How GM’s Mary Barra Drives Value

Consult any movers-and-shakers’ list for the past several years and you’re likely to find GM CEO Mary Barra. She has been ranked among the world’s most powerful women by both Forbes and Fortune. She garnered a spot on Time’s cover in 2014 as among the “100 Most Influential People in the World.” And this year she was ranked #11 of Fortune’s “The World’s 50 Greatest Leaders,” a list which included Bill and Melinda Gates, Apple CEO Tim Cook, the president of South Korea, the #MeToo movement, and the activist students of the Marjory Stoneman Douglas school.

When Barra took the wheel of General Motors in January 2014, she became the first woman to head an auto manufacturer. “No woman on earth runs a bigger company, in revenue terms, than Barra,” noted Fortune. And rising to become a CEO was itself an achievement, since only about 6% of Fortune 500 CEOs are women.

Barra recently spoke at the Wharton People Analytics Conference, where she shared everything from her ascent through the ranks, to making her mark as a human resources leader, to grappling with the tragic ignition switch crisis, to GM’s foray into electric and autonomous vehicles.

Often termed a GM “lifer,” Barra began as an 18-year-old co-op student at General Motors Institute of Technology (now Kettering University) and earned a B.S. in electrical engineering. She said she appreciated the chance to rotate through many different areas of the company, which helped her discover what interested her. Early in her career she worked in the plant and also in engineering, and later continued to move through the organization to communications, human resources and product development before becoming CEO in 2014. “I’ve been fortunate that I’ve been given a lot of opportunities,” she said.

She noted that early on, a lot of those opportunities stemmed from her “interest in people.” She recalled working for a leader in manufacturing operations who said, “you have to win their hearts and minds.” Barra added that “really focusing on engaging with people, and making sure you do win their hearts and minds … and how you empower them, I think has been key [for me].”

“My very first job as a co-op student, I was on the [assembly] line… I want those people to feel motivation and feel valued and empowered.”

She gave the example of someone working on the assembly line who might have to perform a task 60 times an hour. How do you make sure every single one of those actions — 60 times and hour over eight hours — is done perfectly, she asked, while also helping the person make a connection to the customer, to quality and to supporting the vision of the company?

“That really resonated with me,” she said. “My very first job as a co-op student, I was on the line…. I want that person to feel that motivation and feel valued and empowered.”

‘You See Everything in HR’

One of Barra’s favorite roles at GM was vice president of global human resources, which she took on in 2009. “I loved that time, because you’re dealing with people.” She noted, though, that “sometimes people do the craziest things. You see everything in HR. But you also see the goodness of people and how to really help them achieve their goals.”

Interviewing Barra at the conference, Wharton management professor Adam Grant said that HR doesn’t always get the respect that it deserves. He asked her how human resources professionals can better prove their worth so they aren’t perceived as just “the benefits police.”

“I think it’s [about] recognizing that people are the most important asset in the company,” Barra responded. Hiring, retaining and developing people are all essential, she said. “I just wouldn’t subscribe to not being valued — I mean, you’re driving value every day.”

She added that once she was in a leadership role, the HR director was one of a few executives she wanted to keep “really close by” so she could always get the HR perspective: “I want [that person] to tell me if I’m off-base or if the message I’m trying to inspire is not working.”

During Barra’s own time as a human resources leader, GM was just emerging from restructuring. She said it was an opportunity to “really define the culture that we wanted.” One of her notable actions was to take General Motors’ 10-page dress code policy and slash it down to just two words: “Dress appropriately.”

There was serious wrangling in her own department about this. “They said, OK it can be ‘dress appropriately,’ but here’s what we’re going to put in the manual.” They wanted to return to exact prescriptions such as not wearing t-shirts with inappropriate sayings and the like, but she insisted that two words were all that was needed.

Once the policy was changed, Barra received a “scathing” email from a high-level manager. She called him up (“and of course that shook him a little bit,” she laughed) and found out that occasionally a few of his team members had to meet with government officials on short notice, so he didn’t want them to be wearing jeans.

