Russian delegates gain insight from Iowa grocers
The United States has grown up under the spirit of entrepreneurism and a free-market economy. In Russia, where entrepreneurism is still a fledgling concept, business owners often find themselves at a loss over such seemingly common tasks as obtaining a small business loan.
But 11 Russian entrepreneurs, who spent the last two weeks in Central Iowa learning from their American colleagues in the supermarket industry, returned home this weekend, armed with new ideas and insights they hope will strengthen their businesses and, in turn, their country’s economy.
“Under the socialist structure, which these people were all born into, there was no preparation for entrepreneurs,” said Everett Laning, a member of the Indianola Rotary Club, which co-sponsored the delegation along with the Ankeny Rotary Club, and a coordinator of the group’s visit. “They’re working by the seat of their pants.”
Since 1996, the Center for Citizen Initiatives, a San Francisco-based non-government organization, has brought 3,500 Russian entrepreneurs from 90 industry sectors to the United States for management training through its flagship Productivity Enhancement Program. The program strives to provide the Russians with intensive training in American business practices with the hope of giving them a competitive edge in their country’s marketplace, while also helping to build a self-sustaining market economy and supporting the Russian middle class, according to the organization’s Web site.
Marina Inglikova and her husband opened a supermarket seven years ago in Nizhny Novgorod, a city of 1.3 million east of Moscow. Though they have operated a stone manufacturing facility for 12 years, they have chosen to focus their attention on the supermarket, which has proved to be far more profitable. Most recently, the purchased a large building they are converting into a “hypermarket,” or a large-scale supermarket.
She joined with the delegation with the hopes of learning from American companies how to create a chain of supermarkets – she would like to operate 10 – and how to manage a distribution center, which she also would like to add to the business. Visits to several Iowa distribution centers, including those of Hy-Vee Inc., Fareway Stores Inc. and Perishable Distributors of Iowa Ltd., allowed her to see the manpower and equipment required of one of these facilities.
“Before [I] started [my] own distribution center in Russia, [I] was lucky to find it here,” Inglikova said through a translator. “Now [I know] how to do it in a proper way.”
Gary Churchill, assistant vice president of information services at Perishable Distributors of Iowa, spoke to the group Wednesday on a variety of topics related to distribution, from improving the shelf life of food items to establishing auditing accounting principles. Much of the discussion, which was followed by a tour of the distribution center, provided insight into the company’s relationships with its suppliers.
PDI has hosted numerous international delegations, particularly groups from Southeast Asia, whose major concerns involve product transportation. The Russian delegates, however, expressed considerable interest in security and business ethics, Churchill said, speculating that these business owners continually struggle with theft, by employees, customers or both.
The delegates were also fascinated by PDI’s automated distribution system. The delegates initially were put off by the costs of the required equipment and computer systems, but Churchill told them about the long-term cost savings such a system can provide.
“We like showing off our technology,” Churchill said. “We’re one of the leaders around here and we’re very proud of that. And if it helps them make their economy a little better, we’re all for that.”
An automated distribution system is one idea among more than 40 that Sergei Egorov, a resident of Pyatigorsk, planned to take back to his business – a facility that produces natural foods from organic ingredients, and three distribution centers that supply the products to 2,000 to 3,000 stores and supermarkets in southern Russia, with plans to expand his distribution operation into central Russia.
Visits to various distribution centers gave him insight into various operational formats. He had hoped to make a decision by the time he left Iowa as to which format he would implement in his distribution centers. Upon returning to Russia, he planned to write a business plan and perhaps work with a consultant to implement those concepts.
Egorov and Inglikova both cited their persistent struggle with personnel management and their difficulty in hiring qualified workers. In learning from the practices of Iowa companies, Egorov plans to ramp up his company’s training procedures to develop a workforce that better meets his corporate standards.
Inglikova was attracted by the ability of U.S. supermarkets to hire many part-time workers, particularly high school students. Russian businesses, she said, are prohibited by law from hiring part-time workers. She now plans to conduct a lobbying effort to encourage the government to ease those restrictions.
“That could be very good, and you don’t have to pay big salaries to students,” she said. “You can pay just a little money and it would be very useful for a supermarket.”
In visiting Iowa supermarkets such as Dahl’s Food Marts, where customers can not only shop for groceries but visit the bakery, drop off their dry cleaning, rent a movie and pay their utility bills, Inglikova saw the potential to duplicate those services, particularly utility bill payments, in her supermarkets.
“In Russia, that would be in great demand because usually you have to stay in the bank for many hours to pay for utilities,” she said.