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Carlos Brito and Why He Is Successful

In: Business and Management

Submitted By Bobtheman
Words 2750
Pages 11
Introduction
InBev is one of the world’s largest consumer products company and is the leading brewer of beer in existence today. This is a company that has grown at an incredible rate over the past few years. Through mergers and buyouts InBev now has notable beers such as Skol, Corona, Stella Artois, Beck’s, and Michelob Ultra among others under their massive and still expanding portfolio. In July of 2008, InBev agreed to buy Anheuser-Busch from its local roots for $70 per share for a total of around 52 Billion Dollars. This huge merger created the largest brewing company in the world and sent shockwaves through the business world. At the center of all this corporate movement is Carlos Brito, AB InBev CEO. Carlos Brito has been the CEO of InBev since 2005 when he took over for John Brock. Brito is a Brazilian citizen and has been a part of Ambev, a Brazilian brewing company, since 1989 after working at Shell Oil and Daimler Benz. Over the next 16 years Brito worked in finance, sales, and operations and watched as Ambev combined with Interbrew, a Belgium brewing company that can trace its roots back to 1366, among others to create InBev. Brito quickly made a name for himself and distinguished himself as a natural born leader. Carlos Brito has quickly become an expert in cutting costs making the companies he has worked for become as profitable as possible. After Inbev bought Anheuser-Busch in 2008 he cut costs by $1.1 billion dollars. In the time since InBev has seen its share prices quadruple. Some may think that Brito is the type of manager who is relentless and employees respect but don’t like; but that is part of Brito’s growing mysticism. How many CEO’s do you of, that when visiting businesses that serve their product, go and inspect the boxes that the beer arrived in? He makes a point to listen to any issues the business may have. Brito is best known for one key attribute, his incredible attention to detail. First and foremost, Brito is running a company. This company’s goal is to make money. To do this at the level that Brito expects, he has to make some hard decisions. Recently Anheuser-Busch InBev has ditched long term suppliers for cheaper options, raised prices on certain drinks, and even started brewing foreign imports here in the United States just to cut costs. Carlos Brito attributes his cutting costs prowess to one man, Jorge Paulo Lemann. Brito met Lemann through a friend of a friend. He was working for Shell Oil at the time and had been accepted into the Stanford Business School. However Brito could not afford it. Lemann, who worked at a Brazilian Investment Bank called Banco Garantia, ran a scholarship program that identified young promising business minded people. Lemann agreed to pay for Brito’s Stanford degree under a couple conditions. One was that Brito keep Lemann up to date on what he was seeing and doing, that if one day he would be in a position to help others reach their goals and potential that he do so, and that when he graduated he consider coming back to work for him. After Brito graduated he went to work for Brahma, which was a Rio de Jineiro based brewer, which Lemann had just bought. Under Lemann and his associates, Brito became an expert at finding ways to lower costs. Without the help of Lemann, Brito would not be in the position that he is in, helping InBev continue its global dominance of the beer market. Brito realized that sometimes all someone needs to become successful is an opportunity. This is why Brito aggressively promotes young employees who show signs of promise. It has created a culture that rewards hard workers no matter what position they hold in the company. Carlos Brito is a great success story but everyone can attribute part of their success to a mentor or a role model. Lemann is that man for Brito and without him the brewing market would not look the way it does today.
Analyzing InBev and Carlos Brito’s Management Style One of Brito’s best attributes is the way he approaches his leadership style. His personal characteristics help make him a successful leader. The business world has developed a set of core competencies, or skills, knowledge, and aptitudes. Brito exemplifies all of these qualities so it is no surprise that he is as successful as he is.
Leadership Competencies The first characteristic is personality. Having a personality that is outgoing, talkative, and assertive is a great asset. When someone is comfortable in making important and influential decisions for the company, it creates less pressure and not as much stress which can lead to mistakes and blunders. Brito’s personality is a perfect fit for his career choice. Brito has embraced his role as being the leader of a multi-billion dollar company and is not fazed by the stressful situations that arise. Brito is also very self-disciplined and that helps in cutting back excessive spending. Another key trait is self-concept. Successful leaders have to be confident in their ability to get the job done. This also can be called the “leader identity”. Once you recognize that you have the potential to be a great leader or that you already are one, then you have an increased confidence in yourself and success is that much closer. One thing that Brito does not struggle with is confidence. Coming from his own personal experiences, Brito could not afford to be tentative or lacking confidence. That confidence has helped InBev effectively carry out numerous takeovers that if they failed would have left InBev in dire straits.
The third trait is drive. This is pretty clear cut when it comes to Brito. To be a successful leader you need to have an inner driving force that motivates you. What Brito does so well is that he has great drive, but he also is driven to help others experience success. He helps motivate others and that fact alone is enough to set Brito in the upper echelon of managers. Another leader who was renowned for his drive and willingness to take companies in new directions was Steve Jobs, whose success in turning Apple into the powerhouse that it is today speaks for itself. Next we have integrity. Having integrity is not only important for upper management, but also for the entire culture of the organization. Having a leader who is truthful and transparent goes a long way in generating a culture of trust and ethical conduct. Dave Peacock, who was the President of Anheuser-Busch at the time of the takeover said:
