Brazil has already many companies managed under the Excellence Criteria of the Quality National Foundation (FNQ). This year, for instance, Quality National Award (PNQ 2007), that has involved 710 people, among examiners and judges, had a selection of 58 companies. The importance of this award lays on the fact that it introduces these companies amongst the Worldwide Class organizations. They validate the Excelence Criteria created by FNQ and help to mobilize and to divulge the Excellence on Administration.

Among the companies that has already adopted this methodology is Natura, whose co-president of company´s Administration Board and president of FNQ Administrator Council, Pedro Luiz Barreiros Passos, spoke last Thursday to a  entrepreneurs and professionals public on a  webcasting at the Foundation to all over the country about Natura´s  Administation case.

Pedro Passos spoke briefly about the historical of company’s four decades, created in 1969 by Luis Seabra (founder and co-president of the Administration Council of the company), and after he spoke about the administration processes which the company passed until being considered in 1998 The Company of the Year by Exame magazine (the traditional and main economical magazine of the country). He spoke also about how when neglecting its Self Evaluation System Natura lost the acquired syntony and had a drop on internal satisfaction level and high debt index. See here how the company got to came out of this situation and keeps successfully bound for internationalization.

On company’s brief report, some curiosities: Natura started with a second hand Volkswagen; a partner came from a multinational sales area helped to shape company’s direct selling system based on Avon system, installed in the country since 1959; even after 11 years Natura remained small, with an invoicing  of around $ 4,5 mns. But the brand was already then well managed.

Financial turnover just came on 80´s decade, when Guilherme Peirao Leal, another current co-president of company’s Council Administration has set up a distributor to take Natura products to other states and has set up yet another plant to complement Natura products portfolio: L´Arc Em Ciel, to which has invited Pedro Passos to take general managing position.

Brazilian economy then presented na inflation of 100% per month, with excessive tributary charge, where taxes over industrialized products (IPI), for instance, reached 77%. In this scenery to set up 21 in 21 days direct sale catalogue’s price was a huge challenge. But, even under the pressure of these factors, products offers enlarging and sales territorial expansion (which included yet another Rio de Janeiro´s distributor), company has made its way and reached at the end of the 80´s decade a receipt of US$170 mns.

In all Natura was constituted by five companies and besides syntony on certain company fundamental values, it started having divergences of society character and it was necessary a society restructure process, which has taken to the Natura Cosmeticos unification in one single company.

On 90´s decade, practically with no capital and facing yet conjectural problems – a Brazilian economic plan that has confiscated company resources, the open of importations and Brazilian president’s impeachment – Natura got to reaffirm itself as company starting from investing on specification of its beliefs, reason of being and values. “Maybe it has been the best Administration Practice that we had made on our history, the rest was consequence”, Pedro Passos declared.

The decade has reaffirmed company’s compromise with socio environment responsibility and has established part of the brand’s value with the positioning of company’s compromise, not only with its products, but  with philosophy and vision adopted.

At the end of 90´s decade, company starts its internationalization process and on financial performance question it gives an important jump: it reaches a receipt of US$ 657 mns and acquires importance on the sector.

At the beginning of years 2000 company´s compromise with social responsibility, turned into an option for sustainable development. Company’s R&D area turns fundamentally to Brazilian biodiversity, as technological platform. Many professionals of the company had to recycle themselves on universities and to learn about Brazilian actives and its applications. Company was still seeking for a sustainable chain net, which promoted the social inclusion. Until then Natura needed to search actives on remote extracting reserves. “It was a daring moment”, said Pedro Passos. There wasn’t yet a supplier’s net established.

In a certain way it is undeniable that the company helped to alert Brazil to the richness of its biodiversity and the expression of this moment was Ekos line, which today is exported as a Brazilian premium line, not only by its exotic actives but for the sustainable way they are obtained, a precept much valued on the international market nowadays.

Company has constructed its own plant – Natura´s Space – only in 2002 and in 2004 company restarts the capital market becoming the second company of the New Capital Market, a pattern model on transparency and governing.  On the first semester of 2007, the gross income consolidated has reached $ 1,095 bi, a 13,7% growth in relation to the same period of last year. Its participation on national market has grown from 12% to 22,8% on the last four years.

