Staying one step ahead of the pack

Staying one step ahead of the pack

Colin Donald enjoys a nostalgic lunch with a Lithuanian high flier

How to Get Ahead in Business, Lesson one: Choose your parents carefully. When my lunch partner, star management consultant Deividas Tumas was five years old, his mum and dad decided that, as he was a bright lad, it was high time he went off to school, leaving them with more time to develop their budding horticultural equipment company.

They then, er... “edited” his birth certificate to show that he was six, not five years old. It gave him a head start in life and the INSEAD-trained globe-trotting business advisor has been ahead of the game ever since.  

In fact, so prodigious was his school performance that he ended up leaving his home town of Kaunas on graduation and going abroad, entering the Stockholm School of Economics in Riga (SSE Riga) at the grand old age of 17. Even then he completed his degree under an “accelerated programme” of two and a half years.

Thus it was at the age of 20, while his contemporaries were playing student drinking games, he was already a suit-and-tie company man working for the oil refinery Mažeikių
Nafta (now Orlen Lietuva).

“It’s not something I would necessarily impose on my own son” Deividas (now 33) says about his own hot-housed head-start, as the waiter brings our starter of herring rolls with wild boletus mushrooms. “There are pros and cons.”

Nevertheless the pattern of high achievement seems to have been set in everything he has done. He has been a McKinsey consultant in Moscow, a hedge fund analyst in Zurich and a financial IT advisor in London, to become founder and now owner of boutique management consultancy Strategy Labs in Vilnius, specialising in private equity, telecoms and retail, with a special expertise in links with Lithuania’s eastern neighbour Belarus.

The subject of our celebratory lunch at one of Kaunas’s best-known restaurants is the fact that Deividas’s company which he launched in 2012, has just been acquired by the Lewben Group, a Lithuanian wealth management firm with offices in London, Switzerland and Cyprus.

The firm, which is low-profile to the point of being secretive, already has tax, accounting, outsourcing and legal services for high-net worth individuals and corporate clients. Through the acquisition of Strategy Labs, meaning Tumas and his 17 colleagues, it has bolted on consultancy services as well.

Deividas, steeped in the culture of discretion that prevails in his line of business, declines
to divulge details of either sides’ turnover etc, or the terms of what he describes as a
“swap deal”, but he now has a seat on Lewben’s board, and seems quite happy about the arrangement. More on that later, but first: Where are we and what are we eating?

I bumped into Deividas in Kaunas’s Vilniaus gatve, one of the most attractive streets in Lithuania’s a second city, a scenic old trading hub on the confluence of the Neman and Neris Rivers. We convene to the Senieji Rusiai (Old Cellars) Restaurant, one of the best-known eateries in the city, patronised by presidents, diplomats and basketball stars. Its subterranean 17th Century walls are bedecked with murals, including depictions of one of the city’s historical highlights: Napoleon’s Grand Army crossing the Neman in 1812, en route to a minor setback near Moscow.

It’s a dramatic backdrop to the Senieji Rusiai’s highly creative (and delicious) Lithuanian-European menu, and hints at the depth of stories to be uncovered about the history of Kaunas, which served as “temporary capital” of Lithuania after the First World War.

A former Hanseatic city, with its brick-built gothic architecture, it has witnessed many of the partitions and occupations that make Baltic history so daunting for non-natives. How many people, I wonder, might have hidden in these cellars to escape successive invading armies over the decades?

Although he left the city at an early age, Deividas Tumas is a Kaunas boy, and frequently returns to his hometown to visit his parents, pioneers of post-Soviet entrepreneurship with a business selling growing equipment. Before the Wall came down they worked in that quintessential Soviet establishment, a radio engineering factory.

Now Deividas often passes through his hometown, with his girlfriend, the well-known architect AndreėBaldišiute and their infant son Kazys, en route to their holiday pad on Lithuania’s Curonian Spit.

He is well-placed to have observed the changes that have come over Kaunas – all of them for the better as a busy, prosperous old-town street like Vilniaus gatve attests – with its upmarket bars, cafes and restaurants. Later in our meal, while we are enjoying the Senieji Rusiai’s outrageously rich desserts (caramelised pear in port with blue cheese ice cream in my case) on the terrace outside, he casts his keen commercial eye up at some of the undeveloped old flats and apartments above the awnings. It’s only a matter of time, he  says, before these properties are gentrified and sold off for fancy prices.

