After Communism fell in Eastern Europe, the West had won — but it didn’t exactly have a plan of what to do next. Then an influential journalist quoted a third-party politician at a college commencement ceremony, and a stunningly successful initiative was born — one modeled after the Peace Corps, but that catalyzed young business school grads to go to Eastern Europe and have them teach these fledgling free societies how to do business.
John Lynch was part of the first cohort of this program, the MBA Enterprise Corps, which had a monumental impact on the future of Poland, the Czech Republic, Slovakia, and Hungary.
He shared his story with us while reflecting on the program 33 years later:
To put this all in perspective, the timing was just after the fall of Communism in Eastern Europe. The Polish “Solidarity” movement began in ‘89. They had their first democratic election on June 4, 1989, which, by some twist of fate, was exactly the same day as Tiananmen Square in China.
Polish democracy was born on the same day it was killed in China.
So that was a big interesting thing. And then, within a year, by 1990, there were 200,000 Soviet troops in Poland, and it was still touch and go. And then the Polish electrician Solidarity leader Lech Walesa, who then became Poland’s first president, came to the United States to do a speech to the joint houses of Congress. It was the official victory of the Cold War, and it was in the joint houses of Congress — everybody was there.
President George Bush, Sr., was there, and Walesa got a standing ovation. And his speech was called “We the People,” after our Constitution. He gave a great speech, saying, “Okay, we’ve been fighting alongside you Americans to bring down Communism for the last 50 years. We’ve won.” Big cheer. “And now we need your help.” He said his country has been economically decimated by the Soviets, and that he would like to rebuild his country, and now I come with my hat in my hand asking for help. After the speech, the U.S. allocated a billion dollars right away to help rebuild Poland.
And the formation story [of the MBAEC] came from H. Ross Perot. He said MBAs should do “more good” in the world. And then David Gergen, who was then the editor in chief of US News and World Report, gave the graduation speech at UNC Chapel Hill business school — Keenan Flagler — in 1990.
And Gergen quoted Perot, saying it’s a shame that all you MBAs are going off to Wall Street — some of you ought to head off to Eastern Europe and help them build capitalistic systems there.
And a couple of the graduate MBAs came up to him afterward and said, “We really like the idea — how do we do it?” And he said, “You got a professor on your staff here who was a founder of the Peace Corps under Kennedy,” a guy named Jack Behrman.
And Jack Behrman was a professor of management. They went to him and said, “How do we come up with money to pay for MBAs to go to Eastern Europe and help teach them how to build a free market?” And he said, “Let me make a few phone calls.”
‘Capitalistic Tools’ Doing Volunteer Work?
He knew everybody in Washington, and they got USAID to come up with some funds, and they came up with this idea, not the MBA Peace Corps, but they called it the MBA Enterprise Corps, and our year was year one.
We were the first group of volunteers. It was probably the 10 top business schools in America. So it was Columbia, NYU, Wharton (where I went), Stanford, Northwestern, and the University of Chicago. It was really the elite 10 business schools in America, and they had these high-paid MBAs deciding to push off their careers by one year to go do volunteer work.
So Peace Corps people going to Africa digging ditches was a thing since the 1960s, but people couldn’t imagine that a bunch of capitalistic-tool MBAs would want to do something similar!
But it was the most exciting thing happening on the planet at that time — gargantuan political changes. Nobody could imagine the Soviet Union would ever fall, and suddenly it’s happening before our eyes. And when I got the call, I had just graduated from Wharton and was working in New York City, making tons of money. I had a great life guaranteed. And someone said, “How’d you like to quit your job and go to Poland for 200 bucks a month?”
And I just thought, yeah, for one year I want to be a part of history. So, I think that some people were going because they thought maybe they were going to change the world or something. Kind of like the Peace Corps. I was going because I just thought it was going to be the most incredible experience of a lifetime — to be in the Eastern Bloc while capitalism is born.
In 1991, I was informed that I had been accepted into the program. There were 45 of us, and 11 came to Poland. The other 30-something went to the Czech Republic, Slovakia, and Hungary. The program was completely underinformed. We had no idea what we’d be facing. There was no internet. It was 1991. There were no maps. There were no books. There was no information. It was the Eastern Bloc. We knew nothing about what we were getting into. UNC-Chapel Hill actually organized the program and did as great a job as one could do. They gave us motivational speeches. They gave us language lessons. They just put together in six months this incredible training program. We had State Department CIA language instructors who taught us Polish, Czech, and Hungarian in four weeks. We didn’t exactly get fluent, but we got very competent in these very difficult languages in no time doing this immersion-type of learning. They had culture classes, so we knew what to expect. They had people talk to us about Russian spies because the Russians were still there.
So, it was all really kind of, John Grisham, an exciting thriller-type thing, not knowing what we’re getting into. And we all flew over together from North Carolina through, maybe, Chicago, over to the Czech Republic. First, we stopped at all the other countries. We dropped off the Czech volunteers in Prague. We dropped off the other ones in Bratislava. We went over and dropped off the Hungarians in Budapest, and finally, it came to Poland.
We were on a plane for two days. It got great coverage in the press over there. It was in Poland — all the newspapers came to film us getting off the plane. “American Business Experts Coming to Save Polish Economy” type of thing.
It was the wild, wild east. It was so undeveloped.
Almost nobody spoke English, so we got to use our Polish almost immediately. We were put in student dormitories. The second half of the training program was at the University of Economics in Krakow where we stayed in their dorms and had lessons with their professors in language and other Polish culture.
