Based out of Miami, Mr. Holder oversees FTI Consulting’s offices in Buenos Aires, Bogotá, Madrid, Mexico City, Panama City, São Paulo and Rio de Janeiro. Since 2007 he has also led the company’s forensic and litigation consulting practice in Latin America.
Mr. Holder is an expert in risk management, national security, operational risk and money laundering. He has directed corporate investigations and security consulting assignments in Latin America and the United States, including large-scale internal fraud and public corruption investigations, product protection, litigation support, due diligence and hostile takeovers.
In 2005, Mr. Holder founded Holder International, which was acquired by FTI Consulting in 2007. Previously he served as President of Kroll Inc.’s Consulting Services Group, responsible for operations in more than 35 countries, and was head of Kroll’s Latin American and Caribbean region. Before joining Kroll, Mr. Holder was President of Holder Associates in Buenos Aires, Argentina, a risk mitigation and business intelligence firm.
He began his career with the U.S. Air Force as a political-military analyst for the U.S. Embassy in Argentina and as a special agent for the Office of Special Investigations at Langley Air Force Base in Virginia. He is the author of two books: Narcotics Trafficking: A Constructed Typology of the Deviant Market for Illicit Drugs (1997) and Integrity in Business: Developing Ethical Behavior across Cultures and Jurisdictions (2013).
Boyden: What was the inspiration for your new book, Integrity in Business: Developing Ethical Behavior Across Cultures and Jurisdictions?
Holder: The last book I published was nearly 20 years ago and it was connected to my doctoral dissertation. I had been thinking about writing a book for some time, basically because I have spent an awful lot of time in the field with clients. I’ve learned a lot over all these years and I’ve seen a lot of the major problems they face in reputation management or operationally.
Particularly in recent years, because of all the scandals and major frauds that have occurred, and all of the new waves of regulation that have come out in response to them, it just seemed to me that there were some lessons to be learned. Also the book offers readers an opportunity to understand on a real-time basis a lot of the mistakes being made and some maybe even counterintuitive lessons on what works and what doesn’t work.
Boyden: What are the most important basic actions a CEO can take to ensure an ethical management team and workforce?
Holder: Some of these may seem counterintuitive, but the first thing I would say is that soft power works better than hard power in this area. People visualise big compliance departments and large investigations and people walking out of the office with their heads hung low in handcuffs. The reality is that nothing works better than the different tools of soft power to avoid these sorts of major ethical breaches that we’ve seen over and over again in big companies.
The first example that comes to mind is kind of like when the military comes out and says that funding for the State Department should be increased. I’m involved in the hard power side of this but I’m recommending that funding be increased for the soft power side. It works a lot better to prevent problems than to have to react to them and deal with the fallout afterwards.
One of the most powerful soft tools is tone from the top. One common element that we find in major ethical breaches or integrity breaches is that there is no clear top-down message from the CEO saying, “We will not tolerate corruption, we will not tolerate unethical acts; this is what our code of ethics is and this is what we live by.” Sometimes it’s difficult for that tone to reach every corner of the world at a company, but it’s incredibly important because in today’s world of social media and all the different technological platforms that bring things to your doorstep immediately, an ethical problem in Kazakhstan is just as bad as one in New York. It’s going to hit New York in a matter of seconds. You have to work really hard to make sure that clear, strong tone gets out there.
Another thing that’s important to understand is that when you are involved in transactions or you are involved in growth, it’s important to understand the culture of the company you are trying to buy or the culture of the market you are trying to enter, and make sure that you have a method and a plan for imposing the non-negotiable code of conduct or ethics that your company represents across that geography or across that new company. In some cases, the culture of the target company may be completely incompatible with yours, in which case you should look for another partner.
Boyden: The younger generations today are more attuned to the responsibility of who they buy from and do business with, probably more than previous generations.
