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.
The Japanese acknowledgement of team working and especially cross-functional teams was poor. Carlos witnessed that there was a lack of communication and transparency between workers. ‘When you’re in a company that doesn’t work cross functionally, everyone feels satisfied with his own performance and assumes that bad results are someone else’s fault’. It is precisely this that makes the organization work desperately and thus blame is hard to allocate to a specific division or group, especially when the financial accounts cannot show this. As Carlos himself says, cross func-tional teams are a key to his method. He used them throughout the companies he worked for before, and it was important for him to apply it in Nissan as well. The purpose of the teams was to induce change and just through cross-functional teams, unlike doing it from top down, he would achieve this. Carlos cross-functional method and its strength is explained by a passage in the book: ‘… [Cross-functional teams are a] extremely powerful tool for inducing executives to look beyond the functional and spatial boundaries of their direct responsibilities. The idea was to tear down the walls, whether visible or invisible, that reduce a collective enterprise to a congregation of groups and tribes, each with their own language, their own values, their own interests. To compel people to talk to one another, to listen to one another, and to exchange knowledge. That was the essence of their power.’
In Nissan he would create a bit less than a dozen of these teams, intertwining individuals from different and varied departments to be responsible for two tasks and not only what they specialize in. Each team would have two leaders (executives). The ratio-nale around having two leaders is that he wanted to expand the vision of the heads of each department to look beyond their own domain e.g. marketing department. He would bring, for example, head of purchasing and head of research and development in a cross-functional team (CFT) as the two leaders to run the purchasing team together.
Moreover, so the team won’t look like it is being run by two head executives, he appointed a pilot for each time that would arrange the agenda and run dialogue at the team meetings. He served as the real leader of the team to facilitate the exchange of ideas and mitigate the feared presence executives would have upon the team members (dismantling the hierarchy). Choosing the pilots is closely connected with Carlos’s engagement in identifying the future leaders and putting them in this position to develop. The CFT would be on average of about 10 people, and there would be sub-teams of another 10 people in each CFT. Each team and sub team would have their specific goals and questions to solve. Carlos made sure to walk around and listen to all the teams and form and overall opinion of the different CFTs looking for opportun-ities each CFT possessed.
He further explains that these teams were not just a place of exchanging information and ideas, but a place where the best of the companies’ workforce was arranged so as to make them develop and tear down the walls and structural and hierarchical barriers of the organization. Also, the teams were there to challenge the status quo and to look beyond standard procedures but rather at new ways of solving the same problem but in a more effective manner. This would as well prove to provide innovative and diverse thinking.
The skills and traits needed by a leader to run a effective cross-functional teams are based on interpersonal contact, project management skill and political skills. The author has spent a lot of time explaining these issues. For example, political skills he achieved through getting approval from Renaults CEOs as that time that he has the freedom to form his team the way he likes and that he will assist him in all the resources he needs to achieving this task of reviving Nissan. Project management skill is a part of Carlos’s vision and strategy design, and when it comes to specific goals the skill and authority is handed over to the pilot. Interpersonal skills are very important, and Carlos by visiting and monitoring the different CFTs, identifying opportunities and giving them support to avoid unnecessary confrontations. However, technical and cognitive skills are given completely to the teams’ heads to solve, since the CEO cannot commit to this technical tasks that are very time consuming.
Furthermore, by providing a clear vision and promoting it to all the employees together with the targets and how it will improve the firm performance was a motivation in itself for CFTs to work with. He let them select the means to achieve this. Also the sign of flexibility and adaptiveness of the leader role is evident in Carlo’s leadership style and his subordinates leaders he appointed for the CFTs.
Carlos also showed a sign of situational leadership and I quote: ‘If Japan had never started asking itself questions, I would have had to go about things differently. It wouldn’t have been an impossible mission, just a different one. You have to adapt your strategy to fit your circumstances.’ Through out the book he does not stress the leader and follower role directly, but he shows concern for who are his executives and followers, and brings them together so all can interact between each other without much tension. He definitely has to change his strategy as a leader in Japan from that of in the US and France since he is facing a very diverse workforce with strong Japanese traditions that need to be broken down and a company culture other than a Japanese one must be formed.
