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An arranged marriage of equal partners

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Nissan and Renault have something that most companies don’t, thanks to their leader, Carlos Ghosn. It’s not a merger or a joint venture. Instead, it’s a tight relationship that still allows each company to remain independent.

Here’s how Ghosn pulled it off:
  • Don’t force it. As the leaders of many mergers have discovered, if you try compelling people to work together, they’ll balk. Ghosn sets profit targets and lets his managers decide how to achieve them.

  • If it ain’t broke … Nissan and Renault executives thought it would make sense to use the same fasteners. But their managers discovered that the savings would be minimal, while switching would require costly new equipment in every factory and might even hurt quality. The costs outweighed the benefits, so they backed off.

  • Limit the number of cooks. For new designs, agree on common specifications and then let one partner design that particular item. Example: Renault develops diesel engines, while Nissan develops gas engines. Each then buys engines from the other. They once built 29 engines between them; the goal is eight.

  • Everybody wins, or nobody plays. If it looks like a new product might cannibalize your partner’s product, don’t do it unless your partner agrees wholeheartedly. Sometimes, you can shift the new idea to your partner, freeing you to develop another idea.

  • Talk. Keep it informal and flexible, but you do need some kind of structure to move things forward and avoid chaos. Payoff: joint savings and no duplication.
-- Adapted from “Secrets of a Happy Marriage,” Joann Muller, Forbes.

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