Speak Up or Pay Up: Lessons from GM

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The now infamous General Motors mea culpa, which followed the automotive giant’s recall of almost six million cars, has brought the importance of a “speak up culture” front and center. As part of the company’s long road to redemption following the ignition switch failures, which have been linked to at least 13 deaths, CEO Mary Barra launched a “Speak Up for Safety” program.  Its aim is to encourage the entire organization to embrace a culture in which employees can raise concerns quickly and forcefully. The response from GM is commendable and prudent—and absolutely the right area of focus.

Flogging the C-Suite is Missing the Point

Barra and her team came under stark criticism following the release of the three-month investigation into how these defects went unaddressed for so long. How could top leaders not realize these problems? Should they not be ultimately responsible for the tragedies that occurred as a result of the defects?

To hold the leadership accountable in these situations is understandable and important. It also makes for good media fodder and clearly identifies “villains” in the story.  But this overly simplistic blame-game places far too much emphasis on a few, when the broader culture of an organization should be the issue in question.

Undoubtedly, tone needs to be set at the very top, but employees in the trenches are the real eyes and ears of the organization. And the much broader leadership team of both senior and middle management is who employees regularly interface with—and take their cues from.  These are the leaders who control their pay, their advancement and who most materially shape their everyday work experience. 

Research shows that there are two reasons why people don’t speak up or report issues: the belief that nothing will be done, and the fear of retribution. So the onus is not just at the very top of the food chain, but also upon broader leadership to create an environment where workers can flag problems knowing that they will be taken seriously, and that the issues raised will be investigated without fear of retaliation.

Employees as the First Line of Defense

Barra deserves high praise for candidly acknowledging that GM’s missteps were the result of a “broad bureaucratic problem”—one where individual workers repeatedly “failed to disclose critical pieces of information that could have fundamentally changed the lives of those impacted by a faulty ignition switch.”

While loss of life is at the extreme end of failing to promote an environment where employees feel safe speaking up—and are, in fact, recognized and praised for doing so—a “stay silent” culture is unfortunately not unusual. The damages from this unhealthy corporate culture are plentiful and often immeasurable, ranging from poor employee engagement and rampant legal and compliance risks to devastating reputational harm. 

All levels of leadership–from the board to middle management—need to recognize that employees are the organization’s first line of defense.  Empowering them speak up, and instilling a culture where speaking up is perceived to be an obligation, is the key to addressing problems swiftly and effectively, before a flame ignites into an inferno.

Culture is Key

The nature and complexity of modern business means that mistakes are inevitable. While almost every company integrates steps to mitigate tangible risks like accidents as a matter of course, fewer fully address the more nebulous issue of culture and the danger of fostering an environment that breeds fear of speaking up.

As a recent Compliance Week article points out, the “speak-up” culture is the Holy Grail of compliance and risk mitigation. If you've successfully created this type of culture in your company, it means you have the trust and confidence of your employees.  You are learning about issues in real time and have the opportunity to address them early on and internally.

[Read the NAVEX Global whitepaper on Creating a Culture of Ethics, Integrity & Compliance: Seven Steps to Success.]

GM has clearly taken accountability for its problems at the executive level.  But in launching GM’s “Speak Up for Safety Program,” Mary Barra is achieving so much more for the organization.  She has planted the seeds for a new company culture where the everyday worker can be empowered to prevent tragedies, and where the responsibility for ethics, compliance and safety is shared by every single employee.

The risks faced by today’s companies are vast, overwhelming and escalating.  It is only with this scope of vigilance—which serves as a scalable early detection ecosystem—that organizations can be truly effective in moving the dial on ethics and compliance.

 

Topics:  Anti-Retaliation Provisions, Automobile Recall, Compliance, Corporate Culture, Corporate Governance, General Motors, Whistleblowers

Published In: General Business Updates, Labor & Employment Updates, Products Liability Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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