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.