Case Studies Q&A: New Case on the Management of Legal Departments

New Products: Driving Blind at General Motors (A) and (B)

Nathan Cisneros, case writer at the HLS Case Development Initiative, shares his behind-the-scenes perspective on crafting a case based on public sources, messy chains of command, and cover-ups:

EM: What inspired the case study?

Chevy Cobalt, the car central to the ignition switch recall

Chevy Cobalt, the car central to the ignition switch recall

NC: In February 2014 General Motors (GM) issued the first in a series of recalls for a serious safety defect that was linked to over a dozen deaths. As the automaker expanded the recall by millions in the ensuing months, many onlookers wondered if anyone had a firm handle on the problem. GM’s new CEO, Mary Barra, was the company’s fourth in five years. She was blindsided by the recall but quickly won praise for her promise to conduct a full and complete investigation. It was a promise she needed to make. Early reports suggested GM had known about the defect since at least 2004; the federal government, victims, car owners, and shareholders all wanted to know why GM waited over a decade to remove unsafe cars from the road.

As winter melted into spring and summer we at the Case Development Initiative watched the GM case with increasing interest and horror. Murmurs in the press and on Capitol Hill suggested that GM’s own legal department, the department meant to protect the company from exactly this sort of problem, might actually have contributed to the recall delay. Finally, in June 2014, a 315-page independent report commissioned by GM was released. It described in excruciating detail how GM’s legal and engineering departments played hot potato with an ignition switch defect for years. Just weeks later, Barra was in front of Congress with general counsel Michael Millikin at her side, deflecting questions from Senators about why she hadn’t yet fired her top lawyer.

For Barra, the report was the end of the discussion. For us it was just the beginning. What happened at GM, and what can we learn from this terrible tragedy?

EM: What challenges and opportunities did the case writing process present?

NC: We were very interested to learn about how the legal department interfaced with the rest of GM. What were its responsibilities? Legal departments are embedded in complex organizations. Even with the best intentions miscommunications happen and competing interests emerge. We were not sure at first we would have enough material to explore these questions because we relied entirely on publicly available information. However, the combined detail of GM’s independent report, Congressional testimony, and the many excellent accounts by journalists convinced us to give it a try.

We were also mindful of the opposite problem—too much detail. Case studies are meant to facilitate useful classroom discussion about important strategic and professional challenges. “Useful classroom discussion… useful classroom discussion…” We returned to this phrase over and over while preparing the GM case. There was so much detail, so many interesting side stories. However, at the end of the day the classroom discussion is what counts, and all those details and interesting anecdotes should be on the page only if they facilitate a “useful classroom discussion.”

EM: How did the students react to the case study? Did anything surprise you in the classroom? Any memorable experiences?

NC: We piloted this case with a group of senior in-house lawyers. The opening vignette describes CEO Barra and GC Michael Millikin’s appearance before Congress in July 2014. Participants were also shown a video of the proceedings. I saw several grimaces as senators asked Millikin’s boss why he hadn’t yet been fired. It is a brutal clip. I thought participants would be very interested in Millikin’s fate, and whether CEO Barra made the right call. After all, it is such a stomach-twisting scene. However, participants were much more interested in Millikin’s concrete actions in the days and weeks after the recalls were first announced. They didn’t want to debate whether or not he should remain GC. They wanted to know what he did as GC, and what he else he could have done.

EM: What, if anything, would you do differently next time?

NC: We divided our narrative into an (A) and (B) case. The (A) case tells the story through July 2014, when Millikin appeared before Congress, which is where we intended the narrative to finish. However, several important developments since convinced us that an addendum should be written, which became the short (B) case.

Unfortunately, this tragic story has not yet reached the final chapter. It has been one year since GM’s first big ignition switch recall, and in that time the number of fatalities continues to climb. We all look forward to someday soon reading about how GM has repaired both itself and its reputation with GM customers from this terrible series of events.

About Elizabeth Moroney

Case Studies Editorial Assistant
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