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Europe’s Dirty Little Secret

2015. július 27. - Kevin Jackson

The Greek Parliament has just passed two laws that will enact the stringent reforms that its creditors have demanded. This has now paved the way for them to request a three-year bailout package worth up to 86 billion Euros. While Greece previously wanted to avoid any further involvement by the IMF due to their demanding conditions, they now have no other choice but to reach out to them. While it might seem to some that a crisis involving Greece’s exit from the Eurozone has been averted, in reality it is simply masking the real problem and fueling even greater E.U. skepticism from its member states.

It is quite ironic that the IMF regularly speaks of the ill effects of high taxation, yet is insisting on high tax rates at even the lowest income levels. Even worse, the troika (E.U. Commission, E.U. Central Bank, and the IMF) is demanding that Greek businesses pay their taxes in advance at the beginning of the year in order to crackdown on tax evasion. Since Greece is in the Eurozone, it cannot lower interest rates or devalue its currency, these tax measures act to pull capital out of an economy that desperately needs it.

The fact is that Greece’s debt cannot be managed with or without the troika bailout. Its debt to GDP ratio is 177% today and is forecasted to balloon to 200% in the next two years. The IMF actually expects Greece to run a budget surplus of 3.5% of GDP for the next several decades, even though there are only a few examples in history of countries ever achieving this under similar conditions. The sheer notion that Greece under these harsh conditions will be able to evolve from the E.U.’s lowest ranking in productivity and labor force participation to among the highest is totally absurd. So, why is it that the E.U. finds itself in the position to bailout Greece for the third time, if the prospect of success seems so implausible?

The dirty little secret is that there is no way the situation in Greece will end well. Austerity will intensify and the Greek people will continue to support politicians who pledge their opposition against the E.U.’s harsh rule. Greece will not be able to grow its economy under austerity and therefore will once again default on its debt obligations in the future. Other E.U. nations that could face financial struggles down the road (like Portugal, Italy, and Spain) will quickly conclude that they will not want to see their nations undergo a death spiral like Greece. Anti E.U. sentiment is rapidly rising all across Europe as the negative effects of the union outweigh its benefits. Greece is just a symptom of a much larger problem and, unfortunately for the Greek people, their nation will struggle for decades under any scenario that plays out. As for the E.U. itself, it has been proven to be a master of kicking the can down the road as long as it can be kicked.

For more information on the Greece and the E.U. crisis, please refer to the following articles:

Europe’s dirty little secret is Greece will never pay back its debt, Washington Post, Matt O’Brien, July 15th, 2015 http://www.washingtonpost.com/blogs/wonkblog/wp/2015/07/15/europes-dirty-little-secret-is-greece-will-never-pay-back-its-debt/

Greece take step closer to bailout with IMF loan request, France24.com, News Wires, July 24th, 2015, http://www.france24.com/en/20150724-greece-asks-new-imf-loan-step-closer-bailout

Greece, the Sacrificial Lamb, New York Times, Joseph Stiglitz, July 25th, 2015, http://www.nytimes.com/2015/07/26/opinion/greece-the-sacrificial-lamb.html?_r=0

 

For more information about the Corvinus Global Business blogger, go to https://www.linkedin.com/in/kevinmjackson1.

Blog 49

 

Divided Houses

2015. július 21. - Kevin Jackson

When Abraham Lincoln accepted his nomination for state senator of Illinois back in 1858, he famously said, “A house divided against itself cannot stand.” While Lincoln was referring to the situation with slavery that was ripping the United States apart at the time, his words ring true for European nations that are now divided against themselves. This presents a dangerous trend that could seriously threaten the future of Europe, with or without the European Union.

In her traditional New Year’s address, German Chancellor Angela Merkel warned about the rise of right-wing political movements in Europe that could fuel instability and turmoil. In Germany, right populism has been gaining traction and showing up in the form of anti-Islamic protests and harsh words against immigration to the E.U. During his New Year’s Eve address, French President Francois Hollande expressed similar concerns, as well as the outgoing Italian President, Giorgio Napolitano. What all of these movements tend to have in common is a distrust of the E.U. and its single currency. If right wing populism is able to become disruptive once again, peaceful Europe could turn into a fragmented one characterized by nationalism and a collapse of its union.

