Tuesday, November 30, 2004
Newsleader de novembro, em português.
postings appear earlier at http://newsleader.blogs.com
Veja como a falta de sintonia entre o estilo de administração estrangeira e a cultura nacional está afetando o desempenho das empresas e a competitividade do país.
Segue uma súmula em inglês do assunto tratado em português na Newsleader.
________________
Why would I claim there is managerial laziness?
Because there is little effort in adapting foreign managerial styles to local culture.
Companies in Brazil are paying through their noses for their executives to attend lectures by gurus on foreign management techniques. Yet this coming Carnival the samba schools will again perform, by a deadline, a magnificent display of art and organizational competence, with no MBA advisors.
It would help if you only wondered how the samba schools always do it. Particularly if you sometimes fail to lead your own team to achieve a comparable quality by a deadline as stringent as the samba schools meet every single year.
It should not take you much time to realize that some bits of your foreign management techniques may be getting in the way of your people’s effectiveness.
See below NewsLeader’s call for training in
Cross-Cultural Management.
Abstract of the full story in Portuguese:
Managerial techniques developed in the USA cannot work as effectively in Brazil, except when applied to a minority of “globalized” executives. I compared the words used in the inaugural speeches by President’s Kennedy (USA) and Lula (Brazil), as well as the frequency with which they used those words.
The frequency analysis allows verifying that Brazilian culture expresses a remarkable orientation towards collectivism; see below. The issue is not collectivism; most Asian societies are collectivist. Yet, the Japanese, for instance, have built their own managerial style on their traditions and allegiances. The problem arises when people from collectivist-oriented societies are managed as members of individual-oriented societies.
Despite the difference in American and Brazilian cultures, also illustrated below in two well-loved artists, American managerial techniques are deployed in Brazil with little or no adaptation.
The discrepancy between national and organizational cultures leads to alienation and efficiency losses. Your own company may be suffering from it.
In addition, I argue that the same discrepancy leads to favor the choice of public sector employment among the better educated. The Brazilian government and universities employ, proportionally, three times as many scientists and engineers than the same in USA or Korea. This revealed preference for employment in the public sector is depriving the Brazilian private sector of the talent necessary to ensure the shy country’s international competitiveness. How poorly is your own company doing in terms of R&D in Brazil?
I suggest bridging the gap between corporate organizational culture and national culture as a means of enhancing managerial effectiveness and international competitiveness.
The November article is in Portuguese.
postings appear earlier at http://newsleader.blogs.com
Veja como a falta de sintonia entre o estilo de administração estrangeira e a cultura nacional está afetando o desempenho das empresas e a competitividade do país.
Segue uma súmula em inglês do assunto tratado em português na Newsleader.
________________
Why would I claim there is managerial laziness?
Because there is little effort in adapting foreign managerial styles to local culture.
Companies in Brazil are paying through their noses for their executives to attend lectures by gurus on foreign management techniques. Yet this coming Carnival the samba schools will again perform, by a deadline, a magnificent display of art and organizational competence, with no MBA advisors.
It would help if you only wondered how the samba schools always do it. Particularly if you sometimes fail to lead your own team to achieve a comparable quality by a deadline as stringent as the samba schools meet every single year.
It should not take you much time to realize that some bits of your foreign management techniques may be getting in the way of your people’s effectiveness.
See below NewsLeader’s call for training in
Cross-Cultural Management.
Abstract of the full story in Portuguese:
Managerial techniques developed in the USA cannot work as effectively in Brazil, except when applied to a minority of “globalized” executives. I compared the words used in the inaugural speeches by President’s Kennedy (USA) and Lula (Brazil), as well as the frequency with which they used those words.
The frequency analysis allows verifying that Brazilian culture expresses a remarkable orientation towards collectivism; see below. The issue is not collectivism; most Asian societies are collectivist. Yet, the Japanese, for instance, have built their own managerial style on their traditions and allegiances. The problem arises when people from collectivist-oriented societies are managed as members of individual-oriented societies.
Despite the difference in American and Brazilian cultures, also illustrated below in two well-loved artists, American managerial techniques are deployed in Brazil with little or no adaptation.
The discrepancy between national and organizational cultures leads to alienation and efficiency losses. Your own company may be suffering from it.
In addition, I argue that the same discrepancy leads to favor the choice of public sector employment among the better educated. The Brazilian government and universities employ, proportionally, three times as many scientists and engineers than the same in USA or Korea. This revealed preference for employment in the public sector is depriving the Brazilian private sector of the talent necessary to ensure the shy country’s international competitiveness. How poorly is your own company doing in terms of R&D in Brazil?
I suggest bridging the gap between corporate organizational culture and national culture as a means of enhancing managerial effectiveness and international competitiveness.
The November article is in Portuguese.
Wednesday, June 30, 2004
Wednesday, March 03, 2004
March, 2004
NewsLeader
Year 2, issue # 1
Alfredo Behrens
Editor
This is a space for quick conversations on management and society.
Our interests gravitate around issues of leadership, management of workteams, technology, creativity, emotional intelligence and most issues which should be shared to shape a better world.
Our approach brings thorough perspectives into real-life situations and seeks awareness rather than complience.
Your comments will be most welcome.
The Latin American historical hero is frequently depicted on horseback and brandishing a sword as if ready to make kebabs out of all opponents. This icon of leadership quietly impoverishes the diversity of leadership styles, and possibly corporate performance as well.
Fittingly, this post- Carnival issue focuses on the role of virtue in leadership. It turns out that the most effective business leaders are not the alpha males epitomized by the press - or in our historical monuments; but those who lead exemplarily; see more in the Feature Article.
Not only out of virtue, but also as a result of rational choice; and quoting examples from Mexico and Brazil; we call your attention to opportunities for growth in selling to the poor. Besides offering profitable opportunities, these new ventures may well help business to grow while developing new leaders and perhaps new leading styles too. Look this up in Managerial Insights.
In Nourishment for the mind and Soul we bring you excerpts of a The Guardian article on Louise Bourgeois, who, at 92, cannot help to continue to create.
Readership multiplied by 20 since September last! We are now over four thousand sixhundred hundred and we receive kind letters of praise from the likes of AMCHAM Brazil and Intel Capital (Latin America). We also begin to interact with readers as you may gather by reading the readers' reactions,in the From our Readers section.
Who makes up the NewsLeader tribe? It is hard to figure out exactly who we are as we grow so rapidly; but of those over 4600 subscribers, over half are in Brazil, another one thousand are elsewhere in Latin America, and the rest, over 1000, are mostly in English speaking countries. Well over three thousand of our subscribers are business persons, and over one thousand are mostly in academic life, but also in politics, public administration and journalism.
Please continue to circulate NewsLeader among your colleagues and continue to interact with us in any way you wish, including with recommendations for new topics. It is very rewarding to notice we do feel a need.
Yours gratefully,
The Editor.
IN THIS ISSUE
Sponsorship notice: Leadership Cafés are fora to enhance your own personal development and your company's future.
Feature article on leadership: "Feudal values boost stock price"
Management insights: "Selling to the poor may well be your next market"
Nourishment for the mind and soul: Louise Bourgeois, working at 92, answers questions
From our Readers: A spirited exchange on innovation and religion
CLASSIFIED ADS: Ask Newsleader for rates and advertisers
Copyright Information
List Maintenance
To contact the editor
SPONSORSHIP NOTICE Back to top
Leadership Cafés
Personal and corporate development opportunity
NewsLeader is launching Leadership Cafés in São Paulo, Rio de Janeiro, Belo Horizonte and Brasília (and almost wherever else you may need us to).
During half day meetings "in company;" or during two hour sessions in late afternoons, for open enrollment; NewsLeader will facilitate in Portuguese the discussion of leadership issues in small homogeneous teams. These sessions are focused on leadership and aim at securing your own development and enhancing your company's competitiveness.
NewsLeader can also make arrangements for similar events to be held in other Brazilian cities in Portuguese, or elsewhere in Latin America, in Spanish or English.
Write or call the Editor for further details.
FEATURE ARTICLE Back to top
Feudal values boost stock price
Alfredo Behrens
Humility, loyalty, integrity are virtues frequently taken to be pre-capitalist in the sense that, having no exchange value, they cannot fetch a price. Yet, what if feudal virtues turned out to add value to a company's stock?
In a world leaning towards entertainment rather than information, the likes of Jack Welch, Lee Iacocca and Gianni Agnelli are bound to be better known than Darwin Smith, CEO of Kimberley-Clark. However, Smith’s tenure led to his company outperforming the stock market by almost twice than GE under Welch’s own tenure.
Indeed, under Smith, Kimberley-Clark, outperformed stars like Hewlett-Packard, 3M and Coca-Cola, let alone Chrysler or FIAT. Nonetheless, for six years running, Fortune declared the now notorious ENRON “the most creative company in America,” while Darwin Smith did not make even the specialized business press’ headlines.
Jim Collins led a five year study into almost 1500 American companies seeking to unearth what was it that leaders had in common when they succeeded in turning failing companies into great ones. The leaders themselves he called Level 5 Leaders.[1]
Personal humility is one of the common characteristics and one of the reasons that the leaders were relatively ignored by the press. Neither Smith, nor Gillette’s Colman Mokler, nor Abbott’s George Cain sought the press. Neither did the eight other Level 5 Leaders. Further, when interviewed, those leaders would credit their collaborators more readily than themselves. When hard pressed to explain what made them so effective many of these non-celebrity business leaders would also claim that they were simply lucky.
Luck may have had some role, but it did not help their competitors as much. For instance, Abbott Laboratories outperformed the stock market permormance by twice as much as Merck or Pfizer did. Circuit City’s Alan Wurtzel helped that company outperform the stock market by almost 19 to 1; but Mr. Wurtzel claimed that luck also helped him find the right successor.
Why would humility be so important?
Perhaps because it allows for close collaborators to feel dignified by their work, for they are more likely to take credit for their own work than would, say, collaborators of FIAT’s Gianni Agnelli; too busy cruising “his car across red lights, with his chauffeur cowering in the back seat.”
Perhaps as important, the humility of the Level 5 Leaders also assures that lower-ranking collaborators will feel that their best efforts are made on behalf of something larger than themselves, even larger than their bosses. An impression that would not be borne as readily by the workers of Scott Paper under Al Dunlap, the “Rambo in pinstripes,” who pocketed $100 million for less than two years of downsizing at Scott Paper. The latter’s performance, incidentally, was surpassed by Kimberly Clark under Darwin Smith.
Besides personal humility, these Level 5 Leaders also displayed a relentless resolve. Darwin Smith worked through his radiation therapy to cure him from cancer. George Cain - himself an 18 year insider and heir of Abott Laboratories - had to wipe the company clean of the traits of nepotism that had stalled its creativity. Charles R. "Cork" Walgreen III shifted his business out of the food service sector; where it had
invented the malted milk shake and where led the market with over 500 restaurants.
Where does their resolve come from? One may only speculate, but drawing on the Jungian foundations of Jaworski’s Synchronicity,[2] one may admit that in this larger-than-human resolve there is a well of certainty that may stem from a feeling of “oneness” in which the individual leader flows in a river of unconscious determination, larger than himself. This allows us to better understand Collin’s appreciation of “an even stoic resolve” in the determination with which these leaders followed their destiny, and instilled “discipline” within the rank and file. Discipline, in this context, does away with the need for bureaucracy and puts each person at his own helm.
Under this approach “personal humility” makes more sense; because the leader feels he is only allowing himself and others to flow with a force beyond his control, which, in Collin’s study the leaders referred to as “luck”, perhaps for lack of a better word.
In this role, attuned with a force larger than oneself, the leader acts more as Greenleaf’s Servant leader; geared to serve his organization over himself; thus also helping to understand the readiness with which Collins’ leaders credited their collaborators for the company’s success; and the care they put into selection their successors. The latter is in itself a litmus test for stewardness, rather than personality cult.
You may disagree with my attempt to reconcile the seemingly disparate character traits and the behaviour of the most effective corporate leaders singled out by Collins, but one thing is for sure: celebrity leaders did not lead corporate performance as high as Collin’s Level 5 Leaders did. In fact quite a few celebrity leaders even tarnished the reputation of their companies much in the same way that, in politics, a comparable style of celebrity leadership helped wreck the economies of countries like Argentina, or Ecuador.
However, Collins’ work has returned the lost lustre to leaders who, holding precisely these old-fashioned virtues, have led their companies to unparalleled success; and in the process of doing so, these leaders paved the way for their own succession.
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[1] Jim Colins, Level 5 Leadership, Harvard Business Review; Jan 2001, Vol 79 issue 1, page 66.
[2] Joseph Jaworski, “Synchronicity: The Inner Path of Leadership” with an introduction by Peter Senge. Berret-Koehler publishers, 1995.
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Further reading on qualities of leadership: there is an endless list of psychological qualifications for leadership, but - given Jack Welch's standing in the leadership field - it is not a complete waste of time to see Jack's own list, in a reproduction of his Wall Street Jounal article of last January 23rd.
MANAGEMENT INSIGHTS Back to top
Selling to the poor may well be your next market
Alfredo Behrens
There is a lot of waste energy hanging around us, but engineers are quick to point out that it is hard to harness waste energy and put it to useful work. The same with the poor; however ubiquitous they still are too scattered over the planet and each one has too little to spare to pay you with.
This is why marketing gurus have frowned upon the poor. However nasty that may sound, it has always been hard to argue with the diagnosis. This is why it is refreshing to read about a new initiative to reinstate the poor as King of Growth by C.K. Prahalad, professor of corporate strategy at Michigan Business School.
In “The Fortune at the Bottom of the Pyramid,” to appear in the next American Summer, Professor Prahalad adds up all the purchasing power of the poor in the largest developing countries and comes up with a potential market, of sorts, larger than the GDP’s of the largest European countries plus Japan. Such a market begins to sound interesting, perhaps not enough for a multinational to move in any of those poor markets, but enough to trigger awareness. If a company is already present in a country with many poor, could the company – multinational or not - be missing an opportunity? Perhaps.
Professor Prahalad’s adding-up of the poor is effective in raising awareness, but if you are in the cement business in Mexico it might not help to know that you are missing out on customers in Indonesia. Yet, what if you were missing out opportunities in Mexico itself? This is precisely what Cemex discovered in Guadalajara: a way to sell to the poor and make a stable profit while at it.
Cemex is the World’s third largest cement manufacturer and Mexico’s largest one. In the course of its business Cemex realized that while its large construction clients offered a profitable niche, their demand tended to be more volatile than the “build-it-yourself” one. The latter market consists mainly of poor households earning less than $5 a day; far from Cemex’s typical client. The interesting issue is that this market offered a significant growth opportunity.
Cemex moved to organize this market by building on the social capital of the poor: their inherent networking abilities and solidarity liaisons. Small teams of three to ten people were bundled into saving teams focused on home improvements. To them Cemex offered credit to buy cement as well as ancillary services: architectural and engineering advice, plus schools for construction workers and deposits for the cement and other building equipment.
A few years later Cemex brags having extended $10 million in credit to the poor and having made 36 thousand new customers. Cemex is still is adding over 1500 new customers every month. By 2005 Cemex expects to have close to 1 million customers among the “build-it-yourself” market niche. Margins are 3 percentage points lower than the average in the business, but Cemex has extended its market into a vaster and more stable market. Besides, plenty of opportunities now exist for cross-selling, which remain still untapped.
Knowledge @ Wharton also points out to other success stories such as Hindustan Unilever’s in selling soap to poor Indians. But one can also point out to high short term losses made by ill-advised incursions in those markets, like the one of Lloyds Bank in Brazil when it bought the financial house Losango.
Losango specializes in extending conventional credit to poor households to buy electricity-operated household equipment like pressing irons and beaters. Lloyds saw in Losango an easy opportunity to elbow its way into the financial services to the poor; only to find out, as unemployment increased, that bad loans were too many besides too small and too scattered to deserve the effort a foreign bank would have to deploy to clean-up its books. Central Bank guidelines - perhaps inadequate when dealing with loans to the poor - did not help either, as they called for higher-than-necessesary reserves for this type of bad loans; because poorer borrowers make better payers.
For a time “Losango” was known at Lloyds’ board of directors' meetings as “Loss and go”, as Lloyds would have gladly gotten rid of Losango, had they been able to. They were not and they finally managed to turn Losango around into a significant money maker, capable of interesting HSBC, as it bought Lloyds out of Brazil.
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Hot Tip
Think out of the box, suspend your jugdgment and your "Big Five" consultants, call on your local university's social scientists and discuss the new venture into the "poor's market" with a bold and younger executive team which the experience may shape into your company's future leaders.
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As the Losango case illustrates, moving into the lower income markets is not the for faint-hearted. It requires a specific marketing strategy, one that may involve the knowledge of professionals not close to conventional decision makers. Cemex relied on the wisdom of a former socialist advisor to Chile's President Allende. In some ways you would do well in suspending your reliance on conventional advisors, too prone to tell you the new strategy will not work. The strategy also requires resolve and an unusual dose of audacity and managerial low-fat flexibility.
None of the above are likely to come easily, but perhaps selling to the poor may also prove a valuable ground to form new business leaders. Surely a company - multinational or not - can think of a couple of fast track executives eager to try their teeth on a challenge. One can think of Brazil’s intercity transportation business allocating a few heirs to develop new transportation services more attuned with the needs of the poor, or Argentina’s industry testing its proverbial inventiveness in selling food and cleansing materials to its own poor.
