Changes in Project Management at Volkswagen

Project Management at Volkswagen

Introduction

In 2015, Volkswagen was caught cheating on emissions tests, sparking a worldwide scandal. The company was found to have installed software on its diesel cars that would alter the engine\\\'s performance during emissions testing, making the cars appear to be more environmentally friendly than they actually were. In the wake of the scandal, Volkswagen faced enormous fines and intense public scrutiny. So, what could the company have done to prevent this crisis?

A good project manager at Volkswagen (VW) might have changed the outcome of the crisis that contributed to VW’s emissions scandal had certain internal and external changes been made. Because every product had to have been a project, it stands to reason that every crisis might have had a different outcome with the right project management. This paper will describe those changes, particularly as they relate to leadership, communications, and stakeholder expectations. It will conclude with suggestions to the CEO about what I think should be changed, added, reworked and created to prevent this type of crisis from happening again.

Starting with Culture

It all starts with culture. As Larson and Gray (2017) point out, it is the organizational culture that defines the context in which project management will be applied; yet project managers can have a big impact on culture, too—indeed, they must: “Project managers must shape a project culture that stimulates teamwork and high levels of personal motivation as well as a capacity to quickly identify and resolve problems that threaten project work” (p. 17). The culture of arrogance at Volkswagen (VW) was a major contributing factor to the emissions scandal that erupted in 2015 (Levin, 2015). As VW Group CEO Martin Winterkorn admitted in a public apology, the company had broken the trust of its customers and the public and needed to make a “fresh start” (McLeod, 2015).

In order to tackle this problem of culture, project management needs to take a hard look at its organizational and corporate culture and make some necessary changes. First and foremost, the company needs to instill a greater sense of accountability among its employees. Indeed, one of the most important roles of a project manager is to ensure that all workers are held accountable for their actions. This can be a challenge, as workers may be reluctant to take responsibility for their mistakes or may be resistant to being micromanaged. However, there are a few steps that a project manager can take to instill a sense of accountability among workers. Thus, it is important to set clear expectations and provide detailed instructions for each task. This will help workers to understand what is expected of them and will minimize the chance for confusion or misunderstanding. It is also essential to keep track of each worker\\\'s progress and to provide regular feedback. This will help workers to see where they need to improve and will give them a sense of ownership over their work. The project manager should also be sure to enforce strict deadlines and follow up with consequences if those deadlines are not met. This is what it means to prioritize, and it will help workers to understand that their performance has real implications for the success of the project (Larson & Gray, 2017). By taking these steps, a project manager can instill a sense of accountability among workers and ensure that the project is completed successfully.

Furthermore, the project manager at VW must create a more open and transparent work environment where new ideas are encouraged and dissenting voices are heard. A work environment that is both transparent and encouraging of new ideas is essential for any organization hoping to foster innovation and creativity. There are a number of steps a project manager can take to create such an environment. The first one is to be clear and concise in all communications with team members (Larson & Gray, 2017). This will help to ensure that everyone is on the same page and reduce the chances of any possible miscommunication. Additionally, the project manager should encourage team members to share their ideas openly and freely without fear of ridicule or blowback. The way to create a great workplace culture is to encourage dissent and debate; for it is only through these conversations that truly innovative solutions can be found. VW could have nipped a lot of its problems in the bud by thinking innovatively instead of by trying to cheat the regulators. Nonetheless, one other step a project manager could take is to be sure to provide regular feedback, both positive and constructive to workers and higher-ups so that everyone is in the loop. By creating an environment where team members feel comfortable sharing their ideas, the project manager will definitely help to foster a more creative and innovative workplace. Moreover, it is by taking these first initial steps to change the workplace culture that VW could be able to maintain the trust of its customers as well as its place as a leading automaker.

