Culture Eats Volkswagen for Breakfast

We don’t yet know the details behind the failings at VW, and probably won’t for months and years to come. We do know that it is a PR disaster and will cost the company billions. And we also know it is not the first and won’t be the last firm to shoot themselves in the proverbial foot (or perhaps both feet in this case).

But what is behind these large scale failings that we continue to see across different industries and particularly in Financial Services?

The tone of the VW group objective is around quality, excellence and ironically the environment – “The Group’s goal is to offer attractive, safe and environmentally sound vehicles which can compete in an increasingly tough market and set world standards in their respective class.” Nothing remotely subversive or mercenary here and no suggestion of too higher priority being placed on profits or shareholder returns.

And I think it can be safely assumed that their strategies, policies and procedures will support these objectives.

So if VW as an organisation has a sound objective and has processes and controls aligned to that objective, I can only conclude this must be a people and behaviour issue, whereby a group of individuals have taken it upon themselves to ignore not only policies, processes and controls but the spirit of the organisation and what it stands for.

A sub-culture within a particular group or groups appears to have formed whereby individuals have lost touch with what is important for the organisation and acted upon what is important to them – to the detriment of the whole firm.

It is hard for organisations of any size to understand and manage their overall culture and the sub-cultures that will inevitably exist within discrete groups (e.g. functional areas, geographic locations, roles, management layers etc). But by seeking to understand your current culture and comparing that with the “right-culture” for your organisation you have an early warning system for addressing potential gaps. Not having that level of understanding creates significant and potentially very costly risks.

I wonder how many organisations feel confident that they understand the “right-culture” for them and to what extent the “right-culture” exists throughout their structure.

OptimaRS helps organisations within Financial Services address these questions in conjunction with providing regulatory advice and consultancy.


Written by
Stephen Howlett

Oct 11, 2015
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