This article looks at the differences and challenges that some foreign entrepreneurs have encountered when starting a business in Italy. I'd be curious to know if anyone here has had a similar experience -- would you agree that lateness is part of life (and business) in Italy? And did you notice a difference in the way that people build relationships there (i.e. face-to-face vs. email)?
I personally think that, while this article offers some useful tips and resources, and makes a valid point on cultural differences in the way of doing business, it also presents a stereotyped view that doesn't necessarily match reality:
I think there is a certain degree of stereotypes that seep through the article. I would say that:
1) It is not so much that Italians are chronically late to meetings. It is true however that a "late entry" is used as a means to establish authority and power. The more powerful an image you want to project the more likely you are to show up late as a way to implicitly establish a psychological advantage. I think this technique is still prevalent in certain circles.
2) The banking system suffers from intrinsic deficiencies. It is less competitive than the US and it lacks some of the consumer credit "fluidification" effect that the credit agencies produce in the us market. Therefore, there is less credit products available for individuals and entrepreneurs without collateral assets.
3) That you need to work with a commercialista is again, a result of structural issues. As long as the regulatory and tax structures are so complex and difficult to navigate, the need for specialist advice is going to be there.
4) Formality in business communications, delays, face-to-face relationship building are only there, IMHO, because of lack of the same level of competitive pressure that you have in many industries in the USA. I am sure that if a prospective client or supplier knew that they could very well lose a business opportunity in the next 24 hours, they would get to point and sign on the dotted line. Fast.
As an entrepreneur in Italy, I found myself first not accepting the paradigms written in that post, then...well...let's say not all are stereotypes in there.
Late entry is sometimes strategical indeed, but most of the times it is just a sign of less efficiency. The niche markets I have been working on are rich of experiences related to business opportunities lost as people were apparently not bothered in responding fast to a customer request. And don't get me started with emails. Doesn't matter how interesting or how important its content could be, you will still get a very superficial answer if any most of the times. And would we like to speak about constantly missed payment terms?
I'm not saying it happens only in Italy. I'm not saying it happens all the times. What I am saying is that there is a common cause to all that: it's the work ethics being compromised. If you are working and living in a Country in which those things are widespread practice you'll end up going on with the flow as well.
Trust me: i have been living this on my skin everyday.
There are other positive things anyway. I believe that it is still important to have some formality in business and that after all it could be used as an advantage in countries where this concept is not fully understood.
My experience has been that when I have agreed that a meeting is to occur at a time and date certain and if the party I was to meet with does not show up, I simply leave; and if there is a deal hanging in the balance, I go to the next candidate in line and close it. The results have been that those who didn't show up were flabbergasted that I didn't wait for them. After repeating to them that I took the time to be on time and that I expect any business partner to exhibit to me the same degree of respect, my reputation became that of being one who is fair but absolutely intolerant of disrespect. The result is that that now no one ever shows up late for a meeting with me.
Going with the flow where punctuality and keeping promises are frequently winked at is not a business plan. It is a plan for self-destruction. There is a reason that the Italian economy is where it is. It isn't entirely the fault of Silvio Berlusconi. Contributions to the problem have been made by every person who has expected more than what he actually earned, who brushed off a customer because his sense of pride was wounded, or who behaved in a dismissive fashion toward those who could have helped advance his business. Things like this don't happen out of the blue. They occur for a reason.
This book may contain some hyperbole, but it smells like the truth in too many places to be easily dismissed. Umbrage at the suggestion that there is a problem in the national culture that discourages the creation and facilitatoin of business is not a proper response to the criticisms. It would be better to see if any are true, and where they are found to be accurate, efforts to remedy the root causes should be pursued.
A man after my own heart ! I completely agree with you. Well said !!
As Commercialista and financial advisor of few Italian SME I'd like to leave my poin of view. I agree with Matteo. There is a certain degree of stereotypes!
I have to admit that the reason why we need a Commercialista is due to the fact that the Italian body of rules and principles governing the economic system it's old, complex and subjects to daily changes. An entrepreneur, especially if not native, will probably lost him-self trying to deal with all the Agencies and Public Entities that are responsible of managing the numerous tax, labour, administrative issues. But, is it that different for an Italian that intends to start a business in San Francisco? Would anyone start a business without the support of a local chartered accountant or a lawyer? The challenge is not the Commercialista but the Bureaucracy.
On the contrary, it has to be said that most of the times the Commercialista is the Coach of the entrepreneur. Numerous entrepreneurs in Italy are owners, CEO, CFO, export managers, financial controller of micro-entreprise (in this regard, I'd like to remember that 90% of the Italian GDP is made by SME) and consequently are often unable to correctly guide the company in its development process. In these cases the role of Commercialista can be crucial.
Concerning the Banking System everyone knows that we are facing a serious credit crunch that affects the entire Italian economy. How an entrepreneur will finance exportations, investments, research represents the real challenge of the 2012 because Italian banks are overwhelmed of collateral assets and luck liquidity. But before questioning the Italian Banking System we should find out where this situation comes from.
It seems to me that the article offers some hints to the reader but when you come to decide whether or not to invest in Italy, you better find a Commercialista.