The Ghosn Trap
I recently had the opportunity to listen to the “Rise and Fall of Carlos Ghosn” on the Harvard Business Review podcast.
It’s highly recommended.
You know the story. Ghosn made himself famous for turnarounds at Renault and Nissan and being CEO of both companies at the same time. He reached almost legendary status in Japan, where there were comics and bento boxes of him. He was an international success story.
Until he was arrested in Japan. This is an incredible story in its own right and well worth this listen. (Also, there’s a book). His escape while on bail—including being stuffed inside a musical equipment box and rolled onto a private jet—has to be true because no one would believe it if you made it up.
The initial charges against Ghosn ring a little strange to American ears. He was accused of not releasing his true salary, as required by Japanese law. After arrest, more accusations came out that would look familiar in any country. And, interviews in the podcast indicate that people knew or had suspicions that things were not as they appeared.
It wasn’t just ethics. Like a lot of turnaround guys, Ghosn had won all the easy battles, make bold promises about the future and then stalled out.
So why didn’t anyone do anything?
The simple reason is that his image was so entwined with the company’s that losing him would have had a catastrophic effect” on investors and share price. Live by the myth, die by the myth. They were literally stuck with the Ghosn they had created. (This isn’t a new problem. See also.)
A Cautionary Tale, Now More than Ever
Flash forward to today. One of the things that came out of research on pandemic communications was how important it was to all key stakeholders that they hear from the CEO—in bad times and good times. This was a challenge to many CEO’s, who were accustomed to being largely shielded from messy humanity with exceptions created for highly-controlled town halls and being pictured in an open-collar shirt in the annual report.
Look, it’s easy to say, but hardly anything is harder than reining in behavior in the good times—much like it is hard to follow the “don’t let any customer be more than XX% of your portfolio rule.” One of the things that is harder is cleaning up the mess after it implodes, but that always seems to be drowned out by the roar made by opening envelopes that contain bonus checks.
So, as we put our CEOs out front more and more, how do we keep from the Ghosn Trap?
View the “indispensable” CEO as a liability as well as an asset
The most important parts of this puzzle are in the governance structure, the hit and miss king of American corporate life. Boards need to find the right person to be their CEO and one skill that will include is being able to strike the balance between being the face of a company and being the sole author of a company’s success. That expectation has to be memorialized as a deliverable for the CEO. It can be measured and should.
Messaging—basic leadership
Basic leadership 101 is that you share credit. The “dispensible” CEO will need to do this. The communicators around her will need to do their job well. There’s a perfunctory sharing of credit that usually comes with a large helping of self-glory and an ice cream sundae bar. And there’s real sharing of credit that follows the basic principles of good messaging—clarity, relevance, specificity. Do the latter.
Messengers—Show, Don’t Tell
As you tell the story of success, having the right messengers matters. If a manager had a key role, let them tell part of the story. If an engineer or a team of engineers made a key contribution, let them be front and center. Emphasize the depth of the company’s talent. Create a story of sustainable success.