"Leadership and, above all, confidence are necessary conditions for exiting the crisis", said Jaime Aguilera, president of Unilever Spain, during the Continuous Education session, "Creating the Company of 2020 and its Context," held on the Barcelona campus and organized by IESE’s Alumni Association. "If we don’t have confidence in the future, how can we convey it?" he asked.
The session, divided into two panel discussions, was opened by IESE Dean Jordi Canals, who stressed the importance of doing "what is characteristic of business leaders," which is focusing on the long term. He reminded the audience that companies will be the players to eventually lead the way out of the crisis.
The Vision of Companies
During a panel discussion focused on the perspective of businesses and moderated by Prof. Pedro Nueno, Marta Martínez, president of IBM for Spain, Portugal, Greece and Israel, highlighted the importance of technology now and in the future.
"It is an essential element for transforming business models," she said. "According to surveys, CEOs rank it number one among elements that will define the future of their companies, when six years ago they placed it in sixth place."
In addressing an exit from the crisis, Martínez, an IESE graduate, said: "We have successful cases and we should promote these. Sometimes we sell badly what we do well."
Innovation and creativity are critical for a successful recovery, said Aguilera, adding that greater competitiveness is also vital for boosting consumption. This applies beyond the private sector, he said, to the public sector and on an individual level.
Erwin Rauhe, vice president of BASF Spain, said that "over the next few months, there will be more opportunities for growth in Southern Europe than in Northern Europe. We must analyze how to sell not only products but solutions; to do the same things but more efficiently, using fewer resources," he said.
The Vision of Academics
IESE Prof. Antonio Argandoña moderated a panel that included faculty members Alfredo Pastor, Pedro Videla and Xavier Vives. Recovery in Europe "has already started," said Videla, in the wake of adjustments in the public and private sector, sanitation of the banks and consolidation of the euro. In spite of everything, "we have to be aware that the recovery will be slow, since there are not adjustment mechanisms with a single currency."
He compared the situation of Spain, for example, with that of a state in the U.S., such as Nevada. To confront the situation, Spain should incentivize labor mobility, improve work flexibility and fiscal policy, and – on a supranational level – promote greater banking and fiscal union, he said.
Pastor provided an overview of the situation, agreeing with the other speakers that recovery will be sluggish due to the minimal maneuvering allowed by the euro. However, social aspects of the situation should be put into perspective, since the markets will not get back on track by themselves in the short term.
Prof. Vives discussed the development of a banking union in the EU, noting that "the process toward a union is complex but has received strong support in moments of acute crisis. The goal of a transition toward a banking union that is reasonable, that functions and stabilizes the eurozone is to find a balance between moral risk and systematic risk in the policies that adapt it," he said. Prof. Argandoña closed the panel discussion with a warning: "No business sector is exempt from the responsibility of getting us out of the recession."
There’s no room for short-term thinking in the infrastructure business because you have an investment window of 50 to 100 years, Francisco Reynés, CEO of Abertis, told MBA students on IESE’s Barcelona campus on April 12. The talk, titled “How a CEO Thinks About Strategy and Change: The Abertis Case” was part of the Global Leadership Series and was introduced by Dean Jordi Canals.
Reynés, who is also an IESE MBA alumnus, talked about how Abertis, market leader roads but which also operates airports and mobile phone infrastructures, has spent the past four years adapting to the new reality. He was a shareholder and a board member before he joined Abertis in 2009, becoming CEO a year later. The company had spent the boom years diversifying and when he took charge there was no money left to grow.
He said the company needed to be redefined strategically and had to grow internationally. First he changed the culture, “the hardest job I’ve ever done,” he said. The company had to shift from complexity to simplicity, from a national to an international outlook and from a focus on stability to being proactive to change. Strategically he opted for more partnerships, sector focalisation, selective growth and rationalization.
With the help of his team he optimized company on 5 fronts: technology, partners, talent review, streamlining the organization and cost controls and in the process saved €230m since 2010. Over 90% of the company’s income comes from motorways and so the life of the franchise is all important. Under Reynés Abertis extended the average life of its concessions to 2028. All of this has resulted in the share price performing at 30% above the Ibex (the Spanish stock exchange).
“Management is like conducting an orchestra,” he said. “You don’t have to know how to play all the instruments but you need to know about music and you need to pick the best musicians.”
IESE MBA students and professors traveled to Silicon Valley, 10th Retail Industry Meeting, IESE Prof. Africa Ariño is the new associate director of the publication "Academy of Management Discoveries". Don't miss: MBA Alumni Reunion with chef Ferran Adrià and Japanese architect Makoto Tanijiri, Prof. Marta Elvira in Effective Management of Professional Networks.
How much should the Argentine government pay to Repsol for the expropriation of YPF?
This is the question that IESE Prof. Pablo Fernández put to some 22,000 finance and economics professors, analysts, fund managers and business executives worldwide.
Of the nearly 2,000 responses received, 70 percent believed that YPF's own bylaws governing compensation to shareholders in the event of the State taking control of the company should be used to make the calculation.