All of this is very different from the early-mid 1990s he says, the post-communist era time between the death of the old system and the establishment of the new democratic order. Kaunas, he said, became the playpark of the powerful Lithuanian mafia, who ran the city
as their fiefdom.

“When one system collapses, there is a vacancy for criminal organisations to become very powerful, from 1993-98 it was a crazy time until the Government founded an organised crime unit to crack down on their activities.”

“It was very difficult to do business, every business person was squeezed by racketeers – I was attacked on the street when I was still quite young. It was very dangerous. There was nothing here, you couldn’t walk around. It was a nasty time, and as a schoolboy you were very much scared. I remember this as a transitionary period.”

Kaunas’s problems were quickly cleared up in the mid-1990s, and anyway Deividas’s career has largely been made abroad, starting with his BSc in business administration and economics at SSE Riga. This appears to have provided him with a useful and enduring Baltic network of contacts and colleagues.

Now he worries a bit that his old school is “losing its edge” now that visa restrictions and travel to the UK and elsewhere have become so much easier than in his day, the best and the brightest from the Baltic region are more likely to head to Cambridge, London or Birmingham for their business education (other alumni strongly disagree).

Before starting Strategy Labs, Deividas took a crash course in Russian before spending three and a half years in Moscow as a McKinsey “associate”. During this time he worked crazy hours and travelled immense distances advising Russian companies and would-be investors in this vast and complex market.

Prior to that came an MBA at INSEAD in Fontainebleau near Paris and Singapore. These are normally undertaken by 30-something executives in mid-career but, following the pattern set in childhood, taken at an earlier stage by the then 24-year-old Deividas, who describes it as “fun”, not a word always used in this context.  

Nowadays, when he talks to MBA students, as he is sometimes invited to do, he tries to steer them away from a purely material view of these qualifications, which he thinks are too often viewed solely as a means of boosting earning power.

“Some people look at the MBA as an investment. Another way is to look at it in terms of what you want to get out of life, in the same way that people study philosophy. Education should be a broader concept, even business education is a chance expand your horizons. I tell students not to think of it in utilitarian terms. It should not be about being able to go buy a Porsche – though I wish I had one – but about studying completely new things in great schools and making new friends in new geographies.”

“Personally I am driven by different intellectual things, ideas, books, travel. I am more interested in that, less in material things. To me the year of the MBA was a fun year. Let’s face it, you don’t have that many years in your life.”

Deividas Tumas02

As we tuck into our meal, accompanied by exceptional South African and Italian wines skilfully selected by the sommelier from the Old Cellars’ cellar, Deividas proves the best kind of conversationalist, the kind who does not take himself or his bluechip career (he
is also on the board of Rolvika, Charter Jets and Enercom Capital) too seriously.

He also takes care to inform this foreigner about the Lithuanian-ness of what we are eating, starting with the black bread. Discussion of the meaty boletus mushrooms served with our herring starter leads to a talk on the tradition of mushroom gathering as a kind of annual marathon family bonding session that in the pre-independence era seems to have become a way of shoring up Lithuania’s folkloric tradition and even asserting national identity.

The tradition seems to have been strong in Kaunas, seen by him as the country’s heartland, an aspect reflected in the Senieji Rusiai’s locally-sourced ingredients. His current home Vilnius has always been a more a cosmopolitan “city of strangers” he says, quoting the title of a book on the city by Laimonas Briedis. While he does not idealise his relatively sleepy birthplace, after lunch he takes pride in pointing out the riverside beauty spots he knew as a schoolboy.  

We chat over our main courses about the consultancy world, which particularly in its elite upper reaches is notoriously opaque and little-understood by those outside the charmed circle of companies like McKinsey, BCG and Booz & Co. But Deividas was used to working in shadowy, well-remunerated ambiance. Prior to his INSEAD sojourn, he worked for a couple of years in Zurich, the world capital of opacity, working on hedge funds for GFTA Analytics, the “pocket company” of a super-discreet, “super- rich” German investment manager. “It became boring, as these things do” he remembers. Apart from the question what do they actually do, the question about companies like McKinsey is how can they charge so much? Deividas is characteristically lucid on the question.

“You can get advice for $1000 or a $1 million. The latter advice won’t be 1000 times better, it will be maybe 10% better. For some businesses that 10% is the difference. It’s like with a marathon runner, it takes a tremendous effort to gain the extra few minutes in a two and a half hour race, but they make the difference.“

Deividas modestly plays down the risk he took in leaving McKinsey and starting his own consultancy Strategy Labs, renouncing any claim to being a “true entrepreneur”.

