Mission practically impossible.

Practically

Ever try establishing a self-regulatory association in a former communist republic in the middle of a war zone?

Motivating volunteers is tough enough without addressing decades of communist training and without a war to worry about. But an American association executive accepted the practically impossible assignment of establishing a self-regulatory association in a former communist country - one involved in the recent Kosovo war. Gary Scopes, CAE, former executive director of three state, national, and international accounting associations during his 27-year career, and the former president of both the Louisiana and the New Jersey Societies of Association Executives, is now in Macedonia helping to create an association for the accounting and auditing profession. Any executive can benefit from reading the valuable insights Gary shares here from working with especially challenging circumstances.

- The Editors

Late one night several months ago while in bed listening to NATO bombers fly overhead to bomb Serbia, an earthquake shook my room. My apartment in Skopje, the capital of Macedonia, is on a fault line. In 1963, Skopje suffered a severe earthquake that leveled the city and killed 1,000 people. Located only 12 miles from Kosovo, I couldn't decide what to worry about most: an earthquake or Serbian artillery. My thoughts that night instead turned to an association board meeting scheduled for the next day.

In December 1997, I had received an e-mail message from a friend working in Macedonia as head of a foreign aid project. He had spotted an article about the new ethics consulting firm I was forming. He asked if I wanted to come to Macedonia to teach ethics and to form an association for the accounting and auditing profession. The assignment would be through the United States Agency for International Development, which has accounting reform projects in many developing countries throughout Eastern Europe and the former Soviet Union.

At the time that I accepted the USAID assignment, it's unlikely that many Americans could have easily located Macedonia or Kosovo on a world map. Soon after, however, in March of this year when NATO began bombing Serbia, this area quickly became the center of the media universe. Kosovo was a lead story on CNN every day for months, with much coverage devoted to the war's refugees. In fewer than 60 days, Macedonia, a country of 2 million people, gained 300,000 refugees - the equivalent of 30 million new residents in the United States.

Working, despite the war

Developing an association of volunteers is challenging under the best of circumstances, but here, members of my project team and I were meeting with people who had uncles and cousins being bombed down the street by the United States and NATO. Surprisingly - except for a quasi-organized mob attack on the U.S. Embassy at the beginning of the conflict - people still wanted our counsel.

Up-and-coming professionals in Macedonia know that if their country has any chance of becoming part of the world economy, they must form self-regulatory associations that are true to Western practices and ideals. They also realize that competition, long-range planning, volunteerism, and accountability are new concepts, ignored under decades of communism that ended in this country in 1991. (See sidebar, "Macedonia: A Country of Contrasts.")

In a country with 30 percent unemployment and monthly salaries of $200 for university graduates, it doesn't take much to become pessimistic. Young people here typically don't have career plans. But moving from communism to capitalism takes time, and it's difficult to tell an entire generation that the payback may not happen during their lifetime. This makes developing consensus by unpaid volunteers even more difficult, since current circumstances don't allow for ideal solutions. But citizens of Macedonia can no longer count on the government for direction. For the first time, they now have control over their own destinies. And regardless of the politics of NATO, Macedonians want to learn from Americans about what may be the greatest U.S. export - the role of volunteer associations in a free-market economy.

Seeing the future from the past

In addition to their love of American basketball, which they're willing to watch at 3 a.m., Macedonians crave the successes they see U.S. citizens enjoying. After all, how many other countries have low inflation, low interest rates, and low unemployment all at the same time? During the past 10 years, English has become the recognized international language - in large part because of the worldwide dominance of Microsoft Windows, the emergence of the Internet in the United States, and the enormous strength of U.S. capital markets. These factors speak for themselves, so developing countries like Macedonia are hungry to learn and eager to replicate Western concepts. This is particularly true with regard to association management. People here are beginning to discover the significant contribution to the success of Western countries that derives from the enormous value of voluntary resources.

Accompanying this enthusiasm for Western approaches is a great deal of historical baggage, however. After all, this is where the term balkanize comes from, which according to Webster's Dictionary means "to break up into small, mutually hostile political units, such as the Balkans after World War I." The situation in Kosovo illustrates that things haven't changed much during the past 100 years. What this means to potential associations in this region is that their future members are often guided by past injustices. People here have difficulty overcoming deep-seeded emotional divisions to voluntarily work together for a better future. And yet, if they are to ever really succeed, a good place to start is for them to learn about effective association management.

