“The more you want people to have creative ideas and solve problems, the less you can afford to manage them with terror.”
Chairman, Electro Rent Corp.
“American management, in the two decades after world War II, was universally admired for its strikingly effective performance. But times change. An approach shaped and refined during stable decades may be ill suited to a world [of] rapid and unpredictable change, scarce energy, global competition for markets, and a constant need for innovation.”
R.H. Hayes and W.J. Abernathy, Harvard Business Review, July/Aug. 1980.
I told myself I was not going to write about GM, even though I spent eight years there, writing speeches for top execs. The company has enough problems right now without one more insider venting his spleen. Besides, it’s already been done, by my fellow speechwriter, the late and beloved Al Lee, who did a character assassination of the CEO I worked with; the book (Call Me Roger) sank without a trace.
But now I have to, because I read the heartrending story of Donna Gilbert, whose body was wrecked by a crash caused by a flaw in GM’s ignition system (“Woman journeys back from car crash,” Keene Sentinel, Apr. 27, 2014; by-lined Chris Mondics, The Philadelphia Inquirer). The company knew about it – for years.
I tried to stay out of it emotionally, even though this latest ignition scandal and cover-up have, incredibly, driven liberal Michael Moore -- who’s hated GM for 30 years, ever since they ruined his idyllic home town, Flint, MI -- to advocate capital punishment for the people at GM who let it happen!
Roger and Me
I was at GM when Moore made his first docu-epic, Roger and Me. One of my speeches made it into that movie, with the CEO delivering warm, fuzzy Yuletide thoughts, interspersed, by Moore, with shots of a sheriff evicting people in, of course, Flint.
Donna Smith spent 15 days in a coma. And people are wondering why. Does GM have a culture of cover-up? Not exactly.
Arrogant and infallible
It has a culture of arrogance and infallibility. Nobody remembers when GM was America’s industrial colossus. It owned HALF of the North American vehicle market! There was talk, early in the 20th century, of breaking it up.
Those were the days, my friend! We thought they’d never end. But they did. I was on board for the last of them, and nothing beats the corporate jet for travel convenience.
The “GM can do anything” mentality was very strong. But this attitude hides a fatal weakness: the inability to admit error.
The company was deaf in both ears as far as PR was concerned. Their attitude toward PR Staff was old-school: “Don’t you guys take reporters out to lunch so they’ll say nice things about GM?”
I’ll bet there was no high-level PR counsel at those executive meetings where the ignition thing came up (if ever it did), nobody to say, “Fix this problem NOW, before anything else goes wrong, admit the truth, pay off all legitimate claims, and be done with it.” Much better in the long term. So basic.
To deal with endemic problems, GM (and the other companies, no doubt) sometimes practiced “passive recalls” (my term). I once found myself in a long line of cars outside a Detroit-area dealership (BTW, to buy anything other than an American car in Detroit was social treason).
The cars all had the same problem – window washer pump failure. The thing had been positioned too close to the engine heat and would easily burn out if the washer tried to run on empty.
The dealer fixed this and was paid back by GM from a “Policy and Warranty” fund, i.e., fix the problem which we should have anticipated when we designed the car.
The other piece of it, along with the success/infallibility culture, was a militaristically rigid authoritarian management consensus. One exec I worked with made a point of telling me he had a meeting with “my boss” – and he was the 2nd highest executive in the company. Even at these exalted levels, the authority structure must be recognized.
What this means for the ignition debacle was that, at the lower and mid-levels, “the boss doesn’t want to hear about it.” That simple. Doesn’t look good. Affects profits. Nobody dared say, “Fuck it, somebody almost died, he HAS to hear about it.” That was not the GM I knew.
So yes, they’ve shot themselves in the other foot. Screwing up solid market leadership to the point of bankruptcy, being publicly owned (Roger would have loved that – NOT), starting to earn money again – and now this. Haunted by the old GM.
Arrogance, infallibility, rigid command-and-control: these are not humanistic virtues, even though most of these men, and they were men, were no doubt regular churchgoers.
There may be companies where these inhumane behaviors are not practiced. But as far as I can see, they spelled the downfall of GM.