More on the Broken Culture in the Auto Industry: How Dysfunctional Power Dynamics Cause Bad Decisions

As I said in my last post on on the Stanford Student Who Tried to Work at Ford, I've been astounded by both the amount and quality of reactions to my post last Thursday on The Auto Industry Bailout. I argued that I am ambivalent about whether or not the bailout should happen, but if it does happen, part of the deal has to be a path to fundamental cultural and organizational change.  I argued that in particular GM seems to be designed to keep its executives as clueless as possible and that the company is poisoned with a "can't do" attitude -- that their core competence is explaining why change isn't possible and (based on watching the hearings again)why NONE of the problems they face are management's fault. 

At the moment, Thursday's post has generated about 10,000 page views (about 20 times my average post) and 42 comments, plus I have received another 20 or so emails from people who prefer not to make public comments.  These comments are all thoughtful and some are so good that I think it is worthwhile reprinting them again as posts.  The first "reprint" was from that eager young engineer mentioned above who was dismayed by his experience at Ford.  Here is the second, which I find astounding.  My original post argued that one reason that leaders at GM were so clueless is that power dynamics in meetings (and other interactions) are deeply dysfunctional, with the highest status person in the group doing all the talking and none of the listening, regardless who has the most expertise in the room.  As a result, it seems to be a system designed to preserve the status of those at the top rather than to get the best information to the right people at the right time.

This conclusion resulted from observations (often measuring talking time) during meetings I have attended at GM over the past 30 years for diverse reasons.  Matthew E. May, who spent 8 years working full-time for Toyota University and is the author of The Elegant Solution: Toyota's Formula for Mastering Innovation, describes a trick he used in a meeting at GM to bring these dynamics to light and to show the damage that they can do. I guess they didn't learn lesson.  Here is Matthew's amazing story:

Thank you for a thoughtful and insightful post. Everything you describe mirrors my experience with a part of GM in the early 90s. I was doing some consulting with a division of GM and told them the best ideas were not getting heard – in fact, no ideas were being heard. The managers to a person told me that wasn't their culture. During an offside I had the opportunity to design part of the program. It was an age-old prioritization game called Survival on the Moon: you've crash landed on the moon, 200 clicks from the mother ship, with 25 items you have to rank in the order of their importance in surviving the trek to the ship. You do it individually, then as a group, in order to make the point that "we" is smarter "me". (There is a right order, provided by NASA.) I constructed the table rounds cross-hierarchically, so one table might have a vp and a lowly staffer. Then I played a dirty trick: I gave the lowest ranking person at each table the answers ahead of time, saying that when it came time for the group ranking, their job was to everything in their power to convince the table they had the right ranking, short of revealing that I had given them the answer. Not a single table (about 15 tables of 10) got the right answer. Then I had the ringers stand up. Got to catch all the managers red-faced.

I spent 8 years inside Toyota as a fully retained adviser to the University of Toyota. It is the antithesis of everything you describe.

Matthew,thanks so much for sharing this story.  It holds lessons not just about where GM needs to change, but should serve as a cautionary tale for every boss. Matthew's trick would work in a lot of other organizations.  For example,it would work in hospitals where nurses are often afraid to speak-up when doctors make a mistake and ignored and belittled when they do (although some are getting better). And if you want to read about an organization that -- at least for many years -- suffered from the same dynamics, go to the official report written by the blue-ribbon committee that investigated the accident that destroyed the Columbia Space Shuttle.  It it is one of the best management books ever written and you can get it free online. 

In fact, this all raises an interesting question: If you are the boss, how do you stop these dysfunctional dynamics from happening? I recently wrote that getting out of the way for awhile (as John F. Kennedy did) is one solution.  Any other ideas?

Comments

[RutgersFan]

Thanks for the original posting and the follow up. I currently work in the automotive industry in a Tier I supplier to mainly Japanese manufacturers. This is my first position in an automotive company, having been in other manufacturing (Fortune 250) companies. One of my MOST frustrating experiences during my new hire period was repeatedly hearing that my ideas wouldn't work because "we've done that xx years ago and it didn't work". It's a wonder the organization is still in business.

[Wally Bock]

Congratulations! This post was selected as one of the five best business blog posts of the week in my Three Star Leadership Midweek Review of the Business Blogs.

http://blog.threestarleadership.com/2008/11/26/112608-a-midweek-look-at-the-business-blogs.aspx

Wally Bock

[Jason Yip]

Broken link "The Auto Industry Bailout"

[Jared Cosulich]

I can't say I love this example. I'm sure it is more than exemplary of problems at many of these companies, just specifically I can't say for sure if this happened at a given organization it would necessarily mean that there were problems. If, in the process of trying to discover the right answer these teams flatly ignored any input from junior people then that is one thing, but even if they did not ignore the junior person I could easily imagine a situation where they still didn't get the right answer and it was not due to a lack of respect for junior people.

That said I also don't like the fact that there was a "right" answer, although that was probably necessary or the exercise would be pointless. I'm not sure I've ever been in a situation where there is a right and wrong answer. Which is generally how I try to encourage idea flow and opinions from junior people. Simply try to make them right. Challenge their ideas and recognize that chances are there are some good elements to an idea that was introduced by a smart junior person. Too often debates devolve into one answer vs. another answer, and most of the time both answers have interesting elements that are worth exploring...

[Jay Godse]

It goes without saying, that as a boss, you have to put away your own ego. This is easier said than done. A part of that means that you need to understand that when somebody challenges your idea, they are not necessarily challenging your authority. There are few bosses that have ever done that in my experience. To really facilitate open upward flow of uncomfortable information and ideas, you have to assume that they are not challenging your authority.

The second step involves soliciting uncomfortable ideas. I used to tell my team to tell me that my idea was a crock of poo if they thought so. The only caveat was that they had to have a plausible reason why they thought so. It facilitated a lot of good communication, because their reasons for justifying their thoughts brought out a lot of hidden assumptions and knowledge in the open. (That in itself led to better ideas).

The third part, which is very hard, is to get your team to trust you not to "slam" them when they do bring uncomfortable information to you, some of which shows that you as a boss have not done something right. That requires a lot of investment of time from the boss. In the majority of places, challenging a boss' idea or bringing uncomfortable information is a CLE (career limiting event).

Kennedy's way of solving this problem is easiest on the boss because the boss does not have to face challenges to his ideas directly, and no "thick skins" need to be grown.

Two of my bosses who exemplified this kind of approach were Dan W (now at Google) and Alex N (now at TMA Solutions). I think both of those organizations are doing well.

That's my 2 cents.