March 19, 2007

Bangkok Post - Carlos Ghosn is the CEO of Renault and Nissan Motors. He is largely credited with turning around Nissan. For his success he was named Man of the Year in 2003 by Fortune magazine's Asian edition. ...

 Mr Ghosn (rhymes with "phone") became CEO of Renault, Nissan's partner and shareholder, in 2005, succeeding Louis Schweitzer, while remaining CEO of Nissan as well. Born in Brazil to Lebanese parents, he graduated from E{aac}cole Polytechnique and E{aac}cole des Mines de Paris with engineering degrees.

Mr Ghosn gave a speech on Feb 13, 2006 at the Stanford Graduate School of Business on the topic "Nissan and Renault Partnership Benefits from Difference". You can watch the video at http://www.gsb.stanford.edu/multimedia/VFTT/ghosn06.ram

Here are some of his valuable learning points he delivered on cross-cultural management.

FGetting employees to work together to make products that are attractive to customers is the key to success in 21st-century business.

FGetting large numbers of employees to follow the same vision can be a challenge, one that is magnified when two companies from cultures as different as Japan and France are partners.

"You can make companies work together even if they are on different continents," Mr Ghosn said. One company does not need to take over the other, nor is it crucial for both companies' cultures to meld into one. Preserving distinct styles helps each company's employees identify with their employer and stay motivated.

He cited three simple principles that govern the Nissan-Renault alliance. The first is respect for identity: Renault is Renault. Nissan is Nissan. Japan is different from France.

The second is respect for autonomy: Decisions about Nissan shouldn't be made in Paris, and vice versa.

Finally, "We don't work together for the sake of working together." Every joint project or decision has to further the companies' bottom line.

During the Q&A session, a Japanese student asked him, "What is the most challenging experience you faced during the turnaround Nissan?"

Mr Ghosn replied: "During the 1990s, Nissan was not competitive compared to its Japanese counterparts. The other two Japanese automakers were growing and Nissan was stagnant while they had similar resources. Nissan staff lacked their confidence. They felt that something was wrong.

"My first priority was bringing back the self-confidence. We are capable of producing much more what we were on that day. But I needed everyone on the same bandwagon to make sure that we were focused in the same direction."

Mr Ghosn mentioned that regaining self-confidence means you have to be able to answer people's concerns. "First, staff asked about cutting costs and so on, and would we be able to produce a hit model?

"Once you produce the hit model, the media write about it, profits are made. Then, people asked another question _ will you be able to come back with technology? We were able to come back with technology."

By answering each question one at a time, he started building confidence among people.

"Bringing back confidence is important. Confidence is not arrogance. Confidence is the humble attitude of people who know their strengths and recognise weaknesses, overcome them _ build on them. And they keep on pushing forward."

Another question arose about cross-cultural management between the French and the Japanese.

Mr Ghosn replied: "When people work with other cultures, they start by focusing on the negatives because of the differences.

"Assume that we have Japanese and French meeting together. Japanese people are focusing on transforming concept to reality. They are sceptical about concept. Because in their heads they always asking questions: how can I transform this idea to the practical reality?

"The Japanese people have a tendency to take a lot of time to make decisions but then execute very quickly. Because when they think strategy they think about how they can implement it. It's not because they are slow, or don't understand or are not smart. That's why it's taken more time during the conceptual stage but went very quickly during implementation because they had thought it through during the conceptualisation.

"On the other hand, the French have a tendency to be very quick in strategy _ thesis-antithesis, very intellectual in discussion but quick in the conceptual part. But when it comes to the execution part, they come to somebody and assign other people to do it.

"The Japanese will see that the French are so lousy in execution and ignore their quickness in strategy and concepts. The French will see that the Japanese are so slow to get concepts.

"Now, if you want to be successful, you have to reverse. You have to make the Japanese see: how can I learn from the French so I become quick on the concept? And the French need to ask themselves: how can I learn from the Japanese so I can implement it quicker?

"If you leave people alone, they have a tendency to focus on the negative, but you can help them to learn from their differences."

Kriengsak Niratpattanasai is the founder of TheCoach, specialising in executive coaching in leadership and cross-cultural skills. Copies of previous columns are available at www.thaicoach.com. He can be reached at 0-2517-3126 or coachkriengsak@yahoo.com  

 

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