Startup funds say rising

As Romania’s inflation rate is expected to reach 7.7 percent at the end of 2021 and begin to drop next year, the local startup financing environment will not experience significant changes, suggest representatives of funds operating in the country.

By Ovidiu Posirca

Funding could become a challenge if growing inflation starts a recessionary trend

By October, the country’s inflation rate had reached 6.5 percent, higher than the European Union’s average of 4.4 percent, according to Eurostat, the EU statistics office. Going into 2022, the local rate should fall to 4.7 percent, the National Prognosis Commission says in a report.

For funds with a long-term perspective of financing startups, the spike in inflation is just one of the risks they take into account when drawing up their investment strategies.

“Venture capital investments usually have longer cycles than a typical loan, for instance. VC funds are usually structured for around 10 years and this maturity is partly related to the necessary portfolio building and value creation, which take many years, but also to the need to account for inflationary and even crisis economic cycles, so in a way, some inflationary peaks (normally followed by troughs) are part of our investment model,” Marius Ghenea, managing partner at technologyfocused VC firm Catalyst Romania, tells BR.

He adds that in the short term, funds should consider helping portfolio companies hedge the effects of high inflation more than they currently do.

We will probably see a slight increase in valuations due to inflation, but it will be negligible, suggests Cristian Munteanu, managing partner at Early Game Ventures.

“I would argue that inflation will have a more significant impact on how startups spend the capital than on the funding itself. Otherwise, inflation is only another argument for the allocators to deploy capital faster, to put money to work sooner rather than later,” Munteanu tells BR.

EGV has not been factoring inflation in when drafting term sheets for financing deals. The fund’s managing partner says this will remain unchanged for the foreseeable future, mainly because EGV’s investments are all in euro, while inflation has been higher for the local currency.

Iuliana Tiba, Director of Environmental, Social and Positive Impact Financing, BRD - Groupe Société Générale

WHY DO YOU THINK SUSTAINABILITY SHOULD BE A PRIORITY IN ROMANIA?

In the current global context, with the ongoing sanitary crisis and climate change largely acknowledged as a crisis, sustainability is no longer an option, but a need. As part of the European Union, which set its ambitions to become the first climate neutral continent by 2050 and committed to the UN Sustainable Development Goals agenda, Romania has to incorporate sustainability at all levels of the decision-making process, from administration to private sector and financing institutions.

This will be needed in order to assure long-term sustainable development, as a delayed energy transition of even 2 years for Romania could be translated in a 33% reduction in the favorable effects of measures in the long term.

Meanwhile, transitioning to renewable energy can lead to capturing opportunities estimated at EUR 60 bn until 2030, in the field of climate change alone. Naturally, this could also contribute to the development of innovation, as such a large-scale transition will require new business models or product/ service reconfiguration. CAN SUSTAINABLE PRACTICES BE ADOPTED WITHOUT SACRIFICING FINANCIAL PERFORMANCE, OR IS THERE A HEALTHY BALANCE COMPANIES SHOULD STRIVE TO MAINTAIN?

Studies have demonstrated that sustainable practices contribute to the better financial performance of companies, rather than just representing an upfront cost. These studies show that sustainability and profitability go hand in hand. Adopters of such practices have shown more resilience during the COVID-19 crisis, were better equipped to capture competitive advantages, by better positioning themselves among the brands or consumers that became increasingly sustainable, conscious and selective, due to changes in legislation/regulations, or even behavioral changes. Thus, the front-runners will be the ones to make a difference not only for the environment or communities, but also in their financial performance. By preparing in advance, companies will also have the possibility to diminish the climate change impact of on their business, be more inclusive, spot new business opportunities and avoid the so-called stranded assets.

WHAT IS A MAJOR ACHIEVEMENT BRD - GROUPE SOCIÉTÉ GÉNÉRALE IS PARTICULARLY PROUD OF THIS YEAR?

