Sarmale and Strategy in the land of Miorita: Slow-Cooking a Romanian Recipe for Business Strategy

The Starter: Business Strategy in Romania…Unwrapped

Drawing on over a quarter-century of navigating the ebbs and flows of Romanian business strategy, this article represents a personal journey from aerospace engineering towards corporation, consultancy and entrepreneurship, through the rich tapestry of Romania's cultural and economic landscape.

Weaving together the wisdom gleaned from local culinary traditions, the societal insights framed by Geert Hofstede's cultural dimensions, and the strategic theories put forth by luminaries such as Michael Porter, Philip Kotler, Jim Collins, Roger Martin, Clayton Christensen, Renee Mauborgne, Al Ries, Tony Ulwick and others, this piece is my own reflection of a deep-seated understanding rather than an infallible blueprint.

It is further enriched by psychological insights from Daniel David's 'Psihologia Poporului Roman,' offering a window into the Romanian soul.

This narrative is not a prescriptive doctrine, but a lived chronicle that aims to craft a business strategy approach that vibrates with the unique frequency of Romanian ethos and its culinary heart. It is an invitation to explore a path less trodden in the business strategy domain, one that is profoundly Romanian and resonant with the echoes of its heritage, distinct from the well-trodden avenues championed by the West. As we delve into this exploration, I invite you to reflect, critique, and perhaps find parallels in your own experiences.

Selective Insights from "Psihologia Poporului Roman" by Daniel David

Drawing from cognitive-behavioral psychology, Daniel David provides a comprehensive profile of the Romanian psyche through "Psihologia Poporului Român," challenging numerous stereotypes.The findings reveal Romanians possess significant intellectual potential and a competitive spirit. However, they also highlight areas for growth, such as a low trust in people leading to a lack of cooperation for collective action and a tendency to distort reality by over-emphasizing both positive and negative aspects.

Furthermore, the research indicates that Romanian culture often exhibits a sense of collectivism, where the community and family play significant roles in people's lives. This collectivist mindset, deeply rooted in the Romanian ethos, underscores the importance of building trust and collaboration in the business environment. It suggests that a successful business strategy in Romania should not only leverage the intellectual and competitive assets but also focus on strengthening communal bonds for collective success.

Romanians exhibit a high distance to power, indicating significant concentration of social power, with few individuals holding substantial influence over many. This reflects a notable power gap in society, where the idea of a boss emerges.

Additionally, there is a notable tendency in Romanian culture to avoid uncertainty and seek stability and predictability in various aspects of life. This inclination towards uncertainty avoidance highlights the need for businesses to adopt strategies that provide a sense of stability and security in their operations. By mitigating the propensity for exaggerated perceptions, businesses can foster a more balanced and realistic approach to strategy, conducive to collective success.

This nuanced understanding of the Romanian ethos, encompassing both collectivism and uncertainty avoidance or high distance to power, can lead to strategies that are not only realistic and optimistic but also deeply aligned with the nation's cultural fabric. It encourages businesses to navigate the delicate balance between individualism and communal values, ultimately contributing to their success in the Romanian market.

Local Food and Cultural Values

Romania: The preparation of traditional Romanian dishes like ‘sarmale’ or ‘mămăligă’ embodies immanent values of patience, collective effort, and a deep-rooted sense of family. These culinary practices mirror a possible long-term orientation paradoxical, in dichotomy with generally accepted perception) and a preference for familiar, tried-and-true methods, indicative of higher uncertainty avoidance in Romanian culture.
USA: In contrast, American cuisine, with its quick and efficient preparation of foods like hamburgers or hot dogs, reflects a culture that values rather short-term orientation and high individualism.

Business Strategy Theories and Cultural Values

USA: The American business strategy gurus often emphasize innovation (Kotler), competitiveness (Porter's Five Forces), individualism (Christensen's Disruptive Innovation or JTBD), and market dominance (Blue Ocean Strategy). These align with American cultural traits of low power distance, high individualism, and low uncertainty avoidance.
Romania: Conversely, a potential Romanian approach to business strategy, reflecting the country's inclination towards greater power distance (more hierarchical structures), moderate collectivism (community rather prone to family-focus), and a preference for minimizing uncertainty (risk-averse), could potentially emphasize more layered organizational frameworks, communal collaboration, and uncertainty avoidance.

