Viewpoint editorial

Citation

Sears, W.H. and Tamulionyte-Lentz, A. (2000), "Viewpoint editorial", European Business Review, Vol. 12 No. 1. https://doi.org/10.1108/ebr.2000.05412aaa.001

Viewpoint editorial

Slovenia, Slovakia -- ". . . far away places with strange-sounding names . . ." to quote an old song. Central and Eastern Europe (CEE), a dozen places that once were independent countries, then were annexed by or incorporated into other countries in the aftermath of two world wars; places that, most recently, were part of the Soviet bloc and within the past decade have been released from that bondage. Each, in an understandable striving for national autonomy, is struggling to find its future in the world economy, while concurrently trying to rediscover its interrupted history. It is a rough ride for them, trying to cope with market economies that are polar opposites of the stable, predictable, and ineffectual Soviet command economy. Now, each has new currencies that replaced the rouble; new banks and privatized former state companies struggling to cope with the intricacies of free-market financing; and some entrepreneurial enterprises that experience early success on the strength of their founders' energies, then stall-out when the need for western-style managerial and financial acumen reaches a crisis point. These phenomena transcend the cultural and linguistic barriers between and among countries in the Region.

Why are the post-Soviet experiences so similar across national boundaries, despite all the consulting support provided by governments and non-governmental agencies (NGOs)? Despite all the exposure of CEE managers to Western companies, and seminars sponsored by universities, governments, and NGOs? Despite the caution that common sense would dictate? There are four generic reasons:

1. 1.

   state-owned banks lent money to state-owned enterprises early in the transition period, creating levels of debt that could never be repaid;

2. 2.

   there were no provisions for bankruptcy among banking regulators in the Region (because the Soviets kept all businesses afloat to maintain employment levels), so insolvent organizations are allowed to continue their inefficient practices (and keep people employed);

3. 3.

   there are fundamental misunderstandings about money, finance, and other business basics among many public- and private-sector leaders in the Region, as evidenced by (1) and (2), above; and

4. 4.

   (some of the new plant owners and managers were cronies of the former leaders, for whom the plants they acquired were means for personal profit rather than continuing institutions. (Strategic and other planning are not credible practices among those who experienced the failure of all the highly-touted Soviet plans.)

Underlying these is another powerful impediment, one that evokes the kinds of feelings most of us experience when seeing, up close, grievous wounds. The wounds here are psychic, emotional, and result from 50 years of systematic dis-empowerment, of a kind of neutering of the capacity among men to reason and solve problems.

One white-haired diplomat, born in the Region but reared in America, said, "Men had to 'live the lie' for so long - in all aspects of their lives - that they are wounded deeply by the experience. They lost face, they lost confidence, they lost a sense of themselves as capable of thinking and solving problems. And, to make it worse, they see in themselves a relative weakness that makes women stronger by comparison. We've lost at least two generations of men who could have been effective workers and leaders, and it may be another decade before that Soviet wound disappears from men in the Region". These comments were made in June 1999.

Here is a case in point. Shortly after the Soviets left, an American lumberman and his friend in the Region decided to set up a lumber mill. Enthusiasm led to some predictable errors, including sending over American milling machines that were too large for the trees available, and not calibrated for the metric system. Mechanical modifications solved these problems, but not the people problems.

It turned out that the mill's employees worked like Russians, not like Americans, and none of the usual American motivational techniques made a difference. So, except for the American plant manager, all other Americans were replaced with local nationals to eliminate the confusion over language and operating philosophy. But that did not resolve the basic problem: local nationals, managers and workers alike, trained to take directions from above, could not make even the decisions necessary to grade and stack lumber. (Lumber has to be "graded" according to the number of knots.) Since there is no time to count knots on each board, a "judgment call" is required - and that was considered too great a risk for individual decisions.

Consultants came who taught all aspects of operating a lumber mill, including how to grade lumber. Concurrently, other consultants worked on the relationships among workers, managers, and the American plant manager. The basic issues: mistakes will be corrected, but they will not be punished! Mistakes will be made, but training and experience will minimize them. The contest is between how good we can be relative to our competitors, not how to protect your job.

This was training in self-esteem, building competence among people whose capabilities were masked by fright. This was training that emphasized the importance of individuals' contributions of observations and intelligence, not just physical effort. This was training in believing that teams and teamwork are a matter of "all of us working together to create products that customers want to buy". And, most of all, it was about the need for workers at all levels to "own and solve" production problems out of their own capacities as effective, important, competent individuals.

This story has a happy ending because usual HR training and consulting were presented with a humane bias. Someone reasoned that the issue was self-esteem, not stupidity, laziness, or cowardice! When the issue of self-esteem is recognized, it explains the "personality" issue reported about so many of the best and brightest in the Region who act as though they already know everything and often exhibit an almost insufferable degree of smugness. They use culture and language as means for invalidating non-confirming information, and mistake having heard about concepts for functional knowledge and savoir-faire.

This is perhaps the most potentially-damning residue of Soviet social programming, and the hardest for consultants and other management educators to overcome. It is rooted in the Soviet authoritarian tradition and embodies that perversion of the "Golden Rule" that says, "He who has the gold makes the rules". Evidence of this attitude recurs in the book we are writing because even many local nationals note this characteristic as a reason why Western consulting efforts fail so frequently.

What we continue to learn, and hope to share with others, is the need for putting a humane face on HRD. Then, "development" is the discovery of one's competence and potential rather than a performance requirement to be mastered as a condition of employment. Maybe that is a clue to more effective enterprise-building in the New Millennium!

Woodrow H. Sears and Audrone Tamulionyte-Lentz

(Dr Sears is an Organizational Development Consultant with Aon Consulting in Vilnius, LT. Ms Tamulionyte-Lentz is an Aon Vice-President and Director of Central and Eastern European Operations. Their book, Doing Business in Central and Eastern Europe: Cultural Imperatives, Critical Differences, and Opportunities, is scheduled for release by Gulf Publishing Company, Houston, TX in September 2000.)