Leadership Personality & Achievement: TELMEX and Carlos Slim

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Introduction

Numerous studies have centered on leadership with the basis of finding the fundamental traits that makes leaders in a society. Leadership is one of the most researched studies, and research on leadership has gained importance due to the contributions of leaders on the organizational achievements. The values of leaders shape the economy and transform an organization in the present globalization where there is fierce competition in almost every sectors in the economy. However, evidences reveal that transformational leaders are fundamental tools that transform society, and make corporate organizations to build competitive advantages in the global market. Typically, the abilities of a leader are very important in the success of an organization. In building organizational excellence, leadership’s styles not only affect organization achievement, and these also transform an organizational strengths. (Masood et al 2006).

Meanwhile, the research proposes that North America is a region that has become famous because of the known business leaders that come from the region. The business leaders who come from North America display pleasing characteristics, and their personalities help them to make an impact on their employees by sharing a common view and vision. An example of this type business leader is famous Carlos Slims Elú based in Mexico in North America.

The objective of this paper is to examine the leadership personality and achievement. First, the study establishes the theoretical framework that establishes the Carlos Slim’s personality with relation to leadership transformation, leadership visionary and management capability to transform an organization. In addition, research establishes a relationship between Slim’s leadership initiatives and outcomes in transforming his business establishment into a business giant. Moreover, research examines Telmex as a case study to establish the transformation leadership styles and techniques Carlos Slim uses in building and transforming his business empire. Research also expands on the traits, characteristics, behaviors, and personality of Carlos Slim according with the leadership style. Finally, research examines the accomplishment of organizational transformation through leadership’s styles, and change in management. However, before the paper discuses the transformation leadership of Carlo Slim, it is essential to gain insight into the theoretical framework of leadership.

Theoretical Frameworks

Several theories have been formulated on the leadership perspectives in the contemporary business environment. The theory of transformational leadership examined by Adebayo (2004) reveals that energized leader who has the skills of stimulating others in an organizational setting can only direct an organization.

In collaborating the argument of Adebayo (2004) on the theory of transformational leadership, Masood, et al (2006) point out that transformational leaders raise the other to high level of morality, equality and justice. The qualities of transformation leaders are the ability to be free of greed, fear, jealous and hatred that can jeopardize his ability to carry an organization to level of success.

In supporting the other authors previously reviewed Purvanova, Bono, and Dzieweczynski, (2006) reveal that a leader must possess both transformation and charismatic qualities to stimulate others and having intellectual capabilities and the skills to solve the problems.

Although, elements of transformational and charismatic leadership have been subject to intense debate

However, in the past few decades scholars have begun to classify transformation and charismatic leaders to be same. Research conducted by Barbuto (1997) shows that transformation leadership is a fundamental factor that influence transformation process within organization and the charismatic describes the leadership ability to general symbolic power, which the other follows.

However, there are setbacks in the theory of charismatic leadership because of the level of authority instilled by the charismatic leaders on the followers, where his authority must be accepted without question may lead the followers to follow his decisions blindly.

Thus, this paper employs transformational leadership theory in examining the methods Carlo Slim Helú uses in transforming an organization.

Carlo Slim’s transformational leadership’s initiatives, styles and his outcomes in transforming his business establishment into business giant

Carlo Slim was born in Mexico in 1940 by an immigrant parents from Lebanon. Since the tender age, Slim started receiving business lessons from his father on how to increase personal financial resources. His father started his business training with little capital, and taught him to increase the money from his own initiatives. The business training was developed in Slim’s spirit because of his aptitude for numbers. At the age of 12, Slim started buying shares and opened his first saving accounts at Banco Nacional de México.

However, the efforts of his father ended because his father died when Slim was only 13 years old.

To improve his educational skills, Carlo Slim proceeded his education by attending National Autonomous University of Mexico (UNAM) School of Engineering. While studying in the university, he was taught Algebra and Linear Programming, and at the age of 25 he had already laid foundation for Group Carso when he incorporated Inmobiliaria Carso in January 1966.

