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[Music] Well, good afternoon everybody.
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Good afternoon everybody.
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Well, it's great to be back here.
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Uh it's my third time here and um it's uh it's always great to be back to the GSP.
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I'm here today to talk about how leaders and high performance culture connects.
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I'm sure you all are leaders have been leaders are preparing yourselves to be leaders and you all want because you're here to do things that are best in class high performance.
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So I'm here to to talk to you in our experience how those things connect.
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First let me try to u to share with you our definition of leadership because there are so many.
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Let me give you a very simple one.
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First we we started thinking many years ago in the company I mean okay leadership is something is important but are leaders born or formed that forever question and we said okay let's let's take the side of that we can form leaders because people that say that they are born leaders say that only 2% of the population are on that side.
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So let's believe that we can form leaders because that will give us more opportunities to find those guys within our company.
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Second thing we said who is a leader in our company and we said anybody who has an objective a target and for him or her to get there he needs a team he's in a leadership position okay if tomorrow he's in a spreadsheet and he's all by himself or herself he's not in a leadership position but he steps back into a position where I need my team to get somewhere he needs to play that role of leader And now that gets us to the definition of leadership.
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Leadership is something very simple to define, very hard to live. What's the definition? Three things.
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Is about delivering results on a sustainable basis through the team.
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So the whole thing about the people aspect, you can't do it by yourself by the very definition of leadership. Doing it the right way.
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So how we do it, how you do it, that matters as much as what you do it.
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And I'm here today to explore those three dimensions with examples in our experience and how a leader can affect those things.
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There are many more things about leaders.
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You can say leaders are people that are uh cannot be selfish.
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They have to think that it's not about their ego.
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It's not about him or her. It's about the company.
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They're there to build something much bigger.
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Not their ego, their resume, but the company.
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Also leaders have to be somebody people that are people person. They need to believe.
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They need to like to be surrounded by people.
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They need to to like to um inspire people to to get people to believe that they can perform better than they think they can.
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That they together can get to places that they never thought they could. That's inspiration. That's coaching.
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That's making people believe.
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Giving them reasons to believe.
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It's always that thing of upping the bar.
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thing of upping the bar. A leader is also somebody who has to know enough details about the operation to ask relevant questions and to set targets that make sense because some people believe that as you grow in the company you have to become more
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strategic that operations something that for the lower guys and you have to be strategic in our view that misses the point a leader has to be a mix of course I mean it's just like in a ship in a big ship if everybody body is in the is in the engine room and there's nobody looking to where the the ship is going. That's not ideal. If if everybody's at That's not ideal.
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If if everybody's at the bridge and nobody looking at the engine, that also doesn't work.
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So, of course, there are different roles and different mixes between details of operations and strategic side of the business.
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But a leader that's 100% strategy will not be able as time goes by because it's getting distant from the business to ask good questions and set relevant targets.
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So in our company, we value people that can have both.
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And when people come to meetings with me, they know I can dive in into any details because I'm not afraid of it because I travel.
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I try to get as much detail as I need to for those two things.
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need to for those two things. So again lots can be said about leadership but for us it's about achieving results with the team doing it right and now I'm going to explore those three dimensions I'll start with the first one which is all about the dream what we call the dream so if you're saying you need to achieve great results
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you don't want to achieve just average results you want to achieve great results we call it and you need to inspire people we call it you need to give people a dream, a sense of purpose, something that will inspire people, will get them to put their energy, will get them to really believe they can get there, row in the same direction, align the company. It's easy to explain to any
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It's easy to explain to any of us what a dream is.
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A dream is something that's stretched but credible.
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Something that will require a lot of work.
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Something that motivates everybody and something that everybody can see how I can, you know, with my bit of the business help the company get there.
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So, it's something that needs to talk to everybody.
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So, it's a little bit of an art form.
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It's an educated art form on how to set a dream that will talk to everybody, get everybody excited to go in the same direction.
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Because if you can get there and establish that dream, then you up the bar.
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Then you set the reference.
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Anything below that is not acceptable.
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So if you're trying to be best in class, good is not good enough, right?
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And dreaming big takes the same amount of energy as dreaming small. So why dream small?
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Takes the same amount of energy.
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So dream big, inspire people, and that will make amazing things happen because people will start believing.
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It's just like the high jump.
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I mean, if you always put the bar here, people just jump enough to clear the hurdle.
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If you start raising the bar and people believe that they can do it and they do it, they start getting that confidence and they do it.
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So that's the thing about the big dream gets people to be confident that they can deliver.
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The other thing is that you have to dream big, but you have to stay humble.
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That's very important because when you think about it, what what's the definition of a dream?
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Dream is something where you say I'm here, I want to get here. That's a dream. We call this a gap.
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And for you to determine a gap, you have to find somebody out there who serves as a benchmark.
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So you say the benchmark's here. We are here.
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Our dream is to close this gap.
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And then once this gap is closed, you open the next gap.
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That's the only function of a leader in manage management in general. Open gaps, close gaps.
