Alex Lutskiy’s interview for Business Journal
In Ukraine, there are many companies that have been working in the same old ways for the last 20 to 25 years. But, the world has changed greatly. And these companies, little by little, face a variety of difficulties.
Previously, 75 to 80% of businesses catered to the internal market and post-Soviet countries where basically there was no competition, and almost all matters were dealt with through administrative intervention. Companies needed to compete neither on price nor on quality; they simply came into existence and worked.
Now, they are having trouble making big profits. Their way of thinking must be globalized. Such companies must make sure their services and products target not only the domestic market but also the whole world, as it is in many countries.
To achieve positive results, things that have not been changed for the last 25 years, need to be altered. Topping the list are a mindset, management, and business processes. They have to shift from resources to technology and build up high-quality services with competitive prices. Investors must be attracted which is not easy. After all, investors do not plow money into products but into teams.
Young projects launched with due consideration of modern conditions are more competitive and more flexible. And large global companies understand that agility well. To be innovative, firms have to be flexible and fast.
“Monsters” cannot generate that but, they have money. Thus, they buy small promising companies and implement innovations.
I think, soon, we will see many young, promising companies in Ukraine. In fact, they are already emerging. They are new, unbiased, and initially seem to think differently.
In such situations, shareholders and owners of large, “old” companies need to take a close look at themselves and figure out in what their resources should be reinvested to improve.
Keeping it that way is impossible for surviving and thriving. Large companies are stiff, stagnant, and inflexible in virtually everything: from their way of thinking of management to business processes.
If everything is done manually, you cannot compete; you need to invest in changes. It is no longer possible to work on the principle “now it’s earned and that’s good.” You can’t live in day-to-day existence. You must build strategies for a year or three or five to come.
The current economic situation shows that if you earn today but do not reinvest the funds, then in a year, you might not be in the market. Things are changing that quickly. Profits must be invested not in “the pocket” but in the business.
The transformation of large holdings may take up to three years. On the other hand, this time depends on ambition and willingness to grow. But three years is often too much. It’s better not to change the whole corporation all at once, but rather to set priorities, draw a roadmap and get changed little by little, step by step. If everything is changed at once, it may not necessarily work out. Therefore, it’s better to follow the principle: one thing changed and brought to the market as you move along. And thus, in half a year, it’s possible to be more innovative in at least one product or service.
And move on little by little. Constructing a large ship all at once is not realistic.
It is not easy. Not everyone is ready for this. But those who succeed will change and will earn. What is important is the willingness of business owners to evolve.