Thus, the spirit of transformational leadership to direct organizations began to manifest in the Slim abilities when in 1982, he diversified his business activities when Mexico was in debt crisis, and government decision to nationalized banking sectors. His visionary skills made him to invest actively in various sectors during this period.

As was discussed in the previous section on the transformation leadership theory, one of the major qualities of the transformation leader is to possess visionary qualities, which is ability to predict business outcomes. The economy problems that Mexico was experiencing at this time inspired Slim to increase his acquisitions by purchasing Bimex, Hulera el Centenario, Reynolds Aluminio, and Hoteles Calinda. Slim did not stop there, by 1985, his company Group Carso acquired Fábricas de Papel Loreto y Peña Pobre, Artes Gráficas Unidas, and had majority stake in Sanborns and its affiliates. (Carlos Slim Helú, 2007).

After Mexican economy recovers, this is the time Slim’s fortune continues to grow substantially. His business acquisition initiatives make him to acquire number of US based brands such as Hershey’s chocolate, Firestone tires, and Denny’s coffee shops. Moreover, Slim also bought and merged Serguros Inbursa insurance companies into the giant firm. (Academic of Achievement 2008).

Slim abilities to predict business outcome does not only manifest in Mexico but also US. This is made known when Slim was having interview with Business week and Slim was asked a question:

“You’re known as “the Warren Buffett of Latin America” for your ability to pick good stocks and companies”. (Business week, Feb 21, 2000).

Slim’s answer to Business week is as follow:

“Maybe, but I don’t think I’m really like him. I think that I am more of an operator of companies than he is. I buy companies for strategic reasons and operate them. Take Telmex. I’ve always thought we got a very good deal on Telmex, even though people thought we overpaid at the time…..We knew the company had real potential.” (Business week, Feb 21, 2000).

His way of directing his business organization as transformational leaders reveals the practicability of his leadership styles that make him to be one of the successful businessman in the world. For example, Crupo Carso does not have corporate staff, and in his business empire, each company has a structure that makes them more efficient. (Carlos Slim Helú, 2007).

These are leadership initiatives that are the cornerstone of the Slim’s characteristics, styles and personality that influences his business transformation.

Slim’s leadership Styles, change Management and organizational Transformation

Slim’s leadership styles are influenced by the personal principles and beliefs that has influenced his business decision and these are the principles that he has been using in the business transformation and management of his employees.

These business principles are what Slim summaries in 10 points that he urges his colleagues and entire work force to follow. He advises his workforce on how organization structure should be, and from his philosophy on the structure of an organization, he points out that organization should have minimal hierarchies with non-complex structure that can enhance flexibility and growth. Apart from this, Slim also integrates principle that can enhance organizational success, these includes focusing on modernization, quality, simplification that can increase productivity at all times. (Carlos Slim Helú, 2007).

Apart from this, Slim has some philosophy that that he is instilling on his followers as an example transformational leader. As discussed in the previous section about the transformational leadership theory that points out that transformational leaders are those who have the ability to free themselves from greed, fear, jealous and hatred that can jeopardize their abilities to carry an organization to a level of success.

It should be noted that these are the qualities that Slim posses, and the qualities manifested from the letter he wrote to the university students in Mexico city in 1994 advising them on the important attributes of life, which the students must follow. The letter vividly reveals the Slim’s life experiences and philosophy that is guiding him. The letter reveals how a good leader should stimulate good example to his followers and how they will be able to influence the followers in an organization. For instant, Slim states in his letter “I write to you this letter in order to share some of my life experiences, hoping it will contribute to your education, your way of thinking and living, your emotional well-being, your sense of responsibility to yourselves and to others, your maturity, and above all, to your happiness, which should be the result of your daily existence”. (Carlos Slim Helú, June 1994).

