Monthly Archives: June 2013

Warren Buffett’s Investment Criteria for Berkshire Hathaway Investments

Charlie Munger and Warren Buffett, Berkshire Hathaway

Warren Buffett rarely considers aspects of a stock of a company that he might be interested in purchasing for Berkshire Hathaway. He is more interested in the aspects of the business of the candidate company.

Here’s in an effort to clearly summarize Warren Buffett’s strategies on evaluating potential candidate companies for investments of Berkshire Hathaway. While there are not a clear-cut and hard criteria of financial ratios and calculations that Berkshire Hathaway uses to identify potential investments, a compendium of Buffett’s time-tested principles of evaluating potential investments, investors can filter and further research companies that are sound investments and steer clear of the losers they must be avoided at all costs.

  • A candidate company must not have large capital expenditure, high costs of maintenance, or cash flow need for new investments. In his 1994 letter to Berkshire Hathaway investors, Warren wrote, “If you are right about a business whole value is largely dependent on a single key factor that is both easy to understand and enduring, the payoff is the same as if you had correctly analyzed an investment alternative characterized by many constantly shifting and complex variables.”
  • A candidate company must be a player in a good and growing economy or industry. In the Chairman’s Letter of 1996, Warren Buffett stated, “Your goal as an investor should simply be to purchase, at a rational price, a part interest in an easily-understandable business whose earnings are virtually certain to be materially higher five, ten and twenty years from now. Over time, you will find only a few companies that meet these standards – so when you see one that qualifies, you should buy a meaningful amount of stock.”
  • A candidate company’s earnings must be on an upward trend with good and consistent profit margins. “Put together a portfolio of companies whose aggregate earnings march upward over the years, and so also will the portfolio’s market value.”
  • A candidate company must have high and consistent returns on invested capital. Warren Buffet has written, “Leaving the question of price aside, the best business to own is one that over an extended period can employ large amounts of incremental capital at very high rates of return. The worst business to own is one that must, or will, do the opposite – that is, consistently employ ever-greater amounts of capital at very low rates of return.” Also, “Buy companies with strong histories of profitability and with a dominant business franchise.”
  • A candidate company must not be exposed to competition from existing and new companies with abundant resources. To quote Warren Buffett, “In business, I look for economic castles protected by unbreachable moats.” When Berkshire Hathaway acquired Burlington Northern Santa Fe (BNSF,) the economic moat was that no other company could easily afford to build a large new rail network across the United States.
  • A candidate company must have a demonstrated history of retaining earnings for growth. In one of Berkshire Hathaway’s annual report, Warren Buffet wrote, “… more subjective, element to an intrinsic value calculation that can be either positive or negative: the efficacy with which retained earnings will be deployed in the future. We, as well as many other businesses, are likely to retain earnings over the next decade that will equal, or even exceed, the capital we presently employ. Some companies will turn these retained dollars into fifty-cent pieces, others into two-dollar bills.”
  • A candidate company must have a strong pricing power and must be free to adjust prices for inflation. In a 2011 interview with the Financial Crisis Inquiry Commission, Warren Buffett stated, “The single most important decision in evaluating a business is pricing power. If you’ve got the power to raise prices without losing business to a competitor, you’ve got a very good business. And if you have to have a prayer session before raising the price by 10 percent, then you’ve got a terrible business.”
  • A candidate company must enjoy a low debt/equity ratio or a high earnings/debt ratio. To quote Warren Buffet, “I do not like debt and do not like to invest in companies that have too much debt, particularly long-term debt. With long-term debt, increases in interest rates can drastically affect company profits and make future cash flows less predictable.”
  • A candidate company and it’s products must enjoy a consumer monopoly or have a loyalty-commanding brand. Warren Buffet has said, “I’ll tell you why I like the cigarette business. It costs a penny to make. Sell it for a dollar. It’s addictive. And there’s fantastic brand loyalty.” Charlie Munger, business partner of Warren Buffett, stated about Harley Davidson, “Any company that gets its customers to tattoo ads on their chests can’t be all bad.”
  • A candidate company must have a strong management that has a history of allocating capital to good business opportunities and profit from such investments. On management, Warren Buffett is quoted as saying, “I try to buy stock in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will.” On capital allocation, Warren has stated, “To decide whether to retain the capital, we have to answer the question: do we create more than $1 of value for every dollar we retain? Historically, the answer has been yes and we hope this will continue to be the case in the future, but it’s not certain.”
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Posted in Investing and Finance

