Leadership you can wear

July, 2004

NewsLeader

Year 2, issue # 5 


Alfredo Behrens
Editor

This is a space for quick conversations on management and society. 

Our interests gravitate around issues of leadership, management of workteams, technology, creativity, emotional intelligence and most issues which should be shared to shape a better world. 

Our approach brings thorough  perspectives into real-life situations and seeks awareness rather than complience

Your comments will be most welcome.
  

 

Even if you are not choosing an ERP - the software management tool- you may wish to read the article “To SAP or not to SAP” for it is an exercise in business strategy.

Choosing an ERP is a momentous decision in a company. If you operate a subsidiary you may not even be involved in the decision, but you will both enjoy and suffer the consequences. The latter may be worrying; particularly if you have to implement an ERP with a poor local service record. Worse still, unless your are implementing a SAP you may be stuck with an ERP that is likely to be short-lived. Read more below.

Too much gossip goes on in your business? Are the conversation topics a bit too bland? Is your engineering-trained leader a bit short of culture in the humanities? I mean, can you both talk? Is there enough of a common ground? What can be done to improve matters?

 Theodore Zeldin, of The Oxford Muse, is always inspiring, such is the role of a muse, and he asked me an important question, one I am struggling with since: why is conversation so difficult with business leaders of a scientific or technical background?

 That is a related but a different question from the one that C.P. Snow addressed in Two Cultures about half a century ago. Theodore's one is focused on business and therefore on the quality of decision-making. Contribute to an answer if you wish. The question is important.

 Thanks to the many reader-friends who have written back. Ernestina Filgueiras, of Rio, "loved the room with a loo;" So did Circe Monteiro, of Recife, Fabio Neves da Rocha and Cadu Lemos, of Sao Paulo; and Ashok Desai of New Delhi. Many thanks to all, keep in touch. 

Hans Mulder, of the Dutch Chamber of Commerce in Sao Paulo did not like the article as much and kindly wrote a letter which I publish, with thanks, and offer a reply to in the section "From our Readers." Keep all letters coming, dialogue is crucial to the advancement of business and to development.

Illustrations to this issue are, all fragments of photos and by order of appearance: a sculpture Arnaldo Battaglini, "Shadow of Stairs", 2004; Bill Brandt, "Eva" 1930; Robert Mapplethorpe, "Portrait of Ken Moody"; Lucia Chiriboga - two pictures of the series "Del fondo de la memoria vengo"; and the last is of Tina Modotti, "Hands on Tool," 1927. 

Arnaldo Battaglini's sculptures can be seen at the Centro Brasileiro Britanico, Rua Ferreira Araujo 741, Sao Paulo, Brazil until July 18th. Fully worth your visit.

The Editor


IN THIS ISSUE

 

 

 

 

 

Culture In Company

 

NewsLeader is articulating with major bookshops the building of company libraries holding films and music, besides books. All will be lent to employees. We are also offering a matching service: speakers to inspire, debate, provoke and expand your company and its culture. 

 

Join us in this effort to build the companies of the future.

 

Write or call the Editor for further details.

 


 

Leadership

 

in company

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Write or call the Editor for further details.

 

 


 

The culture of the business leader

 

An exchange between

Theodore Zeldin and

Alfredo Behrens

 

We hear and read a lot, and deservedly so, regarding the culture of organizations. But we hear less, much too less, about the culture of business leaders.

 

This is not an easy topic to write about, largely because it may verge in self-righteousness. Yet, intimately, one intuitively knows that a well-rounded business leader is likely to make better decisions. Since decision-making is the bread and butter of executives, which one-day may become business leaders themselves, one is right to wonder about how much they know about what they need to know.

 

Theodore Zeldin put that question to me, in an inspiring way; limiting the arena to question business leaders with a technical or scientific training.

 

We have interacted on this matter, and much of that is candidly put below. It is an ongoing discussion that you may wish to join in.