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But for you to open gaps, you have to be humble enough to believe that there's always somebody out there, companies out there that do it better than you do. Not in everything.
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There's no such a company, a perfect company.
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But in every dimension, supply chain, logistics, finance, legal, people, whatever you want to call it, there are three, four, five companies out there that do it better than you do. So, think about trucks.
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I mean, the loading of a truck, okay?
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The routing systems, you know, the the warehouse management or think about anything else you want to think.
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Everything is measurable.
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And if you can measure, you can compare to somebody else and establish the gap.
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So, this is the thing about being humble.
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You have to believe that no matter how good you think you are, there's always somebody out there who is in specific dimensions and in all dimensions do it better than you.
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Not one somebody, many somebody's.
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All you have to do is go look, establish the benchmark, open the gap and then the whole thing, the targets and the whole systems about closing those gaps.
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And that covers the the the first part in a very summarized fashion of getting to results in a sustainable way is to open gaps, have dreams, get people excited and make them believe that as a group they can do much more than they believe they could.
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The high jump, you keep putting that bar higher and people start believing because they do it that they can do more things than they thought they could.
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All right, are you guys with me? Are you guys with me? Yes. All right. Okay.
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So, now let's go to the and the thing about the dream is this because some companies, you know, you have that thing called the feel-good department.
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I don't know if you've heard about this.
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One of the companies we acquired many years ago, they had a a department called the feel-good department.
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It was an invisible department.
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It was in no work chart, but it was everywhere.
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And every time they had a problem and a KPI and a key performance indicator was not being achieved, they would send that piece of news, bad piece of news to the feelood department, they would repackage that, send it back as a piece of good news and everybody would be happy. Isn't that amazing?
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So the first thing we got there, we said, "Guys, we need to close this apartment, and when things are going well, they're going well.
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We'll celebrate, do more of it.
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When things are not going well, we'll call it a gap, a problem, something we need to close.
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And we always said it's great to look up trying to find that benchmark because when you look up, you get inspired, you get challenged if you're talented.
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When you look down, you get comfortable and you get lazy, right? It's the same thing.
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I mean, if you come to the GSB, you're looking up because the people here will raise the bar for you.
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You'll say, "Oh my god, this is very competitive."
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If you go to some other schools, you feel great.
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You're going to be the the top 1%.
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But is that going to be good for you? No.
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Because it will get you lazy and comfortable.
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So, you have to get your group to look up, find those benchmarks, open those gaps, dream big, and go for it.
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That's the first thing, a leader and high performance, how they connect.
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The second thing is the whole thing, the whole thing about people.
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When you think about it, there's no company.
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What you have is a group of people that equals a company. It's not the opposite. A company equals people.
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No, people equals company.
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So for you to have a great company and a great leader want that, wants that, you have to first have great people.
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The amazing thing about people is that people is the only sustainable competitive advantage any business can have over competition.
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can be a consultant, a banking.
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In consulting and banking, it's easy to imagine because all you have is people and telephones and computers and frameworks and knowledge.
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At least that's what they say.
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In companies more like ours and others where you have brands, I mean, people tend to get distracted that what counts is really the brands, the factories, the warehouses, the trucks, the access to to markets and forget the people component.
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But in our view again just like banking consultant the most important things the only sustainable competitive advantage that is hard to copy is your people machine the way you really grow people attract retain grow develop deploy that's hard to copy and people don't see it.
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It's one of those soft things.
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If you launch a new product that can be copied the next month the next day the next six months.
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If you come, if you have a new marketing campaign that can be copied or even done better, but if you have a people machine that get people to develop and stay within your company and grow and because they are the company, the company will grow as well. That's soft.
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It's hard to see and when they see it, you're already five, 10 years ahead of them.
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So people is very important.
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For you to dream big, you need great people.
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For you to form a great company, you need great people.
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And for you and the thing is that great people attract more of the same.
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That's the amazing thing.
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They like to work together.
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They challenge each other.
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They learn from each other.
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They get inspired by each other.
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The problem is that mediocre people also love to work together.
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They give each other easy targets, right?
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They think everybody's great.
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They celebrate even when they have no reasons to celebrate.
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They use the feel-good department, right?
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And that builds a an average company, not a great company.
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Great companies are formed by great people.
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But the thing about great people is not attracting great people, it's retaining great people.
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Because a lot of companies that do a good job at attracting great people, but they lose them.
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They train them to the marketplace. We're not a school.
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We're not going to be training people for our competitors to use them.
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We want people to come and stay.
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But for them to come and stay, we don't lose good people.
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And when we do, it's a crisis.
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We learned a couple things, four or five things that I'll share with you that talented people like you love in a company.
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Some companies offer that, some others don't.
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First thing, meritocracy.
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Easy to say, hard to to do.
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Matrix is that concept that people grow according to their talents, what they can deliver, the potential they have, the teams they form, the people they attract, the cultural ambassador, the culture they spread.
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They grow because of that, not because of the passport, last names, how long they've been in the company.
