ALL CHAPTERS
Chapter Eight
International Projects
“Can you meet me in Lima?
- Ray Epich
In earlier chapters our story tellers told us a few of the things they did for love, but in this chapter we learn a few of the things consultants do for their firms and global clients. Like sucking on oxygen bottles in the middle of the night, high up in the Andes on a mining company project, or spending the days passing frog-selling locals on the roadside who look suspiciously zonked on coca leaves. All the time, reminding each other, “Remember, we’re doing this for the firm.”
In today’s economy, international consulting grows more and more prevalent. It can be among the most diverse and rewarding of experiences in the consulting repertoire. It can also be trying or, on occasion, even harrowing. What we learn is that different rules apply. You’re dealing with different business cultures, different expectations, and different sets of problems. In some countries, for example, seeking outside consulting services might be looked upon as an admission of failure. Something must be going wrong with that company! Accordingly, a consultant might learn that selling a project by sharing what the firm did for a past client is considered inappropriate, and a sure way not to clinch the sale.
Elsewhere, the business culture might have weaker traditions of using consultants, being less inclined to believe any consultant knows more than they do. How to overcome such mindsets becomes a different kind of challenge. There can be other hurdles to leap, too. Like mandatory evenings spent together carousing and imbibing, as a right of passage to the client’s trust, if also the next morning’s regret.
Basically, different rules apply and you have to be prepared. From South Korea to Russia, Mexico, Uganda and beyond, here our contributors tell us how they did it.
Going Where the Money Is
Our firm got into overseas work by accident. A good friend of mine from Citibank went to Europe to run their Italian operation. While he was there he ran into a problem, so he asked me to come over for a couple of weeks to help out. That was the birth of our international practice, which is now close to 40 percent of our revenue.
It was purely opportunistic. We were sitting around the office looking for work when this call came through; I asked him if he wanted me there tomorrow or the day after. We ended up being there for four weeks and probably did what amounted to the equivalent of a 90-day consulting engagement. We were working six, seven days a week to make an impression.
Frankly, in a small firm I don't know how you can be really strategic in your thinking. Think about it. What's the first thing you need to do? You need to feed your family. So what kind of work will you do? As long you're competent, anything that comes along. Where will you do it? Well, if you don't have anything to do and someone calls from Italy, you'll be happy to go to Italy. If they call from Passaic, New Jersey, you’ll go to Passaic.
It’s not strategy that drives your firm, its opportunity. You're reacting to the market. What does that mean? Well, somebody called from Italy so we went to Italy. We were hungry. We found when we were over there that the foreign banks were far behind the U.S. banks. American consultants were also very popular over there. So we found ourselves with more and more opportunities. Typically, about 40 to 50 percent of our revenue now comes from overseas. One year it was as high as 60 percent. They're very nice engagements, too.
In the Middle East and in Turkey we've built a very good name as the consulting firm for corporate banks. In Turkey, we've dealt with just about every major bank. I think we’ve dealt with most of the banks in the Middle East. In the Arab countries, once you get a reputation they’ll pass you around because everything is so interrelated in terms of family connections.
That's what I mean by being opportunistic. You get an opportunity, you go do it. You do a good job and you build on it. We knew the type of business we wanted to do, which was operations analysis. That's what we were good at. That's what we wanted to build on. Outside of that we had no preconceived notions of where we were going to end up.
Resistance To Paying For Advice
Some Asian corporations are not used to paying for advice. It’s much easier to sell to Western companies that are already doing business in those countries. However, attitudes are changing and there is more recognition among corporate leaders that there might be some valuable lessons to learn from Western companies. This is especially true in the technology areas or other new industries where they have less experience. But historically there has been a barrier or resistance to paying for advice. It’s just not something they’re used to doing.
In Korea, there are large, traditional business networks called chaebols. They exist in Japan, too. They represent highly diversified, self-contained operations, some of which have interests virtually throughout the economy. These traditional networks can make it far more difficult for Western consultants to break into certain areas. The thinking is, there’s nobody out there who knows more than they do.
If you’ve been running a shipping business for 40 years, for example, backed up by one of these large networks, you’re not likely to think anyone can come close to your level of expertise. But if we’re talking about cellular, cable TV, or a new semiconductor area, that is where they are much more willing to look to the West for advice.
Wear Your National Cufflinks
I headed up our activities in Europe for three years, and it's a practice in Europe to usher visitors into the boardroom because they don't have lobbies like we do here in the states. On one occasion I was in Switzerland waiting in this company’s boardroom. There happened to be a big blackboard in the boardroom, and I couldn’t help but notice from what was written there that they were discussing a distribution problem.
Well, when I got in to see the president, I mentioned that one area we were very active in was the area of physical distribution, helping companies decide where to locate warehouses and so on. He said that's exactly the problem we have, I'd like to have you talk with our head of marketing. So just like that I was meeting with the head of marketing. Now this fellow happened to be from Sweden, and that morning I had put on some cufflinks with the three crowns of Sweden on them. I recall telling this fellow that as I had put on my cufflinks, I said to myself that I thought I might meet somebody from Sweden today. Well, we ended up getting a big assignment on just that chance meeting. By the way, the information on the blackboard wasn't confidential. In fact, it didn’t mean anything to me. Other than that I knew they were having a discussion about distribution.
Over the years, I think I can attribute much of my success in business development to my ability to recall assignments we had in a given industry or in a given neighborhood. If a prospect happened to be in an area where we’d done some previous work, sharing that information with them could help sell the project. But in Europe, especially in Germany, it was considered revolting to discuss the name of a client you'd worked for. In Germany, having it known that a company was using a consultant was like having a diptheria sign on a house. It implied there was something wrong, and you’d better stay away.
