Do You Really Want to Know What's Going On in Your Organization? Or Are You Just Pretending?

Three articles in the last four days in the New York Times provide a great explanation of why I'm so hung up on Trust and Transparency.

I have, of course, been following the story of GM's recall of more than a million vehicles for an ignition switch defect that has been responsible for at least thirteen deaths (earlier blogpost, here). And the story keeps unfolding.

On Friday, Bill Vlasic reported that GM's lawyers went so far as to hide product flaws from each other (full article, here):

Employees were discouraged from taking notes in meetings. Workers’ emails were examined once a year for sensitive information that might be used against the company. G.M. lawyers even kept their knowledge of fatal accidents related to a defective ignition switch from their own boss, the company’s general counsel, Michael P. Millikin.

As a result of GM's internal investigations, at least three senior company lawyers have been dismissed (but not the general counsel).

Sunday's paper carried a great column by Gretchen Morgenson on the internal investigation and CEO Mary Barra's report to her employees and to the world:

...In her remarks, Ms. Barra projected an earnest and urgent desire to reform the company’s culture, which she said was permeated by "bureaucratic processes that avoided accountability." That culture meant no one took responsibility for faulty ignition switches in Chevrolet Cobalts and other cars that were ultimately responsible for at least 13 deaths.

Ms. Barra told her audience that she wanted to make sure this sort of thing never happened again at G.M. I believe her. But the depth of the dysfunction at this company, as detailed in the report, makes it hard to see how she can keep that pledge.

The report ...says G.M. officials showed a “pattern of incompetence” that led to inaction on the defects, Ms. Barra said.

That’s the mild version. The report exposes a mind-set throughout the company that was so self-absorbed, so bent on self-preservation and self-protection that it routinely put its customers last.

The key to success at GM, apparently, was finding someone else to blame, known internally as the "GM Salute": "a crossing of the arms and pointing outwards toward others, indicating that the responsibility belongs to someone else, not me." (Relatedly, there's the "GM nod": "when everyone agrees to a plan of action after a meeting 'but then leaves the room with no intention to follow through'.")

And then there's an article, today, by Matthew Wald, exploring how the siloization of decision-making can help create perfect opportunities for management disasters like this one.

In the case of G.M., the crucial insight was that a faulty ignition switch could cause vehicles to lose power and deactivate the air bags. The link between the ignition and the air bags was not a secret; it was an intentional goal of the design, to protect people in parked cars from being injured by air bags that were deployed mistakenly.

The investigation commissioned by G.M. from Anton R. Valukas, a former United States attorney, turned up a memo from August 2001 written by an engineer named Jim Sewell, pointing out that if the ignition power was lost, the "S.D.M. would also drop," a reference to the sensing diagnostic module, which determines whether the air bags are deployed.

But the recalls didn't begin until this year, thirteen years after that memo. How is that possible?

Wald quotes a Columbia University sociology professor with a difference example of poor management response to product flaws that ended in disaster: "Both [NASA's] Challenger and Columbia [space shuttle disasters] had a long incubation period with early warning signs that something was seriously wrong but those signals were either missed, misinterpreted or ignored." If the culture encourages you to look away from potential problems and focus on your own self-preservation... well, how much more likely is a disaster?

The GM engineer who first identified the problem focused on a different, seemingly "non-safety" complaint (cars stalling out). (But I'm not sure how a car suddenly stalling out when under way can be considered a "non-safety" issue....) A little more transparency, a culture that encouraged sharing of and joint solution of problems, should have brought this issue to light much earlier. 

But the fact that GM lawyers kept secrets from each other leads one to conclude that there was much more than the "pattern of incompetence" that CEO Barra acknowledged: it sounds much more like a culture of "We don't want to know."