“The thing I respect most about Brito is that he does what he says he’s going to do. He’s like Abraham Lincoln, only that he is shorter, bald and Brazilian.”
Brito’s honesty gives people confidence in knowing what the plan is going forward and that the company is in good hands. The next core competency is leadership motivation. It says in our book that effective leaders are motivated and want to lead others. It talks about socialized power, which is wanting power as a means to accomplish organizational objectives and goals. This basically means that good leaders do not want power for personal use but to use for the betterment of the entire organization. Brito, even though most other CEO’s do, does not take advantage of having a company car or a company stipend. He believes that he can pay for those things on his own. He wants power to help make InBev a better company and believes that he is the man to motivate his employees to accomplish this ambitious goal. Knowledge of the business is key for any field and especially one as competitive as brewing. Brito has paid his dues and has worked in the beer industry since 1989. When Brito takes over a company he isn’t naïve enough to believe that the other company has nothing to offer in terms of management or ideas. He looks throughout the ranks and decides who someone that would add to his current team is. He absorbs everything and relies on his advisors. This combined effort lends to the fact that Brito is very knowledgeable about his field of business and without that knowledge he wouldn’t be an effective leader. The last two traits go hand in hand. They are emotional intelligence and cognitive and practical intelligence. Brito is a very intelligent man and has used his intelligence to reach the proverbial top of the mountain. His business savvy has helped turn once hapless companies into revenue generating machines just solely from cutting costs. He also has a very calm and cool demeanor and doesn’t make business decisions off of emotional responses to crisis’. The rest of his company knows that their CEO thinks rationally about all decisions and isn’t prone to anger and it creates an atmosphere that genuinely reflects that. Now Brito can get angry and has been known to, but he never lets that emotion get the better of him and he is widely respected for his demeanor in negotiating business deals.
Power and Influence in the Workplace Another key concept we talked about in class that applies here is power and influence and how it interacts in the workplace. Power is defined as “the capacity of a person, team, or organization to influence others”. A key point that sometimes is confusing is that power does not mean actually changing someone’s behavior or attitudes. It’s only the potential to do so. Having the potential to do things requires one to have gotten his power from somewhere. These are called sources of power. The first is called legitimate power. Legitimate power is based off an agreement among organizational members that certain people in specific roles can request certain behavior of others. Brito has this power as he was appointed as the CEO of InBev. Others gave him the authority in the organizations to make highly impactful decisions that could make or break the company. The next source of power is called reward power. Reward power is “power derived from the person’s ability to control the allocation of rewards valued by others and to remove negative sanctions. These rewards are usually doled out as increased pay, time off, promotions, and better work assignments. This motivates the workers to improve. Brito and InBev definitely take advantage of this. Brito is always looking for young, motivated, and promising employees who have done exceptional work. He rewards their efforts with a promotion and a more exciting job opportunity. The opposite of reward power is coercive power. Coercive power is basically if you are not performing to expectations you will be fired. So employees who don’t give it their all or don’t care will be fired by Brito. This is a great motivator but can lead to a negative reputation. These three sources of power mainly come with the territory of holding a position of power. The last two sources of power originate from the person who holds the position. These two last sources of power are the hardest to obtain yet lead to the best results. Expert Power is an individuals capacity to influence others by possessing knowledge or skills valued by others. In Brito’s case his skillset is being able to trim the fat from the company’s expenditures. This power comes from his track record of success when it comes to cutting costs. Even though this is not an issue for Brito but when working to gain job security it is recommended to become irreplaceable when it comes to one certain issue, or becoming the “expert” on that particular subject. It makes you necessary and gives you a certain type of power over your co-workers. The final source of power is referent power. Referent power is also known as the ability to influence others on the basis of your reputation. It’s also based partially on your charisma and your ability to win over people. When you are liked and respected by your employee’s it gives you power over them. Brito is widely respected by his competitors and members within his own organization. Miguel Patricio, Anheuser-Busch InBev’s global CMO called Brito “The most focused person I’ve ever met in my life. He talks about problems and he doesn’t sugarcoat them”. The key with all of these sources of power is not to abuse them. It’s key for individuals in positions of power to continue to portray the qualities that helped them gain the power in the first place.

