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Read our exclusive interview.
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 GREY & ASSOCIATES
Manager:
Lyndell Grey, Chief Executive Officer
Contact:
BULGARIA:
38 Shipka Street
Sofia 1504
BULGARIA
Phone/Fax : + 359 2 44 81 28
USA:
2586 Crosby Herold Rd.
Lincoln, CA 95648
Phone / fax: 916 343 0500
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| STRATEGY |
 Interview with Lyndell Grey,
Chief Executive Officer of Grey & Associates
Q: Could you tell us what are the main guidelines of your strategy here in Bulgaria?
A: What is most important is that, first, I gather as much information as I can about the potential investor or the company that wants a representational position here; I find out also what their goals are, what they hope to achieve here. Then I can decide whether there is a good match here, if this country really is a good match for them. I had some investors for whom it was not a good match and in these cases they should not make the effort to invest here. If I feel like there is a good match, then I sit down and work with them towards some objectives, some specific objectives, step by step, and announce a plan. And what such plan means is always groundwork in depth-first. An investor or company should not just parachute in here. They need some groundwork done, maybe a month, maybe two months - getting information on the industry they are interested in, finding out what the prospects are, what the government position is, who the right people in the government are, finding out the right contacts.
Then, comes orchestrating their first visit. Bulgaria was isolated for so long, that we still, even ten years after the fall of the wall, find the people here interested in foreigners, there is an aura about it. So, when a company or an investor arrives, we can use that, as a media device. It could be a press conference, but it is usually more like offering some interviews, etc. That helps create a momentum that then is quite successful in moving forward. The other element in this first stage is finding good Bulgarian partners here, e. g. if it is an investor, finding the right company to invest in; if it is a manufacture, e. g. such as one of my major clients , Vistawall Architectural Products , finding a contractor.
Then comes the work of cultivating, screening, identifying and developing a partnership because this market is not a sophisticated market ; it’s new. For example, a manufacturer cannot come in with the equipment, materials and just sell them, just like they'd be sold in another country which has had a free market economy for a long time. You have to set up personal relationships and that takes a lot of attention and monitoring, no matter how experienced you are. After ten years in Bulgaria, I am still very careful and keep monitoring whatever partnership I establish because it could not necessarily hold together.
Once we start having successes we go on. The bigger the investment, the bigger the initial contract is, and the more likely it is to fail. It is always better to start with a smaller package and then use that to demonstrate locally that this is a quality product or this is a reliable investor. I like starting with a smaller project if I can, and working towards the bigger one. Once there is success, then we continue with a day-to-day monitoring of it, promoting it and keeping it together.
Q : So your business is something more than public relations?
A : Yes , in fact it’s a partnership.
Q: You have been here since 1988. So you have experienced all the changes here. The government has started privatisation. Could you tell us your opinion about this?
A: Unfortunately it has not moved fast and it also has not exactly been an open market. People who have connections, people who have powerful influence in the country, have had a disproportionate opportunity to purchase private companies. There has been a lot of purchasing or declaring insolvency, bankruptcy and then stripping the factory, the plant, etc. even selling off the parts. It is a very tricky situation but there is opportunity here and there is no question about it. For all the difficulties there is a tremendous opportunity and certainly in the next six months there is going to be a significantly greater privatisation. In the next year it should be completed. This government has had a lot of problems getting started but they are moving in the right direction.
Q: What should the government, in your opinion, do to stimulate the economy, the market and your sector of activity?
A: The taxes are certainly a problem in this country. I do not think a former communist country should rely on a socialist model with high taxes. I think it should go much more towards a strong capitalistic model where favourable tax options are offered for small businesses, all kinds of tax holidays are offered. Red tape is another problem. Someone told me once that the way you can measure how successfully a private business can be is by how long it takes to get a business licence in any one country, e. g. in the US you can get it in one day, in England maybe it is two days. I cannot imagine how difficult it is in Bulgaria. This ; in addition to high taxes is a problem. It is not the climate for business and that is why international people who can shop around and go elsewhere, frequently do. And hat is why small business does not move ahead.
Government must also support the individual owner. Just recently I met with a man from a town outside of Sofia, who has a textile factory and I was so impressed because he is an owner and actually privatisation worked in his case. He bought the factory about a year ago, he has expanded it, added more staff, has done everything right and he is a Bulgarian, not a foreigner. But those are the things that do not count as normal in Bulgaria and it is a pity, because obviously the country is going to be built by producing, and not by trade. It has to be production-oriented.
Q: Could you tell us more about your contacts with the surrounding countries, especially as far as the Romanian market is concerned, with its twenty-three million inhabitants?
