What’s life like as a global CEO? In this special multi-part series, Nissan Motor Co., Ltd. CEO Carlos Ghosn shares his life story, offering personal insights and professional lessons on what it takes to succeed.
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The next generation
Nurturing new leaders is more important than ever for Nissan’s expanded alliance
On April 21, 2016, Osamu Masuko, CEO of Mitsubishi Motors, came to me to ask for Nissan Motor’s support in reviving his company in the aftermath of its fuel-efficiency scandal. Nissan and Mitsubishi Motors were already partners on kei mini-vehicle development, so I knew the company well. It was clear that forming an alliance made strategic and financial sense for both of our companies. And coming from Nissan, which had known its own challenges, we knew that Mitsubishi Motors deserved a second chance.
Carlos Ghosn speaks at a seminar for next-generation
leaders in Yokohama last October.
We announced our plans for the deal in May, and it was completed on Oct. 20. Nissan became Mitsubishi Motors’ largest shareholder, and Mitsubishi Motors became a member of the Renault-Nissan Alliance. With this enlarged alliance, our sales are now at 10 million vehicles per year, putting us among the top three automotive groups worldwide. This scale gives us an advantage over most other automakers, and a disadvantage to none.
In December, I was elected chairman of the board of Mitsubishi Motors. It will be my responsibility to support Masuko-san and Trevor Mann, who came from Nissan to Mitsubishi Motors to take on the role of chief operating officer. But the fate of Mitsubishi Motors depends not only on its top leadership, but also on the growth of leaders within the company.
What qualities make a good leader?
First, a leader is somebody who can deliver performance. He or she systemically delivers, and has long experience delivering on challenges. This sometimes means we must speak up to identify problems or present controversial opinions. This is not always easy for Japanese leaders, for cultural reasons. When we first held alliance board meetings, almost all of it was in French. I had to tell my Renault colleagues to be quiet and listen to their Nissan counterparts. I encourage more Japanese leaders to speak up whenever necessary. This is critical to delivering results.
Second, a leader needs the ability to engage with people. When you’re heading a company, people need to connect with you. If they see you as stiff or cold or not easy to understand, they’re not going to listen to you, and a lot of motivation and engagement is going to be lost. In other words, a leader must have the capacity for empathy.
Third, a leader needs industry intelligence. Electric cars, zero-emission vehicles, smart cars, self-driving technology, stiffer regulations and new competition are all transforming the auto market in huge ways. If you don’t have industry intelligence, it doesn’t matter how much empathy you have, or what kind of performance you can deliver – you will have a lot of difficulties if you are not constantly learning, understanding and acting.
I believe no one is born a good leader. Leaders become leaders when they are recognized as such by other people. When I came to Japan in 1999, I was viewed with deep skepticism by employees. But I worked hard to deliver performance, connect with people and always build my industry intelligence. Through this process, I have gained the trust of our employees, and together we have delivered results. I believe Mitsubishi Motors can do the same.
This portion of My Personal History: Carlos Ghosn was originally posted on Nikkei Asian Review.
Related:
Nissan strengthens Alliance with acquisition of 34% stake in Mitsubishi Motors
The case for reviving Mitsubishi Motors – by Carlos Ghosn
— Nissan Motor (@NissanMotor) October 20, 2016
A glimpse of the future
Ghosn on his plans for life after Nissan and why the alliance will outlast him
I get a lot of questions about my plans after Nissan Motor – and if I believe the alliance will outlast me. The answer to that second question is yes, without hesitation.
Carlos Ghosn at his office at Nissan Motor
headquarters in Yokohama
In the old days, before the Renault-Nissan Alliance was formed, no one in the auto industry could have imagined a partnership like this. Back then, the only ways two companies came together were by outright mergers or acquisitions. The alliance was a unique system, one that we invented and perfected through 18 years.
Over the years, we have proved that our approach is an effective one with benefits for all companies. We have shown that multiple companies can maintain their respective identities while cooperating in such areas as purchasing and tech development and leveraging their combined larger scale. The alliance devised an effective way for all its different companies to grow in an increasingly competitive industry.
But, of course, no one can predict the future. There is a chance that one day the management of Nissan, Renault, and the alliance will be separate. The fact that today I oversee all three entities is because that is what has worked best so far, but it is not the way it must be forever. The future will be decided by the board of directors for each company.
What kind of person will lead Nissan next? I will leave the specific person up to the board, but I will make a suggestion as to what qualities the right candidate should possess: It should be a person who can respond effectively to change and who can sustain growth, and it should be someone who understands the Nissan Way and is dedicated to its future.
