László Kővári

I have had the chance to witness a number of companies from Western Europe in different industries trying to build management teams in various countries within the CEE region.

The most typical scenario is that a local GM runs the country reporting to HQ in Western Europe. Sometimes this works, sometimes it doesn’t; obviously.

It becomes interesting when it doesn’t work for one company, but it works fine for competitors.

It is even more interesting when a company has absolutely no problem managing one country, while it’s having tons of problems managing another one right next to it.

This is a complex problem, here I just turn attention to one factor: cultural fit; itself a complex issue. To simplify it, let’s categorize European cultures based on national drinks.

Wine nations: France, Spain, Portugal, Italy, Hungary, Bulgaria, Greece, etc.

Beer nations: UK, Ireland, Belgium, Germany, Austria, Czech Republic, etc.

Vodka/hard liquor nations: Scandinavian countries, Russia, Poland, etc.

There are lots of nuances, like some beer and wine nations also have a significant hard liquor component, or that some beer nations also have good white wine, but it’s not that important to elaborate on these here.

There is an obvious fit between nations under the same category: there are German companies (beer) for example with Czech and Hungarian operations having much less problems with the Czechs (beer) and much more with the Hungarians (wine).

Sometimes things look good, but unless the integration is managed right, there is a time bomb clicking under the surface. Many top managers from UK or German companies managing Spanish, French or Italian units (or people) could testify to this.

I noticed the following pattern of behavior of companies that managed to build successful management teams:

The wine guys learned to appreciate beer, the beer guys learned to appreciate wine (to keep it simple I leave the spirit nations out of this for now).

More specifically:

- they exhibited a strong drive to understand differences: what are the managers like in the target geographies, how and why are they different (wine vs. beer), how is business done here (what’s the wine / beer culture like), what are the success factors there, how can we go wrong, etc.

- they exhibited a strong appreciation for differences and adjusted their behavior when necessary

- as follows from the previous points: they communicated obsessively.

Pattern of behavior of companies that were unsuccessful building successful management teams:

They expected the wine guys to become beer guys or vice versa.

This fundamental mistake results in passivity and inertia as main style elements:

- crucial tasks are delegated to administrators

- there is no attempt to try to understand the target culture. A good example is a German manager who “interviewed” a Hungarian manager from Transylvania (those guys are so different that they are subjects of many jokes even among Hungarians) and practically walked out of the interview after 10 mins. This mistake is no different from going to China to hire a manager and refusing somebody after 10 mins based on obvious differences. What actually happened is that the German guy realized in the first 5 minutes: “Mein Gott, this is not beer!!!”

- they disregarded market intelligence and didn’t adjust expectations and behaviors.

The short takeaway:

- don’t go shopping for beer in the wine store or for wine in the beers store

- don’t try to turn wine into beer or vice versa: you will inevitably fail.

- you can mix wine with beer, but it doesn’t taste like a drink and you can’t shove it down the throat of people for too long.