Issue No. 488 of Your Weekly Staff Meeting asks: is Carlos Ghosn, the rockstar CEO who fled Japan, guilty or falsely charged by Nissan? And this reminder: click here to download free resources from the 20 management buckets (core competencies) and click here for the new book John wrote with his son, Jason, Mastering Mistake-Making: My 25 Memorable Mistakes—And What I Learned. See Mistake #13 below.
Former Nissan CEO Carlos Ghosn escaped from Japan in an equipment storage box, “the kind used to transport clunky but delicate audio equipment.” (Apparently, not every plan requires out-of-the-box thinking.)
Rubber Stamp Boards & Lapdog Auditors
Leaders and readers—where do I start? This page-turning book has it all: international intrigue, cultural and governmental shenanigans, backroom deals and self-dealing, draconian detentions, a Green Beret’s illegal scheme to whisk Japan’s most famous foreigner out of the country, allegations, indictments, hubris, boardroom dysfunction, narcissism, and dozens and dozens of even more juicy, jaw-dropping disclosures.
This is a Top-10 book for 2021 and we’ll be talking about it for years to come! Read or listen to Collision Course: Carlos Ghosn and the Culture Wars That Upended an Auto Empire, by Hans Greimel and William Sposato.
You’ll remember the worldwide breaking news on Dec. 30, 2019, when Carlos Ghosn, CEO of Nissan and Renault escaped from Japan—hidden in a large black box! With meticulous Green Beret-experienced planning, this clandestine and illegal operation loaded Ghosn-in-a-box onto a private jet at the smaller, Osaka airport. Seven time zones later, after a stop in Istanbul, Turkey, Ghosn landed in Beirut, Lebanon. (And you guessed it. Lebanon has no extradition treaty with Japan.)
How did Carlos Ghosn escape Japan?
View the 6-minute video, “Carlos Ghosn's Great Escape” (CBS Sunday Morning, Jan. 12, 2020).
Shocking Japan and the world (“Ghosn Shock” in the Japanese media), this high profile auto kingpin was arrested upon arriving in Tokyo on Nov. 19, 2018. Instead of facing trial in Japan for alleged financial misconduct (“Defense attorney Takano estimated the whole affair would drag on for at least five years”—typical of Japan’s reputed “hostage justice” system), today Ghosn is a relatively free man in Beirut, where he is a Lebanese citizen.
The story behind the story is skillfully weaved, colorfully painted, and sliced and diced by two Tokyo-based journalists with stunning street cred and international credentials. Why should business leaders, managers, board members, pastors, and nonprofit CEOs read this book?
9 REASONS YOU MUST READ THIS BOOK:
#1. LEADERSHIP COMPLEXITY. Imagine—you’re the CEO and/or chairman of not one, not two, but three major companies (Nissan, Renault, and Mitsubishi). Does it really work? Was Ghosn’s rockstar status a one-off risky experiment, or is this the new global leadership trend? Ghosn was “the first person to serve simultaneously as the CEO of two Fortune 500 companies.” (How many organizations, formally or informally, do some megachurch pastors lead? Does it really work? What might go south fast?)
#2. AN INNER CIRCLE OF ENABLERS. In 1999, after Renault (France) gambled $5.4 billion to rescue Nissan (Japan) from bankruptcy and had a 43.4 percent stake in the company, Renault dispatched Carlos Ghosn to Nissan. The turn-around expert became Nissan’s CEO in 2001—and the two companies and two countries lived happily ever after. (Not!) Per the authors, Nissan claimed Ghosn orchestrated “a web of self-dealing, both of the illegal variety and the merely unseemly kind, because he had concentrated so much unchecked power in himself as chairman and CEO and an inner circle of enablers. No one could tell him no.”
#3. GOOD LUCK WITH THAT. Carlos Ghosn (at various press conferences from Lebanon) claims he is not a fugitive of justice, but a “fugitive of injustice.” True or False? Authors Greimel and Sposato quote a former defense lawyer in Chapter 11, “Justice Japan Style,” that “Japanese judges are very overconfident of their ability to find the truth. They are trained not to admit that they have made a mistake, even when there is a miscarriage of justice.” (Perhaps Mastering Mistake Making should be taught in Japanese law schools?) And there's more: “the US concept of client-attorney privilege is largely absent” in Japan.
