If these 3 Brasilians can do it, how about some SA business heroes?

Did you know that Burger King, Heinz tomato sauce, Kraft (Toblerone, Chips Ahoy, Jacobs and more) and AB Inbev, which sells 1 in 3 beers globally, are all connected to the same 3 Brasilian businessmen?  Jorge Lemann, Marcel Telles and Beto Sicupira bought a small brewery in 1989, and have not stopped doing deals since.  They formed 3G Capital in 2004, to make global investments, and that company now owns all their non-AB Inbev companies.

Warren Buffett likes doing deals with 3G Capital, and has provided the finance on many occasions.  In his 2015 Letter to Shareholders, he said the following:

“Jorge Paulo and his associates could not be better partners. We share with them a passion to buy, build and hold large businesses that satisfy basic needs and desires. We follow different paths, however, in pursuing this goal.

 

Their method, at which they have been extraordinarily successful, is to buy companies that offer an opportunity for eliminating many unnecessary costs and then – very promptly – to make the moves that will get the job done. Their actions significantly boost productivity, the all-important factor in America’s economic growth over the past 240 years. Without more output of desired goods and services per working hour – that’s the measure of productivity gains – an economy inevitably stagnates. At much of corporate America, truly major gains in productivity are possible, a fact offering opportunities to Jorge Paulo and his associates.”

High praise indeed, from a business legend.

Dream Big, is a book that captures the early years of Lemann, Tellas and Sicupira.  Here are my learnings from it:

  1. Dream Big – all of their businesses are mandated to set big goals. Why?  Because dreaming big creates alignment, energises the team and helps to retain top people.  If you only aim to grow at 10%, why would talented people stick around?
  2. People – they are a rigorous with their hiring process (often 8-10 interviews are required). They look for PSD characteristics – Poor, Smart and Deep desire to get rich – rather than Ivy League credentials.
  3. Culture – they are very cost conscious, implementing zero-based budgeting in all their companies. Just read all the steps they took after merging Heinz and Kraft, in this Fortune article.  They also apparently give out copies of “Double Your Profits: In 6 months or Less” to all new staff.  They are also radical about rewarding merit, rather than years of service.  For this reason, they appointed a 32-year-old as CEO of Burger King (read more about Daniel Schwartz here).  This also means taking ownership of poor results – they recently announcing that no one at AB Inbev would receive a bonus due to recent disappointing results.   “Dream. People. Culture.” are still the 3 key words in all their businesses, look for instance at the 10 principles of AB Inbev, which are all based on these concepts.
  4. Leaders need to create time to think – every year they go away for time with Jim Collins, the renowned business guru. Collins spends most of the time just asking questions and giving them space to discuss.  These are business leaders that invest in their own growth.  Collins interviews Lemann here, if you would like to find out more.

Let’s be inspired by their example and start some SA companies that take the world by storm!

Paul Maughan

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