Alfredo Capote, Business Liaison Director at eGADe Business School, has extensive experience in the business world, in

different countries and sectors, and held management positions for decades in technology, consulting, financial services, and

manufacturing companies. Currently he is a business consultant in Mexico and the United States and a member of COPARMeX and IMeF, as well as on the Board of Directors of the Foundation for Sustainable Development (FUNDeS). In this interview he offers some insight on the kind of leadership that businesses need to

face the digital transformation.

Business Liaison Director at eGADe Business School

AlfredoCapote

Talent and an understanding of business and technology drive digital leadership.

WHAT IMPACT IS THE DIGITAL TRANSFORMATION HAVING ON THE DIFFERENT BUSINESS MODELS IN THE COUNTRY?The real transformation is focused on the models that are based on the capabilities provided by information technology and telecommunications, which in turn are creating more value at the moment.

Specifically in the area of Retail, we are now working on a completely different model from a few years ago. The main competitors in this industry no longer have a sales model, but rather a financial one. Based on an intelligent distribution scheme that allows them not only to restock but also to know what exactly it is that customers buy. It is a continuous cycle of demand-driven supply that is dynamic and online.

SUPPLIER AND PRODUCER IN PERFECT SYNC TO BUILD COLLABORATIVE EFFICIENCYCorrect. Suppliers access the retailer’s system, see the orders entered, as well as the sales, and do permanent restocking. It works in real time.I happened to work with that in the

electronics industry: I would make an agreement with a supplier in Taiwan, and I would tell him, "Access my system and supply me." Seventy hours later I had on my production line what Taiwan had sent me, without having to be distracted by inventory, logistics, or customs procedures: I cleared customs myself in my factory!

A FLEXIBLE BUSINESS MODEL BUT AT THE SAME TIME FOCUSED ON LEVELS OF SERVICEYes, agility and efficiency in the business model. Because, what is the big problem in the retail industry? That you shouldn’t keep inventories. It is a collaboration challenge shared with suppliers. And with customers, because now you can interact with customers online. With the new geolocation systems, for example, a customer can go to a department store, and he or she could have someone waiting for them telling them, "let me take you to where the shirts that you like best are."

IN FACT, THE END BENEFICIARY IS THE CUSTOMERSure, but all that comes from the integration of market intelligence,

product intelligence, logistics, warehouse management, the relationship with my suppliers—everything integrated into a concept on which I can project what my customers need.

THIS IS HAPPENING IN THE CONSUMER INDUSTRY, HOW DOES THE PICTURE LOOk IN THE FINANCIAL INDUSTRY?In the financial industry, the problem is that some banks are already very mature, very developed, but they have to take the next step, which is to make it so that the customer no longer goes to the branch. Now, that also changes the model of the relationship with the customer. If he is not going to the branches, when do I have a chance to sell him my products? Before, cross-selling was done at the branches, now what corporate banking executives have to do, through automation and analytics tools, is to visit customers in their offices and say, "these are the kind of things you are doing and the type of products you require." And not only that, you must close the circle. I cannot just stop at my client, I have to see what customers he has in order to offer my services to them as well. That way I build a collaborative ecosystem.

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"The business models that are creating the most value at this moment are those that are enabled, promoted, and supported by technology."

Here at Tecnológico, we call it Customer Management Automation. What does it mean? An intelligent management system on how I should treat customer A, customer B and customer C, based on their behavior.

IN THAT CONTEXT, WHAT HAPPENS WITH THE GENERATION THAT WILL LEAD THESE NEW BUSINESS MODELS?For us to accept people in our master or doctoral programs, we look for people who have leadership skills. But that also involves soft skills. Aside from giving them all the tools, the new generations are training in something very important, which is how to manage leadership, how to communicate and how to understand the environment.

