A business lesson from small cracks

Earlier this year, I brought my car to a tire service shop for the routine wheel alignment. There, I was informed by a mechanic that my front control-arm bushings had cracks, and that I needed to have them fixed elsewhere. I basically shrugged it off, thinking the metal fissures were negligibly hairline in nature. I felt nothing weird in the steering or handling to gather otherwise.

Fast-forward several months and I do sense the car acting up when I’m making a turn, leading me to dread hefty repair bills stemming from my misguided indifference. What would have been a simple (and inexpensive) patch then must now be a costly overhaul — something that could have easily been avoided had I taken heed when first notified by the technician.

This visits me now as I reflect upon two companies currently going through respective maelstroms they themselves caused and aggravated: air bag manufacturer Takata and mobility service provider Uber.

As I write this, Takata of Japan is reported to have filed for bankruptcy after reeling from having to recall millions of faulty air bags (a few of which are being blamed for 11 deaths in the US). It is estimated that the debacle has sunk the firm in a debt pool $9 billion deep. All this over defective air bag inflators that apparently could have been remedied years ago, when the organization chose instead to sweep complaints and red flags under the rug.

According to a story by The New York Times, Takata first learned of the air bag defect in 2004, and proceeded to conduct secret tests. The results revealed that the steel inflator did tend to crack, as narrated by a pair of Takata employees supposedly involved in the tests. “But instead of alerting federal safety regulators to the possible danger, Takata executives discounted the results and ordered the lab technicians to delete the testing data from their computers and dispose of the air bag inflators in the trash,” the Nov. 6, 2014 news article said.

What could have been an opportunity for the organization to embark on a proactive course of action and show its professional mettle in the face of a thorny issue, ultimately turned into a $1-billion fine and absolute financial ruin.

The ramifications are not merely monetary, mind you, as three Takata executives have been indicted over corporate criminal charges.

And then there’s Uber, the toast of the tech community that was valued at $ 70 billion as recently as February. That fantastic assessment was achieved prior to a blog post by a former company engineer, who detailed how she had experienced sexual harassment at Uber during her one-year tenure there, and how Uber’s top management and HR department had repeatedly brushed off her grievances ( because the offending party was a “high performer”).

Susan Fowler’s tell-all proved to be the steep price just-resigned Uber CEO Travis Kalanick had to pay for fostering a toxic work environment and a “bad boy culture,” as critics have termed it. When Fowler first communicated her predicament to HR, the company had its best chance to nip the problem in the bud. They missed it. No, sorry, that would be an injustice to the victim. “Missing it” is to be oblivious to the mess and clueless as to what happened. The mess was properly brought to their attention. That’s not missing it — that’s being hit in the face and pretending everything is fine.

Fowler wrote: “I expected that I would report him to HR, they would handle the situation appropriately, and then life would go on. Unfortunately, things played out quite a bit differently. When I reported the situation, I was told by both HR and upper management that even though this was clearly sexual harassment and he was propositioning me, it was this man’s first offense, and that they wouldn’t feel comfortable giving him anything other than a warning and a stern talking-to.”

When the frustrated engineer eventually left Uber, company executives probably thought they’d seen the last of her. They were, of course, wrong. She went on to disclose her experience online, triggering a series of events that forced Kalanick to step down from his previously untouchable perch. Accusations of sexism and a habitual disregard for the law rose to the surface, imputations that had been sporadically thrown at the company in the past but which had been consistently whitewashed with a fix-all mantra (“people love our service”).

That arrogant belief would no longer suffice for Uber’s major investors this time around, and Kalanick’s head had to roll. All because his leadership team refused to correct a rectifiable office behavior.

Seen a tiny crack (on your car or in the workplace) lately? Mend it now before it splits open and swallows you whole.