Traditions Die Hard

Many years ago, when first traveling in South America, I visited Lima, Peru. It was a fascinating place, due to the historical juxtaposition of Spanish colonial history, indigenous traditions (and people), and of course the ever-present yet incongruous influence of "western" culture (Coca Cola, etc.).

By a serendipitous turn of events, my companions and I found ourselves touring the most famous bull fighting plaza in the country, the Plaza de Acho. As luck would have it, the place was empty, since our visit was many months in advance of the temporada, the season when Spanish and Latin American matadores perform in this centuries-old tradition of tauromaquia.

Our guide allowed us to descend from the seating area of this circular arena, down to the ring itself, where we stood on the sand that serves both bull and bull fighter in this historic and artistic ritual of bravery and sacrifice. With the Peruvian sun shining brightly upon us, we imagined how it must be to see the gate (la puerta del toril) open, and the fresh fighting animal --- raised exclusively for this moment --- come dashing into the ring, seeking to dominate and defend against anything or anyone that might challenge his supremacy.

Having seen bull fights in many famous cities of Spain and Latin America, I must tell you that the art of the fiesta brava is something that has to be learned about. There is a culture and history of this passionate art form, and it is something that escapes many who see only a spectacle of blood and sand. By reading and observing all the elements of this ritual, one becomes more respectful of the bravery and skill that it takes for a single man to face a thundering beast weighing more than half a ton, alone with just a cape in the middle of a ring. To do it successfully, while also showing mastery of the cape, the banderillas and finally the sword and muleta, in all the various moves and classical passes that dominate the fighting animal, is to show what it means to be a matador.

In today's politically correct world, even traditions that are hundreds of years old, and have shown through the ages that they express something ethereal and artistic, are under siege. Even in a city and culture as traditional as Lima, Peru's there are those who would protest and put a stop to this tradition. Let's hope that the world in all of its unique traditions does not become one homogenized culture that eliminates every single tradition, just for the sake of political correctness. Let's hope that traditions as skillful and laden with meaning as those represented in the fiesta brava will not be vanquished by those who hope to make everyone follow their particular view of the world.

To learn more about the tradition of bull fighting, consider seeking books such as:

La Fiesta Brava, the Art of the Bull Ring, by Barnaby Conrad, Houghton Mifflin Co., Boston.

Bull Fever, by Kenneth Tynan , Harper and Brothers, NY, NY.

The Bullfight, A Photographic Narrative with Text by Norman Mailer, A CBS Legacy Collection Book, distributed by the MacMillan Co.

Thanks for reading.

© Daniel A. Cabrera, TopExec.org, All rights reserved, 2008

Seasonality in the Southern Hemisphere

"A funny thing happened on the way to the (U.S.) company's year-end (December) celebrations and quota performance recently when dealing with South America....no one bought any of its product!"

Thus started a sad and fruitless chapter in one particular company's history in Latin America, despite its well-known mantra of Kaizen (constant improvement) and other customer-centric philosophies. You see, for those who have only a limited knowledge of South America, the seasons are reversed, and the selling motion and customer interaction are at times challenging for "northern" firms that think everything in the world operates on "U.S. standards".

Therefore, pay attention to these kinds of realities, when doing your work in the southern hemisphere, particularly in Latin America:

• Budgets for capital expenditures (big ticket software, computers, machinery, etc.) are often set early in the calendar year, and are fully-allocated to vendor "A" or "B" by mid-year.
  
  
• Companies that operate a year in advance for such budgeted items will often be planning their "next year" budget one (1) full year ahead.
  
  
• Expenditures for these kinds of acquisitions will often be completed by December/year-end, however, if you and your firm have not been actively engaged in the "purchase cycle" well in advance of the previous year's budget season, you'll have another year to wait to be considered at all.
  
  
• Additionally, if you and your firm have not earned the right to provide product or services, then for all your excellent marketing and capabilities, folks in South America (and Latin America, generally) will simply not give you the credibility to consider your value proposition.

