Laércio José de Lucena Cosentino

Laércio José de Lucena Cosentino
CEO

TOTVs SA

Laércio Cosentino holds a BA in Electric Engineering. He has held the position of Council President and TOTVs President, besides having temporarily taken other management positions as Market Strategy Vice President. He was director of SIGA between 1978 and 1983 and founded the company in 1983, acting as partner manager. Mr. Cosentino is the author of “Dbase II and III”, “Windows”, “Brazil is not Risk, it is Opportunity” and “Genoma Enterprise”, and is currently an independent member of the management council of Redecard S/A.

 

Quotes

Laércio José de Lucena Cosentino

Laércio José de Lucena Cosentino

CEO, TOTVs SA

You can no longer analyse one country in isolation; all are part of the same context, so that anything that happens within a given group of countries will affect the whole world in some way.

Laércio José de Lucena Cosentino

Laércio José de Lucena Cosentino

CEO, TOTVs SA

Our current challenge is to transform our brand into a global benchmark. While various Brazilian companies have done some interesting work in recent years, there are still only 10 or 20 well-known Brazilian brands, and that is very few for a country hoping to come through this economic crisis strengthened and become the world’s sixth or fifth economy in the near future.

Laércio José de Lucena Cosentino

Laércio José de Lucena Cosentino

CEO TOTVs SA

Brazilians must not be users of technology but owners and suppliers of it. The more technology a country has, the more successful it will be in this knowledge-based world in which we live.

Laércio José de Lucena Cosentino

Laércio José de Lucena Cosentino

CEO, TOTVs SA

If we don’t work now on training people, a shortage of professionals could affect growth.

Laércio José de Lucena Cosentino

Laércio José de Lucena Cosentino

CEO, TOTVs SA

New recruits need to participate in 90 to 120 days of training. This training period used to be shorter, because they arrived better trained. So we have to plan much further in advance and have candidates in mind, in order to recruit in time.

Laércio José de Lucena Cosentino

Laércio José de Lucena Cosentino

CEO, TOTVs SA

The big challenge is to take that knowledge and bring it into the organisation. “Collaborative individuals” ‒ who are totally connected ‒ are generating a need for collaborative companies.

Laércio José de Lucena Cosentino

Laércio José de Lucena Cosentino

CEO, TOTVs SA

The leader of the future is collaborative and takes a very objective approach to diversity.

Laércio José de Lucena Cosentino

Laércio José de Lucena Cosentino

CEO, TOTVs SA

These are good times for Brazil; the state could already have been slimmed down. There’s no way you can be competitive with a tax burden like ours. And to reduce that burden, the government needs to close the purse. There’s only one way: spend less and spend right.

Laércio José de Lucena Cosentino

Laércio José de Lucena Cosentino

CEO, TOTVs SA

The challenge of this knowledge-based society is to succeed in making your presence felt in a world that no longer has any borders and in which the resources are practically the same for everyone.

 

Read interview transcript

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The world economic situation has changed. And research shows recovery to be slower than predicted. In Brazil, the circumstances are a bit different. How do you view the situation? What, in your opinion, are the main factors which could drive recovery?

The world is becoming more and more integrated. Distances and physical and geographical barriers are no longer an issue. You can no longer analyse one country in isolation; all are part of the same context, so that anything that happens within a given group of countries will affect the whole world in some way. For Brazil and the emerging countries, these are good times. What we need is a strong economy, in which people consume more and produce more, jobs are created and a virtuous cycle is developed. At this historic time, this virtuous cycle is much closer to some – not all – of the emerging economies than to the more traditional economies. That is why in terms of the crisis, we need to look at the overall context of all countries with open economies and see how they are confronting their problems; after all, whether you like it or not, everyone suffers in some way in this critical context.

