There and Back Again, a Minnesotan’s Holiday

And just like that, the trip is over. Having “graduated” from FGV’s Doing Business in Brazil course, I am now ready to tackle the professional world as a fully educated Sao Paulan. My classmates and I spent the past 48 hours reminiscing about the experience, what we learned, what we saw, and what it would be like to truly do business with this emerging market. Although it was an amazing experience and extremely educational, we generally all agreed on one thing … don’t do business in Brazil.

Ok, to be fair, that statement really deserves a “yet” on the end of it. Most of our teachers talk about the upcoming opportunities and how to navigate them today. But what they are really saying, once you read through the lines, is that the possibility will exist in the future, but not yet. Maybe 10-15 years is all it will take, but there is quite a bit of internal business that needs to get worked out before I take my next business venture down there. At US$12 for a Big Mac Meal, Brazil is not ready for FiveDollarLiving.com quite yet.

It was a great experience, and a ton of fun, I highly recommend anyone else attend the FGV program and join me in the ranks of Brazilian graduates. As for me, I rejoin to the real world tomorrow and am already thinking about what teachings I can be brought back with me here (besides the corn off the cob street vendor … whom I already miss very dearly).

Obrigado, Sao Paulo.

Teva Excursion to Paraty – Day 2

In the previous Day 1 post, I left you wondering just how much crazier a second day in Paraty could be. After all, we barely survived Day 1, so would Day 2 be more or less? To the very pleasing ears of my future wife, Day 2 was not nearly as insane and I had many less near-death experiences 🙂

9:00am – Wake in the Hostel room after a decent 7 hours of sleep. We watched the first half of the Packer/49er game at the Centro the previous night but were kicked out around 2pm when the bar closed and never saw the outcome (sorry Pack fans, but I was thrilled to see the next day’s results). We walked home in a torrential downpour, and sleeping outside in a hammock in the rain was not going to happen. I’m adventurous, but not quite enough for that … yet.

10:00am – Team Bad-a** hit the road for the beach. After yesterday’s excursion, we were looking to relax a bit more. But, don’t be fooled, we were not going to lay down a towel and relax … in fact, the word relax has no meaning to Team Bad-a**. We immediately walked to the pier to hire a boat and tour the surrounding islands. Most available boats looked like century old tugboats with far too much use, and far too little adventure. But there was one boat that stood out like a diamond in the rough. We walked straight to the speed boat with a 150 hp motor and said “how much?” A little negotiating and the aptly named XS-FUN was ours for the day at US$50 per person.

11:00pm – We spent the next 4 hours touring a dozen private beaches, lagoons, waterways and coves. I was in Thailand last year touring the Phi Phi Islands, and I must admit … they have NOTHING on Paraty. These were far more beautiful, pristine, and picturesque than the island from The Beach. We swam with turtles and tropical fish, visited islands of ospreys and monkeys, dove into the bluest waters and lived a life of luxury for the afternoon. A couple pictures here do it no justice, but trust me, you should be jealous. The only dangerous part was the complete void of safety. No life-jackets given, no slowing down for passing boats or wakes, and only a slight fear of shark infested waters.

5:00pm – Our driver, Francisco, dropped us back at the pier and we made our way to the Hostel to pick up our stuff and go. Our bus driver, the prima-donna diva that he was, refused to bring the bus to us, so we had to walk a few blocks to him. We were late leaving the hostel and lost the group, which meant another 30 minutes of wandering the town trying to find our bus … and prepare emotionally for being stranded. Finally someone else found us and we jumped on the bus for the loooooooong trip home. To pass the time, I watched Pitch Perfect … twice.

1:30am – After a grueling 8.5 hour bus ride, we were finally home. At least this time we were able to make bathroom breaks more often … though out of spite for our prissy driver, I chose to relieve myself on the back of the bus instead of the gas station facilities. Take that Mr. Anderson. But the trip was done and we had just enough energy left to lay out our wet clothes, do a quick check in the mirror, and pass out until morning.

