Political polarization is the biggest fear of executives in 2023

It has been ten years since accountant Rodrigo Capuruço, 44, heard a comment from a German chief about the Brazilian people, which he has not forgotten.

“You Brazilians have flexibility, that’s incredible wealth,” heard Capuruço, now president in Brazil and Latin America of Volkswagen Financial Services, the German automaker’s financial arm.

The then chief of Capuruço was referring, in particular, to tolerance for the opinions and even mistakes of others, the willingness to talk and seek consensus in the face of an impasse, and to adapt to different contexts.

“Fulfilling a democratic agenda is not simple. It takes a lot of dialogue to create a consensus and, at the same time, have the discipline to apply the necessary measures”, says he, one of the executives interviewed in the survey promoted by BTA Associados on the prospects of the high ranking for 2023, in the post-election period.

“But it worries me to see political polarization taking over the living environments, all of them, and putting in check this very special Brazilian quality, which even foreigners recognize in us.”

The survey carried out by the consulting firm BTA Associados, a specialist in organizational management, exclusively for the Sheetcollected the opinion of 203 executives between the 12th and 19th of September, on its own online research platform.

Respondents occupy leadership positions (presidents, members of the board of directors, directors and managers) in medium and large companies, from different sectors, in different regions of the country.

“Most of the executives interviewed are in the positions of directors and managers”, says Vânia Café, a partner at BTA. They account for 65% of the sample, which is made up of 24% of presidents and 11% of members of the board of directors.

The survey showed that 62% see political polarization as the biggest problem to be faced next year. On the other hand, controlling the Covid-19 pandemic, with the high vaccination rate, is the best thing that 2023 has in store, in the opinion of 83% of respondents.

“It seems that 2023 will be the first year, since 2020, in which companies will work without the impact of health restrictions and executives are very optimistic about this scenario”, says Vânia, a partner at BTA.

“On the other hand, regardless of who wins the majority election, executives see political polarization as a serious problem in the coming year, with tempers still very hot – which directly or indirectly impacts business.”

Directly, according to the expert, because relevant topics on the business agenda, such as the tax burden, can suffer obstacles if there is no governance, that is, if each side entrenches itself in its convictions and there is no dialogue to advance reforms.

Indirectly, because teams run the risk of being divided, with poor communication, interspersed with mistrust and prejudice, which can also affect dialogue with the other players in the companies – consumers, suppliers, partners, investors and the government itself.

The BTA survey pointed out that the second biggest concern of executives for 2023 is the tax burden (47% are pessimistic or very pessimistic about the matter), followed by governance (37%).

On the other hand, most are optimistic or very optimistic about their company (75%), their sector (66%) and foreign investments (56%).

In the opinion of the interviewees, the main characteristic that the new president of the country must have is governability – the response of 71% of the sample. Other important skills indicated are managing ethically and transparently (36%), having good communication (18%), being problem-solving (16%), having negotiation skills (16%) and being a reformer (15%).

New president must have more ‘soft’ skills than ‘hard’

“What we perceive is that, in the opinion of the executives, the new –or the new– president should have a softer than a hard profile”, says Vânia. This is because most of the skills mentioned for the highest position in the country are from the “soft skills” profile, which brings together behavioral and subjective skills. In second place come the “hard skills” (technical skills).

“Among the soft skills mentioned are managing with ethics and transparency, having good communication, plasticity, empathy, emotional intelligence, personal development, interpersonal relationships and patriotism”, he says.

Among the hard skills are a resolute, reforming profile, with technical competence, a sense of priority, a systemic vision, planning capacity and analytical capacity, he says.

Although in smaller numbers, political competences –governability, negotiation capacity, diplomacy, peacemaker, aggregator– were the most representative in the sample.

“To govern, you need political competence, which articulates the other skills”, says Vânia. “The ideal leader brings together the hard, soft and political dimensions to produce results that exceed the sum of individual results.”

Still on the political scene, 62% of those interviewed were pessimistic or very pessimistic about an eventual victory for former president Luiz Inácio Lula da Silva (PT). Another 46% would feel that way if the winner is President Jair Bolsonaro (PL).

The least pessimistic scenario is the one that traces the victory of senator Simone Tebet (MDB): only 24% of pessimists, compared to 43% of optimists.

According to Vânia Café, the answers do not necessarily indicate disapproval of a virtual PT government. As the poll showed the executives’ concern with political polarization, the answer could indicate pessimism regarding the issue, if the PT wins.

“But the poll did not reach this level of detail”, he says.

Education is top priority for next government, say executives

The survey carried out by the BTA pointed out that the priority of the next government should be education – 48% of the responses. The topic beats other important ones on the executive agenda, such as tax reform (41%), GDP growth (18%), administrative reform (18%) and even the fight against corruption (17%).

“It is the directors and managers who are on the front lines of companies, they feel the difficulty of developing teams, which in many cases have not undergone a good basic education”, says the partner at BTA. “So, at a time of high competitiveness, with many demands from the market, they need well-prepared people and they resent not having this training.”

The executive also recalls that another high-level concern is with the educational gap generated in the pandemic, which involves basic education.

Communication within companies also gained another status after the pandemic years. According to the survey, ensuring communication between different levels within the organization is the third highest priority for 2023 in the opinion of respondents (83% of responses), after achieving superior results (92%) and ensuring efficiency in operations ( 89%).

Investing in the development of people, teams and organizational culture ranks fourth among priorities (81%).

“Companies are concerned with ensuring efficient communication in the midst of work that is often hybrid or even remote,” says Vânia.

For Rodrigo Capuruço, from Volkswagen, 2023 is another year for the Brazilian business community to prove its resilience. “We can’t control the winds, but we can adjust the sails.”