How to Realize Your Dreams

How to Realize Your Dreams

  • Absorb yourself in the outcomes of your dreams. Wonder about the consequences on your other dreams and aspirations.
  • Work out the path to realize your dreams. Plans are, by themselves, inadequate, but the act of planning is valuable.
  • Surround yourself with sponsors and influential critics. Choose people who are on your side but will also tell you the truth.
  • Persevere. Dreams worth realizing are never straightforward.
  • Adapt. Develop a broader perspective of what you wish to achieve with your aspirations. Be prepared to compromise or give in if things just don’t go your way.
  • Be happy to fail. Even if you fail to achieve your dreams, you will be richer for the experience. And you will be glad you tried and did not shy away from the challenges.
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Posted in Philosophy and Wisdom

Bertrand Russell Critique of Christianity and Religion

British philosopher and Nobel Prize winner Bertrand Russell argued very persuasively through his writings and speeches that religion was merely a fallacy and, notwithstanding any positive effects that religion might have on a person’s emotional or psychological well-being, the concept of religion is for the most part detrimental to people. Bertrand Russell resolutely believed that religion and a religious point of view serve to hinder knowledge and cultivate a fear of anxiety, fear, and dependency.

Bertrand Russell, like Christopher Hitchens, Richard Dawkins, and other critics of religion who came after him, held that religion was to blame for war, coercion, tyranny, and misery that have weighed down the world. Here is an excerpt from his essay, “Why I Am Not A Christian”, first a lecture delivered by Russell on 06-Mar-1927 at the Battersea Town Hall (now the Battersea Arts Centre in London) to a gathering of the National Secular Society, South London Branch.

Religion is based, I think, primarily and mainly upon fear. It is partly the terror of the unknown and partly, as I have said, the wish to feel that you have a kind of elder brother who will stand by you in all your troubles and disputes … . A good world needs knowledge, kindliness, and courage; it does not need a regretful hankering after the past or a fettering of the free intelligence by the words uttered long ago by ignorant men.

Bertrand Russell on Belief and the Value of Religion

TV Interviewer: Why are you not a Christian?
Bertrand Russell: Because I see no evidence whatever in any of the Christian dogmas. I have examined all the stock arguments in favor of the existence of God and none of them seem to me to be logically valid.

TV Interviewer: Do you think there is a practical reason for having a religious belief for many people?
Bertrand Russell: There can’t be a practical reason for believing what isn’t true. I rule it out. It is impossible. Either a thing is true or it isn’t. If it is true, you should believe in it. If it isn’t, you shouldn’t. And if you can’t find out whether it is true or it isn’t, you should suspend judgment. It seems to me fundamental dishonesty and fundamental treachery to intellectual integrity to hold a belief because you think it is useful and not because you think it is true.

TV Interviewer: I was thinking of those people who find that some kind of religious code helps them to live their lives — it gives them a very strict set of rules — the right and the wrongs.
Bertrand Russell: People are generally quite mistaken. Great many of them do more harm than good and they would probably be able to find rational morality that they could live by if they drop this irrational traditional taboo morality that comes down from savage ages.

TV Interviewer: But are we, perhaps, the ordinary person, perhaps, is not strong enough to find his own personal ethic. They have to have something imposed upon them from outside.
Bertrand Russell: I don’t think that is true. What is imposed on you from outside is of no value whatever. Doesn’t count.

TV Interviewer: You were brought up, of course, as a Christian. When did you first decide that you did not want to remain a believer in the Christian faith?
Bertrand Russell: I never decided that I did not want to remain a believer. Between the ages of 15 and 18, I spent almost all my spare time thinking about Christian dogmas and trying to find out whether there was any reason to believe them. By the time I was 18 I had discarded the last of them.

TV Interviewer: Do you think that that gave you an extra strength in your life?
Bertrand Russell: No, I don’t know. No I shouldn’t have said so. Neither it’s a strength nor the opposite. I was just engaged in the pursuit of knowledge.