I don’t know if I will ever make it back to Brazil, but if I do, I will have to find a more efficient way to visit Paraty again. If you are every anywhere in South America, find a way to make the trek. You will not be disappointed and will surely have your own Teva Excursion.

Week 2 Takeaway: Doing Business in Brazil

For my 2nd week takeaway paper, I continue last week’s focus on one key quote, concept, or theme from each professor/guide, and how it helped shape my unique cultural understanding of doing business in Brazil. Again, after evaluating my notes and pictures from the week, I submitted this as homework assignment my week to the program. As with last week, take much of my “facts” with a grain of salt, as they are neither verified nor validated.

Marketing in Brazil: “To work hard means nothing, if I don’t have a specific purpose” – Prof. Marcelo Prado

I struggled with this course for 2 reasons. One, it was the first class after our ridiculous trip to Paraty and I was barely alive, let alone awake. However, I also struggled because the course did very little to focus specifically on marketing in Brazil. This was more of a beginner’s course in general marketing and did not dive very deep into the unique qualities of Brazil and Sao Paulo. Unfortunately, the quote above really represented my key takeaway from this class. Just like in general business, a marketer must find the WIFM (“what’s in it for me?”) or the relevance that I care about, in order to gain my attention and win me over. Unfortunately, Prof. Prado did not find my WIFM, so his own words were ultimately his own demise.

Multinationals in Brazil: “Everyone needs 3 friends to survive doing business in Brazil.” – Prof. Rodrigo de Mello

I continue to be intrigued by how distrustful the business environment is in Sao Paulo. Prof. Mello helped reinforce what most of our teachers have insinuated all along … don’t do business in Brazil. If I was not deterred yet by the insane inflation rates, taxes/tariffs, traffic, lack of timeline respect, etc. then this class put the final nail in the coffin. We have a phrase in the US that President Teddy Roosevelt coined for his foreign policy – “speak softly, and carry a big stick”. This seems to translate well to what Prof. Mello told us about his business policy – Everyone needs 3 friends to survive doing business in Brazil:

  1. A good accountant to navigate the complex tax system
  2. A good lawyer to understand which laws to follow, and which to ignore
  3. A friend with connections in the government, in order to speed up the red tape

Why do you need this? Well, apparently because of the financial, legal, and regulatory implications, starting a business takes an average of 6 months to get off the ground. In the US, you could probably do this in about a week, but Brazil’s “lack of trust” culture appears to put so many complex demands on an emerging business owner: contracts need to be signed, notarized, government approved, re-notarized, etc. Your signature is literally not valid unless it matches a notary’s database and they have stamped the contract with their validation so. If a legal issue ensues, then forget it. Taking a case to court may never get resolved, so contracts have to have negotiation situations built in just to avoid that possibility. It is tough to do business in Brazil, and even harder to start one.

Negotiations in Brazil: “You are being watched for what you do, not what you say.” – Prof. Mark Burgbridge

Great class! Negotiations in Brazil are much like negotiations everywhere, but one key difference is the business that takes place after a negotiation is complete. Did you get everything you want; did they get nothing they want? Revenge is often common in these situations and given the complex legal system navigation, a reneged business deal could mean issues are never resolved. But Brazil relies very heavy on the relationship and trust of the person before a negotiation takes place. Because of the difficulty to navigate issues after the fact, trust is highly important up front. This is why most conversations begin with casual banter – any common ground you can discuss in advance will lay the foundation for a more trustworthy negotiation. “Oh, you studied at FGV? So did I … This is a commonality that you can now build a foundation of trust off of for the future. Here are a few other interesting facts about negotiations and general conversations in Brazil; for every 30 minute business meeting, here are some key figures of “Non-verbal communication” in Brazil vs. the US:

