How Ukrainian Management Differs from Open Market Management System
Frank Pucelik considers that 13 years of experience in consulting and coaching in the CIS on Leadership, Motivation, and effective interaction questions allows him to judge the specificity of Ukrainian market. Due to his opinion, domestic market has grown and changed greatly by nowadays, many firms collected priceless work experience and some managers has got professional education. However, due to Mr.’s Pucelik words, “from the business organization point of view companies look very poor”. The reason, according to his opinion, is that Ukrainian managers are not real professionals, who, in their most, continue working by the laws of closed market and accept the rules of “that game”. “Most of them lack professionalism and they absolutely can’t plan their company’s activity. Because of that, they considerably shorten life time of their company”, - tells Frank in interview “&” the president of “Pucelik Consulting Group”– Frank Pucelik.
“&”: Mr. Pucelik, you’ve got a lot of experience not only in USA, but also in the CIS. Why did you choose Ukrainian market, what it is connected with?
F. P.: I focus my attention on Ukraine knowingly. The explanation is simple: to my mind, the future economic centre is located here. My opinion is not the only one – the majority of serious companies that work in open market think the same way. Kiev is not only very beautiful city, but also the most progressive one, even compared to many cities of Russia. The changes that are going on here witness about this. Let’s compare streets, cars four years ago and now. People changed – they became more self-confident, full of energy, goal-oriented.
On the other hand, there are cardinal changes in Ukrainian business, which has passed a long way in its development. Many companies, that changed their approaches to business, became true leaders. Others try to work using foreign experience and reach success in their desire for good results. Besides, the quality of managerial level increased greatly. Though, there are still plenty of problems and disadvantages: many managers don’t have professional skills, that’s why they are not able to plan clearly their firm’s activity. But, in general, the market is perspective and I see a great potential of management.
“&”: How would you characterize Ukrainian top-manager?
F. P.: To my mind, there are two powerful groups existing in Ukraine. One is the old-fashion heads, who learn only what’s necessary. They resist all possible changes because they don’t understand how new systems work. Usually they are ex-officials, who have necessary connections and control huge amount of money. They are effective within the frames of their power. Some top-managers of that group understand that their “golden age” won’t last long, so they make steps towards new business. From time to time I meet some pleasant surprises: I’m invited to big companies, where such director decides to change everything and correct his mistakes. I always help such people with pleasure.
Different type of managers belongs to the second group, these are smart young people. They “aggressively” absorb any information, make experiments, try to introduce new systems, study marketing, leadership approaches, etc. Of course, these managers at that level make a lot of mistakes, but they are only learning. By the way, they learn much quicker than the same group in any other country. They create really new Ukraine, improve living standards, work and earn, invest money in their business, thus investing in their country. Such “tops” pay the best salary to their personnel, teach their staff modern methodology, and create real companies in a beautiful open way. Thus, company has its mission, managerial and marketing systems. I pin my hopes on that group.
«&»: What is the main difference between Ukrainian and Western managers?
F. P.: Absolutely, there are plenty of them. But the main difference is that Ukrainian top-managers were brought up in conditions of close market system till now and, as a rule, they apply rules of “that game”. But modern market implies participation in competitive struggle and requires following principles of open market system.
«&»: What is the “weak chain” of Ukrainian manager and what does he need to correspond all changes that take place in the market?
F. P.: The weaknesses are skills which are necessary to prevent possible difficult situations in the company. Even though it occurs, they lack knowledge of systematic procedures that allow solving a problem. For example, how manager should create and organize project team (gather participants and distribute tasks among them), what preparations are to be done, what resources are needed, etc. Most of situations, that Ukrainian businessmen call “force- majeure”, are, actually, the result of planning absence, which allows avoiding crisis situation without waiting to solve its consequences.
As known, to prevent a problem costs five times cheaper than its solution. What do the most of Ukrainian top-managers do? They drop into business panic, which can be compared to fire extinguishing, when all methods are good. All possible methods are used here: starting from mass employee firing to changing company’s direction in business. It is possible to “extinguish a fire” happily only one time, but this doesn’t make us closer to problem solution. It works backwards and produces bad habits. Success, reached by the means of wrong strategy, is very dangerous. People start to believe in their ability to run into “building in fire”. But further attempts may lead to company’s death.
