Customer Reviews

Turnaround: How Carlos Ghosn Rescued Nissan

5 star:		(10)
4 star:		(7)
3 star:		(2)
2 star:		(5)
1 star:		(2)

 

 

As we continue to read about the Fiat debacle in Italy, and the grim plateau that car sales figures are cutting in the US, it is difficult to escape the sheer morbid curiosity about how Ghosn has, in less than four years, managed to take a company that many thought was heading for utter disaster and turn in it into one of the hottest automotive manufacturers on the planet (Nissan has once again raked in a record quarter as I write).

David Magee does an engaging job of capturing Ghosn's audacious yet down-to-earth attitude in a culture as obstinate as Japan's. Some very interesting anecdotal evidence here about Ghosn's uncanny ability to motivate subordinates several layers down in Nissan. Automotive companies today are multicultural institutions that operate across traditional geopolitical/cultural boundaries. While several top-brass CEOs (e.g., Nasser who was with Ford until 2001) have recognized this and yet failed to implement it, Ghosn has won his laurels the old-fashioned way -- by enabling a free exchange of ideas in an ailing monster of a Japanese organization. This alone speaks volumes about the man's personality, and I am happy to say I was not disappointed with Magee's treatment of this aspect.

Nonetheless, a business book is a business book. There is only so much detail that can be smooshed in to it, and inevitably completeness needs to be sacrificed for readability by a wide audience. I personally felt that the book sort of glosses over several key points that could have made this a 6 out of 5 stars material --

(1) A more granular look at WHAT Ghosn *really* did in terms of enabling the culture of flexibility without really changing the otherwise autonomous structure that underpins Nissan, i.e., without too much Renault-ification; what processes did he institute to ensure being heard at the lower rungs of the giant organization. Some more managerial nitty gritty would be welcome.

(2) A coverage of some more negative, sensitive issues such as the controversial buy-out of African-American farmers for the site of the huge new Nissan assembly plant near Canton (why should everything that Nissan has done only be seen in a positive light simply because this is an ode to its CEO?)

(3) A more significant background on the contribution of Louis Schweitzer, Renault's low-profile chairman. Curious minds want to know if Ghosn "went it alone" or did he have the ideological spine of someone else too.

(4) A mention of Ghosn's plans (instead of vague broad-brush corporate objectives) for the next few years e.g. the focus on emerging markets such as Turkey. Wouldn't a star CEO such as him for instance be expected to topple Toyota for the no.1 spot? I may be speaking out of turn but THAT to me would be a benchmark of Ghosn's true success because a murky side of me still suspects that part of his success can be attributed to his being a "Gaikokujin" (a foreigner, and it is possible this is why he may have been allowed some slack by his Japanese subordinates), or that he came in with almost zero expectation.

Anyway, this is a slim wishlist and despite some of these themes being given a somewhat short shrift in the favor of singing paeans to Ghosn, I'd recommend this book highly as an accessible introduction into one of the most successful turn-arounds of the 21st century. If nothing else, it bears an important message in thumping down the stale notion that Japanese companies can only survive by sticking hook line and sinker to their dated, dogmatic ways.

Although Magee does indeed provide a brilliant analysis of how Carlos Ghosn "rescued" Nissan, the value of this book extends far beyond that admirable achievement. What we have here is a probing and informative analysis of a leadership and management style which provides important lessons to decision-makers in all organizations (regardless of size or nature) which currently struggle to compete successfully in their respective marketplaces. In a sense, the same skills required by a successful turnaround are also valuable in organizations which are currently prospering: "Be transparent and explain yourself in clear, lucid terms. Do as you say you are going to do. Listen first; then think." Prior to being reassigned by Renault to the Nissan organization, Ghosn had led the revivals of Michelin South America, Michelin North America, and Renault. According to Magee, he "may be the only person to have four verifiable corporate turnaround efforts on four different continents." Serious problems had developed at Nissan in the early 1990s. How serious? It was "strapped by $22-billion in debt, inflated supplier costs, and new product development that was at a standstill." This book explains how, under Ghosn's leadership, Nissan not only solved those and other problems; it regained a position of profitable and prominent leadership in one of the most competitive of industries.

