Volkswagen and the Pitfalls of The Blame Game

We are no doubt all aware of the troubles surrounding the previously “untouchable” VAG Group, who in an effort to become the biggest car manufacturer in the world (overtaking Toyota) would appear to have been taking some chances and apparently “cheating” to make their engines appear cleaner than they are. The initial position of the group was to encourage the Chief Executive Martin Winterkorn to fall on his sword and we now read (BBC News online):-

“Olaf Lies, a Volkswagen board member and economy minister of Lower Saxony has told Newsnight some staff acted criminally over emission cheat tests.”

“He said the people who allowed the deception to happen or who installed the software that allowed certain models to give false emissions readings must take personal responsibility”.

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Interesting and I guess at this level senior heads “have to roll” but what damage will these events do to the ability of VAG to be a dynamic leader in their industry. What will the skilled employees think about developing ideas if they are going to be personally castigated and penalised if things go wrong?

Of course the above is a high profile and extreme example of bad decision making and ineffective control but let’s ask the question of you - what sort of organisation do you run? How do you develop your people and your business? How do your people feel about putting their head ‘above the parapet’ to take calculated risks and challenge the status quo? In other words - make a significant difference.

What they do, how they react and how truly productive they are relates directly to the style and culture you foster. Businesses develop (and markets too) by experimenting and learning from mistakes, then ensuring that the errors made initially are not repeated and that the idea advances in better shape. All through history mankind has developed by learning from mistakes made, changing things and eventually coming up with progress. Galileo, for example, challenging Aristotle’s centuries old view that heavier objects fall more quickly than lighter ones.

The same is true in business, to encourage a truly entrepreneurial and progressive business you need to ensure your people can feel that they can make a mistake and not be castigated but rather mentored and encouraged to look at fresh options or another way. Market leaders achieve that position by constantly challenging the status quo and thinking ‘is there another way’?

Henry Ford, widely accredited (correctly) with changing the face of the motor industry, didn’t get it right first time. His first two ventures, the Detroit Automobile Company and the Henry Ford Company, failed miserably until he learned from his errors and got it right (big time) with the Ford Motor Company. He introduced the assembly line that transformed production and lowered manufacturing costs (an idea he developed from a visit to a Chicago Meat Packer’s premises!).  James Dyson tried over 4000 iterations of his cyclone vacuum cleaner before he got it right and took the market by storm. Compare these successes to the country with one of the strongest ‘risk averse’ mindsets (Japan) that has been treading water for the past twenty years!!!

Blame is driven by biases in the human brain and undermines our capacity to learn. Managers often feel that it is expedient to blame – if a company disaster can be blamed on a ‘few bad apples’ that’s alright then isn’t it?

If your first reaction is that the person closest to a mistake has been negligent, this anticipation of blame will cause that person to cover up mistakes (and thereby learning) and your business stagnates. In other words if you don’t know what went wrong how can you put things right? How can the system adapt without open information and honesty?

We don’t advocate uncontrolled experimentation (or illegal practices!) which can be costly and non productive. But, if within a controlled environment and a culture of encouraging ideas, you permit  your people to take risks and learn from the experience, your business stands a far better chance of outperforming your competition. As we say in our ‘Breakthrough/ Step Change’ performance programme – the trick is to get the people in your organisation who possess ‘know how’, thinking creatively – from here great leaps can be made.

If you would like to discuss how Tinderbox can help contact us now.

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