Managing Stakeholder Expectations

All stakeholders have a right to know how a project is going. Volkswagen’s emissions scandal was the result of a number of different factors, including a failure to properly communicate with stakeholders and a lack of transparency. VW had early discussions with the California Air Resources Board (CARB) but was not very transparent about the issues CARB was raising; in fact, VW went so far as to blame CARB’s testing equipment (Resnick, 2015). The reality of course was that the products VW was having tested were not passing because they were faulty. It was then that the EPA stepped in and threatened to not certify VW’s cars (Resnick, 2015). VW in trying to mislead regulators was attempting to dupe its own stakeholders. It should have been upfront with all as soon as it became evident that it was failing the tests. Instead, it tried to blame the messenger.

One way that the project manager could have better managed stakeholder expectations is by being more upfront about the risks and potential problems with the project. Everyone wants to see projects completed on time and to the satisfaction of all. And a project manager is responsible for ensuring that a project is completed on time, within budget, and to the required standard. Yet, the project manager also has to accept and deal with reality. One of the key ways to achieve this is by managing stakeholder expectations. Not every project is going to go smoothly—especially if a culture that allows cheating is being promoted in the firm. All too often, stakeholders have unrealistic expectations about what a project can achieve and how long it will take to complete because certain leaders play into unrealistic expectations and over-hype or sell a project. This can lead to frustration and disappointment when the project does not meet their expectations. So the project manager should strive to avoid this is by being upfront about the risks and potential problems with the project from the outset. This will help to manage expectations and ensure that stakeholders are realistic about what can be achieved. At VW, everyone was expecting the impossible from its diesel cars, and the emissions tests were showing that VW had not delivered. The project manager should have been open about this with stakeholders. Instead, worries about what such information would do to the stock of the company and to its brand value prevailed; and of course when the truth came out the stock was slammed regardless and lost 30% of its value (Hotten, 2015). Thus, while it may not always be possible to avoid problems altogether, by being upfront about the risks involved, a project manager can help to ensure that stakeholders are not unduly disappointed when things do go wrong—and this can reduce the risk of a big selloff in the company’s shares.

The project manager should have kept stakeholders informed of the project’s progress on a regular basis, so that they would be aware of any potential issues. By being more communicative and transparent, the project manager could have helped to avoid the crises that ultimately led to Volkswagen’s emissions scandal. Managing expectations and keeping stakeholders informed is part of what a project manager has to do on a regular basis (Larson & Gray, 2017).

Leadership

One big aspect of leadership is seen in the decision-making process, internally and externally. Indeed, there are a number of internal and external changes that Volkswagen could have made. Internally, the company should have implemented stricter controls on its engineering and quality assurance departments. This would have ensured that rogue employees could not tamper with the software without detection. The fact that whistleblowers did try to bring this tampering to light before the scandal broke shows that quality controls were not in place and quality assurance departments were not set up and doing their jobs (Gitlin, 2015). Internally, leadership was lacking in making sure that departments were performing. Leadership should have been focused on motivating teams but also on ensuring discipline and rigor.

After all, a project manager’s job is to ensure that a project is completed on time, within budget, and according to specifications (Larson & Gray, 2017). One of the project manager’s most important responsibilities is to ensure compliance with standards by all departments on the project. Unfortunately, this can be easier said than done. Different departments often have different objectives and may be reluctant to change their methods to conform to new standards. That is certainly what happened at VW, as development teams in the software department conspired to help other departments overcome faulty emissions that would not pass inspection (Gitlin, 2015).

Yet even when this conspiracy was reported, leaders did nothing to address it (Gitlin, 2015). They made the wrong decision to look the other way. They acted with complicity in the fraud and deception. No project manager should ever act in that way. Furthermore, the good project manager will ensure that all the different departments are on the same page with regard to standards and expectations. This starts with having a code of ethics that everyone is aware of and abides by. In VW’s case it was most likely that these departments thought they were operating according to gray areas within the standard protocols—i.e., industry “standards”—which is to say they believed bending the roles was acceptable.