During the Organizational Development Congress we have shared various aspects related to the management of companies, and that are usually in the hands of their owners. The figure of "legal society" in Latin American countries is not always used for the purposes that have been created in the most economically developed economies.
The companies, and especially the joint-stock company, has as one of its purposes to offer leverage capacity to the company and, that this leverage is cheaper compared to other options that the owner has at his disposal, as is the case of Banks and other financial entities.
However, it is common that - unlike companies in the United States of North America and in the vast majority of European countries - the public limited company has a single main shareholder who has more than 51% of the shares in his hands.
In this way, one of the main reasons that gave rise to this legal figure is distorted. Later on we have to explore how this legal motive that has a strong economic implication can even become linked to variables that for the moment we have to group within what is known as the behavioral sciences that are also located within the "sciences soft ”.
Entrepreneurs in Latin America have emerged as a consequence of two main sources, the first of which is linked to “what is inherited” within the family patrimony.
To some extent it resembles one of the organizational options referred to by the excellent German sociologist Max Weber. For many decades, Latin American companies have been in the hands of owners who inherited their family businesses, and were able to sustain them over a period of time.
As a consequence of the changes produced during the last half of the last century in the different Latin American countries, the governments took on a democratic-populist and, also, of a clear military nature. In both cases this gave rise to a new and incipient type of entrepreneurs who enjoyed the protection of both the populist democrats and the military who were in government.
This protection made them rather "state contractors" (which of course also includes municipal and provincial areas) where the most common way of operating has been based on what we can call "cost + a plus."
It does not matter to be efficient since as a contractor of the State the protection was granted on a monopoly or oligopolistic basis of operation and in any case the Clients (captives) would have to pay the price of the different products and services.
And here we find what could possibly be linked to the creative and motor capacity of entrepreneurs in Latin America. No one doubts that what is inherited does not have the same value as "what is sweat" and that operating under the system of "cost + one plus" does not differ much from "what is inherited". Both have an arsenal of similarities and possibly their only difference is that what is inherited does not have to be interested in the past while "what is protected" (the system of operating under a cost + a plus) does not have to be interested in the present or the future. In reality, between the two figures, something similar to total protection can be achieved beyond the temporal.
If you will allow me, I will refer to a notable writer who has been awarded many works and - according to others - some of them were not his own: William Shakespeare. His characters have always been particular and Macbeth has been no exception. The three witches who were being led by the sinister underworld goddess of Greek mythology named Hecate, were bent on causing Macbeth's downfall which they couldn't achieve by convincing him that he was following the right route or as a result of getting Macbeth excited. to commit the greatest of evils. Being the goddess exposed to the "little capacity of her subordinates" she takes action directly in her quest to achieve success. The finesse of this action is shown in the words of Hecate:“How did you dare to trade and traffic with Macbeth in riddles and affairs of death. And I, the mistress of your charms, the closest contriver of all harms, was never called to bear my part, or show the glory of our art?
And then Hecate's instructions to the witches (his subordinates) are born so that they "calm Macbeth so that he acquires a sense of total protection (security)." He says it clearly: “He shall spurn fate, scorn death, and bear his hopes above wisdom, grace and fear. And you all know, security is mortal's chiefest enemy ”. And for this the witches are instructed so that they share with Macbeth two circumstances that turn out to be so improbable that he can come to consider them.
From then on Macbeth is ready to commit the greatest of atrocities without taking into account that his "total" security as a result of "feeling protected" makes him a victim of Macduff while his disguised enemy takes his castle.
What relationship can you establish between the fate of Macbeth and the fate of the entrepreneurs in Latin America who have grown up - if this word can really be used - under what is inherited (from the family) or what is protected (from the State)?
The only difference between the fate of Macbeth and that of the entrepreneurs may have to do with the fact that the former suffered a physical death while the entrepreneurs saw their companies languish and stumble. Financial, technological, and commercial globalization found fertile ground for genuine entrepreneurs as a result of entrepreneurs enjoying a sense of protection and security.
Have we talked so far about numbers and figures? Have we talked about whether the products and services of the entrepreneurs were good or bad? Have we made reference to the level of income, the market share they owned, the contribution margin or the profits that came before taxes? No way; We have only referred to aspects related to human behavior, something that not only Shakespeare exemplified but also other notable writers (N. Machiavello: "The Prince").
Surely some of you have seen the movie "The color of money" where the two main characters
- Tom Cruise and Paul Newman - They travel from town to town staying in hotels, having a good life and being in the company of pretty girls. How did they do it? Paul Newman challenged local pool players in bars, and with the result of his bet he was able to make a pretty good living that way.
