GM and the government just announced a massive settlement of $900 million. It’s a very big number, but it was a very big and troubling incident: over 2 million faulty ignition switches that have been implicated in at least 124 deaths. The company will have a monitor in place for three years to ensure that it improves its safety practices.
The settlement is separate from the individual settlements with the victims and their family’s.
There will, of course, be debate about whether $900 million and a monitor is sufficient to teach the company a lesson. Will it prevent the company from looking away the next time it comes across a part that may be defective? Will it change the calculation of the price of human lives vs. product recalls.
To me, the question to ask is: has the company now truly internalized its mistakes?
There’s a temptation in any organization whenever an incident occurs to blame it on a few bad apples or “rogue employees.” That’s not just a temptation for legal reasons, but also for human ones. People like to believe that they are good people and they work for an organization that is good. They want to believe that “we don’t do those things. It was just a few jerks who gave us all a bad name.”
Often that’s true, at least partially. Few organizations are rotten to the core.
For years employees have seen mostly good behavior, or behavior that they feel comfortable with. Each episode is like another drop of water helping to carve out a stream in their minds, until that stream grows into a river of positive feelings about where they work and, more importantly who they are as people.
A major failure is like a huge rock dropped into that river. It can, and probably should, make us want to change course and reassess our beliefs about ourselves, who we work with and where we work. But, it’s much easier to let the water cover up that rock, to push the incident away as a fluke, or something that’s really not representative of who we are.
Now is the time for GM to own up to what it did, and didn’t do, not just financially, but in internal conversations about the “us and the we” of what happened: “We should have known better.” “I hope we have learned something from this” and “Now we have to make sure that this never happens again and none of us fall into the same trap.”
That’s the difference for GM (or for any company where wrongdoing occurs) between putting the problem behind them, and making sure that the problem never happens again. You can’t put the incident up on a shelf like a souvenir. It has to sit in the middle of the room and serve as a reminder of what we did and could do again.
If GM can keep this episode as a constant reminder of the type of company it should be and how we all should behave, then the settlement isn’t just massive. It is also effective.
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