“Farmak” pharmaceutical company harmoniously fits into the topic of our next issue “Titans of Economics”. The participants in this topic are enterprises that have survived the Soviet planned past, the depression of the 1990s and the turbulent present of modern Ukraine.
Over the past century, the production area where the “Farmak” plant is now located has changed several specializations but has retained its integrity. Now it is not only a working enterprise but also an industry leader, equipped with modern European equipment and technologies, which sells medicines far beyond Ukraine.
When we say, “Farmak”, we mean Filia Ivanovna Zhebrovskaya, the owner and long-term head of the company. She, a former chief accountant of the enterprise, has managed not only to restore the position of the plant that had stopped operations in the late 1990s but also to restructure the company’s management, to make “Farmak” company a leader of the Ukrainian pharmaceutical industry and a worthy player in the international arena.
Leadership Journey (LJ): The name of our magazine – Leadership Journey – was taken from an article in Harvard Business Review. This article describes the evolution of a manager at different stages of his development. Tell us about your evolution. How were your team and the company created and developed? How were developing you personally?
Filia Zhebrovska (F.Zh.): I came to Kyiv Chemical and Pharmaceutical Plant named after M.V. Lomonosov, the legal predecessor of “Farmak”, in 1980. Next year it will be a 40 years’ anniversary of my career in this company.
I began my work in the company as a chief accountant, as I had an economic education. Before that, I was one of the chief accountants in the Podolsk district of Kyiv. At that time the chief accountant retired, and the new one could not cope with the work. In those days, it used to be the following way. The party said, “You must!” We replied, “Yes!” That was how I started to work at the plant. On the second working day, I already wanted to leave, because I saw financial losses.
In those days, it used to be the following way. The party said, “You must!” we replied, “Yes!”
The company was going through hard times. There was a shortage of raw materials; employees did not receive bonuses. However, I managed to change the standards regarding costs and set the plant in operation. In the 1980s, production of hydrocortisone was launched. The modernization of the plant continued. The construction of the premises for the production of radiopaque drugs was started.
In 1993, after Ukraine gained independence, we became a joint-stock company, renamed the plant to “Farmak” and began a long-term renovation of the plant. In 1995, employees came to me and said, “Filia Ivanovna, you must lead the plant.” I looked at them and said, “No! I want to learn English; I want to do audit, and not to manage the plant.” They insisted: “We ask you, otherwise we will lose the plant.” At that time, many enterprises of the Podolsk district had already stopped operations. Among them there were a furniture factory, a slate plant, the Generator plant … In general, the production sector stopped operations. And I decided to head “Farmak”.
LJ: What was the basis for you at that time? I know that you were one of the first Soviet leaders who took special courses in market economy. What did it look like?
F.Zh.: I am not a supporter of the Soviet Union, but I want to pay tribute to the Soviet leaders, who in the late 1980s – early 1990s, provided us an opportunity to get a market economy training. A special school was created, with chief engineers in one group, and finance managers, accountants, and economists in another group. I was from the pharmaceutical industry in the group of economists.
It was a great experience, but at that time, we could not even write the word “marketing” correctly. However, at first, we had a training course in Italy on the topics of “Small and medium-sized businesses activities”, “Market conditions”, and “Privatization”. At the University of Bologna, special courses for 25 specialists from the USSR were organized.
At that time, we did not know how to write the word “marketing”
Then we were sent to a stock exchange, which was better developed in the United States. In April 1992, when the Soviet Union was no longer there, we went to Japan, where we studied marketing, personnel management, and rationalization of workplaces. Then in France, there were courses on working with banks. By 1993, only 12 people remained in our group.
LJ: What was the first challenge for you as a new leader?
F.Zh.: The main challenge was to restore the operations of “Farmak”. The leaders and specialists of leading research institutes that were involved in drug development in our country said, “Who is so brave to take the plant management? There is no future. ”
As soon as I had headed the company, I began to form the staff. I needed a team of the strongest people in all directions. If, for example, a financier, then – the best. Such people were available only in the staff of the “Big Four” companies.
