Lessons from Sully Sullenberger and Paul O’Neill for GM

I have written before that organizations take on the personality of its leaders. Earlier this week, CEO Mary Barra of General Motors (GM), reported on the findings of an internal audit of why they did not have an earlier recall when problems arose on some cars. Many heard a lot of blame down the ladder, but we did not hear much about culpability at the top. The key question asked, but not answered, is why did people not share their concerns with management that something was amiss? The unstated answer is it is in the culture of the organization, where people at the top did not want to hear of failings or heads would roll. An analyst who covers the car industry noted there was a modus operandi of “don’t mess with the launch of new line.”

I have written before about two leaders, Captain Sully Sullenberger and Paul O’Neill, who was the CEO who turned around Alcoa and later became Secretary of the Treasury under President George W. Bush. They have some good lessons that GM should emulate  going forward. Sullenberger was the right person at the right time as captain of US Airways Flight 1549 that he safely landed in the Hudson River. He not only studied accidents for airlines, he was on task forces to go to crash sites and help ascertain why the planes went down. So, he knew from his research and experience, what he needed to do to safely land in the Hudson.

He also knew what GM failed to remember. He was the leader of the crew, but he understood all to well that each member of the team has a role in the safety of the flight, including the flight tower personnel. His research showed that many accidents occurred because navigators and co-pilots did not feel comfortable offering input to the pilot or tower. A couple of examples might help. A plane crashed in Japan, because the co-pilot had to acquiesce to the pilot due to seniority. In this case, the co-pilot was on record as being correct that the plane was off course, but the pilot’s judgment could not be overturned.

In another, the Brazilian flight crew of a doomed flight did not have confidence to disagree with an American flight tower. They did not feel comfortable in countering the flight tower and the plane crashed. Sullenberger was aware of other examples that had been noted and improved over time. But, what he did every time he had a new flight crew (even one new member), was get them all together to get to know them and encourage them to speak up if they saw something amiss. Anything, even if small. He noted in his book, that what gave him great comfort during these few seconds on Flight 1549, was he could hear everyone doing their job. He got quick advice from the tower, his co-pilot and navigator. He shared his thoughts quickly and made sure everyone knew what was going to transpire. When he concluded that getting nearby Teterboro Airport was not possible, he offered up and concluded, “it looks like we will be in the Hudson” which allowed rescue crews to be alerted.

O’Neill joined Alcoa which was struggling. And, his first public comments were “we are going to make Alcoa the safest company possible.” This was an odd mission to start out with and many analysts were not impressed. One analyst told his investors to sell Alcoa stock, which he later added, was the worst advice he had ever given. O’Neill knew that the only thing he could get management and union leaders to agree on was safety. So, that is where he started. He also knew that for safety to be important, managers had to talk to floor personnel to understand better the problems, so that a plan to fix them could be developed. So, communication got better up and down the line. The empowered employees starting sharing ideas on how to improve not only safety, but process as well. The company performance and stock price took off.

Both Sullenberger and O’Neill knew that they were part of a team. They also knew the best ideas can come from anywhere, but especially from those closest to the action. So, it is not only vital, but imperative, that management create a culture where ideas can be shared. Otherwise, you would be flying in the dark. It should be noted at the same time GM was having these troubles, they missed a huge market opportunity. Why? Because they were not listening.

GM piloted the first electric car called the EV-1 in California in the early 2000’s. They did not sell them or market them, but a cult-like following was growing as people who wanted to make a difference started leasing them by the thousands. Eventually, the EV-1 was killed as the result of an alleged collusive effort chronicled in the documentary “Who Killed the Electric Car?” which can be accessed by the link below.* The drivers wanted to buy the cars, but GM collected them and shred them. They wanted no evidence. The Board of Directors of GM asked why the EV-1 pilot was being shelved at the same time they were building Hummers, and management said this is the direction America car buyers want. Hummers are no longer made as they were gas guzzlers.

Here in 2014, GM could have been the predominant player in the electric car market, which will grow as more power stations and better batteries become available. Yet, they chose a short-lived strategy, made other bad decisions and had to be bailed out and only now are seeing the failure of not having an open culture to communication. The lesson that was not said by Barra is we did not have an environment where people could offer input and we would listen to them. She needs to talk to Sully Sullenberger and Paul O’Neill and set a more open path for the future. It is not ironic, that both are known for safety.

* http://www.whokilledtheelectriccar.com/

 

 

 

 

Message to GM, Duke Energy and Toyota – If you only listened to a couple of us

Having witnessed the new CEO of GM, Mary Barra, testify before Congress yesterday regarding GM’s failure to remedy problems they knew about, I am moved by a comment from one of the mothers whose child died behind the wheel of a malfunctioning GM car in 2009. Paraphrasing the mother’s comments, “if they only listened to one or two of us, these other people would not have had to die.” I cannot find a more apt quote to surmise how many feel.

