Balancing Tradition and Disruption - George Szegö’s Guide to Next-Gen Leadership

In this episode of The Quest for Success Podcast, we sit down with George Szegö, CEO of Mecalore, to explore his journey from engineer to third-generation leader of a pioneering refrigeration company. Raised in a Hungarian immigrant family in Brazil, George shares how his upbringing, education, and early career shaped his approach to leadership and personal growth.

George opens up about the complexities of family business succession, stepping into leadership after the tragic loss of his father, and the bold decisions he had to make to ensure Mecalore’s future. From implementing financial controls to navigating innovation in a legacy-driven environment, his story is one of resilience, adaptability, and purpose.
With a deep commitment to sustainability, employee engagement, and global impact, George reflects on the balance between honouring tradition and driving change. This episode is a powerful listen for anyone navigating leadership transitions, growing a business with meaning, or building a legacy that lasts.

Key Takeaways
 - Success evolves over time and is rooted in personal growth
 - Family, culture, and early experiences shape leadership values
 - Education and mentorship are critical to long-term development
 - Leading a family business requires balancing legacy with innovation
 - Navigating succession involves tough decisions and emotional resilience
 - Financial discipline is essential for sustainable growth
 - Empowering employees fosters a healthy organisational culture
 - Innovation in refrigeration can help combat climate change
 - Sustainability and social responsibility are central to long-term success
 - Legacy is about building a company that thrives beyond one generation

Connect with George Szegö: https://www.linkedin.com/in/ggszego
Check out Mecalore: https://www.mecalor.com/en/

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Transcript

Dylan Pathirana (00:26.702)
All right. Let's do it. All right. Welcome back to the quest for success podcast. And thanks so much for tuning in once again today on the show. We're really looking forward to this conversation because we're joined by George Sago, who is the group CEO at Mecalore, which is a Brazilian based industrial refrigeration and thermal engineering company. And he is a third generation in the business and really looking forward to kind of diving into his story and understanding a little bit more about him.

So George and I again, one of our OPM members, cast mates from Harvard Business School. I'm actually really looking forward to having this conversation. I know I spent time here and there with George, but I wanted to really dig into his story and understand bit more about you, George. Thank you for joining us.

George Szegö (01:19.654)
Thank you so much for the invitation. It'll be a pleasure to speak with both of you and catch up again.

Dylan Pathirana (01:26.478)
So George, this podcast is all about success. So we need to start with something pretty fundamental. And that is what does success actually mean to you?

George Szegö (01:36.196)
That's a very good question. me, success actually is a concept that evolves over time. in the early days, I'll say, you know, wanted to be, all I wanted to do is like have good grades, study, and that was it. So to me, getting the degrees was all about, success was getting all my degrees that I wanted, study. I was always like curious.

always loved learning, studying, so I went through this path of achieving certain degrees, getting my diplomas. That was a success for me. Then throughout life, you get married, have kids. To me, success is more generically something that whatever you want to accomplish,

and that makes you happy that's success to me and that evolves over time really in these days always always like you know family and friends always within the picture you know having kind of a balanced life is is success is how you spend your time doing you know the stuff that you you love that you like i love working so eventually

I'm always constantly working and at a certain stage, I wouldn't say I work balance life, because most of the time it's an unstable equilibrium using scientific terms. So sometimes you have to work really hard and that's all you have to do. I've done that throughout my career and my life. And sometimes you need more time with your family and friends.

or with the kids. it's having that ability to do or spend time with whatever you love and what makes you happy. So to me that's success. And that means even in the business, if you want to accomplish something in the business and you work towards that and you achieve that. So that's success to me. So it's something that evolves throughout your life.

Dylan Pathirana (03:54.572)
It's a journey, right? Yeah. And I suppose for us to understand the context behind the man who's sitting in front of us today, we need to go back to your early life. Can you give us a bit of a, an idea into kind of your, your upbringing and how you think it's shaped who you've become today?

George Szegö (03:56.294)
It's a gen for sure.

George Szegö (04:12.996)
Yeah, early life. I had a really, really happy childhood. I was born, my parents and my entire family, they're Hungarian, right? So they're immigrants from Hungary. So my grandfather came from Hungary in 56, came to Brazil, had nothing. You know, they pretty much left.

Dylan Pathirana (04:28.813)
Alright.

George Szegö (04:41.422)
after the Soviets invaded Hungary, they came to Brazil with nothing. Obviously, my father was seven when he arrived, my uncle was two. So they pretty much, they were brought up, so my dad was brought up here in Brazil and eventually met my mom after years and years. He went back to Hungary and married a Hungarian woman and she ended up in Brazil as well and then I was born.

So I was born in a family where I was very happy when I was young. We had a complex of apartments. I lived in a small town full of kids. I was always studying and doing all sorts of sports and hanging out with friends all the time.

And I, but I always had, I always had, you know, this, I felt that I was like a fish out of the water because, you know, all my family was European, Hungarian style, you know, they had completely different from all the Brazilians around me. So for a while I was like sort of, you know, I don't understand. was, it was kind of hard to fit in. But then eventually, I'm Brazilian. So I got, to me, I've got, you know, the good sides of being in for my

European Hungarian family mixed with the Brazilian culture and then slightly understanding how to move on because at home was completely different from when I was visiting my friends at home. Different styles of upbringing. So at home was a lot about education, right? Because my grandfather left with nothing. All he had was he was an engineer.

So he had his trade. So he came to Brazil, know, built, started work and eventually started his first company, which is Makealore was his first company that he built. And to him was, know, this is what we've got to do. We've got to survive. We came here, we need work, we have to work hard, we need to survive. It was all about hearing how, you know, you have to work hard to achieve things and we need to survive. And this is the country that...

