Friday, December 15th 2017

Leadership: 10 Tenets for Creating Billions in Value

March 21st, 2014 in Leadership by

By Shawn D. Baldwin

carlos-slim-leadershipThe prolific growth and subsequent value creation of the companies launched by Carlos Slim Helu (left) catapulted him to being named the world’s richest man (surpassing Bill Gates) according to Forbes in 2010, 2011, 2012 and 2013. This is an incredible feat, as most people had believed surpassing Bill Gates in net worth to be a fantasy. It is all the more notable because Carlos Slim (as he’s called) is from a developing country, Mexico. He comes from very humble beginnings, but he began his investing career at the early age of 12. He initially made his first fortune in real estate, becoming a millionaire in his early 20’s, and he has since created a net worth of over $73 billion dollars through his companies. Slim’s holdings are diverse, ranging from securities and banking to insurance and real estate. However, he is most well known for his success in the telecommunications industry. His core holding is America Movil SAB (AMXL) which operates in 18 countries, takes in revenues of over $59 billion, and has over 150,000 employees.

telmexThe telecommunications industry is well-suited for outlining Value Creation (a series this author, Baldwin, writes for Fast Company). The telecom sector, driven by wireless technology and innovation, has been a dominant generator of wealth and jobs. As a point of reference, the telecom sector was up last year over 21% and has a total market capitalization of over $93 billion. The capital markets believe the sector has tremendous upside, as we saw Verizon close the largest bond transaction in history — a $50 billion bond deal last year. Slim sees more potential opportunities in telecom and for American Movil. He says the industry will invest over $9 billion over the next four years, citing greater speed and services for small business as the particular growth engines.

Despite his immense wealth, the first most notable thing about Slim is his extreme humility. Despite being a multi-billionaire, Slim resides in a relatively modest six-bedroom house that is less than a mile away from his office. He personally doesn’t ascribe to the concept of conspicuous consumption, and doesn’t have a super yacht or multiple mansions around the world. He doesn’t have a fleet of high-performance, exotic cars, and he still prefers to drive himself.

When we talked, he spoke in a gentle, patrician voice, often pausing to allow me time to interject or ask questions. As we spoke, it was apparent to me that this very proud Mexican man from a family of six children epitomized the American dream of re-invention and value creation. So, I pressed him for what he thought contributed the most to his success and for a formula and set of rules that he lived by. The first thing he noted was that human capital was the best investment, and that you should strive to educate and enlighten everyone around you. The following are Carlos Slim’s 10 key tenets for success in business:

1. Have a simple organizational structure
2. Maintain austerity
3. Focus on growth
4. Minimize non-productive things
5. Work together
6. Re-invest profits
7. Be charitable
8. Keep Optimistic
9. Work hard
10. Create wealth

An additional key factor that Carlos Slim defined as critical to success was the control of negative thoughts. He outlined: 1) being positive 2) being present 3) being contrarian, and 4) fast action. More specifically, Slim says:

1. “Do not allow negative feelings and emotions to control your mind. Emotional harm does not come from others; it is conceived and developed within ourselves.”

2. “Live the present intensely and fully, do not let the past be a burden, and let the future be an incentive. Each person forges his or her own destiny.”

3. “When there is a crisis, that’s when some are interested in getting out, and that’s when we are interested in getting in.

4. “When we decide to do something, we do it quickly.”

As a testament to his philosophies it was recently announced that the billionaire was poised to double a $250 million investment from a lending agreement he made with the New York Times in 2009 during the height of the financial crisis. That was a time when most were frightened to invest and wouldn’t have invested in old media. Carlos Slim’s take on the investment? “Courage taught me no matter how bad a crisis gets… any sound investment will eventually pay off. In business, you invest when things are not in good shape. When you invest at these times, you take a better position than your competitors. When there is a recession and your competition does not invest, they are giving you the advantage.”

To read the original article as posted, click Fast Company.

ShawnBaldwinShawn D. Baldwin is Chairman of Capital Management Group (CMG), an investment advisory and research firm. CMG provides trading, advisory, and investment banking services to countries and institutions. Since 2002, CMG participated in 75 capital markets transactions with a valuation of over $68 billion for companies such as Google, General Electric and the New York Stock Exchange.