Interview with Josep Lagares, CEO of Metalquimia, Spain
Metalquimia was founded in 1971 by the Catalonian Lagares family in Girona, Spain. Today, the company is a global leader in technology and the manufacture of complete turnkey lines for the production of meat products. The family is known not only for its numerous innovations in the processed meat industry, but also for shaping a new business concept called “Creativation” which allows the family business to bring over 90% of its new inventions successfully to market.
In 2002 Josep Lagares, General Manager of Metalquimia, jumped from a plane with 299 people and set a 300-way world record for group skydiving. The second generation family business tycoon, pilot, and musician steers Metalquimia with his brother Narcis Lagares, Junior whilst under the still watchful eyes of their father, Narcis Lagares. Josep Lagares told Tharawat magazine in this exclusive interview how the family invented Creativation, why success is not a goal, and just why the next generation matters most.
Family business solutions falling from the sky
Josep Lagares’ partiality for skydiving has less to do with the adrenaline rush that comes with it but rather with his passion for deriving important lessons from the free fall experience which he applies to his family business. “Looking at this large constellation of people falling from the sky, I realised that this experience had everything in common with creating a successful family business,” Lagares declares, his eyes shining with enthusiasm. After this experience he felt that his attitude grew less resistant to change and opened him to the many opportunities for his family’s enterprise that lay ahead. Inspired by his plane leap, Lagares wrote a book together with the Chairman of the family-owned Business Department at IESE Business School, Josep Tapies. “Plan de Vuelo” (Flight Plan), which utilising novel format, expands upon the various difficulties family members discover when joining the family business and soon became a bestseller across Spain.
Native to Catalonia, Lagares attributes much of the understanding for family business dynamics to the mentality of his people. Lagares explains that Catalan families have always striven for excellence and quality: “Catalan families are humble and they don’t like to show their assets,” he explains. “They prefer reinvesting into the business. Catalan people are peaceful. We like to put our energy into hard work and focus on the many challenges ahead.”
Adapting for the greater good
Josep Lagares studied chemical engineering in Barcelona, Spain. “I chose this path because I knew it would be helpful to the family business,” says Lagares. His aim was to pursue an MBA in the US after completing his degree in Spain. However, fate intervened: “In 1986 my father’s business partner who owned 50% of the business at the time, decided to retire and my father decided to buy him out. He brought me in and we decided to forge ahead together. The decision to buy the company was made in 1988 and the transaction was completed in 1989.” Had it been Lagares’ plan to join the family business at that time? “No, but the decision to buy my father’s partner’s shares forced me to stay and become an entrepreneur within the family business.”
Josep Lagares is not afraid to mention the many obstacles his family business met with at the company’s outset. “During the Gulf War, our orders were quite affected as much of our business came from abroad. In 1992, we decided to launch a machine that would serve to sterilise the surface of ham. This turned out to be a great mistake as sales were disappointing,” he shares.
After these setbacks, the Lagares family decided to change its strategy. “We decided to push the company towards creativity and innovation by applying a methodology called Creativation. This new way of doing business allowed us to increase our success rate of launching new products from 40% to more than 90%,” declares Lagares. Creativation is the result of combining the Lagares family’s penchant for creativity with their constant desire for applying innovation within the business.
“We think that creativity is a necessary condition but that it is not sufficient to create value. Creativation allows us to generate value from our products and breakthrough technology. It is a learning process and it takes time, starting from a values checklist and climbing up to the final product. When we use Creativation as a process to create new products, we know that it will be able to penetrate markets around the world.”
The Lagares family today operates in over 75 markets globally and is known for its cutting edge innovation in the meat industry. Customers from all markets constantly feed the family business with new challenges. “It is a cycle of Creativation and internationalisation. The customers bring us new challenges and we try to solve them. This is one of the reasons for our success,” states Josep Lagares.
“We started launching new products all over the world; we designed marinating, tumbling and massaging machines. We have also developed the Quick-Dry-Slice system (QDS). Since Roman times drying meat has taken months. We realised that it did not make sense for this process to take that long. In the end you buy the dried meat in slices from the supermarket, so why not dry the slices from the beginning? Thanks to our QDS system, we can now dry the slices in 40 minutes instead of 40 days. This breakthrough technology has been possible thanks to the Creativation method,” explains Lagares proudly.
Creativation in action
In order to implement Creativation into a company, the management has to continually source great talent. “Because talent attracts talent. Mediocrity rejects talent!” Josep Lagares states unblinkingly. “In Metalquimia, we hire based on a Creativation test where we evaluate the capacity of people to think outside the box!” But Creativation does not only apply to the hiring process in Metalquimia, it is implemented along the value chain leading to a lean start- up strategy whenever new products are introduced. “We first have to have a customer requiring a new product, otherwise we do not start the process. It is highly important to work with other companies and especially with universities in order to enable new inventions. In projects where there is collaboration, success naturally follows,” Josep Lagares explains, indicating that sustained trust-based partnerships are what have allowed his family’s business to prosper.