There was some variation concerning the date on which to base the valuation: January 27, 2012, when rumors of the takeover bid first began to fly, or when the expropriation was officially announced on April 16, 2012. Depending on which date was chosen, this could result in a difference of nearly $2 billion.
In the end, the global average valuation was given at $10.3 billion.
Interestingly, the average price per share provided by Argentine experts ($50.2) hardly differs from that of the Spanish ($50.8).
While many people thought Facebook would launch its own phone, rather than get into the hardware business it launched the Facebook Home app for Android phones, says Prof. Josep Valor. This allows you do to anything from the phone interface even when the phone is asleep, giving Facebook valuable information that will allow it to develop more targeted apps and monetise your phone use.
IESE graduates based in Portugal will gather for their yearly meeting on April 18 in Lisbon. The focus of the event will be reforms that the government, companies and society at large need to implement in order to cope with the persistent economic crisis in Europe and boost competitiveness.
The meeting will include a special session with the participation of IESE Prof. José Manuel Campa; João Talone, former special commissioner of the Government of Portugal; and António Vitorino, former minister of the Presidency and National Defense of Portugal. The discussion will be moderated by economic journalist Camilo Lourenço.
Organized by IESE's Alumni Association, the session will be followed by an optional guided visit to the Museum of the Orient and a welcome event hosted by José Gabriel Chimeno and Nuno Saraiva de Ponte, president and vice president, respectively, of IESE's Portuguese Regional Alumni Chapter.
“The future has arrived. Online business is already a part of our lives and now is not the time to hesitate. The train is leaving and you have to run to catch it. Whoever doesn’t, will miss out on the market.” These words from IESE Prof. José Luis Nueno summarized perfectly the essence of the 10th Distribution Business Meeting that was held on April 10 and 11 on IESE’s Madrid campus. The theme of this year’s meeting spelt out it clearly: “The Decline of Shopping Streets and the Birth of the New Multichannel Model.” “Little by little, consumers are leaving the malls and a buying more from home or, via their smart phones, from wherever they are,” said Nueno.
The growing importance of e-commerce and m-commerce and the changes that they have brought about in consumer behavior were two questions that were discussed in depth in various sessions. In Spain, online business is the only sales channel that is growing, at 16.3%. “This is a very difficult moment in the consumer market but, in spite of everything, there continue to be opportunities and companies that continue to grow,” said IESE Prof. Julián Villanueva.
The meeting opened with the question: when will the consumer return? In this first session, IESE Prof. José Manuel Campa emphasized that Spanish exports are “growing at 25% more than before the crisis.” “Spain has also become more competitive although at the cost of a terrible rise in unemployment. Inequality in income and wealth is growing,” Campa lamented. He also drew attention to the fall in internal demand. “We will return to 2007 levels but it will take us some time to get back there,” he warned.
When Will the Consumer Return?
In spite of this difficult situation, Campa believes that in 2014 investment in machinery and plant will grow and exports will continue to grow as well. He said the public sector would undergo an adjustment but with less intensity and predicted a possible rise in taxes over the next few months with “a negative effect on consumption.” “Spain is increasingly a bimodal society, with one group of people who have stable and secure incomes and a growing number of people with less access to consumer goods,” he concluded.
Francisco Javier Campo, president of the AECOC, took a similar line. During his talk he mentioned the fall in Spanish GDP, the decline in consumer spending and retail sales and was critical of a possible tax increase which, he said, “would make the possibility of a recovery even more distant.” In his opinion, the consumer would return to the market when there were more jobs. At the same time, he said that the crisis had had a series of consequences on consumer behavior. “Prices have become the most important factor at the moment of purchase,” he said. He also mentioned the impact of the digital world as a key factor in consumption, as well as consumers’ increasing tendency to look for ways of saving money.
Faced with this situation, Campo encouraged businesses to innovate and to use new technologies, to look beyond their shores and to develop efficient and sustainable value chains. “Businesses have to adapt themselves to a different type of consumer,” he concluded. On this point, Prof. Nueno was clear: “Anything that offers the consumer value with new models will pay off.”
The Decline of Shopping Streets and the Emergence of the New Multichannel Model
During the meeting, Prof. Nueno presented the study “The Decline of Shopping Streets and the Emergence of the New Multichannel Model,” produced by AECOC. The study shows how e-commerce is consolidating as an alternative channel, saving the consumer the trouble of going to a shopping center and offering a better choice, lower prices and simpler refund processes.
Further evidence points to the differences between shops in Type A streets (the most commercial) and other streets, where more and more businesses are closing. “This should worry both the municipal authorities and the manufacturers,” said Nueno. He said to be a market leader it was no longer enough to open more shops. “To reach the consumer it is necessary to go multichannel,” he said.
