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[MUSIC] >> On behalf of the entire Stanford community, thank you so much for taking the time to talk with us today.
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I'm delighted to get the chance to, to have this conversation.
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I'd like to structure the interview around two forms of leadership.
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Your approach to leading the global alliance.
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And then, secondly, Renault-Nissan's, leadership in both electric vehicles and autonomous driving.
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Two things, I'll promise all my questions won't be as long as this first one, and please excuse my, my French accent.
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But, if we could go back to 1999, you were the, the deputy CO of Renault, which at the time was, I think, 44% owned by the French government.
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As the dean said, Nissan was hemorrhaging money.
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I believe you, you found later only four of 43 models that sold were profitable, that had lost domestic market share for, for 27 years in a row.
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27, 21 billion dollars of debt, Daimler Chrysler, the world's biggest car maker at the time.
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>> You know, did their diligence, backed out of an acquisition they, they said they would be better off putting five billion dollars in a shipping container and, and put it in the ocean than investing in Nissan, Louis Schweitzer the CEO of Renault told you he was willing to bet that company's future on the alliance with Nissan.
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But only on a condition that, that you would agree to lead the recovery.
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And I guess at a personal level your wife and four children had just moved back to Paris from the US.
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And you didn't speak Japanese.
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How did you think about that, that offer to go, go to Nissan? >> [LAUGH].
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>> Well look I think from time to time you have opportunities coming, you are not expecting them.
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You just have to make a decision, you take them or not.
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Independently of how much chance of success you have, it's I would say irrelevant, even if, I consider I have 10% of chance of being successful, I would have taken it because, You know, we all want to make something which outlasts us in a certain way, something where you're bringing a strong contribution which is measurable, which is visible where you can really you know say that there was a before and after.
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And this was this huge opportunity.
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Obviously, it was a complete mess in my own life, professional life, personal life.
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Because we were, you know, coming back from the Unites States, settling in in Paris, you know, buying a house, etcetera.
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Kids were moving to the French, to the French system.
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All of a sudden tell them, we're gonna go to Japan.
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And nobody spoke Japanese, nobody knew anything about Japan.
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But, you need to make choice.
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I, so from the beginning this was a huge opportunity, obviously extremely dangerous because you had no, certainty of any kind that you would, you would prevail but I had no hesitation.
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I mean I, from the beginning I said, well, that's it.
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That was, I was expecting something like this, to happen and, I took it immediately.
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>> Can you, can you tell us a little bit about what your first day at Nisan was like?
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What, what do you do in that situation?
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>> Well, you gotta be disappointed because, you know, when you arrive the first day.
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I mean, first day, you arrive in Japan.
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You don't speak japanese, you know, everybody who has been educated into the Western system.
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The knowledge about Asia is pretty poor pretty, you know, simple, simplistic.
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I didn't speak Japanese I didn't know too much about Japan.
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I obviously had Japan in the back of my mind because of the importance of Japan in the car industry.
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And the first day I arrived, I, also, was looking for my translator because without my translator, I could not do anything.
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Just to get to know her, how do you make your phone call you know, what's the name, list of name of the people that you need to meet first, people in the executive company, the corporate officers.
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Where are the main location, the plant's location of Nissan?
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What are the main technical centers of Nissan?
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So I was, during my first, trying to establish just the communications system, and the list of the places where I need to go, and the people I need to meet.
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>> So, so I can think of a number of global consulting firms that, that would've said that their core competency is to come in and help you solve problems like this.
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You specifically didn't want outside consultants? >> No. >> Why not? >> No.
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This is, this, I mean when you want to turn around a company, you want to make sure that the solution is coming from inside.
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I mean anything that looks like it's an, it's an outside base solution.
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This is something which has been fabricated by people coming out of the body of the company.
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Maybe it's much smarter, maybe it's much more adequate, but at the end of the day, everything is about execution.
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And when it comes to execution, you want people buying in.
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And people will never buy in as much as, it is our plan, it's our own plan.
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So from the beginning I know I have been contacted by so many consultant firms who wanted to give a hand.
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Some of them proposed their services for free.
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Even though it looks a little bit strange.
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I said no, because I wanted really the plan to be Nissan plan.
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Made by Nissan, I mean I didn't even want the Renault people to be involved into the internal, the revival plan of Nissan.
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I want it to be done by the Nissan people, mainly by Japanese people in Japan, but also the American Nissan people in the United States, European people in, etcetera.
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So the solution comes from inside and people would say, this is our plan and we're gonna execute it.
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Maybe the plan would have been better with a consultant. Maybe, it's not sure.
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But I can't tell you, when it comes to execution, you know, it could not have been better.
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Because I had a 100% buy in, when the plan was decided.
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And people knew that it was their own ideas, obviously remodeled, that were going to be implemented.
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I had the complete corporate buy in.
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>> So, so can you tell us a little bit about what you did differently or how you, how you, how you helped Renault help itself, or help Nissan help itself? >> Well let me tell you.
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Let me the, the, no matter what is company which is in trouble my experience shows me that you don't need to look for the solution outside it's inside, it is, this is always inside.
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You just need to look for it, obviously solution is not unique.
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It's a bit of specific opportunities that you're going to transform into a plan with priorities, with a timeframe, with specific goals and with achievements.
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So I was just looking for it.
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I knew it was inside, I was looking for it.
