CEO Interview: Phil Friedman, CGS

Phil Friedman is the president and CEO of Computer Generated Solutions (CGS), which enables global enterprises, regional companies, and government agencies to drive breakthrough performance through business applications, enterprise learning, and outsourcing services. He came to the U.S. from the former Soviet Union in 1976 and started CGS nearly 35 years ago with five employees. Today, CGS has more than 7,500 employees worldwide with operations in 18 offices in six countries. The company has customers in more than 45 countries.

As an experienced CEO, Phil has some astute advice for those seeking the CEO role as well as running a global company.

CGS CEO Phil Friedman

CGS CEO Phil Friedman

When you started out, what were you thinking your career was going to be?

Phil: I started working at the age of 16. By the age of 20, I was entrusted to manage 400 people at a military plant producing electronic equipment for submarines and airplanes in the former Soviet Union where I was born. Did I aspire to be a CEO? At age 22 to maybe 24, I was observing the general director of the company, and I remember very clearly saying to myself that I saw a lot of mistakes being made. I thought I could do it better. I knew that one day I wanted to run a company with 5,000 employees. So, in my particular case, yes, I did think that one day I would be able to run a company.

 

How did you gain your knowledge about the CEO role? How have you expanded your knowledge as your company grew?

Phil: The most important element for a CEO is having the skill to interact and manage people, especially in a larger company. I still remember the time when we had 200-300 employees. I knew everyone’s names — spouses, kids and sometimes the parents. It was a very different environment. Everyone was local.

When you start expanding and you have employees working all over the world in many different industries, you must understand the local environment, customs, laws, and accounting processes. The learning never stops. I think it’s a combination of many different things. I had a degree in economics and finance as well as engineering. That helped but you learn on the job. You make mistakes. You read a lot and interact with people. Sometimes your colleagues are the best sources of information.

If a young person came to you today and said, “I want to be CEO one day of a company like yours,” what would you encourage them to do?

Phil: Lately it seems that a lot of executives, particularly in technology, never graduated from college. Look at Michael Dell, {Mark} Zuckerberg, Bill Gates, and others. Sometimes it’s very misleading, because young kids will point to these execs and say, “Why do I need college? Look at those guys. They made it very big and never went to college.” Any young man or woman who is trying to make a career and grow in business has to have a basic knowledge. They have to understand the ABCs. It’s partly developing the knowledge in the field you will pursue in life.

In terms of what you need to be an entrepreneur, the most important thing is not to be afraid to fail. You must have a fire in the belly to be a businessperson or entrepreneur. You have to try. Many times I meet people who say “could have, should have.” You shouldn’t be afraid to fail. If you have that mentality and a basic education, you will learn as you grow. Do a lot of reading and follow trends and competitors. You have to have a base to build upon. A good education is very important.

CGSHow has your approach to running the business changed, particularly as you’ve added distributed locations at CGS?

Phil: It’s very important to surround yourself with good people. You can’t do things by yourself. You must delegate. Every one of our business unit executives has full responsibility for P&L of the business he is running. Once we agree on what we’re trying to achieve the following quarter or year, it’s theirs. They have decision-making power to adjust as they go along. This is a very important element of our success. Every country manager knows what he needs to do and is empowered to do it.

We do many things to keep our team together. We just finished two days of mid-year reviews where we bring in executives from around the world. We review the first six months and adjust our plans going forward. I over-communicate to make sure the whole team is marching to the same drum. It’s a very strict process in terms of communication with management and employees. Every Friday we get detailed reports from the field on the status of the business. Every Monday morning for the past 35 years, I meet with my executive team. On alternate Mondays, we have an expanded executive team meeting to discuss everything that’s going on in the business. It’s very collaborative in terms of how we run the business.

Do you have a formal training program for country managers before they take over to prepare them for the responsibility? 

Phil: No, typically we have very experienced managers. We never send an expat to run one of our operations in a foreign country. We hire local people to run local companies. I don’t believe Americans should run companies in Chile or Israel, for instance. We always follow that. We train people as we work together.

It’s certainly difficult to learn the nuances of a different culture. Will you expand on the challenges of doing business in different countries?

