Super-rich entrepreneurs love to explore brash endeavors outside the mainstream of their business—say, the high-profile space race between Jeff Bezos and Elon Musk, or Larry Ellison’s obsession with the America’s Cup. But it remains genuinely rare, and worthy of attention, when a billionaire entrepreneur takes a hard look at the society around their business and commits to brash endeavors to challenge inequality, racism, and the crisis fueled by COVID-19.
That’s precisely what’s happening in Brazil, where Luiza Helena Trajano, the longtime leader of one of the country’s most celebrated companies, is generating headlines for her outsized commitments to social justice and public health. Trajano is the high-profile face of a giant electronics-and-appliance retailer named Magazine Luiza (in Portuguese, a “magazine” is a small store that sells a wide range of merchandise). Trajano’s company has become a legendary growth story whose 1,400 stores transformed retailing in Brazil, made her a billionaire, and turned a 70-year-old, 4-foot-nine-inch woman into a homespun business celebrity.
This is not her first bold move. Back in 2013, she formed an advocacy group for women leaders, Grupo Mulheres do Brasil, that now has more than 100,000 members and works on urgent social issues from housing insecurity to domestic violence. Trajano has also been a vocal proponent of vaccinations and other COVID-fighting measures, again pitting her against Bolsonaro, who is one of the world’s most notorious COVID deniers.
Late last year, Trajano was praised by none other than Luiz Inácio Lula da Silva (known universally as Lula), the left-wing labor leader who became Brazil’s president in 2003, lifted an estimated 20 million people out of poverty, and is the current leader in the polls to become president again. (Lula also spent 580 days in prison until Brazil’s Supreme Court ordered his release in 2019.) He wrote a paean to her for the Time 100 list of the world’s most influential people. “In a world where billionaires burn their fortunes on space adventures and yachts, Luiza is dedicated to a different kind of odyssey,” Lula wrote. “She has taken on the challenge of building a commercial giant while constructing a better Brazil.”
That tribute stopped me in my tracks. Some four decades ago, when I took a year away from college to start my first magazine, a crusading little journal called Multinational Monitor, I got to spend time with Lula. He was a radical union activist who had left school after second grade, lost the little finger on his left hand in an industrial accident at 19, and delighted in tormenting the foreign auto manufacturers that were racing to build factories around greater Sao Paulo. Meanwhile, a decade ago, for my book Practically Radical, I immersed myself in the unconventional business strategies of Magazine Luiza, just as Luiza Helena and her son Frederico, who is now CEO, were creating a juggernaut. Their work was so impressive that it literally became a Harvard Business School case study—and a publicly traded company now worth $30 billion.
As I reflect on the unlikely evolution of both of these charismatic figures, I come away with a few lessons on the connection between business innovation and social activism—lessons that (I hope) apply to leaders in many different fields and from many different places.
It’s hard to sustain a great company in a deeply troubled society
That doesn’t mean CEOs and entrepreneurs have to act like part-time politicians, or that every business innovator also has to be a social activist. But it does mean that a truly robust definition of corporate success has to incorporate a company’s impact on society—and identify the effects of inaction on its own long-term prospects. It seems pretty empty to talk about building a healthy corporate culture in a world where so many people struggle with discrimination, lack of healthcare, and a climate that keeps getting hotter and more volatile.
Last November, in one of his many attacks against Trajano, President Bolsonaro denounced her as a “socialist”—which is rather comical given her status as a legendary entrepreneur. But Trajano refused to separate her business achievements from her civic agenda. “I think social inequality must be confronted,” she replied to the President’s criticism. “If that’s being a socialist, then I’m a socialist.”
The logic of business innovation can shape the drive for social change
There is no inherent conflict between a leader’s role as business executive and as a social activist. In fact, activism is at its best when there is a direct connection with competitive strategy. One cannot understand Trajano’s social commitments without an understanding of her business model. Over the years, her company has become big, powerful—and rich—by meeting the needs of Brazil’s poorest shoppers. Unlike its major competitors, Magazine Luiza did not set out to build huge stores for well-to-do customers in major cities, the most sought-after market in a country famous for its skewed income distribution. Rather, it focused on low-income customers in small cities and rural areas.
Magazine Luiza devised a set of innovative business practices to let them buy goods that were previously beyond their reach. No Brazilian company was as creative and assertive at looking at the “bottom of the pyramid” as the foundation of its business—which created a powerful foundation for the company’s social activism. “For a poor Brazilian family to buy a refrigerator, for a woman who works every day to buy her first washing machine, this is not merely a purchase,” CEO Frederico Trajano told me. “It changes and improves the quality of life.”
Leadership for social change isn’t that different from business leadership
Both work best when they’re infused with a spirit of top-down humility and grassroots participation. There’s a reason that billionaires like Bezos, Branson, and Ellison shine the spotlight on themselves when they engage in extracurricular pursuits: Their look-at-me style of leadership is also how they built their companies.
That’s not the case with Luiza Helena Trajano.
Magazine Luiza is famously bottom up and open book. Every two years, for example, it holds the Encontrão (“Big Meeting”), where its most important initiatives get formed, critiqued, and improved upon—by thousands of employees at every level of the organization. “This kind of grassroots dialogue allows for creation of richer strategies,” Marco Pellegatti, a management consultant who has worked closely with Magazine Luiza, told me. “It leverages the diversity of the workforce. It also makes for faster execution, since everyone feels like they have a stake in the strategy.”
That same logic applies to Trajano’s civic activism. The social agenda of Mulheres do Brasil extends far beyond Trajano’s personal agenda. Although her recent public visibility has sparked all kinds of chatter that she might get involved in Brazil’s presidential election, perhaps as Lula’s running mate, she has ruled out that look-at-me option.
Years ago, when I was reviewing Magazine Luiza’s head-spinning growth with now-CEO Frederico Tajano, he reflected on the company’s unorthodox business strategies and concluded, “Innovation takes you to places you never expected to go.” Much the same can be said for his mother, in her new incarnation as one of Brazil’s boldest corporate activists. As businesses everywhere struggle with the demand to create economic value and embrace progressive social values, executives and entrepreneurs might want to keep their eyes on the places Luiza Helena Trajano is going.
Bill Taylor is the cofounder of Fast Company and the author, most recently, of Simply Brilliant: How Great Organizations Do Ordinary Things in Extraordinary Ways. Follow him on twitter @williamctaylor.
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