We need to preserve and develop the business strengths of the SMBs’ entrepreneurial environment and make it more resilient to outsider crises. That is our goal and should be of anyone responsible for economic policies.

To develop economies, as we are in a capitalist environment, we need to have consumption, to that be possible we need people employed to be able to expend, though we need employment. It is basics.

Helping countries, banks and financial companies with loans, to avoid systemic ruptures are short-term solutions, with short-term results that will not endure. We need to go to the roots, to a more wide and systemic vision and long-term solutions, and that will be with SMBs.

Therefore, let us start it, and hope that many others follow us, globally.

We need to change the rules of the game!

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Results are not for tomorrow but you need start and, as the time goes, without doubt, results will show up. The network takes some time to “spread the word” but if you have a good product or service and satisfied customers, new opportunities will grow exponentially.

Obviously, it is a personal vision and there will be people, which will not agree with my opinion. With more than 40 years living in Brazil and observing its development, I would like to think that it would be a consistent vision.

Starting with economics, finally with the last movement of dollar (rising) we are foreseeing the possibility of increase of inflation despite the efforts of Central Bank, coupled with  decrease of China expansion, which will diminish the pressure of commodities prices, where Brazil is extremely dependent and, by consequence, will reduce surplus on International Commercial Balance.

Despite some “bad weather”, at short time, the country has the possibility to sustain its small growth (around 2,5%, maybe less), comparing to others in development countries.

Brazil still has a highly cost, regarding to taxes and bureaucracy, but local executives are accustomed to that and if local administration will be made by locals, and not by foreign, the chances of success will be greater.

There are some issues about statistical numbers currently available. I would like to start with consumption. Without doubt, we had a strong demand on basic items (FMCG) motivated by government social programs, bringing over the line of poverty millions of Brazilians. However, at long term, it is not sustainable and it increases government deficit.

Another issue to monitor is the increasing cost of real state, highlighting the prices in large cities. Since January 2008: Inflation (IPCA = 34.5%) and Real State (Sao Paulo, FIPE ZAP = 171.6%).

Local executives’ confidence it is not in its best shape and it will depend on the short-term actions from government, and how they will deal with popular manifestations and how they will deal with economic scenario that it is going worst, mostly because of government debts and figures manipulation.

We are seeing the Bovespa (Brazilian Stock exchange) going to the lowest level since 2009, that movement is more speculation and foreign investor needing to sell Reais to buy Dollars than actually a problem with the local market.

Despite all current issues, it remains a strong economy with good economic fundaments. Brazil has US$ 374 billion in reserves (June 2013). Nevertheless, those fundaments need a close attention and some correction at short time, because they are coming to go to the wrong path.

One common mistake is to forecast Brazilian market using its population to define a potential market. A small tip: use population of Spain or France as parameter for retail demand (50, 60, 70 million) if you deal with products or services that are not essentials or basics, you will avoid bad surprises. Here we have a pyramid with strong wealth accumulation at the top, which actually is happening the same, in the last decades, in USA and Europe.

Bellow, I selected some charts from a Presentation from the Brazilian Central Bank that shows a clear vision of the current evolution of the local economic scenario.

Different from the older posts related with Doing Business in Brazil, I hope that this one is more friendly to have a quick vision of what is happening here.

The Brazilian GDP Growth Rate of the second quarter reached 1.9%, removing Brazil from the “pseudo-recession” and returned to the same level of the first quarter of 2008, according to the Brazilian Institute of Geography and Statistics.

The recover was pushed by families’ consumption coupled with government expenses.

The principal factor that influenced positively the growth rate was the increase of the activity in the services sector.

Would like to highlight that part of this figure is related with financial services, that increase 8.2% comparing with same period of 2008. Which means the increase offer of credit.

Just an observation about this credit increase, mostly the acceleration of credit availability was provoked by the public (government) banking system.

The industrial sector had an increase of 2.1% related to first quarter, but the accumulated in the last 12 months still is negative in 3%.

As I said in the part 3 of Doing Business in Brazil, let’s see third and fourth quarter, the figures will be interesting.

