Carlos Ghosn: Nissan's turnaround artist
 |  Carlos Ghosn |
| |
| YOUR SAY |
E-mail us: Benjamin's Boardroom wants to hear from you. Email your questions and suggestions to CNN Financial Editor Todd Benjamin.
|
|
CNN's Financial Editor Todd Benjamin talks to Carlos Ghosn, the man credited with reviving Japanese carmaker. When he took over as chief executive officer in 1999, Nissan was on the verge of bankruptcy. Ghosn has since cut costs, increased sales and returned the company to profitability.
Ghosn is about to apply those corporate skills to Renault, which owns 44 percent of Nissan, when he assumes the CEO position at the French group while remaining at the helm of Nissan.
Benjamin: First if all, let's talk about the turnaround at Nissan, because you did something phenomenal there. You arrived in 1999, Nissan was $17 billion in debt and you turned it around to be the most profitable automotive company in the world in terms of operating margins, what were the key factors do you think in that turnaround?
Ghosn: The key factors are three: Number one, is you have to establish with the people of the company a very simple vision about where we're going, what's the destination, where we're going has to be shared at all levels of the company. Number two, you have to have strategy, how do we get there, what are the action plans, and make sure they are deployed at every level of the company, everybody knows what is the contribution that is expected from him or from her for the company. Number three, people have to feel strong commitment coming from the top, personal commitment, team commitment coming from the top, we're here to revive the company and if you don't do it well we're out, we're out of here.
At the end, results are going to cement everything, they're going to give you the credibility, they're going to make people feel safe about the company and wanting to join. Vision, strategy, commitment and results.
Benjamin: What do you think the biggest mistake managers make in a turnaround situation?
Ghosn: The biggest mistake you make is not connecting with people, you don't connect with people, turnaround is first about you have to connect with the people in a company, you have to establish some kind of direct and indirect contact with them, you have to feel the situation, you have to understand the expectation of people and you have to respond to them, you have to respond to them in a way that is going to revive the company, that's the challenge.
Benjamin: Do you think being an outsider helped and what about the cultural differences, because you're dealing with a Japanese company, you're having to lay people off, you're having to close plants and in Japan that's very difficult for people to accept?
Ghosn: Yeah, it's true. You don't implement change easily in Japan unless you explain very clearly why you need to do this change, how you're going to do this change and what's going to be the outcome of this change. If you offset or you forget to explain one of these three steps you're not going to do it. So we spent a lot of time explaining why, well it was obvious because everyone what frustrated by the situation of the company, we spent a lot of time explaining how, step by step and in the end we explained what was the outcome.
Benjamin: But why do you think you were able to turn it around to make it profitable?
Ghosn: I think connection with people, bringing a vision that people were motivated to realize and then delivering the results very quickly at the beginning to make sure people want to join the train, that they want to reinforce the move.
Benjamin: Now you've had a mixed cultural upbringing, has that played a part in your success?
Ghosn: No doubt about it, you know when you are from a different culture in a certain way you're not biased, whenever you bring a new idea, it's not considered as a preconceived idea coming from you're own background. As your background is multi-cultural, it's supposed to be non-biased, it helps a lot.
Benjamin: What do you think separates a good leader from a great leader?
Ghosn: I would say a good leader brings results. A great leader writes a new story, it's different. Obviously a new story has to incorporate a lot of results. But a story is a chapter in the life of a company that people want to write and want to remember.
Benjamin: And Nissan's story?
Ghosn: I think the story of Nissan for the last six years is an interesting story and I'm sure it's going to be a chapter in the story of Nissan, which is going to influence Nissan a lot in the future.
Benjamin: You're obviously known as a turnaround artist and you're a real leader. At what point did you realize you were a leader? Was there an incident as a child perhaps that made me think, "Carlos I'm a leader," or was it something that happened further in your career?
Ghosn: I think it happens in the career, when you're a child you always think you're a leader, everybody thinks you're a leader because you want to take leadership in sports activities or in intellectual activities or in boy-scouting activities, anything really, you're going to enjoy it and you're going to think you have the ability to be a leader. I'm not sure a lot of children have this safety and this assurance that they are leaders. Now, with professional experience, it gets a little bit more serious because at a certain moment you start to discover that you make a difference, you start to make a difference with people.
Benjamin: When was this moment for you?
Ghosn: I think that one of the most important moments for me when I discovered myself in a certain way was when I arrived in Japan, a country I did not know at all, a culture I didn't know at all, a country which I didn't visit practically at all. I saw that I was able to connect with people in a culture which is known as being very strong, I had just to admit the fact that I was able to connect more easily with people than some of my colleagues, this is when I started to say to myself, well this is an asset for a turnaround situation.
Benjamin: How would you describe your management style?
Ghosn: Well, its very difficult for somebody to describe his own style. Well, let me tell what some people say about your style. You're very performance driven, you're very demanding, but you're also inspiring.
I'm sure that these are very generous terms. I would not go...I would not describe myself like this. I'm certainly very demanding on myself. I hope I'm more demanding on myself than I am demanding on people around me. I try to make sure that its very well balanced, or if its unbalanced, its towards me. Inspiring? I don't know. When I take a look at the results, obviously we've done a lot of very tough things and people have done it.... I'm not saying always smiling, but at the end they were happy about what they've done inside the company and for me it was a great reward.