A survey was just done among some two thousand CEOs, and the conclusion was that the number one element of the current leadership is the understanding of technology. But we do not just want geeks: the people who have advanced the

most as CEO’s are those who are perfectly connected to their business. I don’t care if you have a green, red, or yellow machine, or that you've done a thorough analysis. Those things are necessary but not sufficient. That whole set of tools has to be reflected in business results: I have to sell more, yield better margins, leave customers satisfied, develop winning products. The CEO who is closely connected to the business is the one who makes the difference.

WHAT SHOULD TODAY’S LEADERSHIP BE LIkE IN THE DIGITAL BUSINESS MODELS?Most definitely leaders make themselves, and there are several styles of leadership. What you have to find is the style that is required in your specific business. Now, the company that is truly competitive is the one that innovates, even if it has three or four people. The key element is entrepreneurship, which can be in the company that you create or the company where you work: Intrapreneurship.

THE NEW GENERATIONS ARE GETTING READY TO LEAD THESE NEW BUSINESS MODELS, BUT THE CHALLENGE IS HOW TO INTEGRATE THIS NEW LEADERSHIP AMONG THE ORGANIzATIONS’ EMPLOYEESIn the end, the most important element of leadership is that you have to find people who are adept at your ideas. They are your followers. I call them adept because you have to "convert" them. What are the companies that work best? Those that have a natural leadership, where the CEO manages to achieve a phenomenon of communication and collaboration with all their partners, who are their employees, their suppliers, their distributors, and the entire ecosystem. When you're a CEO you have to understand that you are an enabler of effectiveness, productivity, and efficiency for your business. But the most important thing is to build followers.

The business ideal, which is very difficult to achieve but one we must continually aspire to, is for people to do exactly what

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the company needs because they are convinced of it. As Americans say, You have to walk the talk.

HOW READY IS MEXICO FOR THE DIGITAL TRANSFORMATION?Mexico is a rainbow. You have everything. There are companies like Grupo Bimbo, Femsa, BBVA Bancomer, but there are others on the opposite end of the rainbow, and you have to pull them in with elements that will allow them to understand all this digital transformation. I might be a little positively influenced because I see the kind of careers we have here: 70% are absolutely new, and where talent, business insight and technology are integrated into the natural cycle of learning.

DOES THIS NEW TALENT HAVE A BUSINESS SCENARIO IN MEXICO WHERE IT CAN DEPLOY ITS FULL POTENTIAL?I see a Mexico that is walking in the right direction, one that has challenges but that is renewing leaderships. I see

a new generation that is much more capable of this new understanding, more entrepreneurial and global. I am passionate about what has happened in the automotive and electronics industries, for example, as well as what is happening in Queretaro, with the entire aerospace industry. If you add those three sectors, you're talking about 80% of the country's exports, which has more added value every day.

MORE MEXICO IN THE WORLD AND MORE WORLD IN MEXICOOf course, we have to solve many things beforehand. One of the problems we have is that we are over-diagnosed. As in the rest of Latin America, we have been diagnosed 500 times, and we already know the prescription. The problem is that we need to execute and do it quickly. Some things are already moving and serve as an example, like what has been done through the concept of Fibras, a truly innovative model for the country and the world.

AND FROM THE PERSPECTIVE OF GOVERNMENT, HOW DO YOU ACCELERATE THE DIGITAL TRANSFORMATION?The government has made much progress in the digitization process, but it must be coupled with what I call reinvention process. The important thing is to create the e-government: Have every citizen go in and process by themself what they need.There is now a project which is the one-stop window for the city of Mexico, where there is an integrated database containing all the information of the citizens, so that they can do all of their paperwork right there. The government has all of the citizens’ information, but it needs to integrate. The other challenge is to create more and more self-managed citizen processes, because that eliminates corruption, mismanagement, and wait times in the public service, and it encourages more dynamic commercial interaction.

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"The company that is truly competitive is the one that innovates, even if it has three or four people."

"But it's not just technology, the tools have to be reflected in business results"

“The key element is entrepreneurship, which can be in the company that you create or the company where you work: Intrapreneurship.”

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