For BRD, 2021 was the year we are proud to have launched a series of transactions that led to the development of sustainable finance on the local market. One such feat is the execution of the largest green bilateral loan in favor of Hidroelectrica SA equivalent to approx. EUR 257M , among other new firsts. A sizeable syndicated ESG loan of EUR 120M has been arranged for NEPI ROCKASTLE PLC, assuming an ESG structuring role. It meant also contributing to the first sustainability-linked bond launched on the local capital market for AUTONOM Services SA, for an amount of EUR 48M, again assuming the structuring bank role and advising on structuring the sustainability-linked framework.

These transactions and others of smaller amounts, but of the same importance, are best practices in the local field of sustainable finance development. We are committed to accompany our clients in their journey to sustainable development and to help them implement strategies that are aligned with the global sustainability or climate change objectives, through innovative financing solutions.

IF YOU WERE TO PINPOINT ONE AREA IN WHICH YOU THINK OUR COUNTRY OR REGION IS IN URGENT NEED OF INVESTMENTS, WHAT WOULD IT BE? AND WHAT IS/ARE THE RUNNER-UP/S?

With the current energy market situation and having in view the objectives Romania has to meet in the field of renewable energy (30.7% by 2030, or even 38% ), that will require a massive investment estimated at approx. 6.9 GW new renewable capacities, the energy sector should be a priority. This sector represents 75% of the greenhouse gas emissions and is vital for all the other sectors to transition to a carbon neutral economy. The contemplated regulatory framework and legislation for promoting renewable energy development will be of a nature to assure meeting the country’s objectives while also contributing to the green finance development.

Ciprian Man, cofounder and angel keeper at Growceanu, an angel investing platform, points out that under high inflation, as it is currently understood, and not hyper-inflation, early-stage investments are more attractive in terms of potential returns.

“As a result, what matters much more than inflation, in this case, is the impact that a business angel’s expertise, mentorship, and network can have on the startup, leading to three or four-digit growth, which renders the impact of inflation almost meaningless,” Man tells BR.

WHAT IS THE IMPACT ON STARTUPS SEEKING CAPITAL?

Although the inflation growth trend should continue until the end of this year, funding opportunities for startup founders will not be affected.

EGV’s Munteanu suggested that there is still a lot of capital looking for deployment targets on the market.

“Venture investing is hot, and I only expect it to get hotter over the coming months,” he adds. VC funding per capita in Romania stands at EUR 116, which is one of the largest figures in Central and Eastern Europe, according to dealroom.co. Romania is performing better than Hungary, Bulgaria, and Poland. However, there are only 85 startups per 1,000 people in Romania, while this number is almost double in neighbouring Hungary. Ghenea of Catalyst Romania adds: “I think the most important takeaway for founders/entrepreneurs is that they should begin considering equity-based financing options, rather than growing in a bootstrapped mode and then getting bank financing or another type of debt leverage. Of course, this is a valid route for growth startups, be they in the tech/IT area or in other growth verticals (life-science, creative businesses), but not so much for startups in other, more traditional verticals, where scaling is not embedded in the business model.”

Startups in early development stages are deemed too risky for traditional banks, but non-bank financial companies could serve as an alternative source, although their interest rates could go up in the high inflation environment.

“If we are talking about funding through

grants, startups should be favoured starting next year thanks to the large amounts of EU funding available for the next period, some of which should go towards startups and early-stages. In fact, this would not only

apply to grant programmes, but also to equity programmes, mezzanine, guarantees or others. As for VC funding, it will become even more available for startups in the next years in Romania and other EU countries in the region,” Ghenea adds.

HIGHER INFLATION GENERATES ADDITIONAL CHALLENGES FOR PRIVATE EQUITY PLAYERS

a recessionary trend, wrote Emmanuel Deblanc, head of private markets at Allianz Global Investors.

“Inflation may stay high for longer, even if the actual year-over-year inflation numbers peak this year. Certain structural forces could keep inflation up – including significant shifts in the monetary policy of major central banks, a changing labour force, and ongoing deglobalization,” Deblanc said. He suggested that any increase in inflation would be expected to push financing costs upwards over time and likely lead to a fall in transaction multiples. “This could impact the price of transactions as underwriting would become more challenging with the accompanying risk of reduced financing for deals,” Deblanc pointed out.

