Are We All GM? Take the Quiz
Is your organization like GM?
Your reaction to that question is probably similar to my own reflexive response–and to the reactions of the vast majority of business leaders and managers: “Of course not! Nor was our company like Enron or BP, for that matter. Our products didn’t kill customers, sap retirement accounts or damage the environment.” Of course, you may wonder why you should care enough to even ask yourself the question. Fair enough, but I strongly believe we all should ask this question.
What if your company is a just a little bit like one of those companies whose problems have dominated the headlines? Or, what if we’re a lot like these troubled companies, only we don’t know it yet because we’re asymptomatic – at least so far? It’s an important question that’s too easy to brush off when we distance ourselves from unsafe automobiles, faulty financial practices or exploding oil rigs. But these problems are symptoms of root causes that are far more prevalent in organizations, including our own, than we realize. Your company may not make cars with faulty components, but there’s a much better chance it has organizational silos and even some variant of the “GM nod” that enabled those faulty components to go uncorrected for so long. I also want to be fair and clear: GM’s symptoms are commanding attention now, for good reason; however, the root causes of those symptoms are not at all unique to GM; many, if not most, organizations, harbor these root causes – whether we know it or not.
So before we categorically distance ourselves and our companies from those in the headlines for the wrong reasons, let’s take a deeper form of pause. Let’s use this moment to reflect on how our behaviors affect other people and think deeply about which behaviors we need to thrive, and to help our companies thrive. Let’s use GM’s current symptoms not to feel (falsely) better about our own organizations, but to (truly) examine the extent to which root causes lurk in our own cultures.
3 Lessons to Recall
This summer, just as news about recalls seemed to be in the business pages’ rear-view mirror, GM recalled another 8 million vehicles and Chrysler Group announced it would recall 695,000 SUVs and minivans. To be sure, what went wrong was terrible: By current estimates, the product-quality problem resulted in at least 13 deaths that left family and friends devastated. But GM is not the only automobile manufacturer to experience quality issues that resulted in deaths, nor is it the only car company recalling millions of vehicles: 22 million cars were recalled in the U.S. in 2013, with Toyota, Chrysler Group, Honda/Acura, Hyundai and Ford, respectively, responsible for the most vehicles. On one hand, this seems shocking: Nearly 30 million cars have been recalled already in the US this year, on pace to shatter the record 31 million recalls in 2004. On the other hand, the bull market in recalls has been greeted with a collective ho-hum.
That’s a shame on two counts. First, lives have been lost and the affected families will endure lifetimes of suffering as a result. Second, the speed with which our business-culture crises recede from our attention illustrates that we continue to NOT learn the same lessons over and over again. Here are three points we should learn from:
The road out of culture crises is long and difficult: One of the top takeaways from the Valukas Report, a dense 315 pages detailing the reasons behind General Motors’ mishandling of a defective ignition switch, is how the company’s culture shortcomings led to its recall failure. While business and automobile-industry reporters quickly glommed onto specific examples of those culture failings (most notably, the insidious nature of organizational silos and the “GM nod”), I found this passage, tucked away on page 258 of the Valukas report, to be especially instructive for all companies: “Because of the multiplicity of causal factors, there is no simple solution, but the lessons learned from this failure can lead to a reexamination of the Company’s policies, procedures, and culture, and provide the Company with an untapped opportunity not only to improve but to innovate and become an industry leader in the processes used to ensure consumer safety.” Bravo to the report for identifying culture as both a core contributor to the problems and an opportunity for competitive advantage, and kudos to GM CEO Mary Barra for vowing to focus on culture. But make no mistake: Enacting this change will be extremely difficult and require a genuine journey. Fixing a product or an assembly line is a mechanical act; it may require highly complex detective work (as the Valukas report shows) but once the fix has been made, that’s it. Fixing a culture is human work, which means it’s deep, multi-dimensional, often intangible and never finished. Sustaining a healthy culture requires constant vigilance.
