Musical Chairs at General Motors
For five years of the time that Alan Mulally has been at Ford Motor Company, General Motors has been playing musical chairs with their Chief Executive Officers. Alan Mulally is about to retire from Ford as CEO and General Motors is just bringing in their first CEO to restructure the new General Motors.
When Alan Mulally came to Ford Motor Company there were serious financial, customer and hierarchy issues that were keeping Ford from being successful. Mulally’s strategy addressed all those issues and that is why Ford is successful today.
The story has been told many times and is part of the legacy of Ford’s turnaround. When Alan Mulally took the helm at Ford Motor Company he changed the way Ford management operated. A simple internationally recognized code of green, yellow, or red was instituted in the weekly meetings whereby each manager presented how their section of the business was doing and where they saw faults (the red).
Mark Fields, CEO-in-waiting at Ford, was the first to bring in a red mark on his SUV district. Mr. Mulally clapped and other managers started bringing in yellows and red marks in their programs.
The past five years have been a head-spin of Chief Executive Officers for General Motors:
G. Richard Wagoner, Jr.Removed March 30, 2009
Frederick A. “Fritz” Henderson March 30, 2009 – December 1, 2009
Edward (“Ed”) Whitacre, Jr. December 1, 2009 – September 1, 2010
Dan Akerson September 1, 2010 – January 15, 2014
Mary Barra January 15, 2014-Present
Mary Barra is the first CEO, since 2009, that has been brought in to manage General Motors as an ongoing concern. The other CEOs were crisis managing the bankruptcy or managing the IPO, or let’s face it, in the C-suite at the behest of the government. It is a much harder job to run a company as an ongoing concern than it is to take a company into bankruptcy or an IPO.
In the first six months of Barra being a CEO she has appeared in front of Congress, fired fifteen GM employees, some of whom she probably grew up with through her tenure at General Motors, and she has gone in front of the entire company and told them that she won’t put up with the “that’s not my job” attitude that got them in the place they are today; as Ms. Barra has stated, “If you see a problem that you don’t believe is being handled properly, bring it to the attention of your supervisor. If you still don’t believe it’s being handled properly, contact me directly.”
General Motors hired former U.S. Attorney Anton Valukas. Valukas interviewed 230 employees, some twice, and reviewed 41 million documents to produce the report that lead him to say, “The structure within GM was one in which no one was held responsible and no one took responsibility.”
“I hate sharing this with you just as much as you hate hearing it,” Barra told employees in a televised town hall meeting in Detroit. “But I want you to hear it. I want you to remember it. I want you to never forget it.” Barra promised to “fix the failures in our system.”
Barra is setting the stage to create a “One GM” in the same fashion that Mulally formulated a “One Ford” strategy. Inside the strategy people will be encouraged, in fact, made responsible, to contact Barra directly when they see patterns of neglect. There will be an executive overlord to make sure that what happened in the past does not happen under Barra’s watch.
Barra’s strength and resolve have been tested. The world is watching to see how well she manages the recall, but she also has to manage her team and as she described them, “220,000 GM employees that get up and go to work with a sincere commitment to do their best.” The long-term viability of General Motors lies in the hands of Mary Barra.
Ford had to have a paradigm of thinking in order to succeed. So does General Motors.
Listen to John Batchelor, host of the John Batchelor radio show and Mary Kissel, WSJ, on an abbreviated version of the Batchelor show[