How a Toxic Culture Can Sink an Organization. Could You Be the Next VW?

Two men with differing placards loudly disagreeing with each other

What is it like at your organization? Do you feel you can ask questions of and raise issues with your boss without recrimination? Are you able to speak openly and make suggestions as ideas are presented in meetings? Is constructive debate encouraged and rewarded?

These are questions that highlight the openness of communication at a company. Where free and easy communication is the norm, ideas are exchanged and evaluated comfortably until the best one is agreed upon. Where communication is closed, decisions are made unilaterally and often arbitrarily. Where would you rather work?

In fact our recent Organizational Alignment Research of 410 companies across eight industriess identified the timely and open flow of communication as one of the top seven factors that creates organizational alignment, higher profits, faster growth, more satisfied customers and higher employee engagement. In highly aligned companies, 81% agreed or strongly agreed that information flow was timely. In lower performing companies, only 6% agreed.

Most of us would choose the open, collaborative culture. Culture is how things truly get done in an organization. It can be measured by understanding the way people think, behave and work. This includes the values and assumptions that enable key behaviors and practices.

What might be the consequences of a culture that is closed and toxic? We only need to look at a company that has recently been in the news for its illegal practices and see if we can find seeds of the problem in the culture that existed there.

Early in the fall of 2015, Volkswagen was the target of an emissions scandal in which the company admitted to cheating on U.S. air pollutions tests. The question now is who was responsible for the decisions that led to the cheating.

The CEO when the scandal hit the news, Martin Winterkorn, has since resigned but has not taken responsibility for the illegal actions. His resignation was made, he says, in the interests of the company “even though I am not aware of any wrongdoing on my part.”

Even if we give him the benefit of the doubt as to whether or not he was privy to the decisions made to fake emissions testing, we can hold him responsible for the culture he allowed to pervade the organization. The new CEO has stated that it is “very, very clear” that their 600,000 people worldwide have to be managed in a different way.

VW now talks about how they need to create a high performance organizational culture where problems are not hidden but can be openly discussed; where there is no fear in questioning superiors; and where there is far less pressure from an authoritarian leader to perform without appropriate inquiry.

There is no doubt that Winterkorn was a strong leader with great ambitions for his company. He wanted to make VW the world’s biggest carmaker. But his management style reportedly could be unforgiving, overly demanding and remote. Apparently, he could be disrespectful of other VW executives and would often lose his temper when bad news was reported. Reports are surfacing that there was a pervading sense of fear if called to his office. Overall it appears he was unapproachable and apparently closed to debate.

The VW culture was just the opposite of an open atmosphere and the consequences were earth shaking to a brand that had always commanded respect. With closed doors and closed minds, no one in the chain of command raised the questions that might have steered the emissions software in another, more legal direction. Time will tell if and whether VW can survive and create a high performance corporate culture that encourages the free and healthy exchange of ideas.

To learn more about defining an aligned and high performing culture, download How to Build a Purposeful and Aligned Corporate Culture.

Share:
Facebook Twitter Google+ Email LinkedIn

Comments are closed.

Over the years, both at 3Com and now at Redback, I’ve found LSA Global to be a valuable resource. The recent compliance program that they delivered for Redback’s executive and management team was the right solution, of the highest of quality, and customized to our business and culture. I would highly recommend LSA to any company looking for top quality solutions.

Gina Fulton
Vice President of Human Resources

In my years working with LSA, it seems like I’ve had a personal consultant at my fingertips to help me identify just the right solution to satisfy our needs. The entire LSA team has become a trusted friend of Actel — assuring we provide state-of-the-art learning to meet our complex, high-tech business and people needs.

Linda Mitchell
Training Manager

The Managing Virtual Teams program was extremely valuable. Your consultant/ facilitator’s fundamental knowledge of Synopsys as a company provided an incredible base to build upon while tackling the complications of managing and working with globally distributed teams. My team walked away walked away with highly useful practices and tools. It was an excellent use of our time.

Debra Martucci
Vice President, Information Technology

PalmSource has found our relationship with LSA extremely beneficial. We worked closely with LSA to customize the right Management Training Program solution to meet our unique business needs. LSA is a quality organization, one that I’d recommend to any company looking for a first class training and consulting partner.

Ken Boehm
Vice President of Human Resources

We partnered with LSA to pilot a customized behavioral interviewing program to help ensure that we continue to hire the best and brightest as we continue to rapidly scale. LSA’s ability to understand our business and our unique culture combined with their desire to ensure that the best practices framework truly fits our performance environment and is highly adopted by our people is a real blessing. Most other firms want to just ‘give you training.’ Not LSA, they are focused on helping me hit our hiring forecasts and attract A players.

