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Recruiting the Eastern Euro-executive.

For those seeking to fill posts in Eastern Europe, the search for talent requires a different |modus operandi.'

It's like Europe suddenly doubled in size," remarked one observer, when barriers between Eastern Europe and the West began to crumble. Indeed, it seems like the answer to a marketer's dream in the highly competitive '90s -- a newfound land in an era of overcrowded markets.

But in spite of initial predictions that companies would rush in to gain footholds in Eastern Europe, there instead has been a slow-and-steady trickle of activity.

What is holding them back? Companies whose long-range plans might include manufacturing or distributing products in Eastern Europe realize that to succeed in this vastly different market, they need a new breed of executive: one who can operate comfortably and knowledgeably within the local culture and evolving business environment but who possesses a Western orientation toward doing business.

While the search for the Eastern Euro-Executive is a relatively new challenge for all executive-search consultants, our firm has a solid and growing track record in this area, with our first Eastern European search going back to 1978. Based on our experience, we would like to offer some observations and suggestions to those seeking to fill executive posts in Eastern Europe.

Different Priorities

There are many factors that make the search for executives for Eastern European posts particularly challenging. Our company is known for its target-driven, systematic approach to search, but, clearly, the search for talent for Eastern European requires a far different "modus operandi." In a more conventional search, we would focus primarily on identifying individuals with knowledge of a certain industry or specific functional skills. These "hard" factors are ordinarily the backbone of a systematic search.

The geographic dimension and cultural roots might be secondary factors, to be appraised in a face-to-face meeting, along with personality fit. In the conventional search, these "soft" qualities are used to separate -- later in the search -- the outstanding candidate from the just "qualified." In Eastern Europe searches, however, familiarity with local culture and language will rank alongside professional skills in importance. Cultural fit becomes the "must have" criterion, and knowledge of a function or industry becomes the merely desirable dimension.

Rather than searching for potential candidates in an orderly, deductive, and systematic fashion -- through well-established contacts in a given industry, by identifying target companies, and by utilizing our data bases -- candidates for Eastern European assignments must be identified through a much more laborious, circuitous process.

To be successful in Eastern Europe on behalf of a Western corporation, one should be familiar not only with values, style, and business customs in the East but also with those of the West. Therefore, our clients need candidates who, though originally from Eastern Europe, have lived and worked in (or at least are familiar with) a capitalist environment.

Typically, depending on the search, we find a way to hook into expatriate networks (of Hungarians, Czechs, Poles, etc.) in the U.S. and Western Europe. To date, only rarely does an Eastern European assignment involve the search for locally based management talent; typically, the focus is on identifying Eastern Europeans who have been transplanted to Western countries and have been exposed to the corresponding values and procedures.

Uncovering biculturally qualified candidates is only part of the process; the other part is finding those who are willing to return to their country of origin. People who have grown accustomed to "the good life" in the West -- particularly those with families -- may be understandably reluctant to relocate to their homeland, where such basics as food, housing, telephones, and schools may be inferior, even scarce. Filling positions in countries closer to Western Europe, like in Czechoslovakia and Hungary, is somewhat easier, and, in some cases, executives may even commute from a Western European base, such as Vienna.

Candidate Profile

When filling a position for Eastern Europe, they are key elements to look for in candidates that will help point to whether they might be appropriate choices. Below, we discuss a few criteria, roughly in order of importance. If the position is based in the West but has responsibility for Eastern Europe, the observations below would still hold true but would be less critical.

* First, we need to make sure that the individual is totally familiar with the nuances of the culture and local psyche. Fluency in the local language is only one element of this, although the most easily quantifiable. You need someone able to operate like a native among natives.

* Since you are trying to anticipate how someone will succeed in a new environment, look for signs of past success and adaptability. How did the individual establish himself when he first moved to the West? How long did it take him? If he was able to build a new life for himself once before, there is a good chance he could do it again. Above all, we would want any potential candidate to be flexible and adaptive.

* An entrepreneurial spirit is an essential attribute for someone coming to what is essentially a pioneer position. Skills developed as a manager at a long-established, multinational corporation, especially at corporate headquarters, may be of little use when the traditional supports, or infrastructure, do not exist, and one is being asked to start from scratch.

* The ideological background of the potential candidate should also be carefully investigated. Anyone viewed as too closely connected to the old establishment might find it hard to win the trust and support of those he will have to work with and manage. On some assignments we have worked on we have had to eliminate otherwise well-qualified candidates for this reason.