Among the conclusions the report reaches is that “business with a physical presence is losing out during the recession at the same rate that e-commerce is developing with the dizzying speed.” “Anyone who doesn’t have virtual shops or doesn’t connect their inventories is missing out some unique opportunities,” he insisted. He added: “The e-commerce players that don’t have physical shops are not only showing lack of respect for consumers but to the fact that absolutely everyone buys in the street, and the great majority, much more in off-line than online shops.” The study also suggests that “supermarkets have to revise their fulfillment model.” And he offered various useful pieces of advice such as: “Choose a good model now so that you can change it tomorrow.”
The Rise of “A” Streets
The Spanish retail fashion trade is going through a slump with a loss of jobs and a fall in income, said Marc Onandia, CEO of European Fashion Brands. “Spain has gone from being a nouveau riche market to a market of the new poor,” said Luis Bodes, CEO of the men’s boutique Hannover 1998. Luis Sans, president of the boutique Santa Eulalia (Barcelona), said that “urban reform can accelerate or slow down trends but cannot create them.” “The premium or “A” streets are experiencing a boom around the world to the detriment of other streets and this tendency will continue,” he warned. This is partly caused by tourists who make up a large number of those with high purchasing power.
Julio Díaz-Freijó, CEO of Vilacaiz, and Enrique Martínez Laguna, director-general of CBRE Spain, believe that the difference between “A” streets and others is becoming increasingly polarized. Díaz-Freijó regretted that shops were closing down in secondary areas of cities due to the slump in consumer spending. “It’s a very worrying situation and I think it’s almost impossible for those zones to be revived,” he said. However he was optimistic about shops located in prime sites. In this regard, he said that Spain was a very attractive country for big international brands because of the large number of tourists and because, furthermore, the prices in “A” streets are the lowest in Europe.
“The successful streets adapt themselves to consumer behavior,” said Martínez Laguna. For him, the fall in consumer spending and the rise in e-commerce have had a direct impact both on the consumer and on shops. In spite of the crisis, he said Spain is the fourth most sought-after country in the world by retailers. “Real estate investment will return because retailers and big brands are interested in having a presence in the country,” he concluded.
Understanding the Consumer
For Juan Pedro Agustín, director of strategic projects at DIA Internacional, his company’s strategy is based on price and getting close to the client. “You have to know the client better. These days technology isn’t a brake,” said. The next challenge for this company, which has put its money on multi-channels and e-commerce, is m-commerce. “For the consumer, proximity is another way of saving,” said José María Bonmatí, director-general of AECOC.
The director of business relations at Mercadona, Ricard Cabedo, said his business model was based on “total quality, in which all of these components have to be satisfied: boss-worker-supplier-society-capital.” He expects 2013 to be “very difficult.” “We have to be very efficient to lower the price of the shopping basket and increase productivity, which is our touchstone,” he said. He admitted that multichannel is not a priority for Mercadona.
The director-general of Makro España, José María Cervera, said his food company’s outlets are newer and better organized than ever, thanks to his clients and the team of people that make up the company.
Other brands have gone for expansion in high-growth markets. This is the case of Pepe Jeans, whose international director, Bart Denolf, said that one of the keys to being successful in this type of expansion is to ally oneself with local partners in order to have access to technology, portfolios and capital. He was joined in the session by Cristina Galán, cofounder of Bitcarrier, who talked about projects launched by this small business based in technology, data quality and the ability to analyze that data.
Multichannel Is Here to Stay
Enric Ezquerra, director-general of Grupo Condis, said that his company recognized the importance of multichannel (mobile phones, the Internet, social networks) in its strategy. He said that to carry out a multichannel approach, it was important to redefine the roles and objectives of the channels, the development of a singular and a multichannel vision of each client, and the needs to develop actions and services that improve the client experience.
For Luis Buceta of BNP Paribas, multichannel is inescapable for food industry companies and he listed a number of factors necessary in order for the format to be successful: low-cost, little investment in capital and convenience. Meanwhile, Jamie Merriman of Sanford C. Bernstein, made it clear that it is important to invest in social networks and the Internet. E-commerce is here to stay, he said, “but every distributor must be clear about the impact of online shops in order to incorporate them, or not, in their business.” At the same time, he insisted that there is still space for physical shops, which have certain advantages over the Internet such as a sense of immediacy, the possibility of touching the product and the shopping experience.
Mobile Shopping
Fuenciscla Clemares, director of Google Spain, and Fernando Gracia, sales director at Facebook, discussed “The Outlook for Big e-commerce and Social Commerce Operators: Social Commerce in Collaboration with the Retailer.” “The mobile is here to stay but there is still a lot of ignorance in the sector,” Clemares said. She went further to add that “the retail world undervalues the potential of mobiles.” She said the mobile was a way of interacting with and getting to know clients.
After discussing the rise of m-commerce in countries such as United States, she said that in 2016 20% of purchases were made via mobile phone. Her advice to retailers was to develop a mobile site adapted to the needs of users on the move, to close as soon as possible the online/off-line loop and to facilitate conversion to multichannel and multi device. “The mobile opens up a whole new world of possibilities for marketing and publicity,” she said.
