umbrella and at least as many different business cultures to manage. Analyst reports indicate that a major traffic jam preventing the nimble responsiveness necessary to function well in the market occurred at Volkswagen AG’s headquarters. This is attributed to Winterkorn’s leadership style, a top-down, hierarchical approach that obviously failed to create a culture built on the kind of principles and passions that would have snuffed the embers of activities contributing to the emissions scandal long before they flamed.

Through years of scientific research, 10 dominant passion archetypes have been identified in the work environment, and they have largely been associated with individual personality types. The 10 passion archetypes are used to codify the strengths an individual leader is likely to enjoy as well as the vulnerabilities they might be subject to as a result of carrying those passions as part of their personality.

If corporations could have a passion archetype (and I believe they do), Volkswagen would be the epitome of the “Builder” passion. It’s been a growth-oriented, goal-seeking entity that has relentlessly pursued market dominance -- and, as recent evidence suggests, apparently at any cost. The strength of a Builder passion is that it imbues one with the drive to achieve, the will to persevere, and the courage to overcome seemingly impossible obstacles. But the vulnerability of this passion is the tendency to cut corners and ignore the rules, which are the very behaviors Volkswagen has demonstrated.

Volkswagen leaders have created an imperialist culture, where the desires of the company supplant the laws of the countries in which they operate and endanger the quality of the global natural environment. They’ve created a culture of lip service to sustainability, without the concomitant action to back it up. Recent events call into question the veracity of the company’s sustainability report and its code of employee conduct. While these declarations may outline expected behavioral norms, the company’s deliberate falsification of data makes these documents no more than corporate pabulum, hardly worth reading because they exist in a culture where they’re not enforced.

Matthias Müller is facing perhaps the single greatest challenge of his career. He is coming into the CEO position on the heels of Volkswagen’s most recent scandal, which followed an executive power struggle earlier this year between Winterkorn and former supervisory board Chairman Ferdinand Piech (grandson of the engineer who developed the storied VW Beetle). After wresting control over the fallout from the egregious behaviors of ousted former leaders, Müller will need to turn his attention to how the culture allowed this to happen in the first place. What’s clear is that it will take more than policy to repair the leaks in the hull of this automotive battleship. Nothing short of a full review of the talents and passions of the people who help him navigate the next chapter of the company’s history will be sufficient to right the now listing vessel that is Volkswagen AG.

Alaina Love is chief operating officer and president of Purpose Linked Consulting and co-author of “The Purpose Linked Organization: How Passionate Leaders Inspire Winning Teams and Great Results” (McGraw-Hill). She is a recovering HR executive, a global speaker and leadership expert, and passionate about everything having to do with, well, passion. Her passion archetypes are Builder, Transformer and Healer. You can learn more about your own passion archetypes here. When she’s not working with her Fortune 500 client base, Love is busy writing her next book, “Passionality,” which explores the alignment of personality, purpose and passion, and how it contributes to our well being. Follow Love on Twitter, Facebook, YouTube or her blog.

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