You Can’t Manage a Secret

Creating a culture of openness and candor is critical to organizational success. It takes a strong, concerted effort by leaders.

“Problems don’t get better with age.” So says Colin Powell, the former military leader and secretary of state, and he’s absolutely right. But how do you get people to bring problems to senior managers’ attention when the culture has rewarded just the opposite? The recent stories of General Motors and Ford illustrate powerfully how a culture of openness, or the lack of it, can make or break any organization, private or public.

Many were outraged when it was revealed earlier this year that GM had decided back in 2005 not to spend about a dollar per car to change an ignition switch that eventually was linked to the deaths of 13 people. What’s equally outrageous, in my view, is how little GM’s CEO, Mary Barra, knew about this problem. Barra, to be fair, is new to her job and had no role in the ignition-switch problem. But when she was presented with a number of facts about the long history of ignition-switch failures while testifying before Congress, she seemed unaware of them. And when asked why it took GM 10 years to even acknowledge the defect, she had no answer.

How could it be that the chief executive officer of a major corporation knew little about a decade-long problem that ultimately led GM to recall 2.6 million cars, resulted in at least 55 lawsuits against the company and will cost several billion dollars in fines and settlements? How could this icon of U.S. industry allow the ignition-switch problem to fester for a decade without recalling the faulty vehicles and without notifying federal authorities (as required) and the public?

The answer seems to lie in the company’s culture. For decades, GM was plagued with warring fiefdoms, so it wasn’t in one’s interest to surface problems in front of your colleagues. And even when problems were brought to senior managers’ attention, action was often impeded by poor communications between GM units. As crisis-management expert Gerry Meyers puts it, “In any big organization, there’s an effort by lower-level management to insulate upper- level management. And the more layers there are, the less [likely] that a very serious matter can get to the top.”

GM’s problems were hardly unique. From the 1980 until the Great Recession, the Big Three became arrogant, bloated in the middle and top, unwilling to learn from competitors, and increasingly disconnected from what car buyers wanted.

But there’s a very positive side to this story, and it comes from Ford. In 2006, Alan Mulally was hired away from Boeing to be Ford’s CEO. Ford veterans were amazed; some were mystified. After all, Mulally wasn’t a “car guy” — he’d spent his entire career working in the aircraft industry. True, Mulally wasn’t an expert in car design and mechanics, but he knew how to create an open, candid corporate culture, which was exactly what Ford needed.

One of Mulally’s early moves was to initiate a weekly Business Plan Review, where Ford’s senior executives meet to review the previous week’s performance numbers. From the start, Mulally required openness. His mantra was, “I can’t manage a secret!” He repeated it continually. Everyone at these meetings was expected to discuss current and anticipated problems along with their plans to address them.

After a few of these meetings, someone brought up a significant challenge. Mulally said, “So-and-so has a problem. He’s not the problem. Who can help him with that?” Soon, everyone got the message: Your responsibility is to the team and the company; you’re expected to be open. Nobody is criticized for having a problem; you’re only in trouble if you don’t raise the problem early or if you have no ideas for solving it.

These meetings, and the message they sent around the company, have been a major reason for Ford’s success under Mulally. The company, which lost over $14 billion in Mulally’s first year, has been solidly in the black for years, with strong customer satisfaction scores to boot. And Mulally has received multiple awards for his leadership, including being named 2011 CEO of the Year by Chief Executive magazine.

Colin Powell once said, “The day the soldiers stop bringing you their problems is the day you stopped leading them.” Alan Mulally says, “I can’t manage a secret.” Different words, same sentiment. Effective leaders foster a climate that invites and rewards openness and candor. What are you doing to create such a climate?

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6 comments on “You Can’t Manage a Secret

  1. Seth Linden says:

    this is a great post uncle russ, and very timely, too — we’re hiring a coach to help us with some of our culture and leadership challenges at work… thanks for sharing! love, seth

  2. Terry Newell says:

    Great post. We see this problem again and again in government, most recently in the VA scandal, where lower level managers in the field pressured their employees to falsify appointment wait times and just kept sending “good” numbers to Washington, DC. By contrast, for a government example, Gen. George C. Marshall, early in his tenure as Army Chief of Staff in 1939, told his senior staff (themselves used to being cautious in what the felt they could say to the boss): “Gentlemen, I am disappointed in you. You haven’t yet disagreed with a single decision I’ve made.” That set the stage for the candor which was an essential aspect of Marshall’s leadership.

  3. Really nicely explained and a great example. Give us more blogs!

    I wrote a bit about decision making as it related to how much time is spent by organizations collecting the data for those weekly meetings of senior managers, since they tend to be so isolated from hands on reality.

    Based on research by Fred Barbash and reported in HBR, 300,000 hours a year. You can read a bit more about it here: http://performancemanagementcompanyblog.com/2014/05/06/moron-engagement-is-it-even-possible-today/

    Bad and expensive decisions (and they are not mutually exclusive, as you clearly point out) are issues of communications and perceived risk and its management. What junior manager does not want their boss to help them solve problems? The issue seems to be that they are punished when they do, so they don’t.

    At this link is that classic example, “In The Beginning”, that shows how mission statements are developed as information is filtered: http://performancemanagementcompanyblog.com/2013/01/25/in-the-beginning-thoughts-on-communications/

    It sure is fun out there.

    .

  4. Russ – Great writing as usual.

    You have good stuff.

    But LOOK at the bottom of this for more opportunities to make an impact.

    The keyword is: “uncategorized.”

    Content is great but the search engines have no way of finding it because it is missing keyword links and metatags that you can add at the bottom of your blog posting.

    Set up general categories and do keywords.

    Take a look at one of the blog posts on my blog.

    On an article like yours, you should have things like “risk management, government decision making, culture of openness, organizational culture and decision making, problems with decisions” or something along those lines.

    If a person is doing a search in Google and types in “articles on problems of decision making in government” — your blog is MUCH MUCH more likely to show up in the listings.

    Hope that helps some.

    Scott

  5. Joe Mangino says:

    Russ,

    I always look forward to your posts. They are consistently well-written, and very insightful!!

    Thanks!

    Best Regards,
    Joe Mangino

  6. Schwartz says:

    In my experience, when secret keeping is the culture, rumors fill the gap with half-truths, fears or wishful thinking. Great article.

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