In Romania’s case, the central bank forecasts that inflation will remain on an ascending trend by April 2022. This is mainly due to higher costs for energy and raw materials. The inflation rate is set to reach a high of 8.6 percent in the second quarter of 2022, according to a report published in November by the National Bank of Romania (BNR). It will fall under 5 percent starting in 2023. “An optimist could say that the higher inflation prints now mean stronger disinflationary base effects next year. There is some truth to that, but that’s not how inflation will stay sustainably lower. We believe that the BNR will need to continue its rate hiking cycle until it reaches a terminal rate of 3 percent in mid-2022,” wrote Valentin Tataru, chief economist at ING Romania, in a note.

Startups that are already generating sales could move to increase prices for their products and services provided that they have a loyal customer base. For early-stage firms, funding opportunities are set to remain generous despite the inflationary pressures.

The first wave of 5G-enabled gadgets and apps is emerging, while the deployment of 5G networks is marking the beginning of a new era that goes well beyond the smartphone. From virtual reality video games to remote heart surgery, many industries will go through dramatic changes in the coming years.

By Aurel Constantin

There are also 5G-equipped drones that can be used across a range of different industries

One of the first uses of 5G on the consumer market is home broadband internet service for those who want to eliminate cables from their house or who live in an area where they can’t get cable TV and internet. An example of such a service is the collaboration between Samsung and Verizon in the US, offering wireless 5G routers that deliver home broadband access through 5G networks just like a smartphone would. 5G-connected devices are already available on the market. After tablets with 5G, Lenovo teamed up with AT&T to release a 5G laptop, the ThinkPad X13 5G, a device that has started shipping for around USD 1,500. Meanwhile, Samsung released the Galaxy Book Go 5G, a 14-inch screen laptop that sells for USD 800. Interestingly enough, you can get a 5G internet connection on a yacht almost 100 km offshore. Meridian 5G, a Monaco-based provider of internet services for superyachts, advertises a 5G Dome Router, a combination of antennas and modems that provides 5G connectivity for yachts sailing at 100 km offshore. The cost of all that gear goes as high as USD 17,000 for the average superyacht. There are also 5G-equipped drones that can be used across a range of different industries, from mapping to firefighting. As 5G chip producer Qualcomm notes, drones can used to map large areas of land and rapidly transfer the data.

END-TO-END SOLUTIONS

an end-to-end solution that will guarantee the consistent low latency and high reliability demanded by time-critical applications and services for consumers, enterprises, and public institutions.

The company is enabling Time-Critical Communication through its new Critical IoT product – easily deployable as a software upgrade on public and private 5G networks, in wide and local areas, on any 5G frequency band. Having deployed 5G networks globally with successful rollouts of enhanced mobile broadband and Fixed Wireless Access services, the new solution will allow communications service providers to further enhance experiences in real-time media use cases like cloud gaming and AR/VR and unlock possibilities in remote control, mobility automation, and industrial control.

Apart from the estimated 2.5 billion mobile gamers across the world who will enjoy lagfree gaming experience, the new solution will thrill all 5G users looking for immersive XR experiences. It will also benefit enterprises, industries, and public agencies where production processes or mission-critical services depend heavily on high-performance, reliable connectivity.

“Ericsson continues to introduce innovative 5G solutions that fuel the global uptake of 5G. Now we are taking 5G to the next level with Time-Critical Communication, a solution that will give our customers the tools to expand their offerings for the consumer, enterprise, and public sectors and further monetise 5G effectively,” says Per Narvinger, Head of Product Area Networks. Time-Critical Communication is a software toolbox for

resolving lags and interruptions in mobile networks. It combines the 3GPP-specified ultra-reliable, low latency communication (URLLC) standard with Ericsson innovations to mitigate major causes of latency. Built on Ericsson’s expertise in Radio Access Network, Transport, 5G Core, Service Management & Orchestration, BSS, and support services, this software product delivers consistent low latency (50ms to 1ms) end to-end at specified guarantee levels (99.9 percent to 99.999

percent) – enabling time-critical use cases at scale. Many emerging use cases are timecritical in nature, demanding the guarantee of consistent low latency and highly reliable performance, currently not possible in today’s 4G and 5G networks. The new solution is designed to address that need and deliver on the full promise of 5G.

