Era of Barra: 4 Lessons from the GM Chief

GM CEO Mary Barra at the annual shareholders’ meeting

Mary Barra has been CEO of General Motors for just three years, but already there is a mountain of lessons for other chiefs in how she has managed not only to survive but to thrive in one of the highest-profile positions of any global business leader—not to mention one of the loftiest perches for any female executive.

Mary Barra is #8 on Chief Executive’s list of the CEOs of the top 1,000 companies (public and private).

Barra’s winning performance so far stands out even more for its contrast with the failed tenure of Mark Fields, the Ford CEO across town who recently was ousted by the company’s scion, William Ford Jr., and the company board in favor of automotive neophyte James Hackett.

“As a leader, Barra demonstrates a mix of discipline and vision, adroitly balancing GM’s immediate imperatives … and its longer-term challenges—ensuring GM’s future in the face of unprecedented industry upheaval,” wrote Joann Muller, Forbes’ Detroit chief and one of the closest media observers of Barra. “She has made decisions other GM leaders never dared.”

The key for Barra has had nothing to do, really, with the fact that she’s a woman. There was a lot of talk about her gender as she assumed the post, with some pundits suggesting that she could succeed at GM in part because she might take a more collaborative approach than GM’s traditionally male leaders had done.

“As a leader, Barra demonstrates a mix of discipline and vision … ensuring GM’s future in the face of unprecedented industry upheaval.”

And surely, Barra has benefited from factors way beyond her control, such as the fact that quiescent gasoline prices have played right into GM’s traditional strength in pickup trucks and large SUVs in the U.S. market, helping to create three years of record earnings.

But, actually, the key to Barra’s success so far has been in the difficult and sometimes hard-knuckled decisions she’s made—moves that, arguably, previous GM CEOs wouldn’t have made.

Here are 4 lessons from GM’s era of Barra so far.

1. Activists need not be appeased. At a time when many other high-profile CEOs are walking on eggshells around activist shareholders and even kowtowing to them, Barra has been running over them. Earlier this month, 91% of shareholder votes at the GM annual meeting were cast backing her, and against a plan by activist shareholder Greenlight Capital. Greenlight’s alternative slate of three directors also was voted down at the meeting.

Greenlight’s billionaire president David Einhorn wanted to split GM shares into two classes, one of which would be a growth-oriented entity.

GM’s stock price has languished in the six years since its initial public offering took the company off the taxpayer dole, and he sought to “help fix GM’s inefficient capital structure and unlock significant value for all shareholders,” as he put it.

But Barra has moved decisively to streamline the company and to stay ahead of concerns such as a leveling off of the U.S. market and capital-thirsty demands for a strategic transformation for the coming age of self-driving cars.

2. Any culture is malleable. Unluckily, Barra ran into the buzzsaw of the GM ignition-switch recall problem right away in her tenure. She salted away her first major victory by handling all aspects of the challenge—from the legal to the operational to the financial to the political—with aplomb.

But maybe more importantly for the company over the long haul, Barra also attacked the underlying, pass-the-buck cultural rot that had allowed such a disaster to occur in the first place, creating an inestimable toll in human suffering and corporate waste. Insiders attest that GM is steadily becoming a different, and better, place because of Barra’s determination to attack the decades-old legacy of irresponsibility that had led to the ignition-switch debacle.

3. Size doesn’t always matter. GM’s traditional position in the automotive world was to participate in nearly every global market as part of its self-appointed mission of competing continually for the title of world’s largest carmaker. But among other problems, GM lost its way in the European market.

So Barra recently made what to some was the unthinkable decision to pull out of Europe— except for some minor operations, like Cadillac’s—to focus on higher-margin operations in North America and China. GM may never again hope to lay claim to world’s largest automaker, but Barra’s bet is that it could vie for a title that she decided would be more important for the long haul: world’s most profitable carmaker.

4. The future waits for no leader. As she dealt with immediate challenges such as safety recalls and activist shareholders, Barra has had the presence of mind to invest GM heavily into a future that looms with a heavy emphasis on vehicle electrification and mobility services such as ride-sharing and self-driving cars.

She pushed GM to get out of the mainstream-priced, long-range Chevrolet Bolt all-electric vehicle this year, months if not a year ahead of Tesla’s more-ballyhooed, upcoming Model 3 for the same segment. And from the start, she pushed the company into some pricey and inventive forays into the new technological era, including investing in the Lyft ride-sharing service and starting GM’s own car-sharing service, Maven. As a result, pundits give GM as good a chance as any company of succeeding in what remains a foggy future for the car industry.

SHARE
Dale Buss

Dale Buss is a long-time contributor to Chief Executive, Forbes, The Wall Street Journal and other top-flight business publications. He lives in Michigan.