Another day, another article about the wonders of Carlos Ghosn. He was even appointed an honorary knight commander of the British empire, joining the likes of Bill Gates, Rudy Giuliani… and Eric Clapton, Bob Hope, and Pele. Another reason why many execs consider him a rock star.
Granted, he did pull off the impressive feat of saving Nissan from extinction a few years ago. And he did it by making a commitment and holding himself accountable by saying he’d resign if Nissan didn’t turn a profit only a year later. A level of personal accountability that sets him apart from his peers at GM, Ford, and basically the rest of business and government for that matter.
And he also loves to walk the factory floors… going to the gemba to find out what’s really happening and as the article points out he even directly drives 5S methods. He talks straight, is focused on results, and requires his managers to also focus on results. Problems are confronted, there is a focus on the individual, and like myself he has an appreciation for simplicity in business… which he claims resulted from being educated by Jesuit priests.
"If you find things complicated, it means you haven’t understood them. Simplicity is the basis of everything."
How true. I wish many of today’s leaders would realize that if an issue appears complicated it’s generally because you can’t see the forest for the trees. Patchwork solutions create complexity. Lean is simple when you clear away the old organizational brush. Even taxes could be simple if the pols didn’t try to use it as a social engineering excercise.
His executive style could be called lean, in that he forces concise meetings by alloting only the minimum amount of time necessary. When you read the text of his speeches you realize he takes out any word or phrase that doesn’t directly "add value"… they have short concise sentences. He even carries two black briefcases to keep Renault and Nissan work separate, and for a while we thought he might need to buy a third GM briefcase. There’s still a chance he may need one for Ford.
Wait a minute. He doesn’t shy away from the tough decisions. He is a strong, fact-based, albeit occassionally brutal, leader. Yes he did turn around Nissan a few years ago. But as Dr. Phil likes to say, "how’s that working for you?"
Nissan’s operating profit is sliding and there is a "drought of new products." Operating margins at both Nissan and Renault have been consistently dropping over the past two years. Nissan’s U.S. sales are off and market share is decreasing. He relocated Nissan’s U.S. headquarters from Los Angeles to Nashville, and the $100 million investment resulted in the resignation of 58% of his U.S. staff. That’s a big loss of knowledge just to change from hip-hop to country music. Renault’s net income and operating profit is also declining.
But in true Ghosn style, he has made a personal commitment to improve both companies. He is almost halfway into his second 3-year plan at Nissan, called Value Up, which promises a significant increase in sales and operating profit, and has a similar plan at Renault. We’ll see in a couple years if the rock star has clothes.