  • 0 silent periods of 10+ seconds (3.5 in US)
  • 28.5 conversation overlaps (10.3 in US)
  • 5.2 minutes of eye contact (3.3 in US)
  • 4.7 touches during conversation (0 in US)

Logistics and Operations in Brazil: “Shipping west and north along road/river intermodal tracks is cheaper than the direct eastern route” – Prof Manoel Reis

As mentioned earlier, Brazil is one of the world’s leading exporters of coffee, soybeans, sugar, ethanol, orange juice, cattle, port, chicken, pulp/paper, iron ore, steel, auto parts, and more. However, much of this country is disjointed, with no true logistics transportation system to rely on for supply chain use. For example, railroad tracks were never standardized, which means most rails in urban settings are a different size than rural ones. Even still, there are no major railroads connecting the producers of goods to the export locations in any direction. The quote above is crazy, yet true. For example, most of the soybean production takes place in the central and southern regions of Brazil – in theory, within 1000 kms of the export ports on the east coast. However, it is half the cost to drive them 1000+ kms east to the Madeira River, then another 1000+ kms up to the Amazon River, then another 1000+ kms up to the northern port city of Belem. This trip takes 7-10 days (twice as long as going east to Sao Paulo), but is literally half the cost. The infrastructure is simply not in place to support transportation on roads or rails in Brazil yet, and the River is a much more navigable landscape today. There are some major projects in line to create 12,000 km of standard rails going north/south and east/west in Brazil, but this will cost an estimated US$30 billion and years to complete.

End of Program Reflection: Innovation and Ideation in Brazil (updated)

(I updated this to reflect my end of program essay instead of just the week 2 reflection)

In the past two weeks, we have spent many hours studying, analyzing, and discussing the culture of Brazil and Sao Paulo’s growing economy as an emerging market for business.  The unique culture has been a key theme to understanding how to do business in Brazil, such as work ethic, currency inflation, taxation, etc.  However, the most intriguing cultural theme I have taken away from this course and my time in Sao Paulo is the interesting emphases placed on innovation or “ideation” as it is commonly called.

This was never more prevalent than during our company visits to Brasilata and Embraer.  These two companies proudly championed their innovation methods and “idea generation” as a pivotal reason to their success.  Through the visits to these companies, speaking with their representatives, and relating teachings during the classroom courses, it has become clearer to me why this works.  In today’s global and social world, doing business in Brazil has created an environment where employee interaction with the company’s innovation demands are encouraged, rewarded, and recognized.  This is seen in the business strategies employed by these 2 companies, the government’s support of innovation in general, and the work ethic of companies to support employee ideation.

The frontline of this capability relies in the company employees.  For example, using the Kaizen strategy to drive process improvements, both Brasilata and Embraer generate 15,000+ ideas a year from their employees to help drive efficiency in production, process, and methodology.  With every employee in both these companies seemingly engaged in day-to-day idea sharing, I wonder how this process would work at my office back home. The team I work for is engaged in a project to deliver a new social media tool which can help generate and measure ideas for enterprise effectiveness.  However, while working on this project, I have struggled with how we can truly maximize this tool’s adoption by our 350,000 employees. In theory, the concept is the same as popularized at Brasilata and Embraer, but the adoption of this tool and the consistency of its use (as with any IT solution) represent the greatest learning I can take away from Brazil.

While visiting Embraer and Brasilata, the biggest support of ideation practices appears to be the revolutionary shift in company culture that supports it. Innovation/ideation has become the #1 priority from leadership as a way to improve the company environment, profits, and success. Building this culture of change, like with any IT or Process project, is of course the most difficult piece. Not only are you trying to build adoption of the tools and systems in place (both technical and procedural), but you have to build adoption of the ideation process and concepts as well. When I look at most IT projects I have worked in the past, this has never been a large enough focus. The priority is too often on the IT solution (the tool, the system, the process), and rarely on the benefit of innovation and opportunity for the people and the possible future culture shift.

