On my present trip to Bucharest (summer 2010), I am experiencing a strong discrepancy between what I am hearing and observing in some environments, and what I am hearing and observing in others. The article below, purely based on personal perceptions, is offered as food for thought. Both in social and economic dimensions, it seems that we are in the process of witnessing the splitting of Romania into two relatively distinct entities. Indeed, for residents in this country, two different and sometimes complementary economic realities are in the process of dividing the country into two substantially different personal, professional, and social systems. To name these two emerging Romanian realities, one can be perceived as mainstream Romania, or Romania of the past, and the other could optimistically be called the new Romania or the Romania of the future.
The mainstream Romania of the past is the one that is most present in peoples minds, most presented on television, most influenced by the Government, most concerned with the recent financial crisis and current economic recession. This Romania is the one that strives within national boundaries as if the international environment was unimportant. It principally wants to stay out of the reach of global influence while opportunistically maneuvering to attract private investment, European grants and international loans. It lives within its own feudal coherency, is led by its historical clans and circles of influence, is strongly influenced by internal populist politics, is daily facing circumstantial ethics and rampant corruption, and is surviving on the short term by entertaining the prospect of easy wins and immediate gratification.
This mainstream Romania is rather consequent in population size. and is the one that is most suffering from the economic downturn. It will probably continue to do so. The people that belong to this segment are either unemployed, retired, belong to the public sector, or are people that work in companies that provide goods and services primarily to the slumping national market. This population is very profoundly local and nationalist, to the point of appearing provincial. Considering that in the near future, reduced retirement pay and salaries in the public sector will be seriously contained, and that added value and income taxes will most probably be raised and remain high, local consumption can definitely be expected to remain low if not depressed. This is not about to change for at least two years or more. To confirm this state of affairs, the official Romanian predictions do not expect any signs of local recovery until 2012. Incidentally this prediction is made by a government that may not be in office by that time.
To make thing worse for the probable difficulties faced by this mainstream Romania, the recent Greek meltdown is provoking added international pressure. Europe and the FMI are strongly indicating that the wild partying years are over.
Among others, the Romanian government is pressured to move beyond vague promises and really deliver within strict deadlines. It must develop competencies and credibility to permanently reduce public expenses. This is the first no-brain decision that most companies have made at the onset of the crisis at a time that the government increased salaries by fifty percent. Beyond this type of decision of course, the government should also focus on driving fundamental reforms in order to accompany the country’s economy and administration into the modern world. But that will take courage. Political leaders must indeed stop populist politics and learn to invest in all areas that will ensure future growth.
Consequently, if local politicians do not significantly focus on real economic issues, financial support from Europe and the international community will be substantially restricted. What is needed for this mainstream Romania is the courage to perceive that the past booming years of easy money and generalized 8 to 12 percent economic growth are gone, and that these will not return spontaneously. Indeed, if the majority of the mainstream Romanian population and its leaders continue to believe that economic and social development will come from abroad, that the good easy times will shortly return, that it is just a question of patience for recovery to spontaneously emerge, then the deep necessary changes will not be implemented, foreign funds will veer off, and the downturn will linger on for many more, longer darker years.
If, however, local leaders first have the courage to model change and then demonstrate the determination to build the country’s infrastructure and implement necessary reforms in all dimensions of civil society, then there can be a hope that Romania will come out of the present local downturn more rapidly. To make it short, Romania must make decisions similar to Greece’s, Spain’s, England’s, Germany’s, etc. in order to ensure economic recovery. As Winston Churchill said at the onset of World War II, this mainstream Romania is facing a number of difficult years and can expect a near future of “blood, sweat and tears”.
Now there is also another more dynamic Romania that seems to be presently emerging out of the current crisis. This Romania of the future is developing around a number of reasonably reinforced companies. In the private sector, there are currently a consequent number of large, medium and small Romanian enterprises that are literally booming. These are the IT companies, the equipment factories, the pharmaceutical producers, the international service-oriented call centers and all the other professional systems intimately and dynamically linked to the rest of the world. Indeed, these champions are almost all suppliers to the reviving world economy. These export-oriented leaders, professionals and companies are deeply connected to the present needs of a global market and are well prepared to compete within this larger environment. Much unlike the local mainstream Romanian market, the world market is currently waking up, and some niches are even experiencing rapid growth.
Consequently, many Romanian goods and services producers that deliver to Eastern and Western Europe and to the rest of the world are now booming. Most are gearing up for full production if not rapid expansion. Many of these “new Romania” companies are local branches of international groups, many others are majority-owned by Romanians. They all seem to be experiencing a very different local economic reality. For them the hard times are already over, or will be over very soon.
Although until 2008, the booming decade had also lulled these “other” organizations into an illusion of comfort, the recent economic crisis has woken them up and many have used the past two years to significantly strengthen. In those difficult years, many of them have significantly reduced payroll and operating costs, eliminated superfluous expenses, replaced ineffective top management, re-focused themselves on their core businesses, renegotiated contracts with suppliers, developed their ethics and professionalism, raised quality standards dramatically, etc. Today, most of these revitalized local companies have already
faced reality. They are implementing the type of htough decisions that the Romanian government and other mainstream Romania companies have so far deviously avoided.
Also note that before the 2007 crisis, headquarters of international companies were very lenient with their local Romanian branches. They were lulled by the recurrent consequential profits that they were inevitably receiving every year. To get their Romania branches profitable again, these same international headquarters have started to manage their local subsidiaries much more professionally, and they will most probably continue to do so. Most of these have been throurouly audited and a good part of their expat and local management has been replaced. In some cases, the consequences have been dramatic. The job market is overflowing with ex-top executives. As a result however, most foreign branches in Romania are now much healthier than three years ago, and many of them are, at long last, being managed according to truly international standards.