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And obviously the best way to look for it is interview as many people as possible, particularly people in critical process area.
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That's why you need to know a little bit of industry, to know where you looking, where you're looking for.
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Let me give you an example, 50% of the PNL of the car company is purchasing.
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You know, I mean a Nissan has in 100 and 10 billion dollars sales a year.
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From the 110 billion dollars sales, you have about 55 billion dollars of buying.
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We buy parts, we buy commodities, we buy services, we buy transportation, we buy everything.
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So, if you don't buy well you can do miracles on anywhere you want, you're not going to prevail.
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You need to make sure that your purchasing process is in line, so number one, number one priority.
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Number two, number two priority making sure, for example, that you know exactly what are the segments, on the market where you have the legitimacy so you can re-establish your name.
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You can re-establish the brand into this particular segment.
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So, you need, first, to, to establish what are the priority, and then you say, okay.
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Why am I, even though I have a Keiretsu, why my purchasing cost is much higher, than, for example, the Renault purchasing cost, which was a smaller company? Why?
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Why Honda and Toyota is making so much money, while Nissan, which is having the same work force, the same engineer coming from the a, same university.
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Part of the same culture, did not get results.
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So little bit little, you go to a very common sense approach where you say, these are the most important processes.
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Let me go and see the people who are in charge of the process or around this process, interview them. What's wrong?
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What do you think is wrong? How can we fix it?
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Okay, so obviously solutions are going to come like this.
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But, by listening to hundreds of people into this process, I can tell you that the solution comes very clearly.
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Now, people usually avoid the dramatic solution.
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For example,we had over capacity nobody want to talk about shutting down plants in Japan.
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Why, because it is something which is sacred, no, you know shutting down a plant in Japan is something that nobody does, nobody do.
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I mean it's something that has to be forced at a certain point in time.
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Dismantling the [INAUDIBLE].
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Nobody's going to tell you [INAUDIBLE] is not working.
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People are going to tell you, yeah, we're buying at the higher price.
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And then you go see the people in the [INAUDIBLE] and they tell you why they have to sell Nissan at the higher price, than Honda and Toyota.
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So interviewing, asking question, in a very simple way.
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And then it's gonna look, it's gonna look very clear.
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People contribute to it, they may not like the final shape of the, of the plan.
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But if you commit to results, everybody joined.
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>> So it, I mean it may look like common sense in retrospect but I, I think every expert you would have talked to at the time would have said hey, you know, there's the Japanese way of doing business. >> Yeah.
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>> And, and, and this is how things are done.
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And, and every class you would take in how to do business in a global environment would say you respect local cultures and, and, but how, like what gave you the confidence to, to challenge the status quo?
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>> No, I am, I am not gonna challenge you know, what you're learning at the university, particularly telling you that, you know.
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But, but when you go and you are a foreigner and you're going to Japan, you're going to Japan for one reason, and that's it.
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It's turning around the company, period.
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That's what people are expecting from you.
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How much work, what do you do, if, if, if, if you have problems, if you have remorse, empathy. Nobody cares. Fix it. That's it.
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That's the message, fix it.
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You accept the job, you have to fix it.
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We had, two main problems.
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One of the main problem of Nissan is that we are $20 billion of debt in 1999, and no Japanese bank, and you know how flexible Japanese bank can be for a Japanese company, no Japanese bank wanted to lend any money to Nissan.
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So we were facing a cash crunch.
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Okay, this is immediate death, okay.
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So we need to reestablish the thrust on it and cut the debt, second you need to come back to profit for ten years.
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Nissan had 1% average operating profit while Honda and Toyota were around 7 to 10%.
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We had about 1% on return invested capital where our main competitors were more than 10%.
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There was something wrong.
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You need to re-establish, you re-establish this. Put it, put it right.
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So I knew from the beginning that what was expected from me is, fix it. Fix it.
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So if, if, when you know you need to fix it, you, you can say, okay, I'm gonna make as many changes as necessary to fix the problem, nothing more. Nothing more.
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So changing the habits, if there is no obvious results, you shouldn't do.
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But when you know that fixing the company is gonna force you to change some habits.
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You need to say it, you need to explain why you are doing it, and particularly you need to commit to the results, because people don't like change as long as there is no commitment to specific results behind the change.
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Now if you commit to specific results, they may give you the benefit of the doubt, and that's exactly what happened in the case of Nissan.
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As you know I spent three months building the plant listening to the people, and everybody told me we cannot shut down the plant in Japan.
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You cannot dismantle the Keiretsu in, in in Japan.
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You cannot challenge the seniority system in Japan.
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You cannot put younger people in top jobs in Japan, diversity, etcetera, etcetera.
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I mean the list of, you cannot do this and that, was huge.
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So I had two choices, first choice I listen to all of this, then the consequence is, I take back the family. I take back my bag.
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I go back to France, because there was nothing I could do.
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The second one is, I need to fix it.
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Then, I need to say, okay, I cannot do everything, but let's do the changes that are gonna deliver results.
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So I have dismantled the Keiretsu of Nissan.
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Not because I consider the Keiretsu was a wrong solution, but I said the Keiretsu didn't work for Nissan. It's working for Toyota. It's working for Honda. Good for them. It didn't work for us.
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That's why we're changing it.
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I challenge the seniority system by saying, it's not I'm, I'm, I have nothing about people who are 50 or 60 or 70 years old.
