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VW CRISIS - WHAT PRICE FOR A LEADER'S INTEGRITY?

By Alan Denton | 2nd December 2015

VW CRISIS - WHAT PRICE FOR A LEADER'S INTEGRITY?

This article looks at some of the statistics behind the value of a leader’s integrity.

This article was published by theresultscentre.com.

Volkswagen is the latest and possibly the biggest in a long line of self-destructive integrity based corporate disasters. As announced by VW last week, the current provision set aside to deal with the issue is a huge €6.5bn.

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?

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 motoring industry 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.

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.”

 One of the key tenets of our executive coaching is ‘being your word’ – an approach to working in a space of integrity. If there was any doubt that a cost of €6.5bn is potentially disastrous the other side of the equation is equally compelling. Dr. Fred Kiel in his bookReturn on Character collected data from over 80 CEO’s over a seven-year timescale. High integrity CEO’s 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.

How could coaching impact on this subject?

Often topics explored in coaching concern the qualities of leadership – I would argue leadership with integrity. Senior leaders in business are often lonely, lacking in challenge and can fall into the trap of believing in their own personality. Conversations concerning accountability throughout organisations – top to bottom – are often very revealing. Do executives really ‘own’ the vision, direction and the decisions that are made under their leadership – who is there to listen to and support them as well as challenge them from an independent ‘unattached’ perspective?

Too often we find our clients have reached the pinnacle of their careers by rising through the ranks from a perspective of what they have done and what they know rather than the leader they could 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 that throughout his or her organisation? What were the conversations and challenges going on inside VW – we will probably never know? What we can know is the direction, culture and ‘way of being’ we set within our own businesses or, if not, think about the implications of our own actions and the potential of our own version of a €6.5bn provision!!