Carlos Ghosn: The Gaijin Who Could Never Fit In

Up until 1999 there were many things that were unknown to the Japanese culture; among those things were lay-offs; merit based promotions rather than seniority based; individualism versus collectivism, loyalty to self rather than loyalty to the organization, supplier-buyer relationship, and a non-Japanese CEO for a Japanese company.

Then came Carlos Ghosn….

Up until 1983 there was a great Japanese Car Company called Datsun, this carmaker was producing some of the greatest cars in the world and it was the 3rd most selling car in the USA but in 1984 apparently someone in the top management got extremely drunk on New Year’s Eve and decided to change the name to Nissan. The term “time will tell” has never been truer than in Nissan’s case because whoever made that decision in 1984 almost sent the company to bankruptcy in 1999, that is until Carlos joined.

Of course having a “gaijin” executive was not an easy thing since day one and those of you who understand the Japanese culture will understand what it meant (anyone knows how many non-Japanese ethnics do hold a Japanese passport for example?) the only reason Carlos cut it through was because the company was desperate to be saved and because Renault had a say in it.

I will not go into the details of how he turned around the company because almost everyone knows about the greatest turn around in modern business history but what is clear is that since day one things have been everything but “sunshine and rainbows” for the man.

Carlos did not just turnaround a company, he challenged an entire culture and that may explain his current predicament. He introduced concepts that were strange to the whole Japanese culture because prior to him there was no such thing as a lay off in Japan, there was loyalty to the company from day 1 till retirement, people did not change companies and they did not move for a better position or salary. Getting promoted was always guaranteed only it was just a matter of time. The time needed was not for one to prove their merit but rather till your senior retired or – God forbid – got deceased. The Japanese culture does not acknowledge the “one man show” at work as well because as far as far east cultures go, collectivism and group decisions are the norm.

Only by understanding the above one can start to understand the deep impact that Carlos brought to all of Japan and not only to Nissan and it can explain the current edgy relationship between Nissan and the Japanese government. It can also explain why his vice president was recently so vocal in criticizing his boss as well as in eyeing his position. And to think that all what happened was because of tax evasions or improper use of company property is – at best – naïve thinking. Why would a man do tax fraud in one country and play by the books in another? Why would one with such a compensation, benefits, power and authority misuse his company’s assets? More importantly why misuse the assets of one company and not do the same in the other 2? Why would Nissan decide to oust him from his position even before the investigations have reached a conclusion? How come prosecutors have not been able to charge him and extended his arrest for 10 days although – as they claim – the arrest came after months long of secret investigations?

Even if the case of tax evasions does hold true and which I insist is a very long shot, there has never been a case before where someone was sent to prison because of it. Japanese Authorities could have put Ghosn under house arrest for example and forbid him from leaving Japan till the investigations were over. But by jailing him, they were sending a message that is supposed to reach the shores of France and all the concerned people there that they are signaling the beginning of a new era where they will want the upper hand when it comes to Nissan.

No matter how things will unfold, one thing is guaranteed Ghosn did forever change the Japanese business scene. The high profile character who was the champion of “my way or the highway” will leave his legacy not only in Nissan but all over Japan. The clearest and most resounding proof can be seen in his long time –Now-Turned-Foe- protégé Hiroto Saikawa for never before has any Japanese assumed such a tone and such an attitude in the business world. For a country that is known for keeping a low profile he surely is not being humble at all in dealing with the case. Perhaps Carlos’s biggest sin at the end of the day was that he was a great teacher that made sure his lessons are well learnt; unfortunately for him this time he might be the victim of his preaching.


The Marketing Strategy of A Cereals Box

The late Steve Jobs is well known for a famous saying: “Customers don’t know what they want until we’ve shown them” ; a saying that holds true in many cases and which I have had the chance to experience firsthand very recently in one of its most blatant figures.

Saudi Arabia is a market mostly known to attract products from the 4 corners of the world; so if you are a fan of studying brands and comparing what they do as opposed to their competitors then here is the best place for so. Add to it that up until recently, shopping – in all its forms – had been the main source of entertainment, so there is always a competition and a struggle to attract customers in all sorts of ways. I’d like to add that this competition is not always clean or ethical – at least not when compared to CSR initiatives that many companies are taking in order to show that they care about the society and would like to give back.

