Leadership Warning Signs: 3 Mistakes GM Made You Don’t Have To

Leadership and growth strategy expert Kirk Dando shares three warning signs that GM actively ignored and offers five tips for avoiding breakdowns in leadership that can lead to catastrophe.

The news could not be worse for General Motors. After years of floundering and failing, the automotive company was finally beginning to see the light of day. They had paid back their bailout money, their cars and trucks were selling, and hope was starting to creep back in.
But then, the bottom fell out. The national news led with the story: People had died because GM failed to replace a part that cost less than a dollar. The response has been outrage — how could they? The resulting storm of congressional hearings and negative press has led to a lot of second guessing, from leadership down to every aspect of the organization and the vehicles they produce. Once again, the brand is suffering incredible damage. To top it off, the timing is terrible, and it will take years to recover, if they ever do.
How could this sort of thing happen? And also importantly, could it happen in your company?

Warning: Failure Often Begins with Success

The truth is, nothing kills faster than success. It happens in organizations of all kinds every day. Companies big and small start experiencing growth and success and soon enough trouble shows up. Here’s why: the seeds of failure are sown in the fields of success. It’s true. Maybe your organization is flying high, or is about to be. If that’s the case one thing you need to keep in mind is that the old adage is true: Pride really does come before destruction.
Maybe the stakes aren’t so high that your success train wreck can cause your customers to lose their lives, but it can cause you to lose your leadership credibility or worse, your livelihood. CEO turnover hit a high in 2013 and 2014 is set to outpace 2013. Do not think this is drama for impact. It’s real.
So, let’s use the GM recall disaster as a leading indicator and dig a little deeper into what happened and how you can predict and prepare for these same growth killers in your business.

General Mess: 3 Warning Signs of Success GM Ignored

Companies have been rising to success and falling back to earth again for centuries. By working with and studying over 5,000 growth-hungry leaders I have discovered 12 common but critical mistakes CEO’s and their teams make that derail growth. I call these dirty dozen the 12 Warning Signs of Success.
For the GM recall and the ensuing fallout, here are the pertinent Warning Signs of Success I believe they ignored:

1) Open Door Closed Mind

The fatal flaw in the ignition switch, which GM now says its engineers discovered in 2001, has spurred the automaker’s biggest crisis since its 2009 bankruptcy and bailout. Clearly, someone at the top didn’t want to hear about or act on the problem at the beginning.

2) Drinking the Chaos Kool-Aid

“It was a chaotic situation inside General Motors back then,” said Maryann Keller, a veteran auto analyst, about the time when the ignition switch issue was created, discovered and not properly dealt with.

3) Core Values Meltdown

Former GM engineers say the company’s reports to regulators describe a sequence of events that was fundamentally at odds with standard operating procedure. Who was making exceptions, and why?

As is always the case, everything rises or falls on leadership. New CEO, Mary Barra must now clean up the mess of past leaders who consciously chose to be problem solvers (not proactive problem predictors) who passively encouraged look-the-other-way deals when it came to upholding GM’s values, SOPs, and consumer safety. True leaders see around corners and predict problems before they show up in the results. Real leaders also set up a culture where doing the right thing is the path of least resistance — something the past leadership of GM chose not to do.
Leaders cannot hide behind the excuse of rogue employees who operated outside the boundaries of the corporate culture. After all, leaders are responsible for creating systems and processes that create predictable and safe outcomes. Like Jack Nicholson said in A Few Good Men “We follow orders or people die; it’s that simple.” Mary Barra appears to be leading in a way that is authentic, transparent, and honest. Unfortunately, she must use her leadership muscles to clean up someone else’s mess instead of inspiring growth and customer confidence. Investors, employees, and customers depend on leaders to evolve and perform at a higher level. What they really need are predictive leaders, not profit-protecting monkeys!

The Lesson for the Rest of Us

If you’re in leadership, be prepared: Your decisions will most likely be judged in a vacuum and very often completely out of context. But, that’s no excuse to shun your responsibility. Leveraging the future with delayed or self-serving decisions is not leadership — it’s irresponsible. Using a “see and ignore” approach (see the problem, ignore it) may create short-term results and short-term heroes, but it ultimately kills growth. And in this case, it actually killed GM customers.
So, how do you avoid this kind of catastrophe in your organization?  

• Get the drama out of your business by hiring and promoting leaders who are values-based and can handle the weight of the truth.
• Reward the behaviors and actions you want to happen when no one is looking.
• Build systems and processes that create predictable and safe outcomes that can scale. Wrap them in accountability and deal harshly and quickly with look-the-other-way deals!
• Be committed (no excuses) to your customers, your employees, and investors vs. being interested (when it’s convenient) in your customers, employees, and investors. There is a BIG difference!
• Make sure if any of 12 Warning Signs of Success are in your business you have a plan to usher them out.

You may not produce or manage a product so closely tied to customer safety, but that doesn’t mean you shouldn’t manage every day as if your customers’ lives depended on it.
Image by Andrew Inwood