Holder: That’s incredibly clear. I would also say that one of the common mistakes CEOs make in these plans has to do with the disposition of compliance resources. In the United States you’ll have a bank that has hundreds of compliance officers and yet in Mexico, where they have a much bigger risk of a breach, they have maybe less than a dozen. It’s an inverse pyramid of risk and resources. There’s a logical explanation for that however, which is that the more litigious and enforcement-oriented markets like the US and UK tend to expand their resources very quickly.
The problem is that a lot of times if you trace where the issue originated, although some do originate in the US and Europe, most of them originate out of emerging economies where the companies have almost no resources on the ground and very little understanding of the local context.
Boyden: Where do otherwise benevolent leaders fail in optimising ethical behaviours across their organisations?
Holder: Again, not allocating resources where they are needed is often the biggest failure. Most leaders actually spend enough money on compliance and ethics programmes. We don’t find that most well-constituted companies skimp on the cost. But the way they allocate their resources is mismatched with the risks that they face.
Obviously an even bigger problem is if there isn’t a proper tone from the top and an overarching programme around it with functional awareness, training, whistleblower hotlines, etc., then the company will have a major ethics breach at some point. It’s just a question of time. Presupposing that this exists, the second biggest issue is where companies deploy their resources.
Boyden: How do organisations stand out for ethics and what are the areas where you expect CEOs and companies to push for a stronger footing?
Holder: What we are seeing is that companies are actually spending a lot of money on compliance now. I’m insisting that that’s not necessarily the best spend. I think a better spend would be on education, training and awareness. But you obviously do have to spend money on compliance, so it’s a good sign that companies are spending more on compliance. But they probably need to spread that into some of the more preventative aspects as well.
Boyden: In Latin America, Brazil and Colombia will hold presidential elections next year and there will be a new president in Argentina in 2015. From a business perspective, what will be most important to watch?
Holder: The first thing to look at in Latin America is that we have something going on right now that is unique in the region’s recent history, which is that there’s a bifurcation of the evolution of its markets into two clumps. You can no longer speak of Latin America as one region in terms of the way their economies are performing. On the one hand you have what we call the Pacific Alliance, which is all the countries that face the Pacific. That includes Mexico, a chunk of Central America, Costa Rica and Panama being the most prominent among them, and Colombia, Peru and Chile, all of which have stronger, more open economies. They allow for capital inflow and outflow pretty freely, have strong direct foreign investment currently and are developing rapidly. These are more market economies that are trying to become more productive and competitive in the world economy. They are facing Asia, which is the new big player in the world market.
On the other hand you have what used to be the traditional powerhouse economies that are languishing. That’s Venezuela, Brazil and Argentina. The Atlantic countries are actually in a slump. They’ve decided to take a different path as protectionists. They have capital restrictions and they treat foreign investors differently than they treat their own local investors. They are mired in complicated tax structures and bureaucracy. They also have big deficits in infrastructure in order to try to manage the growth they are witnessing. Despite the fact that these three economies have enormous natural resources on the commodities side, Venezuela in oil and gas, and Brazil and Argentina more in the agro areas, they are languishing compared to their peers due to all of these other issues and this sort of macro direction they’ve taken with their economies.
Brazil obviously is a bit of an exception just because of how big that economy is in and of itself. It enjoyed for a very long time an almost monopoly in direct foreign investment in the region. That’s come down very quickly now and the economy has too. That’s why you are seeing protests on the streets in Brazil. The economy is being very lethargic and there is concern as to the future of that market.
As for the presidential elections in Colombia, I don’t think that’s going to alter the course of the economy. It’s pretty strong right now and probably will continue to be. It’s likely to delay some direct foreign investment though, since there’s always a little uncertainty around these transitions, but we don’t see any major hiccups there.
In the case of Brazil and Argentina the next year is expected to be very different. Likely the election is going to be about where they want to go as a country macro economically speaking.
In Argentina’s case the situation is just dire. It’s almost as bad as Venezuela. I believe there is going to be a major political regime change. Brazil right now looks likely to re-elect Dilma [Rousseff]. If that happens, it will be four left of centre PT governments in a row, two for Lula and two for Dilma. Although that’s certainly not a guaranteed thing, I think we have to watch closely to see what happens with the economy, especially with the upcoming World Cup. If the economy continues to languish, Dilma may have a problem going into elections. They may move towards a more open market and try to make some of the reforms they desperately need.