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But I don't want a segregation against younger Japanese people who have a lot of talent, and who cannot access the jobs of responsibility, even though they deserve them. So I turn it around.
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I, I consider that we need to stop the segregation against young people into the system, and always with a specific objective.
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Keiretsu, again dismantling the cross shareholding with many companies.
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I've done everything but every single time, explain why.
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And particularly the most important thing, I committed to resign.
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If one year after we started the plan, the company would not be in the black, and I said we're gonna divide the debt of $20 billion dollars by, by two within the, within three years term.
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And that the company growth would resume after having 10 years of decline.
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And, I said if any one of these objectives is not met, I'm out.
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And, obviously with me, all the members of the executive company.
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So, this commitment, which was very strong, because this was not a commitment in a board room, this was a commitment on TV in front of the public, so everybody knew that, you're gonna have to deliver, or get out.
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give, give me and give us the benefit of the doubt.
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The rest of the story, you know it.
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>> [COUGH] So, I mean, Nissan had gone through many strategic plans previously and I think you famously said, strategy is five percent of the answer and execution is, is 95%.
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So, so what does that mean, and how did you actually, what did you do differently?
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>> Well, you know the, the five percent yeah, I said, yeah, five percent of the challenge is the strategy and 95% is the execution.
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This, I said it as CO of Nissan, I said it also as CO of [UNKNOWN] and I said it as deputy CO of [UNKNOWN] when I said, the first time, it was mainly in France.
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And I was to my, to the top management of [UNKNOWN] in France.
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Because there was a tendency in the company to spend too much time on strategy and leave the execution for other people.
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And this is where I said, yeah, strategies fine, it's very important, but it's only five percent.
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If you don't go to execution after this the, the delivery and the promise of the company is gonna be very weak.
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I really, I really believe it.
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Now it doesn't mean that strategy is not important, but when you establish North.
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And you know exactly where north is for the company.
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You've done something very important because you're giving the direction.
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But if you don't start moving North, if you don't start mapping, and establishing milestone, you're never, you're never gonna be getting there.
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You're never gonna be getting there.
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You know, in the car industry, if you noticed, when you see the evolution of our industry for the last 30 years, there have been a tremendous change.
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A lot of companies which were number one, number two, number three worldwide downgraded and weakened and a lot of newcomers coming up.
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If, when you take a look to the new, leaders of the industry, all of them have one thing in common.
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Obviously, you have the Japanese, you have Germans, you have Koreans, you have Franco-Japanese, you have everything.
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There is one thing in common, is the discipline of execution and the importance of processes.
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In our industry, at the end of the day, yes, strategy is important.
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But at the end of the day, the most disciplined organization, the, the organization which gives a lot of importance to processes end up prevailing.
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Who's number one in our industry today? Toyota. Who's number two? Volkswagen.
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Who's number three depending if you consider volume or revenues.
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Let's say it's between General Motors and ourself, Renault Nissan. Who's number five? Hyundai. Hyundia Kia.
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What a change compared to 20 years ago.
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When you take a look to the classification of this industry 20 years ago, it's a complete, it's a complete change.
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What's in common for at least four out of these five top companies?
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Big discipline in execution, a lot of im, importance given to processes.
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It's not sufficient, but this is where the difference is being made.
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>> [COUGH] One of the stories I, I liked for your initial arrival in, in Japan was you decided the executives would've been too far removed from, from the product, from the car.
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And so you moved your executive meetings to the test track.
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Can you talk about that a little bit?
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>> Oh, that, that's, I mean, our industry is an industry around the product, and everything starts from there and ends up here.
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It's, it's, I don't think you can consider anybody to be at the top of our industry without a strong contribution in term of product whatever it is, technology or quality, or reliability or a perceived quality, or pricing.
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Everything is around the product.
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So, understanding the product is absolutely fundamental.
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And, asking top management in our industry, no matter what is their function.
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They can be key financial officer, they can be specialists of HR.
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They don't have to be engineers and especially have a good product.
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But the fact that they put themselves in the shoes of the consumer, listen to the, the, the advantages, the weaknesses, the opportunities, comparing our product to the one of the, of competitors is absolutely essential.
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[COUGH] So maybe back to what you talked about for discipline, at Michigan, sorry, in Michelin, your second job out of training was, as the dean said, manager of a factory that, that made huge tires for heavy equipment.
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I checked our most recent employment report, and, and there were no factory managers, leaving Stanford Business School.
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Are there things that you learned there that, that affect your decision making process as the CEO of two global manufacturing companies? >> Yeah.
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I mean, I, I I consider that the, what we call manufacturing today or mon, the monozukuri.
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I use a Japanese term of monozukuri.
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Monozukuri is everything which covers, product planning, engineering, manufacturing, supply chain.
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This is all the area of the company where the product is born. Okay.
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Versus marketing distributing, selling, financing, et cetera.
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This area of the company, particularly for products which are not commodities, products which are changing all the time, absolutely essential.
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And having, starting your carrier, in my opinion, starting your carrier in this area where you are at the crossroad of many things turning around the product is absolutely essential.
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I wanted to be in manufacturing because in manufacturing, first you deal with people.
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Second, you deal with the product.
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Third, you deal with the supplier.
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Then you deal with quality.
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So everything in one place.
