Ingredients for success: Business growth consists in tenacity and in the ability to adapt to a situation

We are pleased to be talking to one of the most powerful businesswomen in Romania, Anca Vlad, founder of Fildas-Catena Group and one of the few women in Eastern Europe included in the organisation Leading Women Entrepreneurs of the World. A very agreeable person, with a positive countenance and the attitude of someone fully involved in both profession and family life, she reveals to us what these 25 years, which had an impact on Romania, meant to her. She has started to make a career ever since she graduated from faculty, working as Chief of the Export Department of today’s Silvarom. In 1987, she had the opportunity to work at the Romanian Chamber of Commerce, as Country Manager for SmithKline Beecham Pharmaceuticals from Great Britain. After the Revolution, she decided to leave the state sector and, seizing the opportunity, she set up the first consulting firm in Romania. In 1991, she founded Fildas, a company with 7 employees, and later on, in 1999, the Catena chain. Catena and Fildas are now businesses with an annual turnover of 350 million Euros and over 3.200 employees. But the way up here wasn’t easy at all.

The special event during the days of the Revolution

For Anca Vlad, the Revolution in December 1989 is strongly connected with an important event in her private life: her marriage was scheduled on December 25. She remembers how, on the cloudy days of the week prior to the fall of the dictatorship, she was looking for the dressmaker so that she could try her wedding dress. “The dressmaker had disappeared. I saw people buying bread, because, between the 16th and 22nd of December, nobody really knew what was going on, but people would buy bread and tins. There was something in the air,” Anca Vlad recalls. On the very December 22nd, she was to take her driving license exam, but – obviously – it was cancelled. The wedding didn’t take place either, and not only because many guests no longer wanted to come, but also because the church and the restaurant were closed. “Yet they received us at the Civil Registry Office on December 25th. I recall that I was literally walking on bullets. I didn’t find flowers, only a bouquet of mistletoe – this is how a new era started for me.” But the mistletoe brought her good luck.

 High hopes

She remembers the great joy which flooded her soul when Nicolae Ceauşescu’s dictatorship ended. She admits that, from a financial point of view, she was doing alright, but she felt that something essential was missing: “I was 33 years old, I had a pretty good income, I had entrepreneurship, I was teaching French and English, I was doing translations. From a financial point of view, everything was all right, but from the point of view of the freedom of expression and movement, we were like birds in a cage. We had got away from the communist evil! Our life completely changed at that time, but also our expectations. We had high hopes!”

She remembers the first elections and she finds it natural that we should be moving away from communism completely. “I thought that was our only chance. I looked at the people who were queuing to vote and I thought they knew whom they should vote for. But now I realize that I was too optimistic. Great changes cannot be made overnight, a transition period was needed.” But she also thinks that Romania’s transition is not over yet. “Maybe this is our life, Romanians’ life, to live in an endless transition, having a very troubled history. We were all dreaming and we were promised we would accede to the European Union. But the dream did not fully come true. But not only because of us, but also because of the discriminating trend which is haunting our continent,” Anca Vlad says.

 She waited for 6 months for the first customer to arrive

The beginning of her career as an entrepreneur is related, strange as it may seem, again to the wedding. She had been saving money for the event, but, since it no longer took place, she had the money with which she could equip the first office of her first company: a library, a few elegant desks, a copier and a fax machine. The company had the registration number 800, being the first marketing and consulting firm in Romania. “I had attended an English-language high-school and I mastered the language very well, I had connections in the field of medicine, I have always worked for the Romanian exhibitions of medicinal products as a translator, as an organiser, and I thought it was only natural that I should follow this path. My mother-in-law said that I may have also been the first unemployed person in Romania.” And this was related to the fact that the beginning was very difficult: 6 months had passed by the time the first customer and the first contract arrived. But the contract was worth 3.000 pounds  a month, which gave her hope.

“Then a second customer came, then a third, and very quickly we got to set up contracts which were worth 10.000 pounds a month. And during the second year of activity, we also started to develop the commercial side, because the market required it and the sums earned on the commissions were interesting enough so as to make you evolve.” She remembers that, at that time, there was no VAT, but a tax of 2% for the movement of goods. She says that, back then, a company could operate without being compelled to pay huge advance sums to the state, but the taxes were very high: 55% cumulated at some point.

How is the life of an entrepreneur? “Each day has its own potential, you will meet people, you will read something interesting, an idea that you can bring into effect will occur to you, so life can be very beautiful, because it has its creative side, as it is the case with an artist. Of course, it also involves many hardships, because an artist too finds it very difficult to make himself understood and appreciated.”

