The Auto Industry Bailout: Thoughts About Why GM Executives Are Clueless And Their Destructive “No We Can’t” Mindset

The No Asshole Rule

Bob Sutton wrote one of my favorite books in Organizational Behavior: The No Asshole Rule: Building a Civilized Workplace and Surviving One That Isn’t. When I was researching the 2008-2009 automobile industry bailout, I found that Sutton had written about GM in his blog, and I was very excited to read the entry. This reflects a pre-recall snapshot of GM leadership and culture from one of my favorite organizational scholars.

Sutton had interactions with GM employees while a graduate student, and later as a consultant, and his assessment of a possible bailout for GM might best be described as a futile effort. Even with an influx of government funds, he highly questioned whether GM could make the cultural changes necessary to be a successful organization.  He reflected: I believe [the bailout] will be a waste because the leaders of these firms (at least GM, which I know best) are so backward and misguided that the thought of giving these bozos any of my tax money turns my stomach.”

He explained: “I could list hundreds of management, cultural, and operational reasons why I believe that GM is such a flawed organization, but to me, a pair of root causes standout:  Most of the senior executives  — and many of the managers — are (1) clueless about what matters most and (2) suffer from  a ‘no we can’t’ mindset.”

I recently read the Vakalus report to GM covering the investigation into and finally a recall of the ignition switch in a number of vehicles in their line. Valkulas tracked events from about 2000 to 2014. At the very time Sutton wrote his critique of GM, GM employees were fumbling in their attempts to understand problems with the Chevy Cobalt. The descriptions of meetings, conversations, and decisions regarding the ignition switch demonstrate that Sutton’s appraisal was, sadly, completely on target. As I read the report, the sentiment, if not the word “bozos” crossed my mind.

From the first reports of moving stalls in the Cobalt, GM engineers classified the issue as one of “customer convenience.” Because drivers could still steer, they reasoned, the stall was not a safety concern. This attitude certainly provides evidence that the GM employees involved in the ignition switch investigations were clueless about what mattered.

Over and over, for over ten years, individuals and committees started inquiries over the moving stalls and ignition switches, only to abandon them when they could not determine the “root cause.” The Valkulas report concluded, “the search for the root cause became a basis for doing nothing about the problem for years. the lengthy search for root cause thus diverted GM from its obligations and failed to produce the required urgency to bring the matter to full closure” (p. 258). This reflects the “no we can’t” mindset identified by Sutton.

Sutton also remarked, “My experience with GM is that – more so than any company I have dealt with – the norm in meetings is that the highest status person in the room does all or most of the talking.   Plus, more so than any organization I have ever dealt with, employees are expected to express agreement with their bosses.” This cultural norm was evident in the moving stall / ignition switch investigation. The Valukas report revealed, “Some witnesses said there was resistance or reluctance to raise issues or concerns in the GM culture. For example, a Red X Manager said that, if an employee tried to raise a safety issue five years ago, the employee would get pushback…. In a Corporate Executive Board Company survey administered at GM in 2013, GM participants’ rate of reporting misconduct they observed was far below the benchmark rate…. A small number of participants also suggested a fear of retaliation” (p. 252).

The NHTSA Consent order required GM to implement a number of changes: a system that allows employees to report safety or non-compliance issues, training to improve employee documentation and communication, increasing communication between departments, reducing the time required to review safety issues, improving internal data analysis, and strengthing communication with the NTHSA. The consent order explicitly forbade GM from delaying any meetings related to a recall because a root cause had not been determined.

Informed by the Consent order and the Valukas report, in June 2014, CEO Mary Bara identified what she considered five key steps to change GM’s safety culture:

  • Naming Jeff Boyer as Vice President of Safety
  • Hiring 35 additional safety investigators
  • Implementing a “Speak Up for Safety” program
  • Creating a Global Product Integrity organization
  • Restructuring the safety decision-making process.

Bara also expressed a commitment to adopting the full range of recommendations outlined in the Valukas report.

These steps are positive. What I don’t see is how the reward system has changed to reinforce the importance of safety, what steps are being taken to change the knowledge management system at GM, and how they plan on overcoming departmental silos. Over the next few years, we’ll be able to tell if GM was able to create real change in its culture, or, if indeed, the company is run by bozos. Perhaps they need to read one of Sutton’s other books: The Knowing-Doing Gap.

The Auto Industry Bailout: Thoughts About Why GM Executives Are Clueless And Their Destructive “No We Can’t” Mindset – Bob Sutton.

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aimeedars

My husband likes to tease me by telling me I must be an alien. When I worked as a faculty member in a Business school, colleagues from other disciplines liked to say, “She’s not one of them.” I choose to take these comments as compliments and attribute them to the contradictory characteristics that define me. Highly analytical and results-oriented, I also approach interactions and challenges with empathy, curiosity, and wonder. I see myriad possibilities and delight at considering how to implement them. Since they are based on a solid theoretical foundation, most of them are reasonable and effective. In brainstorming conversations, others often respond to me by saying, “I didn’t think of that.” At the same time, I enjoy learning from everyone I meet, and I want everyone leaving a conversation with me to feel like they have been heard with compassion. My hobbies include knitting, making jewelry, reading, and hanging out with my husband and dogs. I am a long-time vegan committed to social justice and animal rights.

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