As indicated previously, Ghosn is a firm believer in transparency throughout all areas and at all levels of an organization. For that reason, prior to the merger of Renault and Nissan, he created cross-company teams (CCTs) which "were charged with finding possible synergies between the companies and exploring specifically how these might work if an alliance was formed." Teams studied product planning, vehicle engineering, power trains, and purchasing. It is incomprehensible to me that Ghosn, a native of Porto Velho, Brazil, could convince those who worked in two such different companies, in cultures with such different values, to work effectively together. He advocated the same strategy which had succeeded so well at Michelin North America: "Assume nothing (find answers within the company), work fast, and earn trust and respect with strong results." As American colleague Jim Morton once said of Ghosn, "he knows how to get a commitment."

Obviously, throughout his career thus far, Ghosn has demonstrated a specific style of leadership and management which Shiro Tomii, a senior vice president in Japan, once summarized as follows: He establishes high, yet attainable goals; makes everything clear to all roles and levels of responsibility; works with speed; checks on progress; and appraises results based on fact. In this context, Magee notes by creating intracompany transparency, "only the facts survive. [Ghosn] loves it when data and analysis win and loses his patience when individuals persistently argue a point with nothing to back it up."

Once the Nissan Revival Plan (NRP) had restored hope, profits, and confidence in the company, Ghosn focused everyone's attention on NISSAN 180 which involves even more ambitious objectives and requires even greater commitments to achieve them. "So questions remain as to exactly how high and how far Nissan will go in its ultimate quest." However, this much is certain: "Renault took a chance. Ghosn went to work. And Nissan responded. Together, they changed world business forever." That is the story which Magee has told in this book and he has done so with rigor and eloquence.

The Japanese Automobile Industry was, just till a decade ago, nearly worshipped. A handful of companies led by Toyota introduced concepts of Lean Manufacturing and effortlessly conquered the highways of the land of the Automobile. Japanese cars were soon seen in all continents, eating away market share from established incumbents. Low cost, high quality and fuel economy were the key differentiating factors. Several research studies were undertaken to explore and demystify the secrets behind the Japanese success. Cultural factors and traditions of Japan like strong relationships with vendors and customers, Industry alliances and a loyal work force wedded to their organization on the concept of life long employment were some of the elements that the West found hard to replicate.

Take "Keirestu' for example. This refers to the alliance between the buyers and the vendors with long relationships and cross holdings that reinforce their mutual commitment to business. This system worked well till Japan Inc fumbled. In the case of Nissan, the vendors were fleecing the already bleeding parent by charging it much higher for their parts. For Nissan, it was unthinkable to source these parts from outside Japan, since it would amount to a gross violation of the principles of "Keirestu". The master had become the prisoner.

Japan once boasted of the tradition of life long employment. This had gradually led to mediocrity at all levels since career advancement and compensation were linked to seniority and not performance. It was sacrilege to close down unprofitable plants and Nissan was saddled with plants running at less than 50 % capacity, hemorrhaging cash. Nissan had no money left for new product development and was forced to retain outdated models. Its customers started looking elsewhere.

Burdened with debt, shrinking market share, negative returns and no where to go, Nissan looks to the West for a Savior. Renault of France takes over. Carlos Ghosn, Lebanese by origin, French by education with strong experience in Brazil and North America, now heads for Japan as the chosen man from Renault. Known for his no nonsense style since his days with tire maker Michelin, he is dubbed " Le Cost Killer".

Ghosn's diagnoses Nissan's problems as primarily internal. He forms the now acclaimed Cross Functional Teams (CFT) drawing executives from all ranks and continents to brainstorm and recommend solutions within three months. The plan is straightforward - Nissan Revival Plan (NRP) aimed at reducing procurement costs, debt, closing plants that were not viable and introducing new models, fast. Simple, but not easy. These decisions were hitting against the very foundations of the beliefs and traditions of the Japanese Industry. Global souring challenged the "Keirestu" and decisions to sell off holdings in associate Companies to raise cash and clear debt was never done in Japan. It is precisely these aspects that make the book interesting. Ghosn not only challenges the deep-rooted traditions of Business practices in Japan, but acts with agility and speed to put the plan into action producing dramatic improvement in Nissan's bottom-line.