Boyden: Brazil’s economy has taken a step back after several years of strong optimism. Do you see any opportunity with the World Cup and the Olympic Games to restore confidence, even though the main events will be on the pitch and not in boardrooms and investment houses?
Holder: I do, but having said that, the only way to do that will be for them to undertake some major reforms at the same time. Brazil desperately needs tax, labor and pension reform. It’s got the highest tax burden in Latin America. It’s incredibly complex. It’s got a pension system which, despite adding new members every year, is running in a deficit because it’s overly generous, particularly to government employees. Brazil has some of the highest labor costs in the world because the fringes are almost 80% of base when you hire an employee.
If none of those three things change, you could have two World Cups, three Olympics and move Barcelona and Real Madrid to Rio and São Paolo respectively and it’s not going to help if they don’t develop a reform agenda, which is very difficult to do politically in Brazil because of how fractured the political parties are right now.
My answer to you is certainly the World Cup and the Olympics will help. They will certainly bring attention back on Brazil. It will be a celebration. But two things could derail that - one being if they don’t undertake any real assessment or reform that’s absolutely desperately needed, and the second is if they have massive protests because of the anemic growth as a result of not doing structural reform.
Boyden: In addition, Chile and Honduras have had elections, and then Uruguay and Panama will hold presidential elections next year as well. Historically smaller nations and their leaders have played bigger roles in Latin American regional trends. How do you see this potentially playing out?
Holder: I do think that again Chile has had an incredibly consistent and coherent macro political and macro economic agenda over the years since its military dictatorship ended. Bachelet is not going to bring any negative surprises; at least we don’t see any on the horizon. She does look likely to win but I don’t see any major changes there.
Even though Chile is a smaller market it’s very important in terms of the trends it sets and where it goes as an economy. I think it will have a positive influence. Bachelet herself, because she’s been President before and because she’s had a multinational and multilateral role in her tenure, could also have a larger than life political influence on the region that I think could be positive. Even though she’s technically a bit left of centre compared to the current regime, she would be seen as a stabilizing force, a pro-market force and somebody whom the region respects.
The other smaller economies are a little less difficult. Panama, no matter who wins, will have a very strong economy. It’s very pro-market so no matter which candidate wins, it’s not likely to see a lot of change. They don’t necessarily punch above their weight politically speaking though – not as much of an impact as Chile but they are seen as a positive influence nevertheless.
Uruguay is kind of a question mark. Mujica’s been a really good president. Their economy has done very well. It’s not following the trend of the other Latin countries that are languishing with high inflation and low growth.
Boyden: A number of companies have centred on Chile as a global test market for emerging markets. Chile is a benchmark.
Holder: It’s kind of like if South America were the US, Chile would be California. It’s a place where a lot of innovation occurs now. It’s growing and attracting a lot of the high tech companies. Google, for instance, put one of its first facilities in Latin America there. You have a lot going on there in that sense of trendsetting, tested, incubator type activity.
Even though in recent years the economy hasn’t performed quite up to the level that perhaps one would have expected, it’s still outperforming most of Latin America. Aside from the fact that it obviously has a commodities advantage with major copper exports, it’s managed to ride the ups and downs a little bit better than some of the other commodities-based economies.
Boyden: What’s your view of Mexico, a year into President Enrique Peña Nieto’s rule, in terms of the business environment? From the corporate view, what will Mexico need to do to continue its momentum?
Holder: Mexico is one of my favourite markets in the region currently, in terms of my belief of prospects for growth. However, it’s growing anemically right now. Even economists seem to be in a bit of a conundrum trying to explain that. Peña Nieto has made a grand pact with the political parties. He’s pushing through a very aggressive reform agenda which will be capped off by the energy reform which includes the reform of Pemex. I believe he’s going to be successful at that, and that’s going to attract some very significant interest, particularly out of mid-sized US oil companies, but also around the world in terms of joint ventures and helping lift oil and gas production in Mexico back to some of the levels it had achieved before.
