Jun 24, 2008

The Turnaround Man - In the Driver's Seat

Ever since Lee Iacocca saved Chrysler from doom in the 1980s, CEOs who succeed in turnarounds are accustomed to some degree of adulation. But few become as celebrated as Carlos Ghosn, whose efforts to bring Nissan back from the brink turned him into a Japanese hero—one who's even inspired a manga comic book. Since 2005, Ghosn has served as CEO of both Nissan and Renault, making him an extreme example of a global executive. Ghosn recently received The Award for Transcultural Leadership from INSEAD, the international business school with campuses in France and Singapore. Each year, the school honors an individual who exemplifies the importance and necessity of working across borders. While in Manhattan for the awards ceremony, Ghosn talked with NEWSWEEK Chairman Richard M. Smith about the challenges facing automakers and the tricks to a turnaround. Edited excerpts:…"
Smith: What do you think the average manager can learn from your experience in doing this simultaneous CEO job?Ghosn: More and more, in any company, managers are dealing with different cultures. Companies are going global, but the teams are being divided and scattered all over the planet. If you're head of engineering, you have to deal with divisions in Vietnam or China, and you have to work across cultures. You have to know how to motivate people who think very differently than you, who have different kinds of sensitivities, so I think the most important message is to get prepared to deal with teams who are multicultural, who do not think the same way.
You weren ' t very popular when you took over Nissan. How did you decide what to do first?When you start in an environment that you don't know at all, and when there is an emergency, you need to act fast. The first step is obvious: you have to listen. You have to establish a diagnosis of the situation not by making analyses by yourself, but trying to analyze from data and from interviews you're having with many people at different levels of the company. So establish a diagnosis; listen and interact with many people, and make sure you have the right priorities before you share this diagnosis and the plan with everybody.
Many observers say a Japanese executive couldn ' t have taken the steps you took at Nissan. Is that true?It could have been done by a Japanese executive, but it could not have been done by somebody who was coming from inside Nissan because there was so much linked to the past of the company that needed to be severed. It's much more likely that somebody from outside the company would be able to do it. If it's a foreigner, it's a double outsider, but a Japanese executive with good experience and a strong character coming from outside Nissan would have been able to do that.
How do you know when an outside leader is required?When you need a breakthrough. When you really need to sever ties with the past. When you need to make sure that all questions are being asked, that there's no taboo. When you need to really question the basic culture. An outsider surrounded by people who know the company very well, who can advise and be a sparring partner—that is the best setting for reviving a company.
Why are auto companies any different than other business?Because most of the future of the car manufacturer is not visible. It's in their pipeline, in products coming and the sourcing of these products … If you do not assess what [a carmaker] is working on today, you do not understand what may happen three to five years down the road.
How much do you think your own multicultural background has shaped your ability to move from culture to culture?It's fundamental, like learning a language when you're a kid. You're going to have a mastery when you're an adult that you'll never have for a language that you are learning as an adult. Being in a multicultural environment in childhood is going to give you intuition, reflexes and instincts. You may acquire basic responsiveness later on, but it's never going to be as spontaneous as when you have been bathing in this environment during childhood.
Many business people talk about going from " good " to " great. " What ' s the difference between a good leader and a great leader?You see the difference after the leader is gone—that's when you can make the distinction. Good is somebody who delivered and allowed the company to overcome obstacles, without leaving a profound impact on its culture. Great is somebody who leads his company to achievements and performance and value that nobody was expecting it had. But ordinarily you cannot measure it during the [tenure]. You always measure after the fact.
You had success at an early age, but are you a different manager today than you were in your early days at Nissan?Yes. You gain in maturity. You gain in experience. In certain ways you're more confident because you've seen the ups and downs. You've seen the very positive, and sometimes you've had some frustration and seen results not coming as fast as you want them to come. So I've gained experience, and probably more comfort.
What ' s it like to have a comic-book superhero based on you?If you have not been a villain at a certain point in time, you will never be a hero. And the day you are a hero, you may become a villain the next day.

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