Hierarchy + Homogeneity = Stupidity

I used to make up bedtime stories for my kids. One of them was about a young lion that liked to hang out with an elephant and a giraffe. Like Simba in Disney’s Lion King the other lions could not understand this, but when drought hit the region this trio mastered the problem by having different strenghts.  The giraffe could reach fruits from the top of the trees, the elephant could stomp a hole in the scorched ground to reveal the water below, and the lion could scare some hunters away. lion giraffe elephant

Obviously, the story contains some weak spots that I don’t think my kids would accept today, but I think they got the idea that heterogeneity is good.  I also  suspect the management of Volkswagen was told  no such story when they were kids.

Now Volkswagen is trying to understand how respected engineers failed to see what a monumentally bad idea it would be to systematically cheat with the exhaust tests.

Pressure must have played a part. The pressure of a successful past combined with a non forgiving leadership….and not having the solutions available to deliver what is expected.

But above all, this looks like a perfekt example of “GroupThink”, the syndrome where a whole Group of people think as one. For those of you who don’t know: This is bad.  Groups Think better than individuals. Above all, groups make fewer mistakes.

Hierarchy
Volkswagen is a strictly hierarchical Company.  An engineer does not say “no” to something that was decided several layers up in the organization.

Homogeneity
One of the key complaints from employees in the Volkswagen group is that only Germans get promoted. Indeed, the top management Group consists of eight middle aged men. One of them was born in spain but moved to Germany as a teenager. The rest are Germans.

Stupidity
For at least a decade, Toyota hade been investing heavily in R&D with the goal of cutting carbon dioxide emissions by 90 percent. Everybody else saw the stiffening legal requirements, but this Group of middle aged germans did not invest to meet those demands.  Only a homogenous Group can be this stupid.  Only a hierarchical organization can accept such stupidity from their top people.

Lea Dunand-Chatellet, fund manager at Mirova, explains how she could ask about innovations to cut carbondioxide emissions only to be told about inventions to open the hatch without using the hands. That’s when she decided to divest in Volkswagen.

So, in the end the engineers were probably under pressure from two sides:pressure

  • A decade of non investments from the one side
  • Legal requirements and competition on the other

Cheating may have looked like their only way out: either that or failing to sell the cars that kept not only themselves, but pretty much everyone in Volfsburg employed.

Let’s stop asking ”who is to blame” and start looking at how such an important decision making Group could be allowed to be so homogenous (=stupid).  Above all, let’s not make that same mistake.

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