Dreamers and doers, welcome to Podbrand.

I'm Mauricio Medeiros, consultant in strategic design and author of the book Brand Tree, Simplifying Branding.

In this episode, we receive Nady Dequech.

She is a counselor specializing in the succession of family businesses, also in governance and heritage management.

With decades of experience advising business, Nady brings unique insights on how companies can move to leadership with success from generation to generation, maintaining the legacy of the founder.

We explore the cultural risks of succession and the importance of governance structures in the delicate and necessary balance between tradition and innovation.

Nady, welcome!

Thank you, Mauricio for the invitation to show the situations here with you today.

Nady, I thank you for accepting the invitation and it is a pleasure to have you.

It will certainly help our audience to reach its best version.

Dive into the theme Perennial Legacy: The Challenge of Business Succession. 

Family businesses face the unique challenge of moving from one leadership to another, and at the same time, they navigate all market changes and business model evolution.

Many times, they face cultural risks when moving from one leadership to another.

So I ask you, what are the main cultural risks that you found during these transitions and how can this be mitigated to ensure continuity in companies?

Mauricio, I think there are many factors.

The first one is that we don't have the culture to plan the succession, because when we talk about succession, what comes to mind is the death of the person who will be succeeded.

I think death is a delicate subject to be dealt with, but I think we have to see it from another perspective, not from the perspective of death, but from the perspective of continuity, the legacy, the family values, the continuity of family business.

There is a very curious and alarming fact.

Several researches show that less than 30% of family businesses move to a second generation, and less than 10%, around 5%, move to a third generation.

What is curious is that entrepreneurs, founders, I think everyone would like to pass on their legacy, but few prepare, it's a paradox.

There are other factors as well, the focus on immediacy, on the financial result, these factors bury the planning of the successor, the lack of communication between family members, effective communication on the subject.

It is very common for the founder's affective relationship with his creation, with the company itself, and this often limits the possibility of anticipating a process of preparation for succession, even if it is for the future.

No doubt, and you know that there is a lot of talk about the preparation of successors, and I usually say that the main preparation is that of the founder, who will be succeeded, because he is the key piece for doing a successor process.

He has to be willing, he has to be prepared for it.

He needs to give up something, the power, the decisions, and we have a great friend in common, Harry Fockink, who is a consultant in the area of family business succession, and Harry has a very interesting premise in relation to this point, that the founder needs to find a new goal from the moment he passes the baton of the operation of his business to a successor, and this goal can be even greater than the previous one, but different from that one, and this is a big challenge.

The change is often received with resistance, especially during the succession, either by family members or even employees of the company.

What strategies do you recommend to deal with resistance within the organization, the corporation, during these transitions that can be critical?

When you start a successor planning, this is very specific for each family, Mauricio. Each case is a case, but an unusual factor that I see is the issue of communication, as I said before.

There's a curious research from KPMG, a family business, which says the following, 55% of the successors of the second or third generation feel prepared to take over the management, but only 11% of the founders believe they are prepared.

There's a huge discrepancy, so there's a lack of communication and integration in that sense.

And the successor process, it shouldn't be an event, it's a continuous and flexible process, even because the dynamics of the family change over time.

Children are born, people die, people get married, directors and collaborators are separated, there's a certain rotation.

So it has to be a constant, flexible thing, always with good communication, so that this is integrated with the whole network.

And not only the employees of the company, but also the family members who don't participate in the company's activities, but it's the heir.

The heir also doesn't participate in anything, but it gets in the way if he's not prepared for the function of heir.

He's always questioning, sometimes he wants to receive more than he understands what's going on in the company, so it gets in the way of the business.

So how do governance structures, such as consulting councils, support family companies during these transition processes?

What mechanisms ensure that they work effectively for a harmonious transition?

Companies that have a more advanced corporate governance have more tools to go through a transition process, a successor process.

We saw, through the media, many family companies with beautiful manuals and reports of corporate governance, but they were actually involved, they didn't practice, they didn't play a role in all those practices of corporate governance.

Corporate governance is not bureaucracy, it's a behavior, it's in practice.

And when the founders have this practice of governance, of ethics, of transparency, of all the practices of corporate governance, the successors, collaborators and even the next generations tend to copy, the example is dragged.

And in this, I think the role of a consultative counselor is very important, because it brings clarity and makes it easier in this process of implementation of corporate governance, brings a vision and a perspective different from those of family members who are sometimes involved, have the emotional part, so he's a person with an impartial vision, but prepared for that specific function, in the successor process or some other subject that the family company needs to adopt.

And it helps to professionalize and brings many benefits in the company in the sense of putting governance into practice and taking away from the paper all the reports and manuals, because it's no use having a paper and not practicing.

You mentioned the reality of most companies not preparing the succession, or thinking about the succession only with the advent of death, the death of the founder, of one of the progenitors of this company.

