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In part 2 of our 3-part interview series with the team behind Volkswagen AG's Together4Integrity program, Hiltrud Werner, Tobias Heine and Dr. Katja Nagel talk about Perception Workshops and how listening closely to their employees feedback is a driving force behind the success of T4I. Together4Integrity was built as a holistic, multi-function compliance program that can disseminate core compliance principles across a multi-national organization with business units ranging from corporate headquarters, to overseas manufacturing facilities.
Below, you will find out the details about how, when and why Volkswagen AG delivers perception workshops, as well as learn about why a uniform corporate culture, that doesn't take in to account local and regional differences, may not be the ultimate goal a multi-national organization should strive for.
Pat: I know that you did a lot of measuring and monitoring of how things were going, so the question is, did you find a specific group within the organization where trust suffered more than in other areas?
Werner: Well at least inside our organization of course it was the technical development employees who had worked there, we found at the beginning especially, in 2016, 2017, that sometimes they tried to hide their company badge when going to the canteen, because they felt the stigma was on them that they had caused this horrible scandal throughout the organization. To make them trust not only in their own colleagues, but also in the management and the whole organization and to rebuild that trust that what they do in that process enhances the organization and improves controls, it was quite important to overcome the scandal as a whole.
"...employees who had worked there ... sometimes they tried to hide their company badge when going to the canteen, because they felt the stigma was on them that they had caused this horrible scandal..."
When we did perception workshops and when we talked to people in technical development, I could see that they were really committed to help the company become a better part of the society, but for them it was also hard as individuals.
Ethics Ambassador Programs
Pat: Tobias, one of the programs that you mentioned that captured a great deal of interest from the audience is the ambassador program - what are some of the responsibilities of the people in the ambassador program?
Heine: We use the ambassadors to spread the message throughout the organization, so that it does not rely only on the tone from the top or tone from the middle, but also from their colleagues. The goal that we are looking for is that, when we have a decision tree, that not only are quality and timing constraints considered, but there's also the thought about if there are any impacts on integrity or ethics and compliance, so that helps us to ensure that in the decision tree for everyone, ethics and compliance is rooted.
"This is great, whenever I discuss issues in the boardroom or give my legal advice, I have the feeling that no important decision is made without me being here and that my advice is followed," Audi Chief Legal Officer
Pat: Have you been able to demonstrate that the program has benefited employee retention and recruiting?
Werner: For this q, I would really answer for my own area. In legal and compliance I must say that i was really overwhelmed by the high potential and very good candidates that applied to work for Volkswagen in the beginning you could ask, "Why is this?". You know there is so much work, they are in a a legal mess basically. But it also gives everyone here the feeling that their voice is really heard, that their job is respected... Just a few months ago we recruited a new chief legal officer to our brand Audi and she came to me 90 days after she started and said, "This is great, whenever I discuss issues in the boardroom or give my legal advice, I have the feeling that no important decision is made without me being here and that my advice is mostly followed and I have never had such a great experience in my career before."
Legal and compliance-wise I can say that recruiting is not the issue, even if there is still a lot of work to do and a lot of the cleanup is still ongoing.
Employee Morale in the Wake of Crisis
Pat: How do you deal with employee morale issues in light of the negative perception of Volkswagen's conduct in the past?
Werner: I think a lot will know that it is very, very difficult for the majority of employees to see their own companies suffer, in terms of reputation among stakeholders or politicians or investors, so this is really difficult. On top of that, we were in a situation where we had a really high complexity of the legal situation, which was very difficult for our employees to understand. Sometimes, they didn't know when something was outlined in the press, was it about this legal case, or that legal case, was it from an international or local case? So we have seen that in this phase, to reestablish employee communication really was key.
We did a lot of open talks where people could join in and ask any questions, I did a lot of interviews, we were constantly asking the question in our employee newsletter and web application, "What other questions do you have?" about compliance, integrity, the legal situation, anything that crosses your mind and we tried to answer all the questions, even the difficult ones, with the most transparency we could give about the actual situation.
Perception Workshops and Feedback
Pat: Another area where we received a number of questions was the perception workshops. Could you tell us what a perception workshop is, how have you designed them and what happens in them?
Heine: The perception workshop is set up to measure employee perception on integrity, compliance risk and culture topics that we have in our organization. It wants to measure the working life reality, whether our activities have touched the working life realities. It takes place at every entity at the very beginning of the T4I rollout. We select a representative sample of employees across functions and across hierarchies, so from blue-collar as well as top management from the white collar area - randomly selected to participate. We use a standardized format with a total of 16 questions and we ask up to 200 participants depending on the size of the organization to answer via a voting app on a scale of 1 to 5.
"What is very important is that we come back to the organization and we repeat the perception workshop to measure the progress and see where we made advancements, or where we did not. It gives us input whether we are on the right track or whether we have to adjust our approach."