Fernando Gracia said that the consumer is changing the way they consume. “The mobile is disruptive. The big players have already taken on this change and are working with it,” he said. He pointed out how in a short period of time Facebook has revolutionized global communications and how it can be a tool to help solve retail challenges. “Having a presence on social networks is useful and brings returns,” he said. “You can connect with your real clients wherever they are. You can engage with them to generate loyalty. You can influence other consumers and build identity through various businesses,” he suggested.
Jaume Betrián, cofounder of Ofertia, and Eric Ubals, cofounder of Motobuykers, discussed the topic “E-commerce: Mobile, Social and Unavoidable.” The two entrepreneurs discussed the history of their respective companies, whose business is based on a exploiting the potential of the Internet and new technologies. “The smartphone is having a significant influence on shopping decisions,” said Betrián.
Ángel Herrero, director of Samsung’s business channel, said mobile devices have become even more influential thanks to the proliferation of tablets and smart phones. “The retail technology sector is going through a period of consolidation because of reduced margins,” commented.
Universal Technology
Universal access to technology has resulted in the user spending more and more time on their devices from which they have access to an enormous quantity of information. Ubals described the business model of Motobuykers, a shopping club for motorcyclists that offers discounts of between 30% and 70% each week. The business has grown in two years thanks, among other things, to the efficiency of the management of e-commerce and the development of a social APP for motorcyclists.
Isabel Mesa, director of WGSN in Spain and Portugal, believes it is time to rethink the retail experience from the point of view of the consumer, and not the other way round. She said that technology he has to be a keystone in retail strategies in order to extend sales areas. There also has to be innovation in physical stores that are vital for developing the business. Finally, Mar Morosse, of Sotheby’s International Realty, talked about the nature of luxury stores in New York and the ways in which they differ in different areas of the city.
Three special "IESE Insight Sessions" are set to be held in Los Angeles, Santo Domingo and San Juan this week.
On April 18 in Los Angeles, IESE’s Prof. Ahmad Rahnema will lead the session "How Wall Street and See Other People’s Money." The event is being sponsored by Cinedigm. Cinedigm is the world’s leading distributor of digital content across both theatrical and digital platforms. Prof. Rahnema will discuss his case study based on the famous movie, "Other People’s Money." The case examines different approaches to pitching and competing against competitors for the same business. Prof. Rahnema will weave key management, finance and accounting issues from the film's storyline into a highly interactive discussion.
Also on April 18 in Santo Domingo, Dominican Republic, IESE Prof. Javier Estrada will lead a session titled, "Blinded by Growth." During the event, sponsored by CESPM, Prof. Estrada will discuss growth from two perspectives - economic growth and earnings growth - and how these relate to the stock returns investors ultimately obtain. He will also demonstrate how evidence indicates that it is possible for investors to obtain low returns in high-growth environments, and high returns in low-growth environments. He will discuss the reasons behind this, the role that valuation plays in this story and the advantages of value investing over growth investing.
On April 19, Prof. Estrada will present the session with alumni and invited guests based in San Juan, Puerto Rico. The event in San Juan will be sponsored by the Caribe Hilton.
A reflection upon the need to rebuild the vision of the companies and leadership that directly contribute to the development of a dynamic society.
The financial crisis that began in the summer of 2007 has escalated into a full-blown economic crisis without precedent in recent history, one that challenges the functioning of the economy and the political system in democratic societies.
This crisis has created a severe economic contraction attributable to the failure of governments to regulate the financial system; unsustainable public deficits; business misconduct; and a lack of corporate sensitivity toward unemployment and other social problems. As a result, the role of business and government, and their ability to build a prosperous and fair society, are in question.
In this context, governments appear to have succumbed to the lure of the short term, disregarding the longer-term interests of society. Their manifest failure to solve today’s problems, coupled with systematic neglect of the long term, have fueled a growing distrust among citizens. Many voices call for civil society to play a stronger role; yet in times of crisis few social actors have the capacity to mobilize collective efforts. Despite these difficulties, now more than ever it is vital to rebuild the reputation of companies, entrepreneurs and business leaders, not on the fragile foundation of public relations but through a renewed understanding of the firm’s mission in a dynamic society.
Image may be NSFW. Clik here to view. “A good leader has to be a collector of dreams, hopes and wishes. The bosses that I have had always have been like that, starting with my father. With the ability to have a dream, follow it and get all of us to follow and work to achieve it,” said Susana Monje, president and CEO of Grupo Essentium and the first female treasurer of F.C. Barcelona, in remarks about what makes a good executive.
Monje leads the family business Grupo Essentium, which was founded by her father Valentín Monje Tuñón and is a conglomerate that once led Spain’s construction sector. Three decades after it was established, the group has an annual turnover of 500 million euros. “The company is nothing like it was 10 years ago,” she said.
Following its global strategy, the group sold in 2006 its companies most closely related to the construction sector and diversified into various industries such as infrastructure, health, education, technology, energy and transportation. Now, amid the recession, the internationalized group carries out activities on five continents.