I was in the cereals and morning food aisles and there was no shortage of cornflakes options at all; brands from the united states, to Europe to the Middle East were conveniently placed next to each other. One thing you need to take into consideration that in this market, all US products are sold for premium prices that is sometimes triple the price of local or middle eastern competitors because of the additional overhead needed to get the product to the shelves and because it is perceived as a higher quality. The boxes were stacked to serve a specific purpose which is to target the main customers of this category: the 7-8 year olds who are the main consumers of this commodity.

It was a classical marketing lesson: on a “relatively” higher shelf were the boxes of a cereal brand that is made in a Middle Eastern country; those come in a 1 kg packaging and for a very competitive price – 16 SAR the equivalent of $4.27. Such a box would be a sensible choice for any parent but on the lower shelves exactly at the eye sight and arms reach of the 7 year olds was a “foreign” box that came in 500 grams packaging and ran for the price of 14 SAR or the equivalent of $3.73 so when compared to the other brand you would be getting half the quantity for almost the same price – not a wise economic decision one might say. Facing those aisles was a father who was doing his regular grocery shopping for his family and he had brought his son with him.

After the father reached out for the bigger box the son told him that he wanted the smaller one; the father refused and told him that the bigger one was better but the son insisted and said that this one had a toy and he wanted it. The discussion went on back and forth for a while and you can easily predict who won that confrontation at the end…. The father had to give in to his persistent son and accept the losses that came out of it….

This is not a unique case nor were the boxes randomly placed like that; companies pay premium prices to have their products placed on shelves and levels that would attract customers the most; it is a part of their “push” strategy where they want their product to be in your face. Regardless if you really need the product or that brand specifically they create a need for you and most of the time you just go along with it. Many times you buy a product not because you need it but because you saw it in your face and something about it attracted you. A bar of soap now boasts to contain more fruit than a piece of cake, you look at the wrapping and you think that it is for a chocolate bar with pictures of all kinds of berries on it; also a strategy to attract you.

We like to believe that our choices are our own but most of the time they are planted into us; What does phone X that costs you a massive amount of money do for you that the much cheaper phone Y can’t do? Would you have bought this specific brand hadn’t it not been conveniently placed for you? More importantly do we really need that “gift” and is it really a gift when we are indirectly paying for it because we went for the more expensive choice? Big companies spend fortunes on marketing and market research in order to influence and attract customers. In one of the teen choice awards events there was a well-known company that was doing research focused only to know what is the percentage of teens who were using Facebook as opposed to those using Twitter and as opposed to other social media platforms. The reason was very simple: know where to spend the biggest chunk of their marketing budget in order to attract more people.

If there was one piece of advice that I wish that someone had given me as a child it would be: “never go after the product that has a gift or free item” ….. I’m not saying that that those products are not good but at the same time I am just questioning why was the gift placed and was it actually a gift? So the next time you go buy a cereals box ask yourself or your child if that gift is really worth it……

Sleep with One Eye Open

Up until recently, I had thought that the Zuckerberg stint with Facebook was by far the greatest rip-off in business history; a man who practically stole an iconic idea, kicked out the bearers, credited it to himself and then went on to create a multi-billion brand all for himself! Sure, many people share with me the sentiment that he was a je** for flipping against the people who trusted him and hired him; while others might argue that Kudos to him, he saw an opportunity and grabbed it and made the best of it; after all it’s all a matter of perspective! Well if you are or let me rephrase “were” like me then I suggest you reconsider your stand on this point and take a look at the “McDonald’s” story.