At one point Tom Cruise wanted to know more about the expertise (Paul Newman's pool playing technique) and asked Newman: What do I have to learn? After a short silence he replies: "You just have to know about human behavior." Actually Paul Newman was not of course the best of all pool players, but he knew very well when making a bet with someone that that person would most likely be at his mercy (not technically, but in terms of controlling the other's behavior).
Now, why is it that many Latin American “entrepreneurs” have succumbed when the doors were opened at the borders and globalization penetrated?
Not all the fault lies with the entrepreneurs. Ortega y Gasset already warned us of the importance that results from the combination of two main factors: man and circumstances ”. And Burns & Stalker (1961), James D. Thompson (1967) and Charles Perrow (1969) detail some aspects where they show the importance of context above companies, and often above organizational participants and also their owners..
There is a natural tendency to sit down and place ourselves within the "comfort zone." At the end of the day, who does not want to feel comfortable, enjoying life and with money at our fingertips.
We all want to achieve it to a greater or lesser extent. What happens is that when we position ourselves comfortably and we do not move so much we tend to “get rigid” and less flexible on many occasions. The organizations that we create we take as the ideal measure and the words that we can use the most have to do with a model where it is proclaimed "Here we have always done things this way… and we have also had and continue to be successful."
Therefore it seems to make a lot of sense "not to change" things the way they are being done at the moment. Being within the comfort, safety and protection zone - which the popular proverb defines simply as "resting on our laurels" - we emphasize that no changes are made (no one seems to want waves). You start to work quite hard on new and creative ways of controlling and you set more rigid norms and more precise rules. James March 6 Herbert Simon (“Organizations”; Wiley & Sons - 1958) have alerted us to the dysfunctional consequences of these control practices, including the bureaucracy, and of course not necessarily the bureaucracy under the conception of the notable Max Weber (1947).Selznick and Gouldner have devoted much of their energies to showing the dysfunctional consequences of rules and controls.
We are then left with the option of having to function in a more open way, with fewer controls and where we can get the staff to participate in decision-making and many actions within the company.
The findings of Arnold Tannebaum and Carl Frost (creator of the Scanlon Plan) show the advantages of adopting a more participatory scheme. Not only can we trust people, but we must begin to do so if we want a growing organization. Can any parent doubt that they must give their child confidence to be successful? So why doesn't the same thing have to happen with companies? Jack Gibb is a strong advocate of considering the importance of “trust in subordinates” to achieve business excellence. And another additional question:
Can a child grow if he is not dedicated to learning? No mother doubts which is the correct answer to this question. However, business leaders do not always emphasize that companies learn and learn through their own organizational members.
We have mentioned the importance of a flexible organization where rules and regulations are important but still leaves enough room for a certain autonomy of the staff; We have also referred to the importance of having staff participate in decision-making; We have also underlined the importance of "that superiors trust subordinates", and we have also mentioned the urgent need to learn that organizations have and that this is done largely as a result of their personnel. But, and now the question comes: Who dares as an entrepreneur to make this decision? And more importantly, what businessman in Latin America dares to put it into practice and implement it within his organization?
And again we return to approach aspects and variables related to human behavior. Some studies and research work have shown that the learning history of many types of learning is authoritarian both in the family and in subsequent schools (primary and secondary).
Do you think it is possible to modify the behaviors, attitudes and preferences of entrepreneurs when they begin to run their companies, in relation to how they related when they were within the family or educational institution?
After many years where we have been characterized by defensive and control attitudes, and recognizing that change is already there - and not that it is yet to come - we begin to realize that we have created an organizational structure that is not very flexible and that it is it begins to act against our own interests.
We want to change our company because we are forced to do so, but as entrepreneurs we continue to find ourselves within a security zone that provides us with a “sense of total protection”. On the other hand, this perception of protection that we have as a result of continuing to exist as a company, unlike some of our contenders that "are no longer on the market" produces cognitive and emotional dissonances: it is not easy to continue operating when there are still traces from the skeletons of our competitors. And as we all know, images have enormous power over our feelings, thoughts and actions. We wonder what has happened to us as entrepreneurs when we discussed and launched new projects in the past,While at present it seems that the strength of the projects is the entrepreneurs who are outside our borders? Why have they created the illusion for me as an entrepreneur that now my company could invade the Brazilian market, which is more than 7 (seven) times bigger and more powerful than the one that I supply today in Argentina, when in reality it is Brazilian companies that In fact, have they settled mainly in Argentina?
So we see that one of our main challenges is to change and modify the structures that we had created. We have been very fortunate to read Alvin Toffler and other futurists, although to tell the truth, as owners we have done so with some delay.
We already know that the world is characterized by placing more and more new products on the market, and we tell ourselves that this is something that is difficult but that we can achieve it with determination.