As far as Brazil is concerned, there may have been a more accentuated slowdown this year than there should have been, but that needs to be considered relative to the business sector’s high expectations for growth in the first quarter of 2011. On average, those expectations have fallen throughout the year. But compared to other countries’ growth, these are still good times for Brazil. I believe that 2011 was more a year for getting on course, and that the world has yet to overcome the challenges. The impact comes from the US economy which, even with all the resources the government has injected into the economy, has yet to show signs of recovery; meanwhile, there are also problems in Europe, where countries are seeing what it means to be part of the euro, in terms of currency, culture and proximity between nations. I think they are now realising that they failed to do what was necessary a long time ago. In addition, there was the earthquake in Japan. So we’re looking at three factors: first, an economy showing no signs of growth (USA); second, a group of countries going through integration and the consolidation of the euro (Europe); and third, an economic downturn as a result of a disaster (Japan).

How do you view politics in the Arab countries?

That is a fourth factor: this quest for freedom in the Arab countries. These are issues waiting to be resolved.

TOTVs seems to be successfully weathering the storm, since it had an excellent third quarter.

TOTVs is a company which develops technology and systems, and applies that technology to its systems and to systems that make its customers increasingly competitive. This activity enables us to maintain a balance, irrespective of the economic context. There are two reasons for becoming more competitive: when the economy is healthy, you need to become more competitive to grow and stand out; when the economy is unhealthy, you need to be competitive in order to reduce costs and use the structure to achieve higher productivity. What changes is the focus. So the software sector is ultimately one which suffers least with the crises, because there are always reasons for someone to put a piece of software in place, whether at a time of great dynamism or a time of crisis.

That line of reasoning suggests you need to recognise when it is time to change the focus.

Absolutely. We have solutions for large, medium, small and micro-enterprises, but our major focus is to supply software that generates competitiveness for small and medium-sized companies. In a crisis, the first companies to be affected are the big global ones. Meanwhile, among small and medium-sized companies, much local and regional trade goes on and, in view of the current situation in emerging countries, those companies are hit by the crisis but to a lesser extent. Furthermore, we operate in 10 sectors, including agribusiness, finance, manufacturing, education, health, legal, HR and engineering. This enables us to dilute the impact and hedge our operations. When there is a crisis, no one stops studying or going to the doctor’s. You may lose out in manufacturing, but perhaps not in agribusiness. So basically we manage to have a market mix and tailor our sales thrust to the circumstances.

What about the fact that TOTVs operates in a number of European countries?

We are present in 23 countries, in practically all of Latin America, in Portugal and in Angola, with 12,000 employees operating across 10 sectors. Our current challenge is to transform our brand into a global benchmark. While various Brazilian companies have done some interesting work in recent years, there are still only 10 or 20 well-known Brazilian brands, and that is very few for a country hoping to come through this economic crisis strengthened and become the world’s sixth or fifth economy in the near future.

In the software sector, Brazil competes with India, which is also an emerging country and isn’t China, which is way out in front.

Some fantastic marketing work goes on in India and that is lacking in Brazil, although the last government did give wide publicity to the “Brazil” brand and restored some pride in being Brazilian. But in terms of marketing in the technology sector, India has done a very good job. So much so that people say: “India is a country of technology companies.” That’s not true: India isn’t a competitor in software applications; it is a major supplier – perhaps the biggest – of labour for systems software coding. But it is the US corporations which own the patents for the design and conception of the products. Even so, India has managed to occupy this niche because its population speaks English and have really good technical know-how with compatible wages. But if we list the world’s top 10 software companies, none of them are Indian. Meanwhile, Brazil has TOTVs, there are a number of US and German companies and the Chinese are coming on the scene.

You said China is coming into the picture...

The thing about China is that it has a series of rules, such as requiring companies to have Chinese partners in operations, to open up their technology, and so on. Among the software applications companies to have set up there, few, if any, have been successful. But China is nevertheless a growing economy – and growing considerably – which strengthens its software companies. Brazil needs to think a bit more about that, because China belongs to the Chinese and we are in a global economy in which we can’t isolate ourselves in any way. We must take part in everything that is happening, but we must think a bit more in terms of country and region in order to create jobs with high added value. Brazilians must not be users of technology but owners and suppliers of it. The more technology a country has, the more successful it will be in this knowledge-based world in which we live.

Looking to the near future, what is the major risk to growth for TOTVs?