As a foodie, I was never interested in their food and I very rarely had it but as a business professional I was always intrigued by their successful business model starting from the real estate part of it, going through the “McCafe” and how they attracted the previous biggest customer base of the likes of “starbucks” which are the mommies and not ending with their most recent foray into the gourmet “burgers”. Having said so, I admit that I had never before known their story or how had they become the biggest burger chain in the world by massive lead on their nearest competitor although he is a king let alone being the largest real estate company in the world as well. Call it “luck” or call it my addiction to movies that led me to watch the recent movie “The Founder”. Over the span of almost 2 hours I sat there mesmerized on how a sales man with a wacky attitude drove for miles and miles and spent years on expanding a brand that 2 “kind hearted” brothers grew by tear and sweat and then had the guts to call himself the creator! The guy was rude enough not to only steal a business but also to dump a loyal and quiet wife and move on to steal his second trophy the wife of one of his “franchisees”! I guess one rip off was just not enough for him.

In the movie, the lead character used a famous tagline “the concept of the egg and the hen” which ironically applies to him as well: did he create the legend of McDonald’s or did McDonalds create him as one of the most notorious business men out there?

The cases of Facebook and McDonald’s are not the only cases, for the late Steve Jobs saw himself kicked out from Apple a few years luckily for him he was persistent enough to come back and take back what was “unrighteously” taken from him. Again, that depends on your perception of things. Things brings us back to an important concept in the movie and in Zuckerberg’s story: “persistence”; in the movie Ray Kroc (impersonated by one of my all-time favorite actors Michael Keaton) attributed his success with McDonald’s to being persistent. Sure enough that man was persistent! Even before he landed with the gem of McDonalds this guy was always persistent. He nagged on and on on every idea he had until he had found his next great idea! Persistence is also what made Zuckerberg hang on till the end that Facebook was his own offspring and he challenged the world with that and eventually won (some might argue that he had enough money to win but that once again is a matter of perception). The mistake that the McDonald’s brothers did and then the Winklevosses followed their lead was being lazy. Sure enough they had a great idea, and sure enough they worked on implementing that idea but they were lazy enough not to follow through till the end. They stopped short of being persistent and of following up till the end; instead they handed out the idea, and the secrets freely to someone else while they went along to do what they were doing. You see, other creators of great ideas, followed through to the end with their ideas and did not trust anyone else; Bill Gates hired people but he shared the same office with them; Jeff Bezos is all about hands-on and Richard Branson started his first business as a one-man show.

A couple of days ago, The Economist magazine posted their quote of the day “If honor were profitable, everyone would be honorable.” Not sure if it signifies that the “end justifies the means” but it seems to perfectly fit both cases above; I’m not saying that everyone else is honorable but I guess they were blunter with it than anyone else. They used to say “if you don’t build your dreams, then someone someday will hire you to build theirs.” Personally, I’d rather put it this way: “if you ever hire someone to build your dreams, you better sleep with one eye open….”

The “Tuna Can” strategy

 “The key to a man’s heart is his stomach” is a well-known Arabic proverb that essentially narrows down a woman’s duties to the kitchen. As degrading as this may be to women, one can’t ignore the fact the food essentially takes up the most important moments of the day and if you are acquainted to the Lebanese cuisine then these moments will become almost “sacred”

I recently got married and my wife moved with me to KSA and since she is in a “transitionary phase” she needed a hobby. Having lived on her own since she went to college and then joined the work forces right after graduation let’s just say that cooking was not her greatest feat. So and in order to fill up a part of her time my wife decided to take on cooking and started preparing our lunch home! Yes feel free to feel sorry for me for being a guinea pig.

In theory, my wife is a great cook because of her mother’s tips and instructions. And although she did some “training” before marriage, her mom was always there to save the day in case something went wrong so you can say so she has never tested her wings on her own.

On the eve of the first “training” day we struck a deal between us. My wife isn’t the biggest fan of tuna but if left without any other option she can accept it for a meal. The deal was as follows: whenever she started cooking a new and complex meal she would keep a tuna can on the sink in front of her. The “tuna can” served 2 purposes: 1- it was enough motivation for her not to fail because otherwise she will have to eat something she doesn’t like. 2- In case her project failed, there will always be a backup plan. Needless to say, the strategy is a fruitful one! Sure enough she sometimes forgets the salt or is stingy with the seasoning and spices but overall it can be considered a success.

