Automotive bosses: time to be Ghosn
The risk with strong leaders is that they motor on for too long, and then try to be backseat drivers
Elon Musk is the most obvious example focus of a cult of personality in the testosterone-fuelled automotive industry. But he is not the only one. At least two European carmakers have been shaped in the images of high-profile leaders. This begs a question: what happens when they step down?
Renault has postponed that day of judgment. The French carmaker is likely to confirm this week that Carlos Ghosn, chief executive since 2005, will serve another term. Already, reports are surfacing that some other directors are unhappy with this.
Mr Ghosn’s achievements are vast, and rightly admired. He helped rescue both Renault and its 43-per-cent-owned associate Nissan from financial chaos. But the first mistake of succession planning is to allow a strong leader to continue too long. The autocratic peril is compounded by Mr Ghosn’s role as chairman of both companies. His long tenure has already led to underlings departing — notably Carlos Tavares, who now runs rival PSA and will face the same issues himself one day.
Another bad idea is to try to pick your successor. The temptation to prefer someone who thinks like you — or worse, someone who is unlikely to outshine you — may be too strong. There is a danger of this at Fiat Chrysler. Shareholders will find out later this year which member of the executive council will succeed celebrated chief executive Sergio Marchionne. But only once the outgoing boss has laid out a strategy that could prove a straitjacket.
Backseat drivers can be equally constraining. Mr Marchionne is likely to remain active within the Agnelli family empire after he steps down. Mr Ghosn may stay involved with the wider Renault-Nissan-Mitsubishi alliance when his tenure as chief executive ends. One is reminded how Ferdinand Piëch, another force of nature, continued to pull strings at Volkswagen years after leaving the management board.
Automakers are capital-intensive and complex businesses. Stakeholders often include governments, founding families and muscular unions. Running a carmaker is hard. But that should not make the top ranks the preserve of well-connected male petrolheads. Committed thinking multiplies the risks that come with technological change. Renault and others should hire more executives from outside the auto industry and rely less on powerful veterans.