And what will I do next? When the time comes, I have considered various pursuits, but life has a way of following its own unplanned path. I hope I will be spending a great deal of time with my children and grandchildren. Perhaps I will teach or do something of a similar intellectual nature. I am also interested in using the lessons from my long business career to support other business, institutions and organizations. Many have asked over the years, but I have not had the time. For me, the source of vitality is to keep learning.
I won’t settle in one place; I will travel all over the world. I cannot conceive of spending all my time in just one country. I am most at home on the move. I continue to believe in globalization and will continue to communicate its merits.
Wherever the future takes me, I know I will return to Japan often, and think of it even more. This incredible country has shaped who I am; it is part of my identity. What I have learned cannot be quantified.
I would like to close by saying thank you to Japan. Eighteen years have passed since I came to this country, and I can never fully repay the debt of gratitude I owe for the way it welcomed me and the kindness it has shown to me. I am forever changed by the people I’ve met here and the company I have been entrusted to lead. Thank you for this opportunity to share my history with you.
This portion of My Personal History: Carlos Ghosn was originally posted on Nikkei Asian Review.
Related:
Hiroto Saikawa appointed as Nissan Chief Executive Officer (Feb. 22, 2017)
The many lessons of Ghosn-sensei
Reflections on the Nissan chief and his My Personal History series of essays
By ATSUSHI NAKAYAMA, Nikkei commentator
What does Carlos Ghosn mean to Japan? Although the Nissan Motor CEO was modest in describing his life and career in his series of autobiographical essays published in The Nikkei, anyone would agree that he has changed post-bubble Japan.
A line at Nissan Motor Kyushu’s plant
Ghosn has never been afraid to question what are seen as the golden rules for success in corporate Japan. Before the economic bubble collapsed in the 1990s, the general thinking in the Japanese business world was that there should be no winners or losers. But economic activity inevitably creates these gaps, and trying to stop that from happening contradicts economic rationality.
Ghosn has challenged such Japanese corporate institutions as lifetime employment, the seniority system and keiretsu – the close-knit web of companies cemented by equity ties, investments and other business relationships. The fact is, they had already become irrelevant when the postwar economic boom ended. While many Japanese people no doubt were aware of this, “no one wanted to take the tough action needed” to solve such problems, Ghosn wrote in his “My Personal History” series.
While he did cast a critical eye on these practices, he never wrote them off as entirely without merit. “A wage and promotion system based solely on seniority produces negative effects,” he wrote. But Ghosn also stressed that he did not think lifetime employment and keiretsu were totally useless. When it comes to introducing reforms, his criterion is as simple as it is pragmatic: Is the current method working? This straightforward approach is how he convinces people around him to embrace change.
What borders?
In addition to spurring reform in Japan, Ghosn also deserves recognition for another major achievement: globalization. In “pre-Ghosn” Japan, being global meant manufacturing high-quality products domestically and selling them overseas. But focusing on the supply of goods is merely an extension of an export-driven economy.
The breakup of the Soviet Union and other events ushered in the era of globalism, which coincided with the collapse of the Japanese bubble. The concept of the borderless movement of people, goods and money – so foreign to most Japanese businesses – came naturally to Ghosn, who was born in Brazil, educated in France and worked for many years in the U.S.
Nissan was probably the first Japanese company to fully embrace such ideas as performance-based pay and workforce diversity. The auto industry was the symbol of the old model of internationalization – made in Japan, shipped abroad – and it was there that the old corporate cultures were perhaps the most deeply entrenched. Nissan fell on hard times, but under Ghosn, it had the advantage of experiencing globalization before its rivals did.
Did he have the magic touch from the start? Waseda University associate professor Jusuke Ikegami, who has studied the executive for years, says Ghosn’s story is one of continuous growth. He was headhunted by French tiremaker Michelin when he was a science major at university and was put in charge of a factory while in his 20s. He continued climbing the corporate ladder, taking charge of the company’s Brazilian and North American units, then becoming the No. 2 executive at Michelin. He went on to become executive vice president of Renault and eventually Nissan’s CEO. The bigger the organizations he headed became, the more he learned.
As head of the Renault-Nissan Alliance, Ghosn decided to bring scandal-hit Mitsubishi Motors into the fold. How far will he go? Only he knows the answer. But one thing is certain: As he wrote in the final installment of the series, he will never stop learning.
Whether a person or a company, the desire to learn and grow is the first step toward success. Ghosn’s strong will is why he has continued to influence the auto industry and Japanese society for 18 years.
This portion of My Personal History: Carlos Ghosn was originally posted on Nikkei Asian Review.
“What Drives Carlos Ghosn” Index Page
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