Effective management is a guarantor of getting over the crisis

Myroslav Alexandrovich I understand that the theme of the crisis already is bored to death, and yet – what is the root cause of what is happening? European countries are almost solved the problem, while Ukraine is still in a dire situation? How can you explain this?

The question "Who is guilty?" and "What to do?" in relation to the Slavic people were raised long before the crisis, and our conversation. But, specifically, the current crisis exposed the lack of competitiveness of Ukraine. Government, business, society - is a triangle of responsibility. Neither side was ready for such a test. The political failure of the current government - a topic which has already been a lot said, and only lazy people today do not criticize the government now. The question that worries me, as a representative of the business community and as someone who has experience in managing companies - it is poor management that exists in all spheres of Ukrainian business. The responsibility of business is to be competitive in all conditions.


What do you mean by "poor management"? If the company lacks the financial resources or credit, if the majority of markets, such as construction, in the process of deep stagnation, how to overcome this situation by management?

The credit for effective leadership in any sphere, as in government and in the management of the company – is not to overcome but to predict. In any book on management theory you may find the thesis that the most effective method of control is in the daily expectation of the crisis. In other words, the leader must always be ready for what tomorrow may be a crisis and collapse of the market and will be stopped easy access to credit, that from the company’s development strategy will have to shift to a strategy of survival. As shown today, many companies were completely not ready, do not even want to think about such situation, and how to conduct business in other, more stringent conditions. Payment for such an approach proved to be too high for many.

The main goal of any leader should be the correct setting goals and objectives, in the planning functions. Competently and precisely formulated goal and mission of the company will develop a clever marketing strategy, set priorities, both short-term and long-term. Properly defined objectives – is 80% of success. I will response using your example - those construction companies which, as is customary in the world, hoped to build a facility for 40% of its assets and 60% of credit - now still exist and are fully capable to survive the crisis. Yes, so to speak, “tightening the belt”, but not close the company, do not loose everything, do not drive people to the streets. And the question is not so much the availability of credit resources, as its intelligent use. But who listens to the axioms and adheres to these “book” formulas, when the market is constantly growing? When it is a huge profit? Why need you invest the 40% of your own assets when the whole object can be implemented for borrowed money? And only those who understand that any credit - it is primarily borrowed resources and its use must be handled very efficiently now managed to stay afloat.

That is, effective management - is the right strategy? What about control?

In order for the business developed, before the team should be clearly formulated goal. When I say the term “developing”, I mean not in the abstract movement of money in the account of a certain entity. After all, what any business, any brand - it is primarily people. And effective management of people for me has always consisted of four main functions: planning, organization, motivation and control. Thus each of these functions should be given equal attention. Head, who pays attention only to control and organize the process, just plays like that, who does not control his team, because they both forget about such features as motivation. Of course, the main task of any enterprise - is generating a profit. And work on those profits should the whole team, from cleaners to the CEO. But to understand their interest in the profits should also the whole team! It is very difficult to explain to people why they should lay oneself out of one hundred percent at work, have long working hours, all of their intellectual ability to send to achieve a result when financially for them nothing will change, regardless of whether this result is achieved or not. And the result, once again, this is the profit. Another business results can not be.

The main problem today is that many managers prefer to “wait till the crisis is over”. Do not look for ways out and innovative solutions, but simply “step aside” and wait until “everything comes back”. Such people decided financial problems of the company by mass reduction of its staff, closing branches and so on. With effective management can not be a reduction in staff by 60%. Clever director or owner did not allow himself to lose professional team in the creation of which was invested time, effort and money - payment for recruiting companies, trainings, etc. But this is only if the formation of the team came up with a clear understanding of goals and tasks to be performed by this team, if the company employs only people who really brought the company’s earnings and contributed to its development.

The main problem was that the majority of Ukrainian companies have overextended staff personnel. Most part of the staff got salaries several times higher than their level of productivity. In other words, there were not enough professional managers in each team. Most of the staff had very little obligations and responsibilities but demanded payment like for very professional work. This is one of the main problems of today’s labor market - the level of skills is not worth the financial desires. This is the wrong balance between the organization and motivation between the control and planning.

In other words, the company where strategy was correct, and effective management, there were no reductions?

They did without massive cuts. Perhaps some sort of reduction of the staff they had to take, but these were isolated incidents and not the dismissal of 50% of staff. The company is always two ways to increase your profits - it is either to increase sales of their services or reduce their costs. The crisis was the catalyst for many companies in terms of adjusting their strategies, accounting errors overstaffing and mismanagement. As a financial advisor for M&A market, I want to stress that in assessing any company is taken into account not only the level of profitability, but also the efficiency of management, professional team, and competent marketing strategy. And even in the current crisis there are a number of companies that continue to generate profits. It is not in such quantities as it was before but still it is profit. Once again I want to emphasize - it is the human factor - 85% success. Ancient wisdom - do unto others as you want them to do unto you. To paraphrase it in terms of personnel management – be such a leader like you may wish for yourself. And the main cause of the crisis in business circles is the low level of social responsibility of many leaders. Many of them have been tested by crisis.

And what, in your opinion, can be ways to solve this problem?

It is unlikely that I may invent something new. Everything I have already mentioned describes dozens of books on effective management and personnel management. The trouble is that these truths in the era of super-profits are do not listen by anybody. Everyone begins to invent their own rules and laws. In the result – it is the crisis and anarchy.

In order to overcome this crisis must return to the more efficient investment management, more balanced and rational relation to credit. If a company makes a competitive product that occupies a certain niche in the market, clearly aware of its goals, objectives and requirements, financial problems are solved completely by attracting a strategic partner. Unfortunately, in Ukraine market M&A are still only in development and many of today’s companies cautiously perceive the moment of absorption of its assets by larger players. Yet another proof of effective management and proper prioritization and focus is the ability of the head in time to realize the need for the sale of assets or attracting financial partner. In this area, the crisis may even play a positive role - breaking down stereotypes, and changing approaches to business, there is a reassessment of values. The crisis is a threat, but it's a chance! The chance for each company to see their own mistakes, a chance to build a more effective system of governance, accents, set priorities. Moreover, every leader must realize for themselves - in business can not "stay", a business can only grow. The strategy of “wait till the crisis is over” - it means stagnation and decline. Therefore, we must clearly realize the need for change, which must start from yourself.

Our Contacts

Ukraine Kyiv mtinvest@mtinvest.com.ua

Twitter Facebook