Cuban Business… Relational over Transactional

By Guest Blogger Kyle Rudzinski

Eddie Onaga, Lindsey Schatzberg, Fanzi Mao, Christine Tringales, Chao Li, Vivek Girotra, and Michael Larcher (all MBA 14) at a "casa particular" overlooking Havana

Eddie Onaga, Lindsey Schatzberg, Fanzi Mao, Christine Tringales, Chao Li, Vivek Girotra, and Michael Larcher (all MBA 14) at a “casa particular” overlooking Havana

A border security agent approached me and began asking questions. As the Spanish speaker in our group, I stepped aside while my friends passed through customs. I didn’t know what to expect; we had just landed in Cuba.

After an interrogation on every detail of our excursion, I began to get a little nervous, especially since we only knew where we would be staying that night. The remainder of the trip had a loose itinerary, but with one goal in mind – to learn about Cuban business firsthand and to identify opportunities for future businesses as the country continues to slowly open. Yet, after a half hour of chatting, it became clear the agent, Rosa*, would cause us no immediate trouble.

Navigating Cuba

The “CubHaas” independent study trek mirrored the Berkeley-Haas innovative leader curriculum as we navigated uncertainty and influenced without authority. For 10 days 12 classmates and I delved into Cuban culture, experiencing the trip of a lifetime.

From Havana’s cultural hub to Viñales’ rural mystique to Trinidad’s colonial tradition to Playa Jibacoa’s picturesque white sands, one thing about Cuba became readily apparent – its people are the nation’s greatest resource. Well-educated (99.8% literacy and 17.5 years of expected schooling), healthy (infant mortality rate lower than the U.S. and average life expectancy of 79 years), and equal among genders (many women ran businesses and both men and women claimed equality in education and financial opportunity), Cubans approach business with a distinct attitude. They do more with less. They’re genuinely entrepreneurial. Business is refreshingly relational rather than purely transactional. They always maintain “The Cuban smile” (when things go wrong, they don’t cry over spilled milk) despite individual economic limits imposed by a socialist economy.

Chao Li, Eddie Onaga, and Michael Larcher (all MBA 14) ride through Old Havana in the back of a 1958 convertible.

Chao Li, Eddie Onaga, and Michael Larcher (all MBA 14) ride through Old Havana in the back of a 1958 convertible.

Everywhere we went – except for the highly trafficked tourist areas – Cubans warmly welcomed us, answered our questions, and sought to do everything they could to help us in our journey. From renting “particulares” (cars from private citizens) to taking us into their homes after arriving at 1:30 AM, the composed demeanor with which Cubans lived in the face of so much economic adversity was simply remarkable. Nobody ever complained despite making $30 a month, having a low financial ceiling unless they participate in black markets, and often struggling to make ends meet. Never frantic or stressed, they are proud to be Cubans and proud to find ways to help friends. That’s how their businesses operated.

Tobacco leaves from an organic farm in Viñales hang dry before rolling

Tobacco leaves from an organic farm in Viñales hang dry before rolling

For instance, we arrived at a delicious paladar (home restaurant) in Viñales at 10 PM. Chatting with our waitress, Anita, we slowly built trust and a relationship. She secured us casas particulares (families licensed by the government to serve as bed and breakfasts) and an expedition the following day through Cuba’s unique organic black tobacco fields where we met with farmers to discuss their commerce. Anita also knew of families with casas particulares on the other end of the island in Trinidad for our other travels. With fixed prices from the government for casas particulares, Anita claimed she did not receive portions of the income. Instead, she helped us only after she felt comfortable with us and felt willing to connect us with others in her network. This happened throughout the trip.

Cuba is a seemingly a tightly interconnected network where people know people. The relationships we established made or broke future opportunities and transactions. Despite a need for additional income, in the instances where we did not invest in trust, Cubans would not extend as much aid. To them, the transaction of payment for service was not sufficient. What mattered was the relationship.

While the part of the Cuban economy we experienced was highly relational, it did not come without drawbacks. Prevalent “island time” required patience, especially given the MBA preference for highly efficient operations.

There are obviously times in which a transactional relationship may be what two parties need more, but the importance of relationships to doing business in Cuba surprised us all and served as only one fascinating experience from an absolutely incredible trek.

*Cuban names have been altered to protect identities.

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