Jaime Augusto Zobel de Ayala Essay Example
Jaime Augusto Zobel de Ayala Essay Example

Jaime Augusto Zobel de Ayala Essay Example

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  • Pages: 4 (1049 words)
  • Published: November 29, 2017
  • Type: Case Study
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Lifelong Lesson From HBS

The ability to find solutions to challenges increases exponentially when you tackle them with a team. Success comes much more easily if you can create the right environment for a group to address issues together. "

Advice to Students

"Never underestimate the importance of the 'softer' management lessons you learn at HBS—the ones that revolve around working with and leading others.As your responsibilities in any organization expand, the people-related issues become increasingly important. The technical tools that seem so important when you are a student will help only up to a point. "

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Divisadero, by Michael Ondaatje Jaime Zobel didn't plan to start his career in the family business. However, after completing a training program at the venerable Ayala Corporation—the largest and most widely diversified conglomerate in the Philip

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pines—and attending HBS, he accepted a short-term position at Ayala and never left.Today, Zobel embraces his role as the leader of the 173-year-old firm, where his innovative, entrepreneurial style of management has benefited both Ayala and an island nation that faces significant social and economic challenges. At least once a year, Jaime Zobel, his brother Fernando (who shares leadership of the Ayala Corporation as its president), and a handful of brothers-in-law travel the back roads of destinations such as Tasmania, Baja Mexico, or South Africa on adventure motorcycles. "The novelist Milan Kundera said that when you're riding a motorcycle, there's no past or future, there's only the present," Zobel observes. I agree. It's liberating to have some time when the moment at hand is all that matters.

So often in business we are reflecting on the past or looking toward the future. " The past, for the

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Ayala Corporation, includes an impressive history entwined with the Philippines' own complicated political and economic evolution. Representing the seventh generation of his family to lead the company, Zobel inherited a legacy of prudent management that preserved Ayala's interests through times of revolution, colonial rule, dictatorships, and war—not to mention earthquakes and volcanoes. Established in 1834 as an agricultural trading house, the $16. billion grouping of companies today is involved in almost every sector of the Philippine economy, with major holdings that include Ayala Land, the Bank of the Philippine Islands, Globe Telecom, and Manila Water.

Zobel says that future challenges include sustaining growth across Ayala's wide spectrum of businesses while "tapping more forcefully into opportunities in Asian and global markets. " A strong believer in the "implicit social contract" between business and society, Zobel is intent on "keeping our agenda aligned with the Philippines' pressing needs as an emerging economy. Zobel's tenure with the company began in 1981. "My father offered me the opportunity to test the work environment in the Philippines at Ayala for a three-year trial period," he recalls. Although considering other options, Zobel took to his work at Ayala "like a fish to water. " He stayed on, and when his father retired from the presidency in 1995, Zobel, still in his mid-30s, became president and CEO.

In 2006 he was appointed chairman, retaining the role of CEO while his brother Fernando became president and COO. My father placed a lot of trust in us," observes Zobel. "Unlike many Asian firms, where the senior generation has trouble letting go, he gave us freedom to sink or swim. " The brothers have pursued a strategy

of maintaining Ayala's core strength—extensive, large-scale, high-end real estate development in and around Manila—while expanding their investments in the middle market real estate sector, water utilities, financial services, telecommunications, electronics manufacturing, business process outsourcing, and IT.

Our goal is to strike a balance that allows us to find new avenues for growth locally, remain relevant to changing customer needs, and participate more aggressively in global trends," Zobel explains. At least once a month Zobel gathers the CEOs of Ayala's disparate businesses for informal brainstorming sessions. "We're constantly looking for synergies. There's excitement in collectively creating something bigger than what each business can accomplish individually. " The formula has proved successful. Ayala has shown strong growth over the past decade despite fluctuations in the Asian economy.

Recent initiatives, such as a public-private partnership with the Philippine government to distribute water; a global portfolio of business processing services; and expanded electronics manufacturing into Japan, Singapore, Vietnam, and China, have been profitable, allowing Ayala to post a 57 percent rise in net income in the first half of 2007. Asiamoney magazine recently named Ayala the best-managed large capitalization company in the Philippines. Yet Zobel is not satisfied with business success alone.In a country where one-third of the population lives beneath the poverty line, he is an advocate of political and economic reform and a champion of investing in the bottom of the business pyramid.

"I believe business should channel resources and skills toward providing the broader population—including marginalized and underprivileged sectors—equal access to products and services, as well as a stake in the overall economy," he states. One example of this model is Ayala's Manila Water operation, which pipes water at

modest rates to 97 percent of eastern Manila's 10 million people.In the lower income sectors, billing operations for the utility are carried out through the local "barangay" unit, the smallest constituency in the local government hierarchy. Ayala is also creating microentrepreneurs through its telecom subsidiary, which operates on a cutting-edge platform and allows its 600,000 resellers to sell their unused telecom minutes to smaller customers for a profit. "These kinds of entrepreneurial activities strengthen the social fabric by engaging people as equity partners in their own future," observes Zobel.His dedication to addressing inequalities in Philippine society is in keeping with the company's tradition of social outreach through the Ayala Foundation, a $22 million nonprofit focused on improving public education, enhancing cultural and historical pride, and building young Filipinos' leadership potential.

"I have a tremendous desire to see the Philippines become more engaged with the rest of the world," declares Zobel, who serves on numerous boards and is chairman of the World Wildlife Fund in the Philippines. Both as a businessperson and as a Filipino, I believe the best investment we can make is in broadening the outlook and skills of our country's next generation.

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