George Szegö (07:03.466)
allowed us in and gave us the opportunities. So was always hearing about that. All the stuff that I always heard is how they had a Jewish background. So when they came to Brazil, my father and my uncle, didn't have a Jewish upbringing here in Brazil because they were scared after the war. lot of people were from...

great grandfather and people died in war or in camps. stuff that stuck to my mind. I was always trying to find the roots or where I came from. I was born in Brazil. But I have this very strong Hungarian. I'm 100 % Hungarian blood. I still have family from my mother's side of the...

or the family in Hungary, so we keep in touch. We had a very large Hungarian community around us at the time. So this is what I remember from the very early days. So this is how it shaped me to become, and in the end, my father was also a mechanical engineer. So my grandfather was a mechanical engineer, my father was a mechanical engineer.

Dylan Pathirana (08:20.619)
Alright.

George Szegö (08:24.922)
I tried to do something different, but I ended up being a mechanical engineer as well. So I actually tried, but it didn't work out. So it's still what I really love. So it's a little bit about my upbringing, what things shaped me in the early days.

Dylan Pathirana (08:43.234)
Yep. And you ended up doing mechanical engineering, as you said, and that even brought you out here to Australia, didn't it?

George Szegö (08:50.278)
Yes, he did. Because, and again, you know, my father did his PhD degree in Penn State back in the US and I didn't want to go to the US and follow the same steps. Right. So I always wanted to do my own thing. I'm going to do my own thing. And I tried really hard, but I ended up being a mechanical engineer. But I said, look, I need to go to an English speaking country. But I don't want to go to a cold place.

So I love Australia, I want to be as far as I can. So I can, you know, I was 22. So I applied, tried, I was working here in Brazil, so I just graduated from uni. And I was working in this company already. was a company that did...

It was power plants, big power plants, cogeneration power plants with steam turbines, gas turbines, boilers and that kind of stuff back in Brazil. And then I realized, look, I want to study more. So I want to get out of here and study, continue studying because I wanted to be a scientist really. So let's find something in Australia. So I reached out, you know, I looked at a couple of universities in Australia, Sydney and then

Adelaide had a pretty good one in the field that I wanted was combustion. So I applied and they gave me a scholarship and said look if you can just come whenever you want. So I said all fine. I was kind of lucky because at the job that I had the company was being they sold the company. So was a big multinational company from Spain.

And then, you know, they sold their assets and it became a different company. They laid off a lot of people and I got laid off as well. So I've got a good service package to go to Australia at the same time. to me, I was lucky there. And then, yes, I spent five years in, in, in, in, in, in, in, in,

George Szegö (11:05.446)
That was a good time.

Dylan Pathirana (11:06.446)
Yeah. And also you worked in Australia as well, right?

George Szegö (11:11.494)
I did some jobs for the defence department while I was there. So that helped to support me while I was studying. I got the scholarship but it was like my professor at the time, gave me half of whatever grant he had. So that was not enough for the entire time. So said, let's try to do some consultancy jobs.

For the Defense Department, so we had one of my one of my professors over there had a you some contacts who worked at DSTO in Australia, so we I did a six-month job for them It was a propulsion system for a missile that goes above muck

So how you burn the fuel and that, so that was fun as well. So I had that opportunity. Besides obviously I was always, you know, correcting and doing some mentoring and cheering to get some money. So I can go to the Belgian beer bar at the time and, you know, drink a little bit. That was all the time. That was good fun. Made very good friends in Australia.

Dylan Pathirana (12:27.95)
Ha ha ha.

Dylan Pathirana (12:33.678)
That's George, coming from a third generation engineering background, like your family, what's the family like, what's living in an engineer's house like?

George Szegö (12:50.238)
I have to ask my wife. She's a lawyer. But yeah, saw it as you know, it's very analytical. But I was completely different. I was very different from my dad. But you know, engineers want to solve problems, right? We're problem solvers. Whatever we see, we need to try and solve it. That's pretty much it.

Dylan Pathirana (12:54.158)
Yeah.

Dylan Pathirana (13:10.711)
Yep. Yep.

George Szegö (13:17.734)
When I speak to some people, they well, look, you don't have to just listen. You don't have to try to solve it. I don't need an answer or a solution. Just listen. So that's the kind of house we live in. We sometimes like details and numbers and that kind of stuff. So that's something very common here. We like math. So we like physics. We like chemistry.

That's how I used to, now I learned how to deal with lawyers. I was only married for 18 years now. But it's a good conversation. We love solving problems really. We see a problem that we need to solve. We stay up at night and we think of like, this is like a big puzzle. How am going to solve this? How am going to break this down and try to solve this little piece and move forward?

Dylan Pathirana (13:52.578)
You

Dylan Pathirana (13:59.566)
Yep, yep.

George Szegö (14:13.616)
So that's how our brain is wired to work, I guess, and most engineers also.

Dylan Pathirana (14:17.646)
Yeah. Yeah. And more than just engineering, like you grew up in a family business, right? So how was that like, cause I know your grandfather started Mecalore. So what was it like growing up in the family business?

George Szegö (14:32.689)
That's a good question because to me I was like the family business was never about you know, my for my grandfather He thought of the family business as a his workplace. He's just another salary wage I go to work and you know make make whatever I need for a living

not saying he wasn't, you he loved being there, he loved growing the company, but he started with Mecalore. was this very small company downtown here in Sao Paulo. They used to do fixed refrigerators. At the time you would take your fridge to take out a compressor and put another new one in, and that's how he started. So on the service side.

Eventually he realized that here in Brazil there was no refrigeration equipment available, nobody was doing that and suddenly he started to do stuff for restaurants, stuff that is very common these days but at the time they didn't have it in Brazil back in the 60s and 70s. So he would start to build stuff for restaurants, he would start to build wine cellars for rich people so they could store their wine.

