HOW WE, AS LEADERS, SHAPE OUR COMPANY CULTURE
In 1960, Volkswagen ran a one-word headline in its advert about a Beetle that would never make it to a dealer. The headline was simply ‘Lemon.’ It was inspired by Volkswagen engineer Kurt Kroner who had discovered a blemished chrome strip on the glove compartment on a Beetle going through quality control. This blemish was enough to reject the vehicle. This action inspired legendary copywriter Julian Koenig, from the fabled Doyle Dane Bernbach advertising agency on Madison Avenue, to pen the ‘Lemon’ ad.
The advert pointed out how many checks each car went through before it was considered good enough to leave the factory. "This preoccupation with detail means the VW lasts longer and requires less maintenance, by and large, than other cars," read the advert. "It also means a VW depreciates less than any other car. We pluck the lemons; you get the plums." The advert concluded with the argument that Volkswagens maintain their value better than other automobiles.
That ad, along with the rest of Doyle Dane Bernbach's Volkswagen campaigns, introduced America to what would become one of the most loved and respected brands of all time: a brand that stood for quality, honesty, and a commitment to its customers. A brand which up until 2014, carried a goodwill valuation of $23 billion on its balance sheet. While goodwill is an intangible asset, it's an important one, because it sums up the thoughts, beliefs and expectations that come to mind when someone sees the logo or hears the name. Put simply, it's a measurement of trust.
This explains why, back in the 90’s, the Volkswagen Golf was widely regarded as a quality car worth paying money for. This was the car to which my generation, fresh out of university, aspired. We believed that a Volkswagen Golf really would last longer and require less maintenance than other cars, and that it would depreciate far less than other cars too. We trusted Volkswagen.
Fast forward to 2015. That reputation, carefully nurtured over decades, has been ruined because Volkswagen has been in the news for installing software in diesel engines that could detect when they were being tested, changing the performance accordingly to improve results. Many customers bought the “clean diesel” cars because they’d been told they were cleaner for the environment than the alternative. Volkswagen showed, through its intentional cheating and deceit, that it can’t be trusted.
Volkswagen’s blatant, deliberate lies were the result of its ‘grow at all costs’ strategy where the goal of hitting corporate sales targets greatly outweighed two of its core corporate values, “Ethics” and “What’s Right For Customers.” Volkswagen shifted from a company that rejected a perfectly good car because of a tiny blemish because it was so rigorous about its quality control to a one that was prepared to cheat its customers in its pursuit for aggressive growth.
Somewhere along the line Volkswagen’s culture changed.
Because so much of our organisational culture is tacit and below the surface, it’s not always easy to identify and change. Culture can feel quite nebulous. This explains why only 28% of the respondents to Deloitte’s 2016 ‘Global Human Capital Trends’ survey felt they understood culture well and only 19% thought they had the right culture despite 82% of the respondents saying they believe culture gives companies a competitive advantage.
One way to look at culture is to think of it like an iceberg. Some aspects of a company’s culture are visible on the surface, while others are submerged far beneath the surface.
The part of the iceberg we can see is made up of the mission, vision, core values, strategy, goals, policies - ‘the way we say we do things around here.’ Beneath the iceberg’s surface is the ‘way we really get things done around here.’ This is made up of unwritten rules, perceptions, assumptions, structures, stories and traditions, some more conscious and explicitly expressed than others.
Culture is very much influenced by our behaviour as leaders. We set the tone for the culture in our business. That’s why it’s so important to have a statement of our values as this gives a yardstick against which we can measure our decisions, behaviours and actions. Whether this is a recruitment decision or a decision about how we treat a customer.
But a statement of our values is just a starting point. Businesses are shadows of their leaders. They’re shaped by the worst behaviours we’re willing to tolerate. That’s why we must work out what living our values means for our business and demonstrate how we walk the talk.
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Questions: How would you describe the culture of your company? And more importantly, how would your customers and key stakeholders describe your company culture? I love reading what you think, so please do share your thoughts in the comment box below.
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I’m Denyse Whillier, a London based business coach and consultant. I guide entrepreneurs from across the globe to achieve profitable, scaleable growth and create businesses that are Built To Succeed™. Built To Succeed™ is my proven success system, developed during my 8 years in the trenches as a CEO, 25 years’ experience at senior leadership and managerial level and training at Cranfield School of Management, the UK's leading business school. It's this background that sets me apart and helps my clients to get BIG results.
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