Not a one man show!

In April 2014, 4iG Plc. started to transform its previous corporate structure. This is still a work in progress but the holding group, which follows a dynamic growth path, has now the organization and stuff needed for its stable operation.

dr. Gábor Felső

After the economic crisis, shopping habits, customer needs and employees’ expectations have changed. A company that does not adjust itself to the new operating environment will not be able to secure long-term and steady growth. It is all the more true for companies of the tech sector that have to respond to quickly changing expectations due to the very intensive growth of the industry which affects all walks of life.

4iG has given an innovative response to new challenges not only on the product level but also in terms of its corporate structure. Within its holding group, 4iG Plc’s main role today is to create and implement a comprehensive strategy adjusted to the group’s long-term goals.

“CEOs are strategists who determine the entire corporate group’s direction of development in order to effectively leverage on synergies in different areas of operation”, says Dr. Gábor Felső, CEO and President of the Board of 4iG Plc. He adds: “Transformation is not yet complete but we are heading towards the direction that promises success for a large company in 2016. An umbrella organization was set up which determines strategy, has an overview of the operation of the group’s individual organization units, such as Sales, Technology, HR, Operations, Finance, and notices when a given area is not in line with market trends, and can even intervene from above.”

This makes subsidiaries themselves as well as their cooperation more effective. “Just like in a big family, tasks are being shared”, saysGábor Somlai CEO of Humansoft Ltd and Deputy CEO for Sales of 4iG Plc. He believes that today everybody, from secretaries to executive officers, does sales within an organization. “This is the greatest difference in how the world has worked since the crisis, and this approach should be shared by all members of the organization. This is what prompted also the transformation of 4iG.

Innovative corporate structure is one of the conditions for the efficient operations of the holding group currently employing about 400 people, while the other, equally important condition is the professional experience and management skills of those in executive positions. Parallel to the group-level transformation process, new executives arrived in the organization including Gábor Felső and Attila Merényi, CEO of Axis and Banksoft Ltd.

“From a professional viewpoint, it is all the same whether you work your way up the corporate ladder within the firm like Gábor Somlyai did or you come to an executive position from outside like I did. However, for motivational purposes, it is good for the company’s employees to see a career opportunity within the firm. We have created a career model at all of our subsidiaries”, says Mr. Merényi.

What all of the three agree on is that the personality, attitudes and management skills of the persons heading the individual subsidiaries matter a lot.

“Both the executive’s personality and professionalism influence the success of the business, and which of these plays the bigger role depends on the current situation of the organization”, says Mr. Somlyai. “Professional expertise is what makes an executive authentic in the eyes of their employees, and without authenticity you cannot lead your team. At the same time, strategic approach, motivating skills and ability to make decisions are also essential requisites for a good leader, says Mr. Merényi.

Gábor Felső thinks that there is no difference between the professional expertise of the management of foreign companies and that of Hungarian business managers, yet we are still lagging behind in terms of management culture which is also reflected by the fact that there are much more successful enterprises abroad than in Hungary.

“After the crisis, certain management skills became more important than others. These include for example cooperation skills and strategic attitudes. The chief executive should have a strong vision but it is just as important to adjust that vision to an ever-changing market in a flexible way. And they will also need to be able to motivate their team during hard times as well so that the firm can reach the goal envisaged in the strategy. This type of management culture and experience is lacking in Hungary.”

“A leader should be brave, take risks, have a good eye and notice when something does not work properly in the organization. You have to make decisions and take responsibility for them”, adds Mr. Somlyai. “But of course Humansoft does not work perfectly, either, because at the end of the day too many problems are escalated to the manager level although they should have been solved at the local level. However, the biggest problem is not that deficiencies occur but that they are not detected at the right levels. But then it also means that it is not the right person who sits there.”

Gábor Felső believes that the personal brand of the leader at a smaller company is a stronger success factor than in the case of larger companies. The bigger a business is, the more important corporate processes, besides the leader’s charisma, become including work sharing, efficient product development, decision-making pathways and whether all these are suitable for implementing the envisaged strategy. As a charismatic leader, Steve Jobs was clearly the face of Apple but it turned out that his company could work without him thanks to its organization based on solid professional foundations and to the fact that it was governed by leaders with excellent management skills. There are examples to the contrary, too.

Merényi Attila

“At Manchester United, Alex Ferguson’s retirement completely devastated a previously successful team. A leader with a dominant personality failed to build a structure that guarantees success”, says Gábor Felső.

Managers of large companies should become a brand name in their line of business: a CEO Finance should be the best among financial managers but does not need to be regarded as a guru among IT technicians.

“As your company grows, professional brands appear alongside or in place of charismatic leaders. It still remains important for a leader to have an attractive and motivating personality but in place of a person-oriented operation, certain mechanisms should be developed”, says Mr. Somlyai.

Merényi also argues for professionalism. “Professionalism is also important when a leader wants to make their team accept their decisions. Charisma is not enough for authenticity.”

The leaders of 4iG agree that in an ideal scenario the manager has both traits and if one of these traits is weaker, the other one will take its role to a certain extent. However, the successful operation of the whole business depends on well-established structures. Personal vision and an efficient corporate structure together can make a business successful.

Let figures demonstrate 4iG’s successful corporate development: according to the recently published flash report, the year 2015 has been the most successful year ever in the history of the public limited company. Whereas the entire Hungarian IT market has grown by 3 to 6 percent annually, the whole 4iG Group’s sales revenues increased by about 30 percent last year, and the growth rate of some of our subsidiaries even surpassed this rate significantly.