Consequently, of course, Romanian managers in these companies will also be expected to commit to their companies, to deliver results, to develop their people skills and capacity to work within teams, to become more focused on medium and long term strategy rather than just on opportunist quick wins, etc. In short, they will also be expected to become real managers by international standards. To make it tougher on them, the job market for stable positions will also become tighter, except, of course for the very good managers and leaders (again by international standards). It will be more and more difficult to pretend to be a manager by just seducing the appropriate leaders and throwing one's weight around., angling around for personal gain at the team's expense. In these companies, humility and hard work will become differentiating qualities to get promoted. The trend has started, and except for a few branches of international companies that have unluckily not really felt the recent crisis, the new Romania organizations are now much leaner and are becoming much readier for international competition.
Another segment of this “Romania of the future” is constituted of more internationally minded nationals who are keenly aware of the behavioral gap between local social and political strategies and normal behavior in more mature democratic nations. They can see beyond national boundaries, and they compare realities. They are deeply disappointed by what they perceive of mainstream Romania and are searching for ways to provoke and accompany needed local changes. They are truly concerned with their country’s real and ethical development. Rather than decide to leave and live abroad (a true option for many), they choose to stay in order to find how to participate in the necessary local transformations, even if only on a small and personal scale.
Less protected by a large corporate environment, these professional individuals and smaller companies carefully choose their suppliers, clients, partners and friends and struggle to create islands of ethical income and smaller healthy social environments. Although life is not easy everyday for this segment of the “other” Romania, it is also facing an upswing on the much shorter term. Indeed, their focus is not on immediate illusionary gratification but on gradual but steady and solid improvement. Even if it takes patience, their strategy can only succeed. Indeed, their economic environment is much more strongly linked to international standards and will consequently grow at the pace of recovery of the rest of Europe and the larger world economy.
For the time being, this group seems to be a minority, but its budding success will deliver a strong local message.
Whatever the future brings on Romania, it is important for all to make the right choices today. It will be much more productive to accompany all endeavors that support organizations, systems, professionals and people that contribute to making Romania and Romanians true partners in the larger world economy. Focusing on developing international standards, behaving according to international leadership ethics and humbly modeling true management skills, raising productivity levels to become competitive in Europe if not on the larger world market, and participating in building the Romania of the future is the best present and local success strategy. In my own way, that is where I wish to contribute, and present indicators of success in my local business are reinforcing my convictions.
But what exactly is an entrepreneur, or what are entrepreneurial dynamics?
In the present business environment in Romania for example, one could say that the definition could encompass all of the above, and probably more specific criteria to include a personality profile, a number of survival strategies in the business environment, a particular observable ethical stance, a range of precise personal and professional behavioral patterns.
In fact, all over the world, entrepreneurs have been studied as a particular psychological profile. If they are just superficially classified as a slightly different type of professionals among other businessmen, entrepreneurs are also known to have a particular frame of reference or perspective on reality, a specific belief system and a range of typical behaviors. Resting on this knowledge, the article below provides a relatively precise definition of what it takes to be an entrepreneur. In short, it offers a more detailed inventory of their specific psychological and behavioral profile.
But let us proceed with caution. The descriptions and reflections that follow do not apply to all the people who believe they are entrepreneurs nor to all those who have developed their own personal businesses. This article attempts to propose a very general profile that may or not fit individuals who present themselves as entrepreneurs nor all the people who are perceived as such.
In some cases, the following descriptions may seem to present an extreme caricature. In other cases, one may feel that the picture really fits some very precise and well-known people. Sometimes, only a number of the characteristics proposed below will fit, but not all. Suffice it to say that this article is not defining anyone in particular but what may turn out to be a very coherent and effective business developer’s profile.
Nonetheless, consensus characteristics of entrepreneurs are quite clear. This type of person is deeply motivated to develop a personally owned independent, successful and highly visible business. They want to acquire economic freedom and an undisputed control of their own lives through the acquisition of material wealth to achieve social status, economic power and possible political influence. In fact, securing the control of their immediate business environment and of all people who could positively or negatively influence the measurable results of their enterprise often becomes a central development strategy. To achieve these goals, a number of other attitudes and behaviors are often initially present or are gradually developed by entrepreneurs.
To achieve control of their immediate pertinent environment, the main communication mode and behavioral pattern entrepreneurs generally implement rests on displayed or underlying directive attitude. When it is outspoken, this directive behavior is generally focused on achieving precise short-term tasks that need to be immediately carried out by the personnel on hand. Whenever they are in their operational mode, whoever happens to be closest at a given time is told exactly what to do and to rapidly report back that it has been successfully carried out.
This illustrates that entrepreneurs are intensely action-oriented and highly reactive to immediate stimulus. They are extraordinary power horses that often succeed in totally exhausting their available personnel by pushing them to produce fifteen hours day, including during power lunches and action-oriented virtual breaks. Literally perceived as supermen or superwomen, entrepreneurs are hyperactive workaholics that seem to never rest, tire or become ill.
As a consequence to this hyperactive dynamism, entrepreneurs do not like to be alone. They are almost constantly surrounded by a group of efficient people and personnel who are capable to immediately and effectively act on whatever directions they are given, without useless questioning and discussion. Entrepreneurs know how to make instant decisions with the aim of immediately influencing reality in the direction they want it to evolve.
As soon as entrepreneurs get a good idea, they decide what to do and then want their decisions to be implemented without qualms. Consequently their form of directivity is very short term and action oriented, and they expect to have rapid and positive progress reports in return. Inherently impatient and opportunist tacticians, they also believe it is a waste of time to plan on the long term and uselessly delve on strategy or vision.
