Interview with Juan Alvarez, BTW Holding, Colombia

Sometimes deciding between the decision of joining the family business or opting not to weighs heavily on younger members of the family due to how definitive such a choice may appear. That there is more than one way of being there for your family and that contributions may vary over time is something that is not obvious to everyone. Juan Alvarez who is a third generation family business member of an esteemed Colombian auto parts firm shows that things can be done differently. Alvarez spoke to Tharawat magazine about joining the family business, leaving it, and joining it again and how this approach has enabled him to continuously contribute to the legacy he is a part of.

After 28-year old Alvarez graduates with an MBA this summer, he will be joining his family business in Colombia for the second time. The Alvarez family commenced their business operations in 1968 as Importadora Cali S.A in Cali, Colombia and with the assistance of 200 employees today specialises in offering their respective markets wholesale auto and motorcycle parts. The company has grown into what is now known as BTW Holding, with business units in Panama, Colombia, Costa Rica, Ecuador and Chile. “I work with my brother Daniele and my sister Sandra. The second generation is represented by my father Bernardo and my uncle Luis Fernando. In total we are 13 family members whereby only the second generation are managers, owners, and family members at the same time,” explains Juan.

“When I was a child I always wanted to become a football player. It has been my passion ever since I could remember,” Juan confesses. He sighs, “However, as these things go, I grew out of the age for playing football and decided that it would be best for me to become a business man.” Today, Juan’s dream has moved from the football field to delivering a good service to the society, which surrounds him through his family business.

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Down memory lane towards the business

Juan remembers during the summers of his childhood his father frequently taking him and his siblings to the business’ main warehouse. “My brothers and I created an instant bond with the employees that has lasted until today. We have always seen the business as a part of our lives and this helped to create a sense of pride,” declares Juan proudly.

“Over the years, especially the years that I have been working for the family business, the connection with the employees grew. As a rule my father never talked about business at family meetings, so we knew little about the financial aspects or business strategies. Once I had the opportunity to work inside the company however, I learned about the main issues, giving me a more comprehensive and interesting perspective on the future of what the family has built.”

This early induction proved effective as in 2008, after obtaining his undergraduate degree in information systems, Juan started work in the family business as a project manager. “I remained in this position for three years. By 2011 there was an increasing necessity for a dedicated team to handle customer complaints and manage our consumer’s problems. And so I was assigned the role of customer relationship manager,” says Alvarez.

Juan’s responsibilities grew within the role and he was put in charge of making crucial decisions such as managing relationships with the company’s six affiliates present in Central and South America. “I was also in charge of a team and had an annual budget I had to keep to. We achieved the implementation of a CRM programme and saw a 50% increase of customer retention across the board. While in this position I was also in charge of implementing a detailed business intelligence platform that analysed sales, costs and expenses, and industry trends,” explains Alvarez, thinking back to the hours of intense work these many projects demanded of him and his team.

Juan also remembers what mental adjustments he had to make when he first joined. “Upon entering the family business I was eager to learn everything quickly but after a while I took a step back and realised that the learning process was going to take years. Something critical which I think happens to all members of family businesses is that you end up working long hours or weekends but at the end of the month you do not see many results,” he expounds.

“This happens because even though you have one specific position you end up working in many places or departments at the same time and sometimes are not around long enough to see the outcomes.”

By August 2013, Juan decided to leave the family business in order to pursue his MBA from an international business school. “I felt at the time that going back to school as well as gaining some outside experience was the best way for me to contribute to my family business in the long run,” he offers.

The next generation prepares for the transition

In the Alvarez family the increasingly imperative task of overseeing generational transition has fallen to the third generation. “My dad and uncle are not worried about succession and this has been one of the family’s main challenges,” says Juan urgently. “This is why we are planning ahead in order to help them to have a healthy transition between generations.”

The family is currently faced with an assortment of persisting challenges. Advancing upon short term opportunities aimed at expanding the business portfolio to reflect new markets in hopes of staving off increased competition is a key priority. The creation of family business governance structures in order to give voice to the ideas of all family members both active and inactive also rests significantly atop the business’ concerns. Separating roles and responsibilities will hopefully be addressed with the implementation of a family business constitution.

“In the long run we want to expand our business into the Middle East and Africa and want to create profitable opportunities for our holding investments. We will over many years face the challenge of the complexity of our market and the needs of the customers in the aftermarket business,” explains Juan.

Juan’s return

Upon completion of his MBA and furthermore building adequate knowledge and experience in the Middle East, a region markedly different from Colombia commercially, Juan Alvarez intends to return to the family business. “Prior to going back into the operational side of our business, I intend to ensure that proper governance structures are in place such as a family council, a family assembly, a statement of values, and a detailed description of roles and responsibilities,” he explains, his sense of familial responsibility clearly on display.

“Additionally, I want to apply improvement concepts and procedures acquired from my MBA. I would like to lead the expansion of the family business portfolio in the Middle East in order to leverage some of the opportunities that exist.”

Generation Now

Juan Alvarez’s drive is palpable and it will be interesting to watch his ambitions unfold within his family business. Does this drive stem from his personality alone or is it a product of the generation he is a part of which so often exudes entrepreneurial ability?

“Generation Y is famous for its willingness to make a lot of money,” states Juan confidently. “But we also believe in supporting non-profit causes and effecting change in the community. We are a technology-oriented generation adapting to changes very easily and looking for solutions instead of excuses. Education is the key to success for future generations which is why family businesses need to structure educational plans for family members in order to create value and growth platforms.” This advice should allow family businesses to attract and retain young hopefuls such as Juan, even if they might leave for a while just to come back stronger.

Tharawat Magazine, Issue 23, 2014