Mrs. Big's Big Deals

By Andrew Purvis/Warsaw

In Warsaw she is known as Mrs. Big. It's a reference not only to Barbara Lundberg's physical stature (5 ft. 10 in.) and no-nonsense New England manner but also to an audacious operating style that has in the past 10 years made her one of Warsaw's most influential executives. As CEO of Elektrim S.A., one of Poland's biggest and oldest communist-era companies, Lundberg, 47, admits that she attracts attention. "I think people find it amusing that a woman is president," she says. In her case they also find it daunting. Late last year the conglomerate was on the verge of insolvency; today, after Lundberg's aggressive restructuring (and a last-minute investment by the French conglomerate Vivendi), cash-flow problems are history and investor confidence is back: the stock price is up 100% since the beginning of the year. Now the former Wall Street banker wants to make Elektrim Poland's foremost producer of interactive Internet content by year's end. "She's ambitious and aggressive, and that's what you have to be to succeed in this country," says outgoing U.S. Ambassador to Poland Daniel Fried.

Lundberg was brought in as Elektrim CEO in February 1999 by institutional investors who had grown impatient with the previous management. The company had grown too quickly in the 1990s, says Lundberg, with interests in everything from chicken farms to electronic-cable manufacturing. Then reports leaked that the management had granted an option to an outside company for a 5% stake in Elektrim's most valuable asset, the wireless firm Polska Telefonia Cyfrowa, or PTC. Major Western shareholders swooped in. Lundberg sold off interests in nearly 80 companies, slashing staff levels from 30,000 to 15,000 by last December. They will be down to 7,000 by the end of 2000.

The former venture capitalist then refocused the company on telecommunications with acquisitions worth more than $1 billion. Today Elektrim boasts more than 2.5 million subscribers through its voice, video, mobile and fixed-line telephone networks. Early last year Elektrim clashed with the German giant Deutsche Telekom over a controlling interest in wireless company PTC. Lundberg has apparently prevailed, but a lawsuit launched by Deutsche Telekom in Polish courts blocked further investments and forced her to take out a loan that increased PTC's debt load 55%. It took a last-minute $1.2 billion sale to Vivendi of a 49% share in a subsidiary that controls PTC to stave off disaster. "It wasn't an experience that I would like to go through again," she recalls. Even so, Lundberg is embarking on a new growth phase, investing $200 million over the next two years in Internet companies.

Lundberg is a rarity: an American in Poland with no Polish roots. A graduate of Wharton and a native of Lexington, Mass., she moved to the country in 1991, not for any sentimental reasons but to become the local head of the Polish-American Enterprise Fund, a U.S. government-backed effort to spawn new businesses in the post-communist nation. "I didn't necessarily make a decision to leave the U.S.," she says, but "I felt that the potential was here [in Poland]." "She's very post-1989," says Ambassador Fried. "There's no sentiment or ethnic ties. She's business."

And business is what she brought back to life in Poland. At the fund, Lundberg helped spawn dozens of enterprises employing upwards of 100,000 Poles and with aggregate sales of more than $1 billion. "Without her the fund would have been a complete failure," says Henryka Bochniarz, a former Minister of Industry and Trade who now runs a private consulting firm in Warsaw. Bochniarz says Lundberg's prior experience as vice president of corporate finance at Kidder Peabody in New York City introduced a level of managerial and financial expertise that did not exist in Poland 10 years ago. "She brought a completely new quality to our business," says Bochniarz. Her non-Polish background also helped when it came to making tough decisions at Elektrim.

Lundberg is thought to be the highest paid executive in Warsaw, though all she will say is that she's earned less than she would have made in the U.S. over the same period. If she didn't have Polish roots to start with, she's tried to grow them on the job. In 1994 Lundberg bought a home on the outskirts of Warsaw (relocating six families in the process) and characteristically took it down to bare bricks before renovating from scratch with the help of renowned local artisans. She can follow a conversation in Polish, and her two children now speak the language fluently. She says that Poles are even more "anarchist" than Americans and that she believes there is a cultural fit between the two peoples, as both are consumed with entrepreneurial energy and at times reassuringly informal.

Not that she has lost her ability to surprise. Lundberg recently presided at a ceremony at one of Elektrim's power plants where, according to Polish tradition, she smashed a bottle of champagne on a new boiler and became its official guardian. "I am the first godmother of a boiler in Poland!" she says with a grin. For most Poles, Lundberg continues to shatter all molds.