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And manufacturing the plant is, the on, the first place where the product is born.
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Before the manufacturing, the product is just a fiction. It's on a computer.
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It's on a design, but the first place where the product exists is in manufacturing.
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So I wanted to start in manufacturing, and frankly, I don't, I don't regret it.
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But I can tell you some of our top executives both in Renault and Nissan, not all of them, but some of the top executives, often come from a background of what we call monozukuri, and a lot of them from manufacturing.
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>> [COUGH] So, going on perhaps a decade, of running simultaneously two, two global companies, how do you get the stamina to, to keep going and to stay fit, you know, personally and, and mentally and physically?
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Well, you know, [COUGH] somebody said, with a little discipline, you do little things.
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With a lot of discipline, you do a lot of things, and with total discipline, there is nothing which you cannot do.
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There was a lot of discipline.
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I mean, obviously, because you're gonna move from one word to the other, from one culture to the other, from completely different company.
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You have jet lags, organization, people are expecting you when you come down from a plane after 14 hours flight to be fresh and ready for them.
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They're [LAUGH] they're not expecting the CEO to come and say, oh my God, this jet lag he cannot answer a question.
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They want you to be on the go all the time.
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So this requires a lot of discipline.
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You have to organize yourself.
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If, if you know you're gonna do this job and you accept the job, you have to organize yourself in order to do it.
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It's tough, but there is a solution.
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There is, there is a solution for it.
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But it requires lot of choices, personal choices.
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There are a lot of things you cannot do, you know.
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There are a lot of things you can do, but you gonna do them within a certain order.
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And, but, particularly with a lot, with a lot of discipline.
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>> Can you give us some examples of, of how you, how you've done that personally?
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>> You know, I can, I can give you I can give you my, my program >> [LAUGH] >> The most simple thing is give you my program for this week and next week, for example. I mean just not to go.
21:22
Yesterday I was, into the pre inauguration of a new plant that Nissan is building in Brazil.
21:28
So a lot of people are gonna say, yeah, lucky you.
21:31
You were in Rio Janeiro/ You, you, you, there's no complaint.
21:34
[LAUGH] But I was in Rio Janeiro.
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In, in fact in the state of Rio Janeiro in Resende, I reviewed the new plant of Nissan, which is going to be inaugurated in April.
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So I was spend the day in Resende.
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Took the plane, flew, I am here today.
21:48
Later I'm going to our, research center, that we have opened in, Silicon Valley in order to make sure that we understand what the startup are doing, particular around autonomous driving.
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We're, we're gonna probably talk about it.
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So, Wednesday night, tomorrow night, I'm going to our, headqua, headquarter in the United States, which is based in Nashville.
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We're gonna have a review with all the North American team about, about the performance.
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I'm gonna visit Kenton, Mississippi Friday, which is one of our large plant, on, on, on Friday.
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Then I'm flying for Japan.
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Next week I would be Monday in Tokyo.
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I would be in Tokyo from Monday to, Friday, executive committee, board meeting, corporate officer meetings, investment committee, et cetera.
22:39
You go through all the elements, and then I'm flying for Paris.
22:46
I have my schedule for 2014 booked already. That's so we [LAUGH].
22:47
Now you can't, I mean, you, you have to accept that.
22:48
I mean, I know exactly where I'm gonna be hopefully, [LAUGH] in December 2014.
22:51
All the board meeting of both company already set, executive committee, the visit to the plant.
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Everything has to be organized.
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If not, there is no way you can do everything you have, have to do.
23:06
From time to time, you have accidents.
23:08
From time to time, there are accidents, but fortunately, I'm surrounded by professional people who can adapt to the situation and make the necessary changes.
23:16
You know, how do you do it?
23:18
It's possible, but it requires a lot of discipline.
23:23
>> You think there are any, any fundamentals about leadership that, that transcend a specific company or industry?
23:28
I mean, do you have a personal leadership philosophy? [COUGH].
23:31
>> yeah, but, you know, leadership also depends on the time.
23:35
I don't think if you're a good leader today, you're gonna be a great leader ten years down the road or 20 years down the road.
23:41
And I don't think that the great leader of today would have been a great leader 20 years ago.
23:45
I think it's adapt to the time.
23:47
If I take today and the foreseeable future, there are some attributes, in my opinion, which are absolutely necessary for leadership position, particularly for companies but not only for company.
24:05
And the number one, the number one attribute, I think, is what I call, empathy, the capacity to connect with people.
24:09
That's extremely important.
24:12
Why I am telling you this because, you know, I, when I look at the alliance, we have about 450,000 people working in the alliance.
24:22
Our first group of people, are Russian.
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This is the largest number of employees we have. Are Russians.
24:30
The second largest group of employees we have is Chinese.
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The third largest group we have is Japanese, and the fourth is French.
24:40
And then you continue like this, and you have American, you have British, et cetera.
24:45
And when you have 450,000 people, with very large group of people spread all over the world, the capacity to connect, the capacity to understand, the capacity to get out from your own reality and try to see what's on the mind of your own people who are fighting on different fronts is, is for me absolutely essential.
25:04
And is gonna continue to be essential for many years to come. This is basic attribute.
25:10
Frankly, if, if I find somebody in my team and he has no empathy, he doesn't have the capacity to connect, I think it's gonna be very hard for him, to be in leadership position.
