Feb 10 2012
An interview in El comercio, the top business newspaper in Peru
Feature Interview ‘”Si las empresas públicas son eficientes, atraerán a los ejecutivos”’ – “If public enterprises are efficient, they attract executives”
The English Version of the interview with Richard Joly, President, Leaders&Co, Partner of AIMS International in Canada
For Richard Joly it is necessary for public enterprises to change their culture and they have to trust in leaders who go out and compete in the stock market
From Claudia Paan
This is not a trend unique to a country. There is always a government that thinks it’s time to make some of their companies compete in the stock market.
This time it was Petro-Perú in Perú. How can they become a successful traded company without trying? Richard Joly explains.
One of the major challenges for public enterprises is to attract top executives – but how?
It is not easy to attract them. And while private enterprises have to make money, companies in the public sector are serving the people. Your values must be aligned with it. You need people with a social agenda. There are those people with much experience in the private sector who are attracted by the public sector.
Is it difficult to find people with this attitude?
Not all have it. Many people think of themselves first before thinking of others. But there are some. And more of them should be brought into these public companies. If organizations are competitive, efficient and stable, you are really attractive to executives.
But governments change and the opportunity to learn is limited.
It is a challenge. Because the government has an agenda and seeks leaders representing the governments strategy in the companies. Many times these companies are economic instruments for the government and why would you need an executive if you only want him to do what you want.
Does this not be an obstacle for business?
There is not much independence between organizations and the government, this should change. Public enterprises should have a board of directors and its own objectives. But this never happens.
What do you think is the most important point that the company should do before going to market?
Hiring the right CEO. This person must have high ethics, communication skills and the ability to make administrative changes. Should be a good leader also.
In view of this, are most public enterprises ready to go public?
When a company goes public the pressure from investors is huge. They expect the same returns as from other companies and that influences decisions. So an important question before you go public is: why are we doing this? In 10 years this company will not be the same. It will look like a private and may fail. That happened to Petro-Canada twenty years after going public. It was finally acquired by another company.
Is it common for public companies fail at the stock market?
Not always. It depends on whether it is easy or not to take the cultural challenges of the company. You need executives who take risks to make necessary changes happen and to become a more competitive company. This was what made the general manager of Canadian National. And today this is one of the most important companies in the U.S.
Changing the culture is the first step to succeed at the stock market, what would be next?
You must bring in executives who have worked in the private sector. It can be difficult to integrate them and people can take it as a challenge. You need smart leaders who understand how to influence. If they are only focused on results, people will not follow.
How long can this process take?
Changing the culture is a very difficult thing. Until you begin to notice differences it may take three to five years. After 10 years you can see the today´s culture as “history”. And 20 years later, it is another company.
What common mistakes are made during this process?
Companies may underestimate the difficulty of changing culture. They think people understand these changes before they really do. They assume that changing processes is enough to change peoples thinking. This is not so. You need to repeat the communication, and the culture.
How to communicate?
In an organization like this, you must have your first line managers working with their team members. They are the agents of change. They’re going to challenge, influence and educate others to achieve the change. But it is important to project the performance which you want to be achieved. Then, you need to “change agents” at all levels and areas of the company.
The next step is ‘freezing’ the organization. That means, find reasons for people to change. Because if they don´´t have these, they will not. The employees may not care if the company is at the stock market or not, as long as they have their work.