To build this culture towards innovation and ideation, one must truly know their current culture and understand what small shifts can be made over time to influence it.  At Brasilata, for example, one small shift was by labeling all their employees as “Inventors” on their job descriptions. At Embraer, another is how employees change assembly line positions with each aircraft completion (thus providing fresh minds to evaluate idea opportunities to the same task every few months).

Innovation and Ideation is not something you can force, nor can you expect, just because you put a IT solution (e.g. tool) in place to support it.  However, with the right “small shifts” to align people in the organization towards the concept naturally, I do think it can become a generally accepted practice over time.  At my company, for example, we have new social media tools, but now need to look deeper into our culture to see what will create the necessary environment to best utilize them.  For example, when will people want to use the tools, when will they want to generate everyday innovation, and when will they want to share these ideas more systematically with the enterprise?  When we can answer those questions, then our company culture will have moved towards this global change.

Another component that has likely helped Brasilata and Embraer drive innovation in their workplaces, is the economic stimulus/subsidy that Brazil’s government provides.  As discussed in class, it may be a complex process to qualify and leverage this government help, but the rewards are already beneficial in the long run for the company.  Creating an environment to support constant ideation now will drive further company innovation long-term.  In the short-term, Brazilian companies can leverage government subsidies, tax breaks, or stimuli, while in the long-term they can create the ecosystem for continual improvement and competitive advantage to their core business models.

Brasilata and Embraer provide great motivation to further expand innovation and ideation practices at any industry and corporation. For Brazil, this appears to be the right combination of tools, programs, and technology at the right time.  As Brazil grows its economic footprint as an emerging global economy, the technology and tools are already available and used by Brazilians today.  Social media tools such as Facebook, blogging, Twitter, email, etc., have already created a social ecosystem where people share their thoughts and opinions with others.  These thoughts and opinions are then “liked”, “forwarded” and “shared” within those tools, thus creating a natural hierarchy of ideation recognition.  Because of this, employees joining the workforce already possess the necessary culture to embrace this at an enterprise level.  At my company, we employee many older generations that naturally resist technology like this, and therefore will have a harder time embracing the culture of ideation necessary for this level of enterprise innovation.  But as more young generations enter the US work place, this culture will be more naturally acceptable nationwide.  I have no doubt the young culture that is drowning in social ideation in the US today will eventually help us transition ideation to the businesses we work in.  For Brazil, the timing was perfect to do this naturally during their booming economic growth – but for the US, we need a little more coaxing to create it more forcefully.

Brazilian Bohemian Bars

Most bars in Brazil are what you expect. Open space with tables and chairs, different kinds of local beer, perhaps a menu to order food if you get hungry, a TV playing soccer in the corner … the usual.

But not last night. Last night we went to the Brazilian version of the Star Wars Cantina. We didn’t have Figrin D’an and the Modal Nodes, but it was pretty damn close. Our version had 3 people sitting on a bench playing instruments: a tambourine, a toy guitar (about 1.5 feet long with 4 strings), and a clarinet. Their music was a mix between a Figrin D, a cartoon theme song, and a 4th grade band practice. Many of the people there seemed to be on one drug or another … which is probably what it would take to enjoy that scene, so after about 30 minutes I peaced out. I am not sure, but I think I saw Han Solo in the corner on the way out.

Teva Excursion to Paraty – Day 1

Not really sure how to sum up our 53 hour excursion to Paraty, Brazil in a short post, but I will do my best. When I worked at Herzl Camp, I coined the term “Teva (Nature) Excursion” for the overnight trip in the woods we would take the campers. I feel like this weekend has given that term a whole new meaning, as it was an extreme trip where my sub-group of 4 (quickly named “Team Bad-a**) refused to back down from any challenge. This was the Paraty Teva Excursion (and the first of my 2013 resolution to do 5 new adventures).

