Frank Herbertz:

Business and politics should exist separately

Mercuri International was founded over 50 years ago as a sales training company. Today, the business school exists in over 40 countries, including Russia. In an interview with Capital Ideas, Chief Executive Officer at Mercuri International Group AB Frank Herbertz talked about opening the school’s Russian office and everything that has been accomplished since.

Mercuri International Business School has existed in Russia for over 20 years, but has received almost no media coverage. You didn’t give any interviews. What has changed?

This is partially true, Russia wasn’t the kind of market the company focused on. During the 2008-2009 crisis we were more concerned with restructuring and turning a profit. We paid less attention to developing markets. But things have changed, and now everything will be different.

What are your students like? What do you teach them?

Our target audience includes anybody who does sales, along with anybody who supports sales departments - marketing, service departments, and managers. Mercuri’s goal is to improve sales, so that’s what we focus on.

About 1.5 million people attend classes at the company every year, and the Russian office accounts for around 200,000. About a hundred companies regularly send their sales professionals over for 2-3 day workshops.

20 years ago was not an easy period of time for Russia. How did you decide to open a business here, especially in sales? This sphere was totally underdeveloped.

Mercuri is a global company. We work with corporations that exist all over the world. Our main objective is having a global presence in order to be able to support our clients in different countries. At the same time, every country is different. This is why we needed an office in Russia that would hold development programs tailored to meet the needs of the Russian market.

How is the program different?

About 30-40% of the course is adapted for the local market. Every country has its own culture. For example, we always say that you need to ask clients questions during the first meeting in order to determine what their needs are. But in Japan, for example, this is considered rude. You have to either be talking yourself or listening to what the client says. We do what makes our clients comfortable.

Who teaches the classes? Foreign experts, expats, locals?

We have a lot of consultants in Europe who can come over to teach classes. But this never works. We opened a local office precisely so that local experts who know the culture and nuances here could teach classes. They speak the same language as the students. When foreign experts come, they aren’t familiar with all of this and classes are not as effective.

How do Russians buy and sell?

Russia is located between Europe and Asia. Here, friendly connections and personal relationships between business partners are important. It’s part of the culture, and there’s nothing bad about it. But it’s not the same in Western business culture.

In your opinion, how has the landscape changed over the past 20 years?

When the school first opened in Russia, the market was a lot less mature. Everything was based on connections, but now expertise and product quality is much more important. Clients have become more cautious and picky, there is less customer loyalty, and people are more critical. I can definitely say that the Russian market has matured and has caught up with civilized countries.

Are you happy with business development in Russia?

We’ve experienced a lot of growth here in the past 3-4 years, about 30-40% a year. The the Russian office has doubled in size in this time. And we’re still looking for new people, we’re still growing.

This market is very important for us. There are some countries where we franchise our business, but Russia is definitely not one of them. From the very beginning, the branch here has been 100% owned by our European headquarters. The Russian market’s share in the company is small for now, about 5-7%, but business is going so well that, as CEO, this is my second trip here in the past 4 months.

Had you been to Russia before?

I’ve been here about ten times in total. This is the second time I’m here for business, my other trips weren’t business-related. I came to Russia for the first time right after the collapse of the Berlin wall in 1990, which was 27 years ago.

What were your first impressions during that first trip?

I served in the German army in 1985-1987, but this was West Germany, not GDR. So I had a specific picture in my head, negative stereotypes and expectations. When I came here, these stereotypes vanished completely. I was really impressed by how different things were and how open Russians are.

What do you think about Russia now?

The people here are really friendly and open, not at all different from my friends in other countries. When I started traveling, I came to the simple conclusion that there are good and bad people everywhere. I’ve met a lot of nice, interesting people in Russia as well.

Speaking of stereotypes, do you find there is a lack of German orderliness here?

No, I don’t feel like there is disorder in Russia.

Have the political and economic events over the past few years affected your business in Russia? In your opinion, is there any room for politics in business?

Business and politics need to exist separately! But unfortunately, one always influences the other. Right now we’re seeing that our clients, international companies, are somewhat limited in terms of their development here. Still, we are convinced that the sanctions will be lifted after some time (1-1.5 years) and business will continue to grow. And Russian companies will be able to easily develop abroad as well.

What are your company’s plans?

To develop the market, to establish both regular and digital communications. We want to develop cooperation with all multinational corporations in a structured way.

How would you describe Mercuri’s sales philosophy?

Reciprocity between people is the most important thing. Always look for a balance between different type of needs - rational and emotional. As soon as you learn to balance them correctly, you’ll be successful.

And the most important recommendation you give to your students?

Never give up and celebrate your victories. If you knock on a hundred doors and only one of them opens, be happy about that one door, not disappointed over the other 99. That’s when your business will start to grow.

Do you have a dream related to business?

Business, and all of us generally, will be better off if we get rid of the stereotypes in our heads. Over 10 years ago I was the director of the Chinese office, and everybody perceived me to be a representative of a different culture. I ran into a lot of stereotypes that pop into people’s heads when they see a German person. So I am convinced that we all need to break down walls instead of building new ones, like the US is doing right now. This is probably the greatest dream I have.



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