Benjamin: What do you think the key to motivating people is? Where do you think a lot of managers go wrong?
Ghosn: Well, the first and most important thing is you need to understand what is expected, what people are expecting from you, from you in a leadership position. What's the expectation? And the expectation is not only about numbers, its not only about performance. It's also about understanding the situation and understanding the software of the company, I would say, the motivation of the company the history of the company. If you are able to do both, at the same time, deliver a lot of performance and respect the company, respect the culture, and make changes in this culture, well, it makes a difference.
Benjamin: Can you look at someone and think, they're a potential manager?
Ghosn: Not look, but after listening to somebody and seeing him in action... you're not infallible, from time to time you make mistakes. But there are people when, after sitting with them and discussing for a few minutes, you know there is a lot of potential.... I have always sense that somebody has potential after a few minutes of discussing and chatting with this person.
Benjamin: But what is it that you pick up on that tells you someone has potential?
Ghosn: It's very subjective.... One of the most important thing is, is this person interesting? Do you get hooked to this person? Are you really absorbed by this person? At whatever level this person is, whatever this person is doing, if you get hooked, if you are really, your attention is taken, if you want to know more about this person, you know that this person has a potential because if you're feeling the same thing other people are going to feel the same thing. And as you know, leadership is firstly based on your ability to connect and to attract people around you.
Benjamin: You obviously have passion; passion about life, passion about the automotive industry. Where does this passion for the automotive industry come from?
Ghosn: Oh, it's rooted in my childhood. I loved cars since I was probably born or a little, small boy, three, four years old. I remember I was always getting to the veranda of the apartment and looking at the cars and recognizing the car by the horn or I loved the style, I loved the design, I loved to go with the driver or with my dad in the front seat or the back seat. I always loved cars. I don't know why, I can't explain it to you. It has always been with me. But at the same time I wanted, particularly when I went to the business, I wanted to make sure my love for the product would not distort my judgment as a business person. So I'm a car guy, I'm not a car fanatic. So that means from time to time, I know how to stop between the love for the car and the good business.
Benjamin: And you're a real numbers guy, aren't you? You like everything quantified, benchmarked?
Ghosn: This is my background. I'm an engineer. There is a saying, which is very true, that you are going to do only what you can measure. And it's very true. A measurement is something, which pushes you to action. And I have discovered and particularly being from a Latin education, I've seen that the word has been overused. People make great speeches, nothing happens after and I've seen that in many countries under different cultures. I've lived in Lebanon, I've lived in Brazil, I lived in France, I lived in many countries where the word is extremely important. And I am attracted by the word. I love languages, I love literature, I love history, but when the word stops and nothing happens and the word doesn't transform the reality, I'm very frustrated and I'm discovering that a lot of people are frustrated also. That's why I'm saying, how can we make sure that the beautiful word and the beautiful speech is going to help transform the reality? But the only way you're going make to sure the actions are going to follow, the result is going come is by measurement.
Benjamin: Now you're a tough act to follow. What advice do you have for anyone who is going to fill big shoes?
Ghosn: Be yourself, aim high, don't be afraid to fail. Being afraid of failure usually provokes failure. Just trust people around you. Anyway, you're going do it one time, you're never going do it twice, so give it your best shot.
Benjamin: And what was your biggest failure?
Ghosn: The biggest failure, let me see... I give as much importance to my family life as I give it to my professional life. And when I'm talking about the family I'm talking about family in an extended...way. Well, I probably took care more of my own family than of my broader family because I had to make a choice, professional choice. Living between professional countries means you're going to leave a lot of people that you love and who love you without connection and without contact and one of the biggest failure is that I was not able to maintain contact with a lot of people who are very important to me.
Benjamin: Do you feel you failed as a father?
Ghosn: I probably will not know it before a while, but I don't think so. I'm very proud of my kids and I have a good contact with them and its very important for me.
Benjamin: How do you find a work-life balance, because you're an action man?
Ghosn: You have to abandon the notion of quantity. You have to abandon it. If your notion is that you need to find as much time for your family and your personal thing as your profession, forget about it, it's impossible. You can't be CEO of a company and give as much time as you want to the activity or the people you love. It's impossible. Now you can compensate the lack of quantity with quality, which means that when you are with the people you love or in doing the things that you like, you have to give it all. You have to make sure that its a very high quality time.
Let me give you an example. When I go home and I have some time with my kids, I don't read the newspaper, I'm not in front of my computer, I don't try to go on TV. I'm just with them. I play with them, I spend time with them. From time to time they're tired of me. But I prefer the situation when they're tired of you, they say, daddy, leave us a little bit, we want our own activity. I'm very satisfied. Because the only thing that I would hate to feel, one day when I will retire or I will get older, is to say well I've been a good president of a company but have not been a satisfactory dad.
Benjamin: And your typical work day is how many hours a day?
Ghosn: Well, it depends. When I arrived in Japan, they were long days; 1999, 2000, 2001, as you know I got the nickname of 7-11 because I was very early in the morning at the office, finish very late. It was around, arriving seven o'clock in the morning, finishing at 10, 11 p.m. I have a less brutal schedule for the moment. Still very heavy. You make 14 hours work a day. But, the weekend is sacred. Saturday, Sunday is really dedicated to the family and our hobbies.