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No, because of the first group of things. That's meritocracy. Very hard.
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In the Q&A, we can explore more of that, but that's meritocracy.
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A meritocracy is hard to do because it entails the fact of fairness.
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Our definition of fairness is that you have to treat different people in different ways. That's being fair.
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If you treat everybody the same, that's unfair.
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A meritocracy is being fair.
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So if somebody is dedicating more time producing more results, have more potential, is willing to chew a bigger bone, is willing to have more accountability, is willing to go to places, be transferred around the globe, that person deserves more opportunity, more exposure, will have more learning, and will also build their wealth according to the value that's being created.
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That's also a very important component.
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It's not the most important one by any stretch, but it's one of the components. Okay.
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So, the idea of fairness is that you treat different people different ways.
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And a lot of companies are afraid of saying that because that sounds incorrect, but at the end, what's incorrect is treating everybody the same.
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The second thing they like is this whole idea about informality.
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Informality is not the way you dress.
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is not the way you set up your operations in terms of offices and stuff.
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For example, in our place, I have no office.
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I have a big table with my direct reports around me and so does everybody in all places in the world where we operate. Why?
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Because information flows. People can speak up.
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You don't need to be booking meetings all the time.
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Meetings happen as you meet people in the office.
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There's no assistant blocking your agenda. You're available. That's informality.
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But that's only part of it.
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The true informality is a company that's able to deal with healthy conflict conflicts and a lot of people don't like that.
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A lot of bosses don't like to be contradicted or challenged.
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What I say is that as long as it's respectful and constructive, you can say whatever you want if you're trying to get the business to a better place and having no hidden agendas help that.
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That's why I never go home with a work related problem.
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I go home with a market related problem.
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So if in that market my brains are not performing well, competition is kicking my you know what, that's something it's 247 with me.
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But if I go to a meeting and somebody says something that sounds strange to me, I won't go home with that.
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After the meeting, I I'll call Jane.
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Jane, can we talk for five minutes? Go to a different room.
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You said that they quite didn't understand. Did you mean A or B? Oh, I meant A. Oh, very good.
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Because I thought it was B.
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Okay, settled and then your mind is free up again to focus on what matters, what creates value and not on internal politics and things like that.
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An open office also enables that.
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People don't have doors to close and talk small talk. It's all open. So that's informality.
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The whole thing about healthy conflicts.
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The other thing that talented people like you like in a company is cander, honesty.
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They want to know where they stand.
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Example, performance evaluation.
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We do it twice a year formally.
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90 minutes oneonone both ways.
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Self-evaluation, my evaluation of the individual, his or her evaluation of me. 90 minutes.
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It takes 90 minutes to get to what counts. Okay?
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very easy to say, very hard to do because then it's a Friday and you say, "Oh my god, if I have to tell Tom the things that are not working, it's going to ruin his weekend."
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And then the next week you travel and then when you're back, he's not here.
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And then a year's pass, 10 years passed, his life is only one. And it's short anyway.
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All of our lives are short for everything we want to do.
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and you're just playing God because you know something and you don't want to share. It's his life. It's wrong.
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You have to tell what's good, what's bad, and how you can help him recover and get back on track. Cander.
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Talented people like to to know where they stand, their future with the company, what the next steps could be, and what they can do better.
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They don't like you to manage that as, you know, playing God. and I'll do it my way.
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I don't need to share that.
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Then they'll share with me. It's my life. I want to know it.
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Another thing that they like is this idea of partnership in our company. We have partners.
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Partners are people up from a certain level up. We have partners.
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They share in the wealth that's created.
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As a company, we're not share we're not shy of sharing wealth that's created.
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Talented people like that.
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They like to know that if you work hard and they do the things and they get the results that part of those things they'll also be able to share.
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It's not the most important thing but it's part of the package.
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So that's very key and in some companies people are very shy.
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They don't like to do that.
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I think this is important for talented people because they feel that there's a wealth creation going on along with a company creating value.
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The other thing they like is growth.
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I was in Mexico yesterday, the last two days.
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We just acquired an operation in Mexico, the group of Modello, the Corona brands, Modello Spiel, all those brands.
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Our head of the Mexican operation, which is a zone, as we call it, we have seven zones around the world, is a third important zone, is a guy who's 35 years old as the head of our maximum operation.
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It's his responsibility to integrate the business, make the tough decisions, rightize the structure, deliver the synergies, continue to grow the top line, get that business to be one of our business, and implement the culture.
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35 So, we're not afraid of giving people early on in their careers as much as they have a lot of the things I described before, you know, that they leapfrog others and they get ahead because they're better.
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That's the thing about fairness. He's better than others. So, why wait? The third leg.
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So, I spoke about leaders again, delivering results with the people, doing it the right way, how you do it.
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Okay, that's what we call the culture of the place.
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Gart mentioned this here as we integrate many companies as we as we grew organically and inorganically.
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Culture was the first thing you know the first thing I do when I acquire a company I go there and I talk about dream people culture. That's it.
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I don't talk about the business about the synergies.
