CEO Club

Sponsored by the University of Miami School of Business Administration and Becker & Poliakoff

Latin America heads of Clorox, Wendy's say they're looking for real experience, and a degree

02 May 2012

Companies are always looking to recruit recently graduated MBA students from top schools, however they’re increasingly looking for new talent in the countries they’re operating in in Latin America and preferably candidates who with the knowledge and skills to dive right into the work.

Heads of Latin America for multinationals discussed what they’re looking for in business students coming out of graduate school at WorldCity’s CEO Club on March 2.

University faculty can't be disconnected from industry, said UM business school Dean Eugene Anderson.

“Most graduates have no understanding of a functional department – human resources, marketing, IT, sales – and what it actually does,” said Sam Jaddi, CEO of MSH Group. “We as leaders in these businesses need to really start to think about what roles we have for MBA people who come into our organization.”

Ben Mansoor, VP of Latin America for Wendy’s, said his company was approached by a handful of universities looking to place their MBA candidates within the companies, shadowing managers in a variety of a departments. At the moment, Mansoor said, “we have one person shadowing our supply-chain department.”

It’s those kinds of experiences that make new graduates stand out from the pack. Michael Costello, vice president and general manager for Clorox International, said his company partners with Students in Free Enterprise, also known as SIFE, to identify those young professionals who have not only a degree, but those who also have some practical business planning skills.

“There are a lot of smart people, but not a lot of people who are going to go the extra mile to do the extra work,” Costello said. “That’s one of the differentiators.”

It was evident that companies, even law firms, are looking to hire people with more than just the classroom basics. Especially in a time when many companies are just beginning to hire again after downsizing during the worldwide economic and employees are being looked to do the work that two or three people might once have.

“Not that being at the top of your class won’t help you get an interview, but if you’re going to get hired there’s got to be something that says that we can have concrete returns,” said Perry Adair, a shareholder at law firm Becker & Poliakoff. For example “what we’re looking for is… someone who legal skills, but has awesome computer skills.”

Companies are looking for new graduates who went the "extra mile" to get real world business experience during graduate school, said Clorox International's Michael Costello.

What remains to be seen is how universities will create programs to give students those skills, and how they’ll partner with businesses to stay abreast of what’s happening across a variety of industries.

You “have to get [students] out into the real world so they connect the theory from the classroom,” said Eugene Anderson, dean of the School of Business Administration at the University of Miami. “You can’t have the faculty disconnected either.”

However getting students out into the real world is only half the battle. The companies where they intern, the supervisors they’re to work under and the work they’ll be doing, needs to be carefully prepared beforehand and organized in such a way that makes it worth both the student and the company’s time.

A couple months isn't enough of interns to really understand how a company works, said Ben Mansoor of Wendy's.

“I went to UM and interviewed 15 or so folks,” said Sam Jaddi of MSH. “I think there’s talent, but I stopped us from hiring these folks because I said we need to have a program in place to support them better.

“They can be utilized a lot more than we realized,” he added.

Fernando Campo, vice president of the Americas for South Florida-based Citrix, made no mention of finance or accounting in what he’d be looking for from an intern. Instead, he said “our interns have to have a very basic set of project/consulting skills, how to conduct a meeting, how to prepare for a meeting, basic consultative ability.”

On top of that he said there should be a direct connection between any company that’s hosting graduate level interns and the faculty that’s teaching classes.

The CEO Club is one of five event series organized by WorldCity to bring together executives on international business topics. The CEO series is sponsored by the University of Miami School of Business Administration, law firm Becker & Poliakoff and the Miami Marlins. The next session is set for May 10.

Electrolux discusses growing in Latin America and the region's changing consumers

06 March 2012

To understand the drastic changes happening in Latin America and how companies are working to navigate the challenges and opportunities, one has to only look at consumer trends popping up across the region and how companies are best penetrating untapped markets.

Electrolux is seeing many brand new appliance buyers in Latin America, as well as some existing customers upgrade to more expensive machines, said Joao Claudio Guetter.

For Electrolux, it’s a $3.5 billion business. “Latin America as a whole has been growing more than other regions,” said Joao Claudio Guetter, regional president for Electrolux Home Products International, and “we have focused a lot on Latin America in the past five years.”

While the company is well known for its vacuums and Swedish roots, after going public in the 1970s it acquired more than 300 companies and today the vacuum cleaners account for only one to two percent of the business, Guetter added. The company has about 12,000 employees throughout the region, with 9,000 in Brazil, a separate market for Electrolux outside of Guetter’s responsibility.