Ghosn had been confined to jail twice for a total of 130 days (with no calls to family or friends permitted). He was facing up to 15 years in prison. And according to his attorneys, Ghosn “was questioned [without his attorney present] for an average of seven hours daily, including on weekends and holidays. Prosecutors dispute those figures.” Per the authors and other sources, this intense interrogation leads to an extreme rate of “confessions.” About just one percent of cases in Japan end in acquittal—a stat that the Japanese, apparently, are quite proud of. The authors add, “One former prosecutor said that if he were to lose just two cases, his career in the prosecutor’s office would effectively be over.”
View the deep dive video on the rise and fall of Superstar CEO Carlos Ghosn.
View “Carlos Ghosn: The Rise and Fall of a Superstar CEO” from the Financial Times, July 26, 2021 (21 min.).
#4. DICTATOR OR DECISION-MAKER? How does one create—and hold together—a global automotive alliance of three major auto makers—featuring 10 brands now in 2021? Click here for the Renault Nissan Mitsubishi corporate website. With national interests and loyalties impacting every decision, how would you orchestrate the governance of this alliance—termed a “strategic alliance” that in 2017 sold 10.6 million vehicles worldwide, making it the leading light vehicle manufacturing group in the world?
Ghosn’s own words: “Between 1999 and 2018, you never heard about any problems, because, obviously, I was the final decision maker, I installed a spirit of cooperation against the extremes. But we knew that the extremes were always there. They were always going to take advantage of any situation to have their opinion prevailing.” He added, “They accused me of being a dictator, but I was a decision-maker.” Are you working on a strategic alliance? What’s your governance model? What’s your style?
#5. CULTURE CLASHES (AND INSIGHTS). Reason #5 why Collision Course is a must-read: you’ll be reminded again that deeply held values and biases in other cultures loom under the surface to create catastrophic clashes, often fueled by basic mistrust. In Chapter 14, “Foreign Entanglements,” the authors include a laundry list of mergers and investments gone bad (Vodafone took a $8.6 billion loss) often due to “culturally insensitive expat executives who had little knowledge of the market, another classic mistake.”
Hans Greimel and William Sposato humorously note what sometimes happens whenever “foreign bosses and Japanese midlevel staff are brought together, when even routine meetings run into language issues and cultural differences about expectations.” One foreign boss showed up unexpectedly at his office on Saturday “only to see the entire Japan management team holding a meeting.” They were “plotting the venture’s strategy,” they said. Yet the non-Japanese boss reminded them that they had just worked on that earlier in the week. The response: “This is the one that we’ll really be following.” Yikes.
I have been in Japan and France multiple times (for business and pleasure), but Collision Course dramatically upped my cultural savvy in the nuances of competing cultural norms. In later years, I’ve been more intentional in widening my lifelong learning lanes by reading outside my culture (See Mistake #3 and Mistake #11 in Mastering Mistake Making.) Read The Great Successor (North Korea) and Money Games (South Korea). See also Leading Across Cultures.
#6. GOVERNANCE DYSFUNCTION. “Until 2018, when Nissan finally appointed its first independent outside directors, board meetings averaged less than twenty minutes long, it claimed.” In March 2019, “Nissan’s governance task force came back with its report on the Ghosn scandal.” The report “outlined how Ghosn allegedly maneuvered with few checks or balances in a world of rubber-stamp board meetings and lapdog auditors.”
#7. THE VOLVO TRUST FACTOR. One former Nissan exec, who left during the tumult, targeted the trust factor—top to bottom. “If you can’t trust people on corporate governance, how can you trust them to build the car you’re going to put your family in? Do you really want to take a gamble with your family? Or are you just going to be done with it and buy a Volvo?” (Delete “car” and insert your company’s product, program, or service. Do customers and clients trust you? Do they trust your governance?)
