I suspect that we tend to vastly underestimate the amount of
energy, or raw force, sufficient to rectify an organization’s dysfunctional
culture. The typical assumption is that replacing the CEO is not only
necessary, but also sufficient. “A fish rots from the head down,” one might
say. However, the head of a fish cannot necessarily stop, not to mention
reverse, an infection spreading somewhere in the body. A sordid mentality can
easily spread once it has taken hold in an organizational body. Indeed, such a
pathogen can develop defense mechanisms geared to the standard antibiotics. To
rely on the body to heal itself involves considerable naiveté. Relying on GM’s
CEO Mary Barra to exculpate the mentality behind the faulty ignition-switch
lapse and ensuing cover-up is thus arguably based on a faulty assumption of
sufficiency.
On July 17, 2014, U.S. Senator Claire McCaskill, chair of
the Senate Subcommittee on Consumer Protection, Product Safety and Insurance,
demanded of Barra, who was testifying before the committee, “How in the world
did Michael Millikin keep his job?” Stating that Millikin should be fired, U.S.
Senator Richard Blumenthal noted that lawyers on Millikin’s staff were involved
in “cover-up, concealment, deceit and even fraud.”[1]
In return, Barra defended GM’s top lawyer as having “high integrity.” Moreover,
she said that Millikin is a key part of the legal department she wants at the
company—the “new GM,” as she had previously described GM under her helm. Yet
can having fired only 15 people for their roles in the faulty ignition-switch
episode, which led to 13 deaths and a delayed recall of 2.6 million cars,
possibly turn an “old” company into a new one? The assumption that the enabling
of covering things up had been limited to the 15 people fired (with financial
incentives to leave—hardly a message of deterrence) is as faulty as the
problematic ignition-switch itself.
To take Barra’s opinion of Millikin as having high integrity
as a given involves ignoring the possibility that Barra wanted both to present
a picture of a “new GM” to the world and protect GM veteran employees—essentially
having it both ways. Put another way, relying on Barra means ignoring her
conflict of interest.
Taking into account Barra’s possible motives, McCaskill took
a look at the support for Barra’s defense of her company’s top lawyer. Millikin
had said that information lawyers in his department had in April of 2013 of the
link between ignition-switch and airbag failures did not get to his desk; hence
he did not know of the defective switches until February 2014. If this is true,
the senator reasoned, then Millikin is guilty of either “gross negligence or
gross incompetence.” Whether the head of GM’s legal department acted with
integrity or not, his job description includes running his department. That
Barra, a manager herself, somehow omitted this point is odd. To borrow a line
from the film, Inglourious Basterds,
the head of the American Nazi-hunters told a German informant, “Yeah, we got a word
for that kind of odd in English; it’s called suspicious.”
It was suspicious that the informant arranged a meeting place at a pub being
frequented by Nazi officers.
In overlooking Millikin’s failure to keep abreast of
important information reaching his subordinates, Barra was essentially protecting
the “old GM” even as she was selling a “new GM” to the world. There’s a word
for this; it’s called lying. Were she serious about removing the culture
enabling unethical and incompetent management in the company, a wholesale
replacement of personnel would be needed throughout the company. To be sure,
such a mammoth effort would have to take place over some time, in stages (and
without giving the old guard financial incentives to leave). “Crime does not
pay” and “Incompetent management is not to be tolerated” would be the messages
sent in word as well as deed, and this is
what integrity is all about. Contrariwise, trying to have something both ways
in line with a conflict of interest is just more of the “old GM.” Even though
Barra came in after the ignition-switch cover-up, indications point to her
having joined the old guard even as she gives lip-service to a new GM.
The old will of course take care of the old, so a new spark must infuse considerable energy into a company gripped by the status quo as its default in order to move the entire entity to a new, higher orbit. That is to say, much ballast must be tossed over as the trust is engaged. We as a society tend to assume that the movement comes about from mere window-dressing by a CEO. We are naïve.
The old will of course take care of the old, so a new spark must infuse considerable energy into a company gripped by the status quo as its default in order to move the entire entity to a new, higher orbit. That is to say, much ballast must be tossed over as the trust is engaged. We as a society tend to assume that the movement comes about from mere window-dressing by a CEO. We are naïve.
1. All
quotes in this essay come from James Healey, “Senators Tell GM to Fire Top
Attorney,” USA Today, July 18, 2014.
