It took fewer than 60 days for Mary Barra, the new CEO of General Motors, to face a crisis. Reports showed that GM waited 10 years to fix a mechanical problem it knew about: faulty ignition switches in some of its cars contributed to 12 deaths.
Historically, leaders of automakers have responded to such situations by limiting their public statements. But Barra, 52, has sought to reassure the public at every turn.
From the outset, she adopted a four-part: apologize, work with regulatory agencies, commit to strengthening internal protocols so such problems never happen again and meet regularly with customers and employees to discuss the matter openly.
Barra’s decision to admit failings in the company’s internal safeguards proved wise. Attorneys often advise CEOs to avoid any admission of wrongdoing, but Barra rejected that approach in favor of acknowledging the problem and promising to fix it.
“The public often complains about companies not taking responsibility and being open, which is one of the root causes for distrust with corporate America,” a PR expert said. “By being proactive and open, Barra generates good will for GM and is also setting part of the narrative of the story.”
Barra even agreed to testify before the U.S. Congress, a step that cast a wider spotlight on the crisis. But by taking such a public stance, she demonstrated her intent to level with lawmakers and enhance her image as a transparent leader who has nothing to hide.
— Adapted from “Lessons for CEOs on Barra’s Response to GM Crisis,” Dale Buss, www.chiefexecutive.net.