Reference no: EM132179382

Management in Action

Mary Barra’s Leadership Guides General Motors through a Crisis and toward Profitability

Mary Barra became the first female CEO of General Motors (GM) in December 2013. Her predecessor, Dan Akerson, commented that “Mary was not picked because of her gender. Mary is one of the most gifted executives I’ve met in my career. She was picked for her talent.”124 Barra’s effective leadership since that time resulted in her being promoted to chairperson of the board in 2016. The company’s net income grew from $5,346 million in 2013 to $9,687 million in 2015.125

Barra started her career at General Motors at 18. She earned an engineering degree from the General Motors Institute and then an MBA from Stanford. She also developed a wide breadth of experience and skills by working in a variety of positions at GM: “Plant Manager, Detroit Hamtramck Assembly; Executive Vice President of Global Product Development, Purchasing and Supply Chain; Vice President of Global Manufacturing Engineering; Executive Director of Competitive Operations Engineering; and Vice President of Global Human Resources.”126

Barra’s Early Time as CEO: The Ignition Switch Crisis

GM was focusing on overcoming its 2009 bankruptcy and around $18 billion in losses when Barra became CEO. Then in February 2014 the company started a recall of 30 million cars containing defective ignition switches that had led to 275 injuries and 124 deaths. Although the causes of the defects occurred long before Barra was appointed CEO, it fell to her to deal with the aftermath.

Barra was called before four congressional hearings and had to set up a $400-million victim-compensation fund. An internal report by U.S. Attorney Anton Valukas revealed that GM “knew about the switch problem since 2001, but because of silence and blame games, led to no action to rectify the problem,” according to Fortune. The company settled with the U.S. Justice Department for $900 million.127

Fortune magazine called Barra the crisis manager of the year in 2014 for her handling of this crisis. Fortune reporter Ben Geier stated, “Somehow, though, even as GM has seen its reputation raked over the coals, Barra has come out more admired and more likely to be emulated than ever.” Geier concluded Barra created this image by “a simple combination of honesty, humbleness, and a seemingly sincere desire to fundamentally change the errors that led to the problems she faced.”128 Barra told employees at a town hall meeting, “I never want to put this behind us. … I want to put this painful experience permanently in our collective memories.” She also “apologized publicly and profusely, visited the families of victims, and set up a compensation fund for them before any legal liability had been established.”129

History tells us that Barra displayed two essential leader behaviors while handling this crisis. First, she was honest. She stated publicly, “The mistakes that led to the ignition-switch recall should never have happened,”130 and “I will not rest until these problems are resolved.”131 Second, she committed to making organizational change. She fired 15 people who were deeply involved with the original cause of the problem and created the “Speaking for Safety” program, which encouraged employees to act as whistle-blowers. Barra also attempted to institute culture change.132

The change focused on getting leaders and employees to demonstrate four key behaviors: ownership, candidness, accountability, and improvement. Barra started by telling the top 17 people who run the company to demonstrate these behaviors. She believes change gains momentum when people observe senior leaders modeling the desired behaviors. For example, she plans to model accountability by being more impatient when others do not hit their goals and plans. She feels this is needed because she was too “nice” in the past.133 She modeled improvement by establishing a global product development organization responsible for ensuring that technical issues are handled quickly. Barra noted, “This new way of developing vehicles will provide the highest levels of safety, quality, and customer service.”134

Barra Displays a Variety of Leader Behaviors

Barra is described as humble, collaborative, and inclusive. She prefers an environment in which employees feel safe to voice their opinions. An Industry Week reporter noted that “once she receives diverse input she gauges the efficacy of all ideas and provides feedback. Co-workers and mentors have praised Barra’s listening skills and her approachability.”135

Barra likes giving others credit rather than stealing the limelight, and she is passionate about cars. She actively seeks feedback from the board of directors and her team. Although she is inclusive, people note that she is not afraid to make hard decisions. Barra told a reporter from the Los Angeles Times, “At the end of the day, the decision has to be made. If we don’t have complete unanimity, I have no qualms about making it. I want tension in a constructive way to make sure we evaluate things from every angle.”136

Barra is organized and task-oriented. For example, “GM’s product development process was in disarray when Barra took over as product chief in 2011. There were 30 different platforms, and inefficiency and poor quality ran rampant. Barra immediately set to work, rationalizing the product line, improving quality and efficiency, and better aligning the product with customer needs.”137

Barra told an audience at the Catalyst Awards that one of her main leadership objectives is to create a happy and productive workforce. She is trying to do this by modeling work–life balance. “General Motors—or any company—will take from you 24/7 and not feel bad,” Barra said. “It’s a company. There’s always something new. There’s always a priority.” Barra and her leadership team strive to respect employees’ activities and responsibilities outside work. Her feeling is “We need to find the opportunity not to do everything, but to do the important things.”138

One Piece of Advice

Barra was asked to provide one piece of leadership advice at a conference. She said, “Do something you’re passionate about, do something you love. Life’s too short.”139

FOR DISCUSSION

1. What sources of power and influence tactics were displayed by Mary Barra? Provide examples.

2. Use Table 14.1 to evaluate the extent to which Barra displays the key positive and negative attributes found in leaders. Explain your rationale.

3. Which task- and relationship-oriented behaviors were exhibited by Barra? Cite examples.

4. Which of the four types of transformational leadership behavior were displayed by Barra? Provide examples.

5. Did Barra demonstrate any of the five qualities associated with humble leadership? Explain.

6. What did you learn about leadership from this case?