Cultural Change Challenges - Lessons from The Old GM to the New GM

A company’s culture is reflected in the image that the brand has in the mind of the customer. This brand image is formed over time by the actions of the management team that are reflected in everything the company does from the quality of the products, the services provided, the messages generated in the promotions of the products, and the attitudes of the channel intermediaries involved in selling the brand.

GM (General Motors) has been historically known for its arrogance and culture as a cost-conscious, plodding bureaucratically silo structured organization more interested in profitability than its customer’s safety. Over all the years that it fell from its perch as the owner of nearly 50% of all the customers that bought a new car in the U.S. to less than half that number, and finally into bankruptcy, it has been deaf to criticism.

Now caught up in the “ignition-switch” scandal, the new CEO Mary Barra, is attempting to explain that there is a New customer-focused GM while it is blatantly obvious that the same moribund problematic culture is still in place five years since the 2009 bankruptcy filing. At that time the GM-lifer CEO, Rick Wagoner, who greatly contributed to the decline of GM was forced to resign. He was replaced by Fritz Henderson, who only lasted 6 months and was replaced by Ed Whitacre, recently retired from AT&T – what did he know about manufacturing cars?

Whitacre only lasted a year and was replaced by Dan Ackerman, a Naval officer turned private equity investor who knew nothing about automaking, either. Ackerman was a public critic of GM’s hidebound culture during his 3 years as CEO. Mary Barra then became the 5th CEO in as many years.

It is a well known fact that the CEO of any company has a major influence on the culture of the firm. Having 5 CEOs in 5 years certainly doesn’t allow enough time for any of them to alter the culture, which is on average a 3 to 4 year challenge at best. During the same period Mullay at Ford was able to engineer a dramatic cultural change with his “One Ford” strategy.

The other significant fact is that the same management group has been in place at GM before and after the bankruptcy, and is still in place today? How can a culture change when the management team that created the dysfunctional culture at GM is still there?

To make matters worse Mary Barra claimed that she knew nothing of the ignition switch problem that has been traced back to as early as 2001? When questioned by Senator Barbara Boxer on the Senate Committee investigating the scandal Barra said that she knew nothing about it? Sen. Boxer’s response was “it’s very strange that such a top employee would know nothing about a serious problem over a 13 year period”?

Mary Barra has worked at GM for 33 years!

How is your culture perceived in your marketplace?


Robert M. Donnelly is the author of: Guidebook to Planning - A Common Sense Approach, an educator: Professor of Entrepreneurship & Innovation at Saint Peter's University, and a brand builder and marketing expert. His new book: Personal Brand Planning for life is a guide for anyone w...

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