Using experience to teach yourself

Citation

Barabba, V. (2005), "Using experience to teach yourself", Strategy & Leadership, Vol. 33 No. 3. https://doi.org/10.1108/sl.2005.26133cae.002

Using experience to teach yourself

Using experience to teach yourself

Shift: Inside Nissan’s Historic Revival

Carlos Ghosn and Philippe RiesDoubleday, 2005

Carlos Ghosn’s role in the transformation of Michelin, Renault, and most recently Nissan is the stuff of which auto industry legends are made. His successful management of what appeared to be insolvable situations has earned him a reputation as someone to turn to when facing a business crisis.

Ghosn joined Nissan as COO in 1999, became president a year later, and in 2001 was named CEO. Much has been written about how he helped transform Nissan from a money losing enterprise to one that is regaining its position as one of the world’s better automotive companies. The real value of this book, however, is its explanation of how Ghosn took advantage of every opportunity throughout his career to prepare himself for what was to come. The book makes it quite clear that Ghosn is the epitome of what Sir Francis Bacon had in mind when he said, “A wise man will make more opportunities than he finds.”

Making opportunities

Ghosn was born in Brazil into a family of modest means whose parents had left Lebanon to work for a brighter future. He returned to Lebanon when he was six.

His college education was in Paris.

The first opportunity. Ghosn began his career in the auto industry at Michelin. He drew the attention of top management, built a reputation as an able manager, and after seven years he received his first daunting assignment – turnaround the Michelin operations in Brazil. This task taught him the lesson of what happens when a company sets up operations in another country and expects that what worked in the home country would work in the new country. He was able to witness first hand that the Michelin system that was highly successful in France would not work in Brazil. The manner in which he went about making the changes that would work in Brazil without causing major problems back at the headquarters in France, reinforced the belief of CEO Francois Michelin that Ghosn was the right man to send to run businesses that needed to be fixed.

The second opportunity. After his success in Brazil, he was sent to the USA to manage the merger of Uniroyal-Goodrich, recently acquired by Michelin. This experience provided Ghosn with the learning experience of putting together a new executive team made up of the best employees from both companies. This task was made more difficult because the executives had been trained in companies that approached the market from very different perspectives. Michelin executives were trained to think of the long-term benefits of strategy development, products, quality and investments as a global enterprise. Uniroyal-Goodrich focused on short-term financial performance with sole interest in the North American market. Ghosn was able to overcome these differences and brought together an excellent executive team by drawing on what he had learned about selecting the right people during his experiences working for Michelin in Europe and Brazil.

The third opportunity. Next, Renault’s CEO Louis Schweitzer offered Ghosn the number two spot in Renault management. Renault had suffered from two significant failures; the unsuccessful acquisition of American Motors, an attempt to get into the lucrative American market, and a failed attempt to merge with Volvo. Ghosn’s strategy to overcome the traditional bureaucracy and current pessimism was to make a significant contribution quickly. He brought together a diverse team of knowledgeable people and developed a plan to reduce costs. To dramatize the significant nature of the plan it was named the 20 Billion Plan ($3.6 billion).

The fourth opportunity. Following the 1998 merger between Mercedes and Chrysler, Louis Schweitzer took the position that Renault would have to form an alliance with another carmaker. Ghosn took the position that any merger would take considerable resources in time and money and, therefore, Renault should “… aim high and pick the biggest partner.” Ghosn had Nissan in mind.

The rest of the book discusses how Ghosn used what he learned in his previous assignments to efficiently and effectively turn the situation at Nissan from bad to good. Why he was successful is found in his own words found in the last chapter:

I’m not one of those people who think that everything’s due to chance and that the world’s chaotic. And since that’s what I believe, when this operation came along, I told myself that my whole career had prepared me for it. I had no preconceived notions about Japan, and I arrived there without any assumptions. I’d lived in many places. My long tenure as a supplier had given me the opportunity to observe all the carmakers. I had contributed to getting Renault back on its feet. I had the feeling that all the things I’d done before were my preparation for this mission.

Reading this book strongly reinforces my own conclusions formed in three large private and one large public enterprise. It’s my belief that it’s crucial to recruit the right person, with the right experiences who wants to take advantage of the opportunity a daunting challenge offers.

Vincent BarabbaRecently retired as GM’s General Manager of Corporate Strategy and Knowledge Development (vbarabba@sbcglobal.net). He has also held similar positions at the Xerox Corporation and the Eastman Kodak Company and served as Director of the United States Census Bureau. His latest book is Surviving Transformation: Lessons Learned from GM’s Surprising Turnaround (Oxford University Press, 2004).