In Shift, Carlos Ghosn, the brilliant, audacious, and widely admired CEO of Nissan, recounts how he took the reins of the nearly bankrupt Japanese automotive company and achieved one of the most remarkable turnarounds in automotive—and corporate—history.
When Carlos Ghosn (pronounced like “phone”) was named COO of Nissan in 1999, the company was running out of gas and careening toward bankruptcy. Eighteen short months later, Nissan was back in the black, and within several more years it had become the most profitable large automobile company in the world. In Shift, Ghosn describes how he went about accomplishing the seemingly impossible, transforming Nissan once again into a powerful global automotive manufacturer.
The Brazilian-born, French-educated son of Lebanese parents, Ghosn first learned the management principles and practices that would shape his decisions at Nissan while rising through the ranks at Michelin and Renault. Upon his arrival at Nissan, Ghosn began his new position by embarking on a three-month intensive examination of every aspect of the business. By October 1999 he was ready to announce his strategy to turn the company around with the Nissan Revival Plan. In the plan, he consistently challenged the tradition-bound thinking and practices of Japanese business when they inhibited Nissan’s effectiveness. Ghosn closed plants, laid off workers, broke up long-standing supply networks, and sold off marginal assets to focus on the company’s core business. But slashing costs was just the first step in Nissan’s recovery. In fact, Ghosn introduced changes in every corner of the company, from manufacturing and engineering to marketing and sales. He updated Nissan’s car and truck lineup, took risks on dynamic new designs, and demanded improvements in quality—strategies that quickly burnished Nissan’s image in the marketplace, and re-established the company in the minds of consumers as a leader in innovation and engineering.
Like the best-selling memoirs of Jack Welch, Lou Gerstner, and Larry Bossidy, Shift is a fascinating behind-the-scenes look at what it takes to transform and re-create a world-class company. Written by one of the world’s most successful and acclaimed CEOs, Shift is an invaluable guide for business readers everywhere.
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CARLOS GHOSN joined Nissan as COO in June 1999, became president a year later, and in 2001 assumed the position of president and CEO. Born in Brazil to Lebanese immigrants, he was educated in France, where he earned engineering degrees from Ècole Polytechnique and Ècole des Mines de Paris. He was chief operating officer of Michelin in Brazil before becoming COO of Renault and then taking over the reins of Nissan. In the spring of 2005, Ghosn will become the CEO of Nissan’s parent company, Renault, while continuing as CEO of Nissan.Excerpt. © Reprinted by permission. All rights reserved.:
My grandfather, Bichara Ghosn, emigrated from Lebanon to Brazil when he was thirteen years old. He traveled alone. In those days, people left when they were still comparatively young. Going to school didn't seem so important.
At the time, the country was still part of the Ottoman Empire, which extended from Turkey to the Arabian Peninsula and the banks of the Nile. But it was an empire that was breathing its last. Distant and corrupt, Constantinople had trouble maintaining order in its far-flung provinces. There were several waves of emigration from Lebanon at the beginning of the twentieth century. The two primary reasons were conflicts based on religious differences--Druzes (a sect of Shi'a Islam) against Maronites, Sunnis against Shi'a--and endemic poverty. My grandfather came from Kesrouan, the part of Mount Lebanon that was 100% Maronite. The Maronites place a very high value on loyalty, especially loyalty to the Church, and respect for traditions. The Maronite mass has always been said in Syriac, for example. Although it's a language no one speaks anymore, it was the language Christ spoke. Maronite traditions and loyalty have been passed down from generation to generation. The Maronites who emigrated have maintained their loyalty to Lebanon and to their family members who stayed in the old country. They send money. They pay to construct a house in their ancestral village and visit it from time to time. The Lebanese Maronites are also loyal to France, which is the result of a long, nearly thousand-year-old history that goes back to the Crusades.
When you live in a world of constant menace, your close family circle is the one place where you're protected, where you can affirm your identity, which is always under threat from the Muslims, from invasions, and from the divisions between rival factions in Lebanon itself.
In the villages, the means of subsistence were limited, families were large, and land was scarce. The young had no prospects. Like so many others, my grandfather realized that he couldn't provide for himself if he stayed in Lebanon. One family member probably told him about a cousin or friend in Brazil, while another one spoke of someone he knew who'd gone to the United States and made his fortune.
"Making your fortune," of course, didn't mean becoming a millionaire; it meant finding a steady job, making enough income to begin and provide for a family, and assure the children a good education.
One fine day at the beginning of the twentieth century, my grandfather left his village, walked down the mountain, on his way to a ship in port at Beirut. After a crossing that took three months, he arrived in Rio de Janeiro, Brazil; he was nearly illiterate, he didn't have a cent, and he spoke only one language, Arabic.