Differences In Perspectives
Early in my years as President of AMCF, I was making the rounds and meeting our members in Europe. I was very much struck by the differences in perspective. It was astounding actually how the characters and the personalities of different cultures played themselves out, especially in terms of what I learned about the perceptions of consulting among clients. As Americans we tend to think of Europe as a monolith. We might differentiate Eastern Europe from Western Europe, but generally we tend to think of Europe mostly in terms of how it differs from us. But actually the culture of things varies considerably across Europe, from country to country.
In the Netherlands, for example, (and these are gross generalities, of course), measurement consulting is very much sought after by corporations. It's very much accepted that you have management consultants help you with your business. People are very open about that. They readily exchange ideas and help each other. But in Germany, by comparison, it’s a common characteristic that businessmen prefer to handle their own problems. Management is embarrassed about having someone help them. Consequently, consulting tends to be more of a quiet-behind-the-scenes enterprise. That leads, of course, to different ways of marketing your services.
In the United States, in comparison to Europe, we tend to be more aggressively innovative, leading edge, and quick to make snap decisions. Europeans look at us and think we don't place enough emphasis on the creation of relationships. We’re quicker to call in our quick fix. Have somebody come fix it. So how management consulting is perceived by corporate leaders remains very culturally bound. It’s a very interesting thing.
Join Consulting, Travel to Asia, Throw Up
One hard lesson that I learned in certain Asian countries is that many clients expect you to get drunk with them if you are to gain their trust. The assumption is that everybody can put on a good front, but if you drink with them, they can get past the veneer, and see the real you.
I recall one night in Korea, back in my hotel room after such an evening with a client. The night ended with me sitting on the bathroom floor, leaning into the toilet, thinking that this was way beyond the call of duty. At that point I didn’t recall any promises in the recruiting brochure, “Come join Monitor, travel, visit exotic places, throw up.”
Actually, Korea is among the more unusual places I’ve ever visited. Korean companies work half a day on Saturdays. That’s the norm. Of course, as a consultant I have always worked hard, probably harder than most of my clients whether they were in Italy or Korea. But the expectation of work was far higher in Korea.
At the end of one of our project engagements we had a huge banquet dinner, with all kinds of exotic foods being served. The sea cucumbers as they were called were quite good. In fact, I ate several of them, assuming they were vegetables. Then I found out the sea cucumbers were actually sea snails. That’s when I started to feel a little bit ill.
Then there was the banquet I attended in China where they served chicken in something like a deep sea batter. When I took the batter off one piece with my chopsticks, I found myself staring at the head of a chicken, the entire head! Fortunately, I hadn’t yet bitten into it. I knew I wasn’t going to eat that particular piece. So I ate the rest of my meal, and then announced how full I was.
. In contrast, I spent a year in Milan on a project, and that was certainly among the more pleasant. Our Italian clients had a nice balance to their work and personal lives. They made us leave by 6:00 o’clock every night, and they liked to take us out to dinner. They had a zest for life, and were very enjoyable to be around.
A Few Hurdles Along the Way
I remember the first time we worked in Greece; it was a downsizing engagement for a major bank. The Greeks were very pro-union and socialist, and when our guy arrived with his assignment, the union people at the bank were able to have a warrant sworn out for his arrest. The pretext was that he didn't have the proper work permit. Someone tipped him off and he started changing hotels every week, and he moved around the bank a lot to do his work. He became a moving target, dodging the Greek authorities for six weeks until the engagement was completed.
On international projects, you can run into a lot of things that you would never expect. The Saudis have a habit with expats or foreign workers of taking their passports away from them when they enter the country, holding them while they’re there. That way they can keep them there until they’re ready to let them go. Or, if they want to deport them, they’ve got the passport.
When I first went there, they wanted to collect my passport, and I got into a big argument with this guy, some bureaucrat at the airport. You’re not taking my passport, I said. Basically, I told him to go to hell. Well, he insisted they always take the passport. But I was adamant. I said to him, I'll decide when I'm going to leave, not you. So they called up the president of the bank, who told them to leave me alone, that I’m not some expat worker. But I was ready turn around and leave, right there on the spot. I wasn't going to give my passport to anyone.
If nothing else, the foreign travel is always interesting. Sometimes it’s just the little things like watching TV in Saudi Arabia with all the movies censored. You might be watching a movie and some kissing scene would be blacked out. Any kind of word that was off-color would be blacked out. All that has changed recently. Everybody has satellite dishes now, so they can't really stop it. They do have a law that you're not allowed to have satellite dishes, but if you take a drive down the road you’ll see everyone’s got a satellite dish.
We have tried to stay out of places where there is government upheaval. Over the years we did a lot of work in India, for example, but there was a period when we wouldn't go there. We wouldn’t go to Pakistan, either. In fact, we did a proposal for a big job for Pakistan’s federal revenue service, just before a big political blow up there. Then we had to say no. They’re killing Americans. We’re not going back. In circumstances like that, I'm not sure they could pay us enough.
Nonetheless, we have found ourselves in some thorny situations. When we were doing work for a U.S. bank in Korea, the unions, who are devoted and active, came in and sat down, put on blindfolds, folded their hands and just sat there. All day long they sat there blindfolded. It was a sit-in strike. I never did figure out why they were striking.
One weekend they actually locked the American business manager in his office on a Friday afternoon. They didn't let him out until Monday morning. When got through that project we left and never went back. We've been asked back. But we won’t go. It's not worth it.