The” Tuna Can” strategy can work for you as well in any business situation; in fact, it is a must. The purpose is to always push an individual or a business to try something new or try doing things “differently”. Being skilled at 1 thing will not last forever neither will it help you in all the situations. You may be extra good at something but if you fail to develop it or build a new skill you might fall off the grid. Take Nokia or Kodak for example who were not only good in their industries they were the leaders yet they painfully fell off of the peak in no time. Had they had the courage to challenge themselves and try new strategies they might have stayed in the front seats.

Any skill you might have will never blossom unless fully put to test; and although the most challenging part is moving out from the comfort zone you do not necessarily have to entirely go out of that zone and this is where the “tuna can” comes in. The purpose of your “tuna can” is to act as a cushion for you whenever you leave your zone to try something new yet it should be something you strongly dread. This back up strategy should be simple as well and not complicated in order to be a temporary “fix” and at the same time not to consume much of your efforts as you fall back to bounce forward again to a different strategy. For Example, Nokia could have used the Android OS on their phones for a period of time until they had finalized one of the 2 OS systems that they were trying to build in-house rather than being stubborn and falling short of materializing any of those 2.

As much as the “tuna can” meal is easy and fast to prepare so should be your back up strategy just squeeze some “lemon, olive oil and a pinch of salt” and off you go!

As a procurement professional, I started implementing the “tuna can” strategy to my approach with existing and potential suppliers, I have trained my team on it as well and the results have been encouraging! This was a much needed step as we steer towards 2017 in a very challenging economy that requires us to change from “this is how it has always been done” to “this might actually work!”

If you are reading this, then this means I have survived both my wife’s cooking and her feedback on this article! Take your time to find your “tuna can” although I warn you, your spouses might not be as forgiving as mine!



The “Brangelina” Story as a Business Model

The story of Angelina Jolie and Brad Pitt can be compared a lot to that of Daimler-Benz and Chrysler merger although the first one lasted 3 years longer than the later. At the time it happened, it was considered a merger made in heaven between 2 big superpowers and at the time it was over it was deemed worthless. For the sake of our story we will consider Brad Pitt to be Daimler Benz and Angelina to be Chrysler.

When Brad “merged” with Jolie he had a small foothold in America (Jennifer Aniston) which was somewhat not fully satisfying him. Brad (Daimler) wanted to expand his reach in America and he came across Jolie (Chrysler) a luxurious, flashy and highly in demand brand at the time and they both clicked. During the years that ensued, Brad went on to strengthen his foothold in America (Daimler building factories in the USA) while Angelina drifted away from her core business (less movie appearances) and did not increase her territory (Chrysler failed to expand into Europe at the same pace that Daimler expanded in the USA). During that tenure Brad was rumored to have had some flings (Daimler’s stake in Mitsubishi and Hyundai motors) but both were ended or denied. Trouble kept coming with Angelina (Chrysler) suffering the most – nervous break downs, double mastectomy and eating problems (Daimler Chrysler merger came to an end in 2007 just one year before the financial crisis when Chrysler took bailout money from the US federal government)

So now what?

For Brad: He will probably keep moving along and searching for bigger and smaller stakes here and there to try to polish his image (Daimler has a small share in the Nissan Renault alliance to help the German manufacturer in building small cars and EVs) Ironically he is rumored to have cheated on Angelina with a French actress (anyone else sees the humor here?) or to increase his reach in unexplored territory (50% stake in the Chinese automaker BYD and 12% in Chinese BAIC as well). He is unlikely to find another “Chrysler” or to settle back to a “small foothold” but he will be “everywhere” (Daimler has operations in 16 countries!)

For Angelina: the “old” lady will have to wait for a Sergio (CEO of FIAT) to come along; someone who wants her for her great past and who hopelessly believes that this past will push him forward to grandiosity; he will be happy enough to carry her big debt (6 children) but unfortunately he won’t get anything. Sure enough every now and then she can give him a “jeep” but that won’t cover the investment. She will drag him in to what she has always done and he will fumble along still thinking that he can get a bigger foothold in America (Sergio Marchionni still hopes he can revive FIAT in USA through Chrysler.)