5G PIONEERING STARTED IN 2017

Ericsson has been piloting 5G for time-critical use cases with customers and industry partners such as BT and Hyperbat, Einride and Telia, Boliden, ABB, Audi, Fraunhofer IPT, DT and Rockwell.

The company also recently partnered with Deutsche Telekom and Telstra to show the benefits of L4S (Low Latency Low Loss Scalable throughput) technology in reducing lag in an interactive cloud game. L4S is one of the new features of its Time-Critical Communication toolbox. Ericsson has also reached a new milestone with MediaTek by proving that 5G can deliver 1ms consistent low latency with 99.99 percent reliability in both uplink and downlink on mmWave band.

“We believe that Time-Critical Communication is key to realising the full potential of 5G. One industry where this solution can play a transformative role is automotive and transportation. With reliable and consistent low latency connectivity, 5G can also vastly improve public health and safety and traffic efficiency, as well as make transportation more sustainable,” says Tomohiro Sekiwa, Managing Executive Officer and Chief Network Officer at SoftBank.

“Time-Critical Communication with 5G can change the industrial automation sector by reducing cables, increasing flexibility and agility, enhancing visibility, and enabling new digital applications with mobility. The ability to deliver consistent low latency with high reliability will be crucial for wirelessly con-

necting XR, sensors, controllers, and actuators – boosting the productivity and efficiency of industrial operations,” says Dave Vasko, Director of Advanced Technology at Rockwell Automation.

GROWING NUMBER OF USE CASES

The number of use cases for 5G technology across both the consumer and enterprise space has been steadily growing, as the technology evolves to touch various verticals across industries, experts said at Huawei’s 12th annual Global Mobile Broadband Forum (MBBF) in Dubai.

The company’s rotating chairman, Ken Hu, said that in just five years of commercial deployment, 5G has provided a “considerable upgrade” in mobile experience for consumers, and that it has already started to empower different industries around the globe.

“Progress was much faster than we expected, especially in terms of the subscriber base, network coverage, and the sheer number of 5G terminals on the market,” he said.

According to Huawei research, there are currently 176 commercial 5G networks in operation across the globe, serving more than 500 million subscribers. In the consumer space, average 5G download speeds are roughly 10 times greater than those on 4G, which has fuelled broader adoption of applications like VR and 360º broadcasting. In the enterprise space, there are already 10,000 projects exploring B2B applications of 5G (5GtoB). 5G applications in industries like manufacturing, mining, and ports have already passed trial and are being replicated at scale.

Huawei’s executive director of the board and chairman of ICT Infrastructure Managing Board, David Wang, explained that, by 2030, the digital and physical worlds will become deeply integrated, creating a near-real-life experience. The digital economy will also become a primary driver of the real economy, and the industry will shift focus from device efficiency to decision-making efficiency. However, he said that these advances will also need us to achieve intrinsic network security and to improve energy efficiency to protect the environment through green growth.

According to the World Economic Forum, by 2030, digital technology can help reduce global carbon emissions by at least 15 percent.

Yang Chaobin, president of Wireless Solutions at Huawei, also spoke about the need to focus on how 5G technology has evolved beyond what it was envisioned to be. “So far, we have seen 5G being used in around 20 different industries, and there are more than 10,000 5G B2B cases that are already put into large-scale commercial use. These cases are scaling up quite significantly and we are seeing that 5G specifications need to continue to evolve in order to improve its capabilities.”

He added that for B2C services, the important thing is for the network to be able to handle a lot of traffic to terminals. “Then there is also the matter of locating capability, which means that the network should be able to locate the device. Also, you need ultra-low latency and high reliability sensing – all of which are new capabilities envisioned for 5G. This is why, last year, we proposed that 5G should evolve to 5.5G because the capabilities of 5G continue to be enriched to satisfy more needs and requirements for different scenarios.”

He added that in terms of the 5.5G vision, vendors and operators around the world have been discussing it for quite some time now, and “we all have the consensus that 5G indeed needs to evolve to 5.5G, but that the official name for 5.5G is 5G Advanced.”

