George Margonis, PMBG – To Unlearn from Traditional Business – Interview for Capital Weekly

George Margonis is the general manager of Philip Morris Bulgaria. He has nearly 15 years of experience in Philip Morris International. His career in the company began in the Sales Department at Papastratos – Greek branch of the concern. In 2009 he moved to the company’s headquarters in Switzerland, where he held the position of Regional Sales Strategy Manager for the European Union region. In 2014, he was appointed Sales and Distribution Director for Greece, Cyprus and Malta. He graduated in marketing and management from the Technological Educational Institute in Athens. He holds a Master’s degree in Business Administration from Kingston University in the UK.

Philip Morris Bulgaria is part of Philip Morris International, an international leader in the production and distribution of tobacco products in the world. The company has 48 production facilities in 832 countries, and over 150 million users worldwide. In Bulgaria the company is number three on the market in the cigarette segment, but in the last years the company invests in Bulgaria and worldwide in the implementation of its vision – to design a smoke-free future through the development of smoke-free products. The Bulgarian company employs about 100 employees.

Q: How has the coronavirus crisis affected your work?

A: The irony of COVID-19 is that we all face this threat together, but the solution for now is to be socially distant. One of the critical characteristics of leadership is to make this “community” in the fight against coronavirus a top priority in the company. And as you well know, live meetings and office work are better than constant Zoom or phone calls. We at Philip Morris Bulgaria have managed to find new ways to stay connected by using more and more technologies. I admit that in the beginning it was difficult for me to keep the spirit and positive mood of our employees. We have a young and very dynamic team and it was a challenge for them to stay separated, even though they are extremely digitally oriented. At the same time, the spirit of the company had to be maintained and employees had to remain efficient. Philip Morris has always managed to meet the challenges and the way we reacted globally and here in Bulgaria makes me proud. We have become more efficient and flexible and I think that in the long run these opportunities and skills will be very useful.

Q: Has this situation affected your sales as well?

A: As our CEO Andre Calantzopoulos recently announced in presenting our results for the second quarter, it had an impact on cigarette sales, especially in March, April and part of May. In June and July we see a recovery. The good news for us is that our smoke-free products continue to go well and we have significant growth worldwide compared to the same period in 2019, including Bulgaria.

Q: How did you choose this sector for your career – by chance or have you always wanted a career in it?

A: I joined Papastratos in 2001, the Greek tobacco company that was acquired by Philip Morris in 2003. It is legendary for the country. Founded in 1931, the group has always been extremely important to the Greek economy and society in difficult times. The family Papastratos was one of the biggest donors to society. So when the opportunity arose to join the sales team, I accepted it with pride. My development opportunities increased after Papastratos was bought by Philip Morris International at the end of 2003. As a young person, PMI opened a global horizon for me to gain knowledge, experience and development. I was able to meet different people, cultures, leadership styles and most importantly – different consumer tastes around the world. All of this perfectly matched my career ambitions, as my education was in marketing and business.

Q: How do you motivate yourself to offer a product whose packaging is written in large letters that it is dangerous to health?

A: Philip Morris International and its employees are going through a period of major transformation. We have developed and continue to develop innovative smoke-free products, the data of which shows reduced exposure to harmful and potentially harmful chemicals compared to cigarettes smoking. The biggest risk for smokers comes from the burning of tobacco. We know that nicotine is not risk-free and addictive, but most of the chemicals that lead to smoking-related diseases are released during the combustion process. We want to offer to smokers who cannot give up tobacco and nicotine altogether to switch to better alternatives to cigarettes. It’s important to state that the best thing every smoker can do is to quit.
To answer your question: I am motivated by the company’s vision for a smoke-free future and the provision of better alternatives to all adult smokers around the world and in Bulgaria.

In fact, I have been doing this with my adult friends and relatives who have been smoking around me since the launch of these products. It also motivates me to work for a company that provides significant benefits to its employees such as security, an opportunity for development even in difficult situations like the current one. I myself have witnessed the same attitude in previous crises. We are a leader in the transformation of the entire industry. On July 7, something historic happened – the US Food and Drug Administration FDA athorized IQOS, Philip Morris International’s (PMI) tobacco heating system, to be marketed in the US as a “Modified-risk tobacco product” as per the MRTP procedure.

