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strategy and business
 / Winter 2009 / Issue 57(originally published by Booz & Company)


Fernando Flores Wants to Make You an Offer

In his consulting days, Flores was a demanding vendor, with a plainspoken, profane style: He was known for calling client executives liars, jerks, or worse if they failed to honor commitments. At the same time, corporate employees learned through his methods to become more autonomous and entrepreneurial, as well as resilient to the slings and arrows of daily life. “My work,” he says, “is to free people from the hindrance of their own backgrounds.” Always present, if not always made explicit, was the example of his own life: If Flores could survive prison and penniless exile to prosper in a new world, so could anyone else.

Some of his students and associates came to speak fluent Flores, employing the speech acts with a consistency that bordered on the cultish. Conversations proceeded via requests, offers, and promises, and this gave Flores a reputation as one part linguistics sensei, one part Pied Piper. Perhaps because of his association with Werner Erhard, and because some of Flores’s followers were former est devotees, his name became tainted in some circles, particularly in Silicon Valley.

“He was out there,” says Paul Saffo, a technology forecaster and visiting scholar at Stanford’s Media X research network. “He added an est-like spin to speech act theory and inadvertently created a business cult. I know several people who became acolytes of his and ruined perfectly good careers.”

Flores’s supporters discovered that using his methods with excessive zeal could have unintended consequences at home. “I started to apply this on a personal level, and it was tough with my wife and kids and friends who were not immersed in the program,” says Miguel Sepulveda, managing director of Antofagasta Railway Company, Chile’s largest private railroad and a BDA client. “You can get kind of arrogant. My father warned me not to turn into the poster boy for language.”

At the same time, Flores’s methods produced results. “Most people in our company were of engineering backgrounds, so we were very attached to a physical reality,” says Sepulveda. “When Fernando spoke of language creating reality, we started realizing the enormous potential for change. We began to question everything.” Within three years, the railway doubled the gross tonnage that it shipped, with the same number of people.

Sodimac, South America’s largest supplier of building materials and home improvement products, credits Flores with helping it successfully fight off competition from Home Depot, which ultimately retreated from South America. “It was not only the speech acts and methodology but the whole philosophy of management that he created,” says Guillermo Aguero, the former chief executive of Sodimac. “I didn’t hire Fernando because of Home Depot — it was a coincidence — but he showed us how to compete with giants.” In addition, Aguero says, Sodimac dramatically improved its supply chain and logistics practices by “understanding the complex web of relationships with vendors as a ‘network of commitment.’”

Other clients realized similar gains during the 1990s. IBM’s key electric card assembly and testing plant, which assembled 5,000 component boards a day, had already cut new-product launch cycles from 28 to 14 days, the industry average, before calling Flores. With BDA’s help, average cycle time dropped to seven days, and new products could be developed, on demand, in a single day. IBM estimated the daily cost savings at $800,000.

Return to Chilean Politics

After more than 15 years of business training and consultation, Flores began to long for a bigger stage. He had spent enough time in academia to know he didn’t belong there. He was a successful entrepreneur and no longer had to work full-time to support himself and his family. And he was tired of endless travel and clients who insisted on meeting with him personally, even when his lieutenants were more than capable. Chile’s return to democratic rule in the early 1990s had provided an opening, and in 2000 Flores moved back to his native country.

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  1. Chalmers Brothers, Language and the Pursuit of Happiness (New Possibilities Press, 2004): An accessible guide to using speech acts in the workplace and elsewhere.
  2. Lawrence M. Fisher, “The Ambassador from the Next Economy,” s+b, Autumn 2006: A Creative Mind profile of Joichi Ito, the Japanese “venture activist” who sees World of Warcraft as a model of organizational design.
  3. Humberto R. Maturana and Francisco J. Varela, The Tree of Knowledge: The Biological Roots of Human Understanding (Shambhala, 1987): Underlying Flores’s work, and that of many others, is an emerging understanding of cognition as evolutionary and behavior as plastic.
  4. John R. Searle, Expression and Meaning: Studies in the Theory of Speech Acts (Cambridge University Press, 2008): Scholarly, seminal essays representing 40 years of research and insight.
  5. Robert C. Solomon and Fernando Flores, Building Trust: In Business, Politics, Relationships, and Life (Oxford University Press, 2001): Flores’s most recent book, coauthored with philosopher Robert Solomon, on the role of trust in modern society.
  6. Charles Spinosa, Fernando Flores, and Hubert L. Dreyfus, Disclosing New Worlds: Entrepreneurship, Democratic Action, and the Cultivation of Solidarity (MIT Press, 1997): Guide for cultivating strategies and skills to be a more effective participant in larger systems, like businesses and societies.
  7. Abriendo Juego, Abriendo Mundos, Fernando Flores’s blog, posted entirely in Spanish.
  8. For more thought leaders, see the s+b website at:
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