Afterwards, the results are directly shown on screen on the stage and the results then are directly discussed with the CEO, who is actually driving those perception workshops, as well as the complete board depending on organization structure. The questions are discussed with [the CEO and board], so it's really bringing open discussions on the answers given to the board and management.
What is very important, as late as one year later, we come back to the organization and we repeat the perception workshop to measure the progress and see where we made advancements, or where we did not. It gives us input whether we are on the right track or whether we have to adjust our approach.
Pat: Could you give an example of the question you might ask during one of those perception workshops?
Heine: Their questions were derived from the supporting objectives described in the Blue Ribbon Panel Report. The questions are not tailored according to the organization, but they are used in a standardized way to allow for comparability between the organizations. One example is, "integrity and compliance issues are discussed in meetings along with current issues," answered on a rating of 1 "I completely disagree" to 5 "I completely agree". Another one is, "I can openly ask questions and open address potential problems." The third example is, "Anyone who points out the risk of rule violation and looks for solutions is given credit for doing so."
You can imagine when you give an answer of 1-5 in a big auditorium, that is then discussed with the CEO, and they have to state what there perception is on the level of answer, there is a lot of energy in the room and a lot of positive energy at the same time.
Pat: It sounds like you were not tailoring the questions for each workshop that you're hosting, it's the same question set. Do you repeat the exact same questions when you do the recurring workshop?
Heine: Yes, the exact same questions. In regard to the participants, we are not inviting 100% of the same participants, approximately 30% participated in the initial perception workshop, and 70% of new persons. We want to have a statistically sound base, but we also want to spread the message even further into the organization.
Pat: So because you are using the voting app in the sessions, you're getting the benefit of having a focus group, which is more qualitative in getting you input. But, you're also coming away with statistics because people are answering and you're getting a strongly agree to disagree numeric score, which I'm sure is very helpful.
Who leads or facilitates the perception workshops? Is it someone from management, someone from the company team or an outside entity?
"...even more important than the moderator is that the CEO or the complete board is participating throughout the whole activity, because the tone from the top is so important."
Heine: So usually we set the scene, from the central T4I team, but on the stage we want to have local management representatives, so the moderator can be the compliance officer, but doesn't necessarily have to be. It is important that it is a well known and recognized person from the organization, because we don't want to come from the headquarters and run the show there, the change has to come from the organization itself. But even more important then the moderator is that the CEO or the complete board is participating throughout the whole activity, because the tone from the top is so important and if the board or CEO sends the signal, that is what we are looking for.
Pat: One of the things that was shared during the previous session was that the recurring perception workshops resulted in increases. A member of the audience acknowledged that the increases were only by about .2 or .3, so they asked, is this misleading? Does .2 or .3 increase actually translate to meaningful improvement?
Heine: It's a good question, because .2 doesn't sound like meaningful change. When the scales that we are offering are from 1 to 5, 0.2 or 0.3 means 5-7.5.%. But actually when we have a look at where the bandwidth is actually chosen, it is from 3.0 to 4.5 - and in this small bandwidth of 1.5, 0.2 or 0.3 is something between 13-20%, which we perceive, on an annual basis, as a quite meaningful step forward.
Another significant result that we have seen is that, in all recurring Perception Workshops we have carried out until now, we have seen an improvement. That is a very good result for us that, despite the brand, the country, the cultural family you are in, across these different parameters, we see an improvement that we are very proud for and it motivates us.
"...topics of things where maybe you have in the recent past not considered to speak about, you can do this now on a big stage with the CEO. That is for sure one change that we have already achieved, and that is a signal that we want to send out and strengthen in the organization."
Pat: I suspect that because you are doing these perception workshops where people are freely speaking and sharing their views, you're also hearing comments that support the idea that you are improving.
Heine: That is one of the key drivers that we want to generate, the topics of things where maybe you have in the recent past not considered to speak about, that you can do this now on a big stage with the CEO. That is for sure one change that we have already achieved, and that is a signal that we want to send out and strengthen in the organization.
Corporate Culture Across Regions
Pat: Hiltrud a question for you, you mentioned in your presentation that each department or regional office focuses on actions that make sense to them, but given that, how does Volkswagen ensure that a single culture is what exists across an organization? Or do you try to ensure that?
Werner: Well, T4I does not aim for a completely uniform culture across our organization. I think that is clearly understood in such a global organization from the Far East, to Europe, from South Africa to Brazil to the US, I think that is not the right goal to go for and diversity is a great strength for us, so we don't want to lose that. What we really aim for is uniform rules and processes and a uniform understanding of what the problem is and how do we tackle problems if they occur. So that means a uniform understanding of integrity, compliance and our corporate values. That is important and becomes the basis for our collaboration. Collaboration itself will then be realized within the cultural patterns of the organization that's why it's also important that the results from the perception workshops are then transferred into improvement measures that are defined within the local entity and we on the corporate area track whether this is really implemented.
When you see a weakness, for example lack of communication to the employees or perceived in transparency about managing consequences of misconduct, the actions after that that a company takes might be different, but the result that they aim for is uniform.