Holcim honcho specializes in cementing client relations
Holcim CEO Ed Sahagun
MANILA, Philippines—When Eduardo Sahagun, or Ed as he is called, was named chief executive officer of Holcim Philippines in September last year, the people in the company were so happy and proud to have one of their own as the new big boss.
That is not only because Ed is a fellow Filipino, the first one to become CEO in Holcim, but more because he was really one of them—someone who has for many years been mingling, working and eating at the company cafeteria with them.
Ed is also no stranger to the dealers, clients and other stakeholders of the cement company, with whom he has built and maintained strong relationship over the years.
In his 33 years in the cement business, Ed has invested a lot of time and effort in talking to people, understanding them, learning and appreciating what they do and knowing their needs.
“I am not a guy who just sits in the office. I talk to people—I walk around our offices to talk to employees, go to places to meet customers and people in our plants. I like talking to people personally, not through e-mails,” he says.
Holcim Philippines CEO Ed Sahagun shares some good news with the company’s managers.
His being in the audit or finance department before did not stop him from going around and meeting people in the office and the company’s customers. Ed is a “relationship person” and it is not going to change now that he is the company’s CEO. In fact, he says, his leadership will be based on relationship and trust.
When Ed was appointed senior vice president for commercial in 2007, the first thing he did was visit customers to ask them what they needed and what support Holcim could give.
“When I started in commercial, a couple of customers were suing us. I talked to one in Baguio for eight hours, threshing out and addressing whatever problems he had with us. Now he is one of our most loyal customers,” Ed says.
The same happened with a customer in Davao who had even led a rally against the company due to certain issues. Ed talked to him for more than two months and his perseverance paid off— he won back the customer.
“I believe everything can be addressed if we only talk about it,” he says, adding that his relationship with customers goes beyond cement. “I want to see them succeed in business so I give them some advice when asked.”
“Keeping a good relationship with customers and dealers is very important because they can fire you anytime if they do not want you anymore,” he says.
When he was named CEO, the first thing he did was to visit customers all over the country, traveling back and forth until he covered all of them and personally informed them of the changes in the company management.
His strong bond with the various stakeholders of the company and his ability to relate with them are among Ed’s key advantages over the other candidates for the post, and even over his predecessors at Holcim. This and his knowledge of the business—the ins and outs, its ups and downs, the numbers (having been a finance guy for a long time), the market and plant operations—made Ed the right man to lead the company, and this was acknowledged by the previous chief operating officer Roland van Wijnen when he turned over the leadership of the company to the new CEO.
Ups and downs
Ed is an accountant, earning his bachelor’s degree from Angeles University. Later, his former employer, the Phinma group, sent him to Arthur D. Little School of Management in Boston (now Hult International Business School) for his master’s degree.
The Holcim CEO started his career in the cement industry right after college 33 years ago as an audit assistant in the Phinma group, which owned several cement companies that were later acquired by Holcim. He had assumed several positions in audit, treasury and finance departments and went on to serve as the finance guy at the La Union plant, where he gained an intimate knowledge of the plant’s operations.
Ed has seen the many ups and downs in the cement industry and he was part of it when the industry almost went belly up twice—once in the 1980s when almost all cement companies ended up under DBP (Development Bank of the Philippines) because of huge debts, and again in the late 1990s when the industry found itself deep in debt due to the Asian financial crisis.
The cement companies “all expanded during the time of President Ramos,” he says. “The economy then seemed booming. We borrowed heavily to finance the expansion. Then came the Asian Flu and, suddenly, our debts ballooned [with the peso plunging from 25 to a dollar to 40 or so].”
This episode paved the way for the entry of some of the world’s biggest cement companies into the local scene and led to the reshaping of the cement industry to what it is today. From about 19 cement companies prior to the Asian Flu, the industry now has nine players, with Holcim leading the pack, accounting for about 35 percent of the market.