25:21
Now, being emp, having this empathy, this capacity to connect is not sufficient.
25:26
I'm saying it's a basic and absolutely necessary condition for leadership.
25:30
Obviously, you have other attribute, but you're asking me some of them.
25:35
I'm telling you I consider empathy is, is the, probably the most important really.
25:41
>> And I think you already said this.
25:42
Would you say that decisiveness is number two.
25:45
Is that, I mean, you've >> What was the second one?
25:45
>> Decisiveness you talked about, like, the flip side of empathy and, and decisiveness.
25:48
>> Yeah decisiveness is number two, but decisiveness doesn't mean a quick decision.
25:53
Decisiveness mean adequate decision at the right time, and the right time may not be the quick time.
26:00
You know, particularly that is something I learned in Asia, because obviously when you take a CEO job in a company, you learn a lot. You learn a lot.
26:08
One of the thing I learned particularly in Japan that from time to time making quick decision, is gonna hurt the execution of the decision because, I think, what do you want?
26:17
When you make a decision, what do you want?
26:19
You want to transform reality.
26:20
You don't want to make a decision for the sake of making a decision.
26:24
You make a decision because you want something to change.
26:29
So, your goal is the thing changed. That's your goal.
26:32
So the question now is, when should you make the decision in order to make sure that this thing has changed in the fastest, period of time.
26:39
So from time to time, you have to wait to make the decision because you're preparing people to execute.
26:45
From time to time, you need to make the decision very early.
26:47
From time to time, a little bit late.
26:49
But when I say decisiveness mean capacity to take the decision at the appropriate time because at the end of the day, what you need is, reality changes.
26:59
That's, that's your goal.
27:00
>> So, [COUGH] I know we promised we'd talk about electric cars as well.
27:05
and, and, I mean, but your alliance has made, has made, you know, tremendous investment, you know, billions of euros in, in zero emission vehicles.
27:15
at, at the New York Auto Show in 2011, you know, I think you set a fairly public goal that you would double sales of the Leaf in 2012.
27:24
Didn't really play out that way.
27:26
What do you think happened, and, and what needs to change to move the Leaf and other electric cars from, from niche players into mass market leaders? >> Yeah.
27:33
Well, you know, I, I considered that, the future of our industry is based mainly from, still with oil, but second with electricity.
27:38
When I say electricity is purely electric car or electrified, electrified power track.
27:45
There's no doubt about it.
27:46
So you see multiplication of the hybrids, mild hybrids, true hybrids, flex fuel, electric cars were moving into this direction.
28:00
One of the reasons for which electric cars, now I'm talking about true electric car, is not moving as fast as we'd like it to go, is the lack of infrastructure.
28:08
We're seeing every single time a city, a state, or a country put the investment in term of infrastructure in the sense of electric car move up.
28:18
We are selling today in the United States 3,000 Leaf a month, 36,000 cars.
28:22
So you're gonna say, oh yeah, but, you know, 36,000 cars in the United States out of, we sell more than 1 million cars in the United States.
28:30
You're gonna say it's peanuts.
28:34
Yeah, but it's a huge change because people buying the Leaf today.
28:37
We have the highest level of satisfaction of any other car that they, that they buy, and most of them don't want to change.
28:44
I mean they buy an electric car.
28:47
They use an electric car.
28:48
They've established their routine with the charging system, et cetera.
28:52
They just love the car, and they wanna continue with it, and it's increasing.
28:57
The last three months, the most sold cars in Norway was electric car. It was a Leaf.
29:03
So, the Chinese have given to ours, themselves objectives in term of electric cars, but they didn't bite the bullet yet because there is no, Chinese technology for electric cars.
29:15
They're waiting for Chinese carmakers to really master the technology of electric cars in order to hit it.
29:23
Japan is, is, is putting a lot of incentive.
29:25
The charging system in Japan is really developing.
29:29
I have zeroed out on the fact, electric car is a big part of the future.
29:34
Where we don't control, and we are a little bit frustrated in the speed at which the charging infrastructure, is, is, is spreading.
29:43
Now I can tell you I was, you know, I think two years, two years ago, my daughter, who was on the campus was driving a Leaf, and at a certain moment in time he stopped a moment in time she said, okay, I need to charge the car.
29:53
I said, well, it's interesting, let's go to the charging station, and at that moment there were only two charging station on the, on the campus. But, both were occupied.
30:03
So, I said so what what you do now?
30:06
I said well I can't drive the car I need to wait for the these two cars to be removed so.
30:11
It we've seen the charging system is a real concern before we see it take off of, of the sales, but it's coming.
30:20
It's coming because lot of cities, lots of states are investing.
30:23
Some only in the United States.
30:25
But France, Japan, China, we are signing an agreement with cities with different cities now. It's coming. I have zero doubt, Tony.
30:37
It's much slower than we thought, but it's not slow, because the technology is not ready, it's slow mainly, because the infrastructure is not moving fast enough.
30:46
>> You were here visiting the engineering school in May, to talk about autonomous vehicles, can you just share your thoughts about why your, so excited about autonomous vehicles?
30:56
>> Well, autonomous vehicle, because in fact we are moving from a period of time where the car is a slave.
31:02
You, know you break you start, to a partner.
31:06
Now he's giving you information, adding that to what you want, and we have the pieces of technology to do it.
