Carlos Slim, Jr.: a tycoon's heir in big business.
There's no business like Carlos Slim Sr.'s businesses. It's somewhat of a cliche, to quote Forbes, but Slim appears on every list of their top richest people, with a fortune worth $14 billion. He is behind the biggest telecommunications blue chip company that stretches from the Canadian border to Tierra del Fuego. Thousands of. Mexicans eat, buy books, medicines, appliances, and gifts from his retail empire--a nationwide myriad of Sanborns and Sears. Inbursa, an insurance, investment, mutual funds, and pension plans giant, along with conglomerate Grupo Carso, account for half the value of the Mexican stock exchange. Some say Slim makes $5,000 US every two minutes, and others joke that he is now investing outside Mexico only because there is nothing left in the country to invest in. Mexico's biggest fixed telephone and internet access provider, Telefonos de Mexico (Telmex), is the jewel in the crown of Slim's kingdom, accounting for more than 90 percent of Mexico's fixed telephone lines.
A couple of months ago, Carlos Slim Helu passed Telmex's helm to his oldest son, Carlos Slim Domit. The news spread like wildfire, making the markets tremble, if only for a moment. Slim Sr. will remain as honorary president of the board; however, his first-born son will act as Telmex's chairman of the board of directors. The board includes an all-star line up of 17 Mexican business moguls, including Grupo Televisa's Emilio Azcarraga and Jean and retail chain Gigante's Angel Losada Moreno, among others.
Analysts say that after an open-heart surgery in 1998, Slim Sr. has slowly and carefully appointed his sons and in-laws to lead his most profitable companies, as part of a flawless continuity plan. There will be no King Lear saga, however. In Shakespeare's masterpiece the monarch split his realm up between his daughters and started a war that destroyed his legacy. Slim had groomed his successors thoroughly. The word is that his strategy consists in granting them full control over their companies once they reach financial consolidation and stability.
From bottom to top
At 37, Carlos Slim Domit is not a newcomer when it comes to managing big business. The 80s were his training decade. A business administration graduate from Anahuac University in Mexico, he climbed the corporate ladder following the Lebanese work ethic that his father taught him and his siblings right from the start. Now he follows in the footsteps of his father, who had entered commerce by keeping the books of his family's business. Slim Sr.'s office, with its Arabic tapestries and carpets, pays homage to his family's immigrant roots.
As part of Sanborn's buying team, Slim Jr. personally supervised purchases for its restaurant service at the massive La Merced market in a tough working class part of Mexico City. Gradually, he occupied key positions that allowed him to get involved in different areas of management within his father's companies. In 1993 he was appointed Sanborn's chief executive officer, and in 1997 he became general director at Sears Roebuck's Mexican affiliate. The next year, Slim Domit was also appointed Grupo Carso's CEO. Carso is the holding company of the Slim Empire. However, since 1995 he has developed an outstanding career in Telmex in different top managing positions, earning him the right to enjoy the sparkle of the family jewel.
But leading Telmex into the future doesn't mean dropping other responsibilities. He will continue at the forefront of Grupo Sanborn as well. Despite the different fields of the two companies, Slim Domit finds similar operational parameters: 'Telmex is a giant, but what's most important is its structure and operation strategy. Being a highly technical telecommunications company, it is also in commerce and services. Sanborn has evolved technologically, as well, from operation systems to internet developments. Sanborn works with Telmex as a client and supplier, so these similarities, as well as a solid experience, for me is not a drastic change but a complement."
Down to earth and very approachable, Slim Domit seems confident at the start of his new task, maybe because he is well honed in the slim style of management "Our businesses are based on very basic principles, such as efficient and productive operations. We are very careful financially, especially in good times, when it is easier for companies to slow their pace, making the wrong investments or taking the wrong decisions."
Slim Domit notes another interesting key point: "Gauging risks by envisioning the worst case scenarios makes it easier to make the most adequate decision, and act accordingly in a quick way." The third point is related to human resources and training, which has been the trademark of the Slim dynasty: "Focusing on economic growth is important, but that is not the only goal. We also look after the personal development of our teams, not only in professional terms, but also at a personal level."
Slim Domit is aware that the challenge for Telmex will now be modernization and social commitment by spreading telephone access all over the country into remote communities, as well as expanding internet and e-commerce services.
One step beyond
A shrewd businessman--like father like son--Slim Domit has opened new opportunities beyond Mexico's borders, especially in the United States. Recently, the Slims have acquired shares in Altria (formerly Philip Morris), Saks Inc., and Office Max. In addition, Grupo Carso Telecom now controls a share of Miami wireless operator, TOPP Telecom. Aggressively targeting the low income Latino market, Telmex's internet service provider Prodigy is now the third largest in the United States, while a partnership with Bill Gates made the offering of an internet portal for Latinos, TIMSN, possible.
In 1999, Slim Domit's tenure at Grupo Sanborn led to the purchase of 14.8 percent of CompUSA, the largest US computer store chain. In the long term, Slim Domit and his father have plans to take full control of the Dallas-based company and forge it in their likeness with an extreme operational makeover to turn it, not only into a computer retail company, but also into a telecommunications and technology company.
In a way, despite being considered new in the field, Slim Domit acquired a knack for the business through Telmex's performance. Word has it that Slim Domit made quite an impression on CompUSA investors during a presentation of his plans to turn the company around, which included the closing of low productivity stores, focusing more on cell phone sales, offering video games and other gadgets, enhancing customer service, and finding better and more profitable locations.
Some analysts think this could be a risky venture, but so far Slim Domit has proved he can be a skillful captain in an operation that would join forces with SBC and Microsoft.
