One of history’s greatest minds, Albert Einstein, once defined insanity as “doing something over and over again and expecting different results.” If you want different results, better results, you must innovate and there is no shortcut for it. Thinking outside the box helps find new and better ways to solve problems, as well as to become more efficient. Hard times will many a times force you to innovate, but it will also prevent you from doing it. However, during a crisis, unsuccessful innovation could lead to the end of a company. In this sense, to pursue innovative projects in terms of time, feasibility, cost-benefit, and processes becomes a pressing challenge for any leadership team. Sometimes you have very few data to decide, some other times you get too much data, but most of the time it boils down to following – your gut.
Salvador Escobedo, President and CEO at PEMEX Procurement International Inc, (PPI) is one such leader who has been the change agent everyone wants to see, while thinking outside the box and staying true to his gut.
A Journey Worth Remembering
Boasting two Master’s degree, one in Economics from the Instituto Tecnológico Autónomo de México (ITAM) and another in Public Administration from Columbia University in the City of New York, Salvador has worked for over 10 years in the public sector specializing in finance, budget optimization, financial management, and economic development. He has held several positions in the Mexican Ministry of Finance, focusing on issues such as financial inclusion, budget analysis, public policy, and financial management. He has also served as the General Manager for Financial Strategy at the Mexican Social Security Institute (IMSS), the largest health institution in Latin America and the most important social security agency in Mexico. During his time there, Salvador developed new infrastructure financing schemes and innovative procurement models for health care services, which eventually contributed in saving over five hundred million dollars in 2015, as well as to expand and improve health services around the country.
Developing Innovative Procurement Strategies
After serving in different government agencies and gaining a broad understanding of the public sector in Mexico, he transitioned to Petróleos Mexicanos (PEMEX) — the Mexican National Oil Company and the eighth largest oil company in the world. Serving as the Deputy Director for Procurement Strategy, Salvador developed innovative procurement strategies, which helped the company save over a billion dollars in 2016. For such reasons, in May 2017, Salvador was appointed as the President and CEO of PPI, a PEMEX affiliate that provides international procurement services for PEMEX and its subsidiaries.
PPI began its operations in 1994 as Integrated Trade Systems in Houston, Texas. Most of the technology required by the PEMEX Group is not produced in Mexico, thereby creating a great dependence on imported goods and services. PPI was incorporated to be more efficient and competitive by providing comprehensive supply chain management. Its location in the world’s oil & gas capital has helped PPI to develop over two hundred long-term partnership agreements since its inception and to have contractual relationships with over 1,700 suppliers
in the oil & gas industry. PPI’s flexibility and adaptability have allowed it to continue generating value for the PEMEX Group, as well as the degree of maturity of the business model, which rests on five main pillars: Connecting supply chain process with the demand, Management of the relationship with stakeholders, Management of supply chain, Support to the procurement operations, and Management of the business.
Attempting to Generate Better Conditions
Salvador believes public service and attempting to generate better conditions in Mexico have always been his vocation. “After the oil crisis, I was fortunate to be part of a highly qualified group selected to help PEMEX navigate the crisis and become more efficient, productive, and profitable. Working for PEMEX, and later as CEO in one of its affiliates, made me realize the enormous contribution companies, public or private, can make in a country by creating jobs, paying taxes, developing high quality products and services; and overall, generating opportunities for economic development. This experience helped me decide to pursue an executive career in the oil and gas sector and to make my contribution from this industry,” Salvador affirms. When asked about the key values that helped him travel the leadership road innovatively and successfully, Salvador said, results orientation, leadership, commitment, persistence, and hard word are the key values that helped him overcome the roadblocks.
An Incident that Made Positive Impact
Due to the oil and gas industry’s crisis and other internal factors, the necessity to maintain PPI as PEMEX’s affiliate was questioned, and how could Salvador know that it would, one day, become one of the most memorable incidents of his life. The crisis generated a high level of uncertainty and fear among the staff, and it was within this context that he was appointed CEO, with the specific objective of increasing operations and value to the stakeholders to keep the company up and running.
“The first challenge I faced to save the company, was switching the staff’s frame of mind and mindset by generating a positive work environment and getting everyone on board towards the objective. I planned a strategic envisioning retreat for all the staff where everyone’s ideas were listened to and included in our new business plan,” Salvador says. For him, adopting this participatory approach was essential to bring the team together and generating a sense of ownership. His approach bore fruit for PPI as it made a very positive impact on the work environment noticeably increasing productivity.
Salvador’s Advice for Young Entrepreneurs
We are living in a highly competitive world, where new products are developed and services are improved every day. My advice to the entrepreneurs entering into the market is to never stop being creative and innovative. The only way to have a chance in this highly competitive world is to think outside the box. To make what already exists better, more efficient or more practical; and to be one-step ahead of what the industry needs and demands in order to develop new products accordingly.
Continuing to Provide International Procurement Solutions
Salvador believes due to the energy reform put in place in Mexico four years ago, the energy sector will grow significantly in the next couple of decades. New companies, national and international, private and public, are now able to participate along the entire value chain in the oil and gas industry, and the entire energy sector in Mexico.
“I expect PPI will grow in the same direction, providing international procurement solutions not only to PEMEX and its subsidiaries, but also to other companies. First, through PEMEX’s strategic partnerships, and later directly to multiple companies operating in Mexico. Afterwards, we will work to expand our services to the entire energy sector, not only oil and gas, providing international procurement solutions to companies such as the National Electricity Company.”