After all, current macroeconomic conditions in most Latin American countries leave little hope for growth as usual. Growth by mergers and acquisitions is one of the most boring alternatives, and one soon to run into anti-trust regulatory difficulties; such as Nestlé (Brazil) did, when it attempted to buy Garoto.
Cemex’s and Lloyds' way points out to an interesting growth avenue, one also likely to allow private business to grow in an even more socially responsible way; while also providing good testing grounds for future leaders.
Nourishment for the mind and soul Back to top
Any answers?
In this section we aim to provide intersections between art and work. Ocassionaly we find examples of artists at work, as in this text, excerpted from
The Guardian, Thursday February 26, 2004
Louise Bourgeois, the grande dame of US art, is 92 and still working. To mark the opening of a new show, we (The Guardian) asked artists, writers and critics to put a question to her. Adrian Searle introduces the results
Louise Bourgeois studied under Leger (who convinced her she was a sculptor rather than a painter), had known Bonnard and Breton, Brancusi and Duchamp, yet she could never be defined as belonging to a generation or a movement. Her career has also mirrored the place of women artists in the 20th century. To mark the opening of an exhibition of her work at the Fruitmarket gallery in Edinburgh, I (Adrian Searle) asked a number of artists, critics and writers to provide a question for her, on a topic of their choosing. Some asked more than one.
Rachel Whiteread (artist): What is your favourite invention (from your own lifetime)?
Louise Bourgeois: I don't watch TV. I don't use a computer, a fax or a cellphone. I'm not driving or flying anywhere. So in the end I'd have to say it's the radio. I listen to the radio at night.
Marina Warner (writer): Did part of growing up in France mean contact with the sensory rituals and atmosphere of the Church, and its beliefs in an incarnate god? And did any of this connect with your imagination of the flesh?
LB: I was raised a Catholic. But I am not religious. In my work, I am interested in real flesh and blood.
Juergen Teller (photographer): How important has sex been to your work?
LB: I think sex and the absence of sex is terribly important.
Richard Wentworth (artist): You obviously like oppositions. You have spoken sometimes about your father so I have always wondered - how is the female artist's intelligence different from the male's? What if you were a man and your mother had been a powerful source for your work?
LB: I can only talk from the perspective of a woman. I cannot speak for a man. I have never been a man yet. My mother believed in me. She was a feminist. Had I been a man, I don't know how that would have changed our relationship. I did have a brother. Had I been a man, it would have been very different relationship with my father. In many ways, I was the successful son that he wanted. After all, I was his spitting image.
John Berger (writer): Is there space everywhere or only in some places?
LB: Space is something that you have to define. Otherwise it is like anxiety, which is too vague. A fear is something specific. I like claustrophobic spaces, because at least then you know your limits.
JB: Is there a musical instrument whose sound is a little like that of your drawings?
LB: The piano. Sometimes the drawings can be a simple note or sometimes they become quite elaborate like chords.
JB: What has recently given you "goose-pimples"?
LB: [The thought that] my source of inspiration would disappear.
JB: At your age, do some of the surprising works you have made now walk beside you instead of confronting you?
LB: I am exclusively interested in what I am working on now. Once I finish a work it leaves the house and is gone and has served it's purpose.
Tacita Dean (artist): Do you forget how old you are when you draw?
LB: I've always said that the emotions I'm interested in exploring have no relationship to gender and for that matter age.
Darian Leader (psychoanalyst and writer): After all these years of work, which ideas and materials do you find yourself drawn back to?
LB: My themes always come and go, but they always remain constant. The inability to make yourself loved is always at the root of the problem. Sometimes I work to be loved, and other times I work because I don't feel loved.
DL: Has there been a sustained period when you were unable to work? And do you have an idea why?
LB: I have never stopped working. There have been moments of depression that for sure took its toll. But I also know that I could always depend on my work to get me out of the depression.
Marlene Dumas (painter): What keeps you working?
LB: Some people say that everything has been done in art. I say the exact opposite. I still feel that there is a lot I want to say and I have to say.
Cristina Iglesias (sculptor): What is the place of fantasy in your work? As a state of mind can it be useful?
LB: I'm not concerned with fantasy in my work. I'm interested exclusively in today, the here and the now.
Francis Upritchard (artist): What is your most recent memorable dream?
LB: I don't remember my dreams. I do remember a dream of long ago where my father was crying and a cat came and gobbled up his tears.
Chris Ofili (painter): If you have a recurrent dream, what might be its soundtrack?
LB: I compose my own music. In fact, I sing all day.
Adrian Searle: What has your work taught you?
LB: I feel my work has made me a nicer person. Or at least I hope so because I'm trying to be good.
From our Readers: Back to top
Technology and entrepreneurial leaders: a match made only in Heaven?
That was the title of the feature article in the December issue which gave place to much insightful feedback from readers in different countries, backgrounds and bread-earning activities. You may find the full article in www.newsleader.blogspot.com.
In a nutshell, the article aimed at dispelling the deleterious belief that Latin American managerial creativity is doomed because the region's inventiveness finds no emotional foothold in a culture which is predominantly Catholic.
I argued that a traditional low self-esteem on this issue was bolstered by work such as that of Max Weber and a few historical accidents, such as the Dutch invasion of Recife, whose short life-span, left, understandably, nostalgic feelings in many Brazilians.
Without attempting to turn historical events into a parlour game I also argued that Protestantism had a mixed entrepreneurial record when it came to the USA itself; and for all the above reasons Latin American entrepreneurs had their future in their own hands and only themselves to blame for their eventual failures.
Below I reproduce -in their original languages - a selection of the letters received, and following them, with my recognition and gratitude to the seriousness of the readers' gracious efforts, I add a rejoinder of my own, in English; which I will gladly follow-up with the same commentators, of even with new ones.
Alfredo Behrens.
Alfredo,
Muito interessante a discussão sobre os holandezes e o protestantismo. Quero, no entanto, fazer um comentário.
A diferença em Pernambuco foi muito menos do fato de serem holandezes do que de ser o príncipe Mauricio de Nassau quem era. Estava aí um dos grandes holandezes de todos os tempos, totalmente fora do padrão - já relativamente alto - dos seus compatriotas. Portanto, a revolução que trouxe para Recife foi a revolução de Nassau, nem foi dos holandezes e nem dos protestantes. Note-se a mesmice da colonia quando ele se foi, sucedidos por holandezes comuns e correntes.
Mas vale a discussão
Claudio de Moura Castro
Grupo Pitágoras
Belo Horizonte, Brasil
Alfredo,
Esta crítica al viejo Max es un poco "light", ¿no te parece? Weber fué muy especifico en aclarar sus caminos metodológicos. La aplicación de sus "tipos" de análisis a una coyuntura histórica están lejos de ser una mera operación de "inferencia"... Por otro lado él nunca dijo que la sola presencia de una pandilla de comerciantes protestantes sea condición de la aparición de formas capitalistas de producción...
Nicolás Nobile
FLACSO y BNV Comunicación Digital Estratégica, Buenos Aires
Alfredo,
In my opinion, the question is not related to what religion, but ethics. Technology thrives when it is protected by patents, and when the business enviroment is protected by a decent Judiciary. In Latin America, our "expert" politicians decided not to recognize patents, a direct form of theft, in order to favour a few local businessmen, which in turn found that the risk involved in investing in technology, was replaced by a risk free investment in political contributions. If this region is to succeed in this globalized world, we need to have an ethical enviroment which allows us to develop, compete, and succeed.
A.F. Keen
Entrepreneur
São Paulo, Brazil
Alfredo,
Sobre el texto de tecnología y emprendedores. Creo que describís una ligazón directa entre adopción de tecnología y regulaciones y dudas de que exista una directa entre tecnología y religión. Creo que la cuestión weberiana allí sería si existe una relación entre religión y regulaciones. En cierta medida, afirmás que tampoco existe esa segunda relación al hacer notar que los estados más protestantes de la Unión adoptaron la esclavitud y la mayor población católica se agrupó en el Norte. Es cierto, pero la inmigración irlandesa y la italiana llegaron con instituciones ya consolidadas y que en alguna medida reflejaban la ética del protestantismo.
Más allá de qué es lo cierto, me atrapó la posibilidad de salir de la empresa como unidad de análisis y tomar como referencia la relación global, ecológica, entre las organizaciones y su ambiente. Creo que son ideas provocativas que ayudan a pensar el sentido de la acción en América Latina, tanto para las empresas como para las universidades o los hacedores de políticas públicas.
Ernesto Gore
Universidad de San Andrés
Buenos Aires
A rejoinder, by Alfredo Behrens.
Indeed, the Prince of Nassau was an exemplary figure, as Claudio de Moura Castro points out; perhaps exemplary to the point of diminishing the importance of the Prince's cultural heritage as the source of his creative influence in Brazil’s Recife when he was entrusted with the administration of a region invaded by the Protestant Dutch. Claudio may well be right in stressing the personality issue over the cultural one in oposing the niceties of the Protestant Prince with the dullness of the Protestant Ducth or even the Catholic Portuguese administration of Recife - before and after the Prince.
Nonetheless, I recollect similar nostalgic reminiscences byt Latin Americans, this time regarding the British incursions in the River Plate area. Both, the Dutch and the English, were Protestant invasions on Catholic dominions. Yet, despite the two centuries between them; despite their manifest commercial interests - as Nicolás Nobile rightly points out - and despite the British invasions not rendering a figure to the historical standing of the Prince of Nassau; both Protestant invasions brought about an undeniable cultural renewal with them.
There is something in the work ethic of Protestantism that Catholics intimately know is different, and at times, perhaps even more effective. This is why those Protestant invasions are recalled with nostalgia: because those Protestant invasions brought with them cultural feats in engineering and the arts and culture that the Catholic authorities had neglected for too long.
However, it need not always have been like that, after all, one of the most impressive start-up venture of all times – Cristopher Columbus’ own - was a Catholic venture! Which helps to show that Protestantism was not and therefore need not always be, more effective at innovation!
Nicolás is also right in stressing, more than I did, the significance of Max Weber’s opus magna. Yet, when tracing the roots of an historical trauma, I was not as interested in what Max Weber precisely wrote, but rather in the social function of his work. Under this light, what the people believe Max Weber wrote may be more relevant in legitimizing and shaping a sense of despair among Latin American entrepreneurs, even among those who toil oblivious of Max Weber.
Then, there is the real side of business, helpfully pointed out by Tony Keen: many Latin American governments have not done enough in protecting intellectual rights, a necessary condition in fostering the development of technology. Worse, many governments have created and environment which distracts honest entrepreneurial activity from investing in productivity increases.
I have no doubt about the relevance of Tony's comments; our countries do have a problem with this issue. However, I like to believe that Latin America’s travails with corruption is more political than cultural. By this I mean that the issue which should concern us is whether such “regulatory environment” is intrinsically cultural (Catholic?), in which case our societies would be doomed; or whether the issue is associated with a particular style of development, i.e. industrialization under overwhelming government protection, as I contend. In this perspective, the political arena reflects a concentration of economic power which reinforces the self-serving regulatory environment; and produces research divorced from the productive apparatus of society and poverty.
The issue of the "regulatory environment" brings us to Ernesto Gore’s interesting contribution. He seeks to bring the political and cultural issues together: Protestantism may foster a more creative intellectual environment through a more appropriate regulatory environment, which may draw on both Catholic and Protestant traditions.
Ernesto may well be right, for individual-centered Protestantism may be more adroit at stimulating personal initiative than top-down Catholicism would ever be able to. Yet, again, let us recall Christopher Columbus' maiden voayage to the New World. Protestants were among those that reamained ashore in fear of a flat Earth.
In my view, that of an agnostic; our received Catholicism reflects the powerful hierarchy of the Catholic Church, a top-down command and control bureaucracy. In fact the Catholic Church’s bureaucratic model is not very different from the XIX century military-based managerial model adopted by the most successful American businesses during much of the XXth century.
Despite the similarity in the models, we cannot hold that because of the current Catholic church's resistance to modernization that the XIX century managerial model was ineffective in producing and deploying the technological revolution that keeps us in a state of awe.
That the control model may be found stifling today does not mean that it had no use and was intrinsically wrong, or even poor. The same with the Catholic Church, who until recentely, with figures of the stature of a Teilhard de Chardin, would have wanted man to become the "spearhead of evolution;" yet now oposes research on stem cells.
So, if both the Protestant business managerial command and control model is shared by the Catholic Church's bureaucracy and Protestant business in the New World and Australasia lies on a Catholic exploratory business venture; we cannot lay back on the half-learned century-old efforts of Max Weber and sustain that there is no way to bridge the gap.
As Ernesto points out, both organizational structures draw on one another. What we need is to explain the cultural roots, if any, of the economic differences, i.e. such as those between French and English Canada, and act upon that information. We must understand the roots of the incontrovertibly superior effectiveness of the social organizations in most of the Atlantic Northern hemisphere, in developing the technologies which free people from the constraints of hunger, disease, idiocy and physical labour. That is what most of development is all about.
Perhaps we may look further into the different ways in which Protestant and Catholic social organizations deal with the individual; on how they construe their social goals and on how those affect technological development and deployment.
We may have to look for the answers in further exchanges, which I would gladly welcome. Perhaps some may wish to contribute as a guest authors.
In the meantime, let us not distract our thinking entrepreneurs: investing in productivity increases is the only way out to sustain competitiveness; and it is investing in technology that helps. That was the reasons I wrote the article in the first place.
Many thanks to all our readers.
Alfredo Behrens
Editor
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Alfredo Behrens
editor@newsleader.com.br
Phone +55 11 38713363
São Paulo, SP
Brazil
Alfredo Behrens is an economist. He holds a PhD by the University of Cambridge, has lectured at Princeton’s Woodrow Wilson School, at FSU and at PUC-RJ. He has broad experience in advising high public officials, shareholders and board members of banks and large corporations on issues such as: governance, corporate relations with governments, M&As and strategic planning focused on the internationalization of companies. He has worked in or with the private and public sector in the Americas, East and Western Europe and Southern Africa. He was awarded the MacNamara Fellowship by the World Bank, the Hewlett fellowship by Princeton University and the Jean Monet Fellowhship by the European University, Fiesole, Italy.
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NewsLeader
Year 2, issue # 1
Alfredo Behrens
Editor
This is a space for quick conversations on management and society.
Our interests gravitate around issues of leadership, management of workteams, technology, creativity, emotional intelligence and most issues which should be shared to shape a better world.
Our approach brings thorough perspectives into real-life situations and seeks awareness rather than complience.
Your comments will be most welcome.
The Latin American historical hero is frequently depicted on horseback and brandishing a sword as if ready to make kebabs out of all opponents. This icon of leadership quietly impoverishes the diversity of leadership styles, and possibly corporate performance as well.
Fittingly, this post- Carnival issue focuses on the role of virtue in leadership. It turns out that the most effective business leaders are not the alpha males epitomized by the press - or in our historical monuments; but those who lead exemplarily; see more in the Feature Article.
Not only out of virtue, but also as a result of rational choice; and quoting examples from Mexico and Brazil; we call your attention to opportunities for growth in selling to the poor. Besides offering profitable opportunities, these new ventures may well help business to grow while developing new leaders and perhaps new leading styles too. Look this up in Managerial Insights.
In Nourishment for the mind and Soul we bring you excerpts of a The Guardian article on Louise Bourgeois, who, at 92, cannot help to continue to create.
Readership multiplied by 20 since September last! We are now over four thousand sixhundred hundred and we receive kind letters of praise from the likes of AMCHAM Brazil and Intel Capital (Latin America). We also begin to interact with readers as you may gather by reading the readers' reactions,in the From our Readers section.
Who makes up the NewsLeader tribe? It is hard to figure out exactly who we are as we grow so rapidly; but of those over 4600 subscribers, over half are in Brazil, another one thousand are elsewhere in Latin America, and the rest, over 1000, are mostly in English speaking countries. Well over three thousand of our subscribers are business persons, and over one thousand are mostly in academic life, but also in politics, public administration and journalism.
Please continue to circulate NewsLeader among your colleagues and continue to interact with us in any way you wish, including with recommendations for new topics. It is very rewarding to notice we do feel a need.
Yours gratefully,
The Editor.
IN THIS ISSUE
Sponsorship notice: Leadership Cafés are fora to enhance your own personal development and your company's future.
Feature article on leadership: "Feudal values boost stock price"
Management insights: "Selling to the poor may well be your next market"
Nourishment for the mind and soul: Louise Bourgeois, working at 92, answers questions
From our Readers: A spirited exchange on innovation and religion
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FEATURE ARTICLE Back to top
Feudal values boost stock price
Alfredo Behrens
Humility, loyalty, integrity are virtues frequently taken to be pre-capitalist in the sense that, having no exchange value, they cannot fetch a price. Yet, what if feudal virtues turned out to add value to a company's stock?
In a world leaning towards entertainment rather than information, the likes of Jack Welch, Lee Iacocca and Gianni Agnelli are bound to be better known than Darwin Smith, CEO of Kimberley-Clark. However, Smith’s tenure led to his company outperforming the stock market by almost twice than GE under Welch’s own tenure.
