GM’s Culture

Let’s talk a bit more about GM and the faulty ignition switch.

During last year’s congressional testimony Mary Barra admits she doesn’t know why GM did not recall and repair the problem sooner (they’ve known about in since 2001). GM is conducting an internal investigation, let me save you some suspense; one of the findings will be the “Culture at GM”. Hmmm, what does that mean exactly? What is culture?

Culture: defines who we are, what we value, how we do things, our norms and our guiding principles. It is NOT words on the wall, it’s the entire system. So culture is the result of the management systems and leadership of the company. GM’s systems created a culture where hiding problems was tolerated, otherwise people wouldn’t have made those decisions. Follow?

OK, so the culture is a problem…what do we do about it? Culture is surprisingly simple to change, the systems have to change:

• Change the compensation system – people tend to do what they are paid to do
• Change the recruiting and staffing process – if you start promoting people based on the new strategy, you send a powerful message about success
• Change the Performance Management systems – People who are evaluated on a new set of goals/objectives will change their behavior. The compensation system and the performance management system should be in sync
• Change the training and development process – Train them to be successful in the new culture
• Change the budgeting system – so that everyone has skin in the game
• Increase the flow of information to more people – so they don’t work in the dark
• Communicate the new strategy and desired culture more often than you think you need to (by double at least) – don’t let a day go by that people don’t hear about the new expectations

That’s it, GM’s culture will be identified as the primary cause for the cover-up and if they make the changes listed above they should come out on top. Caution: many of the people who have been promoted in the old system will “strenuously object”.