Masterclass de estrategia, negocios y vida con Eduardo Torres - Llosa, Parte 2

What Causes Companies to Fail in Peru?

Key Factors Leading to Business Failure

• In Peru, a decrease in sales accounts for only 6% of business failures; companies are resilient and adapt well to falling sales.

• The reduction of profit margins is not the primary concern for Peruvian businesses; they tend to manage costs effectively when margins shrink.

• A significant factor (25%) contributing to company failure is financing growth through short-term loans for asset acquisition.

Lessons from Successful Organizations

• Surrounding oneself with intelligent and positive individuals is crucial for any business's success; quality over quantity matters in team composition.

• Having a small number of highly capable team members can create an environment of excellence that fosters better performance.

The Role of Artificial Intelligence and Human Skills

Human Skills Beyond AI Capabilities

• Continuous preparation regarding future trends, especially artificial intelligence, is essential; understanding what skills AI cannot replace is vital.

• A reference to the character Data from "Star Trek: The Next Generation" illustrates that while AI may excel in logic and strength, it lacks emotional capacity and empathy.

Limitations of Artificial Intelligence

• True empathy cannot be replicated by AI; algorithms can simulate interactions but lack genuine emotional engagement.

• Creative abilities rooted in human emotions are irreplaceable by machines; examples include artists whose work reflects personal experiences.

Future Trends in Technology

Quantum Computing Developments

• IBM's advancements in quantum computing are set to revolutionize technology within the next decade, indicating a shift from science fiction to reality.

Preparing for Future Careers

• Young people should consider careers related to manual tasks or robotics as these areas remain less susceptible to automation.

Emerging Technologies and Economic Leapfrogging

Concept of Leapfrogging in Economics

• The concept of leapfrogging allows countries or companies that are behind in current paradigms to adopt emerging technologies, bypassing traditional methods.

• New technologies can eliminate the need for previous tools or systems, transforming a disadvantage into an advantage by avoiding legacy issues.

Challenges in Education and Information Consumption

• Peru faces significant challenges with low literacy rates, impacting comprehension skills compared to other nations.

• Despite low reading comprehension, Peruvians consume a high volume of video content as an alternative means of information gathering.

Technological Advancements in Communication

• Advances such as speech-to-text and text-to-speech have evolved; now, speech-to-speech technology is emerging, reducing the need for reading altogether.

• This shift could enhance information access for those with poor reading skills if leveraged correctly through technology.

Infrastructure Development for Technology Adoption

• Countries must consider data processing centers and 5G coverage to support new technologies like speech-to-speech communication.

• Estonia serves as an example of a small nation that embraced digital transformation post-Soviet Union, leading to significant economic growth.

Implications for Businesses and Banking Sector

• Traditional banking relied heavily on physical branches; however, the rise of digital banking reduces this dependency.

• New banks can enter the market without extensive branch networks, creating opportunities across various business sizes and sectors.

Upcoming Events and Community Engagement

• An event called "Gurú Fest" will take place on December 13th to celebrate talent and success within the community.

• Attendees are encouraged to participate early due to limited availability; over 40 experts will share their insights during this event.

Entrepreneurial Spirit in Peru

• The discussion highlights Peru's entrepreneurial nature, emphasizing the role of SMEs in driving change within society.

• Participants are invited to envision scaling their businesses using technological advancements as a foundation for growth.

Understanding Business Growth and Financial Management

The Role of Technology in Business Scaling

• The speaker emphasizes the importance of understanding one's own business, suggesting that entrepreneurs are best positioned to make decisions about their companies.

• Acknowledges that many businesses fail due to poor financial management, highlighting finance as a critical area for growth.

Key Financial Insights

• The speaker shares experiences from years of observing various companies, noting that having a keen eye is not enough; tools are necessary for effective management.

• Introduces a tool called "rating," which assesses 25 variables affecting business failure in Peru. Surprisingly, declining sales account for only 6% of failures.

• Points out that reduced profit margins do not significantly contribute to business failures; instead, resilience allows businesses to adapt by cutting costs.