31:12
What does it mean, the car is your,is your partner.
31:16
For example today we have the devices in which you get to the car, the car can measure your temperature, it can define what's your mood.
31:25
It can switch the music you, adapted to you function of excited your angry your frustrated you're happy it can lower the temperature into the car, or or heighten it, it can detect an accident one or two miles in front of you and.
31:43
Change the lane or slow the temperature, or re route, re route you.
31:47
There are a lot of things when the car can become your partner.
31:51
I mean you don't have to decide, it will decide for you.
31:53
As long as you have preprograming for it.
31:57
Why I think autonomous driving is going to be a big thing for the car industry.
32:02
A lot of objective reason.
32:03
The first one is we want zero accident.
32:10
Any car company would like zero accident.
32:12
The only way you move to zero accident is autonomous driving, because 95% of accidents happen on the street. Are human mistake.
32:21
If you had make too many mistake, you made it past you. That's number one.
32:27
Number two, a baby born today has 3% of probably living to be 100 years.
32:35
A lot of people lose their driving license at 75, 70, 80 years old.
32:39
So, if you can imagine the big part of the world population, moving toward 100 years old, and you start losing your driving license at 70, 75 years old, you have a problem.
32:50
Because the last one years are gonna be difficult without autonomous transportation.
32:54
The only way you're gonna solve it is autonomous driving, because autonomous driving you can be handicapped, you can have a lot of physical problem impairment and you can still get into the car, input the address and the car will, will drive you there.
33:09
So, for me, it's in need, in term of safety, it's a need, in term of expansion, of autonomous, of autonomous, transportation.
33:18
It's good for us, because it's an expansion of our market, but also, it's gonna be an essential element for, for senior, for senior people.
33:27
And the pieces of technology are ready.
33:29
We, we have the different technologies that allow us.
33:32
Our estimate is today, we have already announced officially that autonomous driving will take place as mass market of cars by 2020.
33:39
We have already authorization in Japan.
33:41
And I know that we have, there some authorization in the Unites States to allow autonomous driving testing, on the road.
33:49
>> So my last question before I open the, open it up to the floor for, for Q&A.
33:53
The question that, that the dean asks all of us when we apply to Stanford, Business School is what matters most to you and why?
34:00
How would you answer that today? >> What matters most.
34:07
Well, you know, I think what, what matters most is, [BLANK_AUDIO] Making a difference.
34:13
That's what matters most.
34:14
I mean, making a difference.
34:14
I mean, it can be professionally but it can be socially, it can be the father, it can be as professor, as a [UNKNOWN].
34:23
You wanna make a difference.
34:24
That's what matters most.
34:25
You, you, you wanna say, well, you know, I'm dedicating part of my life to do this.
34:30
I wanna have the impression that I made a difference.
34:33
No matter how you measure this difference, but the way you measure difference must be important for you. Okay?
34:41
I think that's what matters all the time, as long as you think you can make a difference, while you have the motivation to pursue whatever you're pursuing.
34:49
And I'm not talking only on the field of professional life.
34:53
I'm talking also on the field of a personal life or on contributing to [UNKNOWN] or contributing to other, to other things in life.
35:02
I think this is for me the most important thing that you can see that what you're doing is something where you know that if you were not there things would have been different.
35:12
And hopefully by you being there, you know, part of a team or part of a company, it's gonna get better.
35:20
But, obviously when you turn around the situation, you have a huge satisfaction, because you say, you know, I was here, I was part of the team who made this transformation.
35:29
Okay, so it's obvious, but in some other cases it would be a bit more difficult to see. >> Thank you so much.
35:34
So we'll move to questions from the audience.
35:35
This session's being recorded, so it's important to have a microphone before you ask a question.
35:38
So please raise your hand and one of the ushers will bring the microphones around.
35:44
[BLANK_AUDIO] >> Thank you very much for the interview.
35:59
So I have a question about determining models for the monozukuri.
36:01
It means trading something in Japanese and you said in your sun, monozukuri covers everything, every step in value [UNKNOWN] from R and D to marketing, and my sense is in Japan, sometimes the Japanese companies too much focus on monozukuri and they focus R and D on technology.
36:18
Trying to have some innovation from the technology side and they failed to attract their customers in the market.
36:25
So my, my feeling is they should shift, on the mindset, on mono, monozukuri and try to focus more on the market side.
36:32
So, what, what do you see this trend, and how, how do you think the monozukuri.
36:38
Hinders the Japanese companies to try to articulate the demands in the East.
36:43
>> yeah, I think it's a great observation to say Japanese company have a tendency to try to create innovation out of technology too much versus other company who gonna go and try to assess.
36:57
Or needs, or aspirations from from, from, from, from consumers.
37:03
That's why I believe that alliances between companies of different cultures are so powerful.
37:08
Because each one brings with his own culture, his own strength.
37:12
And in our case if you can marry the strengths of the monozukuri Japan.
37:17
Through the creativity which comes with French approach.
37:20
As you know, we have a partnership with Daimler with which we, we develop, also a lot of technology.
37:28
So, when you bring companies, as long as the company remains autonomous, obviously, because if you merge all of these automatically you're gonna blend.
37:38
Everything into one culture, and you gonna lose, some, of the benefits, from diversity.
37:43
As long as you can make companies with different culture working together.
37:47
You gonna get the best out of every single, single culture. But I agree with you.