The world is witnessing the situation unfold in Greece and how divided the country is regarding the right course of action it should take. While there are few options left, the country is further weakened by a clear lack of consensus and leadership. If instability in Greece can cause so much turmoil for the E.U., what would happen if right-wing populism were to result in a similar faction in countries like Germany, France, Italy, and even Sweden? Back in March of 2014, Sweden called its first snap election in more than half a century after a far-right party was able to defeat the center-left minority government’s first budget presented to its parliament.

In Hungary, the government is not politically divided against itself as right-wing populism has enabled Fidesz to consolidate its power. Prime Minister Orban continues to drift further and further to the right as he has made statements about bringing back the death penalty and proposing to build a wall between Hungary and Serbia. Is this all rhetoric just designed to get some attention? Perhaps, but there is an underlying and disturbing trend that is churning in nations all across Europe. Nationalism, decentralization, and anti-immigration are catching headlines rather than just being dismissed. Europe cannot stand if the nations that define it are internally divided. While the falling of the Greek house has not brought the Big House down, the next one surely will.

For more information on Divided Houses, please refer to the following articles:

Swedish PM calls first snap vote in 50 years after far-right force budget defeat, Reuters, BY JOHAN SENNERO AND NIKLAS POLLARD, December 3rd, 2014, http://www.reuters.com/article/2014/12/03/us-sweden-government-budget-idUSKCN0JH0M520141203

Right wing in Europe could bring 'turmoil', CNBC, Holly Ellyat, January 5th, 2015

http://www.cnbc.com/2015/01/02/right-wing-in-europe-could-bring-turmoil.html

For more information about the Corvinus Global Business blogger, go to https://www.linkedin.com/in/kevinmjackson1.

Blog 48

 

Monetary Giant with Many Fiscal Dwarfs

2015. július 14. - Kevin Jackson

Martin Feldstein is currently an economics professor at Harvard and was formerly the chief economic advisor to President Ronald Reagan. In addition to his long list of achievements, Feldstein has been arguing against the creation of the European Union long before it ever happened. In an article that appeared in The Economist on June 13th, 1992, he wrote: “The main conclusion is that the now popular idea that the European Central Bank will cope with union-wide shocks while national governments will stabilize domestic shocks is not always the most efficient assignment choice, and it is inconsistent with the imposition of a fiscal deficit ceiling on member countries.”

Feldstein further argued that the only way a union can work is that if economic shocks can be evenly distributed across member states. In other words, in a perfect world there are symmetric spill-overs. The troubles in the E.U. have been nothing but asymmetric as the economic gap between countries like Germany and Greece has never been wider. In a perfect world, labor is mobile and there should never be high unemployment as an equilibrium is always instantly established. The problem is that there have always been significant disparities between European countries and perhaps the creation of the E.U. was a disaster waiting to happen. Martin Feldstein argued this point  back in 1992.

The Greeks have just come to terms with the E.U. and their creditors and will once again try to restore fiscal order. They will try really hard to stimulate their economy, while simultaneously trying to honor all of the commitments it has made to it citizens. They will try really hard to collect taxes from people who have already lost a significant portion of their wealth and promise to create jobs for the young and old who are out of work. The real question remains: "Is there any hope for Greece or is the E.U. just buying itself more time until they are better handle a member state exit?"

Roberto Tamborini is an economist who coined the term “Monetary Giant with Many Fiscal Dwarfs.” He made this statement in 2002 as the E.U. celebrated its formation and ten years after Feldstein published his article in The Economist. I guess it is too easy to say that the writing has always been on the wall, but I cannot honestly see how individual E.U. nations will be able to survive global economic shocks and support a standard of living that is uniquely European. For me, it is just a matter of time before E.U. is forced to break apart due to the structural imbalances that have existed since post W.W. II. Until then, let’s just hope that the Greeks can honor their commitments and show the world that there really is a way to fix a sinking ship.

