Shift - Inside Nissan's Historic Revival

The turnaround of Nissan has been described as one of the greatest turnarounds of the twentieth century. In Shift - Inside Nissan's Historic Revival, in an unassuming, matter-of-fact style, Carlos Ghosn, the man credited with reviving the fortunes of the ailing Japanese automaker, describes how he managed to achieve a feat which many people thought was impossible.

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Eventually, recognizing that he could not progress much higher in a family-owned business such as Michelin, he left the company to join Renault, whose CEO Louis Schweitzer was looking for a number two man who would eventually succeed him. Renault, while never considered one of the top automobile manufacturers in the world, was however a respected name in the business. The fact that a substantial share of the company was owned by the French government limited the choices available to it in terms of growth and diversification, but also served as something of a defense against a possible takeover. At the same time in Japan, Nissan, once a symbol of the company's industrial prowess, was going through a decade of turmoil involving persistent losses, poor product quality, and declining market share both at home and abroad. Ultimately, things reached such as state that it seemed as though the company would be forced to close down. Faced with bankruptcy, and with the Japanese government unable or unwilling to step in, Nissan was forced to adopt drastic measures in order to survive - which, in this case, involved looking outside the country for a white knight.

Renault was not Nissan's first choice as partner. The company flirted with DaimlerChrysler and Ford, both of whom did not consider the alliance attractive enough to pursue. It was only after these companies rejected the idea of taking a stake in Nissan that Renault emerged as a serious candidate for an alliance. While the negotiations and discussions on the alliance were taking place between the two companies, Ghosn stayed mostly on the sidelines. However, once the arrangements were in place, with his multicultural background, international experience, and proven ability to deal with crisis situations, Ghosn was the natural choice to head Nissan.

At Nissan, he found a company that had been in trouble for over a decade, drifting with no clear sense of vision or strategy. Nissan's engineering skills had always been its major strength - however, in the absence of good product development and marketing, with little control over finances, and in a culture that embodied the worst in the much vaunted Japanese style of management, this in itself could do little to save the company.

Ghosn set to work systematically, to revive Nissan's fortunes. He was clearheaded in his assessment of Nissan's weaknesses; at the same time, he acknowledged the strengths that the company still possessed. He was clear about the objectives that he wanted the company to achieve, and firm that they must be achieved - however, he was flexible as to the means through which they were to achieved, giving his teams great freedom in choosing the best courses of action. He also concentrated on communication, ensuring the buy-in from both Nissan and Renault employees, which would be critical for the success of his revival plan. He also set up several cross-functional teams with people from different functional areas, to spearhead the turnaround.

Indeed, according to Ghosn, the cross-functional teams were a critical reason for the success of his revival plan. Composed of handpicked people from both Renault and Nissan, several such teams were formed, each with the responsibility of meeting definite, quantified performance objectives within a specified time frame.

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