37:53
And, and that if, if you have, if you are monocultural, the risk of you being.
37:58
Too much benefiting from your own strength, and ignoring your own weaknesses, they are very big.
38:04
That's why having Japanese company working with the German company working with the French company is such a delight, because we come to solutions that we could have never imagined by our self, no matter where we're coming from.
38:17
So I totally agree with you.
38:20
That's why I think Japanese companies coupled with other companies as long as they know how to make these things happen can be extremely, extremely efficient. >> From back there?
38:34
>> Hi, I'm Linas from MX program.
38:38
Thanks for coming, my question is about common sense.
38:41
You talked about whether you arrived in Japan, and you used your common sense to make some decisions, to change the, to make some decisions about the prob process, things like that.
38:52
But my observation is that a lot of leaders, they all of the common sense that you are talking, you talked about.
38:59
I want to know how to, how to get the common sense.
39:02
[LAUGH] Did you, how is, on the first day when you're working, or what's your process, thanks.
39:08
>> Yeah, well, you know, Yeah, how do you get common sense.
39:12
This is an interesting question, no? >> [LAUGH].
39:15
>> How do you get common sense.
39:15
Well, you know, common sense, common sense means, we are human being, we have aspiration, and from time to time we get off track.
39:26
No matter who we are, at what position we are, we get off track.
39:29
And common sense is what bring you back on track.
39:35
When I went to, when I went to Nissan.
39:36
Common sense indicated that I was coming to Nissan and accepted in Japan for one reason, which is fixing Nissan, period.
39:42
I was not there to make a show.
39:45
I was not there to lecture Japan, about what needs to be done.
39:48
Even though a lot of people, you know, were calling for these kind of things.
39:52
So every time, I never deviated from my mission, because I had this, whatever we call it, common sense, bringing that by saying you know you're here, you're in this job, because people want you to fix the company, period. Okay?
40:05
That's common sense, common sense means go back to the basics, go back to the fundamental needs, and make sure you understand, you know, what's your contribution. Whats the expectation?
40:18
What the expectation from you.
40:20
I agree with you from time to time people lack common sense, very unlikely they gonna to leadership position in my opinion particularly in the business world.
40:30
Very unlikely, some of them escape, but the most frequent thing is that people lose common sense.
40:37
After they come to leadership position, and this is a real risk.
40:42
That's why I think having strong teams, and strong wars which are focused on these other essential things we need to do, are absolutely important.
40:51
So, if you use your common sense some bodies going to remind you, you know.
40:55
That's why you are here, and that's what you're expecting from here. But I agree with you.
41:00
It happens that you can lose your common common sense.
41:06
>> In the back row over there. >> Hi.
41:09
I'm Alex, a second year MBA student.
41:12
I'm curious to get your view on developing countries boost for a company, your company perspective, as well as a student, how.
41:21
Can we capture the gross in emerging countries?
41:30
>> You know, there are lot of literature today on emerging markets, three years ago as you know four years ago, it was sky was the limit, today a lot of people say this is the end of it, this was just a bust, et cetera.
41:44
Emerging market are here to grow, and are here to grow for the long term.
41:50
They're not all growing, they're not gonna grow all on the same rate.
41:55
Brazil is not gonna grow at the same rate than China.
41:57
It's not gonna grow at same rate than India and Russia.
42:00
Or Myanmar or Vietnam or Cambodia or Mexico, everyone has different reality, but there are some things which are absolutely fundamental is that all of them are going to grow.
42:11
And depending on the field that you are considering, you have, you can estimate what kind of growth is going to happen.
42:18
You don't know what's the timing of the growth.
42:20
How much time it's gonna take, but you know what is the size of the gross.
42:23
Let me give you an example, and I'm gonna come back to the current history.
42:27
Today you have about 700 cars per 1,000 residents in the United States.
42:32
You have about 500 cars per 1,000 residents in Europe, okay?
42:37
You have less than 100 cars per 1,000 residents in China.
42:43
You have less than 50 cars per 1000 residents in India.
42:48
You have, less than 200 cars per 1000 residents in Russia.
42:54
You have less than 300 cars per 1000 residents in Brazil.
42:58
Imagining that Brazil, India, Russia, and China,, are gonna remain at the lower level of modernization than Europe is ludicrous.
43:09
All these countries are gonna grow, and their gonna reach at least the level of Portugal, or Spain, if not, if not more.
43:17
So, when you are in China, in the case of China, at 100, less than 100 car pool [UNKNOWN] inhabitants. And Portugal is at 500.
43:24
You can imagine that the Chinese market is going to continue to grow a lot, particularly when you know that the government of China is investing massively in infrastructure, which is one of the limitations for which.
43:36
Maybe it's not going to happen.
43:37
Investing massively in infrastructure, investing massively in education, investing massively in everything which is going to trigger this will to have autonomous, autonomous transportation.
43:49
So, back to your question.
43:50
I think the are huge and tremendous opportunity.
43:54
For companies, for young people.
43:57
You know, I was, two days ago having a lunch with a Brazilian entrepreneur, and he was telling me, you know, if I was 23 years old today, I would go to Myanmar. He's Brazil. I said why.
44:10
He say, well I see in Myanmar the way Brazil was 30 years ago.