For more information on Monetary Giants and Fiscal Dwarfs, please refer to the following articles:

EUROPE'S MONETARY UNION: THE CASE AGAINST EMU, THE ECONOMIST, JUNE 13, 1992 http://www.nber.org/feldstein/economistmf.pdf

One "monetary giant" with many "fiscal dwarfs": The efficiency of macroeconomicstabilization policies in the European Monetary Union: Roberto Tamborini, Discussion Paper No. 4, 2002, http://web.unitn.it/files/4_02_tamborini.pdf

For more information about the Corvinus Global Business blogger, go to https://www.linkedin.com/in/kevinmjackson1.

Blog 47

European Competitiveness?

2015. július 07. - Kevin Jackson

The Greek people have just voted convincingly to reject the austerity package proposed by the leaders of the European Union. Their logic is that they want to be the ones who decide what spending cuts to make and by how much. On the flip side, the E.U. has been shoveling money and restructuring deals to bail out Greece for the past five years and is tired of indulging a government that is continuously unwilling to honor its commitments. The European Union, powered by the German economy, is now at a critical juncture that is far more significant than the Greek debt crisis itself.

The current unemployment rate in Germany is 4.7% and its youth unemployment rate stands at 7.1%. These are very good numbers by historical standards. Let’s now contrast this situation with Greece that now has an unemployment rate of 25.6% and a youth unemployment rate of 49.7%. These numbers are disastrous by historical standards. Now consider the fact that tax debts in Greece are equal to about 90% of their annual revenue as opposed to Germany that has tax debts equal to about 2.3%. If one looks at these figures, then it is hard to believe that a country like Greece would ever allowed into the European Union in the first place. With clever credit manipulation and lack of credible oversight, countries like Greece have become more like banana republics than European ones.

Despite access to a continuous stream of financial support, Greece is going through one of the worst economic declines in modern history and there has not even been a war that has caused it. Since 2008, the Greek GDP has contracted more than 25% and there is a high probability it will get even worse. Despite the fact that both Germany and Greece use the Euro, German ten-year bonds pay 0.8% while Greek bonds now pay 16%. How can this be? The reason is simple: Germany has a highly competitive economy that pulls in a growing amount of tax receipts needed to cover the country’s operating expenses. Greece has a totally non-competitive country that has resulted in a shrinking GDP, falling tax receipts, and the inability to pay the country’s debt obligations.

I am actually using the current situation in Greece to highlight a much bigger problem. Greece at 2% of the Euro Zone’s GDP is not a big fish. Stagnant GDP rates and rising benefit outflows to aging populations in countries like France, Italy and Spain, however, are an entirely different matter. There is no doubt that Germany as a single country is globally competitive, but how long will it be able to be a part of a union that is full of countries that are not? What is unfolding in front of our eyes with Greece will shape the future path of Europe and no denying there are growing gaps between European nations themselves, not to mention the ones widening with the rest of the world.

For more information on European Competitiveness and the Greek debt crisis, please refer to the following articles:

7 key things to know about Greece’s debt crisis and what happens next, Washington Post, Matt O’Brien, July 5th, 2015 http://www.washingtonpost.com/blogs/wonkblog/wp/2015/07/05/as-greece-votes-heres-everything-you-need-to-know-about-the-nations-crisis/

Greece Struggles to Get Citizens to Pay Their Taxes, WSJ, Mathew Karnitschung and Nektaria Stamouli, February 25th, 2015 http://www.wsj.com/articles/greece-struggles-to-get-citizens-to-pay-their-taxes-1424867495

http://www.tradingeconomics.com/greece/unemployment-rate

http://www.tradingeconomics.com/germany/unemployment-rate

 

For more information about the Corvinus Global Business blogger, go to https://www.linkedin.com/in/kevinmjackson1.

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The Future of Europe

2015. június 29. - Kevin Jackson

It was just announced that Greece failed to strike a deal with its international lenders to secure badly needed funding. As a result, capital controls will be put into place and Greek banks will be shut this week. While Greece continues to dominate the headlines, it is really just a symptom of a much larger problem. The future of Europe itself hangs in the balance as its leaders desperately try to hold together a union that is like a boat taking on water from many different places.