 

 

 

Dear Alfredo,

 

A fact which is increasingly striking me: Business executives and leaders with a technical or scientific education have a lot of difficulty reading books outside their speciality, and reading is no pleasure for them. What do you know about efforts to help them overcome this obstacle to their intellectual expansion?"

 

All good wishes

Theodore

 

Dear Theodore,

Unsurprisingly, you ask me an important question; one many people have attempted to answer before. I will only attempt to offer an off-the hip shot at it, in bullet form; for I fear that if I spent longer in attempting to reply in a deeper fashion I might not get to where I would like to be and would have lost the benefit of covering up my mistakes.

*                Yes, technical and scientific staff frequently become industry leaders without the were-with-all that one would expect.  I guess this is more frequent in industry than in services, though it still happens a lot in finance.

*                Technical and scientific people tend to be inquisitive by nature; that they may have “lost it” in business has more to do with the way they are weaned into positions of business leadership. This is a different issue.

*                Whatever the reason, technical and scientific people, when geared to positions of leadership feel the lackluster training they received. They need instant knowledge; they seek MBAs to fill the gaps.

*                Those courses are offered for money and the providers would loose it if they stuffed their curricular grade with information that is not perceived to be immediately useful to clients thirsty of a “quick fix”. So, while MBAs offer a glimpse of hope, they are not enough.

*                Is there a solution?

*                The long-term solution to this problem, à la C.P. Snow, is reformulating what is taught at universities, both in Science and Engineering on one side, and in the Humanities and Social Sciences in the other. Sciences teaching does not awaken much curiosity, we need more of the latter, perhaps even at the expense of information, if necessary. Sometime in 1983 I attended a lecture by Sir Herman Bondi, the illustrious physicist; Master-to-be at Churchill College. He was concerned with the teaching of Science in English pre-university education. He thought it was poor in awakening curiosity. Teaching Science as a collection of successes, Sir Hermann thought, was poor at eliciting the suffering with defeat and the exhilaration with triumph that would capture the idealistic young minds. Sir Herman also thought that focusing in a sequence of successes deprived the learners of the role of intuition and imagination in discovery, perhaps resulting in disenfranchising women from Science in England; different from France, with its larger presence of illustrious women scientists.

*                But all this, important as it is, is too large for you and I to do something about. Is there a short-term solution? I feel there is, but it is a boutique solution, for now. In the short run, we must attempt to quench the thirst in a guerilla way.

*                In the first place, do we "know" what is lacking in the business leaders that come from a scientific or technical background? It does not seem to be information - as you and I know it - but rather, the interest for unframed information. The dialogue is difficult. We do not seem to be interested in the same things, despite a mutual feeling that there is a lot to learn from each other.

*                We might be more effective in penetrating that armour in moments of distress, either business or personal. That is when these men, for they are mostly men, resort to therapy, coaching, and spiritual leadership. Those would be the occasions to sensitize them to the humanities.

*                Short of tactics, I feel that we do not communicate very effectively. You are an exception; but the rule is pretty daunting. The oracular version of humanistic knowledge is much more frequent. It may appear daunting to the uninitiated; and boring or beside the point, to the common business leader.

*                People quickly loose the mental fitness necessary even to read Le Monde; great as it is. But of course, quite apart from language barriers, Le Monde is a product of the French egalitarian public schooling system. Where else do we have something like it?

*                When it comes to America, we have The New Yorker and The Atlantic, and perhaps a few others. But, even then, it is quite difficult to find those magazines away from the larger cities in the USA Northeast.

*                I quote these publications because it is publications like those that keep people mentally fit, and amenable to the type of dialogue that you and I wish to engage business leaders.        

*                The media reflects that loss. Pressed to produce with an eye to the bottom line, the media tends to cater to the most prurient of interests, for those ensure the widest audience. Though extreme, the Porn-internet is a case in point.

*                So, for short, people are untrained for a broad-based dialogue and communication, not only because they prefer to focus on their specialities, but also because they quickly loose the flair for dialogue removed from their zone of comfort.