Access to digital resources is essential today, when the pandemic is having an impact on all individuals as well as on the business world. That's why digital inclusion campaigns are key to providing equal opportunities for everyone, regardless of background, age or physical ability.

By Aurel Constantin

Orange Romania has launched a campaign called Making technology accessible to all, designed to contribute to the development of digital skills and access to technology for Romanians. “The campaign complements our efforts to facilitate access to digital tools in Romania for everyone, from children to the elderly. Since 2012, we have built a series of programmes that provide Romanians with access to opportunities brought by technology, which have changed thousands of lives for the better," said Liudmila Climoc, the CEO of Orange Romania.

A relevant factor when it comes to access to digitalization is having access to a good 4G or 5G network. Orange has invested in the development of a network that now covers 98.21 percent of the country's population with 4G technology, according to data from August 31, 2021. And 5G technology is available to customers in 17 cities, including Bucharest, Cluj-Napoca, Iasi, Timisoara, Brasov, Constanta, Craiova, as well as some mountain and seaside resorts. Another relevant factor is access to programs, like business accelerators, or technology solutions, like the latest developments in terms of 5G. Orange offers a range of solutions for established companies or startups and one of these programs is Orange 5G Lab.

TELIOS AND ORANGE 5G LAB

Orange 5G Lab gives economic stakeholders and researchers consultancy and the opportunity to test and develop products and services using 5G technology. The investment made by Orange helps startups grow and provide tangible solutions that make a difference for all their customer and contribute to the future digital economy.

An example of a startup supported by Orange 5G Lab is Telios Care. With the help of 5G infrastructure and 5G Lab resources, Telios Care’s telemedicine solution provides professional remote medical consultations via phone, text or video conferencing. Telios Care offers improved remote medical services, which would not have been possible without the 5G infrastructure. ”With the help of the 5G infrastructure and the resources available in the 5G Lab, Telios Care improved the remote medical services it offers, ie medical consultations by phone, online and video messages. 5G offers a higher connectivity standard than previous generations of mobile networks, which will ensure better quality video streams and high speeds through which doctors will be able to download and process real-time information,” said Mihaela-Katerina Dobroiu, Chief Customer Officer, Telios Care.

Through Telios Care, patients can contact their doctors and therapists from anywhere in the country, benefit from telemedicinebased care and all they need is a mobile phone. This year, for the first time in Romania, the company introduced the American “prescription fulfilment” model, with digital medical prescriptions that follow all safety protocols being delivered automatically to the patient’s preferred pharmacy. Currently, 3 of the 5 largest pharmacy chains in Romania participate in this system and use Telios Care digital medical prescriptions that result from remote consultations carried out via phone, video or written messages.

Companies like Telios Care provide better solutions with 5G technology, and startups that manage to enter support programmes like 5G Lab are growing quickly enough to provide timely help for those in need.

Despite the global pandemic, the growth rate of holiday sales between 2019 and 2020 was more than double the average year-over-year growth of previous years, exceeding predictions from the US National Retail Federation. This enduring upward tick in holiday sales illustrates that consumers have built lasting habits around holiday spending. Smart brands will respond accordingly.

By Romanita Oprea

Anita Panait, Brandelligence PR

According to ebay, people say they spent an average of around GBP 528 on Christmas shopping and celebrations last year (2020), compared to GBP 551.34 in 2019. This year, 30 percent of consumers plan to spend more, with only 15 percent planning to spend less. This is much more optimistic compared to 2020, where only 13 percent said they’d spend more, and 31 percent said they’d spend less. Still according to ebay’s findings, despite this optimism, many people are worried about further disruption due to covid-19: 45 percent say this means they will likely put off making plans for Christmas until the last minute, and 30 percent are so worried about more disruption that they might celebrate Christmas early with friends or family. When it comes to priorities for this Christmas, ebay’s research finds that while more people want to “go big or go home” with their celebrations and gifts compared to last year (13 percent in 2021 versus 8 percent in 2020), a greater number are still looking forward to a quieter, more relaxed Christmas (25 percent)—rather than a blowout party.