TV Interviewer: As you approach the end of life, do you have any fear of some kind of afterlife?
Bertrand Russell: No, that is nonsense.

TV Interviewer: There is no afterlife?
Bertrand Russell: None whatsoever.

TV Interviewer: Do you have any fear of something that is common among atheists and agnostics who have been atheists or agnostics all entire lives, who are converted just before they die to a form of religion.
Bertrand Russell: Well, it doesn’t happen nearly as often as religious people think it does. Because, religious people, most of them, think that it is a virtuous act to tell lies of the deathbeds of agnostics and such. As a matter of fact, it doesn’t happen very often.

Bertrand Russell’s Books on Religion, God, and Atheism

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Posted in Faith and Religion

Global Poverty: The Rich Get Richer and the Poor Get Poorer

The Rich Get Richer and the Poor Get Poorer

In spite of data that imply that wealth is flowing uphill at an alarming rate, this wealth has left the middle class stuck with stagnating incomes while the new super-rich ascended to their opulent lifestyles.

Globalization, as a powerful force of economic life on the planet, has magnified the chasm between the rich and the poor. The wealth generated by globalization has not spilled over and trickled down to boost up the wealth of the underprivileged. The inequalities between the well heeled and the disadvantaged has grown. Africa still contributes to less than two per cent of the world’s exports and imports.

Data is inconclusive on whether the spread of wealth between the rich and the poor and the resulting inequality has increased or decreased during this last economic recession. The historical precedents are not promising either. The sufferings of the poor and the downwardly mobile class matter more than the tiny deprivations of the rich. Poverty and the tight squeeze on the middle class are a big part of what got us into this mess in the first place.

Productivity growth, while promising economic growth, concentrates jobs where skills are the greatest and costs are the lowest, driving masses of people into joblessness.

Capitalism, for all its virtues of dynamism, has failed to come up with a solution to critical problems such as global poverty. Consider the proposition that everyone might be better off if opportunities were spread more equally. Rather than organizing to slow things down, the rich are preoccupied with the increasing complexity of managing to keep up with the pace of globalization.

To be poor is to be confronted with a deprivation of opportunity. There is not enough opportunity for everyone on the planet to eat, to drink safe water, to work, to have medical treatment when sick, to have basic sanitation, to feel safe — there just isn’t enough opportunity for everybody to be financially secure.

Defeating global poverty remains one of the most frightening challenges facing the international community today. Income- and consumption-based strategies fall short of helping the world’s poor climb out of poverty over the long term in the developing world and even in the United States. However, asset-based approaches to development, such as small loans or insurance, can promote public policies that lead to increases in the capital assets of the poor.

Second, the world should take the initiative to target poverty-alleviation projects in countries that have a good chance of success, where the government is welcoming, the local business community eager for well-footed partners for creating economic opportunities, and where public funds or low-cost financing can be obtained for the project’s early stages.

The fierce debates over economic globalization have focused recently on global poverty and income inequality. Academics, journalists, and multilateral organizations of all stripes have weighed in on this matter, and a compromise seems to have formed around the proposal that poverty and inequality are on the rise.

From clean water to disease control to global climate change, a new breed of business people are designing sustainable solutions to promote international development and reduce global poverty. Many international development initiatives have been applying business discipline to improve livelihoods in many different nations. These nations tackled their development problems through a combination of strategic direction by their governments, a gradual expansion and opening of their economies to world trade, heavy investments in health and education (as universal as resources would allow), and social contracts between different sectors of society that were strong enough to keep these processes moving forward. The role of worldwide assistance was simply to support these self-directed efforts by helping to fill temporary gaps in resources and protect them from the destabilizing effects of international economic and other shocks.

The key to poverty reduction, as the examples from many Asian countries clearly demonstrate, is business, especially small- and medium-sized domestic companies. They provide the jobs, the income, and the motivation for individuals to become educated and move up in the world. For local business to flourish, however, it often needs access to world markets, technology, credit, and managerial know-how. This is the reality of globalization. In addition, multi-national companies provide that access.