To get things done, entrepreneurs usually depend on a close circle of trustworthy and very dedicated lieutenants. The bonds between an entrepreneur and each of the members of their close professional network are very strong, intense and personal. Entrepreneurs want to know everything about whom they hire and need to trust. They demand total availability and commitment.
It consequently seems that people who work for entrepreneurs are often required to have no demanding social or private lives. Work and availability to cater to the entrepreneur’s wishes and needs always come first. Calls in the middle of the night, convocations during weekends and vacations are habits rather than exceptions. Coming very early in the morning and staying late to work every night are the rule. In return, each employee is lavishly paid and may get extraordinary treatment in exceptional situations or when in need. Indeed, good entrepreneurs know how to protect and compensate their very dedicated soldiers. They build their reputation on how they support their people and these are generally proud to serve them and envied by others.
Entrepreneurs who have been very successful and who head very large organizations also know how to apply this preferential system to a much larger number of well-paid and recognized elite troops. These are placed at the heart of the organization, recognized at lavish conventions, publicly praised for their successful accomplishments, extremely well paid and very comfortably supported. In return, of course, they are expected to be totally available and regularly deliver without hesitation.
It often seems that the bond between entrepreneurs and their preferred personnel are so strong that they are as intense or even paramount to family ties and other personal relationships. In effect, successful entrepreneurs know how to build very powerful networks of relationships in which they are the sole and central object of admiration, if not worship. On the long term, this may strongly contribute to building entrepreneurial egos, their impatience and intolerance for slow or mediocre results.
A very dedicated network of committed employees is central to achieving long-term goals for most entrepreneurs. This network may in fact often be much more important to them than the fields in which they choose to invest and develop. Consequently, if an entrepreneur decides to pull out of a given professional area and develop in a completely new arena, their troops usually follow them no matter the nature of the change. This strong bond reveals that entrepreneurs are not only directive. They have a very powerful power of attraction. They seem to resonate more intensely with their organization than with their markets or clients.
In as much as entrepreneurs like to be constantly surrounded by others, they are highly interactive people and can relate with them a very frank, direct, spontaneous, friendly way. They like to joke, socialize, eat, drink, laugh and play with full-hearted intensity. They often have a reputation of party goers. They also regularly organize lavish feasts in order to please and impress their troops, friends, prospects, professional and political network and potential preys.
Entrepreneurs are also often very seductive. They have warm presence and charm, and they do not hesitate to use it to the advantage of both their businesses and personal pleasure. This seductive capacity is often used very consciously to attract any opportunity that should arise and to interest any person or group that could be useful to achieve their goals. They have very sharp senses that enable them to quickly evaluate people and situations they can use to their personal advantage. They quickly and intuitively judge situations, target their preys, victims or objectives and then quickly move in to achieve results. Should the environment present no perceptible interest, however, then they get bored and either get on their phone, clam up or get impatient to leave. Consequently, it can be deduced that they are interested almost exclusively in people and situations from which they perceive they can get a personal or professional profit. Even when they are appearing as a warm friend they are full-time carnivorous hunters.
Beware: even when apparently relaxing or recreating, entrepreneurs are always ready to react or become powerfully directive if the situation becomes critical, no whatever the personal or professional context. Part of their attention is always prepared to deal with perceived danger at a pin’s drop and ensure their personal and business interests. It is as if a permanent safety patrol is ensuring twenty-four hour surveillance to ensure immediate and powerful direction should the need arise. One should not even attempt to catch a true entrepreneur off guard.
The seductive dimension of entrepreneurs is very much directed at new opportunities, interesting businesses, useful partners, beautiful women. In all fields, entrepreneurs love novelty. When they have succeeded in creating a first organization, they will soon start looking around for another business opportunity, and then another venture and another project. Unable to focus on only one field of interest, they often create a network of companies.
The danger in an entrepreneur’s developmental frenzy is that they may spread their resources very thin and forget to ensure the solid stability of all their areas of development. This could categorized as very poor risk management. They often behave in the same way in their personal lives, moving from one conquest to another and yet another, loosing interest in each as soon as a new opportunity appears on their radar screen. Consequently, a Don Juan or Casanova pattern relentlessly focused on achieving new conquests is inherently identical in both their personal and professional lives.
As a consequence of this constant interest in pursuing new partnerships, dimensions, directions and enterprises, entrepreneurs are perceived as creative developers and ambitious promoters. When successful, they develop groups of companies in fields that may have no other connection between each than to have once attracted the attention of the entrepreneurial boss and owner. This constellation of organizations can sometimes develop into large holdings if not conglomerate empires. The danger, however, in their multiple fields of interest is that when they move on to their next conquests, they may forget about their previous acquisitions, and ultimately let them go to waste.
This lack of long term constancy or commitment to clearly delimited realms of interest are linked to entrepreneur seductive patterns on the one hand and to their almost vital need for freedom on the other. Entrepreneurs hate to feel controlled, stuck, trapped, or tied down. Their extremely high capacity to adapt to any new situation is directly proportional to their imperative need to escape as soon as they start feeling cornered, enclosed or the necessity for commitment. Entrepreneurs run away from anything that looks like chains.
It seems that in their formative years, many entrepreneurs have experienced growing up in multiple environments, moving from one community to another, one family to another, one school to a boarding school to another educational institution, one country to another, etc. In order to rapidly fit into strange new environments, this type of historical background tends to develop highly adaptive survival skills. In this type of context, it is indeed useful to protect one’s self. One needs to know how to and where to escape if the immediate environment becomes too uncomfortable or dangerous. From this type of background, staying on the lookout and never really trusting anyone has gradually become an existential survivor’s modus operandi. This type of past is the foundation of a real entrepreneur’s business development and survival skills.
