5 Lessons in Corporate Makeover from GM’s Electric Vehicle Ambitions
Detroit automaker’s 2035 all-EV plan is more than a marketing game
Mary Barra knows how to make a splash.
Early January, the General Motors CEO sent the autosphere abuzz with her company’s impressive virtual CES showcase — essentially redefining the way traditional automakers introduce their products. Then, a few weeks later, she dropped the real bombshell.
Her announcement that the Detroit automaker will stop producing internal combustion vehicles and go emissions-free by 2035 has already become one of the top stories of the year. Many called the statement a desperate move by GM to catch up with its competitors such as Tesla and Volkswagen who are pulling ahead in the electrification game, while others are calling it a clever marketing play to prop up a stodgy brand.
All of them are probably true.
Long-term commitments are often viewed in the industry with skepticism because companies and their leaders are rarely held accountable for them.
But the directional shift is also a masterclass in corporate strategy and vision building. Barra has made some tough decisions in the last five years — pulling out of loss-making regions such as Europe, shutting down factories, upgrading the culture of a company that had once built the template for American corporate behavior.
More importantly, she is actively steering the company out of stasis. She introduced the Chevy Bolt in 2017 — which has become the largest selling BEV (battery electric vehicle) model in North America behind Tesla’s Model 3 and X. She is investing heavily in battery manufacturing. She is pushing GM in uncharted waters with new business ventures such as the company’s new EV logistics arm BrightDrop.
The latest salvo is her boldest yet. Only time will measure its success — or failure — but for strategists and business thinkers, there are five valuable lessons to learn from Barra’s daring move:
>> Make Your Vision Public: There is a time to keep your strategy to the confines of the boardroom — and a time to shout it out to the world. Nobody knows that better than Elon Musk.
For the last decade, the Tesla CEO has used visionary goals as a weapon. He changed how the automotive game is played with his overreaching — and often outrageous — disclosures about his ambitions for Tesla. Traditional automakers have been playing catchup ever since.
Barra has borrowed a page from the Elon playbook — minus the arrogance. Her public commitment to turn GM all electric was her way to up the ante and put her competitors on edge for a change. Case in point: within days of the GM briefing, Ford announced that it is doubling its investment into electrification until 2025 with the added repartee that it “won’t the cede the future to anyone.”
One can only expect more such statements in the coming days from other brands. Competitive intensity force companies to make swift moves, and they often opt for bad strategy when switching gears on the fly.
But there’s a more relevant reason behind goading your rivals. Electric vehicles are highly capital intensive. It’s one thing to launch a few models but another to bet your farm on it. You don’t want to be the only one who goes all in—it pays to have competition in this race.
Technology, volumes and adoption will only improve if everyone throws a lot of money and manpower into electrification — that can only benefit GM, which has already sunk a lot of cash into the strategy. With the announcement, Barra only made sure that his competitors will follow through.
>> Fire Up Your Employees: GM is a corporate labyrinth with a culture code rooted in the post-Second World War era. Barra knows that the company needs a reboot.
During her tenure as GM boss, she has hand picked executives, launched intra-GM incubation initiatives such as GM 2020, and pushed the company headlong into CASE (connected, automated, shared, and electrified) — the four pillars of transformation in the auto industry.
But a few electric vehicles here and there, with a dash of new business models, do not remake a company. They don’t signify a fundamental shift to employees. After all, every carmaker is tinkering with CASE these days. The electrification target, on the other hand, positions GM as a company that is ready to pull away from its roots — gas guzzlers, giant trucks, and suburban spunk. It sends a strong message to its workers that they should be ready to change as well.
More importantly, a bold vision helps attract top talent. Silicon Valley giants and startups know and use this strategy all too well. If Barra intends to change GM, she needs to recast the company to potential dreamers and visionaries, and give them enough reason to give Silicon Valley a pass and join a “good old” automaker.
>> Take Center Stage and Never Leave: A single statement can’t change perceptions— you need to constantly raise the stakes through words and action. Barra’s making sure that GM’s public makeover is a carefully orchestrated dance. First came the logo change.
Then the CES virtual reveal. The EV target announcement. A new partnership with Microsoft. The Will Ferrell ads (in which the comedian takes on Norway, worth checking out). The Super Bowl spots (Cadillac made its first appearance since 2012). The first six weeks of 2021 have essentially belonged to GM in business and automotive headlines.
GM’s new marketing campaign, EVerybodyIn, also underscores the company’s message of renewed leadership, influence and inclusivity. As a company, it not only wants its employees to be “all in” on the EV dream, but also aspires to be the global corporate beacon, as it was in the last century. One can expect GM to keep aiming for the headlines in the coming months.
>> Timing is Everything: Joe Biden’s presidential win and GM’s new EV vision can’t simply be a coincidence. It may be presumptuous to claim that the company would have gone in a different direction had Donald Trump stayed on — it would still be chasing electrification.
Biden’s victory probably allows GM to get bolder. The new U.S. president actively supports climate change policies and electrification. He recently signed executive orders that directs federal government bodies to buy electric vehicles. Other policies and funding in support of EVs are on the way. GM clearly wants to maximize its momentum from these regulatory tailwinds to get ahead in the game.
>> Super Charge Your Investors: This one may seem a non-brainer for any company, but when was the last time Wall Street felt excited about the business of cars (not counting Tesla of course)?
Since the tech boom, the stock market game has changed dramatically. Corporations can no longer just rely on its balance sheet to keep investors interested. Profit and cash flow may pack a punch, but vision and futurism kill. For GM, it must hurt to have a rival (Tesla again) with less than a quarter of its sales but ten times its market capitalization. So when you can’t beat them, you join them.
Barra is using the tech playbook to woo investors with the promise of a bold, new GM. She has positioned GM as a fearless leader on a mission to save the planet, and sell some exciting cars on the way. Investors love such serendipity. Unsurprisingly, GM’s stock has been on fire, up almost 40% since January 1.
It’s hard to say how the new strategy will play out. Hundred-year-old companies don’t transform overnight, and GM will be a particularly tough one to change. But for now Mary Barra has everyone’s attention. That’s a great place to start.