To be sure there will be happy exceptions to these generalities, but based on this writer's many years of experience in the region, it's critical to take into account the seasonality that affects the southern hemisphere. What's cold and wintry to you in the north, is hot and summery in the south. Buy cycles, decision time-frames and associated operational imperatives are significantly different in the southern hemisphere (e.g., South America), than they are in Europe or North America. Sound simple? It can be, but you have to know, you have to plan and you have to execute appropriately to make it happen.

How does your firm handle this kind of challenge? What are you doing to get ahead of the curve and work your calendar effectively in light of fast-approaching summertime dates in South America?

Thanks for reading, commenting and passing along these tips from LatinAmericanKnowledge.

For other blog topics from this same author, take a look here.

© Daniel A. Cabrera, TopExec.org, All rights reserved, 2008

Lula's Meltdown or Bush's?

Per today's Miami Herald, there is plenty to worry about in Brazil as a result of the current "meltdown" affecting world economies, jobs and industries of all sizes and types. Check this out, based on one particular news source that keeps a close tabs on what happens in Latin America.

http://www.miamiherald.com/business/story/772086.html

Despite what Mr. Lula (Brazil's president) stated earlier about his lack of concern for the economy challenges in the USA and Europe, evidently the Brazilian consumer is showing distinctly different behavior when it comes to spending. This, in turn, like in the USA and other markets, reduces demand, curtails retail sales & purchases, which in turn leads to less jobs, less growth and other deflationary trends.

Again, to quote a number of Brazilians, they are "accustomed to these crises" so this is just one more in a string of such events. Nonetheless, the ebullience of the economy in Brazil for the past 3+ years is such that a great many more citizens in that country are now thoroughly vested in a continuation of sound economic policies, robust job markets, and moderately easy access to credit.

What happens to any economy where the "retail" consumer is responsible for a large percentage of the overall GDP, such as in the USA? How do companies and entire economies cope when that demand is reduced substantially or in some cases, eliminated, due to other economic adjustments? No company and no industry, it appears, is immune to the deflationary aspects of this downturn in demand (for more on this look at: http://online.wsj.com/article/SB122688301012632105.html )

>© Daniel A. Cabrera, TopExec.org, All rights reserved, 2008

Amazing Digital Capabilities in Brazil

Call me a technophile or just someone interested in free markets, but either way, the following anecdote shows some of the innovations going on in our world today. In a recent phone conversation with a dealer/reseller of Wi-Fi Broadband products in Brazil, he described one of his solutions:

For the second largest container/shipping company in the world it is imperative to have maximum efficiency in the handling (loading and unloading) of containers that carry the world's commerce inside gigantic, seagoing ships. To do this the old-fashioned way, the company has to have on-board staff (humans) that tell the crane operator where a particular container is, how it's stacked, and in what order (two levels down, etc.). Using two-way radios this can be done, albeit with some delays as the human staffer has to make his way through the ship to identify and locate a particular container (with its unique ID number).

By using Wi-Fi technology that is linked to each container, the crane operators can easily identify the container, know whether it's vertically or horizontally positioned and find out other important details for loading or unloading. With the cost of labor reduced and the rate of efficiency increased, these shipping operations can move at maximum rates, minimizing the time and cost of having these behemoths of the seas in port any longer than necessary.

This, like many other examples from Brazil (voting on-line, paying taxes on-line, etc.), shows a country that is in the vanguard of technology usage to sustain its amazing rates of growth, its incredible (positive) balance of trade and other leading indicators throughout their economy. What do you think? Do you have an anecdote from domestic or international shores about amazing digital capabilities?

Thanks for reading, and pass it along!

© Daniel A. Cabrera, TopExec.org, All rights reserved, 2008

Making the Case for Credibility - A Latin American Exec Confirms My Comments

As posted in commentary on October 31st of this year, the key to establishing successful business in Latin America is through the hard work and profitable pleasantries of personal relationships.