In the world of business, mergers in the “same line of business” either face spectacular success or fail spectacularly. Unfortunately the 2nd option prevailed for our 2 actors in this case just like the Daimler Chrysler case; and as in most failure cases one gets out damaged more than the other and so far it seems that Angelina has had the shorter end of the stick. As the wise man once said “if it is too good to be true, then it probably is!”


July seems to be so generous this year because in one week Greece saved its behind, Iran struck a deal with the “Greater Devil”, New horizons sent us live pictures of Pluto and Bastian Schweinsteiger became a red devil (this last piece of info can be a source of conflict though!).

If anything, the Greek and Iranian deals are purely business driven. Make no mistake, no party involved in any of both deals struck a “yes” purely because of goodwill or good citizenship. A Greek exit from the EU would have signaled the beginning of the union’s end and would have opened the door for other less convinced members to leave the group (Britain comes right on top of my head) and the domino would have rolled and although France and Germany seem somewhat eager to trim off the extra fat, deep down they knew that they had to keep Greece tucked in.  Perhaps the biggest catalyst for the Greek deal came from Russia; it was more than enough for President Putin to hint in one of his press conferences that a Greek exit meant more currency freedom for the country and meant that they were acquitted from all agricultural quota agreements with the EU to make all members eager to solve the situation. Last year’s EU’s sanctions against Russia have hurt both the EU’s and Russia’s economies and Putin might have seen in an independent Greece a possible ally especially that Russia lost important agricultural suppliers in Europe.

On the surface, one might think that Putin was dealt a hand, but the truth is that comrade Putin was a winner because he was smart enough not to slide in the Greek mud while successfully pushing the troubled EU further deep inside.

On the other hand, Putin’s real trophy was the Iranian nuclear deal; and I’m not talking in the political terms but rather in the economic terms. You see, Iran has tons of cash stacked in banks all over the world and years of sanctions have created a very thirsty economy that is ripe to use these funds in attracting investors and in investing heavily in the country. On the other hand, all the global economy is suffering and they are all in dire need for new markets and new money sources. These were the exact reasons that forced USA to restore diplomatic relationships and of course business with CUBA and they were also the reason here. Even France, the biggest ever opponent of the deal was the first country to announce that French companies might still get a chance to invest in Iran despite France’s official stand on the deal and French foreign minister Laurent Fabius has already announced that he will be visiting Iran next week (wait a minute dude, did you consult with your Israeli friends before taking such a hasty decision?). It’s very strange how the slight notion of money and profit can make one turn against their closest allies – just like the current situation of France and Israel.

But before everyone starts drooling over the Iranian pie, take a minute to remember that this is Iran – the country which until recently has been considered the heart of axis of evil and was named all sorts of names and remember that they are not known to be forgetful, so if anything then the biggest chunk will go to their staunch ally – yes you guessed it, it’s comrade Putin again. Russia has already announced that there will be deals that involve planes and if the sanctions are lifted then this will definitely mean both civilian and military planes. In addition, the country that has been for the longest time ever suffering from oil shortages will be able to fulfill its needs both in production and consumption with all the ramifications that will come from such a thing.

Iran might not really replace the EU in terms of trade size with Russia but Putin will definitely benefit the most especially that Iran has high agricultural production which Russia can definitely benefit of. On the other hand, Poor Obama has worn himself out to get that deal done and it so far seems that the Americans will not benefit financially whatsoever despite Obama’s relentless offers to market the deal in USA as a means to prevent war and promote peace, not unless Iran decides to lure them in even more.

A few years ago, Britain released the Lockerbie bomber who was Iranian; the official reason back then was humanitarian – the man was supposedly suffering from terminal cancer. The real reason though was to allow BP to strike a deal in Iran and that was what happened exactly. In 2015, the same is going to happen and nuclear Iran will be allowed to become so in return for financial benefits that the whole world desperately needs.

A lot can be said about diplomacy, about peace, about war and negotiations; a lot has been said about these in the last few weeks but the truth is it was all purely business; the country that until recently represented radicalism and extremism has become the world’s sweet heart and Israel which also until recently was Europe’s and America’s protégée has been shoved aside because it is not economically interesting anymore. For after all, and as one of my MBA finance professors used to frequently say: “It is not unethical, it is just business.”