Wednesday, April 2, 2014

She's in Trouble

Mary Barra, GM CEO, is in trouble. So is the board of GM. Individual and organizational reputations are in danger no matter how you interpret the recall situation.

The board selected the wrong CEO. It's not that Mary Barra is not qualified to be the CEO. She shouldn't be CEO because she wasn't able to influence GM management during the current safety crisis that started years ago. If it was problem she needed to fix once she became CEO, it was a problem she needed to fix by convincing the others to do the recall. If she couldn't, why does she have influence only now that she has the title. Anyone ever watch an old BBC show "Yes, Minister" that explains how its the supporting organizational levels that really have the power and influence. They have the power and influence because they can convince the CEO the rationality of issuing a recall or not. If Mary Barra, when she was in these supporting levels, couldn't convince her boss or her peers (i.e. through courageous followership) that a recall was the right move, she must be a super-woman to have suddenly found the right argument 3 months ago. Or she never argued for a recall before she became CEO. If the latter is the case, then this is another reason she shouldn't be CEO.

It's also unlikely that as a second tier executive, she was excluded from any of the conversations since 2005 when discussions about the ignition problem began in GM. How could she have not had a hint of an eight-year discussion whether the problem was discussed formally or informally (before/after meetings, hallways, etc.)? If she feels strongly about GM's actions now, she must have felt strongly sometime in the last 8 years. Someone in her 'global procurement' function would have had to do some research on a fix that's as extensive as it is now. She was also part of the Executive Operations Committee which should have discussed the possibility of a recall. How could she not have known?

If it was a cultural problem that the board was trying to fix by hiring Barra then the board is at fault for not fixing the cultural problem before. How did the cultural problem, where safety could be a lower priority than finance, come to light in the CEO search, but hadn't come to light before? If the board hadn't had access to non-C levels in the organization, or weren't approachable, or weren't asking the right questions, then the board failed to do its fiduciary duty. If they've failed, then they should be replaced.

Mary Barra probably isn't right for the CEO position. GM's board should be replaced too.

Note: In contrast, Ford is named one of the most ethical companies in the world.

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