As a consequence, entrepreneurs never really put all their eggs in the same basket. You never know what may happen in the future, so it is strategic to have businesses in different countries, put something aside in a tax haven or two, spread wealth in different bank accounts, invest in very different ventures, partner with different people from different networks, and keep all these hermetically unrelated. Entrepreneurs often implement this fundamental survival strategy both in their personal and professional lives. It participates in giving entrepreneurs both the necessary security to feel free the bad reputation of not knowing how to totally commit to any one person, system, idea, project etc. on the long term.
Considering the above criteria, it can be said that entrepreneurs do not like limits. They indeed tend to cross the red lines, regularly bend the rules, freely interpret legal principles and repeatedly stretch their accounting presentations. The name of their preferred game is “Cops and robbers”. They firmly believe that if they can outsmart rules and regulations to their personal and professional advantage and get away with it, then they are right to take advantage of the situation. The day they are uncovered, they first deny then hide, disappear, leave the country, and start again elsewhere. That is when they are not caught and fined or judged and imprisoned. Again, this can be categorized as extremely poor risk management.
To implement original tactics to bend the rules that apply to others, entrepreneurs are very creative in finding angles, flaws, loopholes, and other hidden opportunities. They consequently know how to take advantage of situations where others only see clearly defined limits. Note indeed that successful entrepreneurs usually hire an army of very effective lawyers and financial consultants to ensure their success, while they intensely stretch the boundaries of acceptable or ethical business behavior. So long as they are not caught or cornered by a smarter judge or tax inspector, they consider that they are operating within legal limits.
This explains why entrepreneurs typically flourish in areas of the world where legal and law enforcement systems are still weak or nonexistent. They actually participate in developing new territories, deserts or jungles much like the robber barons in the famed Far West. Entrepreneurs thrive in these and other uncharted areas, often close to the outer limits or boundaries of otherwise well administrated systems, until civilization arrives to impose structure and justice.
One advice to give entrepreneurs could well be to ensure that they surround themselves with excellent lawyers and financial support systems in order to make sure they always stay within the limits of legal and financial rules and regulations and acceptable ethical behaviors. They need also to learn to listen to these advisers. This may become a difficulty if their rapid success ends up swelling their egos to the point of feeling indestructible. Success makes them sometimes reckless. Entrepreneurs should always heed that limits do exist and can be imposed by society.
Another danger for the less ethical and avid entrepreneurs may appear when they unwittingly stretch the rules that apply to decent and timely pay of their employees and when they forget to respect their suppliers and clients on the market. They are sometimes too tempted and succumb to the temptation of a useless show of force or of a quick win by regularly cheating or mistreating members and companies in their business environment.
As a result, they may gradually and unknowingly develop a well-earned negative reputation that will ultimately impede any chance of success. In a short time, all the good employees leave and tell everyone why, and the embezzled clients and suppliers move on to collaborate with more ethical partners, and also spread the word. Very rapidly, these entrepreneurs come to their cheap limits. They then change environments to start again the same pattern in a field where they have no reputation, and if they do not change strategies and behavior, they achieve the same type of results within the same span of time.
There is absolutely no doubt that entrepreneurs are fundamental materialists. Symbolically, if they are not stopped, their ultimate aim is to conquer the world or as much of it as they can within their expandable business environment, sweeping aside and sometimes destroying all visible competition. One business after another, one area added to another, one acquisition to prepare another, piece by piece, the name of the game is territorial expansion and control.
Paradoxically for entrepreneurs, this very high focus on territorial and material conquest is elevated to the dimension of a lofty ideal. This may explain why for entrepreneurs, the end often seem to justify the means. Forgetting about elementary ethics, bending the rules and ruthlessly eliminating others on the way to success is just a small price for them and others to pay in order to achieve their ambitious personal goals.
Under stress and when exceptional opportunities arise, an entrepreneur’s extreme survival behavior will surface and reveal that they can be ruthless, single-minded, rugged hunters. In these cases, they may very suddenly and brutally affect or destroy both their personal or professional environment. “Business is business” is often the justifying motto used as a response to anyone who may challenge an entrepreneur’s disloyal tactics, deceptive strategies, social untruths, treacherous reactions, and otherwise borderline ethical behavior.
Of course, this behavior on an entrepreneur’s part can contribute to making a lot of enemies that will not hesitate to pay them back tenfold, the day they are in a weak position. Note that this medium or long-term result is often what has destroyed many an entrepreneur’s initially successful career.
Consequently, to accompany entrepreneurs that wish to develop on the long term and as well-rounded people, an excellent strategy consists in helping them become more socially conscious contributors. Coaching them to consider the benefits of respecting the environment, of investing in useful and visible foundations, in supporting not-for-profit associations and in developing truly sustainable business models can be an excellent way to begin their transformation. Entrepreneurs then gradually discover that positive participation in an effort to build society on the long term is just as satisfying as selfishly accumulating personal wealth, if not more. Luckily, numerous entrepreneurs choose variations of this path once they start succeeding. They then invest in socially conscious businesses or decide to end their professional lives as very generous donators and philanthropists, supporting the arts and humanitarian causes.
In the same way as it is useful to accompany idealists to get both their feet firmly on the ground in order to learn to manage day to day material reality, it is useful to help entrepreneurs to truly discover the more vertical and spiritual dimensions of their lives. In that way they can learn to invest some of their time and energy in developing themselves more profoundly. This strategy can take the form of vision work focused on long-term sustainable business development or determining a more immaterial personal evolutionary aspiration that runs deeper than just focusing on survival and accumulation of tangible wealth. In the course of this work, however, one must beware. Numerous entrepreneurs may sometimes just use the marketing power of an idealist ambition to fool the masses and better achieve their selfish personal success. That has often been witnessed in politics.
