Most of us would agree that shopping is an indispensable part of our life, and one of the perfect forms of entertainment. Most tourists to Riga, along with its residents, are familiar with the huge shopping centers such as Origo, Alfa, Dole, Mols and Galerija Centrs. However, very few of us know that these five malls are actually managed by one company, Linstow Center Management. This company has been active in all facets of real estate development and operations since 1997. Today the Linstow team consists of approximately 50 knowledgeable and highly educated professionals. At the wheel of the company is Frode Gronvold, a specialist in economics and international marketing. He is Norwegian. He joined the company in 1998, and now is in charge of the daily management of the organization. Despite his busy schedule, Mr. Gronvold met with The Baltic Times to discuss his personal life, business activity and some of today’s important issues.
What are you most proud of in your career?
I am very passionate about the real estate business which I am involved in. The thing I congratulate myself with is that we were able to implement so many projects and set up a well-functioning organization, becoming a lead player in this industry, during a very short period of time. Another stimulating and pleasing moment for me is that being a foreigner, I could fit in and take part in managing this company.
What is your biggest achievement in business?
The most challenging and rewarding project for me is Galerija Centrs. First of all, this was an immensely complicated project, which involved a great deal of work. Its location in Old Town was connected with all kinds of regulatory restrictions and technical complexities, which were really difficult to overcome. But, in the end, it received an award from the International Council of Shopping Centers, which all of us are very proud of.
What is your biggest business mistake here?
If we look at our developments from 1997 to 2008, we did not really make any serious mistakes. We succeeded pretty well with everything that we were doing. One can always argue that we should have seen or analyzed the crisis better, and that we should have reduced our exposure even more, which would make it possible for us to come out from the crisis. On the other hand, Linstow did sell quite a lot of properties back in 2006, and did reduce the exposure. Thus, it is not exactly what I would call a mistake.
Did you misjudge the strength of this current economic downturn in the Baltics?
Looking a few years back, many people could predict that we would face some economic difficulties. The market was already starting to contract. But we did not see the consequences of the global crisis on a fragile economy, like the one of the Baltics. Soft contractions which everybody was talking about did not happen, and instead we had strong recession. I need to admit that a few years ago we really did not see that one third of the economy would disappear.
What is the main success factor in the retail business?
The main success factor of our company is that we have very intelligent and qualified people working with us. The most important skills which one should have are an understanding of consumers and their way of thinking, and competence in the organization locally. Besides, it is also the ability to analyze and make use of one’s own gut-feelings, which usually comes with experience.
What have you learned during your work in the Baltics?
Working here has taught me a lot. Firstly, I learned that one of the most important things in this business is being physically present in the markets that you are investing in. Secondly, I understood that this business is not the one where you can implement your plans during a few years. It requires a long-term prospective, which includes being in the market for a long time, building the right relationship with your companions, and trust with the authorities.
What are the differences, if any, in working in Latvia, from working in Norway?
To begin with, both Norway and Latvia have small markets. We have quite an open attitude to cooperation, and cannot rely only on our domestic market. Talking about the differences, it makes sense to mention the early beginning of our activities. At that time Latvian infrastructure was not developed the way it was in Norway. For instance, there were no banks making commercial financing available at that time. We had to take the role of developing and outsourcing a lot of businesses around us. Practically, we had to start businesses that we were not really in, like a security company, cleaning company, in-house marketing, and a lot of administrative back-up services.
Besides, we had to take quite a high risk, trying to cooperate with the retailers that we did not know previously. But, at the same time, the rewards from taking those risks, in terms of what we could obtain, were much higher than in Norway. I would also say that the Norwegian economy is more efficient, more transparent, and more predictable. We do not have as much bureaucracy as you have in Latvia. Decisions are made in a more efficient manner. Another difference is that people in Latvia, both in politics and management, are often able to get senior positions already in their late twenties or early thirties. This is non-typical for Norway where career development happens more gradually.
What personal qualities do you appreciate in your employees?
I really appreciate when I have colleagues who take initiative, have new suggestions, and develop ideas how to resolve certain challenges. I like people with a creative state of mind, who at the same time are autonomous, self-driven, self-motivated, with the ability to cooperate and get the best out of each other. These are the main skills that I am looking for in my employees. I am also very fond of people who look outside of their own square box, or discipline. If I see a finance director, or an engineer who talks about customer preferences, it makes me really happy.
Linstow has been leading the retail shopping revolution in the Baltics since you opened the Dole center in 1997. What’s next?
If we look at the retail developments in Europe in the coming five years, one will need to see more consolidation. Many projects around Europe, including the Baltics, need to be upgraded, and developed for the consumers to go there. I would like to see that many of the projects that today struggle are improved and are being used by customers, instead of being left empty and having customers moving to new developments.
How do you see the retailing business recovering over the next several years?
We do see certain signs of stabilization in the market. Linstow sales in shopping centers are not dropping anymore. However, the market is still in a state of fever. The consequences of stabilization will not be clearly felt before next year. But, unless there are any dramatic or negative effects of the elections causing political instability, or overheated competition we will return to growth next year.
What do you like or dislike about living in Riga and Latvia?
Riga is a very beautiful city. It has a potential of becoming a tourist destination, which is already happening at the moment. Of course, the financial crisis had stopped the growth of the tourism, but it is now picking up again. Proximity to Jurmala is also a very big advantage. Latvia is a country with a lot of spiritual qualities and rich culture: arts, music, dancing, etc. In addition, it is a very safe place to live in Europe. I cannot raise my kids in a safer country. Besides, it has a very creative and dynamic business environment. All this was very stimulating for me during my work. Talking about negative moments, I could only wish that Latvia would move even faster towards stronger democratic institutions, and would have a more transparent and open economy, and an acute and stable environment for business.
How do you relax?
The best way for me to relax is to spend time with my kids. Perhaps it does not sound like a relaxing activity, but it definitely makes your mind turn in a different direction, and it is a very positive stimulus. I also try to do some traveling, all kinds of physical activities, and read as much as I can, though it is not always possible.
How does your work and high position influence your personal life?
This is a question of priority that you make in life. I have to work more, and dedicate less time for leisure, hobbies and travel, than I would ideally like to do. But, at the same time, when you feel that your work is rewarding, interesting, stimulating, and you have good colleagues around you, it brings you a lot of pleasure.
What would you recommend to people who plan to start their career in business and management?
Firstly, I would advise them to look at the areas that definitely have interesting long-term prospectives, such as energy, green movements, IT sector, etc. Secondly, it is very important for people to combine their industrial knowledge with languages, and not just English, German or French, but also Russian. I hope that Latvians will not miss the opportunity to take advantage of cooperation with Russia, which has a very strong economy and great potential for Baltic countries. But maybe most importantly follow your self interest and pursue a career working in areas where you have natural interests.
Many young people are leaving Latvia at the moment. Does this pose a problem for the country, and what could be done?
It could be that Latvia needs to look at its immigration policy, in a little bit more liberal fashion. Many European countries are also affected by an immigration policy which balances the ability to maintain its national characteristics. At the same time, many Latvians who today move abroad are advancing, learning languages and cultures, and if they are willing to come back to Latvia, they will be able to promote further export and cooperation, which might have a good effect. Hopefully, this problem will be gradually solved when the economy starts to grow and the unemployment rate drops. However, the government will need to address the problem as Latvia has seen the sharpest drop of inhabitants the last 20 years in all of Europe.