"I like people – and numbers"
On his 52nd birthday, and just ahead of his summer holiday, Arvato CEO Fernando Carro made the time for an interview - and the scheduled hour turned into nearly two: it quickly becomes clear that communication is very important him. Since taking office in July 2015, he has traveled a great deal, visited companies all over the world, and spoken to managers, employees and employee representatives, clients and partners to understand them and their concerns, and discuss Arvato’s future with them. At the same time, he managed the change process at Arvato, which involved the implementation of the new structure with the existing Solution Groups, developing their structure, and integrating the Group-level administrative functions into the Bertelsmann Corporate Center. Now Carro takes stock of the first year - and is evidently very satisfied.
Fernando Carro takes stock of the first year as Arvato CEO:
Mr. Carro, you have been in office for over a year now. How has your experience been?
The past year was of course very labor-intensive but also extremely interesting, exciting and fascinating. Arvato is very big and highly diversified: Very few companies have so many different operations and businesses and are active in so many countries. In the beginning – as is always the case when I start a new task – I analyzed the strategy, the employees and organization, the numbers, clients, innovations and investments. In order to understand these subjects at Arvato as well, I have visited more than 50 sites in twelve countries so I could get to know the individual companies and their business, the people on site and our clients. I have participated in over 50 board and management meetings and have had many meetings with employee representatives around the globe – and I have met with numerous clients. These encounters were important for understanding Arvato, but they were also a lot of fun for me because I am curious and I like both people and numbers. Now I know how Arvato functions, and feel very good about being in a strong corporate division that I can fully identify with. I will continue to engage in regular dialog with the people in the businesses on site. Arvato has grown very close to my heart within a short period of time. Times will continue to be intense, but I just moved with my family to Gütersloh from Barcelona and I am happy that I will hopefully be able to see my family more often in the future.
What were the most important moments in the past year for you? What milestones has Arvato reached?
There were plenty of important moments. I quickly realized that many conversations were about the growth and development potential of Arvato, which we can now exploit together. The desire for more intensive collaboration was often expressed. The colleagues want a comprehensive and sustainable strategy and are proud to be part of Arvato and Bertelsmann – they feel they are part of a greater whole. I received many expressions of appreciation. The colleagues are happy when the CEO comes to see them and wants to understand their issues. I believe that top management – as in football – has to be ready to receive the ball, i.e. the issues our people pass to them.
As for the milestones, they include the big strategy decisions and the lineup of the top management. This strategy process culminated in the Arvato Management Meeting in June, where we explained and discussed with the top management the strategic direction of the Solution Groups and of Arvato overall, took stock of what we have achieved to date and, at the same time, offered an outlook for the future.
How satisfied are you with what has been achieved so far? Are you on track?
We are completely on track: we have a clear strategic foundation for all Solution Groups and Arvato overall, we have stable management teams, we are ahead of plan with our numbers year-on-year, and we are acquiring new clients with our innovative approaches to solutions.
What does this strategic foundation look like?
We have defined a strategic framework for Arvato: a focused portfolio – meaning we take a close look at which businesses should be part of Arvato – and a culture driven by trust and collaboration form the foundation. The operative business focuses on three key themes: first, we want to develop scalable services that can grow quickly and reliably along with the needs of our clients. Second, we will develop even more cutting-edge solutions in the future. Third, we will further strengthen our client relationships. Our goals are clear: in the short term we have to achieve our planning, in the mid-term we have to increase profitability and, in the long term, we have to generate additional profitable growth for Arvato.
How are the markets – regions and divisions – that are important for Arvato developing?
