Franco Bernabé. Photo: Elza Fiúza/Agencia BrasilFranco Bernabé. Photo: Elza Fiúza/Agencia Brasil

Most business organisations will face the need for major restructuring at some time as a result of changing competition, new regulation, technological innovation and evolving consumer and social habits.

The same applies for political, religious and other organisations.  Leading organisations at such critical times is an exercise in solitude. Successful restructuring is rare and those who lead such an exercise often are burnt out emotionally if not physically.

One of the best academic articles about this form of crisis management is found in an interview which two Harvard Business Review journalists, Linda Hill and Suzy Wetlaurfer, who in 1998 interviewed Franco Bernabé who was then CEO of ENI, Italy’s large, energy focused industrial group.

Bernabé was tasked to transform the company from a political quagmire into a clean, market-driven business. What he had to go through to achieve this objective is a lesson on the travails of restructuring a large organisation.

What is striking is not the sheer colossal strategic task of reinventing a geriatric business but the steely leadership of an unassuming person who had to face the resistance of those who saw a threat for their future in the change that Bernabé was passionately committed to.

Resistance to change started from the very first weeks of his assignment. Bernabé had a very rare combination of knowledge that made him the ideal person to transform ENI.

He had an encyclopaedic knowledge of ENI’s operations but he also had a 10,000 metre view of the company and where he wanted it to be.

Like all good leaders he put principles before power. His inner compass was calibrated on the principles of humanity and justice. Those who knew him well described him as unassuming but determined and honest. He consulted others, but ultimately he made his own decisions – alone so as not to be buffeted by the needs, emotions, and agendas of others. He told his HBR interviewers that “solitude is one of the burdens – and necessities – of leadership”.

Those business leaders who are embarking on a restructuring programme of their organisations would do well to read Bernabé’s experience at ENI

The appointment of Bernabé as CEO of ENI came as a shock.

In 1992, a new government was swept to power and appointed this little known executive who had only worked for ENI for nine years as a financial controller.

He was not popular with the company’s board at the time because his tireless advocacy of change had prompted the board to demote him once and call for his ouster twice.

Yet Bernabé had a quality that is rare: perseverance. He fought the rumour machine kept alive by his adversaries that tried to involve him in corrupt practices by accepting bribes.  These were the days of mani pulite when hundreds of business leaders finished behind bars. But Bernabé had no skeletons in his cupboard – only a steely determination to make ENI a modern clean business that could fly in a free market without political patronage.

To achieve his aim he had to free the company from political control. He sold 200 companies, dismissed hundreds of managers, and installed radically new business systems and procedures that made ENI leaner and more responsive to its clients’ needs.

Bernabé’s story is a lesson in bold strategy to reinvent a sluggish business that was not exploiting its potential. Bernabé’s integrity ensured his survival, enabled him to embrace risk, accept solitude, and provide strategic and moral direction in a company that had little tradition of strategic thinking.

Any business leader who embarks on a programme of change risks the anger of the popular media. Bernabé was no exception. Resistance to his plans of reform was quick and intense.

He was regularly labelled by the media as a traitor or fool who was destined to bring down ENI, with its 135,000 employees and 335 consolidated companies operating in 84 countries. His detractors argued that as a public entity ENI could not be run like any other business. It had a national mission to ensure Italy’s access to energy and to provide jobs.

Moreover, ENI was a political fiefdom and with the country’s policy of lotizazzione – the agreed sharing of power exercised through the control of national assets by politicians from different parties – many argued that Bernabé was wasting his time.

Bernabé achieved his aim because he also had the backing of his immediate political mentors.

He then moved on to being a banker and a successful one too.

Those business leaders who are embarking on a restructuring programme of their organisations would do well to read Bernabé’s experience at ENI.

johncassarwhite@yahoo.com

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