Many companies see the succession as a singular event, like this one, instead of a continuous strategy or that is prepared in advance.

How can companies then adopt succession as a continuous strategic process, instead of waiting until a crisis or a more critical situation like this arises?

A successful successor process has to be prepared.

There's no way to make a succession overnight, and when that happens, sometimes because of a founder's illness, a sudden death, or even if he didn't prepare his successors, the death wasn't sudden, but he stopped preparing, what we see is that companies tend to crash at that rate I gave you.

They break, they die along with the founder.

The successors can't keep up with the business.

It takes time, as I said, a founder's preparation.

He's the key, he has to have the mission and function of a mentor, not a boss.

And the successors have to have a lot of humility and ability to learn from that successor.

Also, the successor is an integration, and it's a long process, continuous, it's not flexible, as I said, it's not a quick thing.

A recent case, for example, of a well-succeeded succession, is the case of SBT.

Silvio Santos passed away, and he didn't have a lot of fuss in the family business, the programs continued normally, but how did he start it?

It's been many years.

The youngest daughter who is in the board of directors hasn't been prepared technically for many years.

The other daughters who are in the programs have also been preparing.

What did Silvio Santos do?

He saw the ability, he was identifying, and it also takes time, the ability of each heir.

It's no use putting a person, for example, who is extremely shy, like the youngest, as she herself says, in front of a TV show.

She's in the management, in the board of directors.

Other daughters are in the administration, while others are in front of the TV show.

Identifying the abilities of each one, preparing over time, so that it makes this transition in a way, not only prepared, but adopting all the abilities of a chairwoman, so that things work properly when the founder dies, or leaves the business.

Very interesting.

In this case, for example, they saw Silvio Santos a lot, I'm giving this example, of course there are others, Silvio Santos, who is the founder, as their mentor, and I believe he was incorporating the daughters' ideas over time.

So it's a case of success, of succession.

This point is very important, because not all descendants of entrepreneurs have similar motivations, or even talent, to give follow-up to a business that originates in the family.

Non-family executives are frequently essential in leadership transitions, to provide stability and expertise within the business, a technical issue.

In situations like this, where there is no heir, who is part of the family, how can these executive professionals, or even from the board, effectively fill the generational gap while navigating this family dynamic to ensure the continuity of the business?

When it comes to the preparation of heirs, successors, not necessarily the heirs have to be in charge of the business, but he has to know, first, he has to have that sense of belonging that many heirs don't have.

The father has always been in charge of the business, but he didn't even talk about it with his son or daughter, and when it comes to the end of his life, the heir doesn't even know.

He doesn't know the suppliers, he doesn't know the clients, he doesn't know the dynamics of the business, so he doesn't have that sense of belonging.

Now, regardless of whether these heirs worked in the company or not, they have to have that sense of belonging, because they're going to take care of it, because it's theirs.

Exactly in this process of planning the succession, identifying that there is no heir who is going to take over the management, you start to professionalize yourself, but you can't do it overnight.

You start to awaken this sense of belonging of the heirs so that they take care of the company, not as managers, but as owners, and you don't do that overnight.

Yes, certainly.

It's a challenge.

All companies that are long-standing, either had a founder who remained in management for many long years, or there was a well-succeeded association, whether family or not, it doesn't necessarily have to be a heir, the manager, the CEO of the company.

So, with good examples, the Renner stores, for example, which became an open capital company, and José Galló, who was the executive, became the great driver of the company's growth, which later came to be also succeeded by another executive prepared by him, and neither of them was part of the Renner family, for example.

Another good example, which is related to a book I'm writing, which is the biography of Nestor de Paula, who was the founder of Azalea, which was the largest shoe company in the Americas, and the fifth largest in the world.

There was also no specific succession within the family, but there were members of the board, such as Antônio Britto, who was governor of Rio Grande do Sul, but there was also a Dream Team board, which also had members of the family.

Among them, Adelino Colombo, founder of the Colombo stores, or even José Galó from Renner, who was also part of the Azalea board.

But Mauricio, have you noticed a common issue in these companies?

Corporate governance is very well structured and aligned.

That's why I said that when a company has a corporate governance, it already has a great tool to carry out this successive process.

The role of the consulting board is fundamental.

It's like a mentorship of several minds, of people with complementary thoughts and experiences, corroborating not only the succession process, but also the company's own management.

And I would say that this mechanism could be more simplified, even applied to medium-sized companies.

It is enough for businessmen to cooperate in a more integrated and creative way, in the sense of creating advice, including for medium-sized companies, or even mentors who can play this role.

Not only medium-sized companies, Mauricio.

It's a small port if you look at the cases of start-ups.

Today, they already have the mentality of having a consulting board.

Of course, you won't have a board of directors or several board members, because they don't yet adapt to the initial phase.

But having a board member who helps already implementing the first steps of a start-up's governance makes a total difference.

Certainly.

Very well, Nady.