In order to better understand what is happening now and what the future of Europe will be, I am starting a new series of articles that will examine the following five key areas that the EU must address if it is to stay afloat in the future:

  1. European Competiveness: Despite the size of the EU and its ample resources, it is becoming less and less competitive with other regions around the world. Can Europe regain it global competitiveness?
  2. Eurozone Financial Crisis: The EU has been called a monetary giant and a fiscal dwarf. Too many countries with poor financial discipline are marching down unsustainable paths. Can this be fixed or will the EU continue to kick the can down the road until a crisis becomes too big to solve?
  3. Political Discord: Many European countries face a growing distrust of their governments from their own people. Greece is the latest example of a nation that is deeply divided and at war with itself. Can European nations stabilize themselves amidst a growing political discord?
  4. EU Pessimism: There has always been skepticism about the EU and its ability to effectively and simultaneously govern so many culturally different nations. Today, these voices are no longer in the distance but can be heard loud and clear. Can the EU hold itself together in the wake of a rising tide of pessimism about its future?
  5. The UK Card: David Cameron has issued a warning that the UK will exit the EU if it cannot control the flow of migrants that are pouring into his country. This issue is amongst many of the reforms that the UK wants to see done. Can the EU resolve its difference with the UK or will the UK’s voters choose to leave the union once and for all?

The future of Europe is one that will significantly affect the entire world. While we have gotten used to European brinksmanship and its ability to pull together last minute deals, there is a growing probability that a crisis is coming that will shake the core of the EU itself. How much longer can European leaders hold together a union where many of its members are simply unable to govern themselves properly? The world is changing faster than many want to believe and the future of Europe is directly related to its ability to adapt to the new world rather than trying to defend the old one. 

For more information about the Corvinus Global Business blogger, go to https://www.linkedin.com/in/kevinmjackson1.

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Leadership Litmus Test Scoring

2015. június 22. - Kevin Jackson

I established the Leadership Litmus Test to identify the key attributes that great business leaders must have to be successful. For the past ten weeks, I have given out awards to CEOs that best exemplify each of these important qualities. A summary of these awards is the following:

Honesty: Stephen Elop, former CEO of Nokia 

Confidence: Jeff Bezos, Founder and CEO of Amazon

Decisiveness: Indra Nooyi, CEO of PepsiCo

Accountability: Howard Schultz, Founder and CEO of Starbucks

Communication: Sir Richard Branson, Founder and CEO of the Virgin Group

Inspiration: Tony Hsieh, CEO of Zappos

Focus: Carlos Brito, CEO of AB Inbev

Creativity: Kevin Plank, Founder and CEO of Under Armour

Talent Management: Carlos Ghosn, CEO of the Renault-Nissan Alliance

Sense of Humor: Tim Cook, CEO of Apple

Looking through this incredible list of business leaders, I asked myself the question “Who’s the best?” After thinking about this for a while, I have concluded that this question cannot be answered. Let’s suppose that Jeff Bezos and Howard Schultz traded places. Although both are highly capable, I do not think either would be nearly as successful as they are in their current positions. Why? The answer is that both Bezos and Schultz have built organizations around themselves complementing their skill sets. Imagine Bezos applying his aggressive, cost cutting style at Starbucks. Reflecting back on how Schultz turned Starbucks around, his style was the exact opposite. Similarly, Schultz and his premium brand mentality would get lost in Amazon’s vast web economies of scale and efficiencies.

In order to truly understand leadership, one has to first understand who they are as a person and then find or build an organization that best complements this profile. This process, however, is not an easy one and one that is never finished. As people go through life’s journey, skills sets can change and it is important to revaluate both yourself and your opportunities along the way. The Corvinus Executive MBA Program provides a great opportunity for business leaders to explore new areas of interests and gain perspective on their current positions. Every one of the CEOs on the list above have taken a step back from their busy lives to reflect on who they are and where they want to go. As the famous quote says “Life is a journey not a destination.”

For more information about the Corvinus Global Business blogger, go to https://www.linkedin.com/in/kevinmjackson1.

Blog 44

 

Sense of Humor Award: Tim Cook

2015. június 16. - Kevin Jackson

Abraham Lincoln was well known for his sense of humor. During the famous Lincoln-Douglas debates, when Douglas accused Lincoln of being two faced he replied, “Honestly, if I were two-faced, would I be showing you this one?” Lincoln was not the most attractive man and his ability to laugh about it won the hearts of the masses. Today, global CEOs need to have the ability to connect with people from all kinds of cultures and backgrounds and humor is one of the best tools in their toolboxes.