Indeed, under Smith, Kimberley-Clark, outperformed stars like Hewlett-Packard, 3M and Coca-Cola, let alone Chrysler or FIAT. Nonetheless, for six years running, Fortune declared the now notorious ENRON “the most creative company in America,” while Darwin Smith did not make even the specialized business press’ headlines.
Jim Collins led a five year study into almost 1500 American companies seeking to unearth what was it that leaders had in common when they succeeded in turning failing companies into great ones. The leaders themselves he called Level 5 Leaders.[1]
Personal humility is one of the common characteristics and one of the reasons that the leaders were relatively ignored by the press. Neither Smith, nor Gillette’s Colman Mokler, nor Abbott’s George Cain sought the press. Neither did the eight other Level 5 Leaders. Further, when interviewed, those leaders would credit their collaborators more readily than themselves. When hard pressed to explain what made them so effective many of these non-celebrity business leaders would also claim that they were simply lucky.
Luck may have had some role, but it did not help their competitors as much. For instance, Abbott Laboratories outperformed the stock market permormance by twice as much as Merck or Pfizer did. Circuit City’s Alan Wurtzel helped that company outperform the stock market by almost 19 to 1; but Mr. Wurtzel claimed that luck also helped him find the right successor.
Why would humility be so important?
Perhaps because it allows for close collaborators to feel dignified by their work, for they are more likely to take credit for their own work than would, say, collaborators of FIAT’s Gianni Agnelli; too busy cruising “his car across red lights, with his chauffeur cowering in the back seat.”
Perhaps as important, the humility of the Level 5 Leaders also assures that lower-ranking collaborators will feel that their best efforts are made on behalf of something larger than themselves, even larger than their bosses. An impression that would not be borne as readily by the workers of Scott Paper under Al Dunlap, the “Rambo in pinstripes,” who pocketed $100 million for less than two years of downsizing at Scott Paper. The latter’s performance, incidentally, was surpassed by Kimberly Clark under Darwin Smith.
Besides personal humility, these Level 5 Leaders also displayed a relentless resolve. Darwin Smith worked through his radiation therapy to cure him from cancer. George Cain - himself an 18 year insider and heir of Abott Laboratories - had to wipe the company clean of the traits of nepotism that had stalled its creativity. Charles R. "Cork" Walgreen III shifted his business out of the food service sector; where it had
invented the malted milk shake and where led the market with over 500 restaurants.
Where does their resolve come from? One may only speculate, but drawing on the Jungian foundations of Jaworski’s Synchronicity,[2] one may admit that in this larger-than-human resolve there is a well of certainty that may stem from a feeling of “oneness” in which the individual leader flows in a river of unconscious determination, larger than himself. This allows us to better understand Collin’s appreciation of “an even stoic resolve” in the determination with which these leaders followed their destiny, and instilled “discipline” within the rank and file. Discipline, in this context, does away with the need for bureaucracy and puts each person at his own helm.
Under this approach “personal humility” makes more sense; because the leader feels he is only allowing himself and others to flow with a force beyond his control, which, in Collin’s study the leaders referred to as “luck”, perhaps for lack of a better word.
In this role, attuned with a force larger than oneself, the leader acts more as Greenleaf’s Servant leader; geared to serve his organization over himself; thus also helping to understand the readiness with which Collins’ leaders credited their collaborators for the company’s success; and the care they put into selection their successors. The latter is in itself a litmus test for stewardness, rather than personality cult.
You may disagree with my attempt to reconcile the seemingly disparate character traits and the behaviour of the most effective corporate leaders singled out by Collins, but one thing is for sure: celebrity leaders did not lead corporate performance as high as Collin’s Level 5 Leaders did. In fact quite a few celebrity leaders even tarnished the reputation of their companies much in the same way that, in politics, a comparable style of celebrity leadership helped wreck the economies of countries like Argentina, or Ecuador.
However, Collins’ work has returned the lost lustre to leaders who, holding precisely these old-fashioned virtues, have led their companies to unparalleled success; and in the process of doing so, these leaders paved the way for their own succession.
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[1] Jim Colins, Level 5 Leadership, Harvard Business Review; Jan 2001, Vol 79 issue 1, page 66.
[2] Joseph Jaworski, “Synchronicity: The Inner Path of Leadership” with an introduction by Peter Senge. Berret-Koehler publishers, 1995.
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Further reading on qualities of leadership: there is an endless list of psychological qualifications for leadership, but - given Jack Welch's standing in the leadership field - it is not a complete waste of time to see Jack's own list, in a reproduction of his Wall Street Jounal article of last January 23rd.
MANAGEMENT INSIGHTS Back to top
Selling to the poor may well be your next market
Alfredo Behrens
There is a lot of waste energy hanging around us, but engineers are quick to point out that it is hard to harness waste energy and put it to useful work. The same with the poor; however ubiquitous they still are too scattered over the planet and each one has too little to spare to pay you with.
This is why marketing gurus have frowned upon the poor. However nasty that may sound, it has always been hard to argue with the diagnosis. This is why it is refreshing to read about a new initiative to reinstate the poor as King of Growth by C.K. Prahalad, professor of corporate strategy at Michigan Business School.
In “The Fortune at the Bottom of the Pyramid,” to appear in the next American Summer, Professor Prahalad adds up all the purchasing power of the poor in the largest developing countries and comes up with a potential market, of sorts, larger than the GDP’s of the largest European countries plus Japan. Such a market begins to sound interesting, perhaps not enough for a multinational to move in any of those poor markets, but enough to trigger awareness. If a company is already present in a country with many poor, could the company – multinational or not - be missing an opportunity? Perhaps.
Professor Prahalad’s adding-up of the poor is effective in raising awareness, but if you are in the cement business in Mexico it might not help to know that you are missing out on customers in Indonesia. Yet, what if you were missing out opportunities in Mexico itself? This is precisely what Cemex discovered in Guadalajara: a way to sell to the poor and make a stable profit while at it.
Cemex is the World’s third largest cement manufacturer and Mexico’s largest one. In the course of its business Cemex realized that while its large construction clients offered a profitable niche, their demand tended to be more volatile than the “build-it-yourself” one. The latter market consists mainly of poor households earning less than $5 a day; far from Cemex’s typical client. The interesting issue is that this market offered a significant growth opportunity.
Cemex moved to organize this market by building on the social capital of the poor: their inherent networking abilities and solidarity liaisons. Small teams of three to ten people were bundled into saving teams focused on home improvements. To them Cemex offered credit to buy cement as well as ancillary services: architectural and engineering advice, plus schools for construction workers and deposits for the cement and other building equipment.
A few years later Cemex brags having extended $10 million in credit to the poor and having made 36 thousand new customers. Cemex is still is adding over 1500 new customers every month. By 2005 Cemex expects to have close to 1 million customers among the “build-it-yourself” market niche. Margins are 3 percentage points lower than the average in the business, but Cemex has extended its market into a vaster and more stable market. Besides, plenty of opportunities now exist for cross-selling, which remain still untapped.
Knowledge @ Wharton also points out to other success stories such as Hindustan Unilever’s in selling soap to poor Indians. But one can also point out to high short term losses made by ill-advised incursions in those markets, like the one of Lloyds Bank in Brazil when it bought the financial house Losango.
Losango specializes in extending conventional credit to poor households to buy electricity-operated household equipment like pressing irons and beaters. Lloyds saw in Losango an easy opportunity to elbow its way into the financial services to the poor; only to find out, as unemployment increased, that bad loans were too many besides too small and too scattered to deserve the effort a foreign bank would have to deploy to clean-up its books. Central Bank guidelines - perhaps inadequate when dealing with loans to the poor - did not help either, as they called for higher-than-necessesary reserves for this type of bad loans; because poorer borrowers make better payers.
For a time “Losango” was known at Lloyds’ board of directors' meetings as “Loss and go”, as Lloyds would have gladly gotten rid of Losango, had they been able to. They were not and they finally managed to turn Losango around into a significant money maker, capable of interesting HSBC, as it bought Lloyds out of Brazil.
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Hot Tip
Think out of the box, suspend your jugdgment and your "Big Five" consultants, call on your local university's social scientists and discuss the new venture into the "poor's market" with a bold and younger executive team which the experience may shape into your company's future leaders.
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As the Losango case illustrates, moving into the lower income markets is not the for faint-hearted. It requires a specific marketing strategy, one that may involve the knowledge of professionals not close to conventional decision makers. Cemex relied on the wisdom of a former socialist advisor to Chile's President Allende. In some ways you would do well in suspending your reliance on conventional advisors, too prone to tell you the new strategy will not work. The strategy also requires resolve and an unusual dose of audacity and managerial low-fat flexibility.
None of the above are likely to come easily, but perhaps selling to the poor may also prove a valuable ground to form new business leaders. Surely a company - multinational or not - can think of a couple of fast track executives eager to try their teeth on a challenge. One can think of Brazil’s intercity transportation business allocating a few heirs to develop new transportation services more attuned with the needs of the poor, or Argentina’s industry testing its proverbial inventiveness in selling food and cleansing materials to its own poor.
After all, current macroeconomic conditions in most Latin American countries leave little hope for growth as usual. Growth by mergers and acquisitions is one of the most boring alternatives, and one soon to run into anti-trust regulatory difficulties; such as Nestlé (Brazil) did, when it attempted to buy Garoto.
Cemex’s and Lloyds' way points out to an interesting growth avenue, one also likely to allow private business to grow in an even more socially responsible way; while also providing good testing grounds for future leaders.
Nourishment for the mind and soul Back to top
Any answers?
In this section we aim to provide intersections between art and work. Ocassionaly we find examples of artists at work, as in this text, excerpted from
The Guardian, Thursday February 26, 2004
Louise Bourgeois, the grande dame of US art, is 92 and still working. To mark the opening of a new show, we (The Guardian) asked artists, writers and critics to put a question to her. Adrian Searle introduces the results
Louise Bourgeois studied under Leger (who convinced her she was a sculptor rather than a painter), had known Bonnard and Breton, Brancusi and Duchamp, yet she could never be defined as belonging to a generation or a movement. Her career has also mirrored the place of women artists in the 20th century. To mark the opening of an exhibition of her work at the Fruitmarket gallery in Edinburgh, I (Adrian Searle) asked a number of artists, critics and writers to provide a question for her, on a topic of their choosing. Some asked more than one.
Rachel Whiteread (artist): What is your favourite invention (from your own lifetime)?
Louise Bourgeois: I don't watch TV. I don't use a computer, a fax or a cellphone. I'm not driving or flying anywhere. So in the end I'd have to say it's the radio. I listen to the radio at night.
Marina Warner (writer): Did part of growing up in France mean contact with the sensory rituals and atmosphere of the Church, and its beliefs in an incarnate god? And did any of this connect with your imagination of the flesh?
LB: I was raised a Catholic. But I am not religious. In my work, I am interested in real flesh and blood.
Juergen Teller (photographer): How important has sex been to your work?
LB: I think sex and the absence of sex is terribly important.
Richard Wentworth (artist): You obviously like oppositions. You have spoken sometimes about your father so I have always wondered - how is the female artist's intelligence different from the male's? What if you were a man and your mother had been a powerful source for your work?
LB: I can only talk from the perspective of a woman. I cannot speak for a man. I have never been a man yet. My mother believed in me. She was a feminist. Had I been a man, I don't know how that would have changed our relationship. I did have a brother. Had I been a man, it would have been very different relationship with my father. In many ways, I was the successful son that he wanted. After all, I was his spitting image.
John Berger (writer): Is there space everywhere or only in some places?
LB: Space is something that you have to define. Otherwise it is like anxiety, which is too vague. A fear is something specific. I like claustrophobic spaces, because at least then you know your limits.
JB: Is there a musical instrument whose sound is a little like that of your drawings?
LB: The piano. Sometimes the drawings can be a simple note or sometimes they become quite elaborate like chords.
JB: What has recently given you "goose-pimples"?
LB: [The thought that] my source of inspiration would disappear.
JB: At your age, do some of the surprising works you have made now walk beside you instead of confronting you?
LB: I am exclusively interested in what I am working on now. Once I finish a work it leaves the house and is gone and has served it's purpose.
Tacita Dean (artist): Do you forget how old you are when you draw?
LB: I've always said that the emotions I'm interested in exploring have no relationship to gender and for that matter age.
Darian Leader (psychoanalyst and writer): After all these years of work, which ideas and materials do you find yourself drawn back to?
LB: My themes always come and go, but they always remain constant. The inability to make yourself loved is always at the root of the problem. Sometimes I work to be loved, and other times I work because I don't feel loved.
DL: Has there been a sustained period when you were unable to work? And do you have an idea why?
LB: I have never stopped working. There have been moments of depression that for sure took its toll. But I also know that I could always depend on my work to get me out of the depression.
Marlene Dumas (painter): What keeps you working?
LB: Some people say that everything has been done in art. I say the exact opposite. I still feel that there is a lot I want to say and I have to say.
Cristina Iglesias (sculptor): What is the place of fantasy in your work? As a state of mind can it be useful?
LB: I'm not concerned with fantasy in my work. I'm interested exclusively in today, the here and the now.
Francis Upritchard (artist): What is your most recent memorable dream?
LB: I don't remember my dreams. I do remember a dream of long ago where my father was crying and a cat came and gobbled up his tears.
Chris Ofili (painter): If you have a recurrent dream, what might be its soundtrack?
LB: I compose my own music. In fact, I sing all day.
Adrian Searle: What has your work taught you?
LB: I feel my work has made me a nicer person. Or at least I hope so because I'm trying to be good.
From our Readers: Back to top
Technology and entrepreneurial leaders: a match made only in Heaven?
That was the title of the feature article in the December issue which gave place to much insightful feedback from readers in different countries, backgrounds and bread-earning activities. You may find the full article in www.newsleader.blogspot.com.
In a nutshell, the article aimed at dispelling the deleterious belief that Latin American managerial creativity is doomed because the region's inventiveness finds no emotional foothold in a culture which is predominantly Catholic.
I argued that a traditional low self-esteem on this issue was bolstered by work such as that of Max Weber and a few historical accidents, such as the Dutch invasion of Recife, whose short life-span, left, understandably, nostalgic feelings in many Brazilians.
Without attempting to turn historical events into a parlour game I also argued that Protestantism had a mixed entrepreneurial record when it came to the USA itself; and for all the above reasons Latin American entrepreneurs had their future in their own hands and only themselves to blame for their eventual failures.
Below I reproduce -in their original languages - a selection of the letters received, and following them, with my recognition and gratitude to the seriousness of the readers' gracious efforts, I add a rejoinder of my own, in English; which I will gladly follow-up with the same commentators, of even with new ones.
Alfredo Behrens.
Alfredo,
Muito interessante a discussão sobre os holandezes e o protestantismo. Quero, no entanto, fazer um comentário.
A diferença em Pernambuco foi muito menos do fato de serem holandezes do que de ser o príncipe Mauricio de Nassau quem era. Estava aí um dos grandes holandezes de todos os tempos, totalmente fora do padrão - já relativamente alto - dos seus compatriotas. Portanto, a revolução que trouxe para Recife foi a revolução de Nassau, nem foi dos holandezes e nem dos protestantes. Note-se a mesmice da colonia quando ele se foi, sucedidos por holandezes comuns e correntes.
Mas vale a discussão
Claudio de Moura Castro
Grupo Pitágoras
Belo Horizonte, Brasil
Alfredo,
Esta crítica al viejo Max es un poco "light", ¿no te parece? Weber fué muy especifico en aclarar sus caminos metodológicos. La aplicación de sus "tipos" de análisis a una coyuntura histórica están lejos de ser una mera operación de "inferencia"... Por otro lado él nunca dijo que la sola presencia de una pandilla de comerciantes protestantes sea condición de la aparición de formas capitalistas de producción...
Nicolás Nobile
FLACSO y BNV Comunicación Digital Estratégica, Buenos Aires
Alfredo,
In my opinion, the question is not related to what religion, but ethics. Technology thrives when it is protected by patents, and when the business enviroment is protected by a decent Judiciary. In Latin America, our "expert" politicians decided not to recognize patents, a direct form of theft, in order to favour a few local businessmen, which in turn found that the risk involved in investing in technology, was replaced by a risk free investment in political contributions. If this region is to succeed in this globalized world, we need to have an ethical enviroment which allows us to develop, compete, and succeed.
A.F. Keen
Entrepreneur
São Paulo, Brazil
Alfredo,
Sobre el texto de tecnología y emprendedores. Creo que describís una ligazón directa entre adopción de tecnología y regulaciones y dudas de que exista una directa entre tecnología y religión. Creo que la cuestión weberiana allí sería si existe una relación entre religión y regulaciones. En cierta medida, afirmás que tampoco existe esa segunda relación al hacer notar que los estados más protestantes de la Unión adoptaron la esclavitud y la mayor población católica se agrupó en el Norte. Es cierto, pero la inmigración irlandesa y la italiana llegaron con instituciones ya consolidadas y que en alguna medida reflejaban la ética del protestantismo.
Más allá de qué es lo cierto, me atrapó la posibilidad de salir de la empresa como unidad de análisis y tomar como referencia la relación global, ecológica, entre las organizaciones y su ambiente. Creo que son ideas provocativas que ayudan a pensar el sentido de la acción en América Latina, tanto para las empresas como para las universidades o los hacedores de políticas públicas.
