Lessons Learned – A Reflection on Spanish Business and Culture

It’s with a heavy, heavy heart that I write this post-mortem reflection on Chazen Spain from the confines of Watson Library in Uris. Without question the time spent in Spain exceeded every expectation that I had before leaving and much of that is due to the wonderful team at the Chazen Institute, our student leaders Miguel and Carlos, our facility representative Mauricio and last but certainly not least, my fellow CBS classmates. This blog will be a reflection of Chazen Spain, with a nod towards both cultural and business lessons that I flew back to New York with. Starting from the top –

Inditex (Arteixo Headquarters): Fast fashion is no joke and this visit was a lesson in how listening to your customers can be a competitive advantage if done well. Case and point is that when a store sells through an item, replenishments are not automatically ordered. The company first looks at changing styles, and leverages not only their sales team on the ground, but also direct customer feedback. With localized customer support and a highly efficient operating model, the company is able to adapt at lightening speeds.

Banco Santander: What surprised me most about Banco Santander is that the company performed well in the depths of the crisis and has continued to grow as the economy reverts to the mean. Much of this success can be attributed to the extensive risk procedures for loans (an independent committee reviews and approves each one), go-to market strategy and focus on innovation. Yes, you heard me, there is innovation in the consumer / retail banking sector. Dissolving the preconceived notion that the Spanish financial sector remains weak was the most important takeaway from this presentation.

Real Madrid Soccer Game: Our group received a real treat when we attended the Real Madrid v. Schalke soccer game. As an American that grew up playing football (not to be confused with futbol), I will admit that prior to the game I had little appreciation for how lucky I was to attend a game in person but walked away a new fan of the sport. The passion and energy for a league game rivaled any playoff or championship game in the states. It truly was unlike anything that I had ever seen or experienced and I now understand why club flags hang from apartment windows and fans dare not walk into a rival watering hole. World Cup anyone?

Telefonica: Given my undergraduate studies (economics) and pre-CBS profession, I was oblivious to the importance of customer lifetime value and customer acquisition costs. True, first year marketing touched on the topic and introduced me to the variables needed to derive CLV, but this meeting really drove home its real world application(s). The global head of strategy spent ~20 minutes outlining the plan for the company to capture what was described as the ‘huge’ digital opportunity by reducing churn and growing CLV. Connectivity is addictive and their current business model is going to exploit this.

Vicente del Bosque, Spain National Futbol Team Head Coach: A former professional player and current coach, del Bosque offered up invaluable lessons on the important of human relationships, seeing the good in everyone and importantly, thinking globally by always being open to learning new things. When I asked him what is the one thing he’d like to learn, it was to learn how to speak English well. Afterwards, he challenged me to learn Spanish. Challenge accepted. My class starts next week.

H.R.H Felipe de Borbon, Prince of Asturias: It’s not every day, or really any day for that matter, that one has the opportunity to meet royalty. Our time with the Prince provided insight behind the formalities and thought behind meeting a figurehead of state. Everything was highly coordinated and choreographed with one person directing the group, another passing out waters and yet another placing us in the proper position for the group photo.

Flamenco: Defined as a style of Spanish dance and music, Flamenco shows remain popular throughout Spain. For me, seeing the performance was a look back in time. The traditional dress and beautiful music was a sharp divergence from the infamous Spanish nightlife some of us experienced firsthand.

Airbus Group: A global supply chain necessitates careful coordination and tremendous teamwork, especially when dealing with aircrafts and the various ancillary products produced by Airbus. Touring the facility gave me an appreciation for how much work goes into an aircraft and underscored the lessons learned in my Spring A Term Operations class. Bottleneck, lead times and utilization are no longer buzz words.

Real Madrid: Building off the momentum from the game a few days earlier, meeting the Real Madrid CFO gave new perspective of the economics behind the sport. A not-for-profit business, the team is the most profitable club in the world with multiple revenue streams that include the obvious (ticket sales, club membership, broadcasting rights) and the not so obvious (player earn outs, insurance payments). The team truly is global and is constantly looking for new ways to leverage the brand. If you have a mechanism for Real Madrid to expand to the US please let the CFO know.

La Moncola (Spanish Government Headquarters): After touring the grounds and seeing the office of the Prime Minister (aka the Spanish Oval Office), the group heard from Cabinet Members about the importance of further integrating the European Union in economic terms, creating more trade agreements between the EU and the US, and the potential opportunities for the carbon credit market.