When asked about his plans for CompUSA, he made clear to media that there are no short-term plans to open stores in Mexico; however, he would not say no to synergies with other areas managed by his father's companies. "Our aim is to consolidate our position in Central and South America. In the United States we have looked, and will continue looking, for joint ventures and mergers in order to achieve integral telecommunication services on every corner of the continent."
Slim Domit gets enthusiastic when talking about Fundacion Telmex. As mentioned before, profits are not the only drive of his father's companies. One of the foundation's main goals is to provide low cost telephone services to rural communities. "It's important that people have the technology to communicate in remote areas, even if it doesn't seem profitable. Enabling schools and libraries with internet service is a social plus that our competitors don't provide."
The foundation has also launched several programs, such as free specialized health services for low-income populations. The scheme is clever and efficient. Top surgeons and medical doctors hired by the foundation go to remote areas, where the Mexican health ministry lends facilities and local medical doctors assist specialists in surgery and training.
Fundacion Telmex also sponsors the best students in Mexico and organizes forums for them to share experiences and attend lectures by prominent speakers, such as Mikhail Gorbachev, Bill Clinton, Felipe Gonzalez, etc. Another interesting foundation involvement consists of bail bonds. Indians, petty offenders, and low-income people are in jail just because they cannot afford to pay bail. "There are a lot of people in jail, not because they are dangerous criminals, but because they are poor. They can't afford $100 or $300 bail for a petty misdemeanor. The vast majority of them are Indians who don't speak any Spanish, and they end up becoming criminals in jail. It is more costly not to have justice, rather than having it work." Help during natural disasters is also a top priority for the foundation. "We use all of our companies' infrastructures in Mexico to send help where required, as in the recent floods in the state of Coahuila."
The foundation fits in with Slim Sr.'s political left-of-center philosophy, which makes him stand out from the generally conservative slant of his fellow Mexican billionaires. He has repeatedly stated that Mexico's economy is going nowhere unless its workers get decent wages. Higher wages mean greater purchasing power, which would boost demand and make the economy more liquid. Carlos Slim Helu is constantly subject to media speculation about his alleged backing of likely presidential candidate in the 2006 elections, Andres Manuel Lopez Obrador, current mayor of Mexico City. The Slims are pumping millions into the megalopolis's formerly run down and tough Historical Center, which has earned it the sobriquet, "The Slim Center."
On politics, family and leisure
When asked what he would say about Mexican politics as an entrepreneur, Slim Jr. responds, "I think the level of political debate should be raised. The current level doesn't match the needs and circumstances of Mexico. The Mexican macroeconomics is now strong and has great prospects. The point is how to turn that into an internal market development that leads to employment, quality of life, and good company performance."
Slim Domit believes that development should be dictated by institutions rather than by individuals. "Of course there will be different opinions, but we should focus on the things we have in common for the benefit of society and implement those."
Whereas many top businesspeople would barely recognize their own children and go for days without seeing their spouses, the Slims respect the traditional Latino-Lebanese family values. Monday is for family. Sharing conversation and daily events, the Slims become a real family around the table, every Monday without fail. "We barely talk about business at Monday's dinner. Of course, sometimes things come up, but at an informal level. Business is discussed inside the companies or in a board meeting." The Slims apply the same respect for the family to their workplaces.
For Slim Domit, respect consists of supporting freedom of action in every company and allows top executives to reach their own operations' goals. For them, leadership is about letting their managers breathe, instead of suffocating their talents--a mistake made by many aspiring businessmen, who lack the Slim management style.
Each company has a general director, and they are responsible for their operations. "Neither us nor a board member is a micromanager. Respect is important." It is that respect that has turned Telmex into the global force that it is today.
Since Carlos Slim Helu bought TelMex from the government of former Mexican President Carlos Salinas in 1990, it has invested $18 billion in its modernization and growth and become one of the top 20 ranked players on the world telecommunications stage. Telemex is expanding into Latin America, including Chile and Brazil, because there is little room to grow in Mexico, where the company controls about 98 percent of the local telephone market and handles nearly 70 percent of the long-distance traffic.
But Slim Jr.'s life is not all work. At 37, and one of the youngest movers and shakers in the telecommunications industry, Slim Domit has simple pleasures--reading, visiting friends, and traveling in Mexico. "I love Zacatecas, Morelia, and Queretaro. I can tell you that Mexican beaches are the best in the world, without a doubt."
In Slim Domit's own words:
* "Most of our [his and his brothers'] training has been driven by responsibility rather than by ambition. We've never been under pressure or been forced to commit to Carso. It is very stimulating to know that responsibility is linked to the extraordinary performance of our teams."
* "I've learned from my dad that there is nothing worse than doing something you don't like. You harm yourself and the company."
* "Telmex cannot be sold. It's a strategic support for our country, and it is very important that it remain a Mexican company. It's our conviction. Commitment comes from outside; conviction comes from within. [Telmex] is more about conviction than commitment."
* "The secret of my father's success is hard work and a clear and constant commitment. He is always thinking of new ideas and new solutions. He is completely committed to each company's operation; he has a sharp common sense and is open to people's ideas and proposals."
|Printer friendly Cite/link Email Feedback|
|Title Annotation:||Business Executive|
|Date:||Aug 1, 2004|
|Previous Article:||Terry McAuliffe: the man behind the Democratic machine.|
|Next Article:||Facing the winds of change: Jorge Gestoso: holding a mirror to the Latin American experience, Award-winning journalist Jorge Gestoso shapes a vision.|