Now It Is the Auto Industry that Needs Transpersonal Leadership

We define transpersonal leadership as "leading beyond the ego". A mighty task maybe but a requirement to be an excellent leader in the 21st century.

After years of realisation that there are serious issues around the ethical culture of many high profile organisations in the financial sector we are now seeing the first glimpse of a similar issue in the automobile industry. For years it has apparently been an open secret that results from testing emissions and fuel economy bore no resemblance to on-the-road driving. And VW is not the only culprit - General Motors, America's largest car maker was fined $900 million USD a few weeks ago for failing to recall cars with an ignition switch problem which killed 124 people.

In addition to huge fines there is now a growing call to bring criminal charges against guilty individuals responsible for these transgressions. Again the default response is to bring in new rules, new processes and new structures to stop these things reoccurring in the future. This will ultimately add costs to the consumer (have you noticed the increase in bank charges over the last few years to pay for all those fines?) and it is not guaranteed it will cut down on corruption.

Let's look at the "leadership" implications in all this and at VW in particular. Its former chief executive Martin Winterkorn has stated that he knew nothing of these software manipulations even though he was head of R&D in 2009 when apparently the "misleading" software made its first appearance - and he is an engineer famous for his attention to detail.

 According to The Economist (Sept 26, 2015) there were three main drivers for VW to risk cheating:

1. An overwhelming desire to overtake Toyota as the largest car manufacturer in the world
2. The belief they could solve any technical problem if they threw enough money at it - except: fixing the NOX problem also reduces fuel efficiency and power
3. A belief that big car-makers can get away with anything

But let's assume that Mr Winterkorn was telling the truth and that he did not know about the dodgy software. Is he still culpable and was it correct to remove him? After all he cannot know everything that goes on in an organisation of almost 600,000 employees worldwide.

Of course it was correct to fire him (although actually he resigned!).

The main reason for this view is that he did not balance the overriding drive for growth (just like the banks a few years ago) with putting safeguards into the culture of the organisation to ensure that anything illegal was identified and routed out regardless of where or how it manifested itself.

Chief executives across the globe should be asking this question of themselves, "Does the culture in my organisation act as a safeguard against unethical, illegal and maybe even criminal activities?"

As described in Leadership Assessment for Talent Development the solution is to create and maintain a culture that is ethical, caring and sustainable as well as performance enhancing.

From working with a large multinational recently whose CEO believed creating an ethical culture was paramount to their long term success, we at LeaderShape Global asked the question of the senior leadership team, "Why do you think being an ethical company is important for your organisation?" The response was the following list:

1. To create trust with our stakeholders to help overcome barriers
2. To create a safe environment
3. To attract and retain good people
4. To connect the personal to the corporate
5. To secure a long term future as a business
6. To be able to sleep well at night
7. It's good for the corporate image – relevant and ethical
8. So everyone has the same ethical framework and knows where the line is
9. To create a positive environment which will positively impact on innovation
10. Reducing any fear culture
11. To get balanced decision making
12. To get consistency of culture in a changing environment
13. To make the right choices generating sustainability
14. To create transparency and all the benefits that brings

Then we asked the question, "and how many of these are good for business?" And of course they ALL are.

Unfortunately there is a default mentality in much of the corporate world that somehow business and ethics don’t mix very well. Well we believe that in the 21st century the connection between successful, sustainable business and ethics is even stronger and more important. IBM's recent study (1) on the demands of different generations in the workplace found that the Millennials (born after 1993) are looking for fairness and ethics in the workplace even more than recognition and opportunity. This is a real shift.

So how do organisations create this ethical culture that is sustainable, caring and performance enhancing? They need transpersonal leaders! As explained in Leadership Assessment for Talent Development, transpersonal leaders:

•          Embed authentic, ethical behaviours into the DNA of the organisation
•          Build strong, collaborative relationships throughout the organisation and with all stakeholders
•          Create a performance enhancing culture

To achieve this they must lead beyond their own ego. This requires leaders to put "changing themselves" as a top priority.

The first step is they must become more aware of themselves (how they think, feel, behave and do), more aware of their impact on other people, and have a better understanding of other people.

The second step is to use this knowledge to identify which behaviours are their greatest strengths and which need adjusting to maximise their personal performance. We have found that changing just a few granular behaviours can have a huge impact on the leadership competence of leaders and the culture of an organisation. These changes then need to be embedded through real practice until they become a habit.

The third step is to increase their level of consciousness so they better understand their own value touchstones, how they make decisions and hence their judgement process. They need to learn to leave their ego behind in making the best the decisions for the organisation and its stakeholders - rather than for themselves. Finally it really helps to have an understanding of how their own brain works in these areas.

I can hear many of you say, "sounds great but I can never see my CEO going through this process". Well maybe s/he should not be the CEO then and the bottom line is organisations need to get better at selecting and developing their CEOs and part of their contract should be the acceptance of continuing personal development in the areas identified.

About the author: John Knights, co-editor and author of  Leadership Assessment for Talent Development, is also chairman of LeaderShape Global, an organization that focuses on the behavioural and ethical development of leaders. He is an experienced international business leader who is passionate about developing leaders for the future. He is an expert in emotional intelligence and a thought leader in 'transpersonal leadership' and the relationship between neuroscience and leadership.

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Note 1: "Myths, exaggerations and uncomfortable truths: The Real Story behind Millennials in the Workplace.' IBM Institute for Business Value. ©2015 IBM Corporation.