What does the Volkswagen scandal teach us?
Business is a game and you’ve just gotta’ win, right?
Sometimes you’ve got to bend the rules, everyone knows that!
We do whatever it takes to maximise profits and maximise shareholder returns, that’s all that matters.
Pay the fines, show remorse and back to business as usual!
Well guess what, The Emperor has no clothes! The world has changed and the attitudes above are as useful and as out of date as a floppy disc.
Profit is a consequence of providing an outstanding product or service, which in turn derives from having a clear purpose. Purpose and values are what drive truly sustainable businesses. The Volkswagen share price tanked within days of announcing deliberate manipulation of emissions data, with falls totalling 40% so far (source City AM). Breach of trust and shabby values are punished. Any short term gain from cheating has been eradicated.
So what’s the answer, more Corporate Social Responsibility? Nope I don’t think so. A bit of box ticking is not going to do it.
Many businesses need a shift in focus. Henry Ford said that “A business that makes nothing but money, is a poor business’. We have to realise that profit, making money is just a measure of us doing our stuff brilliantly. That should be our focus, doing our stuff brilliantly. Using dodgy software to cheat emissions software is not doing your stuff brilliantly, it’s short term, dishonourable and thoroughly negative.
The fallout from the Volkswagen deceit impacts shareholders, customers, suppliers and employees. Recovering trust and reputation will be a long and arduous journey, if ever reached.
So what’s to be learned?
1. Build your business on a purpose that adds true value;
2. Set out your core values and employ staff that are aligned with them;
3. Do your stuff brilliantly ;
4. Get the first 3 right and profits will flow, it’s inevitable;
5. Remember whatever the size of your business, as managers, owners, directors, we are custodians — make sure you hand the business on, intact!
Owning, managing or being part of a truly sustainable business, delivering a purpose that adds value to society becomes almost a spiritual enterprise. All involved are enriched by the experience. This is what we should be aiming for.
Doing the right thing is simple, but not always easy. The temptations to look for quick wins or short-cuts, can lead to cutting corners and then to less acceptable practices in pursuit of short term gain. Don’t be that person! Choose to build your business slowly and sustainably and for the long term.
If you are interested in some of the ideas and research behind Long Lived companies I can recommend “The Living Company’” by Arie de Geus.
Many roads lead to the pathless garden of truth……
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This article was first published on the blog of Sean O’Leary. Sean O’Leary writes on Midlife Mastery; secrets of Health, Wealth and Wisdom.www.seanoleary.net/blog -,���