The Long Haul

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Categories: automotive


 

As project managers, we think more “in the moment” than most professionals.  We want our projects to meet objectives.  We want to come in under budget, on time, and we want to get on to the next project.  Pronto.

That thinking may lead, however, to some very poor decision making.  In prior posts here on People, Planet, Profits and Projects, we have discussed how thinking about the outcome and the steady-state operation of the project’s product can not only prevent ecological, social, and economic ‘sustainability’ mistakes, it better connects the project to the organizational strategy, mission, vision and values.  Of course, we have to hope that those values are good values.  That’s not so clear with recent news about emissions control ‘cheating’.

What we’ve seen in the past week or two in the automotive industry illustrates the danger of this sort of short-term-thinking whether you are a project manager or not.

Let’s start with VW.  To bring you up to speed (pun intended), we provide this summary, taken mainly from this excellent story by BBC.

In September, the Environmental Protection Agency (EPA) found that many VW cars being sold in America had a "defeat device" - or software - in diesel engines that could detect when they were being tested, changing the performance accordingly to improve results. The German car giant has since admitted cheating emissions tests in the US.

The EPA's findings cover 482,000 cars in the US only, including the VW-manufactured Audi A3, and the VW models Jetta, Beetle, Golf and Passat. But VW has admitted that about 11 million cars worldwide, including eight million in Europe, are fitted with the so-called "defeat device".

The EPA has said that the engines had computer software that could sense test scenarios by monitoring speed, engine operation, air pressure and even the position of the steering wheel.

When the cars were operating under controlled laboratory conditions - which typically involve putting them on a stationary test rig - the device appears to have put the vehicle into a sort of safety mode in which the engine ran below normal power and performance. Once on the road, the engines switched out of this test mode.

The result? The engines emitted nitrogen oxide pollutants up to 40 times above what is allowed in the US.  And it may go beyond dollars and chemicals.  MIT recently did a study which shows that the carbon monoxide released may cause 60 premature deaths.

And the background on Chrysler Fiat?

For this, we provide you with a summary drawn from a recent article from USA Today:

U.S. regulators accused Fiat Chrysler Automobiles of violating emissions standards in more than 100,000 diesel vehicles, spawning concerns that the company could become ensnared in a scandal like the one that engulfed Volkswagen Group.

The Environmental Protection Agency said Thursday that Fiat Chrysler illegally installed software on about 104,000 pickups and sport-utility vehicles that spewed harmful pollutants while failing to disclose the technology.

The allegations involve the 2014, 2015 and 2016 Jeep Grand Cherokee and light-duty Ram 1500 pickup trucks with 3-liter diesel engines.

The EPA said the automaker installed eight different undisclosed software programs on the vehicles, collectively causing them to spew harmful nitrous oxide emissions, which can exacerbate respiratory conditions.

So here’s a question.  Is it only these two companies or is there some kind of endemic problem with the industry?  According to this article from Forbes, the US government thinks it may indeed be wider than these two companies:

Federal investigators have confirmed that they’re pondering the same possibility. If a design defect affects two major manufacturers, why not a third or fourth or fifth? Fiat Chrysler may not be the only company that needs to engage in some strategic soul-searching at this particular moment in time.

Finally, the sheer enormity of the Volkswagen case should directly impact Chrysler and the treatment it can expect as the inquiry goes forward. Even compared to the mega-settlements of recent years, VW’s financial cost is staggering. At $4.3 billion in criminal and civil penalties, with another $15.7 billion to settle car owner suits, it’s one of the most expensive scandals ever.

But it’s not just about penalties. “At its core this case is not merely one large scandal but three,” says Pete Anderson, a former DOJ environmental crimes prosecutor who now leads the White Collar/Compliance group at Beveridge & Diamond. “It involved serious violations of the Clean Air Act, multiple lies and cover-ups, and the fraudulent sale of automobiles. The other aggravating facts that give this case such shock value are the calculated means of the deceptions and the significant financial gains that motivated the crimes.”

So let’s come back to projects and project management.  If this is indeed a ‘culture’ thing, in which it becomes permissible to make decisions which are short-term oriented, as I’m sure you’d agree these decisions were, what can we – we who are known as short-term thinkers – what can we do?

Here are some suggestions:

  • Have your ‘antennae up’ for these practices and the culture that leads to it
  • Remember that as a project manager you are a change agent – by definition.That means you may have to be the one to speak up, to speak truth to power
  • Spend considerable time in your decision making in which you project (the verb!) the timeline out 2 years beyond the decision, thinking of the ramifications along the triple bottom line (ecological, social, and economic).
    • Ecological– consider waste, pollution, energy use
    • Economic – consider not only profit and loss, but damage to the brand, fines and penalties (here in the billions of dollars)
    • Social– safety, health and welfare of human beings and groups of human beings (this software allowed the cars to emit poisons which was particularly dangerous to pregnant women and elderly people)

In short, consider that your project is not making a short jaunt to the market, but rather is in it for the long haul – or there may be a significant price to pay.  And pay, and pay.

Photo credit: https://s-media-cache-ak0.pinimg.com/originals/20/d6/14/20d614184b6e8849eb996dec471de7f2.jpg

Posted by Richard Maltzman on: January 14, 2017 11:36 PM | Permalink

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