The main concern for TOTVs – and for Brazilian companies in general – is a lack of skilled labour. This is a major limiting factor for Brazil today. For growth you need financial investment in infrastructure and you need people – qualified people who are able to carry out the plans of the companies who are set up here. Today there is a deficit of skilled labour in all sectors, from technical posts to less skilled labour, from the building trade to the transport sector.

Research has highlighted the issue of labour scarcity in increasingly stark terms. Has TOTVs had to make any changes to its strategy in view of this difficulty?

No, so far we haven’t had to alter our strategy. But we are of the view that if we don’t work now on training people, a shortage of professionals could affect growth. This is already reducing profit margins for some companies, because when a given occupation is in short supply, its market value rises.

How do you deal with that? What strategies do you adopt? A lot of companies resort to delivering their own training or else seek it abroad...

That’s right. We have to invest a lot in training, trainee programmes and skilled labour programmes.

New recruits need to participate in 90 to 120 days of training. This training period used to be shorter, because they arrived better trained. So we have to plan much further in advance and have candidates in mind, in order to recruit in time.

Regarding pay and benefits policy, has TOTVs had to make changes to attract new staff?

There are two concepts: being a good company to work for and being a company of choice to work for. TOTVs has opted to be a company of choice in technology development. Working to make the brand desirable is a way to attract recruits. You also need to have a very good training and staff challenge programmes in place. Lastly, you need to offer good salaries and benefits. If managers only focus on salaries and benefits, they become very vulnerable. Firstly, it greatly increases their costs and secondly, it attracts people who move on as soon as a better financial offer comes along. So you’ve got to focus on these three aspects and put in place challenge, training and performance analysis programmes.

In terms of HR management, has TOTVs made any changes to HR reporting?

We have always been pioneers on this. We call HR “human relations” rather than “human resources” and our core value is that we are a people-based group. We believe it is not technology which makes the difference, but people. The differential is always people – those that do and those that consume. That is why we give the area a high status within the company. Our HR department has always been directly answerable to the CEO, something which is only now in vogue.

What are the main attributes which TOTVs values in its staff?

The main thing is their willingness to rise to challenges and pursue their dreams. Technical know-how can be acquired through training, but this sense of challenge, this impetus to really chase after your goals and be part of a team that’s in it to win, is something that’s more difficult to put into a person’s career. That is something we set great store by.

In your operations outside Brazil, is there also a labour shortage? Do you have to send people from Brazil?

Our major operations are in Brazil and Latin America. In this region, each country has its own market, of differing sizes, but the challenges are practically the same. We live in a large region, with two languages (Portuguese and Spanish), but with very similar dilemmas. The point is some countries managed to get through the difficulties more quickly.

What about the current gap with Generation Y? How do you deal with that, in a technology company?

Over the last year and a half, we have been putting in place a means of administrating the company which has ended up becoming a product. It’s called “By You” and is a corporate social network, which is being extended to our customers. In October 2010 we set ourselves the challenge of being the first company to be 100% connected, and created a collaborative environment covering the entire organisation. Today, our 6,000 direct employees, plus our 6,000 franchise staff, are all connected via a corporate social network, in which communities are set up and all sorts of innovation and communication goes on. We believe we need to prepare our company not only for Generation Y, but for the generations to come and the new society that is being formed.

For the first time in history, human beings are at the forefront of companies. In terms of technology, historically innovation focused on companies. Telex, faxes and mobile phones were intended for corporate use and only later came to be used by people. Now concepts of social networking and network processing have become widespread in society. We have entered the era of the short message, of social networks, spreading information quickly and sharing it with various people.

The big challenge is to take that knowledge and bring it into the organisation. “Collaborative individuals” - who are totally connected - are generating a need for collaborative companies. This major change has been implemented at TOTVs through “By You”.

What are the main benefits of this collaborative company?

The speed of information, the reduction of hierarchies and the stimulus to innovation processes. When I have to send a notice to the whole company, I post it on the network. And within a short space of time, I can easily identify how the information has been received, even in a company like TOTVs, which has 12,000 people scattered around Brazil and Latin America. This gives us tremendous agility.

In other words, TOTVs is succeeding in taking advantage of what Generation Y has to offer...