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the business about the synergies. No, I talk about what we stand for because we believe that culture has to do with performance and performance cannot be compromised with things like oh here's different oh no no let me explain you this that works in X country in Y country here will not work I'm from Y country we've tried this before don't buy into this one company one culture a lot of mergers and acquisitions don't go well because
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10 years after you merged you still go to a and I say I'm breto from ABI and you say I'm Jane from XYZ 10 years later that doesn't create value because you still operate as two entities just under one corporate umbrella so one company one culture is key and what's this
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culture I'm talking about is a culture of ownership owners make better decisions in our company we strive to have an engaged group of owners look at that an engaged age group of owners versus a selfish bunch of professionals. Professionals are just trying to build a
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Professionals are just trying to build a resume.
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Executives owners are trying to build the company.
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Something that's bigger than any of us in the company.
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Something that will be there forever that we can look back and say, "I was part of it. I was proud of it. My name is in there." That's an owner.
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An owner will stay with the company for many years and because of that will make better decisions because the owner will live with the consequence of the decisions.
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The executive who is there only for two or three years for the resume purpose doesn't care too much about the long term.
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He's not going to be there.
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He's too short-term oriented. We don't like that.
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We don't want to be a rental type company.
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I say that because I compare that to a rental car and people always give me a hard time with that.
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But I know that some people I'm sure not here I'm sure in that school in the east that's the way they think. Okay.
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That when you rent a car they have that thing don't be gentle it's a rental in the east they say that not here.
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So people in rental cars, they they they they try things that they don't try in their own cars, like going up a speed bump and see if the four wheels will go up, you know, and then they land, crash, bang. Why they do that?
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Because somebody else will live with the consequence of their driving in their own car.
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In our own car, it's going to be ours this year, next five years, next 10 years.
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We're not going to do that because we're going to live with the consequences.
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So we don't like people to come to our company as a rental company.
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would likely treat their a company like their own company and if at some point in their careers they ask the question oh you know what I think I'm at a point in my career where I should go and try something that's my own company then we failed because the environment we have
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in the company is a big startup where everything fosters this idea that this is my company that's why wealth creation and link to results so important I always compare with the bakery if you have a bakery and whole foods open, you know, across the street and it had that bakery for three generations. Now Now it's under my watch.
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All of a sudden, Whole Foods open up, selling bread for a tenth of the price of my bread.
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I know it's not the same quality, but they say consumers don't care.
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And it's a one-stop shop for everything. Two ideas here.
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If you are an executive of the bakery, you'll say, "You know what?
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let me cross the street and go work for work for for Whole Foods because they're winning.
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If you are the w if you are the owner of the bakery, you're going to say times have changed. I need to change.
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Competitive environment has changed.
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I need to change what I offer to consumers.
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I know them better than Whole Foods because I've been here for three generations.
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I know their names, their kids, everything.
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I know what they need to shop because I can ask them.
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I can have here their basket, 20 items as opposed to just bread.
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I can be more of a convenience store in and out in five minutes.
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Over there, it's half an hour in lines and parking lots and everything.
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And I can beat this guy with the knowledge I have. That's an owner.
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But for that, my salary will go down 20%.
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I have to cut my vacation for two years, reinvest in the business, and then compete with them.
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Failure is not an option.
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That's the difference between an owner and an executive. So ownership is key.
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Other things that we have in our culture that are very important that people like you love the whole idea of healthy the satisfaction.
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If you want to do something that's best in class, best gets defined, redefined every day.
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So as long as you get to a threshold, yes, you celebrate.
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You know how you celebrate in our company?
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When we reach a threshold, a milestone, we say, "Yeah, that's great. Okay, next." That's it.
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Because the moment you get so convinced that you're the best and that you got there and that's it, that's the beginning of the end.
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That's why that thing that dream big but stay humble.
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The other thing is face the brutal facts.
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Consumers face the brutal facts.
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When consumers go with their wallets to buy products, beer, they give me a message every day of who's winning, who's losing.
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They don't They don't, you know, sugarcoat. They face reality.
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Why should we in the company not face reality?
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Why should we have the feel-good department open?
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You need to face reality. What's working? Let's do more of it. What's not working? Let's not let's change. Let's call it a problem. Let's call it a gap.
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A gap that we need to close.
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Another thing is focus on results.
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That's another thing that average companies get confused. Look at this.
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In a company, what you should reward is results, not efforts.
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Efforts you recognize, you acknowledge it's important for career progression.
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And yes, normally great results came come with great efforts, but not necessarily the truth is is is the same.
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Companies when they go buy their products, they don't buy efforts, they buy results. Can you imagine?
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You put a package on the shelf saying, "Well, this is the uh this is a package that represents six months of effort from this team.
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You know, we work really 247, guys. It was amazing.
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You know, we did all this.
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We didn't get anywhere, but this is the final product of our effort."
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Consumers don't buy that. They buy results.
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And that's very hard because some companies that don't have results, they still pay bonus. They still celebrate.
