Bad News not Flowing Either Direction at GM?


Last week, I blogged about an episode where bad news wasn't flowing up in Boeing (or, it's part of a pattern).

In my Sunday morning reading, I ran across two articles that reminded me of the situations where fear (and other dynamics) lead to communication failures.

The Truth About Cars blog had a months-old story called: Inside GM: Mystery of Crap Interiors Solved.

In the post, our friend Robert Farago told the following believable story from a GM insider:

Agent X reveals one of the main reasons GM's interiors failed to match the competition: the executives didn't know there was a problem. Still don't. Here's why . . .


As you probably know, ever since GM was founded, its execs have either been driven by a chauffeur or provided with carefully prepared and maintained examples of the company's most expensive vehicles….

Our agent says that all the vehicles the execs drove were “ringers.” More specifically, the engineers would tweak the test vehicles to remove any hint of imperfection. “They use a rolling radius machine to choose the best tires, fix the headliner, tighten panel and interior gaps, remove shakes and rattles, repair bodywork—everything and anything.”

Did the execs know this? “Nope. And nobody was going to tell them . . . As far as they knew, the cars were exactly as they would be coming off the line. That's why Bob Lutz thinks GM's products are world-class. The ones he's driven are.”

I asked Agent X if the GM execs would ever drive the cars again. Did he know if Wagoner or Lutz dropped in at a dealership to test drive a random sample off the lot? He found the idea amusing.

When you are not practicing “genchi genbutsu” (go and see) as Toyota leaders do, this sort of thing happens. I bet if Wagonner or Lutz went to a dealer, it was a well-planned dog-and-pony show where, again, the reality wasn't being presented to them.

When I worked at GM (mid 9o's), we put on many planned dog-and-pony shows for execs. If I remember right, the highest exec we had was an up-and-comer, Tom Stephens, who now recently took over for Bob Lutz. When execs were visiting, everything got magically cleaned up. Inventory was hidden, things were cleaned, defective parts were stashed behind construction curtains… these execs were “at the gemba” (not a term we used then), but they weren't seeing anything close to reality.

And I still hear reports from friends in the manufacturing world about how this happens. The same thing happens in hospitals when they know the inspectors are coming from one oversight body or another… things get “fixed”, but it's temporary… the visitors never see the reality of the hospital. So it's no wonder hospitals get acccreditation and then often have some embarrassing quality mishap right afterward.

Why were the GM people afraid to let Lutz and the execs see reality? Why were they fearful in my plant? Why are they fearful in hospitals? Why aren't things “made better” instead of being “made to LOOK better”? Pretty common organizational dynamics once again.

Go to the TTAC site and read the comments, especially this informative comment here. “Potemkin Village“…. having my old history course memories drudged up now, this is very common behavior, the urge to make things look good (it's often easier then true improvement).

The second story is from the Sunday NY Times Magazine (G.M., Detroit and the Fall of the Black Middle Class).

It's a very long story and it's not all relevant to this discussion. I found this interesting because I grew up in the Detroit suburbs and when I worked at GM, I worked with many African-American UAW members who were part of the generation that had moved up from Alabama and the Deep South.

One story jumped out at me, regarding communication:

Just a day before, the line was stopped early for a plantwide meeting on the factory floor. A G.M. executive had recently spent a day touring the plant to determine its future, and the guys wanted to know if any decisions had been made. Would they be bringing back any of the laid-off workers? Were there going to be more layoffs? Was the plant going to close?

The plant manager did his best to reassure everybody but offered no definitive answers. By the time most of the plant's employees got home, however, local news outlets were reporting that General Motors would be shutting down all of its factories for as many as 10 weeks this summer.

Now was this a case of bad news not flowing DOWN in the organization? We'll never know the answer to this, but I could see a few scenarios being possible:

  1. The plant manager hadn't been told and honestly didn't know
  2. The plant manager knew and was told not to say anything
  3. The plant manager knew and CHOSE to say nothing
  4. The news media were wrong about the closures for ALL

Either way, you'd have to think that people did NOT enjoy hearing about this in the TV news. The sequence of events didn't do much to foster trust, and I found the lack of trust was a huge dysfunction within my GM plant.

There are a few random details in the story that are lean related:

The article talks about nepotism that had developed. Basically, Marvin Powell, as a young UAW worker, got his job because his dad worked there. Hiring came only through referral, rather than choosing the best person for the job. The screening was a one page “referral sheet” and application.

Powell submitted his referral sheet, and after a few simple tests — math, reading comprehension, manual dexterity — followed by a team-building exercise, a formal interview and a physical, he started working at Pontiac Assembly.

Compare this to the hiring scrutiny at Toyota. For 2,000 jobs, they had 63,000 applicants to go through. I'm not saying Marvin is a bad guy or a bad worker… but Toyota has a much more stringent and deliberative process of hiring and training (you can read more about that in the books Toyota Talent: Developing Your People the Toyota Way or Toyota Culture: The Heart and Soul of the Toyota Waydisclosure: the links are affiliate ads).

GM did have a week-long orientation and training process for Marvin, as mentioned in the article. But, again, that sounds much less intensive than the Toyota training and orientation process.

Anyway, the NY Times article is probably interesting general reading for those from Michigan or those in (or formerly in) the auto industry.

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Mark Graban
Mark Graban is an internationally-recognized consultant, author, and professional speaker, and podcaster with experience in healthcare, manufacturing, and startups. Mark's new book is The Mistakes That Make Us: Cultivating a Culture of Learning and Innovation. He is also the author of Measures of Success: React Less, Lead Better, Improve More, the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, and the anthology Practicing Lean. Mark is also a Senior Advisor to the technology company KaiNexus.


  1. If GM had been a well-managed company, it wouldn't hparticularly matter what Bob Lutz thought of any given car. What would matter is what the product line manager responsible for the car thought of it, because he would have been the one with the greatest stake in it and with the decision-making authority to do something about it.

  2. Mark,
    You get what you measure.
    I have no doubt that GM has some very capable people at all levels of the organization, but fundamentally, if you're putting those great people in pursuit of the wrong goals, you're perpetuating waste.
    I recently vented to a more experienced colleague about the complexities and inefficiencies of one of our metrics. After my rant, he said simple: "Yeah, I agree. Are you done?"
    In a large organization, at a relatively low level, there was no question of doing anything about it.
    We moved on, wasting more energy attempting to make sense of the nonsensical.


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