Assessing the Romanian Approach to Business Strategy - Insights

1.Emphasize Relationship and Community Building

Explanation: Just as traditional Romanian dishes like ‘sarmale’ require collective effort and are central to family and community gatherings, a Romanian business strategy might focus on enhancing community engagement and loyalty. This approach is rooted in the cultural value of collectivism and the long-term orientation of investing in relationships.
Example: Similar to Agricola Group of companies, which faced a challenging situation years ago, Romanian businesses can emphasize relationship and community building. Agricola leadership prioritized its community by refraining from laying off over 1,000 employees, understanding the impact on local families: “1,000 families would no longer have been able to put a chicken on the table”. Despite facing significant financial challenges, Agricola successfully navigated corporate restructuring with a gradual approach.

2. Risk-Averse

Explanation: Reflecting the careful preparation and time-honored methods observed in Romanian cuisine, such as the meticulous process of preparing ‘sarmale’ and ‘mămăligă’, businesses in Romania could benefit from detailed yet cautious planning when it comes to risks. This aligns with a greater tendency to avoid uncertainty in Romanian culture, where there is a preference for structured and familiar approaches. However, it's important to note that while risk aversion brings a sense of security, it can significantly limit development opportunities.
Example: As the CEO and co-founder of feexers (the ‘Uber’ for on-demand home services), a proptech mobile app similar to TaskRabbit, I recognized an opportunity to revolutionize the Romanian market, traditionally characterized by its black-market dealings. In our venture, we aimed to partner with DIY retailers to formalize and expand the 'on-demand home services' sector. Initially, there was great enthusiasm from local companies. However, the higher uncertainty avoidance of Romanian culture, which typically favors structured and risk-averse planning, became apparent. Although these companies recognized the potential for vertical integration, developing a sustainable competitive advantage, and rapid market expansion, their inherent caution held them back. This reluctance ultimately prevented partnerships and acquisitions that could have propelled both feexers and the Romanian DIY companies into new realms of innovation and growth. Considering that in Romania there are nearly 30,000 companies with capital from neighboring countries, with aggregate investments exceeding 3 billion EUR (source: NTRO, 2022), overcoming the cultural barrier of risk aversion becomes crucial. International expansion is an essential trend that Romanian firms should approach without hesitation, thus opening new horizons for growth and regional influence.

3. “Romanian” Long-Term Orientation in Strategy

Explanation: Reflecting the patience and effort seen in traditional cooking, like the slow cooking of sarmale, Romanian business strategies could emphasize long-term goals rather in sustainability, and gradual growth. This specific long-term orientation aligns with the cultural value of patience and resilience.
Example: Agricover recognized the challenge that farmers faced in financing their operations and created a blue ocean by gradually building a new financial business line, a non-banking financial institution specialized in agriculture. This strategy, done with patience and resilience, eventually made Agricover one of the leading agricultural companies in Romania. Similar to Agricover's approach 15 years ago, Romanian businesses could adopt a long-term orientation, focusing on sustainable strategies that are relevant to the vertical market they operate in. In the midst of European Union farmer protests calling for the relaxation of sustainability regulations due to decreasing incomes and rising input costs, Romanian agriculture might opt for a sustainable and ecological path. This approach could counter the current general trend, paradoxically focusing on practices that balance economic needs with ecological responsibility and demonstrating a long-term vision for resilient and sustainable growth. How does that sound?!?

4. Hierarchical but Inclusive Decision-Making

Explanation: In line with the higher power distance in Romanian culture, clear leadership and decision-making hierarchies are important. However, akin to the way Romanian cuisine incorporates varied influences, there's also a need for inclusivity and diverse input.
Example: Much like Impetum Group's innovative approach of creating a management club for all managers in the community surrounding their group of businesses (CITR, Roca Investments, RocaX și Agista), Romanian companies can adopt hierarchical structures while promoting inclusivity. By establishing a clear chain of command and holding regular brainstorming sessions where employees at all levels contribute ideas, businesses can harness the power of diverse input. This approach fosters collaboration not just among different business units but also among individuals, creating a culture of synergy and innovation that can be the foundation of success, as demonstrated by Impetum's inclusive initiatives. A Romanian company might have a defined chain of command but also hold regular brainstorming sessions where employees at all levels can contribute ideas. Thus, we would benefit from the significant intellectual potential identified by Daniel David in his 10 years of research into the Romanian ethos.