Recommendations

AB InBev consists of 150,000 employees across 24 different countries, Carlos Brito is responsible for all of them. His ability to unite such large companies is quite impressive and his leadership styles are effective to say the least. However, no one is perfect and every company needs work.

Transformational Leadership vs. Transactional Leadership

To start, there were not a lot of options for improvement to choose from. The article we chose praises Brito, leaving little room for improvement recommendations. However, we believe that being a well-rounded leader is extremely important. Carlos Brito is known for getting straight to the point. He implemented a do or die employee system where performance is key. Those who perform well get promoted and those who do not perform up to standard get let go. On one hand, this no nonsense approach has legitimately transformed the company, turning it into the largest beer maker and increasing its margins substantially year to year. On the other hand, when looking at this system from an employee perspective, it does not make for a very stress free place to work. Obviously, at any company those who do not perform well will eventually be fired, however, most places work to make their current employees better instead of immediately finding replacements. We believe that a little more transactional leadership implemented in would not be a bad idea. Although Brito is big on promoting those who perform well, there was no other talk of the use of reward power. People are not going to be happy at a place where the pressure to perform well is extremely high and one’s personal performance is posted for all to see. Combined with a lack of positive reinforcement and no form of punishment besides being let go; working for Brito seems extremely stressful.

Task vs. People Oriented
To add on to the previous point, the AB InBev organization style (influenced almost entirely by Carlos Brito) is much more task oriented rather than people oriented. Everything is about cutting costs and maximizing margins. There is no real reference in the article on ways Brito helps his employees or even makes their work life more enjoyable. Brito’s only goal is to continue to grow allowing for AB InBev to stay the world’s largest beer brewing company. As soon as InBev purchased Anheuser- Busch, Brito (still CEO) laid off roughly fourteen hundred employees, eliminating 2.25 billion dollars in expenses. This combined with the public postings of performance makes Brito and in turn AB InBev extremely task oriented. Another example that is mentioned in the article is a rule that Brito implemented where no employee (no matter the rank) can sit in business class unless the flight is over six hours. While this is not all bad, implementing a more balanced approach could lead to an increase in employee satisfaction, which can increase production and efficiency.
Closing
In the end, we chose the company AB InBev, however after reading the article and doing further research we discovered that to analyze the company was basically the same as analyzing Carlos Brito himself. The man is a symbol for hands on leadership, paying attention to such minor details as picking up trash around the office. When running a company using a lead by example approach, the company is going to end up embracing all of the ideas and practices. This combined with his natural transformational leadership style and his key grasp on how to effectively take advantage of influence and power in the workplace; AB InBev has become Carlos Brito’s masterpiece. Transforming it into the biggest brewer in the world and one of the most profitable companies ever. All in all, there is a lot to be learned from Carlos Brito, his management styles, and the processes that he has implemented into the powerhouse that is Anheuser- Busch InBev.

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