For most of the past year, I have worked with an existing accounting association that began in 1956 in the former Yugoslavia. This group is referred to as the soyuz, which means union - a common term in the Slavic language under communism. The association's leaders are professors and people who held high-ranking financial positions in the government prior to 1991.

Admittedly, working with an existing former communist-inspired association provided some unique challenges for this Western consultant. First, I've learned that, to gain acceptance, it's normal to drink Rakia, which is a local brandy, and partake in two-hour lunches - not to mention learning all the national folk dances. Unfortunately, despite the many pleasant social events, I also watched the balkanization of the association when the largest chapter from the nation's capital broke off to form its own group. My major contribution to the soyuz during this time was to design new bylaws, which for the first time includes ethics enforcement. (See sidebar, "Ethics From an International Perspective.")

Because of a change in Macedonia's national government brought about by democratic elections, our project had to change course to follow a direction that would ultimately receive government support for the formation of the auditing profession. Since the new government did not support the soyuz, we initiated a new Association of Certified Auditors, which included the audit firm owned by the new Minister of Finance (another story altogether). Government recognition is helpful to the auditing profession, because associations can only terminate membership; however, upon the recommendation of an audit association through its ethics enforcement, the government can take away the right to practice. We expect this new association to assist the government in interpreting international standards, administering its certification program, and developing the certification exam. Already in place are quality training programs design ed by our project team.

Our first lesson at an organizational meeting of this new group, where we invited auditors representing registered audit firms, was that you do not schedule a meeting unless you have general agreement from all participants beforehand about what the meeting will accomplish and how. We learned that bitter rivalries existed between audit firms because of serious past personal and business conflicts. Several people at this meeting were willing to fall on their swords for anything that might benefit their enemy sitting across the table - and I'm talking about people from the same country and religion.

As a result, we resorted to the proven technique of listening to the customer. I visited every audit firm and heard the specific concerns of each. We vowed not to schedule another meeting unless we had general agreement in advance about key issues.

Establishing trust

During this time I also consulted the formation of a new federation of accounting associations for 12 countries of the former Soviet Union. My experience working with the people from Macedonia and other former communist countries showed that they are reluctant to put too much power into any individual. Whereas in the United States the same person usually serves as president of the association, president of the board, and president of the executive committee, it's not uncommon here to have three individuals serving in these capacities. The issue is one of balancing accountability and power, which does have merit. Our final compromise approach is to have two presidents: one for the association and executive committee and the other for the board of directors, which is similar to the chairman position for many U.S. corporations.

Many of my experiences with forming this new group are similar to those that someone would experience in the United States. For example, competition exists for leadership positions from international, national, and local firms. This has escalated in Macedonia into a major battle as to who becomes the first association president. This is a good problem to have in that it reflects interest and importance, but it's easy to get bogged down in debates about the shape of the table. For instance, it took a long time for my project team to gain consensus about who would vote in the first elections. Some complaints we heard compared our effort to the breakup of Yugoslavia, when the country "made the mistake of letting the people vote" instead of leaving the votes to the Republic's leaders - or in our case, to the heads of the audit firms. Although the support of firms is vital, we decided that this association is still an organization of individual certified auditors. What we quickly realized was that the voting process was not really the issue. People simply advocated whatever approach guaranteed election of their presidential candidate.

Despite strong Balkan emotions, one thing is clear from the feedback we've received from all of the auditing firms and potential individual members. No matter how difficult the problems associated with establishing a self-regulatory association in a setting such as Macedonia, it is evident from the faces of the people and from their pleas for our involvement that they do want our help. Skills we take for granted in the United States for working together in association management take on a special meaning in a country where generations for centuries have known only war. And yet, from this executive's vantage point, you can export the progress, success, and professionalism of U.S. associations if you commit to remaining both patient and positive.

Macedonia: A Country of Contrasts

The Cyrillic alphabet used by most of the Eastern Slavic world was developed during the ninth century in a monastery in southern Macedonia by two brothers, St. Cyril and St. Methodius, whose disciples helped spread literacy as far as Russia. Today, upper Greece is known as Macedonia, and a controversy exists about who are the real Macedonians. Alexander the Great was born in Greece in the fourth century B.C. and conquered the entire Mediterranean region, which he called Macedonia. That's why Greece today calls the new nation to its north the Former Yugoslav Republic of Macedonia (FYROM), which is the term the new country had to use when it joined the United Nations in 1993. But Bulgaria also claims that these new Macedonians are Bulgarians, since that country's Slavic language is closer to Macedonian than to Greek.