Entrepreneurs often pair with other entrepreneurs and sometimes even seem to either hunt together on the same territory or strongly support each other’s ambitions in very different realms. As a couple, they often both have their separate realms of interest, independent and unrelated businesses, autonomous areas of development
and expansion. Whatever their unified or separate professional choices, they are often very visible, social and political couples, each adding to the other partner’s capacity for seduction and development in a wide variety of circles.
Sometimes the more reactive, directive or ruthless nature of their profile and behavior will result in extremely high visibility on the covers of scandal-oriented newspapers spreading news of their boisterous behavior and contradicting rumors concerning their intimate lives. Sometimes their more glamorous dimension will regularly expose them in glossy publications displaying their social success in artistic circles, business conventions and political events.
Either way, entrepreneurs consider that the media exposure participates in creating the myth that they will use to get leverage and achieve future goals, increased celebrity and more power. Either way, these public displays will invariably publicize their presence, status and wealth and show all that they have achieved ambitious materialistic goals and social status. Invariably this will feed the ambitions and fantasies that participate in motivating the development of competition: future entrepreneurs.
Some entrepreneurs will be much more secretive and choose to protect the quality of their private and professional lives behind high walls or far away from paparazzi cameras and the public eye. This generally applies to those who have learned to achieve a balance between contributing to added value for society through socially useful enterprises and investing in their private and personal development. Among these will be found the truly fulfilled entrepreneurs who have achieved equilibrium between external material success and internal personal or spiritual growth.
In the course of the last twenty five years I have worked in a large number of countries all over the world. In each and every case, Romania included, the diversity and the constant challenge has always both challenged and interested me.
What is different about consulting in Romania? I often get that question both there and the rest of Europe. A lot of people are interested in Romania and perceive it as a far-off unknown land at best somewhere in Eastern Europe. In Romania, however, people both want to know and don’t want to know how they are perceived by foreigners. I have the feeling that Romanians are very eager and afraid of other people’s perception of their culture in general and of their business culture in particular. Maybe more so than in other countries. It is difficult to say things without ruffling feathers. That is a first difference about consulting in Romania, or being an expatriate here.
So answering the question is not easy. I usually try to respond to the best of my ability, and have often fallen short of expectations. But I have never avoided the question when it has be put to me.
When I start a new consulting project there, am aware that I have preconceptions of what I will find, based on local experience. I feel there are specific characteristics about working in Romania. However I question these preconceptions because they are most probably not true for a lot of organizations, regions and people in Romania. Besides, it is very important for me to approach every new project, organization and client with an open mind, free of “pre-judgments”, or “prejudices”.
But to cover one of the differences that strike me here, I would like to start with a Romanian quality. Every time I come to Romania I am struck by the people’s friendliness and respect. There is very a high level of politeness, civility, “bonne éducation” one would say in French. Romanians like to welcome, receive, host, make you feel at ease, and like to show they listen and value what you have to say. The culture and the people are warm and “open” to others rather than “competitive” or resistant. Relationships are polished, showing respect and saving face is important. And whether rich or poor, Romanians always give you the best they have. It is always a great pleasure, especially in contrast to more direct, less generous or respectful environments, like sometimes in France.
The other side of the coin is that I sometimes measure the extent of all that is not said, not shared or withheld, to save the appearance of a good relationship. Organizations and cultures that favor apparently good relationships above all have important counterproductive limits. Its members will often face a difference of opinion with apparent passivity one could mistake for acceptance. Contradictions are dealt with in very indirect, devious and sometimes manipulative ways. Conflicts are not apparent, and therefore sometimes all the more difficult to resolve.
I have found that relationships are so important in some Romanian companies that these often take precedence over effectiveness or results. Defining and solving problems, making decisions, managing action, and running efficient organizations, all seem to come second to developing or preserving good networks with people and groups and catering to different internal and external webs of influence.
More than elsewhere, it seems important for Romanians to develop and follow up on coalitions and allegiances, to have a personal hold on people through secrets and knowledge of confidential information, to create solid friendships with potential partners in strategic places rather than to focus on challenging objectives, respecting deadlines or attaining exceptional financial results.
“Without relationships, you get nowhere” could be the motto which designates relationships as the main means to success. This would make Romania quite oriental, in its business culture. Paradoxically, however, it sometimes seems that entertaining good or useful relationships has become a fulltime job that does not lead anywhere else. For a lot of people, it appears to have become a goal in itself.
Although that is slowly changing, I have been told the job market is generally “difficult”. As an indicator, that is interesting. Finding openings is not easy for anyone, no matter the position. It is due in part, if I understand correctly, to the very low turnover in Romanian organizations. Traditionally there is very little mobility.
People get into organizations or “find a place” through relationships. Then they stay there as long as possible, developing the network around them to make their “position” safe. To do that, hiring old time friends, bringing in some family, and weaving strong personal ties with people already in place are common strategies. Implementing this takes time and energy, and the outcome is a safe lifelong position. What then is the benefit of changing jobs?
At first I was also struck by the amount of time and energy spent in what one could consider ‘gossiping’. Who did what to whom, what the other did in return. Who else was then involved to clear out the situation, who then got hurt or mad. It seems there is always a “dramatic” play going on, that attracts organizational attention and keeps “confidential” discussions rolling between not-so-innocent bystanders. Beyond gossip, however, it is almost vital in some spheres to keep up with the relational information and know who ends victorious. The winner of relational “duels” obviously pulls the most weight and being friendly to them may someday be useful.
