During her testimony before the US Congress on GM’s ignition switch recall, new CEO Mary Barra did some things right and other things wrong. The larger question for Barra, the one everyone wants answered is, “What comes next?”
Tailor the Response
Any response to the crisis needs to consider the public’s perception of the company, but to some extent, it also needs to be tailored to the face of the company. In her recent appearances, Barra comes off as very sincere in conveying the company’s deepest regrets. If she lacks in anything, it’s sincere forcefulness. She may need to consider increasing the force with which she delivers her public statements, to communicate GM’s determination to fix the issue and make amends.
Minimize Distinctions Between the Old GM and the New GM
Many crisis management experts have suggested that Barra continue emphasizing the fact that the “New GM” is not the same as “Old GM”. One expert explained that this strategy employs a powerful trope, adding that GM has changed their character so much that it’s almost a rupture in their identity. This sounds like the kind of evasive cop-out auto companies are notorious for. Everyone knows there’s still a lot of the “Old GM” in the “New GM”. If anything, Barra should let up on that argument and stop emphasizing the differences to such an extent.
Create Space Between Attempts to Shield the New GM from Liability and the Ignition Switch Recall
The “New GM” has indicated that it may be shielded from liability for actions that occurred pre-bankruptcy. While this is fine legally, Barra still needs to take full responsibility for the problem. GM should set up a trust fund to compensate victims and their families. Barra recently announced that GM had enlisted the help of Kenneth Feinberg, known for his work with 911, Katrina and BP oil spill victims. However, the company has not yet said whether GM will establish such a fund. Apologize once again for those who have been harmed by this defect, offer tangible proof that GM will do its very best to make things right.
Pound the Positives
Barra should be presenting a stronger, more positive case for the company by stressing the actions the company is taking to make sure it won’t happen again. The current GM has a nice product renaissance and quality story to tell. Don’t be afraid to tell it, even if it means using paid advertising to do so.
Bottom line: Barra needs to get the story straight and tell it with honesty and sincerity. Anything that smacks of evasiveness will be pounced on by the media. The truth may hurt, but in this case at least, GM should avoid the spin and accept responsibility.
Informational Credit to 99 Truck Parts & Industrial Equipment Ltd.