For the first time in history, a woman will lead one of the 3 great American automakers when she takes the helm of General Motors where she currently serves as the Executive Vice President of Global Product Development, Purchasing and Supply Chain.
That woman is Mary Barra.
Mary Barra’s career at GM started in 1980, when she went to the Pontiac division as a “co-op student” through General Motors Institute, now Kettering University. She earned a bachelor’s degree in Electrical Engineering and in 1990, earned her MBA from Stanford University through a GM fellowship. She had been with the company ever since, steadily rising through the ranks.
This article by USA Today aptly describes why this is such a good move by GM.
For much of its history, the auto industry has been a guy thing — a fraternity of male engineers and executives more excited by Mustangs than minivans, more interested in horsepower than highway fuel economy.
While that might seem perfectly normal given the industry’s affiliation with auto racing, women actually make the majority of car-buying decisions. By some estimates they are the principal decider in 80% of vehicle purchases in America.
So General Motors’ decision to make 51-year-old Mary Barraits first female CEO, while groundbreaking to be sure, might best be seen as a bow to reality, a strategic decision by the company to get closer to its customers.
The milestone, however, might never have happened as a natural evolution. It took a complete rethinking of the company in the wake of its 2009 reorganization to bring it about.
This is true in a direct sense because current CEO Daniel Akerson, in his determination to bring change to the executive ranks, plucked Barra out of a job often staffed by women (head of human resources) and put her in the more upwardly mobile post of product development chief.
It’s also true in a more general sense, because the pre-bankruptcy GM simply couldn’t afford to care much about the types of cars that women wanted. The company was so bloated and inefficient that it could only make money off of cars with huge markups — big SUVs and pickups, full-sized sedans and muscle cars. Now the company is efficient enough to invest heavily in models of all sizes and shapes.
It’s an important lesson. Sometimes what a company needs is not a new and different CEO, but a new and different company. The CEO will come as a matter of course.
This lesson could be applied in other industries, most notably finance, where women are in short supply as CEOs and senior executives at major institutions.
That’s a problem. One of the major causes of the financial crisis of 2007-09 was a shift away from a client focus at major institutions to one of quick profits from trades and complex transactions. This shift flourished in a testosterone-fueled culture, one chronicled in best-selling author Michael Lewis’ first book, Liar’s Poker, which describes major bond traders going by a moniker derived from the male anatomy.
A remade financial services industry, one rededicated to client services, would make for a more stable banking system. It would be less contemptuous of shareholders and taxpayers. And, inevitably, it would have more women in top positions.
Female CEOs are still relatively scarce. In the Fortune 500, there are only 22 (not including Barra), which comes to 4.4%. This reflects, among other factors, societal attitudes and the decision by many women to take time off for parenthood. Yet often it reflects a corporate culture stuck in its ways and averse to change.
Congratulations to Mrs. Barra! I look forward to seeing what direction she will take GM under her leadership and I wish her absolute success in her new role.