JUNE 26: TIME MAGAZINE SPEAKS EXCLUSIVELY TO JOHN ELKANN
Posted Tuesday, June 27, 2006
Italy's Most Famed Big Business Will Soon Be In The Hands Of Gianni Agnelli's 30-Year-Old Heir. Fiat's John Elkann Talks Exclusively To TIME About Food, Art And Strategy
LONDON: 26 June 2006: It's been nine years since John Elkann was handpicked by his grandfather, Giovanni "Gianni" Agnelli, to be next in line to take the reins of the family's automotive and financial empire. And while Fiat's fortunes have rollercoastered, Elkann has been methodically groomed into what many hope will be one of Europe's top business leaders for decades to come. Guiding an entrenched business dynasty in a competitive global marketplace is a tall order for the tall executive, a lofty 1.9 m though still baby-faced. "He is now the point of reference for what is quite a sprawling family empire," explains Giuseppe Berta, author of The Fiat After Fiat. "This is a delicate moment. Elkann is still rather young, and there are some conflicting ideas within the family about their holdings. But he is the only one who can lead them into the future." Over the course of several encounters in Turin and Rome, he spoke exclusively with TIME's Jeff Israely about his rapid rise in Italy's leading business family, Fiat's struggle to adapt to a shifting global playing field, and a young man's relationship with his famous silver-haired grandfather.
The death of this formidable figure and of Gianni's younger brother Umberto Agnelli, both from cancer within a 16-month span, created the vacuum that forced Elkann — the eldest child of Gianni Agnelli's daughter Margherita and French-Italian writer Alain Elkann — to step to the fore ahead of schedule. He did so amid the company's two-year crisis that came, in 2002, from weak management and damaged brand image, and forced a €3 billion bank bailout to stave off potential bankruptcy. "If the situation had been different, I might have had more time to ease into the job. But I was forced into the middle of a bad moment," Elkann told TIME. "The company was being mismanaged. The family leadership was aging and sick. The financial community didn't support us anymore. At that point, you have the choice to let it go or you try to fix it."
Though it unfolds like a Victorian play, Elkann insists that his ascendancy to the Fiat throne was "very natural." Born in New York City and raised in Britain, Brazil and France, he returned to his parents' hometown of Turin to study engineering at the rigorous Politecnico University. That was when Elkann began to pass Sundays on the family yacht and afternoons at the Fiat offices with Agnelli, who was then still Fiat's chairman. Elkann recalled to TIME how he first inched into the family business under his grandfather's watch. "I saw him here, or maybe on the boat," he said. "I would ask questions, and he always responded." Not yet 20, it was clear that he had a deep drive for business. "It was a gradual process of being tested and wanting to be tested," Elkann recalled. "[Agnelli] saw that I was committed to the work. He believed you should do what you like doing in life. He believed in people developing the capabilities they're most suited for."
Henry Kissinger, a longtime close Agnelli friend, says it's too early to try to measure Elkann up to his legendary forebear. But having known the grandson since he was 12, Kissinger says Elkann has all the tools to become a formidable leader. "He is extremely intelligent and has a great sense of responsibility," Kissinger told TIME. "I've seen, in the past few years, he has managed several crises with extreme dignity and wisdom."
One factor that Elkann is indeed constantly weighing is time. His Blackberry is in subtle but continuous motion, out of and back into his jacket pocket. Elkann says his grandfather, who is universally remembered for his graciousness, could also cut you short. "The problem is speed," he explained. "He was impatient. He had a capacity to get to the point, and always wanted to get to that which is essential without wasting time." That's how Elkann often sees dining. "Long meals I find to be painful," he told TIME.
Elkann has been working hand in hand with IFIL chairman, Gianluigi Gabetti. The pair picked Marchionne, the man largely responsible for the car company turnaround. Besides launching two successful new models, the Panda and Grande Punto, and streamlining management, Marchionne personally negotiated the deal that forced General Motors to pay out $2 billion to Fiat to free itself from a put option in the companies' 2000 joint-operating accord that could have forced the U.S. automaker to buy the Turin company outright. But Elkann is expected to become the singular face of Fiat. "Because of his background, John's international mentality is not a question of schooling, it's a natural part of who he is. This is a great advantage," says Fiat chairman Luca di Montezemolo.
More than ever now, the dynasty's future will be anchored by the eldest Elkann, known to friends and family as "Jaki." But it won't always be smooth sailing. His second cousin, Andrea Agnelli, also 30, son of Umberto and a Fiat board member, publicly contested Elkann's decision to up the family stake in the automaker. Differences of opinion are part of every family, Elkann notes, but insists that he aims to bring all into the fold, citing his grandfather's views. "He believed that leadership is consensus," Elkann said. "He won the support of the family and business partners and the community. He believed you lead by getting the best from the people around you."
Bocconi historian Berta thinks the family's continued financial presence is important for Fiat's stability, but that the professional managers should run the shop. Another Gianni Agnelli, he says, would be impossible today. "Elkann must fulfill the role of chief stockholder. That means being less of a presence in the operation of the company than his grandfather." Berta said. "Back then Fiat acted like an institution in Italy. Fiat has to behave like a normal company."
That's harder than it sounds. Gone are the days when nationalism and protectionism meant that as many of 85% of cars sold in Italy were Fiats. Now the company needs a genuinely global approach, which probably includes pursuing one-off, local alliances to build specific products. Elkann may be especially suited for these global challenges, having lived all around the world as a youth. "Moving around, you adapt quickly to environments," he told TIME. "If you are competent in many things, you don't have the depth of knowledge in any one field. I'm more long than deep. But fortunately for me, the family's interests were already diversified by both business and geography."Along with sports and the family business, another passion Elkann shares with his grandfather is art. The creative DNA has multiplied through his author father and painter mother. "Artists have a sensibility that others don't have," he says. "They have a way of reading into the future." And so, in their own way, do business leaders — they just tend to have less time.
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