We met with the president of Econia Ukraine, Irina Varagash, to talk on not only business topics. Apart from the traditional concerns of a businessperson, like management of the largest water producer, innovations and training of employees are on her list of strategic tasks.
In addition, Econia just recently experienced the second raider attack in its history. Therefore, Irina knows firsthand how a manager should behave when she hears: “Hello, we are the new owners of your business.”
Leadership Journey asked Irina about how to ensure corporate peace and at the same time be ready for war. Not only in the market.
Many have heard of your fight with raiders. Did the experience of the first raider attack help to survive this the second time?
I felt anger and desire to end this raider outrage. I did not believe this is at all possible in our country. Why does raiding continue to flourish in our country? The experience of the first raiding attack has taught us that every step needs to be double-checked, and all these years we have been doing business completely transparently and within the law. I knew that legally there could be no complaints about the company. There was something else. Something that goes beyond the law. In fact, this was the case — the raiders took advantage of an invalid court decision, attracted corrupted registrars and thus had the opportunity to make the second raider attack in our company’s history.
The experience of the first raiding attack has taught us that you need to double-check every step
The most difficult time was an hour and a half on my way from Kyiv to Zolotonosha when I simply was incapable to control the situation personally. I was recalling the first time. Exactly 10 years ago, armed masked men broke into the enterprise premises and held employees hostage.
Based on the previous experience, I knew it was important to prevent this psychologically crucial moment and not let the strangers into the territory. Fortunately, when I arrived, the citizens, employees and their relatives, the police, representatives of local authorities headed by Vitaly Voitsekhovsky, the mayor of Zolotonosha had united and kicked the raiders out of the territory.
It was our first small victory. But I knew, the hardest part is ahead. As an owner, I was to solve one more difficult legal problem. And this was a task with many unknowns.
Was I prepared for a raider attack? Yes and no. In our country, alas, we must be prepared for anything.
Do you have any advice for your colleagues on how to prepare for such situations?
First, you need to pay attention to the statistics. According to the Opendatabot platform, since 2013 about 1,700 raiders’ attacks have occurred in our country and their number is growing every year. And that means the level of threat is going up.
Since 2013, about 1,700 raiders’ attacks have occurred in our country
To manage a business in modern Ukrainian realities is difficult. Overlapping political and economic crises often turn business management into a “race for survival.” Do recall the number of economic crises and revolutions we have experienced. The crises of 1998, 2008, 2014. The revolution in 2004 and 2013. Currently, we have war and elections.
You will be surprised to know the number of Ukrainian companies, which take all their efforts not to develop business, but to protect and secure companies “here and now”. We have so many tasks to accomplish that often there is no time to think of risks. Over the past six months, I was often invited to speak on the Econia “raider case” at economic forums and CEOs business meetings.
People listen carefully. They empathize to an extent. They write something down. But I have also noticed that deep in their hearts common business owners believe, “Raider attacks have nothing to do with me». In my view, many medium-sized entrepreneurs are sure their business is not interesting for raiders. Large corporations, which have a huge turnover, financial stability, high-class lawyers and an excellent reputation, are sure raiders will not dare to attack them openly.
RAIDERS’ ATTACKS IN THE COUNTRY HAVE NOT DISAPPEARED ANYWHERE
Alas, as practice shows, neither of them is insured against unlawful seizure. After all, raiding in the country has not disappeared anywhere. Moreover, it has become a kind of business. But there is also a downside: because of these crises, business becomes stress-resistant to any crisis raiding included.
Fighting off the raiders is still half the battle. To promote business in a market as competitive as yours is another dilemma. What innovations have helped you take your place?
You should define, what you mean by the very concept of “innovation”. Talking with my colleagues or partners, I often come across that people understand innovation as an invention. Business owners decide to concentrate on innovations, and to this end hire special, talented professionals for the flow of ideas to be inexhaustible. In my opinion, this is rather an ideal picture, which is not always possible in a real business.
For me, innovation is a completely new, and at the same time more efficient way to use knowledge, skills, and abilities, to use intangible and tangible assets. This supports or increases the value of the brand, the company as a whole. In Econia, the implementation of innovations can be seen in different forms: it can be new products, unique combinations of tastes, original packaging solutions, new business models, processes or management methods.
