On the outskirts of some of the world’s largest cities exists an informal way of life. It’s unlike any other. To most, these spaces are defined as slums, shantytowns, or favelas. The list of stigmatized words associated with these settlements is never ending. Regardless of their delineation, the sheer mention of their existence conjures up an endless sea of negative associations—rampant crime, dismal infrastructure, impoverished communities, filth, and a severe lack of education. Yet the reality is not as simple as all that. While our assumptions are not wholly dishonest, they are wildly deceptive.

Heliopolis, the largest favela in Sao Paulo, grew out of a need for proximity to the amenities that the city had to offer. When this informal settlement was first established in the 1940s, the demand for it was low, thus the population was much smaller and much more spread out than it is today. Over time, as Sao Paulo expanded so did the desire to be situated within its reach. But housing within the urban area was not affordable to a large number of low-income residents. So they settled down on un-owned and non-delineated land areas, like Heliopolis. Today, the densely lined streets of this three-quarter square-mile favela, is home to roughly 100,000 inhabitants.

When we first see Heliopolis, all of the stereotypes we could imagine about an informal settlement are at play—the tin roofs are rusting, the streets are sprawling and unorganized, brick buildings are crumbling, and crime is rampant. There is no denying that these characteristics are a reality. What surprises us, however, is that an average home within the perimeter of Heliopolis costs $100,000 USD. As a matter of fact, one of the most prestigious hospitals in Sao Paulo sits along the edge of Heliopolis. Read more…

Not long ago, establishing quality procedures was at the core of a company’s managerial dynamics. Few could escape quality circles, ISO standards, or implementing processes that advocated the “right way” of getting things done in order to improve efficiency. Everything was about streamlining practices to improve productivity and quality as well as about uniting the members of the company around the idea of the proper way to work and provide service. Through such efforts companies would gain competitiveness and margin points and they would take the lead over others.

Quality management is a powerful management tool. It gathers the staff around a clear and virtuous purpose: doing better what we were already doing well. It reassures customers, who, informed about the company’s virtue, trust it. This system works, if all competitors live in a similar context, facing the same constraints.

But the arrival of “emerging markets,” with lower production costs, has shattered all the management reflexes born from quality processes. In this context the idea of doing better what the company already does well is useless: their competitors from Asia, India, and elsewhere have changed the game.

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