Pemex is hogtied. Its money is too committed to other things. That’s forcing a lack of exploration which is forcing declining production, which in turn means declining revenues and budget for the Mexican government. That cycle has to be broken. Peña Nieto is taking a huge risk in breaking this cycle and I think he’s going to be successful. I would have expected the economy to be growing faster now than it is. The reason I say that is we’ve had a number of major corporate clients that 15 years ago moved their facilities from Mexico to China to produce or assemble goods because of a wage arbitrage and have now moved them back to Mexico because wages in China have risen significantly, to the point where it’s actually less expensive to produce in Mexico again.
The country is seeing larger amounts of direct foreign investment than they’ve had in the past. But the economy is still a bit lethargic compared to where we think it should be. Mexico’s challenge is to be more productive. The productivity in Mexico hasn’t risen for years. Part of this wave of new investment is based on wage arbitrage which isn’t sustainable long term. The reason why Peña Nieto is trying to reform the telecommunications and labor and energy industries is because he wants to make Mexico a truly global competitor. Of all the markets in Latin America, one has to understand that Mexico alone exports more than all the rest of Latin America put together.
The public security problem really has two aspects. One is the real problem where you’ve got the police and military at war with organised crime from the drug cartels. Then you have the perceived problem owing to the fact that earlier, security-related crimes were in the press every five minutes. This created a perception of a highly unsafe country, and despite some improvements, the public insecurity persists.
Boyden: Has Peña Nieto taken on some of the reforms that needed to happen? He’s done what nobody in Brazil has really done.
Holder: Exactly. Peña Nieto is doing in Mexico what somebody needs to do in Brazil. I’d like to send him down there for a year or two once he’s done with the energy reform in Mexico. Brazil is not tackling their issues. They are hoping that China will just get really hot again and buy all of their commodities exports and they can put off their issues for a while longer. That’s just not a viable long-term solution. That’s why you see these structural problems in Brazil, while Mexico on the other hand is attacking theirs head on. That’s why I’m so bullish on Mexico. It takes a while for GDP growth and direct foreign investment or new investment to flow back in and new growth to come out based on the reforms that are put in place. I believe Mexico has a brighter future because of some of their reforms.
Mexico’s tax reform has been enormously criticised, however. The problem is if you reform companies like Pemex along the lines that Peña Nieto is trying to do, the government is going to receive less tax income from Pemex and they need to levy more tax income on the private sector, which pays one of the lowest tax rates in all of Latin America and has one of the highest tax evasion rates. There is some question on how that could impact the economy or might be impacting the economy currently. But I believe that Peña Nieto is doing the right thing and that growth will come because of his initiatives.
Boyden: Compared to five years ago, do you see security and risk mitigation as having improved overall in Brazil and Mexico, or is it relatively the same? Also, what can be learned from Colombia in this regard?
Holder: Brazil and Mexico are in similar positions in terms of public insecurity. Mexico has gotten significantly worse in the last decade. After the drug cartel transferred their headquarters from Colombia to Mexico, Mexico has had a terrible problem. You have a terrible insecurity problem on both the Mexican and US borders, with a lot of violence, organised crime with cartels fighting for territory and the government fighting with them and money laundering.
On top of that obviously Mexico has some significant work that needs to be done in terms of making its police and judiciary more effective to cope with public insecurity. In fact, crime in Mexico has gotten significantly worse over the last decade, but has stabilised in the last three years since Calderón unleashed his war on the cartels.
Brazil has been pretty bad all throughout this period, but the interesting phenomenon is what’s happening inside the country. For a time, the two big cities in the southern part of the country that have real problems with public insecurity, Rio and São Paulo, were getting better. They were improving - Rio because they did a pacification programme of the favelas and São Paolo because they just really put a lot of money into policing and trying to lower violent crime rates.
However, while that was happening, at the same time the northeastern cities started becoming much more violent than they were before. Recife, which is one of the biggest cities in the northeast, sort of exploded in terms of criminality compared to before.
