Deadly GM breakdown carries a lesson for us all

The opening sentence of the 325-page internal investigation report on a death-dealing scandal at General Motors paradoxically runs too long yet gets right to the point:

"In the fall of 2002, General Motors personnel made a decision that would lead to catastrophic results - a GM engineer chose to use an ignition switch in certain cars that was so far below GM's own specifications that it failed to keep the car powered on in circumstances that drivers could encounter, resulting in moving stalls on the highway as well as loss of power on rough terrain a driver might confront moments before a crash."

Aha, we first thought, the culprit - unmasked!

But the deeper we read into the report lead-authored by Chicago attorney and former federal prosecutor Anton Valukas, the less we cared about an engineer in 2002, and the more we learned about the dereliction of so many employees who should have known better. So many employees who have so much in common with ... those of us who work in other complex organizations.

There's a lesson in this debacle that we ignore at grave peril - to ourselves, to our employers, and most of all to customers who trust us.

And, echoing in our memory bank, there's an intervention step that the chief executive of Chicago's then-Sears, Roebuck took during his company's scandal that every one of us can and should take today. (No need to first wait for a scandal to surface.)

First, though, parse the GM investigation and:

• You find "no evidence that any employee made an explicit trade-off between safety and cost in the investigation of the (Chevrolet) Cobalt." But you also learn that a financially strained company's pressure to contain head count and costs may have influenced ultimately devastating decisions.

• You find foolish corporate attempts to sugarcoat facts at the expense of simple candor, with employees trained to write about a safety problem as an "issue, condition, matter." And a "defect"? Heaven forfend! Instead, "does not perform to design."

• In sum, you find what rookie GM Chief Executive Mary T. Barra on Thursday called not only "a pattern of incompetence and neglect." But you also find many employees who didn't, in her words, "take the responsibility" to identify and fix the problem.

That's precisely where the rest of us enter, stage right: Granted, there is serious career risk in telling a boss about a blunder, a looming threat, an urgent problem or - worst of all - a systemic and possibly intentional failure to make ethical behavior more important than company performance. As the GM debacle attests, less of the former can, in the long run, hurt the latter.

Many of us sign annual statements pledging that we will report even suspicions of misconduct, or even questionable judgment, to supervisors in our organizations. The GM report is replete with instances in which an engineer, or a committee, or an executive, or somebody else should have thought less about process and protocol than about doing what was right for this company, its workers and the people who buy its products.

In the wake of this GM report, expect to read lots of encouragements for employees to speed bad news up their companies' chains of command. Second the motion.

But managers who stand around waiting to hear about something suspicious in the Memphis operation also should be asking hard questions, and not just of their subordinates.

Enter Sears, stage left:

On a warm spring Chicago Sunday in 1997, Arthur C. Martinez and his top executives were just as shellshocked as Barra's team would be years later at GM: Company lawyers used overhead slides to explain that Sears, the once-moribund company he had revived, had violated federal law for a decade. Federal authorities would confirm that company execs didn't know about the misconduct lower on the company ladder. Sears soon accepted full responsibility for improperly collecting $110 million from 187,000 customers whose bankruptcies should have freed them of their debts to Sears. The federal fine: $60 million.

What we most recall is Martinez's message when he broke the devastating news of the scandal to Sears' top 200 executives on April 10, 1997:

Splendid advice, Ms. Barra, and it's yours for a hat tip to Martinez.

Splendid advice, too, for all of us whose careers have blessed us with positions of influence in our organizations.