He did like morgues, so you know, that needed refrigeration. So he started to do anything related to refrigeration pretty much. Cold chambers for food and eventually, you know, he took on a huge job. It was a major chamber. He didn't have space for that and he said, well, look, I need a factory. And he went after a factory. And that's how he ended up with a refrigeration factory at the time.

Dylan Pathirana (15:55.374)
Yeah. Wow.

George Szegö (16:18.406)
He had another business as well. went into, so the plastic industry came to Brazil back in the, it was about late 80s or early 80s. So he built another business and that was his major business. That business was the one that he was working and that was a small company or it was literally in the back of the other company. So you had to walk through the entire company. had a,

dozens of injection molding machines and he was you know producing he was the largest producer of auto parts for a a Honda motorcycle here in Brazil so that company was large and McElroy was a tiny little company and I used to walk around with them and you know go to you know the annual parties and they have the barbecues so was just you know walking around the factory my grandfather always would take me

Dylan Pathirana (17:00.886)
wow.

George Szegö (17:16.654)
on a tour, with me. So he was like, you know, I'll go to the workplace. He parked his car. He was like very methodical. So he parked his car every day at the same time, at the same place. He would go out, leave his stuff, come do a tour around the factory. So he was like, come with me, I'll show you around. So I would go, it's like, you know, this guy is doing a good job and why he's doing a good job.

We just bought this new equipment over here. There's no, he bought like, you know, a 3D measuring. So he would measure some parts of the first 3D measuring thing of Brazil. So it was very, he was very into quality and innovation. So I grew up hearing all those things, but to me, well, that was his job. He didn't talk about it as a legacy or anything. Just like, you know, this is what I do for a living.

Dylan Pathirana (18:04.994)
Yeah.

George Szegö (18:10.694)
I have this factory and the other one is something different. It was at the back. They had woodwork still at the time, so you would actually get the guys over there in the factory to build them beds and chairs instead of refrigeration equipment. That's what I remember. After a while, my father...

Dylan Pathirana (18:11.864)
Yeah.

George Szegö (18:36.922)
joined the company. My father worked in a very large engineering company here in Brazil for 11 years after he came back from his PhD from the US. And eventually, you know, he needed some extra cash. He, he went into the, he called up his dad said, look, you have a, you know, I need a summer kind of a summer job. thought, yeah, come on in. You can work. We need some droids at the time, you all the droids were

hand and that kind of stuff. So he was doing that for a month and eventually he never left. So he stayed in the company and said look there's this disorder company I think you should take care of it because this one is just too big and then now it's yours do whatever you want. But so that's how he pretty much started in the business. And then you know my dad completely transformed so I was when he joined I was probably

Dylan Pathirana (19:06.626)
Yeah.

Dylan Pathirana (19:26.67)
George Szegö (19:36.954)
about nine or 10 years old. And then I remember, we had, it was a big thing. And now he was like, you know, kind of fighting with his dad pretty much all the time because he wanted to do stuff and his dad didn't want anyone to do it. So I remember that time of my life. you know, we weren't, we had hardships at the time before he actually went into the family business. that we, you know.

Dylan Pathirana (19:49.838)
you

George Szegö (20:05.36)
We just had a very tight budget, I remember. And then after that, after a while, he managed to get better. The company grew. He was really into the engineering. So he brought all these engineering, he brought in computers to the business and he transformed engineering. He transformed the brand that we have now these days. So, you know, we're a recognized leader in most markets.

We're working here in Brazil and that's what we did. He grew the company. The company here, he's kind of the founder of this company really. So my grandfather started it, but it was something that was small and he didn't really care about it because he had another factory which was, know, he had, at the time he had almost 600 people working in three shifts and...

Dylan Pathirana (20:51.554)
Yeah, yeah.

Dylan Pathirana (20:58.754)
Wow.

George Szegö (21:00.208)
So it was a very large company. And the other one was just, you know, to build these beds and chairs and kind of stuff, building probably one equipment every couple of months. And so my dad took this company and wherever we are today, right? This is what I remember really.

Dylan Pathirana (21:13.463)
Yep.

Dylan Pathirana (21:16.846)
Awesome. Yeah. And did you always anticipate you would end up in that business or did you kind of want to steer clear of it?

George Szegö (21:23.91)
No, actually in the beginning I wanted to do my career. So look, yeah, we have a family business. I don't want to go into the family business. I don't want to just sit in a chair and you know, my father or my grandfather or whoever just tells me, you know, this is how you run a company. This is how you need to do business, blah, blah, blah. And this is what you have to do. You just continue this and you know, here's your paycheck.

I never wanted to do that. I wanted to have my career first as a scientist, right? So I worked in Australia. Eventually I said, look, if I want to be a scientist, I need to do a postdoc somewhere. But eventually I said, no, as soon as you start going on that career of a scientist or a professor, you get less and less of what I really love doing.

She's been in the lab, you know, doing the experiments and that kind of stuff. So you go into more admin work, you have to teach and then, you know, you have to be part of the group who puts up the syllabuses for the classes and they, look, I'm not gonna do that. Came back to Brazil. I actually went back to Brazil from Australia because I was in a long distance relationship at the time it was my girlfriend. So she's my wife today.

Dylan Pathirana (22:26.766)
Mm-hmm.

George Szegö (22:50.182)
So two years she came back, she came to Australia three, four times to visit. She said, look enough, you have to come back. So, you know, I finished the, I finished whatever I had to in, in, in the land, came back to Brazil. Eventually she said, look, I have a job opportunity. I'm going to New York. And I said, well, okay, let's go to New York then. I just, you know, got nothing here in Brazil yet. So let's move to New York.

