In the following article, Bohuslav Lipovsky and Michaela Lipovska of CE Interim looks at the history and challenges faced by the interim management industry in the CEE region over the past 30+ years. Interim management in Central and Eastern Europe (CEE) has undergone tremendous evolution over the past few decades, shaped by historical, political, and cultural factors. Let us dive into the journey of interim management in the region, from the fall of communism to the present day, highlighting the unique challenges and opportunities that have influenced its development.
The Historical Context
Post-Communist Transition
The fall of the Iron Curtain in 1989 was a pivotal moment for Central and Eastern Europe. As countries transitioned from centrally planned economies to market-oriented systems, the need for expert managers to guide organizations through this significant change became evident. Velvet Revolution in the Czech Republic and Slovakia, fall of the Berlin Wall in Germany, and the following events in Romania, Hungary and Poland created a huge demand for an out-of-the box view and senior management competencies.
Economic Liberalization and Privatization
During the post-communist transition, economic liberalization and privatization played crucial roles. Many state-owned enterprises were privatized, and new private businesses emerged. Interim managers were instrumental in restructuring these organizations, introducing modern management practices, and enhancing efficiency.
Integration into the European Union
The early 2000s saw 8 CEE countries joining the European Union – Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia, which accelerated economic integration and modernization. This integration brought new business opportunities and challenges, necessitating interim managers with cross-cultural skills to navigate diverse business environments.
The Emergence of Interim Management in Central and Eastern Europe
Early Adopters
In the 1990s, multinational corporations mostly from USA, Germany, France, Italy and UK were at the forefront of introducing interim management practices in CEE. These companies often deployed interim managers from Western Europe to lead local operations and ensure alignment with global standards.
Local Adaptation
As interim management gained momentum, local firms began to recognize its value. This led to the growth of a local interim management industry, focused on addressing the specific needs and challenges of businesses in the region.
Development of Interim Management Providers
In recent years, Interim management providers emerged as key players in formalizing the industry. These interim providers matched interim managers with organizations requiring their expertise, promoting best practices and professional standards.
Cultural Challenges and Adaptations
Communication Styles
The CEE region boasts diverse communication styles influenced by historical and cultural backgrounds. Interim managers must navigate these differences, from the direct communication preferred in Poland or Czech Republic to the more formal and hierarchical communication found in various other parts of the region.
Leadership and Hierarchy
Leadership styles in CEE vary significantly, with some countries favoring hierarchical structures and others adopting more egalitarian approaches. Interim managers need to adapt their leadership styles to fit the cultural context of the organizations they work with.
Decision-Making Processes
Historical legacies of centralized control can impact decision-making in CEE, often resulting in a more cautious and consensus-driven approach. Interim managers must understand these dynamics and adjust their strategies accordingly.
Building Trust and Relationships
Trust is fundamental for successful interim management in CEE. Given the region’s history of political and economic upheaval, building trust with local teams and stakeholders can be challenging. Interim managers should prioritize relationship-building and demonstrate reliability and integrity.
Current Trends and Future Directions
Increasing Demand for Interim Managers
The demand for interim managers in CEE continues to grow, driven by ongoing economic development, current economic recession in Europe, corporate restructuring, and the need for specialized expertise. Interim managers are increasingly sought after to lead factory relocation projects, productivity and performance improvements, implement sustainability initiatives, and manage mergers and acquisitions for private equity funds.
Cross-Cultural Training and Development
As the interim management industry matures, there is a growing emphasis on cross-cultural training and development. Interim managers are investing in enhancing their cultural competence to better navigate the diverse business environments in the various countries of the CEE region, as there is a growing trend in cross-border interim assignments.
Technology and Regional Interim Management
Advances in technology have enabled regional interim management, allowing interim managers to support organizations in CEE from different locations. This trend is likely to continue, providing greater flexibility and access to a broader pool of expertise.
Conclusion
The history of interim management in Central and Eastern Europe underscores the region’s resilience and adaptability. From the post-communist transition to the present day, interim managers have been pivotal in driving economic transformation and modernization. Understanding the cultural nuances and historical context of CEE is essential for interim managers to navigate the complex business landscapes and deliver successful outcomes.
As the demand for interim management continues to grow, cross-cultural competence will remain a critical skill for interim managers operating in this dynamic and diverse region.