In fairness to Barra, she was not in charge of GM until this year, but she needs to get to the bottom of this and rebuild people’s trust. What we did learn yesterday is GM changed a part in one car model without changing the part number to track if it would be successful, which is unheard of. In other words, they tried to sneak a change in to limit risk. This is malfeasance on top of the decision not to heed warnings and fix something. People did not have to die.

GM’s woes follow closely on Toyota being fined $1.2 Billion for its covering up of accelerator problems. Toyota’s handling of this issue was extremely poor, at best, and it is not over. Several managers may face criminal charges for ignoring the cautions and requests of subordinates to fix the problem. Driving a run away car with an acceleration issue led to deaths and accidents. People did not have to die.

Not to be outdone, Duke Energy, who had a stellar reputation up until the late 1990s until it made some poor acquisitions and accounting issues tainted its image, decided to forego fixing problems with coal ash ponds after being sued last spring by several environmental groups. These coal ash ponds are near waterways, as the coal ash has to be kept wet so the pollutants in the ash don’t blow into the water and people’s lungs. Some of these waterways actually provide drinking water to local communities. Instead, Duke chose to work with a friendlier state agency and governor, who used to be employed by Duke and agreed to settlement of $99,000 (which is a tad shy of Toyota’s fine) and to fix the problem on their time. Now they have had a coal ash spill and some other leaks to contend with. No one has died as of yet, but drinking polluted water is not good for people’s health.

These issues are on the heels of Penn State not addressing a sexual predator scandal in its midst and it becoming more known that the Catholic Church has been covering up for sexual predators among its priests for years. I mention the sex scandals as well, as all of these issues relate to one key theme – leadership caring more about their image than their customers and people who have trusted them.

“If they had only listened to one or two of us, these other people  would not have had to die.” If they had listened to the first voices in the sex scandals, others would not have had to be raped by a priest or Jerry Sandusky. If Duke had only heeded the warnings and lawsuits, they could have been ahead of the problems, rather behind them. Leaders need to lead, not protect their hind end or organizational image. Hopefully, Barra can steer GM better toward being more trustworthy. Hopefully, Pope Francis can continue to rebuild the trust in the Catholic Church. Hopefully, Duke can remedy their failure to act. Hopefully, Toyota and Penn State have learned their lessons. You owe this to us. And, it is time we start demanding it.

Note: My friend Barney has an excellent post on GM which can be found with the attached link. http://mountainperspective.wordpress.com/2014/04/02/is-general-motors-good-for-america/comment-page-1/#comment-3513

 

More Elves to play with – very cool

A quick update on our Elf friend courtesy of an article today in the Triangle Business Journal. I should say friends, as after six months, Organic Transit has just delivered its 200th solar-powered car-bicycle called the Elf and has passed $1 million in sales. Organic Transit will be profitable once they hit the 300th vehicle.That is a lot of elves to play with. For more on the Elf, please click on the attached post entitled “This Elf is not impish, it is solar-powered” from March, 2013: http://musingsofanoldfart.wordpress.com/2013/03/02/this-elf-is-not-impish-it-is-solar-powered/ .

North Carolina based Organic Transit started in Durham, which is part of three cities that form corners of Research Triangle Park (Raleigh and Chapel Hill are the other two). The Triangle was designed around innovation and research. The company announced it is opening up a manufacturing center in San Jose, California after six months of business. They have raised over $1 million in investment funding and plan to open up five more facilities in the next 18 months including branching out into Europe. They noted San Jose as the logical next city, as it is the electric car mecca in the US.

It is ironic that San Jose is the electric car mecca and next move for Organic Transit, as GM had a pilot program in California on its EV-1 back in the early 2000s and pulled the plug (pun intended) on it even though it was more successful than planned. The drivers (who were not permitted to own the cars and had to lease them) wanted to buy the cars, but GM would not sell them to the drivers even after much pleading. GM took them back and did something unheard of – they shredded them. One Board member asked management why as he thought electric cars were the future, but was told Americans want Hummers and GM opened up that plant instead. If I remember correctly, Hummers did not do well after the initial sugar rush died and the government had to make a small loan to GM to keep them afloat. I have said before, GM could have owned the electric car market by now, but that is another story.

Getting back to the Elf, this is a cool idea and sells to people who don’t need a big vehicle to get around with. I applaud the innovation. That is what makes American hum along. And, the humming will be the pedaling of tires when the solar power wanes. Well done, Organic Transit!