Article: Leading and managing in emerging markets

#Leadership Development

Leading and managing in emerging markets

Does poor business leadership lead to less effective management and lower productivity?
Leading and managing in emerging markets

Why has Latin America lagged behind the leader for over a century, having started earlier and from a better footing too? Scientists are not praised for grappling with questions they cannot give answers to. But I am not a scientist, and am old enough not to worry about failure anymore. So I’ll say its management, stupid!

Could it be only poor management? Of course not, but if to poor management we add poor leadership we get closer to an explanation. But why would both management and leadership be poor? Are there not any business schools in Latin America? To that, I’ll say business schools are part of the problem. But why would it be so? Because what management b-schools teach is out of tune with the local cultures. But how could that have happened? Because a dispirited Latin America accepted as good what was good only because it had worked well elsewhere. 

But why would have these Latin Americans become dispirited to the point of unquestioningly accepting the recommendation to work together at odds with their cultural script? Because ever since America defeated Spain in 1898, Latin Americans have behaved like the ‘Six Actors in Search of an Author’, from the Pirandello play — they have the script but no theatre will have them. 

Why did this happen? It was during the Cold War that most business schools in Latin America came to life, midwifed by America. Classes were taught in English with textbooks in English. The best and the brightest students – among those well-versed in English – were invited for further studies in America and came back Americanized and teaching the American business mantra. Now, that mantra is less effective at leading and managing the brunt of Latin Americans who do not speak English and are less well-versed in Anglo-Saxon ways. In Latin America, the mismatch leads to poor business leadership, less effective management and lower productivity. 

The American business school gospel works for the small Comprador class whose role I outlined in my earlier article1, but it fails the majority. The Comprador class furnishes the cadre of foreign-owned corporations, the cadre’s underlying Catholic obedience prevents them standing up to management in Anglo-Saxon quarters who seek to sell, not to buy, and this prevents the Comprador class from fostering innovations or seeking new markets, or perhaps even seeing opportunities. 

Business schools are partly responsible for poor management and poor leadership because the management mantras b-schools teach is out of tune with the local cultures

This Comprador class’ lens distortion became obvious when managers at global soft drink corporations, or global food ones, missed out on the opportunities to simply add fruit juices to soy-milk to create what an Argentine lawyer developed under the name of AdeS. That brand now sells close to $1billion across Latin America. But it was an Argentine lawyer, not a Comprador manager, who saw and seized the opportunity. Interestingly too, is that this lawyer sought only to add value to his soy plantations because his workers earned very little without that. That is why he set the AdeS factory in the hinterland, not the most obvious choice for a factory, and that is why the factory was moved to Buenos Aires when AdeS was bought by an American corporation.

Because there is not much to learn from mainstream business publications on how to effectively lead and manage in emerging markets I set out to figure out how Latin Americans did it before our minds were taken over by American b-schools. I studied 19th century insurrections to figure out how their leaders did it. Their followers accepted deferring payment sometimes for as much as a decade. They were infused by the opportunity to offer their lives for a cause – so Catholic and so Muslim – and exchanged loyalty for protection. Performance appraisals were terminal: death in battle or survival, when the best performers were rewarded on the spot with titles and distinctions which carried no money because there was no money around.  Recruitment was effectively carried out along family lines or among neighbors, and was carried out where the cause’s message would be more readily accepted. 

That behavior at Latin American insurrections could not be more different from what is today recommended mindlessly at business schools, though the traits of our people are still very much the same. Moreover, I sense that some of what made the Latin American insurrections so effective is also at play among the Brazilian samba schools, the Dabbawallas of Mumbai, the Nehru boat racers at Punnamda Lake, and with the Jain Palanpuris diamond traders. They all recruit along trusting lines and reward loyalty, making clan-oriented peoples so effective at their own work. These similarities are so strong that perhaps Columbus was right after all, he might have well hit India when sailing the western route. 

Read more in Alfredo Behrens book Gaucho Dialogues on Leadership and Management, published by Anthem Press. 

Topics: Leadership Development

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