CBS Alumni Event: Meeting with the CBS Alumni Club of Spain was a treat because we met with our future colleagues, and also heard from a Spanish economist on the forefront of shaping the tax code. What was especially interesting to me was that there is an option for businesses to not file taxes, but rather pay an estimated amount that is calculated by the government given a host of assumptions around revenue, traffic and costs. The resulting incentive problem exacerbates the current tax debate around a system trying to follow a US style code but offer a European style welfare state. At some point something has got to give.

DiverXO: I already posted about DiverXO in Lessons from the Kitchen, but to reiterate, this meeting afforded perspective on how business success is not confined to the boundaries of large corporates. There are copious lessons to be learned from businesses well outside of the norm and the teamwork, passion and resolve we saw at DiverXO was a testament to just that.

That’s all he wrote. Thanks for reading!

Nate Walcker ’15, Spain

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Photo Credit: Yumna Cheema

From The Kitchen – Lessons in Leadership, Entrepreneurship and Teamwork

This morning our Chazen Spain tour officially (sadly!) concluded following an insightful meeting with David Munoz, Chef / Owner of Michelin Award winning restaurant DiverXO in Madrid. For readers of this blog not well versed in the culinary awards scene, think of a Michelin as winning the FIFA World Cup or the Superbowl. At first, I wasn’t sure what to expect when we walked into the restaurant to meet with Mr. Munoz. Since Monday our group had met with senior leaders across the county, but suddenly found ourselves at an acclaimed restaurant, suited up at 9:45 in the morning, with no plans to eat anything. As a ‘foodie’, I remember thinking that Carlos and Miguel (our Chazen leaders) had to be playing a sick joke on all of us but after we started it didn’t take long for me to figure out that there was much more to this meeting than food.

A true self-starter, Mr. Munoz has an inspirational story. After finishing culinary school and working alongside a number of high profile chefs in London, he (alongside his wife) started DiverXO with NO seed capital. Given the thin, volatile margins in the restaurant business there is no question that this was a huge risk but as he explained to the group, when you love something you’re willing to make sacrifices to achieve the end result, whatever that may be. What was particularly impressive was that he was so balanced and sure about his decision. After speaking about the origins on DiverXO, Munoz went on to offer a lesson on teamwork and leadership that rivaled many of the Spanish leaders that our Group had met earlier in the week. With three Michelin Awards under his belt at the young age of 33, Munoz is clearly doing something right.

After DiverXO, our group headed over to Arroces de Segis for a closing lunch that featured a plethora of Paella, ham, bread and even TWO birthday cakes for Josh Hessan. Carlos and Miguel picked a gem. The food was on point and I had to be rolled out of the restaurant. Needless to say, I am going on a juice diet when I get back to New York.

Away from the event today, I should note that last night (Thursday) Telefonica sponsored an Alumni Club of Spain event featuring Ignacio Conde-Ruiz, a member of the Expert Committee on the development of the Sustainability Factor of Pensions 2013. The event was a welcome treat. The Group heard from a thought leader at the forefront of Tax Reform in Spain, and mingled with a host of notable alumni. For me, the time spent on Thursday night really drove home the point that our Columbia MBA and the CBS Community at large, truly is one of a kind.

Note: Never heard of DiverXO? Worry not! There are plans for a New York location in 2015. Just in time for graduation dinners. Mom, if you’re reading this, please be on the lookout so we can make a reservation.

Link to Meeting with the Prince of Asturias:  http://www.casareal.es/ES/Actividades/Paginas/actividades_actividades_detalle.aspx?data=11878

Also, be on the lookout for another post that delves into the cultural and business lessons learned following the week in Spain. Thanks for reading!

Nate Walcker ’15, Spain


Beyond the Case – The First +72 Hours in Spain

Photo Credit: Yumna Cheema
Photo Credit: Yumna Cheema

To be 100% transparent with readers of this blog, I was planning to do a daily debrief on our meetings but there are just not enough hours in the day. Needless to say, the first 72 hours have flown by. For some context, since cramming onto a 5:30am flight to Santiago de Compostela to visit Inditex (Zara ParentCo) on Monday, the Group has toured Zara’s operations and flown back to Madrid, visited with Banco Santander senior leadership, attended a Real Madrid game, spoken with a Telefonica board member and the head of strategy, learned life lessons from renowned Spanish National Soccer Coach Vicente del Bosque, attended a live Flamenco show and met the Price of Asturias, H.R.H Felipe de Borbon. Taken in aggregate, these meetings have afforded valuable insight into not only the Spanish economy, but also the cultural aspects that have come to define what is now one of my favorite places in the world.

