Hector Fernandez exclusive: ‘Strategy is important, but relentless execution is what wins’

IGT recently divested and rebranded its lottery operations as Brightstar Lottery. How will shifting focus towards gaming operations help you compete more effectively in the global market?  

I'm a simple person. I think human brains can only do three-to-five things at a time. Anytime you try to do too many things at once, it's really hard to execute at a high level. Strategy is important, but relentless execution is what wins. As we split the two companies and then added everything into the mix, the most important question wasn't ‘where do we compete today?’ 

The most important question actually is, ‘what are we not going to do anymore?’ And it's a very tough question because everyone loves the business they're in and thinks it's great, but I think that focus with relentless execution is what wins the game. One of my primary jobs is resource allocation, and we can't afford everything. In fact, if we try to do too much, we'll do nothing well.  

One of the things I did is after the second week I started, I went to go visit the Eastern European studios and I asked each Studio Head, give me three things that we could do better. Don't give me five, don't give me 10, just give me three and they did. We're going to fix one at a time.  

How did visiting with those international teams help incorporate yourself within IGT? 

In this job, people tell you what you want to hear, and they'll come with beautiful slides of what you want to hear. I went to visit the manufacturing workers in Reno, the studios, then I went to Eastern Europe and held a mini town hall in every single one of them. I started off with, ‘we're all flawed human beings. Every single one of us, including me, have lots of flaws. I cannot help you if you just tell me what I want to hear. You have to be brave to tell me the things we need to do better, because from a performance standpoint, there is no question we have to do things better.’  

I even asked them not to introduce me as the CEO, but as the Chief Overhead Officer because that's what I am. They do all the work, but my job is to set strategy, direction, guardrails, a reward system, hold people accountable and drive culture. Just introducing myself like that made them laugh and kind of disarmed the situation. They were far more willing to be open about the things that we need to fix.  

And how will IGT's digital and FinTech businesses also work into that strategy, especially during this leadership transition?

They are fantastic businesses and, in the analogy I gave, very adjacent to what we do every single day. A casino operator can’t fully open a new casino with just our product. I wouldn't recommend it; we need diversity on the floor. But we have a system that can operate all the backend. We have a FinTech business that provides cash access, transactional services, collects cash back from the floor and provides an audit mechanism. I just went through a deep dive with the FinTech team a couple of days ago. The tools they have created are very much consumer-friendly, but also very operator-friendly in the background.  

Obviously, we have a land-based business that has amazing brands we will continue to evolve and make better. For North America or globally, if iGaming is legal in that jurisdiction, we also have the ability to engage a consumer with that same great content in an online setting. One of the things that's really important to me from a business standpoint is we are only in regulated businesses. I know there are other competitors that are in some unregulated businesses, but it’s really, really important to me that the foundations of what we do is always centered around responsible gaming because we have a privilege and a responsibility in this business.  

The privilege is to provide an entertainment experience for a consumer. The responsibility is not to ruin anybody's life. The biggest metric is my kid, he's now 15 but he started asking me when I first got into the business, ‘Dad, what do you do for a living? Do you ruin people's lives?’ We can have responsible gaming initiatives, but I have to go home and tell my child, ‘hey, we do everything we possibly can to ensure that what we do is entertainment, and we create a lot of guardrails.’ Now I can't control everyone's behavior, but that's a bigger metric than any other regulatory body. I have to go home and tell my kid that.  

Following IGT and Everi’s merger under Apollo Global Management, what are your goals as Incoming CEO for integrating both companies while continuing to drive innovation? 

It's preserving the best of both worlds and being open to building a new narrative. One of the things we talked about in our first global town hall is we're on chapter one. The introduction has been written. Bringing these two amazing brands together, capitalizing on their strengths, shedding the weaknesses and building this new novel together. How many times in your career can you say you were part of an organization that’s on chapter one? Almost always you come in during the middle of a novel, towards the end or maybe that novel has already been written.   

That's the great part about being here. It's the fact that I haven't written it – and I told that to the team. All the people that work in these two organizations are going to write it together, and we'll eventually look back because what you find in life is that the journey is always the best part. Once you get to the destination, to the top of the hill, you almost long for that chaos of what it took to get there. That's the beauty of all of this. We're on chapter one, maybe halfway into chapter one now that we're a few days into it, but we're going to write this novel together and it's going to be a great experience.  

How does IGT balance player preferences and integrations seen across differing regions, such as the US, Europe, Asia, etc.? 

This business is very nuanced, and I think you have to be humble enough to know that. A game you make in Australia isn't necessarily going to work in North America. A game you make in North America isn't necessarily going to work in Europe. I'm a big believer that, to be successful globally, you need to have teams that are living and breathing that every single day. If you go to the Philippines or Australia and you watch people gamble, it’s a completely different experience than here in the US. I think a lot of organizations get in trouble where they're like, ‘I sit in Las Vegas, the mecca of gambling and therefore I know what works everywhere.’  

That's not true. If you go to Oklahoma, the style of play and the types of games are very, very different. You have to be humble enough in this business to understand that you don't know everything. You have to take the time to learn, and you've seen a lot of failures in content where people believe, ‘hey, I made it here and now I'm just going to put it in Romania where fruit games are really big and it's going to work.’  

Could you also speak on Nick Khin’s legacy with IGT, and how he will continue to assist the company as a Special Advisor to the Board? 

Nick obviously spent 12 years here. He's a long-term industry veteran. Not only did he work here prior to the announced acquisitions and help deliver a lot of the success that IGT had, but as I was sitting out in my non-compete, he was the Interim CEO and played a very critical role. I'm very grateful to Nick for all the things he did for the business. In our global town hall, we really acknowledged him and all his contributions.  

He is a Special Advisor to both me and the Board, and what that means is if there's strategic things that come up where I need some history on why we made a certain decision, he's available for me or the Board to give him a call. And that's important because there's not one individual in any business that can know everything. There's not an individual in any business that can make all the right decisions.