Financing Growth Wisely

• Warns against financing growth through short-term loans, which can lead to cash flow issues. This approach accounts for 25% of failures in Peruvian businesses.

• Advises aligning asset financing with the appropriate loan duration to avoid cash flow problems during expansion efforts.

Defining Your Business Model

• Encourages entrepreneurs to clarify their business model by asking two key questions: What unique value do you offer customers? How do you monetize this value?

• Stresses the importance of differentiating factors such as product quality or location in attracting repeat customers.

Establishing Company Culture

• Discusses how company culture is shaped by the owner's behavior and values, impacting employee engagement and overall company performance.

• Highlights that an owner’s treatment of employees influences workplace culture and can attract talent aligned with those values.

Embracing Technological Opportunities

• Concludes with advice on leveraging technology effectively. Small businesses should not shy away from adopting new technologies like AI due to misconceptions about accessibility.

• Warns against relying solely on consultants for technological guidance; proactive learning and adaptation are essential for small enterprises.

Understanding Business Value and Scaling Challenges

Key Insights on Business Strategy

• Recognizing what is truly valuable in your business is essential. Identifying specific ideas that can be applied strategically is fundamental for success.

• Be cautious of hidden costs when scaling operations. Understanding financial implications from the start, referred to as Fin Ops, is crucial to avoid unexpected expenses.

• Familiarize yourself with the basics of technology and finance related to your business. While expertise isn't necessary, asking informed questions is vital for navigating complex systems.

Cultural Insights from BCR Experience

• The importance of data-driven opinions was highlighted during discussions about workplace culture at BCR. A humorous acknowledgment emerged where individuals refrain from commenting without data.

• Reflecting on personal growth and excellence, insights were shared regarding how experiences at BCR can inform both corporate culture and individual development.

Importance of Surrounding Yourself with Talent

• Emphasizing the value of surrounding oneself with intelligent people, it was noted that having a strong team significantly enhances outcomes in any business environment.

• The cultural aspect of meritocracy was discussed; being in an environment where data drives decisions fosters a productive atmosphere conducive to success.

Family and Social Circles Impact on Culture

• The discussion extended to family dynamics, stressing the need for positive influences within personal circles while also seeking out capable colleagues in professional settings.

• Leadership plays a critical role in establishing a culture of excellence. Consistent meritocratic practices contribute to creating an environment where high standards are maintained.

Recommendations for Personal Growth Resources

• A final inquiry led to recommendations for books or podcasts that encourage continuous learning and self-challenge. Notably mentioned was Thomas Friedman's book "Thank You for Being Late," which addresses paradigm shifts relevant to current societal changes.

Impact of Technology and Socioeconomic Insights

Overview of Technological Changes

• The first half of the discussion highlights the significant impact of technological changes, emphasizing that we are at an exponential growth curve where acceleration is expected.

• A recommended book titled "200 Years of Economic History in Peru" provides a light yet concerning read about historical economic challenges faced by Peru, authored by journalists rather than economists.

Recommended Readings for Understanding Current Issues

• The speaker suggests reading various books to understand current societal issues, including those that reflect on past challenges and how they relate to present-day problems.

• "Nexus" by Harari is mentioned as a critical read that discusses technology's impact compared to historical innovations like the printing press.

Analysis of Political Movements

• Angus Deaton's work sheds light on the socio-political climate in the U.S., particularly regarding suicide rates among white middle-class individuals and its connection to Trump’s voter base.

• Another notable book discussed is "The Twilight of Democracy," which explores radical political movements both on the right and left across various regions, including Europe and Latin America.

Cultural Reflections and National Identity

• The speaker shares personal reading experiences, including Ken Follett's "The Pillars of the Earth," reflecting on historical architecture in Europe during the 10th century.

• There’s a focus on creating positive narratives about Peru’s potential, countering long-held beliefs that hinder national progress.

Future Prospects for Peru

• The conversation emphasizes fostering a mindset that encourages dreaming big for Peru's future, highlighting cultural achievements such as ancient constructions and artistic works.