Phil: As you can imagine, we have facilities in Canada, the U.S., Chile, Romania, Israel, and India. Every country presents a different challenge and opportunity. They are all culturally very different. Someone who used to operate a business in India will not operate well in a country such as Chile without major training. The biggest asset of a company like CGS is the people. People would not take it positively if we sent an executive from the U.S. to run a company in Chile. They, in turn, appreciate the fact that an American company puts a Chilean manager in charge of a Chilean company. They already understand the local customs and language barrier. We take that into consideration when we appoint the leaders.

You’ve mentioned several times that business is fundamentally about people. Are there any systems or theories you use about how to think about and manage people?

Phil: As a privately held company, we use certain tools and approaches that probably would not work today in a large publicly held company. We like to believe as a family-run business that we have created an atmosphere where employees work in a close, family type of environment. We encourage managers to be on the floor and interact with people. We have a lot of activities all over the world for our employees. We meet with them on a regular basis. We keep our ear to the ground to find out what issues might be coming up. Year after year we have a President’s Club where we bring in top performers from our call centers. We take our top international employees on a cruise. We’ve been to 60 different countries together with our team. We do a lot of bonding. Employees don’t see themselves as isolated but feel that they’re part of a much larger company. We also provide a lot of opportunities that our employees appreciate. For example, we bring employees from India or Romania to train in the U.S. We also provide a lot of training, with many tech resources, to help them keep abreast of what’s happening in the world. We also do sporting activities. We have a soccer team in Israel and Romania. I hope it will continue as we grow.

Americans are notorious for seeing the world only through the American lens. Is there anything you are seeing that American CEOs should be aware of from a global perspective?

Phil: Maybe I do have a unique perspective on this. When I was growing up in the former Soviet Union, I was not allowed to travel. I left the country for the U.S. at age 26. I’ve since traveled to 130 countries around the world. It certainly helps you to understand how the world operates. It gives you a perspective that not everything that we do in the U.S. should be followed in other parts of the world. You must understand the business environment and cultures around the world. The challenges are very different in central Europe than in the U.S., for instance. Relationship building is very different in Europe than in Chile. It’s not something you learn overnight. I speak seven different languages, which helps me to communicate with people around the world. Can I point to one single thing? Probably not. Exposure to the world helps you to be a citizen of the world and act like one.

Is there anything else you’d like to add?

Phil: A CEO needs to be prepared to work hard and face challenges. Success is not a straight line up. There will be some failures, which are very important in your overall understanding and how to avoid it next time. Someone who is dedicated and loves what he or she does certainly can succeed as a CEO, because opportunities are endless.

What does CGS do? 

Phil: The business started out in the ERP marketplace. We are the number one solution provider to the fashion industry. We have global customers that use us for everything from manufacturing imports and needs to running the business. We have a propriety product design system and a proprietary manufacturing product. Our main ERP product is called BlueCherry®, which is accepted by vendors as a standard for companies in this field. We sell our product on-premises. At the same time, many customers choose the cloud, so we have two data centers to deliver SaaS solutions. We do a lot of managed services. We manage networks and provide technology solutions to customers. That’s all within one tower of the company.

The second part is elearning and channel enablement. We develop the most sophisticated solutions for elearning. They are typically avatar and gaming-based solutions. We’ve been identified and recognized as one of the top learning companies in world. We also offer channel enablement. We take all the business partners and manage them for some of the largest tech companies in the world. We recruit business partners, enable them and train them. We help them to succeed in competitive situations and close business. Our customers are really large technology companies such as IBM, Dell, and Citrix. We manage hundreds of business partners globally.

The third part of the business is in the area of IT outsourcing and BPO. We have six facilities in Latin America, three in North America, six in Central Europe, and one facility in the Middle East in Israel. At the end of the year, we will have a major facility in India. Our best customers buy many different services from us, such as software, cloud delivery, tech support, elearning, and BPO services all on one contract. That in a nutshell is what we do.

One Response to CEO Interview: Phil Friedman, CGS

  1. My greatest admiration and respect, Mr. Phil, you are an example to follow. I applaud your standing achievements.

    Yordi Toro Perdomo
    Back Office Executive
    CGS CHILE, Valparaíso

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