Friday, Jan 11
8:00pm – Board the bus for a 250 km ride to Paraty

Saturday, Jan 12
3:00am – After 7 hours of navigating mountainous roads with 45 degree inclines, no concept of slowing down, and speed bumps every 100 meters in a sh*tty bus, we finally arrive in the colonial city of Paraty. Cobblestone roads, beaches, tourism, mountains, rainforest looking foliage … even the awful trip couldn’t take away from the hope of adventure to come.

5:30am – Wow. Two and a half hours of negotiating with our bus driver finally done. The guy was supposed to stay in Paraty with us, but never mentioned we were to book him a place to stay. Nor that it had to be a private place to his “standards”. There were no rooms left at the hostel so i offered up my bed, he refused. We offered another hostel with a private room, he refused. Finally, we gave him US$200 and sent him to a hotel, telling him we didn’t want to see him again until Sunday at 5pm for the trip back. Between 25 of us, it was about $8 each, worth the price of an extra hour of sleep at this point.

9:00am – After a very relaxing 3.5 hour nap on a hammock, we awoke to start the day. Team Bad-a** rented mountain bikes and took to the mountains. It was a total of 20 km roundtrip, straight up, then back down, then up the other side and down again. The bikes were … ok … they held up well on the way up, but had ABSOLUTELY no breaks coming down. I used my feet, the bushes, and other death-defying maneuvers to keep me from barreling head first into passing cars on the narrow windy road. But the views were worth it, simply an incredible countryside.

2:00pm – We get to the first waterfall, Cachoeira de Penha and learned how to surf/slide down the falls into the pool below. I have never seen the likes of this before, wow. The locals were slightly better than us, but it was still awesome to try.

4:00pm – We continue the bike trek down the mountain and back up the other side. Navigating this “rainforest” terrain felt like I was on the set of LOST. Overgrown tropical vegetation, deserted buildings in the distance … even a radio tower on the top of a mountain. JJ Abrams must have come here for his initial inspiration.

5:00pm – We get to the second waterfall, Cachoeira de Pedra Blanca and went nuts with diving off the cliffs into the pools and navigating the different sections of waterfall. This was about 3 times the size of Gooseberry Falls, and an incredible sight worth the extra trip up the mountain again.

5:30pm – Side story. Paige broke the key into the bike lock, stranding us on the mountain top after everyone went home for the night. We were the last people there, with no way to get down besides walking, but we got lucky in that one of the remaining park guides happened to have a hacksaw on hand. Only in Brazil! After a quick scare, we made our way back down the mountain again (just as scared).

7:00pm – Drop off the bikes, having somehow miraculously survived the downhill run again (this time, holding the brakes firm to the handlebars praying somehow it would magically stop the bike if needed. It didn’t.)

9:00pm – Time for the highlight of the weekend: A local version of the Brazilian Churrascaria at our hostel, Che Lagarto. For US$13, we had more variety and quantity of meat then I have ever seen below. The picture here is about 1/3 what they made, not to mention the full table of breads, vegetables, salads … and a free Caipirinha (sugar cane rum, lime, sugar). We had a bartender doing bar tricks (at one point he juggled bottles lit on fire), and a live band playing traditional Brazilian music. A fantastic party!

12:00pm – We head out to join the locals at the town “Centro”, or central square. Live music, bars surrounding the square, and thousands of people just hanging out. It was like a South American version of New Orleans, and just as exciting. Even managed to find a bar to see the Packers get slaughtered.

Stay tuned for Day 2…

Company Tour: Brasilata

Our second company tour took place on Friday, where we visited the Brazilian manufacturing company, Brasilata. Brazilata is a family owned steel can producing company, with over 100 employees, and $250 million a year in sales. Most interesting, though, is their recent “Simplification Project” that for the past 25 years has earned them over 100 new canning industry patents, and put them on the map as one of Brazil’s “Best Places to Work”.

