Jose Ruiz

You Corp.
Succeed by applying to your personal life and career the same principals that propel leading corporations.

by Jose Ruiz

The exact definition of business is a matter of debate.  But without getting into much detail or controversy a business is a legally recognized organization designed to provide goods and/or services to consumers.  Formed to earn profit that will increase the wealth of its stake holders and grow the business itself.
 
If you are reading this there is a high probability that you work, you are either an employee or an entrepreneur.  It really does not matter.  In the end, you do something (your product) and someone pays for it.  People who surround you or depend on you such as your wife, kids, parents are affected by how you do it and what you get. They, along with you, are stake holders. I’m pretty sure that you and your stake holders have felt the need to increase your wealth. You are a business.
 
Working in executive search I speak to many managers and directors from Fortune 500 organizations. They are masters of business strategy and execution yet, most of the time, I get a strange look if not a blank stare when I ask how they have applied those concepts to their person and how they have used those concepts to get to where they are. I truly can’t say they got there by chance. But I’m also not sure it was always something that was planned and mapped out. There are moments in time which change the course of events, alter the paths of your career and change your professional life. Some are positive and some are negative and for most of us the majority of these events are unexpected.
 
When I ask people who have had successful careers what the secret is, the most common response is “hard work and perseverance”. Check! You won’t be successful without them. But I also know many people who have worked hard, been relentless and have fallen short of their goals. There are no guarantees that you will be successful and achieve all of your goals, but I bet you can increase your chances by applying the same business concepts great corporations use. You might already work for one and apply them everyday, you just might not be applying them to yourself.
 
Identify and understand your stakeholders
People who surround you or depend on you such as your wife, kids, parents are affected by how you do it and what you get. What are their needs today and what will they be tomorrow? Your needs and those of your other stakeholders should be your big objective.
 
Know, understand and develop your product/service 
Know what makes you valuable and think about how your current job or activities will affect that value. In the end, your employer is your client. How many potential clients do you have? Be strategic. Everything you do should be part of the creation of a unique and valuable position. A good strategy may require you to make trade-offs – Your resources are limited. Choosing what not to do is just as important as choosing what to do.
 
Create and propel your personal brand
Yes, you are a brand. Distinguish yourself and make sure you never forget that perceptions matter. People remember you and what you are by what you do and what you reflect. Work on a positive brand.
 
Apply The Hedgehog Concept (Simplicity within the Three Circles)
Good-to-Great companies do what they can do best (as opposed to what they want to do best), what they are deeply passionate about, and they focus on what drives their economic engine.
 
Be effective: Plan and execute seamlessly
Know where you want to go, plan how you are going to get there and when. Be visionary. Spot trends but stay focused and constantly reassess everything.
 
Focus, document and measure relentlessly
Use a central score board and share it with your stakeholders. Goals slip when progress is not being measured…and measured against time. Set milestones at frequent intervals. When gaps occur, question what went wrong and apply corrective actions.
 
Be ruthless with resources and stay financially flexible
We live in a world of cycles. Recessions and economic crisis will happen and most likely a few times in our lifetime. Be prepared, don’t lose focus and be sustainable. Plan long term.
 
Don’t B.S. yourself
B.S. your clients or your stakeholders and it will have an impact on your personal brand. B.S. yourself and you will be on a direct path to failure. Believe your own B.S. and you are done.

Jose Ruizis a Principal in Heidrick & Struggles’ Monterrey office. As an executive recruiter he has worked on executive search projects for multinational clients in industrial sectors and consumer markets. He can be reached at +52 (818) 8625-6521 or jruiz@heidrick.com

About Heidrick & Struggles International, Inc.
The world’s premier provider of senior-level executive search and leadership consulting services. The firm’s executive recruiters and leadership experts operate from principal business centers in North America, Latin America, Europe and Asia Pacific. In Mexico, Heidrick & Struggles operates offices in Mexico City and Monterrey. For more information about Heidrick & Struggles please visit www.heidrick.com

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By Harold L. Sirkin – Business Week

March 17, 2009 7:17AM

A big reason for the narrowing gap is the fact that Mexico has already absorbed the rapid increase in manufacturing wages that are just starting to hit China and other developing economies. The shrinking labor-cost advantage, coupled with the devaluation of the Mexican peso in the past year, is making Mexico even more competitive.

The question doesn’t really matter, but the answer for U.S. manufacturers always seems to be the same: China.
With good reason. China has a huge, low-cost, underutilized, and eager workforce unencumbered by outdated unions, labor laws, and expensive government mandates and regulations. China has a strong supply network that is getting better all the time. China understands the value of infrastructure and is investing heavily in it. National and provincial governments want to help business succeed, not tie its hands.

All this points to China as the wave of the future. But that doesn’t mean China is the only option for manufacturers — nor is it always the best one.

There are many other low-cost manufacturing alternatives: Brazil, India, Thailand, and Vietnam, to name some. Closer to home lies America’s third-largest trading partner, Mexico. If distant China is the Big Kahuna of low-cost manufacturing and sourcing, Mexico should be seen as El Pequeno Kahuna.

Mexico Is Growing More Competitive

As noted in a 2008 Boston Consulting Group report, Mexico’s Evolving Sweet Spot in the Globalization Landscape, the cost difference between low-wage Mexico and lower-wage China has been narrowing. In 1996, Chinese labor cost about one-third of Mexican labor. Today, Chinese labor costs are about half of Mexico’s — $1.69 per hour, on average, in 2007, compared to $3.46 per hour, according to the International Labor Organization [ILO]. In another year or two, according to estimates, hiring a Chinese worker will cost about 85 percent of what it costs to hire a Mexican worker.