ARE THERE ANY NEW TRENDS IN BRAND COMMUNICATION AROUND THE HOLIDAYS AND SPECIAL EVENTS OF 2021?

gence PR, wouldn’t say that we are seeing new trends, but rather activities being adapted to a new and unexpected context. “I’m seeing a mix between old-but-gold, classic marketing incentives, such as partnerships and giveaways, as well as some new practices that have come to light based on clients’ higher expectations. They are more sensitive, their habits are changing quickly, they expect perfect services and want to feel unique. So we are talking about trends like customised marketing, incentive-based loyalty programmes, special deals, all-in-one packages, family offers, clear and transparent digital communication, including activities that support the community,” Panait said.

The best gifts this holiday season might be those that can be not unwrapped, but experienced—and this might be a long-lasting trend, especially as the pandemic has proven that we all miss human connection and a human approach. These days, probably more than ever, good communication has become the key to executing successful events and it will continue to play an integral role.

For most of us, the pandemic was like a wakeup call about the importance of time and how we use it, about the importance of spending quality time with family and enjoying special experiences. People are now searching for fast, yet customised services, as well as safe and well-reviewed venues and experiences. “After almost two years of adapting to a new way of living, I don't think we will come back to what once was; we will instead redefine normal living. People now want to be charmed, and as a hospitality entrepreneur, you have to show that you deserve them, and especially their time,” Anita Panait added.

ONLINE. OFFLINE. HOW TO TACKLE HYBRID EVENTS

Humans have limited attention spans, especially now as we continue to work remotely, managing distractions and responsibilities at home. For in-person events, attendees now also have access to multiple mobile devices, making creative engagement tactics a musthave. Therefore, it is very important to know how to prioritise different types of content. People learn in different manners, so it’s best to mix up the way content is being delivered, whether it’s via a live streamed keynote, moderated panels, fireside chat with a Q&A portion or interactive breakouts and workshops.

Another tactic in the world of online or hybrid events is creating opportunities for two-way dialogue by finding ways to have your attendees take part in the event. For example, using live polling and surveys, interactive Q&As or chat functionalities helps people connect and learn from one another. Incorporate gamification elements to help motivate attendees to participate in a variety of ways. This could include awarding points for attending various sessions, asking questions or engaging with a sponsor.

And probably the most important aspect is making sure everything—or as much as possible—is personalised. Communication plays an important role in bridging the gap between virtual and in-person events. Starting with the event website and registration, it’s important to think through how to personalise messages for those attending on-site rather than virtually.

The influence and rise of demand in social media has also greatly impacted the way events are created and communicated about today. Therefore, content and the manner in which it is presented are of rising importance. According to Melissa Kendal of little word studio, having a content calendar is key. One must determine the cadence of all types of communications, including shortform videos, Instagram posts, tweets, emails, and so on. Set up a tracker so that you not only know when these get published, but can also see how they perform. Each week, meet with your team to analyse the performance of past posts and iterate future posts. The rapid development of social media has pushed businesses to pay more attention to how they treat customers, as everyone can come out nowadays and tell the world about their experience. What you communicate on social media should always be reflected by the customer experience, and ideally, customer service should to go that extra mile and exceed expectations.

“Half of all shoppers we polled experienced some difficulty knowing what to buy for others, highlighting the need for discovery aides—especially during the holidays. Of those who discovered something online last season, 45 percent said it was a gift for someone.

The concept of online discovery is not new, but the way it happens is changing. Many are turning to social apps, specifically, for personalised inspiration and curated recommendations. Nearly eight in 10 consumers we surveyed said they used at least one Facebook app or service for discovery last holiday season. More people are purchasing on social apps as well. Grand View Research estimated that social commerce represented 11 percent of global retail ecommerce revenue in 2020, generating USD 474 billion,” said Alicia LeBeouf, Head of Industry, Retail, Superstores & Grocery at Meta, for AdWeek.

