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Innovative Leadership during Economic Crisis

02/18/2009 12:00 PM Wong Auditorium
Emmanuel Maceda, SM '89, Chairman, Asia Pacific, Bain & Company

Description: The same institutional tenets guiding innovative management during good times needn't waver during a downturn, even the present one, says Emmanuel Maceda. After two decades at Bain, one of the world's premiere management consulting businesses, Maceda feels confident in his company's practices and principles, which have guided both Bain and its clients through earlier economic booms and busts.

Bain constructs innovative leadership around three pillars: customers (clients), people and products, Maceda says. His company seeks a winning edge by establishing warm and lasting client relationships. At Bain, this means even top executives commit to working directly with clients, and assigning teams to the "client interface." Clients are solicited for feedback through surveys and interviews, and come back to Bain for repeat business, finding satisfaction in its "collaborative culture," says Maceda.

Bain's organization has evolved around unique recruits, tapped from just seven elite business schools (including MIT Sloan). New staff are carefully trained and begin team building, which they continue throughout their careers, at all levels of the company. This costs Bain a great deal, but it's necessary, says Maceda. The firm encourages activities that build "esprit de corps," and touts a compensation model tied to the profitability of the firm. Bain also rewards the development of client products, whether in strategy, organization, M&A, which can be tested elsewhere then scaled up to produce new revenue.

This type of innovative leadership, says Maceda, could "apply broadly to most service"based organizations who want to make people the heart of a sustainable, competitive advantage, and to translate better products that meet clients needs better." Such an organizational model holds true even or especially during times of crisis. "If you believe you have a strong competitive advantage, usually during times of crisis you can harness that and win." Clients' needs change "a bit" under economic duress. They may require help figuring out new strategies (such as cost reduction vs. aggressive growth), and seek new products in areas like cash management, and "quick hit revenue tools."

Maceda points out significantly that in recent economic downswings Bain kept hiring, and its leadership took lower dividends, as the firm sought to retain key client and supplier partnerships. It's not easy, but try to "nurture those relationships, even if you have to cut back in other places," counsels Maceda. He concludes, "The fundamentals of being innovative leaders around client, people and products don't change in a crisis."

About the Speaker(s): Emmanuel Maceda originally joined Bain in 1988. He is also a member of the Global Operating Committee and Nominating Committee. Past roles include: leading Bain & Company's Performance Improvement practice, leading Global Recruiting and membership in the firm's Management Committee.

Maceda's client experience has been in corporate strategy, operational improvement and organizational effectiveness. He has worked with clients in consumer products, retail, telecommunications, utilities, health services, technology and transportation.

Maceda holds an S.M. in Management MIT Sloan and a B.S. in Chemical Engineering (Magna Cum Laude) from the Illinois Institute of Technology. Prior to joining Bain he worked with E.I. Du Pont de Nemours.

Host(s): Sloan School of Management, MIT Sloan School of Management

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