Then again, we've worked in other places like Singapore where they give national awards for productivity. It is great working over there. Everyone wants to win the national award for productivity. They are also completely open about looking for more effective ways to do things. Business gets a lot of support from the government.
Fortunately, we never have had anything of a really serious nature happen on an overseas engagement. That is, other than the couple of stories I’ve mentioned and perhaps having the opportunity to eat monkey brains or repack your luggage at gun point.
The Ukrainian Privatization Diet
My first overseas client was a privatization committee appointed by the government of the Ukraine. I was 25 at the time. We were hired to help them figure out how to move from mass government ownership into actually creating profitable companies and selling shares to the public. We were building that part of our business, and at that time it was fun work. But, in return, it required a strong commitment and really heavy work to win projects in foreign countries.
The project was about half done by the time I got there. The head of the previous team had been fired; he managed to run up huge bills in his final days, so we had almost no budget money left. But rather than destroy our firm’s credibility in the Ukraine, management and staff called together two emergency teams to fix things up. I went out as a junior member of a three-person team.
We had so little money that we had to stay in a modest family-style apartment. It had three bedrooms, so we each had one bedroom and there was a tiny little kitchen in the middle. The three of us were living in fairly close quarters. It was one other man, one woman and me, and the man and woman didn’t get along at all. The place had this musty old furniture and I slept on a bed that had spent most of its life as a Styrofoam sofa. There was a long seam running down the middle so you had to sleep on one side or the other.
There was a lift but it was often broken, so we had to walk up and down four flights of stairs. Electricity was reasonably consistent, but not so water. One morning I was taking a shower when the water suddenly went down in the toilet and then right back up, and the water began flooding in. It was in the middle of winter so it was freezing cold at the time and the temperature was about 15 or 20 degrees below zero.
I bought one of those big fur hats the Kremlin guards wear, a big heavy coat, long underwear, and thick gloves. A Western business suit is absolutely useless in that kind of weather. We had a driver our old Soviet-era old car with musty upholstery of an unknown origin.
There are no restaurants to speak in all of the Ukraine as far I could tell, but that was OK, because we didn’t have any project money either. Our diet consisted of cheese, kielbasa, a kind of mealy bread and maybe a few jaundiced-looking pieces of fruit. By the time one of my colleagues came out to see me, he said I looked like I’d lost about 15 pounds.
The morale among workers was low in the Ukraine. There was massive over-employment, which is typical of a Soviet-era agency. As many as eight people were crammed into these tiny offices but they really had no work to do, which is really just soul-destroying.
A lot of people ran their own businesses full-time, either within the government office or by taking off in the afternoon. Here’s a good example of this sort of cottage industry. We were promised office space on our client’s premises because we were working out of our apartment and we really wanted a place to go and spread out a little bit and not be in each other’s faces all the time. We managed to twist someone’s arm after about a month and a half, and came and showed us up into this converted attic. That’s where they were going to put us. He opened the door and there was an impromptu hair salon where some people from this government agency were moonlighting.
In the end, the reforms we put forth were blocked by Bolshevik forces in the government. The entire project was absolute hell!
Peru Part 1: Can You Meet Me In Lima?
Nick Radell, a partner, and I were doing a project for a copper and brass company down in St. Louis. A system controller in New York called and asked if we could come to New York to talk about another study.
We said of course, and off we went. His name was Ken Maynard, the same as the famous old western movie star, so he was easy to remember. Ken said, “I’ve got a problem in our mine down in Peru. We have an accounting system, we have a planning system, but it’s all obsolete. The government is threatening to nationalize the mines and we need a new system to help with valuations and negotiations. How would you fellows propose to work on something like that? Do you do those kinds of studies?”
“Well, of course, we do those kinds of studies,” we told him – “we’re experts.” In fact, we had just put in a new accounting system at your St. Louis plant using one of our staff who was an expert at cost accounting.
We talked to Maynard on a Thursday, and he said, “I’m going down to Lima, Peru on Monday. Could you fellows join me there on Monday?” Now, here is a fellow who’s only an assistant controller in a large company. So we’re saying to ourselves, we go on what could be a wild goose chase, and spend a lot of money flying down to Lima without seeing someone higher than an assistant controller to authorize a project. If we question his authority to do this, of course, we’re never going to get this assignment. So we’ve got to weigh this in our minds. And we didn’t have visas. We had passports, but no visas.
We said we had to think about it for a little bit. Nick and I talked in the hallway about what we should do, and I said that this guy has a lot of confidence even though he’s a young guy, perhaps 26 years old. He doesn’t look like he’s going to ask anybody’s permission to do this, so why don’t we just go down. Then we ask Maynard if he can get us visas. “Oh, yeah,” he said, “we have big connections with the Peruvian government. We own these mines down in Lima.”
Maynard made the arrangements – I think that we also talked him into paying for the trip as well. He told us to wear old clothes, not to get dressed up. We were looking at one another, wondering how long we are going to be there. The smelter was 250 miles from Lima and the mine was another 100 miles beyond that. The mine was a famous mine, the Cerro de Pasco mine, and it was the first mine that the Incas had in Peru. It was still a working mine hundreds of years later.
Peru Part 2: Planes, Chickens and Oxygen Bottles
We flew down, and that was a real experience in those days. You had to fly to Miami from New York. First Chicago to New York, New York to Miami, and in Miami you had to get on an American flight that flew into Lima. And these flights back and forth to South America were just full of people, chickens, just about everything imaginable. And in those days there were no limits on how much you could carry on in terms of baggage, so there were people all around us with sacks, not luggage, but bags of stuff they bought in the U.S. Everything possible!
