Turkish-owned Ramenka Ltd. has been in Russia for four years. During that time, it has invested $130 million into expanding its Ramstore supermarket chain, a policy that helped it to declare its first profit only two years after opening shop here. Last year, Mustafa Saglam became general director of Ramenka. Speaking to The Leader, he explains some of the intercultural barriers the company has crossed on its way to success.

The Leader: How did you begin your career?

Mr. Saglam : After graduating with a management-engineering degree from my university, I did a bit of military service and then I joined the Koc Holding industrial group as a marketing specialist. I became marketing manager in 1994. It is any Turk’s dream to work at Koc Holding. The Koc group owns Migros — which has 50 percent shares in Ramstore. The first Ramstore in Baku was set up in 1995 and I was a consultant in this.

The Leader: Have you always been ambitious?

Mr. Saglam : I am a workaholic by nature. At the beginning of my career I worked 16-hour days. I had to work especially long hours when I was young because I had so much to learn in a short period of time. A person in a top position at Ramenka in Moscow works 14 hours a day, otherwise he can’t manage to get everything done.

The Leader: How does working in retail in Turkey compare to working in the sector here?

Mr. Saglam : Both culturally and commercially, working in Moscow is completely different from working in Turkey. Turkey turned to a market economy 20 years ago, whereas Russia only did so 10 years ago.

Step by step, at Ramenka we have adapted our knowledge of consumer behavior to Moscow; we have changed many policies, such as display, pricing policy, assortments, working conditions and employees’ promotional packages.

The Leader: What are the differences in personnel policy?

Mr. Saglam : In Turkey, staff on the shop floor work six days a week, and then they have a day off. We tried this system here, but it didn’t work. We started the two days on plus two days off work schedule in June ’98 because hundreds of people came to us and said that they were off to their dachas and that they wanted to return in September. With two days off they have time to visit their dachas.

We don’t allow it, but it is also possible for some employees to be involved in another business two days of the week. I’ve not seen this kind of working schedule anywhere else in the world. But we try to accommodate it, and in this way, we reduced staff turnover.

Also, in Turkey we generally hire people who’re about 18 or 19 to work in store. Here, the people working in our stores can be up to 40 because they are more loyal and we have less discipline problems with them. But it is true that it is harder to train older people in customer services, and that’s why we have younger people at the cash desks and older people working at the deli and dairy counters, for example.

The Leader: Could you please describe your role?

Mr. Saglam : My main responsibilities are in business development — to set up the biggest trade chain in Russia and Moscow. Also, of course, another thing is to ensure high profits, to create cash flow, cash generation. I am also responsible for operational things.

The Leader: What’s an average week at Ramstore like for you?

Mr. Saglam : My day begins at 8 a.m. and typically consists of a lot of meetings with my colleagues. Every Monday, I have a meeting with the marketing people. On another day, I have one with sales. Every day, I also have a minimum of 10 meetings with our suppliers (we have about 2,000 product suppliers), because we always have to be on the lookout for new products, ideas and promotions. At the end of the day, I have a meeting to review finances. I also visit a couple of stores a day.

I also meet with government inspectors and local authorities. I attend such meetings two or three times a month.

The Leader: How has Turkey’s currency crisis affected your business?

Mr. Saglam : It will affect us positively because the prices in Turkey will be lower. There was 100 percent devaluation recently. That is a big opportunity for exporters. So, we’ve started importing from Turkey.

The Leader: How about the 1998 financial crisis, did Ramstore make any gains?

Mr. Saglam : In many ways, it was a good thing for us because it gave us the opportunity to build up our customers’ trust. The crisis began in August, and when all our competitors shut, we didn’t. Our shelves were always full, and we only increased our prices slightly, and at that, bit by bit. In the long term, we gained a great number of customers after the crisis.

We were helped in the crisis by the fact that we have good relations with Turkish and European producers, who supported us.

The Leader: What kind of training programs do you have for various posts?

Mr. Saglam : We are quite ambitious about training programs and spend a lot of money on them.

We have a big training center in Turkey, where we send about 30-40 people a year. People are trained in marketing, sales, human relations and financial control there.

We also have training programs where we invite teachers from universities, such as MGU, to do talks on human resources and psychology. And we organize employee conferences that examine what’s going on in Russia, particularly in the economic environment. We also send accounts people to government and PriceWaterhouseCoopers courses, where they are taught about the new VAT law, for example.

In addition, we send our people abroad to France and England for training. The United Kingdom is good for promotions, and France is good for display. We also have both Turkish and English in-house language courses. Some people like to learn Turkish after working hours.

We have also just started doing graduate management training.

The Leader: What’s the nationality of most of your management? What kind of cultural problems does Ramenka struggle with?

Mr. Saglam : We began with 55 Turkish staff in one store; now we have nine stores and only 20-25 Turkish staff among them. We have cut the number of Turkish staff because it is cheaper that way — also because we are in Russia and it seems logical that our staff should be Russian. It is our policy that someday our general director will be Russian.

As far as cultural misunderstandings in the store go, the main problems were linguistic and cultural in the early days. But we have already solved these problems. They were mainly related to discipline and with working hours, and different mentalities. This was a problem because prior to us, there was no example here of our style of business. An example of a discipline problem is people not stacking shelves at the precise time that they have been asked to do so.

The Leader: What are the challenges and risks of doing what you’re doing in Russia?

Mr. Saglam : Russia is obviously an emerging market and it is a big experience to live with high inflation and devaluation, to live with uncertainty. I am always having to make quick decisions. Doing business in an emerging market is the greatest experience for professional managers, although it is not necessarily so for the owners.