*                However, I feel it is not completely lost and that we should not focus only on guerilla tactics, hoping to instill curiosity and imagination in business people at the time they have been wounded. Perhaps we should be working more with them; along the lines they can understand more readily.

*                Business leaders of a bent mostly led by “Return on Investment” considerations do respond to information that makes sense.

*                See for example the stamina with which business has adhered to body fitness training. This has taken over in the last two or three decades. Business premises may now have gyms, but not libraries. Business pays to keep their staff bodily fit; but not mentally fit. Funny isn’t? Sad too.

*                But the opportunity lies in that business leaders have responded to a lack of something that has been conveyed in a way they can understand; in a way they can justify the expense to their shareholders: staff who are not bodily fit cost money. Literally so; full stop.

*                Unimaginative business leaders probably cost more money. Yet, have we framed our offer in a way more palatable than: "You need to read this or otherwise you will become mentally flaccid”?

*                I do not think we have been good salespeople ourselves. Up to now we have sold knowledge on the disputable basis that it is good for you, like soup is.

*                We need to think in ways that show that knowledge-oriented conversation would broaden the mind to the point of helping people make better decisions and thus enhance the “Return on Investment.”

*                 Anybody that has worked in a corporate environment knows how idea-sapping that can be, and it need not be, for it may actually be dense in intelligence, though of a different sort; though the common ground for social interaction may not show it: the range of acceptable conversation topics is indeed absurdly narrow and may comprise little besides sports; sex, gossip and jokes.

*                I believe there is scope in selling knowledge-based products as a means to raise the level of social interaction in business; away from chitchat and gossip, and closer to substance. This should improve not only the quality of conversation and cooperation within the company but also help to re-focus significance of contribution, team-leadership, and, ultimately, profits.

*                What would the instruments be? We would need at least two types of them: vehicles of knowledge and inducements.

*                Among the vehicles, would company libraries be enough? What about inducements for reading? Only reading? What about other vehicles like theatre and cinema? What about talks? What about coaching, twining leaders with academics, on a one to one basis, like the tutoring universities do?

*                Among the inducements, some companies withhold end-of-year bonuses if their beneficiaries do not engage in sports. I mostly disagree with extrinsic incentives, but making a concession to the short term, might it work in our favour to withhold a fraction of bonuses, or other prerogatives, if some business leader were to fail in a knowledge-based assessment?

Enough for now,

Big hug

Alfredo

 

Dear Alfredo,  

 

I have made a little progress with this problem meanwhile, which I shall develop when I have done more thinking. I emphasize that it is not a problem of transmission of knowledge, so much as of sensitivities not having been cultivated. You cannot learn to dance just by following instructions and good dancing involves a degree of flirtation. Similarly, you cannot enjoy reading a book until you feel comfortable with the style and approach of the author. So I am focusing on sensitizing people to the different  modes of thought  of different disciplines, from which specialization excludes them. It has to be done gradually, and through conversation before it is possible to move on to books. So we have to broaden the range of people's conversation. What about a mini-sabbatical course of say 4 days for those who want to expand their imagination?

 

 

 

 

 

 

 

 

To SAP or not to SAP?

 

If that is your question, answer 'Yes, ASAP'; and you will be on the safe side.

 

Alfredo Behrens

 

 

Whether Microsoft buys SAP or not is very interesting; almost as interesting as understanding what will happen to PeopleSoft and its clients and suppliers, now that everybody knows that SAP is Microsoft’s first choice.

 

SAP is being courted. Somebody might buy SAP, and even if nobody does, the threat that a stand-alone PeopleSoft may not be able to compete, may handicap PeopleSoft forever.

 

The Enterprise Resource Planning (ERP) software segment is large business. New licenses amounted to $5 billion in 2002. This is the realm of the likes of SAP (market share at 25%), Oracle (7%) PeopleSoft (6.5%) and SAGE (5.4%). Clients of ERPs are among the largest companies, for all ERPs purport to boost managerial competencies by integrating the information the business runs on. 