Brasilata adopted the Japanese process efficiency strategies of Kanban and Kaizan to drive innovation in their workplace, where employees (called “inventors”) at every level are encouraged to submit ideas for streamlining the workplace. From this program, they recorded nearly 150,000 ideas in 2012, with an adoption and acceptance rate of 92%. We spent about an hour talking with a Director in charge of the facility and learned why this process was so successful. A couple reasons we learned are below:

  • The goal is not to improve profits, but to improve the internal environment you work in
  • Employees do not receive monetary rewards, but rather symbolic recognition and shared profits
  • The 1000 employees, together, own 15% of the company, and therefore collectively gain from improvements to the bottom line
  • 99% of the ideas cost less than $500 to implement and therefore can be done immediately by teams
  • Each month, the best ideas are submitted and recognized in each department\
  • At the end of the year, the best idea receives the “Super Cup” for greatest recognition
  • Ownership of ideas does not exist, everyone owns them together and builds on them together

On the surface, this has a bit of a socialist mentality where the work/gain of all is shared by all. However, the program works and has made Brasilata the market leader in South America that it is today. It is hard to think that a company that specializes in paint cans, aerosol spray cans, and other chemical containers can be so changeable, but they are among the highest innovators in the world and continuously improve their products, processes, and strategies.

When you look at what you do day to day, how many of these are ideas you can share? A spreadsheet to track progress of a project, a new use of social media to share knowledge, a solution to a problem emailed to you? These are all the types of ideas that Brasilata encourages and records, and the results have been extremely rewarding for them.

It was a good visit, and a nice discussion with one of the company’s top executives. A nice change of pace from the first visit to Natura, where we were given a tour guide and treated more like generic visitors. At Brasilata, we had a chance to evaluate, analyze, and discuss the unique culture of this company with its leaders, and therefore received a better understanding of “Doing Business in Brazil”.

The $10 Pineapple

Funny story. We went to the Mercado Municipal (market) today for lunch (Kelner convinced me to make the 1 hour trip for a deli style 100% beef bologna sandwich, and even though they messed up and gave us Turkey … it was still a-wait-for-it-mazing (#1 below). I’ll have to go back next week for that sandwich again, because damnit if i don’t love me some good processed beef.

Ok, so back to the story. It reminded me of the first trip to the market last Monday, during the city tour. One of the things this market is known for is it’s exotic fruit selection. Fruit stands surround the market hawking dozens of tropical fruit you have never seen before. Some of my favorites were the “has a cashew nut sticking out of the top” fruit (#2 below), the “looks and tastes like an artichoke fruit” (#3 below), and the “giant red kohlrabi looking thing with white kiwi center” fruit. These are the official technical names of course. After 30 minutes of tasting these incredibly sweet and juicy treats, we were ready to buy … and then we learned the prices. Artichoke fruit? US$10, White kiwi thing? US$25. Regular old Pineapple? US$10. You could say this is because we were American, but i witnessed locals buying at these prices too.

I picked out the artichoke fruit (which was incredible), then wanted a pineapple. Those cost a buck at the minneapolis farmer’s market, so I figured the price is negotiable. No deal. The guy would not allow much haggling, and I ultimately passed on it. I can only imagine what these guys bring in a year with fruit costs so high. But then, the best part! As we are leaving we drove around the corner where some homeless people surrounded the streets. And right there on the corner, were 10 boxes of pineapples with at least 10 fruits in each. $1000 worth of pineapples there for the taking and dozens of hungry poor Brazilians just walking past them! What is going on???

Later, I went to a grocery store, and found the same darn pineapple for about $3 US. I have now figured out how to “Do Business in Brazil”. Take a sh*tload of pineapples from the grocery store and sell it for $9 next to the market. Instant billionaire.

After a commercial break, we’ll be right back … to commercials.

I am not a very big political activist. Anyone who knows me knows how I typically vote. And anyone who knows my demographic data: religion, income, residence location, social class, etc. can probably figure it out too. In the US, this is something we joke about, but every election always comes down to a few key swing states that can go to either party. States like Ohio and Florida decide the election every year, because states like Minnesota and Alabama never change.