But we also learn that it is not enough to take into account that there are more and more new products and services; It turns out that now all these products and services are much more varied. Have you explored what options we had as children regarding cereal for breakfast? They were very few.
And how many are the varieties that children today have at their fingertips! Well, as entrepreneurs and owners we go the extra mile and we say to ourselves: “Even though I am working more hours than ever, that now I must invent and impose new products and services on the market, I am going to persist and fulfill this task.
But this task becomes something bigger of a cyclopean type since the new products and services that we have to create now must also be more diverse. For this we are willing to work even longer hours ”.
And is this really enough? It would seem that since we must now add to the two characteristics mentioned the fact that these new products and that they are also more varied, it must be added that they must have a short life. This was unimaginable fifty years ago. Do you know any entrepreneur or business owner in Latin America that had to participate and take into account the same "death of their own products and services" not to say their own company? This was surely in the minds of very few homeowners at the time.
Therefore trying to change these structures in our own heads, in the heads of our managers, our Clients, our suppliers, and our staff, is something we have not been used to. And it turns out that now, in these times, it is urgently needed.
Faced with this sense of lack of control within our own body as entrepreneurs, we begin to think that perhaps we can benefit as a result of having external assistance. At the end of the day, there are consultants for something despite the jokes that have been made up about them (especially a very good one that refers to a leading consultant in the world: Arthur Andersen).
But we find that consultants suffer from many of the deficiencies of owners and entrepreneurs.
1. not all of them are familiar with the vast majority of the number of experts in Organizational and Business Behavior.
2. They are mostly not aware of all the “Best Practices” that are available to them.
3. They do not always take into account all the different Phases or Stages of a consulting intervention.
4. The vast majority of them have technical expertise that is fundamentally based on their “Diploma Profession” that has not had much to do with the change implementation processes.
Of course they have tried to make changes to the Clients, many of which have not been successful in terms of what the Client “expected”. For the consultant, the explanation is due to the fact that “there was a lot of resistance to change”.
Once a consultant gave me this explanation as a result of a poor intervention in which the Client has felt dissatisfied with the services provided: "People were reluctant to change." The question I have asked you is the following: What have you done to deal with this problem?
Didn't you anticipate that there would be some resistance to change? What actions have you taken to "get the organization ready for change"? He told me that finally the partner of the consulting firm had a meeting with the CEO and they decided to “put more pressure”, and that finally with more resources and more time they got a little closer to the expected achievements. Given this answer, I only managed to ask him: What would Kurt Lewin say to this decision to “put more force in the direction of in favor of change? He replied that no Kurt Lewin worked in his consulting company!
Margaret Wheatley specializes in dealing with change in organizations and especially with those companies where the situation they face is chaotic. He points out that CEOs report that up to 75% of the efforts and energy that they dedicate to achieve change in their organization have not been successful in relation to expectations. What ends up happening is that after the intervention, organizational leaders are rather forced to manage “unanticipated and unintended consequences” rather than deal with the new results that have been planned, and that are often found. facing a group of "survivors who are exhausted and demoralized."
It is really surprising that with almost 100 million species on the planet that survive thanks to their extraordinary capacity for change and adaptation, human beings NOW have so much difficulty changing. And a question arises: If we were to leave the comfort zone, would we initiate a process of change? And the following question that was asked by a participant (María Rosa Nieves) a year ago and which is exemplary:
What can we DO to get out of the comfort zone?
Many times before eating a new plate of food, we test how it is. It is also common for us to test under many other life circumstances. A lot of our conversations with strangers - at least the initial ones - have to do with this aspect of testing.
Now, when we really try to change something - which we don't do very often - do we at the same time have some mechanism at our disposal to test how we have done? It is not easy to introduce changes of direction in our actions.
Many of us are familiar with the story highlighted by De Bono (the creativity specialist) when referring to that little ant on the ground and looking up at the huge tree in front of him, laying his eyes on a single leaf on the which is very interesting. When he dares to climb the tree in search of “that” particular little leaf licking his lips in anticipation, he soon learns that there is no single path. After having overcome the entire trunk and having climbed a particular branch, he realizes that this is not the correct branch and repeats the operation with several other branches.
It is possible that he will do this many times until he finally finds the appropriate direction (the branch) where "exactly the little leaf he wanted for himself is perched."
Now, this is what happens to us when we choose to change: we have great difficulties in knowing the proper path. Returning to the little ant, once she has taken that little leaf that attracted her so much, the ant has no doubt about the downward path that she must now travel.
The same thing happens again with humans in relation to the process that the ant follows: once we choose an option, we choose it and incorporate it as one more “automatic behavior”. And the question that only the genius of Karl Weick could formulate so clearly: Is it possible that as entrepreneurs we have the capacity to be able to treat in an equivocal way everything that in our lives we have unequivocally filed away?
