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Digital success of multinational firms in Brazil: a cultural explanation
1. Jorge Carneiro
Brazilian Society and Cultural Traits
1
Digital success (or not) of US firms in Brazil: a cultural explanation
Pedro Hofmeister
October 25th
, 2017
Sao Paulo
Class of 2018
2. Jorge Carneiro
Brazilian Society and Cultural Traits
2
Pedro Hofmeister
1. cultivation, tillage
We ought to blame the culture, not the soil. —Alexander Pope
1. the customary beliefs, social forms, and material traits of a racial, religious, or
social group; also
2. the set of shared attitudes, values, goals, and practices that characterizes an
institution or organization - a corporate culture focused on the bottom line
– […]: a total of 10 definitions: culture could be anything (or everything)
In business and in class, broadly blaming “culture” for successes
or failures might limit success and learning
Foreword
Culture according to the Merriam-Webster
3. Jorge Carneiro
Brazilian Society and Cultural Traits
3
Pedro Hofmeister
Two large and famous US multinationals had a green field
B2B business in Brazil;
Decided to startup a new fast-growing, innovative, disruptive
consumer business using leading digital and e-commerce
tech;
Part of a global project, outlined with the help of consultants,
led by global teams
Global diverse people, from different nationalities led,
planned and executed both projects
One was an extreme success, the other failed
A cultural explanation will follow:
Two tales of US multinationals in Brazil
One success, one failure: why?
4. Jorge Carneiro
Brazilian Society and Cultural Traits
4
Pedro Hofmeister
Two tales of US multinationals in Brazil
Different stories
Industry
Consumer Electronics.
Computer Hardware.
Insurance.
Consumer Lines/P&C.
Characteristics
Product. Low margins.
Global competition.
Commoditized. Tax
incentives for local
manufacture.
Service. Higher margins.
Protected by written and non-
written regulation. Large
availability of
capital/investment.
Geographic location
(cultural implications)
HQ in the South
(Porto Alegre).
HQ in São Paulo.
Transformation
New segment. Standardized
platform/practices. Several
existing assets.
New segments. Inability to
standardize. From zero.
Leadership
Foreign, combine technical
skills and diverse int’l
experience, MBA education.
Foreign, diverse, combine
technical skills and specific
int’l experience, industry
success.
5. Jorge Carneiro
Brazilian Society and Cultural Traits
5
Pedro Hofmeister
Two tales of US multinationals in Brazil
Different stories
Implementation
Designed by consultants
(MarketMotive/Kaushik).
Implemented by internal team
– committed to the proj. of
their careers
Designed and implemented
mostly by consultants (Bain,
McKinsey, Accenture,
Sapient) – one more project.
Local Team
Selected based on int’l
experience and language
command (communication).
Clear company core
competences.
Selected based on technical
skills and local market
experience.
Incentives
Clear goals. Objective
performance review based on
official metrics and
competences. Grades defined
within team.
Shifting goals. Space for self-
defined metrics. Discussed at
“round-table”. Grades
adjusted after manager
submission.
6. Jorge Carneiro
Brazilian Society and Cultural Traits
6
Pedro Hofmeister
Culture is to blame:
A multiple regression perspective, fixing for endogeneity
Independent variables Dependent variables
National culture dimensions
(Hofstede): regional and individual
differences
Revenue growth: 300x in 3 years.
Break-even faster.
Corporate culture:
Incentives: results driven, team
spirit, fairness/integrity Intervening variables
Large bonus, promotions. Public
recognition by Global CEO.
Power and responsibility: org.
structure, internal teams
CULTURE SUCCESS Friends > Enemies at the office
Results > Politics
Relax > Stress
People: soft skills > hard skills
Happier happy hour, beer tastes
like winning.
Leadership: attentive, open,
dialogue with US and Brazil, able
to manage and influence all above
upwards and downwards
Get home tired, but in great spirit.
Enjoy life/family.
Be happy.