While the week officially kicked off with the aforementioned flight, the Chazen Spain experience really began once we touched down Saturday morning. Our three leaders (Miguel, Carlos and Mauricio) have been outstanding and there is no question that everyone fortunate enough to be on this trip has truly seen a different side of Spain. On our walk through Rerio Park on Saturday, we saw sidewalk magic acts that rival a David Copperfield show and even saw a host of random Disney characters posing for photos with unsuspecting tourists. And here I thought Woody, Tiger and Batman only existed in Times Square. The highlight of Saturday for me was the evening cultural activities. The Group dined at a restaurant in the Old District named Restavrant Botin that was founded in 1725 and is the earliest restaurant in the world, according to the Guinness Book of Records. Afterwards, we were able to experience the infamous Spanish nightlife firsthand with a stop at a rooftop overlooking the town square. While Sunday was a ‘lazy day’ with plenty of free time to explore the city, most of the group took advantage of the optional activities including an open air bus tour and a tapas crawl through the lively La Latina section of the city. Candidly, I am the worst person to ask if food is good because I love just about everything, but the tapas we had were tasty and at 2 EUR a piece you really couldn’t go wrong.

What was really notable about Sunday for me though was when I hopped a cab ride back to the hotel with Mauricio. A simple back and forth with our driver turned into a lively discussion about the state of the Spanish economy. With Mauricio translating, we spoke about the implications of structural unemployment, raising the retirement age for Spaniards and touched on the evolution of healthcare insurance. The driver at one point explained “In Madrid, you look around and think everything is fine with people out enjoying the day. It’s really not”. That right there is perspective that a textbook will never offer.

The formal meetings have all been insightful and eye-opening in their own right. Zara was of particular interest given the first-year coursework on the topics of vertical integration and operational efficiency. Touring the facility really drove home the lessons from the CBS classroom. Each function in the facility serves as purpose and the overall design is geared towards delivering a high quality product to the customer in as little time as possible. By and large the most impressive stat of the trip is that Zara is able to go from design to store in as little as 21 days! Furthermore, today at Telefónica we heard about the strategy behind increasing customer lifetime value, willingness to pay and the fundamental reasons underpinning negative net debt for many of the TMT companies that Telefónica counts as comps. By the way, the head of strategy showed a slide with 100 companies that they track for comparable purposes. I will never look at a comp sheet the same way again.

Today was also special because we had the opportunity to meet Spanish National Futbol Coach Vicente del Bosque and the Price of Asturias, H.R.H Felipe de Borbon. Talking with del Bosque was truly a lesson in leadership and the importance of having passion in whatever it is you choose to do in life. The Prince followed with a history lesson on the evolution of the role of the Spanish Royal Family and his thoughts on the Spanish economy. Overall, a TON to fit into just 72 hours and an experience that a blog will not even come close to doing justice to.

More to follow and if you’re still with me, thanks for reading.

Nate Walcker ’15, Spain

La Primavera Awaits

After completing the last of my core examinations this morning, I am only a few days away from making the journey to Spain for a jam packed week of cultural escapades, business roundtables and what will hopefully be an eye-opening experience for all parties involved. Led by two CBS Spaniards, Carlos Abellan ’14 and Miguel Nigorra ’15, and CBS Professor Mauricio Larrain, the group is set to visit with an impressive list of businesses and political leaders across Madrid, Santiago de Compostela and Barcelona. With 3 cities in just shy of 8 days, there will be much to see, much to do, and plenty to blog about.

I look forward to affording readers of this blog insight not only into the operations and minds of aforementioned companies and leaders, but also into just how far the Country has come since the depths of the ’08 financial crisis that rocked the Spanish and Global economies alike. To me, this perspective is well worth the +7-hour flight in an ‘economy’ middle class seat. Stay tuned for more.

Nate Walcker ’15, Spain