A brief history of my succession | Pedro Herz | TEDxLaçador

Pedro serenely narrates how he went through the succession process in the company started by his mother.

Graduated in Switzerland as a bookseller, he took over Livraria Cultura in 1969. He was responsible for expanding what was previously considered a family business to a commercially competitive scale, without losing the culture-disseminating character that his mother and founder of the business, Eva Herz, had always asserted. He innovated by transforming Cultura in the first bookstore in the country to sell online. Currently, he is the president of the board of directors of the company.

This talk was given at a TEDx event using the TED conference format but independently organized by a local community. Learn more at http://ted.com/tedx

Good afternoon.

Just to be different,
I've brought along my stool.

(Laughter)

To begin with, I'd like to give
a brief introduction.

I've been approached many times,
to talk a little

about the succession process
in a family company,

like the one I manage.

This question has been made to me
with enormous frequency,

and I intend to talk a little about this.

Time is short, but I’ll try my best.

For this, I’ll need to quickly
go through the company’s history

to help you understand a little.

I hope I'll manage it.

Everything starts in 1938

when my parents fled from Nazi Germany.

They had to leave in a hurry,
at the last minute,

a little before
the "Night of Broken Glass."

They managed to board a ship,
which I don't think was a choice,

it was more like, "Get on,
and see later where it's going."

They managed to board this ship
that was going to Buenos Aires.

This ship made a stopover in Recife,
to fuel, and they were able to get off.

And then the first thing happened
that blew my mother's mind especially,

because after 15 days of seeing
blue sky and water on both sides,

they got off in Recife - you may know it,
the docks are at the old center -

and they noticed that every other door

had a Star of David.

The Star of David is nothing less
than the symbol of Judaism.

My mother almost freaked out, and thought,

"This is this country I want to live in,"
because in Germany,

the door of their house
was painted with a swastika,

to identify them as Jews.

And there she was, her head spinning,
almost unable to walk down the street,

until they found out what this was.

Do any of you know what this was?

Do you remember? No.

It was the symbol of Antarctica brewery.

(Laughter)

It's true, it's true.

Antarctica had, on all its products,

a label with the Star of David
and a little "A" in the middle,

it's there on the Internet,
you can check it out.

And my mother almost lost her mind.

This was all clarified afterwards,

because she had thought it was
the door of a Jewish home,

but it was Guaraná Antarctica,
Antarctica beer, etc.

Well, since Getúlio Vargas
was the Brazilian dictator at that time,

he didn't allow the entry
of German refugees.

So the ship left for Buenos Aires.

There, they were able to stay

and my mother went to work as a weaver.

My father took her at five in the morning

to work with a machine
she'd never seen before,

but that's alright.

Then they went to ask for a visa
at the Brazilian consulate.

And they did the paperwork,
I think, in six months,

I can't say exactly when,

but about six months later,
they got the visa to come to Brazil.

They wanted to come to Brazil
for many reasons, I think.

They wanted to come to São Paulo

because it was the city
where most of those who fled came to.

Just to illustrate, the Brazilian consul
flirted with my mother,

and he promised the visa.

My mother agreed to a date
on the day he gave the visa.

She used to say
that he's still waiting until today.

(Laughter)

They arrived in Brazil in '39.

I'm "made in Brazil."

(Laughter)

I was born in São Paulo,

in the middle of the Second World War.

My father got a job

as a commercial representative
in a clothes industry,

and he'd go around selling shirts,
cloaks, and so on,

whatever the clothes industry makes.

Things started to get difficult,

because they had two sons -
me and my brother.

And in 1947, my mother needed
to help my father somehow.

So she had an idea

which resulted from living
amongst Germans in São Paulo.

The Germans would say, "I can't
find a book to read, a best-seller.

We only hear about them..."

My mother had the idea to buy ten books

from someone who imported
books from Germany.

He gave my mother credit,
she bought ten different books,

put them in the living room
and started renting them,

the same way this is done with videos.

The rental period was one week,
the books were well bound,

so she started to get
a small income from this rental.

People liked what they read
and they started to encourage my mother,

"Hey, I liked this book so much,

can I buy one to give as a gift?"

She kept hearing that and so had the idea
to also start selling books.