There were a couple of bathrooms in the back of the plane, and after about seven hours of people going back and forth to these johns, there was water all over the floor. The whole plane was a complete mess. Food wrappers, diapers, an unbelievable mess.
We landed in Lima, and right away we went to our hotel. We were essentially tapped out. The next morning we went over to the client’s office in Lima. The staff were a bunch of expatriate accountants – career nomads, expats who worked wherever in the world there is mining. They got very high pay, and six months leave ever few years to go back to England.
There was Ken Maynard and he looked like George of the Jungle. He wore a pith helmet and one of these khaki suits with multiple pockets, like someone from South Africa would look on a safari. One of our drivers came up and with a vehicle that looked like Humvees. It was wider than a normal jeep and longer. Nick and I get in to the back seat, along side two oxygen bottles. That was our first clue that we were in trouble. The bottles were five, six feet high. Giant oxygen bottles, one on each side. Maynard sat in the front with the driver, and off we went from Lima.
When we planned this trip, we had to line up other players to bring with us. We figured we would bring other players along and somehow slip out so we wouldn’t have to do the work ourselves. We definitely did not want to stay up on the mountain forever, obviously. And we had to find people who could handle the altitude. So we found a Swiss in our New York office – he was also a mountain climber – and from Mexico City we brought one of the local staff who was already living at one mile high. We thought those would be the ideal guys to bring along, and they did have the right technical background. They were in another vehicle coming up with us.
For about the first ten minutes we were on level ground. And then the driver put it into low gear, and we started up the mountain. And we were driving, and driving, and driving. We were going up into the Andes on what was never wider than a two-lane road, and sometimes there was only one lane. And as we were driving there were a lot of these blind corners where the driver had to honk the horn, floor it, and try to make it around the corner.
Peru Part 3: Crosses, Coca Leaves, and Llamas.
I can’t stand to be a passenger in a car in the first place and I didn’t dare open my eyes on some of those corners, especially those where there were crosses and little shrines (a blessed virgin with flowers and a cross) which of course memorialized earlier fatal accidents. We didn’t see anybody for the first hundred miles but eventually we started to see native Peruvians standing by the road. There were women who looked just like the Peruvian women in National Geographic. They had the big hats, the shawls, just standing there just looking forlorn and chewing betel nuts or coca leaves. I think that they were all zonked out; they just didn’t look right. Essentially they were all high, standing along the side of the road. There were no villages, all we saw were these solitary people, all zonked out. Every once in a while we’d also see a llama standing by the side of the road.
This ride went on and up until we reached a pass called Ticlio. As I recall the pass is about 14,000 feet high. Then we realized what the oxygen was for. We started sucking on the oxygen, not continuously but everyone once in a while, just a little whiff.
We passed through Ticlio pass and started down the other side of the mountain to about 13,500 feet. Eventually we got to a town called Arraya where there was a smelter, a big railroad yard, and a building called the Inca Hotel, which was owned by the mining company.
Nick and I both had suitcases. But as we got out of the car we could hardly even pick them up. We were now suffering from soroche, which is altitude sickness, and we both got headaches real quick.
These little Peruvian guys were all about five feet tall – 4’10” or five feet – with barrel chests, clear evidence that Darwin’s evolution was at work. Their lungs had expanded over the generations in order to get enough oxygen in the thin mountain air. Apparently, if they went down to Lima they suffered from lung congestion. It is too humid and there is too much oxygen for them so they have to stay on the mountain top forever. They worked at the mine or around the Inca Hotel.
Peru Part 4: “If We’re So Smart What Are We Doing Here?
When we finally checked into the Inca Hotel they give us two adjoining rooms with a single bathroom. We went to dinner, and had the hotel’s piece de resistance, roast cuy, a kind of guinea pig. It tasted just like chicken, as you might expect. The one thing they told us was: don’t have any alcohol, don’t have a beer, just don’t drink because this would only accentuate the soroche. So all I had was iced tea. The fellows who were with us were already looking at one another like: “What is this? How did they get us up here?”
We finally went to our rooms at about 8:00 pm. Again, there were giant oxygen bottles and masks in the room. Nick and I were in one room, there was a shared bathroom in middle, and the other two, Hans the Mexican and Tomas the Swiss, were in the other room. I went to sleep but woke up at 2:00 am with this unbelievable headache. I reached for the oxygen bottle and began sucking on the oxygen. I looked over at the next bed and there was Nick, sitting on the edge of the bed, also sucking oxygen. There was a light on in the bathroom, and the door was not closed. So we went in there, knocked, and found Tomas laying on the floor with a nose bleed and a rag over his face, crying. And Tomas was the guy who already lived at 5,000 feet! The other guy, Hans, was in the bedroom sitting on the edge of the bed, sucking the oxygen.
I went back into the bedroom, sat down, and sucked on my own oxygen. Nick said to me, “If we’re so smart, what are doing in a place like this?”
And I told Nick, “This is for the cause, the firm. We’re going to get this job.” And we had the right crew there, except Tomas of course, he was gone. We couldn’t use anyone who cried the first day. Can you imagine what he’d be doing at the end of a week or two? He’d be outside of our room with a pick axe from one of the workers.
Peru Part 5: Down The Shaft
We got up at about 5:00 am the next morning. Between the smelter and the mine was a one-car train, and inside the coach were four little picnic baskets. They were brown with a checkered table cloth over the top and a bottle of wine sitting up. It looked like we were in Italy having a picnic on the beach on the Riviera.
