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Name Paul MolyneuxCompany Vestel, UKPosition Former Managing DirectorHQ Berkshire, EnglandEmployees 59

EXECUTIVE INTERVIEW

two culturesPaul Molyneux has brought his understanding of Japanese business practice to Vestel, as it plans to brand its offering with a licence from Sharp.

IMAGES BEN LISTER

As manufacturing group Vestel looks to the future, it plans to expand by adding a branded business model, and also by investing in new technologies to stay on top of a rapidly changing environment. Former Managing Director Paul Molyneux discusses what lies ahead.

The CEO Magazine: What are the key differences between Japanese and Turkish business?

Paul: In Japan the business culture tends to be more long-term, a little bit more structured, and the decision-making process is definitely slightly longer than in Turkish companies. Vestel is a bit more of a trading environment; traditionally it’s not a branded business. Their core model is OEM, ODM, manufacturing, supply chain, and key value chains. Decision-making, therefore, is a little bit quicker. It’s a bit more market focused. In a Japanese environment the communication is very structured—lots of namo oshi, where you’ve got to get things agreed to in principle before the meeting, so the meeting is a ceremony. In a Turkish company it’s almost the opposite, everyone wants to get involved with decision-making because information is power. Part of the job of running their biggest subsidiary, and also helping them to set up the branded business, was to try to balance those two approaches.

We’re not talking about being overly structured, but some structure is good, and the ability to plan is still important. So we’ve brought a bit more

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EXECUTIVE INTERVIEWEXECUTIVE INTERVIEW

professionalism to the business, and by having a good framework I think that we can really create f lexibility and an environment where our team can develop.

How has this experience shaped your leadership style?

Leaving that Japanese environment and coming to Vestel, I was very conscious that it wasn’t really my style. My natural management style is much more

collaborative. It’s really about bringing people together, empowering teams, and creating accountability. That is sometimes very hard to do in a Japanese environment if you’re running a regional business, because over there the absolute level of decision making that can be devolved is still relatively limited.

In the Vestel environment, there is quite a lot of autonomy in decision making, and obviously you’re expected to drive the company forward, so you really have to create a team that enables you to do that.

What plans are in place for further growth at Vestel?

There’s a big opportunity at the moment. Of the €300 million that we turn over annually, roughly €200 million is what we call ‘brown goods’—TV,

mainly—and €100 million is whitegoods. So there’s an opportunity there to grow that side of the business, which is also why they’ve licensed the Sharp brand for whitegoods. Part of what I’ve done is to help them set up the European operation for that branded business. As a corporation, this is their biggest opportunity to develop a branded part of their business. There will also be opportunities with ‘brown goods’ in the future, where they take their core OEM, ODM business model—i.e. manufacturing on behalf of other people —and they f lip that over and leverage their manufacturing skills and their supply chain skills to develop a

proper branded business. That will also allow them to leverage their investment in R&D as well, so there’s a reason to invest in new technology going forwards. Plus the world’s changing massively; there’s the new Internet of Things, where it’s all about device connectivity. Some of the traditional business models that we see today are really going to change in the future, and I think having that branded business as part of its portfolio is going to be quite important to Vestel.

What are the strategic areas of focus that will ensure continued success?

They have to maintain their focus on the market. As I said, they’re pretty market focused now and they need to maintain that because things are changing. That will give them the ability to be both proactive and reactive to what’s happening in that business

environment, and that will also determine their success moving forwards. We are seeing technology change, and the pace of change is accelerating, so the role of the traditional OEM and ODM is also changing slightly. How they cope with this new ecosystem that will develop further with the Internet of Things, particularly as it’s an environment that’s probably more software than hardware driven, will be their greatest challenge as a manufacturing entity.

How have you worked with suppliers and key partners to achieve success?

With shipping 1.5 million units into the UK market each year, it’s critical that we have a really good supply chain. We work very closely with them, and we’re pretty focused on the basics of the business. Procurement and fulfilment are both very important as well, so we

work not only with our suppliers, but also with the suppliers of our customers to make sure that we can deliver the right goods at the right time to the right place. That’s crucial to our value chain as an ODM and OEM—to be able to manufacture and distribute in a very accurate and timely manner is really important.

“With shipping 1.5 million units into the UK market each year, it’s critical that we have a really good supply chain.” – Paul Molyneux

“Pacifica Group has been working in partnership with Vestel for over 10 years, and during this time we have provided after-sales support for both their TV and white goods products. We have always found Vestel to be very supportive and professional.” - Kevin Brown, Group MD, Pacifica Group

“We are proud to be business partners with such a prestigious organisation as Vestel; having supported their logistics chain for over 10 years, we have grown with them.” - Augusto Cosulich, Chairman of forwarding agent Fratelli Cosulich UK

Supporting Vestel logisticsfor more than 10 yearsFratelli Cosulich, established in 1857, now employs more than 700 people with group offi ces in 15 countries around the world.

The group’s activities include freight forwarding, ship agency and marine fuel trading, and contribute to over US$1 billion turnover per year.

Fratelli Cosulich UK Ltd Offi ces in Felixstowe and Heathrow Tel: +44 (0)1394 600 101 | www.cosulich.it