As obtained results (and already divulged), company has obtained in 2006 a US$2,5 bns receipt for final consumer. Until this year third quarter and already divulged on the market, around 10% above of this value. But for Pedro Passos more then superlative numbers is the number of beauty consulters – 699 thousand. “This for me is the greatest present that a company can have. There is no translation in value. Of course we are very happy with financial results, but this is a priceless strength”, reinforces the speaker.

Natura has 50 million consumer, na stimative of people which buyes at least once at each threee month brand´s products.

Natura´s Administration

From the beliefs settlement, reason of being and values that company found its course and sustainable base to then enter into Quality Administration.

At the time of five companies’ junction into one, Natura verified that had excellent professionals. It was enough to invest strongly on their qualification and to bring other bearing, coming from companies such as Guillette, Shell, Johnson, with administration models and techniques more efficient. “It was a hard process, but from those guidelines we established it was easier for us to determine what we wanted and to show to then how we liked the things”.

After that company has contact with excellence culture and for the first time it has implanted a management system.

The chosen one – SISPEN – has an internal evaluation and an external evaluation. The internal one feed strategic administration draw. Until today, according to Pedro Passos, it has this shape and it is until today it is structured with the self-evaluation into the National Foundation of Quality model. 

Sispen Planning System involves Strategic Evaluation, Vision, Aspirations, Mission and Internal Evaluation, among others. As result it started to be diffused by organization a series of criteria that there wasn’t on the company at the beginning of decade, such as leadership, client and collaborator satisfaction index, market research, corporative responsibility, etc.

It was from this systemic thought that company started to introduce these administration tool set: the people’s organization, the training process and etc. Ando n the 94 cycle it was initiated the self evaluation. “In 1997 we were with 63 points. Financial performance was the R$370 mns receipt to R$ 827 mns in 4 years and the operational result was growing too: from 65 to 86, not at the same proportion. Organizational level research, the first one we’ve made in 95, was of 49 favorability to 56 favorability”. And clients and consumers dissatisfaction gap started to follow in this period, Pedro Passos pointed out. 

In very short time Natura, which in 1992 was facing a difficult market situation, with no capital and starting with a unified structure, had, in 1994, administration excellence culture spread in the all company. “From a systemic vision, we’ve started to implement the Administration Excellence Model criteria and already in 1998 Natura is elected the Company of the Year by Exame Magazine.

All this featured on better products on launch of brands that are on the market until now, such as Mother & Baby. “Then we thought we knew everything and abandoned the Internal Evaluation. The process of loose syntony was very quick and in 2001 the operational result and the collaborators research has fallen. For the first time we had a net debt that was 4 times greater then company’s profit Ebtida margin. The fact is that operational revenue started to follow and the distance with client was increasing”, explained the co-president of Natura´s Administration Council. 

The quick growth on Natura´s debt made company to define self evaluation as quotidian practice.

On the occasion, according to the executive, it started a new cycle inside the company. “it was when we have retaken the excellence search. We have started a finance recover program in 2000 and, two years later, we have reintroduced the self-evaluation, now in charge of examiners of the National Quality Award ® (PNQ), making us to return to our good performance”, told Passos.

After that there was a series of other implementations demanded by administration, such as ISO implementation, improvement on strategic plan, expansion of the international operations, among other measures. In 1998 company have decided for the creation of the Administration Council, together with the publication of the annual report turning available finance result seven not being yet a open capital company, which would occur in 2004. “it was a compromise way with an administration pattern”, points out Pedro Passos.

“The important wasn’t the absolute value of the self evaluation in points, but to show the evolution of the curb inside company”, he says, “if it is happening a mobilization for the administration or not”. This is basically to apply the Administration Model into the company, he explains. “Each company has a greater emphasis in one thing or other, but it is necessary to stay attempt in all to that fundaments, because is with them we make the opportunities identification”, he concludes.

At the moment Natura´s growth, according to Pedro Passos, depends on other factors, such as how to reply this model also in other countries. “We are leaving a moment of improve internal processes and benchmarking and amplifying the administration model to implement on the internacional operations”, says he

I think we, companies affiliated to the FNQ net have the mission of translating this excellence on administration on our mechanisms. We have the obligation of seeing how we can take these new models ahead and also to make that our tools reinforces the importance of innovation on administration.