6 Tips for Building a Company East of Germany

What to Know for Building a Company East of Germany

At a reading Tuesday at the Austrian Embassy here in Washington, D.C., author Catalin Dorian Florescu presented his new novel, Jakob beschliesst zu lieben or Jacob Decides to Love. (There was some debate over whether one can decide to love, but we’ll leave that for another day or week.) Florescu was born in Romania in 1967 and immigrated with his parents to Switzerland where he now lives and works.

At some point in the discussion, the phrase “Eastern Europe” came up, and Florescu expressed his displeasure. He said that most countries in that part of Europe would like to move on from the term that brings a sense of a lower class. I was reminded of this as I looked over Reinhard Sander’s presentation from last year’s SIPA Munich Conference. The session was titled, “How to Build a Publishing Company in Eastern Europe – Experiences and Conclusions from Two Decades of Doing Business East of Germany.”

Sander opened by saying that “the term ‘Eastern Europe’ implies similarities that do not exist anymore, if ever did. In the Bad Old Days, before the Iron Curtain fell, the term indicated a group of countries politically adverse to the West, to put it mildly. This is why people in ‘Eastern Europe’ usually are not happy with this term, to say the least.”

Here are some of his tips and knowledge indicators for doing business in that part of Europe:

1) These countries are very distinct. “If you would not mix up Denmark with Finland, you should not mix up Slovakia with Slovenia,” Sander said. (Fun fact: former SIPA member Tod Sedgwick is now U.S. Ambassador to Slovakia.)
2) “…in practically any respect substantial to business, there is hardly any difference between Eastern and Western European countries—with regard to both upsides and down-sides,” Sander said.
3) He added that because the area is now “partly saturated” for business, it will be a challenge to find the right niche—and providing multi-lingual services can get expensive.
4) “The famous motto ‘trust is good, control is better’ still applies. Therefore, create a most transparent reporting system.”
5) “Maximize recruiting efforts and provide sufficient management attention.”(Sander admitted that he was not saying anything earth-shattering here.)
6) He said that foreign-owned corporations can take advantage of their position as being able to offer more opportunities than local firms. To take advantage of this, he listed four tips:
a) try to understand the basics of the local history and you will most likely avoid embarrassing moments;
b) show respect to the local culture but don’t exaggerate or imitate; you are and always will be a foreigner;
c) be aware of local affairs but avoid taking sides;
d) be honest, be serious, be reliable.

He concluded that 9 a.m. to 6 p.m. should be an accepted day. “Focus your attention on hiring Mrs. or Mr. Right and on building loyalty with the parent company,” Sander said. “Create a corporate home; prove attention (and respect) with frequent visits.” Lastly, he said, “Introduce unambiguous rules; acknowledge performance with decent payment and perks.”

SIPA Munich is, of course, coming around again very soon on March 28-30. Check out the website here. Sessions this year include New Opportunities – Mobile and Social Publishing in Africa, Merging with your Competitor and Creating a Strategy for Growth, and Specialized Information Publishing in Russia, so new landscapes will be broached. The value from this three-day conference is exceptional. You should decide to take part.

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