Boyden: Latin American companies and multilatinas are expanding in the region and globally, including Anheuser-Busch InBev, Burger King and LAN. How and in what sectors do you see this expanding?
Holder: Twenty years ago, when I was working in the region, almost everything we did was oriented towards capital flowing north to south exclusively. As the region grew and more capital started coming in, it started getting a little more east to west. Before, the capital mostly came in from the US and Canada but during the 90s, more and more capital came in from Europe. Then the economy started booming and in the last decade, particularly the last five years, a number of very large Latin American companies have gone on global acquisition sprees. We’ve seen a significant flow of money going south to north.
You are also seeing a very big east to west capital movement with Asia as well. The biggest investor in Latin America today is China. It’s not the United States anymore and it’s not Europe. China is the biggest trading partner with several of the bigger countries in Latin America, and some of them are bigger trading partners with each other than they are with the US. One key conclusion of this story is the waning influence of the US in the region and the increased importance of Asia and particularly China in the region.
The second conclusion would be that companies are getting big enough and have access to enough capital down in Latin America that they are now buying companies up in the US. The big ones that we can talk about, for example, is JBS, the big Brazilian meat packer that now owns most of the meat production in the US. The Brazilian funds bought Heinz together with Warren Buffet. They bought Burger King too. Vale is all over Africa in addition to other places. In Mexico, you’ve got Televisa and CEMEX buying cement plants all over the world including the US.
There’s a whole class of multibillion dollar revenue and market cap sized private or publicly held companies that are going out and expanding all over the world. That is a new phenomenon and it will continue. The pace will probably pick up as the capital markets grow.
Boyden: For decades Latin Americans have had to manage under pressure and often in crisis. From a global perspective, what can be learned from Latin American managers?
Holder: Clearly nobody else in the world has the experience that a Latin American manager will have in terms of running a company under crisis and managing through the uncertainty, unpredictability and tremendous growth curves that you face in economies that are just growing so fast, and there is such a pent-up need and demand for such managers. If you have a business that you want to grow aggressively or that you think is going to enter choppy waters, I can’t think of a better manager to have than someone who grew up in Latin America. You tell them you are going to have 4% annual inflation, 3% GDP growth, 2% interest rate and to run with it and they can’t believe it. They’ve never had that to work with in their whole life.
Instead, they are used to inflation probably being 1,000%, having no access to capital except for what you can generate yourself, being unsure of whether you’re going to be paying the same taxes three months from now as you are now, and being unsure if you are even going to be able to source the materials you need. Now go. It’s a profound difference.
A Latin American executive probably won’t play well if you want a manager that’s just going to be a caretaker of a mature business and who is going to try to squeeze pennies worth of value out of it. That’s probably not the best use of someone who grew up in an environment like this. Any troubled business or market environment, any strong growth curve environment or anything else that requires calm under fire, creativity, vision and analytical skills, Latin Americans are your people.
Boyden: Will we start to see more Latin American execs being recruited to roles outside the region?
Holder: We already are. There are a number of Fortune 100 companies that have Latin Americans as CEOs, COOs and CFOs. It’s already happening.
Boyden: How would you describe your management style?
Holder: I would say that I am a hands-off kind of manager. I like to give my team the ability to make their own decisions and their own mistakes, if they are going to make a mistake, and take a mandate and move forward with it. I am not a micro manager. I will allow people to have their freedom and I will allow them to do the things they need to do. I try to be more of an advisor to them. I am very clear however on what the objectives are. I’ll sit them down and say this is what is expected. We’ll come to an agreement and I will hold them to that.
On the one hand I’d say I am demanding from a results standpoint, but on the other hand, how my team gets to the results, as long as it’s culturally acceptable to us as a firm, is flexible and I am supportive of them, even if sometimes I don’t agree 100% with some of the things they are doing, which happens a lot.
Boyden: What are your deal makers and breakers when evaluating talent?
Holder: An absolute deal breaker is someone who requires an enormous degree of hands-on management. That may work in other firms but at FTI we are an expert-driven business. I expect people to be able to carry their own water and to follow a mandate and be self-starters.
