Angel Corcostegui, WG’80, PhD’82: Banking on Being No. 1
When Banco Central and Banco Hispano Americano merged in 1991, executives of the newly-formed Banco Central Hispano set up a consolidation plan designed, over the course of four years, to merge the two existing corporate cultures and create a more aggressive, efficient and profitable operation.
Three years into the implementation of that plan, the bank also hired its first chief executive officer. In 1994, Angel Corcostegui left his position as managing director of commercial banking, capital markets and international banking at competitor Banco Bilbao Vizcaya to head up Banco Central Hispano, now the fourth largest bank in Spain.
After a little more than one year on the job, Corcostegui clearly feels he made the right move. “In two to three years from now, BCH will be the leading bank in Spain,” he predicts. “We already have a number of major strengths, including, first, our large retail banking network in Spain, with 2,600 branches operating all over the country. Second, we offer very powerful financial services to large corporations, from corporate banking to capital markets and cash management.
“Third, our international operations are growing with strong presences in South America, Europe and the U.S. And fourth, we have an impressive industrial group with holdings in some of the largest Spanish corporations in the following sectors: oil and petrochemicals, telecommunications, electric utilities, construction, food and real estate.”
Corcostegui, 43, was born in Bilbao, Spain, and educated at Jesuit schools. Although his father was a doctor — as was his grandfather, great grandfather, great-great grandfather and now, two brothers — Corcostegui senior felt strongly that his children should have an education in the world beyond Spain. “From the time I was seven, I spent all my summers in foreign countries,” Corcostegui remembers. “My father would gather together me, my three sisters and three brothers and distribute the destinations. ‘You are going to France this year, you to Germany, you to England.’ He always said that we had to know not only the different languages, but the different cultures. And I am following the same philosophy with my own children. My two sons spent one month this summer in Germany and one month in New York state.”
Corcostegui studied civil engineering at Santander where he met his future wife Ana, an architecture and interior decorating student.
After a six-month tour of duty as a soldier in the Sahara Desert, Corcostegui decided to pursue a business career rather than civil engineering. “I chose Wharton because of its quantitative bent and also because the U.S. was then about eight to 10 years ahead of the rest of the world in business and finance,” says Corcostegui, who spoke fluent French and German at that time, but needed to take an intensive three-month English course before entering Wharton.
While pursuing his MBA and PhD, he worked part-time for the World Bank in Washington, D.C. and for Chase Econometrics in Philadelphia. After graduation, he spent six years with a multinational industrial conglomerate based in New York.
“To me, the greatest virtue of the U.S. is its utter lack of fear in the face of change. When an American sees a company floundering, he first identifies the problem, designs the change and plunges ahead to implement it. Early on in life Americans learn that they must innovate. They are not afraid to change companies and even professions, if necessary. That is not the case in most of Europe.”
In 1987, Corcostegui was recruited to be the assistant general manager of Banco de Vizcaya, the fifth-ranking bank in Spain at that time. One year later, the bank merged with Banco Bilbao to become Banco Bilbao-Vizcaya. Corcostegui was promoted to director and general manager of BBV in 1988 and to managing director and general manager of commercial banking, capital markets and international banking in 1990.
In 1994, he was approached to become the CEO of Banco Central Hispano. “The bank needed one last push to complete the merger plan,” he says. “It was a tremendous opportunity.”
Corcostegui says his biggest challenge at the bank right now is to improve earning power and also the quality of service. “I am making the client the center of gravity in our organization. This is simple to say, but extremely demanding to do, because it forces our group to constantly review our approach to clients, and to continuously change our market segmentation, our products and our pricing.
“A second priority is to improve productivity, to develop and have a much more efficient business model. In three years, our work force has been reduced from 32,000 to 24,000 without losing market share, mainly by improving our operational systems. It is the only way to survive in Europe’s extremely competitive financial services industry.”
Stefanie Shelley, WG’89: On the Front Line at GE Capital
Stefanie Shelley got her first taste of consulting and problem solving when she worked as a senior consultant for the Small Business Development Center during her two years at Wharton.
Six years later, she is still involved in problem solving, but on a much different scale.
As director of quality at GE Capital, the financial services arm of GE Company, she is responsible for “developing a company-wide approach to better understanding the needs of GE Capital customers and creating the processes and culture necessary to meet those needs.
“It’s the first time as a company that we are implementing a unified and consistent strategy across the 25 businesses that make up GE Capital,” says Shelley, 32, who reports directly to GE Capital’s president. The 25 businesses, with total assets last year of $154 billion, range from mortgage insurance, commercial real estate and consumer credit cards to auto financing, computer services and truck leasing.
Shelley has been on the fast track at GE — changing jobs within the company three times in 1994 alone — since she first joined its strategy and business development group in 1991. She spent two years leading efforts to improve business performance in everything from new product development to cycle time reduction to sales force effectiveness.