Recently, I met at length with the G.M. for Latin America of a company specializing in high-tech solutions for security within the Information Technology (IT) industry. The company is on the smallish side, but the products and appliances they offer are excellent, with a fantastic cost/benefit advantage. They compete with some of the biggest and best known companies in networking, security and similar technologies, and they do so without a huge physical infrastructure, local/on-the-ground presence or a well-known brand. As a result, they have to compete with not only the quality and competitiveness of their offerings but more specifically with their commitment to the marketplace.

In what seemed like an echo to the words I wrote here last month, when asked what I thought it would take for his company to expand its success in the region, I told him the following:

• Your company has to be willing to invest for the long-term, in people, talent, product, services
  
  
• You have to be willing to create a presence, and not expect results through once-in-awhile efforts
  
  
• Your credibility is earned over time, with consistency and actions, not words
  
  
• Your brand has to be positioned and nurtured to establish it as worthy of the region's business; you have to earn the right to do business in Latin America
  
  
• You must create value in what you offer, and not just expect pricing or discounting to lead to long-term success
  
  
• You have to become "local" in every sense of the word, and reach your consumers, customers and partners by ways they deem appropriate or useful, not necessarily by your ways

When I finished running down my list of attributes and qualities that in my experience have proven to be tried and true, he said, "I couldn't have said it better! That's exactly what I think about doing business in Latin America." So, in sum, it's not just my experience that underlines these realities in Latin America, but the experience of others that corroborates these realities.

Will every firm take this approach? Certainly not! There will be those that prefer the quicky method, the Wall Street-driven "gotta have it now" approach, but in the end, these will not garner a long-term presence. They will pass through, and their presence will be short-lived. Latin America has changed immeasurably in the past 20+ years, and consumers and buyers throughout the region are far more demanding now about who and how they engage with for commerce, for investment or for any number of other opportunities that continue to arise within the southern neighbors of the United States of America. Which approach is your firm taking? Is it the right one?

Personal Relationships and Business

On a recent radio "article" on NPR, (National Public Radio), the topic was about doing business in Iraq, and all the billions of dollars and euros that are being earned by companies from around the world, mostly non-American corporations. The basis of their earning this business and these revenues? Their willingness to establish themselves, on a personal relationship basis, with the ministries and departments within the Iraqi government, to earn the right to compete for contracts, projects and other investments planned for 2009 and beyond. To paraphrase one commentater: the Westerners are only interested in getting the job done, getting the answer quickly and moving on. The others are willing to stick around and build up the trust and involvement required by these consumers (government or otherwise) even if that means spending a lot more time and effort.

This brought to mind the very real circumstances that exist today in Latin America. It is not simply a matter of having an American executive open up his/her rolodex and start making calls to garner business in the region. Likewise, it's not an effective strategy to drop in for a once-in-awhile meeting or sales call with prospective customers (private sector or government) and expect that meeting or that call to create the necessary elements to winning any substantial business.

Just as in the Middle East, and Asia and most of the world, consumers (executives, corporations, small and medium businesspeople, etc.) are going to insist on establishing with you, your company and your offerings a working, personal relationship. As a friend of mine from Argentina said to me recently, "No one wants to do business with someone who is not committed to the relationship." So, a glad-handing representative from anywhere (even within Latin America) will likely fail to win the business by seeking the quick, easy path to success. Instead, it takes time, effort, actions, investments and a lot of commitment on the part of anyone or any company that wants to earn the right to provide service, products or solutions to customers in Latin America.

Don't believe me? Ask a Latin American what they look for most in a vendor or supplier relationship. Better yet, ask yourself if you're using a long-term approach to building credibility and thus positioning yourself and your company's offerings to best serve the needs and potential wants of your prospective customers in the region. By doing so appropriately, you'll find that success comes to you much more completely, and for the long-term, rather than quickly.

