What do Brazilian companies that opened their doors in 2020, at the start of the pandemic, have in common? If we consider the trend indicated by an IBGE study released at the end of last year, 60% of them will close their doors by December. This is the percentage of companies that do not survive the first five years of operation in Brazil—and it doesn’t even take a unique event in history, like the pandemic, for them to shut down.
Throughout their journey, some of the biggest obstacles for organizations in the country have to do with the behavior of their leaders. Something that is independent of chaos in health, climate, or the economy. An attitude that does not give due attention to planning, management, or even the pace the company needs to maintain to create conditions for expansion. Taking the right steps at the right time.
The Brazilian scenario, with sudden regulatory changes, high interest rates, and excessive bureaucracy, is already complex enough for entrepreneurs to create even more barriers. However, to understand how a greater number of companies can build more enduring trajectories, I like to think about the 5 Ps of corporate survival. The first of these is planning.
No matter how much the winds may change later and the entrepreneur needs to redirect the helm, starting with a well-structured plan is essential. Better to have a plan that can be altered than to navigate without a proper one, or none at all. Perhaps the idea of a Minimum Viable Product (MVP) has led some to interpret that every single part of the business is in a testing phase, waiting for insights to improve over time.
Yes, everything can be improved. However, not all adjustments can be left for later. There are strategic decisions that need to be made from the start, lest a company lose relevance. There are costs of innovation and technological transition, for example, that, if delayed, make operations too expensive or even render the business unviable.
The key to growth lies in the balance between solid planning and what can be flexible. Between values, beliefs, and resources that the company must have from its founding—being born with them—and what it can acquire over the years.
The second P is performance. If some time ago the availability of venture capital in the market allowed companies to accelerate expansion before they were capable of generating revenue, that cycle is over. Now it is essential to focus on business efficiency from day one. To think of ways to show investors that the company is capable of growing predictably and scalably. To prove that its model works and, even better, is profitable.
The third P concerns processes. Being easy for the customer to understand, simple for the team to deliver. Be wary of what is 100% digital, because digital doesn’t work alone. It’s necessary to identify how the decades of experience of professionals can interact with new technologies to accelerate results. Both are complementary.
The fourth P is people. A company cannot wait to grow before starting to value its talent, which includes recognition, training, and the creation of a strong and diverse culture. A 2024 Gartner survey indicates that the shortage of skills is the greatest workforce-related risk, according to 80% of the board members interviewed. If you’re not helping your people evolve, other organizations are helping theirs, and they may reap the benefits.
We still have time until December to give our companies an even more promising future. That’s when our fifth P comes in: onward to 2026?
