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.”