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Leadership in the current economy – CEO’s perspective

admin — Sun, 28 Mar 2010 23:32:06 +0000

About the Author:

Max Catanese is the CEO of Almax Mannequins and an HBS alumni. His previous experience is in KPMG and PWC as an Auditor. Almax has mannequins with exclusive positions, faces or finishing’s that have been specially manufactured for international brands, such as: Benetton, Calzedonia, Coin, Diesel etc., Check out their website: www.almax-italy.com

From Max’s Desk:

The economic crisis that has hit the world in the last two years will leave consequences in the way of doing business in the next ten years. It is a global crisis that has worsen the expectations in all the countries. Leaders are living difficult times no matter which industry they belong to. Before August 2007, CEOs were managing growth. They forgot the obstacles of what it means to manage a crisis. Leaders were not prepared because the world was meant to grow “forever”, artificially doped by finance. Not all has been bad though. Industries got back their importance and role and banks have learnt a lesson for the future. Those who will overcome the crisis will get stronger than they were before.

Leading in turbulent times is difficult for many reasons. Results are worse than expected (and in many cases abruptly negative) and tension is high throughout all kind of organizations. People work under stress. Tensions come from inside and outside also. All the stockholders of the companies are under the same pressure. Suppliers are afraid to lose clients who are approached by many substitutes and must give a better service for less money; banks are hit by the crisis and don’t give access to credit as they did before, clients are demanding better service with lower costs. As a result, competition is higher and margins much lower.

A leader has to give strong signals to the organization. First of all, the leader must get the big picture and has to read a complex situation inside and outside the company. The leader has to intervene inside the company with great motivation, always giving the impression of having the pulse of the situation and giving the directions to get out of the crisis. It’s important to be calm and not panic and, at the same time, motivate people to get out fast from this situation. It’s important to follow all the momentum with great attention and give stimulus to the people. Inside the company, nobody must think that the leader is not aware of the problems. The leader must provide the solutions and always indicate the roadmap to follow. Send positive signals and do not give importance to negative signals (that must always be foreseen).

In difficult times a leader must transmit awareness and assure the workers. People are crucial inside all organizations and they must be motivated and encouraged. A leader who is psychologically strong, impacts the result and work of the people. Show good results and don’t emphasize mistakes. Bring tranquility inside the company. A leader must adapt the strategy to the current situation but always keep it on the track for the long term strategy. Changing strategy with no reason would create confusion inside the organization and it’s the last thing needed in a company when things are going wrong. Consistency and positive moves are crucial in the way of success.

Real life experience: Entering Colombian Market

admin — Tue, 17 Nov 2009 23:58:26 +0000

Antonio Caparrós

About the Author:

Antonio is Director de Gestión (Managing Director) of Grupo SM Colombia. He had to envision the company as a whole: designing, developing and implementing a strategic plan in the most cost effective and time efficient manner for the commercial, marketing, operations, finance, human resources and institutional relations departments. He was part of the valuating team in 2005 – 2006, and was chosen to be the person responsible to lead the Colombian project. He was a CFO before taking up this role.

Grupo SM is a multinational publishing holding that focuses on providing solutions and materials to educational institutions. It also promotes youth and children literature. Grupo SM has footprint in 9 countries: Spain, Dominican Republic, Puerto Rico, Peru, Chile, Argentina, Colombia, México and Brazil.

From Antonio’s Desk:

I work for the international division of Grupo SM, and in 2005 we started to evaluate the alternatives to enter the Colombian market. Finally we decided to buy an existing player (at that moment the 6th place in the market with no more than 9MM USD in revenues, was a family-owned business and was losing money).

In 2006, we bought the company and I came to Bogotá (Colombia) to manage the transition period, stabilize the company and start a new era. The landing was quite difficult. All the employees cared a lot about the previous owners and they were scared of losing their jobs.

The first year was all about winning people’s confidence, building teams that believe in this new venture and giving them the opportunity of turning around the situation and propose new ways of doing things (they never had this chance in the previous company). The second year was all about creating new brands and image in the market. Internally, the employees were involved in the strategy planning for the next 3 years. They were assigned specific tasks and were clear on how to contribute to it.

The big task was to tell the customers that a new player is in the market; we were ranked 3rd in the market share at that time.

We are in the third year. Lot has been accomplished including gaining market share (revenues are up to 14MM USD), new products have been launched and a new organizational structure is in place. Now, we are focused on keeping the growth, but taking a lot of care of the profitability ; this year our revenues will revenues will be close to 16MM USD.

All this turnaround is possible because of a cultural and values based change management. The employees first concept (similar to HCL’s philosophy) is the solid path to a solid organization.

Critical Success Factors:

· Clarity since the beginning: Mission, Vision and Objectives (short term for small wins and midterm… something you can see coming)

· Always WHY and HOW :leading by example… actions… Explain ‘Why’ we are doing it and ‘How’ should we do it)

· Story telling: People like to hear stories and, if used well, you can send very potent messages they can sense your emotion and passion to the process.

· Good sense of humor: Opportunities like this are rare, so we are in this together. Lets enjoy it and learn from it!!!