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Monday, Sep 01, 2014
Commentary

GM scandal a warning to all of us who have bosses: Speak up!


Published:

The opening sentence of the 325-page internal investigation report on a death-dealing scandal at General Motors paradoxically runs too long yet gets right to the point:

“In the fall of 2002, General Motors personnel made a decision that would lead to catastrophic results — a GM engineer chose to use an ignition switch in certain cars that was so far below GM’s own specifications that it failed to keep the car powered on in circumstances that drivers could encounter, resulting in moving stalls on the highway as well as loss of power on rough terrain a driver might confront moments before a crash.”

Aha, we first thought, the culprit — unmasked!

But the deeper we read into the report lead-authored by Chicago attorney and former federal prosecutor Anton Valukas, the less we cared about an engineer in 2002, and the more we learned about the dereliction of so many employees who should have known better.

There’s a lesson in this debacle that we ignore at grave peril — to ourselves, to our employers, and most of all to customers who trust us.

And, echoing in our memory bank, there’s an intervention step that the chief executive of Chicago’s then-Sears, Roebuck took during his company’s scandal that every one of us can and should take today. (No need to first wait for a scandal to surface.)

First, though, parse the GM investigation and:

—You find “an astonishing number of committees” at GM that devoted attention to the ignition switch problem. But all those meetings of all those committees merely enabled a pass-it-on culture in which “No single person owned any decision.”

You find “no evidence that any employee made an explicit trade-off between safety and cost in the investigation of the (Chevrolet) Cobalt.” But you also learn that a financially strained company’s pressure to contain head count and costs may have influenced ultimately devastating decisions.

You find foolish corporate attempts to sugarcoat facts at the expense of simple candor, with employees trained to write about a safety problem as an “issue, condition, matter.” And a “defect”? Heaven forfend! Instead, “does not perform to design.”

In sum, you find what rookie GM Chief Executive Mary T. Barra last week called not only “a pattern of incompetence and neglect.” But you also find many employees who didn’t, in her words, “take the responsibility” to identify and fix the problem.

Granted, there is serious career risk in telling a boss about a blunder, a looming threat, an urgent problem or — worst of all — a systemic and possibly intentional failure to make ethical behavior more important than company performance. As the GM debacle attests, less of the former can, in the long run, hurt the latter.

The GM report is replete with instances in which an engineer, or a committee, or an executive, or somebody else should have thought less about process and protocol than about doing what was right for this company, its workers and the people who buy its products.

Automaking is a business in which mistakes have lethal consequences — in this case, at least 54 front-impact crashes in which at least 13 people died. Those things can happen when faulty ignition switches cause autos not only to stall, but to unwittingly disable their safety air bags.

Managers who stand around waiting to hear about something suspicious in the Memphis operation also should be asking hard questions, and not just of their subordinates.

Enter Sears, stage left:

On a warm spring Chicago Sunday in 1997, Arthur C. Martinez and his top executives were just as shell-shocked as Barra’s team would be years later at GM: Company lawyers used overhead slides to explain that Sears, the once-moribund company he had revived, had violated federal law for a decade. Federal authorities would confirm that company execs didn’t know about the misconduct lower on the company ladder. Sears soon accepted full responsibility for improperly collecting $110 million from 187,000 customers whose bankruptcies should have freed them of their debts to Sears. The federal fine: $60 million.

What we most recall is Martinez’s message when he broke the devastating news of the scandal to Sears’ top 200 executives on April 10, 1997:

“After this meeting, spend the next half-hour at your desk. Do nothing but think about your own operation. Not just to identify additional exposure, but to fundamentally rethink — Is what I do, the direction I give, the body language I use, creating an environment where something like this could happen? Is my message, ‘Make the numbers at any cost?’ ”

Splendid advice, Ms. Barra, and it’s yours for a hat tip to Martinez and the price of a Chicago Tribune.

Splendid advice, too, for all of us whose careers have blessed us with positions of influence in our organizations.

That is, with positions of ... responsibility.

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