Leaving any organization may therefore be a risk in Romania, not only because one looses a job and a salary, but because one will have to rebuild their relational base all over again elsewhere, in another organization which already has very strongly structured social networks, often resistant to newcomers. One will loose a lot of time and energy learning the new spheres of influence, finding the good information outlets, developing the right connections. This is very costly, and so the low turnover rate.
One needs to note that gossiping as a national sport Romania is also a passtime that is not helping the coaching and consulting profession. "Don't tell anyone I told you this, but.." is the introduction often used to pass on confidential information. Unfortunately the initiator rarely considers that the information will surely spread with the same introduction, and that the world is a very small place.
As a consequence and knowing this all too well, numerous clients are quite hesitant to really open up to a coach, and even less to a local coach. Indeed, how sure can one be that the professional who is intimately part of the local culture has truly learned not to use confidential information to increase his or her importance in this relationship-based environment? To coach executive teams and important figures in the country, this state of affairs may be giving foreign coaches a definite advantage on local providers.
There are also very positive aspects to this type of relational organization culture. Organizations in Romania are made up of very strong and tightly knit clans. The clans have a high obligation to protect their members. There is therefore a good level of concern, support and solidarity between clan members. Fidelity runs high. The clan will protect you if you protect the clan, no matter what happens or what it does. Your clan can become more important to you, to ensure your survival, than your organization. Remember that this concerns lifelong commitments. These social networks or clans can survive through major economic and political upheavals. I suspect some have been here a long, long time, and some today cross international boundaries
The flip side of the coin is the highly conservative dimension of relational clans. Change can be dangerous to internal hierarchy or networks of influence. Whatever comes from the outside can be disruptive to the subtle “clan” relational equilibrium. Some strongly-knit “clan-like” or feudal organizations would rather let themselves die than accept change. They would prefer excluding the environment rather than grow and see their power base get modified to their disadvantage. Protecting the clan is paramount. Other operational and objectives are secondary.
Working with companies that are so highly involved with complex relational networks of influence at all levels, is very difficult for the unknowing stranger, the expatriate or the foreign coach or consultant.
To be accepted by a relational company with this type of “feudal” culture, one must first show that they accept its premises and operating principles. This is quite a contradiction for an outsider, a consultant or an expatriate who is officially there to help implement change. To implement change in an organization, it is useful to propose new basic assumptions and help implement different and more efficient and effective operating principles. It is also often necessary to model different ways of being and relating. But if you represent change to a “feudal system”, there is a high probability you will be rejected by all as unacceptable.
To pass this hurdle, there are some possibilities. There must be at least a few internal strongly motivated “change agents” who are personally and deeply committed to developing a different future for their organization, if not their country. It is obviously useful if the leaders and owners are amongst them, as well as members of the most influential clans.
But this is not enough to implement organizational change.
There is a another criteria about doing business and consulting in Romania which comes into play at this point. It seems that in general and more so than elsewhere, Romanian employees have exceedingly high expectations of their leaders, and are equally disappointed with them. Normal: leaders are human.
There is a widespread belief that change must come top-down from the hierarchy. And if hierarchy does not plan for it and implement it correctly from start to finish, then not much can be done. According to the personnel, it seems the leaders are responsible for everything, and owe them results. Romanian personnel seem to spend their time holding their leaders accountable for results, not the other way around, as one would have it elsewhere. It is striking to see the number of people who consider that the evolution of their own professions, positions, jobs, and even lives, are out of their hands, in those of their hierarchy, of the state, and today of Europe.
This tendency to delegate responsibility upwards and wait in a more or less passive or expectative stance for significant change makes it difficult for people to motivate themselves and provoke even small significant differences in their direct environment. There is a general shared perception that change is the responsibility of “someone up there”, if possible of a well-meaning leader or more vaguely, of the “system”. An individual is helpless and cannot do much to modify anything for the better in their own realm of responsibility. What a load to carry for any leader!
For the personnel, there are personal and collective advantages in having this type of belief and position. One of them is not having to be responsible for goals and results. Whenever anything is not achieved, it is invariably because of the leader’s decisions, because of the social, political or European context, or all of the above. If we are convinced that our leaders are both totally responsible and not very competent, we never have to feel responsible for our own unsatisfactory lives and results.
For a consultant in Romania, dealing with this upwards delegation and passivity is also difficult. People agree with what you have to say as an expert, but don’t expect to change their habits. For them, change is the consultant’s and leaders responsibility. That is what "they" are paid for. The tendency is to try and delegate to him or her all the research, analysis, decisions and responsibility for problems and solutions, and wait for results in a passive and critical stance. It is as if one could teach effectiveness and other ways to achieve success to hopeful but passive students.
Here again, the strategy for the consultant, or leader, is not to take on the apparent challenge. It is in fact a trap. One cannot help a team or company grow or help solve its long term problems if there isn't at least an “active minority” of employees ready to take on the challenge. The organization and some of its personnel, must actively want to succeed before success will come their way. In a way, this would justify choosing a coaching approach to help Romanian personnel help themselves. Only afterwards, when the personnel wants change can consultants and their "expertise" be useful.
The first step for a leader and consultant who wants change in an organization is therefore to develop an active circle of internal change agents. A new “network of influence” of key employees who can be trained to foster change, mobilize motivation, take initiatives, stay centered on developing effectiveness and take pride in delivering results. This “change agent network” has to be well chosen, structured, trained, supported and closely followed to succeed in a resistant environment.