Ernesto Gore
Universidad de San Andrés
Buenos Aires
A rejoinder, by Alfredo Behrens.
Indeed, the Prince of Nassau was an exemplary figure, as Claudio de Moura Castro points out; perhaps exemplary to the point of diminishing the importance of the Prince's cultural heritage as the source of his creative influence in Brazil’s Recife when he was entrusted with the administration of a region invaded by the Protestant Dutch. Claudio may well be right in stressing the personality issue over the cultural one in oposing the niceties of the Protestant Prince with the dullness of the Protestant Ducth or even the Catholic Portuguese administration of Recife - before and after the Prince.
Nonetheless, I recollect similar nostalgic reminiscences byt Latin Americans, this time regarding the British incursions in the River Plate area. Both, the Dutch and the English, were Protestant invasions on Catholic dominions. Yet, despite the two centuries between them; despite their manifest commercial interests - as Nicolás Nobile rightly points out - and despite the British invasions not rendering a figure to the historical standing of the Prince of Nassau; both Protestant invasions brought about an undeniable cultural renewal with them.
There is something in the work ethic of Protestantism that Catholics intimately know is different, and at times, perhaps even more effective. This is why those Protestant invasions are recalled with nostalgia: because those Protestant invasions brought with them cultural feats in engineering and the arts and culture that the Catholic authorities had neglected for too long.
However, it need not always have been like that, after all, one of the most impressive start-up venture of all times – Cristopher Columbus’ own - was a Catholic venture! Which helps to show that Protestantism was not and therefore need not always be, more effective at innovation!
Nicolás is also right in stressing, more than I did, the significance of Max Weber’s opus magna. Yet, when tracing the roots of an historical trauma, I was not as interested in what Max Weber precisely wrote, but rather in the social function of his work. Under this light, what the people believe Max Weber wrote may be more relevant in legitimizing and shaping a sense of despair among Latin American entrepreneurs, even among those who toil oblivious of Max Weber.
Then, there is the real side of business, helpfully pointed out by Tony Keen: many Latin American governments have not done enough in protecting intellectual rights, a necessary condition in fostering the development of technology. Worse, many governments have created and environment which distracts honest entrepreneurial activity from investing in productivity increases.
I have no doubt about the relevance of Tony's comments; our countries do have a problem with this issue. However, I like to believe that Latin America’s travails with corruption is more political than cultural. By this I mean that the issue which should concern us is whether such “regulatory environment” is intrinsically cultural (Catholic?), in which case our societies would be doomed; or whether the issue is associated with a particular style of development, i.e. industrialization under overwhelming government protection, as I contend. In this perspective, the political arena reflects a concentration of economic power which reinforces the self-serving regulatory environment; and produces research divorced from the productive apparatus of society and poverty.
The issue of the "regulatory environment" brings us to Ernesto Gore’s interesting contribution. He seeks to bring the political and cultural issues together: Protestantism may foster a more creative intellectual environment through a more appropriate regulatory environment, which may draw on both Catholic and Protestant traditions.
Ernesto may well be right, for individual-centered Protestantism may be more adroit at stimulating personal initiative than top-down Catholicism would ever be able to. Yet, again, let us recall Christopher Columbus' maiden voayage to the New World. Protestants were among those that reamained ashore in fear of a flat Earth.
In my view, that of an agnostic; our received Catholicism reflects the powerful hierarchy of the Catholic Church, a top-down command and control bureaucracy. In fact the Catholic Church’s bureaucratic model is not very different from the XIX century military-based managerial model adopted by the most successful American businesses during much of the XXth century.
Despite the similarity in the models, we cannot hold that because of the current Catholic church's resistance to modernization that the XIX century managerial model was ineffective in producing and deploying the technological revolution that keeps us in a state of awe.
That the control model may be found stifling today does not mean that it had no use and was intrinsically wrong, or even poor. The same with the Catholic Church, who until recentely, with figures of the stature of a Teilhard de Chardin, would have wanted man to become the "spearhead of evolution;" yet now oposes research on stem cells.
So, if both the Protestant business managerial command and control model is shared by the Catholic Church's bureaucracy and Protestant business in the New World and Australasia lies on a Catholic exploratory business venture; we cannot lay back on the half-learned century-old efforts of Max Weber and sustain that there is no way to bridge the gap.
As Ernesto points out, both organizational structures draw on one another. What we need is to explain the cultural roots, if any, of the economic differences, i.e. such as those between French and English Canada, and act upon that information. We must understand the roots of the incontrovertibly superior effectiveness of the social organizations in most of the Atlantic Northern hemisphere, in developing the technologies which free people from the constraints of hunger, disease, idiocy and physical labour. That is what most of development is all about.
Perhaps we may look further into the different ways in which Protestant and Catholic social organizations deal with the individual; on how they construe their social goals and on how those affect technological development and deployment.
We may have to look for the answers in further exchanges, which I would gladly welcome. Perhaps some may wish to contribute as a guest authors.
In the meantime, let us not distract our thinking entrepreneurs: investing in productivity increases is the only way out to sustain competitiveness; and it is investing in technology that helps. That was the reasons I wrote the article in the first place.
Many thanks to all our readers.
Alfredo Behrens
Editor
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Alfredo Behrens
editor@newsleader.com.br
Phone +55 11 38713363
São Paulo, SP
Brazil
Alfredo Behrens is an economist. He holds a PhD by the University of Cambridge, has lectured at Princeton’s Woodrow Wilson School, at FSU and at PUC-RJ. He has broad experience in advising high public officials, shareholders and board members of banks and large corporations on issues such as: governance, corporate relations with governments, M&As and strategic planning focused on the internationalization of companies. He has worked in or with the private and public sector in the Americas, East and Western Europe and Southern Africa. He was awarded the MacNamara Fellowship by the World Bank, the Hewlett fellowship by Princeton University and the Jean Monet Fellowhship by the European University, Fiesole, Italy.
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March, 2004
NewsLeader
Year 2, issue # 1
Alfredo Behrens
Editor
The Latin American historical hero is frequently depicted on horseback and brandishing a sword as if ready to make kebabs out of all opponents. This icon of leadership quietly impoverishes the diversity of leadership styles, and possibly corporate performance as well.
Fittingly, this post- Carnival issue focuses on the role of virtue in leadership. It turns out that the most effective business leaders are not the alpha males epitomized by the press - or in our historical monuments; but those who lead exemplarily; see more in the Feature Article.
Not only out of virtue, but also as a result of rational choice; and quoting examples from Mexico and Brazil; we call your attention to opportunities for growth in selling to the poor. Besides offering profitable opportunities, these new ventures may well help business to grow while developing new leaders and perhaps new leading styles too. Look this up in Managerial Insights.
In Nourishment for the mind and Soul we bring you excerpts of a The Guardian article on Louise Bourgeois, who, at 92, cannot help to continue to create.
Readership multiplied by 20 since September last! We are now over four thousand sixhundred hundred and we receive kind letters of praise from the likes of AMCHAM Brazil and Intel Capital (Latin America). We also begin to interact with readers as you may gather by reading the readers' reactions,in the From our Readers section.
Who makes up the NewsLeader tribe? It is hard to figure out exactly who we are as we grow so rapidly; but of those over 4600 subscribers, over half are in Brazil, another one thousand are elsewhere in Latin America, and the rest, over 1000, are mostly in English speaking countries. Well over three thousand of our subscribers are business persons, and over one thousand are mostly in academic life, but also in politics, public administration and journalism.
Please continue to circulate NewsLeader among your colleagues and continue to interact with us in any way you wish, including with recommendations for new topics. It is very rewarding to notice we do feel a need.
Yours gratefully,
The Editor.
IN THIS ISSUE
Sponsorship notice: Leadership Cafés are fora to enhance your own personal development and your company's future.
Feature article on leadership: "Feudal values boost stock price"
Management insights: "Selling to the poor may well be your next market"
Nourishment for the mind and soul: Louise Bourgeois, working at 92, answers questions
From our Readers: A spirited exchange on innovation and religion
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NewsLeader can also make arrangements for similar events to be held in other Brazilian cities in Portuguese, or elsewhere in Latin America, in Spanish or English.
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FEATURE ARTICLE Back to top
Feudal values boost stock price
Alfredo Behrens
Humility, loyalty, integrity are virtues frequently taken to be pre-capitalist in the sense that, having no exchange vale, they cannot fetch a price. Yet, what if feudal virtues turned out to add value to a company's stock?
In a world leaning towards entertainment rather than information, the likes of Jack Welch, Lee Iacocca and Gianni Agnelli are bound to be better known than Darwin Smith, CEO of Kimberley-Clark. However, Smith’s tenure led to his company outperforming the stock market by almost twice than GE under Welch’s own tenure.
Indeed, under Smith, Kimberley-Clark, outperformed stars like Hewlett-Packard, 3M and Coca-Cola, let alone Chrysler or FIAT. Nonetheless, for six years running, Fortune declared the now notorious ENRON “the most creative company in America,” while Darwin Smith did not make even the specialized business press’ headlines.
Jim Collins led a five year study into almost 1500 American companies seeking to unearth what was it that leaders had in common when they succeeded in turning failing companies into great ones. The leaders themselves he called Level 5 Leaders.[1]
Personal humility is one of the common characteristics and one of the reasons that the leaders were relatively ignored by the press. Neither Smith, nor Gillette’s Colman Mokler, nor Abbott’s George Cain sought the press. Neither did the eight other Level 5 Leaders. Further, when interviewed, those leaders would credit their collaborators more readily than themselves. When hard pressed to explain what made them so effective many of these non-celebrity business leaders would also claim that they were simply lucky.
Luck may have had some role, but it did not help their competitors as much. For instance, Abbott Laboratories outperformed the stock market permormance by twice as much as Merck or Pfizer did. Circuit City’s Alan Wurtzel helped that company outperform the stock market by almost 19 to 1; but Mr. Wurtzel claimed that luck also helped him find the right successor.
Why would humility be so important?
Perhaps because it allows for close collaborators to feel dignified by their work, for they are more likely to take credit for their own work than would, say, collaborators of FIAT’s Gianni Agnelli; too busy cruising “his car across red lights, with his chauffeur cowering in the back seat.”
Perhaps as important, the humility of the Level 5 Leaders also assures that lower-ranking collaborators will feel that their best efforts are made on behalf of something larger than themselves, even larger than their bosses. An impression that would not be borne as readily by the workers of Scott Paper under Al Dunlap, the “Rambo in pinstripes,” who pocketed $100 million for less than two years of downsizing at Scott Paper. The latter’s performance, incidentally, was surpassed by Kimberly Clark under Darwin Smith.
Besides personal humility, these Level 5 Leaders also displayed a relentless resolve. Darwin Smith worked through his radiation therapy to cure him from cancer. George Cain - himself an 18 year insider and heir of Abott Laboratories - had to wipe the company clean of the traits of nepotism that had stalled its creativity. Charles R. "Cork" Walgreen III shifted his business out of the food service sector; where it had
invented the malted milk shake and where led the market with over 500 restaurants.
Where does their resolve come from? One may only speculate, but drawing on the Jungian foundations of Jaworski’s Synchronicity,[2] one may admit that in this larger-than-human resolve there is a well of certainty that may stem from a feeling of “oneness” in which the individual leader flows in a river of unconscious determination, larger than himself. This allows us to better understand Collin’s appreciation of “an even stoic resolve” in the determination with which these leaders followed their destiny, and instilled “discipline” within the rank and file. Discipline, in this context, does away with the need for bureaucracy and puts each person at his own helm.
Under this approach “personal humility” makes more sense; because the leader feels he is only allowing himself and others to flow with a force beyond his control, which, in Collin’s study the leaders referred to as “luck”, perhaps for lack of a better word.
In this role, attuned with a force larger than oneself, the leader acts more as Greenleaf’s Servant leader; geared to serve his organization over himself; thus also helping to understand the readiness with which Collins’ leaders credited their collaborators for the company’s success; and the care they put into selection their successors. The latter is in itself a litmus test for stewardness, rather than personality cult.
You may disagree with my attempt to reconcile the seemingly disparate character traits and the behaviour of the most effective corporate leaders singled out by Collins, but one thing is for sure: celebrity leaders did not lead corporate performance as high as Collin’s Level 5 Leaders did. In fact quite a few celebrity leaders even tarnished the reputation of their companies much in the same way that, in politics, a comparable style of celebrity leadership helped wreck the economies of countries like Argentina, or Ecuador.
However, Collins’ work has returned the lost lustre to leaders who, holding precisely these old-fashioned virtues, have led their companies to unparalleled success; and in the process of doing so, these leaders paved the way for their own succession.
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[1] Jim Colins, Level 5 Leadership, Harvard Business Review; Jan 2001, Vol 79 issue 1, page 66.
[2] Joseph Jaworski, “Synchronicity: The Inner Path of Leadership” with an introduction by Peter Senge. Berret-Koehler publishers, 1995.
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Further reading on qualities of leadership: there is an endless list of psychological qualifications for leadership, but - given Jack Welch's standing in the leadership field - it is not a complete waste of time to see Jack's own list, in a reproduction of his Wall Street Jounal article of last January 23rd.
MANAGEMENT INSIGHTS Back to top
Selling to the poor may well be your next market
Alfredo Behrens
There is a lot of waste energy hanging around us, but engineers are quick to point out that it is hard to harness waste energy and put it to useful work. The same with the poor; however ubiquitous they still are too scattered over the planet and each one has too little to spare to pay you with.
This is why marketing gurus have frowned upon the poor. However nasty that may sound, it has always been hard to argue with the diagnosis. This is why it is refreshing to read about a new initiative to reinstate the poor as King of Growth by C.K. Prahalad, professor of corporate strategy at Michigan Business School.
In “The Fortune at the Bottom of the Pyramid,” to appear in the next American Summer, Professor Prahalad adds up all the purchasing power of the poor in the largest developing countries and comes up with a potential market, of sorts, larger than the GDP’s of the largest European countries plus Japan. Such a market begins to sound interesting, perhaps not enough for a multinational to move in any of those poor markets, but enough to trigger awareness. If a company is already present in a country with many poor, could the company – multinational or not - be missing an opportunity? Perhaps.
Professor Prahalad’s adding-up of the poor is effective in raising awareness, but if you are in the cement business in Mexico it might not help to know that you are missing out on customers in Indonesia. Yet, what if you were missing out opportunities in Mexico itself? This is precisely what Cemex discovered in Guadalajara: a way to sell to the poor and make a stable profit while at it.
Cemex is the World’s third largest cement manufacturer and Mexico’s largest one. In the course of its business Cemex realized that while its large construction clients offered a profitable niche, their demand tended to be more volatile than the “build-it-yourself” one. The latter market consists mainly of poor households earning less than $5 a day; far from Cemex’s typical client. The interesting issue is that this market offered a significant growth opportunity.
Cemex moved to organize this market by building on the social capital of the poor: their inherent networking abilities and solidarity liaisons. Small teams of three to ten people were bundled into saving teams focused on home improvements. To them Cemex offered credit to buy cement as well as ancillary services: architectural and engineering advice, plus schools for construction workers and deposits for the cement and other building equipment.
A few years later Cemex brags having extended $10 million in credit to the poor and having made 36 thousand new customers. Cemex is still is adding over 1500 new customers every month. By 2005 Cemex expects to have close to 1 million customers among the “build-it-yourself” market niche. Margins are 3 percentage points lower than the average in the business, but Cemex has extended its market into a vaster and more stable market. Besides, plenty of opportunities now exist for cross-selling, which remain still untapped.
Knowledge @ Wharton also points out to other success stories such as Hindustan Unilever’s in selling soap to poor Indians. But one can also point out to high short term losses made by ill-advised incursions in those markets, like the one of Lloyds Bank in Brazil when it bought the financial house Losango.
Losango specializes in extending conventional credit to poor households to buy electricity-operated household equipment like pressing irons and beaters. Lloyds saw in Losango an easy opportunity to elbow its way into the financial services to the poor; only to find out, as unemployment increased, that bad loans were too many besides too small and too scattered to deserve the effort a foreign bank would have to deploy to clean-up its books. Central Bank guidelines - perhaps inadequate when dealing with loans to the poor - did not help either, as they called for higher-than-necessesary reserves for this type of bad loans; because poorer borrowers make better payers.
For a time “Losango” was known at Lloyds’ board of directors' meetings as “Loss and go”, as Lloyds would have gladly gotten rid of Losango, had they been able to. They were not and they finally managed to turn Losango around into a significant money maker, capable of interesting HSBC, as it bought Lloyds out of Brazil.
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Hot Tip
Think out of the box, suspend your jugdgment and your "Big Five" consultants, call on your local university's social scientists and discuss the new venture into the "poor's market" with a bold and younger executive team which the experience may shape into your company's future leaders.
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As the Losango case illustrates, moving into the lower income markets is not the for faint-hearted. It requires a specific marketing strategy, one that may involve the knowledge of professionals not close to conventional decision makers. Cemex relied on the wisdom of a former socialist advisor to Chile's President Allende. In some ways you would do well in suspending your reliance on conventional advisors, too prone to tell you the new strategy will not work. The strategy also requires resolve and an unusual dose of audacity and managerial low-fat flexibility.