We are all GM: While the stakes may not always mean life or death like GM’s, we all have culture shortcomings, many that may ultimately threaten our organization’s existence. Why do you think so many of the report’s details resonate with so many of us? I’m talking about the “nod,” corporate gatherings at which everyone agrees what has to happen, knowing full well that those actions will not be taken; the “salute,” a blame-deflecting gesture in which a manager crosses her arms and points “outward toward others, indicating that the responsibility belongs to someone else, not me;” and the information-damming “management silos” Barra has promised to remove. We read about those practices and empathize because we know them, or similar culture malpractices, so well. These types of behaviors, and our response to them, speak to a moral conscience we all share; for example, we believe “nods” and “salutes” are bad behaviors. What we need to keep in mind is that these behaviors and the silos are symptoms, not causes. The root cause is the culture: No automobile manufacturer wants to produce cars with flaws that lead to recalls, but culture failures lead to technical ones. Bottom line: We can all learn from the GM debacle precisely because virtually none of the organizations for which we work are immune from such culture malpractices and misbehaviors. Here’s what the Valukas report doesn’t say but should: When we ignore our moral conscience, bad things – even loss of life – occur. Culture work requires the courage to listen to our conscience, to speak out against bad behavior, and to stand up for our values. And values get far better mileage than internal control updates and policy or personnel changes.
Culture Crashes Will Continue: That the auto recall crisis has played out so far as if it were routine is troubling. It began with a revelation of terrible harm, followed by blame, assumption of responsibility, an investigation of what went wrong and repercussions (firings, improvement plans, compensation schemes, vows this will never happen again, etc.) interspersed with congressional hearings, possible regulatory changes and pending legal actions. We follow a similar, if not identical, blueprint crisis (corporate governance/Enron) after crisis (global financial) after crisis (auto recall). Unless we address the root cause of our crisis mindset, these breakdowns will continue across all industries. And they will take an increasingly costly toll in declining trust.
A Root-Cause Quiz
Are we all GM? Well, no, not literally. But most us, if we look deeply enough, will find similar root causes embedded in our cultures that could one day cause our companies to crash. Does your company exhibit any of these root causes? Ask the following questions to find out:
Does your culture coerce employees or motivate them?
Hopefully, it does much more than coerce. While carrots and sticks remain necessary performance management tools, they are not sufficient: Organizational cultures and leaders should inspire people to elevate – rather than shift – their behavior. I’ve long argued that we’ve entered the Era of Behavior. Today, it has become clear that we’ve entered the Era of Elevated Behavior. Not only are companies competing on the basis of behavior, but the companies that succeed in this era will be those that inspire employee behaviors that forge more meaningful connections with all business stakeholders.
Are your leaders managing employee engagement?
If so, they are likely mis-managing employee engagement. For years, employee engagement scores have declined despite the millions of dollars companies invest to boost sagging workforce morale. That’s because most companies treat engagement as a how-much process (i.e., higher salaries, expanded benefits and more face-time with supervisors = more engagement) rather than a HOW process. The frequency of lunches, performance reviews, volunteer program outings and team-building exercises does not produce higher levels of employee engagement. Employee engagement is determined by the quality and meaningfulness of these interactions and the journey in which managers are enlisting their employees. What’s more, the source of engagement has nothing to do with quantity and everything to do with quality – specifically, the extent to which trust, values and mission actually inspire and drive daily activities and interactions.
Do employees do whatever their bosses order, or do they follow established procedures and policies?
Hopefully, they do more than either option. Business sustainability is no longer about what organizations can and cannot do; it is about what organizations should do. Employees should do the right thing, which stems from a sense of shared values and a shared mission. That doesn’t mean that employees should fly solo. Instead, they should enlist and collaborate with the right people in doing the right thing.
Is your organizational culture autocratic or rules-based?
By now, I’m sure you’re sensing a theme: Neither culture is sufficient given the way the world works today. The most innovative and sustainable companies, and given time probably the most successful, invest the time and energy – and commit to the journey – required to develop and maintain human cultures. These “self-governing” organizations are highly transparent, value individual accountability over top-down decision-making, foster high levels of trust throughout the organization and strive to achieve long-term significance as opposed to focusing only on short-term success.
The questions in this pop quiz are representative of the type of soul-searching work organizations need to conduct to determine if they are neglecting root-cause issues. The true test takes time and commitment. It takes a lot of miles to get our culture right, and the journey on this road never ends. So let’s get started on the long and challenging culture work we need to do so that we can break out of the crisis lane once and for all and demonstrate that it is what’s deep inside our own cultures that counts the most.
This article was originally published in Forbes: https://www.forbes.com/sites/dovseidman/2014/09/10/are-we-all-gm-take-the-quiz/?sh=6b23d6de5e87