Jitka Kunstova, AMP’94
Director of Finance and Administration, Strojobal
As director of finance and administration for Strojobal, a packaging company in Eastern Bohemia, the Czech Republic, Jitka Kunstova has found herself trying to merge the business cultures of two very different worlds.
Strojobal is owned by the French giant Pechiney, a global packaging conglomerate that uses English for all its reporting systems, documentation and company-wide communications. Meanwhile, at Strojobal, says Kunstova, “we have people who are either experts in some form of management but don’t speak English, or people whose English is good but they don’t have the necessary business skills.
“Consequently all the communication for the finance department goes through me, from intercompany receivables and payables to foreign bank transactions. I also manage the information science area, which includes the computer department. For example, we have to meet monthly reporting deadlines, which is an automated process in most Pechiney plants. Here it is done manually, so it tends to be very time consuming … There are Western requirements to meet but with Eastern skill levels and work habits,” she says. “Sometimes I feel a bit overloaded.”
Kunstova is no doubt up to the challenge. Already she has been witness to dramatic changes within Eastern Europe, including the 1993 division of Czechoslovakia into two separate countries, the Czech Republic and Slovakia, and the ongoing effort to convert their economies to a free market system.
She graduated in 1982 from the Prague School of Economics and was hired as an investment analyst with a large chemical producing company called Synthesia. After four years she moved over to a similar job at the head office of a group of chemical companies that reported to the state-owned Ministry of Industry.
In 1989, with a change in government, these head offices were dissolved. Kunstova worked in the information science area, still for the Ministry of Industry, teaching herself relevant business theory and application by “going to the library and reading magazines like Fortune, Business Week and the Economist along with specialized journals,” she says.
In 1991, with the push towards privatization, the Ministry of Industry ceased to exist and the country adopted a more liberal trade policy that included opening its borders to more commerce with Europe. Kunstova was hired by the country’s biggest bank, Komercni Banka, in its foreign exchange office. Again, it was a process of self-education. “We had to introduce things that were previously unknown here, like international money transfers and foreign payment guarantees,” she says. “I learned about letters of credit by studying one we received from a foreign bank.”
In 1992 Kunstova attended a one month training program organized by Georgetown University for 27 bank managers in the town of Brno. She took the place of her boss whose English wasn’t sufficient for the training. “For the first time, I had an opportunity to learn about the free market.”
In 1994, Kunstova attended Wharton’s five-week Advanced Management Program. “It was absolutely fantastic,” she says. “The group included top managers from companies such as AT&T, DuPont, Harley Davidson, Philipps and the Japanese Ministry of Industry, all of whom have multinational experience. I had no background of this kind at all, and I was the only person in the program from the Eastern bloc. What I did contribute was information on what it was like in my part of the world, in a former centrally-planned economy.”
After returning to her bank in Eastern Bohemia, Kunstova says she found her supervisor to be unsupportive of her new ideas and unwilling to incorporate them into the bank. About this time, Pechiney flew her to France and England to be interviewed for the position of finance director at its $35 million subsidiary Strojobal. She accepted the job in March 1995.
Kunstova learned English as a teenager in Eastern Bohemia where she rowed competitively and was a member of the Czechoslovakian team that competed throughout Europe. “I needed to communicate with rowers from all over the world. That was my incentive.” She now has a 17-year-old son and is married to a metallurgist who is manager of a foundry.
“Fortunately my son is a good boy,” says Kunstova. “If he wasn’t, I couldn’t work as hard as I do.”
Federico Zorraquin, WG’87
General Manager, IPAKO
This is how Federico Zorraquin, general manager of a subsidiary of Garovaglio and Zorraquin — his family’s newly-reorganized Buenos Aires-based insurance, manufacturing and chemical holding company — describes his working relationship with his father:
“I bring ideas, stamina and risk-taking. He brings experience, reputation and excellent judgment … We made a wonderful team during the whole restructuring process.”
Which is good, because when Zorraquin graduated from Wharton and came back to Argentina to work for Garovaglio and Zorraquin, he found himself, he says, “in the middle of the storm.”
A quick synopsis: After spending four years with one of Garovaglio and Zorraquin’s subsidiaries, an appliance manufacturer called Rheem, Zorraquin in 1991 was named general manager of the holding company. It was during that same time that another subsidiary of the company called IPAKO – then the country’s largest manufacturer of commodity plastics – had run into trouble because of operating inefficiencies and a downswing in international chemical prices.
IPAKO itself had two subsidiaries: Petroken, a joint venture with Shell, and Cerro Castille, a mining concern. Petroken was also suffering from low price levels in the world markets, and Cerro Castille was about to be shut down due to lack of mineral reserves. “All these factors were combining to make IPAKO almost non-viable,” Zorraquin says.