#8. FIRED IN 15 MINUTES! In Chapter 16, “Scandalous Affairs,” the authors chronicle the stunning whistle-blower story of Michael Woodford (a Brit), who served just two weeks as the CEO of the Japanese camera company, Olympus Corp. The board fired him after just a 15-minute discussion—when “he started to question hidden losses of $1.6 billion in speculative investments” by the company. The chapter discloses the cultural implications of “the narrow viewpoint of employees who live in the world of their life-time employers.” These issues, certainly, played into Ghosn’s long run as CEO of Nissan. But no spoiler alert here. Read Collision Course to decide for yourself if the charges against Ghosn are legit or not. But more importantly—how effective is your organization’s whistleblower policy and culture?
#9. NYT AND WSJ AGREE! The authors note that “Remarkably, the case and Ghosn’s escape from Japanese justice found the editorial pages of the New York Times and the Wall Street Journal in unlikely agreement.” The question: “Are foreign executives in Japan safe from capricious prosecution?” In addition to business executives, I would add: international travelers, missionaries, and tourists. As a result of reading Collision Course, I’m now thinking differently about international travel. They quote a long-term foreign exec, “It has clearly put a chill on executives from abroad taking a senior job with a Japanese company. It’s a much riskier proposition than it was a year ago.” Yikes.
Whew! Many commentators suggest Carlos Ghosn’s story will become a Hollywood movie (“based on a true story”). If so, I’ll watch it—but there’s no way it will be as good as the book.
To order from Amazon, click on the title for Collision Course: Carlos Ghosn and the Culture Wars That Upended an Auto Empire, by Hans Greimel and William Sposato. Are you a listener? Listen to the book on Libro.fm (12 hours, 54 minutes). And thanks to Harvard Business Review Press for providing a review copy.
YOUR WEEKLY STAFF MEETING QUESTIONS:
1) From his safe perch in Lebanon, Carlos Ghosn has been interviewed numerous times about his daring escape from Japan. “As the Alliance wobbled without him, Ghosn seemed to relish in sniping at its troubles from the sidelines. He derided the group’s new consensus-based approach as ‘Santa Claus’ management.” How would/should your CEO and/or board spokesperson respond to a former CEO’s sniping?
2) Check out the classic CEO bios of yesteryear like Iacocca (1924-2019), who led both Ford (the Mustang!) and Chrysler (1978-1992). Or read more about the “Peter Drucker of the United Kingdom,” Charles Handy, in my review of Myself and Other More Important Matters.
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Mistake #13 of 25:
Every Leader Needs a Coach—Except Me!
Insights from Mastering Mistake-Making: My 25 Memorable Mistakes—And What I Learned, by John Pearson with Jason Pearson
Peter Drucker’s classic, The Effective Executive, is John’s recommended book for Mistake #13. Have you read Drucker’s wisdom on mistakes and risk-taking?
John confesses, “I squandered way too many years treading water without a coach.” In Mistake #13: “Every Leader Needs a Coach—Except Me!” John notes that while he often coached others and often encouraged others to have a coach, sadly he often neglected his own counsel. He credits $1-a-year CMA (CLA) Senior Adviser George Duff with helping him over many rough patches!
According to Milestone Leadership, “92% of executives who received coaching said they would be willing to be coached again.” (Milestone offers coaching at $750 for a 90-minute session. Whew! The $1-a-year compensation for George Duff was John’s bargain of the century!)
George Duff told John that every year he re-read Peter Drucker’s classic, The Effective Executive (the featured book in Mistake #13). Click here to order the 50th anniversary edition (2017). Click here to read the foreword by Jim Collins, “Ten Lessons I Learned from Peter Drucker.”
Click here to view the list of all 25 mistakes and read the introduction to Mastering Mistake Making. To order this book from Amazon, click on the title for Mastering Mistake-Making: My 25 Memorable Mistakes—And What I Learned (10 Minutes for Lifelong Learning Workbook), by John Pearson with Jason Pearson.
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JASON PEARSON: UNEXPECTED CREATIVE. Do your communication strategies need more out-of-the-box thinking or in-the-box thinking? Need fresh messaging? Contact Pearpod Media (Design, Digital, Marketing, Social).
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