Four Groups Blog

While Bob Sutton knows GM very well (research, speaker, existing contacts there), he can’t stop himself from feeling compelled to speak his mind. Here are some extracts from his piece;

I am ambivalent about whether the auto industry should receive the 25 billion dollars… I worry that it will be a waste because the industry has lost so much money and so many jobs in recent years that these firms are in a death spiral that is impossible to stop… I also believe it will be a waste because the leaders of these firms (at least GM, which I know best) are so backward and misguided that the thought of giving these bozos any of my tax money turns my stomach – which is pretty much the same point made by observers ranging from ultra-capitalist Mitt Romney to near-socialist documentary filmmaker Michael Moore.

Bob continues;

To me, a pair of root causes standout: Most of the senior executives — and many of the managers — are (1) clueless about what matters most and (2) suffer from a “no we can’t” mindset… the norm in meetings is that the highest status person in the room does all or most of the talking… more so than any organization I have ever dealt with, employees are expected to express agreement with their bosses… GM is a culture where subordinates are expected to shut-up and kiss-up when the boss is around… Do I believe that that the current crop of executives could transform the GM culture to include these and other practices that will increase their awareness of what is going in their company and in the marketplace? No… But this “can’t do” mentality is pervasive.

Perhaps the most salient example comes from the perks offered to executives…

Consider the case of the free GM cars. This isn’t a new problem. Many other observers have commented on it before me. I commented about it very forcefully about to some GM managers a few years back. I argued that they needed to abolish the program because it caused the whole top of the company to be out of touch with the car ownership experience. They answered that GM couldn’t possibly get rid of the program because they had negotiated such a great tax deal with the state of Michigan (much better than Ford, they bragged) and because it was one of the few perks left for white collar employees. I was not very nice, I argued that this mentality was one of the reasons that the company was in trouble and would get in more trouble. They treated me like I was insane.

If there were ever a case of a firm’s human and economic values being out of line, this must be one of them!