So like elsewhere, a coach or consultant in Romania faces several hurdles and as usual, there are strategies and solutions to overcome them. These hurdles may be found elsewhere in other companies and cultures but it seems to me there is a mix specific to Romania. That is what makes the job of a consultant so exciting: constantly searching for and finding new ways to learn and grow together.
On this trip to Romania, I have been struck by the number of times I have heard leaders and managers pronounce the word “crisis” to describe the present economic situation. Indeed, it seems almost socially fashionable for the whole Romanian population to have long discouraged discussions on the subject.
Note that along with the use of this word comes a commonly accepted frame of reference: the present situation is perceived as temporary. When it will be over, all will come back to normal, that is to say: to what life was before the crash.
Consequently, a large number of people are bracing to wait out the crisis, hoping it will be short. Some self appointed futurologists are reinforcing this idea by announcing probable dates, such as 2010, maybe early 2011.
For organizations to survive through this period, the main fatalistic financial strategy is very logically first to cut all expenses that are not perceived as productive, second to downsize production. When times are good, spend in marketing and hire personnel. When times are hard, cut all unnecessary expenses and fire. To be sure and for lack of real leadership, that must be the pinnacle of current strategy.
This is not a crisis but an adjustment
Imagine, however, that the business environment in Romania will not shortly return to what it was. Consider that the presently perceived temporary crisis is really a permanent adjustment to the larger European and global economic environment. Envision that all the market segments that have grown by over 20% yearly to rapidly boost Romania towards consumer maturity will never again develop in the same exceptional proportions.
This alternative frame of reference may drive individuals and organizations to radically reconsider their present strategy consisting in cutting costs and just waiting it out, hoping for the best.
If one chooses to believe that things will never be the same again and that the future will be completely different, then it is urgent to make courageous decisions and take action without delay.
Consequences for leaders and managers
Preparing for a deeper transition in the present economic situation calls for a completely different type of leadership and management style. When the market grows by double or triple digits yearly, basic management decisions are the rule. Invest heavily in every possible direction to occupy the terrain, develop visibility through intensive marketing and pacify your personnel with lavish spending. Indeed, employees will be reasonably happy if they can personally benefit from the booming economy with a regular substantial increase in their personal lifestyle.
Exceptional growth in recent years has permitted a large number of quick promotions, a huge surge in per capita income and the creation of a consequential middle and upper class. Anyone with reasonable expertise is now enjoying a managerial or executive position. This
miracle has been achieved within a decade thanks to the booming Romanian economy.
Note however, that a large number of people holding relatively important leadership and managerial positions have achieved professional success by simply surfing on the market and not making too many mistakes. If nine percent growth has placed Romania in the first ranks of western developing countries, it has also lulled a large number of leaders and managers to believe their behavior was responsible for their organization's success in the market's natural
Reinforced by these relatively extraoerdinary results, numerous are the leaders who have developed a very satisfied, individualist, sometime autocratic and oftentimes arrogant management style. They may sometimes rather be perceived as having developed an attitude.
Organization culture consequences
The consequence in terms of management culture can be observed in numerous companies today. In the recent past, the best way to get an easy promotion was to develop personal career-oriented strategies: Always agree with your leaders and show evident signs that you admire them, never propose contradiction, avoid taking any original and successful initiative that may be interpreted as a threat to your environment, don’t take risks, hide mistakes and do not communicate bad news. In other words, lay low and reinforce management and executive egos.
As a result, numerous Romanian executive teams and top management have lost contact with what their employees really think. Worse, they often don’t even care. In numerous Romanian and multinational companies, one can perceive a deep schism separating upper management from their employees. This state of affairs may in fact be the real present crisis.
Leadership and top management urgently need to re-establish communication channels with their personnel to reinstate their company’s social contract. To do this, executives must rapidly develop their people skills. They need to learn to work together rather than agains each other. They need to develop respect for each other, for their managers and for all their employees to start tapping the unused, dormant potential within their organizations.
Executives first and then their managers also must start to really listen to their people. That means they have to stop pretending they have all the solutions and alone know what needs to be done to face a very uncertain present and a radically different future. Developing basic
communication skills and the capacity to establish respectful relationships with the personnel is an urgent necessity.
If we believe that we are not going through a temporary crisis but that we must permanently adjust to a new global reality, then urgent operational decisions must be made and precise action must be implemented. The focus cannot only be financial and this calls for new priorities and competencies in the decision-making process of executive teams.
All HR strategies previously geared to spending money to pacify personnel and middle management must be redirected to helping them focus on increasing quality, developing effectiveness and delivering measurable results. Management must also learn new competencies. Rather than favor individual career-oriented relational strategies, it needs to develop more performing teamwork and collective performance focused on achieving measurable results. Beyond reinforcing individualistic strategies, learning how to manage and develop teams is the key to success on the future markets.
Training and coaching
Presently, the training profession is also going through a very difficult period. Lavish leadership roll-out programs focused on delivering leader-chic principles are being cancelled. It seems they are suddenly perceived as unnecessary expenses that have created very little measurable added value. Probably, training needs to be redesigned to very practically help develop everyday individual and collective behavior aimed at increasing operational results.
Interestingly, in this transition period, there is one profession that appears to be booming. Coaches who are well trained in accompanying individual and collective clients towards making the necessary urgent decisions to achieve measurable results are suddenly in excessive demand. Some of them are even fully booked.
That may be an indication that some have understood that the current situation signals a coming fundamental shift in the Romanian economic environment if not in the society as a whole.
I do hope that this transition is good news for you.