However, he stressed the most time is spent on figuring out what the problem is of Nissan by paying attention to what people in the company had to say. He points to the fact that exchanging information around the company and outside to understand the situation is vital for management. He claims by understanding the complete situation the forces inside the company that brought the company down for example, (other than external forces that you cannot control) is vital, because he believes the company for most part determines its own faith, it’s the internal happenings that determine the company performance, not so much that of the economy.
Leaders are not born, they are developed by other leaders
I ask myself how does Carlso Ghosn achieve to bring a group of individuals to form a team and for them all to give their maximum. How does he manage to bring a ‘good’ source of people? We usually think that now I am blessed to have a good team of individuals that are hardworking and competent and other times you say, well you cannot get these people all the time, sometimes you just get the wrong people. Well Carlos does not believe in this saying, he is a person who is very much in control of his reality. He says that to get the ‘right’ people, you do not have to go and find them, sometimes they will come to you attracted by an extraordinary challenge. ‘You’ll find people who can rise to it.’ Carlos as the CEO and executive pays a lot of attention to his teams, monitoring them at all time, and makes sure to provide a dose of confidence to reinforce their work. By doing this he claims it’s a ‘good way to educate executives’. Leaders, in his opinion, are developed by other leaders.
Just like the CEO of Michelin helped develop young executives to future leader, like Carlos, by giving great responsibility, so too does Carlos believe. He believes that every CEO has a responsibility to create the leaders of tomorrow by identifying potential competent individuals who are ambitious, and thus sending them to challenging places where their work is difficult, risky but very promising. He wants to shape the leader through letting him or her deal with adversity and challenges, to take responsibility and not by ‘giving them books to read or by having them follow some training course.’
The CEO must assess the risk the prospective leader is going through and provide supportive activities to that leader, so s/he will develop confidence on the way. Mistakes are OK, but there are not many chances a prospective successful leader can burn, so to speak. It is important for a company to coach its prospective managers. The ones who come out as winners from the challenge they faced, are the ones who become the future leaders. Carlos depicts this well by saying: ‘Leaders are formed in the fire of experience, Its up to the head of the company to prepare a new generation and to send them to hot spots as part of their training. He must prepare for a smooth transition by training people, guiding them, pushing them forward, but not too hard.’
The good results on performance are just a mere sign of his effective leadership strategies. He has become a sort of idol or role model in Japan – the Japanese made a comic book hero out of him. Appearing in Japanese magazines in a country which lacked a strong leadership role and strong leaders is proof of this. It was used as role model to suggest and inspire the Japanese government in picking up the country out of its problems and this in a country which has a good deal of contempt for foreign firms and managers. Any man who shows tolerance and great responsibility and delivers promised targets with honest work is worth such a reward. His leadership thoughts are very practical and seem to have worked for him and others (followers) through his experience. Two leaderships notions arise: 1) the advantage of cross-functional teams serving as coherent link between departments uniting the organization, so as to acquaint everybody with everything related to the organizations functions; diverse opinions, thoughts, ideas flourish in this setting, leading to a more inter-active and dynamic process of achieving set goals and targets.
The second is, the responsibility of CEO’s and executives have on empowering, supporting and creating leaders out of potential managers in their firm. This he stresses is very important. Also, his background is very well suited for achieving this. It is this combination of a manager and leader that he fits in so well with. On one hand he aligns objectives and strategies so well, motivates and organizes teams, supporting them, building strong and thriving communication links between them, achieving a coherent company identity through providing a clear vision and communicating it clearly to everybody, developing the people who show potential, and at the same time sustaining social and ethical righteousness. These are some of the issues you as a reader can pull out out from the authors experience but also find in the leadership literature.