Rio de Janeiro was the city where the people who'd made their money in the provinces went to take up residence and enjoy life. But the Brazilian El Dorado, at that time, was in the Amazon, in central and northwestern Brazil.
So Bichara shouldered his bag and set out for the new frontier, the territory of Guapore, near the border between Brazil and Bolivia. It later became the state of Rondonia, whose capital city, Porto Velho, lies on the Madeira River, one of the great tributaries of the Amazon River. It was there that he decided to set down his bag.
He went up and down the region, doing odd jobs. Little by little, he found his own way, started working for himself, and became an entrepreneur. At first, he bought and sold agricultural products; later, he went into the rubber trade. Hevea brasiliensis, the Brazilian rubber tree, was plentiful in those parts. Later still, he helped develop some of the Brazilian airlines that were establishing a countrywide network, acting as a local agent. He helped them to get to know the region and provided them with various services.
After many decades of hard work, in a country where he didn't know the language and started with nothing, he became the head of several companies. One of them traded in agricultural products, one of them was in the rubber business, and a third operated in air transport.
Although he is a very important person to me, I never knew my grandfather. I speak about him from hearsay, because he died relatively young at the age of fifty-three, long before I was born. He needed a gallbladder operation, and in those days, surgical resources in the Brazilian interior were primitive. He died on the operating table. But everyone who talked to me about him--my father, my uncles, and many other people who knew him--described him as a powerful personality. He was a genuine pioneer with a taste for taking risks. He had to make his way on his own when he was still very young, without money or knowledge or education. I admire him as someone who started with nothing, built himself a completely respectable life, educated his children properly, and left a decent inheritance, although quite small by today's standards.
But his inheritance bequeathed to his eight children, four boys and four girls, and his grandson was far more than his modest estate--they also inherited his example and his values.
He wasn't an ordinary man. He did some things that surprise me to this day. His contemporaries greatly respected him, and not only for his accomplishments. They admired him because he was a man of great integrity, a quality that was pretty rare in those days in the world of the pioneers. He was a man with principles and a family man; that's the way I think of him. His children were very attached to him. My father spoke of his father with a great deal of affection, as did my uncles and my aunts. He was someone who left a mark on their lives.
When my grandfather died, the family business was divided among his children. Many of them were already working for one or another of the companies. My father, Jorge, took over the businesses related to air travel.
Like most families in the Lebanese diaspora, our family maintained close ties to Lebanon. My grandfather's brothers and sisters and cousins stayed in Lebanon, as did his mother. Roughly every three years, our family returned to Lebanon.
Like many émigrés, my father went back to the old country to get married. When it's time for serious things in life, many emigres try to reaffirm the old values and traditions--especially when it comes to marriage, where family and religious values play such a large part. On one of his trips back to Lebanon, my father had obtained an introduction to a very reputable family, and that's how he met my mother. They got married in Lebanon, and she returned to Brazil with him to work and start a family themselves.
My mother, Rose, who has been called Zetta all her life, also came from a large family. They lived in the Lebanese mountains in the northern part of the country. Her father had immigrated to Nigeria, where she was born. But the schools in Nigeria were less than ideal, and so at a very young age she was sent to school in Lebanon. It was a common story. Her father stayed in Africa to work. He sent money to his family and returned to Lebanon from time to time, every two years, to spend the summer with them, before going back to Nigeria. That still happens frequently today, not only in Lebanon but also in many other countries of emigration.
Zetta attended school with the Sisters of Besaneon, one of the teaching orders that were the guardians of Catholic faith and French culture in Lebanon. For the Maronites of the Lebanon Mountains, France was something like a second home. My mother received a French education; she loves French culture and French music. For her, there's France, and then there's the rest of the world. Naturally, if you have a mother who's devoted to France, that's going to rub off on you. French culture runs deep in our family.
My mother and father took up residence in Porto Velho. It was there that my sister Claudine and I were born.
While the natural world around us was exotic, the climate was difficult. Mosquitoes, heat, humidity. Swimming in the river was out of the question. The water wasn't potable unless you boiled it before you drank it.
One day, the young girl who helped my mother around the house gave me some water that hadn't been boiled. I must have been around two. I got very sick, and I had a series of stomach disorders. The doctor told my mother, "If you want your child to have a normal life, you have to take him to a more temperate region, where daily conditions are easier and the water is healthier." My mother first took me to Rio, hoping I'd get better there. In fact, I did get a little better, but I was far from being completely cured. My father and mother decided that the only solution was for me to leave Brazil and live in Lebanon with my grandmother.
