As Mary Barra Returns To D.C., Can GM’s Culture Really Change? – Forbes

Posted: Wednesday, June 18, 2014

General Motors General Motors chief executive Mary Barra goes back to Washington on Wednesday for her second round of appearances before Congressional committees.

This time, she’ll be able to provide more information about Switchgate, as Detroit News columnist Daniel Howes has dubbed the  recalls of millions of cars for faulty ignition switches, than she could offer during her initial testimony last month.

Barra undoubtedly will face pointed questioning about GM’s cultural failings as depicted in a report by Anton Valukus, the famed attorney hired by the company to investigate the situation. And, as she did during Round One, she undoubtedly will emphasize her mission to change GM’s culture.

But the Valukas Report has raised a compelling question about the 106-year-old auto company. Can GM’s culture really change?

As a business journalist, I’ve been observing GM for most of my adult life. I’ve heard a succession of CEOs, from Roger Smith to Bob Stempel, Jack Smith to Rick Wagoner, declare that they were bent on cultural change. Through all their various efforts to cut through GM’s intransigence, through reorganizations and optimistic names like the Plan to Win, another observation has stayed in my mind.

GM’s culture, someone I wrote about once told me, is like a sponge. You press on it, and it indents. Then, once you’re finished, it simply bounces back to its previous shape.

Barra, like her predecessors, is undoubtedly determined to keep that rebound from happening. And yet, others see the same likelihood that she will not have any more success. Howes at the News wrote that Barra may have already overplayed her hand by insisting there is a “new GM,” when in fact, the report shows that isn’t the case.

“Like its hometown, GM is burdened by legitimate suspicions it cannot change, cannot slay the demons of its past to become a functioning member of corporate America not wedded to the worst habits of a golden era now long gone,” he said. “Switchgate, despite all the New GM rhetoric, only reinforces suspicions compounded by the fact that most of Barra’s leadership team are products of Old GM.”


Picture of GM's headquarters in Detroit. Taken...

GM’s headquarters in Detroit.(Photo credit: Wikipedia)

In the 1980s and 1990s, as Barra was rising in the company and those previous GM CEOs vowed to fix its culture, another CEO became famous for the way things changed at his place. Jack Welch is probably best remembered as “Neutron Jack,” the man who vowed his operations at General Electric would be first or second, or they would be sold.

But he also woke up a place just as moribund as GM and made it an industry leader by his clear examples. Writing two years ago in Fortune, Welch and his wife Suzy made it clear just how tough a mission someone like Barra faces.

“If your company’s culture is to mean anything, you have to hang — publicly — those in your midst who would destroy it. It’s a grim image, we know. But the fact is, creating a healthy, high-integrity organizational culture is not puppies and rainbows,” the Welches wrote.

“And yet, for some reason, too many leaders think a company’s values can be relegated to a five-minute conversation between HR and a new employee. Or they think culture is about picking which words — do we ‘honor’ our customers or ‘respect’ them? — to engrave on a plaque in the lobby. What nonsense.”

According to the Welches, cultural change is about behavior, and consequences. While some employees understand the importance of a company’s culture, others get by with “values drift.” They either don’t know what the top echelon is striving for, or ignore their directives.

“Look, it’s Management 101 to say that the best competitive weapon a company can possess is a strong culture,” the Welches wrote. “But the devil is in the details of execution. And if you don’t get it right, it’s the devil to pay.”


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