And then she said, look, we have to get married. so fine, let's get married. So we got married. I still went back to Australia for a few months, came back, got married. I went to New York. I was still finishing up some work that I had in my doctorate degree. Finished that, but that was 2008. So that was the big financial crisis. We were living in New York, no opportunities for us.

for know, for us pretty much. And, you know, nothing for me to do as an engineer in Manhattan, right? You know, most consultants, plus I looked, I'm going back to Brazil, I'm gonna find a career path. So I really wanted to be, you know, in the corporate side, know, I love engineering, so I wanted to do engineering work. I went back to Brazil, find the job in the same line of business, so cogeneration, power plants. I found myself, you know,

with good friends that I had from the past. They gave me a job. I looked at this, whatever you're going to earn, come back whenever you want, just let me know. So this is what happened. We came back from New York and I was working. So it's a private equity company. So they just acquired this, you know, they had a management buyout of this company. So it's kind of a startup with a private equity.

They had a lot of assets, but they were building the company so they can sell it later. So that was a very good experience for me. I learned a lot and that's what I wanted to have my own path, my own career. I wanted to be a manager somewhere else and grow. And I never thought of like, well, obviously I've always thought of eventually going into the family business, but when I wanted to eventually.

Dylan Pathirana (25:09.77)
Mm-hmm.

George Szegö (25:09.99)
and when there was like an opportunity there. And not that like my father would say, and he would respect that he did. So you do whatever you want, you just let me know, because if you're not coming, yeah, I need some succession. I need to think about succession,

Dylan Pathirana (25:23.352)
So you had no pressure of coming from family?

Yeah yeah so you didn't get any pressure from your your father to join the business? Directly?

George Szegö (25:35.046)
No, not a lot. He let me... Because he saw... I've got a lot of a... You're not doing the right thing. He would never say, you know, come and work with me or come and work in the company. So he was always like, whatever you're trying to do, it's not going to work. So I said, I'm going to do my way. So I'm going to try. I'm going to do it. Even if I fail, doesn't matter. I'm going to have my own...

And if that eventually leads to the family business, fair enough. But I never had that as my end goal, right? So we didn't have any kind of like, well, these are the rules if you want to come into the business. No, we didn't. That was kind of the path I took.

Dylan Pathirana (26:21.39)
So George, how that transition happened from working for someone else and then you start working, coming to your business. How that happened? Did you actually talk to your dad or how that early?

George Szegö (26:34.438)
It was at the time, so was in this private equity. So it's a private equity owned business, right? So they wanted to sell it. So I went in there and I worked really hard for like three years. I pretty much didn't see my son in his first year of life. I was traveling everywhere. So it was a really great experience. And during that path, was lucky enough to have like two mentors in that company that

really believed in what I was doing and that was really important to me. So you know these two people I said look you're going to be a manager. So said are crazy I just came out I was a PhD student you know a year back and how are you going to turn me into a manager and manage a hundred people all over Brazil in these car plants and I don't know how to do that so just relax you can do it I'll help you. So you know

So it was a time where they actually I participated in the process of selling helping them sell the company. So they sold the company and eventually, you all that started field and you know, I had a lot of autonomy. I was able to I was able to do kind of whatever I wanted the way I wanted and I was developing the team the way I wanted eventually that they sold and they came, know, this big Japanese corporation came in. So they said.

to me was like, you know, game over. The fun is over. I'm not going to learn the war down the track and you know, the fun is over. And in the business, in the family business, they were after an engineering manager for a very long time. They couldn't find anyone, anyone that could really stand up for my dad and, you know, discuss stuff with him. So, well, you're perfect, right? So you had an engineering.

You're a mechanical engineer. You also have a PhD like he is so he's gonna respect you. Okay, fine. I'll try. I'll go there for a year if that works out. know, because if it doesn't I still I'm still young enough to do stuff. So I went I had a pretty hard probably three to four years with him. was he was not my direct boss.

George Szegö (28:54.374)
But I had a guy who's still there with us. He's he's more than 40 years in the company. He was my boss, so he was between my dad and I. And I stayed there as an engineering manager for eight years, still with a boss. that's how I learned. Not that my grandfather, or my father was really, they were engineers that were trying to run a company.

They did success, but they're like business people, right? So I was not brought up as, know, how you do business, business models and, you know, finance and that kind of stuff. No, just do the engineering work. And if you do it very well with a lot of quality, now we're going to succeed. And that's the recipe. And they did. But and that's when I joined the company. so was in our core business is engineering. So I learned all the engineering side.

develop a lot of the products that we have today, managed to learn a lot from clients. So it's a very good experience to me. And that's how I joined pretty much.

Dylan Pathirana (30:01.934)
So, yeah, George, so recently, you had to kind of take over the business like unexpectedly. Was it? Yeah. So, so what was that like?

George Szegö (30:20.358)
So it's going back a little bit. was already eight years in as an engineering manager. Everybody was, you know, saw me as the successor, but my dad didn't really want it to stop working, which is fair enough. But he needed a succession and he needed because the succession was not only me sitting in his chair, but you know, all the people wanted to evolve as well in the company. So it was at that point.

After eight years, then I decided, I did my engineering degree, my PhD, I said, look, nobody's gonna teach me business over here. I need to go after and do something in the business side. So in 2018, I decided let's go do an executive MBA. So I went after that as well. So I was curious and then that opened up my mind a lot.

in terms of all the business stuff that I didn't learn really in the company and that I really needed if I wanted to go forward, right? If I needed a good transition, that was in my head. So in 2018, I started to do an MBA here in Brazil, in Sao Paulo, a good place. And then 2020, when I was finishing the degree, the pandemic hit. So we had this chance, so I moved.

That was the best time for me because I moved from an engineering role to a business development role at the time. And during the pandemic, we managed to acquire, that was the first time we did it, we acquired a competitor because we had that opportunity. And with that came some international partnerships as well that we needed. So in the last five years, the company, after that, right, so from 2019 to...

in last year, we grew like three times in terms of revenue. So an industry growing that much in that short period, that was like, you know, puts a lot of strain in the business. So eventually we opened up an office in Mexico. We just opened an office now in Columbia. We started to export more and now we are like four companies.