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Posted in Global Business

Verne Harnish’s Recommended Books on Management & Leadership

Verne Harnish, author, management consultant and Principal at Gazelles

Verne Harnish, management consultant and author of three books, recommends the the following five books that can actually help you run businesses for those of you tired of reading the same old advice. His recommendations appeared in the Fortune magazine issue of 07-Nov-2012.

  • 'Ownership Thinking' by Brad Hams (ISBN 0071772456)
    Ownership Thinking: Brad Hams on implementing ownership-thinking and engaging employees by ushering meaningful and lasting changes to organizational culture by enabling employees to understand the financials, the impact of their work, setting profitability goals, and creating employee bonus plans that pay for themselves. The sub-title is “How to End Entitlement and Create a Culture of Accountability, Purpose, and Profit.”
  • 'Driving Excellence' by Mark Aesch (ISBN 1401323979)
    Driving Excellence: Mark Aesch provides a biographical account of how the author turned around Rochester Genesee Regional Transportation Authority (RGRTA) and leadership lessons from the achievement. The subtitle is “Transform Your Organization’s Culture – And Achieve Revolutionary Results.”
  • 'Built to Sell: Creating a Business That Can Thrive Without You' by John Warrillow (ISBN 1591845823)
    Built to Sell: Creating a Business That Can Thrive Without You: John Warrillow on how to create value in a business by increasing profitability and creating a sustainable business model.
  • 'How Companies Win' by Rick Kash, David Calhoun (ISBN 0062000454)
    How Companies Win: Rick Kash, David Calhoun describe the shift from supply chain-driven business to demand-driven businesses, and how companies can change their approaches to enterprise management, marketing strategies, and delivering products and services. The subtitle is “Profiting from Demand-Driven Business Models No Matter What Business You’re In.”
  • 'Tell to Win: Connect, Persuade, and Triumph with the Hidden Power of Story' by Peter Guber (ISBN 0307587959)
    Tell to Win: Connect, Persuade, and Triumph with the Hidden Power of Story: Peter Guber on the power of story telling to touch our hearts, and educate, entertain, influence, motivate, and communicate. Storytelling cannot be formulaic—the book covers essential elements necessary for constructing and telling a compelling story.
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Posted in Management and Leadership

Four Steps to Spark Your Renewal

Four Steps to Spark Your Renewal

Exhaustion and feeling overwhelmed from the routine of life results from a combination of factors. Chronic overloading of our physical, emotional, and mental faculties can have dire consequences and sap motivation out of life. It is impossible to maintain high performance over the long term without burning the candle at both ends. The overrunning effects of exhaustion can also disrupt personal relationships with family and friends, undermine your sense of gratification, and increase stress. Here is how to flight the cause and not the symptoms of exhaustion and spark your renewal.

1. Discover optimism

Whether you are undergoing a difficult time or merely struggling to be keep up with the pressures of everyday life, there is potential for optimism. Optimism is nothing more than an image of a positive and feasible future. Optimism is a powerful force. Neurologically, optimism truly helps us to counteract the off-putting effects of life’s pressures and burdens. Optimism can inspire us to dig down and find the courage and strength to move in the direction of our dreams. Prove your pessimism incorrect by acting as if things are already better. Optimism begins with a period of mindfulness, contemplation, and rejuvenation. Put the pressures of life to the side and discover ways to reconnect with yourself. Then, direct your energies towards what needs to be done and keep adjusted with yourself and people who are close to you. Optimism is not a substitute for hard work, but a supplement to it.

2. Concentrate on what matters the most to you

If you’ve been feeling besieged, detached, pessimistic, without purpose, and inching for survival instead of evolution, an adjustment must be the order of the day. Research has shown that many people simply do far better in their jobs and in their personal lives when they are doing what they believe matters the most to their world. In work, as in love, you have to follow your heart. Alas, passion for what matters to you is so hard for most people to act out. Reflect on how your work makes sense in the bigger picture of your life and in the world around you. Take one tiny step toward bringing more meaning to your life. Try to learn and then recruit others to promote and encourage you. Focusing on what the matters most to you intensifies the possibility that you can endure with life and investing your time on everything that is best aligned with your personal values.