Now enter Brazil, and your whole political stigma is thrown out the window. We discussed in our Political, Economic and Social Structure course that, on average, 40% of Brazilians change their party preference each election. That is an incredible number, but it may have something to do with the party system as well. There are apparently over 30 political parties in Brazil, meaning you rarely have an elected official with the majority of the vote anyway. And how do you learn about these candidates? Interestingly, Brazil has a mandatory 2-hour television program on every channel for every day of the month leading up to an election. This 2-hour block is dedicated solely to political campaigning, which is often created right up to the last minute as candidates poll uncertain voters. With so many candidates to choose from, and the forced marketing programming, it’s easy to understand why 40% are swayed each time.

What does this mean? Well, that’s tough to say, because so much of Sao Paulo’s culture is young and new. They are still figuring out what works, what doesn’t, and what systems will bring the best results. On the one hand, it is nice to have a forcefully informed decision between multiple candidates, but must be very hard to get any traction as a political candidate. Franken and Klobuchar would have their work cut out for them.

Week 1 Takeaway: Sao Paulo Business and Culture

My homework assignment this week was to provide a 1 page reflection paper on some of the teachings and learnings from this week’s classes. Unfortunately, with such an intense amount of information, concepts, and culture exposure during these past few days … writing 1 page paper sounded impossible. Especially since I really like to hear/see myself talk…

For the paper, I chose to focus on one key quote, concept, or theme from each professor/guide, and how it helped shape my unique cultural understanding of the people and business in Sao Paulo. After evaluating the notes and pictures I took this week, I am submitting what you see below. Take much of my “facts” with a grain of salt, as they are completely unverified.

Sao Paulo City Tour: “This train station is an exact replica of the King’s Cross Station in London.” -Tour Guide
Our Sao Paulo tour guide said this proudly as we walked around the mega train station pictured below. At first I thought it exciting as well, but then the day went on: the Banespa skyscraper built as an exact replica of the Empire State Building, Cable cars surrounding a “Largo de San Francisco”, Ibirapuero Park resembling Central Park in NYC, the upcoming Templo de Solomao being built as an exact replica to Jerusalem’s Temple of Solomon. These buildings provide visiting tourists and businesses with familiarity and sites to visit, but it was a slight disappointment to me as well. In my pre-trip preparations, I read about how Sao Paulo is known for its incredible architecture and design by famous designers like Azevedo, Niemeyer, Marx, and Mendes da Rocha. There definitely are other incredible works, such as the Sao Paulo Museum of Art that is suspended above ground by 2 lateral beams, but we we were not exposed to these. This theme of replication may tie back to Brazil’s natural culture to avoid planning. More on this next…

 

Brazilian Business: “You don’t have to do it today, if you can pay someone to do it tomorrow.” -Prof. Gilberto Sarfati

Brazil is a culture of avoidance. The culture has a lack of planning, accountability, timeliness, and inhibits a general stereotype of “”laziness””. Sound bad? To us, sure … but apparently not to native Brazilians. This is the style they enjoy, and business tends to follow the trend. If a Brazilian worker says “”I will get this to you tomorrow””, what they are really saying is “”I will get this to you anytime after today.”” Coming from a consulting background, this concept feels exceptionally foreign to me. How can you deliver results by the timelines promised, meet contractual obligations, and provide high value consistently if you do not respect timelines? The architecture examples discussed above help explain my understanding of this concept. Why expend more effort and money to design a new train station, when there is a very reputable train station in England you can easily replicate? To readers unfamiliar with São Paulo, this may sound like negative stereotyping and discrimination. However, this is how it was shared to us by Prof. Sarfati, and apparently how most people from São Paulo would describe themselves as well. To Brazilians, it is not laziness, in fact it is considered noble to not work. But perhaps this is due to the lack of social discrimination in Brazil. More on that next…

 