The company has grown throughout the region mostly by acquisition. Guetter himself said he joined Electrolux when a Brazilian-owned company he was working for was acquired in the 1990s.

“We just went through a major acquisition in Chile, we bought a company called CTI, a $500 million company with operations in Chile and Argentina,” he said. Entering new markets through acquisition seems to be the tack of choice for most companies looking to compete in Latin America.

“Our next target now is to find something to do in Mexico,” he added. “We are in Mexico today but not with an industrial presence.”

The big opportunity in the region is getting appliances into the hands of first-time buyers.

“If you take a machine in the U.S. or Europe you have a 90 percent penetration rate, when you go to Latin America it’s 60 percent, when you go to Asia, it’s 40 percent,” Guetter said, noting Asia is Electrolux’s other big growth market. “Here in the U.S. the appliance market is basically a replacement market.”

IBOPE Zogby's Kjell de Orr, a Swede working for a Brazilian company, asked what it was like being on the opposite side of the equation.

About half of new clients in Latin America are first time buyers and Electrolux is seeing people “trade up” to better washing machines with more features. On top of that many consumers throughout the region who already own washing machines are purchasing dryers instead of simply hanging clothes out to dry as they used to.

“Some years ago for each dryer there were 20 washing machines,” Guetter said. “Today this ratio has dropped a lot. Now we probably sell seven to eight washing machines for each dryer.”

Yet how those products end up in South America is continually changing. Guetter said that in Brazil, 90 percent of what’s sold there is made there. For the Latin America region, however, he said products are “50-50. Fifty percent from China and 50 percent from North America [via] our Mexican operation in Juarez.”

Corporate and national culture was also an important factor to the Latin American expansion, and a key consideration many companies have to take into account when they enter a market through a local acquisition.

“I’m Swedish working for a Brazilian company and you’re Brazilian working for a Swedish company,” said IBOPE Zogby’s CEO Kjell de Orr, Electrolux “is a Swedish company what does it mean? You’re talking about 100 brand acquisitions globally, does culture influence the way you think?”

Guetter remarked “Sweden [is] a social democratic country [and] Electrolux follows the same rules, it’s very human oriented, very environmentally friendly” while outlining the company’s environmentally friendly processes both in building its products and handling its workforce.

“If we have an accident in any of the factories they go directly to the board in Sweden,” he added.

The downside of that, however, is that a decision “can take months or years” as opposed to the more autocratic, Brazilian style of management where most directives come from top managers.

Taxes, corruption and ease of doing business key considerations for Latin American expansion

12 September 2011

When it comes to doing business in Latin America there’s far more to consider than simply what tapping into a new market will add to a company’s bottom line.

Issues like corruption, bureaucratic red tape, security, ease of travel, labor disputes and a host of other factors come into play as companies decide where to rev up operations, a gathering of multinational executives who oversee Latin America said during WorldCity’s CEO Club on Sept. 9.

Nowhere have those issues been more important than in Mexico and Brazil. Though the wider narrative has focused on violence in Mexico, the staggering growth of Brazil and the opportunities that come with that, many spoke of reality being contrary to perception.

UPS's Romaine Seguin said the company is looking to invest heavily in Mexico as opposed to Brazil.

“We’re starting to see a real big shift, especially in the auto industry, of companies starting to manufacture in Mexico, Volkswagen moved their engine production [there] almost a year ago… and the question is what about Brazil?” said Romaine Seguin, Americas Region president for UPS. “It’s a tough country to do business.

“Just for importing goods you send it express and you pay a 60 percent duty tax [and] an 18 percent value-added tax. It’s protectionism,” she added.

Despite the violence in Mexico, where about 40,000 people have died since President Felipe Calderón launched a war on the drug cartels in 2006, many executives said they feel more safe there than Brazil, and opportunities are equally as plentiful.

“Our business in Mexico is much more steady. Brazil is much more violent, and we have people killed every year,” said Dominick Bossart, vice present for Brink’s Global Service in Latin America. “We had one armored truck stolen in Mexico. The same vehicle turned up two days later and the money was still in the truck. The gangs needed the truck to move bigger stuff.”

The overall consensus of the group was that while violence is more overt in Mexico, it’s just as prevalent in Brazil, though everyone doesn’t openly carry semiautomatic weapons and the press doesn’t cover it as much.

Outside of security issues, a host of other considerations also affect where companies choose to grow in Latin America and by how much.

