Jorge Paulo Lemann, alongside Steve Jobs, has become one of the leading sources of inspiration for Generation Y and Z professionals (born between the 1990s and 2000s), according to research conducted by Page Talent, a recruitment firm specializing in internships and trainee programs, and by Inova Business School.
Among Lemann's achievements are the acquisitions of companies such as Burger King, Kraft Heinz, Lojas Americanas, Budweiser, and several others.
These are the three main steps he has followed across his most significant business ventures:
1 – Efficiency
What we refer to here as efficiency is that billion-dollar question that great companies ask themselves constantly: “How can we perform better tomorrow than we do today?“.
If you don't have an answer to that question right now, then you are on the right track. That is precisely the point.
This is how Lemann always prepares himself to be one step ahead in his businesses.
3G Capital is a prime example.
The 3G investment fund is built on an aggressive strategy of investing in established brands, followed by rigorous cost-cutting through a method known as Zero-Based Budgeting (ZBB).
The idea is that every expense must be justified annually, regardless of how small it may be. This helps redirect the costs identified through ZBB into investments that can accelerate sales growth.
For instance, when it came to Anheuser-Busch, a multinational American beer manufacturer acquired by InBev, Lemann observed that the heirs and executives enjoyed a lifestyle of extravagant perks:
They had six (6) private jets and two (2) helicopters, with twenty (yes, 20) pilots available to the company. And when they flew commercially, they always traveled first class and stayed in five-star hotels.
At InBev, things changed; executives travel in economy class and stay in hotels rated three stars at most. Meals are taken at modest restaurants.
Studying economics at Harvard was a decision that permanently changed the way Lemann sees the world around him.
By living and working alongside professionals and students considered the “best in the world” in their respective fields, he understood that bringing the best talent into his companies would make those companies winners as well.
This leads us to the second step:
2 – Meritocracy
A major concern for J.P. Lemann has always been surrounding himself with the right people — talented and committed individuals, much like those he encountered at Harvard.
He understood that “talent wins games, but only a team wins championships.” If you have not just one person, but a team of talented individuals within your company, you will have a differentiator and a competitive advantage to sustain the business for many years.
But how do you attract and retain that talent, preventing them from “escaping” to other companies? By applying the principles of meritocracy.
The rule is simple: perform well and be rewarded for it.
Among his preferences was seeking out employees with certain characteristics: young, from middle- or lower-income backgrounds, intelligent, and driven by the desire to succeed financially.
It may sound like an overstatement, but his results prove that these choices work — as when he hired a young man from the suburbs of Rio de Janeiro, brought into Banco Garantia at the age of 16, who by 32 had become one of J.P. Lemann's own partners.
Compensation and career advancement within Lemann's companies are based solely on performance, with no consideration given to tenure.
There are 3 levels:
1 — Entry-level: receive a fixed salary plus profit sharing;
2 — Commissioned: receive a percentage of the company's total profits; and
3 — Partners: receive commissions and dividends.
This leads us directly to the third and final step:
3 – Partnership
After all, what is partnership? It is a collaboration between partners and employees, in which those who achieve the best results are offered the opportunity to become partners in the company.
The model is part of the culture of major North American financial institutions, such as Goldman Sachs, which promotes high-performing employees with the goal of making them partners.
In Brazil, the first company to adopt this model was Banco Garantia, acquired by Lemann in 1971 alongside a group of partners.
That company was the seed of the model still maintained today by 3G Capital.
Marcel Telles and Beto Sicupira were employees of Lemann in the early years of Banco Garantia, and rose through the ranks to become his principal partners today.
Partnership is a powerful incentive for employee growth within companies — a way of keeping people motivated that delivers tangible business benefits in the form of stronger results.
The model that originated with Goldman Sachs in the United States came to Brazil through Banco Garantia and is today present not only in renowned firms such as XP and Messem Investimentos, but also in numerous startups both inside and outside Silicon Valley.
Companies that are capable of keeping their employees motivated will be rewarded with a competitive advantage powerful enough to conquer their markets.
“I learned that, in a partnership, or when hiring people, you should not surround yourself only with people who are like you. The goalkeeper is just as important as the striker. And I learned to treat the goalkeepers in my companies well.”
J.P. Lemann
Source: Startse