So, in fact, at this moment
the bookstore was born;

up until then, it was a lending library.

Then there was no more space
for the books at home, so we had to move.

We were all living together, the books,
my father, mother, and the two brothers.

So we moved to Rua Augusta,
which was reasonably close.

In the beginning, we shared a store,

then my mother
and her business partner quarreled.

We then went to another two-story house,
and we occupied the whole first floor,

which was quite big,

and the library and the small bookshop
were installed in the large living room.

We lived at the back of the store.

After I had to choose between sleeping
on the bed or on the floor -

because there were books
all over the place -

we managed to move
to an adjacent apartment,

and the business expanded.

It took over the room,
the living room, etc.

Here I'm already talking about 1957,
because I have to be brief.

My father went on with his activity,

my mother took care of the kitchen
and her two small sons.

My father would come home for lunch.

When my father came in for lunch,

my mother would rush to the kitchen
to make food for us.

And I'd be coming home from school
and such, that lunchtime thing.

I remember him telling once,

and I even witnessed a bit of this -
I'll tell you because it's funny.

At the end of the 1950s,

I think it was about that time,

a book came out by Fritz Kahn,

"Our Sex Life."

A woman came in...

It was a book on sexual education,
nothing more than that.

This woman came in, my father
was at the front, in the living room,

waiting for any clients
while my mother made lunch.

And she asked about this book,
called "Our Sex Life."

My father, a German
who barely spoke Portuguese,

opened the door to the corridor,
a corridor this size.

At the back was the kitchen
and my mother was there...

And he shouts out,

(German accent)
"Eva, we have sexual relations?"

(Laughter)

It's true. (Chuckling)

I told this to Moacyr Scliar and he wrote
a chronicle on it for the newspaper.

So these picturesque things happened

throughout the settlement
of the Herz family here in Brazil.

There were very funny things.

The space got small, we moved,
as I already told you...

The 60s arrived,

things were expanding, growing,

and my mother considers moving
to Avenida Paulista.

At the end of the 60s,
almost by coincidence,

I got married and we moved
to Avenida Paulista.

And at that moment,

I joined the bookshop,

I became part of it.

We discussed it a little, my mother
was very scared, the expenses,

condominium fees, taxes,
electricity, telephone, all that.

Would we manage?.

I said, "You know what?

I'll work and if I have to go
without eating, I will,

but we can't have employees
going without payment."

Okay. Things carried on,

things kept going, it worked,
it started progressing.

Decade of 1960.

I then noticed that there were
already conflicts going on between us.

My parents' succession,
which I would take on,

starts at this point.

So I'm already talking
about the first succession,

one of the successions.

Actually, I'll talk a little
about this succession.

I was uncomfortable with the money
being kept in the drawer,

so I bought a safe from a company
which moved out of the building.

My mother went on about it for a week,
"How absurd to spend all this money!"

And I bought a PBX.
Do you know what that is?

It's a telephone thing that we needed
because we had three telephone lines.

It was something like,
"Answer here, answer there."

My mother went on a rant,
we almost went at each other.

But it was all settled, I calmed down,
she saw that it made sense.

There was no sense keeping the money
in the drawer, the PBX was useful,

someone here needed to answer,

the phone would ring there,
they'd had to rush over to it.

These technological changes

happened naturally,

movement increased,

I had two sons

who were born in the seventies.

Things carried on as normal,
I can't go into too many details.

My sons were already in college,

they were almost of age,

and they expressed interest
in helping me in the bookshop.

I said, "You're both mad, absolutely mad!

Here we work a lot,
you're not into that, I know.

Your friends like to go
to the beach on weekends,

one wants to go to the country,
the other to the farm,

I know what young people are like.

Here we have to work on Saturdays,
we can't have that."

"No, we want to..."

I spent one year saying no to them.

Throughout a whole year, I said,
"No, you're not into it."

"Let us try it,"
and I was saying no for one year.

And the volume of work
grew enormously for me.

In the meantime, I had
already rented another shop

because there wasn't
enough space for the books.

Finally, I ended up agreeing.

Here I'm already talking
about the beginning of the nineties.

My sons joined us, and it was good,

it was very good because I was
very overloaded with work

and it was very useful.