Barra suggested that the manager talk with his team to come up with a solution. He later responded that the few people in question had decided to keep a set of dress clothes in their locker for those exigencies. The problem was solved. Barra said that an overly-detailed policy or procedure can have the unintended effect of making people “live down” to it — or the rule will simply be ignored because the supervisor will say, ‘Oh, I don’t agree with it either.’

But if you make the managers own the policy — especially at the first level of people supervision — it helps develop them, Barra said, noting that seemingly small changes can help transform corporate culture. She added, “If managers can’t handle ‘dress appropriately,’ what other judgments and decisions can’t they handle?”

Facing a Massive Corporate Crisis

Shortly after Barra became CEO in January 2014, she was blindsided by a major crisis.  A longstanding ignition switch defect was revealed to have caused at least 13 deaths (the death toll ultimately rose to more than 100.) Millions of GM cars had to be recalled, several high-level employees were fired and Barra had to testify before Congress. For the most part, Barra has been lauded for how she handled the catastrophe, successfully preserved GM’s reputation and contributed to its ongoing success.

She offered some insight into the days and weeks when trouble first hit. One thing people outside of a company often don’t understand, she said, is that “when you are in a crisis, it’s not like you have perfect information on day one. In our situation specifically, we learned we had an issue, and we acted. But then there was a lot to unfold.”

“We began to believe [self-driving cars] could happen much faster [if] instead of an evolutionary path, we could have a revolutionary path.”

Barra immediately created a small team, which met daily for anywhere from 20 minutes to two hours. One of the actions taken was a read-across, which Barra explained is done when there’s an issue in vehicle safety. The team methodically investigates whether the problem could be happening in other vehicles, regardless of whether they’re from the same manufacturing partner or have the same design.

The team also acted based on GM’s values, Barra said, and was determined to do everything possible for the customer, to be transparent and to make sure the situation could never happen again. “That literally guided us every step of the way.” She also noted that under her leadership, GM would always “do the right thing even when it’s hard,” regardless of the financial impact or the glare of the public spotlight.

Nevertheless, she said, she spent a lot of sleepless nights thinking “this just doesn’t feel right” about one path of action or another: “‘No, we’re going to say we’re sorry…. We’re going to do an independent investigation…. We’re going to release the independent investigation….’” She said that while business leaders in crisis situations are offered advice by “everyone,” sometimes they should trust their gut.

No Steering Wheel or Pedals?

Grant talked about GM’s innovations in electric vehicles. He commented to Barra that GM had beaten Tesla to market last year with its Chevy Bolt EV, the first electric car with a range of 200 miles.

He also noted GM’s commitment to developing autonomous vehicles. For this effort, the carmaker chose to acquire a startup company, San Francisco-based Cruise Automation, in 2016 rather than continue to try to build the capability internally. “We began to believe it could happen much faster [if] instead of an evolutionary path, we could have a revolutionary path,” Barra said. GM is poised to launch a self-driving car with no steering wheel or pedals next year, according to Wired.

How do we get people used to the idea of self-driving cars, Grant asked, especially those who really enjoy driving?

Barra cited GM’s publicly-stated goal of zero crashes, zero emissions and zero congestion. She said that in the U.S. about 40,000 people die in traffic accidents annually and that 90% of those accidents involve human error. She believes that autonomous driving can dramatically reduce those numbers.

The further refinement of electric vehicles, she said, can get us to zero emissions. And zero traffic congestion can be achieved with “a combination of autonomous and different modes of travel, not just the individual driving their vehicle but ridesharing and car-sharing.” Designing cities differently may also be necessary. “All of this we look at as General Motors’ responsibility,” she said.

She commented that while it’s human nature to resist change, she believes people will eventually recognize the value of these new developments. Riding in a car will become safer, the environment will be cleaner for future generations and people will no longer have to deal with the “road rage” of being stuck in heavy traffic.

Nevertheless, she noted, “I love to drive” and that she couldn’t wait to try GM’s ultra-speedy 2019 Corvette ZR1 and some of the new trucks. But also there are times when “almost anyone is going to say, ‘If someone else could get me from point A to point B, that would be better.’”