1 – Can every company use OKRs?
You have probably heard of the OKR concept because of Google, which popularized the method of tracking performance and results in companies. However, it was Andy Grove (frequently cited on podcast episodes), former CEO of Intel, who created the method used to make goals tangible.
The entire idea is, in fact, based on bringing employees closer to a corporation's key objectives — and going beyond revenue and financial metrics. How does an employee contribute directly (and in a way more connected to daily routines and deliverables) to the company's goals?
Objectives and Key Results must be tangible to everyone and well calibrated. Studies indicate that if objectives are too easy or too difficult, team demotivation is inevitable. OKRs are a good measure of this, as they require constant monitoring and reviews. Without measuring results, it is impossible to track how easy (or, of course, how difficult) it is to achieve them — and therefore, it becomes impossible to iterate and identify key execution points.
There is also the question of: who should define these OKRs? Normally, leadership sets the goals, which are then cascaded down across areas, departments, and individuals. The point to raise here is that this ends up limiting what people will do (rather than making them accountable for it), which is at odds with an environment of innovation.
2 – What is the profile of a good entrepreneur?
With the expertise of having already accelerated 300 startups and invested in 114 of them, Ace has developed — over time and after analyzing thousands of pitches — the ability to evaluate a good entrepreneur. Something that, in Pedro Weingertner's opinion, has more to do with behavior than with the professional role one holds.
From this experience, an analysis of the ACE entrepreneur archetype was also born, with five key characteristics. They are:
- Purpose: an emotional connection with the problem one has committed to solving. It does not need to be a display of virtue, but it manifests as something that drives the desire to get out of bed.
- Calculated Risks: it is not about taking out a bank loan without knowing how to repay it later. It relates to moderate challenges and planning, with full awareness of the challenge being undertaken.
- Coachability: the ability to act quickly upon receiving feedback and to be absolutely resilient. Knowing how to receive negative criticism and still move forward.
- Self-Awareness: using self-knowledge to anticipate reactions in stressful situations, as well as the ability to recover from them swiftly. The entrepreneur must be their own consultant in difficult situations.
- Strategic Network: knowing how to leverage your network, often more focused on the strategic than the personal. This is not easy, especially for introverts — a trait commonly found among entrepreneurs.
3 – How successful companies redefine their businesses
About 8 years ago, a global study conducted by the Harvard Business Review on the high growth of companies was published.
This study investigated the importance of three well-known strategies for driving exponential growth in companies:
— Creating new markets;
— Meeting all stakeholders' needs;
— Changing the rules of the game.
And although all of these strategies continue to drive the growth of many companies to this day, there is a fourth element that was not considered and that is currently crucial to the success of any business.
We say this because this element is one of the main reasons StartSe managed to grow 25 times in 4 years.
An element so crucial that, if you do everything else right and set only this fourth element aside, your business will likely not thrive in the long run…
This element is purpose.
But hold on: this is not motivational talk, nor is it about hanging inspiring words on the walls of your company…
I am talking about something that has demonstrably delivered — and continues to deliver — results not only for StartSe, but for many other organizations that generate millions and millions of reais every year.
And you will soon understand why it is so important to pay attention to this if you want your business to remain alive and profitable in the years ahead.
João Brandão, coordinator of the Master's program in Leadership and People Management at FGV and coordinator of the Leadership and High Performance module of the FGV CEO Program, states that Generation Y and Z "have a social and economic awareness, value what is sustainable, and care about being part of the change in what they believe is best for the world."
This basically means that you will not be able to retain your employees simply by offering a salary increase or additional benefits.
Yes, that worked for many years… but, as you know, the world has changed.
Today, current generations seek much more than simple financial achievement. They want greater flexibility, freedom of time and, above all, they want to feel that their work positively impacts the world in some way. That is where purpose comes in.
When your organization's purpose is aligned with the purpose and values of your employees, you are able to:
— Create an excellent organizational climate, which makes everyone happier by giving them greater freedom;
— Extract the best results from each individual;
— Make them work as if they were owners of the company, of their own free will, without the need for pressure;
— And generate exponential profits for your business.
4 – Is working in Squads for everyone?
In plain terms: squads are multidisciplinary teams that work with a great deal of autonomy to arrive at an answer to a given challenge, operating in environments of high uncertainty.
Many companies have misconceptions about what Squads are and how to implement them. It is not enough to place people from different areas at the same table. It is necessary to give them a common objective (a major company challenge, for example).
The best-known use — and also the origin — is in software development companies, with a focus on gaining agility in product delivery. But what does this entail? Lean thinking, placing the customer at the center, autonomy for decision-making, a complete product vision, and continuous delivery.
The direction is singular: "the company needs to reach this objective. Do it however you see fit, with whatever processes you deem appropriate, as long as the result is delivered." Yes, we can emulate the environment of a startup, in the sense of granting autonomy and agility to shape the product based on customer feedback — and redirecting the course whenever necessary.
In Squads there are no titles, but there are roles, such as the Product Owner, responsible for keeping the project on track from the customer's perspective, and the Scrum Master, responsible for routines and processes.
If the Squad concept does not apply to the company, there are other ways to adopt Agile in the company's day-to-day operations, such as exploring agile cells, agile routines, etc. Each level of implementation can be tailored for different areas of the company.
5 – Books every entrepreneur should read
We love recommending books, especially to our entrepreneurs, and sharing the lessons from this journey. Some books are directly related to business, others are more motivational, some are technical… We start with the essential trio (and go much deeper on the podcast): The Startup Owner's Manual, by Steve Blank, whom Arthur is a fan of and calls the "Kotler of entrepreneurship."