• Pride in Peruvian gastronomy is expressed, noting its recognition as one of the best globally. This pride extends beyond food to tourism potential despite current challenges with sites like Machu Picchu.

Boom in Construction and Mining in Peru

Future Projections for Copper Production

• A significant boom in construction and mining is anticipated within the next three years, which could dramatically enhance Peru's copper production capacity.

• If all copper projects are operational, there is potential to increase production capacity by 1.5 to 1.6 times over the next decade.

• The speaker emphasizes that copper will remain a crucial metal in the future, highlighting its importance for the country.

Transforming Mindsets Towards AI

Challenges of Traditional Banking Mindset

• A question arises regarding lessons learned from transitioning from a traditional mindset (like BVA or BSR) to one focused on artificial intelligence.

• The discussion points out that media often highlights only successful outcomes, neglecting the learning process through mistakes made during transformation.

Learning from Errors

• The speaker reflects on how large institutions often make errors during their transition and how they adapt their strategies based on these experiences.

• Emphasis is placed on understanding that not every outcome needs to be positive; learning from failures is essential for progress.

Personal Journey of Digital Transformation

Initial Skepticism

• The speaker shares a personal story about being skeptical of digital transformation while working at a highly efficient bank in 2015.

• Despite high profitability and low delinquency rates, there was resistance to change among traditional bankers who prioritized risk management and shareholder satisfaction.

Influence of Technology Leadership

• The president of the global banking group pushed for digital transformation despite skepticism from peers, emphasizing technology's role in banking evolution.

Understanding Consumer Behavior Changes

Shifts in Financial Consumer Expectations

• The speaker discusses realizing how consumer behavior was changing with technology—people were already using apps for various services like taxis and food delivery.

• This realization led to an understanding that banking would also need to evolve similarly as consumers began expecting more convenience.

The Future of Technology: Holograms?

Anticipating Technological Advancements

• The speaker mentions writing a book titled "Digitalízate por dónde empezas," sharing insights into his journey through digitalization.

Generational Technology Gap

• Reflecting on generational differences, he humorously notes how his son will likely struggle with future technologies just as he does now with current tools.

Speculations About Future Communication Tools

Evolution Beyond Phones

• Discussion includes predictions about phones becoming obsolete as new communication methods emerge, such as holograms or advanced speech-to-speech technologies.

This structured markdown file captures key discussions and insights from the transcript while providing timestamps for easy reference.

Understanding the Impact of Technology on Business

The Role of Technology in Business

• The discussion emphasizes the necessity for businesses to understand how technological advancements will affect their operations at all levels.

• It is suggested that individuals should enhance their knowledge through reading and engaging with authoritative sources to adapt their business models effectively.

Productivity and Daily Routines

• A participant shares feelings of distraction, particularly from social media platforms like TikTok, which hinder productivity despite having many ideas.

• There’s a connection made between productivity habits and the pursuit of happiness, highlighting the mental burden entrepreneurs face when constantly thinking about work.

Personal Experiences with Work-Life Balance

• The speaker reflects on their past corporate experience, emphasizing the importance of maintaining weekends free from work commitments for personal well-being.

• They discuss strategies such as limiting phone use during vacations to maintain a healthy work-life balance.

Transitioning from Corporate Life

• After leaving corporate life six years ago, the speaker focused on writing a book and pursuing courses in digital transformation while managing time effectively.

• They express gratitude for being able to make this transition without falling into depression, attributing it to feeling productive and engaged in meaningful activities.

Finding Purpose in Work

• The speaker stresses that having a sense of purpose is more important than merely tracking hours worked; fulfillment comes from feeling that one’s efforts contribute positively.

• They acknowledge there isn’t a "magic formula" for success but emphasize personal growth as a key indicator of productivity.

Closing Thoughts and Audience Engagement

• As the session concludes, appreciation is expressed towards Eduardo for his insights and communication skills, suggesting he has potential as an influencer.

• Final remarks highlight the positive initiative behind sharing knowledge and encourage continued engagement with uplifting content.