The crisis has come and settled into our everyday reality. Of course, some say this is not a passing crisis but a permanent adjustment for the Romanian economic environment. Crisis or adjustment, however, this period is provoking CEOs to ask themselves pertinent questions about where they have been spending their money in the past fifteen years, and particularly about the measurable results of two decades of training expenses. Indeed, in soft skills such as management, leadership, communication, sales, team work, negotiation, time management, personnel evaluation, etc many companies have spent millions of Euros to train their managers and personnel by the hundreds. The current question is: What are the measurable results today?
In the past, these training programs were sold to CEOs both by Human Resources and by training companies as a necessary long-term investment to develop people. These programs were generally designed as motivating if not entertaining, and organized in locations perceived as indirect perks to increase personnel satisfaction and company loyalty, if not compensate dissatisfaction. This goal may have been partially achieved.
But after all these years of intensive personnel training at relatively high expense, the time has come for an evaluation of the measurable effects in the development of employee and manager practical skills. Where indeed are the well-trained leaders and managers? Where are the good communicators and salespeople? Where are the good team workers and negotiators? Which organization can boast really implementing a performing personnel evaluation program? Which managers or leaders really delegate and have definitely resolved their time management issues? Where are the teams in which members really cooperate and achieve ambitious goals together? When taking a close look at results in many companies, the measurable return on investment of training programs could generally be considered a dismal failure.
- Consequently today in many companies, both CEOs and Human Resources are questioning themselves and past investment choices. The search is out for the really good training programs, for the really performing training companies, for methods to really measure training results.
Now is this really different? In the past ten years, companies have been searching for the good training programs, for the performing training companies, for methods to measure training results. Although we all agree to the problem, it seems that all are preparing to apply the same solutions that have not worked in the past. Today, we need to take a real step back and fundamentally reconsider the framework in which training has been delivered in the past fifteen years.
Recently speaking with a Romanian CEO about team coaching, he questioned me about the measurable results of team coaching. I asked him the following question: In his executive team, what effectiveness criteria could be measured before a team coaching process, that could again measured after, in order to measure return on investment? The CEO was suddenly silent, as if at a loss for words.
- Indeed, to measure results of any action, one has to have precise measures before the action and a clear idea of what needs to be changed. One has to define specific needs and then set precise goals for change.
The CEO then proceeded to discuss what his needs were more precisely: His executive team meetings were disorganized, too long, too informative and argumentative. They produced few decisions and these rarely led to any measurable actions in the field. These meetings were not only considered ineffective, but they reflected the general way the whole organization was managed.
Consequently in this organization, the effectiveness of a possible executive team coaching process can be precisely measured. If during or after the coaching process, this team's executive meetings become more efficient, shorter, less informative and argumentative, if they result in more collective decisions that are followed-up by implementation within the company, one could conclude that the return on investment was satisfactory.
To measure ROI, one could be even more precise. If the meetings became half as lengthy, and if they produced twice as many good decisions, their effectiveness would then be multiplied by four. One could calculate the expense of the time spent by all the executives, the number of implemented decisions within their deadlines, the quality of the executive team information process, etc. Basic Euro added value could be calculated and then compared to the total investment of the coaching process.
Comparisons with traditional training
Now in the above example there are a few subtle differences that make team-coaching return on investment more measurable than more classical training programs. The first main difference is that the above example concerns a defined local system: a specific executive team.
Most training programs are delivered to non-local groups of participants that never work together. The focus of most training is on the training content, not on modifying on-the-job measurables before and after the training. The measures of results of habitual training programs are also made very difficult when individual participants return to their distributed teams.
- There are much higher measurable results to sales training, for example, if the program is delivered to intact local sales teams with a team-coaching approach, one sector or region at a time, and with their hierarchy than if it is delivered to individuals originating from very different distributed teams.
Of course, coaching real systems such as sales teams, including hierarchy in these programs, requires a very different set of skills on the part of the “trainer” than when dispensing training to a distributed group of individuals that do not habitually work together.
- Working with real teams in a team coaching, team training or team development process will automatically address the issue of team member interfacing effectively to achieve their team goals.
This addresses the fact that most team and organizational issues concerning active collaboration between team members are totally avoided in traditional training contexts. It is indeed impossible to address real operational issues between team members when the team is absent from the training context. The result of this systematic avoidance in traditional training sessions is that it is very rare to find teams of individuals that really know how to work together. Unfortunately, this is true of all the executive teams of CEOs I have met. Individuals who do not know how to really collaborate in order to achieve collective goals are now running most Romanian organizations;
- When a team works together with its leader to address its issues in a team coaching or development process, it can immediately decide on the changes it wants to implement and it can immediately designs methods to follow up on those changes.
The learning achieved in a team-oriented learning context is consequently immediately integrated for future application in each team’s everyday operations. Decisions by the team leader can immediately validate and support the team learning experience.
- The collective motivational energy developed during a team development or coaching process is kept by the team upon its return to the work environment, and consolidated as the team measures its concrete improvements and results on the field.
This is an important added value compared to the feeling of disappointment often felt after traditional training programs, when participants have to part and each return to their work environments which have not been through the learning experience at the same time.
These points illustrate that if companies want a change in the results of their investment in training, they need to operate a fundamental change of paradigm in the way they spend their training money. The fact is that to measurably develop managers, increase sales, improve communication, increase empowerment, retain employees, improve delegation and time management, etc, the best approach is to achieve these goals through team coaching and team development. Measures prove that it is not through the traditional training programs that have cost so much in the past.
Interestingly, individual coaching is gradually coming to Romania, but team coaching idoes not seem to be a real concern, except for some CEOs. Individual coaching is certainly useful to develop individuals, but is this an indicator that the individualist frame of reference of training is still too pervasive in the way coaching is considered in Romania?