Florian von Oppenheim 
In 2002, after 3-years in private client management at Goldman Sachs in London, Florian von Oppenheim was looking for a new challenge: something in emerging markets with entrepreneurial scope. Luck and fate brought him to China, after a friend introduced a promising records management company with operations across Europe and Russia. Negotiating a franchise based deal to break into the China market, was an opportunity which fitted both aspects of what von Oppenheim was looking for.
Five years on, OSG Records Management is one of the leading independent providers of confidential hard and soft copy data storage in China. Its Chinese operations are the creation of von Oppenheim with the technical infrastructure such as software, training and some marketing materials provided by OSG
International. For those who believe that inauspicious starts can lead to great things, the company¡¯s setup during SARS could hardly have been more challenging. However, from its beginnings in Shanghai, operations now include Beijing and Guangzhou with another centre to open shortly
The company was the first to obtain a Wholly Foreign Owned Enterprise (WFOE) business licence specifically for Document Storage and Records Management: a process which proved particularly tortuous, lasting from mid-2003 until early 2004. Challenges faced during this registration process included one western consulting firm demanding a 50% upfront fee for their services. After having received the down payment, they subsequently announced they were unable to obtain the business licence. However, after a referral from the German Chamber of Commerce and a helpful official in Hongkou District, the company was finally able to obtain its business licence.
During the registration process, the other main areas of focus were finding suitable premises to establish a secure records management warehouse; sales and marketing; and of course building the team. After trying with a number of real estate agents (including Belfrey Partners) it was one of their industry partners who finally introduced a suitable location in Pudong, Shanghai. The key aspects of this warehouse being its security, anti-fire system and of course general presentation, so as to meet client expectations for the storage of critical data. Perhaps more so than any other industry, the perception of building image and reputation were key to establishing a level of credibility in this nascent market.
Secure storage with OSG
At the time of writing, there are approximately 37 staff across OSG China. Initially head hunters were used for sales and management level positions, though in general it was found the quality referrals was below expectation. The first sales person actually came from a competitor company from general marketing. Thereafter, recruitment was largely driven from a combination of networking events, general job advertising and latterly back to recruitment companies for higher-positioned employees. Interestingly, extensive use was also made of interns from Western universities on 3-6 months placements; they proved an enthusiastic and
cost effective method of staffing specific projects during the earlier stages of the company¡¯s expansion
Managing staff expectations has again proved a major challenge, both from an owner and employee perspective. The experience has been local employees tend to expect better treatment and higher pay from foreign companies. However, as an employer, short-term orientation and corporate loyalty have been some of the major issues, requiring a change in traditional western mindset to staff management. As a developing company, particularly with different geographic locations, the over reliance on key figures also turned out to be a situation which required careful monitoring. This is particularly so in a country like China, where the language barrier often leads to over reliance on some personnel. In one case, this led to the emergence of an over powerful office manager in one of the satellite offices.
Is this the one you were looking for
?
Moving forward von Oppenheim identifies price, quality of staff and the ability to sell a new business methodology, as the key challenges for his business. In a land where many operations are used to selling below cost, price remains king in transactions. However, the perception of the business is also crucially effected by the quality of the staff and image of the operation which has to project international credibility. Hence the importance of the business locations and details such as the marketing literature and
operational procedures. Finally, it is about combining these aspects to sell a product that the market has yet to assimilate into normal operational practice. And for this, besides people and perceptions there is only one final inviolable ¨C perseverance.
Looking back over the last 5 years the company has been a significant success story. But two aspects come to mind when asked what he would have done differently ¨C think bigger and play more on the foreign brand. Not a market for the feint hearted.
Author: Jerome H Vaughan
Belfrey Partners