Tim Cook is the CEO of Apple, the world’s most valuable company by a large margin. As one can imagine, the pressure of being the successor to the legendary Steve Jobs is enormous. Cook, however, has found a way to win over many of his skeptics through solid performance and his colorful sense of humor. In a recent commencement speech at George Washington University, Cook asked people to silence their phones by saying “So those of you with an iPhone, just place it in silent mode. If you don't have an iPhone, please pass it to the center aisle; Apple has a world-class recycling program.” In another recent incident, Brandon Moss of the Cleveland Indians hit his 100th home run into the bullpen (this is where pitchers warm-up). His teammates grabbed the ball and wrote a ransom note saying that Moss would have to buy them all sorts of Apple products to get it back. Cook seized the opportunity and opened this year’s Apple’s World Wide Developer Conference by holding up the ball and saying that he was giving in to the ransom requested by Moss’ teammates.

Why is Tim Cook’s use of humor important? First of all, it builds trust. People who can laugh together feel more like each other. Secondly, humor is memorable and viral. Cook’s joke with the Cleveland Indians and their ransom note will be talked about for years as the story has been picked up by news sites and social media from around the world. Finally, humor is a great way to defuse serious situations. Letting situations become too stressful can cause serious damage, while a little levity can work wonders.

Great leaders like Abraham Lincoln, Winston Churchill, and Mahatma Gandhi were all known for their sense of humor that revealed their true characters in times of great distress. Gandhi famously once said that “If I had no sense of humor, I would have long ago committed suicide.” The world desperately needs strong, powerful leaders, but often times this need is confused with toughness and discipline. Winning hearts and minds requires making a connection and tasteful, well timed humour is skill that leaders have used since the beginning of human history. The Sense of Humor Award goes to Tim Cook for his ability to use humor so that the world can also see his humanity.

For more information on Leadership, please refer to the following articles:

Apple CEO Caves to Cleveland Indians' Ransom Demands – Except the Lube, Rolling Stone Magazine, James Montgomery, June 8th, 2015

http://www.rollingstone.com/sports/news/apple-ceo-caves-to-cleveland-indians-ransom-demands-except-the-lube-20150608#ixzz3dCUBQamn

Why Great Leaders Have A Sense Of Humor, LinkedIN Post, Jas Singh, March 14, 2015

https://www.linkedin.com/pulse/why-great-leaders-have-sense-humor-jas-singh

3 Big Reasons Humor Benefits Your Leadership

http://switchandshift.com/3-big-reasons-humor-benefits-your-leadership

 

For more information about the Corvinus Global Business blogger, go to https://www.linkedin.com/in/kevinmjackson1.

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The Talent Management Award: Carlos Ghosn

2015. június 08. - Kevin Jackson

Rather than hand out an award for delegation, I have chosen to create one for talent management instead. Companies of all sizes have always faced the tough challenge of attracting, developing, and retaining talent. Today, talent development has reached a whole new level, as successful business leaders at international companies must now have a global mindset and be comfortable with multi-cultural environments. Carlos Ghosn is the French, Lebanese, Brazilian Chairman and CEO of both Renault and Nissan. As the architect of the Renault Nissan Alliance, he has demonstrated that he is one of the world’s best at global talent management.

The talent management system created by Ghosn dates back to the radical changes he made in Japan after the Renault Nissan merger. One of his first moves was to eliminate the seniority and age based promotion habits at Nissan. Lifetime employment was eliminated and everyone was required to be accountable for his or her own performances. Another move was to change Nissan’s official language to English in order to better facilitate global strategy sessions. As Ghosn pressed on with his Nissan Revival Plan, he was labeled as the “keiretsu” killer by those who were threatened by these changes. The results, however, speak for themselves as Nissan did return to profitability as old school employees were replaced with those who share Ghosn’s global vision.

