Perspectives from ISB

Pablo Isla, the CEO of Inditex, has just been nominated as the best boss in the world by the Harvard Business Review. His success looks to be influencing other family businesses in his home country to rely more on outsiders to run their businesses.

Isla, CEO and chairman of the Spanish-based retail giant that’s better-known by its Zara brand, and is owned by its founder Amancio Ortega and his family, is the number one best performing CEO in the World for 2017, according to the HBR.

Isla has been running Inditex since 2005. Under his leadership, the business has become the biggest fashion group in the world in terms of revenues, achieving €23.3 billion in sales during its fiscal year 2016. Inditex, which apart from Zara, operates another seven big fashion brands, has more than 7,400 stores in 94 markets around the world.

Asked by the HBR about his view on managing the business with a controlling family shareholder, Isla said this: “I would say in a very positive way. I think something which is very relevant for us as a company, for me as chairman and CEO of the company, is to have the full support of our founder, and I would say of the whole board, in terms of thinking always in the long term, having a long-term approach, investing in the business, paying a lot of attention to everything which has to do with sustainability of the business, from every different point of view.”

Perhaps Isla’s success at Inditex is leading more Spanish family businesses to take a closer look at their top management structures and make the decision to bring in non-family members to run things. Because, just in the last month, two of Spain’s best-known family businesses have ditched family members and brought in outsiders.

More significantly is the decision by Spain’s famous department store group, El Corte Inglés, to replace its family CEO with two outsiders. Dimas Gimeno looks to have got the sack after just four years in the job. Gimeno, whose uncle took over running the business from his uncle and the founder of the business, Ramón Areces, is to be replaced by two long-term employees of the group, Víctor del Pozo Gil and Jesús Nuño de la Rosa Coloma. The two will be joint CEOs.

Source: Family Capital, November 15, 2017;

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