Matts Rehnstrom – Shaper of Business Excellence
Connect with me!

Someone knew about the problem!

Car crash - MC900153782Welcome to this Business Excellence Article.

There have been some severe issues with cars that do not work as expected. They have even caused severe injuries and death. A couple of years back Toyota had problems with the accelerator in a couple of their models. It made the cars accelerate uncontrollably and caused accidents. At the same time, but not revealed until now, GM had a problem with their ignitions in some models, which caused their vehicles to suddenly stop and as the power was off the airbags did not work. If then the suddenly stopped vehicle caused an accident the passengers were not protected, as they would have been in a car with the power on.

This has now forced GM to recall 1.55 million cars of various models. The direct cost for that is $300 million. However, as seen from Toyota’s mishap, the cost is much, much higher. They had to make a settlement that cost them $1.2 billion and also made a loss in the US market share of 3.9% over three years. The cost of this is huge, and of course, most tragically of all, the loss of  life.

What does this have to do with Business Excellence then, except for showing insufficient quality? The point is that investigations revealed that some people at GM knew about the problem before it appeared. We then have people that knew about the problem and how to fix it, but on the other hand the company continued to produce cars with the faulty parts in them. How can this be?

Are people at GM evil, negligent or stupid? No, of course not, they only act in an environment that creates the outcome that we now see.

The investigations will continue but as far as I can find out from the articles about the issue, I can see a culture of not taking the signals seriously.

  • It could be that those who saw the problem and knew how to fix it, did not understand the seriousness of the problem, and therefore did not report it.
  • It could also be that they did not have any mandate of doing anything about it, and although reported in up the chain of command, they continued to install the wrong parts.
  • It could be that those who received the report, the manager(s), decided to continue the production anyway. The reason for that could be that they did not understand the seriousness of the problem, or they did not want to stop the production, as that would cost a lot of money there and then.
  • Or it could be that the managers saw the problem and reported it upwards in the organization, but someone higher up made the decision to ignore it, most likely due to the cost there and then to stop the production, combined with the hope that it would not cause any issues later.

GM did, after a couple of years, come out with a recommendation for some of their customers, to avoid having several keys on the same key ring as the ignition key. This shows that someone had reported it and also that someone acted upon that information and tried to inform the customers. This person did not however, make the call to recall the vehicles, only to inform the customers about not overloading their key rings. This cost GM hardly anything and left the customers with the “responsibility”.

Bacteria CulturesIt is very important that the culture in the organization, means that if you see something that is wrong, you also have the responsibility and mandate to stop the work and to fix it. If GM had fixed the problem in the beginning, the costs would have been a fraction of what they are now and that cost would also have been more positive, as it could have been to fix something for the customer before they received the product – not spending money on damage control. It would still have been considered as waste according to the LEAN terms, as the fault should not be there in the first place. I see it as better to accept a lower cost early on, than having a higher cost later on, especially with the fatalities in mind.

I have in my time been barked at by more senior people when I have attempted to point out something that should be fixed. My suggestions were met with the order to continue to work, not to think about the process or quality. When those projects ultimately crashed, those people never took the responsibility for the order given. Always being the one that says, “I told you so!” is not popular. If I did, I was unpopular twice, instead of listening to me in the first place and then having a creative discussion about the issue.

In your organization you must create a culture that makes it possible for people, wherever they are, to be responsible and have the mandate to make a call to stop something that is wrong. You must also build your processes to be able to handle continuous improvements. It is due to the halt of a faulty process, that you learn for the next production run. If you ignore this, you will need to have a lot of processes handling damage control instead. Look at GM and others, those processes are costing you much, much more than you can afford.

My advice to you for now is to take the time to look into your processes, responsibilities and mandates to improve your work. Make time now, not later.

 

Please share and comment.

To you and your organization’s excellence.
Matts

About the Author Matts Rehnstrom

Matts helps Business Analysts, especially those who work in government administration, to design efficient and high quality business processes for their clients so they are able to deliver value in a sustainable and transparent manner. With over 20 years of advanced business process design in both IT and government, he can show you a simple ‘Business Excellence’ formula which dramatically reduces the time required to design a process as well as ensures it is created in a way which is optimized for the people who actually do the work. The health of the business and the people working in it is always at the forefront of how I help business analysts design their processes. ➔➔If you are a business analyst who wants to ensure you deliver the best possible outcome for their clients (especially if your current project is not running perfectly according to plan!) then Matts can help you.

>