On Jan. 21, 1988, a General Motors executive named Elmer Johnson wrote a brave and prophetic memo. Its main point was contained in this sentence: “We have vastly underestimated how deeply ingrained are the organizational and cultural rigidities that hamper our ability to execute.” from David Brooks in the Quaqmire Ahead at the NYT.
In coming months, a slew of articles, books and case studies will emerge about the ultimate demise of GM and Chysler. These once mighty institutions epitimized US ingenuity and manafucturing capability. They were about design and marketing. They were powerful, and massive institutions. However their fall from greatness is not a lonely chapter. It’s been preceeded by numerous other once mighty instituions. Just look at the original 30 firms that made up the DJIA. How many remain?
Allied Chemical, American Can, American Smelting, American Sugar, American Tobacco B, Atlantic Refining, Bethlehem Steel, Chrysler, General Electric Company, General Motors Corporation, General Railway Signal, Goodrich, International Harvester, International Nickel, Mack Truck, Nash Motors, North American, Paramount Publix, Postum Incorporated, Radio Corporation of America, Sears Roebuck & Company , Standard Oil (N.J.), Texas Company, Texas Gulf Sulphur, Union Carbide, U.S. Steel, Victor Talking Machine, Westinghouse Electric, Woolworth, and Wright Aeronautical.
So it should be of little surprise that GM and Chrysler are underwater today. The primary reason for their failure is spelled out byElmer Johnson’s evaluation. “We have vastly underestimated how deeply ingrained are the organizational and cultural rigidities that hamper our ability to execute.”
For every organization, anything that hampers its ability to execute is huge. It’s like going up to bat knowing the bat you chose is too big, and the likelihood of a strikeout high. As I’ve studied organizations, interacted with leaders and given presentations, I’ve come to realize that silent problems (problems that are avoided, neglected or go unnoticed) are an integral component of how an organization is able to execute. Simply, as the number of silent problems grows inside an organization, the ability of the organization to execute diminishes proportionally. This is why solving silent problems are so important, and integral to the short and long term performance and viability of the organization.
Yes, silent problems were an integral component as to GM & Chrysler’s demise. After all, silent problems eventually become Without Warning Events, which can derail almost any organization for a period of time.
Bottom Line: High performance organizations deal with silent problems when they’re small.
Tags: Chrysler, gm, Silent Problems
Rodney, this is a great assessment of the GM’s situation. Many organizations do not even recognize silent problems, let alone deal with them when they are small.
Leaders who can spot these organizational termites are worth their weight in platinum. -Michael
Thanks for your insights Michael. Yes, the silent problem phenomenon is truly intriguing once you start looking into it.