Her major contribution was to help develop a common approach to supplier management and sourcing across the whole company. Not only was she able to help the GE businesses achieve significant price reductions and quality improvements, but she was also in a highly visible position that brought her into close contact with Jack Welch, GE’s chairman and CEO, and led, in March 1994, to a new job at GE Capital, one of GE’s 12 business units.
At GE Capital, Shelley started a new business venture designed to sell the company’s sourcing expertise by packaging it into products for customers.
Out of that effort came two major initiatives: 1) a corporate charge card targeted at small businesses that offered corporate discounts on products from GE partners and 2) a transportation management program for GE customers that allows them to achieve the same discounts that GE Capital receives from rail, trucking and ocean carriers.
After 10 months with GE Capital Business Services, Shelley was recruited for the new position of quality director at GE Capital. She began the new job in November. “In many businesses, quality is often thought of as whether a product works or not,” she says. “Because we have so many diverse financial services businesses here, we are using state-of-the-art techniques to better understand key drivers of customer loyalty and retention. For example, if you want an auto lease or a credit card, what service experiences really matter to you and which ones will keep you coming back to us? In a service business you have to understand what the customers want and work to deliver that every time. If a customer wants financing in 24 hours, you have to work on providing it in 24 hours.”
Shelley grew up in Princeton, N.J. and was an economics major at Colgate. Between college graduation and Wharton she worked in corporate finance at Bankers Trust.
She lives in Manhattan to be near friends, siblings and Long Island beaches. Her “absolute passion” in life is running, which she does in the morning before her hour-long commute to GE Capital in Stamford, Ct. “When I’m not working,” she says, “I’m either exercising or socializing.”
Peter J. Tate, W’67, WG’69: The Evolution of Ad Agencies
Where do York peppermint patties, Michelin tires and the beaches of Bermuda intersect?
Answer: In the Madison Avenue office of Peter Tate, executive vice president of DDB Needham Worldwide and account manager for some of the ad agency’s largest accounts — including Hershey Foods, Michelin Tire and the Bermuda Department of Tourism. Tate is also COO of the 350-employee New York office and responsible for helping to attract new business and set company policy and strategy.
In the 17 years he has been at DDB Needham, Tate has seen enormous changes both within his company and throughout the ad industry. DDB Needham, which is owned by publicly-traded Omnicom Group Inc., has grown into the fifth largest ad agency worldwide, with international billings last year of $6.7 billion and domestic billings of more than $3 billion.
That growth, says Tate, has come during a period in which the role of ad agencies has changed from providing its clients with one type of product — advertising and commercials — to providing clients with “core communication concepts,” which go beyond TV/radio commercials and print ads to include sales promotions, corporate identities and logos, philanthropic and sponsorship involvement, and interactive communications.
Often it has been the clients, rather than the ad agencies, who have led the way in adapting to a changing business environment, says Tate. “Traditionally ad agencies have been the innovators. But recently we have been playing catch-up ball … Thirty years ago, companies didn’t do their own marketing. Now many have their own internal communications department with just about every capability
Within the industry itself, the biggest challenge facing ad agencies is to differentiate themselves from each other, according to Tate. “Increasingly, agencies of the same type and size are regarded as commodities by a lot of their clients. When I got out of Wharton, firms like Ogilvie & Mather, J. Walter Thompson, Grey and Ted Bates each had a unique personality and style. But then through the mergers and acquisitions of the ‘70s, ‘80s and early ‘90s, everyone got homogenized and the individual companies were perceived as one.”
Tate says that DDB Needham, which itself was created by a merger eight years ago, has been able to forge its own identity though a series of memorable and enduring ads, including the Michelin tire campaign.
The challenge from the beginning, he notes, was to take Michelin’s relatively limited ad budget (approximately one third that of its biggest competitor, Goodyear), and strategically position the Michelin brand in a way that would, in advertising words, “preempt a category generic benefit.” Everyone is “interested in a tire that is dependable, safe and reliable,” Tate says. DDB linked these attributes to Michelin tires through a series of ads featuring babies sitting on, around, and upside down in the tires.
The baby ads have achieved universal awareness and “likability” in the U.S. “A campaign in a quasi technical category that lasts 10 years is almost unheard of,” he says.
Tate has also played a pivotal role in the Hershey account, which under his management has grown to become the second largest account in the New York office. The Wharton connection helped. Tate was hired at DDB in 1978 by a Wharton graduate — Paul Paulson, WG’59 — specifically to handle Hershey. And within Hershey, Tate was assigned to a group of people that included Jay Carr, WG’69, now president of Hershey International, Frank Cerminara, WG’72, vice president, commodities procurement, and Leah Longan, WG’74, director of marketing.
Prior to joining DDB, Tate spent six years at Ted Bates Advertising, and two years with Young & Rubicam. While at DDB, he has also been responsible for such accounts as Olympus, CIGNA, Campbell’s (Mrs. Paul’s), Liz Claiborne, Allied-Signal and Pepsi Cola, among others.
Tate, 49, and his wife, a vice president with Natwest Bank New Jersey, have two daughters, one at Lehigh and the other at Ohio Wesleyan. They live in Princeton.
