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 Thinking of doing business in
Central and Eastern Europe? We put some questions to Ian
Herbison, Regional Director, Central Europe, Mmd, who was in
Munich recently to collect the International Business Awards'
Stevie Award for Best Public Relations Agency for Mmd
Corporate’s office in Nicosia, Cyprus.
Mmd has been operating in Central and
Eastern Europe (CEE) for some fourteen years now. What
are the biggest changes your company has seen in the region in
that time?
It is no exaggeration to say we have seen huge and truly
historic changes over the last 14 years—socially, politically
and economically. Our business in the early years was driven
by the major multinational investors into the region—the likes
of IBM, Visa, and Mittal Steel—whose initial focus was very
much on what are known as the Visegrad countries of Czech Republic,
Hungary, Poland and Slovakia. There was much competition among
those four countries as to which would provide the business
capital of the region, with Prague making the early running,
but Budapest emerging for much of the ‘90s as the main
regional hub. The region saw phenomenal growth of 20 percent
plus year-on-year during this period.
The Visegrad markets today have many of the characteristics
of more mature Western markets, with lower growth rates and an
increasing recognition that they cannot compete on price
alone. There has been a shift away from Budapest, with Warsaw
increasingly being the preferred regional hub because of its
large domestic market and strong stock exchange.
Over the years the focus of multinationals has spread
further east into the former Soviet Union, and south into the
former Yugoslavia, Romania, and Bulgaria. Our business has
evolved to meet this by organically expanding across the wider
region and supporting our clients as they move into these
markets, navigate the complex regulatory and business
landscape, and exploit huge growth opportunities.
In terms of our own business, it is fair to say that, whereas in the early years we could differentiate ourselves by being the only provider of Western-style media and public relations services, nowadays these services are increasingly commoditized. Our focus now is firmly on providing higher-value consulting services along with pan-regional campaigns for clients wanting an integrated approach across CEE.
Which industries are showing the biggest signs of growth in the CEE region? And which CEE products or services do you think are going to be most successful in the global marketplace?
There is still a very significant influx of foreign investment right across the region into production and manufacturing, although the focus is increasingly shifting away from heavy industry to value-added manufacturining, such as automotive and electronics. Other drivers of growth are intellectual and service based. IT and computer companies in particular are setting up global research and development facilities across the region, and there has been a huge increase in business process outsourcing to capitalize on the educated, young workforce.
As for future success within the region, the winners will be those that exploit the combination of a young, highly educated workforce, relatively low wages, and access and proximity to EU markets. Many global consumer electronics companies have already recognized this and continue to invest in the region.
Successful exports from the region to the global market place are as diverse as Croatian pharmaceuticals, Romanian data protection software, Polish cheese, and the iconic Skype from Estonia. If the region can harness and retain the talent that has traditionally emigrated to Western Europe and North America there will be many more examples.
What advice would you give to companies wanting to do business in the region?
Spend time learning the local market and engaging with local stakeholders. Localize your strategy and approach accordingly, but stick to the corporate governance principles you adhere to in more developed markets.
This may sound banal, but time and again we have seen foreign investors fail to reach their potential in the region by either making no allowance for local cultural, political, economic or social circumstances, or by not engaging with local stakeholders or having a local face.
At the other end of the spectrum, we have seen companies coming in and adopting unethical business practices that they would never have used on their home turf, but believing—often having been advised—that such practices are normal and necessary in the region. They are not.
For companies considering expanding into the region, are there any common mistakes that are made, or preconceptions that should be avoided?
In addition to the above, I would say the most common mistake is to treat the CEE region as homogeneous. There are huge cultural, social, and political differences between the countries in this region and each country requires a separate approach.
What is your background in PR and Marketing? What were the biggest differences you encountered in moving to CEE?
My background was originally in management consulting with PriceWaterhouse Coopers (PwC) in the UK before moving into communications. My first professional experience in the CEE region was providing PR support for Unicredit’s acquisition of Zagrebacka Bank in Croatia, and I have now worked with Mmd across ten markets here.
When I first arrived, PR people were viewed as being at the bottom of the food chain: someone to get your picture in the paper if and when you won a prize. Slowly this has changed, and regional management has begun to understand the important role PR professionals can play at board level to help achieve key corporate objectives.
Talking of prizes, Mmd recently won a Stevie at the 2007 International Business Awards for Best Global Consultancy. What has this award meant to your company?
We are delighted with the award and received extremely positive feedback from our clients and partners internationally. We are especially pleased that this is an international award across business disciplines and not just a PR industry accolade. We will work hard to repeat our success in future years!
About Ian Herbison
Ian has worked with Mmd in ten markets, and held country management positions in Croatia, Serbia, Romania, Bulgaria, and Poland before assuming operational responsibility for the CE region. Ian has extensive specialist experience in supporting foreign direct investment, privatization, and M&A into the CEE region, providing board-level counsel to leading companies in the energy, mining, steel, telecoms, broadcast, and financial services sectors. In addition to in-country campaigns, Ian has directed a number of pan-regional corporate accounts focusing on reputation management, issues and crisis management, and financial PR. Ian has a background in management consulting with PwC in the UK.
About Mmd
Mmd is the leading corporate, public affairs and public relations consultancy across Central Eastern Europe, South East Europe and Russia, and CIS. An organically developed network, present in the region since 1993, Mmd combines global class standards with local insight and knowledge. Mmd supports clients in 18 countries across the region from fully-owned and managed offices in Austria, Bosnia Herzegovina, Bulgaria, Czech Republic, Croatia, Estonia, Hungary, Kazakhstan, Latvia, Lithuania, Poland, Romania, Russia, Serbia, Slovakia, Slovenia, Turkey, as well as Ukraine. In the majority of our region we operate affiliate relationships with global consultancies.
Mmd delivers single country and pan-regional campaigns specializing in five practice areas:
- Corporate communications and Public Affairs
- Healthcare and Pharmaceutical
- IT and technology
- Business-to-Business
- Consumer
Mmd develops and implements pan-regional, single country, and global communications campaigns for both national and multinational organizations, including many Fortune 500 companies. In addition, Mmd operates a global strategic consultancy, crafting and delivering pan-European and global corporate and public affairs campaigns with focuses on Washington DC, New York, London and Brussels. For more information go to www.mmdcee.com.
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