For more information on doing business in Latin America and the world, see:

www.TopExec.org

Thanks for reading, and see you next time.

© Daniel A. Cabrera, TopExec.org, All rights reserved, 2008.

Latin America in 2008 - a snapshot

This post originally appeared on June 19th, 2008, at www.TopExec.org/TopExecBlog

In speaking with a friend recently, someone who lives and works in one of the powerhouse European countries of the world, we got to discussing business opportunities in Latin America. His comments, among other things, brought to bear some of the unknown, or underappreciated, realities of Latin America today.

Some of these include regional development, powerful economic and democratic changes that have taken hold since the turn of the 21st century, as well as a little-noticed items that might surprise you. To wit:

In a Miami Herald article in April of this year, efforts were described throughout the region, notably Brazil, where environmental projects are making headway in reducing greenhouse gases, and other pollutants, through engineering and technological approaches. Notably, one of the persons quoted in this article also called out the vast difference between Latin America and China, stating, "Decision-making in Latin America can be very difficult." Whereas in China, with an authoritarian government, decisions on complex or major environmental projects can "...take two months to develop a plan. It's one year or more in Latin America."

Other commentators, as well, have noted some of the challenges in the region, particularly adoption and usage of the Internet as a major thoroughfare for business, education, commerce and governmental initiatives. Despite some progress, the trend in the region is not keeping up with standards and "through-put" being led by European and Asian nations. This creates challenges for those wishing to offer their "software-as-a-service" or other entities that want to "virtualize" their offerings, cut down on travel expenses or otherwise facilitate service or product offerings via this important mechanism.

That being said, one can also point out to extremely positive changes and progress being made in the national economies of Mexico, Colombia, Brazil, Chile, Peru and other nations. Brazil, in particular, is on the cutting edge in size, breadth and profitability for any number of industries, including automobiles (8th largest market in the world), PCs (5th largest in the world), cellular phones (3rd largest in the world), and companies of all types are investing to make sure they have long-term success in this giant market. For a quick look at some comments on this overall trend in Brazil, check out this article.

The bottom line? There is a lot of opportunity throughout Latin America, and the firms that understand this and gear up to become truly "local" participants, drawing on their "global" resources as well as using effective representatives or surrogates in meeting the needs of consumers (business or individual consumers), will find that their investment in time, resource and money will pay off significantly. Is it easy? No, it never has been and will continue to present challenges. Is it worth it? You betcha.

Thanks for reading, and if you need help addressing your Latin American business interests, feel free to drop me a line (info[at]TopExec.org). I can help.

© Daniel A. Cabrera, TopExec.org, All rights reserved, 2008.

Brazil Brings it North

This post originally appeared on Sept. 8, 2008 at www.TopExec.org/TopExecBlog

As a long-time specialist in Latin America business I can tell you without a doubt that the changes in Latin America over the past few years have been astounding. Today's Wall Street Journal for example calls out some of the historical trends, pan-regionally, and the effect of U.S. policies on trade.

From my point of view, the real mover and shaker in the region (and I'm not talking about samba or capoeira) is Brazil (or as they spell it, Brasil). This country has moved inexorably from a backwaters, wannna-be, to a real player on the world stage. In recent months these kinds of developments are taking place, increasing the movement from south to north:

1) Brazilian mining companies are going "vertical", meaning they not only mine the iron ore that is shipped worldwide to make steel for autos, washing machines and the like, but they are now creating totally integrated operations to mine the ore, refine it, and create the steel products for domestic and international use. This is BIG news for steelmakers in other parts of the world, not all of it pleasant for those mills that only produce steel, after sourcing the iron ore from Brazilian miners.

2) U.S. companies are seeking and finding financial support from Brazilian investors - this is really something, when a "3rd World" country can generate enough free cash flow to offer investments into US or European-based companies. Case in point, a firm in the US that specializes in retail solutions for grocery companies and other retailers, recently turned to Brazilian investors to expand and grow its business. Not only will there be Brazilian money helping the U.S. firm grow, but Brazilian management expertise will be there, as well.

