Mexico and Brazil

Mexico and Brazil

I want to start with Mexico because it was our first and longest international relationship.  I recall my first interaction with the Mangino Group in the mid 1960s.  At that time they were a manufacturer of safes and vault doors through an agreement with us.  They were just beginning to successfully market and service our ATM products.  They were also very well connected to the Banking industry in Mexico.  Mexico was experiencing very difficult economic times and The Group could not afford to make the necessary investments in parts to continue servicing our ATMs.  This was another one of those unique Ray and Earl business decisions that cemented a great relationship and demonstrated our willingness to support this market at virtually any cost.  They decided to provide the necessary parts to Mexico at zero cost if the Mangino Group committed to continue to provide service and reimburse us when they could.  Well they did both and I believe because of that we enjoyed a significant share of that market for a long time. 

I was asked to become a member of the board of the Mangino group.  As a board member I was able to spend at least two or three days every quarter interfacing with very important officials of the Mexican Banking industry and establish a great relationship with the Mangino family that still exists.

It was in the late 70s that a manufacturing and distribution group in Brazil to visit Sao Paulo to discuss possible marketing arrangements contacted us.  Ray and I made that first trip together and it was a very memorable and educational trip.

This was my first trip to a country that was in some economical and social stress at the time.  We were advised not to bring or wear any valuables or bring much cash.  We were chauffeured or escorted at all times.  The inflation rate was so high that people literally did not keep cash in their pockets and went to their bank or an ATM to get enough cash for only their immediate needs.  They would be known to go to an ATM 4 or 5 times a day to serve their shopping needs.  The value of money was calculated daily and zeros were added to currency values depending on the date.  Invoices all had a price escalation clause indicating the amount to be paid based on the value of currency on the date the invoice was paid.  I brought $100.00 in cash with me and it was worth less than $50.00 when I left a week later.

The primary reason for our visit was to discuss ATMs with the largest bank in Brazil, the Bradesco Bank.  The distributor that invited us wanted to demonstrate to the bank a superior solution to their ATM services that could be provided by the distributor and Diebold.  We were picked up on the roof top of our hotel by the banks helicopter and flown to the landing pad next to the banks headquarters facility, which was about 25 miles outside of Sao Paulo.  We were escorted directly to the Chairman’s office, which interestingly he shared with the entire executive staff.  I was the most unique arrangement and philosophy we had ever experienced.  All of the bank’s executives were seated at a very large boardroom type table. Each had their own filing cabinet behind them and a private telephone on the table.  There were also additional chairs available for small meetings.  Ray and I and our distributor were placed in a chair grouping at the head of the table with the chairman. 

Before our discussion began, I had to ask about the arrangement.  The Chairman said it was designed to facilitate good communications.  There were no secrets tolerated and when necessary they could elicit an opinion from the entire group immediately. 

We were, then, introduced to the group and the reason for our meeting.  Several times we were interrupted with questions from other executives and the chairman solicited opinions from the other executives.  All in all, the entire meeting went very well and led to a very successful distribution arrangement and eventually a manufacturing operation.

The meeting was finished a little early, which allowed the helicopter pilot to offer to give us an exciting tour of Sao Paulo.  He flew us over some very beautiful grounds and parks and then flew through the city below the building tops.  What a thrill.  Unfortunately Ray was not as adventurous as I and left early to return home.  I finished the week visiting several other banks to get a feel for the size and feel of the market.

Lessons learned:

1.  Supporting a valued distributor in hard times assures great results when times improve.

2.  Always look for distributors who are well connected with your market target.

3.  Always be open to new concepts and ideas, ie…the Brazilian communications philosophy.

4.  Take time to get to know both new cultures and new countries.

5.  Spending personal time, i.e.…meals, home visits, and customer visits help cement lasting and very supportive relationships.

Going Globa

In the early 1980’s we began to market our system outside the US.  We initially worked through large partners who had a global sales and service presence.  Our most largest and most successful relationship was with Phillips Industries of Holland.  They provided us with entrees to major banks in the UK, Australia, New Zealand, China, Hong Kong, Europe, Tai Won, Singapore and South Africa.  We opened small offices in Hong Kong, and London to provide them with sales and technical support.  We did work with other large companies but the Phillips relationship seemed to work the best for us. 

In the other major markets, Mexico, Canada, Saudi Arabia, and South America, we developed specific distributor relationships. 

All of this development work required extensive travel to establish good working relationships and provided me with the most memorable experiences of my life.  Unfortunately it took me away from home and my family for long periods for about three years.  It was also during this period that my father and early mentor passed away and my mother began to suffer from some of the early effects of Alzheimer’s.  Fortunately with the help of my family I managed to get through all this and still help move our business forward.

Again thanks to my family and my great support from my Diebold team, I was able to recover from a case of pneumonia that I contracted on one of those international trips.  My recovery was about a month and I was not able to leave my home or do any work during that period.  Thanks to my great assistant Mary Anne and a super team the business carried on very well.

I will discuss key country experiences in subsequent chapters.

Lessons learned:

1.  Global market development takes a great deal of your personal attention and energy until solid relationships are established.

2.  It pays to establish as many international personal relationships as possible.

3.  Spend time in the homes and in recreational activities with key international contacts.

4.  Never forget the importance of family and friends when in personal distress.

5.  Trust your team to continue what you have started in your absence.  In fact you will learn they will perform at a very high level during those times.