GOLD OF KOSYUK: MHP owner Yuri Kosyuk about the company’s main value, transformation and the impact of happiness on business

Yuri Kosyuk

This is not the first interview of the author with Yuri Kosyuk. Over the past six years, in conversations for various magazines and in the framework of joint presentations at conferences and forums, we had a chance to discuss his business story, operating principles, innovations, attracting investment, the trends in the agricultural market, and the Ukrainian and the world economies. This time we talked about meanings. “Why are you doing this?” This is the main question that this entrepreneur puts both to his employees and partners, and to himself. The answers help to correct the roadmap and to determine whether the people “on the train” are the right type.

From the outside perspective, it may seem that MHP, one of the largest agricultural companies and chicken producers in Ukraine with a capitalization of $ 1.2 billion, has long been in the comfort zone due to its scale and financial success. Kosyuk disagrees: the process of change in this business is continuous, similar to the regeneration of the skin on the hand. Now the company is going through one of the biggest transformations in its 20-year history. In the interview with Leadership Journey, the billionaire Kosyuk told about the purpose of this transformation and the anticipated results.

Leadership Journey (LJ): Business, as a living organism, is going through different stages of development. At what stage is MHP now?

Yuri Kosyuk (Y.K.): We are on the verge of a crazy transformation in the office and business processes. What there was before was out of date — starting with the management model and ending with what people in the company were doing. We conducted an in-depth analysis and found that a large number of employees were doing the work that nobody needed: they were writing reports that no one read, they prepared contracts with 20 signatures. All this is very inefficient, including from the economy point of view.

We have performed an in-depth analysis and found that a large number of employees were doing the work that nobody needed: they were writing reports that no one read

Calculations showed: in some cases, the cost of time of people performing a certain job was five times higher than the price of the potential risk that may arise if this work was not performed at all. We have a global transformation of the financial service and other departments under way.

I will give an interesting example. MHP had an IT system support department, which employees were to monitor and fix errors. When this service was checked, it turned out that these employees intentionally were making mistakes to fix them later. That is, people who were to reduce errors for us, created them on purpose to save their jobs. They were doing the company harm from the inside.

LJ: If this happens in the office, is the situation even more complicated in the factories?

Y.K.: This is not so important. One day, consultants came to me with a proposal to install a very smart process automation system at production sites. I told them that I was not interested at all. They were surprised. How come? Everyone is interested, and you are not. I said, «My factories work fairly well». It is not my problem now. Because the price of a factory mistake is much lower than that of an office mistake.

The issue of how well we have sold, and at what markets, is much more important than optimization of 3% of a technological process at an enterprise. They were shocked by this because most clients ask them to transform not «the head», but «the left leg’s toes». We are now transforming «the head». This is more complicated, more expensive, and, what matters, more important. This process gives interesting results. We begin to see things we have not noticed before. New markets, new opportunities – both foreign and domestic.

As to us, we are now transforming “the head”, which is more complicated, more expensive, and, what matters, more important

LJ: What have you noticed, for example?

Y.K.: People often ask me about the role of MHP in 30 years or in 50 years. I think, doing business in the industry others will try to avoid in the future or are avoiding even now will be our main value. Now everyone wants to sit on the Internet, work on outsourcing, do projects, and no one wants to work on the ground, in dust and mud. This will become our competitive advantage in the future – to do things we know how to do and love to do.

LJ: What place in this picture do you reserve for a human?

Y.K.: The key place. The human will remain in the center of the main processes. Recently we had an annual meeting – I spoke to the staff of MHP enterprises. At this meeting, my son was present and listened attentively. In the evening, he came up to me and said, “I have understood: MHP is not about chickens, it is about people.” The main thing the company needs is people. The rest is derivatives.

THE HUMAN WILL REMAIN IN THE CENTER OF THE MAIN PROCESSES

We are experiencing a transformation – a transition from the traditional model of business management to the simplification and optimization of many processes. The value of a human is not decreasing. The roles and functions will change. We move towards highly specialized positions. Highly specialized employees will focus on specific goals and objectives and will be highly productive and professional. They are a valuable resource. You can pay them one and a half higher salary compared to the market. This is a crazy motivation to do but it is justified. You cannot save on talent.

LJ: How soon can you see potential in people? The features, which are valuable for you.

Y.K.: Not immediately. This is not fortune telling on the coffee grounds. You give a person a task; he performs it: one person is more productive, another person is less productive. Some people are doing their job joyfully and motivated. I follow this process and draw conclusions. It is like in a gym: some people would not go there. And others would willingly go with joy and enthusiasm. Some like CrossFit, and others – a treadmill. You need to choose for a person a job he would love and would be ready to work seven days a week.

