Carlos Slim Interview
Financier and Philanthropist
December 2, 2007
Washington, D.C.
MEXICO’S TELECOMMUNICATIOS TYCOON
 back |
Page 4/ 5 | next |
Were you a "hands on" manager?
Carlos Slim: Me? Yes. I get involved. One day, I look for something, some problem to solve, that I think is important, and some strategy to change, some proposition for doing things. We're very innovative. I worry that we cannot patent some of our innovations. Now we have a big problem in Mexico, because a mountain -- or a hill -- fell down and blocked the river, a big river. There were 20 million meters of earth and rocks that moved and made a dam in the river, creating a big problem. We're making a channel to open the river to boats. There are 120 machines working there, 24 hours a day, all night and day, and our people are developing a new concept that is very interesting to finish this.
Someone in your position is also bound to attract some criticism. How do you deal with criticism, wherever it comes from?
Carlos Slim: First, you need to be clear that you're doing the right thing. And the criticism can come, in my case, that we're a partner of politicians or that we benefit by government or are supported by investors from other places. How you say enfrentamos? We confront the problems and we make a declaration. I think problems should be attacked immediately. Confront the problems, any kind of problem, not only criticism. The truth will come and the problems will go.
How much pressure does someone feel in your position? How do you feel when you read in the paper, "Carlos Slim is $3 billion poorer this year" or "Carlos Slim is $5 billion richer" because of this or that? Is there a pressure involved in what you do?
Carlos Slim: Oh no. Many of these things they write about me, or about anyone, are not true, first of all. Second, you're not setting records.
You have the privilege and responsibility of managing wealth. I know -- and my children are agreed in the same area -- that when I die I will not take anything. I think that people (a person), that has wealth of his own, or maybe a government, a politician that manages the wealth of the people, or has the responsibility to manage money, the responsibility is to be efficient with the wealth, to manage it okay. And you are worried about the efficiency and the way you use it. At the end, you manage the wealth temporarily when you are alive, and maybe you are still alive and you put the wealth to be managed by others.
When you are worried about the organization, actually you are taking care of the interest of the investors. You are worried if there is something bad in the price, or the value of the company, because you are doing the wrong things. But if you're doing the right things, and the markets move up and down, you worry what to do about things. Not to worry to make things happen in the short term, but in the long term, no? And when you are doing the right things, the value will be there. It will come.
When we spoke to Bill Gates some years ago, he said it was the worst thing that happened to him, when they named him the richest man in the world. Suddenly everybody wants something. The government wants to regulate him, wants to break up Microsoft. Now people are calling you the richest man in the world. Do you feel the same kind of burden?
Carlos Slim: Well, I don't know if I am. It's not a football game. I don't know who is, but that doesn't matter. All my life, people send me letters asking for many things, every day, but you have your own plans, your own programs. Ten years ago, the regulators were very tough. Now they are tough, but that's life. Competitors want to take away your market, and they want it free. If they have problems, they want asymmetric regulations. They want you to lose your market and give up 20 or 50 percent of the market just because of their beautiful face or because they're so loving.
What are the responsibilities of acquiring wealth?
Carlos Slim: I think it's a social responsibility to make wealth produce more wealth, for at the end of the day it will go to society. It also gives you the possibility to use this wealth for other purposes beyond the business. That's my belief that it's crazy that you make wealth and you leave it to a foundation when you die, for others to do you don't know what. During life, you should use your wealth outside the business, for other causes, for other risks, for other jobs, like nutrition. That's what we do in our foundations. Nutrition, health, child health, health education, education, education. That's the main reason for civilization. You need to have more education. We try to do it in high impact.
Countless others have tried to do what you do, and not everyone has done it so successfully. What accounts for your huge success? What characteristics? How do you explain it?
Carlos Slim: I think vocation, motivation, what you study, what you read, what you learn, and especially to organize a team of people. Resources, human resources. A team of people that get motivated, that work with you, that accept your leadership and that you are constantly forming, educating, and that work with a motivation that makes them feel that they can achieve anything that they propose. To feel that you're part of a winning team. That motivates people, and that's the way you look at it in sports. It's the same in politics. It's the same in science. Why this team? Why is Barry Bonds breaking this record, or Pelé, or Maradona? Because they're good with this vocation. They have talents but also they work strongly. They work not in number of hours, but in training and learning and planning and creating.
You can't do it by yourself.
Carlos Slim: No. If you're an investor you can do it by yourself and sometimes there's a confusion. An investor, a speculator, can do it by himself. Well, nearly by himself. He needs information but he can do it without any people, with a small office, but if you're operating a business, if you're operating companies, if you 're operating industries, you need a team to make it happen. Always look to make it better, and as much as you have a good team you can do that.
What do you look for in hiring someone to join your team?
Carlos Slim: Well, what we used to do is to have young people in the companies and they go as far as they can. That means that most of the people that are in charge came from inside of the companies. They learn how we operate, how we work, they like it. Many times, some of them have offers of higher incomes, and they stay with us. They stay in the team, thinking in the long term and not thinking in the short term.
If a young person came to you for advice, what would you say to him?
Carlos Slim: Depends what he wants to do. I think people have different vocations. Let's say my three boys. My three children work in the business, but I told them, "If you don't like this business, don't get involved." Sometimes you have another vocation or other interests. They need to find which area they want to be in, and in this area to look how to be better every time, but especially to be better inside, and to try to have a good family, to be happy, because that will make him stronger. The first thing to recommend is that they don't work in some place that they don't like, that they don't do things that they don't like. That they look for what they really want to do and what kind of thing they want to be involved in, or if they want to go it alone by themselves, to find that. And after they find that, to get involved in a team and work like in a team.