None of the above are likely to come easily, but perhaps selling to the poor may also prove a valuable ground to form new business leaders. Surely a company - multinational or not - can think of a couple of fast track executives eager to try their teeth on a challenge. One can think of Brazil’s intercity transportation business allocating a few heirs to develop new transportation services more attuned with the needs of the poor, or Argentina’s industry testing its proverbial inventiveness in selling food and cleansing materials to its own poor.
After all, current macroeconomic conditions in most Latin American countries leave little hope for growth as usual. Growth by mergers and acquisitions is one of the most boring alternatives, and one soon to run into anti-trust regulatory difficulties; such as Nestlé (Brazil) did, when it attempted to buy Garoto.
Cemex’s and Lloyds' way points out to an interesting growth avenue, one also likely to allow private business to grow in an even more socially responsible way; while also providing good testing grounds for future leaders.
Nourishment for the mind and soul Back to top
Any answers?
In this section we aim to provide intersections between art and work. Ocassionaly we find examples of artists at work, as in this text, excerpted from
The Guardian, Thursday February 26, 2004
Louise Bourgeois, the grande dame of US art, is 92 and still working. To mark the opening of a new show, we (The Guardian) asked artists, writers and critics to put a question to her. Adrian Searle introduces the results
Louise Bourgeois studied under Leger (who convinced her she was a sculptor rather than a painter), had known Bonnard and Breton, Brancusi and Duchamp, yet she could never be defined as belonging to a generation or a movement. Her career has also mirrored the place of women artists in the 20th century. To mark the opening of an exhibition of her work at the Fruitmarket gallery in Edinburgh, I (Adrian Searle) asked a number of artists, critics and writers to provide a question for her, on a topic of their choosing. Some asked more than one.
Rachel Whiteread (artist): What is your favourite invention (from your own lifetime)?
Louise Bourgeois: I don't watch TV. I don't use a computer, a fax or a cellphone. I'm not driving or flying anywhere. So in the end I'd have to say it's the radio. I listen to the radio at night.
Marina Warner (writer): Did part of growing up in France mean contact with the sensory rituals and atmosphere of the Church, and its beliefs in an incarnate god? And did any of this connect with your imagination of the flesh?
LB: I was raised a Catholic. But I am not religious. In my work, I am interested in real flesh and blood.
Juergen Teller (photographer): How important has sex been to your work?
LB: I think sex and the absence of sex is terribly important.
Richard Wentworth (artist): You obviously like oppositions. You have spoken sometimes about your father so I have always wondered - how is the female artist's intelligence different from the male's? What if you were a man and your mother had been a powerful source for your work?
LB: I can only talk from the perspective of a woman. I cannot speak for a man. I have never been a man yet. My mother believed in me. She was a feminist. Had I been a man, I don't know how that would have changed our relationship. I did have a brother. Had I been a man, it would have been very different relationship with my father. In many ways, I was the successful son that he wanted. After all, I was his spitting image.
John Berger (writer): Is there space everywhere or only in some places?
LB: Space is something that you have to define. Otherwise it is like anxiety, which is too vague. A fear is something specific. I like claustrophobic spaces, because at least then you know your limits.
JB: Is there a musical instrument whose sound is a little like that of your drawings?
LB: The piano. Sometimes the drawings can be a simple note or sometimes they become quite elaborate like chords.
JB: What has recently given you "goose-pimples"?
LB: [The thought that] my source of inspiration would disappear.
JB: At your age, do some of the surprising works you have made now walk beside you instead of confronting you?
LB: I am exclusively interested in what I am working on now. Once I finish a work it leaves the house and is gone and has served it's purpose.
Tacita Dean (artist): Do you forget how old you are when you draw?
LB: I've always said that the emotions I'm interested in exploring have no relationship to gender and for that matter age.
Darian Leader (psychoanalyst and writer): After all these years of work, which ideas and materials do you find yourself drawn back to?
LB: My themes always come and go, but they always remain constant. The inability to make yourself loved is always at the root of the problem. Sometimes I work to be loved, and other times I work because I don't feel loved.
DL: Has there been a sustained period when you were unable to work? And do you have an idea why?
LB: I have never stopped working. There have been moments of depression that for sure took its toll. But I also know that I could always depend on my work to get me out of the depression.
Marlene Dumas (painter): What keeps you working?
LB: Some people say that everything has been done in art. I say the exact opposite. I still feel that there is a lot I want to say and I have to say.
Cristina Iglesias (sculptor): What is the place of fantasy in your work? As a state of mind can it be useful?
LB: I'm not concerned with fantasy in my work. I'm interested exclusively in today, the here and the now.
Francis Upritchard (artist): What is your most recent memorable dream?
LB: I don't remember my dreams. I do remember a dream of long ago where my father was crying and a cat came and gobbled up his tears.
Chris Ofili (painter): If you have a recurrent dream, what might be its soundtrack?
LB: I compose my own music. In fact, I sing all day.
Adrian Searle: What has your work taught you?
LB: I feel my work has made me a nicer person. Or at least I hope so because I'm trying to be good.
From our Readers: Back to top
Technology and entrepreneurial leaders: a match made only in Heaven?
That was the title of the feature article in the December issue which gave place to much insightful feedback from readers in different countries, backgrounds and bread-earning activities. You may find the full article in www.newsleader.blogspot.com.
In a nutshell, the article aimed at dispelling the deleterious belief that Latin American managerial creativity is doomed because the region's inventiveness finds no emotional foothold in a culture which is predominantly Catholic.
I argued that a traditional low self-esteem on this issue was bolstered by work such as that of Max Weber and a few historical accidents, such as the Dutch invasion of Recife, whose short life-span, left, understandably, nostalgic feelings in many Brazilians.
Without attempting to turn historical events into a parlour game I also argued that Protestantism had a mixed entrepreneurial record when it came to the USA itself; and for all the above reasons Latin American entrepreneurs had their future in their own hands and only themselves to blame for their eventual failures.
Below I reproduce -in their original languages - a selection of the letters received, and following them, with my recognition and gratitude to the seriousness of the readers' gracious efforts, I add a rejoinder of my own, in English; which I will gladly follow-up with the same commentators, of even with new ones.
Alfredo Behrens.
Alfredo,
Muito interessante a discussão sobre os holandezes e o protestantismo. Quero, no entanto, fazer um comentário.
A diferença em Pernambuco foi muito menos do fato de serem holandezes do que de ser o príncipe Mauricio de Nassau quem era. Estava aí um dos grandes holandezes de todos os tempos, totalmente fora do padrão - já relativamente alto - dos seus compatriotas. Portanto, a revolução que trouxe para Recife foi a revolução de Nassau, nem foi dos holandezes e nem dos protestantes. Note-se a mesmice da colonia quando ele se foi, sucedidos por holandezes comuns e correntes.
Mas vale a discussão
Claudio de Moura Castro
Grupo Pitágoras
Belo Horizonte, Brasil
Alfredo,
Esta crítica al viejo Max es un poco "light", ¿no te parece? Weber fué muy especifico en aclarar sus caminos metodológicos. La aplicación de sus "tipos" de análisis a una coyuntura histórica están lejos de ser una mera operación de "inferencia"... Por otro lado él nunca dijo que la sola presencia de una pandilla de comerciantes protestantes sea condición de la aparición de formas capitalistas de producción...
Nicolás Nobile
FLACSO y BNV Comunicación Digital Estratégica, Buenos Aires
Alfredo,
In my opinion, the question is not related to what religion, but ethics. Technology thrives when it is protected by patents, and when the business enviroment is protected by a decent Judiciary. In Latin America, our "expert" politicians decided not to recognize patents, a direct form of theft, in order to favour a few local businessmen, which in turn found that the risk involved in investing in technology, was replaced by a risk free investment in political contributions. If this region is to succeed in this globalized world, we need to have an ethical enviroment which allows us to develop, compete, and succeed.
A.F. Keen
Entrepreneur
São Paulo, Brazil
Alfredo,
Sobre el texto de tecnología y emprendedores. Creo que describís una ligazón directa entre adopción de tecnología y regulaciones y dudas de que exista una directa entre tecnología y religión. Creo que la cuestión weberiana allí sería si existe una relación entre religión y regulaciones. En cierta medida, afirmás que tampoco existe esa segunda relación al hacer notar que los estados más protestantes de la Unión adoptaron la esclavitud y la mayor población católica se agrupó en el Norte. Es cierto, pero la inmigración irlandesa y la italiana llegaron con instituciones ya consolidadas y que en alguna medida reflejaban la ética del protestantismo.
Más allá de qué es lo cierto, me atrapó la posibilidad de salir de la empresa como unidad de análisis y tomar como referencia la relación global, ecológica, entre las organizaciones y su ambiente. Creo que son ideas provocativas que ayudan a pensar el sentido de la acción en América Latina, tanto para las empresas como para las universidades o los hacedores de políticas públicas.
Ernesto Gore
Universidad de San Andrés
Buenos Aires
A rejoinder, by Alfredo Behrens.
Indeed, the Prince of Nassau was an exemplary figure, as Claudio de Moura Castro points out; perhaps exemplary to the point of diminishing the importance of the Prince's cultural heritage as the source of his creative influence in Brazil’s Recife when he was entrusted with the administration of a region invaded by the Protestant Dutch. Claudio may well be right in stressing the personality issue over the cultural one in oposing the niceties of the Protestant Prince with the dullness of the Protestant Ducth or even the Catholic Portuguese administration of Recife - before and after the Prince.
Nonetheless, I recollect similar nostalgic reminiscences byt Latin Americans, this time regarding the British incursions in the River Plate area. Both, the Dutch and the English, were Protestant invasions on Catholic dominions. Yet, despite the two centuries between them; despite their manifest commercial interests - as Nicolás Nobile rightly points out - and despite the British invasions not rendering a figure to the historical standing of the Prince of Nassau; both Protestant invasions brought about an undeniable cultural renewal with them.
There is something in the work ethic of Protestantism that Catholics intimately know is different, and at times, perhaps even more effective. This is why those Protestant invasions are recalled with nostalgia: because those Protestant invasions brought with them cultural feats in engineering and the arts and culture that the Catholic authorities had neglected for too long.
However, it need not always have been like that, after all, one of the most impressive start-up venture of all times – Cristopher Columbus’ own - was a Catholic venture! Which helps to show that Protestantism was not and therefore need not always be, more effective at innovation!
Nicolás is also right in stressing, more than I did, the significance of Max Weber’s opus magna. Yet, when tracing the roots of an historical trauma, I was not as interested in what Max Weber precisely wrote, but rather in the social function of his work. Under this light, what the people believe Max Weber wrote may be more relevant in legitimizing and shaping a sense of despair among Latin American entrepreneurs, even among those who toil oblivious of Max Weber.
Then, there is the real side of business, helpfully pointed out by Tony Keen: many Latin American governments have not done enough in protecting intellectual rights, a necessary condition in fostering the development of technology. Worse, many governments have created and environment which distracts honest entrepreneurial activity from investing in productivity increases.
I have no doubt about the relevance of Tony's comments; our countries do have a problem with this issue. However, I like to believe that Latin America’s travails with corruption is more political than cultural. By this I mean that the issue which should concern us is whether such “regulatory environment” is intrinsically cultural (Catholic?), in which case our societies would be doomed; or whether the issue is associated with a particular style of development, i.e. industrialization under overwhelming government protection, as I contend. In this perspective, the political arena reflects a concentration of economic power which reinforces the self-serving regulatory environment; and produces research divorced from the productive apparatus of society and poverty.
The issue of the "regulatory environment" brings us to Ernesto Gore’s interesting contribution. He seeks to bring the political and cultural issues together: Protestantism may foster a more creative intellectual environment through a more appropriate regulatory environment, which may draw on both Catholic and Protestant traditions.
Ernesto may well be right, for individual-centered Protestantism may be more adroit at stimulating personal initiative than top-down Catholicism would ever be able to. Yet, again, let us recall Christopher Columbus' maiden voayage to the New World. Protestants were among those that reamained ashore in fear of a flat Earth.
In my view, that of an agnostic; our received Catholicism reflects the powerful hierarchy of the Catholic Church, a top-down command and control bureaucracy. In fact the Catholic Church’s bureaucratic model is not very different from the XIX century military-based managerial model adopted by the most successful American businesses during much of the XXth century.
Despite the similarity in the models, we cannot hold that because of the current Catholic church's resistance to modernization that the XIX century managerial model was ineffective in producing and deploying the technological revolution that keeps us in a state of awe.
That the control model may be found stifling today does not mean that it had no use and was intrinsically wrong, or even poor. The same with the Catholic Church, who until recentely, with figures of the stature of a Teilhard de Chardin, would have wanted man to become the "spearhead of evolution;" yet now oposes research on stem cells.
So, if both the Protestant business managerial command and control model is shared by the Catholic Church's bureaucracy and Protestant business in the New World and Australasia lies on a Catholic exploratory business venture; we cannot lay back on the half-learned century-old efforts of Max Weber and sustain that there is no way to bridge the gap.
As Ernesto points out, both organizational structures draw on one another. What we need is to explain the cultural roots, if any, of the economic differences, i.e. such as those between French and English Canada, and act upon that information. We must understand the roots of the incontrovertibly superior effectiveness of the social organizations in most of the Atlantic Northern hemisphere, in developing the technologies which free people from the constraints of hunger, disease, idiocy and physical labour. That is what most of development is all about.
Perhaps we may look further into the different ways in which Protestant and Catholic social organizations deal with the individual; on how they construe their social goals and on how those affect technological development and deployment.
We may have to look for the answers in further exchanges, which I would gladly welcome. Perhaps some may wish to contribute as a guest authors.
In the meantime, let us not distract our thinking entrepreneurs: investing in productivity increases is the only way out to sustain competitiveness; and it is investing in technology that helps. That was the reasons I wrote the article in the first place.
Many thanks to all our readers.
Alfredo Behrens
Editor
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Alfredo Behrens
editor@newsleader.com.br
Phone +55 11 38713363
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Brazil
Alfredo Behrens is an economist. He holds a PhD by the University of Cambridge, has lectured at Princeton’s Woodrow Wilson School, at FSU and at PUC-RJ. He has broad experience in advising high public officials, shareholders and board members of banks and large corporations on issues such as: governance, corporate relations with governments, M&As and strategic planning focused on the internationalization of companies. He has worked in or with the private and public sector in the Americas, East and Western Europe and Southern Africa. He was awarded the MacNamara Fellowship by the World Bank, the Hewlett fellowship by Princeton University and the Jean Monet Fellowhship by the European University, Fiesole, Italy.
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NewsLeader
Year 2, issue # 1
Alfredo Behrens
Editor
The Latin American historical hero is frequently depicted on horseback and brandishing a sword as if ready to make kebabs out of all opponents. This icon of leadership quietly impoverishes the diversity of leadership styles, and possibly corporate performance as well.
Fittingly, this post- Carnival issue focuses on the role of virtue in leadership. It turns out that the most effective business leaders are not the alpha males epitomized by the press - or in our historical monuments; but those who lead exemplarily; see more in the Feature Article.
Not only out of virtue, but also as a result of rational choice; and quoting examples from Mexico and Brazil; we call your attention to opportunities for growth in selling to the poor. Besides offering profitable opportunities, these new ventures may well help business to grow while developing new leaders and perhaps new leading styles too. Look this up in Managerial Insights.
In Nourishment for the mind and Soul we bring you excerpts of a The Guardian article on Louise Bourgeois, who, at 92, cannot help to continue to create.
Readership multiplied by 20 since September last! We are now over four thousand sixhundred hundred and we receive kind letters of praise from the likes of AMCHAM Brazil and Intel Capital (Latin America). We also begin to interact with readers as you may gather by reading the readers' reactions,in the From our Readers section.
Who makes up the NewsLeader tribe? It is hard to figure out exactly who we are as we grow so rapidly; but of those over 4600 subscribers, over half are in Brazil, another one thousand are elsewhere in Latin America, and the rest, over 1000, are mostly in English speaking countries. Well over three thousand of our subscribers are business persons, and over one thousand are mostly in academic life, but also in politics, public administration and journalism.
Please continue to circulate NewsLeader among your colleagues and continue to interact with us in any way you wish, including with recommendations for new topics. It is very rewarding to notice we do feel a need.
Yours gratefully,
The Editor.
IN THIS ISSUE
Sponsorship notice: Leadership Cafés are fora to enhance your own personal development and your company's future.
Feature article on leadership: "Feudal values boost stock price"
Management insights: "Selling to the poor may well be your next market"
Nourishment for the mind and soul: Louise Bourgeois, working at 92, answers questions
From our Readers: A spirited exchange on innovation and religion
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During half day meetings "in company;" or during two hour sessions in late afternoons, for open enrollment; NewsLeader will facilitate in Portuguese the discussion of leadership issues in small homogeneous teams. These sessions are focused on leadership and aim at securing your own development and enhancing your company's competitiveness.
NewsLeader can also make arrangements for similar events to be held in other Brazilian cities in Portuguese, or elsewhere in Latin America, in Spanish or English.
Write or call the Editor for further details.
FEATURE ARTICLE Back to top
Feudal values boost stock price
Alfredo Behrens
Humility, loyalty, integrity are virtues frequently taken to be pre-capitalist in the sense that, having no exchange vale, they cannot fetch a price. Yet, what if feudal virtues turned out to add value to a company's stock?