3. Practice gratitude as an antidote to pressure

Gratitude has the power to unlock the fullness of life by allowing us to rejoice the present by transforming refusal into acceptance, disorder to order, and ambiguity to clarity. Research has shown that people who practice gratitude everyday have a superior sense of self-worth. Practicing gratitude could be as simple as writing down a list of things or blessings you are grateful for each day. Gratitude makes sense of our past, brings peace for today, and creates a vision for tomorrow. Develop an attitude of gratitude, and give thanks for everything—good or bad—that happens to you, knowing that each step forward is a step to achieving something bigger and better than the present. In addition, expressing gratitude can reduce the occurrence and length of episodes of depression.

4. Overcome the fear of trying something new

When it comes to overcoming pressure and renewing the spark of your life by creating new ways of getting things done and improve your performance, you need to overcome your fear of failing and of doing something new. If you try to feel comfortable until you try something new, it is likely that they will never attempt anything that requires courage. Trying something new requires courage and the ability to beckon that courage is a huge benefit towards sparking your self-growth. Instead of diving right into a situation that looks daunting, approach it in steps allowing you to gain confidence at each step. Try something new that opens up the possibility for you to grow.

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Posted in Philosophy and Wisdom

Three Simple Ways to Create Abundance and Enhance Your Life

Clear away the clutter of the past

Abundance in life is all about prosperity, blessings, faith, compassion, and, ultimately, well-being. The more you can do to raise your positive energy and weed out the sources of negative energy, the more you can live your life abundantly.

  • Clear away the clutter of the past. Many physical and mental constructs in your life, viz., articles, tools, gadgets, events, circumstances, books, even friends, live longer than their usefulness. These things once consumed your active attention, perhaps helped or shaped you and drained your energy. However, in the rearview of life, these might appear and inconsequential. Let go of them. Hanging on to things no longer needed only clutters your mind.
  • Express gratitude. Gratitude is an emotion we would all do well to cultivate to generate more joy and meaning in life. Feeling appreciative and conveying gratitude makes us more contented and heartier. Each day, invest a few minutes to put on paper things and people that make you thankful. You could direct your gratitude inwardly too. Be open, honest, and sincere to yourself.
  • Manage your fear of failure. As human beings, we expend a significant portion of our energies dealing with anxiety and fear. Fear inspires how we act and react to everyday situations. Fear can be paralyzing for some. Overcome your fear by taking just a few minutes to list the advantages and anxieties of dealing things you are afraid of. Consider the prospective benefits of conquering those fears. Mull over ways your life could be different if you could not give up on your challenges because of fear.

Develop a positive attitude. Your life experience is up to you to create. Live your life to the fullest. Deserve nothing but the best and never settle for anything less than what you can afford to create for yourself.

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Posted in Philosophy and Wisdom

Domestic Demand is Transforming China

China transforming into a consumption-driven economy

China’s growing middle class has been a prevailing foundation of its political, social, and economic stability. China’s population, which accounts for one-fifth of humanity, is seen as the biggest market ever. The growing consumer demand has been the underpinning for the country’s transformation from an export-driven economy to consumption-driven economy.

For decades, China was the world’s workshop because of its political stability and a dependable, compliant, and competent manufacturing labor force, groomed with a sense of discipline that the government enforces upon this labor force. China is transitioning away from its past fixation on low-cost manufacturing and ushering an era of sustainable development. In chorus, the Chinese government has tried to push domestic consumption and indigenous innovation as the next growth vectors of the Chinese economy after a highly successful wave of economic growth driven by investments in infrastructure and exports.

China is currently experiencing the largest relocation and urbanization revolution in the history of humankind. In a decade, nearly half of Chinese will live in urban areas and semi-urban areas, some of them urban metropolises with populations of million-plus that emerged only a few years earlier. The great transformation in the landscape of China over the last few years has been the migration of hundreds of millions of peasants from rural China, now that the government allows them to leave.

China Service Sector The middle class in China, and their consumption and their need for services, is at the heart of the country’s evolution to a domestic demand-driven economy. Pressures on the middle class in China are ever increasing. Inflation is high, a bubble in the real estate market has dissuaded young families from buying real estate, and tens of hundreds of recent college graduates are unable to find jobs.

