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Leaders Magazine Interview

LEADERS Magazine Interview Questions for:
Dr. Yılmaz Argüden
Chairman
ARGE Consulting, Istanbul

Senior Advisor and Representative in Turkey
Rothschild

Coordinating Chairman
Turkish-American Business Councils

1. ARGE Consulting has been rated as one of the top three management consulting firms in Turkiye. What client achievements do you most like to cite that have helped lead to this distinction?

ARGE Consulting, a leading Turkish management consulting firm, has celebrated its 15th anniversary, this year. Recognized for improving management quality and helping development of non-governmental organizations in Turkiye, ARGE Consulting, has been the choice of more than 200 leading institutions in hundreds of projects as the management consulting firm to work with. During its first fifteen years,
• ARGE, has helped numerous leading companies in their industries with new strategic initiatives to improve their profitability and market values.
• Numerous ARGE clients have been recipients of National and European Quality Awards. Turkiye has become one of the leading countries in Europe in terms of the number of European Quality Award recipients she hosts.
• Governance of many institutions; and careers and performance of thousands of professionals are being managed by the governance and human resources systems established with ARGE’s institutional development projects.
• Companies that work with ARGE are able to utilize competition law and EU norms for strategic advantage.
• ARGE, has also been a leader in introducing new management concepts such as ‘balanced scorecard’, ‘intellectual capital’, ‘value management’, ‘change management’, ‘reputation management’, and ‘good governance and NGOs’ in Turkiye.
• A leader in Corporate Social Responsibility ARGE, is the first Turkish firm to sign the Global Compact in Turkiye.
• ARGE’s policy of encouraging its employees to donate one day a week for non-profit activities and its achievements in the community has resulted in ARGE being selected as one of the top three companies to Shape the Future with its corporate social responsibility approach by Generation Europe at The European Parliament in 2002.
• ARGE Consulting has been the only Turkish company to be featured in the European Commission publication named, ‘Responsible Entrepreneurship’.
• ARGE’s corporate social responsibility approach has been featured in a case study prepared by the Bosphorus University and made available to other universities by the European Case Clearing House.
ARGE consultants are Certified Management Consultants, many of which are EFQM quality assessors with world class experience in a large number of projects.

2. Among your many other important responsibilities, in June you were appointed Rothschild’s representative in Turkiye. How would you best describe Rothschild’s presence in Turkiye, and how you see the investment bank’s activities in Turkiye evolving in coming years?

In August 2006 Capital, a leading business magazine, named Rothschild as the number one investment bank operating in Turkiye. As part of its strategy to render high quality specialist advice to large corporations, prominent family businesses, and successful entrepreneurs, Rothschild has developed an active presence in the Turkish Mergers & Acquisitions market. Recently, Rothschild has been the advisor to the Turkish Government on privatization options for Turk Telecom, formation of Avea through the merger of Aycell & Aria, and sale of Telsim to Vodafone. Rothschild has also been the advisor to the Çolakoğlu family in selling part of their shares in Türk Ekonomi Bank to BNP Paribas and to GE Consumer Finance in its purchase of shares of Garanti Bank, and more recently to Dexia on its acquisition of Denizbank.

Given that the Turkish economy presents one of the highest growth rates among the OECD countries and among the largest 20 economies in the world, Rothschild expects the interest of international investors to continue to increase. We also believe that, continued commitment of Turkiye to the privatization program and the desire of key Turkish families to focus their business portfolios increase the likelihood of further M&A activity in Turkiye. Finally, the increasing interest of Turkish entrepreneurs in developing their business in the international arena, either in Europe or in the region, means that acquisition opportunities will be followed aggressively. Therefore, Rothschild with its strong presence in more than 30 countries and a deep sector and geographic understanding will be good placed to provide M&A advisory services in Turkiye.

3. As the Coordinating Chairman of Turkish-American Business Councils and former Chairman of TAIK, for years you have been actively working to enhance Turkiye’s attraction as a global investment destination. In your conversations with investors who are interested in investing in Turkiye, what points do you emphasize with them most?

Turkiye is at the centre of an economic and political area known as ‘Eurasia’, where three regions of the world, Europe, the former Soviet Union and the Middle East intersect. The proximity to the Balkans and the rest of Europe as well as to the growing emerging markets in Central Asia, the Middle East, and North Africa creates unique business opportunities. The experience of numerous global firms confirms Turkiye as a predominant investment location and export platform. Companies like Microsoft, Coca-Cola, GE, Procter & Gamble and Phillip Morris, as well as international investment institutions like the World Bank Group’s International Finance Corporation have already selected Turkiye as a regional base. Turkiye is fast becoming a ‘production centre for Europe’ in diverse industries, but in particular in automotives.

Turkiye is also the leading investor in the Caucasian and Central Asian Turkic Republics. Due to her strong cultural and historic ties, Turkiye provides privileged access and a perfect base to develop business with these countries.

The international image of Turkiye in terms of a destination for investment is generally shaped by the diverse market opportunities, both domestic and export-oriented, that Turkiye offers. The potential of these markets covers over one billion consumers.

Growth rates since 2001, on the other hand, have been the highest in the OECD area. What is different from the past is the fact that in the period since 2001, Turkiye has carried out some of the most impressive and long-awaited structural reforms, which were recognized by the international community: the EU has agreed to open full membership negotiations with Turkiye and the IMF declared Turkiye a success story. It would not be an exaggeration to suggest that in the absence of a force majeur, Turkiye is set on the right track for economic growth of satisfactory levels.

Furthermore, the long-term perspectives look even more promising. With Turkiye’s population growth rate having fallen from over two per cent to roughly 1.5 per cent, it is on the verge of entering a ‘golden demographic period’ similar to what East Asia experienced in the 1980s, where the productive working population is the largest relative to children and retirees, providing the potential for even more rapid income growth.

This situation is likely to be a panacea for improving European competitiveness as well as Turkish competitiveness. The continuation of reforms to bring Turkiye into full EU membership will not only increase the confidence in the Turkish potential and investments in Turkiye, but is also likely to make Turkiye indispensable for the EU. For example, with her renowned hospitality, quality of medical care and pleasant climate, Turkiye is likely to become the ‘Florida of the EU’, in terms of caring for the old.

Only a few emerging markets in the world have the potential of attracting investment both for export as well as for their domestic market. Turkiye is in a privileged position to create a ‘virtuous investment cycle’, with a more competitive domestic business environment further strengthening Turkiye as a platform for exports, and exports in turn stimulating firms to upgrade and better serve the domestic market. This is true not only for products, but also for the young managers. Young Turks are being employed by global firms throughout the world, with their professionalism and flexibility to deal with a wide range of circumstances. The Chairman of Pfizer suggests that, the most important export of their Turkish operation is qualified managers / leaders.

Recently, Turkiye has become one of the top countries to host European Quality Award winners, and Turkish brands are becoming household names in a wide range of countries. In short, with her high growth potential, qualified workforce and managers, and the entrepreneurial spirit, Turkiye provides an important potential market for global businesses. Furthermore, regional political stability can only be established on a sustainable basis if the economic development spreads throughout the region. The engine for growth in the Balkans, Caucuses, Central Asia, and the Middle East is likely to be Turkiye. Perhaps most importantly, as an observer of the Turkish economy has put it, ‘Turkiye will be the “viagra” for Europe’ by becoming the key agent to help improve European competitiveness.

Dr. Argüden
yarguden@arge.com


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