A flawed culture can literally kill people as recently demonstrated by General Motors (GM) Co. The ignition recall crisis is at the heart of the matter. The defects led to the deaths of at least 13 people as reported in a 325-page report presented by attorney, Anton Valukas. And, while the report spares those at the top, it does expose the fact that lower-ranking employees acted without communicating to senior leaders. As a result, 15 employees have been let go, while another five have been disciplined.
The report pulls back the curtain on a company that had no sense of urgency to fix the ignition problem and describes what it is now being coined, “The GM Nod.” GM’s CEO, Mary Barra, admits that this is a practice of GM managers sitting in a room, nodding in agreement at steps that need to be taken, and then leaving the room and doing nothing. “The GM Salute,” another catch phrase, defines the habit of employees sitting through meetings and pointing at others for being the wrongdoers.
Is culture change possible?
So, what can Barra do moving forward?
Ralph Walkling, executive director of the Center for Corporate Governance at Drexel University’s business school, says “The way she changes the culture is by example.”
Barra may have trouble shaking up GM’s silo structure because “there was a culture that the information did not flow upstream,” said Richard Steinberg, a corporate governance consultant who advises boards.
Steinberg urged Barra to take advantage of new technology that better monitors potential risks – “That not only ingrains the process, it automates it,” he said.
Larry Johnson, a corporate culture expert and author of Absolute Honesty: Building a Corporate Culture that Values Straight Talk and Rewards Integrity, believes that culture change in large companies is possible. The first step is to realize that there is a dysfunctional culture; the next step is to understand why the culture must change.
In the case of GM, he says that Barra must clearly communicate with managers and other employees to educate them to the seriousness of the situation. Additionally, new expectations regarding safety must be developed and conveyed to everyone. Finally, reward and punishment systems must be realigned to reinforce the new expectations.
“And, while rewarding those who adjust to the new standards, Barra must also be willing to let those go who do not,” Johnson says. “Plus, who she brings in to replace those she lets go is critical. New managers and those promoted should be passionate about safety as much as profit. Managers with positive track records for insisting on safety will help establish the standard for anyone wanting to be promoted.”
But a more strategic view is critical, says Greg Moran, President and CEO, Chequed.com, Inc.
“Changing culture alone is impossible,” Moran says. “To change it, you need to change performance expectations and measurement. You need to ensure your selection systems are in line with the job’s performance expectations, measurements and company values. Great companies understand how to effectively measure what they want to achieve in terms of results and values, and then rigorously screen against those criteria during the selection process.”
So, don’t let a poor work culture bring you down. The results can be disastrous.