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After spending more than three weeks in Brazil, the third stage of our Odyssey ended on the 6th of April 2022.
And what an adventure! Our encounters with 22 employees, 14 companies and many “Cariocas” in Rio de Janeiro and “Paulistanos” in São Paulo, helped us to understand the Brazilian managerial and societal culture.
As for Norway and Iceland, our understanding of this culture is obviously not exhaustive, and the examples we are going to share with you do not reflect the behavior of all Brazilian companies. However, the elements that we highlight in this article have been common to all our interviews.
Aproveite sua leitura! (Enjoy your reading)
In order to understand the managerial innovations that we will present to you later in the article, it seems useful to outline our impression of Brazil in more detail: its assets, its potential and its weaknesses.
First of all, this land-continent of 215 million inhabitants has rich natural resources (minerals, first producer of biofuel, one of the world’s leading agricultural countries), which gives it an important geopolitical and economic advantage.
In addition, the country benefits from a high-performing tertiary economy (75% of the country’s GDP in 2018 according to IBGE), particularly in the financial sector. For example, the Brazilian Central Bank launched the mobile application PIX to manage the increase in online interactions during the Covid-19 crisis. All the Brazilians we met use this app. It is a government tool that allows everyone to exchange money from one account to another for free and instantly or to make payments worldwide.
Dominant country of South America, 9th economy in the world, one of the largest democracies in the world, successful tertiary economy, abundant natural resources: theoretically, the country has the potential to be one of the most developed countries in the world.
However, we quickly discover that Brazil suffers from a number of problems that continue to slow down its development:
Our Brazilian journey began in Rio de Janeiro, known in Brazil as “Cidade Maravilhosa” – the wonderful city. With a population of more than 12 million (urban area), Rio is known for its magnificent beaches (Ipanema, Copacabana), its statue of Christ the Redeemer and its gigantic carnival. However, the city is also the stage for glaring inequalities.
In fact, almost a third of Cariocas live in favelas. We had the opportunity to visit Rocinha, the largest favela in Rio. These places are full of creativity, talent and resilience, but also places of poverty, extreme violence and discrimination.
The proximity of these places to areas of great wealth is particularly striking. For example, Leblon, one of the richest neighborhoods in Rio, is only a few minutes away from the Vigidal favela.
Xavier, CEO of Templo, explained that the Brazilian system is organized to maintain social and economic inequalities. For example, interest rates are very high (up to 11%), making investment very profitable for the richest and borrowing very expensive for the poorest.
Similarly, Xavier described how the social ladder in Brazil does not function properly due to an educational system that is sometimes inadequate and unequal. For example, according to official data, the average length of schooling is barely seven years. Four out of ten children do not complete compulsory education. These figures conceal great regional disparities. In the poorer Nordeste, 60 % of young people lag behind in school. During our conversation with our guide in Rocinha, we also realized that access to education is very difficult for children living in the favelas, which contributes to reinforcing inequalities in the long run.
We often hear about the necessary adaptability of companies in a VUCA environment (Volatility, Uncertainty, Complexity, Ambiguity). This world seems very real for some of the Brazilians we meet. It is reflected daily and not only in enterprises. For example, extreme poverty, the paroxysm of uncertainty, affects 19.3 million Brazilians.
Hugo from the Instituto Serrapilheira pointed out that Brazilians, even the wealthier ones, are well aware of this uncertainty and instability. It is an integral part of Brazilian life and culture. For example, when Bolsonaro came to power in 2019, funding for research was quite suddenly cut by 86%, forcing some actors to adapt. Without public support, some universities in Rio can no longer pay electricity costs and have to find solutions to continue admitting Brazilian students.
However, in the face of uncertainty, poverty, instability, and widespread awareness of these factors, we can see great resilience, strong adaptability, and great creativity.
Indeed, it is this context that has allowed us to meet the most innovative enterprise governances since the beginning of our Odyssey. Achieving a lot with little, innovating while your back is against the wall, always moving forward: these are the Brazilian strengths.
We have met several Brazilian enterprises that are trying to cope with the side effects of a very hierarchical structure (loss of motivation, loss of meaning, micromanagement, multiplication of meetings…) by inventing new organizational methods and new management processes.
