Why Volkswagen are no better than a child stealing sweets
Every year when I was growing up, my parents forced my brothers and I to give up sweets for Lent. For 40 days and nights we had to take any sweets we were given and put them in Tupperware containers, which we would keep in our bedrooms. I, as someone with a fairly significant sugar addiction, found this practice a sophisticated form of child abuse. My parents, naturally, had a different view.
One year, a week or so into this ordeal, it struck me that if I were to just lift the lid of the Tupperware and sneak out a single sweet, I could feed my addiction whilst appear to be obeying by the rules. Just one more I would say, each time I went back for another, and another, and another. I had cracked the system!
However, before long my mother became suspicious and demanded to look inside my Tupperware. Realising I’d been rumbled I played the trust card:
‘But mum, if you really trusted me, you wouldn’t need to look!’
She was not convinced, opened it anyway and stared down at an almost empty container. Needless to say, the sh*t hit the fan, and when Easter finally arrived I had to abstain a further week whilst my brothers gorged themselves on chocolate eggs. Lesson learned.
I was reminded of this event whilst reading about the Volkswagen emissions scandal, which now looks to engulf the rest of the automotive industry. Automotive businesses like Volkswagen, Mercedes and Honda would all claim to be purposeful, responsible businesses. Their corporate websites would be full of claims of how they are improving our world. Yet in reality, they are doing the opposite.
Much like my sweet-scrumping former self, these organisations set out with good intentions. They probably spent a fortune creating grand purpose statements, plastering them over walls and into employee handbooks. Boasting about their purposeful credentials. But seemingly, that’s where it stopped; there was no real commitment to it in practice.
For many big companies this is how it feels. Purpose is a tick-box exercise, something to say you have ‘done’ in order to say you have purpose. But it doesn’t translate into action, or tough choices. It carries about as much weight as a FIFA internal investigation.
As a result there is little transparency in this sort of leadership either. Much like a child snaffling illicit sweets, these organisations can’t be open about their activities when they deviate so greatly from their intended purpose. Worse still, they make grand claims to be purposeful as a distraction from how self-serving they are, and then fudge the numbers to make themselves look good. When employees realise the business purpose is meaningless, it gives licence to any sort of activity, no matter how dishonest.
Because of course, if you are caught, there’s no accountability either. An organisational culture that treats purpose as empty words doesn’t have accountability. People might lose a job, but they’ll never go to prison, or face a lifetime ban from that industry. They never face real consequences.
There has been only one US banker jailed following the crash in 2008. Only one following the Barclays Libor Scandal. According to Companies House, as many as 4000 known alleged fraudsters, money launderers, terror financiers and corrupt officials currently hold directorships of UK companies. How can an organisation claim to have purpose, when it is accountable to no-one?
At least I faced the music for snaffling sweets. And I was eight.
In modern businesses we talk about purpose, but how many leadership teams are truly committed to seeing it through, even when it’s inconvenient? How many are truly transparent in their efforts to pursue it? And how many accountable, personally, for failure to uphold that purpose?
Sometimes a leader just instinctively knows how to do this, with integrity and authenticity. When the Nintendo Wii U Console bombed, then-CEO Satoru Iwata slashed his own salary in half to avoid having to make redundancies. He asked his board to cut theirs by 20-30%.
This move showed his commitment and accountability. It showed his employees, and his customers that he genuinely cared and that they mattered. When he sadly passed away in July 2015, the outpouring of grief from Nintendo and across the gaming community was no surprise.
Iwata was a leader who embodies the principles of purposeful leadership. But until we consistently have leaders who are committed, transparent and accountable as well as purposeful, we won’t create businesses we can trust and be proud of. We’ll just have a lot more Volkswagens. And the world has had quite enough of those.