Interview about the upcoming seminar on “International business & Managerial leadership”

November 2009
BTA – Bulgarian News Agency

Q: In your opinion, has Bulgaria and its economy changed since 1989?

Steven Stromp: Definitely.  It is progressing.  Opportunities, albeit slow to expand, are advancing and a stronger middle class is burgeoning.  This middle class is the foundation of a stable political and economic system.

Q: Is the transition from planned to market economy in Bulgaria successful? Which has been done right? What mistakes did we make?

That is difficult to assess.  Hungary went to “shock therapy” and was applauded for it then, but is suffering for it now.  Slovakia went to “gradualism” and was scorned for it then, but is more successful now.  Each had their own political problems and corruption associated with the transition that aided and stymied market economy reforms.  At most, Hungary will have a mixed economy and at most, Slovakia will be closer to a market economy, depending upon waves of populism and nationalism.

From what I have seen, privatization and spurring economic development have been pressing and difficult transitional issues.  All modern societies strive to be fair, focused and orderly.  There is unlikely to be an ideal formula to determine what was done right whether by accident or by design.

To be more successful, a strategy to modernize the infrastructure, to execute fair laws and set up market reforms with regulatory power and finding advantages in Bulgaria’s talent and technologies.

Q: Is the Bulgarian economy competitive nowadays: what are the strong sides and what should we develop – nuclear energy, new “green” technology, ecological production and tourism, IT, software or heavy industry?

As with other accession countries, Estonia and Slovakia, they focused on a few industries to develop their comparative advantages.  Their leadership allowed them to leap frog development of several advanced economies in Western Europe.  

With the depth of intellect and its experience in various industries, “green” technology and software support and production seem to be a good match for Bulgaria.  Language skills are high, knowledge is high, and the environmental landscape is exceptional.

Q: In comparison to other former socialist countries, in Bulgaria there is almost no production and manufacturing industry.  We don’t see big international companies but only retailers and banks.  What do you think are the reasons for this?

Typically and in no particular order: the transportation infrastructure, labor skills, laws and wages, government’s stability, adjudication precedence, mountain ranges and neighborhoods determine the “where” of production sites.  Bulgaria has a few yellow flags in this brief review.  Slovakia found a niche in manufacturing, particularly autos, and the auto industry invested in them.  

Q: Do you think that Bulgarians are now used to the democracy after living 45 years in socialism? Are they able to cope with the new economical realities?  Are they doing business in proper Western way?

I am not sure Bulgaria is used to it.  Bulgaria’s history and democracy were not unified for any period of time to “get used to it”.  Bulgarians are creative and have learned to adapt to the regional hegemonic power.

Serving the public interest versus self interest is difficult to cope with in the economic reality of 21st century.

Doing business the proper way? Hmmm well the USA was a market economy spokesperson …but with the government leaders allowing 7 years of no-bid contracts, 6 years of presidential orders and outrageous earmarks provided a model of cronyism over a leading free market economy.

The most proper way to do business is through transparency and accountability.  Countries that exemplify these characteristics have built the foundation to survive bad economic times and capitalize on good ones.  A few examples are Norway and Denmark.   

Q: Are the Bulgarian managers successful?

If success is meant to be getting the job done on time and within a budget, then probably yes.  To be competitive, Bulgarian managers, rely more on coercion and position power.  

Success for company managers to remain competitive is by being fast to market, finding the right mix of customizing and standardizing to fit market demands, with a pricing strategy that is fair in terms of quality.  The product, the people and the processes are indispensible in being successful in the global markets.

Q: Which groups of the Bulgarian population have better position on the labor market? Which ones are the most vulnerable now in the terms of crisis?

Most vulnerable are groups who have lower level of education and are engaged in unskilled labor.  After the government in Sofia announced plans to cut public administration, we can say that this is the second most threatened group.  We can say that the finance and banking employees are affected to some extent too.

Best positions have employees and managers that are ahead of the current situation and the competition.  Those who keep up with the latest trends and at any time seek further practical knowledge.  Various seminars and conference, for example, are the perfect place for acquiring knowledge, exchange and/or generation of ideas, and establish contacts with other employees, managers and entrepreneurs.

Q: Is the education in Bulgaria at good level? Does it meet the needs of the market? Is it practically oriented? Does it provide the necessary start in young people’s life?

