We were greeted by Mr. Anil Govada, who is the Managing Director of Alcoa's Asia Pacific operation. Anil has been with Alcoa for 27 years and started at Alcoa in Pittsburgh. While in Pittsburgh, Anil worked on Asia-Pacific sales which eventually led him to his current position in Hong Kong. Anil is also a VT graduate!
Anil gave a detailed presentation and Q&A session on the history of Alcoa, the future growths and challenges, and what it takes to be a global manager. The presentation gave a good history of Alcoa and their motto "Alcoa can't wait for tomorrow". Anil's presentation taught us that Alcoa was founded in 1888 and today has 240 locations in 35 countries, with 87,000 employees worldwide. Alcoa aluminum is in everything to include electronic gadgets, air & space travel, beverage containers, cars, and iPods. I think what many of us found most interesting was that Ferrari's were made by Alcoa! I come from a business/finance background in Defense Contracting and therefore have little experience with the aluminum industry, however I found Anil's presentation to be very interesting and amazed at everything Alcoa does.
From a business standpoint, Anil explained how Alcoa has become an aluminum leader and they have successfully taken on the Jack Welch/GE model of becoming #1 or #2 in more than 90% of their businesses. Anil told us about the 1990's and early 2000's when Acloa acquired several companies, but have since divested them because they did not fit the #1 or #2 business model. Anil also explained that Alcoa principles are centered around integrity, shareholders, employees, customers, environment, accountability, and profitability. When asked what Anil thought was the key to Alcoa's success, he said without a doubt personal integrity is #1 for long-term growth. Along those lines he also explained that Alcoa may look at shareholder growth, but would not do so at the expense of the bottom line. Alcoa has taken a "disciplined execution" approach and which for the most part means sticking to their core competencies and keeping 2-3 profitable portfolios to compensate for non-performers. In recent years Alcoa has managed through the financial crisis by focusing on cash growth and reducing capital spending. I asked Anil if the thought that focus would continue in future years and he indicated he did, as it is good business practice to constantly look at ways to reduce capital expenditures (without interupting R&D growth). One last take away I found fascinating from Alcoa's business model, was their capability to close the accounting month in 8 hours! Anil didn't expand on the process for doing so (as I'm sure it's proprietary!), but an 8 hour accounting close is unheard of; most companies close over 3-4 business days. I am very curious as to the details of how Alcoa was able to achieve an 8 hour close and would like to contact Anil in the future to see if he is willing to share Alcoa's strategy.
As for Alcoa's future international growth, Anil indicated the company sees growth opportunities in both India and Vietnam. Actually, Alcoa is currently performing business in every major country except India, which I find to be quite an accomplishment. Alcoa is also looking at mega trends as part of their growth opportunities and see urbanization and climate change as areas for growth.
Last, but definitely not least, Anil talked to us about his experiences as a global manager and what it was like for him coming to Hong Kong from the US. Much of what Anil discussed, was similar to what we learned in Dr. French's Oganizational Behavior class as well as Dr. Gnyawali's Global Strategic Management class. In both courses we discussed the importance of global managers adapting to local cultural norms. Anil explained that to be successful in a foreign country, you must have an open mind and be willing to adapt to the culture you are in. He explained for example, the work hours in Hong Kong differ from the US in that employees come to work in the late morning (9-10am) and take a 2 hour lunch around 1pm, then come back and work until midnight. Anil believes this is because the living situations also differ in that the people in Hong Kong live in smaller apartments with several family members, so therefore they spend a lot of time outside of the house. Anil also explained that as a global manger he had to take on the customs of his Hong Kong employees. During the Chinese New Year he was expected to give each employee a red envelope with a small gift of money.
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