China’s transition provides an incredible opportunities in the service sector. The Chinese middle class will have a huge appetite for services in medicine and healthcare, media, tourism, business consulting, environmental services and household consumer services. Some of the persistent challenges that the manufacturing economy had to overcome with respect to China’s legal and intellectual property rights will continue to challenge the service sector as well. The new political leaders of China are expected to sponsor fiscal and administrative policies that will continue to make China flourish as the world’s most prominent consumer market and a resource of global competitiveness.

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Posted in Global Business

Book Synopsis: ‘Shift:’ Carlos Ghosn takes you Inside Nissan’s Historic Revival

Carlos Ghosn, Renault-Nissan

In the year 1999, Japanese automaker Nissan was in a downward spiral. The company had accrued massive debts, severe losses, and a badly damaged brand. Nissan had exhausted its strategic options and its managerial resources. It dreadfully needed a global partner and a new chief executive officer. Renault, the French multinational vehicle manufacturer, answered this call for desperation. Established in 1899, Renault was a so-so European automaker with far-from-inspiring prospects.

Renault had thus obtained a 36.8 percent stake in Nissan. Renault CEO Louis Schweitzer put Carlos Ghosn, the company’s second-in-command, in charge of Nissan. Ghosn seemed a perfect choice for the job. At Renault, Carlos Ghosn had earned his standing as a savage cost-cutter and first-rate manager. The French labor unions had begun to call him “Le Cost Killer.”

When he become heir to the helm at Nissan in 1999, it was clear that Carlos Ghosn had been training all his life for this mandate of turning around Nissan. Ghosn’s multicultural background made him unusually well matched to take on the Nissan challenge.

The Making of Carlos Ghosn

Shift: Inside Nissan's Historic Revival by Carlos Ghosn At Nissan, Carlos Ghosn was the definitive outsider. A multi-disciplinary talent who could speak more than a few languages, Ghosn was born in Brazil to Lebanese parents. As a youngster, he relocated to Lebanon at age six and was educated by Jesuits in Beirut. From there, he relocated to France, where he earned degrees in engineering from the prestigious Ecole Polytechnique and Ecole des Mines de Paris, two of France’s most esteemed universities. Alongside, Ghosn learned five languages, a passion for logic and statistical precision, and a gift to perform in unfamiliar—even multi-cultural—landscapes.

In 1978, after graduate studies, Carlos Ghosn joined Michelin, the French tire manufacturer. He swiftly moved up the ranks, from an engineer to plant manager to chief operating officer. He then took a seven-year stint in the United States integrating the Uniroyal-Goodrich operations, which Michelin had just acquired. During his 18 years at Michelin, he established two approaches that would stand him in good stead later in his career: an approach to cross-functional teams, and a methodology to rationalize and consolidate manufacturing operations.

Over the years at Michelin, Carlos Ghosn had recognized that his advancement at the family-owned company was limited. In October 1996, he transited to Renault as its executive vice president for purchasing, manufacturing and R&D. He soon called for upheaval by closing a Renault factory in Belgium and squeezing out billions of operating costs by initiating several efficiency programs with suppliers and in-house units alike. Following a string of efficiency improvements across Renault and consolidations of operating plants, Carlos Ghosn became known as “le cost killer.”

Renault-Nissan Alliance

Carlos Ghosn Led Nissan’s Historic Revival

At Nissan, Carlos Ghosn recognized that crisis was not only essential for organizational transformation, but also a powerful catalyst for it. After years of regretful leadership and disoriented policies, Nissan was headed to bankruptcy. Ghosn first determined just how deep the financial rot ran. He discovered that, inside Nissan, there was a sense of deep denial about the company’s perilous operating and financial condition. Carlos Ghosn went about slashing purchasing costs by 20%, reducing capacity by 30%, closing five factories, and ousting some 20,000 workers through layoffs and attrition. In Japan, large companies were viewed as simply too big to fail. Then Japanese government was expected to rush to the aid of companies if Japan’s keiretsu-linked financial institutions did not.

