Bernabe - One day in their careers, most CEOs will lead his...

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One day in their careers, most CEOs will lead his company through a crisis. But few CEOs will face crises as disruptive and dramatic as those encountered—and overcome—by Franco Bernabè and ENI, Italy’s large, energy-focused industrial group which has been the province of bribery scandals and politicians. The latest saga culminated in the summer of 1993 when ENI's former chairman Gabriele Cagliari, in jail on corruption charges, put a plastic bag over his head and died. In his six-year tenure as CEO of Eni, Bernabè has transformed the organization from a debt- ridden, government-owned, and politically controlled entity into a competitive and profitable publicly traded corporation focused on energy production. He sold off 200 companies, dismissed hundreds of managers, and installed radically new business systems and procedures. Paolo Fresco, a vice chairman of General Electric who bought 80% of Eni’s turbine company stated: "He belongs to a new generation of leaders in Italy,". By driving ENI into the top class of oil companies, Bernabe wants to win a place among the GEs and Coca-Colas of the world. In 1992, ENI’s loss accounted to $643 million and net debt to $19 billion. In one year, Bernabe manage to cut debt in half and built net earnings to $3 billion, making one of the most profitable publicly listed oil company of the world, after Royal Dutch/Shell, Exxon, British Petroleum, and Mobil. In 1995 this state-owned company floated its first tranche of stock, raising $4 billion for the Italian Treasury. Since then the shares have risen 60%, giving ENI a total market capitalization of some $43 billion making it Italy's biggest publicly traded company and a must-buy for investors in the Italian market, which has climbed in lire by double digits so far this year. "To the extent Italy is a marvelous opportunity, ENI is the best way to play it," says Chris Buckley, Merrill Lynch's oil analyst in London. Bringing our focus on one man, Barnabe, this paper will investigate the skills a manager require to handle a crisis. Our question is what makes a good manager? Why and how did Barnabe manage to change ENI in such a profitable company? According to Wooten, a successful company, capable of handling a crisis is associated with leadership competencies. Leadership can be defined as a “collective phenomenon where different individuals contribute to the organization”. Leadership competencies, in turn, are characterized by the knowledge, skills, or abilities that facilitate one’s ability to perform a task. A crisis situation requires perception and sensemaking skills by leaders in order for them to determine appropriate courses of action. Leadership competencies is expected to include decision making, communication, creating organizational capabilities, sustaining an effective organizational
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culture, managing multiple constituencies, and developing human capital. Did Barnabe enacted
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Bernabe - One day in their careers, most CEOs will lead his...

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