Is Your Ethics Program Alive, or Just Some Words?

It’s not surprising that the subject of workplace ethics is top of mind with the recent scandal involving Volkswagen’s altered diesel-emission-testing software in more than 11 million of their vehicles. VW’s CEO has already stepped down, and a select group of employees believed to be involved have been suspended. With a Code of Conduct that promotes values such as customer focus, top performance, creating value, renewability, respect, responsibility, and sustainability, how could this happen?

Was it greed that led to the decision to use such a deceptive tactic? Time will tell. As the investigation unfolds, it will be interesting to see what aspects of VW’s strategy and business modeling, corporate ethics, and organizational culture might have played a role in creating conditions leading up to key decisions.

To learn from situations such as these, adopt a mindset of curiosity:

What type of communication systems between VW and its various stakeholders might have prevented this fraudulent practice and outcome?

What allowed (or encouraged) VW personnel to make decisions that violated the company’s ethical commitment to its stakeholders and compliance-reporting agencies? How did certain interests trump others?

Additionally, the following questions help us explore many of the implications that arise in situations such as these:

  • Legal implications: Do the actions taken rise to the level of criminal? If not, are they contrary to our internal values, or just bad business?  Who will be held accountable?
  • Business impact: Reports indicate VW has already set aside billions of dollars to settle the matter. Will that be enough? Can a company survive this and earn back the trust of consumers worldwide?
  • Policies and rules: The new CEO has already revised the internal organizational structure. Will that be enough to turn the tide of a culture that led to this situation?
  • Company values: The outgoing CEO stated this in the company’s 2014 Annual Report: “We stand for strength, reliability, and long-term success – even under less favorable conditions.” Yet nine months later, Volkswagen admitted to an illegal practice ongoing since the 2009 model year. When company values are just words versus truly “alive,” there’s a disconnect between word and deed. How aligned are your organization’s values with its actions?
  • Stakeholders’ interests: “Our pursuit of innovation and perfection and our responsible approach will help to make us the world’s leading automaker by 2018 – both economically and ecologically.” Is this possible at this point? What’s next for stakeholders (and individual car owners)?
  • Individual considerations: Is this an organization an employee would want to work for?

These situations always bring up more questions than answers, yet much can be learned. How might your current ethics program prevent such a colossal mishap from taking place? Could your program actually facilitate the same type of debacle? What kinds of conversations take place in your organization today around company values and ethical decision-making? If not attended to consistently, deliberately and proactively, your culture (and business outcomes) might reflect just that as well.

As members, you have access to two great FYI whitepapers to help you start and continue conversations with your management team: See FYI – Code of Ethics and FYI – Manager’s Guide to Making Decisions. Difficult considerations, tough discussions, and your stakeholders will thank you.