The sweet taste of success

Raised in Warsaw in the 50s and 60s, Barbara used to live near E. Wedel, a chocolate factory famous for its high quality confectionery products. As she looks back on the events that led her to return to her childhood home in Warsaw, she slowly unwraps a piece of candy. With names like „Neapolitan” or „Fabulous,” E. Wedel’s chocolate candies could tran-sform a kid’s mouth into a tiny „corner of heaven.” Barbara’s story is a story of sweet success – just like Wedel’s fabulous candies.

Today Barbara lives with her husband and daughter in rural Chester County, Pennsylvania, where I interviewed her for this report.

With a laugh Barbara recalled how her business adventures in post-communist Poland began one day seven years ago when her husband Rick showed her an article in Industry Week magazine titled „Doing Business in the Wild, Wild East.” The article described Pepsi Cola’s purchase of Poland’s venerable E. Wedel company and the problems Pepsi was having trying to manage and modernize the Polish candy business.

Barbara read the Industry Week article with mild amusement. Because she had been born and raised just a few blocks from E. Wedel’s plant and offices, she knew what the problem was: those brash young American businessmen may have been well versed in Western business methods but they knew next to nothing of the language and customs of the country they had come to work in.

Instead of teaching E. Wedel’s managers and accountants U.S. GAAP (Generally Accepted Accounting Practices), these Yuppies had probably succeeded in offending for the most part.

Like most Polish Americans, Barbara had been following developments in Poland with interest; now she sat back in her chair and mused a bit about how she might have handled the situation at E. Wedel. What a challenge it would be to revolutionize Poland’s accounting practices. At that moment it occurred to her that this might be her chance to get off the sidelines and become involved in the great historical events that were unfolding in her native land.

Barbara picked up the magazine again and scanned the article for names and locations. George Swirski, a bright and ambitious chemical engineer, now General Manager of PepsiCo Foods International, Poland, confessed on the pages of Industry Week that he was learning the hard way that „the devil was in the details,” as they say in English. Engineering was one thing, but the arcane and obstruse language of international accounting was something else again. Accounting was Barbara’s forte and, as they say in Polish, „where the devil fails, send a woman.”

Barbara realized that George needed someone who could translate old style Polish accounting into modern American GAAP and vice versa. On a whim she decided to write to him and offer to help. She simply addressed her note to:
George Swirski, E. Wedel, Warsaw, Poland. Barbara smiled as she mailed the letter for she realized she wasn’t exactly going by the book with this job application.

Weeks later, long after she’d forgotten about the Industry Week article, Barbara’s phone rang back in Pennsylvania. On the line was some obscure person in Human Resources at Pepsi Cola’s world headquarters in New York:
„Would Barbara travel to New York for interviews with several PepsiCo International executives?” the voice asked.

The following week Barbara interviewed with half a dozen high-level PepsiCo executives including the Controller for European Operations. The interviews seemed to go well, so Barbara was quite disappointed when not one but two rejection letters arrived in the mail a week later. She was even more surprised when a few days after that, the same Pepsi Cola company called to offer her the job in Warsaw. Confused? So was Barbara, but she said nothing about the rejection letters and simply accepted Pepsi Cola’s generous job offer. Apparently, two of the executives she’d interviewed with had checked the „no interest” box on their interview report forms thus triggering the automatic „Thanks but no thanks” letters from H. R. Barbara’s first days in Warsaw were filled with nostalgia; so little seemed to have changed in the 25 years she had been away. Here was a park she had played in as a child, there was the department store where her mother had taken her to shop. The weekend before she started her new job at E. Wedel, she visited her old neighborhood (Grochow), walked past the gritty apartment building she had grown up in and then down the dusty tree-lined street to her oldschool. It wasn’t exactly how she remembered her old neighborhood, but there it was right in front of her again, stripped of the veneer of time and distant childhood memories.

She turned a corner and there was a Wedel candy store. She entered the store with a ra- cing heart and her mouth watering, and for a moment, she felt like a little girl of long ago. She bought a box of chocolates and thought about tomorrow, the first day on her new job.

Venerable is the word for the E. Wedel company, a big, old Polish candy manufacturing business that had somehow managed to survive two world wars and almost 45 years of communism. Housed in a dozen old buildings (including some shell-pocked W.W.II survivors) in the Praga-Poludnie area of Warsaw, E. Wedel was still cranking out some of the finest chocolate candy in the world (and had the lion’s share of the candy business in Poland) when the company was taken over by Pepsi Cola in the early 1990s.

Prior to Barbara’s arrival, PepsiCo’s attempts to make sense of the fiscal situation at their new Polish candy company had been frustrating. Not only had PepsiCo failed to reconcile the two conflicting accounting systems but, perhaps more importantly, had failed to acknowledge the cultural and language differences between the two companies.

Barbara felt confident her unique qualifications and expertise would be enough to carry her through the early days of her unusual new job. Little did she know that her toughest challenge would not be accounting but culture. As soon as she entered the accounting department, she realized she too was a foreigner.

Delegated to a small corner of an old-fashioned Polish style accounting department, she found herself isolated and her work ignored. In fact, Wedel’s accountants acted as if they didn’t need Barbara’s work and were content with the status quo. Barbara knew her primary job was to report results to PepsiCo in New York, using American GAAP accounting. In addition she had been assigned to translate and reconcile Polish and American accounting practices and coordinate between Polish and American accounting staff.

The results of Barbara’s hard work soon became evident and appreciated on both sides of the Atlantic. When E. Wedel’s accountants had mastered the basics of American GAAP they discovered Barbara’s reports were actually quite useful. On the other hand, PepsiCo, for the first time since they bought E. Wedel, was able to understand the candy company’s financial situation. Based on Barbara’s reports, PepsiCo directed company managers Wojciech Modalski and Ron Nawrocki to increase the company’s profitability as soon as possible.

PepsiCo, still dissatisfied with E. Wedel’s low profitability a year and a half later, replaced Modalski and Nawrocki with a new management team from England headed by Oxford graduate John Wells. The new cost accounting team used Barbara’s pioneering work to increase E. Wedel’s profits. Consequently, PepsiCo sold E. Wedel to Cadbury for a handsome profit.

As Barbara recalls her first business adventure in Poland, she remembers a bright, hard working Polish accounting graduate at E. Wedel named Grazyna Gorska in particular. Grazyna quickly learned the secrets of American GAAP reports and statements from Barbara and has since gone on to help introduce Western accounting principles and practices at other companies in Poland. With bright young accountants like Grazyna Gorska, Barbara knew her old country was well on its way to catching up with the west in business.

Sweet is the taste of E. Wedel’s chocolate candy and sweet is the taste of success; ask Barbara, she’s tasted both. Or, if you’re curious enough and have what it takes, find out for yourself.

Who knows, maybe you also were born under a lucky star!

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