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Book Review On Carlos Ghsosn's Leadership Style - Shift Inside Nissan's Historic Revival

Carlos, a son of Lebanese parents born in Brazil, had spent his early life both in Brazil and Lebanon. He had obtained his pre-university education in Lebanon where he proved to be a very intelligent, hard working, and rebellious student (always wanting to learn more and never giving up on solving tough tasks). The teachers respected him and his exceptional math skills coupled with his interests of history, geography, languages and that like would prove to be of great help in his future career. After finishing his education in Lebanon he moved to Paris, France, as many Lebanese students would prove to do, and aspired to attend the most prestigious and demanding education France had to offer. He was diligent enough to enroll in the Ecole Polytechique and Ecole des Mines. He decided that his valuable higher education would be chosen so as to keep the doors open for employment wherever he wants. He did not seek life time employment but constantly sought for life time learning and development. His education gave him just this as well as many contacts and opportunities with companies around France.

He was recruited to Michelin right after graduation. There he would have to undergo an intensive and very meticulous training program which he knew had nothing to do with his higher education (mathematics) but rather the logic derived from there, of problem solving. The training program was designed so as to empower the trainees in solving problems related to the operations of the company, for example, solving engineering issues, manufacturing issues etc. This problem solving training led him to other projects that would eventually help Michelin. He understood he had to be patient and endure the tedious time spent in the shop floor to see how things work in the company, starting from the bottom up. He knew he was educated as a engineer, but would as a result of Michelins training would develop as a manager. His hit came when he was assigned to solve a problem with a subsidiary of Michelin in Germany and to figure out a way to improve its profitability. He spent long working hours and figured out the bits and pieces and suggested solutions to improving the subsidiary. This was to prove a vital step in his restructuring and recovery of firms’ in the future. It was exactly here that he learned and proved that he can bring a division or subsidiary from the doldrums to the bliss of business glory.

Another eagerly anticipated project dealt with the Brazilian division of Michelin which proved to be his vantage point. Since he was emotionally attached to Brazil, the place he spent his early childhood time, there too, he restructured the division, comprehending those elements the previous executives had ignored, and applied rigorous changes that would prove to be very successful. He understood that you cannot apply the same business mentality and operation in Brazil as you would in France (corruption, inflationary economy etc. are just some variables that separate these very different two business worlds apart). Different circumstances call for different solutions and vision. Due to his early achievement in his mid-20s, he rapidly became a manager to be trusted, and who can make an impressive recovery of companies in turmoil. He rose quickly through the Michelin hierarchy, developed very good personal relationships with both, coworkers, but most importantly executives, including the charismatic and considerate and well appreciated CEO of Michelin; who Carlos can only spare good words for. By now he had a wife and children, and he had another project on his hands -- to takeover the US Michelin division, which was a big part of Michelins market. He did so, improved the profitability of that division once again and confirmed him as one of the most effective managers.

After his US Michelin quest, he was offered a job he could not refuse -- to work for Renault (Frances largest car producer). Not only did his past accomplishments and his excellent management skills lead him to this position, but also the Michelin work with its suppliers, the car industry, helped him understand the car industry in its entirety as well its major opportunities that it offered. There too, he made contacts, had established previous trust in his effective management skills and revived the firm to its glory. Consequently, an alliance between Renault and Nissan was being negotiated and the fit between these two corporate giants was too good to be missed out on.

However, in order for the alliance to reap the full benefits, now in his 40s, Carlos Ghosn had to revive Nissan from its difficult times, especially those experienced during the 1990s. He assembled his executive team and instituted cross-functional teams in the challenge of the Nissan Revival Plan that sought to bring back Nissan to its glorious days. This expedition led him to everything he had accumulated so far, the chal-lenges dealt with: improve performance, major responsibility, challenge culture, relationship building, and creating transparency, devise a clear vision, and use team lea-dership (cross-functional teams). He had to break the cultural boundaries and Japanese traditions which considerable hampered growth and performance of Nissan -- this he did with consideration and with great responsibility, transparency and consequently gained trust. This was his natural pinnacle of his career and not only made CEOs rethink the unmanageable adversity of change but he delivered every promise and target he set.