3) For those who drink beer, and enjoy regional varieties, a recent mega-investment by InBev (Brazilian/Belgian brewer) in taking over Anheuser Busch in the USA is BIG news. This is not just a question of consolidation in the brewing industry (a phenomenon that has been taking place for some time in the US and other markets), but it's another huge indicator of the sophistication of Brazilian management talent, as well as money. Watch what happens to Bud and the rest of the Anheuser Busch line of products.

4) Major IT/Computer companies, such as IBM, Dell and others are all setting up or have already done so, major installations in Brazil to satisfy that market, now the 5th largest in the world for PC's. Naturally, this appears as a movement of capital and smarts from the north to the south, but in this writer's opinion, the effect is inverse: Brazil as a major consumer of IT products will begin shifting the way all types of companies set up and operate for the benefit of that country and its consumers and by extension, the rest of Latin America. Auto makers, as well, are redefining their product for Brazil, and when it comes to ethanol, the Brazilians have superior experience, cheaper prices and far wider abilities to plant, grow and process bio-fuels for the auto industry or other consumers. The U.S. and other countries have a lot to learn from the folks down south.

5) Oil companies and deep water drilling are going to find that Petrobras, the Brazilian national oil company is showing the way on how to find, drill for and extract major oil fields that are deep under the ocean, and deeper still under the rocks or sea bed that lies below thousands of feet of saltwater. For a U.S. that is nearly surrounded on three sides by ocean water, with vast petroleum and natural gas fields yet to be exploited, this Brazilian expertise will become a resource to learn from in the deep water exploration that will lead to new sources of energy off the shores of the United States. Hands down, the Brazilians are some of the world's best when it comes to this kind of oil field capability.

So, apart from the traditional exports that are famous from Brasil (coffee, bossa nova, soccer (futbol) and the Girl from Ipanema), the trends are strongly moving in ways that give Brazil a lot more influence while operating on the world stage. This will continue well into the future, and will continue to have significant impact on all parts of the "North". Stay tuned for more on this compelling topic.

If you or someone you know needs help with growing any part of your business in Latin America, including Brazil, contact me. It's what I do, and fluently in both Portuguese (the language of Brazil) and Spanish (the language of most of the rest of the region).

Thanks for reading. If you find this useful, please comment and share it with a friend. As they say in Brasil: "Chau!"

© Daniel A. Cabrera, TopExec.org, All Rights Reserved, 2008

Building Emerging Markets

The questions came via email from a senior executive interested in my thoughts about Latin America. “What do you think about the viability of software markets in Brazil and other parts of the region?” More specifically, he wanted to know my thoughts on the market for “on-demand applications” and specifically “talent management applications”.

Before commenting on those particulars, it might be helpful to provide context, since the world appears, at this writing, on the edge of an economic abyss, and many of the financial and commercial norms that we have known in the past several decades are changing so fast as to warrant some reflection. What is happening to emerging markets, especially Latin America? How are people coping and in what direction are these markets going? Do they rely on technology or other solutions that come from “the north”, or are they increasingly independent and uncoupled from the freezing-up of credit and other mechanisms in the northern hemisphere?

In brief I would say that it’s a mixed environment. Certainly a market as huge and self-sufficient as Brazil is a lot less concerned about the challenges faced in the U.S. and Europe. For them, in the words of a good friend in that country, they are accustomed to crises all the time, in fact it’s almost a way of life. Except for a jump in interest rates, recently, nothing much has changed since the “meltdown” began earlier this year in the U.S. and other world economies. In other words, to the extent possible, business people and others will take these situations in stride, find a way around the barriers they come up against, and move forward. Brazil has natural advantages, of course, including a widely diversified economy, a huge population of consumers that have learned to love a stable currency and credit facilities to enhance their life styles, and a government that has in the main been largely free-trade and hands-off with regards to managing that country’s economy.