“It was a steady increase in 25 years: from zero to one million, to two millions, to five, to seven, to seventeen, to twenty-five millions. It is the women’s manner of building a career, brick by brick. The increase meant tenacity and the ability to adapt to a situation, because we, the entrepreneurs, had to comply with so many governments, so many sorts of legislation, so many waves… and I had to keep the boat afloat and in the right direction. And my crew was getting bigger – from 7 people 50, to 100, and now there are more than 3.000 employees. We have a lot of customers, many suppliers of goods and services, who depend on us and work for us. But I can say that my dream as an entrepreneur came true.”

 The main problem was related to financing

When she started doing business, the world appreciated Romania. But it didn’t last long. “The Revolution had taken place and the world appreciated Romanians’ bravery, the fact that they had succeeded to escape dictatorship. But then some events took place which led to a misunderstanding in the first place, and then to a feeling of contempt towards Romania, caused by the fact that we didn’t manage to solve some social problems. The lack of sympathy led to a big reluctance in the granting of credits to our companies until 2002 or so,” says the founder of the Fildas Group. Twelve years had already elapsed, during which the local enterprises were not able to evolve, because the banks would only grant credits to state firms and foreign companies. “Romanian entrepreneurs’ main problem was the lack of financing, especially since the state did not pay its debts on time. As for Fildas, I managed to convey a strong feeling of trust to the partners with whom I got the business going. They appreciated the steadiness of the group; they thought that we had a solid business and that they could deliver the goods on credit.”

Credits skyrocketed in 2007, as if foretelling the crisis. “We also received some lending proposals, and we accepted them, because we needed them. The crisis was severe; we had to cope with many insolvency situations of our partners, many of them being caused by the enormous invoices resulting from their relationship with the state. Those were hard times for us too. We had big problems with the bank credits and the devaluation of the Romanian leu. And the fact that the state postponed the payments to the suppliers for almost a year and did not reassess the currency, as we were working with a fixed price for medicines, made us lose very much. We had to deal with hardships for about 2-3 years,” Anca Vlad admits. In that unfavourable economic context, the business of Fildas came to a standstill. On the other hand, the crisis did not have as strong an impact on Catena, because it was a new business, and new businesses were better off during the crisis, says Anca Vlad.

“Let’s make ourselves known in Europe as who we really are: a proud nation, with talented people; we have a history, we have intellectual qualities. We cannot allow being hurt, and I, for instance, cannot allow having my score reduced by 30% in relation to the same turnover taxes, and the same business, only because I am a Romanian shareholder. Romania is a country of intelligent people, of art and beauty, a country with a history. Romania is a country with extraordinary perspectives.”

 The lessons of the crisis

The crisis taught Anca Vlad to no longer make any long-term plans. The budgets of the Group are now made for a year, business plans for six months, and the contracts with the banks for three years, especially since the banks are not willing anymore to set up contracts for longer periods. As to business plans, everything relies on development. “We are the most powerful chain of pharmacies in Romania, and we occupy an honourable third place for the distribution activity. In this context, we obviously need a changeover between generations, so that the company may evolve and stay firm when faced with countless earthquakes in the economic field and in a powerful competitive environment. We renew our staff permanently, and that way we always have young managers, so that there may be people who can carry the dream further. We received a certain kind of education, and now a new generation emerges who also yields good results. Succession is now secure,” the founder of Fildas Group says.

 Young graduates are not oriented towards entrepreneurship

But unfortunately, Anca Vlad says, nowadays’ graduates are not oriented towards entrepreneurship. And this is not because of them, but because of the Romanian education system. She gives as example the British education, which prepares children to become entrepreneurs at the age of 18, and where Economics and Business are two subjects emphasized since high-school. “I am surprised that the Romanian education system did not evolve in this direction and that nowadays, as a high-school graduate, you don’t know anything in this respect. Sometimes, what you have to do doesn’t necessarily require being a faculty graduate.”

She believes that the school doesn’t prepare at all the young for the tough activity in a real company. “It’s not their fault that they don’t know, but of those who do not teach them. They do not have practical abilities, for they do not practise what they are being taught, but they learn quickly and are very willing to learn. They have a future ahead of them, but it would be a pity for us to become only a source of employment,” Anca Vlad says.