“It’s a communicative, participative style. I’m interested in the opinions of the people on my team. I believe you need to know how to listen and that by discussing an issue you make better decisions,” said Monje, who said she faces challenges when it comes to managing her agenda. “When you are an executive, work tends to occupy all your available time and that increases with the more responsibilities you have. Work/family balance is a constant goal and also managing the guilt you feel when something doesn’t get done.”
She regrets that government cutbacks are affecting work/family balance policies today, but she is positive about the future: “I am a natural optimist and I believe that Spain will exit the crisis because there is a desire for this. It is true that in a globalized world this is more complicated because other countries now have cheaper labor, high-level technologies and raw materials. But we have other assets in Spain: human capital, entrepreneurial initiative and within Europe we are among the countries with the most tightly-adjusted wages. Today, no matter where companies are, their activities are diversified.”
She also stressed that one of the most important assets of her company is the people she manages: “the responsibility of a company is to provide working conditions that allow people to have as enjoyable a life as possible, with internal and external equity: internal, by offering a career within the company that allows the opportunity to progress; and external, with salaries that are adjusted to the markets where we have businesses and without gender differences,” said Monje, whose organization leads activities in countries such as India, Peru and Brazil.Image may be NSFW. Clik here to view.
he annual meeting of IESE’s International Advisory Board ended today with a conference titled "How International CEOs See the Global Economy" which was introduced by Dean Jordi Canals. The conference was divided into two panel discussions, the first of which, "The World Economic Outlook," was moderated by Prof. Franz Heukamp.
Patricia Francis, of the International Trade Center, said that although we have a fairly predictable political landscape for the next couple of years, this has not been translated into confidence. "Any slowdown in China will affect countries selling into China, especially Australia and parts of Latin America," she added. She was followed by Toyoo Ghyoten of the Institute for International Monetary Affairs who discussed the bold steps the new Japanese government is taking to pull the country out of two decades of stagnation. "The stock market has gone up and business confidence has risen," he said. "The prime minister has changed a mind-set of defeatism into optimism, although there is no room for complacency."
Asked whether a similar approach could pull the eurozone out of its slump Ghyoten said: "Applying monetary easing is one option for the eurozone but the ECB is doing that. If you argue that it has to be more aggressive, you have ask in what way?"
Narayana Murthy, founder of Infosys Technologies, said "we can only solve the problem of poverty by creating good jobs with good incomes and entrepreneurship is the only tool we have. This requires good ideas that are easy to communicate, a ready market and the willingness to make sacrifices today for a better tomorrow. The problem is not money, the problem is good ideas. Government needs to create an ecosystem so that entrepreneurship can thrive."
For his part, Stanley Motta of Motta International said he was concerned at how much money was being printed but added that "there is a common agenda in Latin America. We haven’t solved all our problems but we have a common outlook."
Andrea Christenson of the doll manufacturer Käthe Kruse Puppen said it was hard for small companies to survive. "We are too small to make mistakes and the question is how to find the right partners to expand into the Asian market," she said. "We have now found a German-Asian company that is also in the toy industry."
The second session, moderated by Prof. Eric Weber, was titled "Corporate Strategy in a Volatile World: The Role of the CEO." Hans-Jacob Bonnier of Bonnier AB talked about the digital revolution in the media before adding that "the role of the CEO is to guide managers through change. The CEO is the team coach who has to keep everyone happy because happy managers love to go to work."
He was followed by Franz Haniel of Franz Haniel & Co, who reminded the audience that the values that define the culture of a company are vital. With global teams it’s more vital than ever for CEOs to understand what makes each individual tick. "The single most important characteristic in a CEO is empathy," Haniel said.
Denise Kingsmill of IAG commented that CEO pay has shot up in recent years and shareholders are very concerned about this and are starting to flex their muscles. "The era of the CEO as super hero is ending," she said. Hans Ulrich Maerki, ABB, pointed out that under a new Swiss law shareholders will decide salaries of CEOs. "When we talk about corporate strategy it should be for the next four or five years, not reacting to every event. What a CEO needs to do is look from the outside in to judge the company’s capabilities."
The last contribution came from Kees Storm of Aegon who said "volatility means you need to be flexible." He added that many CEOs just want the board to agree with their proposals but believes the board needs to be more involved in strategy.
Is it possible to go on innovating in sales? In an atmosphere of crisis, what strategies should a company adopt? What should a team leader do in the current situation? How can we get closer to today’s client? These were just some of the questions discussed at the 6th Sales and Marketing Officers Meeting that was held on April 17 on IESE’s Madrid campus.
The title of this year’s meeting, “Reinventing Yourself in Order to Advance: Innovation in Sales” was a declaration of intent. During three intense working sessions, the meeting, led by IESE professors Julián Villanueva and Cosimo Chiesa, discussed the importance innovation in the sales model, in management and the sales team.
