Carlos Ghosn - "Leadership Starts with Transparency"

Carlos Ghosn has been one of the world's highest-profile executives of recent times. But even Ghosn himself had major doubts he could plot the survival of ailing Nissan motors after its 1999 takeover by Renault. The Raoul de Vitry d'Avaucourt Clinical Professor of Leadership Development Manfred Kets de Vries; Research Project Manager Elizabeth Florent-Treacy and case writers Mark Mildon and Antoine Ting illustrate Ghosn's success in bridging such yawning cultural differences. But can he now repeat this in France?

by Manfred Kets de Vries, Antoine Ting,Elizabeth Florent-Treacy,Mark Mildon
Last Updated: 23 Jul 2013

Even with the "celebrity executive" culture now so well-established globally, Carlos Ghosn continues to excite the world's media. The Raoul de Vitry d'Avaucourt Clinical Professor of Leadership Development Manfred Kets de Vries; Research Project Manager Elizabeth Florent-Treacy and case writers Mark Mildon and Antoine Ting examine the career of the French-educated, Brazilian-raised child of Lebanese emigrants.

Having earned a global reputation for his faith in operational transparency, as well as his personal and analytical skills, the case concentrates on Ghosn's success at salvaging then-moribund Nissan Motors after its 1999 takeover by Renault. It highlights how one of Ghosn's top attributes - his personal and professional uniqueness - may have been the deciding factor in being able to bridge the massive divide between French and Japanese business cultures.

As Nissan's chief operating officer, Ghosn became the first foreigner to reach such a senior level in a major Japanese corporation. By 2004, Ghosn had transformed the firm from the most debt-burdened carmaker in the industry, to one of the most profitable. Often called "Le Cost Killer" due to the highly controversial austerity measures he had taken overseeing Renault's South American operations, Ghosn was far from fully confident he could engineer the same type of turnaround at Nissan.

But Ghosn had already earned a solid reputation for shaking up corporate status quos. The authors describe Ghosn's effectiveness at his first company, Michelin, known at the time for its conservative, paternalistic culture. Appointed Michelin's manager for Brazil while only 31, he soon developed the style that would become his signature - delivering results while refusing to play the charming diplomat with either head office or local decision-makers.

While few would dispute that Ghosn had hurdled many major cross-cultural obstacles at both Michelin and Renault in Latin America, not many were betting at the time on him being able to match his success in Japan. The case describes Ghosn's canny ability to identify Nissan's most debilitating problems - all of which essentially involved a complacency that had long blinded its senior management to the wants of their rapidly dwindling customer base.

Six months after his arrival, Ghosn made a high-profile presentation of his Nissan Revival Plan. A very bold move on many fronts, it exposed him to what would surely have been a media pillorying if the swingeing job cuts and technical restructuring were to fail.

The authors attribute much of Ghosn's ultimate success to his adept use of cross-functional teams in breaking down the "silos" that had long stifled transversal cooperation within the sprawling corporation, and that had worked well for him in the past. Reflecting in 2004 about Ghosn's remarkable success in turning Nissan around, Renault CEO Louis Schweitzer credits his protégé with providing the transparency, clarity and boldness of vision utterly essential for a company in crisis.

The authors detail Ghosn's somewhat unorthodox managerial philosophy, including a far more hands-on approach and absolute insistence on maintaining what he considered a healthy work/home life balance. And while Ghosn was careful to avoid being disrespectful of Japanese cultural norms, he never "did things the Japanese way". He also proved himself a savvy exploiter of the local media, gaining invaluable exposure while allowing him to polish Nissan's quite tarnished image.

The case concludes in mid-2005, as Ghosn was preparing to succeed Schweitzer as CEO of Renault. Ironically, many felt that the Brazilian's reputation would be an even bigger hindrance in France. Unlike Schweitzer, Ghosn was far from being a product of the French establishment. Could he navigate the often hazardous waters of the distinctively Gallic intertwining of business and politics? And how would Nissan fare with its charismatic saviour no longer at the helm?

INSEAD 2005

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