Fiercely maintaining and nurturing close business relationships to stay ahead of tough competitors requires focus and dedication. But, for Gianpietro Mascialino, CEO of Italian fifth wheel specialist, V.Orlandi, client value equates to competitive edge.
Despite the doomsayers, there is a lot to celebrate about Italy's economy. And, in no small part, this is due to the strength and sustainability of often family-run manufacturing enterprises that have ridden out more than their share of political upheavals and economic rollercoasters. It is a resilience that requires the agility to capture and keep both existing and prospective markets. Such consistent understanding and application of such market experience emanates from a company such as V.Orlandi.
This family business based in Brescia – a picturesque commune nestled between the Alps and the river Po’s plains – specialises in the manufacture of couplings, fifth wheels, kingpins and landing gear. The current encumbent of the CEO’s chair, Gianpietro Mascialino, 45, has steered the company into not only holding its own in the tough European market, but also into becoming a global force in the trailing equipment market since he took the reins in his mid-20s. In an exclusive GT interview, he talks about maintaining a competitive edge in a harsh business environment and reveals why personal relationships are critical for successful business negotiations.
Q: V.Orlandi is a classic family business that has weathered out more than one storm in its long history. What’s your secret?
A: There is a popular Italian proverb – la calma è la virtù dei forti, the calm is the virtue of the strong. At V.Orlandi, we stick by that principle and avoid hasty reactions. Just like our competition, we lost a significant percentage of our turnover in 2009, but we did not panic. I believe that the combination of expansions and recessions, the ebb and flow of economic activity, are all part of the global business cycle, and the key to success is staying calm and analytical even when times are tough.
Q: At the age of 27 you were appointed CEO of multi-million euro company. How did you cope with such responsibility at a young age – and which lessons did you learn along the way?
A: My family acquired the V.Orlandi business in 1989. At the time I was 23 and started working as an accountant to support that new venture. I couldn’t even finish University as this challenge was taking up all my spare time. But, I still don’t regret it – I was always drawn to this new, industrial world and wanted to uncover the secrets behind it. And, that passion paid off when I was appointed CEO only four years later, in 1993. Being such a young leader has never been easy; and I had to work hard to show my family, all my staff and myself that I was putting my heart and soul into it.
Q: Do you think that your young age and revolutionary spirit have helped you expedite V.Orlandi’s globalisation?
A: Yes. At one point Iveco World – named OM at that time – asked me to develop a dedicated drawbar coupling to be fitted on the assembly line of heavy trucks, and suddenly I started traveling myself all around the world to look for new business partners and establish a solid dealer network. It’s amazing to see that that most of the people I first met as a young man are still working with us and most of them became close friends of mine. On the other hand, I was very lucky, because I could always draw back on my family’s experience. My father and his brother, for instance, have always remained close to me and gave me all the guidance I needed.
Q: Considering the latest euro-zone debt crisis, do you think the company’s global approach was more of a blessing or a curse?
A: International sales have become an important part of the V.Orlandi business. They will help us recover from the current crisis and maintain stable growth well into 2012. Our global focus also helps us improve our product and make it even more competitive, making it a real blessing. We receive a lot of feedback from different regions across the world and constantly re-assess our product.
Q: How do you translate that global feedback into future growth?
A: By focusing on on-going product development, even when the economic situation demands cutbacks. We have understood that you can only achieve your goals by constantly investing in R&D and employing the latest technology. At V.Orlandi, prototypes are designed using FEM technology supported by CAD-CAM systems and validated by virtual stress analysis performed on electronic models as well as by laboratory tests. Large-scale production is then carried out by CNC workstations and machining stations, using the latest SPC equipment and procedures.
Q: In Italy and around the globe, financial volatility and investor risk aversion are still increasing and performance continues to diverge across regions. How do you avoid being sucked into the whirlpool?
