The Volkswagen Cheating Scandal: A Story of Deliberate Corporate Malfeasance and Numerous Leadership Lessons
When I first read about the Environmental Protection Agency (EPA) announcement on Volkswagen’s wrongdoing in September 2015, I instinctively knew that this was not likely to be just another corporate scandal that gets swept away in a few months.
I wrote to myself: “this is a story with legs, long-term consequences, and numerous iterations to come.”
I also knew the story would touch all of my professional hot buttons — leadership, corporate responsibility, corporate image management and corporate branding, business ethics, accountability, and the desire to see those in positions of power punished if their actions are found to be illegal or done for personal benefit.
How right I was. And now, 18 months after this corporate cheating scandal became public, the story is still far from over.
The Volkswagen diesel emissions test cheating scandal and its various offshoots have had a far-reaching impact on a wide range of parties. This impact has been financial, environmental, political, and regulatory. The parties affected include car owners, Volkswagen’s leadership team and employees, shareholders, car dealers, government officials, regulatory agencies, the media, the automotive industry, and even the Made-in-Germany brand.
Leadership Lessons from the Volkswagen Saga is a story of deliberate corporate malfeasance that has impacted the automaker’s car brands, leadership structure, governance, corporate reputation, current and future financial results, and its corporate culture.
This was not corporate negligence or a correctable mistake that took place, but rather deliberate malfeasance on a grand scale and over a seven year period of time (in fact it most likely would be continuing today had it not been for the testing conducted by West Virginia University).
Volkswagen did not overlook something in production and take a risk assessment that the cost of recalls outweighed fixing the problem during manufacturing. Rather, engineers at the company deliberately installed software into the management systems of over 11 million vehicles whose sole purpose appears to be to cheat the known procedures of emissions testing.
It is a story full of leadership lessons on corporate governance, branding, crisis communications, corporate responsibility, business ethics, and individual accountability relevant to leaders of any size organization.
The Volkswagen scandal is now the benchmark for corporate cheating and corporate scandals. Just as Exxon Valdez oil spill in 1989 was constantly brought up as the benchmark for oil spills until the BP Deepwater Horizon explosion and subsequent massive oil spill in the Gulf of Mexico in 2010, this story will be dredged up as the yardstick for future corporate scandals.
The former and current executives from ExxonMobil, BP, Enron and other corporate disaster and malfeasance stories of recent years must all be thrilled! They can finally escape the limelight of future media cycles.
The Volkswagen saga is a huge wake-up call for leaders at all levels of any company or organization. And it will continue to be so for years to come.
Leadership Lessons from the Volkswagen Saga is available on Amazon in both Kindle ($8.88) and paperback ($18.88) formats.