44:13
60 million inhabitants, very rich country, it couldn't be totally mismanage willingness to open to open the country, and I say you know, I have the impression that I know how this is gonna go, and I want to benefit from it.
44:27
So, you're gonna have a repetition in a different way of stories, but my point is emerging market are usual opportunity, as long as you have the recidity to analyze each one of them by itself.
44:38
And see all the metrics, which matter for your industry or your area of of interest, but it's not gonna be linear, you're gonna have ups and down, and stabilization and consolidation and then, acc, acceleration.
44:54
Without any doubt, the usual opportunity.
44:56
>> Over here on our stage left.
44:58
>> Thank you for your presentation.
44:59
My name is Chris Davis, I'm doing a Fulbright Scholarship from London.
45:03
It's probably a very simple question but, in terms of personality traits or common themes, either in, what, what do you need to be in your position?
45:13
Or similar roles at your level in terms of common personality traits to be successful?
45:20
>> frankly, I don't think, I don't think you have a lot of things in common between, if you take for example the 1,000 largest companies in the world today, I don't think you can say there is something common for these people.
45:40
And you can, I mean I can see personally because every year I go to uuu, which is the largest concentration of CEO in the world at a certain place.
45:49
And we meet a lot of people, you know.
45:51
And it's very interesting because we meet Russians CEOs, and Chinese CEOs, and Indian CEOs and Brazilians and Vietnamese and Cambodian.
45:58
And they're coming all over the world and you say, oh, oh, there must be something common between all them.
46:03
No, No, The approach is completely different.
46:05
I don't think you can say there is one single attribute or a little bit of commonality between, between all these, all these people. I don't think so.
46:16
Certainly, there is, all of them want somehow to contribute, that's for sure.
46:23
A lot of them do not take no, for an answer.
46:27
You know, there are some things like this but [UNKNOWN] in term of personality approach, drive, I don't think there is something, there is something common.
46:38
>> Okay, this will be the last question.
46:41
Is there, back here, back row again?
46:46
>> Thank you very much for taking the time to talk to us.
46:48
On your point about electric cars, as you well know, building out a electric charging infrastructure both has chicken and egg problems.
46:57
Someone has to move first.
46:59
And it's a highly regulated space.
47:01
So, as we're a group of MBAs, what's the one thing that you would recommend that we, as MBAs, focus on if we wanna see that built out?
47:14
>> I, I would say today, we are concentrating, that being, a large company, who are investing on electric cars are concentrating on these areas of the world, where leaders of the countries see a problem behind too much dependence on oil.
47:38
And CO2 emissions being not something fabricated, artificially but, a real threat, okay?
47:47
So whenever you have these two elements, then, you are, we around the table.
47:52
I'm gonna give you an example.
47:53
I sat down with, I'm Brazilian, I sat down with the President of Brazil.
47:57
We are talking electric cars.
47:58
Immediately I've seen that she was not the believer in electric cars.
48:02
I said okay, that's fine, no problem.
48:04
We're not gonna concentrate our efforts on Brazil.
48:07
We are concentrating our efforts on China.
48:10
We're gonna concentrate our efforts in Japan, we're gonna concentrate our efforts in the United states.
48:13
Because there are leaders here who are saying, well you know what?
48:17
Too much dependence on oil, is a problem.
48:20
And CO2 is not something fabricated it is something real.
48:25
And if you don't pay attention to this, we're gonna have serious, serious problem.
48:28
So, what, what I would like to tell you is, as, if you wanna go into this area, which is environmental friendly transportation, in particular with electric cars, first you need to make sure that you're leading with people who don't consider it only as a business, but consider it as a must.
48:47
I mean, when you have a problem of the size of the CO2 emission, and you have the solution to this problem, you just cannot ignore it by saying, you know what? It's not the time.
49:02
I'm gonna wait until something happens before I jump in. No we have a solution. We have the technology.
49:09
We need to move it in, and we're gonna have to find our way to make it a reality a reality of the business.
49:15
From time to time it may take, it may take a lot of efforts, it may take a lot of investments, your efforts cannot be rewarded.
49:23
But when if we take off, in my opinion, it's gonna be absolutely tremendous.
49:30
So my point is, just find allies, who are, not only see it as an opportunity, but are convinced that it is the right solution.
49:40
And the technology in term of battery, motor, inverter, everything is moving very fast.
49:48
So I don't think we're gonna add too much to it.
49:52
Everything which is around the charging system still needs, to evolve.
49:57
Lowering the cost of the fast charging going to systems that allow you to charge the card in a very convenient way.
50:05
When we started with the fast charging, we had the 40 minutes charge.
50:09
Now we are at 20 minutes.
50:11
We have offer from some suppliers coming to less than ten minutes.
50:15
Where people are offering us a system where when you're driving youfr car on a highway, you can charge through the, through the wheels.
50:23
That means, there is an explosion of ideas coming, and I think this is where innovation is gonna take place.
50:31
But I have no doubt on the fact that the technology that will protect the environment, and [INAUDIBLE], at the same time the explosion of autonomous transportation, particularly through the development of emerging market, is a huge one.
50:44
>> So, thank you so much for, for spending the time with us today.
50:48
And on behalf of the entire Stanford Graduate School of Business, Mr.
50:51
Young, thank you for your time, and thank you for coming. >> [NOISE].
50:55
>> Thank you, thank you very much. >> Thank you. [MUSIC]