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April 2, 2014 | lmahler

Grading Mary Barra – How the New General Motors CEO Performed before Congress

Anyone who follows the political comings and goings of Capitol Hill knows that congressional hearings around hot-button issues are often tense, difficult moments for those called to testify. Such events attract widespread media scrutiny and can be a make-or-break moment for corporate leaders. It’s not just the corporation’s reputation on the line; it’s the CEO’s personal brand at stake.

We’re seeing this dynamic play out this week in the case of General Motors (GM), which has recalled 2.6 million vehicles over safety issues that led to a documented 13 deaths. Recently uncovered documents indicate that GM employees knew of the defects years ago and chose not to fix them, citing cost concerns.

It is against this backdrop that new GM CEO Mary Barra appeared before Congress this week. Here, we take a look at the strongest and weakest parts of her performance:

Issuing an Apology: A+

When your company has done harm to its customers, the first step is to issue an apology – preferably before you’re asked for one. In this case, Barra started her testimony with a heartfelt “I am deeply sorry.” This acknowledges to your stakeholders that you are aware of your organization’s shortcomings.

Showing Compassion to Those Impacted: B+

Despite being cleared of legal liabilities for accidents that occurred prior to the 2009 bankruptcy deal, Barra said “We do understand we have civic responsibilities as well as legal responsibilities,” and announced the hiring of Kenneth Feinberg, a well-respected expert with extensive experience in victims’ compensation issues. Barra wouldn’t commit, however, to providing compensation, citing Feinberg’s 30-60 day window for evaluating the situation. We understand that she has a legal obligation to protect shareholders and employees, so it may very well be impossible for anyone in this situation to earn an A.

Announcing Plan to Prevent a Repeat: A

As the story unfolds, it is becoming clearer that cost concerns were at the heart of GM’s decision to ignore faulty ignition switches for nearly a decade. To move past this image, Barra repeatedly emphasized that the new GM had moved from a cost-focused company to a consumer-focused company. She also announced the hiring of former U.S. attorney Tony Valukas to conduct a full-access investigation into what went wrong, who was responsible and whether internal policy changes are needed to prevent this from happening again.

Providing Information: C

It may just be a simple matter of timing, but beyond announcements about internal investigations and potential assistance to victims, Barra didn’t bring a lot of new information to the table. Committee members demanded specificity, and by repeatedly deferring such specifics through reference of ongoing investigations, she only seemed to stoke their frustration.

Overall Grade: A-

In her first two appearances before Congressional panels, GM CEO Mary Barra performed admirably. Her even-keeled manner came across as professional and dependable, and she proactively spoke to the steps GM has taken to resolve the issue. Particularly for a new CEO, she exuded a command of mistakes that may not have occurred on her watch, but for which she accepted full responsibility.

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Posted by lmahler at 5:06 pm | Tagged , | Comment (0)

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