GM’s new CEO Mary Barra
Credit: Reuters/Carlos Osorio/Pool
Question: How do you and your company respond when things go bad?
– Deny they happen?
– Ignore them?
– Acknowledge them?
– Acknowledge them – and do something about them?
– Acknowledge and do something about them – immediately?
HOW you respond to bad events can make or break your reputation. How FAST you respond is part of “how” you respond.
Consider GM’s announcement in late February that GM was recalling 1.6 million vehicles for a faulty ignition switch that could cause the engine to turn off and the air bags not to deploy. Thirteen deaths have been attributed to this defect.
Our first reaction is naturally a judgment about GM’s car quality, or lack thereof.
But, then we wonder: why did it take GM management nine years after GM engineers discovered the problem to decide and announce the recall. That makes us wonder about the quality of GM management.
Their delay might result in a fine of up to $35 million by the National Highway Traffic Safety Administration. But a bigger hit could be to GM’s image.
In her letter to employees, recently-appointed CEO Mary Barra wrote, “The vehicles we make today are the best in memory and I’m confident that they will do fine, on their own merit. And our company’s reputation won’t be determined by the recall itself, but by how we address the problem going forward.” (Italics mine)
All well and good, but left out of her statement, that part of her statement anyway (the rest has not been released), is how quickly they respond. Nine years is not a very good score!
So, if you aim to be a Noble Enterprise, make sure that you take action – public action – on negative events QUICKLY. Your customers, employees, suppliers and community will be watching closely. A timely, honest & fair response to a product defect will go a long way to making you the preferred vendor (and employer).
See: the 3/5/14 issue of the Wall Street Journal, ‘Recall Is First Big Test for GM’s Chief”, page B1.