When Culture is Everything – What Happened to VW’s?

While visiting a client yesterday to discuss developing the business values and behaviours, I was pleased to hear the new Operations Director state that in her opinion, culture was everything. It doesn’t matter what processes, branding and technology you put in place, if the company does not have the right culture, progress will be slow.

Often when selling the concept of values and culture to Board members, I find they see this as a ‘nice to have’ rather than a real benefit that will impact on the bottom line. Time and again recently, we have seen how losing sight of values can cost a business very dearly.

 “Not everything that can be counted counts, not everything that counts can be counted”           Albert Einstein

What happened to VW’s culture and values?

This has been demonstrated by the catastrophic VW scandal. As someone who has bought VW cars for over 30 years, because of their reliability and the trust I had in them, I was horrified to learn of their break in integrity. What led a company that is a top global brand, which is trusted around the world, to forsake it all for short term gains? This is especially “when Volkswagen listed its intangible assets (which includes goodwill) at $67 billion”. Their name means ‘the people’s car’. When did their values change? Did arrogance or greed overcome commonsense?

Whatever the reason, the cost is enormous with current potential fines of $11billion, loss for product recalls, share value drops of $18billion and the uncountable loss of faith, not just for their product, but diesel cars in general. The ramifications are going even wider into other car manufacturers and governments. Like Humpty Dumpty, can trust, once broken, ever be put back together again? Will the brand be forever tarnished?

Lessons to be learnt

As a smaller business, you may think this does not apply to you. Culture is just as important in any size business and perhaps even more so when owners are in daily close contact with employees. Just because culture is not tangible, it doesn’t mean it won’t impact on you. Gravity isn’t tangible, but it is painful if you try to ignore it.

The values of a business impact on the behaviours that occur and the culture that this then creates. What your values are and how you live those values will impact on your decision making, employee satisfaction and motivation, brand reputation and ultimately, whether customers will buy from you. All of these affect profitability.

In a previous article I wrote about values – lost in translation. I would suggest again that you take time to think about your values, why they are important to you and how you can keep them with you at all times. Whatever you do, please do not ignore them, as the cost of doing so can be enormous.