The Lean Startup, by Eric Ries (who, incidentally, will be visiting Brazil soon — but that is a topic for another note), a disciple of Blank and one of the pioneers of the lean movement.
Business Model Generation, by Alexander Osterwalder, which we do not use at ACE. I find the concept confusing, but from a methodological standpoint, it introduced the canvas concept — from which several post-it workshop models are also derived.
Other highly recommended titles are The Innovator's Solution, by the frequently cited Clayton Christensen, and High Output Management, by Andrew Grove, which covers fundamental management concepts.
To read (or listen to) the complete list and all the commentary, just click here!
6 – Magazine Luiza Case Study
The overwhelming majority of Brazilians still overlook this tool in their businesses…
But Brazil's largest retailer achieved that title precisely by mastering what only 1.6 percent of domestic companies use.
If you invest in the Brazilian stock market, you certainly know it… its shares are simply the best-performing ones since 2015… reaching a cumulative growth of 1,134 percent.
Of course, Magazine Luiza's story has not always been positive. In fact, its IPO took place in 2011, and in 2015 (before the boom), the company reached its all-time lowest share price.
But adopting a new method was what allowed the company to grow more than 10 times in just 4 years.
Magazine Luiza underwent a digital transformation and began operating actively as an e-commerce business — something other retailers were already doing as well.
What truly drove the company's step-change was the implementation of a tool developed by a man named Guilherme Treviso.
Consider that Magazine Luiza is a retail and direct-offer company, meaning the shopping experience needed to be fast. And the objection that most often delays a retail customer's decision is price.
So Guilherme and his team developed a pricing methodology for the company that transformed the customer experience for the better…
They needed to find a way to automate the discount process in a manner that served the customer while minimizing the company's losses.
Since the price one person is willing to pay varies greatly from another… it would have been impossible to find a way to personalize discounts for each user… were it not for Guilherme Treviso's expertise in Artificial Intelligence.
Before this tool, a user would take up to 40 minutes to complete a purchase (more than enough time to give up on it). Today, by having a personalized experience and receiving an offer at the ideal price, the average purchase time has dropped to one-tenth and transactions are typically completed in just 4 minutes.
This tenfold reduction in purchase completion time may be directly related to the company's tenfold growth over the past 4 years.
Even at its worst moment, it was not difficult for Magazine Luiza to become Brazil's largest retailer once they began leveraging technologies the rest of the country was ignoring.
When fewer than 2 percent of companies in your country use a technology capable of optimizing and automating processes, you have the opportunity to outpace all your competitors by being the first to adopt it.
That is why we invited Guilherme to be one of the speakers at Brazil's largest Artificial Intelligence event, Inteligência Artificial Conference, to share what he did to structure the automated pricing dynamics of Brazil's largest retailer.
Organized by StartSe in partnership with I2AI (International Association of Artificial Intelligence), the event will take place in São Paulo on October 30th. It will bring together names such as Alexandre Del Rey (I2AI), Samir Araújo (Amazon Web Service — AWS), Jordi Torras (Inbenta), Gisele Takekawa (Ambev), Sandro Giovanni (Embraer), Steven Choi (Olivia), and many others, to discuss the current applicability of Artificial Intelligence in their companies.
7 – The Reserva Innovation Model
How does a seller of board shorts in Ipanema generate 400 million in annual revenue and have its company ranked as the only Brazilian entry on the world's most innovative companies list according to Fast Company?
Simple: by building a business company that uses technology rather than a retail company that sells clothing:
"Today we are a business platform that scales different ideas through logistics and technology. This platform is a kind of motherboard, a hub that serves all the group's brands, combining administrative, financial, technology, logistics, supply, and expansion functions," defines Rony Meisler, CEO of Grupo Reserva.
One of Reserva's differentiators is a mindset capable of turning failures into opportunities. Today, one of the group's new projects is Faça.VC, where any designer can open their own online store.
The designer uploads their artwork to the platform and Reserva then handles the rest — developing and printing the product, completing the delivery, and processing the payment.
The seed of this project grew from a failure with the Use Huck initiative, a fashion brand created in 2011 by TV host and company partner Luciano Huck.
By mistake, a print featuring the carnival phrase "Vem ni mim que eu tô facin" was applied to a children's t-shirt. The internet caught wind of it and began accusing the brand of promoting pedophilia. The Use Huck brand had to be shut down.
"Today, the Faça.VC project is already ten times larger than Use Huck. In that sense, Grupo Reserva is very similar to Amazon. You think a business has ended, but in reality only the name ended. We keep the technology and apply it to new propositions."
Another major insight from the brand is its Customer Centric vision. Rony keeps a small notebook called Experiência Reserva, where all the great experiences he and his team of employees have tested to enhance customer delight are recorded.
From that notebook — with more than 5,000 entries — projects were born such as the Now system, a sales registry integrated with the customer's CPF that displays which Reserva products have the highest purchase potential for that customer.
And from Now came Reservado — products selected with Artificial Intelligence, delivered to the customer's home. The customer tries them at their leisure and chooses what they want. The salesperson charges the purchases to the credit card and collects whatever was not chosen. "Now Reservado already accounts for 23 percent of the network's revenue," states Meisler.
It is not new technologies that will reinvent companies, but rather the way leaders and managers use those technologies to create something new for their customers.