WorldCity Business Magazine

(4) CEO Roundtable: The Key to Success

by WC

For these five firms, success is the product of corporate cultures that stress integrity, caring, passion and service

As with many companies that have attended recent CEO Roundtables, times are good for Chiles LAN Airlines, regional medical equipment distributor MD International, Texas-based real estate firm The Staubach Company, Miami logistics company Econocaribe and ITESM, or Monterrey Tech, one of Mexicos leading universities.

For LAN, 2007 was a record year for revenues and profit. MD International, a Doral-based firm that distributes medical equipment in Latin America, saw sales grow by 25 percent and expects another 30 percent growth in 2008. Econocaribe recorded 12 percent growth, while The Staubach Company grew by 38 percent. Meanwhile, ITESM, which opened up its North American office in Fort Lauderdale only eight months ago, is already reporting major achievements in recruiting U.S. students for its undergraduate and graduate programs, as well as developing student and academic exchanges.

Yet, despite all the upbeat news, the discussion at our most recent CEO Roundtable, held at the elegant Regency Ballroom at the Hyatt Regency Coral Gables, focused little on the external market factors underpinning the success of many international businesses in the region, such as the strong economies and surging currencies. Instead, this discussion focused on certain ingrained values that would make these specific companies successful under almost any market conditions.

Instead of GDP growth, consumer demand and exchange rates, the executives stressed things like service, caring, integrity, reliability and passion as the keys to their success. Since 9-11, its been tough times in general for the airline industry, explained Pablo Yunis, LANs vice president for North & Central America. But for LAN, its been nothing be good times. We continue to grow and increase profits, said Yunis. In fact, while other airlines were suffering under the weight of rising fuel costs in the fourth quarter of 2007, LAN registered a record $100 million profit.

How has LAN exceeded expectations, while other airlines have faltered? After 9-11, the industry decided that the answer was to cut service. But we said no, we were not going to sacrifice service, but rather invest in service, explained Yunis. The airline, which has received plenty of kudos, including an award as Latin Americas leading regional airline in 2007, recently began offering fully-reclining seats in the business section on all long-haul flights to Latin America, the first airline to do so. That commitment to service has paid off. The company expects double-digit growth again this year. Said Yunis: We believe that we are selling an experience, not just a flight from one place to another.

MD International, a Doral-based distributor of medical equipment into Latin America, has a similar story to tell. While competitors have gone out of business, MD has experienced solid growth throughout the region. We operate from a spirit of caring, said Al Merritt, company founder, CEO and controlling shareholder. We realize that theres a patient at the end of that piece of equipment whose life is going to be changed because of the job we do or dont do, he said.

But MD Internationals caring doesnt stop there. We care as much about our employees as we do about our customers, said Merritt. who regularly takes his management teams on wilderness retreats and adventure trips, offers tai-chi and yoga sessions at his Doral headquarters and brings in a masseuse once a week to help his employees relieve stress. We operate with a value system that is a sustaining force for our company in this industry.

For Richard Schuchts, director of the Miami office of The Staubach Company, a real estate advisory firm headquartered in Dallas, the mantra is similar but the magic word is integrity. This is a people-oriented business, said Schuchts. We make sure to have the best employees and that they are paid well.

At Staubach integrity starts at the top. The company was founded by Dallas Cowboys quarterback Roger Staubach, whose two Superbowl championships and a Heisman Trophy in college not to mention two tours of duty in Viet Nam in between is the stuff of heros and legend. With Rogers name on the company and his reputation on the line, he takes every aspect of the business very seriously, said Schuchts. And it shows throughout the company.

When asked what was driving his business, Luis Alvarado, who in mid-2007 set up the North American office of Monterrey Tech, perennially ranked as a one of the few world-class business schools in Latin America, said it was passion. We feel that we have a calling to trigger development through education, said Alvarado, who has already followed up those words with action.

In addition to recruiting 20 U.S. students for the university in Monterrey, as well as establishing academic exchanges and arranging dozens of internships for Mexican students in the U.S., Alvarado has been busy developing a community learning center in one poor community in South Florida. Using Monterrey Tech alumni living in Florida as mentors, the center, which also has the support of the Mexican consulate, is training small business owners to improve efficiency and become more profitable. We call it business incubation. The aim is to trigger development, said Alvarado.

Service. Caring. Integrity. Passion. Whats left? For Econocaribe Consolidators, a Miami company that started 40 years ago moving containers into the Caribbean Islands, the secret to their success is simply old-fashioned reliability.

Originally, we were known as the guys who could deliver your three pallets of goods into the Caribbean pretty well, said company president John Abisch. But then Econocaribe clients in Taiwan, India and other places began asking the company for references of companies to bring goods into the U.S. market. Econocaribe, which already had offices in cities across the U.S., originally set up to help funnel shipments to Miami for trans-shipment into the Caribbean, was ready to answer the call. As a result, Econocaribe, which grew overall by 12 percent in 2007, saw its U.S. import business jump 50 percent for the fourth year in a row. We used to do two containers a week from India which we transshipped into the Caribbean, said Abisch. Now we do 15 containers and 13 of them stay in the U.S.

The companys biggest destination markets are still Puerto Rico and Jamaica, but the focus is quickly shifting. Last year, the fastest growing markets were Belgium and India. My guess is that in five years time, well be dong more exports into Europe than into the Caribbean.