Another deal breaker is someone who comes across as saying yes to everything. The “yes” man type person is someone I really don’t like. I don’t like people that agree with me all the time because I don’t believe that I’m always right. It’s just not possible. I’m usually right and a lot of times they are wrong, but I want to at least have a discussion about it. Someone who is either too intimidated or believes that the way to get ahead is to be a “yes” man is a deal breaker for me. I would also add to that and say that I am not at all interested in people who are good at internal politics. I realise that in big corporations sometimes those kinds of people tend to do well, but I am not interested in people who do that.
I am incredibly focused on our clients. Whoever I hire and in whatever position, their number one job is client service. I don’t care if you are the receptionist, a senior managing director or the accountant. We are a client-facing organisation and that’s where I want the focus to be. Otherwise, I am very open-minded in terms of backgrounds of people.
Boyden: In what areas do you believe in taking chances with talent and in what areas are you more conservative in selection?
Holder: I take chances with new ideas and I think confidence can lead to growth. I’ll take a chance on someone if I believe they can build something for me that’s different from what we are already doing. Our market is constantly evolving and we have a tendency to get lost in the weeds and to not be taking that next evolutionary step. I will take risks on that. It can be costly. There is a lot of money if someone doesn’t work out but I will take those risks.
Where I am conservative about hiring is the people that have to do our accounting, the people that have to report to the SEC, the people who have compliance jobs, and all the people whose job it is to make sure everything we do is proper in terms of what’s expected from us, our shareholders, colleagues and others in the company.
Boyden: How did your earlier career with the U.S. Air Force influence your work ethic and what key leadership lessons did you take away?
Holder: I probably had the most holistic education you can possibly get anywhere in the world going into the Air Force Academy. I had a military job. I played collegiate sports. I was a glider instructor pilot . Then I usually had somewhere between 25 and 30 credit hours of classes every semester, so I practically didn’t sleep for four years
The Academy itself and then my career afterward were very good in teaching me discipline, time management skills and leadership. The military is a very hierarchical organisation and one of the things I’ve learned is that nothing gets done unless people respect you. I never ask anyone in our organisation to do something that I don’t do myself. I don’t ask them to bill more hours to clients than I’d bill. I don’t ask them to generate more revenue than I generate. I don’t give myself an extension because I’m in a management position. I lead by example.
Boyden: What has been the biggest obstacle you’ve had to overcome in your career and what did you take away from that experience?
Holder: There are a lot of them and I’m going to describe a positive one. The one I want to focus on is after I got out of the Air Force, I decided to go into the private sector and really had no idea what I was doing. I had graduated summa cum laude and I had 100 business cards from every defence contractor you could imagine wanting to hire me. But I didn’t want to do that. I wanted to have my own company.
Keep in mind that at this point I didn’t have an MBA. I didn’t have any real business experience. I just had this idea that I wanted to run my own company. I wanted to have my own company in Latin America despite the fact that I was an American and not from there. I literally got on a plane from Washington and flew down to Buenos Aires with about $10,000 in my pocket and said I’ll give it a spin. If it works out - great; if it doesn’t, the worst-case scenario is I come back home with my tail between my legs and ask one of these nice people at Ford Aerospace or Rockwell or somewhere else to give me a job.
It was really scary. I was leaving the potential of a job with the government, where you have healthcare coverage, a regular salary and all sorts of fringe benefits. I was an officer. I had a great lifestyle. And instead I decided to just fly to some other country. Obviously I’d been to Argentina before. I was stationed in the Embassy there. But it’s not the same thing when you go with just $10,000 in your pocket and say I’m going to start a company.
That was probably the biggest obstacle I had to overcome - my own ignorance. I probably would be terrified to do something like that today. But I went down and met with a former Argentinean lawyer, Luis Moreno Ocampo, who ended up being the first Head Prosecutor of the International Criminal Court.
