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How Decisive Leadership Saved General Motors from Catastrophe

February 20, 2020
5 Min Read
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Detroit Free Press

An indecisive leader has difficulty making decisions. They tend to spend lots of time listening and weighing up the pros and cons, but when it comes to the crunch, they have difficulty taking suggestions and turning them into concrete action. The results can be demoralizing and frustrating. They can stall a company's progress, and directly effect its bottom line.  

"It’s OK to admit what you don’t know. It’s OK to ask for help. And it’s more than OK to listen to the people you lead. In fact, it’s essential.”

– Mary Barra, CEO at General Motors

In contrast, decisive leadership involves listening, weighing up the pros and cons, and then taking decisive action. A decisive leader makes tough decisions that often involve taking risks. Like an army general deciding on when and where to withdraw their troops, sometimes it’s not even about a positive outcome, but how to mitigate damage.

Making tough decisions can also be widely unpopular, might mean not being liked and can even be met with open resistance. No wonder that sometimes, not taking action at all seems like a dream option (though often has disastrous repercussions of itself).

General Motors versus the world

Mary Barra, found herself faced with all the above. Just days after becoming the new CEO of General Motors in January 2014, Barra discovered that an ignition switch failure in GM’s cars was directly responsible for 124 deaths and 275 fatal injuries.

But rather than trying to ignore the discovery, she leaped into swift and decisive action. In the following few months, she recalled more than 30 million vehicles and issued over $900 million in compensation to the victims. She then went one step further: She hired former US attorney Anton Valukas, and delegated him to investigate the underlying causes.

“The biggest lesson I learned, and I take it to everything I tackle now, large or small, inside of work and outside: If you have a problem, you’ve got to solve it. Because that problem is going to get bigger in six months. It could get bigger in two years. But it’s not going to get smaller with time.”

Sometimes it’s simply about making a decision. Any decision. Because not making a decision makes the problem worse. Imagine how many more injuries and deaths would have resulted if Barra had not galvanized GM into recalling the vehicles when she did.

The underlying cause

To Barra, it wasn’t enough to solve the immediate problem of the unsafe vehicles. There were clearly serious underlying issues within GM’s production processes that urgently needed to be addressed, or further future catastrophies would be inevitable. Valukas’s investigation found the core issue was incompetence driven by a culture of fear and lack of communication.

There was an ingrained attitude of inaction: Reports filed with missing data that were often overlooked and departments operated in isolated silos, that meant issues took a long time to be resolved (if ever). This all culminated in the ignition switch failure going uncorrected for over a decade.

As a result of the investigation, Barra fired 15 employees. Then Barra rolled up her sleeves and set about fixing GM.

“They didn’t take responsibility. They didn’t act with a sense of urgency.”

A decisive leader in action

Indecisiveness and inaction had had a catastrophic result. Now Barra needed to take decisive and action to make sure it never happened again. That meant listening and making changes. Fast. Barra looked into the process for reporting safety issues. She found it convoluted and slow.

"It was a tragic situation, and if I could roll back the clock, I would. But it made me impatient. When's the best time to solve a problem? The minute you know you have it."

So she revamped the process for reporting safety issues and launched a safety hotline. Now any employee who had a safety concern could report it quickly and anonymously. They could even report to her directly.

But wait, there’s more…

GM was also in severe financial trouble. Now that she had effectively dealt with the ignition switch crisis, Barra refocused her attention on GM’s finances. She took a step back, analyzed the situation and took away the emotion. She realized that in order for GM to continue to grow, there could be no sacred cows. That meant no car or product line was safe. It all had to be viable to the business or it was gone. As a result, GM sold its Opel and Vauxhall to PSA Groupe in Europe.

Barra's decisive leadership leads to the selling of GM's Opel and Vauxhall to PSA
Barra's decisive leadership leads to the selling of GM's Opel and Vauxhall to PSA (Courtesy of Carscoops)

Not only did Barra steer GM through a major crisis, she broke sales records in her first year as CEO.

“She exhibited real leadership here, addressing both her internal and external constituents. She was poised and decisive.”

Greg Smith, consultant with VIA Agency

Changing a culture

GM had a culture of fear and internal competition because departments felt like they were competing for resources. So Barra re-allocated resources evenly and worked with teams to improve internal communication. It wasn’t enough that she, the President and CFO wanted to improve safety. The employees had to know and want that as well.  Barra’s own departmental communication needed improving too. She, the GM President, and CFO now speak about 3 times a day. And she makes sure she's always available in the event of an emergency.

What makes Barra a decisive leader

In a short time, Barra accomplished and achieved a lot. She instigated new safety procedures and protocols, improved communication between all departments, empowered employees to take responsibility, revitalized the workplace culture, sold underperforming brands and improved sales.    

Decisive Leadership puts Barra in the headlines in a good way (Courtesy of Time Magazine)
Barra's decisive leadership puts her on the cover of Time Magazine (Courtesy of Time Magazine)

These actions speak to a proactive and decisive leader. Taking away the specific details and looking at it from a macro level she:

  • Made decisions and put them into action. Quickly. (Recalled 30m vehicles)
  • Took risks (Sold Opel and Vauxhall)
  • Listened (To her department heads and employees)
  • Embraced change (Introduced new safety procedures and protocols)
  • Encouraged and practiced open communication on all levels (encouraged employees to speak out and take ownership, encouraged inter-departmental communication, improved her own communications with her team)

As a leader it's okay to deliberate, listen and ask questions. In fact, as Barra said, it's essential. What’s not okay, is then not taking any action at all.

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