VW's switch to English as its company language is a key reform
|Christiaan Hetzner is Automotive News Europe's Germany correspondent.|
The first time I heard it spoken at a Volkswagen event was ironically in Hanover of all places – where the purest form of German is spoken. Andreas Renschler, head of the VW Group's newly created commercial vehicles holding, began addressing guests in a foreign language: English.
This was strange because senior executives at VW, that most German of all companies, never hosted a big event at home in English, the lingua franca of the business world.
Daimler CEO Dieter Zetsche and BMW chief Harald Krueger both speak English effortlessly thanks to respective stints in the U.S. and the UK but Volkswagen CEOs have had no such ability. Former VW Group CEO Martin Winterkorn's English was poor and his successor, Matthias Mueller, struggles with the language.
Despite employing 600,000 employees in all corners of the globe, to date Renschler's "start-up" was the only VW Group subsidiary to have discarded the language of Goethe and Schiller in favor of Shakespeare as its official tongue. Until now.
In the future, English will be VW Group's business language, the automaker's personnel chief Karlheinz Blessing said in a statement. The change should improve VW's ability to recruit international top performers and also improve cooperation among the company's top managers. "Diversity and international experience will be more important for management than ever before," Blessing said.
VW Group will be aiming for managers with a broader experience profile. Among other things, greater priority will be given to foreign assignments and knowledge gained in different business areas and brands. "The objective is to foster internationality, diversity and a change of perspective," the automaker said.
Female managers also will get the opportunity to gain "the experience and capabilities they need for appointment to top management positions faster."
To really understand why this is so significant and why it might help Volkswagen reform its insular corporate culture, one has to know a little bit about where VW comes from.
Its home town of Wolfsburg in northern Germany didn't exist on any map prior to the company's founding. The plot of land on which the Wolfsburg plant was built in the 1930s during the Nazi regime was geographically closest to the provincial backwater of Fallersleben. Ask a German to name a big city too boring to live in and chances are good they would pick nearby Hanover. Since there is virtually nothing noteworthy around VW's headquarters, people refer to this drab area surrounding Wolfsburg as the "Midland Canal" after a domestic waterway.
While comparisons between Wolfsburg and Detroit, home of the Big Three, can often be found in media reports, they were forced and never made any sense. America's Motor City has a thriving cultural scene known for soul, jazz and rap music as well as its three major automakers, whereas Wolfsburg can make no such claims.
Wolfsburg is entirely dependent on one employer – without VW the city has no reason to exist. During shift change its infrastructure collapses under the weight of rush hour as workers file out of the plant by the tens of thousands.
In this Wolfsburg bubble, the company long acted as if Germany was a satellite that revolved around its headquarters. Indeed, some managers referred to VW's home as "the navel of the world," only half-sarcastically.
It probably doesn’t help that VW remains to this day the only German corporation to have its own federal law as an archaic monument to the group’s domestic importance. Passed when the company was partially privatized in 1960, the VW Law protects the automakers against hostile takeovers by ensuring the 20 percent voting stake held by its home state of Lower Saxony grants it a blocking minority. Abolishing it remains taboo for Germany’s mainstream political parties.
This reinforced the parochial mindset to that was so key to understanding why Volkswagen's management repeatedly failed to even remotely meet growth targets for the U.S. market over the past decade.
Ultimately VW's inability to appeal to American consumers by preaching German engineering with a certain missionary zeal was the cause behind a strategic decision to differentiate itself by offering what we now know to be fraudulent "clean diesels."
Remembering your roots is great way to remain grounded, yet strangely VW was somehow capable of being both provincial and conceited at the same time.
Outside of Europe, the group has in fact only truly been successful in China, where it got help from two local partners, Shanghai Automotive and FAW. Perhaps by adopting the business world's chosen form of communication, it can help VW in finally becoming a truly international group that listens to its customers rather than preaches to them.
You can reach Christiaan Hetzner at email@example.com.