Innovating in new markets (that is to say, operating in other countries), training programs for sales staff, new formats, new technological tools and improving the motivation of sales networks were some of the most important aspects presented in the 4th Study of Innovation in Sales Teams. Executives also saw the need to innovate and produce ideas, and to involve employees in the process. “Now is the time to introduce changes in the sales force, because there is much room for improvement,” said Prof. Villanueva, co-coordinator of the study with Prof. Chiesa.
The document also shows that only 15% of sectors had grown in sales volume and only 7% had raised their prices during the crisis. Regarding how to grow in the future, the study was quite clear: 43% of this growth must come from new clients and another 27% from maximizing existing clients. A high percentage of those questioned (66%) emphasized the importance of innovation in delivering value and another 65% highlighted the necessity to innovate in products and services.
Unstoppable Change
Cosimo Chiesa emphasized that “we are in the midst of an unstoppable process of change. The consumer, the product, technology and habits have all changed. Markets are more complex, confusing and competitive and it’s increasingly difficult to stand out,” although that is fundamental if you are to offer “value propositions” to the consumer. To survive in an increasingly uncertain future he said it was necessary to make decisions in three fields: creativity, beliefs and values (what he called the “inside game”) and interpersonal and intrapersonal qualities (“the outside game”).
“Some 80% of professional success depends on attitude,” he said. “Beliefs can be motivating or limiting, and the latter paralyze the attitudes of many sales people,” he added. What steps do you have to take to move from a limiting belief to one with more possibilities? “Have clear goals, question your beliefs and your excuses, get out of your comfort zone and accept challenges and decide whether you want to be the protagonist in your life or just a spectator. Be proactive,” he recommended.
Meeting New Demands
Angelo Ruggieri, Desigual sales manager in Europe, said that “we have to meet new market demands. Our philosophy has always been to look for something new. This is why we have set up DShop.” This is a new business concept for multibrand outlets in small and medium-sized cities. In these establishments, Desigual occupies between 80% and 100% of the sales area with its collection, furniture, lighting and logo in the shop window. The plan is to open 300 DShops in three years, which implies a strategic alignment throughout the company. So far, Desigual has opened 50 DShops in six months with a turnover of €6.5 million, 20% more than expected.
Miguel Giribet, country manager of Privalia in Spain, spoke about the importance of using new technologies in business development. Engagement is fundamental if you want to innovate, he said. For his business, “shopping on Facebook is a big part of our innovation.”
Javier Pijoán, head of sales and distribution for Heineken in central and eastern Europe, emphasized the importance of execution in competitive advantage. “Success comes from a combination of strategy and execution,” he said. In his opinion, aspects such as ambition, alignment through all departments of the company, covering all the market, focusing efforts and measuring performance of the sales team are key to understanding the success and expansion of the beer company in various European markets.
Effectiveness and Efficiency
Salvador Pons, director-general in Spain of Laboratorios Menarini, said that one of the main values of this pharmaceutical company was in its sales network. “We want to be more effective and more efficient. That requires strategic planning and sharing and internalizing this strategy across all departments and increasing the quality of visits because preparation is fundamental to our sales techniques,” he said.
“Anyone who is well-prepared has a future in spite of the crisis. Motivation, innovation, client relations, good incentive and compensation systems, all of these factors affect the well-being of companies. Although there is a long way to go, we need to advance with humility. Success is the fruit of values, dedication and hard work,” said Chiesa, winding up the meeting.
The pharmaceutical industry still offers important opportunities for MBA graduates who want to make a difference in the everyday lives of people, concurred participants in a panel organized by IESE’s MBA Healthcare Club on April 19.
During the panel discussion, which formed part of Healthcare Day, invited speakers shared with IESE MBA students how their career paths have evolved, why they chose to work in pharma and skills that companies are looking for today.
As business models shift, firms are looking for professionals who have the capacity to learn, be flexible and "drive change," said Javier Girbau, director account management at Merck. Mar Guinot, senior manager of business planning & analysis at Amgen, said that as the industry transforms, new models and ways of thinking will be needed at many companies.
Sergio Serra, country manager at Tilliots Pharma Spain, said that there will be a growing number of alliances in the sector, as large "classic" companies partner with smaller biotech firms to provide new healthcare solutions. Among key trends that are set to impact the sector are: a focus on prevention, personalized medicine and home care, he said.
Pricing, however, will continue to be a central issue in the industry worldwide, said Jordi Fernandez, marketing director at Roche Diagnostics. Natalia Borniquel, director of portfolio management at GlaxoSmithKline, said that fast-growing emerging markets are becoming lead markets, moving ahead of the U.S. and Europe. In this context, the goal of firms will be to bring down costs as they improve products.
Despite challenges faced in the industry, participants described the sense of satisfaction they feel from working in an industry that focuses on innovation and seeks to improve people’s lives.
It is particularly gratifying to work in the sector today, said Borniquel, because it is not clear how business models are going to shift. "It’s exciting to be part of the change."
José López, executive vice president of Global Operations at Nestlé, often tells people he is "responsible for anything that can go wrong at Nestlé."