Ghosn himself has recently an article entitled “How to Recruit and Retain the Best Talent.” He cites an interesting statistic saying “Among Fortune Global 500 CEOs today, 14 percent lead companies headquartered outside of their country of birth – a percentage that will continue to rise in the coming decades." Another telling statistic he uses is that “In the American tech sector, 75 percent of companies founded by U.S. venture capitalists have at least one foreign-born CEO, CTO or head engineer.” In order to build a successful, global talent management system, Ghosn lives by these three Golden Rules:

  • Hire the best and challenge them: It is never enough to just hire the best; your system has to constantly challenge them to become even better.
  • Leverage your partners to ensure a broad and deep talent pool: Extend your talent development system to your entire organization and its partners to cast the widest net possible.
  • Shatter the glass ceiling: Never limit the mobility within an organization based on gender, race, age, or nationality.

There are many who link the failure of the DaimlerChrysler-Mitsubishi merger to a lack of global leadership and a total misunderstanding of cultural differences. I completely agree with this assessment. In contrast, the success of the Renault Nissan merger has been largely because of the transformational leadership abilities of Carlos Ghosn. His keen understanding of cross-cultural differences has enabled him to build a system where Renault and Nissan employees complement each other rather than contradict each other. Carlos Ghosn gets the Talent Management Award for his incredible ability to build and maintain a global talent system that keeps the Renault Nissan Alliance competitive in one of the world’s toughest industries.

For more information on Leadership, please refer to the following articles:

How to Recruit and Retain the Best Talent, LinkedIn Post, Carlos Ghosn, February 19th, 2015: https://www.linkedin.com/pulse/how-recruit-retain-best-talent-carlos-ghosn?trk=mp-reader-card

Celebrating the Best! CNBC’s Asia Business Leaders Awards recognize the top leaders in Asia. http://www.ddiworld.com/go/archive/2012-issue-1/celebrating-the-best

Carlos Ghosn: “the four global socio-economic mega-trends reshaping the auto industry”, Eurotechnology Japan July 17th, 2014   http://www.eurotechnology.com/2014/07/21/carlos-ghosn/

 

For more information about the Corvinus Global Business blogger, go to https://www.linkedin.com/in/kevinmjackson1.

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The Creative Award: Kevin Plank

2015. június 02. - Kevin Jackson

It is not a secret to most people that Nike and Adidas dominate the global athletic footwear and apparel space. What is a secret for most people is that Under Armour is rapidly building its global brand through creativity and innovation and steadily taking market share away from both Nike and Adidas. Under Armour aims to create the world’s largest digital health and fitness community by creating an open source platform that allows people to access it using any device. Kevin Plank, the CEO and founder of Under Armour, argues that the more people exercise, the more shirts and shoes they buy. Building a fitness community is not only a good way to motivate people to exercise, but it allows Under Armour to collect enormous amounts of data about its members. This data can then be used to create products designed for specific target groups and ultimately individuals. 

While playing football for the University of Maryland, Kevin Plank noticed that the compression shorts they used in practices stayed dry, while the other gear was always wet and heavy. After graduating in 1996, Plank used his personal money and $40,000 in credit card debt to create his own line of training gear made of quick drying material. In 1997, he was close to bankruptcy before making a sale to Georgia Tech University for $17,000. This marked the beginning of the incredible rise of Under Armour as its products quickly caught on with college football and NFL teams. In 2006, Under Armour expanded to footwear and bravely chose to directly compete with Nike and Adidas. Plank steadily extended their athletic footwear portfolio from football cleats to baseball, followed by training shoes, running shoes and then basketball shoes in 2010. This calculated and measured approach, combined with innovative products, has allowed Under Armour to compete in a space that few thought would ever be possible.

Under Armour announced this year that it was acquiring the fitness app, MyFitnessPal, for $475 million. Why? For starters, MyFitnessPal has more than 80 million users and is a leading resource for healthy living and nutrition. The company also acquired Denmark-based, Endomondo, that has more than 20 million registered users primarily based in Europe. Under Armour plans on using the data from these communities to create a line of sportswear that can be customized for each user and their preferences. A great example of Plank’s vision can be seen in the video called “Future Girl.”

