Alumnus Daryush Arabnia Successfully Opens a Geico Branch in China
Daryush Arabnia is a former John Cabot student and now the Executive Director of Corporate Development & Marketing for Geico-Taikisha. Geico-Taikisha is one of the leading firms supplying car manufacturers with automated paint plants worldwide. The company was founded by Daryush’s grandfather and continues to thrive as a family-owned business. Daryush’s father Ali Reza Arabnia, also a JCU Alumnus, is the current CEO of Geico-Taikisha.
After only two years in the business, Daryush Arabnia flew to China to open a new branch of the company.
Read the interview with Daryush:
What are the positive and negative aspects of a family business?
Geico-Taikisha is one of numerous family-owned businesses in Italy, but one of few to survive the “third generation curse.” In many family businesses, lack of organizational clarity and the entrance of new members result in vicious internal fights. My sister and I represent the third generation. Thanks to successful planning and management by previous generations, each of us is responsible for different aspects of the business. This avoids overlap of tasks and conflicts of power. The dynamics of a family business are very delicate, and they are a balancing act that rests on clear goals and a suitable organizational structure.
When the company can count on a good internal organization, there are priceless advantages for both the firm and the family. From a business point of view, there is continuity. The members of the family are likely to take over the business for their entire lives. The business benefits from a clear company mission, a consistent management style, and a strong personal motivation from the members. The lower turnover rate also allows for long-term planning.
Although I missed the whole phase of research and discovery that a young graduate usually faces right after university, I feel lucky to have gotten significant work experience right after graduation. I was involved in Geico-Taikisha’s strategic decisions, gained meaningful experience right away, and acquired a lot of knowledge from my relatives and senior colleagues.
What were the steps to opening a branch in China?
I still remember the day my Dad called to tell me I had to leave for China. It was December 2010, and I was twenty-seven years old. The decision was quite unexpected and once there I had to start from scratch. In the initial phase, I looked for valuable partners; choosing the right people is crucial, especially in an unfamiliar country. I looked for lawyers, financial experts, fiscal agents, strategic consultants, and a personal translator. After that, I needed to obtain a business license to operate in China.
This phase required a lot of negotiation and constrained some of our activity. In China, once you gain a business license in a certain territory, you are bound to that area and you are not allowed to operate in any other city. In addition, given the peculiar laws regulating land acquisition and rents, finding the ideal spot was not easy. Much negotiation was also involved regarding the fiscal aspect because the Chinese government imposes limitations on the amount of each invoice. Since our business operates with large sums, we needed to find a compromise with the local authorities. Finally, I had to select and hire 12 employees. I decided to rely on local, young graduates.
What was the hardest aspect of opening the business in a foreign country? How did you overcome the challenge?
When I left for China I was quite young and it was my first independent experience. For sure, the biggest barrier I encountered was the Chinese language. When I arrived I didn’t speak Chinese, so I hired a personal translator who helped me especially to communicate with local authorities. Despite his help, the feeling of not understanding a word during the long negotiations was very unpleasant. Patience and perseverance helped me a lot!
Also, the complex bureaucratic system and the strict government laws were obstacles that I could not have overcome without the help of my local partners. This is why I think that a valuable team is essential in cases like these.
Did the experience at John Cabot help you in some way?
Definitely! More than from an academic point of view, I feel that John Cabot transferred to me the open-mindedness and the ability to adapt to any kind of situation. At JCU I learned to appreciate and be respectful of other countries and cultures, and to be curious and interested rather than focusing on existing stereotypes. The pragmatic and practical style of the lectures enhanced my ability to reinvent myself if needed, to be flexible and have the courage to give my opinion. It transferred to me a bit of that naïve bravery that turned out to be useful in many situations. Moreover, I can still rely on an international network of friends for advice and help.
Geico has been growing exponentially, with a compound annual growth of 40% since 2009. How has the company managed to be so competitive throughout the years?
First of all, we dedicate a lot of attention and care to our employees. This has a positive impact on turnover rates and motivation of our teams. Before going to China, we learned that the average Chinese worker leaves after only one year with a certain company. It has been four years since we started our operations in China, and we have had zero turnover so far.
In Milan, we also built a recreation center for our workers called “Laura’s Garden of Thoughts.” This is an area of more than 2,000 square meters that my father, Ali Reza Arabnia, dedicated to the employees of Geico. Here, once every five weeks, we organize “Teasing Friday,” where we invite different speakers to talk about diverse topics that create interesting debates with the audience. There is also an Art Gallery inside the center where new exhibitions are displayed every five weeks. In addition, inside the garden employees have at their disposal a gym, a restaurant, an amphitheater, and an indoor park in which to relax.
We dedicate a lot of resources to training our employees, with great emphasis on soft skills. We are aware that the know-how of the company mainly comes from the people who work in it, so we make sure to preserve and foster this treasure year after year.
Finally, I think that our focus on innovation is another reason behind our success. Especially in hard times like these, companies should always invest in innovation. Geico has two innovation centers: the one located in Milan is the true innovative brain, while the second, in China, is mainly focused on adapting innovative solutions to the needs of the Chinese market.
What advice would you give to young graduates interested in international business experiences?
I think that you should never give up. Don’t let yourself be fooled by stereotypes, and always pay attention to everything that is around you.