Zagreb – Milan Račić, Chief Executive Officer of Indium d.o.o., challenged the Croatian Chamber of Commerce (HGK) to step out of its comfort zone in a 16 page strategy for fiscal years 2014-1018. The strategy, submitted on Friday, challenged the organization to become the de facto Ministry of International Trade in Croatia by refocusing the bulk of its resources on export development instead of showy but ineffective conferences, political trade trips and trade shows – modes of business better suited to the 1950s. ˝HGK needs to be more than a high end party planner,˝ emphasized Mr. Račić.
In the strategy, Mr. Račić, who is also one of the candidates for president of HGK, highlighted the fact that the HGK has a budget equivalent to 16% of the U.S. Chamber of Commerce, while Croatia’s GDP is only 3.59% of the American GDP. “We spend $1 on HGK for every $1,789 of GDP, while the Americans spend that for every $13,720 of GDP generated. Yet we are surprised that our products are not competitive.” The strategy, called “Fortune Follows the Bold”, was issued on the same day that Fitch Ratings revised Croatia’s credit rating outlook to negative largely on account of a “policy credibility gap”.
“We have talked about reform and restructuring for the better part of the past 20 years and indeed may be some of the world’s greatest talkers of reform but nobody really believes us anymore – least of all ourselves,” says Mr. Račić. The strategy proposed that HGK serve as the model restructuring project in Croatia – in effect, “the” case study in honest, bold, decisive and transformative leadership. “We have tried declaratory restructuring – where we leave almost everything the same, but declare a successful restructuring – and it has been an abysmal failure,” says Mr. Račić.
The strategy, submitted in both Croatian and English, also criticized Croatia’s habit of putting politics above competency. “We unfortunately recycle our leaders more than we recycle bottles,” joked Mr. Račić. “If we want the HGK to be the flag-bearer for a transformed, confident, creative, honest and export-driven Croatian economy, then we can’t hand over its reins to the same management which has dominated our economy over the past 20 years.” He continued, “Croatia is in an economic war but just doesn’t know it and we make our difficult position even worse by not selecting and promoting objectively the best people, putting politics ahead of competency, and constantly recycling unsuccessful leaders of dubious qualities. The HGK deserves new fresh leadership. It is really fairly simple, if we want changes then we make real changes, if we don’t – then let’s just be honest about it. Fortune follows the bold!˝
About Indium d.o.o.
Indium d.o.o. is a management consulting firm specializing in restructuring and strategy. Mr. Račić holds a Bachelor of Arts degree from the University of Toronto, a law degree from the University of Manitoba and a Masters degree in International Law from McGill University. In his career, Mr. Račić has negotiated several billion dollars worth of M&A, corporate & structured finance, and aerospace transactions, formulated the development strategy for several market-leading multinationals, managed a $700 million operating lease portfolio and structured a €100 million real estate-focused private equity fund.
Contact Indium at media@pureindium.com.