We are entering the fire pit.

These are questions for quick answers that I ask all the guests.

The first one.

What are the virtues of a successful entrepreneur?

There are several, but I would highlight two.

The resilience to not give up in the face of adversity.

In Brazil, we have many.

A lot of bureaucracy, a huge tax complexity, political issues, legal insecurities, and humility.

Humility is fundamental for you to lead, especially to be open to learn from others, to learn from your own mistakes and to start again whenever necessary.

What differentiates dreamers from doers?

I think dreamers are only in their desire.

They can hardly achieve their dreams.

There is a Chinese philosopher, Lao Tse, who said that knowing and not doing is the same as not knowing.

It's a phrase very similar to Goethe's.

So, if you only stay in your dreams and not do, you don't fulfill your desires.

You stay in desire.

And the last one.

What is design?

Design has to do with creativity and development.

I think it's a word that is very conducive to this context of successful planning.

If you want to leave a legacy, you have to have a design.

Your planning, what you want to leave as a legacy, how is it going to be done?

Very well.

We make a point of asking the guests to indicate books.

Nadya, which books have impacted your trajectory, that have left you a mark and that can help our dear audience find your best version?

Mauricio, it's very difficult for me to indicate a book, because I like to read a lot, and several books have impacted my journey.

But I would highlight one, which is by Viktor Frankl, In Search of Meaning.

Viktor Frankl had an experience in the Nazi concentration camp.

His wife died, his parents died, and in that extreme suffering in the concentration camp, he was able to identify a meaning for life.

After he left the concentration camp, with that meaning of life, that mission of his, he was able to transform thousands of lives, he created long-term care, and with his teachings, he impacted many lives.

And why do I say this?

Because I think that in family businesses, a process of transition, of succession, even in conflicts, every family has a meaning, a purpose in common.

This can be transferred from generation to generation.

In fact, not only in family businesses.

I think we all have to have a purpose in life that motivates us and moves us.

Viktor Frankl's book was recommended by some other guests.

It's a wonderful book that I've also read.

The purpose is perhaps one of the most relevant discoveries of the branding process.

And in my book, Arvore da Marca, in which I make an analogy between the constitution of a tree with the construction and the development process of a brand, the whole process begins in the seed, which is the vision, but in the roots, and the root is exactly the purpose.

And a tree that has solid, strong, consistent roots can go through the greatest storm on the surface, and even so, it will survive.

Even the ballad, it will fruit again.

I think Viktor Frankl's teaching was exactly in this context.

He overcame an immeasurable adversity.

It's hard for us to quantify or qualify all the sacrifice, all the suffering that he and all the people who were subjected to the circumstances of Nazism went through.

And I particularly visited, many years ago, a concentration camp in Austria, the camp of Mauthausen.

And when you're there, you're transported to that reality.

So you see and see, wow, what people went through here, it's unimaginable.

And I think it's important, because we always need to bring this historical memory, so that it never repeats.

In fact, the purpose is the great lesson of Viktor Frankl's book.

Thank you for this invitation.

I think it's one of the main factors that families need to identify.

The purpose, the value of the company and of the family.

Because it's much easier for the next generations to recognize this, and besides, the family members, as I said, those who are not working in the company, they unite for a common purpose.

Perfect.

Just reinforcing that the link of this book, dedicated to Nadya and the other guests, you can all find it on the website podbrand.design, in the book menu.

Nadya, I still have the question from the previous guest.

And here at Podbrand, we have this tradition.

He left a question without knowing that you would be the next guest.

It was Leo Horta, who is the founder of Maitreya, a business management consultancy based in São Paulo.

His question is, what were your biggest mistakes or disappointments so far?

And how did they help you grow or improve in your life?

Mauricio, nowadays I see mistakes and disappointments in a different way.

I see it as necessary experiences for our evolution and learning.

I don't think people disappoint us.

Those who disappoint us are our own expectations in relation to that person.

And when we can have a detachment to the ego and realize that what that person did, she did it according to consciousness and her evolution, things become much clearer.

You realize that it's not with you, but with the person.

And mistakes are… Of course I had a lot of mistakes, but I see them as part of the human essence.

We all make mistakes.

And to learn, I think it's part of it.

The important thing is that we learn from these mistakes and we adjust the photos in this journey called life.

Perfect.

And finally, Nady, what question would you like to leave for our next guest?

Speaking of succession, I have a question I ask the founders, and I think for everyone.

What legacy would you like to leave?

Nady, it was a great joy to have you here today at Paulo Brand, to have your insights on governance, especially in family businesses.

They are precious. They are useful for any size of business, for any type of entrepreneur.

I am very grateful for your acceptance of the invitation, for your wisdom, and thank you for sharing your experience with us today.

Mauricio, thank you once again.

I am curious to know the answer of the next interviewee.

And it was a joy to be here with you.

Excellent.

Thank you very much and see you soon.

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