A: Being the owner of a successful manufacturing company means you have to keep moving forward, invest in state-of-the-art machinery, study new business strategies and try to anticipate competitors in the market. I try to build a team of talented, young people around me that will help me carry the brand into the future, and try to mix the old blood with the new to keep our tradition alive.
Q: Assuming the euro debt crisis will not affect trailer demand and the build rate will continue ramping up; will V.Orlandi retain the ability to maintain supply?
A: Yes, flexibility is our key advantage. As a family company with a solid financial background, we can react to changing market needs in an instant, and our R&D department is well prepared for a spontaneous change of plans as well. In addition, our machines work 24 hours a day and produce on a just-in-time basis, which makes us even more flexible than the competition. On the other hand, our vast experience gives us the wisdom to consider every detail before making a production-related decision such as integrating new processes.
Q: How important is that heritage for the future development of the company?
A: Being a part of this industry for more than 150 years is a huge heritage. As a historical manufacturer of safety devices we have experienced constant growth for decades and can look back on 30 years of experience in the global marketplace, so I am 100 per cent sure that we will continue playing an important role in the future as well.
Q: How much of the original spirit is still palpable today?
A: Wherever we operate, the essence of V.Orlandi's corporate spirit is to find creative solutions without ignoring everyday problems and situations. It’s a simple formula – we focus on engineering, technology and improvements at all levels. Of course we are aware of the fact that different markets have different needs, but at the same time, we always want to deliver a long-lasting, easy-to-maintain product at a modest price to give the end user a real competitive advantage. That’s why we have established a lot of long-lasting relationships with the OE industry and support the ISO commission. Together with our ISO colleagues we will keep working on new solutions and design standards that will make the global transport industry safer and more sustainable.
Q: A forecast report issued by British consultants CLEAR predicts 48.2 per cent growth in trailer demand in Eastern Europe in 2011, lead by Turkey, Russia and Poland. How important is that market for V.Orlandi?
A: It’s true, emerging economies like Turkey and Russia are experiencing rapid growth at the moment, but there is no rush because we are well-placed to capitalise on that development. In fact, working in Turkey in Russia already is a reality for V.Orlandi.
Q: How did you manage to establish the V.Orlandi brand in these markets?
A: We have basically translated our successful domestic strategy into a global one. We always try to establish a business relationship with local dealers who look after their own area, because we believe they know best how to service it. My people then visit them regularly to provide personal support and training.
Q: Is that strategy successful? Does is show up as an actual increase in market share?
A: Yes, it has proven itself for many years. However, talking about actual market share is difficult because there are too many variables to be considered – such as the area we are talking about or the particular type of coupling or fifth wheel. Just look at our coupling range. We cover a range between 3.5 and 500 tonnes, which makes it hard to name a general figure. But, I am confident to say that we are the undisputed market leader in Italy, although we still see many opportunities on a global level.
Q: Apart from Eastern Europe, which future markets are you observing at the moment? Where do you see new opportunities?
A: We are already present in the world’s most important markets except the US, where they use a different design standard. Therefore, I think the US market might present a number of untapped growth opportunities to us. We are always keeping an eye on interesting markets and will be able to decide quickly if an opportunity for a joint venture comes up.
Q: How do you communicate your personal and corporate values to the ever-growing global V.Orlandi network?
A: It’s all about communication and nurturing relationships. We talk to our international dealers on a daily basis to maintain a constant flow of information, for instance. We enjoy working with them and try hard to give them our full support and visit them regularly. It’s just as critical to cultivate, maintain and nurture relationships with the people we do business with and not to burn any bridges. Positive relationships are the key to success in business, that’s why we always treat our customers like dear and valued friends.
Q: What do you see as the next improvement the market is crying out for?
A: As market needs change, there is always room to improve a product. Plus, experience has shown that there is always a market for an intelligent idea – and our testing room is always full of new ideas. In fact, we have already developed a range of new products that will make our clients’ lives easier, but it is still too early to talk about details.