Croatian Managers Are Often Burdened by Quick Earnings and Posturing

The founder and owner of Hill International and the creator of the concept of humanistic management claims that the Croatian labor market is better than the Romanian but worse than the Slovenian, and that Croatian managers often lack the ability to make quality decisions.

Interviewed by: Vanja Figenwald
[email protected]

Hill International is one of the strongest consulting firms in the field of human resources in Central and Eastern Europe. Founded in 1975 in Austria, it began to expand into regional countries in the late 1980s, and today has branches in 24 countries, including Croatia since 1996. Dr. Othmar Hill, the founder and owner, established the business on the concept of humanistic management and services tailored to each client according to his unique method, a scientifically based procedure that measures the skills and competencies of candidates. Hill states that it is a consulting firm that focuses on searching for and selecting managers primarily for companies in Central and Southeastern Europe.

Hill International has offices in 24 countries in that region, except for Belarus and Moldova, thus almost covering the entire region since the late 1980s when it arrived in Hungary. They are not true ‘headhunters’, but, as Hill says, business psychologists. Therefore, the search for talent includes advertisements, the internet, direct communication, and psychotests.

• You claim to engage in humanistic management. Can you explain it?
– Based on many trainings, I have realized that there are two key points in a company. One is managerial technique, or the tools and techniques used for management such as assessment systems, functional diagrams, job descriptions, etc. The other is style, the way you do it, which is equally important as the technique. Many disasters and failed collaborations result from poor or shaky managerial style. Therefore, I believe you must combine both. If you use an aggressive, expansive technique along with a pleasant, friendly relationship with subordinates, you are a nomadic manager. On the other hand, if your technique consists of dismantling the organization and you behave repressively towards people, you are a so-called jungle manager. The future lies in nomadic culture, that is, in the combination of social sensitivity and good technique, and that is precisely humanistic management.

• Can you outline the candidate selection process? What is measured and how?
– First, the profile is determined, the competencies of the company, and what its experience and knowledge (‘know-how’) consist of. These are key segments that are looked at over a period of, say, the next three years, and they need to be defined now. We help with that. Then follows the search for candidates who will best fit the established profile. It is very important to formulate the advertisement accurately because if it is not precisely formulated, you will not reach the right people. Consideration is given to people from the company as well as those outside it. There are three techniques for identifying candidates that are combined. The first is a structured interview, which consists of a conversation between a psychologist and the candidate in which specific questions are asked and desired answers are obtained. The conversation lasts on average half an hour, but it can only yield basic information. It is necessary but not sufficient. Then a psychological diagnosis is set, a ‘management audit’, which analyzes the candidate’s potential through a questionnaire. This provides insight into personality, abilities (memory, logical reasoning, mathematical talents, negotiation skills, etc.), work style, sales abilities, or managerial technique. Finally, the candidate’s interests are analyzed. We can, which is very important, find out if you are in the right sector at all. Most people in Austria have never had professional orientation and do not know if they are in the right place, which is a huge waste of resources. Standard tests are useful but insufficient. They simply cannot determine a person’s social potential. With these three tools, we achieve about 85 percent accurate predictions, which is the maximum.

• Well, but your tests are designed according to the average and its measurement. Can they therefore discover above-average, rare talents?
– No, no. They may be standardized, but they can show whether someone should become a general director. The same matrix can be used to show that. Our method can be used for selection from secretary to general director, and from Germany to Kazakhstan. This reduces the risk for investors entering any of these markets, especially if you consider that we can determine how prone someone is to corruption, for example. If a person is assertive, selfish, and disciplined, they may be a good salesperson. On the other hand, if they are undisciplined and asocial, they could be a psychopath. Therefore, sometimes just one or two variables can completely change the outcome. Business psychology can determine these things, which significantly reduces the risk for companies.

• Your tests do not seem significantly different from many others that have been used in the world for decades. What is their advantage?
– The difference is enormous because our tests are structured in a way that we designed ourselves. They all contain hidden structures that help us accurately distinguish variables in each individual. Therefore, we have a series of components that sometimes require three to four hours to complete, but that effort is small compared to the damage you have if the wrong person is working in an important position.

• Do you follow candidates even after they are selected?
– Of course, we are in constant contact. Through surveys, we have determined that people selected through our company achieve better results for five years than those found with the help of other companies. A friend of mine once showed me a list of people who have been in his company for more than five years, divided into columns with the names of people found with our help and the help of other companies. The first column was full, the second empty.

• Have there been complaints from companies that were not satisfied with the selection?
– Of course, but that does not happen often. We provide a six-month guarantee (one year for higher managers), and during that period we find someone else if the client is not satisfied with the selection. In that case, if the client comes and says that this or that person was not good, that they were fired, we do not even ask for an explanation or reasons, but simply redo the job.

• Free?
– Yes, but that really does not happen often, maybe five times out of a hundred people. Such a system should be tested on politicians because the way they are chosen today is catastrophic. Choosing friends and party comrades is terrible.

• Looking at the list of your branches, there is almost exclusive focus on developing countries. Why only them?
– Because that was a very smart move for us. Those markets are extremely segmented, and if an American company enters, for example, five different markets and needs a financier, how would they do that? They do not know the language or local conditions, so we are a great help to them. We did not go to Western markets because they are saturated with various consulting firms. In Germany, we actually do not have real competition. There is only one German company that has maybe five or six offices in the region, while we have 14. At the end of the 1980s, I was not sure about that decision because everyone was rushing to Brussels, but now I see that I was right. Besides, I love the Slavic mentality because my family also comes from this area.

• What about the crisis, what do you think about the current financial crisis and what do you advise managers?
– Yes, the situation is very dramatic and requires a change of the entire paradigm. Communist materialism has simply been replaced by capitalist, which is sick, as is the entire concept, economically and politically. We must find completely new, non-competitive answers for the future, a common understanding. Human resources are constantly wasted this way. There is no alternative to humanism and putting people at the center. When it comes to survival, the matter is easy. You need to find the right strategy and determine what to do in the next three years. The key is in leadership and selecting people, in assessing management performance, ‘management audit’.

• What is meant by assessing management performance?
– It is the same thing, only from the inside. What we usually do, only in this case we determine the management’s ability within the company: whether it can lead itself, and then others, that is, can it lead and how does it do it. After that, we offer possible solutions for situations that offer improvement.

• How well do you know the Croatian labor market and can you compare it with those in the EU?
– Your labor market is somewhat in between, both developed and underdeveloped, but significantly better than, say, in Romania, where people run headlessly from one company to another. Slovenia is somewhat similar to Austria, a little ahead of you.

• What should be improved here?
– There is a lack of awareness about the work being done. There is a lack of decision-making ability and speed in it, and there is also a burden of quick earnings and posturing – expensive cars and luxury. I believe your future is positive, and I regret that you have to wait so long for EU entry, especially considering that Croatia has always been Austria’s second living room. Here we feel at home.