“I never thought ‘I’m going to quit McKinsey and do this’, it happened naturally. Some friends asked me to sit on a board of a company in Vilnius and once a month we had / I had a meeting with them. At some point I started seeing the potential, so I hired a couple of guys from SSE Riga, explaining that this was a start-up and therefore it was a risk.

“We started off with no office, no company, no website, no logo, just a vision of the future. We didn’t actually have any signed clients though there were two or three we were talking to.”

“I knew there would be enough to keep me and a few guys going, one or two projects a year. To me this is not true entrepreneurship, that’s when you take bigger risks. To me it’s more like being a dentist or a lawyer. Would you ask a doctor if they think they are worried about going bankrupt? You can be a successful or an unsuccessful doctor but somehow you will always have patients.”

Strategy Labs found interesting “patients” around the world. For example it was retained to launch Smart Mobile, a new mobile operator in Sierra Leone. The team, which got out just before the recent Ebola outbreak, were interim managers, responsible for entire commercial operation of the operator (HR, finance, marketing, sales and distribution).

Deividas seems guaranteed even more deep-pocketed “clients” now he is with the Lewben Group, given the cross-selling opportunities that will occur. Business for him is about more than servicing the wealthy clientele that inhabit the plush-carpeted world of family offices, where the talk – or rather discreet whispering – is about “tailored wealth preservation and growth solutions.”

He makes a convincing case that wealth is not for him an end in itself. This explains the pro-bono work he does on the supervisory board of Kurk Lietuvai (Create for Lithuania).
This one-year work placement programme for young professionals was launched by Invest Lithuania in partnership with the Lithuanian Government, enthusiastically backed by the President Dalia Grybauskaite. It is aimed at drawing on the expertise of Lithuanian youth who have completed their studies at universities abroad, and harnessing it for the greater good of the homeland.

Each year, a select team of 20 young professionals is chosen to work on strategic governmental projects and to participate in high-level decision-making processes.

Three separate four-month rotations in the public sector are tailor-made according to experience and preferences of the participants. At the end of each rotation, the young professionals present their projects to the Lithuanian Government as well as the public. It’s a scheme which will, for example, allow future leaders of Lithuania to work on overseas aid projects.

As befits a young business leader with a good grasp of strategy and wide economic experience, Deividas thinks deeply about the future of his country and how it should position itself in a competitive world, and also who it should position itself towards. Sitting
as we are on a restaurant terrace in a picturesque old city, on a sunny day, watching the world go by, surely if it was marketed properly, there would be a future for Lithuania as a European tourist destination? Well not really, according to him.

“We are a beautiful country but there are a lot of beautiful countries out there that are equal or better in terms of attractiveness to tourists.

“The problem is that the country tries to focus itself towards the West, with advertising campaigns in papers in Oslo or London, but no one wants to go from there. If you can go to Spain, which has better beaches, why come here?”

“We always forget our best tourism strategy is to make ourselves more attractive to Eastern countries. Our target clients are Russians and Belarusians. OK, we don’t like them very much, but we must learn to like them.

“I’m very positive about the future of Lithuania, as we enter a new phase, though there is the question of when the next bubble will arise.” 

“Real estate prices are surging. Officially the growth rate is only a few percent but the movement in the market is crazy. All my friends are buying or selling, all the building and restructuring going on, it seems like the next phase of growth has really begun, and the question is how short it is or how long it will be?“

Knowing, as he puts it “how quickly the milk turns sour [in Eastern Europe], Deividas portrays his country, as being in a kind of race against time to develop the strengths that
will eventually supersede the boom-bust cycle.

“I think we should at some point hopefully succeed in succeed in developing our strengths as a country like Estonia has, creating edge, it has infrastructure, it is marketing itself very well.

“We should focus on being a technology and service-driven economy. And for a small country that’s possible, you ain’t going to be an industrial country, you ain’t going to have cheaper prices than China. We still are an industrial country, majority of GDP is from manufacturing.”

“Hopefully we have more and more noise created by start-ups like Vinted [a popular online clothes exchange] or CGTrader, a 3D model marketplace.

“We should be good at something, like Switzerland is good at banking.” We are good at services and we are still hungry so we work harder. We should be good at something, the answer is services.”

No doubt Deividas, who is good at quite a lot of things, will make his influence felt.