Americanas: Telles’ bedside book beyond default – 02/10/2023 – Market

Judging a 200-page book by two paragraphs doesn’t seem to be the best way to define a work. The internet court, however, wasted no time in attributing the billionaire scandal at Americanas to one of the chapters of a book considered to be on the bedside table of Marcel Telles, one of the company’s main shareholders (previously controlling).

The small excerpt that won social networks and clickbait pages teaches how to delay payment to suppliers to improve momentarily —in that year, not always— a company’s balance sheet.

Taken out of context, step 37 of the book “Double Your Profits – How to Reduce Costs, Increase Sales and Dramatically Improve Your Company’s Results in Six Months” turns it into a default manual that fell like a glove for the Americanas case .

What author Bob Fifer, specialized in increasing the profitability of small and large companies, does is establish parameters for a company to obsessively seek profit. And it’s obsessively cutting costs—from personnel to furniture, from reports to office supplies, from inventory to rent—that Fifer focuses his load.

“Some business owners are so (wrongly) focused on customers that they fail to see the enormous profit opportunity that exists within the company itself,” he writes in step 48 (“Be more rigorous with internal functions”).

Of course, the strategic allocation of resources and increased sales are there; after all, argues Fifer, the goal is not a perfectly satisfied customer, but a customer who gives the company maximum profit.

The strategy proposed by the author is for the administrator to focus obsessively on financial results, and if possible only on that. To do so, it needs a meritocratic company, where all employees have a chance to grow and who are committed to this unbridled pursuit of profit at all costs. Only then will they understand why an extra expense is denied, why layoffs were necessary, why they had to move to a more distant location with cheaper rent.

The rewards for this team should be higher-than-average salaries so that everyone works hard and is committed to the vision of maximum profit. The benefits should be the minimum possible —including Christmas baskets—, since, of course, they represent a cost for the company.

Spending should be focused on what actually brings results, such as the sales team and marketing strategies, which should not be abandoned in times of crisis to prevent the company from “disappearing” to the public.

Today these strategies seem obvious, and even dated (as in the passage where he states that not all office workers need a computer because some of them only use the equipment a few days a week). The book was written 30 years ago, and much of what it teaches is already being put into practice. There are manuals and consultancies out there specializing in leaning a company, training salespeople, setting prices, etc., updated for the fast-paced dynamics of the 21st century.

In addition, the ESG agenda, which did not exist before —but which would certainly be an expense to be cut in Fifer’s view—, has become a requirement on the part of shareholders (although there is a movement against it), and a new generation of professionals has interests beyond the purely financial.

The reader will not find answers to these contemporary questions in “Double Your Profits”, written during the primacy of the liberal agenda and profit at any cost of the 1990s.

At the time, one of the greatest promoters of the work was Jack Welch, CEO of General Electric who transformed the company into the largest in the world at the end of the 20th century. , who have seen their income and salaries grow exponentially.

Welch inspired executives around the world, including the Brazilians Telles, Beto Sicupira and Jorge Lemann, with a short-term results strategy. His idea —later implemented at Ambev, under the Brazilian trio— was to reward the top 20% workers with bonuses, fire the 10% considered the worst and keep the remaining 70% unchanged.

After Welch left, in 2001, GE went into decline, ceased to be a leader in technology and most of its result came from the financial arm of the company, hit by the 2008 crisis. Welch, a strong supporter of Donald Trump, he was no longer the unanimity of before when he died in 2020, but his teachings instructed generations. And part of that is due to “Doubling Your Profits”.

With no publisher at first, Fifer self-released the book and sent it to about 80 CEOs of Fortune 500 companies, according to a 1994 CNN report. Welch was one of them. He liked it and ordered 125 copies to distribute to his senior managers, who then ordered another 2,700 copies (other businessmen did the same).

For profit generation above all else, the book is (or was) an accurate manual, capable of transforming bureaucratic companies from the 1970s-1980s into money-making machines. Today, it should be read with reservations.

One of the author’s teachings, for example, is not to spend too much information — for him, there is a useless desire to be exact, since in the business world most decisions are made by instinct.

But with the wealth of data available today, it’s hard to tell a business owner to stop analyzing it, even if they still don’t quite know what to do with the numbers. Whoever finds out first goes first.

The same goes for the urgency of Industry 4.0, a technology from the world of science fiction 30 years ago.

Going back to the two paragraphs that went viral, today it is common practice for contracts with suppliers to provide for payments over long periods — although some companies, like Americanas, still delay their obligations.

These caveats, however, do not derail the work. It is possible to extract from there techniques to make the company more efficient, improve results and enable better wages for competent employees. It can be especially useful for micro and small companies that do not have access to good consultants or more qualified managers, already versed in cost reduction and profit maximization techniques.

But it is necessary to read with the head of 2023, to prevent a contemporary company from becoming a firm 30 years behind schedule.