Sixth floor, Building S49 of the Audi plant in Ingolstadt. This is not a room you would expect to find on a carmaker’s premises. It is not a design studio, not a body shop and not an office. Instead, it’s a place for music – the rehearsal room of the Four Rings’ works orchestra, the Audi Philharmonic Wind Orchestra. Here, Audi Board Members Alexander Seitz and Wendelin Göbel meet with sociology professor Stefan Kühl and integrity expert Holger Eckstein. A discussion about the conflicting pull between goal-oriented leadership, the pressure to perform as well as integrity and compliance.
Mr. Göbel, here we are holding a conversation between drums, trumpets and music stands. Isn’t a company such as Audi a little bit like a big orchestra?
Göbel: Yes, there are a lot of parallels. Each musician is an artist in their own right with unique skills. But to achieve lasting success, they all have to devote themselves to a greater cause, casting aside vanity and sensitivities. And follow the conductor’s lead. If just one of them steps out of line, the overall sound quality suffers.
In business, playing by the book is called compliance. Mr. Seitz, you are also responsible for integrity at Audi. What is the difference?
Seitz: There are lots of definitions, but the way I like to explain it is with an example. When in the seventies seatbelts became mandatory in Germany, there was initially a huge outcry because drivers felt this encroached on their freedom. It was only the threat of fines that made us grit our teeth and buckle up. That’s compliance – adhering to rules. Today, no responsible driver would think of setting off on vacation without ensuring that his children’s seatbelts are securely fastened, regardless of whether he’s likely to hit a police checkpoint or not. Why? Because standards have changed. That’s integrity – doing the right thing even when no one is looking. This is something we aim to pursue systematically at Audi.
Which brings us to the next topic – diesel. Does there always have to be a scandal before we have these conversations?
Kühl: Especially after a scandal, companies want to prove to the public that they are ready to acknowledge their mistakes and do better. Structural changes are initiated, regulations tightened and new specialist departments created. This certainly applies to Audi, too, and as a first step, that’s the right thing to do. Then comes a lot of flowery language about values, which often fails to get to the heart of the matter. Instead, companies would do well to admit that there are always conflicting goals in business. That is why, for legitimate reasons, businesses operate in the gray areas on the borders of what’s permissible.
What do you mean?
Kühl: One of the first things I learned in the automotive industry was how to deal with competitive pressure. A few years ago, I visited a manufacturing site and asked whom they considered to be their fiercest competitor. To my surprise, they didn’t answer “competitor A” or “B” but “our plant next door” that produces the same parts and may well be awarded the next model. And if you’re too quick to reply that we must all pull together as a team, you’re missing the point about how these employees perceive reality.
Stefan Kühl, who was born in 1966, studied history and economics at the University of Bielefeld, John Hopkins University in Baltimore, the University Paris Nanterre and the University of Oxford. He earned a doctorate in sociology from the University of Bielefeld and another in economics from Chemnitz University. Following various professorships, including at the Helmut Schmidt University/University of Armed Forces in Hamburg, Kühl has been a professor of sociology at the University of Bielefeld since 2007. He is also an organization consultant for the Metaplan company.
Seitz: You’re right, that’s a good example of conflicting goals. There are opposing interests and perspectives in our Group, too. But at the end of the day, it’s about achieving success together. Over the course of my own career, I’ve assumed the most varied positions and, of course, thrown my weight behind the respective interests in the process. But such conflicting goals have nothing to do with gray areas. We are a profit-oriented organization and have ambitious goals, which we pursue relentlessly. Nevertheless, scams and rule violations must be taboo. Rules – whether in the form of laws, regulations or corporate guidelines – must be strictly adhered to. Without exception.
Göbel: Especially in the premium segment, the truth is that customers buy a brand that they connect with emotionally and that they trust. And they identify powerfully with the Four Rings. By nature, that excludes shady and corrupt business practices. I like to hold our corporate activities up to the ideal of the honest salesman. He also faces conflicting goals but, for all his commercial drive, would never conceive of breaking the rules. Once you shake on it, it’s binding.
