Breakthrough to survive

Thomas Peters completed 74 years two days before making a lecture at HSM Expo 2016, an event of executive education held in November in São Paulo. The topic of his presentation was “How to Succeed in a Disruptive Age”. Breaking paradigms, after all, is a specialty of the guru, considered by the Los Angeles Times as the father of the post-modern company.

Peters usually thinks outside the box and is effective in his positions – even when they relate to his own condition in the business world. An example of this is the emphasis, even as a man with over 70 years of age, to defend the presence of younger professionals, in the range of 30 years old, and of women on the seats of the companies’ boards (see the ideal composition of a board suggested by him).

The consultant is an innovation enthusiast and, as such, believes that the best ideas emerge in startups. Master’s degree in civil engineering from Cornell University, PhD from Stanford Graduate School of Business and best-selling author with “Overcoming the Crisis” (Harper e Row do Brasil Publisher), Peters gave an exclusive interview to Mundo Corporativo after his presentation at the HSM Expo 2016.

How to perform effective breakthroughs in companies and make changes in business, speaking in a pragmatic way? How to get there?

The corporate leaders and directors need to move across companies and see how things happen. The CEO needs to see for himself what happens in brick and mortar stores and distribution centers, for example. He needs to talk to the sellers. This may not be fun in the perspective of a top executive, but it is necessary. And saying that he is too busy to do something like that is no excuse. There is the story of an American health institution which, in their recruitment processes, analyzes how many times the candidate uses the pronoun “I” and how often uses the “we” in interviews. They hire the “we”s and not the “I”s. It is a concept of teamwork. In situations where a company wants to launch a new product or enter a new market, in a report of, say, 43 pages about the action, how many of them are about how to access the market and how many are about implementation? I usually see in reports of this type 37 and a half pages of market analysis. However, it is important to talk a lot more about implementation for things to happen. The North-American businessman Conrad Hilton, the founder of the Hilton hotels network, used to say that the secret of business success is not to forget to fold the shower curtain inside the bathtub – that is, is in the details. One of the major problems today is that, in schools, a good part of the programs and training are mistaken if we consider the economic profile in 20 years. Instead of focusing on creative activities, the priority is given to skills to accomplish tasks that will be performed by artificial intelligence.

You preach the boldness and the encouragement of ideas, even if they do not lead to profitable strategies; you say that companies learn a lot with the failures. How to apply these principles in markets where mistakes can cost careers and even the health of companies?

It is a difficult question. It is possible to encourage this boldness, but I believe that senior leaders often don’t really sponsor it. What we need, in my opinion, is organizations in which all are encouraged all the time to try new things. The whole mindset of the institution, in all departments, should be directed to this. I need to be able to walk by the company and ask each employee: what you are working on? What are you trying? It’s like Google to say to all its employees that it hopes that they spend 20% of their time on projects that have nothing to do with the assignments of their positions.

Does this type of model work in practice?

Many of the great advances come from small initiatives. I used to use a term called 4 Fs: “Find a Fellow Freak Far away”, and is hence that 90% of innovation comes from a place far away from company headquarters. The magic of innovation in the United States is in the amount of startups. The figures show that, at every 700 attempts, there is a Google. Innovation is a numbers game.

And how does this logic apply to Brazil?

The problem in Brazil is that large companies acquire the startups and choke them with their rituals. If I was president of the country, I would know that I have 17 thousand startups, which I must encourage their development and ensure that they have access to funding, because from them new Googles can arise. When these startups become large enterprises, they will get exhausted, but it is part of the game. The Silicon Valley is also a numbers game. The secret of its success is its mortality rate. We hear about several companies there, but we don’t know 98% of them. This is an absolutely necessary part of the process.

What should be the companies’ management priority at the moment, considering the economic and business contexts?

I have the impression that all businesses, of all markets and all sizes – banks, hotels, all types of organization – should prioritize the talent development of its employees. Companies need people that are motivated, full of energy, well trained, encouraged to experiment. Everything can be differentiated, the word “commodity” does not exist for me, with the exception of the oil industry, which heavily relies on technological change. We went through a moment in which we must be obsessively focused on re-educating ourselves. Training should be the number one investment in companies. In the army and the navy of the United States, the responsible for training is a three star general, and the definition of an effective army and navy is that they are well trained. If this is true for these institutions, why can’t it also be true for businesses? We must understand that this is sort of a war.

You emphasize that companies need to take advantage of the “creative destruction” momentum, instead of continuous and incremental improvement. Considering the political and economic situation and in a moment of gradual recovery in confidence in the country, do you believe that this would be an opportunity for the Brazilian companies take this kind of risk and promote this change of course?

Currently, not taking risks is a way of dying soon. This is what I see in the health industry, for example. A certain artistic imagination to set the image of the store or company, the ability to imagine a place that is dramatically different, in that people are engaged with what they do and try new things, is something that cannot be lacking.

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