The Insider View - Warsaw
Local experts act as guides to doing business in Poland’s capital city
The tenth-biggest city in the European Union, with more than 1.7 million inhabitants, Warsaw has developed rapidly since the fall of communism in Poland in 1989 heralded its socioeconomic liberalisation. As well as being the country’s most populous metropolitan area by far, the capital is also its wealthiest, ranking fifth in the EU for GDP per capita. The average salary in the city is more than twice the national mean and its unemployment rate is the lowest in Poland at 3.7 per cent. The province of Mazovia, which surrounds the capital, is Poland’s most prosperous region, contributing 20 per cent to the nation’s income and attracting 30 per cent of foreign investment. Aleksander Solski ACMA, CGMA, finance director for Unilever in Poland and the Baltic states, says that Poland has experienced enormous changes over the past 25 years in its transition into a modern market economy. “It was the only country in Europe that went through the recent global financial crisis growing its GDP every year,” he says. Many people regard this period as the best for Poland since the 16th century.” Solski underlines Warsaw’s economic importance. “It’s a place where many multinational companies have set up their head offices, not only to run their Polish operations, but also to manage their entire central and eastern European business,” he says. Although the country has enjoyed two decades of uninterrupted economic growth, the brain drain of educated citizens to western Europe that started when Poland joined the EU in 2004 shows little sign of slowing. A recent survey found that almost half of Polish students are thinking about emigrating after graduation to seek better employment opportunities and higher wages. Commenting on the research, Janusz Czapiński, an eminent social psychologist, told national daily newspaper Rzeczpospolita: “Our economy lacks innovation in the creation of new jobs for the 21st century. This is the reason that our young people are looking for work abroad. Until this changes, the trend will not stop.”
Poland’s concerted efforts to appeal to foreign businesses in recent years are reflected in its rapid rise up the World Bank’s global “Ease of doing business” table. It is the 25th-ranked nation overall this year – a dramatic improvement on 76th in 2009, when only Greece ranked lower among the EU member states. “Warsaw business people value professionalism and follow the core rules of western business etiquette,” says Beata Mierzejewska, assistant professor at the Warsaw School of Economics. “Trust is also important. Anyone doing business in Poland should aim to develop social relationships with their associates as a step towards strong business relationships.” It’s important not to underestimate the challenges of operating in the city’s sophisticated commercial environment, according to Solski. “When the country was emerging from communism, there were loads of easy wins. These are now long gone. If you come here thinking: ‘They know nothing; I will teach them,’ you’ll fail,” he says. “You need to arrive humble and be prepared to fight in a competitive market.” But Solski stresses that foreign entrants to the market should not be deterred and will find potential local partners receptive to new ideas. “Poles are open to new opportunities and eager to take on challenges, adapting well to the changing world. They are open to trustworthy partners. Younger people here tend to be more flexible and broad-minded, as they have often had international experience during their studies.”
Mierzejewska offers three tips for commercial success in Warsaw:
– Network, network, network. Build social relationships with potential business partners and people they trust.
– Seek out start-ups and boutique advisory firms, led by ambitious and well-educated people. Trust them and don’t be afraid to give them a chance to work with you
– Stay abreast of global business trends, as they find their way to Warsaw quickly.
Large organisations in Poland have traditionally been hierarchical in nature, with bureaucratic cultures predominating, especially in the public sector. But the country’s exposure to businesses from western Europe and the US over the past two decades has helped to reshape modern Polish management culture. Firms in Warsaw have been particularly inclined to adopt less formal, devolved structures, for instance. Solski says that the capital’s management culture has been shaped by foreign executives who arrived in their thousands during the 1990s, accelerating the transfer of commercial practices from the West. But he reports that a new generation of homegrown leaders has since emerged – expat managers are increasingly being replaced by highly skilled and driven locals. “Poles are ambitious, hard-working and hungry for opportunities. It’s relatively easy to ignite them for new challenges – especially if you’re an authentic leader,” says Solski, who notes that there is a “war for talent”, as Polish companies compete with foreign firms for the country’s brightest candidates.