Carlos Ghosn Cross Functional Teams

Cross-Functional Teams

“When you get a clear strategy and communicate your priorities, it’s a pleasure working in Japan. The Japanese are so organized and know how to make the best of things. They respect leadership “. Carlos Ghosn

Even though Ghosn expected that his attitude toward cultural respect and opportunism would lead to success, Ghosn was pleasantly surprised by how quickly Nissan employees accepted and participated in the change of their management processes. In his speech at Tuck school he mentioned that workers love stories, they want to understand the story they are in and the role they are playing, they want to see a happy ending-and they want to be part of that ending. Nissan employees were eager to prove themselves." In fact, he has credited all of the success in his programs and policies to the willingness of the Nissan employees at all levels to change their mindsets and embrace new ideas.

Perhaps it was the way he started that set the foundation among the employees. He was the first manager to actually walk around the entire company and meet every employee in person, shaking hands and introducing himself. In addition, Ghosn initiated long discussions with several hundred managers in order to discuss their ideas for turning Nissan around. This began to address the problems within the vertical layers of management by bringing the highest leader of the company in touch with some of the execution issues facing middle and lower management. It also sent a signal to other executives that they needed to be doing the same thing.

But he did not stop there. After these interviews, he decided that the employees were quite energetic, as shown by their recommendations and opinions. With this in mind, Ghosn decided to develop a program for transformation which relied on the Nissan people to make recommendations, instead of hiring outside consultants. He began to organize Cross-Functional Teams to make decisions for radical changes in the company. Part of his interest in doing this was to address the motivation and horizontal communication issues that he encountered throughout the organization. He felt that if the employees could accomplish the revival by their own hands, then confidence in the company as a whole and motivation would be high. He was making it clear that he was also putting his own future in their hands because he had publicly stated several times that the Nissan company had the right employees to achieve profitability again in less than two years.

Before the strategic alliance occurred between Renault and Nissan, Renault had made an agreement to remain sensitive to Nissan’s culture at all times, and Ghosn was intent on following through on that commitment. First and foremost, when he chose managers from Renault to accompany him from Renault to Nissan, he screened carefully to ensure that those people would have his same cultural attitudes toward respecting Nissan and the Japanese culture. And, after completing his rounds of talking with plant employees, he chose not to use his newfound understanding of the problems to impose a revival plan. Instead, Ghosn mobilized existing Nissan managers by setting up nine Cross-Functional Teams of approximately 10 members each in the first month. Through these CFTs, he was allowing the company to develop a new corporate culture from the best elements of Japan’s national culture.

He knew that the CFTs would be a powerful tool for getting managers to see beyond the

functional or regional boundaries that defined their direct responsibilities. In Japan, the trouble was that employees working in functional or regional departments tend not to ask themselves as many hard questions as they should. Working together in CFTs helped managers to think in new ways and challenge existing practices.

Thus, Ghosn established the nine CFTs within one month of