George Szegö (32:41.06)
We acquired a large, very large project here in Brazil, a 10 year old project, and it's gonna go for 10 years in a big hydroelectric power plant here in Brazil. So the company was very big at the time. I was already in a business development side. Obviously it was not only because of me, but everyone was kind of something that was kept and my father didn't really want it. And suddenly this...

big expansion happened and everybody just went. And so we needed to restructure the company. Right? So that was the time. I needed and that's 2020. And then eventually I said, look, I need some sort of leadership program, right? So I'm just going to start continue learning on the business side. That's when I joined, tried to join the OPM. Didn't work because of the pandemic. So I joined later.

First year of OPM, was still, and my father would not say that I was his successor, right? Would not say. Like everybody was like, of course that's him. He's the most qualified, everybody knows what you, what should we do? So people would try, it was kind of weird relationship. Not with my dad, but like, people they wanted to be good to me, talk to me, because I was just gonna be,

Dylan Pathirana (33:44.127)
Hahaha.

George Szegö (34:07.142)
You've got to be probably this his success or eventually so I have to be in good terms with you Not only with him. So the dynamics wasn't really good and for my dad This is what is too big for him to handle. He was the most Most intelligent guy that I know he's very very very intelligent He was a very good person But he had his limitations in terms of like

business and he knew that. But eventually what happened is that we started, so in my first year we finally got back from Boston and we started to say look we need to sit down and talk about succession. So I said you're fine. Back in the days I said well we need a board here in the company so it can help us out you know for how we can move forward. Companies are much bigger than we used to and we were a multinational company, going international.

Uh, he said, okay, fine. I'll listen to you. And eventually after my first unit, said, well, okay, he announced to the others officially that I was going to be his successor. So that was like a big step for him and for me. So we were having the, you know, the best time we sat down and, uh, we managed to talk business. He would, you know, started to respect me and said, look, in the beginning, he would, he would, he would disagree with 99 % with whatever I said.

Dylan Pathirana (35:35.883)
Yeah.

George Szegö (35:37.318)
That year he started to agree with 90 % and he's like, yeah, you're the guy for the future. I don't know how to do this anymore. So it was a really good, but he had a tragic accident, right? So he started to plan a transition. He had a tragic accident back in January last year, 2024. So suddenly, know, plans just pretty much gone. There was no time for a...

Dylan Pathirana (35:41.229)
Nice.

George Szegö (36:06.67)
smooth transition. I felt prepared, right? So I felt prepared, but when it hits you, was always involved in the decisions, in the strategic part of the business, in whatever we wanted to do. But suddenly now it's on me. So, know, stuff that I was complaining about, I'm the one who actually got to have to solve it, right? From now on. With not a lot of time.

you know, move things forward. So pretty much last year was a very tough year, but it was a very good year also. Last year was our last year in Harvard. So Harvard for me was really good in that. To me it was a very, very nice transformation with everything that happened. Really opens up your mind.

to me as a leader now. Pretty much last year I kept most things as they were and understood a little bit of the dynamics and how we can move forward. Last semester I started to change stuff slowly and this year is pretty much my first year as I can say the CEO of this group.

five business units, I still have to structure this. So I'm continuously learning as we go. I just didn't have this time, smooth transition, it all happened at once.

Dylan Pathirana (37:40.011)
Absolutely.

Dylan Pathirana (37:45.356)
Yeah, so since you kind of taken over what your dad was doing, did you see anything that you need to change immediately?

George Szegö (37:57.35)
For sure. We already started. For example, my dad, the company is 65 years old, And we grew tremendously in five years, as I said. We tripled the company. We have units outside Brazil. And he didn't like finance at all. So we didn't have a budget. So we didn't have a budget. Just like, how can you do it without a budget? Well, it worked.

Dylan Pathirana (38:22.83)
That's amazing.

George Szegö (38:27.192)
So that's always, it worked until now. But I convinced him when, so during the pandemic when we acquired this competitor, so we had to pay, we bought a company. And at the same time, we tripled the factory as well. So we invested in manufacturing and tripling our facilities. So he pretty much, we pretty much got all the money the company has made in 60 years and invested at once. And eventually.

the finances without a budget there was no You know no predictions no forecasting. No nothing. So no controls Yeah, he ended up putting back a lot of money back into the company Everything that he personally made his entire life. He reinvested and said look You cannot live with that like that anymore. So there was a you know, the first thing is getting the finance of the company and you know, i'm not a

a big finance guy myself, but we really need that. So that was the first thing that we need to overcome. we didn't, you know, second or third cycle of budgeting, we're learning how to do that and protect our finances, right? So it's not that everything is not going well, but we need controls and that kind of stuff. And the other thing was, you know, succession was about me. It happened.

Dylan Pathirana (39:26.766)
Absolutely.

George Szegö (39:50.474)
with this accident immediately, but the other people needed also their paths, right, forward, moving forward. So I changed the design of the organization to deal with this, you know, multinational company that we have. So we have to behave like a multinational company. We need controls as a multinational company.

One example, my father went there for an inauguration of our subsidiary in Mexico in 2019. went back. Never went back. So it's like, how come? this is like, you know, these people are growing. Oh, yeah, they selling it. So it's all good. We're making money. know, this kind of thing. So I really respect whatever brought us here, which is, you know, was fundamental.

Dylan Pathirana (40:24.396)
wow.

George Szegö (40:41.622)
It was successful, we wouldn't be here without that, without him and the others bringing us here. And now, know, slightly changing that and, you know, restructuring the company as we need to behave these days. And for the future, want to, know, our next big goal is reach the United States, so getting to that market, which is, you know, one of the most competitive in the world.