 Legislation should be rewritten

She thinks that legislation is very burdensome, overly heavy and unforeseeable and that is why it should be rewritten, mostly in the economic field. “The laws are impossible to read, although they should be drafted in simple language, for they are conceived for us, the citizens, so that they might help us, not confound us. I have a «translator» of laws, because there are in each law all kinds of references to other seven previous laws. If we must not infringe them, then the laws should be very clear. The state has to do something so as to gain our trust.”

 The economic potential of Romania: the IT and the agriculture

She thinks that Romania has two economic fields with major potential: the IT and the agriculture. “God created the best conditions so that we might have an efficient agriculture, but this one has to be industrialised as well. On the other hand, we have to develop our IT skills, especially those of us who are employed. Young talents that graduate from specialised schools must be encouraged, because around them can be set up teams that will really bring value to the Romanian society.”

A third domain with potential in Romania is, according to the founder of Fildas, the one of creativity. “We are capable of innovation, but we have to encourage those who are talented and possess creative intelligence. But this thing requires a great deal of attention as to the way in which the government employs both funds from tax revenues and European funds,” Anca Vlad thinks.

 State computerisation versus private sector computerisation

As to computerisation, Anca Vlad believes that the state circulates sums of money too large for a project that, in the private sector, is carried with far less money. “I must confess that I am pretty much concerned about the launching of the 2020 project – I hear, for example, that 5 billion Euros are needed for the computerisation of the country. However, these figures are aberrant, but I heard them being uttered. Computerisation must be done gradually, because technologies change very often. There is a need for a project that can be accomplished step by step, and the optimum variant must be looked for. We are experienced too: we have 2.5 million loyal customers, we release 6 million prescriptions all over the country and 18 million fiscal receipts, and we know exactly when, how much and what our customers have bought, and we do that with IT expenses lower than two million Euros a year.”

Anca Vlad also expresses a relevant opinion regarding the “cloud” technology, which the state wants to implement. “This «cloud» is not only a word, but a genuine marketing construct, with respect to the storage of some data, which isn’t made at all in the clouds, but here, on earth, in someone’s server. Where data are being stored is a European problem.” She thinks that the Government should have its own servers to store information. “We have our own servers, we cannot store all information related to patients and medicines on the «cloud».”

As to the health cards, Anca Vlad believes that the problems that many have are not related to their usefulness, as some might want to give the impression, but to the fact that these cards reduce considerably the possibility of corruption within the health system. “Everybody has cards and, if they may have cards with money on them, they may also have cards with information on their health condition stored on them. But the problem lies elsewhere: this card reduces considerably the possibility of corruption. Control and computerisation are essential.”

 Entrepreneurs could help governments

Anca Vlad believes that the Government would have things to learn from the entrepreneurs in the private economic field, if it gave them the possibility to engage in a dialogue, and she doesn’t understand why, all these 25 years, only few governments and authorities really paid attention to them. “We have several internal communication platforms; one is called The Path to Excellence, where pharmacists write. They write about what they take notice of and, even though the subscriber is anonymous, the information still reaches the managers. Some proposals can be implemented, others cannot, but there is a dialogue, there is somebody who reads these proposals. I wish that in Romania too would be a real dialogue between the business environment and the authorities. We know the market prices for the projects that the state wants to implement. All they have to do is ask us and to listen to our opinion.”

 The culture of teamwork

She believes that teamwork is a great problem in Romania nowadays, at all levels, including the private sector. “It’s a real problem and we encountered it in our company as well. But I conceived a course to solve the lack of teamwork, that I also participated in. The result was astonishing. We held contests, first individually and then in teams. The hierarchy changed: those who had the best results individually, when they had to work in teams, did not make the team yield the best results. Those who had average results in the individual competitions were in the winning teams. So not the individual qualities are decisive, but the qualities of the team and teamwork. Since then, we have been working only in teams.”

On a personal level, she has got many other preoccupations, besides business. One of them consists in encouraging Romanian plastic art. “I think I will try to support female entrepreneurship. Now I have a child that has to finish school, but then it will be much easier for me to travel. I participated in various conferences and I found out that it is more difficult to travel inside the country than abroad. One arrives to Iaşi with a greater effort than to London, but I intend to overcome these difficulties for a bright cause,” Anca Vlad says.

“I’m an optimistic person. There are also sad moments in my life, but they are fleeting ones. Maybe if I hadn’t been this way, I would have given up business. After rain comes sunshine! And each day is a wonderful gift.”

November, 2015, Romania after 25 years, special edition of Financial Market magazine