Mary Barra: “I’m Not In a Startup, But a Start-Over”

Some 33 years ago, Mary Barra began working at General Motors, where her father worked as a diemaker with the Pontiac division. She started with a position inspecting fenders and hood panels in a Pontiac plant; rose through the ranks in manufacturing, engineering, and human resources; and then was named head of global product development, purchasing, and supply chain. In December 2013, Barra, a 1990 graduate of Stanford’s MBA Program, was named the Detroit-based company’s chief executive officer, becoming the first woman to lead a major global automaker.

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Mary Barra (Photo by Jeremy Deputat)

In a talk with Stanford GSB students on May 1, she shared her lessons of leadership, including how she’s navigating the opportunities and challenges of driving change at a 100-year-old company with 200,000 global employees. “I’m not in a startup, but a start-over,” she says. Here are some excerpts from her advice for students on steering a company toward future success.

Do the Hard Work of Changing Your Culture

Corporate culture doesn’t change quickly, says Barra, but it’s critical to have a strong culture to motivate employees and to cultivate an environment that breeds success. “It distinguishes great companies that last over years and decades from companies that are average, or here and gone the next day,” she said.

Last year, GM developed three core values for the company: The customer is our compass, relationships matter, and individual excellence is crucial. “But it’s not what you say, it’s what you do,” she says. “If you put some words on a banner, you put them on a poster, you email them, but you don’t live them, your people will know, and they won’t be all in.”

“I’m getting to demonstrate in a very visible way to all 200,000 employees around the globe that we really mean it,” says Barra, referring to GM’s values and the company’s response to high-profile safety recalls announced earlier this year. If your employees and stakeholders know that you’re living your values, and you have a unified leadership team that understands the mission and helps drive change, then you can succeed in changing the culture, she says.

Own What You Control and Prepare for What You Don’t

Managers must make difficult decisions about parts of the business that are failing or not oriented toward future success. It’s vital to have an inspiring vision for your company, Barra says, but “you also have to face the brutal facts — with your industry, the competition, your performance and, your business plan.” Having an unvarnished view enables you to make the best decisions. “If you’re not seeing it, then the whole organization isn’t, and you’ll definitely miss something,” she says.

It is critical in today’s competitive landscape to prepare for a future you can’t always control. The auto industry will experience major shifts caused by innovation in fuels and propulsion systems, evolving mobile technology, and changes in energy and transportation policy that may deprioritize individual driving and lead to different models of car ownership. “I believe that our industry will have more change in the next five to 10 years than we have had in the last three to four decades,” she says.

“If you start to see the landscape shift, you can create a competitive advantage for your organization,” she says. “But it doesn’t have to be a defensive move; it can be proactive and on the offense.” General Motors, for example, is exploring a diverse range of fuel options — from extended-range electric vehicles to fuel cells to compressed natural gas — because it’s not yet clear what will prevail in the future.

Be Proactive in Relationship-building

Some businesspeople do a cost-benefit analysis when deciding whether to maintain a contact or do a favor. That’s a shortsighted approach, says Barra, because helping someone without expectation leads to a more rewarding life, but also because tough times are much easier to weather when you have a supportive network. “You can’t build a relationship when you need it,” she says. “And you never know what relationships may be important as you go forward.”

Face Hardship Head-on

“I have the opportunity to do that right now. You’ve just got to address it head-on,” she says, referring to the challenge of managing the recent recall. “This is a very difficult and tragic situation because lives were lost. I want to make sure we address and fix any problems; that we learn from them, and, most important, that we focus on our customers and do the right thing as we move forward.”

In any business scenario, problems never solve themselves. They only grow to threaten your competitiveness, ability to innovate, and, ultimately, your company’s survival. “One of the reasons General Motors went through its bankruptcy [in 2009] was that we had big problems, and if you keep moving them down the road, they just get bigger,”she says. “When I talk to my team now, I say, ‘If you have a problem, let’s solve it now, because I promise you in six months it will be bigger.’ In fact, in two years, it might be gone, because likely your company will be gone.”

Make Personnel Changes Quickly, Decisively — and Decently

If someone isn’t getting the job done, even a friend, it’s your job as a leader to take action, she says, adding that in any organization striving for change, there will be some “CAVE people” who have to go. CAVE people, Barra explains, are Continually Against Virtually Everything: “They may be very smart but nonetheless aren’t aligned with your company’s goals and vision, and end up sucking energy out of the organization.”

How does she prepare for difficult conversations? “First of all, I do prepare for them,” says Barra. “And I think, ‘If someone were having this conversation with me, how would I want them to do it?’”

The key is to move through the process with grace and dignity toward the individual, and to do so swiftly so your company can move forward. “No one has ever said, ‘Wow, I addressed that talent issue too quickly,‘ “she says. Managers may feel like personnel issues are one-on-one — between you and the underperformer — but in reality it’s almost always affecting the rest of the team. “Generally, everybody knows you’ve got an issue, and they’re just waiting to see when you’re going to deal with it.”

More than 200 Stanford GSB students and faculty were on hand to hear Barra, who was on campus for her first Stanford GSB Advisory Council meeting. “This was always a special place for me, and I’m honored to be part” of the Advisory Council, Barra said later. “I look forward to helping chart Stanford’s future as one of the world’s leading institutions of research and higher education.”