Nonetheless, there is a definite impact in the stock markets and capital markets of these emerging economies, including Brazil. Stock markets are getting hit, currencies are weakening against the U.S. dollar and projects are being delayed to let the dust settle. Those countries that have enjoyed a run-up in commodity prices without building up a sufficient “rainy day” fund are going to find severe challenges when demand falls for their bread and butter products (soy, wheat, copper, beef, etc.). A notable example of this is Argentina, which continues to flail away at its economic challenges and has recently announced it will appropriate private pension monies to tide it over as major, sovereign debt comes due in the coming 12-24 months. Chile, on the other hand, has been very conservative about holding on to the tax revenues raised (in the billions of dollars) over the past several years for its many commodity exports (copper, fisheries, agricultural, etc.), and has an enormous reserve upon which to draw in this faltering market environment.

What do these macroeconomic issues have to do with “on-demand applications” and “talent management applications”? From the perspective of building an emerging market, creating a brand and gaining market share there is a correlation. Until such time as the value proposition and cost/benefit equations are fully embraced by consuming organizations of these offerings, it will be a long, hard road to create and sustain markets with these kinds of products. In particular it should be noted that the effect of an exporting company’s marketing, advertising and even customer success stories in the U.S. or Europe have very little impact on the folks in Latin America. Even as their economies have grown, and their imports and exports with other countries have expanded, Latin America remains focused on its own markets, its own communities and its own reference points. Until an “on-demand, talent management application” can really be proven as a must-have, versus a nice-to-have for day-to-day operations, there will be serious impediments to building that particular market. Likewise, until the “best practices” of performance reviews (see a contrarian view on this topic: here), succession planning and other talent management techniques become acceptable to Latin American firms and worth funding via technology, consulting or other investments, it will be tough for this kind of application to make progress in the short term. So, just as the consumer, generally, and many companies in the U.S. are cutting back on expenditures, and eliminating many nice-to-have items, so, too, consumers and corporate organizations in Latin America will do the same, having an impact on how U.S. and other non-Latin American vendors approach and serve these markets.

That being said, there are vendors that have on-demand offerings, fairly well-known, well-capitalized and willing to do the “blocking and tackling” it takes to create and build an emerging market like Brazil, Mexico or other nations in Latin America. Does this mean they can achieve short-term results? Yes, but not on the scale that Wall Street-driven firms in the U.S. or Europe might be hoping for. Does it mean it might take years to begin to get real traction in the region? Yes, it does. One particular “Software-as-a-Service” vendor I know admitted to six years of effort in Latin America, and they are just now (as of mid-2008) beginning to find their bearings and produce what they hoped for all these years. Who knows where they are today, in this “soft freeze” economy that seems to be delaying new hires, postponing projects and hoping that the first of the year will dawn warmly with positive GDP’s and operational budgets to gear up sales and profits once again in the region?

Regardless of the challenges, there will be those vendors who make a commitment to being “global” and put into action the teams and strategies necessary to serve and build emerging markets. With appropriate expertise, a clear-cut strategy and the executive talent to see the big picture in terms of time, resources, talent and commitment (yes, it’s often called hard work), Latin America and other emerging markets will adopt on-demand applications, just as they will adopt wireless broad band technology, or any number of other products and solutions. Want them to adopt talent management applications? Then, put the talent you have on the case, fund it appropriately, scale it on a time line that makes sense in Latin American terms (not Wall Street terms), and get to work. Need help figuring out what to do? Contact me: info@TopExec.org and I’ll be happy to help.

Thanks for reading this chapter of the Career Path Expressway™. Please share it with a friend, and subscribe to the blog to receive future postings. My regards to you, and safe travels as you approach emerging or other markets in today’s global economy.

© Daniel A. Cabrera, TopExec.org, All rights reserved, 2008