Fixing Volkswagen Requires Manufacturing Candid Conversations

When Volkswagen’s emissions-hiding scandal surfaced, then-CEO Martin Winterkorn initially tried to ride out his leadership crisis, claiming he had been unaware of the company’s use of pollution-hiding software. Authorities are investigating, but currently no public evidence directly links senior management to the rigging of diesel engines marketed as green technology. Winterkorn eventually agreed to resign to give the company a chance to recover, which might have been worthy of some praise, but then Winterkorn insisted he was “not aware of any wrongdoing on my part.” This article examines why he bears responsibility for the crisis as a leader and examines the related lessons that should be learned. The auto sector is under huge pressure to cut both costs and emissions while also improving vehicle quality and safety. As a result, and as every CEO knows, the temptation to cheat is enormous. But as a leader, it never pays to focus on rewarding results while ignoring how they are achieved, especially when conducting business in environments that are highly competitive. In other words, trust is only a good thing when you have a culture that supports the right behaviour. The essence of good risk management is asking appropriate questions and getting truthful answers. Leaders need to listen to the “whispers” in the organization. The Volkswagen saga is yet another example that all three Cs of leadership — competencies, character and commitment — are essential for good leadership.