It is a different vision of globalization and with a systemic and transdisciplinary approach. It is not a “recipe” or a “magic plan” to develop internationalization of small and medium companies.

It gives a broad vision of globalization and some aspects related with entrepreneurship, economical trends, social changes, technology,  a model to develop a global entrepreneurship network and the possible results that could be achieved if the network was implemented.

The Portuguese  comments, about the book:

Lançamos um livro sobre Estratégia de Mundialização para Pequenas e Médias Empresas, as PMEs. Este livro foi escrito em parceria com um amigo, Mário Luís Magnani, e nosso objetivo não é oferecer uma “receita de bolo” ou algum plano estratégico, no sentido convencional ou acadêmico.

Nossa preocupação maior foi a de procurar desenvolver uma visão global, e sistêmica, para que o empreendedor possa ter uma noção do todo o ambiente que o envolve e das influências externas que direta e indiretamente afetam e afetarão, no futuro, o seu negócio.

Então, este livro, como se poderia classificar nas áreas de conhecimento? Em negócios? Em administração? Em acadêmico? Em auto-ajuda?  Em todas elas!

Neste projeto exercita-se a Transdisciplinaridade e a visão sistêmica da realidade.

O empreendedor, para seu sucesso, deverá ter uma visão panorâmica do ambiente que o rodeia e conhecimento das várias ferramentas disponíveis para buscar e viabilizar o seu sucesso.

Para tal, é apresentado um histórico recente do processo de globalização, seguido por uma análise do desenvolvimento social e suas desigualdades. Na seqüência é apresentada uma crítica ao modelo econômico atual, seus desvios dos valores originais propagados e possíveis conseqüências futuras. Comenta-se sobre a Tecnologia da Informação e os sistemas utilizados atualmente, os principais processos atendidos e alguns problemas causados pela aplicação indevida de tais tecnologias. Oferece-se, passo a passo, uma sugestão de organização e de implementação de uma rede para os empreendedores, com indicação dos sistemas a utilizar, sua configuração, metodologia de implantação e indicações de ações para contornar os principais problemas que poderão surgir.

Encerra-se este livro com desenvolvimento de um mundo virtual, para exercitar os modelos mentais dos empreendedores e criar uma visão espacial e multidimensional do mundo em que os empreendedores estão inseridos,  permitindo, com este exercício, visualizar a causa e efeito de todas as ações ligadas, ou não, ao universo das pequenas e médias empresas.

Apesar de termos terminado este projeto – livro – no final de 2005, ele está, mais do que nunca, atualizado. Por exemplo, no Capítulo intitulado A Queda do Império, já tínhamos antevisto o que ocorreu no final do ano passado, 2008, isto é, a crise financeira americana que se propagou para o mundo inteiro. O que aliás, não precisava ser nenhum gênio, para sugerir que tal iria ocorrer…

O site, onde está disponível para aquisição, é o Clube de Autores.

We have two important aspects to analyze, about the importance of cultural differences.

The first is when analyzing the internal business environment, and the second is when we make the approach to the external environment, local and global, to sale our products or services.

It is important to have a multicultural work environment, because it allows the development of different perspectives and richer brainstorms about problem solutions.

People with difference cultural background, usually, have different mental models and different approaches to problem solving, which creates a great potential on the team work and results.

Also, it helps to avoid misunderstandings, when dealing with particular issues, about a product or service that doesn’t satisfy clients’ needs in a specific region or country.

The second aspect is related with doing business globally.

What induce more noise in international negotiations are the cultural aspects, which are misunderstood and confused with Ethical differences.

The cultural aspects that need to be highlighted are: the protocol, the religion, the use of colors and their meaning, the corporal language, eating habits and gifts.

There is, also, another perspective about different cultures, which is from Geert Hofstede, and analyses the Cultural Dimensions. They are: Power Distance Index, Individualism, Masculinity, Uncertainty Avoidance Index and Long Term Orientation. One possible use of his method is exactly in International Businesses. The score of dozen of countries is available on his web site.

