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Carlos Ghosn: Automotive Turnaround Champion Speaks to HBS Community

Cost cutter, troubleshooter, turnaround artist. These words have all been used to describe Nissan and Renault CEO Carlos Ghosn, and when the leader came to Harvard Business School’s campus on Monday, November 27, he went beyond the public image to share inside secrets with the HBS community.

The 46-year old Brazilian native of Lebanese descent has been lauded in the media for delivering results at Nissan and then as CEO of Renault. HBS first year students are already familiar with his actions in the automotive industry from seeing Ghosn as the protagonist of a LEAD case. This fame brought a standing-room only crowd of about 200 students for an engaging question and answer session with Carlos Ghosn.

Invited to campus by the Turnaround Club, Ghosn discussed his philosophy on guiding a firm through a stormy era. According to Ghosn, there is “no problem without a solution” in the corporate world, and the keys to reinventing a company include staffing the right people on the turnaround team, orienting the team towards results and motivating people to succeed.

Not only do the right people need to be in place, but Ghosn also defined the right leader for a turnaround as being specifically an outsider. In his turnaround of Nissan, Ghosn was a company outsider and a foreigner; characteristics he felt had both benefits and disadvantages, as he initiated the turnaround effort.

To illustrate his point, Ghosn pointed to Ford Motor Company’s recent appointment of former Boeing phenom Alan Mulally, as CEO. As Ghosn puts it, if a longtime Ford employee were to be promoted to the top job, he would be challenged and even dismissed if he asked the “right” questions-the questions that challenge the underlying basis on which the automaker does business-and the hypothetical leader’s peers would simply retort with comments such as, “you were there when we made that decision” or “you know why vehicles take years to design.” Instead, an outsider’s perspective allows a leader to ask the basic questions that would address the heart of a struggling company’s problems.

The story above was amongst Ghosn’s many stories demonstrating his zeal for finding solutions in the dynamic automotive industry. Mr. Ghosn began his speech with a discussion of the alliance relationship between Nissan and Renault and went on to describe this summer’s talks between the current allies and General Motors regarding a possible three-company relationship. Each time he described the industry, its challenges and his relationships with other automakers, Ghosn’s face lit up. His team also made a special effort to introduce Ghosn to HBS’ newest student club, the Automotive and Transportation Club, in order to forge a relationship with students interested in the industry.

Not only did Ghosn discuss his leadership role in the automotive industry, he also got personal with the audience. Antoine Poissonnier (NC) posed a question about career strategy which gave Ghosn a venue to discuss how his family commitments relate to his work.

Ghosn explained that his business opportunities are not part of a prescribed plan or long-term career strategy. Rather, he takes the opportunities as they come, and at each point in his storied career, he has wrestled with a desire to provide consistency for his wife and children in their community.

Ghosn noted that his children were living a comfortable life in good schools during his stint with Michelin’s US operations. Then Renault called with an opportunity in Paris. At first the job hardly looked attractive and appeared to as an ugly monster transporting children and wife out of their home to a new world in Paris.

Then in 1999, as soon as the family became comfortable with their new life in France, Renault’s leader tapped Ghosn to forge a new relationship with struggling Japanese automaker, Nissan. Another big ugly monster at the door-and yet Ghosn had his family’s support for the move to Japan.

Rarely does an executive choose to expose his personal decisions and feelings in a public arena, so Ghosn was uniquely honest with his experience of being open to new challenges while still keeping family considerations top of mind. Perhaps it is one more reflection of the daring, open style that has made Ghosn a successful leader and motivator throughout his career.

December 4, 2006
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