We headed off to the Cerro de Pasco Mine – I think it was about 150 miles and it took two or three hours on the little train. We were up so high that the lakes didn’t have fish in them, there was not enough oxygen at that altitude. But there were frogs, giant frogs. We were seeing more and more natives by the side of the road and there were women standing by the side of the train holding up the frogs by the legs, offering them for sale. We couldn’t figure out whether we were to eat them raw or cook them, or maybe take them back to our rooms as pets. But of course we just waved.
The Cerro de Pasco mine is 14,000 feet altitude. We went to the mine office, met the foreman, and everybody shook our hands. Then they took us on a mine tour. The full-length coverall suits they gave us were made for guys five feet tall, with big chests. When we finally struggled into these suits, we were hunched over and singing soprano. The elevator took us down the mine shaft to the main floors at 12,000 feet, or nearly 2,000 feet underground. It was unbelievable down there. All I could think about was an earthquake, which happen all the time. What kind of a chance would you have 2,000 feet underground in the Andes?
In the mine there was a principal shaft and probably another shaft parallel to that, and large rooms where they stored equipment. The mine was honeycombed with main tunnels and little tunnels shooting of at angles, and air shafts called chimneys that went between the tunnels. Everywhere there were little metal ladders. Only a few of the tunnels had little railroad cars.
They gave us a guide, another little five-foot guy, whose job was to take us through the tunnels and auxiliary tunnels and up and down the chimneys. He was moving fast, and we were having a hard time keeping up with him. We were crouched down and the tunnels all smelled like urine. The smell was really bad down there because of the urine and the fact that there was very little oxygen inside the mine.
After an hour we were panting, ready to fall over. Then it dawned on us that our guide wasn’t the same guy we started with. They were switching off on us, to keep a fresh leader in front of us, to wear us down. It wouldn’t have taken much of a trek to tire us out but they were actually doing some kind of a relay race with always someone fresh in front of us, running up and down these ladders. We had to tell the guide, “Slow down. You're killing us. You're never going to get us out of this mine.” They very much enjoyed showing us hard they work.
We finally got back to the surface and as we unzipped those little suits our voices returned to normal. As we got back on the train to Arraya we still had these tremendous headaches. We were sucking hard on the oxygen bottles. For some reason they didn't have oxygen in the mine. Once we got down to 12,000 feet, I guess they figured we didn't need oxygen anymore.
Peru Part 6: Adios Gimble
The mining people then patted everybody on the back and saluting us for making the valiant effort to tour the mine. And, we got the assignment. We identified Hans as a keeper and got rid of Tomas. That night Nick and I were sitting in our room again, wondering, “Now how are we going to get someone to take our place, because we are not coming back here unless it’s once a month. But we’re not going to be here much if we can help it.”
Nick said, “How about Gimble?” He was the one who had done the accounting project in St. Louis. He also had just been married.
And I said, “You know, Gimble’s not stupid. Gimble’s not coming here.”
“Gimble will do anything for money, “ said Nick.
“Yeah, you’re probably right,” I said. So we left for the States. Nick calls Gimble and offers Gimble the whole fee, no Cresap cut off the top or anything. The entire fee would go to Gimble. He’d stay down there for 18 months, and once you’re out of the country for 18 months you don’t have to pay U.S. taxes. So he would get the fee for the whole 18 months, tax-free.
Well, that got Gimble’s attention and he agreed. He took his new bride, moved down there, and stayed there for 18 months. We couldn’t believe it because around the Inca Hotel were houses where the managers lived. In front of each house there were dressed chickens hanging, or sides of llama, or whatever meat they had, all covered with flies. We thought to ourselves, “This is what people are eating here. They’re rubbing the flies off this meat and eating that for 18 months. No thank you.” There’s no amount of money in the world that would have gotten me to do that. It could have been $10 million, and I still wouldn’t have stayed for 18 months on top of that mountain. Nick and I alternated – I think we each went down for a week per month for the first few months. Once Gimble was settled in, we said, “Adios, Gimble.”
But Gimble stayed. He not only did that job, he did another job: a linear programming study where we did ore optimization. They had five mines, and they would sell contracts to Europe plus certain assay value for the ore. And if you mixed it properly from the five mines – absolutely met all the criteria but no more than meet the criteria – you’d optimize the ore shipments for millions of dollars of savings. We did a lot of work for them, it was very successful.
Out After Dark in Uganda
I was assigned to a Ugandan telecommunications project. The phone company was a state-owned monopoly and we were working on a project to introduce competition. I was staying in the Sheraton in Kampala, the capital. The Sheraton is on a hill away from the rest of the city and I decided that it would be nice to get out of the hotel and take a walk. It was Sunday evening and already dark.
Uganda is right on the equator. And in the tropics, they get more or less 12 hours of daylight and 12 hours of darkness every day. So no matter the time of year, it gets dark around 6:00 pm. As I walked along, this prostitute was staring at me and waving. She was wearing bike shorts and a skin-tight top; she was positively overflowing from both. She was just a big woman, she certainly outweighed me. (Editor’s Note: Misha would acknowledge that he is in fact skinny.)
Anyway, I passed her by. By that time it was getting too dark to walk back, so I turned around to look for a taxi. But this woman took it as a sign that I was just too shy to approach her and came up and grabbed my ____ really hard. She said something like, come on handsome. I was just shocked and very embarrassed.
I just ran away. I was frightened. Plus, you never know, she probably wasn’t working alone. It was probably the best thing to do in the situation.