If you are looking for details on strategy in the pattern of a research study on Nissan, this is not the book. This is a simple story of a man of courage who takes charge of a sinking auto manufacturer in its homeland, steers it to safety and zooms ahead on top gear to be named Man of The Year by Automobile Magazine in 2002. From near bankruptcy to record profits would be the summary of Nissan -1999 to 2002.

I have not read a business book like this one. I would liked for the author to have given even more detail about how Carlos Ghosn did it but the story is interesting and tells how one man pulled off a miracle. I used to work at Nissan and the Japanese would not change. Now they have.

As a Nissan fan, I found this book interesting and to some extent informative as well. It is written in simplified english and appeals to a wide audience irrespective of age. So, you don't need to be a 'management guru' to get some tips for a 'successful turnaround'--this book tells all--the hero (Mr. Ghosn), Nissan the firm, how the turnaround was attempted, initial frustrations and finally how it 'got back in the black'--clearly and consisely. Further, while the story revolves around the hero, Mr. Ghosn, the author mindfully includes all those 'little' triumphs and tragedies that contributed to the turnaround effort in a witty manner. This adds to it's appeal and hence the suspense and interest.

Furthermore, it provides some valuable management advice and guidlines in an actual case scenario laid out across three continents and in cultures that don't usually see 'eye-to-eye' on many issues. Be it corporate strategy, cross-functional teams, hierachical communication, branding or new product development this book provides you with the insight needed to give effect to your own 'mini turnaround'. A must for any book lover!

T

The facts of the story of Carlos Ghosn are surprising. I read about Lee Iacocca years ago but what Carlos Gohsn did at Nissan is even more remarkable. The book is an easy read and it tells how it was done. I am afraid U.S. car makers are going to have problems with this man.

This is the best leadership book I have read this year about any business subject. The author tells a story I had never heard and blends leadership lessons. The story of Carlos Ghosn is irresistible.

The turn-around at Nissan would probably make a great story but this is not it. The book reads like a press release, a really, really long press release.

The book has no drama, no conflict. I compared it with "The Big Store", by Donald R. Katz, about a similar turn-around at Sears. Mr. Katz's book told a story. Even though the reader knew what ultimately happened at Sears, Mr. Katz kept the reader tied to the book by treating the story like a novel, with twists and turns, good guys and villains. Even the good guys weren't perfect. Mr. Katz painted real people doing an extraordinary job.

No such story telling comes through here. From page 1, Carlos Ghosn is treated like a super hero. We learn very little about the man. Mr. Magee is breathless in his description of a "multicultural leader" who used "cross-functional teams." The book includes lists that would have been better suited to a management book that Mr. Ghosn might have written himself. The characters in this book, including Mr. Ghosn and the French, Japaanese and American managers he led, develop no depth. You don't cheer for any of them because no conflict arises. And in a corporate turn-around this big, there had to be conflict.

There is also no unifying theme in the book. I would have liked to have read a book that told this remarkable story centering around the development of a car, like the Z or the Altima. That would have been a great backdrop for this story.

Maybe this book came out too soon after the NRP ended. There is no historical context. Even some of the text uses present and future tense. It's a shame, because when this whole story is told by a great storyteller, it's going to be a page-turner.

I picked up this book with great anticipation. I had heard about Ghosn's paradoxical global triumph - A Lebanese Brazilian, working for a French company, goes to Japan to turn around a traditional Japanese auto company. I was looking forward to either a biographical treatment of Ghosn, or detail on the turnaround. In trying to handle both, the book slid into mediocrity.

The book covers Ghosn in a favorable light. Greatness doesn't come from a good life. I would have prefered to see more on the troubles Ghosn had to overcome.

