Philip Morris was one of the first foreign companies, which in the mid-1970s began to work in the USSR, and in the mid-1990s, – to master the market of independent Ukraine. Founded over 170 years ago, the company has not lost its market flexibility now. The company does not get tired of reinventing the business model and the logic of personnel management. This allows it to increase sales even in the conditions of radically changed trends.
Irina Vladimirova, Director of People and Culture at ‘Philip Morris in Ukraine, the Caucasus, and Moldova’, spoke about how to work with the personnel when you change the course of business, how to innovate in HR, to motivate employees and to nurture professionals within the company.
Your business card says ‘Executive Director of Staff’. In the international business community, the person in charge of the personnel is perceived, actually, as the second in charge after the CEO. Do you agree with this statement?
Yes, this is a well-established international trend, and Ukraine is quickly adopting global trends. Actually, any business consists of a business idea you are promoting into the market and a team working for the result. Therefore, in today’s world, you can copy an idea, be it a product or a service, in a short period. To copy a team with its unique set of skills, attitudes, and culture is extremely difficult, and it takes years.
Once people were looked upon as a resource or personnel. Now people are a capital
Once people were looked upon as a resource or personnel. Now people are a capital. An employee is not just working for the company. He is a co-creator of the values and culture of the company. He can take the company to a new level, not only by his skills and knowledge but also by offering new approaches and generating ideas.
Previously, my position was titled ‘Human Resources Director’. Now it has transformed into the ‘People and Culture Director’, which best reflects today’s approaches and attitudes towards the staff, its value for our company.
You have been working for the company ‘Philip Morris Ukraine’ almost since the first days of its existence. How has the company transformed over the years? How have your tasks changed?
‘Philip Morris’ had entered the Ukrainian market in 1994. Business was actually built from scratch with a new understanding, cut off from the former USSR habits. Our factory was an example of how an enterprise with well-established approaches of the Soviet economy is changing under the influence of Western capital. I started as an intern. HR, as a function, did not exist in Ukraine at that time. The company was recruiting graduates who had not yet been trained in accordance with an outdated system, that is, open-minded, ambitious, development-oriented young people, with a knowledge of English. Therefore, my journey is that of transformation with the company, when I had the opportunity to find myself, to try myself in different roles, at different levels and geographies.
You are a large company, and at the same time, you are looking for people with an entrepreneurial spirit: proactive, understanding their influence on the ultimate result, and responsible. For all this time, have you ever felt yourself a cog in the system?
A large international company quickly assesses your capabilities and immediately sets a high bar for you, which gradually raises higher and higher by offering to perform tasks that are more complex
Building a career within one corporation has its pros and cons. I see many positive points: for example, you can analyze what is happening in the company and why; at what stage of the development the company is. In addition, a large international company quickly assesses your capabilities and immediately sets a high bar for you, which gradually raises higher and higher by offering to perform tasks that are more complex. There is a good English word – stretching. This is what a good company does to you – it develops you by stretching the limits of your opportunities.
I have been working in the company for over 20 years. It is interesting to observe how the rules of the game change even in system companies when they are infected with the spirit of a startup. For example, we went into the sphere of innovation, and this required us to rethink our own expertise.
After 170 years of working in the market, a world leader in its industry makes a bold decision: «We change the mission, we change the focus, and we go to the territory of technologies that will change our traditional business.» How fast can we transform? How do we allocate resources between the new direction and the established business that allows us to launch this new one? How should you say in the company that some employees today are moving to work in an innovative direction, while others need to wait for a while?
And how did you solve new tasks? Have the approaches to working with the personnel changed in the conditions of the transition to the unknown?
The faster you test a new approach, even after making a mistake, the faster you will get a new experience, and as a result, new knowledge – the better achievers you will be.