A big reason for the narrowing gap is the fact that Mexico has already absorbed the rapid increase in manufacturing wages that are just starting to hit China and other developing economies. The shrinking labor-cost advantage, coupled with the devaluation of the Mexican peso in the past year, is making Mexico even more competitive.

Moreover, wage and exchange rates are not the only factors managers need to weigh. There’s also the cost of transoceanic shipping and the inherent risks of a long-distance supply chain. When these and other factors are taken into account, Mexico often looks better.

The fact that Mexico is our neighbor means a company often can place an order one or two weeks before delivery is needed, rather than four to six weeks in advance, as is typically necessary when sourcing from China. In times like these, when demand can fluctuate wildly, the ability to respond quickly to changing market conditions can be critical.

Shipping Savings Exceed Labor Edge

Mexico’s proximity to the U.S. also means less dependence on America’s crowded ports. It’s also faster and cheaper to move heavy products relatively short distances by truck than to do it over thousands of miles by ship, and then further by rail, truck, or both. As Mexico’s Evolving Sweet Spot noted, “in the case of a refrigerator — a very bulky product — manufactured in a low-cost Asian country and sold in the U.S. for $500, the cost of shipping represents up to $100 of the price tag, or 20 percent. Shipping it from Mexico would cost less than half that amount.”

If assembling each refrigerator takes four man-hours, a manufacturer would save just over $7 in labor costs per unit by manufacturing in China. If the company can save over $50 in transportation costs by manufacturing in Mexico, while paying seven or eight dollars more in labor, the advantage goes to Mexico, with net savings in excess of $40 per unit.

Without a supply base, manufacturing can’t be shifted to Mexico any more than it can be to China or elsewhere, but Mexico is taking care of that. For example, many of the world’s top manufacturers of industrial, commercial, and home refrigeration, heating, and air-conditioning equipment have formed an industry “cluster” to attract a supply base in and around Monterrey, in northern Mexico. The cluster grew by 9 percent in 2007. South Korea’s LG has had a manufacturing presence in Mexico since 1988; in addition to refrigerators, the company produces digital TVs, PDP modules, monitors, and mobile phones there.

Aerospace Is Clustering in Mexico

The Monterrey industrial cluster has drawn leading suppliers of parts and components as well. For instance, China’s Golden Dragon Precise Copper Tube Group — the largest producer of precision copper tube in the world — made an initial investment of $50 million in the area and eventually will employ 900 people there.

A second industrial cluster in Mexico also is attracting global attention, this time from the aerospace industry. Before the downturn, more than 160 companies were involved, employing nearly 17,000 workers.

Proximity offers other advantages as well. Being in the same general time zone means it’s easier for U.S. companies to conduct real-time business in Mexico. The majority of Mexican cities, for example, lie in the same zone as Chicago, just one hour behind New York. When you need to be on-site, there are frequent and direct flights from some 20 U.S. cities. Language also is less of a barrier, with native Mexican managers typically speaking English and increasing millions of Americans conversant in Spanish.

Just as China has disadvantages, so too does Mexico. According to the January 2009 Wall Street Journal-Heritage Foundation Index of Economic Freedom, corruption remains “pervasive” there and “Mexico’s rigid labor regulations continue to hamper productivity,” making it difficult to lay off workers when necessary. Mexico’s infrastructure remains woefully inadequate, slowing the flow of needed raw materials and intermediate goods. And battles with drug traffickers make some areas unsafe.

What To Look for Overseas

So what should U.S. executives considering global manufacturing or sourcing do?

1] Think globally. Competing successfully probably will require more, not fewer, locations. To succeed in the future, most companies will need a global network of manufacturing, assembly, design, and research and development facilities.

2] Pinpoint production. Facilities should be built where they’ll do the most good. The question managers need to ask is: What can be done best where? That’s where the work should be done.

3] Develop a portfolio. Your objective in choosing manufacturing locations is to maximize returns while minimizing risk. Ask yourself where markets can be developed or expanded. This will help you determine what the future portfolio should look like.

In addition to its appeal as a manufacturing hub, Mexico is the world’s eleventh-largest country and — prior to the recession — was experiencing a boom in domestic consumption [as were China and India]. This might make Mexico a better choice than a country with a smaller domestic market.

4] Act strategically. The decision to acquire or build a plant in China, or Mexico — or Missouri, for that matter — should be part of a long-term strategy, not an isolated decision. As with all long-term capital decisions, you need to consider both your next potential moves and long-term changes in your customer base and competitive environment.

Managing isn’t getting easier. It takes more knowledge of more things — and perhaps more chutzpah — than ever before. Competing with everyone from everywhere for everything is a different challenge than that faced by America’s captains of industry in the 19th and 20th centuries.

To maintain America’s leadership, business executives will have to be engaged far beyond our shores. Dozens of countries will play a role in our continued success. If we’re wise, Mexico’s role will be larger than most.

© 2009 Business Week Online

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I remember asking a group of friends from New York after 9/11 what they thought of Rudolph Giuliani. The response was that they believed he was a great leader. They described him as decisive, assertive and determined, able to inspire a sense of security in a time of fear and crisis. When Giuliani was running for President I asked the same group what they thought and they said they believed Giuliani was not a good leader. He was stubborn, hard headed and made unilateral decision. It was obviously not the answer I was expecting but made me realize that at the time, in crisis, Giuliani’s character and management style made him a good leader but his style was not perceived flexible enough and at least this group of individuals felt that he did not evolve as circumstances and the environment changed.

What makes a good leader? His character and style? My hypothesis is that that it is his/her ability to adapt to what is required at the time to successfully guide the people that he/she leads. What makes a good leader in times of economic crisis?

Please comment!

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