General Motors Company CEO Mary Barra testifies during a House Energy and Commerce Committee hearing on Capitol Hill, on April 1, 2014 in Washington, DC.Mark Wilson—Getty Images
It’s hard to overstate how unprecedented GM CEO Mary Barra’s announcement this morning of the findings of U.S. attorney Anton R. Valukas’ investigation of the company’s ignition switch scandal was. Barra called the report, based on 350 interviews with 230 individuals, as well as the examination of 41 million documents, “extremely thorough,” “brutally tough,” and “deeply troubling.” The National Highway Traffic Safety Administration will be posting the whole report later today on their website, but in the meantime, here are the three things you need to know about the case and its ramifications, based on Barra’s preview of the report.
This wasn’t a trade-off between cost and safety – Barra says that the report found no evidence that the bean counters within the firm pushed the engineers to compromise safety in order to save 90 cents on an ignition switch that ended up costing lives. Rather, this was about a company with lots of divisions and moving parts that didn’t talk to one another. The ignition switch scandal was, in the end, a kind of death from a thousand cuts in which multiple divisions had information that could have prevented the safety issues, which they didn’t share, and for which no one person took ultimately responsibility. Those “silos” are what Barra is going to try and break down over the next few weeks and months – one of the key steps she’s taking to do that is putting responsibility for safety issues in the C-suite, as well as appointing a single VP of safety to coordinate everything, with the help of 35 new safety investigators.
Barra isn’t guilty herself, but she’s taking personal responsibility for fixing not only the problem, but also GM’s corporate culture. Barra didn’t know about the problem – indeed, she said that she believed “deeply in my heart” that if information had traveled out of various corporate silos and up the food chain, “we would have dealt with this issue very differently.” In one of the most telling moments of her speech, she told employees that if any of them saw a problem with safety that should be addressed, they should tell their supervisors, and would be commended for doing so. And, if they still didn’t feel it was being addressed, they should come to her – she actually said “contact me directly,” which is the first time I’ve ever heard a CEO say that in a similar press conference.
This is a scandal that could change not only GM, but also the auto industry itself, and the broader business landscape. The “silos” that Barra kept referring to, those divisions within the company that don’t talk to each other, are a problem not just for GM, but for nearly every big company in America. Finding examples of this is like shooting ducks in a barrel – there’s the famous anecdote about two Sony divisions building plugs for a single product without knowing what the other was doing, or the blue chip tech companies that hire PR reps to follow around executives and write down what they are saying so that they can tell the rest of the company, because the leaders don’t do it themselves.
Expect “de-siloing” to become a major management topic. And expect Barra to continue to be in the spotlight – she gave a rock star performance at this conference, and has set the bar for herself even higher, pledging to set a “new industry standard for safety.” If she can get all the many parts of GM to talk to one another, she may set a new standard for corporate management, too.