In a world leaning towards entertainment rather than information, the likes of Jack Welch, Lee Iacocca and Gianni Agnelli are bound to be better known than Darwin Smith, CEO of Kimberley-Clark. However, Smith’s tenure led to his company outperforming the stock market by almost twice than GE under Welch’s own tenure.
Indeed, under Smith, Kimberley-Clark, outperformed stars like Hewlett-Packard, 3M and Coca-Cola, let alone Chrysler or FIAT. Nonetheless, for six years running, Fortune declared the now notorious ENRON “the most creative company in America,” while Darwin Smith did not make even the specialized business press’ headlines.
Jim Collins led a five year study into almost 1500 American companies seeking to unearth what was it that leaders had in common when they succeeded in turning failing companies into great ones. The leaders themselves he called Level 5 Leaders.[1]
Personal humility is one of the common characteristics and one of the reasons that the leaders were relatively ignored by the press. Neither Smith, nor Gillette’s Colman Mokler, nor Abbott’s George Cain sought the press. Neither did the eight other Level 5 Leaders. Further, when interviewed, those leaders would credit their collaborators more readily than themselves. When hard pressed to explain what made them so effective many of these non-celebrity business leaders would also claim that they were simply lucky.
Luck may have had some role, but it did not help their competitors as much. For instance, Abbott Laboratories outperformed the stock market permormance by twice as much as Merck or Pfizer did. Circuit City’s Alan Wurtzel helped that company outperform the stock market by almost 19 to 1; but Mr. Wurtzel claimed that luck also helped him find the right successor.
Why would humility be so important?
Perhaps because it allows for close collaborators to feel dignified by their work, for they are more likely to take credit for their own work than would, say, collaborators of FIAT’s Gianni Agnelli; too busy cruising “his car across red lights, with his chauffeur cowering in the back seat.”
Perhaps as important, the humility of the Level 5 Leaders also assures that lower-ranking collaborators will feel that their best efforts are made on behalf of something larger than themselves, even larger than their bosses. An impression that would not be borne as readily by the workers of Scott Paper under Al Dunlap, the “Rambo in pinstripes,” who pocketed $100 million for less than two years of downsizing at Scott Paper. The latter’s performance, incidentally, was surpassed by Kimberly Clark under Darwin Smith.
Besides personal humility, these Level 5 Leaders also displayed a relentless resolve. Darwin Smith worked through his radiation therapy to cure him from cancer. George Cain - himself an 18 year insider and heir of Abott Laboratories - had to wipe the company clean of the traits of nepotism that had stalled its creativity. Charles R. "Cork" Walgreen III shifted his business out of the food service sector; where it had
invented the malted milk shake and where led the market with over 500 restaurants.
Where does their resolve come from? One may only speculate, but drawing on the Jungian foundations of Jaworski’s Synchronicity,[2] one may admit that in this larger-than-human resolve there is a well of certainty that may stem from a feeling of “oneness” in which the individual leader flows in a river of unconscious determination, larger than himself. This allows us to better understand Collin’s appreciation of “an even stoic resolve” in the determination with which these leaders followed their destiny, and instilled “discipline” within the rank and file. Discipline, in this context, does away with the need for bureaucracy and puts each person at his own helm.
Under this approach “personal humility” makes more sense; because the leader feels he is only allowing himself and others to flow with a force beyond his control, which, in Collin’s study the leaders referred to as “luck”, perhaps for lack of a better word.
In this role, attuned with a force larger than oneself, the leader acts more as Greenleaf’s Servant leader; geared to serve his organization over himself; thus also helping to understand the readiness with which Collins’ leaders credited their collaborators for the company’s success; and the care they put into selection their successors. The latter is in itself a litmus test for stewardness, rather than personality cult.
You may disagree with my attempt to reconcile the seemingly disparate character traits and the behaviour of the most effective corporate leaders singled out by Collins, but one thing is for sure: celebrity leaders did not lead corporate performance as high as Collin’s Level 5 Leaders did. In fact quite a few celebrity leaders even tarnished the reputation of their companies much in the same way that, in politics, a comparable style of celebrity leadership helped wreck the economies of countries like Argentina, or Ecuador.
However, Collins’ work has returned the lost lustre to leaders who, holding precisely these old-fashioned virtues, have led their companies to unparalleled success; and in the process of doing so, these leaders paved the way for their own succession.
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[1] Jim Colins, Level 5 Leadership, Harvard Business Review; Jan 2001, Vol 79 issue 1, page 66.
[2] Joseph Jaworski, “Synchronicity: The Inner Path of Leadership” with an introduction by Peter Senge. Berret-Koehler publishers, 1995.
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Further reading on qualities of leadership: there is an endless list of psychological qualifications for leadership, but - given Jack Welch's standing in the leadership field - it is not a complete waste of time to see Jack's own list, in a reproduction of his Wall Street Jounal article of last January 23rd.
MANAGEMENT INSIGHTS Back to top
Selling to the poor may well be your next market
Alfredo Behrens
There is a lot of waste energy hanging around us, but engineers are quick to point out that it is hard to harness waste energy and put it to useful work. The same with the poor; however ubiquitous they still are too scattered over the planet and each one has too little to spare to pay you with.
This is why marketing gurus have frowned upon the poor. However nasty that may sound, it has always been hard to argue with the diagnosis. This is why it is refreshing to read about a new initiative to reinstate the poor as King of Growth by C.K. Prahalad, professor of corporate strategy at Michigan Business School.
In “The Fortune at the Bottom of the Pyramid,” to appear in the next American Summer, Professor Prahalad adds up all the purchasing power of the poor in the largest developing countries and comes up with a potential market, of sorts, larger than the GDP’s of the largest European countries plus Japan. Such a market begins to sound interesting, perhaps not enough for a multinational to move in any of those poor markets, but enough to trigger awareness. If a company is already present in a country with many poor, could the company – multinational or not - be missing an opportunity? Perhaps.
Professor Prahalad’s adding-up of the poor is effective in raising awareness, but if you are in the cement business in Mexico it might not help to know that you are missing out on customers in Indonesia. Yet, what if you were missing out opportunities in Mexico itself? This is precisely what Cemex discovered in Guadalajara: a way to sell to the poor and make a stable profit while at it.
Cemex is the World’s third largest cement manufacturer and Mexico’s largest one. In the course of its business Cemex realized that while its large construction clients offered a profitable niche, their demand tended to be more volatile than the “build-it-yourself” one. The latter market consists mainly of poor households earning less than $5 a day; far from Cemex’s typical client. The interesting issue is that this market offered a significant growth opportunity.
Cemex moved to organize this market by building on the social capital of the poor: their inherent networking abilities and solidarity liaisons. Small teams of three to ten people were bundled into saving teams focused on home improvements. To them Cemex offered credit to buy cement as well as ancillary services: architectural and engineering advice, plus schools for construction workers and deposits for the cement and other building equipment.
A few years later Cemex brags having extended $10 million in credit to the poor and having made 36 thousand new customers. Cemex is still is adding over 1500 new customers every month. By 2005 Cemex expects to have close to 1 million customers among the “build-it-yourself” market niche. Margins are 3 percentage points lower than the average in the business, but Cemex has extended its market into a vaster and more stable market. Besides, plenty of opportunities now exist for cross-selling, which remain still untapped.
Knowledge @ Wharton also points out to other success stories such as Hindustan Unilever’s in selling soap to poor Indians. But one can also point out to high short term losses made by ill-advised incursions in those markets, like the one of Lloyds Bank in Brazil when it bought the financial house Losango.
Losango specializes in extending conventional credit to poor households to buy electricity-operated household equipment like pressing irons and beaters. Lloyds saw in Losango an easy opportunity to elbow its way into the financial services to the poor; only to find out, as unemployment increased, that bad loans were too many besides too small and too scattered to deserve the effort a foreign bank would have to deploy to clean-up its books. Central Bank guidelines - perhaps inadequate when dealing with loans to the poor - did not help either, as they called for higher-than-necessesary reserves for this type of bad loans; because poorer borrowers make better payers.
For a time “Losango” was known at Lloyds’ board of directors' meetings as “Loss and go”, as Lloyds would have gladly gotten rid of Losango, had they been able to. They were not and they finally managed to turn Losango around into a significant money maker, capable of interesting HSBC, as it bought Lloyds out of Brazil.
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Hot Tip
Think out of the box, suspend your jugdgment and your "Big Five" consultants, call on your local university's social scientists and discuss the new venture into the "poor's market" with a bold and younger executive team which the experience may shape into your company's future leaders.
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As the Losango case illustrates, moving into the lower income markets is not the for faint-hearted. It requires a specific marketing strategy, one that may involve the knowledge of professionals not close to conventional decision makers. Cemex relied on the wisdom of a former socialist advisor to Chile's President Allende. In some ways you would do well in suspending your reliance on conventional advisors, too prone to tell you the new strategy will not work. The strategy also requires resolve and an unusual dose of audacity and managerial low-fat flexibility.
None of the above are likely to come easily, but perhaps selling to the poor may also prove a valuable ground to form new business leaders. Surely a company - multinational or not - can think of a couple of fast track executives eager to try their teeth on a challenge. One can think of Brazil’s intercity transportation business allocating a few heirs to develop new transportation services more attuned with the needs of the poor, or Argentina’s industry testing its proverbial inventiveness in selling food and cleansing materials to its own poor.
After all, current macroeconomic conditions in most Latin American countries leave little hope for growth as usual. Growth by mergers and acquisitions is one of the most boring alternatives, and one soon to run into anti-trust regulatory difficulties; such as Nestlé (Brazil) did, when it attempted to buy Garoto.
Cemex’s and Lloyds' way points out to an interesting growth avenue, one also likely to allow private business to grow in an even more socially responsible way; while also providing good testing grounds for future leaders.
Nourishment for the mind and soul Back to top
Any answers?
In this section we aim to provide intersections between art and work. Ocassionaly we find examples of artists at work, as in this text, excerpted from
The Guardian, Thursday February 26, 2004
Louise Bourgeois, the grande dame of US art, is 92 and still working. To mark the opening of a new show, we (The Guardian) asked artists, writers and critics to put a question to her. Adrian Searle introduces the results
Louise Bourgeois studied under Leger (who convinced her she was a sculptor rather than a painter), had known Bonnard and Breton, Brancusi and Duchamp, yet she could never be defined as belonging to a generation or a movement. Her career has also mirrored the place of women artists in the 20th century. To mark the opening of an exhibition of her work at the Fruitmarket gallery in Edinburgh, I (Adrian Searle) asked a number of artists, critics and writers to provide a question for her, on a topic of their choosing. Some asked more than one.
Rachel Whiteread (artist): What is your favourite invention (from your own lifetime)?
Louise Bourgeois: I don't watch TV. I don't use a computer, a fax or a cellphone. I'm not driving or flying anywhere. So in the end I'd have to say it's the radio. I listen to the radio at night.
Marina Warner (writer): Did part of growing up in France mean contact with the sensory rituals and atmosphere of the Church, and its beliefs in an incarnate god? And did any of this connect with your imagination of the flesh?
LB: I was raised a Catholic. But I am not religious. In my work, I am interested in real flesh and blood.
Juergen Teller (photographer): How important has sex been to your work?
LB: I think sex and the absence of sex is terribly important.
Richard Wentworth (artist): You obviously like oppositions. You have spoken sometimes about your father so I have always wondered - how is the female artist's intelligence different from the male's? What if you were a man and your mother had been a powerful source for your work?
LB: I can only talk from the perspective of a woman. I cannot speak for a man. I have never been a man yet. My mother believed in me. She was a feminist. Had I been a man, I don't know how that would have changed our relationship. I did have a brother. Had I been a man, it would have been very different relationship with my father. In many ways, I was the successful son that he wanted. After all, I was his spitting image.
John Berger (writer): Is there space everywhere or only in some places?
LB: Space is something that you have to define. Otherwise it is like anxiety, which is too vague. A fear is something specific. I like claustrophobic spaces, because at least then you know your limits.
JB: Is there a musical instrument whose sound is a little like that of your drawings?
LB: The piano. Sometimes the drawings can be a simple note or sometimes they become quite elaborate like chords.
JB: What has recently given you "goose-pimples"?
LB: [The thought that] my source of inspiration would disappear.
JB: At your age, do some of the surprising works you have made now walk beside you instead of confronting you?
LB: I am exclusively interested in what I am working on now. Once I finish a work it leaves the house and is gone and has served it's purpose.
Tacita Dean (artist): Do you forget how old you are when you draw?
LB: I've always said that the emotions I'm interested in exploring have no relationship to gender and for that matter age.
Darian Leader (psychoanalyst and writer): After all these years of work, which ideas and materials do you find yourself drawn back to?
LB: My themes always come and go, but they always remain constant. The inability to make yourself loved is always at the root of the problem. Sometimes I work to be loved, and other times I work because I don't feel loved.
DL: Has there been a sustained period when you were unable to work? And do you have an idea why?
LB: I have never stopped working. There have been moments of depression that for sure took its toll. But I also know that I could always depend on my work to get me out of the depression.
Marlene Dumas (painter): What keeps you working?
LB: Some people say that everything has been done in art. I say the exact opposite. I still feel that there is a lot I want to say and I have to say.
Cristina Iglesias (sculptor): What is the place of fantasy in your work? As a state of mind can it be useful?
LB: I'm not concerned with fantasy in my work. I'm interested exclusively in today, the here and the now.
Francis Upritchard (artist): What is your most recent memorable dream?
LB: I don't remember my dreams. I do remember a dream of long ago where my father was crying and a cat came and gobbled up his tears.
Chris Ofili (painter): If you have a recurrent dream, what might be its soundtrack?
LB: I compose my own music. In fact, I sing all day.
Adrian Searle: What has your work taught you?
LB: I feel my work has made me a nicer person. Or at least I hope so because I'm trying to be good.
From our Readers: Back to top
Technology and entrepreneurial leaders: a match made only in Heaven?
That was the title of the feature article in the December issue which gave place to much insightful feedback from readers in different countries, backgrounds and bread-earning activities. You may find the full article in www.newsleader.blogspot.com.
In a nutshell, the article aimed at dispelling the deleterious belief that Latin American managerial creativity is doomed because the region's inventiveness finds no emotional foothold in a culture which is predominantly Catholic.
I argued that a traditional low self-esteem on this issue was bolstered by work such as that of Max Weber and a few historical accidents, such as the Dutch invasion of Recife, whose short life-span, left, understandably, nostalgic feelings in many Brazilians.
Without attempting to turn historical events into a parlour game I also argued that Protestantism had a mixed entrepreneurial record when it came to the USA itself; and for all the above reasons Latin American entrepreneurs had their future in their own hands and only themselves to blame for their eventual failures.
Below I reproduce -in their original languages - a selection of the letters received, and following them, with my recognition and gratitude to the seriousness of the readers' gracious efforts, I add a rejoinder of my own, in English; which I will gladly follow-up with the same commentators, of even with new ones.
Alfredo Behrens.
Alfredo,
Muito interessante a discussão sobre os holandezes e o protestantismo. Quero, no entanto, fazer um comentário.
A diferença em Pernambuco foi muito menos do fato de serem holandezes do que de ser o príncipe Mauricio de Nassau quem era. Estava aí um dos grandes holandezes de todos os tempos, totalmente fora do padrão - já relativamente alto - dos seus compatriotas. Portanto, a revolução que trouxe para Recife foi a revolução de Nassau, nem foi dos holandezes e nem dos protestantes. Note-se a mesmice da colonia quando ele se foi, sucedidos por holandezes comuns e correntes.
Mas vale a discussão
Claudio de Moura Castro
Grupo Pitágoras
Belo Horizonte, Brasil
Alfredo,
Esta crítica al viejo Max es un poco "light", ¿no te parece? Weber fué muy especifico en aclarar sus caminos metodológicos. La aplicación de sus "tipos" de análisis a una coyuntura histórica están lejos de ser una mera operación de "inferencia"... Por otro lado él nunca dijo que la sola presencia de una pandilla de comerciantes protestantes sea condición de la aparición de formas capitalistas de producción...
Nicolás Nobile
FLACSO y BNV Comunicación Digital Estratégica, Buenos Aires
Alfredo,
In my opinion, the question is not related to what religion, but ethics. Technology thrives when it is protected by patents, and when the business enviroment is protected by a decent Judiciary. In Latin America, our "expert" politicians decided not to recognize patents, a direct form of theft, in order to favour a few local businessmen, which in turn found that the risk involved in investing in technology, was replaced by a risk free investment in political contributions. If this region is to succeed in this globalized world, we need to have an ethical enviroment which allows us to develop, compete, and succeed.
A.F. Keen
Entrepreneur
São Paulo, Brazil
Alfredo,
Sobre el texto de tecnología y emprendedores. Creo que describís una ligazón directa entre adopción de tecnología y regulaciones y dudas de que exista una directa entre tecnología y religión. Creo que la cuestión weberiana allí sería si existe una relación entre religión y regulaciones. En cierta medida, afirmás que tampoco existe esa segunda relación al hacer notar que los estados más protestantes de la Unión adoptaron la esclavitud y la mayor población católica se agrupó en el Norte. Es cierto, pero la inmigración irlandesa y la italiana llegaron con instituciones ya consolidadas y que en alguna medida reflejaban la ética del protestantismo.