It should be noted that Carlo Slim possesses the qualities of transformational leadership, and this is revealed from his letter to the students. The transformational leaders are the people with skills to stimulate others, and have ability to motivate followers to emulate his attributes in order to create safe environment. This also includes the ability to free himself from greed, fear, jealous, and hatred.

Slim advised to students on how to achieve success in life and this entails love, friendship, and integrity. The students must also have internal values that are important than professional, social and economic success that can help students in living successful life. For example, Slim states that “Emotional strength and stability are in the interior life, and in avoiding emotions that erode the soul such as envy, jealousy, arrogance, lust, selfishness, vengeance, greed and laziness, which are a poison that is ingested little by little.” (Carlos Slim Helú, June 1994).

Thus, with relation to Slim’s business philosophy and internal belief that a company should not be limited in size and should have clear objective of increasing in size and create wealth at all time. With patient and optimism, there are greater rewards in the business investment. (Carlos Slim Helú, 2007).

The astute of his business philosophy and his leadership styles lead him to acquire businesses he believes to be undervalued, and with his business skills, he transforms the businesses by overhauling their management. For example, Slim invests in undervalue businesses such as real estate, a construction equipment company, then mining interests. In addition, Slim grow his portfolio into a printer, a tobacco company and retail stores. (Academic of Achievement 2008)

By 2007, the group of companies of Carlo Slim has worth more than $150 billion. The Slim’s personal wealth estimated by Fortune Magazine has reached $59 billions that makes the Fortune Magazine and other sources to conclude that Carlo Slim is now the richest man in the world. (Academic of Achievement 2008)

These are the transformation styles and techniques used to transform TELMEX as discussed in next section.

Transformational leadership styles and techniques that Carlos Slim use in building and transforming his businesses: Case of TELMEX

Slim acquired Telefonos de Mexico (Telmex) in 1990 when the company was privatized in 1990. Thus, in partnership with Southwestern Bell and France Telecom, Slim gets hold of 10.4% Telmex stocks, and since 1980s, Slim has been initiating certain techniques of acquiring companies and transform the companies. (Business week, 2000, Carlos Slim Helú, 2007).

Slims’ techniques to transform Telmex is by embracing culture of modernization, quality, improvement of customer service, which are the techniques Slim used to transform Telmex. (Carlos Slim Helú, 2007).

For example, five years after the acquisition of Telmex, Slim trained all his employees on modern technology and in the area of information technology so as to equip his employees to adopt modern techniques in Information Communication Technology. (Vázquez and Alberto 2007).

Part of the styles and techniques Carlo used are to change the obsolete equipments and other electromechanical analogy equipments the Telmex was using in 1991 to modernized them to digital technology that enhances the improvement of Temex service. Presently, the company has modernized technology installed throughout the country. (Carlos Slim Helú, 2007).

More technique Slim’s use in transforming Telmex is by using his unique idea of introducing cell phone service, and by selling cell phone with prepaid system rather than offer monthly bill to customers. It should be noted that with prepaid system, the Telmex customers grow substantially by 66%. By 2000, Slim uses Telmex to beat all his competitors including foreign based companies in wireless telecommunication service providers. (Academic of Achievement 2008).

In addition, with intention to reach every part of the country, Slim provides subsidies by reducing the telephone charges and profits margin in all part of Mexico so that Telmex will have the largest network in Mexico. This is also part of techniques that Slim is using to beat his competitors in Mexico. (Carlos Slim Helú, 2007).

The attributes of transformational leadership that indicates that a leader must be able to free himself from greed influences Slim’s decision in running Temex organization. Slim beliefs that public telephone is important for easy communication, and facilitation in the improvement of business activities. Thus, Slim increases the public telephone booth from 69,025 in 1990 to 715,000 in 2007. (Carlos Slim Helú, 2007).

