Is your corporate culture encouraging safety and adherence to quality or putting employees and the public at risk?

We may never know the full story of the tragedies involving GM cars (NY Times, July 16). The safety scandal has left CEO Mary T. Barra facing the scorn of regulators, the Senate, courts, victims’ families and many others, and will surely damage the seemingly Teflon-coated GM brand. Pondering their fall from grace provides valuable lessons for senior managers–particularly those in transportation, health care, energy and oil and gas.

Lead ethically and with integrity

As leaders, our actions declare our expectations far more loudly than any written policies and procedures do. We have all heard of negligent leaders with their proverbial heads stuck in the sand, ignoring or minimizing troubling situations. When they don’t address the concerns, this eventually leads to reduced financial returns, dampened stock prices or negatively affected compensation. One need look no further than US banking and investment practices circa 2008. This kind of negligence is almost always exposed, ultimately, and typically costs more in the long run. You can avoid or minimize these challenges if you:

• Communicate and model your commitment to ethical practices, safety standards, and your compliance with all company policies and regulations.
• Use all communication channels including social media, employee meetings, and one-on-one conversations to reinforce your commitment to doing the right thing.

Your apparent expectations of others will flow from these personal practices.

Take personal responsibility

When you are the leader, you are accountable and responsible for all that happens on your watch. Ignorance of the situation does not provide a “get out of jail free card” (pun intended). When people make mistakes:

• Acknowledge the errors to those inside and outside of your organization.
• Be visibly committed to identifying and resolving the contributing factors, and when possible, the root cause.
• Make amends as possible and where appropriate.

Manage your information

We sometimes forget the maxim, “there are no more secrets.” Email, cell phone conversations, and social media are transparent and can expose sensitive information across the globe in minutes. Most organizations still lack effective and secure information management. In this story, the documents from GM’s “death inquiries” (when they looked into the automobile fatalities) exposed what they already knew about the vehicle problems and their lack of action (both in the face of this, and more generally). Of course, they also revealed their poor judgement. While I am not a proponent of hiding or destroying evidence, this scenario is a good reminder that, as leaders you need to:

• Manage your information with greater discretion.
• Ask those accountable: “How and where do we store our information? What policies do we have in place for information management? How do we govern our practices to ensure adherence to our policies?”

Create a Culture of Transparency and Accountability

A contingent of GM employees may have been aware of the defective ignition switches, as reported accidents spanned a decade. What happens in your organization when someone identifies a quality or safety issue– especially if resolving the concern could result in a project delay, a cost overrun or a disappointed customer? Ideally, “messengers” such as these deserve to be applauded, not shot. Unfortunately, in some organizations, poor performance or unethical behaviours have been ignored since the perpetrator held a key client relationship or had specialized technical expertise.

Great leaders create an environment of transparency and support difficult conversations. When this is lacking, like in the GM case, you may incur unwanted and unintended external transparency. David Friedman, the safety agency’s acting administrator, said about this situation “GM’s decision-making, structure, process and corporate culture stood in the way of safety.” When you or your leaders identity situations of non-compliance to safety, quality or ethical behaviour, what is the outcome? Remember that effective performance management practices support a culture of accountability.

It extends beyond your walls

Some organizations mandate safe and ethical practices to their staff, but turn a blind eye to suppliers and partners who may not adhere to the same high standards. When this occurs, leaders inadvertently send a message to their staff that they will make allowances in some situations; this then implies that following the rules is at one’s discretion.

No company wants to incur corporate scandal or accidents. Fortunately, if you create a corporate culture of transparency and accountability, your company may avoid a catastrophe like GM’s. If your organization has a misstep, honesty and actively demonstrating responsibility for the actions will help you to avert an unmanageable crisis.

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