Of course, dissensions started
as soon as they joined.

Young men, very inclined to modernity,

very tuned to modernity.

I was forced to give in
about certain things,

but with some moderation.

One starts to hear
about electronic commerce -

I'm already talking about 1994.

I had already operated telex,
you don't know what that is.

Does anyone know what telex is?

No.

(Laughter)

Right after that,
the electronic thing appears

through something called BBS,
which lasted very little.

BBS stands for Bulletin Board System.

And then the Internet was born in 1994.

Electronic commerce begins,
which was something crazy.

All this technological evolution

happens at a speed much greater

than the human being is able to absorb.

So it was a turbulence within the company,

because there were new versions daily,
and sometimes twice a day.

And all that started to grow,
digital books arrived -

I'm already talking about 2000.

The digital books arrived,
which we work with,

and my succession was already established.

So, the third-generation succession
was already established.

At a certain point,
I saw things were really on fire,

I said, "Sit down. Let's do something.

Starting from you onward, the company
is no longer a family company.

It must cease being a family company."

"Why?"

"For a very simple reason.

I think a family company
must stop when it gets to a certain size."

"Blah, blah, blah."

"It has to stop from a certain size,
the responsibility is too big."

I was seeing it all piling on top of me.

(Laughter)

Anyway, it got too big,

and I think that
when that moment arrives -

the size of the company -

today we have 2,000 employees,
19 branches, a significant income -

the management needs to be professional.

All this to talk
about this succession process.

Very well, this is all
agreed upon and signed.

No grandchildren,
no mothers-in-law, no cousins,

it's no longer possible to do that.

It's signed and agreed upon.

Then I thought,
"Well, now they're there..."

In 2005, I transformed
the limited company into a corporation

and established a board of directors

of which I am president since 2009.

There is a fund which came
and owns 25% of the company,

75% is ours.

And the succession was established.

Then I started thinking about myself.

And me? I'm healthy, I'm a young boy,

my pediatrician is super-happy about me.

(Laughter)

So, what about me? Where do I stand?
The business was established, and me?

So I started looking to see
what to do with myself.

Am I going to watch Silvio Santos
all day? No, right?

Sit my ass on a chair
and watch those kinds of things.

And I started looking
for things I like to do.

As was mentioned here, I'm president
of the Artistic Culture Society,

a century-old society in São Paulo,

dedicated basically
to the dissemination of music,

mainly classical music,

which, unfortunately, lost its theater,
which was burnt down in 2008.

I have just approved the new project,

a building estimated between
140 and 150 million Brazilian reais,

12,000 square meters,

which I will start very soon.

So I won't die of boredom.

(Laughter)

Apart from that, I was elected
cultural director of a club in São Paulo,

called "A Hebraica,"

where I have the pleasure of organizing
things a little in the cultural area.

I do this sort of from a distance,
with little physical presence.

And I also have talked
to the directors of a TV station,

called Arte 1,

"I'd really like to talk
more about the industry

that I know so well,
which is the book industry."

I started recording a TV show,
which has already started

and is on the air every Saturday
at 10 p.m. on Arte 1

for whoever wants to watch me.

I talk to people involved
in the editing industry:

authors, editors, illustrators -

all those who work there.

I don't intend to talk about
the work of some author,

that's what other people do so well,
like Edney Silvestre from GloboNews.

I have no interest in competing with him.

But to talk about how I search
for a literary agent,

how I sell my books,

if I'm interested in publishing it
in England, the United States, wherever -

this no one knows about.

A new book comes out in the US,

immediately, it may depend,

a whole page about it appears
in the New York Times.

It's an industry.

In Brazil, we unfortunately
haven't yet arrived at this point.

Just to finish up and to remind you

that successions happen
throughout our lives,

throughout our careers.

If you want to take
a step forward in a company,

it's good that you find someone
who does as well as you do

so that you can go up a step.

Succession in a family company
is very similar.

In our lives, we do a lot of successions,

whether in private life -

someone dies, someone is replaced,
unmarries, whatever -

these are successions,
all these are successions.

I think it's easier in a private company

because common sense must prevail.

Thank you very much.

(Applause)