On the Road in St. Petersburg
The first time I went to Russia was actually before the collapse of the Soviet Union. I was working in Helsinki and, just for the experience, decided to take the forty-five minute flight over to Leningrad (now St. Petersburg). I arranged a four- or five-day trip through In-Tourist, what was then the Soviet Tourist Bureau. As luck would have it, that happened to be the same week that the Korean airliner, KAL 007, was shot down by a Soviet jet.
My wife was back in North Carolina, and, needless to say, she did not want me to go. But I’d already invested a few bucks with In-Tourist and it seemed to me to be a very interesting opportunity. I did call the U.S. Embassy in Helsinki just to check on the situation. I remember being routed to five different bureaus within the embassy before anyone would talk to me directly. Finally, I got through to someone at the political section and asked them if there had been any incidents involving U.S. citizens. The answer was no. But they cautioned me that there was an embargo on, and no U.S. air carriers were going into Russia. They recommended that I not go.
Of course, FinnAir was still flying into Russia, which was what I was booked on. I told the embassy I was still considering going. They repeated their recommendation that they would rather that I didn’t. I remember asking them, are you telling me that I can’t go? Well, no, as a U.S. citizen, I could do exactly as I liked. They just strongly recommended that I not make the trip. Needless to say, I ignored their advice and off I went to Russia. It seemed to me to be an interesting time to be there.
So there I was, a party of one and one of the very few Americans in St. Petersburg at the time. I saw the English translation newspaper posted in the hotel with the Russian position on the airliner incident, which I immediately discounted as complete propaganda. I was also harassed by the wife of a Moscow embassy staff member who was herself traveling as a tourist in Russia. She thought it was inappropriate that I was there, but as it turned out she had her college roommate with her, who was obviously doing the same thing I was.
St. Petersburg is considered the most beautiful city in Russia, the Venice of Russia. But actually I found it to be incredibly dirty. At the hotel I was staying at the water basically ran yellow. The TV didn’t work and each hall was guarded by an old dragon woman in a black dress, who just sat there staring sternly at everyone who walked down the hall. The old women in the chairs were the result of a socioeconomic policy to create work. You would find the streets being swept by the same women, with their black dresses and twig brooms.
The most exciting moment was when I became lost. I had left anything having to do with business back in Helsinki, in a locker at the airport. That meant I also left behind my maps of the city. There were no English translation signs anywhere. I knew the Teniski Prospect, which is a main street in St. Petersburg but otherwise I had to rely on my memory of the maps.. Generally, I got around okay but on one occasion I did become hopelessly lost.
When I realized I had no idea where I was, I figured the young people would probably have better command of the English language than the older people, so I stopped two teenage girls on the street to ask directions. They didn’t have any English language skills. But the armed soldier nearby did. He came up to me to ask what I was doing. I think he suspected I was trying to pick up these girls but I was really just trying to find my street. He was your stereotypical stern Russian solider, never cracked a smile even when I put on my best Southern charm. He had his rifle at the ready, off his shoulder, but he did tell me how to get to where I was going.
I also met a fellow on the street who wanted to practice his English. He came up to me and I thought he wanted money or to buy my blue jeans or something like that. Many Russians on the street wanted to buy some American item. Oddly enough, all I had with me was The Nine Hundred Days of Leningrad, by Harrison Salisbury, which is about the siege of Leningrad during World War II. This was probably not the wisest book to have taken into Russia. Well, I ended up being invited to some nightclub with this fellow and his friends and out of curiosity I went. I thought it would be interesting just to hang around with a bunch of Russian people, to spend some time with them.
It turned out some of the women there were prostitutes plying their trade. Of course, I wasn’t interested in anything except buying some drinks and talking. There was quite a bit of discussion about Bolshevism that night. Two of these guys were royalists and they were not at all happy with Communism. They were also vehemently anti-Semitic. It was just a very strange political conversation and it went on almost all night.
Eventually the night became quite late and in St. Petersburg they raise the bridges at about three in the morning and they stay up until about five in the morning. There is a lot of water, so in that sense it’s almost like Venice. I knew I had to get back to my hotel before they raised the bridges. I ended up weaving my way back to the hotel with these two royalists, one of whom spoke English very well and one of whom did not speak English at all. On the way back to the hotel the fellow who didn’t speak English started screaming something in Russian. I asked the other fellow what he was saying. He said, “Oh, he’s just saying that all Bolsheviks should be hung from the nearest lamppost.” This had me more than a little worried because in Leningrad the police were likely to take offense. At this point I said, “Well, fellas, it’s been a lot of fun but good night.” By then I could see the area where my hotel was. I made a hasty departure and that was my last contact with those guys.
As a postscript, I had planned to meet the English-speaking fellow the next evening, but it never happened. We were going to meet at this big plaza. I went at 6:30 pm, the appointed time, and it was misting slightly so I wore my trench coat. There were about 15 other people skulking around this plaza, also in their trench coats. Across the plaza was this government building where I could see video cameras pointing out the windows toward the area. I waited around for about 20 minutes before deciding maybe this wasn’t such a good idea. So I just went back to my hotel, had a nice quiet dinner and left the next day.
On the way out of the country, the guard at the airport took considerable interest in my book, The Nine Hundred Days. He was fascinated with it and kept turning the pages, but he wasn’t reading it. I guess he was looking for microdots or something. Then very sternly he gave it back to me. I returned to Finland on Aeroflot, the Russian airline which was not considered to be particularly safe. I remember the entire planeload of passengers burst out in spontaneous applause when the plane lifted off. The relief was palpable. And that ended my first trip to Russia.