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And that's again beginning of the end.
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Leaders celebrate when they have what to celebrate.
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They call it a problem and a gap when there is a gap and they recognize and acknowledge effort, but they reward results.
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So think about means and ends. What's key is ends.
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Means are only good if they get you to the end faster, quicker, cheaper.
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They need to exist otherwise the ends are not replicable but means by itself no it's about ends the other things is stay lean a leader of a high performance company is always worried about staying lean just like in my life staying healthy because when you're lean in situations are good that's okay but when situation turns bad like 2008 and you're lean you have more of a condition to survive first and to compete and to take advantage.
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The best deals we've done as a company was in countries that were having issues and a lot of foreigners were leaving.
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were leaving. We're coming in not because we're mattress or anything but because we take a long-term view of the business and we say okay it's up but we'll have ups and downs and that country is having a down year a bad year but that country
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the fundamentals are there not changed because of a bad year so let's go in and the last thing before I open for Q&A is that no shortcuts That's very key to keep a culture that works and instills high performance and supports the big dream and supports great people to come and stay. I once interviewed Jim Collins who used
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I once interviewed Jim Collins who used to be a professor here.
29:49
We're very connected to him as a company.
29:50
connected to him as a company. And I interviewed him and I asked him if your book good to great is a recipe book on how companies based on research not your opinion go from good to great how come so many companies don't read the book and just like a cake or you know do it
30:06
you know and he said brut according to my research most companies start with good intentions but then because they are in a hurry executives professionals not owners they are in a hurry they jump stages So instead of developing their own people, they hire from the market. We develop people from within. We like
30:25
We develop people from within.
30:25
We like to get people like you to join us, undergrad to join us.
30:30
And yes, it takes five, seven years to get somebody to be really up to that level that you need.
30:39
But then that person is part of the group.
30:40
It's that engaged group of owners, not that selfish bunch of executives and professionals trying to build a resume. We hate that.
30:50
For example, when I go to to to to talk to to people like you as students, there's one thing that all my colleagues hate when I say, but I'm going to say it.
31:00
As a leader, I cannot promise fun in my company.
31:05
And then everybody leaves the auditorium.
31:10
I'm not a native speaker, as you can see. I'm Brazilian.
31:12
So fun for me has always been a word in English that I quite did not understand because fun for me is being at the beach with my kids. That's fun.
31:24
But in a company, I expect much more than fun.
31:26
I cannot promise fun 100% of the time because one of the things that the leader should do to get performance is to put pressure in the system.
31:33
We all work much better in the pressure. Think about academics.
31:39
When you have an exam pressure, you perform, you study, you cramp everything, you go there, you focus, you do it the best you can.
31:46
You have 100% of you there, right?
31:52
I can promise passion, which for me is much more important than fun.
31:55
I can promise development, growth, learning, being excited.
32:04
That's what I can promise.
32:04
dynamic leaprogging steps in career fun.
32:10
Yes, when we achieve results, but I cannot promise fun 100% of the time.
32:16
Other companies promise that.
32:16
And yes, they become an average company because if you go to a place where you have fun all the time, there's no pressure and without pressure there's no performance.
32:27
We all perform under pressure much better.
32:31
So the whole thing about no shortcuts is this.
32:33
It takes a long time to build a great company. Only owners can do it.
32:39
Professionals cannot do it.
32:39
And I'll invite you to think about those things.
32:44
Let me open up for questions. Thank you very much. [Applause] All right.
33:04
We lost some audience here. Hi Mr. Breto, my name is Miho.
33:07
Uh thanks uh first of all thanks for sharing with us your thoughts.
33:11
My question is in regards to how do you actually ensure that your company and the people that are in the company live by those principles day in day out.
33:19
You know how do you make sure that they not become complacent and they understand the principles but then at some point they kind of you know like fall short uh and and you know do not follow them.
33:28
Well, because of I travel a lot, so do my other leaders in the company.
33:33
We have targets that are stretch targets, you know, that really put pressure on people.
33:40
And people that don't really like that, they can put up with that for one year, two years, and then at some point they say, you know what, I never found anybody who said if you're trying to build as a leader a high performance company, those things are wrong.
33:53
Never met anybody like that in all the acquisitions and things we did.
34:00
But I've met people that said, "You know what?
34:02
Given this stage of my life and my other interests, I'm not willing to do it."
34:06
It's the same thing as a marathon. I jog.
34:09
I don't run marathons because I'm not willing to put up the training, the time, you know, I don't want to do it, you know? So, I jog. I don't run marathons.
34:19
We're looking for the guys that run marathons.
34:21
And some guys are joggers and that's fine, but not here.
34:27
So when we go recruit and interview, we try to be very clear about what we do about about how we do things then much more than what we do.
34:34
So people understand that they're joining a group of people that are trying to do something that's best in class.
34:39
It will never be perfect. We have many gaps.
34:43
That's why we need people like you to join us and help us close those gaps so we can open the next gap.
34:46
But that's the direction.
34:48
That's the the power of a dream. Yes. Question here.
