Kyiv – Time for Revival
Having spent some months last year working in Kyiv, we certainly hope that this vibrant young economy can get back on its feet. It needs political stability, committed foreign support, and above all a belief in long term performance that goes beyond the immediate cash gratification that recent businessmen (domestic and foreign investors) have been seeking.
Kyiv and Ukraine are not alone in exposing black market trading, bribery and corruption. It happens globally, but is talked of as being part of this countries culture. In a stage of adolescence it may be accepted – but as the country grows and matures its systems, that too will have to change to attract stable development and investment. The Government has to begin to drive ethical change from the very top that will build a strong and powerful country for future generations. As the breadbasket of Europe; a producer of steel; the largest landmass that sits between Europe and Russia, Ukraine has a tremendous future potential as both a political and economic presence. We have to begin to think about future generations.
It is time to recognize that change takes time and yet more suffering, however to evolve into a leading economy requires people at many levels to embrace a new way of working. Too often we heard that old saying ‘that will not work in Ukraine’. Many of the young talented folk we met are cynical and feel betrayed by the corruption and visible wealth on the main streets – and equally visible poverty of the suburbs. Trouble is that they too will buy into that unless they can receive support and see alternative solutions to gaining a better lifestyle for them and the country as a whole.
Ukraine has huge potential. The people are generous and kind. Business needs organization and integrity. We need to convince those people who are suspicious of change that together they can build a new and better tomorrow for Ukraine.
My company – alongside many others – will welcome the opportunity to play a part in the revival of business and economic growth. We specialize in business continuous improvement, people development and process management.
When there are people like us willing to bring insight into ‘world class performance’ to the market – then failure is truly not an option.
Jan M Stefanowicz. Date Printed: 8 September 2009
Kyiv #4
10 ways to buck the economic downturn
As wealthy as some Oligarchs are, we have not eaten any oysters in Kyiv.
Nobody is impervious to the global economic crunch. Indeed, had it not been for the untimely demise of western investment banks – our Ukrainian client may have been acquired by some expansive foreign interloper. Our client had readied itself appropriately – put the dressing on the dummies and placed them in the window. The rest of the store was somewhat empty but in ‘those heady days of 2008’ – who from the west wouldn’t invest over a billion dollars in this 5 year old enterprise without looking too deep? In the west many did (to their eventual discredit), but timing and the ill wind of economic change determined that a less lucrative solution would await our client.
Working with them, we witnessed what we coined as the ‘Top 10’ activities that entrepreneurial businesses need to posses to survive.
- Be Prepared
Appoint fasEo Consultants to open your eyes and bring new and challenging concepts of management and organization in the face of a financial meltdown. (we like that one – but in truth we arrived before the crisis, so we do recognize that coincidence had a role to play).
- Build Team Spirit
Engage the senior management in a business focus session to discuss strategy and forge working parties to solve the organizational challenges. (we led the client team through two days on board a riverboat – exploring strategy and developing behavioral habits and team awareness. We worked hard and played hard. We discovered that the accounting team were good at numbers and had great figures).
- Manage Processes
We set about developing a methodology to look at the way that the business was managed and led. We created plans to explore processes and roll out a staff wide education program. (when the credit crunch hit, our client was forced to reduce the workforce and reengineer the remaining processes. Action is better than inaction).
- Reengineer the Business
Picking up the remaining workforce, a team was assembled to reengineer the client back office functions. Our solution was to commence a self assessment that would then lead to a program of continuous improvement. (It is critical to have the people who do the work involved in every stage of a process improvement).
- Refinance the Balance Sheet
Global crisis brings out the best and the worst in all institutions and Governments. Not unlike anywhere else, the Ukrainian Government – probably casting an eye to the UK and US, agreed to support the Balance Sheet, with the proviso that financial institutions in Ukraine must cease unsecured lending and increase liquidity. (we wondered at the queues outside most banks – but when asking what was happening, the less pc answer was that customers were making lots of deposits. We knew that to be old style Soviet rhetoric!).
- Redefine the Workforce
We know people who have been offered unpaid leave, forced on unwanted vacation and we have seen many jobs cut. The personal tragedy of this unwelcome economic bullet is difficult on the human capital involved. (our client elected to implement a performance pay so that employees would feel part of the solution as they rode the storm together).
- Stop a Run on the Banks (Don’t refill ATM’s!)
The best ruse to stop your customers drawing down their money – don’t refill ATM’s. Card acceptance in Ukraine is at best underdeveloped. So we too joined the queues of people wondering where they may locate an ATM and obtain some spending money. The alternative was a half day wait outside a bank to see a teller and complete swathes of official papers. (this brought the economic crisis to our very doorstep. Ukrainians accepted the delays with natural grace. We recalled some months previously seeing the same situation but less happy clientele at Northern Rock in the UK).
- Undertake a Customer Satisfaction Survey
Yes, really. We wholeheartedly believe in the Customer viewpoint as being the determinant for success. Stop issuing credit, block ATM’s, endure the worst crisis since the 90’s (Ukraine) and then complete a survey?? (we were taken aback by the timing – but the bravery of our client was never in doubt).