Más allá de qué es lo cierto, me atrapó la posibilidad de salir de la empresa como unidad de análisis y tomar como referencia la relación global, ecológica, entre las organizaciones y su ambiente. Creo que son ideas provocativas que ayudan a pensar el sentido de la acción en América Latina, tanto para las empresas como para las universidades o los hacedores de políticas públicas.
Ernesto Gore
Universidad de San Andrés
Buenos Aires
A rejoinder, by Alfredo Behrens.
Indeed, the Prince of Nassau was an exemplary figure, as Claudio de Moura Castro points out; perhaps exemplary to the point of diminishing the importance of the Prince's cultural heritage as the source of his creative influence in Brazil’s Recife when he was entrusted with the administration of a region invaded by the Protestant Dutch. Claudio may well be right in stressing the personality issue over the cultural one in oposing the niceties of the Protestant Prince with the dullness of the Protestant Ducth or even the Catholic Portuguese administration of Recife - before and after the Prince.
Nonetheless, I recollect similar nostalgic reminiscences byt Latin Americans, this time regarding the British incursions in the River Plate area. Both, the Dutch and the English, were Protestant invasions on Catholic dominions. Yet, despite the two centuries between them; despite their manifest commercial interests - as Nicolás Nobile rightly points out - and despite the British invasions not rendering a figure to the historical standing of the Prince of Nassau; both Protestant invasions brought about an undeniable cultural renewal with them.
There is something in the work ethic of Protestantism that Catholics intimately know is different, and at times, perhaps even more effective. This is why those Protestant invasions are recalled with nostalgia: because those Protestant invasions brought with them cultural feats in engineering and the arts and culture that the Catholic authorities had neglected for too long.
However, it need not always have been like that, after all, one of the most impressive start-up venture of all times – Cristopher Columbus’ own - was a Catholic venture! Which helps to show that Protestantism was not and therefore need not always be, more effective at innovation!
Nicolás is also right in stressing, more than I did, the significance of Max Weber’s opus magna. Yet, when tracing the roots of an historical trauma, I was not as interested in what Max Weber precisely wrote, but rather in the social function of his work. Under this light, what the people believe Max Weber wrote may be more relevant in legitimizing and shaping a sense of despair among Latin American entrepreneurs, even among those who toil oblivious of Max Weber.
Then, there is the real side of business, helpfully pointed out by Tony Keen: many Latin American governments have not done enough in protecting intellectual rights, a necessary condition in fostering the development of technology. Worse, many governments have created and environment which distracts honest entrepreneurial activity from investing in productivity increases.
I have no doubt about the relevance of Tony's comments; our countries do have a problem with this issue. However, I like to believe that Latin America’s travails with corruption is more political than cultural. By this I mean that the issue which should concern us is whether such “regulatory environment” is intrinsically cultural (Catholic?), in which case our societies would be doomed; or whether the issue is associated with a particular style of development, i.e. industrialization under overwhelming government protection, as I contend. In this perspective, the political arena reflects a concentration of economic power which reinforces the self-serving regulatory environment; and produces research divorced from the productive apparatus of society and poverty.
The issue of the "regulatory environment" brings us to Ernesto Gore’s interesting contribution. He seeks to bring the political and cultural issues together: Protestantism may foster a more creative intellectual environment through a more appropriate regulatory environment, which may draw on both Catholic and Protestant traditions.
Ernesto may well be right, for individual-centered Protestantism may be more adroit at stimulating personal initiative than top-down Catholicism would ever be able to. Yet, again, let us recall Christopher Columbus' maiden voayage to the New World. Protestants were among those that reamained ashore in fear of a flat Earth.
In my view, that of an agnostic; our received Catholicism reflects the powerful hierarchy of the Catholic Church, a top-down command and control bureaucracy. In fact the Catholic Church’s bureaucratic model is not very different from the XIX century military-based managerial model adopted by the most successful American businesses during much of the XXth century.
Despite the similarity in the models, we cannot hold that because of the current Catholic church's resistance to modernization that the XIX century managerial model was ineffective in producing and deploying the technological revolution that keeps us in a state of awe.
That the control model may be found stifling today does not mean that it had no use and was intrinsically wrong, or even poor. The same with the Catholic Church, who until recentely, with figures of the stature of a Teilhard de Chardin, would have wanted man to become the "spearhead of evolution;" yet now oposes research on stem cells.
So, if both the Protestant business managerial command and control model is shared by the Catholic Church's bureaucracy and Protestant business in the New World and Australasia lies on a Catholic exploratory business venture; we cannot lay back on the half-learned century-old efforts of Max Weber and sustain that there is no way to bridge the gap.
As Ernesto points out, both organizational structures draw on one another. What we need is to explain the cultural roots, if any, of the economic differences, i.e. such as those between French and English Canada, and act upon that information. We must understand the roots of the incontrovertibly superior effectiveness of the social organizations in most of the Atlantic Northern hemisphere, in developing the technologies which free people from the constraints of hunger, disease, idiocy and physical labour. That is what most of development is all about.
Perhaps we may look further into the different ways in which Protestant and Catholic social organizations deal with the individual; on how they construe their social goals and on how those affect technological development and deployment.
We may have to look for the answers in further exchanges, which I would gladly welcome. Perhaps some may wish to contribute as a guest authors.
In the meantime, let us not distract our thinking entrepreneurs: investing in productivity increases is the only way out to sustain competitiveness; and it is investing in technology that helps. That was the reasons I wrote the article in the first place.
Many thanks to all our readers.
Alfredo Behrens
Editor
How to be a guest columnist instructions Back to top
Provocative insights under 400 words long will receive our attention more rapidly. Larger pieces may be abridged without consultation with the author. Guest authors may wish to submit contributions in English, Spanish, Portuguese, French or Italian. Please use Arial 12 font and with each submission and include a statement indicating the work submited is your own. Please also submit your affiliations, email address and CV or Oxford Muse like portrait. Authors will only be notified when their contributions are selected for publication.
CLASSIFIED ADS Ask Newsleader for rates and advertisers Back to top
We are becoming leaders in intellectual property management. We offer unique and innovative services backed-up by Engineers and Registered Patent Agents. Ask for PATENT
--------------------------------------------------------------------------------
Fornecemos conferencistas para motivar a reflexão em reuniões de negócios. Ask for CONFERENCE.
--------------------------------------------------------------------------------
Talent for hire. Newsleader can put you through to a pool of experienced and highly trained strategists and managers who can coach you through hard decisions. Ask for COACHES.
Copyright Information Back to top
Copyright 2003: Authors retain copyright of their work. Alfredo Behrens is entitled to all other rights concerning NewsLeader, except the template design. You are encouraged to make use of the views and information provided herein, as long as you appropriately give credit to the author and quote this Newsleader's issue number and date.
List Maintenance and Earlier issues Back to top
Subscribe
If you haved received NewsLeader from someone else you may wish to subscribe yourself. To subscribe send an email to newsleader-alta@elistas.net
Unsubscribe
Should you have fallen into our distribution list by mistake, please send an email to newsleader-baja@elistas.net or click on this unsubscribe link and follow the instructions in Spanish or English.
Earlier issues
Earlier issues can be found at www.newsleader.blogspot.com
To contact the editor Back to top
Alfredo Behrens
editor@newsleader.com.br
Phone +55 11 38713363
São Paulo, SP
Brazil
Alfredo Behrens is an economist. He holds a PhD by the University of Cambridge, has lectured at Princeton’s Woodrow Wilson School, at FSU and at PUC-RJ. He has broad experience in advising high public officials, shareholders and board members of banks and large corporations on issues such as: governance, corporate relations with governments, M&As and strategic planning focused on the internationalization of companies. He has worked in or with the private and public sector in the Americas, East and Western Europe and Southern Africa. He was awarded the MacNamara Fellowship by the World Bank, the Hewlett fellowship by Princeton University and the Jean Monet Fellowhship by the European University, Fiesole, Italy.
Back to top
Copyright © 2003, Alfredo Behrens. Newsletter design by Newsletter Promote
Friday, November 07, 2003
NewsLeader
November, 2003
NewsLeader
Issue # 3
Alfredo Behrens
Editor
This is a space for quick conversations on management and society. Our interests gravitate around issues of leadership, management of workteams, technology, creativity, emotional intelligence and most issues which should be shared to shape a better world.
This issue focuses on the roles of entrepreneurship and leadership in organizations.
The feature article “Listening skills...” calls your attention to the role of management’s receptiveness to suggestions, particularly in less meritocratic societies.
In “Entrepreneurs by default?” we answer those that mistakenly believe that Brazil’s workforce displays little inclination for entrepreneurship.
The issue is further explored in the interview with Anne Miller, international consultant and earlier designer of the London Business School’s Summer course on entrepreneurship.
What is the importance of values in guiding entrepreneurship? Newsleader is concerned with two possible deviations in our relatively new societies. One that leads educated youngsters into enterprising crime; and another which pushes a wedge between the individual’s own values and those of the corporation which he or she leads.
According to the New York Times Brazil is becoming a Cybercrime lab. This is why Newsleader is sponsoring a First Software Job policy to IT knowledgeable youngsters. See our advertisement below, calling for IT outsourcing opportunities for Brazil.
Newsleader is also supporting creative research on entrepreneurship at the University of Queensland. There, Louise Earnshaw is researching into the personality traits and attitudes that differentiate “youth-at-risk” and entrepreneurs. Please collaborate by answering her survey. Louise’s research may lead to ways in which our societies will be able to generate less delinquents and more entrepreneurs!
There is also the possibility that corporation leaders may fail to be truthful to themselves when leading. Please fill out Newsleader’s own survey on this matter.
If after working so hard for NewsLeader - and yourself - you feel the urge to fly-out-of your-box; spend some time with yourself: Google any poet, choose any poem of your liking, print it out and paste it on your PC. It should help you to avoid Auden's unimportant clerk syndrome!
IN THIS ISSUE
First Soft Job: Why outsource IT jobs to Brazil
Listening skills and the survival of the fittest corporations
Entrepreneurs by default?
Nourishment for mind and soul: poetry
Does "Being True" enhance leadership effectiveness?
From our Readers: Entrepreneurs and youth-at-risk
GUEST Column: Why corporations should worry about entrepreneurship? Interview with Anne Miller
Classified adds: patents, guest-speakers, coaching
Copyright Information
Subscribe and unsubscribe information
SPONSORSHIP NOTICE Back to top
First Soft Job
It makes business sense
and it should cost you nothing.
Give us your software headaches and we will supervise the tired, huddled software developers yearning for a First Software Job in Brazil.
NewsLeader is structuring partnerships with Brazilian software factories to offer outsourcing software development for the Americas, Europe and Japan.
The difference?
We will see that a significant share of the new employment goes to young lads at risk of becoming hackers. Brazilian competence in software development, coupled with unemployment, is turning the country into the World champion of World-class hackers, posing a worldwide security threat (NYT, Oct 27-2003).
Shed even a small outsourcing project to us and we will offer you some of the World’s most competent software developers in your own time zone, in a peaceful region of the World, for less than you pay developers elsewhere. Besides, you will be contributing to social development in Brazil, and helping to strengthen your own security at home.
--------------------------------------------------------------------------------
NewsLeader recommends a new book, in Portuguese:
"Emprendedorismo Corporativo" de Eduardo Bom Angelo et alli. Editora Negócio, 2003, São Paulo, 205 páginas. Esperamos poder oferecer uma resenha no próximo número.
FEATURE ARTICLE Back to top
Listening skills
and the survival of the fittest
Alfredo Behrens
Specialization breeds isolation. It can be deadly, both to the specialists as well as to the organizations that employ them. Jack Welch’s GE almost bit the dust to dotcom newcomers such as Ariba and Commerce One.
How could have the legendary Jack Welch woken-up to the Internet potential only after he saw his family purchasing online for Christmas, as late as in 1999?
GE’s Information Services (GEIS) did lead in pre-Internet EDI transactions; catering to about 100,000 companies. But the specialist GEIS had a skewed view of the Internet potential. Locked into prevailing (EDI) technology, GEIS - still mainframe bound - saw the Internet as a cheap alternative for those who were not large enough to operate in the EDI system. GEIS at first even offered Internet solutions to hook the minnows on to the EDI fading World. By 1997 it was clear even to GEIS that EDI was doomed, but GEIS failed to communicate it effectively to the conglomerate’s leaders; missing the “first movers’ advantage”.
Jack got it late. How could this have happened? The organization’s culture can take the brunt of the blame. But is it enough an explanation?
GEIS was number one in its field and, by GE rules of engagement, it was safe; GEIS thought it could afford to fuss about with the Y2K bug. To GEIS’ former “crew-cut” Marine commander, offering to engage a credible bug must have seemed more appropriate than pointing to a threat by tie-less Californian flamboyant young executives. Besides, developing new technology meant dumping the old one, at a high cost - for uncertain revenues. GE’s conglomerate structure would not have favoured spending the millions that were necessary. Not unless the specialists had developed the communication skills they lacked, or the conglomerate leaders had the listening skills they failed to show. After all, Mr. Welch saw the light while listening to his family. He may have been hard of hearing, but he was not deaf.
Can we see similar communication failures nearer to home? Perhaps we can. Brazil’s leading private bank innovated in Internet banking to the point of leading in number of online customers, loosing only to BofA and Wells Fargo. But the bank’s specialists’ divisions never managed to persuade their bosses that they could export that technology while it was internationally competitive. Something similar happened to Brazil’s second largest private bank.
The specialist divisions of both Brazilian banks were led by technically proficient staff, successful at what they had been asked to do, but unable to overcome the credibility gap when proposing ventures out of their realm of competence. Very much like GE; only that it should have been easier for GE to listen, for the USA is a meritocratic society while Brazil is less so.
In many Latin American countries, speaking up to bosses, particularly to owners, requires the specialist staff to overcome higher psychological hurdles than in more meritocratic societies; and therefore requires from company leaders a greater willingness to listen to the specialists.
MANAGEMENT INSIGHTS Back to top
Entrepreneurs by Default?
Entrepreneurship is among the most sought for talents in business. Countries that figure well in entrepreneurial rankings usually portray more vigorous adoption of new technologies and management techniques, all contributing to enhanced productivity and steadier growth patterns.
Brazil stands prominent in entrepreneurship according to Global Entrepreneurship Monitor. Yet, a recent soundbyte published in Forbes Brasil suggests that Brazil’s performance in entrepreneurship may not be as glamourous.
Indeed, a human resource consulting company serving some of Brazil’s most prominent companies –named in the article above - reports that entrepreneurial vocation may be lacking: less than 2% may have it.
Is this situation widespread? When GEM’s country entrepreneurial ranking is adjusted to reflect needs-based entrepreneurial activity; Brazil ranks highest in the World; suggesting that Brazilians are entrepreneurial by necessity rather than by disposition. A similar conclusion can be drawn from the data on Argentina, and Chile, while Mexican entrepreneurs would appear to be less driven by necessity than the other three. Yet all four countries appear amongst the above average entrepreneurial countries, even above countries like Israel, Hong Kong, Singapore and China.
--------------------------------------------------------------------------------
Hot Tip
Innovation requires a rewarding organization. A punishing one is unlikely to be a creative one. Where does yours stand? Think carefully before putting the brunt of the blame on your workforce’s lack of entrepreneurship.
--------------------------------------------------------------------------------
Therefore, the GEM data does not support the view that Latin Americans are less entrepreneurial, though necessity may make Brazilians unduly entrepreneurial.
This could be mischievously construed to mean that Brazilians prefer a wage to launch a business and when they do find a job they show it!
Yet, if the Brazilian workforce at large were not entrepreneurial, could Brazilian business or government have developed and adopted such successful banking automation practices, or such effective e-commerce solutions? Probably not, because being a first mover requires a considerable amount of entrepreneurship.
So, if Brazil is a highly entrepreneurial society - as suggested by GEM and shown by Brazil’s inventiveness - and there are companies in Brazil with less entrepreneurial disposition that would be desirable; the solution to the problem lies squarely with those companies' management.
If you sense your company’s entrepreneurship disposition is somewhat stolid; it would pay to be attentive to the appropriateness of your hiring procedures as well as to the ways your business is rewarding innovation and punishing mistakes. For it is the latter three, rather than the nature of the Brazilian workforce, which accounts for more of the revealed entrepreneurship talents in your company, however low they may be.
Nourishment for the mind and soul Back to top
W. H. Auden
Excerpt from “The fall of Rome”
…
Cesar’s double-bed is warm
As an unimportant clerk
Writes I DO NOT LIKE MY WORK
On a pink official form
…
Does your work occasionally feel like that of Auden’s unimportant clerk?
How long has it been since you last read some poetry? Since you wrote poetry?
Google Auden, Seamus Heaney, Akhmatova, Neruda, Fernando Pessoa;almost any other; and fly out-of-your-box.
SPOTLIGHT: Does "Being True" enhance leadership effectiveness? Back to top
" Feeling authentic, living a life that is strongly connected to one’s belief system, is energizing and promotes growth, learning and psychological well-being."
Does the above sound to you like a gender-laden statement? Can personal and business values fall out of line more readily in men than in women? Is there a gender issue in leadership? Are there women and men styles of leadership?
