Should we stay in Latvia or conquer the world?

Natalja Gudakovska, Amrop Latvia Senior Project Manager

The latest generation of Latvian entrepreneurs is increasingly proving that products and services created here can attract attention and become globally competitive. However, in order for such a scenario to come to fruition, in addition to a great business idea, funding and a mutually supportive and relentless team, another crucial factor is required. This is the entrepreneur's ambition to conquer the European and global markets from the very beginning, from the moment the company is founded. In my experience, entrepreneurs with this attitude develop their businesses very differently from those who focus only on the Latvian market. The "global conqueror" mindset is often a decisive factor in attracting like-minded people, investors, and partners. After all, we all want to be part of a growing, successful business and be involved in a great and valuable project that will make the world a better place.


Valuable castles in the air

In Latvia, enormous plans are sometimes dismissively referred to as, “Castles in the air”. This term alludes to unrealistic fantasizing that is unlikely to come true. Imagine if every entrepreneur were completely free of the "castle in the air" syndrome. It is doubtful that a single revolutionary product would have been created, since the usual order of things is that something cardinally new almost always borders on science fiction. However, in order for changes to take place, it is not possible to get by without “castles in the air”. In the Latvian business environment, this kind of thinking is vitally important, because we are usually too cautious, careful, and sensible.

Of course, the aforementioned determination to conquer the global market seems to be a much riskier approach than exclusively focusing on customers in Latvia. However, in the long run, it is much riskier to stay in a small, limited market than to plan well in advance to enter the markets of Europe and then other regions. In fact, in the long run, this is the only survival strategy, and market diversification will become the best guarantee of increasing turnover and reducing exposure to fluctuations in a tiny market.

What makes us superior and where are we lacking?

What are our entrepreneurs' pluses and minuses in terms of their ability to conquer foreign markets? The main advantages include the ability of Latvian entrepreneurs to create innovative products and to maintain production costs relatively lower. In other words, we can offer the same high quality, unique brand and its story at a relatively lower price. In addition, Latvian entrepreneurs are exemplified by the invaluable ability to “understand” future trends and demand. Moreover, the brands we create have the power to surprise and captivate people not only in England, Finland or Canada, but also in Latvia. Our entrepreneurs approach the formation of long-term relationships with potential customers extremely seriously, which means outstanding quality and service, as well as a connection to the company's values. Over the past 30 years, we have mastered how a modern business functions, and our understanding of Western and Eastern markets is in our favour.

In terms of things that could be improved, we should start with the fact that our entrepreneurs are not always aware about important cultural differences in different markets. When someone says, "We might do this", it means to a Brit that the thing under discussion is never going to happen. To a Latvian, it means that we will most likely do it at some point in the future. Cultural differences have a direct impact on marketing and communication strategies. There is often a lack of in-depth knowledge of the regulatory framework for business, how to organise supply chains and how to work with local partners. Another typical challenge is the availability of investment for expansion; more specifically, a lack of understanding of how to secure investment.

The ability to “interpret” a foreign culture

One of Amrop's special qualities, which we have developed through international recruitment and frequent collaboration with colleagues from over 60 countries, is our appreciation and understanding of different cultures. It would not be possible to recruit responsible managers without knowledge of the local market, the values and the wishes of people. A strong team, including people from the market in question, who possess expert knowledge of the specifics of local markets and can help to find a way to “pitch” the opportunity to local candidates, often becomes a key determinant of a long-term success story. It is worth noting that, when it comes to recruiting employees in foreign markets, very precise and clear information needs to be provided about how collaboration and communication will take place, how performance will be measured, and what procedures will be followed, as well as any potential pitfalls. It is vital to prepare new employees by informing them of potential risks, what support they can expect, or what support may not be available. Bearing in mind that candidates are entering an environment with unfinished processes, infrastructure and limited support, preparation is crucial in order to ensure they do not have unrealistic expectations. This, in turn, helps our client to develop infrastructure and create processes that run more smoothly.

The very beginning of relationship is important as the new employee learns about the company’s values and internal culture, history, and goals. These are essential elements for two reasons: firstly, it helps to set more appropriate expectations and assess what kind of experience will be essential; and secondly, it helps [new employees] to settle into their new team and to understand that they are part of the company's journey towards a larger goal. So again, at this stage, it is vital to have a “castle in the air” that really excites and motivates the team.

For instance, Grindeks shared with us that during the last year the company has successfully opened subsidiaries in 29 countries in Europe, North America, and Oceania. Thanks to the high quality and professional cooperation with Amrop, subsidiary CEOs have gradually started working in 17 countries (it is planned to continue this development by opening subsidiaries in other parts of the world). In the context of rapid global development, there is a need not only for employees all over the world, but also for meaningful communication between all relevant parties. In order not to lose the importance of face-to-face meetings, all CEOs of newly opened subsidiaries first spend a week in Latvia, where they get to know the company's basic operating principles and meet colleagues in all key functions in order to understand Grindeks' core values and vision for the future. To maintain this connection and create a sense of team unity, communication is crucial.

The company organises regular individual online meetings for the subsidiary's CEO with colleagues from the relevant function and the company's Board of Directors, as well as a fortnightly online meeting for all CEOs.

Diversity as an asset

We often find ourselves acting as a kind of "bridge" between a Latvian entrepreneur and his team in a foreign market. Our mission is to act as an interpreter, explaining what the company CEO and other colleagues are saying. Cultural diversity can become a company's strength, developing unique products and services, as well as maintaining a creative microclimate within the company. My experience of working in Western Europe shows the importance of positive feedback on the work of employees. In Latvia, we are used to focusing on the negative things and criticism, and taking a job well done for granted. While criticism is necessary, praise is no less important, because it encourages and relaxes people, making work more efficient.

Of course, when it comes to efficiency, the use of technology should also be mentioned. However, for all that technology can do, it cannot yet "sense" the opportunities and risks generated by cultural differences. This can be accomplished by experienced business managers, HR professionals and other employees, who often possess a unique development resource in the form of the different experiences, knowledge, and opinions of different people. Applied properly, this can help business owners to achieve and fulfil their plans to conquer the world. However, none of this is possible without an ambitious approach to your business, so one of Latvia's long-term development goals is to create the most fertile soil for entrepreneurs who want to and can build "castles in the air".

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