These organizational structures are largely inspired by Holacracy, Sociocracy and the basic principles of the Teal Enterprise described by Frédéric Laloux (self-management, wholeness, and evolutionary purpose).
They are no longer based on job descriptions, hierarchical authority, and vertical control, but on greater employee autonomy, a hierarchy of skills, and the fulfillment of everyone in their roles.
They also share three characteristics:
Stephanie from Tribo defines tension as a situation that could or should be different than it is because there is an opportunity or because it causes problems.
In simpler terms, tension is felt when the perception of what is happening is different from what is expected or desired.
Tension can be operational (there are roles in the circle to solve the tension, e.g. communication problem between two circles, let us find a digital tool to better disseminate information) or governance (it is necessary to create, revise or remove existing structures in the enterprise, e.g. create a new market opportunity circle for the metaverse).
Tensions feed and animate these circles daily.
But what is a circle?
It is a semi-autonomous, self-organized and self-managed group of people whose purpose is to respond to a specific tension common to all.
Circles are:
Example of the circle organization, presented by Danilo, a partner at Target Teal.
All employees are assigned roles in several circles based on their skills.
How does this differ from a traditional hierarchical governance?
The total non-existence of managers or of a decision-making “leader” within the circle resulting in:
Roles that differ from traditional positions:
This is what Lula, a former consultant at K21 in Brazil, told us, “No one in the enterprise and in the circle can force you to stay in a role if you no longer have the motivation to do so. At some point, I wanted to invest myself more intensely in a podcast assignment we had and less in my consulting assignments. By agreeing my exit from the role with the circle, there was no problem. The benefit is that you work on assignments you believe in and are passionate about.”
Moreover, these innovative organizational structures have other interesting similarities:
Consent decision making is based on the absence of objections. A situation that can occur in 3 scenarios:
What is interesting here is the area of tolerance. Not objecting is different from agreeing. It is this extra space that defines the range of tolerance. Even if I disagree with a decision, I can tolerate it as long as I have no objections. In this model, participants in the circle do not have to reach consensus to make a decision. Instead, they simply straddle their tolerance bands, which allows much more room for growth and faster decisions WITHOUT having a leader or manager decide.
Zona de concordancia = Consent area
Zona de tolerancia = Tolerance area
Zona de objeçao = Objection area
Consenso = Consensus
Consetentimento = Consent = Area of tolerance for all.
Interesting practice at Tribo (100% remote enterprise) for decision making via zoom! If they consent, they put a 👍. When they have an objection, they put the sign below:
Its meaning according to the CEO Stephanie:
“An objection should not be seen as a disagreement but as a gift. I have something to offer you so that you can make the best decision possible.”
Impulso operates in remote work and not in home office. Everyone is equipped to work properly from home and if someone wishes, he can also practice remote work in a third place.
The third places can be coworking spaces or even the enterprise’s own offices! Impulso’s premises are designed as a social space that can welcome people when needed, but not as a space where the enterprise’s culture lives and where employees come regularly 2 or 3 days a week. Sylvestre’s desire was to illustrate their digital culture in a physical space, not the opposite. For example, there is a special room in the middle of the site where employees can rest and share in peace.
This distinction is fundamental and explains why, in contrast to the other countries we visited, hybrid forms of work (some days telework and some days on-site) do not meet with approval at all.
These Brazilian organizations have not thought of telework as a response to covid constraints, remote work is actually part of the corporate culture.
Thus, all organizational processes are designed to respond to a digitalized organization.
Deize, an employee of Impulso for 3 months, explains with enthusiasm these processes and the feeling of belonging to a very strong digital company culture since day one.
According to her, this is possible thanks to a developed onboarding. The onboarding is offered directly and exclusively online via the Notion tool. It consists of everything an employee needs to know to understand Impulso’s digital processes and culture (podcasts, articles, feedback, testimonials, digital tools and their use, etc.).
We can observe the same practice with Pedro from the 100% remote enterprise Anga&Din4mo, who introduces us to his wiki, a freely accessible website (https://wiki.grupoanga.com/) entirely dedicated to helping new employees understand the company’s remote working culture.
Onboarding is voluntarily offered only in remote mode to implement remote organization processes immediately. Rafael from Impulso has a tip for enterprises that work in a hybrid way: “With hybrid work, your processes only need to be thought of remotely”.