One thing must be extremely clear: Business is Business and Ethics is Ethics.

The gray area that many people try to develop and to blame cultural aspects does not exist.  The gray area used as excuse to failure or to allow, or endorse, unacceptable ethical situations must not exist.

A common idea that I read a lot, it is that bribery is expected and usual in some countries. Bribery is wrong in any place of the world. It is difficult to me, to believe that are some people, serious people that endorse that practice and say that it is usual in some places.

To exist bribery, we need to have at least two actors, the one that “donates” and the “receiver”, what happened was a long and old process, where the powerful offered advantages, gifts and bribe to have their interests attended quickly, and that process in some world regions become more usual. It is easier to buy the guy than to explain what I want.

Another point that I read, it is that each country makes or interprets their business ethical standards. I believe that it is, also, not true. Each country has a level of “corruption contamination”, that should be the reference. An observation, corruption is not only a characteristic of poor countries. We find it, also, in developed countries, and frequently.

So, Ethics is one thing, business rules and cultural aspects are another.

Cultural aspects and how to deal with their particularities, depends on the study and interest of each one that wants to develop international business, and it is needed, before making suppositions about it and delegate that responsibility to ethical differences.

To kill, to steal and to harm others aren’t a moral acceptable behavior in any place in the world. Business rules are made by the human beings and followed in a moral or immoral way, as their conscience and education says.

Last week we had the world’s biggest IPO (Initial Public Offering) in the last year.

The Brazilian company Visanet (VNET3.BR) raised 8.4 billion reais ($4.3 Billion). It is the Brazilian largest credit card networking company.

This indicates that investors believe in local consumption and growth in per capita income.

In June the auto sales reached 289.792 units and an increase of 22% related to May 2009, and an increase of 19% related to June 2008.

The Industrial production is growing, after having a strong fall:

 
According to the Brazilian Central Bank (BCB), the services industry is expected to have an annual growth rate of 2.1% and agriculture 0.8%.

Also, according to BCB the GDP annual growth rate will be around 0.8% (last report estimates that was 1.2%) and the Brazilian government still sustains that will be 1%.

The Brazilian GDP is compounded by 65.3% Services, 6.7% Agriculture and 28.0% Industry.

The Public Net Debt decreased to 38.4% of GDP in April 2009 (smaller than Japan, Germany, USA and United Kingdom).

The Real earnings April 2009/ April 2008 increased 3.7%.

The Foreign direct Investment in April 2009 was $3.4 billion.

The Unemployment rate in April 2009 was 8.9%.

The third and fourth quarter of 2009, will bring, surely, interesting figures and a strong slope of recovery and isolation of the international crises.

Let’s see if I am right…

The link will take you to the Box.net web page and it will ask you, if you want to download it.

ChangeManagement – Synopsis pdf

 Rephrasing last paragraph, you will have the vision of the whole, go to the parts and return to the whole, which mean, systemic vision.

5.1. Individual differences and Interpersonal needs

An aspect already stressed, using the Peter Senge and Stephen Covey perspectives, is the importance that people have in the formation, management and development of teams.

The last two aspects that will be highlighted will be related with people, and they are: the individual differences and interpersonal basic needs, when integrating a team.

The Personal differences can be about:

• Values and believes
• Psychic dominant functions (sensation, feeling, reason, intuition)
• Type of intelligence
• Culture
• Character
• Temperament

About Interpersonal needs, they can be:

• Necessity of inclusion. It happens at the initial phase of the group formation. It is when they are seeking for a positioning and acceptance inside the group, and also an identity match.
• Necessity of control. When we have games of power. In this phase we can have leadership clashes.
• Necessity of affection. It is when we have exchange of communications, manifestations of empathy and antipathy, joy and sadness, harmony and tension. It is when the differences are recognized.

There are also studies about profiles, already made, about how each individual deals with changes and negotiation processes, like: facilitator, pragmatic, entrenched, engaged, competitor, and so on.

However, understanding individual differences and personal needs, easily, any profile can be analysed and defined.