Carlo Slim has techniques of beating his competitors by assuring that everybody in Mexico should have access to telephone service. His technique is by extending the telephone service to rural areas because the telephone networks of other telephone service providers in Mexico are only based in the towns and cities. Thus, Telmex is the only telecommunication service provider that extends its service to rural areas in Mexico. Apart from telephone service, Telmex also launches internet access that improves internet connectivity in every part of Mexico. The modern techniques that Slim embraces in the telephone service make Telmex to have 100% share of the market. However, since Telemex has gone public, the company has invested $30 billions between 1999 and 2007 only in Mexico and approximately $45.8 billions in telecommunication sectors that make Telmex investment to reach 65% in Mexico.

Meanwhile, by the end of 2007, Telmex has 17.8 millions lines reaching approximately 22, 890 communities in Mexico. In addition, the revenue of Telmex increases yearly, for example, the revenue increases by 0.6% from 2006 to 2007 that made Telmex to realise revenue of approximately US$9.5 billions in 2007. The solid revenues base allows the company to expand, beat its competitors and assume the position of leadership in the telecommunication sector in Mexico. (Telmex 2007).

Presently, Telmex is the largest wireless Telecommunication company in Latin America. (Academic of Achievement 2008)

Thus, with spirit of expansionism, Telmex has also gone international and is now operating in Argentina, Brazil, Chile, Colombia, Peru, Uruguay, Eucuador, and United States of America. Since 2008, Telmex international has been listed in the New York stock exchange and other stock exchanges in Madrid and Mexico. (Carlos Slim Helú, 2007).

With spirit of transformation leadership, Slim transforms Telmex that was formerly operating with obsolete technology to the modern telecommunication service provider.

Discussions

Report reveals that Carlos Slim Helú is exceptional transformational leader who has an ability to transformation a dead organization into super giant. This has been revealed on the methods he has used to transform Telmex that was struggling for finances before 1990 to a company that has been operated in different countries and be able to be listed in the New York stock exchanges. While transformation leaders are very scarce in the society, evidence has shown that Slim has visions to manage an organization. It should be noted that in the modern day business, survival of an organization depends on the model of the management, which Slim has been able build over the years. Slim has been able to stimulate tangibles and intangibles values that all his employees are emulating over the years. This is reflected in the way Slim develops his human resources to the level of professionalism, where each employee has autonomy to make decision. It should be noted that Slim styles of instilling values and abilities have yielded sustainable advantages to his companies. For example, Slim instilled the culture of endurance to his employees during the Telmex’s transformational process, and this has yielded positive results as Telmex has monopolized the Telecommunication system in Mexico. (Vázquez and Alberto 2007).

References

Adebayo, Dada O (2004), Perceived workplace fairness, transformational leadership and motivation in the Nigeria police: implications for change, International Journal of Police Science & Management, 7(2), 110-122, from EBSCO, (AN: 16787190)

Academic of Achievement (2008), Mexico’s Telecommunication Tycoon.

Barbuto, John E, (1997), Taking the Charisma Out of Transformational Leadership, Journal of Social Behavior and Personality, 12(3), 689-697, from EBSCO, (AN, 1303203).

Business week, (2000), Carlos Slim: “The Key Is the Internet» The Mexican mogul talks about his business philosophy — and his plans to put Mexico in the vanguard of the digital revolution. Web.

Carlos Slim Helú, (1994), Letter to Young People.

Carlos Slim Helú, (2007), biography.

Carlos Slim Helú, (2007), from his thought.

Purvanova, Radostina K, Bono, Joyce E, and Dzieweczynski, Jessica, (2006), Transformational Leadership, Job Characteristics, and Organizational Citizenship Performance, Human Performance, 19(1), 1–22.

Masood, S, A, et al (2006), Transformational leadership and organizational culture: the situational strength perspective, J. Engineering Manufacture, 220, 941-949.

Telmex (2007), Annual Report (2007), Informative Corporative, Mexico.

Vázquez, Gisela, and Alberto, Beautiful (2007), The Secret of Carlo Slim, CNN Expansion, News Cable Network LP, USA.

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