GM & IKEA

Which one do we want to be, corporate America?

Recently, I found myself in Detroit, as I often do, on a business trip. Mary Barra had just made one of her appearances in Washington, attempting to explain to Congress how General Motors could have made a series of repeated decisions over a period of many years to a) fail to correct a potentially, and in fact, demonstrably life-threatening defect in a sizable number of its vehicles, and b) consciously decide to hide that fact from the public, its own employees and the US government. The stated number of deaths caused by the original engineering defect and the subsequent decisions not to correct it was stated as somewhere around 13, but estimates of the actual number were being quoted as high as 300.

Speculation has been wall to wall about who knew this, when they knew it, who made the multiple decisions a) not to correct the defect, and b) to hide its existence and the company's failure to correct it. Much was being made of Ms. Barra's status as a GM lifer, and there was even speculation about whether she herself may have had knowledge of the problem and failed to act on it. She has been seen repeatedly in the media apologizing, pledging that the culture of the company will change, and several people (not very many of them, and surely not everyone responsible) have even been fired. 

Regrettably, the story has reached a degree of saturation in the media where it has been so extensively covered that it has become wallpaper, so familiar that the public begins to assume that everything there is to know has been revealed and that nothing else of note will be forthcoming, a perception reinforced by endless media repetition and speculation from "experts" in the absence of real news. This in turn leads to the inevitable impression that, true or not, the players have told as much of the truth as is going to be told, based on the advice of a battery of lawyers and spin doctors, and significant facts will never be known.

This is the point the story had reached on a morning in a hotel room in Detroit as I collected my clothes, cell phone, Ipad, and other belongings, trying to make sure I didn't leave anything behind as I rushed to get downstairs for breakfast, check out and head out to a meeting.

I remember feeling a sense of regret about GM as I passed in front of the TV. I think we as Americans want our corporations to be better, more responsible, more admirable in their behavior, just as we want that from our government, but we are getting used to expecting less (and getting it).

I was distracted for a few minutes by a few last minute emails. When I checked back in on the news, I noticed that a completely new story was being reported. The report referred to some sort of decorative netting for a child's bed that was being sold at Ikea, and it was being recalled because it was determined that it could be a choking risk. Apparently, a child could potentially get caught up in it and choke to death. Even at 7:00 AM with a lot of other things on my mind and a full day ahead, this was really too horrifying a prospect to just shrug and pass over. Between the GM crashes and the child choking hazard it was looking to me like a banner day for failures of corporate governance and responsibility, and basically not a very nice world to be contributing to, in whatever way we each may be doing that.

But it turned out that I was jumping ahead of the story.

The Ikea story was not over, and as I jumped to conclusions in my head, the story turned in another direction, with the following statistics: number of deaths reported from the defective bed netting - 0; number of injuries reported - 0. The product was being recalled from every Ikea store because someone in the company had identified the possibility that the product could be a danger to children. No one had to sue anyone, there were no congressional hearings. Ikea simply decided to do the right thing, just in case, rather than accept the risk that something could happen to even one child because of a product sold in their store. Of course, Ikea is a Swedish company, not an American one, but I don't think that is really the point.

The point is about choice. I think every company gets to decide what it wants to be, and it makes those choices every day, and the choices can't always be about money. Sometimes it doesn't matter what the ethical midgets on Wall St. think, it doesn't matter what the spreadsheets say, what the cost / benefit analysis says, what the relative cost of the legal fees are versus the settlement, what an "acceptable" level of loss is, etc etc etc.

Sometimes, a company, just like a person, needs to just do the right thing, and usually, like a person, mostly companies know what that is. They just allow themselves to be distracted by the numbers, or the rationalizations, or fear, or any number of other things, just like people.

So this is my question. Who do we want to be, corporate America? GM? Citibank? Bank of America? Do we really want to package bad loans into securities and knowingly sell them to the public based on a bunch of lies about their value? Do we want to put people's lives in danger by knowingly selling them products that could endanger their lives?

I don't think this is complicated. This is simple. Sometimes you just need to do the right thing.

I know what I want to be - I want to be Ikea, and GM should want that too.

T. Alex Blum