WHAT COULD UKRAINIAN ENTREPRENEURS TEACH THEIR COLLEAGUES FROM PROSPEROUS ECONOMIES?

           Among the instructors at the Swedish Institute of Management, where I recently underwent training in the Develop Your Business program, one person who stood out was 79-year-old Chris. He had been involved in business and management throughout his life. During one of the sessions, Chris told us that he had been observing Ukrainian entrepreneurs since 2006 and noticed a tremendous breakthrough – from superficiality and a desire to socialize instead of learning to awareness, systematic thinking, and scalability. Aside from being proud of our Ukrainian counterparts, I have had a few interesting insights.

           I've been in business for 30 years, with almost 20 of those years dedicated to continuous learning, including business wisdom. We used to be inspired by economies in the West: Europe, the USA, or in the East – Japan or Singapore. Often, we underestimate our own knowledge, skills, and experience, admiring advanced economic models. This truly helped us broaden our horizons and refine our business processes.

           But here's what's interesting – we didn't halt our companies during times of war. For me and many other entrepreneurs, it was the skills acquired during the turbulent 90s or crisis-ridden 2000s that proved invaluable, rather than what we learned in business schools. I describe illustrative cases in my book, "It's not f*king MBA: Hard Business Lessons of the War against Ukraine." Let me give you a few examples.

           Flexibility and adaptability

           Ukrainian entrepreneurs approach business as if it were their favorite toy, allowing themselves to experiment against protocols and established rules. Sometimes, this leads the company straight into a pitfall, but other times, it saves it from there.

           One of the heroes in your book, the owner of a water bottling and beverage production company, made a daring experiment that saved his business during the war. A few years ago, he stepped back from operational management, observed the processes from the sidelines, and realized their inefficiency. So, he decided to downsize the company from 350 to 50 employees, effectively eliminating the marketing, sales, and warehouse departments. Today, he is the only one in Ukraine selling water online with a 100% prepayment model. This bold move showcases the willingness of Ukrainian entrepreneurs to take unconventional steps to adapt and thrive in challenging circumstances.

           Efficiency improved as meetings and contradictory protocols disappeared, he explained. Sometimes, bureaucracy within a company can reach a point where it hinders customer service due to excessive internal paperwork.

           The new business model and fiscal restraint in investments allowed his company to accumulate a substantial cash reserve. "Without this cushion during the war, we would have come to a halt," the owner admitted. "Nobody pays on one hand, and nobody releases goods without prepayment on the other. In conditions of a cash shortage, people couldn't even start a process to earn something. His company, however, could easily pay for raw materials.

           Another bold pre-war experiment of my colleague was abandoning rigid annual planning. The main focus was whether the company was moving forward or backward in terms of revenue and demand for its products. According to the case's protagonist, conventional business planning often fails to account for rapidly changing realities, planned goals lose relevance, and we stubbornly stick to the figures agreed upon at the beginning of the year. Furthermore, being fixated on plans, we miss out on market opportunities that emerge on the fly. So, after several years of operating under such a model, when the war began, the company continued to work in its accustomed mode – uncertainty and chaos didn't scare it.

           Speed, assertiveness, and the owner's readiness to return to the helm at any moment were crucial factors. "We survived thanks to speed and perpetual hunger, and not only during the war," said another hero of the book, the owner of two large grocery store chains with over a thousand employees.

           Unlike companies in prosperous economies, we never had anyone to rely on except ourselves. You couldn't get a loan for a business idea, and the government or investors wouldn't help. We've always been hungry and always on our toes, and this nurtures a fantastic ability to make quick decisions and changes that might seem uncivilized from the perspective of the "civilized" business culture of the Western world.

           "In Europe or the USA, would we allow someone to call you from work on a Sunday evening? Or for the owner of a retail company to curse out the owner of a supplier company at night? You'd get sued!" mused the businessman.

           Some of the stores from both chains operated in southern regions, which, in the early days of the war, found themselves under heavy enemy fire. Turnover dropped by 90%. Quick decisions and reorganization were necessary. One of the three partners took control for a day, temporarily displacing management. They opened stores in western regions of Ukraine, swiftly relocated employees who were willing, along with their families, and adjusted business processes in the new conditions. Decentralization of the company proved to be a significant help. According to one of the owners, only twenty people work in the central office, even though in a business with such a turnover, there are usually more than three hundred. "You could say that decentralization saved us, as most critical issues were resolved on the spot," says the retailer.

           Human relationships, instead of paperwork or protocols, played a pivotal role. As one of my conversational partners put it less eloquently, "Get it done, no matter what." There are things that cannot be written down in instructions or protocols, and that's human relationships. In crises, these relationships take the forefront, surpassing procedures and regulations. Spoken words and commitments become more important than pieces of paper with signatures and stamps. This is how we built our companies in the chaos of the 90s, and now circumstances have brought us back to these roots.

           "With the onset of the war, manufacturers shifted to working exclusively on a 100% prepayment basis - no postponements. This completely disrupted the market and established processes," cites an example of the founder of the trading mentioned above company. Only through negotiations at the owner level could some solutions acceptable to both sides be found. "We told our suppliers: today, you're in a good position, but tomorrow, the situation may change, and you'll be begging to get on the shelves again. And ultimately, through long, emotional, and often unpleasant discussions, we managed to find partners and reconstruct mutually beneficial conditions," the retailer says.

           In his opinion, somewhere in Western Europe, where the owner of a large company doesn't participate in operational management and management operates by protocol, the business would have long since come to a halt. In our case, no protocol can stop the owner from making a decision to return to management in the middle of the night and, with a single act of will, restart processes or make a call to someone whom no manager would dare to call.

           Two days before the war started, a Swiss machine worth 700,000 euros arrived at the Pet Technologies factory in Chernihiv. It was supposed to symbolize the company's transition to a new level, a higher league of equipment manufacturers, but it became a symbol of constructive stubbornness instead.

           Only a certified company could start such equipment. For almost a year and a half, the machine, which we jokingly call the "Rolls-Royce," remained idle due to Switzerland's neutral status. During the war, Swiss companies were prohibited from doing business with both Russian and Ukrainian businesses.

           We didn't wait for favorable conditions. What were we supposed to do? We made late-night calls to our acquaintance who worked for the Swiss company. During those times, he could speak as a private individual, not a company representative. Our conversations lasted for hours - he understood everything, so we sought solutions together.

           The warranty for the "Rolls-Royce" lasts for two years - not from the moment it's launched, but from the moment of delivery. If we had started it on our own, we would have lost both the warranty and the right to purchase unique spare parts from the official representative.

           They say that Ukraine will need at least five years to rebuild its economy after victory. In our circle of entrepreneurs, we often discuss this idea. Whose approach is more effective: the Ukrainian approach, which I would call "creativity on the brink of madness," or the "correct" approach we are taught for a lot of money? Both! The first helps us save our companies during the war so that we can implement the second approach after it's over.