At big companies, bad news travels fast.
General Motors CEO Mary Barra acknowledged as much in testimony on Capitol Hill this week as congressional investigators sought to find out exactly when GM executives knew that faulty ignition switches in some cars were linked to fatal accidents.
"I cannot tell you why it took years for a safety defect to be announced in that program," Ms. Barra said. "But I can tell you that we will find out."
The larger an organization gets, the less likely it is that bad news will travel smoothly up the chain. The mantra at big corporations is "go along to get along." Stopping work on products vital to the bottom line is often incompatible with pleasing the boss. Engaging in straight talk with those who lead Corporate America is a rare occurrence.
C-level executives tend to be isolated from their corporate stakeholders because most of the information they receive is filtered by subordinates, suppliers, and consultants. "CEO disease" is a term used to describe the isolation that envelops a leader when subordinates become reluctant to disclose bad news or worst-case scenarios that might trigger a shoot-the-messenger response.
However, that is beginning to change as c-level executives seek a cure for "CEO disease" by participating in interactive conversations through their personal blogs. Blogs are personal. They humanize the Web and keep CEOs in touch with what’s going on out in the world. People feel they can really have a conversation with someone who has a blog.
For example, at General Motors, former Vice Chairman Bob Lutz's "Fast Lane" blog generated 10,000 reader responses in January 2005 and received 4,000 to 6,000 daily visitors. More than 900 readers asked Lutz, who overseen product development, to revive the Chevrolet Camaro. Lutz wrote, ".....I will tell you that the enthusiasm shown for Camaro in this forum is a shining and prominent example of the passion that exists for this automobile." GM was in the process of developing a new Camaro based on a concept car unveiled shortly afterword.
Alan Mulally, CEO of Ford Motor, at a high level meeting was told that by Mark Fields that a technical issue had delayed the launch of a new line of vehicles. The room went silent. Then Mr. Mulally started to clap. The applause was meant to signal that the revelation, while not "warm and fuzzy" news, was welcome. The Ford example highlights a tension in the relationship between managers and subordinates that can stanch the flow of information. A CEO's knowledge depends on what direct reports choose to tell him or her.
Sources: The Wall Street Journal, April 3, 2014