In 1993, Zorraquin’s father asked him to become general manager of IPAKO. He immediately started on an ambitious restructuring program.
It worked. First, Zorraquin engineered the sale of Petroken. Second, he put Cerro Castille into Chapter 11, restructured its debt and found a partner to purchase 30 percent of the company.
Perhaps most importantly, he restructured and streamlined operations at IPAKO and at the end of 1995 sold two of the company’s three plants to Dow Chemical. The sale boosted profits for 1996 to an extraordinary $100 million. It was a noticeable turnaround from 1993, when the company lost $50 million on sales of $200 million.
“We are a much smaller company now, with sales of $35 million (compared to $280 million before the sale to Dow), but we have substantial financial resources which we will be reinvesting into new activities,” says Zorraquin. “We intend to grow in the specialty products area within the chemical industry but also to expand in other areas outside.”
This year, sales of the holding company — which, in addition to the chemical and mining interests, includes the appliances company, a packaging company and an insurance business — are $85 million.
Zorraquin’s turnaround took place during a restructuring of the Argentine economy as a whole. “That meant a lot of pressures for companies like us because our markets were opening up to foreign competition on one side, and our currency became severely appreciated with regards to the dollar on the other side. Meanwhile the chemical industry worldwide was facing one of the biggest recessions in history so that there was lots of product available at very cheap prices. It was an explosive situation.”
Zorraquin, who is married and has four children, grew up in Buenos Aires and earned a degree in industrial engineering. Before attending Wharton he worked in both IPAKO and Rheem as a production engineer. Today he remains general manager of IPAKO but is also embarking on new business development activity. “It’s still not an easy situation,” he says. “Our markets continue to be unstable. At the same time, we are faced with the very attractive opportunity of reinvesting a significant amount of cash that we have generated. I like this life better than the one I had three years ago.”
Guy F. Detrilles, WG’71
Partner, SA Egon Zehnder & Associates
A turning point in Guy Detrilles’ professional life probably came in 1980, when he was putting together real estate projects for Triad International, a Middle Eastern group in Beirut that was building huge housing and service complexes for what was then a booming economy.
Detrilles had joined Triad in 1974, following two years each with Banque Paribas and Bank of America International where he was in charge of merchant and investment banking activities throughout Europe.
Middle Eastern companies at that time were sitting on huge profits from the oil shortage and eager to invest their money in everything from airports and harbors to hospitals and apartment buildings. Over the next five years, however, “civil war broke out in Beirut, the oil shortage ended and many of the companies found themselves overextended,” says Detrilles. “By 1978, they realized there was a limit to the sky.”
There was also a limit to Detrilles’ physical stamina. “It was an extremely exciting time, and professionally very interesting, but absolutely exhausting,” he notes. “I was on the road 300 days a year, dividing my time between London and the financial activities, and Saudi Arabia and the construction projects … I had to decide whether this was something I could keep on doing.”
Not surprisingly, Detrilles talked to a number of search firms in the process of “throwing out my anchor and seeing what my next step in life would be … One of the search firms suggested I join them. I’ve been here ever since.”
The firm was SA Egon Zehnder & Associates International NV, one of the largest executive search firms in the world. Detrilles is head of their 20-person Brussels office where he works primarily on international searches in the financial services industry. Clients in the Brussels office are half international and half domestic and represent every major industry, from information technology, banking and insurance to pharmaceuticals and consumer products.
“Clients today are more exacting than 15 years ago,” Detrilles says. “Everyone is under a lot more pressure, the markets have become far more demanding and all the job categories require very specialized skills.”
It’s expected, Detrilles says, “that senior management candidates speak three or four languages and have work experience in several different countries. That’s been true for several years.” What is new, he adds, are the number of industries that were not as important even a decade ago, including software, biotechnology, telecommunications, and volume-driven service industries like hotels and resorts, credit card companies and airlines. All of these are creating new job opportunities.”
Europe is facing the same economic stresses that the U.S. went through in the early ‘90s, Detrilles says. “Unfortunately there is no such thing yet as a European economy. Significant differences still exist between the countries. My quick analysis is that the UK right now is doing well, Germany is not doing well, France has gone through a traumatic period but is trying to solve some of its major problems, and Italy and Scandinavia are both definitely on their way up.”
In all these countries, to varying degrees, “the governments are facing tighter budgets, demand for goods and services is down, and there is less consumer confidence and less consumer spending. All that creates a climate, not of recession, but of a standstill at best.”
Brussels is different, says Detrilles, who grew up in the Antwerp region of Belgium, earned a degree in engineering from the University of Ghent, married a French woman and has two sons, ages 10 and 15. “It is the headquarters for so many global businesses as well as the home base for international lawyers, lobbyists and consultants. There is far more international activity here than in any other city in the world. In that sense, it’s a unique market.”