IQOS is the first and only electronic tobacco heating system to be authorized for sale in the United States as part of the FDA’s procedure for modified risk tobacco products – MRTP. This happened after we provided a number of studies and scientific evidence after four years of comprehensive research of our scientific data. We have invested billions of dollars in the best labs, people and development of smoke-free products to fulfill our mission for a smoke-free future.

Q: How difficult was this transformation for the company and the employees?

A: The biggest transformation is happening inside the company. We decided to give up everything we had learned so far. We used the word “unlearn” – to reject all traditions and habits that we had from the cigarette business and become something completely different. For us, the feeling is like flying on a plane while building it. It is a big challenge and the trip is unpredictable, but this is how we learn not to be afraid of change. Smoke-free products are part of the future and new technologies will gradually replace the things we are used to, not only in cigarettes, but also in food, fuel, etc.

Q: Would you say that PMI is now a technology company, not just a cigarette company?

A: It can be said. And in the future we will become more technologically oriented. We have hundreds of patents applications and we have thousands of patents already granted. We are the only tobacco company in the top 50 in the European Patents Office in terms of number of patents for innovations. We are already using a technological infrastructure that we haven’t even thought about before – like the call center for serving our customers, etc.

Q: What was your most difficult moment as a manager in the beginning?

A: Leading people is exciting because you have a direct impact on the business and the team development. At the same time, it is a great responsibility to build the right culture in the organization, to be honest with the team and partners, to focus on the result, but to be able to bring your whole team to the endpoint of this result.

Like all managers and leaders, I have made mistakes and am still making them. Over time, you develop your skills and judgment to make better decisions and motivate your people. But it is important to say that mistakes and failures are not the main problem in this whole process. The problem is when you don’t learn from your mistakes and you don’t improve. I would say that business is a marathon, not a sprint. You have to improve all the time.

In the sales team, older and more experienced employees said, “When you hear ‘no’ from a customer, don’t give up because it’s temporary. You need to find a way to convince him to say “yes” the next time you talk to him.”

Q: What are the characteristics of the Bulgarian market of tobacco products?

A: The Bulgarian market is large and dynamic. Attempts to reduce the sale of contraband cigarettes have been important in recent years. We must acknowledge the good cooperation with the authorities and the industry in this direction.

Another feature of the market is that in Bulgaria mainly cigarettes are smoked, without many other alternatives for the adult smokers. That changed with the launch of oue tonacco heating system in Bulgaria two years ago, and we are already witnessing hundreds of thousands of adult smokers switching to those smoke-free products. They are joining another 15 million users worldwide. Smoke-free products are the future and more and more Bulgarian adult smokers are choosing to switch to them. It is difficult for some to get used to, but this is normal.

Q: In recent years, we have witnessed many political variations of increased regulation in the sector, which have negatively affected it, how do you find the dialogue with the authorities?

A: For us, cigarette sales still remain a core business in many countries, but we are working to change that. For us, smoke-free products are the main focus and priority. In 2019, we were selling smoke-free products in 52 countries, and they represent about 20% of our revenues. Around the world, about 150 million consumers buy our products, 15 million of them have already switched to out tobacco heating system.
So I can say that our progress in this area is helping to reduce cigarette smoking and the transition to better smoke-free alternatives. But to achieve a smoke-free future requires joint efforts. Our company cannot do it alone. On the one hand, of course, is the partnership with our employees, our suppliers around the world, etc. On the other hand, there are regulators, including the Bulgarian authorities, who can accelerate the transformation of the sector through the proper regulation and the provision of accurate information to consumers. That is why we believe that communication and dialogue with the authorities have always been and will always be transparent. Globally and regionally, our company is trying to be a responsible partner of the state, but also of the non-governmental sector, for example in the field of illicit trade. If we make the same efforts in the regulation to reduce the harm from tobacco, I am convinced that we will succeed.

Q: How do you choose the people from your team, what are your requirements for them?

A: From my experience, I have found that in order to be successful, you need a diverse team. This means diversity in terms of gender, experience and personalities. In this way you can promote creativity, oppose the established status-quo, increase productivity. So every profile and person is welcome in my team without any prejudices. At the same time, I hold on to several characteristics: ambition, honesty, optimism, curiosity and perseverance in achieving the goals. I believe that these elements can make a person successful in a business environment regardless of his background or education.

The interview was published in Capital Weekly. You can read it here.