Friday, March 27, 2009

8000 Free Cars

According to an NPR story I heard the other day there's one perk GM refuses to give up: a company car and company-paid gas for about 8,000 white-collar employees. General Motors spent nearly $12 million on fuel for its staff.

You get to drive a new car every six months. You never have to pay for it. Gasoline is always free."

A GM spokesman defended the program, which has been around for at least 50 years. He said the perk is part of white-collar employees' overall compensation.

It doesn't eliminate all driving impacts for employees. For example, when gas hit $4 per gallon last summer an employee really felt the impact, of course it wasn't the cost, rather he complained that he had to swipe his credit card twice to fill up the tank of his big free SUV.

GM calls the perk the Product Evaluation Program. The company says it's an important tool: employees must make routine reports to an internal Web site and immediately identify problems.

Walter McManus, a former GM economist, worked at General Motors during most of the 1990s: "I'm not aware — when I was in market research or in product planning — of anyone at GM ever using the information for any sort of analysis or any product development decisions," McManus said. "No one that I knew took it seriously."

A company spokesman said killing the program now would be "extremely" disruptive, kind of like the inconvenience of having to fly on a commercial airline to go to Washington DC.

From a problem-solving and innovation perspective this Product Evaluation Program is a bad idea. If GM really thought this kind of feedback was valuable it would make more sense to give the cars to non-employees. But in today's Web 2.0 world such a program is unnecessary. We saw at the MIT EF how effective paying attention to Twitter and other web tools to get immediate feedback from customers, and interacting with them to solve problems.

The real issue with this perk, and every other exclusive perk, is it creates entitlement for a small group while festering disengagement in everyone else. The justification doesn't wash with the other 230,000 GM employees.

If employee feedback is wanted, then randomly select 8,000 employees to get the cars every few weeks. This would make more sense given the stated objective. But because the stated purpose of the perk is untrue, the practice undermines 'truth telling' in the company. 230,000 employees know the management is lying about the value of this perk. What else are they not being genuine about?

The foundation of good problem solving is truth. GM does not operate in an environment of truth -- perhaps that's why they are in trouble. The old management team doesn't get this. They have serious mindset problems.

The best thing for General Motors, and for us as tax-payers is to put in a new leader in the CEO role, who will rotate every direct executive into a significantly new job (see the article on the value of moving managers around). This breaks the mindset and will allow GM to start down the path to build Trust, Engagement, and Empowerment (TEE).
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