We are under transformation – a transition from the traditional model of business management to the simplification and optimization of many processes.

LJ: How many times has the company experienced a transformation in 20 years?

Y.K.: The company is constantly undergoing a transformation. This process is permanent, as is the regeneration of the skin on the hand. But what we are experiencing now is, perhaps, the greatest changes that have been caused by the introduction of the ERP system. We have described the processes as they were, looked at the result and said, “No, it makes no sense”. Why should we describe the processes as they were, if we already had them? Let us better dream of what we would like to have in 5–10 years. Living in need, we do not see the forest beyond the trees. We decided to transform the company in accordance with our dreams, and not our needs. We decided to begin from the finish and move back to reality. We were dreaming with the top management, voicing the most daring ideas and visions.

YOU NEED TO CHOOSE FOR A PERSON A JOB HE WOULD LOVE AND WOULD BE READY TO WORK SEVEN DAYS A WEEK

LJ: What were you dreaming about?

Y.K.: About a company with happy and super-motivated employees highly specialized in the area of their responsibility. Every person is in his place and is consciously doing the job. Unhappiness at work is not a permanent condition, but a temporary one, due to the wrong choice. The employee might be doing things he does not like, or the manager has incorrectly determined the employee’s position in the company.

I do not want people to work in MHP who do something simply because they are used to doing it.

I happen to ask a person a question: why are you doing this stuff? Sometimes I hear the answer: I do it because I do it every day. That is, he is fussing about in order to fuss. He does not answer: I’m doing it because I enjoy the process, or because I want to earn a million dollars, or because I want to fulfill myself in this, or because it’s an occupation of my life. Therefore, I do not want people working in MHP who do something simply because they are used to doing it. I want everyone to have a purpose and excitement in their eyes and to be happy.

We think that we are far behind the United States. In fact, there is a huge number of people going to work for the sake of going to work. And no one bothers about this. There are large public companies in which there is no one owner, which are managed by a board of directors, in which they do not implement global transformations aimed at making people happy. They leave the order of things just not to make it worse. I do not want that.

I HAVE ALWAYS BEEN LUCKY WITH PEOPLE

I have always been lucky with people. MHP was growing rapidly. I was running ahead, very energetic people were following me. They were picking up my ideas, projects, implementing them; they were running even faster. These are people-drives, people-stars, attackers, who would solve interesting and complex tasks. And there must be a large scale organization to provide them with new objects for the attack. In no case should you load them with a routine and streamlining “the results of storming”. It is useless and stupid, as stupid as driving around the field at a Ferrari wheel.

LJ: Ichak Adizes has a notion of founder’s trap – a situation when the owner continues to engage in manual control, not feeling that the size of the organization no longer allows it. Have you managed to avoid this trap?

You trust the person, transfer the task to him and then just watch how he copes with it. You provide him with the conditions for him to keep running, and the wind in his back, but not in the face.

Y.K.: I got into this trap about 15 years ago. But I think I managed to cope with it when I have learned to trust people and delegate. You trust a person; give him a task and then just look at how he copes with it. You provide him with the conditions for him to run, and the wind blowing not in his face, but in the back. Perhaps this was the first big transformation that began during our preparation for the IPO.

I have understood one more thing. There are no specific features of a particular industry. A company can invite experts from other industries – metallurgy, media, medicine, etc. And they can bring value to the company. Adaptability, learning skills, and motivation are all that matters.

ADAPTABILITY, LEARNING SKILLS, AND MOTIVATION ARE ALL THAT MATTERS

LJ: You have repeatedly spoken negatively about the MBA. Why such an attitude?

Y.K.: This thing gives not so much a special knowledge as it puts on people blinders, and often also a crown. It happens that a man is a fool and no MBA will help him, but he will put on a crown. And a fool in a crown is not even funny, it is already scary.

LJ: Do you hold on to people?

It happens that a man is a fool and no MBA will help him, but he will put a crown on. And a fool in a crown is not even funny, he is already scary.

Y.K.: No, I do not hold on to personalities. If I see that a person is ineffective, first I try to understand why. And I am sure that this is a question to me: why in my company one day he was effective, and the next day he became ineffective. Most likely, I have not noticed the problem in time.

