Nissan Turnaround

In an interview with CNN's Financial Editor Todd Benjamin the architect of the turnaround of Nissan Carlos Ghosn identified three factors: Vision, strategy, commitment and results. He said: number one, a very simple vision needs to be established with the people of the company about where management is going, what's the destination, and be shared at all levels of the company. Number two is to have a strategy for the company to get there, what are the action plans which have to be deployed at every level of the company so everybody knows what is expected from him or her and the contribution for the company. Number three, people have to feel a strong commitment coming from the top, personal commitment, team commitment coming from the top, with the goal to revive the company otherwise we all be out of the company.

Mr Ghosn believed from the beginning that the turnaround is based on connecting directly or indirectly with people in the company, managing their expectation and helping them understand the severity of the situation, and the challenges and sacrifices needed to make the necessary steps for the turnaround. Mr. Ghosn realized that making a change to a Japanese company where laying off people is a difficult thing to do will not be easy. To overcome the difficulty Mr. Ghosn explained clearly why the change is needed, how the change will happen and what is the outcome of the change.

Mr. Ghosn multicultural background has helped a lot in the success of the turnaround since he was perceived non-biased without any preconceived idea about him by the Japanese people.

Carlos Ghosn is the leader who cut costs, increased sales and returned Nissan to profitability. He did it by inspiring the people he dealt with and demanded performance. He focused on the people factor and on the results from the revival plan. He stated in an interview with Wall Street Journal that management is about doing things that usually people do not want to do by giving them reasons for making substantial changes. Changes that included reducing head-count and closing plants. This is not a small feat for a company in Japan where having people lose their jobs is far from the norm. He tackled the culture issue brilliantly by appearing non-biased, having compassion about people's jobs, presenting his case as a very serious matter, and selling his plan as the only option for the survival of the company. He opened the possibilities for people who are about to lose their jobs to find a job somewhere else, by helping them and caring about them. These actions were necessary to make people buy in and do what they do not like to do.