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 / Second Quarter 1997 / Issue 7(originally published by Booz & Company)


Conceptual Re-engineering at Nissan

We had overcome a lot of hurdles to get to this point, however. We dealt with the realities of individual "power plays" as some people fought the coming changes either behind the scenes or out front. We worked against this by measuring each of us on a "collaboration scale" (collaboration, as opposed to negotiation or direct order). We used such common-sense terms as underminer/blocker/neutral/facilitator/accelerator. We also gradually accepted the reality that our formerly treasured functional expertise was actually a roadblock to collaboration; those not burdened by "facts" were far more able to make innovative, team-building contributions.

In many respects, the spirit of the change had become healthier. Our people inspiringly identified our previous management philosophy as being one of administrative management of corporate objectives and chose instead a new direction of stewardship of our corporate heritage.

This led eventually to their ability to embrace the new advertising direction for the Nissan division, which incorporates the free spirit and entrepreneurial values of our founder in the United States, Yutaka Katayama, and the legacy of the company's earlier Datsun name. (See box on page 64.)

They were also able to see the company's luxury Infiniti brand in a new light for the first time since its launch in 1989, and therefore capitalize on its natural strengths. They were able to attack Infiniti's pending off-lease problem -- having an increased volume of off-lease turn-ins (likely fetching lower prices, given the higher supply) -- by rewriting the "rules" with the help of our retailers, thereby completely changing the situation's financial dynamics. The retailers agreed to buy the higher volume at higher prices, and we in turn agreed to market and promote them. It was a basic mind-set change that our off-lease vehicles were valuable, instead of a problem.

The result is a much healthier imagery and thus valuation for both the Nissan and Infiniti brands, as well as a much healthier financial picture for the future. But there was still much to do to keep our new corporate attitude from being threatened by bureaucracy and other internal factors.


Indeed, this conceptual re-engineering definitely remains a work in progress, and there are countless issues still facing us. We need to:

defeat our bureaucracy.

develop high-volume traffic-inducing marketing to complement our successful added-value imagery marketing for both franchises.

change the environment for our retailers to satisfy consumers better and thus provide better protection against retailing alternatives.

Defeat Our Bureaucracy. We will restructure and greatly simplify our organization and budgeting framework so that we can sharpen our focus on our core business (sales/marketing/distribution/dealer and customer relations). We will utilize core strategies to guide our business approach, and will strive to have our national headquarters even more fully integrated with our 10 regional offices. We will insure accomplishment of our business objectives, and do no more than we can while still maintaining that focus -- the corporate equivalent of "Don't bite off more than you can chew." We will continue expecting successful results against set objectives, but additionally create an agile, innovative environment in order to be more responsive to changing conditions and opportunities.

Develop High-Volume Traffic. Traditionally, we have used advertising messages for multiple purposes -- there were corporate, brand, model and dealer campaigns as well as those geared specifically to increase traffic by featuring special events or sales. And each of the campaigns at the model level or below could carry additional weight: adding lease prices or cash discount offerings to the ending of product commercials, for example. As we have now effectively developed brand imagery advertisements, we are about to consolidate all of that into a two-tier approach.

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