 

Truth is somewhat slimmer, in that all ERPs have evolved by complementing different original services and ERPs fail to deliver equally well along all demands on their prowess. As it turns out, some ERPs are stronger in helping managing people; others are stronger in finance, others in customer relationship management. But, after some teething problems following implementation, ERPs do help and that is why they have large clients; that Microsoft wants.

 

If Microsoft bought SAP, both together would claim one third of the market, making life difficult for the rest of ERPs. Oracle has plenty of not-ERP related revenue sources that can be used by Oracle to keep its ERP market share. Not so with PeopleSoft, which will feel a significant pinch in the price of its licenses if it is to overturn the allure of siding with the obvious long-term ERP winner, SAP.

 

 

 
 
Hot Tip

If you are not buying SAP, negotiate SAP-compatibility terms from your ERP provider; for SAP is most likely to become the industry standard.

 

 

 

Whether Microsoft buys SAP or not should now be immaterial for PeopleSoft, or to those that already bought its licenses. The real threat for PeopleSoft, and to its clients and providers, lies in that if SAP is talking to Microsoft it means that SAP is up for grabs. If not Microsoft, then Accenture or IBM could have her; and PeopleSoft is bound to loose anyway; despite offering an excellent product.

 

Who will take SAP? SAP may have more of a strategic interest in joining Accenture or IBM because they can help with the implementation of SAP at clients, which takes hordes of engineers to do, at about 50%-60% of the cost of the projects. On the other hand, SAP may command a higher bid from Microsoft because SAP should mean more to Microsoft than to IBM or Accenture. Yet, again, the crucial issue for PeopleSoft, and to its clients, is that SAP is up for sale.

 

If SAP were bought by Microsoft, or by any of the above, SAP would eventually become the hard to beat market-leader. PeopleSoft, SAGE, Seibel and even local solutions like the Brazilian ones, would not disappear overnight; but, deprived of the oxygen of easy new license sales, most are bound to fall behind technologically, and eventually, to wither.

 

A market-challenged PeopleSoft is bound to worth less now than last year. PeopleSoft managers will find it harder to explain to shareholders why they wasted money on buying J.D. Edwards – an even smaller ERP, and then wasted more money in fighting-off Oracle; and all of this was only a year ago.

 

Not all is lost for PeopleSoft; which can also re-trench and boost its consulting services, striking alliances worldwide with its preferred implementers and software customizers to better serve its significant client base. That avenue may provide PeopleSoft with enough revenue to think over its longer-term strategy. But consulting services is a completely different ball-game and PeopleSoft better move fast; faster than it proved capable when assuaging the concerns of its newly acquired J. D. Edwards clients. Unlike the latter, software implementers and customizers have less of an investment to protect and can side with the any winner much more rapidly than PeopleSoft’s captive client base.

 

 

 

 

Dear Mr. Behrens,

 

I will never defend the kind of "entrepreneurs" employing people under slavery like conditions.

Your article, A Room with a Loo, however, gives the wrong impression that such is common place throughout Brazil.

 

Along the same lines, you could write that the "Febém" is a prison exclusively for small children arrested for small delicts such as shoplifting, that the MST is a peaceful movement of small landless farmers, that infant prostitution only exploits very young children, and so on.

I am afraid this kind of "colored" and sensational journalism is all too common in foreign publications when Brazil is at stake, fuelled by reports like yours.

Apart from hurting the image of Brazil and subsequently its indirect economic interests, they also fail to address the mentioned problems in a realistic way, resulting in an opposed effect on approaching potential solutions.

...

...

...

It takes over 150 days to register a new company in Brazil. Running a company takes expensive external consultancy as to find a way through the jungle of over 45 taxes and duties on Federal, State, and Municipal level, including overlapping and even unconstitutional ones. One of them is called "Social Contribution over Net Profits", by the way. Then it takes up to 40% of turn-over to pay all those taxes, on average ten times the net profit investors eventually take home. Taxes often go down the drain, whereto many companies pay for private health insurance for their employees, provide company transport, education, and so on, to make up for those failing authorities who swallowed the money to finance its own oversized structure. A structure including corrupt inspectors who come to further drink blood. If a company goes bankrupt, however, the share-holders and its representatives may be held nominally responsible. Closing down a company in a normal way is prohibitevly complicated and expensive on the other hand, including high lay-off charges and fines. 

