Paul Salnikow, CEO of The Executive Centre, has made the most of rising demand for serviced workspaces, writes Andrea Zavadszky.
Paul Salnikow must have learned a thing or two about fung shui during his 20-plus years in Hong Kong. The founder and CEO of serviced office provider The Executive Centre (TEC) always manages to choose an office for himself that clients find desirable in his business centre at Two Exchange Square – which doubles as the company’s HQ. “If anyone wants to lease my office, of course I will move. I’ve already moved offices four times this year. I’m not even unpacking anymore,” he laughs, pointing to some pictures still stacked against a wall.
This is just one sign that business has been good for the company, which celebrated its 20th anniversary this July. A Hong Kong success story, Salnikow founded the company in 1994 as a subsidiary of the Saudi fund for which he was working at the time. During the following few years, however, despite putting TEC’s foundations in place and other contributions to the fund that included the development of an award-winning office building in Sydney (Aurora Place), there was something that troubled him.
He felt nobody was really excited about any of his achievements and there were no repercussions even if he made some losses, as the fund had plenty of cash. “If you try to measure and motivate yourself, this becomes frustrating,” he says. “But it gave me the experience to run my own business and set my own direction.”
When he decided to leave the fund in 2000, he bought out TEC, which at the time had only three serviced office locations and annual revenue of less than US$500,000. In the past 14 years, he has taken the company through four private equity transactions and has grown it to 65 business centres in 20 cities, with annual earnings of US$120 million.
“The size of the business is clearly large enough now for a listing, but we don’t want to be just listed, we want to be actively traded,” Salnikow says. “I want to take it to a bigger size; when we hit the market we will be sure it is a meaningful listing.”
He aims to double the number of business centres in the next four years and has just got a helping hand from CVC Capital Partners, one of the world’s largest private equity firms. The first investment of CVC’s new US$3.5 billion Asia fund went to TEC. “Just five years ago, we were working on being understood as a premium operator in Asia. Now we are recognised as one,” he says. “Client satisfaction helped us build the business to a high standard, which in turn is very satisfying for us.”
Having grown TEC to 600 employees, Salnikow needs to continuously build the management system and team structure. There is a 50-member corporate leadership team that takes care of running and developing the company, and local teams in each office – which are run like mini-companies – independently drive the business within the corporate structure.
“[As a leader], your vision needs to be evolving all the time,” Salnikow says. “You have to have a clear vision and be a good listener – like a sponge, taking in information all the time. You have to be a strong communicator as well. You can’t just walk around preaching propaganda. And you have to respect other people.”
He travels to every new location to make sure the quality of premium corporate office environments is maintained at the same high standard.
One of the ways he developed his management skills was by seeing how things shouldn’t be done. “I had anti-mentors,” he says, referring to a Japanese company at which he spent six years before joining the Saudi fund. It was heavily regimented, he explains, and creativity was discouraged. “The driving principle was conformity and obedience. You were just another brick in the wall.”
A more positive inspiration was his father. Born in Belgrade, then part of Yugoslavia, from Russian nobility that had fled Russia after the First World War, he later moved to Buenos Aires where he met Salnikow’s French mother. After they married, they moved to New York, where he spent 45 years with IBM. After retiring, he became a sculptor. “He was always motivated and ambitious. He reinvented himself several times,” Salnikow says, adding that this inspires him to take risks and get through difficult times.
Salnikow was born in the US as a first-generation European immigrant with Russian as his first language. He studied in Japan and worked in New York, London and Hong Kong.
He’d like to pass on that feeling of being comfortably international to his four children, two boys and two girls, who have an English mother, were born in Hong Kong and speak Mandarin fluently. “They should be confident and comfortable to look on the world as an opportunity,” he says.
He loves the excitement of his job and the business. “It’s humbling, but exciting, thinking that our first business centre opened in 1994 in the Bank of America Tower and now it’s an established premium brand in Asia,” he says. “I really enjoy the growth of the business. It’s confirmation that we are doing a good job.”