Wednesday 8.7.13 Tech Data
This morning we had to drive to San Jose to visit the local branch of Tech Data. The General Manager, Gregory Banning was not only gracious enough to meet with us, but gave us an informative two hour presentation not only about Tech Data, but also about local customs form the Gringos’ perspective. We knew the fact that there is high literacy of 96%, due to the fact that the military was abolished in 1947 and the money saved was invested into education. Costa Ricans also enjoy free health care and most of the educated population is fluent in English. The cost of hiring people in Costa Rica is lower than in US, the country is stable and there is free trading zone, thus encouraging companies to establish branches in Costa Rica.
The Chinese and Americans are ready to defend the country in case it is threatened by Nicaragua, which tends to be aggressive. The Chinese even build a large sport stadium, but for a price. In return they gained 10 years of fishing rights around the Pacific Coast of Costa Rica. Costa Rica has first woman president Laura Chinchilla, but since she leads the country in very progressive way she lost a lot of appeal. President is elected only for one term and thus people can’t wait for her to leave the office. While talking about politics, most of the candidates are religion based. There are 4.6 million of people and about three to six hundred thousand illegals, mostly Nicaraguans, but since they are not as well educated as the locals they do most of the manual work. Most of Costa Rican companies bring an expert from US to establish the company. Public Schools are not as good as private. We have also learned that public schools run in two shifts, the morning and the afternoon. The locals call themselves Ticos or small, to distinguish themselves from the Gringos who are all the foreigners.
We have encountered some traffic jams and full highways, lot of accidents and some crazy driving during our stay. Gregory explained that one way to drive is to stick your head out the window, lift up you palm, that is the only way to get in. The traffic offense fines are very high, most people are not able to afford them and since policemen are paid very little they are happy to accept a bribe instead of writing the ticket. The country is still steeped in traditions. Family is important and 67% of young people live with parents for a long time, thus several people in the household work and help them to economize on food, lodging and electricity. Most goods are imported, making them way more expensive than in the U.S. People are more formal, and it takes several invitations if you want to get someone to visit you. If they come, they are traditionally at least one hour late and will bring flowers or drink. Tattoos and flip flops are frown upon as sign of lower class, like it used to be 40 years ago in US. Respect for the boss and the leading rich and traditional families is high. Disrespect is a cause for employment dismissal. Religious holidays are important. Most people are Roman Catholic. Thus Easter Week, Christmas and the Feast of The Holy Virgin on 8.2. which we experienced is very much observed. Although religion and politics are freely discussed, one should not attempt to discuss soccer, for it is the national pride and touchy subject. Another interesting fact is that 99% of people turn out at elections. It is not necessary to tip locals and it is discouraged, but Gringos do it as they are used to do it in US. Taxi drivers have respect and carry guns.
About Tech Data. There is a doctor and dentist on site at Tech Data Office. The employees are members of Association of Solidarity which provides discounts for the employees. The employees are called members. Lunches are heavily subsidized. The Costa Rican branch was established with 50 members, but now has 285. Tech Data is responsible for 2% of Costa Rican GOP. Interesting fact is that Amazon, which tends to now be Tech Data’s non- traditional competitor built their office just next-door to them. However Gregory Banning understands leadership and runs the company’s Costa Rican branch well. His leadership is strong and effective. As we as we walked through the building, he knew most of the employees by name. The policy is to empower the employees. In Costa Rica it is the policy of the employer to forbid employees from taking electronic devices to their work station and they also have to speak only English. Tech Data employees are allowed to use cell phones during working hours and Greg has seen that they use them to do business for Tech Data also.
Tech Data was established in Clearwater Florida in 1974 by Ed Raymond who distributed paper for computer printers. His son Steve who has an MBA moved the company into sales of computers and accessories in 1987. Basically, Tech Data acts as a wholesaler of computer related goods to consumers. They are a major dealer for Lenox, but HP and Microsoft are also strong partners of Tech Data. Now they are looking into expansion into other products. Before Greg Banning arrived hot from the trip to Florida, we listened to Gustavo Barrantes, who is the manager of Lenox division. He told us of the tremendous growth in sales over the last three years and also that Tech Data uses Sandler for their sales training every 3 months and technical training by Lenox every 4 months.
The visit to Tech Data was very informative, providing not only the information about Tech Data, but also highlighting the difference between the culture of US and Costa Rica. They even fed us lunch. Again this was very interesting, because it was take away local food. It consisted of salsa, black beans spread, roasted chicken and tortillas, and we had the choice of drinking tea or carrot juice. The fact that Tech Data recognize the value of good nutrition made my day.
The group decided that since we are close to Starbucks in the center of the city, we wanted to stop by. In fact, the shop looked just like the ones we know in US, with the exception that from the ceiling hung the traditional colorful painted ox-wagon wheels as a decoration. It is amazing, Costa Rica is the major supplier of Starbucks coffee and now it sells it back to Costa Ricans at an exorbitant price. Gregory Banning gave us insight that only Americans go the Starbucks in the morning, but locals frequent it from lunch to midnight. It serves for them as a meeting place. I have observed a group of young sales people being trained on the job, which looked more official than the training in US.
Tomorrow we will visit Intel and then the trip is over. On Friday I fly home.