35:09
Okay, one thing I forgot to say is that the best way to develop people within the company, then I'll go back to your question, is to get them constantly out of their comfort zone.
35:18
All of us, we all grow big time once we get taken out of our comfort zone.
35:25
In some companies you enter finest you go all the way your career in finance in our company is exact just like when you came to the GSB.
35:32
And now to your question when I came to GSB I came from Brazil where I was the top student in every place I went to you know my high school my engineering school I was always the top five top 10.
35:44
I come to the GSB I was average.
35:49
Okay, I was average and I was like, "Oh my god, that was important to me because it opened the gap to me.
35:55
My gap was closed because I said, you know what?
36:00
Here where I am, the schools I go and I went to the best schools in my country." I was stopped.
36:07
I was not looking hard enough.
36:07
I think I did when I decided to come to decided to apply at least to GSB and they accepted me.
36:13
But that opened the gap to me and I said, "Man, the world is much different than I thought it was.
36:17
So GSP helps helped me big time on that.
36:20
Second thing it helped me is the idea of excellence.
36:25
I think here every try everybody's trying from the faculty to the students to do something that's excellence that's bestin-class in companies that you guys are starting ideas discussion groups.
36:36
I mean here you have Nobel prize Nobel Prize winners teaching you.
36:41
I mean you know you come with this idea that good is not good enough.
36:46
It's it got to be excellent because it can be. Okay.
36:47
So, and the third thing is the power of ideas.
36:54
That's also something I didn't know.
36:56
This idea that when you have a powerful idea, you can get people to really come with you and you can get a group to do much more than they thought they could because you had this powerful vision, powerful idea.
37:06
And I think here at business school, I was exposed to many of them.
37:10
So, really opened my gap big time and I never looked back.
37:12
I'm I'm still trying to close that gap, by the way.
37:16
And I was very lucky that I was here in 1989, 1987, because if I were to apply today, I'm pretty sure I wouldn't be here like you are.
37:22
So, they up the game big time here, too. Hi, my name is Rachel. Thank you so much.
37:28
You talked about comparing yourself to companies right here. Okay. Hi.
37:33
You you talked about uh looking at companies in other industries that are better than you guys are, um whether it be at legal, marketing, supply chain.
37:41
Could you give us some examples of the companies that you're trying to learn from?
37:47
In the old days when we're trying our our people compensation system, we look a lot about a lot because of the partnership structure, we look we look at companies like Goldman Sachs 20 years ago when there was still a private partnership, not today a public company.
38:04
In those days they had a lot of the things that we learn from in terms of being frugal you know be very costconscious because we are because money is so hard to make that we try to tell our people guys let's spend money in a very careful way because it's very hard to make money in the first place and if we're here all working for the consumer let's see what's important for him or her and everything else is up for grabs.
38:27
grabs. So if A B C D is what they really pay a premium for buy more of get more loyalty we'll get more loyalty from them let's do more of this and the non-working money let's question so Walmart was a big inspiration then Pepsi
38:46
the whole thing about leadership we learned a lot about Pepsi so just three examples of in the old days when we're putting this stuff together companies that we looked for for for hints By the way, our company is a collection of things we copied from everybody. We didn't create anything and we're very
39:05
We didn't create anything and we're very proud of that.
39:09
By the way, we copy with pride.
39:09
The only thing we did a little twist was on the people's side because we thought it was so important in our culture in in some ways so unique that we did a couple twists.
39:22
Everything we just copied and I've been in the company since the very beginning.
39:27
So I can pretty much in sales where I spend most of my time tell you everything all the best practice we have and the frameworks we use from which company which year in that visit that we saw that thing that we copied that we got that manual that we adapted to our situation.
39:43
So we copy everything but on people we try to invest much more time than the average company would do or even this companies that we visited and especially on the retain.
39:52
How can we build a place where these people love and will stay?
39:57
That's my number one priority. Another question here.
40:15
I think it's is by but by by staying humble.
40:17
I don't know if I understood your question correctly.
40:18
So you're saying how do you avoid as you grow to Oh overpaying. Oh good.
40:26
I mean we we have a toolkit we have a toolkit of uh things we developed along the way because uh we've done many acquisitions but if you look at transnational you know different continents six and every time in the last 10 years and every time we we get more tools in that toolkit.
40:45
So what we do is that we have a clear because we've been very lucky that we've been acquiring things that's in our own industry.
40:50
So you have a whole bunch of metrics that you come and you say okay that's what's expected from this business.
40:56
It's not a diversification type business that you go into a total different business and you can get hurt.
41:01
So we go and we say okay this is the way this business should be run.
41:06
So therefore these are the synergies that should be there.
41:08
lots of things in procurement, lots of things on duplication of structures because we have the the global teams that can do things that the standalone company had to do themselves.
41:20
So, and we put a limit to ourselves. We're very disciplined.
41:26
You only know of the things we did, but there are many things that we passed that we said no no it's beyond our limit, our you know what we put as a threshold and there's no value to be created.