Perhaps Nike and Adidas are no longer taking Kevin Plank lightly as Under Armour has overtaken Adidas as the second biggest sportswear maker in North America behind Nike. The interesting part is that Plank recognized that the sportswear industry is being transformed by technology and that throwing big money at athletes is an antiquated notion of brand building. He foresees the fusion between what we wear and who we are as the big opportunity to reach people of all ages. Kevin Plank gets the Creativity Award for his consistent ability to disrupt the status quo with ideas that are transforming the sportswear industry.

 

For more information on Leadership, please refer to the following articles:

Under Armour CEO is calling out Nike and Adidas, CNBC Matthew J. Belvedere

Thursday, February 5th, 2015 http://www.cnbc.com/id/102400180

Kevin Plank Discusses Under Armour’s ‘Dumbest Competitors’, Bloomberg, Dana Karlson, February 5, 2015

http://footwearnews.com/2015/business/mergers-acquisitions/kevin-plank-under-armours-dumbest-competitors-adidas-nike-11467/

Under Armour Versus NIKE: Can David Beat The Footwear Goliath?, Market Realist, Phalguni Soni, December 10th, 2014

http://marketrealist.com/2014/12/armour-versus-nike-can-david-beat-footwear-goliath/  

Under Armour History: http://www.underarmour.jobs/why-choose-us/our-history/

 

For more information about the Corvinus Global Business blogger, go to https://www.linkedin.com/in/kevinmjackson1.

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The Focus Award: Carlos Brito

2015. május 26. - Kevin Jackson

Brazilian born Carlos Brito is the CEO of AB Inbev and has played a significant role in the transformation of the entire global beer industry. Some say Brito looks like he works in a hardware store, as he likes to wear jeans with his shirt tucked in. He is a no frills guy who does not believe in flying business class unless the flight is over six hours and thinks there should be no special privileges for executives. Despite his down to Earth demeanor, he is not an easy boss to work for and demands top performance. The results are quite clear, however, as Brito has created the world’s largest brewing company (AB InBev), and is still focused on building a whole lot more.

He became the CEO of AmBev in January of 2004, the same year AmBev merged together with Belgium based Interbrew to form the world’s largest brewing company called InBev. One year later, Brito was elected as CEO of InBev due to his reputation as being a master at cost cutting. In 2008, he engineered the hostile takeover of Anheuser Busch for $52 billion in cash creating AB InBev, displacing SAB Miller as the largest brewing company in the world. Finally, AB InBev acquired Grupo Modelo in 2013 to further cement its position as the world’s number one.

When asked about how he has managed to unify 150,000 employees in 24 countries to produce and distribute more than 200 beer brands, he will always say “people are the most important factor in a company.” In particular, he gives the following advice:

  • Be Fair: If younger employees outperform their seniors at AB InBev, then they will be the ones who are promoted.
  • Be Informal: Create an environment to facilitate communication across all corporate boundaries. Brito does not work from his own office, but rather a large table with his key members of his team close by.
  • Be Candid: Always say what you mean and mean what you say.
  • No Sugarcoating: Never take bad news and spin into something positive. Address all bad news openly and honestly.

Carlos Brito is now at it again and exploring a $122 billion takeover of SAB Miller. Many industry analysts believe this will happen by the end of this year. Why? The reason is related to Brito’s relentless pursuit of efficiencies that can be realised from consolidating the production and distribution of premium beer brands. He believes it is his personal duty to deliver the best products at the best prices to consumers all around the world and the highest returns to AB InBev shareholders. Carlos Brito is award the Focus Award for his incredible ability merge together different companies into a world leader with a focused vision.

For more information on Leadership, please refer to the following articles:

Carlos Brito: (Brew)master of the Universe, Fortune, Daniel Roberts, August 15, 2013, http://fortune.com/2013/08/15/carlos-brito-brewmaster-of-the-universe/

The Plot to Destroy America's Beer, Bloomberg, Devin Leonard, October 25, 2012

http://www.bloomberg.com/bw/articles/2012-10-25/the-plot-to-destroy-americas-beer

Carlos Brito: “You Have to Treat People in Different Ways”, Insights by Stanford Business, Bill Snyder, July 24, 2014

http://www.gsb.stanford.edu/insights/carlos-brito-you-have-treat-people-different-ways

 

For more information about the Corvinus Global Business blogger, go to https://www.linkedin.com/in/kevinmjackson1.

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