We have to avoid conflict between generations because in five years’ time these people will be working for our companies. In the old days, it was so hard for a generation to change an attitude. Before, no one had a voice; today, everyone does, because anyone can put information online and be followed. All the conflicts we have seen in North Africa were the result of social networks and this extremely rapid connection. The power used to be in the communication medium, in the information domain. Nowadays, the opposite is true: we are sharing knowledge through the internet. What we have to do is take the best of both generations and combine them.

How would you describe this leader of the future?

The leader of the future is collaborative and takes a very objective approach to diversity. This is important because today’s world is very different and requires this collaborative ability from its leaders. A US company, for example, launched a tablet and, after two weeks, said that it was no longer going to produce the product. So this connected society can collaborate to market a product, but it can also kill a bad product very quickly.

What measures, in your view, should governments take to promote growth and ensure that companies remain competitive in this connected world?

We’ve had a president who opened up the market, others that stabilised the country, others that brought in the Law of Financial Responsibility and others that sold the Brazil brand overseas. Now it’s time for a government concerned with promoting productivity and competitiveness in Brazil. In the case of our sector – digital products – for example, you can buy software whenever you like, tax-free. You process the software wherever you like in the world and there’s no way of putting a “software meter” in place to monitor it. Brazilian companies need to be guaranteed the same conditions.

What would that involve?

It would involve a whole series of reforms. We've already come a long way towards having a state which understands all that is happening, but we need to reduce the size of the state. These are good times for Brazil; the state could already have been slimmed down. There’s no way you can be competitive with a tax burden like ours. And to reduce that burden, the government needs to close the purse. There’s only one way: spend less and spend right. When we talk about competitiveness, we don’t mean revenue to support the state, but for investment. That would make all the difference.

Has TOTVs looked at social and environmental issues as a way to increase revenue and reduce risk?

We believe that all successful companies should give something back to society. Since 1998 our Institute for Social Opportunity (IOS) has trained over 18,000 deprived young people in IT and helped them find their first job. Last year, over 40% of these newly trained young people were employed by our customers. As regards the environment, we can be said to be a non-polluting company: our activity has a very low impact, as we recycle computers, motherboards and components which cannot simply be disposed of in a landfill. The software industry is clean. Our biggest crime is paper, but we have already cut down a lot and plan to go further.

On the issue of innovation, which is more important: quality, quantity or speed?

The best innovations are those that are implemented. The tablet wasn’t invented by the people who made a success of it; it was invented years back, then someone took this old platform, created a new concept and made it happen. We believe that the important thing in an innovation process is for it to achieve results.

We have had two very interesting innovation processes: we created the concept of software distribution franchises; and now we are adopting an interface in which all our software applications will be hooked up to social networks. The concept of franchises was TOTVs’ big innovation. The reason behind it was the need to distribute software to small and medium-sized companies in a country of continental proportions like Brazil. The idea was to do this quickly with fewer resources and, most importantly, drawing on the entrepreneurship of various Brazilians, regionally. So the franchising project is a flagship project of ours. Few companies around the world have succeeded in implementing such a structure.

The second innovative aspect, which we are currently developing, is to make social networks the interface for all our software applications. We would like to be pioneers in establishing a “natural interface” in the world of software. As of next year, when users open a piece of TOTVs software, they will be entering a huge social network; from there, they will go to the processes, which will have indicators, which, in turn, will call the software routines. What we are saying is: the important thing is the digital relationship.

How are you preparing the succession process for the leadership positions at TOTVs? Is it a concern?

Yes, I think it has to be a concern for all companies. If a company is looking to become a global corporation, it must always be thinking about this issue; if not, it means it is not looking to perpetuate itself.

How have you allocated your time recently?

TOTVs today has a number of unique features: we never see a crisis as a problem. but as an opportunity; and we always try to have the biggest possible hedge in place so that we can get back on course if the wind blows more to the left or to the right. In view of this, one conviction of ours is that we are a group based on people ? so I spend most of my time trying to understand people. In good or bad times, we are always dependent on people, to develop, buy and sell. A CEO’s main job is to be a good leader, a reference.