For me, the main thing was (and remains to) not the team’s attitude to me, but their attitude to work – dedication and professionalism. And when a person is an expert in his profession, then our relationship with him will develop. If we talk about leadership style, then I must admit that at first, it was authoritative. It was necessary to survive, to know where to go and what to do. There was no democracy – it was necessary to start production, expand the nomenclature, and retain people.
There was no democracy – it was necessary to start production, expand the nomenclature, and save people
If you ask me about the current management style, then I will tell you — it is democratic. Every business direction has a director in charge, who are high-level professionals. If I would have selected employees based on my likes or dislikes, we would never be successful.
When people saw that “Farmak” paid wages on time, constructed objects every year, they had begun to work with more enthusiasm. They knew that in the company, the working hours ended not at 5 pm, but when we had the plan fulfilled.
During the transformation, the quality director, production director, and general director left the company. I asked to go one more person myself. Now we are friends with her again.
LJ: What was your first product? Who was your first customer? How far do the Ukrainian medicines reach now?
F.Zh.: We began with the production of five finished pharmaceutical products and substances that the Kyiv Chemical and Pharmaceutical Plant named after M.V. Lomonosov was producing for all pharmaceutical plants of the Soviet Union. But all 15 states of the former USSR republics were disorganized, and nobody needed these substances.
Sometime later, the same substances appeared on the market, but of Chinese origin. We made a strategic decision – to reorient on the release of finished medicines of European quality. We began to produce products that were popular among the population: drops, ointments, etc.
In parallel, we decided to create a tablet production. In 1996, under the TACIS program, 2.6 million ECU was allocated to Ukraine and Belarus (ECU is the currency unit used in the European Monetary System of the EEC and the EU in 1979–1998 – Red) to create the drug “L-Thyroxine”, indicated for the treatment of thyroid gland. After the accident at the Chernobyl Nuclear Power Plant and the increase in cases of thyroid disease, this was a very important medicine for Ukrainians.
In 1998, a production line for L-thyroxine was commissioned at “Farmak”. This was the starting point for increasing the production of medicines tablets in our company. Today, about 30% of Farmak products are manufactured in solid dosage forms.
In the 1990s, we began to cooperate with the Poles. We supplied them with “Validol”. Subsequently (in 2016) we even bought a company in Poland to bring our products to the Polish market. By the way, currently, we are exporting about 4 million packs of “Validol” there.
But at that time it was clear, in order to develop, it was necessary to switch to international quality standards.
But at that time it was clear, in order to develop, it was necessary to switch to international quality standards. In the late 1990s, the German government, through the UNICUM program, allocated funds for Ukrainian enterprises to create an infrastructure for quality management based on international standards ISO 9000. It was within this program that “Farmak” developed for the first time in Ukraine a quality management system in which GMP standards were integrated.
At that time, we worked closely with our research institutes — the Kharkiv State Scientific Center for Drugs and the Institute of Pharmacology and Toxicology, which developed many drugs that were antidotes for bacteriological weapons. For example, this very institution developed our antiviral drug “Amizon”. “Farmak” conducted clinical and non-clinical studies of “Amizon” in reputable research institutes and laboratories in Germany, United Kingdom, the Czech Republic, the Netherlands, Switzerland, and the United States, having spent $20 million. During these studies, the antiviral effectiveness of “Amizon” was discovered and proved.
Currently we sell our products in Germany, Poland, we have preserved the markets in Latvia, Lithuania, Estonia, and Bulgaria. “Farmak” managed to enter the Vietnamese and Iraqi markets. Today we supply products to Australia. We do not stop.
LJ: Tell me, are you just you or are you – “Farmak” company?
