Tuesday, July 15, 2014

Where Companies Go Wrong

By Jim Owen

It feels like déjà vu all over again, as Yogi Berra so famously put it. Here we have yet another corporate giant under fire for failing to heed its most important obligations.

I’m talking about the latest General Motors debacle - the slow-motion crash-and-burn we’ve witnessed since it came to light that troubling auto safety issues at GM went unrecognized for more than a decade. Sorry as we might feel for Mary T. Barra, the newly minted GM CEO who found herself on a congressional hot seat after just a few months on the job, her discomfort pales against the casualties suffered by the dozens of people hurt or killed in accidents tied to defective GM vehicles.  

To be clear, nobody is suggesting that GM management knowingly pushed safety issues under the rug; the company has voluntarily recalled millions of cars over the years. Investigators did find, however, that lower-level GM employees flagged problems with unexpected stalling of some models as early as 2005, but no one acted on their warnings.

That tells us the real problem at GM is a corporate culture that pushes off problems and avoids accountability, even when public safety is at stake. This kind of mindset may also have contributed to GM’s bankruptcy woes in 2009.  

Of course, it can be hard for employees to give bosses bad news that translates into millions of dollars in costs, especially if their managers want to look the other way. And there’s no doubt that a head-in-the-sand, cover-your-behind mentality too often rules in big corporate and government bureaucracies.

That’s all the more reason why every organization needs a culture of doing the right thing that starts at the top, is championed by management, and carries through every layer of the corporate or agency structure. If GM’s leadership had explicitly made it every employee’s job to put safety ahead of profits and “do what has to be done,” the company might not be on the ropes today. 

It’s one more reminder that “everyone needs a code…a creed to live by.” In our Standing Tall workshops we see many people from small and mid-sized companies—business owners and professionals who take time to articulate a clear set of values they can call upon to guide them in the face of difficult choices. Can big companies like GM afford to do anything less?