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04/27 2013

Carlos Ghosn’s Success = Not Speaking Japanese

Carlos Ghosn had to face skeptics — and deal with a shaky alliance between two car companies — when he became CEO of combined operations between Renault and Nissan.   He posted an article in Business Week (December 12, 2011 edition) where he reflected on the factors that allowed him to be successful in this endeavor.

Ghosn left Renault in 1999 and moved to Japan to revive Nissan.  Brazilian-born and a citizen of France, Ghosn had little in common with Nissan’s Japanese leadership team.   In addition, Ghosn claims that every single change that was needed at Nissan went against everything that the Japanese valued about their company.

Given the scope of change that Ghosn felt was needed — and given the long-standing practices that he sought to change all at once — it may well be that his lack of understanding of the Japanese language was a key to his success.  By not understanding the language, Ghosn was immune from hearing exactly what his Japanese counterparts were saying about him.   He actually sees this communication “barrier” as being a key ingredient in his success.

By not being able to understand what was being said about him, Ghosn was more emboldened to make the substantive changes needed at Nissan.   According to his Business Week article, Ghosn points-out that while Nissan wanted results, they did not want change.  Being polite, his Japanese counterparts would not directly disagree with any of his decisions, but would instead find work-arounds (or propose something else) so as to avoid needed changes.

In the end, Ghosn claims that he found the sense of commitment common to the Japanese people to be an important ingredient to his success as leader at Nissan.   Specifically, once Ghosn made clear his personal commitment to Nissan’s success, he found that his Japanese leadership team was much more aligned with his overall direction for the company.

Even when having to pursue objectives that were totally contrary to Japanese culture — such as reducing headcount in a culture that values lifetime employment, or challenging seniority in a culture that respects those older than yourself — Ghosn was able to engender support because others could sense his personal commitment to Nissan’s success.

Finally, Ghosn claims that it was important for him to not completely ignore his earlier responsibilities at Renault as he pursued his work at Nissan.  As CEO of both companies, Ghosn had real responsibilities to both companies — and given the amount of his time required by Nissan, it would have been easy for Renault employees to be jealous or resentful of the time and resources being consumed by their partner company.  Despite this, Ghosn claims to have been “fair and even” in his treatment of both companies, and now that Nissan has experienced a major turn-around in recent years, he is spending most of his time dealing with the Renault brand.

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