«&»: Is tactics of “fire extinguishing” in crisis situations inherent only to Ukrainian management or USA also faces it?
F. P.: I wouldn’t say that USA is an exception and there are no crisis situations. They take place sometimes, but it happens very rarely. Besides, they are always solved with crisis management approaches. Such approaches and procedures exist, but they require a certain type of combination, discipline, and developed skills, etc.
“Force-majeure” in Ukraine is a common, every day occasion. Another case is the approach that is used to solve problem at the very beginning. For instance, two Ukrainian companies, which deal with food wholesale and retail, receive an invitation to conference on record-keeping in Kiev. One company sends its accountant there; the other considers it to be useless waste of time and money. As a result, the first company closes its sale points for an hour in order to change price-lists, and start new computer program, and makes other changes which were discussed on the conference before they come into force. The other one, in turn, closes for a week crying “force-majeure!”. As a result, total loss is 30% of permanent clients. That’s why you can’t say that planning in Ukraine is impossible.
«&»: You were saying that Ukrainian top-managers had been brought up in the conditions of closed market, that’s why they still implement rules of “that game”. May it be the major problem?
F. P.: Indeed, old styles of closed market are commonly used, because there is no Ukrainian management system. It is in the process of change and represents ineffective combination of closed market habits mixed with people’s understanding of open market system. But it works very seldom. When it doesn’t work, people count on what they know – connections, power. And only after several failures they come to the fundamentals of open market. There is a hard struggle between these two systems that has led us to some temporal state that is characterized by balance between them in Ukrainian market. I hope that open market system will take control here over time. But, at that, there should be respect to traditions without total elimination of existing practice, which is already present here combined with proper open market systems. That’s why my main goal in the beginning of my work in Ukraine was to give open market experience and connect it with the use of existing values to strengthen that good that we already have. To my mind, originality of my experience is concluded exactly in integration of two systems.
«&»: Can you give certain examples on the rules and principles combination of close and open systems?
F. P.: Most of Ukrainian structures have employees whose duties are “solving” close system “questions”. It is normal at present situation. At the same time, the rest of the personnel communicate with clients, suppliers, etc., and general communication and work styles should correspond to the rules and principles of open market system.
«&»: According to your words, Ukrainian managers fail to have professional preparation. But today, a lot of companies pay attention on education of their managerial personnel. Besides, foreign consultants are usually invited for this purpose more often than domestic. What do you think it is connected with?
F. P.: Most of the “advanced” companies here came up to understanding that professional skills are necessary in order to be successful in business. But Ukrainian consultants don’t have experience of work in the open market. Many of them didn’t work abroad, that’s why they teach to be “the best among the worst” rather than “best of the best”. At that, most of foreign specialists have knowledge only about open market system. So, they recommend only following its rules and they have no idea about the “niceties” of Ukrainian business reality. I feel ashamed for what foreign consultants bring here. It seems like they didn’t do their “homework” before coming here. Moreover, they come with initially bad attitude, considering this place to be “inverted”. They don’t understand they have to give up their confidence that they are teaching “poor”, “unhappy” people who simply don’t know what to do. I’ve been working in the open market for 25 years already and I know how they work and think there. But markets are diametrically opposite and before teaching someone you are to learn a lot. That’s why Ukrainian companies have to be very careful with choosing a consultant, because it is possible to lower company’s effectiveness instead of raising it.
«&»: What methods are really effective, but not used by Ukrainian companies?
F. P.: I think there are things that are missing very often. First, most part of the companies in Ukraine don’t have effective system of using information. Second, domestic managers can’t create positive psychological motivation yet. As for the first point, information is a key to success in the competitive market. In the closed market information is stored and controlled and it is almost impossible to create effective business information systems because of that. They are commonly used as a missing element. This is one of the reasons why functioning open market companies experience difficulties here. They don’t know how and where they can get information and find out which data is accurate. Besides, this information changes every day and this makes the process of getting it even more difficult.
«&»: Which of the USA market trends have you noticed in Ukraine?
F. P.: Indeed, some of these trends became noticeable in Ukrainian market. Among them are: monopoly disappearance, increase of competition, increase of quality information value.
30 November 2003, interviewed by Alyona Kiryakova
At materials: http://www.companion.ua
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