We need lot of certifications on our products, so we're working towards that. My father was a people guy, only people. People are happy you were doing well, which I really believe and I don't want to lose those values. But we also need the results side of things, which comes with good controls, finance, how you operate. So that's the first thing that I've done. Changing the design.

Dylan Pathirana (41:34.594)
Yeah. And how do you go, how do you go about managing that change where it's like, you know, it's a family business. So there's a lot of legacy there. So how do you manage the kind of innovation while still maintaining that, that legacy piece?

George Szegö (41:50.336)
that's hard. That's hard. That's hard. I mean, the good thing is, and it's that I inherited is a very good people and very good managers and directors that are willing to do the best for the company. And that's probably the legacy that my father left. Obviously, the probably the most important one. He had very good people.

that believed in whatever we do. Really what we do is behind the scenes. It's not a sexy business, right? We manufacture refrigeration equipment. we had a case in Harvard that was similar in that sense, right? That, you know, how can you make this business a purpose for a business where, you know, you manufacture auxiliary equipment nobody sees and that cannot fail and that behind the scene and, you know, it's not very sexy.

But he managed to have a group of people that love these kind of engineering, solving complex solutions and bringing innovation. So one of his passions was we manufactured climatic chambers, which are like a big box where you put in all sorts of stuff in different sizes and dimensions. for example, you can put two big tractors inside.

and you simulate weather inside. So, sunlighting, temperature, humidity, and that kind of stuff, pressures. And so, these chambers are really innovative and innovation. So, there was one of his big passions and we're still doing that a lot. So, this kind of a special projects and customized work is how we manage to actually go and continuously innovate.

and motivate people because they learn, there's a very dynamic, there's always like something different happening in the company. It's not a standard production that goes on and on forever and you just need to optimize. So that's how we keep innovation going and people share their ideas, work on very challenging projects. On the people side, obviously change of mentality, that's pretty hard, right?

George Szegö (44:09.424)
So, you know, we were moving from, you know, keep my dad happy was how it was done in the past. If he was happy, everybody was happy. So they learned how to keep him happy. It doesn't work like that with me. need to get professionalized a little bit, business, look at results, higher risks these days.

Dylan Pathirana (44:20.28)
Yep.

George Szegö (44:35.524)
It doesn't work this way if you want to go international where you have big competitors, global competitors and that kind of stuff. So that's the big change. That's the most challenging stuff. But it all goes back to having the people and the change of mindset. That's the hardest part.

Dylan Pathirana (44:56.13)
Yeah. Yeah. So I mean, you are a great place to work, a certified organization, right? And I mean, as you said, so your employees, your team members, they pretty much work on your to satisfy your debt. Now you're changing the rules and you're coming with different processes, et cetera, to make it more, you know, like more process driven organization.

George Szegö (45:03.024)
Yeah.

Dylan Pathirana (45:25.806)
So how do you gonna keep that great place to work culture, know, mean, you know, changes, people don't like changes, right? So that could be a big challenge, right? One of the key challenges that you have, right?

George Szegö (45:41.574)
Change, to me, that, you know, this change, the entire change management, I've actually been studying about how you do, it's easier to study than actually implement this change management. But to me, it's like, change brings fear, right? So insecurities in people. So like,

Dylan Pathirana (45:53.134)
Yep.

George Szegö (46:05.466)
People feel that like, I'm going to lose my job or whatever I did now is not fine. I have to change the way I do things. I have to change the way I think about things. So that's something that needs to be in my view and how try to do it is gradual. you have to tell them what's going to be done, how it's going to be done, why it's going to be done. And eventually you have to do it.

You are going to lose some people along the way. They're not going to want that new reality anymore. And that's part of change. We're that very gradually or as gradually as we can. don't need it because we have the good thing about being a family business is that we're looking at long term and not like short term. So I don't need to go there and say to the board, OK, this quarter was amazing. Next quarter is going to be even better.

We just want to be in the game, right? We want to be in the game for the long run. So we're thinking about the long run, how we can get there. we can, some things we cannot do it that gradually. We have to, you know, change. But it's a lot of telling people what we need to do, why we want to do it. So the people part is very challenging, Jim. I'll say that...

Dylan Pathirana (47:31.409)
yeah.

George Szegö (47:32.198)
Some people are going to be happy and are really happy that with these changes, like, well, this is what we needed, right? We need more objectivity, we need more KPIs, we need more... So they're going to love and they're going to thrive now, and they weren't in the past. And some people are not just going to adapt to this new reality.

Dylan Pathirana (47:37.24)
Yeah.

George Szegö (47:51.686)
And I think, you know, the people who are actually going to be there are the ones that are going to be happy with it, with this prospect of, you know, new things coming and working towards and building that stuff together. A great place to work, we're actually just doing this this week again. The first time we did it was last year. For us, it was like, you know, something we've never done to actually assess how we were doing. And we're fortunate enough to be

Dylan Pathirana (48:09.154)
All right.

George Szegö (48:21.254)
have a good grade and get the certification, need to repeat. think this year with the results, they'll get to see how happy people are and we want to hear from them. And that's really how you can make, you need to listen and hear the people in different ways. But it's challenging, right? But I think the organizations that will thrive and thrive, it's like, you know, they take good care of their people.

Dylan Pathirana (48:36.206)
Absolutely. Yeah.

George Szegö (48:49.146)
But they have their eyes on results as well. know, both, you need both. If you only like, you know, just results, like in our most financial institutions, banks and investment bank is just about results and bonuses that works well for them, but that's how they work. And just companies that do just say, no, just take care of the people. And, know, just make them happy. But you don't have the results. Either they, you know, they fail or they couldn't have.

Dylan Pathirana (48:53.964)
Absolut.

George Szegö (49:18.778)
They don't have the results they could have. I think a good mix, but it's the difficult part. That's the most challenging part for me.

