I always say, to have a big dream requires the same effort as having a small dream. Dream BIG !!! — Jorge Paulo Lemann
“Always have a big dream” — Jorge Paulo Lemann. Very few people recognize him, but he is considered the Warren Buffett of Brazil and some even compare his accomplishments to those of visionaries like Walt Disney, Henry Ford and Sam Walton. Lemann surprised the world when he and his business partners Carlos Alberto Sicupira and Marcel Herrmann Telles took over three big iconic American brands: Anheuser Busch, Heinz and Burger King.
The three Brazilians are among the richest in the globe making the Forbes billionaires list, with Jorge Paulo Lemann making the twenty second spot in the list. Lemann and his partners have come a long way and I find their story very inspiring. Together they are experts in the art of business and corporate culture. I admire and believe in the business model they created over the years based on three values: big dream, great people and simple culture. I will discuss briefly Lemann’s journey to success and the simple but revolutionizing corporate culture that now drives results in the three powerful American corporations acquired by the Brazilian and his partners.
Born in 1939, Lemann was the son of Swiss immigrants who had moved from Switzerland to Brazil. His father, Paul Lemann had founded the dairy manufacturing company known as Leco. While attending the American School of Rio de Janeiro, Lemann was seen as the smartest and most talented in his class. Yet it wasn’t just his grades that impressed, he was also a fantastic athlete and excelled at surfing and tennis. He was so good at tennis that he would eventually become a five-time national champion and via his dual citizenship, represented both Brazil and Switzerland in the Davis Cup. It was after competing at Wimbledon that Lemann stopped pursuing his tennis ambitions. In another decision that speaks volumes for his levels of determination, he moved onto another career path in which he could become the best in the world, finance. He was accepted to Harvard in 1958 to study economics, a rare feat for a young Brazilian at the time. Lemann didn’t enjoy his Harvard days, so he successfully completed the course in three years instead of the Ivy League college’s intended four.
After graduating from Harvard, Lemann went on to work at a Swiss investment, Credit Suisse, in Geneve. Quickly after starting at the firm he was dissatisfied with the bureaucratic structure and operating ways of the company that lacked culture and sense of ownership. He returned to Brazil to work for Invesco where he was able to gain a percent equity in the firm, giving him that sense of ownership he craved in business. Shortly after joining, the firm went bankrupt and Lemann searched for other opportunities. His entrepreneurial spirit led to the creation of the investment bank Garantia with Carlos Alberto Sicupira and Marcel Herrmann Telles as the main partners.
The three partners had a vision of how the bank should operate and grow. This led to the creation of a business model similar to that of Goldman Sachs, a meritocracy. In a meritocracy, opposed to a bureaucracy, those who work hard and produce results get rewarded with bonuses and given part ownership of the business. The meritocratic structure was accompanied by a culture of simplicity. Lemann and his partners did not dress in fancy suits or have luxury cars, they wore jeans and khakis to work in contrast to many firms that have a formal dress code. With regards to recruiting, Lemann believed that to be successful the firm needed to recruit the best people and give them performance incentives in addition to a competitive salary. For Lemann the formula for success relies on getting the best people, having big dreams and providing those hard workers with a chance to own a part of the company. With this culture the Garantia bank grew to be the top bank not just in Brazil but in Latin America.
As more talent began to push for part ownership at the top with the Brazilian trio, Lemann decided to expand and involve Garantia in other ventures such as consumer goods. Garantia’s first big acquisition was a retailer called Lojas Americanas, similar to a Walmart in the United States. The first thing they did after the acquisition was change the culture. They began with simplification of the current corporate system in the retailer. In a year the retailer was set on the right track and provided the firm with big profits. After entering the retail sector Lemann set his eyes in the beer industry.
The most popular brands of beer in Brazil were Brahma and Polar which were both struggling to grow. In a meeting with the owner of Brahman, Lehman suggested buying the company and after the owner discussed it with his board they agreed to sell Brahma, making it Garantia’s biggest acquisition. When Lemann discussed his analysis on why he bought the beer company to his partners he says: “Tropical country, hot climate, good brand, young population and poor management” in addition he went on to justify himself saying he carried out an informal market survey where he looked at Latin America and said: “Who is the richest guy in Venezuela? A brewer. The richest guy in Colombia? A brewer. The richest guy in Argentina? A brewer. These guys can’t all be geniuses… It’s the business that must be good.” Lemann again sent a Garantia representative that would re-structure the business into a very profitable one.
After a couple of years, the company decided to acquire Polar the competition and become the largest brewer in Brazil. From the acquisition, the company AmBev was born and Lemann’s big dream was to acquire as many brands all over across Latin America. After this the possibility of a merger with the Belgian beer giant InterBrew, owner of Stella Artois, arises. The Brazilians managed to merge and create InBev the largest beer company in the globe. Like previous ventures they would install their culture in the company and set big dreams to achieve. With these giant ventures in play and the lack of the trio’s presence in Garantia, the firm started to deteriorate and was sold to Credit Swiss. This was a failure Lemann still regrets but did not stop him from achieving his big dream. With InBev the purchase of Anheuser Busch, owner the best-selling beer across the world (Budweiser), was within reach. In the negotiations Lemann and his partners were able to team up with Warren Buffett who owns a big stake in Anhesuer Busch and acquire the iconic American brand and achieve the biggest dream of all.
After creating Anheuser Busch InBev, Lemann and his partners created another investment firm that would seek companies with a great brand but poor management and slow growth to acquire and restructure. This is where Heinz and Burger King fall into and since the Brazilian’s have acquired them they have grown faster into more sustainable businesses with their dream, ownership culture and simplicity mindset.
“Invest always and above all in people” Lemann credits his success to the strategic culture he implemented and the fact that he surrounded himself with the best people and set a big dream. The three Brazilians might not be experts in the art of making beer but they sure are brilliant in the art of business and dreaming. This simple strategy helped Lemann become Brazil’s richest person with a networth of approx. USD 15 billion.
Sources:
https://www.forbes.com/profile/jorge-paulo-lemann/?list=rtb/&sh=3f1f907f65f7
https://en.wikipedia.org/wiki/Jorge_Paulo_Lemann
https://news.miami.edu/stories/2020/08/for-brazilian-investor,-taking-risks-paid-off.html
https://moneyinc.com/jorge-paulo-lemann/
https://www.worldfinance.com/strategy/the-rise-and-rise-of-jorge-paulo-lemann