Flying in Over the Jungles of Java
I had an engagement in Indonesia that was unique and a lot of fun. It involved an Indonesian company buying a major U.S. company. Because the Indonesian government was involved in helping guarantee some loans, I had to meet with a senior government executive who would be the equivalent of our Secretary of Commerce. While I was there, this client wanted to show us his other operations, so in Jakarta I found myself climbing aboard a helicopter. We flew around Java and it was a hoot.
We flew into these small villages where the kids would all be let out of school and they’d rush up to the helicopter. They’d kind of bow to the guy from the company because all their fathers worked for the company. I’ve probably done other projects that were more professionally exciting. But flying over the jungles of Java! God, that was beautiful. Something I won’t forget soon.
Kuwait Part 1: What Are You Doing Next Week?
I was sitting in our Chicago office one Friday afternoon, wrapping up the week’s business when the phone rang. My boss was in New York and wanted me to come there Monday morning and meet some potential clients. “Sure, I said, who are they?’ He told me they were the Al Ghanim family from Kuwait and the project involved building a strategy for investing their money throughout the world.
The members of the family and their large coterie all were gathered in a huge living room in the Presidential Suite at the Plaza Hotel. I was ushered to the front and the questions began. They were different from me in looks, attitudes, demeanors, etc. I was lost as to how to fit into this group as well as to how to execute the project. But somehow I was accepted and invited to Kuwait. Because westerners had difficulties in adjusting and in being useful there the invitation was simply to come out at their expense and spend a week with them. At the end of the week I could tell them whether I wanted to stay.
At that time the only country outside the U.S.A. that I had been to was Canada and this was back in the days when our border was completely open. In fact, I didn’t even have a passport. But, all the details were arranged and off I went. My first stop was our London office where the partner-in-charge was responsible for our work in Kuwait. He briefed me and we blocked out a study plan including a schedule for rotating back and forth between Chicago, London and Kuwait.
I landed in Kuwait and while waiting for my bag at the airport, my trench coat was stolen. I swear that I only blinked and it was gone. A taxi took me to the local hotel where they had booked my reservation. I was the only westerner in the hotel; nobody else spoke English and I didn’t know a word of Arabic. Directly outside my window was the loudspeaker for the mosque and six times a day the muezzin would call the faithful to prayers. I jumped to the ceiling each time. After two days I convinced the client coordinator that moving to the new Sheraton was a condition for my continuing on the project. It was brand new and completely western, and it had liquor service to boot.
Kuwait Part 2: The Boom Town
Kuwait in 1974 was a boom town, simply exploding with growth and opportunities. In a matter of only a few years they completely transformed the city. They tore down the old mud walls that surrounded they city, and transformed it from medieval to modern with gleaming towers, resembling many big cities in Europe or the U.S.A.
The Al Ghanim family was one of the highest ranked families in Kuwait, perhaps second only to the Al Sabah family whose head was the Emir of Kuwait. The Al Ghanim’s had the largest General Motors dealership in the world in terms of sales. They were in construction, finance and just about every facet of Kuwaiti social and business life. And like most Kuwaitis they were very uncomfortable about the small size of Kuwait and how precarious it was inside the Middle East. The country is very small; it had been carved out of Iraq by the British during the 1800’s. Kuwaitis were concerned about being invaded and they wanted their money to be safe.
But they also wanted to show to all Kuwaitis that they were a key part of a growing nation and their projects had to be highly visible. Our overall strategy consisted of investing in infrastructure businesses in safe countries in the West, and setting up branches and projects inside Kuwait. One of the first acquisitions was a prefab building company in Texas. The investment had minimal country risk and they could bring the products and technology back into Kuwait for growth.
Kuwait Part 3: You Can’t Take Detroit Out of the Boy
The Kuwaitis had stereotypes of everybody else in the world. They hired only Scots for accounting positions because they were thought to be tight with money. They hired only Americans for strategy and management, and so on. This was important because almost all the workers were expatriates. The Palestinians at that time were the most educated of Arabs and held the key positions as assistants to all the top Kuwaitis. They were the guards and the gatekeepers so to speak. The AL Ghanim family even collected dues from Palestinian workers for the PLO.
I became friends with the Scot who headed the accounting area. His family adopted me and we went to the Arabian Gulf at the Saudi border for swimming and socializing on weekends. He knew a lot about me from our long conversations such as where I grew up and where I went to school.
One night the young head of the Al Ghanim family invited a large group to his private home on the shores of the Gulf for a dinner with his father and the Managing Director of the old BOAC airline out of London. His home had the only green lawn in the country. He installed a desalinization plant for fresh water and brought in a horticulturist to create the lawn and gardens. His reception room looked huge to me, and the floor was layered with thick Persian carpets. Drinks were being served from a solid gold cart. The dinner tables were thick crystal glass cast in Italy. I was overwhelmed.
During dinner, the Al Ghanim family patriarch told us about his youth and the time he spent on the desert. He was friends with a young Saudi prince who later became the king. They went falconing in the desert and would stay out for weeks in tents. He showed us the scars from when a falcon decided to take a bite from his arm. Literally, he said, in his lifetime Kuwait had moved from a medieval society to a modern nation.
As I was sitting there with my jaw dropped to the floor, my Scottish friend came over and said, “You can take the boy out of Detroit, but you can’t take Detroit out of the boy.” Truer words were never spoken.