In two years, we have evolved from a team of seven people, which launched IQOS as a pilot within a ‘closed club’ in Kyiv, to the point that the whole company now works in two directions: our traditional cigarette business and innovative products. A smoker can purchase IQOS and get a decent service. It was not easy. A new product was launched in more than 40 markets, and we receive support and advice from our global office. However, when you enter the territory of innovation, the business model will inevitably be tied to local realities. It is impossible to implement a ready-made plan from the center in all 40+ countries. You creatively fulfill the tasks in your market. You are trying, watching. Does it work or not? Trying again and testing new approaches again. And this is the main difficulty! We were a perfectionist company — first, we brought the product to the ideal and then had launched it to the market. Now we are breaking the old model and telling our employees: “The faster you test the new approach, even making a mistake, the faster you will get a new experience, and as a result, new knowledge – the better achievers you will be.”
Startups have almost no fear of mistakes. They do not aim to launch a super-high-quality product from the very beginning: they produce a prototype and refine it along the way. And we have to exist in two paradigms: in traditional business, everything should be perfect, in the new one — you have to constantly learn, bumping your heads, apply the gained knowledge, learn again and change, change and change again. There is even an expression that every startup dreams of becoming a big corporation and conquering the world, and every big company tries to remember how to be a startup to reach a new level.
EVERY BIG COMPANY TRIES TO REMEMBER HOW TO BE A STARTUP TO REACH A NEW LEVEL
In what proportions do you have now the innovative and the traditional business? How many people are working in innovation?
Everyone is involved in the new project, but the degree of involvement is different. Some people work 100% of the time for the innovative business, others – only partially. After launching a new product, we set a goal to involve every employee, even those working in the traditional business in new functional responsibilities. We have created the employees engagement program. It helps everyone to learn everything about the new product, to understand how the business model works, what skills we need now, and to get a real opportunity to try out new business by converting adult smokers among their friends and acquaintances into IQOS users. Here it is necessary to remember a very subtle, but important detail: we target IQOS only for adult smokers who deliberately made their choice in favor of tobacco. We had to train the whole organization.
Analyzing the tasks that you face, tell me, have you achieved the plan for the new product?
The plan will be achieved when we switch 100% of adult smokers to innovative products. We cannot predict when this will happen. If everything depended only on us, then even tomorrow. Many external stakeholders are involved in the process — from regulatory authorities to the general public. Moreover, when I say ‘we’, I mean not only our company but the industry as a whole. It used to be difficult for tobacco corporations to talk about their mission. Now it is clear: we want to improve the lives of smokers and offer them an alternative. For me personally, this gave a new deep meaning and significance to things in which we invest our time and effort.
Thus with the new line of business, have you left your comfort zone?
We not only attracted new specialists with new expertise, but also paid a lot of attention to training our existing employees
Of course! We have long worked in a well-established business, where the rules are clear, where there is an established system of business processes and personnel training. And here we go into a completely different business segment, where a number of new directions are opening up for us in which we have not yet worked: digital technologies, customer service, retail brand. Therefore, we not only attracted new specialists with new expertise but also paid a lot of attention to the training of our existing employees. Moreover, it had to be done quickly! We had to introduce innovations, not in a small company of 30-40 people. In Ukraine, we have 1,300 employees, and in the Ukraine-Georgia-Armenia-Moldova cluster, there are 1,450 people. Different levels of employees — managers, mid-managers, specialists, and analysts — are undergoing conversion at different times. Characteristics necessary for transformational leadership crystallize out along the way. For example, resilience – the ability to continue the movement, despite any difficulties.
Do you have a big ‘People and Culture’ team?
There are 14 people in Ukraine. It is not a question of the number of employees; it is about the tasks, which they solve. Automation and digitalization help us a lot. Against this background, our division should fit into the new trend of providing our employees with quality experience (Employee Experience — EX, similar to User Experience — UX). It is necessary to establish effective business processes and to provide such working conditions for employees so that they would be happy to work in the company and not feel like cogs of the system. Some of the colleagues in our department deal with issues of employee training, their involvement; others work with the business, and there are several divisions of expertise. One of the key areas is to attract talent in the broad sense of the word. We do not just select personnel but build up an image of us as an employer. We develop programs for potential candidates, for example, the Philip Morris Business Academy, which sessions we conduct in five cities of Ukraine. To date, we are practically not using the services of recruiting agencies and now deliberately consider people with completely different skills and attitudes that are radically different from those we were looking for before.
