Shift: Inside Nissan’s Historic Revival
By Carlos Ghosn and Philippe Riès
256 pages, $25.95
“Is there a manager in the house?” Like a theater owner faced with a sudden medical emergency, Nissan sent out a call for help in 1999. The Japanese automaker had exhausted its strategic and managerial resources and desperately needed a global partner and a new chief executive officer. The call was answered by Renault and Carlos Ghosn, the company’s second-in-command and its Mr. Fix-it — Le Cost Killer, as the French labor unions had begun to call him.
Mr. Ghosn is the ultimate outsider’s outsider. A polymath speaking several languages, he was born in Brazil to Lebanese parents. In his business career, Mr. Ghosn has brought a dispassionate, analytical approach to each managerial problem he has faced. In Shift, Mr. Ghosn gives us a thumbnail autobiography and tells the story of Nissan’s turnaround.
It is generally acknowledged that the best development experiences for managers are tough assignments, demanding bosses, and hardships; Mr. Ghosn certainly seems to have experienced all three. He describes spending the first 18 years of his business career at Michelin, the French tire maker, where he handled a broad range of challenges, including a seven-year stint in the United States integrating the newly acquired Uniroyal-Goodrich operations. At Michelin, we see him pioneer an approach to cross-functional teamwork, and to the rationalization of manufacturing operations, that would stand him in good stead later. When he takes the helm of Nissan in 1999, it’s clear that Carlos Ghosn has been training all his life for this job.
Crisis may not be essential for organizational change, but it is certainly a powerful catalyst. For managers reading about turnaround artists in such situations, there is a certain vicarious thrill: You are the company surgeon; all the stakeholders are finally ready to change; the status quo is no longer tenable, and all the old arguments for its maintenance have been blown away.
It will be interesting to see whether Mr. Ghosn, now elevated to the position of CEO of Renault (while keeping his chairmanship of Nissan), can produce the same magic in a larger organization where a similar sense of crisis is not present.
Made in China: What Western Managers Can Learn from Trailblazing Chinese Entrepreneurs
By Donald N. Sull with Yong Wang
Harvard Business School Press, 2005
256 pages, $35.00
Donald N. Sull is an associate professor of management practice in strategic and international management at the London Business School. In Made in China, he and his research assistant, Yong Wang, chronicle the emergence of eight Chinese companies and the stories of the entrepreneurs who founded them. The firms were selected from four industries: information technology (Lenovo and Sina), telecommunications equipment and services (UTStarcom and AsiaInfo), “white goods” (Haier and Galanz), and food and beverage (Wahaha and Ting Hsin).
Chinese companies face a variety of risks: unpredictable regulation and industrial policy; unclear and shifting property rights; and unreliable access to global markets and capital. This dynamic context requires a mode of operation that does not fit neatly into the management frameworks developed in more stable economies. Professor Sull uses each of his examples to illustrate an alternative framework called the Sense-Anticipate-Prioritize-Execute (SAPE) cycle. Rather than trying to predict the future, the entrepreneurs focus on rapidly responding to and learning from each unfolding situation, cycling through the process faster than their competitors. Although no single move is decisive, over time the faster learner builds an unassailable advantage.
The stories of Chinese entrepreneurs are compelling and topical, and the SAPE framework is a useful reminder of the significant limitations to the predict-plan-implement sequence commonly found in the strategy literature. The entrepreneurial process could, of course, just as easily be illustrated using stories of American entrepreneurship. Bill Hewlett and David Packard, for example, were fast learners who were pleased to tell their story of failure and improvisation to anyone who would listen — much to the chagrin of the business school professors who had invited them into their classes expecting to hear a tale of insightful planning and programmed implementation.