He uses a concrete example: “In a team of 7 people, 4 of them work on-site in the same room and 3 work remotely. One of the people working on-site has a question about how to handle her task. Naturally, she should turn aside and ask one of her colleagues, right? Well, no! She needs to ask the question via the remote communication tool in which the entire team is operating”.
At Impulso, we found other interesting practices to embody this digital culture. For example, the use of the collaboration tool Slack in a very advanced and automated way. One of the channels caught our attention: “give me stars”. This is a channel that allows employees to thank each other. For example, when a collaborator wants to thank another employee for his help, his work or any other gesture or attention, he can use this channel. We were surprised by the amount of emojis present in the messages and the frequency of these “thanks” (between 2 and 3 per day).
Transparency is also very important in this kind of remote organization. At Impulso, when an employee has a question, he must ask it on a dedicated channel to allow everyone to have access to the information, even if the question is addressed to a specific person.
The Hjalli Model Gender Scale
In the end, Sylvestre has well summarized the state of mind that we discovered in Brazilian enterprises: “The problem is not remote work. The problem is the misunderstanding of the right processes to implement a remote work culture”.
In this way, Impulso challenges the common belief that on-site teams are naturally more integrated by demonstrating the effectiveness of their model.
In Brazil, we came across some very innovative governance models.
It’s also the first time we have met managers who talk so much about the importance of “educating employees about this kind of organization and these new practices”.
For example, Ligia from Vagas told us that, contrary to what one might think, it is very difficult for some employees to no longer have a clearly defined position with a salary scale, benefits, areas of power and action, or authority over others.
Ligia explains that it is important to be clear on these issues and not assume that employees will easily adapt to a more empowering, horizontal, and adaptive structure.
To illustrate her point, Ligia mentions the example of decision-making by consent (mentioned earlier in the article).
In theory, decision-making by consent seems to have many advantages and allows for the engagement of employees by making them actors. Again in theory, making this kind of decision simply requires sitting around a table, discussing a decision, listening to objections and taking them into account.
In fact, Ligia explains that effective decision-making by consent requires communicating nonviolently, knowing how to formulate objections, distinguishing between objections and personal attacks, listening actively, etc…
Most employees have not been trained in nonviolent communication, in integrating an objection, etc. To reach a true decision by consent, without frustration, this learning is essential.
The same approach is used by Alexandre Pellaes, Top Voices Linkedin and CEO of the Exboss enterprise, who discussed autonomy with us.
We often assume that empowering employees is a positive thing. Alexandre explains that some managers grant it to employees who are not ready or do not have the ability for it yet.
He further states that, in some cases, autonomy can become a burden: I am autonomous but I can’t do everything by myself. Often, this can be accompanied by frustration and significant pressure. “You asked for autonomy so why do you keep complaining?”.
We came to the conclusion during these meetings that managerial innovations that seem obvious to integrate into enterprises (decision-making, autonomy, transparency, etc.) actually require progressive learning and therefore training time.
As usual, we have also observed in Brazilian enterprises, what we believe to be some difficulties in terms of management.
The struggle to say no: we quickly understood that it is more difficult to say “no” in Brazilian culture. For example, for the first time in our search for enterprises we had many positive responses, enthusiasm and then the absence of responses from the person, without an effective refusal to meet us.
Hugo from the Instituto Serrapilheira commented that in the context of feedback in enterprises, in order to truly understand what the person in front of us wants to convey, we need a very fine cultural reading. Criticism and objections, even constructive ones, will never be frontal. When he arrived in Brazil, he sometimes left a meeting thinking that it had gone well, while his colleague, present at the meeting, knew perfectly well (thanks to his experience and to his decoding of the Brazilian physical and emotional language) that this was not the case.
Similarly, Xavier from Templo told us, “If a Brazilian worker does not know something, he will not necessarily tell you. This can get you in trouble as a manager because you end up with employees who say they can handle a task when in fact they can not”.
Control in enterprises: Gustavo from Sitawi points out that in Brazil, there is a labor law that stipulates that enterprises with more than 25 employees must have their employees clock in and out of work. This is a far cry from the flexibility mentioned above.
Ultimately, Brazil:
