Tag Archives: doing business in latin america

Fail Fast? Fail Often?

There is a culture of failure inherent in entrepreneurship and in intrapreneurship (entrepreneurship within a larger organization or company). This culture is summed up in Silicon Valley’s startup mantra of “Fail fast. Fail often.” Failure is often celebrated by entrepreneurs and innovation experts as a way to get to success. A badge of honor to testify that they tried and failed before getting to the next big idea.

There is truth in this concept: in order to create something new or make unexpected connections between things, one has to embrace failure. In education, embracing failure is fundamental for students to take risks with their learning and the way they see the world and interact with it.

Should failure be celebrated? What happens when failure has tangible financial and opportunity costs for business not to mention its impact on entrepreneurs, their families and their friends. What happens when we have different ideas of failure? Has someone failed just because they don’t fit in with what society wants from them?

One of the best analogies of entrepreneurship is: “Starting a business is a lot like jumping out of an airplane and assembling the parachute on the way down.” But what happens around the entrepreneur?

In a series of articles, I will explore the question of failure and entrepreneurship and share with you stories from the entrepreneurship (and intrapreneurship) scene around me. Check out the hashtag #resilientwife to find out more about this new endeavor of mine.

Obviously, entrepreneurs want to talk about failure in the context of success – a sort of rite of passage or journey to creating something of value. Understandingly, no one wants to be defined as a failure or be told that their business is a failure. Here lies the challenge…to represent failure, entrepreneurship and resilience accurately.

EMC

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Community is Viable

Now, more than ever, the power of collaboration is manifesting itself across space and time. Digital tools are helping us to create connections between seemingly disparate interests and to solve problems on a global scale. Nevertheless, in regions in development and, in particular, in Latin America, there exists a range of problems in the public and private sectors that could be solved through collaboration, innovation and excellence. Problems such as energy generation, response to natural disasters, and high school desertion to name just a few. Design thinkers say that collaboration is viable when there is a better understanding of users, a relevant place to prototype ideas and the built-in motivation to implement those ideas. If you turn this around, it holds true that if you don’t have these three elements, collaboration – and the viability of using “community” to solve problems – may just be impossible. What is happening in Latin America, then, to make “community” viable? Perhaps a closer look at these three elements can help us see why the region is falling short.

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First, when we better understand users, we can better address needs and design a product or service that fits those needs. Seems simple, but implementation of this element is difficult in high context cultures such as those that exist in the majority of countries in Latin America. In cultures that encourage alignment with social status and formal social rules, understanding users – and users in multiple interest groups – is a challenge. It involves using interviewing techniques and empathy to gain a complete understanding of stakeholders and usage. Understanding what question to ask and being able to bring the answer from various areas into context, helps form an accurate picture of users and their needs. Striving for a better understanding of users – and using multiple research methods in order to overcome cultural characteristics – is key in solving users’ problems.

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Second, designing solutions must be an interactive process. We will always need a place to work with stakeholders, test assumptions and take risks. This is why innovation centers sometimes fail: they need to work with community and not in isolation from them. Nevertheless, innovation centers in Latin America specifically are extremely useful in fostering more cross functional collaboration and mitigating some of the risks associated with large scale innovation investments in developing countries. Multinationals Dupont and BBVA as well as “multilatina” Stefanini have successfully gained insights and new products through their centers; illustrating that while innovation centers may have their drawbacks, they can be a relevant place to prototype ideas.

Finally, motivation must be present at the idea implementation phase. This means that while we may have a prototype or project, there is always more work to be done in implementing the idea. What can help with the successful implementation of the idea is community. As the old saying goes, people are more committed to that which they help build. If communities are collaborating on ideas that benefit them; they will have a higher successful implementation rate. There is also the possibility for the ideas that spread. Like a TED Talk, a good idea can spread and be implemented much faster when members of community that will benefit from the idea get involved and share their passion around a solution.

Is community viable? Yes it is. But seeing collaboration for what it is – working towards understanding users, engaging users and prototyping with users in the Prototype-Pilot-Product triad – makes community collaboration viable. In Latin America in particular, understanding these elements and their unique challenges in our region, is essential in community viability.

– EMC

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Being True to You

I was at a birthday party yesterday where there were children from many different countries. A blend of English, Spanish, French, Portuguese could be overheard from the various conversations taking place.

I was talking to a teacher, scientist and mother and she described how important it is for children to have a language that they feel comfortable expressing themselves in. She mentioned that there are some students that don’t have a native language because they are third culture kids or because they have been schooled in international schools all their lives that they don’t feel comfortable expressing themselves in their mother tongue.

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From a business perspective, I can draw a connection between “being true to you” in business and “being true to you” as a person. Just as it is important for children to have a language where they feel comfortable expressing themselves, it is important for companies to remember who they are and how they best express themselves. Of course, it is important to go after a new market or offer a new product or service that fits a growing need you have identified but it is also just as important to not lose the language that makes the company – the brand, the following, the DNA that your clients fell in love with.

Being true to you is being to true to the others around you who love you – as a person, a company or a product/service.

– EMC

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Savvy Saturday August 22, 2015

You don’t climb mountains without a team, you don’t climb mountains without being fit, you don’t climb mountains without being prepared and you don’t climb mountains without balancing the risks and rewards. And you never climb a mountain on accident – it has to be intentional.

Mark Udall
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El contexto sí importa

Previa a la visita del Papa Francisco a Ecuador hubo una explosión de comunicación de palabras, frases e ideas atribuidas al pontífice. Muchas de ellas eran hermosas expresiones de la necesidad de unión, de vivir con alegría, de evangelizar y vivir su fe, de tener vidas coherentes y valientes.

Una buena cita encapsula una idea o un pensamiento y de una forma particularmente esclarecedor. Da a lector o al público, la libertad de imaginar la masa real debajo de la superficie de las palabras como un iceberg. Invita al lector de pensar, contemplar y aplicar esta idea en su vida profesional o personal.

Es justamente esta invitación a la contemplación de palabras que a veces nos hace falta cuando se trata de frases o palabras fuera de contexto. Las palabras hermosas se quedan como palabras hermosas o nos conducen hace pensamientos o ideas equivocadas si no se los entienden dentro de su contexto.El arte de la comunicación es alinear las palabras con contexto paraEl contexto sí importa inducir acciones concretas hacia una meta.

Características de nuestro mundo social y físico inmediato – las calles donde caminamos, las personas que encontramos, las palabras que escuchamos – juegan un papel muy importante en la conformación de lo que somos y cómo actuamos.

El contexto sí importa. Con la visita del Papa Francisco y los mensajes que compartió con América Latina y el mundo, no hay que olvidar el contexto de su comunicación. El lenguaje y las palabras no solo describen el mundo pero tiene la capacidad de crear mundos; las palabras conllevan mucho poder.

– EMC

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Business, Negotiation and Fishing – ¿Qué tienen en común la pesca y los negocios?

Today I am posting my article published in AmericaEconomia.com earlier this year. It talks about the vital importance of humility and patience in business – two characteristics discussed during the Global Drucker Forum last week in Vienna, Austria. Here is the link to the article ¿Qué tienen en común la pesca y los negocios? and below is the article in full.

EMC

¿Qué tienen en común la pesca y los negocios?

En una escena de la película “La pesca del salmón en Yemen”, basada en la novela del mismo nombre escrita por Paul Torday, el doctor Alfred Jones, un científico especializado en piscicultura, conversa con un jeque yemenita sobre la pesca. El jeque explica por qué ama la pesca: “admiro a los pescadores. Sólo se preocupan de los peces, el río y el juego”. Más allá, dice, la pesca fomenta virtudes como la paciencia y la humildad.

fly fishing
Courtesy: fishingintheyemen.com

En la pesca se encuentran muchas similitudes con negocios internacionales. Para hacer este tipo de negocios, una organización tiene que salir a otros “aguas” y adaptarse a diferentes idiomas, culturas y prácticas de negocios. Los resultados publicados por las empresas internacionales en sus informes anuales muestran que las alianzas y fusiones corporativas en el extranjero tienen una tasa de fracaso del 40 al 80%, porque no logran los resultados esperados en términos de ingresos, creación de valor o reducción de costos. Una forma de mitigar el riesgo implícito al hacer negocios internacionales -como en la pesca-, es conocer el ámbito donde se quiere estar en la adquisición de información, conocimientos y experiencias a través de expertos locales.

Otra característica clave de los negocios internacionales de alto riesgo es que la empresa tiene que tener fe en que un premio importante le está esperando después de atravesar el proceso de identificación, negociación y cierre del negocio. Un pescador sueña con pescar el pez gordo después de invertir innumerables horas esperando que un pez se acerque y muerda el anzuelo. Lo mismo sucede con los atletas y equipos deportivos exitosos. Tienen que saborear la victoria y estar preparados para ella, puliendo sus hábitos de tal manera que sepan por instinto cómo actuar antes de que se acerquen sus competidores.

Wayne Gretsky, el atleta de mejor puntaje en la historia de la Liga Nacional de Hockey canadiense, decía: “un buen jugador de hockey va donde está el disco, un gran jugador de hockey va donde estará el disco”. Un proyecto internacional de éxito requiere de visión, práctica y acción oportuna.

Hay una similitud importante con la pesca durante la fase de negociación de un proyecto, que tiene que ver con aguas quietas y aguas turbulentas. Cuando el agua está quieta, los peces se toman más tiempo en estudiar la situación y probar el anzuelo. En cambio, cuando los peces se encuentran en aguas corrientes de ríos, riachuelos o torrentes, existe mayor probabilidad de que pierdan la oportunidad de comer si vacilan mucho tiempo. Los peces actúan rápidamente y sin reflexión en aguas turbulentas. Los negociadores internacionales usan como ventaja el sentido de urgencia en la identificación de factores en el ambiente y la manipulación de los mismos. Los negociadores exitosos pueden cambiar la percepción del ambiente para lograr los objetivos de la negociación o simplemente si sienten que el ambiente es demasiado cómodo. Para ellos, la negociación es un juego donde los cambios sutiles pueden afectar el resultado logrado.

¿Y vale la pena la pesca en otros “aguas”? Los mercados emergentes están creciendo el doble que los mercados desarrollados, por lo tanto, el mercado emergente es atractivo. Sin embargo, esto no significa que las empresas en los mercados emergentes no exploren oportunidades de expansión hacia mercados tradicionales.

De hecho, el Boston Consulting Group (BCG) publica cada año un estudio de “global challengers” (contendientes globales) de los mercados emergentes que están entrando con éxito a los mercados desarrollados, con creciente presencia de mercado o, a veces también, con la compra de empresas de dichos mercados. Un ejemplo estrella es el Grupo Bimbo que compró las operaciones norteamericanas de Sarah Lee’s y luego las de Weston Foods en los EE.UU., para convertirse en la mayor empresa de pan en Norteamérica, desde el año 2009.

Los proyectos internacionales, al igual que la pesca, requieren de fe, perseverancia y humildad. A veces se busca el premio en los mercados emergentes y a veces son las firmas latinoamericanas las que incursionan con firmeza en los mercados tradicionalmente establecidos y lo hacen con mucho éxito.

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Why Latin America? 5 ways that opportunity knocks

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Opportunity: we look for it every day. It’s what our organizations are built upon, it inspires us to create new products and it helps us set our sights and company vision on creating something of value; today’s best new ventures are those that act on an opportunity of changing (even just slightly) the status quo. But if there is opportunity at home, why consider expansion to a region like Latin America?

And that’s exactly the question posed to me this year by a group of executives in a stuffy office in downtown Quito, Ecuador. It’s an all too familiar question according to my colleagues in trade and investment promotion. Partners, clients and sponsors all want to know: “What’s the big deal about Latin America?”

Based on ten years of working in Latin America and conversations with hundreds of investors, entrepreneurs, employees and corporate executives, there are 5 reasons that seem to resurface when we talk about the “why” behind business expansion and opportunities in the region:

1) Heterogeneous
The fact that Latin America is a heterogeneous region gives companies a wide range of possibilities for market entry, collaboration and how they manage their operations. Countries in the region vary in their acceptance of foreign investment and ease of setting up a business representing opportunities for innovation, partnerships, and use of local resources. I have collaborated with international brands that have been wildly successful in this dynamic region – mainly because they didn’t try a monolithic approach to market entry and expansion in the region. BMW Group and their country specific local partnership strategy (usually allowing one well established business group to manage the brand in each country) is one example of a successful approach tailored to specific markets in the Latin American region.

2) Economic Powerhouse
Latin America represents a $4.8 trillion economy with about 600 million citizens. Brazil is seen as an economic powerhouse but there is no denying that rapidly growing Mexico and resource-rich countries like Chile, Colombia and Peru (the Andean Region) also have tremendous buying power. Buying power and growing number of consumers represents an opportunity for new ventures as well as entrenched players.

3) Burgeoning Middle Class
In the last 10 years, 50 Million Latin Americans have joined the middle class and present an opportunity for foreign companies not just as consumers but also as sources of talent from an increasingly well-educated and globally savvy middle class.

Apple is aiming to launch its first retail store in Rio de Janeiro, Brazil by March 2014 in time for the 2014 FIFA World Cup; the rising middle class is driving demand for consumer products and electronics and, in the future, may be a factor in the establishment of more manufacturing plants if public and private sector are able to convince the manufacturing side of business that the talent and opportunity exist in the region.

4) Connected
Mobile penetration in the region is above 100% and Latin America will have nearly 300 million Internet users by the end of 2013 and nearly 400 million by 2017. Public and private sector organizations in Latin American countries are bringing most of their service and product offerings on line making the dynamic region more connected and transparent for doing business. This also brings ample opportunity for brands – from startups to large corporations- to engage with their customers, suppliers and stakeholders.

5) People
Latin American countries have high context cultures meaning there is a real focus on relationship- building and the “context” associated with doing business. While international companies studying their market entry strategy may find these nuances daunting – such as how connected you are – it is an opportunity for foreign firms to start with a clean slate and connect with the right people – and make the right impression – from the very start.

The risk-reward argument in favor of doing business in Latin America doesn’t quite cut it anymore; Latin America used to be touted as an opportunity for brave companies to make large amounts of money: “high risk brings high reward” people would say. But after helping organizations understand, engage and grow their market in Latin America in the last ten years, I have learnt that risk-reward is not the answer to why companies should “bother” with Latin America. Ventures that want to take advantage of opportunities in the region will likely enjoy monetary rewards as well as foster innovation and learning in their organization by diversifying their market, accessing new talent and resources, building a loyal following and creating a strategic contact network.

EMC

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Doing Business in Latin America

Every year the World Bank publishes a report Doing Business on how easy (or difficult!) it is to start and run a business in 183 economies across the globe. The report also makes conclusions regarding ease of business across major trading regions such as Latin America. In the report’s own words:

It measures and tracks changes in regulations affecting 10 areas in the life cycle of a business: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.

I always study this report (and have been doing so since I worked in the Trade Section of the Canadian Embassy in Quito) since it tells me what are the new and reoccurring risks of doing business in Latin America and what my clients might or should be concerned about. It helps me think about mitigating these risk factors and what should be considered in a regional or country strategy. That’s why I’m writing about it here; it prepares entrepreneurs, shareholders, legal counsels and your executive management for success in the region.

Nevertheless, here’s the essence of my post today, if a business has the right people (team, country manager, board of directors etc.), the right “can do” attitude and the right market (profitable, growing and strategic – even if it’s within a region that may be deemed unfavorable for “doing business”) these risks can translate into issues and these same issues into a risk management plan. In effect, the presence of potential risks that chase away a weaker competitor makes doing business for those with the right people, action plan and market for their products or services extremely fulfilling. And that’s the beauty of working in developing markets.

One caveat before signing off; there is a correlation between ease of doing business and corruption. In other words, if doing business is perceived as being difficult due to a plethora of regulations and paperwork, there is always the temptation to take the easy road. I am not advocating this here. I am encouraging businesses to persevere with the highest ethical standards and to grow a profitable and good business; a business that others will want to emulate for its integrity, people, sense of purpose, perseverance and, of course, long-term profit numbers!

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