Can we still talk about seasonality in communication like we did in previous years or has that slowly disappeared? “In its basic sense, seasonality in hospitality is a fact. Seasonality actually characterises the hospitality industry and it is essential to determining customer behaviour. The highest season used to be the festive period, when many regions attracted the most visitors. However, the effects of seasonality are felt by most hoteliers or restaurants and it is essential to maintain communication and marketing strategies even during periods of low occupancy rates,” Anita Panait said. She added that nowadays, seasonality is influenced not only by seasons, time availability or income disposal, but also by political tensions, economic instability, natural calamities or a prolonged global pandemic. “People will start to travel more often and do more exploring, and the gaps between seasons will probably be more balanced in the future. Of course, there will always be highs and lows, but what you do between these periods in terms of marketing and communication is essential,” Panait explained.

By Alina Galeriu, Galeriu & Partners PR

One thing has stayed the same over the years in terms of the way our clients communicate during the holidays: it’s all about the joy of giving. Even though all industries have been going through very difficult times, our clients are still willing to send out press kits and show their generosity with sample products and creative gifts that are waiting to be unboxed. Getting influencers more involved for such activities is of course a new development that wouldn’t have happened a few years back. So, yes, social media still is the rising star in the communication mix. You can’t beat its drive and exponential growth. You asked about creativity, and I will highlight two main directions: first, cost efficiency is the most in-demand skill during this pandemic, and of course it takes a lot of creative effort to make an impact with small budgets; the second has to do with attention to detail, because since the number of social interactions has declined, brands need to make each encounter with the consumer really count. The same goes for encounters with influencers or journalists as a public relations consultant. Every detail matters. From the wrapping paper and ribbon of the press kit to the greetings in your email or the moment you decide to do a press pitch. This is a permanent PR concern: remembering that every word, every gesture, and every detail tells a story, so you need to be wise and skilful enough to control that story by putting time and effort into planning your every move ahead. I believe PR has never been more strategic and customised as it is today.

The contemporary business environment is more dynamic than ever, generating plenty of opportunities and challenges for leaders. In this context, leaders are required to manage paradoxes that typically denote a challenging tension.

By Romanita Oprea

Paradoxical leadership is defined as “seemingly competing, yet interrelated, behaviours to meet structural and follower demands simultaneously and over time” (Zhang et al., 2015, p. 539). The central idea of paradoxical leadership is that the leader adopts “both-and” approaches that behaviourally accept and integrate competing demands simultaneously over time, to harness the intention within the paradox.

Accordingly, paradoxical leaders may respect every team member’s viewpoint and encourage all members to voice differentiated ideas and opinions. Meanwhile, they may also promote team information integration and offer the necessary instructions and guidance to achieve innovative goals. Combining these managerial practices, paradoxical leaders could lead diverse teams to meet both the differentiation and integration requirements of innovation.

PLB in people management is characterised by leaders’ known ability to understand and address multiple competing demands from the organisation and their followers. Five behavioural dimensions are associated with paradoxical leadership in people management: (1) combining self-centeredness with other-centeredness; (2) maintaining both distance and closeness; (3) treating subordinates uniformly, while also allowing for individualisation; (4) enforcing work requirements while also allowing for flexibility; and (5) maintaining decision control while also allowing autonomy. the topic, can we say that paradoxical leader behaviour is starting to grow into a trend? According to Madalina Uceanu, managing partner at CareerAdvisor, we’re finally realising that the paradox of choices we must make in our private lives manifests itself in the same way in our professional lives. The results are different, of course, but the essence is that the choices you make can stimulate or tone down the voices of those around you, in every context.

In turn, Loredana Popasav, transformative coach at The Simplified Mind, pointed to the fact that we live in a volatile, unexpected, complex, and ambiguous world. In the last couple of years we have been experiencing even more unpredictability and uncertainty. “Leaders therefore have to adapt, change, and navigate through unknown waters. The behaviour that some successful leaders manifest when facing change might seem paradoxical. Yet, history is filled with leaders that behaved in a way that could be perceived as paradoxical. From this perspective, I would dare say that paradoxical leadership behaviour is as much of a trend today as it was when King Arthur sat down at the round table and recognised his knights as his equals,” Popasav said.

She adds that what we have today that we didn’t have back then is visibility and much more access to knowledge. If we direct our attention in a certain direction, we will find many examples of paradoxical behaviour. “In my understanding, this is more a reflection of today’s world than a trend (...) the leadership skill is not a discovery of the 21st century. Naturally understanding that complexity is a given and developing diverse ways to resolve challenges are key abilities. Without these skills, a lot of people with similar backgrounds will end up deploying traditional

solutions to new problems - and that often doesn’t work or it can suppress talent.”