A: When we first started our business here we had in mind all along that we would use Bulgaria as a doorway to other countries for many reasons. Romania is a very good example, it has a much larger market, it is close by. It is moving forward a little faster than Bulgaria and yet, because it is so close we have connections and are able to provide services to investors or companies there, as we do in Bulgaria. Also some companies and many of the people we work with in Bulgaria have a history of business in other countries, such as Khazahstan, Russia and the Middle East. They provide an avenue by working through them to other markets, e. g. an American or a any western businessman might be hesitant to get into those markets and it is a means to do it in a controlled way with people who have a track record. So it is those two reasons why: it is the geographic proximity, we are centred here in Bulgaria in this region; and because of the fact that Bulgaria has a history of operating in the countries in the other surrounding regions where the markets are rather problematic for Americans.
| Q: As people say in the US, contacts often mean contracts. What do you do in order to encourage greater contacts?
A: Bulgaria is still a country where contacts are carried out by word of mouth, by meeting people. One can advertise but if you think that you can expect to get a lot of business through advertising, then you are wrong. That is the way just to make sure that people know that you are on the scene. But the contacts come from slugging it out, it is a day-to-day work: meeting someone at a cocktail party, calling them, visiting them and talking to them; getting to know government officials and asking them to refer you, but getting to know them in a personal way. I do not mean in a casual way; business in Bulgaria is a very personal kind of thing.
Q: But this is about the local market, what about the foreign one.
A: In terms of geography there is an overlap, having in mind for example Romania, Bosnia. Many of the people who are doing business here, are also doing business in surrounding countries /cities such as Bucarest. In terms of extended areas such as Khazahstan, one of the companies that I have contract with, has had a lot of work to do there. We hope to work with them on their next project.
Q: What is interesting is the trust that you have gained from the foreign companies. Could you tell us about Mr Soros regarding that you know him personally?
A: He is certainly a fascinating person and such a strong figure in Eastern Europe. I met Mr Soros in 1992. We were working on a project and we each took part in it. He put money into the project and I was the person attempting to get the money. This was a US project, an American University in South-western Bulgaria. He came to Bulgaria as a philanthropist and out of his concern for a region that had hindered communism for several years. As you may know he is a Hungarian who had to flee and has strong anticommunist feelings. Working with him on this project at the university, I watched how he used his resources and was able to get them to multiply. We were able to get his confidence in this project through our mutual contacts, as well as through direct contact with him. Another important quality about him is that he has intuition about people. If you think of him in terms of numbers and figures, you might think that he is beyond that. What I realised about fabulously successful business people such as George Soros , is that they use all tools available and they are much better at it.
Q: You had those great contacts with Christopher Forbes. As a matter of fact, you were the one who organised that breakfast back in February with the President of Bulgaria in the US. This is important because you are organising meetings in the US for Bulgarians, between Bulgarians, who are not only politicians but also businessmen. Maybe we should elaborate on this.
A: That was a nice opportunity because it gave Bulgaria chance to show face with some of their business people to a sophisticated American business community and in a very pleasant environment. Mr Forbes is interested in these markets. We had met several years before and had discussed Bulgaria for a long time, so when I found that the President of Bulgaria was going to be in the US, I called Christopher Forbes and said that the President was coming to New York and told him we would like to some event. Forbes responded immediately. I think he sees very clearly that you do not have to wait to see that a market is developed but you must watch it as it is developing, and you keep measuring it. You must monitor it, you must track it, you must meet the people who are helping to create that market. So, the President was at that breakfast, as well as the Minister of Finance. We invited some Americans who had successful businesses in Bulgaria, together with some Americans who were intending to invest in Bulgaria to talk about what was working for them and what was not. We created a forum that I believe was helpful and stimulated further contacts for the Americans. For Bulgaria the investor must have contacts at the top because this is a country that is still evolving out of an authoritarian regime.
Q: As a last question, could you tell us about your hopes for the future of Bulgaria?
A: I am very optimistic about the future of Bulgaria.
It is a part of Europe; it is an underdeveloped
part of Europe. There is a lot of potential here,
great opportunities for manufacture and production
at less expensive prices. There is an incredible
reservoir of intellectual talent here. I have seen
young people developing excellent business skills.
Yet , this country still does not have the necessary
infrastructure. But the potential is here and those
problems will be solved. It is a question of time.
I would say that in 2-3 years there is going to
be a successful business climate here. That is why
I am very happy to be here now. There is no question
that Bulgaria has all elements of a country that
is just going to keep moving on. All of the market
potentials are there. The prospects are good. |
© World INvestment NEws, 1998.
This is the electronic edition of the special country report on Bulgaria
published in FORBES Magazine's
November 30th issue.
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BULGARIA, 
