GM’s strategy refocus helps lower costs image

Last year it became clear that General Motors, the largest US automaker, had to change – it established a new record of recalled autos because of its wrongful and old ways of thinking and acting.

While the automaker went through bankruptcy reorganization back in 2009 and that moment could have been auspicious to introduce a new company culture, the necessary jolt only came last year and unfortunately it was one that implicated the loss of lives – the well known ignitions switch scandal. And chief executive officer Mary Barra immediately embarked on a quest – fix the company from top to bottom. The results are now starting to show, with a more nimble entity and making decisions that better the entire organization, not just one department or compartment of the business – “silo,” as business insiders characterize the various units of major corporations that usually don’t communicate well with each other. Since January for example, Barra and her staff have been working on more than 300 Operational Excellence business improvement projects that could yield savings or revenue of $3 billion. “Three hundred projects needs to become 3,000,” adds Gerald Johnson, GM’s vice president of operational excellence.

According to the executive, the focus has been on various segments, from processes and data to eliminate waste, reduce variation to improving quality, lowering costs and lifting revenue. They also intend to grow customer loyalty by ten percent and reach a 10 percent earnings margin by the turn of the decade. His unit is also tasked to refocus the corporate culture from a tradition-bound one during the next half decade.