F.Zh.: “Farmak” is me. My world and my air. I have always strived for “Farmak” to become something more than just a business. Today it is a successful company with a human face, a good reputation, values, and a social mission. When people ask me, “How many hours a day do you work?” I say, “24 hours a day.” It is true. For 22 years, I was the General Director working for 24 hours a day because there was no other way. You cannot separate a company from yourself.
“Farmak” is me
LJ: But still, two years ago you moved away from operational management. When did you realize that you could take this step?
F.Zh.: When I turned 55, that is, I reached the retirement age for women, I decided that I should prepare for the transfer of operation management. It was in 2006. And I moved away from operating activities in 2017. And during these 11 years, I was getting ready.
I understood that there were already new technologies and new approaches. And the young people who grew up here in the company were stronger than us. Yes, I have the experience, and I understand many things better than they do. But you do not have to run around with the agreement text to collect signatures. There are electronic systems for this. Information technologies that replace human labor, accelerate and improve processes.
What have I done? I have identified several people who will work without me, independently. Someone was my advisor. Someone was appointed a Head of the department.
We have created a security service in the company. We began to implement SAP in the financial department; we invited a team of internal audit and financiers. We have a strategy manager.
Currently, it is not one person that deals with a contract. One person inputs the contract in the information system; the other checks it; and the third one approves it. Three stages of online checking.
EVERY SPECIALIST AT THE PLANT IS A EUROPEAN LEVEL SPECIALIST
Today I am proud to say that every specialist at the plant is a specialist of the European level. It is important to preserve them because they absolutely do not care where they work: here, in Latvia or in Poland. They speak English. They have studied all the rules of production in the pharmaceutical industry according to European standards. This is a completely new generation of people, who has grown up in our company. They grew up in the company that, as I was told in 1995, had no future.
LJ: But it certainly requires steel nerves. After all, much that is happening now, you would have done differently. How do you take these innovations?
F.Zh.: I would say, easy. I am not checking, who has come to the company, what drug was delivered. Apparently, 11 years of getting prepared were not in vain.
I was preparing both the team and myself. Now, “Farmak” employs people much younger than me. All they need is not to interfere with their work. We have invited new specialists, but in 80% of managerial positions, we have appointed people from the company.
In 80% of managerial positions, we have appointed people from the company
Before a promotion, these employees have internships abroad; they learn about all the innovations in the pharmaceutical industry. Every such person is golden to us. We invest a lot in them.
Today we occupy the 103rd place in the list of the largest taxpayers in Ukraine. This is despite the fact that we are the largest company. We employ 2,700 people. We took this place because we pay a decent salary to our employees, from which taxes are deducted.
LJ: You travel a lot. Is it a way for you to feel free, or you just never had an opportunity?
F.Zh.: Some time ago, in 2010, I have checked, how many vacation days do I have? It turned out – about 300 days of unused vacation. And I gradually began to spend them in 2011. I would go for a 10-12 days’ vacation. Typically, I would travel to the seaside to swim and breathe a fresh air.
Previously, I used to fly 100,000 miles a year. This is quite a lot. These were business trips to Europe, America, and China – all to develop the business.
In 2010, I wondered, how many vacation days do I have? It turned out – about 300 days of unused vacation
Now I have bought an apartment in Madeira. I visit it with great pleasure. I put on sportswear, take a backpack and go to enjoy the natural beauty. Did I have this opportunity earlier? No, I did not have.
Currently, I travel a lot. In 2017 in July, I took ten driving lessons and started to drive in a different way. Before this, the last time I was driving was in 1995.
Besides, I have dancing and English in my plans. Last September, in order to learn English, I went to Malta for three weeks, where there was no one speaking Russian around. I cannot say that today I speak English fluently. But my knowledge of English is sufficient to travel communication.
Yes, I do have a schedule of my meetings on my phone, but my attitude to work has changed. I am happy with my new team.
I do not interfere with operational activity.
That is for sure.