Please take a minute to reply to a very short survey that will help us determine whether this would be a promissing area of managerial research. Only the first 100 answers can be handled, until November 20th. Click on Being true, Newsleader survey or copy the link below and copy it into your browser:
www.surveymonkey.com/s.asp?u=44144299068
You should then be lead to the survey which only has five questions. Many thanks, and remember, the survey is anonymous.
From our Readers: Louise Earnshaw, University of Queensland Back to top
What makes or breaks an entrepreneur?
Besides income, what is the difference between a young entrepreneur and the young-at-risk of falling into crime?
Louise Earnshaw, both with the University of Queensland’s School of Psychology and the School of Business, is working to tell us the difference. Her preliminary findings indicate that the two groups (entrepreneurs and kids at risk) share a number of unique similarities but that the young-at-risk show personality differences to successful non-entrepreneurial professionals. Her work may turn out to be most important in shaping social policy and in helping us understand how to promote entrepreneurship.
To further her research work Louise needs your help in the way of filling out a questionnaire. This is your chance to reveal the traits of your personality which have turned you into a successful entrepreneur or professional. Help Louise and help us all by filling her questionnaire. She has promised to share her findings with NewsLeader.
GUEST Column: by Anne Miller Back to top
NewsLeader interviews Anne Miller on entrepreneurship at large organizations.
Anne is a partner with Mercer Delta Organizational Consulting firm, based in the London office, from where she works around the world. She is an entrepreneur and an innovator who believes that that entrepreneurship is a way of being at the workplace. Her approach is action-oriented and led to the development of the Action Lab™ - a rapid cycle time approach for innovation. In 2001, Anne created and served as initial Director of the Entrepreneurship Summer School at London Business School with the purpose of transforming concepts into fundable business plans.
NewsLeader: Why are entrepreneurship issues relevant to large companies?
Anne Miller: Large companies inevitably deal with an overload of initiatives, with individuals who do not bring their full potential to work and with an overemphasis on tasks rather than results. Entrepreneurs are focused, must continually stretch their potential to deliver and produce the ‘goods’. Entrepreneurship is more than just starting new businesses. It is a way of being in the workplace and large companies can surely learn from the strengths of entrepreneurship.
NewsLeader: What are the key issues that promote and hinder entrepreneurship in large companies?
Anne Miller: Very succinctly, there are four key levers that promote whether a company has a culture that fosters courage, experimentation, speed and accountability or hinders it:
1. Behaviour of the CEO and his/her leadership team
2. Reward and recognition structures
3. Planning and measurement
4. Decision criteria and governance structures that either do or do not distinguish the difference between experimental / new ventures and mainstream, business as usual activities
NewsLeader: How can entrepreneurship be developed in large companies?
Anne Miller: As Dr Jeffery Pfeffer from Stanford says “Everyone wants to build a learning organisation but no one really wants anyone to learn”…because that means tolerating mistakes.
Companies that want to foster entrepreneurship must create a cultural context that allows responsible mistakes that accompany learning. Rather than putting all the energy into being 100% ‘right’, companies need to build skills for rapid cycle time recovery, resiliency and creating a bigger opportunity out of a mistake. The first condition to develop entrepreneurship in large companies is for the leadership to want it and to have the courage to practice its behaviour among. If this condition cannot be met, then the effort will be severely compromised.
How to be a guest columnist instructions Back to top
Provocative insights under 400 words long will receive our attention more apidly. Larger pieces may be abridged without consultation with the author. Guest authors may wish to submit contributions in English, Spanish, Portuguese, French or Italian. With each submission please include a statement indicating the work submited is your own. Please also submit your affiliations, email address and CV or Oxford Muse like portrait. Authors will only be notified when their contributions are selected for publication.
CLASSIFIED ADS Ask Newsleader for rates and advertisers Back to top
We are becoming leaders in intellectual property management. We offer unique and innovative services backed-up by Engineers and Registered Patent Agents. PATENT
--------------------------------------------------------------------------------
Fornecemos conferencistas para motivar a reflexão em reuniões de negócios. CONF.
--------------------------------------------------------------------------------
Talent for hire. Newsleader can put you through to a pool of experienced and highly trained strategists and managers who can coach you through hard decisions. Ask for rates.
Copyright Information Back to top
Copyright 2003: Authors retain copyright of their work. Alfredo Behrens is entitled to all other rights concerning NewsLeader, except the template design. You are encouraged to make use of the views and information provided herein, as long as you appropriately give credit to the author and quote this Newsleader's issue number and date.
List Maintenance Back to top
Subscribe
If you haved received NewsLeader from someone else you may wish to subscribe yourself. To subscribe send an email to newsleader-alta@elistas.net
Unsubscribe
Should you have fallen into our distribution list by mistake, please send an email to newsleader-baja@elistas.net or click on this unsubscribe link and follow the instructions (in Spanish).
Alfredo Behrens
abehrens@terra.com.br
Phone +55 11 38713363
São Paulo, SP
Brazil
Back to top
Copyright © 2003, Alfredo Behrens. Newsletter design by Newsletter Promote
November, 2003
NewsLeader
Issue # 3
Alfredo Behrens
Editor
This is a space for quick conversations on management and society. Our interests gravitate around issues of leadership, management of workteams, technology, creativity, emotional intelligence and most issues which should be shared to shape a better world.
This issue focuses on the roles of entrepreneurship and leadership in organizations.
The feature article “Listening skills...” calls your attention to the role of management’s receptiveness to suggestions, particularly in less meritocratic societies.
In “Entrepreneurs by default?” we answer those that mistakenly believe that Brazil’s workforce displays little inclination for entrepreneurship.
The issue is further explored in the interview with Anne Miller, international consultant and earlier designer of the London Business School’s Summer course on entrepreneurship.
What is the importance of values in guiding entrepreneurship? Newsleader is concerned with two possible deviations in our relatively new societies. One that leads educated youngsters into enterprising crime; and another which pushes a wedge between the individual’s own values and those of the corporation which he or she leads.
According to the New York Times Brazil is becoming a Cybercrime lab. This is why Newsleader is sponsoring a First Software Job policy to IT knowledgeable youngsters. See our advertisement below, calling for IT outsourcing opportunities for Brazil.
Newsleader is also supporting creative research on entrepreneurship at the University of Queensland. There, Louise Earnshaw is researching into the personality traits and attitudes that differentiate “youth-at-risk” and entrepreneurs. Please collaborate by answering her survey. Louise’s research may lead to ways in which our societies will be able to generate less delinquents and more entrepreneurs!
There is also the possibility that corporation leaders may fail to be truthful to themselves when leading. Please fill out Newsleader’s own survey on this matter.
If after working so hard for NewsLeader - and yourself - you feel the urge to fly-out-of your-box; spend some time with yourself: Google any poet, choose any poem of your liking, print it out and paste it on your PC. It should help you to avoid Auden's unimportant clerk syndrome!
IN THIS ISSUE
First Soft Job: Why outsource IT jobs to Brazil
Listening skills and the survival of the fittest corporations
Entrepreneurs by default?
Nourishment for mind and soul: poetry
Does "Being True" enhance leadership effectiveness?
From our Readers: Entrepreneurs and youth-at-risk
GUEST Column: Why corporations should worry about entrepreneurship? Interview with Anne Miller
Classified adds: patents, guest-speakers, coaching
Copyright Information
Subscribe and unsubscribe information
SPONSORSHIP NOTICE Back to top
First Soft Job
It makes business sense
and it should cost you nothing.
Give us your software headaches and we will supervise the tired, huddled software developers yearning for a First Software Job in Brazil.
NewsLeader is structuring partnerships with Brazilian software factories to offer outsourcing software development for the Americas, Europe and Japan.
The difference?
We will see that a significant share of the new employment goes to young lads at risk of becoming hackers. Brazilian competence in software development, coupled with unemployment, is turning the country into the World champion of World-class hackers, posing a worldwide security threat (NYT, Oct 27-2003).
Shed even a small outsourcing project to us and we will offer you some of the World’s most competent software developers in your own time zone, in a peaceful region of the World, for less than you pay developers elsewhere. Besides, you will be contributing to social development in Brazil, and helping to strengthen your own security at home.
--------------------------------------------------------------------------------
NewsLeader recommends a new book, in Portuguese:
"Emprendedorismo Corporativo" de Eduardo Bom Angelo et alli. Editora Negócio, 2003, São Paulo, 205 páginas. Esperamos poder oferecer uma resenha no próximo número.
FEATURE ARTICLE Back to top
Listening skills
and the survival of the fittest
Alfredo Behrens
Specialization breeds isolation. It can be deadly, both to the specialists as well as to the organizations that employ them. Jack Welch’s GE almost bit the dust to dotcom newcomers such as Ariba and Commerce One.
How could have the legendary Jack Welch woken-up to the Internet potential only after he saw his family purchasing online for Christmas, as late as in 1999?
GE’s Information Services (GEIS) did lead in pre-Internet EDI transactions; catering to about 100,000 companies. But the specialist GEIS had a skewed view of the Internet potential. Locked into prevailing (EDI) technology, GEIS - still mainframe bound - saw the Internet as a cheap alternative for those who were not large enough to operate in the EDI system. GEIS at first even offered Internet solutions to hook the minnows on to the EDI fading World. By 1997 it was clear even to GEIS that EDI was doomed, but GEIS failed to communicate it effectively to the conglomerate’s leaders; missing the “first movers’ advantage”.
Jack got it late. How could this have happened? The organization’s culture can take the brunt of the blame. But is it enough an explanation?
GEIS was number one in its field and, by GE rules of engagement, it was safe; GEIS thought it could afford to fuss about with the Y2K bug. To GEIS’ former “crew-cut” Marine commander, offering to engage a credible bug must have seemed more appropriate than pointing to a threat by tie-less Californian flamboyant young executives. Besides, developing new technology meant dumping the old one, at a high cost - for uncertain revenues. GE’s conglomerate structure would not have favoured spending the millions that were necessary. Not unless the specialists had developed the communication skills they lacked, or the conglomerate leaders had the listening skills they failed to show. After all, Mr. Welch saw the light while listening to his family. He may have been hard of hearing, but he was not deaf.
Can we see similar communication failures nearer to home? Perhaps we can. Brazil’s leading private bank innovated in Internet banking to the point of leading in number of online customers, loosing only to BofA and Wells Fargo. But the bank’s specialists’ divisions never managed to persuade their bosses that they could export that technology while it was internationally competitive. Something similar happened to Brazil’s second largest private bank.
The specialist divisions of both Brazilian banks were led by technically proficient staff, successful at what they had been asked to do, but unable to overcome the credibility gap when proposing ventures out of their realm of competence. Very much like GE; only that it should have been easier for GE to listen, for the USA is a meritocratic society while Brazil is less so.
In many Latin American countries, speaking up to bosses, particularly to owners, requires the specialist staff to overcome higher psychological hurdles than in more meritocratic societies; and therefore requires from company leaders a greater willingness to listen to the specialists.
MANAGEMENT INSIGHTS Back to top
Entrepreneurs by Default?
Entrepreneurship is among the most sought for talents in business. Countries that figure well in entrepreneurial rankings usually portray more vigorous adoption of new technologies and management techniques, all contributing to enhanced productivity and steadier growth patterns.
Brazil stands prominent in entrepreneurship according to Global Entrepreneurship Monitor. Yet, a recent soundbyte published in Forbes Brasil suggests that Brazil’s performance in entrepreneurship may not be as glamourous.
Indeed, a human resource consulting company serving some of Brazil’s most prominent companies –named in the article above - reports that entrepreneurial vocation may be lacking: less than 2% may have it.
Is this situation widespread? When GEM’s country entrepreneurial ranking is adjusted to reflect needs-based entrepreneurial activity; Brazil ranks highest in the World; suggesting that Brazilians are entrepreneurial by necessity rather than by disposition. A similar conclusion can be drawn from the data on Argentina, and Chile, while Mexican entrepreneurs would appear to be less driven by necessity than the other three. Yet all four countries appear amongst the above average entrepreneurial countries, even above countries like Israel, Hong Kong, Singapore and China.
--------------------------------------------------------------------------------
Hot Tip
Innovation requires a rewarding organization. A punishing one is unlikely to be a creative one. Where does yours stand? Think carefully before putting the brunt of the blame on your workforce’s lack of entrepreneurship.
--------------------------------------------------------------------------------
Therefore, the GEM data does not support the view that Latin Americans are less entrepreneurial, though necessity may make Brazilians unduly entrepreneurial.
This could be mischievously construed to mean that Brazilians prefer a wage to launch a business and when they do find a job they show it!
Yet, if the Brazilian workforce at large were not entrepreneurial, could Brazilian business or government have developed and adopted such successful banking automation practices, or such effective e-commerce solutions? Probably not, because being a first mover requires a considerable amount of entrepreneurship.
So, if Brazil is a highly entrepreneurial society - as suggested by GEM and shown by Brazil’s inventiveness - and there are companies in Brazil with less entrepreneurial disposition that would be desirable; the solution to the problem lies squarely with those companies' management.
If you sense your company’s entrepreneurship disposition is somewhat stolid; it would pay to be attentive to the appropriateness of your hiring procedures as well as to the ways your business is rewarding innovation and punishing mistakes. For it is the latter three, rather than the nature of the Brazilian workforce, which accounts for more of the revealed entrepreneurship talents in your company, however low they may be.
Nourishment for the mind and soul Back to top
W. H. Auden
Excerpt from “The fall of Rome”
…
Cesar’s double-bed is warm
As an unimportant clerk
Writes I DO NOT LIKE MY WORK
On a pink official form
…
Does your work occasionally feel like that of Auden’s unimportant clerk?
How long has it been since you last read some poetry? Since you wrote poetry?
Google Auden, Seamus Heaney, Akhmatova, Neruda, Fernando Pessoa;almost any other; and fly out-of-your-box.
SPOTLIGHT: Does "Being True" enhance leadership effectiveness? Back to top
" Feeling authentic, living a life that is strongly connected to one’s belief system, is energizing and promotes growth, learning and psychological well-being."
Does the above sound to you like a gender-laden statement? Can personal and business values fall out of line more readily in men than in women? Is there a gender issue in leadership? Are there women and men styles of leadership?
Please take a minute to reply to a very short survey that will help us determine whether this would be a promissing area of managerial research. Only the first 100 answers can be handled, until November 20th. Click on Being true, Newsleader survey or copy the link below and copy it into your browser:
www.surveymonkey.com/s.asp?u=44144299068
You should then be lead to the survey which only has five questions. Many thanks, and remember, the survey is anonymous.
From our Readers: Louise Earnshaw, University of Queensland Back to top
What makes or breaks an entrepreneur?
Besides income, what is the difference between a young entrepreneur and the young-at-risk of falling into crime?
Louise Earnshaw, both with the University of Queensland’s School of Psychology and the School of Business, is working to tell us the difference. Her preliminary findings indicate that the two groups (entrepreneurs and kids at risk) share a number of unique similarities but that the young-at-risk show personality differences to successful non-entrepreneurial professionals. Her work may turn out to be most important in shaping social policy and in helping us understand how to promote entrepreneurship.
To further her research work Louise needs your help in the way of filling out a questionnaire. This is your chance to reveal the traits of your personality which have turned you into a successful entrepreneur or professional. Help Louise and help us all by filling her questionnaire. She has promised to share her findings with NewsLeader.
GUEST Column: by Anne Miller Back to top
NewsLeader interviews Anne Miller on entrepreneurship at large organizations.
Anne is a partner with Mercer Delta Organizational Consulting firm, based in the London office, from where she works around the world. She is an entrepreneur and an innovator who believes that that entrepreneurship is a way of being at the workplace. Her approach is action-oriented and led to the development of the Action Lab™ - a rapid cycle time approach for innovation. In 2001, Anne created and served as initial Director of the Entrepreneurship Summer School at London Business School with the purpose of transforming concepts into fundable business plans.
NewsLeader: Why are entrepreneurship issues relevant to large companies?
Anne Miller: Large companies inevitably deal with an overload of initiatives, with individuals who do not bring their full potential to work and with an overemphasis on tasks rather than results. Entrepreneurs are focused, must continually stretch their potential to deliver and produce the ‘goods’. Entrepreneurship is more than just starting new businesses. It is a way of being in the workplace and large companies can surely learn from the strengths of entrepreneurship.
NewsLeader: What are the key issues that promote and hinder entrepreneurship in large companies?
Anne Miller: Very succinctly, there are four key levers that promote whether a company has a culture that fosters courage, experimentation, speed and accountability or hinders it:
1. Behaviour of the CEO and his/her leadership team
2. Reward and recognition structures
3. Planning and measurement
4. Decision criteria and governance structures that either do or do not distinguish the difference between experimental / new ventures and mainstream, business as usual activities
NewsLeader: How can entrepreneurship be developed in large companies?
Anne Miller: As Dr Jeffery Pfeffer from Stanford says “Everyone wants to build a learning organisation but no one really wants anyone to learn”…because that means tolerating mistakes.
Companies that want to foster entrepreneurship must create a cultural context that allows responsible mistakes that accompany learning. Rather than putting all the energy into being 100% ‘right’, companies need to build skills for rapid cycle time recovery, resiliency and creating a bigger opportunity out of a mistake. The first condition to develop entrepreneurship in large companies is for the leadership to want it and to have the courage to practice its behaviour among. If this condition cannot be met, then the effort will be severely compromised.
How to be a guest columnist instructions Back to top
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