VW’s Corporate Culture Costs them over $18 Billion!

VW’s Corporate Culture Costs them over $18 Billion!

Don’t believe me? Read what Bob Lutz had to say about VW Chairman Ferdinand Piëch, who developed a culture of fear and intimidation.

Here is a short excerpt from Bob’s article:

I sat next to him at an industry dinner in the Nineties, just after the fourth-generation Golf had debuted at the Frankfurt show. I told him, “I’d like to congratulate you on the new Golf. First of all, it’s a nice-looking car, but God, those body fits!”

“Ah, you like those?”

“Yeah. I wish we could get close to that at Chrysler.”

“I’ll give you the recipe. I called all the body engineers, stamping people, manufacturing, and executives into my conference room.
And I said, ‘I am tired of all these lousy body fits. You have six weeks to achieve world-class body fits. I have all your names. If we do not have good body fits in six weeks, I will replace all of you. Thank you for your time today.’ “

“That’s how you did it?”

“Yes. And it worked.”

According to Bob Lutz, that culture of fear may have yielded short term results, but now VW is paying for it (literally).

VW will have to pay almost $15 Billion to settle after an emissions-cheating scandal. They have their culture to blame.

In VW’s culture, employees would rather cheat an emissions test than risk losing their jobs. Is that the type of environment you would expect your employees to thrive in?

Whether you have taken the time to identify the beliefs and actions that will make up your corporate culture or not, you have one!  I’m sure Ferdinand Piëch didn’t say, “I want my employees to fear me and do whatever it takes to preserve their jobs.”  But, by his actions, that is the culture that was perceived.

And now it is costing the company billions of dollars.  When a culture is perceived by your employees and not distilled by positive actions targeted towards your business objectives, you quickly lose control.  You also lose all the benefits that come from a positive corporate culture – open communication, team work, innovation and customer service.  Wouldn’t you rather have your employees driven by the desire to be successful rather than driven by fear?