November 10, 2005
Philip Morris USA CEO Recommends Taking the Hard Road
by Sandie Taylor
In business, there’s one clear-cut equation all companies must
adhere to: revenue minus cost equals profit. But Michael Szymanczyk,
CEO and Chairman of Philip Morris USA, said the equation is not as
simple as creating revenue and minimizing costs. “The complexity
here is what you do to generate revenue and how you do it,” he said.
“It takes thought and preparation.”
Leading the nation’s largest cigarette company in an industry that
has been declining for 25 years, there’s much more to Szymanczyk’s
job than just keeping an eye on the bottom line. As CEO, he
testifies before Congress and federal courts to defend the tobacco
industry, and he works with non-governmental organizations such as
tobacco control groups and positive youth development coalitions to
improve the company’s integrity.
In his talk for the Nov. 7 VIP Speaker Series, Szymanczyk advised
students to follow a hard or unconventional career path. “Look for
different and less conventional environments that force you to
grow,” he said. “There will be key decision points in your career
and the most important learning experiences come from choosing the
unconventional ones.”
When Szymanczyk joined Phillip Morris in 1997, all 50 states were
suing the company for engaging in bad business practices. “There
were many allegations being made against the tobacco industry,” he
said. “One of the positions I took is, ‘I don’t know if that’s true,
but no one will ever make those allegations about a company I run.’”
His goal is to transform Philip Morris into “the most respected,
effective and responsible developer, manufacturer and marketer of
consumer products—especially products intended for adults.”
To be a leader with an aspiration like this, Szymanczyk said the
role requires very good judgment, a broad perspective and sound
ethical boundaries and direction. “Nobody wants to be deceived,
misled or cheated—so that was a boundary for me.”
A year after he became CEO of Philip Morris, the company created a
Youth Smoking Prevention department, geared toward educating minors
on the risks of smoking. He said if the company does their job, no
kids will be smoking, and as adults, they will continue not to
smoke. “And that’s okay. We support that,” he added. “But how do you
satisfy shareholders who expect growth?”
In order to sustain itself in the future, Philip Morris intends to
create long-term value, exceed consumer expectations and align with
society on tobacco initiatives.
“We’re interested in acquisition,” he said. “You’ll see this company
becoming a two-category company—and hopefully a three-category
company—in the next five years.”
At Philip Morris, he said his career has been and continues to be a
hard and exciting road. “Every morning, I wake up with a twinkle in
my gut—even when I have to testify in court—because it really is a
fascinating environment.”
Notable Soundbites
On choosing an unconventional first job selling soap over
working for a glamorous company:
“In business, nothing happens until someone sells
something.”
On making the best decisions:
“There’s a tendency to do what’s comfortable and surround
yourself with people you’re comfortable with. But that wouldn’t
benefit me much. I need to surround myself with diverse
perspectives to make better decisions."
For information on specific programs at the McCombs School, consult our contacts page. For media information, contact the Communications Director by phone at 512-471-3314 or by email at CommunicationsDirector@mccombs.utexas.edu.