And in today’s digital world, a single mistake can have enormous costs since any customer complaint will remain online indefinitely, López told IESE MBA students during a session held Monday on the school’s Barcelona campus. His presentation, "Managing the Supply Chain in a Global Company: The Case of Nestlé," was part of IESE’s MBA Global Leadership Series.
"If there was ever time we needed to go for zero defects, zero accidents, zero losses – now is the time," said López, who meets daily with the Nestlé’s quality manager, as well as its Digital Acceleration Team for updates on customer opinion.
López said he favors generating competitive gaps across the value chain, rather than the common approach of closing gaps to catch up with rivals.
"I think it’s a much better idea to create gaps," which Nestlé does by focusing on three areas, also referred to as the "three Cs": delight consumers, deliver competitive advantage and excel in compliance.
In its approach to CSR, Nestlé puts a spotlight on rural development, water and nutrition, he said. The three areas were chosen because they involved global problems that Nestlé – which seeks to be a leading company in nutrition, health and wellness - could effectively address, he said.
López said there is a lot of confusion in the world today about what it means to create value and what it means to create wealth. He recounted a recent trip to London where he met with the heads of various start-ups. Entrepreneurs generally fell into two types: those who sought to create real value for customers and others who were already focusing on a lucrative exit in the near future.
"At Nestlé value creation comes through work, not only money," he said. "It’s about creating a sustainable business model by engaging the hearts and the minds of all the Nestlé employees around the world, so that the company continues to be an engine for development and prosperity."
López also said that he believes "economies of scale are overrated," citing Nestlé’s relationships with some 690,000 farmers, many in emerging markets. Characterizing the company’s approach as "Hercules Meets Buddha," López said that he gained important insights on sustainability during nine years he spent working for Nestlé in Japan, where raw materials are scarce.
In Japan, he learned that "waste is not an option," he said.
Recessionary woes, coupled with the rise of e-commerce, have seen the demise of many traditional businesses, as the growing number of vacant, shuttered shops on the streets of many European cities attests.
In Spain, retail sales have drop by 22 percent over the past four years. Conversely, during the first half of 2012, e-commerce registered sales of more than 5 billion euros.
Solving the problems of the retail sector involves implementing a multichannel strategy that integrates online, mobile and social channels, while at the same time reinventing physical stores, which remain cornerstones of the sector.
Buyer Trends
Consumer behavior is evolving in a fast and unpredictable manner. Consumers are leading and shaping multichannel commerce, with retailers trying to adapt their strategies accordingly. The major trends are as follows.
Spain’s pension system is obsolete, unsustainable and requires deep, immediate reform, IESE Prof. Javier Díaz-Giménez said during a Continuous Education session, held April 22 on IESE’s Madrid campus.
Prof. Díaz-Giménez discussed the system’s structural problems during an event titled, “The Serious Problem of Spanish Pensions and a Radical Proposal for its Solution.” The talk was organized by the IESE Alumni Association as part of the conference series “Economy and Society: Proposals for a Dynamic, Innovative and Fair Economy.”
“We have to double savings for retirement by redesigning the current distribution system and complementing it with capitalized plans,” said Díaz-Giménez. “We need another distribution system that is entirely contributory, with a contribution from the worker that is well-defined by law and is not capped.”
He reminded the audience that in just 27 years, Spain’s pension system has undergone six reforms. “The social security administration today does not provide precise information about future pensions,” he said. After criticizing public administrations for spending all the funds accumulated in their piggy bank, he called for a system based on “a mix of contributions, in which the contributory portion must be guaranteed.”
He pointed to Sweden, where contributors spend about 2.5 percent of their contribution on obligatory personal pension funds that are managed by a state agency.
“When you compare Spanish pensions with others around the world, you realize they couldn’t be worse,” he said. Obligatory pensions should be understood as a type of “forced savings for old age.”
“They are really like a deferred salary. Workers give part of their rights for the current GDP in exchange for rights to receive GDP in the future. But these future rights are uncertain. If there is no GDP, there are no pensions,” he warned.
"Minimum Pensions are Different"
“Today’s pension system problem has been caused by changing life spans, as well as issues related to demographics and the cost of managing savings in the long term. People are living longer, starting to work later, birth rates are dropping and the growth rate of young people and adults is flat. All these factors, in the long run, influence the sustainability of the system,” he said.
Díaz-Gimenez also argued for a clear separation of non-contributory from minimum contributory pensions, “which are something different.”
“Minimum pensions should be understood as an expression of our solidarity with older generations. They should be funded from the state budget and should be focused, that is, based on an income threshold and patrimony,” he said.
To carry all of these initiatives out, Díaz-Gimenez called for the creation of a Pensions Agency in Spain, centered solely on contributory pensions.
Miami was the backdrop for a special session on the centrality of relationships for leadership and career development, led by IESE Prof. Marta Elvira on April 23.
During the session, organized by the IESE Alumni Association, Prof. Elvira discussed how to raise awareness of personal networks and the multiple sources of developmental support available in it. Participants also reflected on next steps for shaping their networks in light of career goals and their professional environment.