He had set up a consulting firm that was helping privatised companies put anti-corruption programmes in place. I went and saw Luis and we decided to do a partnership. Then eventually it turned into my own company, which I sold to Kroll for millions of dollars several years later. It had a happy ending but it was a gigantic obstacle and I was terrified when I started.
What I took away from the experience is that if you don’t take risks in life you never know whether you are going to be able to get the rewards or not. Sometimes if you are in the right place at the right time and you work really hard, it works in your favour. It takes a good idea and some degree of risk taking, but you also have to get a little bit lucky in terms of the timing and context. I hit the Latin American market at just the right time. I was offering something down there that didn’t exist at the time and so it became a very hot commodity.
Boyden: Looking out a decade what do you think will most surprise people in the Latin America of 2024?
Holder: I don’t think there are going to be any tremendous surprises for the region within a 10-year period. I think what you are going to see in the next decade though is some economies in the region really making progress. You are going to see more and more Latin American countries in the OECD level of development. I think the region is going to become much more prominent and important in the world. I think you are also going to start seeing intellectual capital coming out of the region and not just wage arbitrage or commodities.
The views and opinions expressed here do not necessarily represent the views of Boyden; only those of Mr. Holder.
For views on the Latin American executive market from Antonio Sanchez, a Boyden Board Member and Managing Partner in Colombia, please continue to the Boyden View section.
The Boyden View: Latin American Companies and Executives Coming of Age
Antonio Sanchez is a Boyden Board Member and the firm’s Managing Partner in Colombia
As multilatina companies expand in the region and globally, what types of executives are most in demand?
Country Managers and Chief Operating Officers are the key executives being recruited. In the case of COOs, companies need leaders to be able to integrate all the various markets together, whilst also understanding each market’s culture and objectives.
So if the executive is on the regional or corporate level, he or she has to be someone who is capable of quickly understanding the culture and objectives of a company and also possesses the ability to adapt and promote that culture in other territories.
With the expansion of the consumer sector in the region, what are the key attributes of senior executives needed to take companies to the next level?
With the market changing so rapidly, this person must be perceptive and decisive. A top consumer executive in Latin America needs to really understand the shifts in the market, trends, modification of products, and the expectations of consumers.
And also executives today must be self-motivated and capable of taking on initiatives. Oftentimes companies are attempting new launches in our markets, and being isolated in an almost “start-up” situation is becoming more common.
Will the upcoming presidential elections in several Latin American nations affect companies’ decision-making or timing in engaging in new searches for management?
In the past, all around Latin America, companies often waited for decisions based on political outcomes. Today, companies are often acting with a more aggressive and long-term view of goals when looking at investment in any given country.
Much of this change was initiated by the oil and gas industry. Often, despite political uncertainties, energy companies surged ahead with investments, given the huge potential payoff. Now, we’re seeing similar calculations of a more proactive strategy, instead of a “wait and see” approach from consumer products, pharmaceuticals, financial services and so forth.
Another good example of this success is Spanish banking. Big Spanish banks invested in Latin America 10 or 15 years ago regardless of uncertain economic and political situations, and now that early investment has paid off.
Avianca has had an amazing comeback story and the company is now listed on the New York Stock Exchange. What are the management lessons from their turnaround?
First, the new management was able to clearly measure and understand the whole regional market potential that others did not see. They valued the brand and the customers, and they leveraged the fact that Avianca was a long-lasting company not just in Colombia, but also in other parts of Latin America. The new management took full advantage of a critical situation and turned it around in a very strategic way by seeing it as a glass “three quarters full” instead of a “half empty” scenario.
From a global perspective, what are the strengths and attributes of Latin American executives? What can leaders from outside learn from Latin Americans in how they manage?
In the past 15 years, we have really accelerated our understanding of the world, and many of our executives have gained top educations in Europe and the United States.
Second, over the years we have established a much more positive, flexible and creative approach to crisis including economic and political situations. We are accustomed to being more resourceful in terms of challenges.
I hear often from my clients and my colleagues that Latin American executives have a greater degree of commitment. They are more capable of reacting to take things into their own hands instead of focusing on conflicts amongst various parties. It’s in our culture that we’re more team players.