Successful transformation needs a contemporary culture of leadership and teamwork.
So integrity pays in the long run?
Eckstein: Yes, staying clean pays. There is this preconception that integrity is an obstacle to a career. That saying yes and doing what you’re told without arguing will get you ahead a lot faster. From my many years of experience as a transformation coach, I can tell you that’s definitely not true. Integrity builds a strong support base. I sense a real desire among people for leaders who, in times of doubt, follow their own convictions instead of being swayed by some faction’s interests. My unequivocal recommendation to Audi is: Stay true to your values. That way, others will follow your lead.
Göbel: That’s a good point. Successful transformation needs a contemporary culture of leadership and teamwork. I’m a native of this region and came to Audi 30 years ago. Since then I’ve borne witness to an unparalleled success story. But we can’t afford to rest on our laurels. We know we need to make changes in many areas. For instance, by further honing our leadership principles and the Audi Code of Conduct. I consider our key corporate values to be appreciation, openness, responsibility and integrity. With the “Stimmungsbarometer,” we regularly survey our employees about our progress, which is a good touchstone for integrity and the culture at Audi.
Eckstein: We need to be clear about the fact that selectively engineering a change in culture is a far-reaching process that takes many years. There’s no manual for how to go about it. It’s no easy feat and demands a great deal of the executives. Along the way, it helps to engage in honest dialogue with the employees. You’ll be surprised at how much employees are capable of. Because, believe me, people have a sixth sense for whether you’re serious about change or not.
Holger Eckstein, who was born in 1965, studied business administration at the WHU – Otto Beisheim School of Management in Vallendar, Germany. After ten years as a business consultant, executive and HR consultant, he opened his own business as a life and leadership coach and change management consultant in 2000. In the years that followed, he became an expert in meaning and integrity. He helps people and companies use integrity to shape their lives and their businesses in a meaningful way that generates the greatest good for all those involved.
And is Audi serious?
Göbel: For one thing, there’s already a fantastic energy in the team today. This is what made Audi great. However, we also have to ask ourselves how can we advance our shared understanding of values. This is only possible through open dialogue across all hierarchies. We’ve established platforms and formats for this, where thinking outside the box is not only accepted but encouraged. I want it to be easier to put forward new ideas and openly discuss them.
Kühl: Most innovations actually come from pushing back boundaries. We organizational sociologists like to talk about “useful illegality.” Only when members continually weigh up whether to abide by formal structures or bend the rules will their organization become truly agile. It’s no mere chance that work-to-rule is one of the most effective forms of industrial strike in a company.
A second diesel scandal must never be allowed to happen. This goal unites us all.
Eckstein: It stands to reason that no company can achieve a transformation with a work-to-rule approach. It takes entrepreneurship and the drive to shape change. And integrity is our North Star. Laws, rules and regulations are natural boundaries that are non-negotiable. This is a balancing act that calls for a shared understanding of “What’s possible?” and “What’s off limits?” that applies to everyone.
Seitz: I think there’s one thing we all realize: A second diesel scandal must never be allowed to happen. This goal unites us all. To achieve it, we are guided by the concept of entrepreneurial integrity. This is why we have pooled and reinforced the areas of Integrity, Compliance and Risk Management. We have honed our processes in product development and put integrity under the authority of the Board of Management.
Göbel: And we are bringing all employees on board. Integrity, culture and compliance are not “wellness” topics; they have very specific consequences and measurable effects. It’s about reputation and financial success. So at the end of the day, it’s also about job security going forward.
- Sustained, financial success and responsible action are inseparably linked.
- This is why Audi has defined integrity, respect and collaboration as an independent strategic goal - on an equal footing with corporate image, agility and profitable growth.
- To achieve this goal, Audi is pursuing a holistic approach, systematically fine-tuning existing processes, structures and its corporate culture as a way of consolidating the Four Rings' ongoing viability.
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