Jan 22, 2024

SPRI Group interview with Felipe Villaño, CEO of Lontana Group

The SPRI Group publishes an interview in which Felipe Villaño reviews the Group’s sustainable strategy.

“Customer focus, self-improvement, teamwork and integrity in everything we do”.

In the words of Felipe Villaño, CEO of Lontana Group, these are the keys to the Group becoming a benchmark in the industrial sector, with a workforce of more than 1,000 people, distributed in 19 centres in Europe, Asia and America.

In these 75 years of history, Lontana Group has grown sustainably while remaining true to its founding principles. What is the key to this?

A company can only remain true to its principles when these are shared by all the people who make up the company. In our case, as a family business, we have a differential advantage over non-family businesses to make this a reality, in that we have the opportunity to ensure the continuity of our parents’ culture from the Group’s governance structures.

The key to sustainable growth must be understood from two perspectives: on the one hand, in the family, we are educated so that the legacy received from a previous generation is made to grow as much as possible until it is passed on to the next generation, who in turn will continue with the same objective; this idea translates into a determined and continuous investment in the Group that guarantees adequate financial soundness. On the other hand, we see ambition, good teamwork, persistence and commitment of all the people who work in the company as key; this ensures complete alignment to the common goal of making us more competitive.

And how do you align so many diverse people with the same corporate culture?

The key is to share a common purpose. When you are clear about the company’s purpose, you significantly increase the quality of your work, your ability to make the right decisions and to inspire others.

All of us at Lontana Group aim to generate prosperity and trust in the society in which we live; we seek economic and social well-being through the creation of value in an ethical and responsible manner.

As a frame of reference, we want to focus on the sustainable development of the industrial world, contributing decisively to its growth, but without compromising future generations.

Family businesses find it difficult to successfully overcome generational leaps, especially those that reach a size like the Lontana Group. How have you managed to do this?

Family businesses have to understand that the family, the ownership, is satisfied as long as the business functions properly.

To this end, at company level, it is essential to have the different governing bodies of the company professionalised, so that the positions of greatest responsibility are filled by the best profiles, whether or not they are members of the family. On the other hand, in the area of ownership, it is necessary to work on having responsible shareholders and future shareholders, who stand out for their long-term vision, who carry out coherent ownership planning, who know how to distinguish the responsibilities of ownership and governance structures, and, finally, who have a perfectly defined succession plan.

Speaking of the business, what is the Group’s current situation?

In these last few years of uncertainty, in which changes have been constant and far-reaching, we have maintained our strategic plans while adapting to the new situations that each moment required. We have made key investments for the Group to ensure its growth, increased our internationalisation as a driver of diversification, enhanced our processes through innovation and digitalisation, increased our proximity to stakeholders, and developed new products to capture more value within the supply chain.All this has led us to the best moment in the Group’s history in terms of both results and profitability, which provides us with a solid foundation to continue to drive our growth. Despite all this, we must continue to work with humility, with a short step but a long look.

From this response, it is clear that the Group is committed to occupying an even more relevant position in different sectors and markets. What are the keys to achieving this?

There are always external factors such as economic cycles, monetary and fiscal policies, geopolitical tensions that can condition our evolution, but in the Group we start from the idea that our businesses are easily scalable, that what normally works in one market can be replicated in others. We know that we have to keep things simple, because anything that is complex is ultimately unsuccessful.

We have to continue to apply a recipe based on four ingredients: customer focus, self-improvement, teamwork and integrity in everything we do. At the same time, in addition to following these guidelines, we must not lose sight of one of the keys to the Group’s longevity: its transformation.

What do you understand by transformation and what do you see behind it?

Any past success does not guarantee future success. The environment is increasingly changing and organisations have to know and be able to adapt to any disruption, regardless of its magnitude. Transformation is precisely this, activating those levers that allow, through internal processes, the development of business models that ensure the long-term success of companies. This involves rethinking strategy in terms of customer value proposition, sectors, products, but also how we do things from the inside out. Transformation, contrary to what might be thought a priori, has to be considered when things are going well, when the results are satisfactory; otherwise, in addition to doing it at the wrong time, it is much more difficult.

In my opinion, our status as a family business also puts us in a better position for this. On the one hand, because of our ability to make a firm commitment to value creation in the long term, without the pressure of investors looking for profitability in a few years’ time. On the other hand, because of the commitment of our people to a solid business project with a vocation for permanence.

Currently 50% of Lontana’s business is international. How has the process been to reach these figures?

Our internationalisation process began at the end of the 1980s, as part of a strategy of growth and risk diversification in the Group. We started from the idea that, if in Spain we had important customers in key sectors such as the automotive or energy sectors, it was feasible to do the same in nearby countries such as Portugal or France, where we could compete with local suppliers without the need to create a permanent establishment.

With the turn of the century, in a much more globalised world and with greater logistical facilities, we began to structure our export departments appropriately in order to continue penetrating more European markets. At the same time, we began to have our own offices in those countries where distances by road, certain multinational clients, or the nature of the market itself, required us to be physically present. This is the case of our centres in Mexico and Germany.

In other cases, the need to achieve greater competitiveness within the product value chain, such as our establishment in China, has also been a key to increasing our turnover in international markets. A very important point for me in this process of international expansion is the fact that it has been carried out organically, without acquisitions, and respecting at all times the particular culture of the different countries.

Finally, what are the Group’s main challenges in the medium and long term and what is the biggest challenge in achieving them?

In terms of major objectives, I would highlight three on which we will concentrate most of our efforts. Firstly, to clearly expand our presence in the two most industrialised countries in Europe, France and Germany. Secondly, to establish ourselves in the US with several of the Group’s businesses, as a clear alternative market to Europe. Finally, to continue to increase the profitability of the business through our participation in the value chain of our current products.

Undoubtedly, only a people structure aligned to the needs of business development allows us to realise these plans. Attracting, developing and retaining talent will therefore be the most critical aspect, the biggest challenge. To meet this challenge, we will rely on a new People Management Master Plan that will increase the attractiveness of our employee value proposition and continue to make Lontana Group a great place to work. People are always at the centre. They come first.

Article published in SPRI Group