Change Communications Case Study: General Motors

Change Communications Case Study: General Motors

Introduction and Overview

The General Motors (GM) brand suffered reputational backlash due to its recall scandal. Rehabilitation of GM’s image proved to be difficult five years after emerging from Chapter eleven bankruptcy due to a botched recall. The company recalled approximately 2.6 million vehicles due to a faulty ignition switch that was lethal to customers (CBS Evening News, 2014). GM embarked on undoing the reputational harm by connecting with customers to build a stronger relationship. They identified social media as a crucial channel in regaining customer confidence and trust (Twentyman, 2014) The task of using social media to change the communications narrative was a massive task for a company manufacturing 13 different brands of vehicles across 37 countries around the globe. This paper explores how GM used social media as a communications change tool in the effort to enhance its brand.

Identification of the Main Issues/Problems/Questions

The recall scandal facing GM was a low point for the company as it caused customer deaths. When GM voluntarily recalled 2.6 million cars in 2014, it seemed like a responsible move from the company. However, it emerged that GM had known about the faulty ignition switches as far back as 2004, and the lethal switches were responsible for approximately 97 deaths from 2005 onwards (CBS Evening News, 2014). The switches inadvertently switched off airbags and car engines during driving. GMs reluctance to fix or reveal the problem for approximately ten years was because of fears that the cost would have been too high (CBS Evening News, 2014).

New CEO Mary Barra was initiated by fire as she was under immense public pressure due to the recalls. She issued a congressional apology for the way the company run things before her tenure. She emphasized that the company was in the process of shifting from a cost culture that focuses on profits to a customer culture that prioritizes quality and safety (Twentyman, 2014). There was a need to change the company’s communication model to assure customers that it had indeed shifted to a customer culture.

Cultural change is one of the most crucial steps in effecting the change management process in an organization (Khan & Hashim, 2014). One of the main issues was the communication distance between GM and its customers. The company responded to this by enhancing its social media presence through launching over four-hundred social media channels on various platforms and employing 500 individuals to serve the role of customer engagement. (Twentyman, 2014). The high investment in social media was a good reputation turnaround strategy since studies show that social media helps to increase positive sentiment and engagement.

GM further opened a Social Command Centre in April 2013 at its headquarter office. At the Centre, employees monitor various social media streams while responding to customer suggestions, complaints, and queries (Twentyman, 2014).  The teams at the command Centre come from customer care, public relations, and customer care. There was initial friction over three different groups working together, but the differences have receded with time (Twentyman, 2014). Customer care teams are in charge of sales opportunities and customer issues; marketing teams are in charge of content development and influencing passion for the brand, and PR team members engage with influencers and mainstream media to handle crisis management.

Analysis of Issues/Problems/Questions

GM’s social command Centre has proven to be responsive to stakeholders concerns about the company’s responsiveness to customers. It offers faster mechanisms of identifying product issues at an earlier stage than other feedback channels in the company (Khan & Hashim, 2014). For instance, when the company launched the GMC Sierra and the Chevrolet Silverado, there was a barrage of complains about unduly hot steering wheels and a faulty air-cooling system (Twentyman, 2014). GM was able to quickly take note of the information and seek adjustments from the manufacturing, engineering, and quality teams. There was an effective and fast response as GM immediately replaced the steering wheels and fixed the air cooling system.

Identify the Organization’s Change Management Model or Combination of Models

GM’s change management model has been useful because of the adoption of a bottom-up approach. Employees at the social command Centre identify issues and then escalate them to management with a report to the CEO (Twentyman, 2014). The participatory, inclusive approach has been critical in deploying a fast and effective response to customer issues. The social media team at the low levels of the organization works hard and inspires enthusiasm and understanding at the top of the organization. The changes have been crucial in improving public perception translating into increased sales and market shares for GM (Khan & Hashim, 2014). The reception of GM management to social media feedback shows leadership that has learned from previous mistakes and is willing to listen.

Recommendations

The recommended solutions and strategies can only be implemented successfully through centring customers as the guiding compass of the organization. Social media is a crucial channel for focusing customer’s concerns in the digital era. If GM had a robust customer-company engagement strategy in the 2004-2014 decade, the faulty ignition switch mishap would never have occurred. It is essential that GM has learned from its mistakes. It should increase the budget of the Social Media Command Centre and hire more staff members to handle customer concerns. There should also be a forum for the top management team, including the CEO, to engaged directly with customers on social media using questions and hashtags.

References

CBS Evening News. (2014). GM recall came years after defect was discovered [Video].    Retrieved from https://www.youtube.com/watch?v=KJoNWN4Hdrw&feature=youtu.be

Khan, M. A., & Hashim, M. (2014). Organizational Change: Case Study of General Motors.         In ASEE 2014 Zone I Conference, April (pp. 3-5).

Twentyman, J. (2014). Using Social Media to Drive Change at General Motors. Diginomica.