Education and Multi-Cultural Background

Carlos was an intelligent and disciplined child, who showed signs of good organizational and managing skills. He had a strong stance on never giving up on problems that were posed as difficult or complex. He never gave up on finding the solution to problems, and he made it a joy to figure them out. In the book, Carlos quotes his former teacher’s wise words: ‘If you find things complicated, that means you haven’t understood them. Simplicity is the basis of everything’.

Although he was disciplined in his studies, however, he had a healthy disdain for boring subjects and a challenge towards authority. Other than that he had excellent grades, was very competitively orientated, and went beyond text book learning. As he moved to France, Paris after graduation he finished the notoriously tough Ecole Polythechique, university of engineering. He finished his education with an engineering degree and during his education he was immersed in a international environment with people owning different backgrounds (this would prove to be helpful for a number of reasons). Although, it was a diverse bunch of students, he still felt a bit different due to his even more diverse background (Brazil, Lebanon, France). By his mid-20s he had successfully completed his studies and also got a chance to add a few languages to his portfolio – he had a keen interest in learning languages and social science related issues. But his education was not based on relationships and social sciences stuff, related to managing; rather his education was engineering which included lots of mathematics. This gave him the edge of being able to solve problems logically and rationally, creating analysis based on quantitative measure performance targets.

The Notion of Team Leadership

What Carlos managed to do, especially when he came to Nissan, is to evaluate the company thoroughly to find out the problems that were hindering it from a better performance level. He went by looking for the strengths and weaknesses. After analyzing the situation he set the objectives that Nissan must accomplish. However, he empowered the teams to choose the means to achieve these targets – the freedom to find the best suited way of reaching the target was given to the team. The cross-functional teams would be the chosen method to do so.

As a leader and CEO of Nissan, Carlos understood that Nissan was very vague with its vision and goals. So he decided to create a clear vision and strategy (five year strategy). The first thing a CEO has to acknowledge is that he is a powerful leader and has a certain degree of responsibility attached to this title. Carlos points to that a lead-er such as him has to put a clear vision for the future that everyone in the company must know, and this vision should lead to a strategy with clear goals and targets that have been prioritized. Even more importantly the leader must make sure that the workforce knows how much they have contributed to these goals, a concrete and measurable number that can be put into numbers. Carlos believes this way of measuring objectively the way individuals and teams have contributed to performance of the company (on a yearly or monthly basis) can be more useful for motivating and a base for rewarding employees, than general raises based on subjective views, such as good work on projects.

For the revival plan to succeed the cross-functional teams had to succeed. Carlos specifically chose the people from Renault and Nissan; the prevailing requirement was that the chosen people were culturally conscious to other team members, and that there is a balance of cultural values. In addition, Carlos had to devise a team of execu-tives to appoint to Nissan which possessed a few specific criteria’s: you have to open-minded (especially for cultural differences), enthusiastic, self-motivated and of course a competent individual. The point was not to change Nissan culture just because ’...of the sake of change; we wanted to make them for the sake of performance. In every step we’ve taken, we’ve been very careful not to institute changes that haven’t been based strictly on the advantages they give us, the progress in company performance that they contribute to.’ By showing that every change made was for the sake of performance and benefit to the company, gradually this change would be approved and accepted, first by the employees and then by the media, for example. This was the key to maintaining trust and face.

Submitted by:

Darko Perunicic

Darko Perunicic is a business (internet) entrepreneur and possesses a Master’s of Science in Business Administration degree. One of his websites: Greek Homes http://www.greekhomes.info is about property for sale in Greece & Scabel http://www.scabel.com is a prime example of a innnovative product.




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