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Grupo Salinas CEO Preaches Balance to Incoming MBAs

9/8/2009 --

Ricardo Salinas urges students to "find their element" during Ross Leadership Initiative's Foundation Session.

Watch video from the event:

Noel Tichy's introduction of Ricardo Salinas

Ricardo Salinas keynote

Dialogue with John Byrne and Ricardo Salinas

Q&A with Ricardo Salinas and incoming MBA students

ANN ARBOR, Mich. — Ricardo Salinas had a specific message for incoming Ross MBAs during their first week on campus. Don't think about money. Instead, this CEO of Grupo Salinas encouraged them to figure out the exact point at which their talents and passions converge: what he calls their "element."

"Focus on who you want to be and what you want to do rather than what you want to have," Salinas said during his keynote speech at the Ross Leadership Initiative's (RLI) Foundation Session. "You cannot be successful in life if you don't enjoy what you do."

It became obvious from his presentation that Salinas always has enjoyed what he does at the helm of Mexico City-based Grupo Salinas. The conglomerate houses retail stores and specialized commerce, as well as media, automobile, telecommunications, and financial services companies.

When Salinas was just 32, his father handed over the business he built by spontaneously retiring during a board meeting. That was in 1987, when Mexico was in the midst of a grave economic crisis, and rookie CEO Salinas had to face the possibility that the then-ailing company could go under.

"In Mexico at that time, everyone was selling and no one was buying," recalled Salinas. "That's exactly what's happening in the U.S. right now."

Instead of panicking, Salinas restructured the company from top to bottom using three guidelines: allow only cash sales, accept lower profit margins, and sell fewer products. Once the company was profitable again, Salinas sought expansion.

To grow the conglomerate, Salinas led a group of investors to buy a media package privatized by the Mexican government. Though Salinas had no television experience, Grupo Salinas' TV Azteca was soon competing with Televisa, the leading major television network in Mexico.

"I knew I was taking a big risk," Salinas said. "But that's the beauty of youth. You aren't fully conscious of risk and you should take advantage of that."

Salinas' message dovetailed with the RLI credo that taking risks builds leadership skills. RLI is an integrated series of co-curricular activities designed to supplement MBA classroom learning and analytic coursework throughout a student's 20-month education at Ross. During the week-long Foundation Session, students undertake intensive team-building activities that test their innovation, creativity, cooperation, and communication skills.

Salinas was one of several RLI speakers who shared his experience during the Foundation Session. He was joined during his presentation by John Byrne, executive editor of BusinessWeek and former editor-in-chief of Fast Company. Byrne launched BusinessWeek's rankings of business schools and is the author of eight books, including a New York Times best-seller.

"During their time at Ross, a lot of students will focus on the how. How do I create a business plan? How do I start a company?" Byrne said to Salinas. "But let's focus on the why. What's your purpose and what's your company's purpose?"

Salinas had an easy answer: "The main thing is to enjoy what you're doing and want to win. There's no point in playing the game if you don't want to win."

But he went on to say that the key to business is balance.

"In the business of business, it's easy to get overly competitive and start doing really stupid things," Salinas said. "The way to keep yourself in balance is to open your eyes to other things that are important to your community and to be a part of them. The guy who gives will make more than the guy who receives."

For his part, Salinas gives in different ways. Grupo Salinas places a strong emphasis on empowering so-called bottom-of-the-pyramid consumers by offering financing to segments of the population not normally considered credit-worthy. By catering to a lower-income population, the group's Banco Azteca now has more than seven million deposit accounts and eight million borrowers. It also carries out more than 400 million operations a year with assets of nearly $5 billion.

To make savings accounts and credit more accessible to lower-income people, Banco Azteca never charges fees for account maintenance. Monthly account statements are replaced with digital ones accessible to customers at stores around the nation.

"You have to recognize that there is always a business opportunity at the bottom of the pyramid, but it's not always very sexy," said Salinas. "You have to be mentally prepared for that."

Another way Salinas gives back is through Fundación Azteca and Empresario Azteca.

"Access to capital, education, and information technology at accessible prices is crucial for consolidating the middle class," he said. "Improving society in those ways is Fundación Azteca's goal."

The foundation provides nonprofit organizations with the tools they need to improve health services, education programs, and environmental protection.

As new Ross MBAs go through RLI's Foundation Session, they also get the opportunity to contribute to society. The RLI Global Citizenship Day places student volunteers in underprivileged communities to highlight the role of business in supporting a vibrant society.

The interdependence of corporations and communities is something Salinas takes to heart. In 2005, he created the Empresario Azteca program. Empresario Azteca's goal is to use the managerial experience, financial capabilities, market strength, buying power, and extensive distribution network of the companies in Grupo Salinas to offer training, consulting services, financing, equipment, and other resources to contribute to the creation and growth of small business in Mexico.

As someone who seems to have the balance of business down to a science, Salinas left the new MBA students with a few last words of advice: "Stick around old guys like us. Look for somebody who has lots of white hair. Stick with them and find out how they did it."

—Leah Sipher-Mann

Watch video from the event:

Noel Tichy's introduction of Ricardo Salinas

Ricardo Salinas keynote

Dialogue with John Byrne and Ricardo Salinas

Q&A with Ricardo Salinas and incoming MBA students



For more information, contact:
Bernie DeGroat, (734) 936-1015 or 647-1847, bernied@umich.edu