LJ: So you don’t cloud your look and perception of a person? It happens that yesterday he was super effective, demonstrated a good result and in a sense worked for his record book. Today, he is no longer stellar, but the record book works for him – position, level, status …

Y.K.: I do not have such a problem. I update the story at each new turn. And ‘yesterday’ is the keyword. There is no perpetual train ticket. Can you ride the train forever? Yes, you can, but you need to re-punch the ticket at each stop. That is, at each station, you must confirm that you are needed, interesting, and indispensable.

THERE IS NO PERPETUAL TRAIN TICKET

LJ: You have to pay very close attention to people. What circle of people does remain under your view?

Y.K.: 15–20 people, no more needed. I can work with them, teach them, and they stick to the same policy with their subordinates. They are ‘drilling down’.

LJ: Do they have the right to private life, or is MHP their life?

Y.K.: I am quite jealous in this issue, but I do not press or force. I try to organize everything so that MHP would become their life on a voluntary basis. I believe that I can find a certain number of people who will share my attitude towards this company and will live for this company just as do. It is important for me. The search for such people is like gold mining. You need to process a lot of empty ore to find something precious.

LJ: One entrepreneur I know once said the owner has the right to everything. And even if he is leading the company to a disaster, let him do it. Do you agree with this thesis?

The search for such people is like gold mining. You need to process a lot of empty ore to find something precious

Y.K.: I do agree with this. This is the risk of the owner. If the manager sees that something is wrong, he should tell the owner about his concerns. He should come and talk, but nothing else. If the decision of the owner does not change after this conversation, the manager just needs to leave. If he was heard, he can stay, if not – then he should shake hands and go.

LJ: But we had previously discussed that he might be obsessed with the company, it is difficult for him to just go …

Y.K.: This is like a divorce – it is always difficult. If it were easy to divorce, then there would be 50 times less divorces. The owner is taking a higher risk; do not bother him to take risks.

LJ: Are people a resource or a capital?

Y.K.: I think that there is no conflict of concepts. They are both a resource and capital. People are the greatest value of the company; I always say this. And they are capital. At the same time, they are a resource, because the company achieves certain goals and results based on their knowledge, experience, time, and energy. This story cannot be divided. A resource that is properly collected, organized and motivated becomes a capital.

LJ: Do you know/feel how your direct subordinates perceive you?

Y.K.: It is hard for me to judge, I do not see the situation from the outside. I want to use the 360 evaluation one day to understand this.

LJ: What are your control points?

Y.K.: Where do we go, with whom do we go – I control these. Occasionally I do control the quality of following the roadmap. I am doing this, I repeat, to check the quality of a person. If the roadmap is compiled qualitatively and I see that people follow it correctly, I am checking less and less so as not to interfere with them.

My son believes that in life you need to find a formula when you do not separate life and work

LJ: You used to say that MHP is your life. How is it in practice?

Y.K.: I am still saying that. They cannot be separated. My son believes that in life you need to find a formula when you do not separate life and work. He says, “I have many friends who separate their studies and free time. And I do not separate, I feel good all the time: when I am studying, and when I am having free time.” In this case, you are completely happy. I will give you an example. I spend a lot of time creating a strong and comfortable ‘field’ to attract people, who then would follow the roadmap and complete tasks. Is it management or not management?

LJ: Management …

Y.K.: I do not manage the plant, the machines, and the operational processes. I think about how to make a person happy. Make him happier and he will be even more effective. If this is a job, then I work 24 hours a day.

PEOPLE ARE THE MOST IMPORTANT THING THAT A COMPANY NEEDS. THE REST ARE DERIVATIVES

LJ: Can it (working too much) lead to an excess of sweetness? As in the case of too much of a confiture.

Y.K.: No, I am constantly mixing up and I think that I am doing it right. I am never doing my work without a rest and never having a rest forgetting my work. There is another danger – to miss the moment when you became a break for your company, a bottleneck. That is what I am thinking about more and more now.

LJ: Do you have a solution? Is there anyone who could manage your company more efficiently than you do?

There is another danger – to miss the moment when you became a break for your company, a bottleneck

Y.K.: There is no solution yet. There are many such people in the company – they manage different directions. You can separate businesses, after all. We once were looking for the chief engineer and did not find. Then we invited three different engineers for three different sites. And they do an excellent job with their tasks. There is no one ‘main big guy’. It turned out that we do not need a chief engineer. We often think that we need ‘a chief’, but it is not always true.

LJ: Do you realize that you are one of the biggest risks of the company?

Yu.K.: I do realize it, moreover, I have been aware of this for a long time. That is why I delegate a lot to people and contribute myself to the training of these people.

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