| Laura Colby |
WASHINGTON (WP-BLOOM) – For a new book about Mary Barra, who made her public debut as General Motors’ chief executive officer a year ago this week at the Detroit auto show, Laura Colby of Bloomberg News spoke to Barra and dozens of current and former employees.
This edited and adapted excerpt from “Road to Power” focuses on a key meeting Barra held in September 2014 with 300 top managers, setting the tone for how they should act and lessons learned from the crisis dominating her tenure: The recall of millions of cars for a defect now linked to at least 42 deaths.
Detroit’s Eastern Market is in a gritty part of town where farmers have been coming to sell produce to urban families for more than a century.
Though just a mile or so from General Motors’ buttoned-down headquarters, these blocks could be on a different planet.
Colourful graffiti-covered warehouses alternate with rows of early 1900s brick buildings that now hold cafes and restaurants.
Today the country’s largest open-air market also draws bearded hipsters who are, slowly, bringing life to the formerly bankrupt city.
The symbolism of the place – history and renewal – isn’t lost on Mary Barra, who in January 2014 became the first woman to run GM.
Instead of the chandeliered ballrooms of GM’s past confabulations, it was Eastern Market she chose as the site to meet with her top 300 global executives in September.
In a rehabbed warehouse on Russell Street, not far from the Hamtramck auto-assembly plant she once ran, Barra drove home a message as unadorned as the surroundings: Get with the programme, or get out.
“If you think the system we have in place is the best one,” Barra told the group, “you’re part of the problem.”
Barra is not the first boss to try to root complacency out of the largest US automaker.
Previous CEOs dating back at least to Roger Smith in the early 1980s have promised to change GM’s culture, with little noticeable effect.
The insular atmosphere – perhaps best illustrated by the “GM nod”, where employees in a meeting might agree to take action but never do – was singled out as one reason it took the company more than a decade to recall 2.59 million vehicles with potentially fatal flaws in their ignition switches.
The recall dominated Barra’s first months at the helm, and by the time of the Eastern Market meeting she already had been hauled to testify before Congress twice.
What sets Barra’s approach apart from her predecessors is that she avoids talking about “corporate culture”, an amorphous concept that develops over the course of many years – and can take that long to change.
She prefers to break it down: Individuals making individual actions.
“Behaviours are something we can change right now, today,” Barra said a few weeks after the Eastern Market meeting. Everybody at the company has to change his or her behaviour, “including me”.
Her biggest fault? Being “too nice”, Barra said. “I accepted a lack of performance if there was a reason.
“As managers, it’s our job to make sure people perform as they promise.
“You made your plan – now hit your plan.”
By June, Barra had ousted 15 employees for their roles in mishandling the recall.
She continued instilling the new discipline in the weeks leading up to the Russell Street meeting.
She asked each of the 300 leaders to send his or her thoughts about behaviours that were holding GM back.
A few dozen executives didn’t respond to the request from the CEO – just the kind of behaviour she was trying to change.
The laggards got a personal follow-up from Barra.
The gist: I’m equating it with the fact that you don’t care enough. And if you don’t care enough, don’t come to the meeting. If you do care enough, get it done and don’t ever let this happen again.
Barra’s approach is the right one, says Maryann Keller, a long-time auto industry analyst who has written several books on GM.
“The way you instil change is you have meetings and have people say what’s wrong,” Keller says.
Once the group was ensconced in Russell Street, they huddled in rows around a stage where Barra and her top managers – President Dan Ammann, head of global product development Mark Reuss and Chief Financial Officer Chuck Stevens – took turns talking about behaviours that got in the way of the company’s business.
One of the worst: Working in silos, where one team concentrates only on its own work without regard for how that affects others.
That was one of the key criticisms outlined in a May 29 report by Anton Valukas, a former US Attorney and chairman of the Jenner & Block law firm whom GM’s board hired to investigate the handling of the recall.
Even here, Barra encountered pushback.
Some engineers argued that silos were necessary in technical areas because they needed the expertise to get things done.
At that point, one of Barra’s recent top-level hires stepped in: Johan de Nysschen, who previously headed Audi of America and is now a GM executive vice president and the president of Cadillac.
Just because engineers need to collaborate closely within a group doesn’t mean they don’t have a broader responsibility, he said.
De Nysschen, whom Barra snagged from Nissan Motor Co’s Infiniti brand in July, is one of more than a dozen managers out of the top 18 that she has either hired or moved to new jobs since becoming CEO.
While senior executives on Barra’s team may get her vision, making it trickle down to more than 200,000 employees will be more difficult.
Talking about a vision for the future of the company will help galvanise employees who were demoralised by the switch scandal, says Sigal Barsade, a professor of management at the University of Pennsylvania’s Wharton School.
“That’s where her emotional intelligence comes into play,” she says.
Part of that emotional intelligence involves knowing both which behaviours to bat down, and which to embrace.
At one point early in the Eastern Market meeting, Barra called out the name of a manager from GM’s manufacturing operations in Sao Jose dos Campos, Brazil, and asked him to stand.
The manager, who had only joined the company a few months earlier, rose, unsure of whether he was about to be made an example of. He was.
Barra read out the comment he had sent her in preparation for the meeting: “I’m new to GM, but it seems like the company doesn’t understand that one person’s problem needs to be everyone’s problem, especially at this level.”
The description almost exactly matched the company behaviour criticised by members of Congress and by Valukas’s 325-page report.
“That,” Barra told the crowd, “is exactly what we need.”