5.2. Ways to analyse and develop a change

Example 1:

First stage, Identify the change:
• Awareness of the necessity of change
• Indentify the type of change

Second stage, Planning:
• Diagnostic
• Define the objectives and strategy
• Define the processes, methodologies and key process indicators

Third stage, Implementation:
• Structure: teams, resources, education, and so on.
• Change: the implementation.
• Consolidation.

Fourth stage, Control and Evaluation:
• Verify the results and KPI (key process indicators)
• Feedback the course corrections to the first stage.
 

Example 2:

• Start
• Define the Scope
• Risk Analysis
• Validation Test
• Change Planning
• Define the Change Manager (responsible)
• Define the team
• Prepare the communication process
• Define the implementation team
• Implement
• Evaluation tests
• Manage the updates and corrections
• Documentation
• Maintenance

Here, we finished this sequence of articles about Change Management.

The truth is that, nowadays, what we call change management, could be named as contemporary management of the XXI century. The Cartesian and Newtonian model of order, stability, linearity and forecasting, doesn’t exist more, maybe, never existed.

If we look to the evolution of administration theories, it can be seen, at least, half dozen different lines of thought (Taylor, Fayol, Weber, Mayo, McGregor, and so on).  If it is analyzed the strategic planning schools, at least ten schools will be found, as Henry Mintzberg explained in his book Safari of Strategy. So, it can be said that, always, management was in evolution and dynamic, so, by corollary, it was always in a continuous process of change, adaptation and evolution.

As already said, balance is a limit-case and not a general rule or state of contemporary times. It is also true to internal and external environments of organizations, and in its most diverse forms and perspectives, of those environments, and they are in continuous mutation and adaptation to the new reality that, by itself, is dynamic and unpredictable.
 
The notion of time and change become more evident by the velocity and intensity in the current transformations of our environments (in all dimensions), which took to highlight and reinforce the concept of change management, that, in fact, always existed.
 
Organizations are developed and managed by people, so, the further sentences, about change management, will have the focus on people and the necessary synergy to the dynamic process of management occur with efficacy and efficiency.

To have a dynamic and continuous process of adaptation and evolution of the organization, it is important that the organizational structure be able to learn and to practice the self-development. For that, the concept of learning organizations can be rooted with the “Five Disciplines” of Peter Senge, that are:

Personal Mastery: it involves formulating a coherent picture of the results people most desire to gain as individuals, alongside a realistic assessment of the current state of their lives today. Learning to cultivate the tension between vision and reality can expand people’s capacity to make better choices, and to achieve more of the results that they have chosen.

Mental Models: it is focused around developing awareness of the attitudes and perceptions that influence thought and interaction. By continually reflecting upon, talking about, and reconsidering these internal pictures of the world, people can gain more capability in governing their actions and decisions.

Shared Vision: it establishes a focus on mutual purpose. People learn to nourish a sense of commitment in a group or organization by developing shared images of the future they seek to create, and the principles and guiding practices by which they hope to get there.

Team Learning: through techniques like dialogue and skillful discussion, teams transform their collective thinking, learning to mobilize their energies and actions to achieve common goals, and drawing forth an intelligence and ability greater than the sum of individual members’ talents.

Systems Thinking: people learn to better understand interdependency and change, and thereby to deal more effectively with the forces that shape the consequences of our actions. Systems thinking is based upon a growing body of theory about the behavior of feedback and complexity. to help people see how to change systems more effectively and how to act more in tune with the larger processes of the natural and economic world.

Endorsing the above principles and it is valid for team work as for individual initiatives, the “7 habits of Highly Effective People”, of Stephen Covey, are also fundamental in these times of change. They are:

1 – Be proactive – Principles of Personal Visio
2 – Begin with the End in Mind
3 – Put first things first – Principles of Personal Management
4 – Think Win-Win – Principles of Interpersonal Leadership
5 – Seek first to Understand, Then to Be Understood
6 – Synergize – Principles of Creative Cooperation
7 – Sharpen de saw – Principles of Balanced Self-Renewal

Note: Next article, and last, we will anayze Change as a process.