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General Motors: Too Late for a Culture Shift?

April 7, 2014

Is my life worth a buck? That's what many owners of the Cobalt and other General Motors products may be asking themselves now. Surely, that’s the last question GM wants its customers to raise as they decide which vehicle will be their next purchase.  

Last week, a memorandum surfaced in congressional hearings investigating safety issues tied to the Cobalt’s ignition system. Written by an engineering professional at GM, it indicated that changing a defective ignition part would add 90 cents to the cost of each car. The information available thus far suggests that GM concluded that such an expense could not be initially justified.

Someone authorized manufacture of a new part. Sadly, at least 13 deaths have been linked to the defect found in the original component.

Testifying before Congress, GM President Mary Barra expressed regret over the Cobalt’s safety issues; she stated that GM is now moving from a culture of cost containment to a culture of safety. Barra testified that communication silos will be removed and senior management will learn of safety concerns faster.

Those are welcome commitments. Nevertheless, some people will never consider buying GM products. Other loyal customers will likely check out and purchase other brands.

It's been nearly 30 years since Ford dealt with a similar business crisis. For many of us, when we hear the word Pinto, we picture the ill-fated Ford compact whose exploding fuel tanks caused multiple deaths and injuries. Likewise, my guess is that for a long time, when we hear Cobalt, many of us will think of GM’s substandard subcompact rather than the bold, vibrant blue color for which the company named it.  

How could this have been prevented? From what Barra stated, it appears that GM looked at costs primarily from the perspective of direct out-of-pocket expenditures. For organizations committed to quality and safety – which spans many industries, including nuclear power, health care and pharmaceuticals – this is a myopic, dangerous business view.

But cost control as a primary business driver makes sense as long as the full range of critical metrics is considered. The true cost of product defects, safety hazards, and aberrant workplace cultures is the resulting damage caused to brand reputation and trust when the public or an organization’s own team members suffer injury.

So where should GM start? I recommend it to return to its deeply stated values and commitments. These are the first phrases in GM’s statement of corporate responsibility:

“General Motors is a great car and truck manufacturer with a long history of outstanding corporate citizenship. At GM, corporate responsibility is more than words. It is an acknowledgement that our actions shape our reputation.”

Putting its values into daily action from workaday to major issues will encourage everyone throughout the organization to raise concerns and issues promptly and clearly. That will then give GM the quick information it needs to address problems before they cause widespread harm.

In turn, prompt preventive and remedial actions will bring meaning back to its values and will help restore public trust, which has been damaged in such a tragic, costly way.