Dylan Pathirana (49:25.706)
There's a balance to be had there. And I suppose on the innovation piece that you were talking about earlier, I know you're pushing a lot of sustainability. I want to understand why that's important to you. And also, where do think the future lies?

George Szegö (49:41.574)
Well, sustainability for me is a very broad term. know, most of the time you think about the environment, like the climate change and then eventually climate change is a really big problem to tackle. Everybody needs to be involved. That's too big. So for us to help change our surroundings or the stuff that we do that will help the world.

be a better place and avoid that. We're into refrigeration. So, you know, they have the Kyoto Protocol these days. know, most countries signed. We need a new class of refrigerants for the future to avoid global warming. So we're working towards developing those products as quick as we can. Europe is already using those types of refrigerants in their refrigeration equipment.

The United States just started last year and in developed countries like Brazil, it's going to take longer in terms of legislation. But we want to be first. We want to pioneer that. We want to be here. And we are the ones who want to bring the change and change our products and change the way that we think and the market thinks. And since we're leaders in a lot of the markets we're in, we want to

be the first ones and bring that technology to Brazil and the other countries that we're already working on, in Latin America, which we're really behind in terms of legislation and the need for that. And I think Mexico is going to be a big driver in that. So in sustainability on the environmental side, I'll say that's more efficient products with this new type of refrigerants.

It's a challenge for a lot of manufacturers because they can be explosive or burn. They're pretty safe, but you need some sort of safety protocols over there. So it's very challenging. But they're doing that in Europe and in the States and say, can't we do it here and be the first ones? So on the sustainability side, a lot of...

George Szegö (51:58.462)
working with the new refrigerants because that's our field and having very efficient as efficient as we can be. That's part of it. Sustainability, I think of we come from Brazil, so what we can do in our surroundings, you know, it's not exactly sustainable, it's more on the social side. We believe a lot in education.

We have 500 families that depend on us in several different places in Brazil and outside Brazil. How can we better educate these people and make their lives? obviously they have the paychecks with us. Well, how can we make their lives better? They become better persons because of the company or what they learn. They trade, they pass that down to their families and whoever is surrounding them. I think this is

part of what we're trying to accomplish as well. One of our big dreams is having our own kind of university set up. you know, to train these people to make them better persons. So that's in terms of sustainability and what I think for the future, that's the kind of stuff that we try to implement. But obviously you need...

Dylan Pathirana (52:59.584)
Nice.

Dylan Pathirana (53:11.822)
Yeah.

Mm.

George Szegö (53:17.412)
You need results in the company to allow you to do all that stuff and continue investing in all that stuff. So that's the kind of stuff that we are working on right now.

Dylan Pathirana (53:27.192)
Yeah, that sounds incredible. I suppose going back to the legacy piece, know, your granddad started the business in a 20 square meter room, and then your dad took it over and I suppose under his leadership, it went global. What is your legacy going to be? Or what do you want your legacy to be?

George Szegö (53:47.568)
Very good question. Well, I think my dad made the, you know, as I said, my grandfather was the guy who brought all this European style, you know, quality assurance and that kind of stuff for the business. And he really believed in that. My father brought in all the engineering. We need to be good engineers. We need to have very reliable equipment. We need to work.

keep quality as much as can. It's our big differential. What differentiates us from the others? So we want to compete. We need to have very engineered products. His passion was really engineering. We moved kind of against his will internationally, really, you know, a big, big leap when we opened the Mexico. So to me, he's making a, I wanted to be seen.

the company scene is a global play really. We play in different markets. We decided to play in the Americas first. When I say global for us is the Americas, we already is to consolidate our position here in Latin America. There are countries that are kind of similar to Brazil. And then move to the States for to me, it's like, we reached the States, we can play there. That's to me is gonna be.

international, an international player really. So I have some companies here in Brazil that did that in the manufacturing space like in Rayer and those are the guys who I look up to and say well we obviously very much we're smaller but we can do the same thing we can do the same path. So that's that's to me for the company-wise that's it.

Dylan Pathirana (55:36.536)
Yeah.

So George, sorry to cut you off. Do you do anything different to your dad in international business?

George Szegö (55:49.498)
yeah, I guess we know because I wanted to be as he was also a scientist. he was happy, you know, having these special projects where he could be, you know, the engineer, the scientists in different projects. To me, I wanted to build something bigger. So I think bigger. How can we do that? So eventually we built a big lab. There was a big lab to certify our equipment.

in terms of performance. And we really need that to go internationally. So certifications, going through standards and that kind of stuff. He was like more local, right? He was treat everything as Brazil. His mindset was Brazil. That's what he knew. We didn't want to really, you know, go and, you know, talk to the Colombians.

go to Bolivia and then, you know, that was too much for him. But I love that really. Let's go out and learn from people and learn from, so that's kind of the difference. We just certified our lab, finally, an international certification. That's the first lab in the Southern Hemisphere where we can certify this type of equipment we manufacture here. know, air-cooled chillers inside this chamber from an American Institute. As you know, a big

Dylan Pathirana (56:53.057)
Yep.

George Szegö (57:17.228)
A big thing for us that happened a couple of weeks back. So our engineers are really happy with that as a large accomplishment in Brazil, Latin America. I think this way is just think bigger in terms of what our engineers can do. Sometimes we feel that, you know, we are from a, we're the underdog, we're in a developed country, we cannot do this stuff.

So I think that's the mindset. Look, yeah, we can. My father really thought of the products have to be internationally good. I think we can be as good as them or even better than them and work towards that. And the other difference is that I'm working a lot with technologies, digital technology in this field as well. So how we can monitor this equipment outside Brazil, how we can bring this data in and do predictive.

type maintenance in these kind of machines and I don't know, change our business model. So I think these are the changes that I'm bringing in that we didn't think about a few years back.

