Is Your Culture as Strong as You Think? Lessons from VW and The Peanut Corporation of America

Picture of a compass that points either to the right or the wrong way

The real business of corporations is making decisions…the big strategic decisions about what sets you apart to the small ones about when to hold the next team meeting.  There are hundreds of large and small decisions made every day. The question is…how are they made? Are there guidelines to follow in the process? And, more importantly, are there corporate values that provide a framework for decision making that will drive every decision toward the right, and away from the wrong, choice?

Two scandals in the news recently make one wonder about the state of corporate cultures and values in the world today. Both show a shocking disregard for ethics or for the safety and well-being of the company’s consumers.

  1. The first scandal dates back to 2008 when an outbreak of salmonella that killed 9 and sickened over 700 was traced back to peanut butter paste that ended up in snack products widely distributed within the US. Finally in 2015 the CEO of the Peanut Corporation of America was brought to trial and the sentence handed down…28 years in prison for knowingly distributing tainted food. One commentator said that then-CEO Parnell probably did not intend to kill people but “he just ran his business in a way that caused a lot of injury and some deaths.”
  2. The second was the revelation that Volkswagen was caught cheating on US air pollution tests. The company installed software that could detect when smog tests were being conducted. The software operated the emissions control system during the test and shut it off when the test was over. Then when the vehicles were back on the road, they dumped anywhere from 10 to 40 times the legal pollutants into the air. Again we have an apologetic corporate leader with an admission that Volkswagen was “dishonest.”

These are two extreme examples of what can go wrong when company’s corporate cultures lose sight of their true purpose—serving their customers.

The lesson is that we as corporate leaders need to be vigilant in keeping our eyes and those of our employees on the compass that steers us…our values and our culture. If we truly aim to act in the best interests of our customers, no one from the CEO on down should ever make a decision that does not take into account our customers’ needs and wants.

Why didn’t any Peanut Corporation of America employee speak up about possible contamination and unclean production practices? And where were the whistle blowers at Volkswagen? The performance culture at both companies must have been pretty toxic in this regard. We can only assume that questions must have been squelched, dissent was not allowed, employees feared recriminations and greed was king. In a more healthy performance environment where values are honored and where the culture encourages the open sharing of ideas, the situation could never progress to such shocking extremes.

We can also assume that basic ethics were not practiced or enforced. After all, it appears the CEOs in both cases were involved in the wrongdoing! Don’t you think these leaders now regret their actions? Too late for them. But plenty of time for the rest of us to review why we’re in business and make sure we practice, model and monitor our values. Beyond our own behavior, we need to hold each and every employee accountable for understanding and implementing the corporate culture and values so they provide the direction for all actions and decisions.

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