Volkswagen is the latest and possibly the highest profile in a long line of self-destructive corporate disasters deriving from lack of integrity at the top. As announced by VW last week, the current provision set aside to deal with the issue is a huge €6.5bn, meaning the company is set to pay a colossal price for its mistakes
The boss of Volkswagen Group of America admits his company has “totally screwed up” over the vehicle emissions scandal. So how does this issue of integrity impact all of our businesses?
Success begins with honesty
The apology comes amid claims that UK and European vehicles from VW and other brands could be caught up in the scandal, which has rocked the motorindustry and could see VW fined $18bn (£11.6bn) for programming cars to deliberately cheat their way through emissions tests. When driven normally and away from a test environment, the US Environmental Protection Agency (EPA) claims a number of VW and Audi cars produce up to 40 times as much nitrogen oxide as is allowed by law for diesel engines.
So what does this say about leadership and integrity in the wider business world?
Warren Buffet famously said:
“Look for three things in a person: intelligence, energy and integrity. If they don’t have the last one, don’t even bother.”
At The Results Centre, one of the key tenets of our executive coaching is ‘being your word’ – an approach to working in a space of integrity. Our 3 Ts programme begins with ‘Truths’, which includes a deep dive into your culture and ways of working. You can find out more about this groundbreaking approach by emailing us at info@theresultscentre.com
If there was any doubt that a cost of €6.5bn is potentially disastrous, the other side of the equation is equally compelling. In his book Return on Character, Dr. Fred Kiel collected data from over 80 CEOs over a seven-year period. High integrity CEOs produced a multi-year yield of 9.4% whilst, at the other extreme, a return of only 1.9% was achieved. Additionally there was a 26% improvement in employee engagement in the former group.
Supporting top executives to lead with integrity
Often the topics explored in coaching concern the qualities of leadership and I would argue integrity is always a key factor in this conversation. However, simply being a ‘good’ person is not always enough when individuals are under severe pressure to perform and have the final say so on difficult decisions that others would not wish to take.
As a result, senior leaders in business are often lonely and lack constructive criticism in the form of someone who will challenge their decisions. Due to this, it’s not surprising that some CEOs and directors fall into the trap of believing in their own personality, warts and all.
Staying connected as a leader
Conversations concerning accountability throughout organisations, from top to bottom, are often very revealing. How many executives can honestly say they really ‘own’ the vision, direction and decisions that are made under their leadership? And who is there to listen to and support them as well as challenge them from an independent ‘unattached’ perspective in order for the ownership of this vision to be able to happen?
At The Results Centre, too often we find our clients have reached the pinnacle of their careers by rising through the ranks from the perspective of what they have done and what they know rather than the inspirational leader they have the potential to be. Coaching can and does impact on this conundrum – how do leaders, particularly those newly promoted or on their own at the top, resist the urge to micromanage or, at the other extreme, become totally out of touch with what is occurring in their business?
Moreover, how does a leader stand in the place of complete integrity as an individual and embed this stance throughout his or her organisation? What were the conversations and challenges going on inside VW? We will probably never know but what we can know is the direction, culture and ‘way of being’ we set within our own businesses. One way to bring this in to focus is to think about the implications of our own actions and the potential of our own version of a €6.5bn provision!!
Email us at info@resultscentre.com to set up an introductory chat to discuss how we can use our proven results programmes to support you to use your leadership to foster a positive workplace culture built on integrity, leading to better engagement and more success.
Author: Alan Denton, Results Director, The Results Centre