Odebrecht's “Structured Operations” department

Rarely has it been made public so crystal-clearly that the sources of business success are not always described in the best manuals and management books.

The disclosure by Operation Car Wash of the existence of a very active company department called “Structured Operations”, which, according to the Federal Police, would be a “bribery department”, laid bare with eye-popping clarity the countless practices that would be illegal within the company.

If it is truly proven, the “reach” of the scheme is impressive. According to the Federal Police, hundreds of companies and individuals would have received multimillion “transfers” under various justifications, legal or illegal. Funds that would have gone to public officials and politicians, advertising agencies, as well as competing companies that would band together in cartels organized to harm the public interest.

If all of this is truly proven, perhaps this was the most efficient department in the company. The one that was actually delivering the most significant financial results.

It is sad to think that this department may have been far more important than the engineers and construction workers who toiled day after day to deliver what, in principle, mattered to those who ultimately paid for the services that were supposed to be performed.

Just as it is sad to consider that perhaps, to a large extent, it would be thanks to this vast scheme that Odebrecht has for many years been one of those highly prominent and visible national companies. With more than 70 years of existence, the company grew and became an enormous diversified conglomerate of companies, operating both in Brazil and in 27 countries, with revenues of more than R$ 107 billion, involving more than 128,000 people of 70 nationalities.

The company always prided itself on an organizational culture based on principles, concepts and criteria articulated around its “Odebrecht Entrepreneurial Technology” and on an explicit code of conduct. Norberto Odebrecht, its founder, wrote numerous books in which he set out his thinking and the company's values. The company's website even has a link called “Ethics Line”.

It is also sad to recall that the company's current president, the founder's grandson, has been in prison for nine months and – at least as far as is officially known – remains silent, denying any wrongdoing. Not to mention that several other company employees have also been arrested. And bearing in mind that other large construction companies have also been punished by the same operation for sharing similar practices. But the Odebrecht case, if everything is truly proven, would stand out for the depth and breadth of the illicit scheme.

For decades the world over there has been a fight against the evils of cartels and of inappropriate relationships between governments and political parties and state-owned companies and organizations that provide public services.

In Brazil, should all the illegalities be confirmed, the Odebrecht case would be yet another “empire that fell”, along with other large national construction companies and Petrobras, as well as other great economic powerhouses that, for different reasons, have also come apart, such as the companies of Eike Batista's X group.

They are illustrations of the limitations of large and successful national companies whose business thinking and practices are based on low risk, little efficiency, low quality and high dependence on the State.

We hope that Odebrecht, the other construction companies and other firms that may have been involved in dishonest practices can recover and move toward a new period, with new values and business actions. With more focus on delivering real value to customers and on efficiency in the use of resources.

May they learn the lessons, as some of the large construction companies under new management seem to be doing. Hopefully they will forget and abandon their previous practices and focus more on the other departments, those that actually add value for customers.

Society is increasingly vigilant and has more access to information. The laws are stricter, and the Judiciary is quite independent.

The temptation to return to the old schemes may arise. But complying with the law must be considered a mandatory practice, not a special virtue or business naivety.

We hope that the new phase of economic management that is likely to come, possibly with reduced state interference and greater liberalism, will create greater reliance on efficiency and quality as the essential way to achieve business success.

There is an enormous need for infrastructure works in Brazil. It is to be hoped that companies will seek to permanently reduce costs, deliver in ever-shorter lead times and with ever-better quality. Exactly the opposite of what has been done until now.