   

Isn't it about time to stop blackpainting entrepreneurs in general? Brazil desperately needs them to create employment, pay taxes, and fuel development.

In the current situation, small businesses are going informal, medium sized ones are going broke, and larger ones are moving to countries where they are more welcome.

 

We may only save the apples by taking out the few rotten ones. By saying that they all tend to be rot, be condemm the lot.

I hope I am not the only one with this point of view.

 

Yours,

 

Hans Mulder

Dutch Chamber of Commerce

Sao Paulo

 

 

Dear Mr. Mulder,

 

 

You seem to believe that what may be construed as bad news about Brazil should not be talked about. I believe that it is precisely by discussing that in the open that we may be able to show how pernicious issues such as slavery are for Brazil's development.

 

I agree with you that slavery may not be large, and you seem to agree that it is not desirable that that it exists at all. Yet, my argument was not about the size of slavery but with the relative tolerance to coercion at the workplace that tolerance of slavery seems to invite. 

 

I can see at least two good reasons to unite our efforts to put an end to slavery in Brazil.  In the first place, learning to live with slavery prevents the healing of a historical wound.  In the second place, because slavery may be the evidence, among others, that coercion at the workplace, and the consequent cynicism, may reach inordinately high levels in Brazil.

 

While the historical wound of pillage and violence implicit in slavery does not heal, society will have no peace; preventing the necessary alignment of forces to strive towards a common end.  Besides, I argue that the phantom of unpunished slavery gives rise to cynicism at the workplace; precluding healthy relationships at work.

 

Cynicism leads to employees discounting public relations efforts, to intrigue and to sabotage. In a cynic atmosphere a true dialogue is broken. Employees will do as little as they can get away with while employers will throw their arms in the air at suggestions for employee development.

 

Dealing openly with slavery should help to address coercion at the workplace. This is what I believe is a recasting of the human resources problem in Brazil; and an invitation for you and I to work together. 

 

Issues such as poor bankruptcy laws, high tax rates and corrupt officials are all to obvious as to be repeated. This is why I do not address them despite recognizing their importance, both in Brazil and in your letter.

 

I respect you interest in seeking to engage me in a dialogue and I will always respond gladly to your calls on what I wish to talk about.

 

Yours sincerely,

 

Alfredo Behrens

 


Provocative insights under 400 words long will receive our attention more rapidly. Larger pieces may be abridged without consultation with the author. Guest authors may wish to submit contributions in English, Spanish, Portuguese, French or Italian. Please use Arial 12 font and  with each submission and include a statement indicating the work submited is your own. Please also submit your affiliations, email address and CV or Oxford Muse-like self portrait.  Authors will only be notified when their contributions are selected for publication.

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Copyright 2004: Authors retain copyright of their work. Alfredo Behrens is entitled to all other rights concerning NewsLeader, except the template design. You are encouraged to make use of the views and information provided herein, as long as you appropriately give credit to the author and quote this Newsleader's issue number and date.

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Alfredo Behrens
editor@newsleader.com.br 
Phone +55 11 38713363
Sao Paulo, SP
Brazil


Alfredo Behrens is an economist. He holds a PhD by the University of Cambridge, has lectured at Princeton’s Woodrow Wilson School, at FSU and at PUC-RJ. He has broad experience in advising high public officials, shareholders and board members of banks and other large corporations on issues such as: governance, corporate relations with governments, M&As and strategic planning focused on the internationalization of companies. He has worked in or with the private and public sector in the Americas, East and Western Europe and Southern Africa. He was awarded the MacNamara Fellowship by the World Bank, the Hewlett fellowship by Princeton University and the Jean Monet Fellowhship by the European University, Fiesole, Italy.

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