“The wage rate in Brazil is at least twice as high as it is in Mexico and the unions are very difficult to deal with in Brazil,” said UPS’s Seguin. “The severance you will be paying makes you want to fall off your chair, all management people are in a union. It’s very unusual.”

“Then you have the taxes you pay on salaries in Brazil,” said EDF Communications CEO Erich de la Fuente “To hire someone you need to pay almost 100 percent on each level.”

It is easier to attract talent from around the region to Miami than to other cities, said McCann Erickson's Martin Ortells.

There is also the ‘Custo Brasil,’ or the cost of doing business in Brazil, which refers to payments government officials might demand to ensure to a building permit is issued or a court filing is received by the appropriate department.

“Even though there are clearly some very valuable business reasons to be in the market, there’s no question,” that it’s there, said Henry Martinez, executive vice president and managing director for Discovery Networks Latin America. “With Brazil being so hot, in every sector there are basantes, people you hire to take care of red tape.”

For that to change, said de la Fuente of EDF Communications, reform will have to come from the top.

“Before Chile became better they addressed a lot of institutional corruption. The high-ranking changes against corruption are what have made Chile a good place to do business,” he argued.

Finally discussion turned to where companies are placing staff and Latin America, and whether Miami will remain the gateway to the region. The two cities that cropped up first were São Paulo, Brazil’s financial hub, and Panama City, which has increasingly become a business hub for the region as the 2014 opening of the expanded Panama Canal approaches.

In staffing headquarters further south, some warned that placing operations in Brazil may keep staff only focused on that country, due to its size and because it operates in Portugese while the rest of the continent speak Spanish. Placing headquarters in some countries may make attracting talent difficult as well.

“I see the ebb and flow happen as peoples’ reaction to a market that will provide a particular cost structure,” said Martin Ortells, president of McCann Erickson in Miami. There is “also the value of being able to attract multinationals, individuals from different countries. It becomes difficult to attract talent from different countries, you can get them, but not to the same degree you can get them in Miami.”

The CEO Club is one of seven event series organized by WorldCity to bring together executives on international business topics. The CEO series is sponsored by the University of Miami School of Business Administration, law firm Becker & Poliakoff and the Florida Marlins. The next session is set for Oct. 9.

Datamining, online community building can generate more revenue from the same customers, says Quaxar's Azuela

11 October 2011

In a world where companies and brands interact more and more directly with customers, finding a way to capture their attention and customize offerings to their habits is the future of marketing and communications, according to Leonel Azuela, founder of Miami-based loyalty and digital marketing firm Quaxar.

He discussed what companies can do to drive business using information they already have at WorldCity’s CEO Club on Oct. 7, as well as how Quaxar grew from a digital electronic consulting agency into its present form.

Azuela said Quaxar moved into the customer-relationship management world when he and partners realized the ability to grow as a business was limited when they worked on a project basis.

“We were dealing with profitability, billable hours and all that stuff,” he said.

Putting some personality behind a blog, or marketing campaign, helps catch the attention of customers and keep them engaged, said Quaxar Founder Leonel Azuela.

Now “you go to a database and you discover things,” he said. As an example “if a customer is buying everything three months and he’s a business traveler of InterContinental Hotels and suddenly he stops coming for three months the probability of him going to the competition is high.”

With that kind of knowledge a company can then offer the wayward traveler some kind of discount in hopes of bringing him back.

Putting together an effective customer outreach program, however, has some requirements.

“How do you advise on the right level of touch points with somebody when you’re trying to reach out?” asked James Mancini, general manager for logistics giant C.H. Robinson’s Miami branch, who noted the concern about overwhelming people with emails.

“A loyalty program needs to have a soul,” Azuela said. “If people are using you only as a coupon, forget it, because you’re only going to be seen like that.”

A way to do that, he added, is on blog that offers the chance for engagement and sharing useful content.

Yet “at the end of the day you’re content is great, but who is your audience?” said EDF Communications CEO Erich de la Fuente. That’s “just as important.”

Companies can't expect everyone to be a master of all marketing channels and must let each person play to their strengths, said EDF Communications CEO Erich de la Fuente.

To that end, both he and Azuela agreed that finding experts in specific areas is equally important as crafting the right message or campaign.

“We’re good at crafting messages,” de la Fuente said, but “we’re trying to re-design the company where we have a content editor team, then we bring in people who know how to best get the word out.”

That trend of dividing work to outside firms or revenue-sharing partners seems as though it may become more prevalent in the coming years.

