An illuminating article in TIME magazine recently looked at the problems of insular management and poor accountability in large organisations, using GM’s ignition-switch problems as a case study.
The article struck a chord with us, as it would with anyone who has had experience of working with large and established businesses. Insular management. Siloed operations. Endless meetings that fail to result in action. Individuals not held to account. In the case of GM, this had tragic consequences, with as many as 74 deaths having been attributed to the ignition-switch fault. Last week, plaintiffs filed a lawsuit against the company seeking as much as $10 billion in damages.
If you are interested, like we are, in delivering organisational change in challenging corporate environments, the subsequent investigation and report by former US Attorney General Anton Valuka will be required reading. Ineffective communications between departments, blamed for conflicting and poorly informed decisions at GM, has been cited in numerous investigations into industrial accidents. Poor communication between contractors was cited as a factor in the Deepwater Horizon oil spill. And as far back as 1951, the US Air Force Inspector General published a report entitled Poor Teamwork as a Cause of Aircraft Accidents, with the recommendation of mandatory teamwork training programmes as a means of improving safety in the airline industry.
Managing people, programmes and organisational change
There are also lessons for other organisations. In our experience, the same challenges that led to disaster at GM – siloed working and poor accountability – are the same challenges that can slow or derail any transformation programmes. We were recently engaged by a client that was mid-way through a major transformation programme. Despite the backing of the CEO and despite the urgency – investors clamouring for a step-change in performance – the programme was in real danger of collapsing, without having delivered any of the required benefits or savings. We witnessed a culture of poor accountability across all layers and departments in the business. Worse still, the day-to-day business decision-making had ground to a halt as senior managers were tied up in endless meetings, few of which resulted in any tangible decisions or actions.
As the article notes, there are various means for breaking down internal silos. Establish a set of core values or a mission-statement that everyone can understand. Apply an external perspective to challenges. Hire outsiders, and particularly women and minorities, who often communicate better across departments. At Able and How, we would echo all of these – while emphasising the importance of underlying organisational change capability. We have worked with many of the world’s leading organisations in using our Change Index to assess and monitor their ability to drive change across their business. Using the resulting information, together with our experience in supporting major business transformation, we then help our clients deliver the required interventions to ensure their programmes perform.
Author Rana Foroohar concludes with the point that silo-busting at GM – or any other organisation – requires starting at the top. In our experience, we would say the same is true for anyone wishing to drive meaningful change in their business. Visible leadership and having an effective change management strategy can make the difference between delivering successful, sustainable change – or failure. In the case of GM, the cost of failure has been significant.
01 July 2014