Executive MBA assignments lead to new unique biofuels project

Nikolai Germann, an IMD Executive MBA alumnus, described the day in 2006 when he delivered his EMBA Silicon Valley Venture Capital pitch exercise as both the best and worst time of his life. Four years later, Germann is comfortably delivering pitches to the likes of European Union Parliament and top government officials in Sierra Leone as the project manager of a unique biofuels project for the Addax & Oryx Group, a Swiss-based oil and gas company.

It wasn't always so easy, though. While on the IMD Executive MBA program, Germann and five of his Executive MBA colleagues put countless hours into preparing a pitch to a group of Silicon Valley venture capitalists on behalf of a start-up nanotechnology company based in Zurich. Not wanting to let his colleagues down, Germann endured a sleepless night prior to the morning pitch to a group of real Silicon Valley venture capitalists.

The VC exercise is intended to be a practice scenario benefiting the Executive MBA participants, the company and the venture capitalists. However, after the team's 15-minute presentation and a 15-minute Q & A session, one of the VCs actually contacted the entrepreneur so that he could invest real money in the project.

"It was something incredible," Germann explains. "This was supposed to be just an exercise."

Practice makes perfect as they say. This experience, along with the various Executive MBA strategy assignments, provided Germann with the confidence to present a unique biofuels project in front of the Addax board in December 2007. After surviving the VC pitch exercise in California, Germann was more prepared than ever. He received the green light and funding from the Addax board for a full project feasibility. And now, along with government officials, Germann is also mobilizing locals in Sierra Leone, presenting to NGOs and major conferences in the industry and addressing media, among other stakeholders.

"I am much less nervous now when I present as opposed to a couple of years ago," he said. "Silicon Valley was a turning point for me. We actually saw with our own eyes the path from idea to wealth open up before us. There are not many events in your lifetime when you are able to look back and see crystal clear years later a life-changing experience."

For Germann, there are a number of correlations between the project and his Executive MBA work. An oil trader for 10 years with Addax, Germann knew he wanted a new challenge, but while still staying within the same company. The Executive MBA was the ideal route to explore new possibilities.

As part of the distance learning project, Germann and his colleagues used the Five Competitive Forces Model to analyze and rate the attractiveness of the water utilities industry. In Project Enterprise, they spent 48 high-pressure hours understanding and defining the key success factors of the telecom industry and eventually came up with a new strategy proposal.

"It gave me the opportunity to go outside the comfort zones of the business in which I had been working for years to learn about something totally new and transform that into a decision process," he said.

After building the foundation of formulating a strategy in an industry that he was not familiar with, Germann then applied the same principles for the strategy assignment related to his own company later in the Executive MBA program.

"The Blue Ocean Strategy and Diamond Strategy Model were a source of inspiration and guidance for the task of identifying a strategic diversification in my company. The IMD Executive MBA provided the tools and the fertile learning environment to explore new frontiers based on a thorough analysis of the industry in terms of business system, market segmentation, core competencies and competitive advantage."

After analyzing the strengths of Addax vis-à-vis the competition, Germann came to the conclusion that his company's distinct capabilities were in its know-how of investing and operating businesses in Africa and its expertise in the energy sector.

Now Managing Director of Addax Bioenergy, Germann and his colleagues are leading a project setting up sugarcane plantations and ethanol distilleries in Sierra Leone with the goal of producing ethanol for export to the EU market. This project could very well turn into the industry standard.

His day-to-day responsibilities at Addax have significantly changed. From being an oil trader, where deals are struck quickly and the pace of work is fast, Germann is now thinking more long term about sensitive political issues with various environmental and social ramifications. The project involves some 2,000 individuals working on agricultural and factory operations.

"We are a just a couple of weeks away from closing the financing," Germann explains. "We are already on the ground in Sierra Leone and are establishing roads and plantations. Two years ago when we started, we were one of many companies involved in renewable energy projects in Africa. Now we are one of the few remaining. I anticipate that we should be the first actual 100 percent ethanol greenfield project in Africa."

Germann credits the strategy of Addax as the reasons why it has flourished while so many other have gone by the wayside. He notes that despite the financial crisis, Addax had the financial support from shareholders so that development could continue. Sustainability is also an important part of the strategy.

"From the start, we decided to make this 100 percent sustainable and applied the toughest standards in terms of large scale infrastructure and agricultural project developments. In any annual report you can find 'sustainability' - we wanted to really live this out. We knew we had to work with the local communities and went to them to receive their feedback. Had we received a negative response from them, we would have not pursued it further. You can't cut corners - and this has helped us in receiving financial backing from the government banks."

While he has graduated from the Executive MBA program, Germann is still leveraging the lifelong learning opportunities at IMD as he continues to lead this project.

"One of the top qualities of the Executive MBA is getting to know quality people," Germann concludes. "My EMBA leadership group still connects regularly and enables us to share ideas and problems with trusted colleagues and receive their feedback for projects and business situations we are all dealing with today. These are people who I have developed friendships with and who are experienced, senior level managers able to offer solid advice because they go through the same issues. This continuous learning is really important. I imagine at some business schools it is a matter of collecting as many business cards as possible. At IMD, you are able to develop deep, trusting friendships and then rely on these people. This is truly a unique aspect of the program."

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