Me and My Shadow
In some countries, such as Iran just prior to the overthrow of the Shah, it was customary for the government to assign a counterpart who shadowed you around. We had a project director assisting the government in implementing a new telecommunications system, and he and his shadow were in a high-rise office building built for the new telecommunications company. They had gone up to this one floor and got off and were looking for office space for the consulting team. My partner happened to notice that one whole wing of the floor was completely empty. So he asked his Iranian colleague if they could use that space. This fellow says no, that space is reserved for the company cafeteria.
My partner asked him how soon would they be building the cafeteria? Would there be any chance they could use it temporarily, at least until construction of the cafeteria got underway? And the shadow tells him that actually they had no plans to build a cafeteria, they had merely told the employees they were building a cafeteria. But if they used the space even temporarily as an office, then the employees would become suspicious that they had no intention of ever building a cafeteria. Believe it or not, that’s how things were done.
I think sometimes it can be pretty tough duty to work in such different cultures. A number of years ago one of our partners got into a very difficult situation because of a contract dispute. It involved some procedure that had to be followed regarding how a document was signed; something to do with having a third party attest to it. Apparently, this fellow didn’t understand how things had to be done and ended up violating this protocol. It turned out to be a serious matter and the next thing he knew he was in jail for over a week. Eventually we got him out with the intervention of the State Department. But after that it was a little hard to find people who wanted to go on that assignment.
We’ve learned a lot since then. For one thing, we always make sure people work with business agents who understand the local culture. If we don’t have a local operation, then we’ll find somebody there to partner with who understands the local business practices.
Overseas you have to evaluate carefully exactly what kind of situation you’re getting into. There was one account we were working with in Latin America and one of my partners got into a dispute with the client over the settlement of the final fees. The other side suggested we could settle the whole thing by making a certain “financial contribution.” The partner said absolutely not, we don’t do business that way, never did and never will. We’ll litigate instead.
We hired a local attorney, but when our side showed up in court, we discovered it was a military court. The judge was sitting there in uniform, wearing a bandolier and a Sam Brown belt with a gun and holster. Slowly the light went on, and we folded our tent and left the country. We never did collect our fees. It was what you call a learning experience.
Fortunately, the world has changed a lot since those days. Most countries now are more or less up to certain standards in their business practices. But I’m sure there’s still someplace in the world where you run into this kind of situation.
The Cost of Doing Business
Frankly, I think bribes are the cost of doing business in the developing world. Many firms build that factor into their calculations for project costs. German companies can write off bribes in their accounting books. On the other hand, the U.S. government demands that U.S. firms not pay bribes. But there are lots of other ways to compensate people in order to get business. None of which I would advocate or push for, but these often end up happening.
Probably the most common method is to take an employee or a temporary employee, some local guy who’s connected to your client. It could also be their nephew or niece. This isn’t necessarily bad because you need someone who understands the local environment. I also assume that I’ll be paying exorbitant amounts of money to local consultants, usually though a local company. Typically the one who recommends the local consultant is the client itself.
For instance, we had a project in Tanzania that entailed developing a regulatory agency across six sectors of Tanzanian infrastructure, all of which were owned by the state. We were asked to take on a local man who had served as the first telecommunications regulatory commission chairman in Tanzania. He was basically the equivalent of the head of the FCC and would have been perfect if we could get him. We wanted to hire him to advise us on the regulatory environment in Tanzania, but in fact, he was so good and so successful that he turned up his nose at working with us. This is very rare because the locals don’t ordinarily have a chance to get paid by a Western company at Western rates.
Having failed to get our first choice, our client said, “Oh, we have just the guy for you.” And they introduced a man with a doctorate, apparently he was an economist. It turned out that he knew nothing about regulation, he was lazy, and he’s billing outrageous amounts of money for doing basically nothing. I wanted to hire him directly but was forced to hire him as part of a two-person consulting company, which also contributed nothing. We all agreed up front that I had a fixed pool of money that I wanted to pay a consultant, probably around $10,000. I wanted to reserve some of our money for this other superman if and when he became available.
For their purposes they wanted it to look like I was paying them like $500.00 a day rather than paying them in a lump sum, so that they could use this figure to charge future consultant companies. So imagine my surprise when five weeks into what turned out to be a seven-month project, they billed me for four men, basically for doing some photocopying and production and other odd jobs like that.
It’s a form of bribe in the sense that I didn’t want to pay these people for the work that not done, or if performed only very badly. But I’m getting direct pressure from the client saying, what have you done about these local guys, they’re complaining to me that they haven't been paid. What's the problem? Though the link is not absolutely explicit I understand that there’s some arrangement between the client and the local consultant. In developing countries, people have understandings and look after one another.
Eye-Opening Experiences
One of the most important, life changing events I've ever had was the first time I went behind the Iron Curtain. This was in 1972 on a trip to Hungary and Austria. I was married then to someone with a Hungarian name. His parents were Hungarians. Being behind the Iron Curtain gave me a different appreciation of the world, the trip was actually very scary for me. I had grown up in the 60’s when we were in Vietnam and people were burning draft cards. There was a lot of anti-American sentiment around the world. But to go to Hungary in 1972, and have this patriotic feeling coming back to the United States, to be able to appreciate the First Amendment and the Bill of Rights, the Constitution that we live under; well, that stuck with me. Very deeply.
I was also in Czechoslovakia two months before the Berlin Wall came down. Again, the sense of dread was there, going over the border, the dogs sniffing the train. You could see trusses above the train where we were sitting. We had been told there were snipers on the trusses who would shoot at random into the coal carts because people would sometimes try to escape by hiding under the coal. There was a sense of desperation in the air then, a feeling that something eventually was going to happen. But it sure didn't seem like we were just two months away from such major change. Traveling does change your view of the world.
STORIES FROM READERS
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