miércoles, 8 de septiembre de 2010

Innovation to assemble and to dismantle

This year I have been involved in the business development of innovation projects in the area of Software Development (data cleansing) and Biotechnology (Bio markers, mobile organs, and stem cells among others) that I have been thrilled to thing about innovation

Also I recall a group of MBA students of the Georgia Institute of Technology that I addressed at Universidad of Palermo this year.

Even thought the topic was “Economic Overview & Argentina Business Environment” one of the lessons that I took from that talk is that innovation applies to assemble and to dismantle as well.

Together with Andres Borenstein, Master in Finance & South American Chief Economist at the British Embassy, we address the proposed subject from a macro vision and also towards a more micro theory and practice of dealing, with the Argentine environment.

I had to provide some cases and deals that address the ways and mechanism for resolutions that entrepreneurs for Latin America have in environment like us. Also a little bit of the local and business gossip.

After the debate, the Dean of the Faculty of Economics Gabriel Foglia; Professor Daniel Seva MBA Program Director and Emilio de Pedro, executive of Impsa joined the panel as well.

Since the scenarios on which an American and a Latin American entrepreneur must dream and figure it out how to do it, are so different, that questions and concerns arose.

They were shocked with the statistics that a crisis occurs approximately every 5-7 year in our countries.

The talk and discussion was rich and I would like to extract a distilled reflection of an exchange that took place about how an Argentine entrepreneur manages to create an environment not proactive with these purposes.

We should clarify that crisis for us is not to restrict consumption in Starbucks, or go shopping on Saturdays, or to change the car and or the property every other year, but the absence of medium and long term goals as a country, the lack of planning and strategy, the lack of financing programs, and also inflation rates in double digits at some point in our history, a week-etc. You name it!

To the dismay of the audience for this economic diagnosis, I gave two examples of how two entrepreneurs turned out and used a strategy not to create but to disarm (or menace to do it) as a valid tactic in the ongoing strategy of creation of wealth. How they used also as an excuse the “Lehman Brothers” effect.

In the first case, and even though his business enjoyed very good health in the Southern Cone, the entrepreneur at the very moment he read the newspaper about the Lehman Brother crisis, almost instinctively, took a taxi to Ezeiza Airport and flew to USA, the place the headquarter of the master franchise of his business was. When he reached their offices, he said that the purpose of his trip was to terminate and return the franchise agreement due to the ongoing financial crisis caused by Lehman effect. As the American executives were themselves passing for a moment of anxiety and uncertainty, they took it for granted that also South America operation were collapsing as well. But the termination of the franchise agreement would ruin their global strategy and also the value of the company as a whole.
To make a long story short, the business of this entrepreneur got a renegotiation in the fee of the master franchise agreement with a "waiver" for several years in the payment of royalties to the U.S.

The other case, more or less at the same time and using the same arguments, an important group led by a serial and consecrated entrepreneur defaulted all the domestic and international debt, using the same Lehman argument, and afterwards obtain more favorable terms in those debts.

Then I explained that what I wanted to highlight and point out, it is not the nature of those negotiations neither justify them, but to point out the dynamic and ability to react that you need to have to operate in a more unstable and uncertain world.

However, it is no coincidence that in the past year and a half, is the fifth lecture which summons me to give EMBA's MBA'sy various American universities, who come to have this kind of cross cultural experience, to try understand that you mean by "smoke under water."

After the talk I was thinking about this way of arm and disarm, not as a strategy, but as a tactic of supporting the reinforcement of every long-term dream. One thing is the program and other strategic mission.

In a constantly changing environment, the success of the company or project is delivered not only by the ability to understand how to adjust the strategy from time to time, but also the ability to respond consistently to changes in the environment, in a way that we can adjust programs and tactics.

In a complex world full of uncertainty the ability to prognoses the future is as important as the ability to respond the facts that the environment provides to your project.

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