Page Spring Seminar: Tony Cervone on how a crisis led GM to redefine itself

After its ignition-switch crisis in 2014, the automaker made a bold declaration for the future.

Photo credit: Thomas Moore
Photo credit: Thomas Moore

General Motors’ ignition-switch crisis was the impetus behind a major repositioning of the automaker, a process its comms department was deeply involved in, according to Tony Cervone, the company’s SVP of global communications.

Cervone spoke about that experience to former IBM chief brand officer Jon Iwata at this year’s Page Spring Seminar, held Thursday in New York City.

The ignition scandal broke in 2014, after GM issued a recall for vehicles with faulty ignition switches that under certain circumstances turned the vehicles off and disabled the airbag system while they were being driven.

The defect was linked to 124 deaths and 275 injuries, and after the recall, investigators discovered that GM likely knew about the flaw as early as 2004. As a result, GM paid nearly $3 billion in penalties and settlements, narrowly avoided criminal prosecution and GM CEO Mary Barra fired 15 people, including eight executives.

The scandal started a series of discussions at GM, Cervone said, that resulted in the "three zeros statement." "General Motors," Barra has written, "has committed itself to leading the way toward this future, guided by our vision of zero crashes, zero emissions and zero congestion."

Cervone said the process leading to the declaration began a few months after the scandal hit as the company prepared for its annual executive meeting. Held to review the prior year’s progress and plan for the future, the meeting was normally an annual snooze fest, featuring a massive PowerPoint deck and a decidedly uninvolved audience, Cervone said.

In the wake of the scandal, however, and facing competitive threats from Tesla and the ride-sharing industry, he added that the company instead decided to seriously review how it was functioning.

"[It] led to literally about four months of conversation on the senior leadership team, and we came to the conclusion that we were going to be disrupted, but we can choose to disrupt ourselves," Cervone said.

After many meetings, company leaders found themselves entering familiar territory, discussing branding and attempting to come up with a mission, vision and values statement, he added.

"We went into that piece in the beginning and realized it just wasn't enough," Cervone said. "That led to [Barra] asking me and our CMO to get together and ask, ‘What does this really mean?’ ‘What are we going to become?’ and then, ‘How do we get to that?’"

The ultimate answer, they found, was that GM needed to face a problem it had been punting for years: what are the unintended consequences of selling 90 million vehicles around the globe every year?

"The unintended consequences are people crash and die," Cervone said. "We do pollute if we make an internal combustion engine. No matter how good it is, how clean it is, and how much we argue about it, it still pollutes, and we are causing aggravation and congestion in cities with the massive influx of vehicles."

Facing these hard truths was the solution to a culture that allowed the scandal to occur and the challenge of disruptive competitors, he added. "We needed [Barra] to say and accept that these unintended consequences could be our solve."

She did, Cervone said, and the result was the three zeros statement.

It’s more than just an aspirational statement. Cervone said senior GM leaders have identified behaviors it thinks employees must model so it can accomplish the three zeros. Those behaviors have become part of the way GM employees are evaluated.

In addition, Cervone said, GM has begun looking at itself as more than just a car company. "Having this North Star of the three zeros means we are a company that can say, ‘We are huge...we are a massive venture capitalist. We can really disrupt that world, and we will go ahead and do that ourselves.’"

The future for CCOs
Iwata, former Text100 CEO Aedhmar Hynes, and former Aetna communications leader Roger Bolton presented the Page thought-leadership study entitled "Our Moment of Truth: What’s Next for the CCO."

The study was an examination, Hynes said, "of how the CCO role is evolving, how it must change and what we must do to get there."

The study generated three key findings that CCOs are in an ideal position to address. First, this existential moment for companies and CEOs; second, societal issues are an intensifying force; and finally, society is dealing with the weaponization" of information, perception and advocacy.

Both Iwata and Bolton spoke about how CCOs must adopt to address the challenges.

More than ever, the study found, CCOs are assuming or being asked to assume ownership of corporate brands. Owning a brand, Iwata said, doesn’t just mean using the correct logos. It means ensuring the company’s character is reflected throughout the organization, all the way down to on-boarding new employees.

"Let's take a moment of truth for employees," Iwata said. "For their first day on the job, is the first brand job experience on-brand? Does it just mean your logo was on all the employee materials? No, it means, does the experience of that first day sound like what your company is supposed to sound like? If all you have done is tell someone you’ve got to use a certain pantone color, you haven’t done it."

The Page study also emphasized the importance of corporate culture and the role CCOs can play in guiding it during times of corporate transformation.

"CEOs are telling us the number one obstacle to their ability to transform their enterprise is culture, and they're looking for help," Bolton said. "As we went around the world to talk to CCOs, those who were doing the most leading-edge work across the enterprise were working on corporate character and transformation. We are heavily involved in leading or enabling culture change."

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