Dylan Pathirana (58:16.13)
Yeah,

Dylan Pathirana (58:23.882)
Excellent. Yeah. So George, three generations of engineers and three generations of entrepreneurs. And what's your expectation for your children?

George Szegö (58:37.158)
Ah, look, he's 13 now and my daughter is nine. I don't know, I think they need to, at this stage, they need to know what we do. I think, you know, instilling them in a sort of a legacy, this is going to be eventually yours, so you can work here eventually. So at this stage is more for them to know what we do. So, you know, they come in.

come with us a few times a year and at the factory. They know where we're at. We share a lot of information with them about what we're doing in Mexico, what we're doing in other places. But he's going to be free to choose whatever is a bit too early for them, right? But I think they need to be free to choose whatever they want in their lives. If they want to be a musician, fine. To me, my job is to have the company

The company and business cannot rely on the next generation. My father was actually lucky that he had me coming in. If that happened and I wasn't in the company, probably, you know, it was going to be very difficult times and we had to sell the company or something. So my job for the next generation is to have a company where if they wanted to work for this company, which is going to be completely different by the time they graduate or they know what they want to do with their lives.

Dylan Pathirana (59:53.122)
Yep.

George Szegö (01:00:05.35)
They can have that opportunity if the company is still there. But they have to change their path. They're too young yet. And thinking about succession, think that's another thing that the company needs to be structured in a way that if I wanted to step out, I could one day. I don't want to do that now. I don't think I'm doing that.

Dylan Pathirana (01:00:15.597)
Yeah.

Dylan Pathirana (01:00:25.848)
Yep, absolutely.

George Szegö (01:00:34.406)
the next few years, but the company needs to be structured in a way that if I had to leave, if I'm not the best CEO for the job, I'll bring somebody in. If you want to have a successor while my kids eventually want to work there, but they're not ready yet, I can have a successor. So for the next generation, that's what my plan is really.

Dylan Pathirana (01:00:56.184)
Yep. That makes sense. suppose George, looking back on your journey, do you feel successful?

George Szegö (01:01:04.614)
I'll say I'm happy. So if I'm happy with what I'm doing, I'm successful. I'm happy with my life, with my personal life, with what I'm doing work-wise, with friends, with family. I'll say what success is, said, it's a journey, right? You can be successful today and something happens tomorrow. So yeah, I think.

If you take the picture, not the movie, yeah, for sure. I'll say that.

Dylan Pathirana (01:01:38.222)
That's awesome. I really like that. Take the picture, not the movie. suppose, know, George, this conversation has been fascinating and you've done so much in your time and your journey is incredible. And we could talk at length about it, but I want to, I want to wrap up here. And throughout our conversation, I've been jotting down a few key points, which I think have been factors which have led to your successful life. And I want to share them with you. The first one I think is the biggest one. And I could honestly just leave it at this, but

George Szegö (01:01:39.366)
Yeah.

Dylan Pathirana (01:02:08.246)
It's you're a continuous learner, whether it was, you know, going and getting all of these degrees that you wanted to get and then going and getting your PhD and then, or when you realized, Hey, there's no business knowledge in this business. I need to get that and upskill on that going and getting your MBA and then eventually going to Harvard. You're always kind of looking for that knowledge and always trying to upskill yourself and constantly developing even now, you know, reading stuff on change management and trying to understand.

so that you can progress yourself and the business forward. I think that's definitely the key one for me. But the next is, I suppose it's taking the leap or taking opportunities, whether it was, you know, deciding you had to move country, come to Australia or, you know, go to New York, you always were willing to take that leap. And, you know, it's, it's a risk that I suppose not everyone would be willing to take. And in doing so it opens the doors to new opportunities, which eventually

you know, led you to your success. The next one is you're an innovator. And I think that comes from your engineering side of things, but you're always looking for a better way to do things and optimizing, which, know, in a family business is definitely a strong skill to have. And the last one is self-confidence. I think it takes a lot to forge your own path when there's

you know, an easy option for you to take. You could have easily slotted into the family business from when you were young, but you wanted to forge your own path, go out and see the world, learn things. And then even when you came into the business, you wanted to do things your way. I think that's really important because, you know, you're doing things for you and not being shaped by other people around you. And also you mentioned your dad had a really great relationship with your employees.

And I can see that you're continuing with that, know, and knowing you for a shorter period. know you're very good with relationship, you know, someone that anyone can trust and anyone can go and have a chat and knowing that, you know, it's very genuine chat. So that's also another strength that you're bringing George, you know, and thank you so much for having this conversation with us. It was really great to know a bit more about detail about your business and your

Dylan Pathirana (01:04:30.89)
life and thanks for sharing that with us.

George Szegö (01:04:36.048)
Thank you so much. I had a lot of fun talking to you guys. It so great to see both of you working together. Enjoyed that a lot, That's something that really is really good for you to guys have as long as you can. Life's short and it's unexpected things can happen. So just enjoy. Enjoy life.

Dylan Pathirana (01:04:39.982)
You

Dylan Pathirana (01:04:47.778)
That's it.

Dylan Pathirana (01:04:56.536)
That's it.

Absolutely.

George Szegö (01:05:04.816)
Thank you so much again. It was a great pleasure and I hope to see you both soon somewhere in the world.

Dylan Pathirana (01:05:07.564)
No, thank you. You're welcome. Yeah, absolutely. We'll have you down, down here one day soon. And for those who have listened to this episode. Yeah, that's it. And for those of you who have gained something from today's episode, it would be awesome if you could like and subscribe to this episode and you can see more of our incredible content over on our website, the quest for success podcast.com. And with that, we'll catch you guys in the next episode. Thanks for listening. Hey.

George Szegö (01:05:15.106)
It's been a while since I've been to Australia.

George Szegö (01:05:35.926)
Thank you.