Moreover, one can end up with a fixed mindset – believing there is only one way to do things – and that increases certainty for employees but reduces the leader’s ability to respond to the situation, generating mixed results.

“The main achievements are related to increasing empathy and taking a step back between stimulus and response, thus creating a more observatory role that can ensure the most efficient and objective reaction.

The constant tension in finding the proper balance generates constant improvement and self-development, which positively impacts the whole organisation, and not only due to the leader’s authority level, but also by them serving as role models for anyone with whom they interact,” said Madalina Uceanu.

Paradoxical leadership behaviour is structured around the Yin and Yang philosophy, stating that all things exist as a balance of contradictory and inseparable opposites. Not all studies on paradoxical leadership support this philosophy.

THE POWER OF TEAMS

Authors have suggested that by targeting role modelling behaviours, leaders can increase the self-efficacy of their followers, and by creating a supportive environment for employees to balance tensions in creativity, paradoxical leadership behaviour eventually strengthens the self-efficacy of employees and their psychological safety at the workplace. However, the degree to which self-efficacy is formed in an organisation is influenced both by paradoxical leadership behaviour and the freedom of voice.

Nonetheless, a leader will be better able to recognise the members of small teams through proper leader-member exchange communication. As such, it will be expected from team members to engage in more self-driven behaviour and thus have higher self-efficacy levels. But is it true that under the influence of paradoxical leaders, team members may learn to share and integrate various perspectives, which can facilitate the elaboration and integration process, therefore enhancing team innovation? According to Uceanu, paradoxical leadership rather refers to having a more humanistic approach to business, which tends to be the only way in the knowledge worker society of today, where the Y generation is predominant and the Z generation is starting out its work life.

“We tend to use sophisticated words to define simple concepts that are actually as old as life. In my view, paradoxical leadership refers to a leader’s capacity to fine tune the environment they are influencing, which implies a higher level of human connection with those around them and an increase to their own depth of perception,” Uceanu explained.

“It may be so, but this just sounds like good leadership. All great leaders foster a culture where people can speak up, share ideas, and challenge each other in constructive ways to find the best solutions. Maybe it has a new name now, but we all have experiences of this happening and not happening (along with the feeling of terrible waste when it doesn’t),” said Loredana Popasav.

A good leader can very well be a role model in the sense that they set the tone of a business through vision, direction, strategy, and behaviour. Companies usually expect their leaders to set an example of the kind of behaviours they ask of others in the organisation, but how this extends is limited. “Certainly, some leaders have a level of skill, knowledge, experience, and charisma that I find admirable, inspiring or aspirational. But leaders are people, and people live lives and have stories. I find it useful to learn from people instead of simply following or imitating them,” the transformational coach added.

Would this tactic work for Romanian business leaders? Madalina Uceanu is sure that it would, as there are many leaders in the country who are already using it, even though they’ve probably never labelled it as paradoxical leadership. As mentioned above, we tend to package simple concepts into sophisticated words. Loredana Popasav doesn’t see it as a tactic, but as a reaction to the state of change. “I see it as a mindset and a philosophy. Would effective leadership work in Romania? Yes. But the better question might be how many leaders here have the courage and experience to deliver on the requirements of paradoxical leadership?

Can anyone become a leader? In Popasav’s view, many people can learn some of the skills of leadership. Just as many can learn to play the piano or play tennis or drive a car. This doesn’t mean that everyone will be able to play at Wimbledon or drive a Formula 1 car. “There are leadership skills that anyone can learn, but I don’t believe everyone has the talent or determination for excellence, while some are not concerned about others enough to be truly effective,” Popasav concluded.

“As long as one can find an optimal way to lead themselves, these skills can definitely be developed to a level that has an impact on others. But I think that again, even with leadership, we are already overusing a term due to its trending status. We all need people to look up to, and if we are able to become role models ourselves, then leadership development is not necessary,” said Madalina Uceanu.