One of your colleagues said that the employer’s market was replaced by the applicant market.
I would not say this was relevant for all positions and profiles. There are many companies and industries where the employer market still holds. But when we talk about new approaches, about innovations, then this is undoubtedly the market of the applicant. More precisely, there is no longer a notion of ‘an applicant’: he is not looking for anything at all. Employers are looking for him. It becomes more and more important for an employer to understand the deep needs of a professional in order to integrate him correctly into a new team and, more importantly, to prepare the team for his arrival. After all, integration is a mutual process.
How do you increase the engagement of your colleagues?
IN OUR NEW CORPORATE CULTURE IT IS IMPORTANT TO LEARN FROM MISTAKES
We have conducted several events, where our directors shared their experience of mistakes and spoke about the consequences of these mistakes, as well as the lessons learned from their experience
This is an interesting question. The key element was to explain that in our new corporate culture it was important to learn from mistakes. We conducted a series of events, where our directors shared their experience of mistakes and spoke about the consequences of these mistakes, as well as what lessons were learned from the experience. Such events are held in the Learning HUB, which can be visited by any employee.
We also introduced the practice of training the leaders by the employees. Last year, mentors were chosen for directors among the younger generation. On the one hand, they can communicate not as a boss and a subordinate, but as equal people. On the other hand, those who work for a company not long ago often see the picture more realistic and can tell how a new initiative is taken at the grassroots level.
In addition, we launched a Transformation Academy training for the management team. The schedule was quite tough: 12 weeks of practical training — each week a new task was given, different from the previous ones. These were business cases where you had to sort out a situation, and practical tasks, for example, to play the role of a call center employee and to parse correctly an appeal about the new product. These 12 weeks allowed understanding how difficult it was to start a new business. We have to transform not only the company but, first, ourselves. Having survived this break of pattern, you start to understand better other functions and employees; you begin to show more empathy within the organization.
How do you measure employees’ satisfaction?
We use the NPS loyalty index: are the employees ready to recommend the company to others, are they ambassadors?
We have a culture of annual ‘measuring opinions’ on critical issues. And this is not just a question of ‘Are you happy?’ type. It is more important for us to know whether a person is engaged in what we do, whether he is ready to change, whether he shares our ideas. We use the NPS loyalty index: are employees ready to recommend a company to others, are they ambassadors?
How high is the level of your independence in the international company? How free are you to influence the result?
If I were asked this question about 15 years ago, I would say that many decisions and approaches were given by default, and your task was to adapt them to the local market — to implement or perform. Now, to implement any new approach, you need to take into account the local peculiarities. The large corporation has no choice; it cannot control everything. The times when the same solutions were implemented in all the regions are long gone. We are quite independent; the only request from the headquarters is to share good local approaches with other countries.
There is a process-focused thinking and result-focused thinking. It is held, that a correctly aligned process will eventually lead to a result. Another approach is to go ahead and break through the walls for the result. Which is your approach?
You need to find the right balance between the situations ‘I see the goal and do not see obstacles’, and ‘I see the boundaries no to trespass’. Because the result can be unsustainable and can lead to negative consequences. In this, I see a kind of dualism that resonates with our transformation, when in parallel there are two types of business – traditional and innovative. There is even a Design Thinking and Lean Startup methodology adapted to our realities, which we call Fast Forward. It foresees that employees can initiate mini-experiments to test their ideas. They are not time- or money-consuming, but in the end, we get not just an opinion, but also a rational decision.
What skill would you like to develop? What do you count on in your personal development?
Now I am interested in an in-depth investigation of personality profiles opposite to me. Once, they seemed to me incomprehensible, strange, and even not very efficient. This (investigation) is a kind of immersion when you look at the surrounding reality from the perspective of a person very different from you and thus you discover the world anew – so amazing and diverse.