* On the other hand, we would want someone who is familiar with the "ins and outs" of the old system. American decisionmakers tend to underestimate how different a mindset it takes to succeed in state-run economies. Ideally, a candidate should fit the profile of a Western entrepreneur -- imaginative, creative, ambitious, a risk taker -- but also should be able to handle the Eastern European bureaucracy, which is still a fact of life. Not only must he know that system so that he can anticipate obstacles that may arise and be able to overcome them, he must be temperamentally suited to tolerate the system's relative slow pace and inefficiency. Moreover, he must be willing to take a longer-term view of success.

Search Guidelines

From these selection criteria flow a few basic procedural guidelines to keep in mind when recruiting for an Eastern European position:

Keep |Musts' to a Minimum. At the start of each assignment, after conferring with the client, we draw up a detailed position specification. One can never hope to find every desirable quality or skill in any one person, but here that point should be underscored. Remember, you will be dealing with a small universe of candidates to begin with (e.g., bicultural Czech bankers, Hungarian industry managers, and so on, who, in most cases, have emigrated to the West), so the more hard-and-fast criteria you apply, the fewer candidates you will be left with. Think carefully before each criterion becomes etched in stone. Determine which attributes and skills will be truly essential in the successful candidate. And think again when applying the criteria to eliminate specific candidates.

Is fluency in the language essential? Definitely, if the individual will be running the day-to-day business in a country; not necessarily if, for example, the candidate will serve as head of Eastern European Business and be based in the U.S. or Western Europe. Increasingly, however, to develop Eastern European markets -- whether exporting from or selling to a country -- the individual entrepreneur will need to be based in the particular country in order to succeed, and will need an excellent working knowledge of the language and culture.

Think Creatively. Companies that are attempting to succeed in the vastly different business environment of Eastern Europe may need to fashion creative management structures that they have not tried before.

A client company of ours, based in Western Europe, has joint ventures with local producers in several Eastern European countries. In order to maximize motivation among employees, the company decided to hire local employees for all positions in the joint ventures, including management positions. To act as an East-West "bridge," a new position was created, that of "consultant," where the individual would work with the local manager as a sort of alter-ago to share the know-how and skills required for success. This consultant is employed by, and reports to, the client company's Western headquarters.

Although he has no line authority over local joint venture management and can influence only by persuasion, the consultant's performance is judged by bottom-line performance of the joint venture. This organizational structure, which was instituted in the first of our client's joint ventures several months ago, seems to be off to a good start; the entity has already surpassed the goals that were established for the first year. They are now in the process of implementing a similar structure in their other Eastern European joint ventures.

While initially an innovative organizational structure such as this might be a bit tricky to institute, our client's effort and imagination are certainly being rewarded. For one thing, the consultant's position has been an easier one to fill than conventional management posts for Eastern European operations. He does not have to be a local, nor does he have to be locally based -- two criteria that would eliminate a lot of otherwise exceptional candidates.

Moreover, countries such as Poland have strong local unions that try to protect jobs for their citizens; there can be a great deal of resentment and mistrust when foreigners take over high-visibility positions. The resulting ill will could make building an effective management team difficult.

This example is presented not as a formula for others to replicate but merely to illustrate how one company has applied an innovative and successful solution to a challenge it confronted in Eastern Europe. The pioneer environment in Eastern Europe will test the creative mettle of companies that wish to do business there since the tried-and-true strategies of Western business may or may not be applicable.

Be Patient. A final word of caution: A search for the best-qualified person for an Eastern European management position might take a bit longer than other searches you have undertaken. You are looking for a constellation of business and personal skills, experiences, and attitudes that is not easy to find. In fact, there may be only a handful of people in the entire world who fit your requirements, and they will take patience and ingenuity to ferret out.

Certainly the opening of Eastern European markets presents great opportunities for Western companies, and those able to identify appropriate markets, products, and strategies will get their foot in the door. But those willing to invest the additional time to search for that rare, new hybrid of East-West manager to help them over the hurdles will truly reap the benefits that Eastern Europe has to offer.

Fortunat Mueller-Maerki, a Swiss citizen, is a Partner in the New York office of Egon Zehnder International. During his 16 years with the global executive-search firm, he has focused on international searches, particularly those in which client and candidate represent different cultures and value systems.
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Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Chairman's Agenda: Acquiring in Eastern Europe; selection and assignment of corporate executives to posts in Eastern Europe
Author:Mueller-Maerki, Fortunat
Publication:Directors & Boards
Date:Jan 1, 1991
Words:1877
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