Farewell, But Not GoodbyeBy Guido van der Zwet | Tue, 12/14/2021 - 10:51
There is a time of arrival and a time of departure, and for me, the time of departure has arrived. After 16 years in Mexico, I am moving to the US where I will open and run our new US entity from Houston. It has been quite a journey and I have met so many great people and learned so much. This article is mainly for those who have plans to do business in this thriving country, with some tips that I wish I had known before I started and wish to share.
iPS Powerful People is opening an office in Houston to further develop the market and focus on our existing clients, develop a network of new clients and be part of the exciting offshore wind industry that is developing at a fast pace and will do so for the next decades.
When I arrived in Mexico in 2006 there was only one option for a mobile provider, one gas station, and the city was filled with VW Beetle taxis. I drove about 50,000km through the city using my Guia Roji map in the first three years, with no GPS available. The city and the country have come a long way since then. Mexico is an exciting country with a great deal of promise for the future.
Over the last nine years, I have been in charge of the commercial development of iPS Powerful People, a recruitment and crewing company, and we have proudly hired over 5,000 people, fed many families and developed talent. I am proud of our team and all we have accomplished over the last years and will do in the coming years. I will stay involved in the commercial development and relationships in Mexico but I will physically move to Houston in the beginning of 2022.
The P’s of Mexico
On one of the first industry trade missions I participated in Mexico, I was made aware of the 3 P’s to succeed in Mexico by Alberto de la Fuente, Country Chair of Shell. It has stayed with me since then and I have added some more P’s for becoming successful in Mexico. I would like to share them with those who are already in Mexico or have plans to do business in the country’s energy sector.
The 3 P’s I learned are People, Presence and Patience, which I will explain below. In my experience there are also the P’s of Politics, Partnership, Perseverance and Perception, which should be added to the list.
Working at iPS Powerful People, this P is close to my DNA. When iPS first came to Mexico in 2007, the idea was to recruit the incredibly capable manpower in the country. It has a young population (27 is the average age), salaries are low compared to many other seafaring countries, and the 80-plus years of history in oil and gas exploration has developed a big and capable workforce. We have not been disappointed by the quality of capabilities we have found in the country. After a few years we started to pick up some contracts and with the Energy Reform in 2014 we really took off. Mexico went from only one operator (PEMEX) to having over 40 operators in just a few years. Although we only achieved about 25% of successful auctions forecasted in the five-year plan, it has been a huge change for the industry.
Now, one of the most important things to consider when looking for the right people is to do a thorough background check on the person that will represent your company. Especially in commercial and management functions, make sure that the person has a clean history and a good reputation in the market. In my opinion it is crucial to use a professional party to find your candidates or to check references (not just those mentioned in the CV, but other stakeholders at the companies where the candidate has worked, or within your own network). A person with a bad reputation will do more damage than good to your company. There are also professional parties that do background investigations; the higher the position, the more it is worth conducting an investigation.
The only way to succeed in Mexico is by building your relationships and network. You can tap into an existing network by working either with a partner or by hiring an experienced person in the market.
Mexico is the only country where you can have a lunch meeting from 2 to 2 (a phrase I learned from the late Ernesto Marcos). Personal relationships are important in Mexico and often build outside office hours. The huge number of cocktails, breakfast sessions, exhibitions and trade fairs have helped me to build a network that I would not have had by just being here every once in a while. The current COVID-19 situation has made it difficult to build relationships, but still most interesting meetings are in an informal environment.