And so my family settled into a pattern typical of the Lebanese diaspora: My mother, sister, and I returned to Lebanon, while my father shuttled between Brazil and Lebanon. We lived the way a great many families do when the father goes to work in a difficult country. He earned enough money to place his family in another country, one where education is of a higher caliber and conditions are easier.
The Maronite community is one where feminine values are very strong, which obviously presents a contrast with the surrounding Arab world. The mother plays a very important role in the family and exercises a great deal of influence. There are many reasons why this is the case. It's often because the mother remains in Lebanon while the father works abroad. She becomes the authority figure. Father and mother relate to each other as equals. And considering many fathers' long absences, you can even say that the mother becomes the head of the family.
When we arrived in Beirut, I was six years old. I would remain in Lebanon until I was seventeen, finishing high school at a prestigious Jesuit institution, the College Notre-Dame.
Because my mother and father were Maronites, that is, Eastern Catholics, both of them were devout; my mother is still very observant. We lived in a traditional religious environment, but we were not fundamentalists. We're very much open to Islam and the other religions. In Lebanon, religion takes the place of cultural affiliation. There are the Druzes, the Sunnis, the Shi'a, the Maronites, the Greek Orthodox, the Armenian Catholics. Your religion is a major part of your identity. I've always had a religious consciousness. I've never felt it as a constraint but rather as a way of life.
In 1960, when we arrived in Beirut, it was a prosperous, vivacious, sunlit, charming city, beloved by tourists, as well as the financial center of the diaspora and of the other countries in the region. Lebanon was considered "the Switzerland of the Middle East." The problems caused by the strong Palestinian presence and the interference of Lebanon's neighbors, Israel and Syria, didn't begin until 1973. And the full-blown civil war--which divided Beirut in two and left barely a stone unturned in the city center--began two years after that, in 1975. I had graduated from high school four years earlier, in 1971.
My childhood was the beginning of a very stable period in my life. I went to the same school from the first grade to the last. The Jesuits played a large role in my formation. In their educational philosophy, discipline is very important, and competition equally so. There's a constant challenge, a grading system that encourages students to outdo one another. After all, the Jesuit order was the first multinational company in the world. And at the same time, the Jesuits are well known for promoting intellectual freedom.
In one class we had a professor of French literature, Father Lagrovole, a short, stout Frenchman, already aging but still very strict. He was not really a nice man--in fact, a bit haughty--but he had such a passion for French literature that we respected him very much. He would chant poetry, trying to make us hear the music. He was extraordinarily fascinating because he was so excited by what he was talking about.
He said to us, "If you find things complicated, it means you haven't understood them. Simplicity is the basis of everything." He seemed extraordinarily wise, as the priests often did. Their families were far away, they'd left their friends behind, and they lived to perform a single mission: to teach Lebanese children, or other children on the other side of the world, the French language. There was something about them that fascinated me--their devotion, their sincerity, their simplicity, their culture. I learned a lot from the Jesuits, and by the time I graduated I had a firm sense of discipline and organization, along with a taste for competition and for a job well done.
In retrospect, I was an exceptional student, but an undisciplined one. The latter trait was the despair of my mother. My mother believed a sense of duty was essential, along with levelheadedness, practicality, and discipline. As far as she was concerned, authorities were always right. When I was with the Jesuits, she was happy because I got very good grades. But at the same time, she was distraught at my rebelliousness. If I hadn't been a good student, I would have been in serious trouble.
While the Jesuits showed little pity to rowdy or mediocre students, they were much more tolerant of good students, even the rebellious ones.
So they put up with me. I did well in math and physics, but my real passions were history, geography, and languages.
One result of my family's history was that it exposed me to many languages. The first language I learned was Portuguese. By the time I arrived in Lebanon, I spoke Portuguese, a little French, and very little Arabic. At the College Notre-Dame, we studied French and Arabic. Learning languages quickly became one of my passions. The study of language is the best way of understanding the connections between peoples and cultures. Today, English is my primary means of communication, although the language most familiar to me is still French.
I graduated from high school at the age of seventeen, having passed both my French baccalauréat, a necessity for gaining entrance into the French universities, and its Lebanese equivalent. When it was time to think about a college education, I was naturally drawn to France. While the United States was a possibility, I wasn't familiar with the school system, and American universities were very expensive.
I had no idea what it was I wanted to do with my life--I had no role models around me that I could follow. But we did have one cousin who had gone on to study business at the Hautes Études Commerciales and worked in a bank in Paris. During my last year in high school, I sent him my résumé and transcripts and asked him to enroll me in a preparatory school so I could enter the HEC, too.
And so I moved to Paris.
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