41:37
Our idea was never to be big to be big was to be best in what we're doing.
41:42
It'll never get there because best is one of those things that keeps getting redefined every day. It's a never- end story.
41:48
That's why every three years we do a KPI of the dream.
41:50
The dream is to be the best in what we do.
41:55
But because that will never we'll never get there.
41:56
get there. Every three years we say if we were to continue along this journey and given the situation competitive or because we acquired this company and this and that for the next three years this is a set of KPI KPIs indicators that will orient us and then once we achieve those sometimes we achieve
42:14
earlier sometimes takes another year never in the the way you planned it it's always because things change but the target remains and when we achieve it said okay now for the next three years what are the next things that will ensure sure that we continue to be on that path because we'll never get there because it keeps getting redefined. Another question. Yes. Another question. Yes. Hi.
42:35
Uh first of all, thank you for the wisdom.
42:38
I it's wonderful, wonderful thoughts. I really appreciate it.
42:40
I'm interested in the one company, one culture idea.
42:43
Uh especially as you're crossing borders with companies that are hundreds of years old.
42:48
I mean, they good question.
42:50
They are very proud of their legacy and their history and the culture that built it.
42:55
And yet you're saying that was wonderful. Now you belong to us.
42:59
Assimilate to the Borg or or what?
42:59
So I'm wondering about turnover.
43:02
I'm wondering about how you retain that. Very good question. Very good question.
43:07
And that's that that's key guys because that's where a lot of people get distracted. There are two things.
43:11
You have the national culture of countries of regions and you have the company culture. Two different things.
43:22
We don't want to change the national culture. we can't do it.
43:24
And the beauty of the world is that people are different.
43:27
So you go to China, they dress differently, their pastimes different, their food's different, they have landmarks that are different. That's all beautiful.
43:34
Then you go to India, you go to Brazil, you go to Belgium, go to Germany, you go to Canada, go to the US, even in the same country, different regions. That's all beautiful.
43:42
And that's why the world's so interesting.
43:45
And one thing we said from the very beginning is that if you join our company, that's we call it the 10 principles.
43:52
One on dream, two on people, seven on culture. 10.
43:54
And in good and bad times, they don't change.
43:57
Those are the principles.
44:00
So if you like them, great.
44:02
We're not going to change them.
44:04
And that causes turnover. Yes. But fine.
44:07
Because it takes 20 years, 30 years, a lifetime to get the fabric to to be one, a strong one.
44:13
And you can destroy that by starting being flexible and starting believing things.
44:18
You go to Korea and people say, "Oh, no, Brento, here is different."
44:23
This whole idea of targets and compensation.
44:24
For example, I'll tell you when we came to the US because we believe in ownership, our long-term incentive, okay, it's fiveyear vest.
44:32
So for you to get the shares, it's a fiveyear vesting period.
44:38
The company we acquired in the US was three years given that the one-third would vest in the first year, the second third and the second, the third and the third. We said forget it.
44:51
That's that's short term. That's not long term. Call it something else.
44:55
If you're going to be here for 30 years, what's five years?
44:57
Ours is five, sometimes 10 years cliff.
44:59
So if you live four years, 11 months, zero. It's five years.
45:07
And a lot of people left because of that.
45:09
For example, I travel commercial.
45:13
And yes, because I travel to Russia, China, India, and all that.
45:15
It in a way, one could picture as a waste of time.
45:21
But that's important for the culture because then when I ask people, guys, we're in a tough year.
45:25
We need you guys to to buckle up and to really stretch things and really give your best because it's a tough year and find non-working money so we can invest behind the working money.
45:36
I can say it because I travel commercial.
45:39
I stay in the same hotels everybody stays.
45:41
They stay in the same hotels that I do.
45:42
I eat the same thing they eat. Everything's the same.
45:44
I make more money than they do. We're not socialists. Okay.
45:54
No, but on the silly things, we hate anything that's a status symbol.
45:58
We think that destroys the whole idea of a group, an engaged group.
46:04
So, I don't have a company car. I don't have a driver. I don't have an office. I don't have a jet.
46:09
I'm just like all my colleagues.
46:12
And yes, it takes a toll, but it's worth for the culture, which is much bigger.
46:17
And the culture is the one that gives us the performance, which I'm here for. Then it's a full circle.
46:21
here for. Then it's a full circle. But again this idea of national culture so what Japan is different but if you Japanese colleague want to join a company you have to buy into this concepts and by the way what we say is that you have to have a big dream
46:36
surround yourself with the best people you can find and create an environment where they stay look at Mike Phelps he had the same idea he wanted to have eight gold medals why eight all of us would be happy with one he wanted eight dream he surrounded himself with the best people he could coaches, exercise people, everything. And he owned the process. He was he was
46:56
And he owned the process.
46:56
He was he was not being forced to do it.
46:59
He was doing this in during his birthday, Christmas Day, New Year's because he wanted it.
47:07
So the principles apply to any good student here at the GSP to any good athlete and we believe to the company too.
