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Thursday, Jun, 12, 2014

A Tale of Two CEO Transitions - Ford and GM

Recently both Ford and GM transitioned insiders into the top job.  However, they are experiencing very different transitions- one smooth, one challenging.  What are the elements orchestrating what is playing out?

Ford CEO Mark Fields and top GM executive Mary Barra are both highly educated and have long, successful histories in the auto industry and at their respective companies. The selection of Barra, the first female CEO of a major automaker, attracted a significant amount of attention. Mary Barra's short time at the helm turned stormy almost immediately, as the company became embroiled in a controversy that has seen millions of vehicles recalled for safety issues.

Meanwhile, Ford, in the midst of a profitable year, thoughtfully transitions Fields to follow a successful predecessor, Alan Mulally.  Fields has been groomed to continue their winning strategy ? the "One Ford" game plan. It has been decades since any of the Big 3 automakers has had back-to-back successful CEOs.  Businessweek notes Mulally was "focused on nurturing people and building a strong executive team" and left Fields with a "clear and transferrable process" for managing executive meetings and making decisions. Perhaps most critically, he encouraged the members of his team to be upfront about problems and to focus on finding solutions.

As Mulally's designated successor, Fields had already been running executive meetings when the transition officially took place. There is something to be learned from this rare example of a major automaker making a smooth transition from one CEO to another. It will be interesting to see how Fields matures in the role when the next unexpected crisis hits Ford.

Meanwhile, GM's Barra is in a completely different transition as she sits in the Congressional hot seat trying to explain the failure of GM to recall vehicles with ignition defects that resulted in 13 deaths. The question is: Can Barra change the culture of cover up that allowed a known danger to exist?  She has been in leadership positions as well as the executive team for years at GM, although she claims she had no knowledge of this problem.  Since leaders shape the culture by their beliefs ? what they pay attention to, what they ignore, what gets rewarded, what gets punished ? it may be hard for Mary Barra to step out of the mindset that created this culture. Four months into her tenure there are already whispers that she will be out, even though her tone is one of accountability, backed by the recent firing of 15 people involved in the cover up.  The challenge for Barra is to build confidence that an insider can pull off the systemic changes critical to GM.

What can be learned from these two different executive transitions?  It goes beyond good succession planning.  While both companies are currently profitable, it is the leader's style and the health of the culture that ultimately determine the long-term success of not only the people who transition into key executive roles but also the company itself.


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