Given the central role Creativation plays in the Lagares family business, we ask Josep Lagares to expound on just how this method is transmitted to Metalquimia’s many employees. “We want our people to be creative and in order to enable this we must inform, share, recognise, and reward! 20% of profits are distributed to our employees and the ones with the good ideas get higher rewards,” he clarifies. Once again Lagares draws a parallel to one of his many hobbies: “When you pilot a helicopter you always have to take into account three aspects: First, you have to keep looking at the cockpit, secondly, you have to look outside checking your flying altitude, and thirdly, with your feet and hands you must keep the control over the helicopter. The same triple focus applies to the family business: One eye on your business, one eye looking at your markets and your customers, and a third focus on the governance,” explains Lagares.
Investing in the next generation
Today, Josep Lagares is the General Manager of Metalquimia, while his father remains in a presidential role and his brother Narcis is the operations manager. Despite how elaborate the moving parts of the company may appear, the leitmotif of Metalquimia is to simply transform the world of processed meat. “Many innovations in the meat processing industry have been the result of Metalquimia’s efforts,” states the proud Lagares.
We ask Josep Lagares how he achieves a balance between his many responsibilities at work and his private life. “Outside the company I try to do other things. My life is not only managing Metalquimia. I would like to do my part in changing the world. I think it is very important to have a good influence on the next generation. I realise that the only way for mankind to survive in this crowded world is via the next generation and their education. I am a trustee and I have been the vice president of the Prince of Girona Foundation, which is presided over by H.R.H. Prince Felipe of Spain. The foundation is dedicated to the young people of Spain and provides education in entrepreneurship, social business, science and culture,” explains Lagares. He fervently believes that by instilling values and creativity in young people, they are then given the tools they need to face the challenges ahead.
“I have also presided over Impulsa Forum, which is the main activity of the Girona Foundation and is spearheading initiatives for innovation in education. It has allowed me to have an impact on the world. I am also the president of the Foundation for Creativation, which has been founded with the vision of promoting the ability of children to be creative in order to innovate. They will not solve new problems with old knowledge. They will solve new problems with new creativity, with new knowledge!” declares Lagares.
He strongly believes in the ability of these initiatives to activate creativity in young people. “The foundation creates programmes which we implement in public schools in addition to regular subjects. They are extra programmes where the teachers learn creativity techniques. Some 3,000 students are in this programme in Catalonia and we will be launching a new programme in summer.” Lagares is also involved in the musical education of young people with an eye on keeping the art of classic orchestra vital for generations to come.
Like father, like sons
Josep Lagares attributes a lot of his current success in the business and within his personal passion projects to his relationship with his father. “I learned about the business early on and I was by his side always. He is my best friend. I remember that in 1996 he came into my office and he said, ‘Okay Josep it is your time!’ I was 33 years old when he told me that I would be running the business! He has been by our side all this time but he has never rejected one of our decisions. He was only 60 years old when he handed us the business,” Josep says warmly.
Josep Lagares draws a parallel between the successions strategy applied by his father and the experience of skydivers who must go through a moment of separation, whereby they create a distance in order to open their parachutes and land safely. “This is what my father did: he separated himself from the company and allowed us to land safely. He has his own life outside the company so he is very busy in addition to helping his sons.”
When asked whether he will employ the same strategy of separation when handling family members in the future, Joseph Lagares says, “We are preparing the next generation to fill the right position at the right time. Maybe the success of my father, my brother and I came from the fact that we started the business together. We had and still have a shared vision. Till today we work hard on our leadership and management and not only in the family but company-wide,” Lagares explains.
The Lagares father and sons trio is clearly driven by a system of shared values, yet, additionally, maintains a common ground with risk management in mind.
“We always think about what could possibly go wrong! We always have a Plan B, and sometimes a Plan C. We have learnt how to transcend our fears. In the family business fights erupt easily but the rational answer is relax, focus, and flow! The family business does not belong to us but to the next generation, so we must stay in control and manage risks,” explains Lagares. “And this attitude has had a contagious effect on the other employees in the company, igniting collaboration on every level.”
Success is not a goal
“Success is not a goal in itself,” declares Lagares. “Success is always a consequence of a great job. It will come after you work your hardest. Success is not so important for a single person’s growth but for the collective growth of family, business, and society.”
So what does the future hold for the Lagares family business? “We are working on creating the structure for the third generation. There are five members in the third generation: My brother has a daughters and two sons, and I have a son and a daughter. In the future, we will have a family council, a board of management, of which my father will be the Chairman. If we stay healthy, we can still have ten or fifteen years at the helm of the company before our children join. We are meanwhile preparing our skydivers separation plan and our moving on plan. By the time the children come in, we hope that there will be a holding structure,” outlines Lagares.
Family businesses are the future
Spain has one of the highest unemployment rates in Europe. We ask Josep Lagares how he feels about the role of family businesses in bringing about necessary change: “Family businesses are key! I am convinced that the only way to create new jobs will be to re-industrialise the economy. The industries that are performing well are mostly dominated by family-owned companies. Many of them have survived the worldwide crisis because they have shown financial prudence and they have reinvented all their operational processes. They have kept on investing in this time of crisis, they have kept on creating, and they have improved their worldwide branding while maintaining contact with their customers. Many industries are now ready to make the next quantum leap and will therefore create a lot of jobs. This will be the fastest way of job creation. I am optimistic about the next five years. We will see the boomerang effect! The world will soon be facing a protein crisis and our industry will require innovation. We will have to feed people with the resources we have so we have to find solutions.”
Creativation seems to be the solution to the challenges ahead not only for Metalquimia, but for family firms around the world.
Tharawat Magazine, Issue 22, 2014