“It’s impossible to have somebody doing everything perfectly, some people are really good at operating Facebook or Twitter, some are really good at creating email engines,” Azuela said. “If you go inside an iPad or computer, 80 percent of it was done by somebody else but the brand was done Apple.

“We try to implement the best players, and the best players are in platforms and services,” he added. When Quaxar pitches a potential client it does so with “a creative agency and a hardcore IT company.”

Build a communications strategy, and stick with it, top executives say

27 July 2011

When a crisis hits, many companies quickly mobilize a communications team to get out their message. But they’d be better off having a communications team working year-round, if they really want to build credibility.

Erich de la Fuente, chief executive officer of Miami-based EDF Communications, discussed the importance of communications at WorldCity’s CEO Club on July 8 in a wide-ranging session that touched everything from preparing for a TV interview to managing social media.

Don't wait for a crisis to develop a communications strategy, said EDF Communications CEO Erich de la Fuente.

“It’s just as important to communicate what you did as to do what you did,” said de la Fuente.

Too often, companies neglect communications until they face an accident, lawsuit or other problem. By then, it may be too late to develop a coherent message or build relations with the media.

“Without a communications strategy, your business won’t reach its potential,” said the Cuba-born executive, whose firm has worked in countries as varied as Rwanda, Ukraine and Colombia.

To develop a communications strategy, it’s essential to know what your company stands for. Define three or four key messages, and focus on them in your communications over and over, he said.

As with sales, know and segment your audience. Decide who you want to reach inside and outside the company. Target what you say to them by age group, geography, type of media and other factors. Finally measure the effectiveness of your communication to make sure the message is understood, he said.

In meeting with the press, executives need to prepare. Communications staff can help them understand, for example, that a reporter may be seeking financial specifics or wants an industry outlook. They also can help executives practice interviews to make sure their message is clear and consistent.

“One of the biggest misperceptions is that ‘the media is out to get me,’” de la Fuente said, noting most media just want information and executives can shape the discussion too. “And nobody is a natural in front of a camera. People who seem like a natural have been trained and trained and trained.”

Vital to any strategy is internal communication with employees. Workers who can say what a company does, and what it stands for can be ambassadors. Keeping employees informed also boosts morale. In contrast, employees left in the dark may speak negatively of a company and hurting its image,
he said.

What are some best practices to keep employees informed?, asked Susan Greene, marketing director at Becker & Poliakoff law firm based in Fort Lauderdale.

With today’s Internet technology, teleconferences work well, de la Fuente said. One multinational has a monthly “tele-coffee” with its president, where employees who excel get to meet and ask questions of the big boss via Internet. Workers may be in Peru and the president in New York, but they share.

Blogs with video a good addition can also help spread the word. And of course, there’s nothing like face-to-face meetings. It pays when a top exec visits an overseas office and hosts a town-hall session, he said.

“It’s important that the communication be two-way,” de la Fuente added. Executives need to know: “Are people understanding what I’m saying?”

But how do you stay relevant to today’s youth who often think that executives, like politicians, are simply giving them “spin?”, asked Kjell de Orr, chief executive officer of polling and market research company Ibope Zogby.

Offer concrete examples, de la Fuente suggested. Find third-party endorsements that validate your point. And reserve the CEO to speak only on certain occasions.

“If the CEO talks all the time, you become just the spokesman,” said le Fuente.

Reaching today’s youth means mastering digital and social media. They are the first generation “to actually form a global community,” thanks to the penetration of the Internet, said Tom Shea, managing principal for Florida and the Caribbean for Right Management Consultants.

That means investing resources too, said Ibope’s de Orr. It’s not enough to start a Facebook page. A company needs people to update and monitor it and communicate appropriately, said de Orr.

The message on Facebook or Twitter, as with all media, needs to stay consistent and sincere. If talk abounds about your losses, for example, say what you’re doing to address them, said de la Fuente.

“The minute you get caught in a lie, you lose credibility,” said de la Fuente. “And communications is all about credibility.”

The CEO Club is one of seven event series organized by WorldCity to bring together executives on international business topics. The CEO series is sponsored by the University of Miami School of Business Administration and law firm Becker & Poliakoff. The next session is set for Sept. 9.

CEO Club

Latin America heads of Clorox, Wendy's say they're looking for real experience, and a degree

Electrolux discusses growing in Latin America and the region's changing consumers

Taxes, corruption and ease of doing business key considerations for Latin American expansion

Datamining, online community building can generate more revenue from the same customers, says Quaxar's Azuela

Build a communications strategy, and stick with it, top executives say

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