And then the director of the program is Janusz Jaworski. He was just the most well-connected guy in Poland — he was a part of the resistance. He was a Solidarity member. He set us up with a two-week program with all the ministries of industry. We were talking to the upper echelon of the new Polish government, telling us their plans to rebuild their country and how we would fit into it because we were embedded into small and medium enterprises of Polish entrepreneurs. The free market was 12 months old, right?
There was no business education. None of the entrepreneurs had any money. There wasn’t even a stock market yet.
I mean, it was the raw beginnings. In the years since the Poles had their free election, their economy dropped 60%, because the Russian clients all pulled out. The Soviets stopped doing business with Poland, so all these factories were just dropping like flies. We went to work for private entrepreneurs in every business you can imagine. There’s somebody with a bicycle shop. There was somebody doing bottled water. We were working for a consulting company, helping small businesses get loans from banks or get World Bank financing for factories and stuff.
Baptism by Fire
But it was all basic, first-level startup, and the 12 of us were placed in these different companies. We were all given crappy little apartments. We didn’t have cars. We had $200 per month. So we were not the rich ex-pat crowd coming over, working for Price Waterhouse Cooper. We were working for Polish companies taking buses, and we didn’t have phones in our apartments, and we were trying to figure out life as we could over there. So, we were immersed into Polish society like baptism by fire.
Every company we worked for usually had somebody who spoke English, but a couple of them didn’t. So, those poor people had no idea what was going on. There was no one who could talk to them. And we all went to work. It was a tight-knit group. We would get together, twice a month or something. Most of us in Poland were in Krakow. All the other programs were in the capital city. But we were in Krakow, which is the second city of Poland, just because the volunteer professor happened to be from Krakow. Which turned out to be a gift of a lifetime, because it’s maybe the most beautiful city in central Eastern Europe. It’s just a gorgeous place and nobody here spoke English.
We had to learn Polish because in Prague, there was already a pretty big American crowd, a lot of English being spoken, but in Krakow, not at all. There’s no English you would hear on the streets at all. It was just incredible.
We were supposed to come for one year. We came on August 3rd, 1991. I remember the date. We were supposed to stay for one year and then go back to the States. We had our MBA student loans deferred for that year. We got our 200 bucks a month paid into a bank account somewhere, which was enough to live on back then. I mean, the average wage in Poland was $100 a month. It was a bit like China in terms of earnings. Three years before it was $25 a month, right? So, it was really, really poor.
Almost nobody had a car. There was never any traffic because nobody had cars. The most gifted people were those who had cousins in Brooklyn in Greenpoint or Chicago. And those families would send money to their Polish relations. And they would go out and buy a car or start a small business with that seed money from their families. And that was really the grassroots start of the free market.
So, we came over as part of a cultural economic exchange. And we were considered incredible business gurus, because we came from the United States. and we came from the top business schools. We were working with small companies. I mean, they were like 15-person companies. These were not corporations or anything. These were small startups who were just growing. Some of them went on to become publicly traded, huge companies, successful. They still fondly think of their early days with Americans on board who were helping their team. And so that was supposed to be a year. I extended mine for six months more. I did it for 18 months, but then that segued into my decision to stay and start my own company. I did a startup in Poland, which I still own and am running today.
It’s a clothing business, but it’s corporate apparel uniforms. So, we do polo shirts for Starbucks. We do uniforms for KFC, or we could do 25 sweatshirts for the local high school. So, we do printing, embroidery, and sourcing clothing from all over the world. It’s a pretty good-sized business. We have 300 people. So, in the industry we’re in, it’s the biggest one in Poland.
And we started with three people. It had humble beginnings, just like the Polish entrepreneurs here.
When we got here, it was such a gray, dark place. There were no neon signs anywhere. There wasn’t a McDonald’s. There wasn’t a bottle of Coca-Cola in sight. It was just all local stuff, and we didn’t know the brands.
I think the program was very successful. I think it was all about building bridges between America and Poland. My company employs 300 people now — about 240 Poles and 60 Ukrainians. We’ve also been helping Ukraine a lot.
Poland is close to the top of the list of countries that adore America. I’m pretty sure we impacted thousands of people’s lives from the work we did here. Some Americans are skeptical of government aid and aid programs and stuff like this, but I’d have to say that this was a home run. This was a really effective program.
That’s Never Happened Before!
There’s another related story in that same funding that came with Walesa. Some money — $250 million — went to a fund. There was the Polish American Enterprise Fund, the Hungarian American Enterprise Fund, and the Czech and Slovakian American Enterprise Fund. Poland got $250 million. It was supposed to be seed money for venture-capital startups for Polish companies.
A friend of mine was the first private-equity guy in Poland — he was also a Wharton grad. He was 25 years old when he came here. So, the U.S. government allocated $250 million to these smart people to invest wisely in Poland. They invested in these businesses. They never expected to get it back. It’s just aid, right? And after 10 years, the Polish American Enterprise Fund came back to them and said, “What do we do?” And they said, “What do you mean?” And the Poles said, “We turned your $250 million into a billion, so what do you want us to do with it?” They said, “Jesus, it’s never happened before. We gave aid and people are giving it back!” They said, “Just keep investing it — just roll it over and just keep doing the good stuff that you’re doing.”
And then, after a couple of rollovers, they privatized it. And so, the U.S. got all their money back — with profit. That fund turned into the first and most significant privately held private equity firm in Eastern Europe, called Enterprise Investors. And they’ve had 12 funds now. They’ve raised 30 billion dollars. They’ve multiplied it by many times. It’s an absolute home run. A great organization, funding companies throughout central and Eastern Europe, in every industry you could think of.