In his business career, Carlos Ghosn has brought a composed, analytical approach to each managerial problem he has faced. As Ghosn went about in his efforts to transform Nissan, he implemented a quantitative, results-oriented methodology of setting numerical targets and then holding his leaders and their organizations accountable for them. Carlos Ghosn also announced the conclusion of seniority promotions and financial cross-shareholdings with other companies, set meticulous financial targets and declared that he would quit if he did not meet his own demanding targets. His drastic plans made were opposed by Japanese management traditionalists. He was also reprimanded by the powerful Japan Auto Parts Industries Association.

Carlos Ghosn also invested heavily in Renault-Nissan’s technological abilities. He set up cross-functional Renault and Nissan management teams in engineering, design, and marketing. These cross-functional teams were asked to uncover every problem and set new, realistic-but-tough performance goals. In addition, Ghosn was a tough taskmaster and executed with discipline. He made it clear he would not tolerate any backsliding: he writes, “If you disagree with the plan, you’ve got to leave the company.”

Carlos Ghosn with Nissan 350Z

As cost saving programs, consolidation of operations, and reduced reliability on debt improved Nissan’s financial performance and Nissan’s operating efficiency, Carlos Ghosn took courageous steps to invigorate the Nissan brand. He revitalized the Z-series sports-coupe line with the Nissan 350Z, a model that had been terminated previously in 1996. In the U.S., the world’s largest automotive market, Nissan jumped into new market segments with the Nissan Murano SUV and the Nissan Quest minivan. Nissan also flourished from Nissan Titan truck, the Nissan Armada SUV, and the Infiniti QX56, full-size vehicles that accounted for higher profit margins.

As a result, Nissan not only reached Carlos Ghosn’s demanding targets, but also exceeded them. Again, Carlos Ghosn was promoted. In May 2005, he rose to become the president and CEO of Renault.

Currently, Carlos Ghosn is the Chairman and CEO of the Renault-Nissan Alliance, the global strategic alliance that oversees the unique cross-shareholding agreement between Renault and Nissan.

Book Recommendation: “Shift: Inside Nissan’s Historic Revival”

“Shift: Inside Nissan’s Historic Revival”, by Carlos Ghosn and French business journalist Philippe Ries, offers a treasure trove of practical guidance to executives who find themselves in challenging business cultures, especially in a global business environment, and are faced with diverse expectations for engagement of employees and managers.

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Posted in Management and Leadership

A Fish Called Wanda (1988) – Apologies

A Fish Called Wanda (1988)

A Fish Called Wanda (1988) is heist-comedy film about a group of jewel thieves. Jamie Lee Curtis plays one of the thieves, Wanda, an attractive American. She seduces Archie Leach, the lawyer of one of her associates, in an attempt to find where her associate hid the jewels before the police detained him in suspicion of the heist. John Cleese, member of the Monty Python gang member, plays the lawyer. Also on the English side of the gang is another peculiar character named Ken, who is played another member of the Monty Python gang, Michael Palin. Ken has many oddities: most prominently a bad stutter, love for animals, Ken has some fish, one of them named Wanda.

Also part of the gang is American con artist and weapons man Otto played by Kevin Kline. Otto pretends to be Wanda’s brother, but Otto and Wanda are lovers. Otto is an Anglophobe who is enthralled by the philosophy of German philosopher Friedrich Nietzsche. Otto becomes insanely jealous of the budding romance between Wanda and Archie. Archie and Wanda’s liaisons to go dreadfully wrong as Otto interferes with their plans.

John Cleese and Charles Crichton wrote the script. Charles Crichton, a veteran of some of the best British comedies of the 1950s, also directs. The movie features some of the best comic tales in the true tradition of the Monty Python troupe: Ken’s attempts to kill a woman witness that misfire and actually kill or harm witness dogs. The plot is solid and the jokes are perfectly timed and delivered by the film’s spectacular cast.

Here is John Cleese and Kevin Kline in one of the most comical scene of the movie.

Archie: All right, all right. I apologize.

Otto: You are really sorry?

Archie: I am really really sorry. I apologize unreservedly.

Otto: You take it back?

Archie: I do, I offer a complete and utter retraction. The imputation was totally without basis in fact, and was in no way fair comment, and was motivated purely by malice, and I deeply regret any distress that my comments may have caused you, or your family, and I hereby undertake not to repeat any such slander at any time in the future.

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Posted in Music, Arts, and Culture