Is GM’s board setting up Mary Barra to fail as new CEO?
Mary BarraA heavy schedule of 2013 GM product launches tested Barra—the highest-ranking woman in the auto industry—and her grades were all superlative. She's brought a new rigor and discipline to GM's often unruly product development process. Critics praised the 2014 Chevy Impala as the best GM car in decades, and the upcoming seventh-generation Corvette is a top contender for car-of-the-year honors. Her biggest fan: chairman and CEO Dan Akerson, who keeps talking up the likelihood of a woman becoming a Detroit CEO .
The overwhelming consensus on Mary Barra is that she’s an excellent choice to be General Motors’ (GM) next CEO. But how well she performs will depend on many factors, and a famous leadership expert is concerned about how GM has prepared the company for the Barra era.
Noel Tichy has watched the auto industry up close as a longtime professor at the University of Michigan’s Ross School of Business. He’s well known for having run General Electric’s (GE) Crotonville leadership development center under Jack Welch, and he has written or co-written several business bestsellers, including Control Your Destiny or Someone Else Will, The Leadership Engine, and Judgment. His next book, due out in August, is called Succession. He strongly endorses the choice of Barra as CEO — “a hell of a good leader with a great background,” he says. “The bad news is that the board and the CEO [Dan Akerson] have potentially set her up for failure.”
Tichy’s first concern is that GM didn’t give Barra the chairman’s job; GM’s board will be chaired by former Cummins CEO Theodore Solso, a GM director for the past 18 months. Splitting the CEO and chairman roles is becoming mainstream — almost half the S&P 500 companies do it — but Tichy doesn’t like it. “It rarely works and most of the time fails,” he says, because it introduces a potential new source of conflict.
A second concern is that GM added a new job, president, which will be held by CFO Daniel Ammann. Tichy says that move is “back to the future at GM, adding layers that get in the way.” Presidents were common among U.S. companies in the 1980s but have fallen out of favor; among America’s 10 most admired companies in Fortune’s latest ranking, for example, you won’t find a single one.
Tichy is concerned also that GM has given important jobs to the other CEO contenders. Ammann was one, as was Mark Reuss, who will move into Barra’s current job running global product development. Tichy believes it just doesn’t work to make them report to the person who got the job they were after.
Combine those three factors, Tichy believes, and the effect could be significant: “These are serious flaws that can potentially set GM back to the good old days.”
A GM spokesman declined to comment on Tichy’s views, noting that Barra isn’t even CEO yet — that happens Jan. 15 — and says the company is content to let performance prove the doubters wrong.