Human nature is an extremely complex thing to understand, and this has been proven so many times, but it always comes up with something most unexpected. Here I am talking of human thought in the business scenario. We have seen companies like Apple, from almost going down to coming up with something brilliant that has taken them to the top of the world, in a matter of a decade. We have seen brilliant thinking like a totally new way of doing things in the market place. Look at Amazon. All these changes happen these days, in a very short duration. In both these example, we see brilliance shown by the minds of individuals.
But there are businesses which are long haul businesses like Steel making, Car making, Aeroplanes. These are businesses where companies have been around for decades, coming up with incrementally better and better products. Of course, there is natural survival of the fittest process, closing certain organisations. These long haul companies achieve their name and fame over the decades. They produce glory in such a way that in India when someone wants to buy a Chocolate, she will say go and ask for a Cadbury! When you want to drink a soft drink, she will say let’s have a Coke! (Variants thereof) Company names become synonymous with the products they make. Such achievements are real long-term. In such a scenario the VW issue that has suddenly cropped last week, at least to me was a big shock. How they got into such a big mess! What made them do what they did?
I remember from childhood days in Mumbai, there was a restaurant famous for its thick Lassi. (It’s a sweet, thick shake like drink made out of yoghurt, where the thickness is achieved by adding thick milk cream topping) One beautiful day there was a story in newspapers that these guys were adding thick ink blotting paper in place of the milk cream. This made Lassi look original & thick, but it was cheating. Luckily the paper was not harmful to health. WHY was this done? The motive was to make a few Rupees more on each Lassi served! What was the harm? Honestly, I don’t know but hopefully nothing serious!!
These days I hear of snack vendors adding thinly cut Cabbage in place of Onion in the snack, as the Onion prices have hit the roof. These are usually added to stuff like Batata Wada (Potato Patti with some mixes of vegetables) or in Bhel, an Indian fast food, which is made by adding an assortment of stuff! WHY this is done? The motive was to retain profits to a reasonable level by replacing Onion by Cabbage. What was the harm, there was no real harm!
There was a case of a Theatre owner who rented out some areas in his theatre for people to use as a warehouse. These areas came in the way of emergency exits, which are used well, only in emergencies. The emergency did arise, as there was a fire during one show. The emergency exits could not be opened due to the stuff stored; the end results 50 to 70 people died in the fire. WHY was this done? The motive was to make additional money by selling the non-existent place for a warehouse and of course make money! What was the harm; great harm there were deaths!
But the Lassiwala was a small restaurant, Snack vendors are small-time businessmen, theatre guy was a prominent businessman, and they all cheated for money! But what about these giants like GM &VW??
A few years back GM in India fudged their records for their SUV while offering vehicles to Government agencies for emission testing. What could have been their motive? Why did they do it? It was definitely not for money but what could be the motive to cheat? This act was restricted to only India operations and did not cover many vehicles. End result many senior people were thrown out possibly with one suicide! Harm, of course, there was harm as additional NO was pumped out in the atmosphere.
But what about VW? 11 million vehicles are affected the world over as already accepted by VW. What’s going on? Who ordered this cheating? What was achieved? Could this have happened without clearance from Senior Management Group? It’s embarrassing to compare Laasiwala, Wadawalla with VW!! Small timers, all cheated for money, and the Giants cheated for God Knows What!! But from what has come out till date VW & GM are the worst culprits. When the GM issue occurred, GM was the world’s largest vehicle manufacturer of cars and so is VW when the cheating issue broke out. Do such companies become so large by cheating? I don’t think so! They do it by sheer hard work, perseverance, and passion. They are here for long haul stay in the market. Their products have been known for both quality and performance. So why they did what they did? What was the motive? Were they never worried that this cheating is bound to come out at some stage? What effect will this have on their name in the global market? Did they think that public memory is very short and companies will easily override the ripple effect? Can one of the waves become a tsunami? Is VW prepared for a Tsunami? I don’t think so.
How will VW matter close? It’s anybody’s guess as on today. There will be action from Governments leading to hefty fines, there will be costs of replacements of components on the car, or there will be hit on the performance. There will be class action suits in America, and these can be really expensive! VW says they have already set aside US $ 7/ billion to handle the matter. As I understand this amount can only handle public relation costs; what about the value of VW’s tarnished name?
I started the blog with a discussion on the human mind. What sort of mind created this problem? In this world, there are people like Bill Gates who have given Billions of Dollars for charity and are encouraging others to do the same. How does this successful mind think differently from VW mindset? How is human DNA created? If it is produced by circumstances what better example can there be than the German nation. What event changed this superb mindset in Germany to cheat so blatantly! It is a classic case for psychologists. I was an engineer who cannot fathom the reasons for such a change in the mind. I could have also accepted some cheating, though not justified it if it were done for a small duration because the launch of that specific product got delayed! Then cheat and launch a so-called good product and then switch over to excellent products after a short delay, good products have been VW speciality anyway.
Germans are proud of their quality products, and the German mind focuses on work, work and work in the proper sense. Results are seen in Germany’s phoenix-like rise post World War II. How current events will affect German psyche? How will German mind overcome this blatant cheating? I am sure they will do it with more work and more focus!
For those who want to read about this issue here is the link.