An outsider takes on Japan

This post is abt Carlos Goshn (spell it as 'gon'), one of my inspirational figures in Biz world. I raised a point in philosophy class last week that biz leaders doesnt get affected with "cultural changes" and Carlos is one such who being from Brazil, worked in US & Europe and joined Nissan, Japan and revived the company to make profits in just 19 months.

"An outsider takes on Japan" is an article in McKinsey Quarterly under Organisation/Change Management function on Nov 1 2001. Here are the parts of interview for sample thats published in McKQ. See the way he answered the Qs.

Interviewer: How do you describe the Nissan revival plan?
Carlos Ghosn: The plan is still, unfortunately, known for its immediately dramatic part. How do you make head count reductions in Japan? How do you reduce manufacturing overcapacity in Japan? How are you going to get rid of the seniority system in Japan? How do you establish performance-based management? So attention was focused on cost reduction, sales of assets, and how we are going to eliminate the keiretsu1 and develop other kinds of suppliers.
In fact, the Nissan revival plan is more a growth plan. Not only the good part but the part of growth that is a little bit more painful: shifting resources from where they are not effective today to where they’re going to be much more effective.

Interviewer: How have you managed to reduce the number of jobs at Nissan, given the Japanese tradition of avoiding straight layoffs?
Carlos Ghosn: In Japan, head count reductions are taking place, and we’re not planning to change that. The reductions are [coming] through retirement and preretirement [offers].
There is also relocation. For example, we’re closing the Murayama plant. We said to every single blue-collar worker who would like to be relocated in another Nissan plant, we will offer him a job. It happened that 80 percent of the people accepted a new job in another plant. So there’s 20 percent that we’re helping to find a job [with another company]. We’re helping them to reintegrate because they want to stay in Murayama.
Outright sackings of [Nissan] employees in Japan are not taking place. It’s not taking place, because I don’t think I need to do this. We can revive Nissan without that.

Interviewer: What attitude did you find at Nissan upon arriving?
Carlos Ghosn: This is something that is common; this is the biggest sign that a company is in trouble. Not just in Japan but everywhere. The biggest sign is when everybody tells you he is achieving his objective. Yet the company is in bad shape. Why? Because when you are in a situation where everybody feels good about what he is doing personally—or his section or his department or his country—all the problems are due to the neighbor or the colleague or somebody else who is blind about how much [trouble] he is creating. And the company suffers. This was exactly the situation of Nissan. Nobody felt really responsible for the situation of the company, and that’s why there was no sense of urgency.

Interviewer: What lessons have you learned on the job?
Carlos Ghosn: You have to make sure that you understand the cultural differences between Japan and all the cultures that I’ve been part of, whether it’s French or American or Brazilian or Eastern. Even though you know that, you can always fall into traps. At the beginning of the year in Japan, there are a lot of parties where people greet each other—suppliers and dealers, for example. It happened that we had the supplier New Year party at the beginning of January. And I was supposed to be in Brazil at the same time. I spoke to our people and asked if it was a problem if I didn’t go to the supplier party. They said, "Obviously, they would love to have you there, but if you have a fundamental reason, they will understand."
In an American environment or in a Brazilian or French environment, if you are absent and you have an excuse, it’s not a problem. But in Japan, you have to come. So this is something I learned: there are certain formal meetings or events that you cannot miss. You have to find the right balance, obviously. Even though you know the rules at the beginning, it’s not the same thing when you go through it [in real life].
For example, you know that the Japanese approach is very different from the French approach or the American approach. Japanese people want and need to spend a lot of time on a concept at the beginning. They need to understand the concept. What do you want to do? Why do you want to do it? How do you want to do it? It takes much, much more time. [But] when they [the Japanese] understand and they buy in, they execute. And you don’t have to spend a lot of time checking afterward—the results will be here. The Nissan revival plan is going to be an excellent example of this.
In a Latin American country or even an Anglo-Saxon country, it’s different to a certain degree. People are very quick at the beginning. "We understand. We understand. You don’t have to continue. We understand." So the concept part and the decision part are very fast. The problem is that when they [Westerners] execute, you’re going to have to intervene many times to make sure that everybody is moving in the direction that you want the company to move in.
In Japan, I also discovered, if people don’t act, it doesn’t mean that they don’t agree with you. It means they don’t understand, which is totally different. This is the kind of thing that you learn—not in the books, but in your day-to-day practice. In this case, it’s Japan, but it could be in another country.