With regard to regions, Germany naturally remains important; we generate the majority of our revenues here. France is our second-largest market. We want to increasingly focus on the U.S.: due to a number of important clients, this market is of strategic importance and has enormous potential for our businesses. Our subsidiaries in the Netherlands, where we opened a large, new logistics center just this spring, and in Poland, from where we perform services for the German and European markets, are also very successful. Ireland is also exciting because many U.S. clients have their European headquarters there. The UK and my home country of Spain remain very interesting for me, although the situation there has become a bit more difficult; the same applies to Turkey. In the Bertelsmann growth regions of Brazil, India and China, we also perceive opportunities for Arvato. With regard to content, we will continue to advance the digitization of our operations and offer solutions in big data, cloud services, omni-channel and robotics. Here, we are working intensively on innovations and proactively developing new solution models. Another focus of our work and hence our investments is the field of e-commerce services and the strategically important healthcare sector – and the services of Arvato Financial Solutions, for example in Scandinavia. We are continually evaluating investments. Currently we have an eye on the e-commerce services market in the U.S. and are looking into possible investments in the data analysis segment in India.
As CEO of Arvato, you deal with the group’s most important customers. Which ones have you have already met with? And how do you plan to strengthen your customer relationships in general?
For me, it was important from the very beginning to be in dialog with our major customers, and I am in touch with important contacts at our top customers. With Microsoft, for instance, we’ve been cooperating for a long time. I visited their corporate headquarters in Seattle, and top managers from there have also come to Gütersloh – we talked very openly about our business ties, what works well and what we need to improve. That’s created a lot of trust, and ultimately there were new orders, which I’m very pleased about. All the other major technology companies have partnerships with us in the various Solution Groups. These clients are immensely strong and are seeing significant growth - and we want to grow with them. Of course we take good care of all our clients, whether they are large or small. The important thing is to take a purposeful approach – we want to deliver what we are commissioned to do, but we also want to be a strong partner, talk to the customers as equals about their needs and requirements, and develop new ideas in order to jointly advance the business. In the end, this also contributes to higher margins and furthers the purposes of both sides.
You emphasized the importance of the employees at Arvato for economic success. What do you expect from the colleagues?
With over 70,000 employees worldwide, Arvato has the largest share of employees in the Bertelsmann Group. We therefore have a special responsibility with regard to profits, growth and job security. The Arvato top management is aware of this responsibility and I expect each of our managers – and these are all colleagues who lead employees – to set an example of partnership and mutual trust. In this time of digital transformation, trust plays a special role; trust makes us more agile than large organizations and gives employees the freedom to contribute their ideas. Everybody working with me knows how much I care about this. With the strategy processes we have now completed for all Solution Groups and with the Arvato Management Meeting back in June, we have also defined important cornerstones in this regard and have made good progress. We can only recruit and retain employees if we also promote their development. This, too, is an important concern for me and I am very committed to it. I often participate in the Arvato management programs, take a close look at the career development of our young potentials and, during all my visits on site, I talk with colleagues about their concerns and what we can do better from their point of view. Involving employees, seeking open conversations, allowing and discussing different opinions – all of this leads to a culture of engagement and personal commitment, and that’s what we need.
In November, Bertelsmann will launch the fifth global Employee Survey. What, from your perspective, is its importance for Arvato?
The Employee Survey is an excellent opportunity for all of us to give our opinions. I’m already looking forward to the results. For me, this tool is a reality check: we can define where we want to go only if we know where we stand right now. That was the original idea of the Employee Survey, which Bertelsmann introduced many years ago as one of the first companies in Germany to do so. We have to continue in this tradition and motivate as many employees as possible to take part and speak their mind. We can always do things better and contribute our own ideas. And I really attach great importance to working with the results. Next year will certainly be influenced by these results. By March 2017, all questionnaires will have been evaluated and we will start implementing the results. Here, too, I will personally take action; after all, I have already lived through several Employee Surveys and know of the tremendous potential for improvement they bring if the results are properly dealt with.
Can you recall a few examples of measures taken as the result of a survey?
Often they were measures that specifically concerned conditions in the workplace, like a new air conditioner or issues such as noise pollution and preventive health. But I also remember measures to improve interpersonal communications, which I think is very important in general: for instance, in one of my previous fields of activity, we introduced a regular breakfast of management with employees, simply to promote the exchange of information. Staff meetings, routines with entire departments, personal conversations – there are many ways to build trust. Talking to each other is important, and I believe it’s better to talk one too many times than too little. This also goes for the interaction with our customers: They often praise us for being excellent in customer communications. I believe that in some cases, we could take that as an example for our communications within Arvato, too.