Beirut native Gilbert Ghostine is a top manager on the move. After 21 years in a career with drinks company Diageo — known for its top selling brands such as Johnny Walker, Smirnoff and Guinness — he is transitioning into his new role as chief executive of Firmenich, a Swiss manufacturer of flavors and fragrances that had $3 billion in annual turnover as of 2013. Curious about his migration, Executive catches up with Ghostine by phone in Singapore as he prepares to walk onto his new job next month.
You are moving from the helm of Diageo Asia Pacific to become chief executive of a privately held company in the highly specialized manufacture of flavors and fragrances. Is there a message here for Lebanese graduates?
As you know, there are very few global Lebanese CEOs, and I think the [message] is to inspire the new generation of Lebanese who are starting their career in a global context.
Is it correct that your first successes in Beirut helped kickstart your international career?
That’s right. I started by joining the distributer Diageo in Lebanon in a junior marketing position. The best practice that we created for our brand in Lebanon became the global best practice, and this is how I was the first Lebanese to join Diageo.
When looking back at the time when Lebanon was your launchpad, what gave you the best advantage?
When you come from a small country like Lebanon, [one advantage is that] you have interpersonal skills, you value relationships and you invest in relationships. The second thing is the family roots, the family connection, which also emphasizes the value of human beings and investing in building relationships with people. Lebanese hospitality also helps; we hosted friends, families and colleagues at home, which helped us to build even stronger bridges with stakeholders who were customers or colleagues in the business.
These skills that you are describing are very much on the soft side when compared with MBA degrees and knowledge that one can acquire in a business school. From your experience, how would you differentiate between the importance of things that you can learn in university and the things that you can only learn in life, and perhaps from your culture of origin?
Business schools are important and we have exceptional education in Lebanon. What life brings you is something that gives you an edge in [terms of] soft skills, [i.e.] interpersonal skills. The other dimension is the entrepreneurial mindset that you learn in Lebanon, where it is all about making sure that you break through. [Another critical] fact is that there are a lot of things that you have to do yourself and where you can’t rely on a government. This is an example for the entrepreneurial mindset where you are forced to break through and don’t rely on government subsidies or welfare, which people [in developed economies] rely on.
Let me ask you in this context about the many restraints that Lebanon currently faces in terms of economy, security and politics. When young people here look around themselves and see all these problems, is that in your opinion an impediment to their development or do you think that it can be an inspiration to break through?
That’s a great question. I have always believed that your attitude determines your altitude in life and at the end of the day it is all about the mindset. If we look at my generation — I am 54 — we are the war generation. I was 16 when the war started and our upbringing was not an easy one. We had to study by candlelight and had to dodge bullets on the way to university to attend exams. We were even unsure if the university would be open the next day to present [our papers]. We went through hard times but we didn’t give up. I strongly believe that all of us are global citizens now and that there are opportunities for us. Even though there are challenges, volatility, uncertainty and tragedy in the Middle East, these situations will not last forever. The situations will pass and there will be plenty of opportunities for everyone in this part of the world.
If I then may jump to the present, how do you plan to exercise the skills you developed in Lebanon and those you have acquired with Diageo in your new position as CEO of Firmenich?
I am very excited about this new opportunity but honestly, this was not an easy decision for me to make. Diageo was my family for the last 21 years, and I am emotionally very attached to the company and grateful for the experience and opportunity they offered me. Now I have been offered this great opportunity to be a global leader of a company that has 120 years of experience. Firmenich has decided to open the job and I will be the first non-family CEO. This will be an opportunity to reinvent myself, by learning a new sector, a new industry, a new business model, but also by bringing in my global expertise in M&A [mergers and acquisitions] and in leading women and men over four continents in another industry.
You mention your M&A experience, does this hint that Firmenich might aim for more inorganic growth by acquisition for its future?
The journey for Firmenich will be a combination of organic and inorganic. The organic growth opportunity is there, but if there are inorganic opportunities I am sure the Firmenich board will be open [to] more alliances or acquisitions.
In conventional wisdom, the transition from a family-run business to one with an external CEO and greater board based governance is not an easy one and requires great investments of time and strategic thinking. With this in mind, do you see your affinity with family business from your Lebanese background as a special qualifier for your new role?
You put your finger on the right spot there. I started my career in Lebanon in a family owned company and understand family owned businesses. At the same time, throughout my career with Diageo I have taken the lead on so many alliances and global relationships, like with Moët Hennessy and Grand Marnier and some of the alliances we created in Asia. Working with these family owned companies also gave me greater insight and, for everything that I have felt in the last nine months or a year when I was [holding discussions] with the Firmenich family; I felt very inspired by their values and vision for the company and I am looking to work with them and help continue their legacy.
Diageo is a company that appears to be all about brand performance. By contrast, Firmenich is a company whose products many consumers will not be able to cite even though these products are in the ice creams and beverages they enjoy and the perfumes they use.
I think this is where I can bring value and some insight because I have worked on the consumer side of the business for 21 years. Firmenich is a different business model, because it is business to business instead of business to consumer. But the top 20 customers globally for Firmenich are consumer goods companies on either the fragrance side or the flavors side. Bringing this consumer goods company expertise can only help Firmenich better understand this theme and accelerate its growth.
The industry of flavors and fragrances has its share of controversies because as consumers we are suspicious of things that sound chemical going into our food. Do you expect to have to deal with many challenges of this sort?
I haven’t started my job yet and so I am not close to these issues and challenges, but I know from Firmenich that they operate at the highest international standards and today hold 1,800 patents, and these patents are approved by the highest authorities. And there are very few companies in the world that have a Nobel Prize, and Firmenich’s head of research won a Nobel Prize some time ago. [Editor’s note: Leopold Ružička won the Nobel Prize for chemistry in 1939.]
You said that you are looking to reinvent yourself and also referred to your age during our conversation. Is being in one’s 50s a good time to reinvent oneself?
I say yes. People need to always reinvent themselves.
It’s not too late?
It’s never too late. Being in your 50s is today what a few years ago was being in your 40s and 30s. We are still full of energy and full of ideas, and we can take our global experience and make sure other people keep benefiting from it. And the biggest risk that executives have in their career is getting comfortable with their comfort zones, and that is a dilemma that I personally went through: being well paid, working for a great company, having a big job and constant opportunities for promotion, or go to reinvent yourself, learn a new sector and new business models. Some people don’t want to cross this bridge, but I am incredibly excited about this opportunity and am looking forward to starting my new role [on October 1].
What was your biggest personal surprise as a Lebanese person going into global business?
What surprised me most was how credible and respected the Lebanese are abroad. We always have this impression that we might not be perceived highly and not be respected. I had actual experiences while living and working in the US [from 2002] of meeting people who found out that I am from Lebanon and who were all full of praise for the Lebanese friends they knew. We have a reputation of being entrepreneurs, hard working, with high ethics, and of being people who, when we make it, invest back into the communities in which we live and operate. That was my biggest surprise, how much credibility we Lebanese have globally.