- Write Propaganda
Communication is vital for any organization to develop internal and external perspectives for customers, investors, analysts and staff. Never more so than when a country is facing rampant inflation and a falling currency that unnerves even the wealthiest of consumers. (it is critical to talk – but tell the truth even if it hurts).
- Open a Museum
A what? When the financial sky is falling down on most businesses, our client determined to open a museum dedicated to their 5 year heritage. (we probably needed to be Ukrainian to understand this move, but it is without doubt a measure of our clients creative spirit. A smile in an otherwise tough period of business history).
In the words of Jonathan Swift – “He was a brave man who first ate an oyster”.
We like to think ‘he’ was a Ukrainian entrepreneur!
Kyiv #3
All the notes are being played…..
It is often said that a poor decision is better than no decision – and we used to agree
Having experienced many different organizations, we still wonder with some surprise, at how often we meet members of a management team who simply “know best”. They know their job, their subordinate’s job and in turn the whole cascade of activities that follow. Or they say they do!
One CEO we met with recently ventured to say – “all I need is for every employee to do exactly as I would do – then all will be good”. That’s King Julian. His view of delegation was micro management, venturing upon cloning! At the other end of the scale – the “full-on” entrepreneur has been seen to abdicate rather than delegate. Not for him, or her, the mundane task of running a business – it’s all about ideas. Ideas that come racing in and out of the business, with the rest of the team unable to keep pace or make sense of it all.
Neither CEO is wrong – but each model is flawed and in need of support before they face probable failure.
A lack of clear organizational structure and accountability – particularly in a business environment that is built on low communication – results in a demonstrable slow-down of decision making. Even the smallest of decisions escalate to the highest level for approval and subordinates do not seek to use their creativity, knowing their plans or suggestions will be blocked or at best delayed.
But hang on – this is about consulting in Kyiv and not a serious business blog (or is it?).
In the hours following our work assignment, we ventured into many restaurants that abound the streets of the city. Indian, Chinese (admittedly not many but excellent), Georgian, Italian, Sushi bars (everywhere) and the numerous lunch-time specials.
Oh, and let’s not forget the Irish Pub at the Golden Gate – a particular favorite (recall that EPL football is a critical).
So how are most restaurants organized? Well it is often pot luck. Soup, if ordered may be warm, cold or hot. It may arrive first – or last… or often all courses arrive as one. Your meal may arrive – but your colleagues might not….
If you are in a rush – lunch will take 45 minutes before all courses arrive as if on the same bus. If you are looking to kill time – the service delivery becomes suddenly improved. Why is that? Is it just a jaundiced view from some quirky consultants who like to poke holes where none exist? Maybe. Maybe not!
Our observation is that in this developing economy we have sacrificed some of the planning for instant solutions. Stuff is delivered ad-hoc.
In a language (Russian) that cannot differentiate readily the meanings of ‘effective’ and ‘efficient’ – or translate the word ‘enable’ we seem to have found the root cause.
While we see that our paradigm is clearly challenged, at the end of the day business gets done, meals are served and food is eaten. But with better planning and process understanding the result would be a more pleasing and satisfying experience for all concerned. What would Gordon Ramsey say if he came here? HE WOULDN’T!!
So the developing machine pushes Ukraine forward at a mighty speed. But the organization and structure will need to be put in order. We have punk music where we are expecting melody!
In Kyiv, all the notes are being played, but not (yet) necessarily in the right order.
Kyiv #2
“It’s OK – that’s Ukrainian time”
Porsche, Bentley, RR, Mercedes, BMW – all pimped and racing through the streets. Ladies strut their stuff in the highest heels and shortest skirts; guys hang out in street bars smoking and drinking. No, we are not in downtown LA or on the French Riviera…
– but in the former Soviet State of Ukraine. Kyiv – the capital city.
Intermingled with this noisy and polluting view of the city are parks that offer tranquility and a chance to share a beer and perhaps a game of chess.
Without doubt we could see that this city – like Warsaw (Poland) some 15 years before, is mobilizing. There is a lot of energy and deals are being struck. The significant difference here however is that when the communist system fell it bequeathed a lot of wealthy mini magnates and true oligarchs in its wake. The $100,000 car is the status symbol here that gets you noticed first… and there are cars a-plenty. But cutting through this noise we see a large population of people who are still struggling to make a living wage. The people in the park.
Home prices, hotels and restaurant bills in the city are comparable to London and New York. Yet, average monthly wages are no more than $350. We are in a city where the ‘have and have-not’ societies co-exist with relative appreciation of each other. Mercedes cruise above ground and vast soviet-era subway trains tear under the streets moving thousands of people each day. Each faction is focused upon its own needs, everyone wants a flat screen TV and nobody wants to pay taxes. Much like the US we think!
The shadow – or ‘brown envelope’ economy – thrives. Government argues internally and the country is becoming divided upon a polar axis – with the east being drawn back toward Russia and fables of good Soviet days, while the west faces Poland and the EU, happy to turn its back in the sentiment “Glad I was not born a Muscovite!!”