Macedonia, or FYROM, is a country of contrasts - from the modern mall of its capital to its open Turkish markets and medieval monasteries. It is a mountainous country with lush valleys, where wine-making and farming predominate. Most people are Slavs of the Eastern Orthodox religion. Most Albanians in the country are Muslim and constitute a 25 percent minority. Yet this country has somehow avoided the Kosovo-type ethnic problems by including Albanian representatives in its democratic parliament. But because the Albanian birth rate is three times that of the Slavs, the current Slav majority worries about a future shift in the balance of power. These worries help perpetuate political tensions.

In general, however, Macedonians are very hospitable and do not want to say no. This eagerness to please can cause some communication problems. For instance, most restaurants have very broad menus, and after awhile you realize that no restaurant offers everything that is printed on its menu. (In fact, most restaurants offer about 25 percent of what is indicated, with all restaurants offering mostly the same things.) Once when I ordered chicken salad from the menu, the waiter brought a grilled chicken breast with french fries. His comment was, "It's chicken."

This communication gap exists in business, too. Local people will often tell you what they think you want to hear, not what actually is the case. Getting the true story about their activities may take countless follow-up questions, and even then you never can assume that you'll truly understand something until you see it for yourself.

Adapting to Another World

Working within the international arena has become much easier during the past five years. Even in a developing country like Macedonia, expatriates can receive plenty of English television programming, make U.S. credit card and checking account transactions, and obtain inexpensive local Internet access that will connect them with the rest of the world. Considering what can be accomplished today using the Internet, the outlook for operating internationally has greatly improved from a few years ago, when regular mail and expensive telephone calls were your only links.

All this new technology does not decrease the need for people who operate in the international arena to maintain a high degree of adaptability. Seasoned travelers have always emphasized the need to expect the unexpected. This same need for flexibility and tolerance applies to everyday life and work when you're a resident of a developing country. For instance, simply going to the bank can test your patience. Trips to get money for your bimonthly payroll may take 20 minutes or two hours. You're wise to take along reading material and to be prepared to find out - after you've waited your turn in line - that the bank has run out of cash and you will need to return tomorrow.

Although English is common throughout most of the world, it's still necessary to learn some local language if you want to deal effectively with local people either in personal or business settings. In this regard, Macedonians are no different from others in their appreciation of those who try to speak some of their language.

Ethics From an International Perspective

Developing countries have special needs when it comes to teaching ethics. First, a distinct lack of even basic trust often exists. Consider, for instance, those who have lost their life savings because a bank collapsed and who have subsequently watched others get rich at their expense. In such instances, unethical behavior often holds more allure, since it's easier to focus on short-term benefits instead of the long-term survival achieved by people and companies who consistently practice good business ethics. To understand ethics is to appreciate the long term.

Resources for promoting ethics and a long-term outlook are improving, however. For instance, membership in the International Federation of Accountants, New York City, has become something of the Holy Grail for national accounting and auditing associations since IFAC formed in 1977. Today the federation has member associations from more than 100 countries. A country's membership in IFAC signifies that the country has a functioning professional association whose members follow a code of ethics. Because of organizations like IFAC, it's easier to advocate true international standards on ethics and the importance for a developing country to become a member of such a respected international community.

Other organizations - such as Transparency International and Organisation for Economic Co-operation and Development (OECD) - promote ethics and responsible corporate governance, providing helpful guidelines for developing countries throughout the world. The Web sites for these three organizations are well worth your visit.

* IFAC: www.ifac.org

* Transparency International: www.transparency.de

* OECD: www.oecd.org

Additionally, as the primary foreign aid vehicle for the United States, USAID has projects all over the world that need association management experience. If working to promote ethics, professionalism, and responsible governance within the international arena sounds like something in which you might be interested, start by researching the Web sites for USAID and International Business and Technical Consultants, Inc.:

* USAID: www.info.usaid.gov

* IBTCI: www.ibtci.com

Gary M. Scopes, CAE, is an associations and ethics consultant for International Business and Technical Consultants, Inc., Vienna, Virginia. E-mail: [e-mail].