Jennifer Remling
Director of Global Recruiting

AKQA

We have worked with LSA Global for our learning and development needs and have always had great success. They helped us recently with customized Management Workshops that we held for the second time. It was fantastic, and I would highly recommend LSA to anyone that is attempting to get immediate and impactful improvements.

Mary Johnston
HR Manager, BU Radiology Informatics

LSA provided top notch solutions right when and how we needed them. They exceeded my expectations from a speed, quality, and cost standpoint. I recommend them to anyone looking for a true business partner in the Learning and Development arena. The breadth and depth of their expertise has helped us hit tight deadlines across multiple projects.

Fortune 500 Financial Services Company
Director of Infrastructure & Technology

I had been working with LSA for many years with my prior company. Currently, I’m with a company who hadn’t done much basic management skills training. After identifying and presenting a program recently, our managers are excited and talking in the halls about the great experience. LSA saves us time in delivering the right training for our needs.

Phyllis Moracco
HR Director

LSA has been a tremendous asset to my portfolio, both at my current company and my past company. As an HR leader, I am always looking for ways to find external resources that can provide a solution to our management training needs. LSA does that for me. Their solutions are presented in a much more leadership-oriented manner so as to be crisp, business relevant, and easy to apply right back on the job. I will continue to augment our programs using LSA solutions.

Ken Boehm
VP of Human Resources

I highly recommend LSA Global to anyone who is looking to improve individual or organizational effectiveness through their top quality programs and broad range of expertise.

Greg Pappas
VP of Human Resources

The LSA Global team was very receptive and flexible to our needs every step of the way. Their staff and facilitator demonstrated attention to detail, responsiveness, and professional courtesy. The participants were thrilled with the outcome and rated the communication skills workshop and the facilitator as ‘Excellent’. I’d highly recommend working with the LSA Global team to meet your professional development needs.

John Mastrorilli
FRDP Leader

Intuit

We signed up with LSA early on–as their 22nd Member! Since then, our organization’s learning needs have increased and decreased and increased again with the changing times. The beauty of the LSA business model is its flexibility…when we needed to supplement our own internal resources, we used LSA services knowing that we could depend on the outstanding quality of the leadership development and management training programs they provide.

Margie Bunting
HR Manager

Harmonic has worked with LSA for over 8 years. We have found their partnership extremely beneficial. We recently implemented a Management Development Program that was designed and customized to support our company’s strategic initiative of hiring, building, and retaining key intellectual property and human talent. We worked closely with LSA to target and implement the right solutions with the greatest impact. I would recommend LSA to any company that’s looking for a trusted training and development partner.

Janice Passarello
Director of Human Resources

We engaged LSA to design and deliver a 6-month custom executive coaching program for a group of our key leaders. The focus of the program was to help a core group of senior leaders to leverage previous investments in management training, to ensure the engagement and retention of key employees, and to push critical strategic initiatives forward. Even with the high expectations of our senior people, LSA has completely exceeded our expectations. I would recommend them to anyone looking to create and implement a custom coaching methodology using proven tools to drive true change.

Ivan Fukumoto
Senior HR Manager - Staffing, Training, & Development

We contacted LSA to help us with customized management development. LSA worked with me to identify a solution that would meet our exact needs. We decided to start at the top and ran the program for our executive team. It was such a great success that we hope to roll it out companywide. We look forward to a long-term partnership with LSA Global and their team of experts.

Barry L. Byrd, SPHR
Human Resources Manager

Evaluate your Performance

Toolkits

Toolkits

Download key published insights and tools from industry experts highlighting best practices in the areas of talent, strategy and culture.

More

Health Checks

Health Checks

Want to know how you stack up against leading organizations?  Receive a complimentary benchmarking analysis courtesy of an LSA Expert.

More

Whitepapers

Whitepapers

Get up to speed on timely solutions critical to your business. Published by LSA Experts based upon client feedback and key industry trends.

More

Methodology

Methodologies

First we identify the key metrics you want to improve. Then we assemble a dedicated team of elite experts who have successfully solved similar problems with similar clients.

More

Blogs

Stay up to do date with the latest information on how we help high growth companies align their culture and talent with strategy.

More

Case Studies

Client Case Studies

Real world consulting and training approaches from LSA projects, providing insights on how your company can outperform the competition.

More