Let’s not confuse things. Ukrainians, like their neighboring eastern cousins enjoy socializing, singing and dancing. Soon after arrival, our new work colleagues quickly introduce us to the concept of the Vodka Party. Essentially an evening gathering where the ladies are called upon to prepare cold cuts and set a table dressed with delicious food. The men watch, smoke and talk. With the food, comes the vodka. With the vodka come the toasts, to the hosts, to the guests, to the ladies etc etc. Each greeting delivered in a specific order, and each with heartfelt (and sometimes lengthy) sentiment overflowing with emotion. And it doesn’t seem to stop. The entire evening revolves around the table and the vodka – now conjoined by wines and beers. Many hours of animated talking, incoherent memories and a very, very, difficult day will follow. Our first lesson learned – never socialize with Ukrainians unless the next day can be spent ‘at rest’. And so to work…………
Being entrenched in our western paradigm we like to set meetings, write agendas, invite guests and arrive on time. That is really not the way that work happens with our client.
A 9am meeting can readily start at 11am – not all the folks will arrive on time and the agenda is really just a placeholder that is seldom referred to. “But you are 2 hours late for our meeting”. (we mumble in our exasperated manner). “It’s OK – that’s Ukrainian time!” is the answer. No malice – just fact. Then at the other end of the day – its 7pm, ‘can we have a meeting’ ask our Clients……..sure!
Work happens. It may be less organized than we want, but the people are well educated, hard working and keen to learn. Timekeeping will none the less be our first consulting objective!!
We are a week into our work. We have met a warm people who have welcomed us without question. Language challenges that make us all laugh. Westerners who think they know it all – easterners who want to listen and learn, and probably know more!
It will be an interesting assignment.
Kyiv
Seeking normality in New Markets
We landed one Spring afternoon in 2008 – before the ‘credit crunch’ and the subsequent wipe-out of normality. It was going to be our first CIS consulting project, spread over many months – giving us the perfect opportunity to see a new city and develop our international footprint further. Having worked extensively across Europe and most latterly in Poland – we knew that this would be a closely allied trip, in terms of language, culture and business development objectives.
Our sense of normality was immediately questioned when we emerged from the baggage hall without our bags – reassured that BA will fly them in the next day and that these things happen regularly (if not normally). Gently weaving past the many scruffy taxi drivers we found our appointed driver and set off along the large new highway to the city. Decamped at the hotel and having a couple of hours to spend on a bright Sunday afternoon, we gathered our map and proceeded on foot. Normality was again being challenged – the map had names translated to our alphabet… but the street signs were in Cyrillic. We pressed on however, making for Independence Square, which was so much the symbol of this free country. Ten minutes later we had been ‘arrested’.
While gazing at the skyline and across at people idly sitting around, chatting with beer bottles in hand, we were approached by a member of the police who asked in broken English to see our papers. In disintegrating Russian we replied that our passports could be found at the hotel. At this point our liberty was a matter of history and a visit to the police station ensued. We realized now that in fact Ukraine is not in the European Community and our version of normality was questioned.
After a walk through winding streets, as the sun set behind the tall grey buildings, and followed by a few uncomfortable hours at the police station, we were given our liberty by a large jovial police sergeant. Freedom was assisted by placing a small commission in his hand for services rendered to us. We had learned our first lesson. Commissions, bonuses and bribes are apparently normal means by which wheels may be oiled to enable the process of this new found capitalist society. Normality, but not as we know it, we thought (until we remembered the scandals and gigantic bribes that had plagued the UK and US this year!!). Who were we to question normality?
We left the police station, surprised by our first introduction to the beautiful city of Kyiv. We turned the next corner to see a Tourist Office (“so they do like foreigners?”) and across the next block a familiar looking Irish Bar. Like an oasis in the desert it provided draft Guinness, English language and EPL soccer to keep us busy into the night. We were in Kyiv, and normality had been resumed.
Over the following days and weeks we came to learn more of the culture and need for change that was fuelling a country with thousands of millionaires – as measured by the number of expensive and fast cars seen cruising the streets. All this wealth supported by an average workers monthly wage equivalent to 2 nights stay at a city hotel. Normality here.
We met warm, friendly, hospitable people who have an insatiable appetite for enterprise, learning and … vodka! Our Client demonstrated a desire for us to help them become western focused and to build upon their value proposition. They had already developed a western style structure, but with our assistance hoped to build depth in terms of managing the people, processes and results. We worked into the summer, developing strategy, vision and value systems. We sought ways of aligning the people to the vision, created work teams to focus upon critical factors which would add significant value for them. We had effectively seen a young business struggling with the challenges of growth and change – and moving into unknown areas with a positive approach. We created outline plans for deploying a Balance Scorecard approach to measure business critical activity with appropriate feedback loops.
Then the unthinkable happened – a financial crisis that had been gathering storm force winds in the US swept across Europe. Investing banks were in pain, funds were being pulled and losses sustained. The fledgling economy of Ukraine was hit with full force and banks’ liquidities fell into question as depositors withdrew (largely) dollar denominated savings, and the National Bank imposed measures to protect the economic integrity.
Normality would no longer be a ‘normal’ means of measure for any of us.
Look out for the next Letter from Kyiv!!
