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Lesson #3: Make Your Company a Lean, Mean, Operating Machine
Lesson #3: Make Your Company a Lean, Mean, Operating Machine
Helu dislikes being compared to Warren Buffett, not because he does not admire the American investor’s long list of shrewd business acquisitions, but rather because he feels it is an inadequate assessment. When Helu takes over control of a company, he does so in order to operate it. Buffett wants a good investment, but Helu wants to run a company. He wants to make his companies practical and lean operations, bringing efficiency to their every move. And, most importantly, he wants to do it himself.
“It’s not a question of arriving [at a new company] and putting in a whole new administration,” says Helu, “but instead, arriving and ‘compacting’ things as much as possible, reducing management layers.” Helu likes to take control, but he is not imprudent enough to think that he can do it on his own. To that end, he maintains the management of the original companies as much as possible, since they are experts at running the business.
Helu also wants his companies to be managed in a hands-on manner, with himself at the forefront. “We want as few management layers as possible, so that executives are very close to the operations,” he says. “We also don’t believe in having big corporate infrastructures.” Grupo Carso is as lean as you get, having no corporate staff whatsoever. Slim himself worked out of a windowless basement in a two-storey building for his entire career, even as his fortune soared into the billions of dollars.
After Helu had acquired control of Telmex, he immediately set out to improve its operations. It was a notoriously badly run company, and Helu saw it as his main task to turn things around. He upgraded equipment to modernize the company and personally drove hard bargains with suppliers. He even threatened to pull out of a deal with their biggest supplier, Sweden’s Ericsson, if they did not give him the best deal he knew he could get elsewhere.
Helu describes his own management style as practical. After gaining a minority stake in badly managed companies and fixing their inner workings, he goes ahead and seeks majority control. And, he does not waste any time doing it, saying, “When we decide to do something, we do it quickly.”
When Helu takes control of a company, he keeps control. In 2002, he spent $300 million to buy the troubled MCI and immediately set out to turn it around. Despite keeping MCI executives on board, he never let them get in the way of his vision. When they disagreed with his decisions, he would say, “What we have to do is seek the best for our shareholders,” namely himself and his children. It worked; in just a few years, Helu saw his shares in MCI rise to $1 billion in value.
Helu did not just want to buy a company and sit back to let others run it. It was his money, his investment, and his operations, and he was going to make them as lean and mean as he knew how.
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In 2001, Musk had another one of his many dreams: he wanted to launch a “Mars Oasis” project, landing a miniature greenhouse on Mars. He wanted to see if he could grow food on the planet, which would help pave the w...
Helu dislikes being compared to Warren Buffett, not because he does not admire the American investor’s long list of shrewd business acquisitions, but rather because he feels it is an inadequate assessment. When Helu...
