Interview with Professor Vicente Falconi, founding-partner at FALCONI
Vicente Falconi Campos has a PhD in Engineering and was a professor at UFMG (Federal University of Minas Gerais). His is a partner and board member at FALCONI Consultores de Resultado, a company he cofounded. He was a member of the Management Chamber and the Energy Crisis Steering Committee in 2001, and has served on the board of several companies and is a member of AmBev’s board. In the following interview, he talks about meritocracy, setting goals, and how about his involvement in the Department of Education in the State of Rio de Janeiro.
In the consulting business, credibility and trust are paramount. How did you get the nickname “management pope,” making FALCONI national known?
Our learning comes from Japan. We worked with the same consultants who worked on the recovery of postwar Japan, guided by the Americans. It was about ten years of many trips to Japan, and traveling all over Brazil to visit Brazilian companies along with those consultants. In that period, from 1985 to 1995, all the technology, but mainly the way to conduct a consulting company, was absorbed and transformed into 6 books that together sold more than one million copies.
In 1991 I began to provide consulting for the former Cia. Cervejaria Brahma, and I have been a member of its board of directors since 1997. I learned and taught a lot at Brahma. I learned a lot about meritocracy and a financial focus on management. We continue to learn in life. Every day learning a little more. For this to happen we need to love what we do and have the humility to know that everyone knows something more than we do, and can teach us something.
Credibility is the result of hard work, focusing in the client’s need to obtain results. I always say this to our consultants: “We don’t go to a client to make money. We go to help them make money. What we make, over the long term, is a result of what we deliver.” Trust, I believe, results from the values we have practiced and shared in our company with insistence, which translates into ethical behavior above any other interest.
Last year, it was reported that Petrobras would like to adopt the “Ambev model” of management, based on its meritocracy primer. What is this model?
The AmBev model is nothing more than a strict discipline to using the PDCA (plan-do-check-act) approach, coupled with meritocracy and financial focus. The old Brahma and then AmBev have been excellent and constant clients of ours for many years, FALCONI is working with AmBev to this day. This persistence characterizes exceptional companies.
Meritocracy is something that everyone supports, but few people know how to practice it or are willing to face its reality. Are you willing to promote a good employee and set aside a relative or friend who is not so good? Another characteristic is that the choice of the future leaders is made by very clear methods that emphasize the ability to reach goals and alignment with company values.
A financial focus is something everyone says they have. However, what I call the financial focus is actually putting priorities where the return on money is greatest at any level of the company. This isn’t always obvious.
What should be taking into consideration when setting goals?
There are three axes of management: goal setting; organizational, process, and method (PDCA) restructuring. Setting goals isn’t for beginners. First, you need to know where the goals will be set. They are established in indicators previously determined by the strategic formulation of the company. Once these indicators are determined, the next step is to evaluate the earning potential in each of them.
We call these earning potential opportunities “gaps.” Based on these gaps, a first goal statement is made. Each goal is then discussed with its owner, with the executive responsible for achieving it. This discussion must be exhaustive until everyone is sure that the goal is fair and that it will be possible to achieve it, even if we do not yet know how.
What aspect of management do Brazilian companies err the most in?
Everything. Ever company has their strengths and weaknesses. It is rare to find a company that does everything according to the model. In some, the goals are often poorly established, and in several cases, people don’t believe they can be achieved. They start out losing.
In others, the organization and the processes are never reexamined. Now, everything changes around us, new technologies, new government regulations, new materials, new competitors, among others, and therefore our organization and processes must change constantly. I recommend a revision at least every five years.
Finally, the practice of the PDCA management method can be deceiving. Everyone looks at the model and thinks: “I know that.” I usually say that people know how to draw PDCA, but practicing it on a day-to-day basis throughout the company is not something for beginners. It requires a lot of hard work and dedication. There are no magic or instant formulas.
In the current economic environment, what should be the management focus in the private sector?
It is very hard to make such a recommendation, because each case is different. Each company has its own peculiarities. What I can say is that most businesses today are very concerned about costs. I really like to differentiate costs from waste. A cost can be good, and sometimes we should even increase it.
However, waste, expenses that don’t add value, must be constantly eliminated from the organization It is not always easy to see this waste, for we human beings have become accustomed to everything and we end up allowing this waste as a matter of course. It is always good to have someone from outside show you, based on facts and data, where this waste is located. The rest you know how to do!
FALCONI was contracted by the state government of Rio de Janeiro for a consultancy in the area of education. What was your diagnosis and what did you do as a result?
Between his first and second term, Cabral’s government was much criticized for the education results. The State of Rio de Janeiro, even though it is the second richest state in the federation, was in last place in education! The governor sought us out and asked what we could do. After evaluating the situation, we assured him that if FALCONI worked together with the government team, which is our way of working, the State of Rio de Janeiro would be among the top five at the end of his term.
Two stories are worth noting. The first was a meeting of our team with the governor’s entire staff. The Finance Secretary questioned us about our goal and this led to a constructive discussion. I stood up, upset, and said to him: “Mr. Secretary, we know how to set goals, and setting this one was a lot of work. If the governor agrees, he will be among the top five after four years. I won’t allow anyone to doubt me on this.” We came in third!
The second story was the presentation of our proposal to the governor. Before presenting the proposal, we told him the following: “Governor, we will present you a slide. If you agree we will move forward; if not, we will quit before we even present the rest.”
The slide had some key points: (1) appoint of a secretary that was more of a manager than politician; (2) eliminate and political indication for any positions in the Department of Education. We wanted to apply meritocracy, including for school principals; (3) selection of a group of 300 people who would be trained to be share management techniques among the approximately 1,600 schools in the state. It would be like a “state owned management consulting company”; (4) the department had over 100 thousand employees and no HR! We suggested having HR just for the department. He agreed to everything.
It was the best experience we had in education management in Brazil. We achieved the goal. Wilson Risolia, who was the Secretary of Education responsible for the achievement, is now responsible for the education group of FALCONI Consultores de Resultados. An extraordinary person!
Interview published in the February 2017 edition of Bens & Serviços magazine (pgs. 18 a 21)