1: “Germans are extremely proud of their engineers—particularly those in the car industry, which is home to stellar high-export brands like Daimler, BMW, and Porsche,” Fred Kofman writes in The Meaning Revolution: The Power of Transcendent Leadership.
Martin Winterkorn, the future and now former CEO of Volkswagen, is an “intelligent, ambitious overachiever,” Fred notes, earning a PhD in physics from Germany’s acclaimed Max Planck Institute.
Martin got a job in the car business. He was consistently promoted, and in 2007, he was named CEO of Volkswagen.
His goal as CEO? To make VW the world’s biggest carmaker.
Martin “displayed a critical, exacting, and authoritarian streak of character,” Fred notes. “He was known for being both demanding and precise.”
He also developed “a habit of criticizing people and ordering them around, even in public,” he writes.
“As a result, other executives feared their leader; woe betide anyone who told him something he didn’t want to hear. ‘If you presented bad news,’ an employee told Reuters, ‘those were the moments that it could become quite unpleasant and loud and quite demeaning.'”
2: In 2015, Volkswagen admitted a massive fraud involving 11,000,000 vehicles that had passed emissions tests while still generating nitrogen oxide far beyond the legal limits.
Martin “claimed that he was not aware of any wrongdoing on his part,” Fred notes. While he did take responsibility for the problems, he “quickly put the blame on his people in the United States.”
He then resigned “to clear the way for a fresh start, for the company.”
The impact on VW was enormous. Its stock price dropped 30 percent, losing $18 billion in market capitalization.
The company also agreed to pay $4.3 billion in criminal and civil penalties, bringing the total cost in the United States alone to $20 billion.
Volkswagen’s market share in Europe fell by 10 percent, to its lowest level since the 2008 financial crisis.
“The loss wasn’t only financial,” Fred notes. “According to scientists at the Massachusetts Institute of Technology, thousands of people in Europe may die early as a result of the pollution from the cars fitted with illegal ‘defeat’ devices.”
In the United States, federal prosecutors filed criminal charges against six Volkswagen executives. One executive was imprisoned. The other five remained in Germany.
While Martin may be innocent of wrongdoing, Fred believes he’s guilty of “wrong-leading.”
“He was a disengaging, controlling, and arrogant leader,” he writes, “who promoted, and likely abetted, behaviors that drove VW over the cliff.”
3: There is truth to Lord Acton‘s old truism: “Power corrupts. Absolute power corrupts absolutely.”
Studies show that “power excites the same neural centers that respond to cocaine,” Fred writes. “The feeling of power increases the levels of testosterone and its by-product 3ɑ-androstanediol in both men and women.
“This, in turn, leads to raised levels of dopamine, hijacking the brain’s reward system . . . In other words, power literally goes to our head.”
As leaders, we must be vigilant to avoid succumbing to corrupting power.
“Achieving power reliably turns people nasty,” says American psychologist Dacher Keltner. “The seductions of power induce us to lose the very skills that enabled us to gain power in the first place.”
Studies show “people who feel powerful,” Fred notes, “are more likely to have affairs, to drive inconsiderately, to lie, to shoplift, to argue that it is justifiable for them to break rules others should follow. . .
Many times, the worst behaviors, including shouting, profanities, sexual harassment, and destructive criticism, often come from those in the highest positions of power.
“Perhaps more unsettling is the wealth of evidence that having power makes people more likely to act like sociopaths. Research has found that 20 percent of leaders in business and government demonstrate narcissistic and psychopathic tendencies; that’s roughly the same proportion as prison inmates compared to 1 percent of the general population.”
Fred’s recommendation? “Take this as a serious warning. If you are able to earn the trust and commitment of your followers, you will acquire tremendous power.”
Which, if we are not careful, may make us untrustworthy.
More tomorrow.
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Reflection: Have I experienced or witnessed corrupting power?
Action: Discuss with a colleague or family member.
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