5. Balanced Approach Between Local and Global

Explanation: Romanian culture, exemplified by its cuisine that seamlessly blends Eastern and Western influences, provides a model for businesses to harmonize local traditions with global trends. These cultural traits encourage businesses to honor community ties and carefully evaluate risks, making them more likely to adopt strategies that respect local traditions while cautiously exploring global opportunities. This cultural framework supports a pragmatic approach where global trends are embraced, but with a preference for initiatives that have clear compatibility with established local norms and a calculable risk profile.
Example: The Carpathian Single Malt Whiskey exemplifies this approach. It represents a strategic adaptation to global markets, executed with a clear understanding of the local distilling traditions and the global prestige of single malt whiskey. By meticulously researching market trends and leveraging Romania's unique cultural assets, this initiative successfully merges the traditional with the international. The Carpathian brand maintains a strong local identity while appealing to a broader global audience, showing a deep respect for Romanian craftsmanship and a thoughtful entry into the competitive global whiskey market. This demonstrates how Romanian businesses, like a fashion brand, could apply similar principles, integrating authentic Romanian motifs with international fashion sensibilities, leading to products that are culturally grounded yet globally relevant. We are indeed a unique culture on earth: Orthodox Latins in the Balkans. This could be a sustainable competitive advantage, provided that it is effectively communicated.

The Aftertaste: Reflections on Strategy in the land of Miorita and Sarmale

Creating a business strategy in Romania is, in a way, akin to preparing ‘sarmale with mămăligă’. It's about embracing the Romanian way - slow-cooking our strategy with care, blending local wisdom, and spicing it up with global trends.

As we reflect upon the potential insights identified in this discourse - from the hierarchical yet inclusive decision-making akin to the diverse ingredients of our cuisine, to the "Romanian long-term orientation" reflected in the patient preparation of our traditional dishes - we might see a possible path to success in building a strategy deeply rooted in our cultural heritage.

It's a way of crafting strategy that, much like ‘mămăligă’, is simple yet profound, flexible enough to be paired with various accompaniments, yet robust enough to stand on its own.

Becoming aware of and leveraging these specific cultural insights can guide us towards a successful strategy in Romanian business, whether we choose to enhance the positive aspects or strive to lessen those that may hinder us. This strategic balance, akin to the balance of flavors in our sarmale, could be the key to long-term results and cultural satisfaction.

However, let's not forget that these reflections are limited to my personal experience in the Romanian business landscape. As we approach the final bites of our strategic feast and contemplate the journey that has unfolded, I pose to you - strategists, executives, entrepreneurs, and dreamers - a closing question: "How do you perceive the impact of these insights on the way we think and develop strategies in Romanian companies? Do you resonate or not? Your perspective is invaluable."

PS: Considering, in the simplest terms, the scholastic principles of neurolinguistics, we are what we speak, as reminded by the Bible in John 1:1-14 KJV: "In the beginning was the Word..." This ancestral wisdom applies even in our contemporary world, where our expression in the Romanian language is not just communication but also a window into our culture and traditions.

Similar to traditional dishes like sarmale and mămăligă that bring people together, I believe that the way we think and develop business strategies strongly reflects our culture, how and what we eat, and not least, how we speak.

Those who know me probably are aware of a subject that deeply concerns me: the passive and reflexive voice in the Romanian language. The passive voice (for example, the expression: ‘s-a decis’ = 'it has been decided') is dominant in the Romanian language and suggests, in a way, a lack of responsibility, while in Anglo-Saxon countries, the active voice prevails, implying the assumption of responsibility. Regarding the reflexive voice, this is a unique feature of the Romanian language and is not found in Anglo-Saxon culture or, in a particular way, in other European languages.

Let's take, for example, the expression 'Eu m-am născut...' (I was born...). In English, it sounds something like 'I was born,' in French, 'je suis né,' in German, 'Ich wurde geboren,' etc.

This reflexive form is absent in any other European language.

In other words, only Romanians have managed to be born by themselves, while the rest of the nations remain at the stage of having been born;-)

Beyond linguistic aspects, we can consider that the way we use the passive, active, or reflexive voice in our language can influence how we think. In this context, where ‘we are what we speak’, how could this unique element influence the way we think and develop the strategy of a Romanian company?