In her talk, she discussed a range of developmental relationship types, including allies, friends, sponsors and mentors. To strengthen their networks, executives should also think what value they add and giving back to the network. She also encouraged participants to take a long-term view of network-building and build relationships before you need them. She also warned them to avoid becoming overly dependent on a single mentor.
International joint ventures (IJVs) are generally considered safer than acquisitions. Research suggests this is due to information barriers often inherent in the acquisition process.
IESE Prof. África Ariño joined Jeffrey J. Reuer (Krannert School of Management, Purdue University), Tony W. Tong (Leeds School of Business, University of Colorado) and Beverly B. Tyler (College of Management, North Carolina State University) to investigate how executives address information asymmetry and adverse selection surrounding international joint ventures (IJVs) and acquisitions.
Executives can address such hazards not only through their governance decisions, as prior research indicates, but also through their selection of exchange partners.
This study, "Executive Preferences for Governance Modes and Exchange Partners: An Information Economics Perspective," complements prior research on firms' governance choices in three ways:
The third edition of the IESE Private Equity Competition (IPEC) was held on April 19 on IESE’s Barcelona campus. This is the first time the competition, which is set up and organized entirely by IESE MBA students, was open to teams from other top European business schools.
Apart from IESE, this year’s participants were HEC Business School, INSEAD Business School, IE Business School and London Business School. Teams were selected by each school through an internal selection round. In the coming years the IPEC would strive to include participation from more schools.
The IPEC is unique in Europe as it replicates the "true-to-life" experience of a PE investment analyst, giving participants a unique insight into the buyout process. Teams of 5 from each participating business school acted in the role of a private equity fund – working on a real life MBO transaction, with the original transaction documents and alongside the actual persons involved in the deal, giving an exceptional level of authenticity to their task.
Each team first had negotiations with judges acting as the Investment Committee, the Lending Bank and the target Management Team. Thereafter, they had to present their investment proposal to a panel of top judges, which included Fernando Garcia Ferrer (Partner and Head of Markets & PE, KPMG), Marcus Brennecke (Head of EQT Equity in Germany), Chris Wildmoser (Partner, CVC), Marco Sebold (Director, Change Capital Partners), Norbert Steinke (CEO, Hallhuber), Beatriz Gonzalez García-Marqués (Senior Manager, KPMG), Sertac Yener (Director Project Development, Al Nowais Investments), Ammar Al-Rikabi (VP, Arch Investment Partners Limited), Magdalena Markiewicz (Senior Associate, Rothschild) and Carlos Robles (AD, The Carlyle Group).
As well as learning about the strategic and financial considerations of an investment, participants also got the chance to network with top private equity professionals. The judges were very impressed by the high quality of teams while the students benefitted appreciated the real-time feedback and the learning experince.
IESE Business School (Leonce Ano, Diego De Paula, Pietro Ceresa, Jakub Dzik and Luca Salvatore Marzano) won the IESE Private Equity Competition 2013. They were praised by the judges for their thoroughness and consideration of most of the key aspects in the deal. INSEAD Business School (Ghaleb Samara, Tarek Hegazy, Toby Chang, Yeshwant Holkar and Shehryar Kamruddin) was the runner up, with London Business School (Vladi Atanassov, Bernardo Cioni, Bill Hutchinson, Ruslan Mahhov and James Robinson) taking third place. The IPEC was organised by IESE students – Dumitru Furtuna, Stefano Charrey and Varun Dalal under the invaluable mentorship of Prof. Heinrich Liechtenstein. KPMG and Ermenegildo Zegna sponsored the event.
In an ever more global business world, the ability to interact effectively with people from different cultures is vital. To help executives strengthen their cross-cultural management abilities, IESE Business School will offer a complimentary webinar, led by Prof. Yih-teen Lee on Tuesday, April 30.
The seminar "Managing People Across Cultures" will take place at 5:00-5:45 p.m. (CEST in Europe) and 11:00-11:45 a.m. (Eastern Standard Time in the U.S.). To sign up for the free webinar, visit.
During the webinar, executives will discover how the workplace is influenced by cultural backgrounds, values, attitudes and behaviors and develop specific intercultural competencies for leading effectively in an internationally-connected world. Prof. Lee will draw from his research on intercultural leadership to present key learning points.
The webinar will also serve as an introduction for managers interested in participating in IESE's upcoming Short Focused Program, Managing People Across Cultures, which is set for June 18-20, 2013 on the school's Barcelona campus.
Managing People Across Cultures will offer participants practical insights to handle the cultural challenges of managing people in a globalized workplace. Among the cultures covered are Australia, China, Eastern Europe, France, Germany, India, Japan, South Korea, Switzerland, the United Arab Emirates, the United Kingdom and the United States. The 3-day intensive learning experience helps managers and leaders develop intercultural competencies so they can be more aware of their own culturally-based perceptions, norms and patterns of thinking and adapt their behaviors according to specific cultural contexts to achieve business objectives.