Ed was appointed chief financial officer of the group in 2002. It wasn’t the best time for any finance man as the cement industry was still in bad shape—funds were short and the company was in survival mode. But challenges can bring out the best in a person, and Ed fared well. He did well in managing risks and raising funds. His bosses then, amazed at his resourcefulness in getting funds, referred to him as “the most creative CFO.”
Holcim CEO Ed Sahagun briefs employees about the company’s performance.
It was then that he developed a strong network with banks and business partners which he maintains up to now.
Change of direction
Five years later, Ed was named senior vice president for commercial, a not-so-common move for a finance guy as the new assignment involved sales and marketing, which some might have thought at that time was not really his line. But, again, he did well. Prior to his appointment to that post, when he was still in finance, Ed would go with commercial people, whenever possible, to visit customers. That sort of prepared him for the marketing job.
He did well in commercial, establishing record sales (10 million bags) only two years in the job. That earned him a special plaque from the company that said, “Ang galing mo, pare.” Three years later, another milestone was established by his team—sales hit 15 million bags.
He points to customer loyalty as his most rewarding experience as commercial head. And his colleagues point to the relationship Ed has established with them and the many initiatives he introduced during his stint in commercial for his success in this field.
“If there’s one thing I hope I have instilled in the team, it’s that we need to keep showing and communicating to our customers how much we value them.”
Trust program
Ed was chosen to head Holcim among five candidates, and he was the only Filipino. Just like the four others, he applied for the job. He says nationality does not matter in the selection of the CEO in Holcim offices everywhere. What counts is the capability of the candidate, not the color of one’s skin.
“That’s what the Holcim system is all about. We want our people to do well, speak out their minds and choose the positions they want. They will not only be heard, they will be helped in attaining what they are aiming for,” he says.
Under the Holcim system, anyone with high potential can apply for the position he is aiming for. The potential of the employees is determined based on his performance, and if the bosses decide he is what the Holcim people call “hi-po” (high potential), he will be prepared and given training here or overseas.
Holcim’s trust program gives the “hi-pos” access to management meetings, where they are treated as equals even when discussing confidential matters. “We show that they are trusted completely.”
Retiring officers can also name their successors and they have to do that six months before they leave the company. This will give the retiring employee the time to prepare for his retirement and the successor the opportunity to prepare for his next assignment.
The retiring employees will serve as the coaches of their successors during the six-month transition period.
“Those who will not be selected for the post they are applying for or drop out of the program can always come back. Candidates are assessed and informed of how they fare so if they are failing, they will be able to catch up,” Ed says.
This system works well in Holcim Philippines as shown by its employee engagement score (85 percent), which has always been higher than those of the other Holcim offices in other countries.
Ed trusts his people enough to let them decide or participate in decision-making.
Sahagun talks to Holcim shareholders before the annual meeting.
“When asked how to do certain things, some bosses will give instructions. When you ask Ed, he will throw back the question to you and discuss it with you until an answer is reached. That is participative management,” a colleague at Holcim describes Ed’s style of management.
During his term, Ed says he will personally attend to the company’s corporate responsibility programs and make them more relevant and sustainable to the beneficiaries.
“We will measure our program’s effectiveness in raising the standard of living of the people and what these projects have done to the communities. We will partner and work with the people in formulating and implementing the programs,” he says.
Retirement
Ed has been in the cement industry all his professional life and there’s no tinge of regret for not trying other fields.
“I look at cement not as a commodity. I look at how it changes people’s lives. When we see the roads, bridges, power plants, irrigation systems and cell sites built with cement, we are convinced that we are part of almost everything that improves the lives of the people.”
He has five more years before retirement and, apart from running the company and leading it to new heights, he says he will inspire people to aim higher and work to achieve their goals.
He has no retirement plans yet, but he believes he will not run out of things to do. One thing he is sure of, he wants to teach people and help them succeed in their chosen paths.