Brazilian Culture: “I am an Egyptian Jew, my wife is Japanese, but we are both Brazilian and that’s it.” – Prof. Gilberto Sarfati

Brazil is a true Melting Pot. Initial ethnic figures were a mixture of native Indians, black slaves, and Portuguese colonizers. Now, as a historian I will need to look this up at home, but apparently the Portuguese plan was never to colonize and push other cultures out, like the Spanish and English. Portugal simply wanted to export the resources back to Europe and did not care about the inhabitants of Brazil. Instant social acceptance, right there. From the very beginning, these cultures merged together and it was not only acceptable, but expected, to instantly merge communities together. There is literally no term for “”Mixed Couple”” in Brazil, and their has never been a Civil Rights Movement. Simply put, there are no minorities in Brazil, because social integration is natural. São Paulo is only 150 years developed as well, with means everyone is basically still an immigrant. Being from the US, this is very difficult to believe, but here is an example: The most authentic Sao Paulan food is Pizza (Italian), and the most common is Rice and Beans (African). Having spent years studying social culture and humanities in the US, this concept is amazing to me. Imagine how different the world would be if European countries all shared this concept before spreading out to “”conquer”” the western world. All cultures in Brazil simply work well together, which is one of the reason’s the Natura company’s Ekos line is so successful. More on that next…

 

Natura Company Visit: “The sustainable business model for Ekos takes into account the socioeconomic development of rural producers” – Natura website

On Wednesday we visited the Brazilian company Natura. Natura is a consultant-based cosmetic company similar to Avon or Mary Kay. The produce products and catalogs, and then employ millions of consultants to sell them in stores, door-to-door, etc. One of the key differentiators of Natura, is their consistent focus on corporate responsibility to the environment, sustainability, and organic products. To understand this better, we discussed a new product line called Ekos, which partners with 50 underdeveloped communities in Brazil that help produce the goods. As a skeptical American, I naturally think “”ok, Natura sought out these communities so they can take advantage of cheap labor””. However, if you read their website, watch the videos, etc. you can see that this is not the case. The Ekos line truly helps benefit these communities, lifting them out of third world status and allowing Natura to give back to the community as much as they take. Much more than just paying for the labor, Natura is investing in communities with infrastructure, technology, etc. According to my very limited research, these amenities are more important to the community’s wealth than the paychecks they receive. However, this may be because their paycheck is literally worth less tomorrow than it is today. More on that next…

 

Banking in Brazil: “Brazil has the highest inflation rate of any country. The cumulative devaluation of Brazilian currency, over past 70 years, added up to 2,750,000,000,000,000%.” Prof. Rafael Schiozer

Many of our professors talk about the inflation rate in Brazil, and how it is the highest in the world. Stories were shared about getting your paycheck and immediately buying groceries, because food prices go up 20% the next day. I struggle with understanding the true impact of this inflation rate, but even more I wonder how Brazil can be an emerging market if investments will be worth so little over time. Why would I invest money in this market, if it will be worth 20% less tomorrow? I imagine this has been a significant barrier to entry for many foreign companies looking to do business in Brazil. However, this is also probably why the banking industry is so successful. Citibank and HSBC expanded to Brazil and have done very well here. And you can not walk 10 feet without seeing an advertisement for Banco Itau, Brazil’s largest domestic bank (even our classroom is sponsored by Itau, see pic). The Brazilian President made this one of his top priorities over the past 10 years, championing a campaign to move to “”0% inflation””, and it will be very interesting to track this and foreign expansion here over time.

This reflection was supposed to be just 1 page, but it is hard to stop once you get going. I’ve already shared, from previous posts, my reflection on a couple other professors and concepts. and will continue to reflect on these learnings and more while down here. Brazil is an incredibly unique country and Sao Paulo’s financial success is one that every business student should study. No doubt the other programs at the Carlson school are equally beneficial, but I am very glad I chose this one and am excited to see what next week’s classes and company visits bring.