It’s not often you will hear a CEO express an apology for a company failure, particularly when the company is in crisis. The corporate lawyers will nearly always advise against an apology because, they say, it admits blame. Not something you want to do if you think you’ll end up in court. But that’s exactly what General Motors CEO Mary Barra did when she went before a House Subcommittee last week. GM’s current problems provide an ongoing case study in crisis communication tactics.
Barra, who became GM’s CEO on Jan. 15, has been embroiled in a series of automotive recalls totaling 6.3 million cars and trucks. But it was the 2.6 million cars recalled for an ignition defect that has resulted in 13 deaths that was the primary topic before Congress.
Many credit Marietta lawyer Lance Cooper for bringing the breadth of the GM ignition problem to light, causing the company to extensively expand its recall. It was his work on behalf of the family of Brooke Melton, who died in 2010 when her 2005 Chevy Cobalt lost power and swerved into oncoming traffic, that got GM’s attention, experts say.
A maxim in crisis communication is this: Tell it all, tell it fast, tell the truth. How has GM done?
Tell it all
As Barra testified before Congress last week, she said, “When we have the answers, we will be fully transparent with you, with our regulators, and with our customers.” While the sentiment is right, the “tell it all” dictum seemed unsatisfied as she responded to question after question with assurances that, while she doesn’t have the answers now, they will be forthcoming following an internal investigation. Beyond her assurances at the hearings, after her second day of Congressional grilling before the Senate Subcommittee, Barra released a statement promising to “keep Congress informed.”
But lawmakers and family members of those killed in the recalled cars accused GM of a culture of secrecy. In fact, a front-page story in the New York Times reported GM has “refused to disclose publicly the list of confirmed victims,” increasing the pain and frustration of survivors.
Barra’s prepared testimony before Congress acknowledged a problem and asserted that as soon as she knew about it, it was made public. But even the title of the testimony to the House Subcommittee, “The GM Ignition Switch Recall: Why Did it Take So Long?” admits the second part of the maxim was missed.
Tell it fast
It now is common knowledge now that as early as 2005 GM engineers had identified and were trying to solve the ignition problem. But no recalls or the information surrounding them were forthcoming until recently. And company documents reveal that when a fix was found, it was determined to be too expensive. Barra said it would have cost GM about $100 million in 2007, much more today. But she also admitted she thought GM had been more of a “cost culture” and promised a customer-centered culture going forward.
It remains to be seen whether Barra’s GM will “tell it fast” when it comes to revealing facts from the internal investigation.
Tell the truth
While we may not have all the information, Barra is giving the appearance of being forthright. She may not be saying a lot, but much of what she is saying is hard — case in point being the already noted apology. Barra told Congress the latest round of recalls (the company recalled 1.5 million more vehicles the day before her House testimony) proved the new GM’s devotion to truth.
“We identified these issues. We brought them forward and we are fixing them,” she said.
Given the internal documents that revealed the cost concerns surrounding a fix, if we learn via smoking-gun emails or the like that GM leadership withheld anything they knew, the damage to GM will deepen.
Big, established brands like General Motors are better positioned to weather crises than are smaller or newer companies. But still, GM has a long way to go to re-establish consumers’ trust. Finger-pointing at a past corporate culture will not work for long unless real, honest, transparent progress is made.
In her testimony last week, Barra appeared compassionate on the one hand but uninformed on the other. For GM to recover quickly and for Barra to establish her credibility as the company’s new leader, compassion and competence will need to find a balance.
Bryan H. Reber, Ph.D., is the C. Richard Yarbrough Professor in Crisis Communication Leadership in the Grady College of Journalism and Mass Communication at the University of Georgia.