Being present at trade exhibitions, industry events, trade missions and preferably by having someone representing your company is a key for success. One of the things I am proud of, is being cofounder of Holland House Mexico, which promotes and increases business between Mexico and The Netherlands. Among many other services, it represents Dutch companies at trade fairs in a Dutch Pavilion, including stroopwafels, which are always a success. Holland House Mexico also offers a representative for a day, where you can hire a person to represent your company physically in Mexico for one or more days per month. More information can be found at www.hollandhousemexico.com
One distinction from The Netherlands, where I am from, is that doing business in Mexico does not mean you need to provide the best proposal in a tender. It means building a network, building trust and getting a foot in the door. We have various examples of clients where it took us months and sometimes even years to build the relationship and do business. Make sure you have a plan and count back the steps it will take you to get there. Things might not be as straightforward as in the US or Europe, but with patience, things will come your way. You will find that it will be difficult to explain this to your superiors and colleagues from other countries. I have been lucky enough to have an understanding director and owners at iPS, to whom I am very grateful for the opportunity I was given and for the patience and trust I was provided. Over the years and with help of a great team, I was able to pay back the confidence.
One of the few certainties in Mexico is that everything changes all the time. This is also true with the difference in strategy between one administration and the next (a president/party in Mexico is elected and stays in power for six years. The President cannot be re-elected, but the party can be; for example, the political party PRI had been in power for 70 years in a row between 1929 and 2000).
Every political party has its own agenda and plans. Laws can be changed and do so all the time; important laws that have been adjusted in recent years have had great influence on energy, labor and market conditions. Make sure you get well informed by reading the daily changes in the “Diario Oficial” or have a legal adviser to keep you up to date and help you adapt.
Look for partnerships in Mexico. This does not always mean you need to have a joint venture, it also means look for strategic partners in the country. Make sure to become a member of trade organizations and actively participate. Most countries have their own Chamber of Commerce, most industries have an association. In this way, you do not have to reinvent the wheel but can use the many years of experience and knowledge from others.
Finding a sophisticated business partner in the country, one that can open doors, like a representative with a proven track record, can also save time and effort. Make sure that you have investigated and checked the references of the partner you choose. Please do not hesitate to ask my opinion at any time.
One of the skills I mostly learned in Mexico is perseverance. Do not give up. Most things in Mexico are not black and white; there is a big gray area. When things appear to be impossible, there are always other ways to achieve it. When one door closes, other doors or windows of opportunity open.
To give you an example, in April of this year, the Labor Law Reform outlawed outsourcing as a whole in Mexico. This means that you are not allowed to hire personnel through a third party when applied to areas that are not the business purpose as stated in the Articles of Incorporation of the entity or related to the main business activity of the entity (by invoicing volume). Although this had a big impact on our business, it also opened windows for new opportunities; we helped our clients by running payroll and HR services under their name, helping them register as an employer and more than anything, supporting their HR operations now that personnel are under their name (there are quite a number of pitfalls in running payroll in Mexico). Permanent staffing, headhunting and “Specialized Service” (the services that can still be legally outsourced) still offer plenty of opportunities.
We are at your service for any inquiries, advice or explanation on how to work under the new rules and regulations.
In the end Mexico has many qualities and flaws, as does any place in the world. I have seen many people come and go over the last 16 years that I have been in Mexico. It is not the place for everybody. You can see the pollution, traffic, bureaucracy and even corruption and crime or you can put on rose-colored glasses and see the amazing food (Mexico is one of only four UNESCO protected kitchens, next to France, the Mediterranean area and Japan), good weather, culture (Mexico City is in the Top 10 for most museums in one city), almost 10,000km of beaches and welcoming people.
Besides the crime statistics on one side and the promising growth numbers on the other, it is a matter of perception and has become part of the culture and growth of the country. Remember it is a different country; you have to adapt but not too much. I always found that adapting but also holding true to your most important values and principles works best.
Nos vemos ahorita
One of my favorite words in Mexico is “ahorita,” which literally means “in a bit,” but this can be stretched from 5 minutes to infinity. As I said, I will still be involved in doing business in Mexico so I am sure we will meet again in the future.
A special thanks to all those beautiful people I have met over the last years, those who have made me grow in good and bad times. Thank you to our clients for the trust of doing business with us and thank you to the team at iPS Powerful People who make the magic work.
I am always open to discuss Mexico and share experiences and points of view on different topics, business and nonbusiness-related.