Culture Overhaul Is Up To GM Insiders

Six months after stepping aside as General Motors Co.’s fourth CEO in five years and leaving his successor with a searing recall crisis, Dan Akerson tells The Detroit News “we all … didn’t fully realize how deeply some of the problems ran,” reported The Detroit News.

That’s not the half of it, as his hand-picked replacement, Mary Barra, is learning.

The most insidious aspects of GM’s corporate culture — blame-shifting, lack of accountability, a callous disregard for customers — survived decades of declining market share, financial losses and an epic bankruptcy. Those serial embarrassments mostly failed to penetrate, much less change, critical corners of the automaker’s engineering and legal operations.

Whether the recall mess proves any different will depend on how dramatically GM’s Barra-led leadership unambiguously departs from the go-along, get-along management culture that persisted for way too long there, enabling the ignition-switch fiasco blamed for at least 13 deaths and dozens of accidents.

There are the “demotions” that move personnel problems around instead of remove them; the unofficial “management union,” as Akerson referred to it in an interview last December, that memorializes excuses and protects underperformers; the nice-guy legacies of former CEOs Jack Smith and Rick Wagoner, who each presided nobly over decline.

There’s a still-prominent public ethos that equates criticism of GM and its missteps with a homegrown form of treason, as if a decade of hiding defective switch problems from customers and regulators is perfectly acceptable business practice. Any sentient person knows otherwise.

How ’bout finally getting it right? Akerson predicts the unspooling mess, still under investigation by trial lawyers, federal regulators, the Securities and Exchange Commission and the Justice Department, will drive a kind of systemic culture change he failed to deliver in his comparatively brief tenure. But will it?

The answer depends on leadership, who it promotes, how it compensates them and what it tolerates — or doesn’t, and uses the proverbial boot to underscore that a culture of accountability is more than expedient talk before congressional committees.

Barra’s taken many smart first steps — publicly sharing a withering internal investigation, changing GM’s safety reporting structure and management, instituting new programs to encourage reporting of safety issues to the highest levels, aggressively issuing recalls lest smaller problems grow.

But action and follow-through with GM people will speak loudest to the automaker’s risk-averse culture, including whether Barra’s claim to drive change will hold longtime colleagues accountable instead of giving them a pass that would not go unnoticed inside.

Finally, a culture rooted in accountability is marked by consistent discipline, exemplified in this town by former Ford Motor Co. CEO Alan Mulally’s tenure at the Blue Oval. His stint is proof that clearly articulated leadership can exorcise bad habits of the past and produce a consistent winner.

Reality is this: senior management is heavy with GM veterans, starting with Barra and product chief Mark Reuss. The company’s directors are proving less aggressive than the crew that led the automaker after its bankruptcy. Akerson is gone from the board, as are hard-headed business types like Ed Whitacre, David Bonderman and Robert Krebs.

The federally induced bankruptcy engineered by the auto task force quickly pushed GM through Chapter 11, eliminated four brands and cashiered a cadre of fifty-something executives, but it left relatively unmolested the “frozen middle” that harbored the secret of GM’s ignition-switch debacle. Its exposure after more than a decade is an opportunity to exact sweeping change.

It’s fashionable among outsiders-looking-in to trash GM’s “culture.” Members of President Barack Obama’s auto task force did it; members of Congress did (and do) it; Akerson, Whitacre and a slew of mostly now-departed executives did it, too, conveniently overlooking their roles in husbanding its worst aspects.

And it’s fashionable among Barra’s leadership team to counter that longtime company insiders are better equipped to lead dramatic change of GM’s quasi-ossified culture because they know it best. Maybe so, yet they’re also products of the culture they negotiated successfully to get to the top — none more so than Barra and Reuss.

The truth of GM leadership the past five years is that outsiders have proven less adept at changing GM’s culture than being driven by it. It’s now the insiders’ turn, a chance to alter GM’s historic arc and prove skeptics wrong.