YES but more emphasis on practical skills is needed to go along with the depth of theory and conceptual thinking.  Therefore they attend to receive extra qualifications in USA and Western Europe.  Having leadership skills, a global and local perspective will propel them into a greater position to achieve results, be accountable and to move companies forward.  Fortunately in Bulgaria there are already seminars led by western specialists.  Exactly that type of seminar is the one that we organize in Sofia – “International business & Managerial leadership”.

The topics of this training course are real problems of the present day especially in times of world economic and financial crisis.  Now more important than ever is to know how to keep the clients, how to inspire and motivate your team, how to be on charge of an ethical company and at the same time to search for new market horizons.

Q: Where is Bulgaria nowadays in terms of dealing with the economic crisis?

I think the government took the necessary measures to deal with the economic crisis - the optimization of public spending and focusing on revenue.  Q4 2009 is perhaps the most difficult for many companies and managers in the last 10-11 years.

Q: Forecast of the Bulgarian Government for the decrease in the economy (lower GDP) in 2010 and starting its potential recovery in 2011?

In my opinion the Bulgarian economy will shrink in 2010 as forecasted by the government.  I think they are intentionally conservative and skeptical in their expectations.  Recovery process may be expected to begin in Fall 2010.

Q: Based on your experience and the world practices, what is your forecast about: the Bulgarian economy, the salary levels, the bank rates (deposits, credits), and the direct foreign investments?

When companies recover from the crisis shock, they will start hiring people again and to increase their salary expenses.  The level of Foreign Direct Investments (FDI) depends on the global situation, but also the behavior of the Bulgarian government matters.  If it manages to find attractive niches and to create stimulating conditions for development of this industry sectors, then there will be increase in the investment interest towards Bulgaria.

Q: What is the proper managerial behavior in times of crisis?

Focus on developing talent, managing the short term while planning the long term.  Employees will respond in kind to the situation if management is open, honest and driven.  Changing behavior to improve productivity can be done with urgency while overcoming reluctance simultaneously.  

Q: What would be your advice to the Bulgarian managers?

Align your team with smart people, lead with integrity, involve stakeholders, inspire, equip and set up the processes.  Companies and their leadership team that can inspire employees attract the better talent who make managing the day to day stuff easier by creating better products and reducing waste or inefficiencies.  

Q: What economic behavior would you give the average people – can they benefit from the crisis (for example buying a house at reduced prices or make a deposit at a higher interest)?

Be disciplined in investment whether that is in real estate or a diversified portfolio of financial instruments.

Q: Do you think that it is the nation’s mentality and thinking that needs to change, so that the Bulgarians can become more successful: to have a better economy and higher standard of living?

The nation’s mentality is unique, changing it is not going to be fast, easy, nor absolutely necessary.  Bulgarians have a rich history with a diversity of influences impacting business, politics, economics and organizational behavior.  There are advantages from these influences.  The difficult part is funneling them into a common vision can be polarizing.

Leadership and ethical behaviors are keen to emulate even if it is not the most profitable way.  The 21st century, the EU and the watchful eyes of citizens will build trust between businesses, consumers, citizens and governments.  This deters corruption, which is the one word that derails the fabric of the economy through distrust.


*This is a material of MBAcademy – Management & Banking Academy.  The dedicated to providing professional seminars, trainings and courses in the general management, corporate finance, investment management and commercial banking.  For the part covering commercial banking, the organization is partner for Bulgaria of the leading Austrian banking training firm.  The company offers interesting and useful training topics that are practically applicable in the West but not sufficiently discussed by the Bulgarian education system.

MBAcademy is organizing a 5-day training seminar on “International Business & Managerial Leadership” which will be held INTERPRED – World Trade Center in Sofia.  The program covers the leadership skills and strategies that today’s middle and senior executives need to possess in order to get the most of the expertise, independence, and confidence of knowledge workers..

The participants in this training will learn about:

Value adding management strategies

Teaching, mentoring and coaching as a way to improve performance and productivity

Use reflective and innovate thought processes to tackle your organizational obstacles and apply them to your business

Survival strategies for managing change in the workplace

Six essential skills that provide a foundation for effective leadership

Six step strategy for effective communication and management

Introduce tools to help assess and address difficult situations
Develop a “Leadership Action Plan” to assist with application of skills on the job.