47:14
So we're not asking anything that's out of the ordinary. It's all common sense.
47:17
But because it's common sense, people don't talk about it.
47:19
They take it for granted and that's why it doesn't work. Gets diluted.
47:25
So one company, one culture, never buy into the situation.
47:27
Oh no, here it doesn't work.
47:30
No, no, we've tried before.
47:31
Trust me, it doesn't work. Don't buy it.
47:33
Because then if culture has to do a performance and you dilute it, your performance will suffer.
47:38
And as a leader again, you're there to generate results with the people doing it the right way. Another question. Last question.
47:48
Uh I'm a second year MBA student. My name is Alex. Thank you for coming.
47:50
I want to say here at the GSP, we're big uh consumers of your products. So, thank you. Um yes, great.
48:01
That said, that said, and I'm included in that, but that said, um I I don't want to ignore um all the harm that alcohol does call does cause in the world.
48:10
Uh it is a drug and a harmful one at that.
48:12
Uh Harvard just released a 75-year uh longitudinal study citing um alcohol as the primary factor for uh relating to unhappiness in in life.
48:19
And um I want to ask you how you uh deal with the implication uh the ethical implications of of you know very good question running the very good question.
48:32
First I think any product is engineered and thought for something and then people can always misuse it. Think about cars.
48:41
How many accidents are on the roads?
48:41
And cars were thought to be what?
48:46
Means of trans transportation to go from A to B.
48:48
But some people use it as a racing track, as a racing thing.
48:55
Think about pharmaceuticals, drugs. Think about Tylenol.
49:01
In some countries, you cannot sell Tylenol in the way you sell here in the US because if you take 20, you'll kill yourself.
49:11
because your liver stops.
49:13
But the guy who thought that Tylenol was for your headache, for your back pain, but if you take 20, you die.
49:17
Alcohol is the same thing.
49:19
The same way there are studies proving what you said, there are many studies that says, including many countries, alcohol is part of the healthy diet that governments tell people they should do.
49:31
Nobody's saying you should start if you don't drink it.
49:36
But if you drink it in moderation, that's good for many things. governments say that.
49:40
So again, we are against misuse of alcohol and we've been working I remember in Brazil 15 years ago.
49:50
We gave breathalyzers to the highway patrol because they didn't have the money to buy it.
49:54
And I remember being interviewed in the press and people saying, "Babto, you want to sell more beer and you give breathalyzers to people to, you know, to the highway patrol. How does that connect?"
50:04
And I say look at our per capita consumption here compared to other countries.
50:09
Those other countries have a higher per capita consumption but they do it right and the accidents are way lower compared to ours.
50:18
So there's a clear opportunity here to designate a driver to use it in moderation to use more cab services and we supported all that.
50:29
For example, if you go to a music event of ours today, anywhere in the world, and you drive, and at the end you had two or three beers and you don't feel like driving back, we'll provide you free parking with security, transportation, and you can come the next day and get your car.
50:46
Again, I'm not saying we're perfect, guys.
50:47
I'm just saying all industries have harmful use, okay?
50:50
I'm just saying as an industry, we've always said we don't need that.
50:55
And we try to partners with people that can enforce the laws because we can't.
50:59
So they have the means to go after people that are doing that.
51:05
On the other hand, AB the company acquired here has been a visionary on that has been working on responsible drinking since the 80s.
51:11
And government statistics in the US, government statistics, not ours.
51:16
They've been measuring for 30 years.
51:18
They see that drink and drive access in the US are at an all-time low and underage drinking alltime low.
51:26
Their statistics why because what works is education and targeted intervention.
51:32
It's not increasing taxes restricting distributions because the moment you do this do do this you create a gray market.
51:40
So the way to do it like anything driving how do you teach your kid to drive?
51:45
I mean, you teach the kid, you know, this is not a racing track.
51:50
This thing has it can kill people and then maybe you'll have a kid that will be responsible.
51:54
Alcohol is the same thing.
51:57
Drugs the same thing, you know, Tylenol, anything.
51:59
So, I think anything can have a misuse, can be misused, but our business is mostly based on the way it was thought to get people together.
52:07
Can you imagine celebration, at least in our culture, without an alcoholic beverage or food?
52:16
There was an ad by be in the 80s where there was a graduation party and everybody was celebrating with carrots.
52:23
So everybody was celebrating with carrots. Okay, graduated. All right. Okay.
52:26
Let's toast and then huck huck.
52:30
Well, let's celebrate now that we graduated from Stanford Business School. Let's have water.
52:33
Everybody will have water or juice. Can you imagine that? No.
52:37
So that's what we're for.
52:37
That's how beer was created.
52:41
But yes, just like automobiles, just like pharma industries, some people, luckily a minority will use it in strange ways and we're totally against it.
52:50
And if I have more time, I could explain.
52:52
We had actually a report that's online saying of all the initiatives that we do and you can always say you can do more. Always we can do more.
53:01
But you know, at least we we have a position and we're doing things. Thank you very much. [Music]