The book also does not have enough time to go into detail on the turnarounds. Ghosn's been through 4, and none had enough detail. "Cross Functional Teams" is a fairly common management idea. What did Ghosn do differently to make it work? Breaking up the Japanese conglomerates was an enormous activity - the book made it seem a little too easy.

Again - great topic but weak treatment.

David Magee's book tells the very interesting story of how Nissan's fortunes were revived by "a fiery, intellectual, Brazilian-born, French educated man of Lebanese descent, Carlos Ghosn".
Although Nissan was established in 1933, it had its heyday in the 1960s when products like its Z car took the American market by storm and its Datsun brand was a global brand leader. By the late 1990s, Nissan had lost its focus and direction. Whereas Honda and Toyota were both going from strength to strength, Nissan languished, its glory days seemingly gone forever. Faced with a mountain of debt, they allowed the French Renault company to buy what was effectively a controlling stake in the company.
Renault dispatched Ghosn to Tokyo, where Ghosn performed what can only be described as miracles. He slashed Nissan's debt burden, he restored its cost competitiveness, he sold off non performing assets, he reorganized its finances and streamlined its management systems. Magee tells us that he even inspired the F-Marinos, the soccer team Nissan sponsor, to advance from languishing in 13th place in its league division to winning the competition, all in the space of a year.
How could one relatively young man accomplish so much in such a short period of time? Magee attributes his massive successes to the homespun wisdom of Fr. Lagrovole, a Jesuit priest, who taught Ghosn at school in Lebanon! Lagrovole advised his young charge to listen before he speaks and to understand where everyone is coming from in cultural and other terms.
Armed with this advice, Ghosn set out to take to the corporate world by storm. Before reviving Nissan's fortunes, he restored Michelin's profitability in its key Brazilian market. Having then organized the merger of Uniroyal -Goodrich and Michelin, he was head hunted by Renault and quickly revived their fortunes in Europe. Having solved their European problems, Ghosn was dispatched to Tokyo to reinvigorate the newly acquired Nissan company.
Ghosn, in some ways, comes across as a comic book hero. And in fact, he was made the hero of a Japanese manga comic book, which he helped write and which Japanese salary men eagerly read in the hope of picking up some managerial tips from this remarkable man.
Fr. Lagrovole's advice apart, they will find few tips in this book which tells us that Ghosn's forte seems to be at cross-cultural management and at paying attention to both the minutest detail and overall strategy. There are no worthwhile insights into the mind of this remarkable strategist. We hear, unsurprisingly, given his results, that he works very hard but likes to devote his weekends to his family but we get no inclination of why he is so brilliant and how we lesser mortals can learn from his successes and his failures, assuming, if we dare, that he has ever failed at anything.
We are told that the Nissan revival has been a great success. But, as with his earlier successes, the synergies to Renault are not explained. We are not even told what Renault hoped to gain by taking over Nissan. Instead, we are told on pages 207/8 that "Ghosn stressed time and time again that he and others were at Nissan for the good of Nissan, not for the good of Renault."
But it does not make sense that Renault should take over Nissan so that Nissan would benefit. Renault's management is supposed to work in the interests of Renault's shareholders, not Nissan's. We are told that Renault hopes the Nissan merger will boost Renault's sales in Indonesia. But, just as we are not told why Renault failed to merge with Volvo, so also are we not told why an unstable country like Indonesia stands at the center of Renault's projected synergy gains.
Instead, Magee informs us that Nissan has gained so much from the Renault alliance that it might soon be strong enough to divorce itself from the French company entirely. If so, how did Ghosn's successes with Nissan benefit Renault and, Indonesia apart, has the Nissan merger strengthened Renault's position in the auto market against the formidable opposition of such titans as Toyota, Honda, Ford, General Motors, Daimler and Volkswagen?
Instead of addressing those key managerial and strategic questions, Magee wastes too much time discussing such things as Mississippi's race riots in the 1960s. The result is a shallow book that does not do justice to the very important topics it purports to cover.