Carlos Ghosn - Creative Leadership

You don’t trust your boss, and why should you? He micromanages your projects. His communication with you is uneven, and you’re never exactly sure what he wants. He takes credit for your ideas and successes, yet he is quick to hand out blame. He breaks promises. And sometimes he just doesn’t seem to know what he’s doing. Taken together, or even separately, these are good reasons to not trust your boss.

Yet the problem is not that you don’t trust your boss, but that he doesn’t trust you, or anyone working for him, for that matter. Maybe your boss has been burned before and refuses to risk trust. Or maybe he’s too selfish to understand that trust is a two-way street. Or he just doesn’t know how to trust, to establish the kind of relationship that allows for good leadership.

I believe even good leaders struggle with trust. Recently I was counseling an individual running important projects through his organization. He prides himself for his “flat” organization and his perfectionism, a potent mix for leaders. Everyone reports to him, and he demands the highest quality work from himself and others. Who can argue with that? The problem with perfectionists, however, is they frequently are micro-managers, waiting to step in at any minute to “save” the day. Honestly, this is a terrible way to run an organization because it undermines employees and their faith in their leaders. Without trust, empowerment is impossible, worker commitment dissolves and work is not scalable.

Creative Leadership
Leaders should embrace humility, acknowledge errors and apologize for mistakes. From your comments and emails, it is clear I struck a nerve. Obviously far too many of you are in the presence of, and possibly the victim of, egotistical and selfish managers who are blind to their own faults and unwilling to admit when they’re wrong.

For that reason, I decided to discuss the most basic building block of leadership — TRUST, which is an integral component of our thinking around Creative Leadership. Trust allows for a covenant between leaders and their colleagues and employees, providing the foundation for interpersonal bonds that lead to organizational success. I believe most problems in the workplace, although some bosses might disagree, stem from a lack of trust.

Our theory of Creative Leadership is built on the idea that everyone at every level in the organization is a leader; that leaders know themselves, alert to their failings and strengths, to better serve the organization; and that only by mastering complexity – both human and organizational – will they be able to achieve alignment. Without trust, however, leadership is often a hollow victory because there is no guarantee it can be sustained.

Much is made of trust in interpersonal relationships, political life and general society, but there is not nearly enough focus on the role of trust within complex business organizations. A trust-based ecosystem builds confidence and certainty. Of course, that doesn’t mean that leaders won’t have to make difficult decisions that impact lives, but there is a way of approaching these things that does not undermine trust.

The last decade of corporate greed and wrongdoing has taken its toll on trust in the workplace, however. Outsourcing, financial scandals, exorbitant CEO pay and downsizing have helped to create an environment of anxiety, fear and suspicion in corporate America. While understandable, it is toxic.

Without organizational trust, morale wanes, productivity declines and profits disappear. Distrust inside an organization is a poison, one that spreads with an insidious speed and with disastrous consequences. Trust brings respect for the organization and its leaders. It allows employees to feel invested in the organization and to fully contribute, whether offering solutions or daring to take informed and necessary risks.

There is no better example of the transformational nature of trust inside organizations than Carlos Ghosn’s remarkable success at remaking Japanese automaker Nissan. When he arrived in March 1999, as a result of the merger with Renault he became chief operating officer, the problems facing Nissan seemed insurmountable: Only four of its 43 models were profitable; it was $22 billion in debt; and seven of the prior eight years had been in the red.

Immediately, Ghosn moved to engender trust by putting his own job on the line. He told workers, dealers, customers and the greater business community that he would quit his job if he was not able to show a profit at Nissan within two years. He did it in 18 months.

The first few weeks after his arrival, Ghosn toured the company’s far-flung operations to meet employees and managers, introducing himself and asking people for their own ideas on how best to rescue the company. As the first non-Japanese leader at the company, Ghosn was uniquely committed to honoring company and Japanese culture.

An anecdote reported in The Ghosn Factor, a book written by Miguel Rivas-Micoud, illustrates Ghosn’s unwavering commitment to culture, even to the smallest of details. Ghosn insisted on learning how to hold and use chopsticks, a good idea in Japan but also a savvy choice as a leader. Ghosn wanted to demonstrate his subordinates would be reminded of his faithfulness to their culture and his respect for their traditions. A small but critical way to build trust.

To meet his ambitious goals, Ghosn launched a campaign to build trust by adopting a sensible leadership strategy of transparency, execution and communication. Effective leaders are transparent in what they think, say and do, and they challenge their employees to do the same. Ghosn also understood that execution is 95 percent of the task at hand and strategy 5 percent, so the emphasis was on taking action and not navel gazing. Finally Ghosn was committed to thoroughly communicating the company’s policies and direction, eliminating secrecy even when the hard decisions had to be made.

Ghosn adopted a system of cross-functional teams to encourage brainstorming and to build an ongoing dialogue about streamlining company operations and policies. These teams, which were later made permanent, were vital in creating an environment of trust and interconnectedness. While Ghosn oversaw a number of layoffs and plant closings in his first two years at Nissan, he was still able to garner the trust and respect of his employees because he maintained a relationship built on openness and made the case for changes with logical arguments based on real-world data.

Faced with a debilitating downward slide, Ghosn helped Nissan decide what kind of organization it wanted to be. Ghosn’s respect for individual contributions shows a profound understanding of how to build trust and empower individuals. And even if you get burned when employees fail to follow through or honor that trust, the organization is better off because employees feel they have the trust of their leaders and will be more committed to the overall mission and strategy.

Ghosn is often lauded for his strategic thinking in saving Nissan, but the often-ignored key to his success, I think, lies on the “softer” side of organizational life. This is the most difficult area of leadership theory to teach and execute in organizations. Leaders of every level must fully embrace the “softer” skills to succeed.

For that perfectionist colleague who sought my advice on trust, the struggle was learning how to build a culture of trust while getting the work done. He noted that if he just let the people working for him complete the work on their own, there was the chance they would fail, and he would be held accountable for that failure. A thorny situation for managers.

I told him that if he really wanted to empower his team, he would have to take the leap of faith to trust them, with all their individual weaknesses and strengths, and, yes, take the risk that they would fail. In fact they probably would fail at some point, despite their best efforts. But the risk of failure would be seriously diminished and the consequences muted if he was wise in choosing his team. And further, his team would trust him and work harder for him; they would be more committed to the organization.

I have found, and I believe quite passionately, that good people need to trust their leaders, and leaders must strive to trust their people. Building an organizational culture of trust is perhaps the most important thing a leader can do to build a successful organization.