Going back to your experience in the insurance business, you said that if you insure one automobile, it's like gambling, high risk. But if you insure 100,000 automobiles, you spread your risk and it's a much better business. But you have to start with that first automobile. How do you build a business like that, from the first to the 100,000th automobile?
Carlos Slim: Well, you can begin with one. Let's suppose that you're talking about a very new insurance company.
First, you begin creating your organization with a team of salesmen, not with one. You need to create many hundreds of salesmen to go to the market to offer the product. What you can do, maybe, if you are going to begin, is to find which area the casualties are lower, the risks are lower, because there are less stolen cars and accidents, and you can begin in this place. You will begin selling one maybe at 11 o'clock, but at 5 o'clock, maybe you've sold 100, and 200 next day, and 600 and 1,000, and as much as you go there, you're taking a statistical risk.
That's true. But as entrepreneurs just starting a business, if they don't have access to capital, they can't hire a hundred salesmen to create that scale quickly. How would you counsel them to get started?
Carlos Slim: Well, an insurance company is regulated, and you need to have a license. If you don't have the minimum capital, they don't give you a license. Maybe you can begin by selling insurance if you love the business, like an insurance salesman. If he loves the business, he can begin selling insurance and to invite people to work with him to make a team of salesmen and grow in this way. If he has a big portfolio and he wants to start an insurance company, maybe he can look at a partnership or apply for a license. But he needs to capitalize first, or he won't get the license for an insurance company. You wouldn't buy insurance from a company without capital.
Maybe an insurance company isn't the best example for an entrepreneur getting started in business.
Carlos Slim: Well, in the U.S., it's beautiful because you have venture capital. When you have a good project and a good proposition, you can find the support of investors. In other areas, you need to find capital from friends or someone that can push the capitalization of business. People that don't have any capital can begin working by associating, be an associate of one that has the capital. No? You know, there is the joke about one who has the capital, the other has the experience. They lose everything, and now the one with the capital has the experience.
Tell us, what captures your imagination in business and in people?
Carlos Slim: I think it's not only one thing. Life is the most important thing, that your imagination fly to many places, nature, many things. Many things take my imagination.
And with people?
Carlos Slim: People, concepts, places, ideas also, many things, many things. A curiosity for know things -- for understanding other things.
What created that curiosity, that curious mind?
Carlos Slim: I think the interest to know new things, to know better what you know, to know deeper. The more things you know, the more things you know that you don't know. Curiosity to know people and treat your friends, to go deeper with them, and all these kinds of things, great curiosity in life.
Did your father have that influence on you?
Carlos Slim: I don't know, but I know that when I was very young, a child, I make many questions, and some people always don't like that I make so much questions. Now you don't need to make so much questions, but you can look it for yourself. No? I'm still asking questions. Yes. I still ask a lot of questions.
Do you believe your training as an engineer influenced that, asking questions?
Carlos Slim: I think it was before my studies, when I was a little boy. But engineering is interesting, because you study exact science and experimental science. But I will say that curiosity is beyond the profession I have.
Do you think your engineering training has helped you to evaluate business opportunities and risk?
Carlos Slim: Well, I think talking about curiosity...
When you love life, you want to know more about life. I think engineering is important to give you the tools. And in business, to analyze, it's important to simplify, to have the essential points, the essential issues, the fundamentals, the basics, and take out everything that is secondary, to have less variables to study or to look at. Because when you have a lot of variables, and you don't make a distinction between the ones that are essential and the secondary ones and parameters, you have confusion. I will say that engineering is important, but also when I was finishing my (academic) career, I make my thesis about linear programming. That's operational research. That's to optimize functions, optimize results of things, and the study of models that take you to the optimization of the solutions.
Have you carried out that theory of optimizing solutions throughout your business ventures?
Carlos Slim: I think so. When I was studying that 45 years ago, the parametric linear programming was very interesting, because the problems in the models were the parameters. That's very difficult to define precisely. The parametrics give you the difference between which solution is optimal. One teacher said that an engineer is someone who makes with one dollar what others that are not engineers make with two dollars.
So has that been a part of your thought process as you look at risk, as you look at opportunity?
Carlos Slim: When you make the evaluation of things, when you look at these kinds of investments, it is very important. I think maybe it is more important than engineering to understand the economy, the macro economy. The macro economy is very important, to know the national accounts, what means fiscal deficit, what means trade deficit or trade superávit (surplus), what means each item, but not only quantitative, but also qualitative. I think economy is very important, to know the basics of economy. To understand what is happening, you need to understand economy. You need to understand the financial statements of the companies, the sectors, and to have world references.
What part of what you do is instinct -- which is innate, you were born with it -- and what part is experience, a skill set that has been taught?
Carlos Slim: I don't know. I think that more than instinct, there are circumstances. Experience, I think, is important. To know the whole. I think that from the first moment in '65, that I founded the companies, I always knew that I'm not an executive. I'm more an entrepreneur. I'm not a person that works from 8:00 to 6:00, or from 9:00 to 5:00. I don't have the characteristics of the executives. I think in business, you have the executives or the COs, the investors, and the entrepreneurs. They are different personalities.
What is the difference between an entrepreneur, a businessman, and an investor?
Carlos Slim: Well, I don't know in English. In Spanish, we say empresario, we don't say businessman. The entrepreneur is more a creator, a promoter, and he works with executives. The executives are the ones who have the work to be done, the organization, a leadership in the organization, but the entrepreneur needs to be the leadership of the leadership.
| back |
Page 4/ 5 | next |