Why Volkswagen’s biggest challenge is to avoid the corporate sickness of initiative overload

This week Volkswagen’s sales figures were published and guess what? Toyota is back at the top spot for global car sales with 7.5m vehicles sold in the first nine months of 2015, against VW’s 7.43m reported earlier this month. According to Sean Farrell in The Guardian, these figures include less than two weeks of sales after VW admitted to have manipulated US emission tests and all hell broke loose. We can only imagine what Q4 sales will look like for VW as the emissions-rigging scandal takes full effect.
More disturbingly is maybe the fact that Toyota outsold Volkswagen in each month of the third quarter, so even long before the scandal-of-the-year erupted. According to The Guardian, some analysts thought Volkswagen’s dash for global sales had masked the underlying problems, making the company cumbersome and overly complex with more than 300 models, multiple brands and almost 120 factories worldwide.

Balancing parallel initiatives

For the new leadership of the company – yes, new brooms sweep clean – enormous challenges await. And we don’t have to be skilled in the art of divination to foresee the company respond with an overload of initiatives, programmes, projects and actions, in order to keep up with the expectations of clients and all other major stakeholders. However, from working with major industrial clients all around the globe, we know it can be an ugly struggle to balance parallel initiatives. In the next twelve months it will become clear what level of change VW can realistically absorb. Also relevant: what is the capability and capacity of VW’s staff in the lower ranks to make this turn-around?

Bruised and battered

Today’s dynamic world of business requires a well-developed capability to change, to improve or even keep performance at its current level. It will be interesting to observe if the bruised and battered company -or rather its senior management- is able to prevent the corporate sickness of initiative overload: starting so many initiatives that the majority fail to deliver against expectations in the timeframe required.

Truly functional teams

It is my belief that top-notch project portfolio management is not the solution, as this widespread disease is often caused by how leadership teams think, assume and behave. The real challenge is to do less: to start fewer, but more effective projects. To create truly functional cross-functional teams with horizontal KPIs. And to have the courage to relentlessly eliminate projects without a clear data based impact on VW’s major goals and objectives. Only then will the company be able to make this U-turn, survive and catch up with Toyota in the future.
Interested to learn more on how a wealth of initiatives leads to a poverty in execution? Please download our white paper The corporate sickness of initiative overload.