DREAM BIG: How the Brazilian trio behind 3G Capital acquired Anheuser-Busch, Burger King and Heinz

Category: Business
Reading time: 4.5 hours
Rating: 6/10

This book tells the stories of the career of the richest man in Brazil, Jorge Paulo Lemann, and his two main associates.

Jorge Paulo graduated early from Harvard University with a degree in Economics and immediately began working in the financial sector at Brazilian banks. After ten years of making numerous connections and some money (about $ 200,000), he became unemployed, but set out to build his own bank. By copying the same meritocratic and results-oriented business ecosystem as Goldman Sachs, he turned his bank into one of Brazil’s best-known financial institutions, earning a lot of money in the process. During the next decade of work and development of his firm, Jorge Paulo met two of his best workers (who later became partners) of his firm. When the bank began to decline in results and quality, it sold it and made about $ 200 million. Jorge Paulo and his two partners started their own private equity firm, acquiring Anheuser-Busch (the largest brewery in the world at the time), Lojas Americanas, and Heinz, all multi-million dollar companies.

Here are some of JP’s most important career ideas and strategies for running a business:

– The 10 main lessons of the group:

1) Always invest, especially in people
2) Don’t be afraid to dream big and use it to support your momentum.
3) Create a meritocratic culture with appropriate incentives for everyone.
4) You can export a culture to different industrial sectors and geographies.
5) Focus and focus on building something big and durable; the money will follow
6) Simplicity is gold!
7) Being a fan is good
8) Discipline and patience are key, especially in difficult times.
9) A high-level, disciplined management committee with aligned motives and goals is a powerful tool
10) Find advisors, consultants and mentors, and also connect them with each other (added value)

– Jorge Paulo and his associates preached that meritocracy, low costs and a quality team with aligned goals were the main ingredients for a successful business model.

– Finding, training and maintaining quality workers is a continuous effort and a priority.

– Everyone’s income must be stimulating, fair and in sync with the interests of the company. At the beginning of his bank’s history, Jorge Paulo wanted to make sure everyone received fair compensation, but not so much that associates felt complacent and comfortable with their current situation. The bonus-driven meritocratic system at your bank could turn an intern into a partner, as long as they prove worthy. He met his 2 main partners this way.

– The 20-70-10 rule: employee evaluation was key to maintaining quality as the company evolved. Each year, JP would amount to the top 20% of workers, take the middle 70%, and fire the worst 10%. This was the best way to keep talent on the roster and instill a sense of urgency and high-level work in the company.

– The main objective of a boss is to choose people better than him to continue the legacy of the company.

– Leadership comes from clear ideas and the daily example of minimal details.

– A good company always tries to improve. There is always room for improvement. Even when he was a billionaire past retirement age, JP was still looking for his next investment. This also says something about how what he does is part of himself, and money is not the main goal.

– Innovations are great, but copying good models is much easier

– The education and training of associates must be continuous and rooted in daily activities.

– A big, challenging, common and essential goal helps everyone to work together.

Some other interesting ideas and facts:

– JP and his billionaire partners were extremely “common.” They often wore jeans and T-shirts, disliked flashy cars and houses, and avoided press attention. The main reason that Banco Garantia went bankrupt and eventually sold was because most associates made too much money, became complacent, and got distracted by their material possessions.

– When the bank began to make huge sums that were not all given as bonuses (to avoid distractions), the trio would look for companies in which to invest with their new profits.

The business trio weren’t afraid to fire low performers. Whenever they acquired a new business (such as Antarctica and Lojas Americanas), they generally followed a barrage of fire.

– This opened space for new young talent, but also reduced many costs and inefficiencies.

– Before making monster acquisitions, nobody knew much about the industry in question (drinks and beer, or retail). However, the trio sought out mentors and experienced people to help and guide them with valuable information. After a few months of intense mentoring and studying, they already knew enough to change the business.

– They considered themselves “one trick ponies” and always copied proven models and systems in their new acquisitions (always getting excellent results).

– Acquiring Antarctica may not have been the best decision on paper, and they admitted they were lucky to skip due diligence, which would have prevented them from going through with the purchase.

Sometimes being lucky is better than being good.