Innovation is a symbiosis of your experience, global trends, monitoring of your niche and understanding your client
I think innovation is a result of a symbiosis of your experience, global trends, monitoring of your niche and understanding your client
However, today this is not enough. To become competitive, you must create something unique. So, recently we released “Iodo”, special drinking water with iodine content, which simply solves the problem of iodine deficiency. To create such a product, we used an innovation result of a Ukrainian research institute. Scientists have invented a modern method of iodization, which allows, without changing the composition of water, to enrich it with iodine ions. This combination is unique because it repeats the natural bonds of ions, in which they are perfectly absorbed by the human body and is safe for daily use.
What are the products with which the company established itself on the market? I know you have become a pioneer of a niche. What discoveries is the company proud of?
Yes, we were the first in the country who created the first children’s water with a completely different composition than that of the “adult” water. It has a balanced composition of all trace elements precisely for the need of a newborn. Our “Malyatko” and “Akvulya” TM created a niche in the market of baby food in Ukraine — «baby water», and formed a culture of its consumption. Over 18 years of development, “Malyatko” became the first national trademark in Ukraine that represents all categories of baby food.
I also remember how we were the first to introduce an ergonomic bottle that fits perfectly into the hand of a baby, distributes the weight. We were the first to bring cap-spill bottles on the shelves. Moms are very fond of this product for safety and convenience.
We offered the market children’s cookies, which do not crumble in the mouth. A modern innovative technology HTUST (High-Temperature Ultra Short Time), used in the production of «Malyatko» baby porridge, ensures the preservation of all vitamins, minerals and other nutrients. Special technology of partial hydrolyzation of cereals is used for its production, giving the porridge a natural sweetness without adding sugar.
Innovation for us is a symbiosis of customer needs, your intuition, and the ideas that may or may not work.
Speaking of innovations that failed, what were these products?
If we talk about failures, these two projects were associated with brands. The first one is “Tea-Coffee water” with a low level of mineralization. Due to its composition, this water allowed to better reveal the taste of tea and coffee. It was a failed project because tea outlets are very small, and there is no place to put 2 or 6 liters of water. It turns out that there is a need because there are gourmets, but there is no technical basis for distribution.
Water for teenagers is the second failure project. At some point, it seemed logical to create a new product for the “Malyatko” consumers, who were growing with our product. And we created it. We focused on teenagers who already had their pocket money. But we did not work well on distribution and closed this brand. At the same time, our competitor has created a similar project. They used our idea, our bottle design, even our corporate heroes on a skateboard and bicycle.
Yes, ideas are easy “to borrow”, so to say. But what stands behind a brand is hard to fake. I mean social projects that become an intangible asset of the company. What social projects does your company implement?
For many years now, within the framework of the company’s social mission, we have been supporting ATO fighters, helping children and mothers of these families, the elderly, and supporting hundreds of social projects throughout Ukraine. Even now, I am telling you, and feel embarrassed. Most of my colleagues and I are convinced, you should not shout about your good deeds. On the other hand, if a business talks about its values, the public will treat the company differently.
If a business talks about its values, the public will treat the company differently
I am sure that business needs to open up. At least for the sake of being understandable for the new generation of specialists. Take the millennials, for instance. For them not only financial attributes of a job are important. They want to feel good about their families and friends. They want to be useful.
When they come to the company, they also take into account the social component. They have an explicit desire to be involved in something important, great and useful. If we are ready to change at the level of a company, then we will be congruent with the expectations of our children. They will not leave Ukraine, and together with us, they will develop our country. Create new values. Or support and develop our values.
How did the values evolve in your company?
Quality has always been and remains the main value that underlies our company. If at the beginning of its development, the company implied “impeccable quality of products”, today this value also includes the quality of work, the quality of communications, business processes, the quality of life of employees and the quality of partners.
Today it becomes necessary to master soft skills from the social field
We are doing everything to keep up with the changes, to gain new knowledge and skills. Today it is not enough to have in your arsenal so-called hard skills, that is, technical skills that are directly related to your activity.
Today it becomes necessary to master soft skills from the social field. These include the ability to persuade, to find the right approach to people, to lead. The skills of interpersonal communication, negotiation, teamwork, time management, personal development, erudition, and creativity are important. They allow today to be successful.
Already in the working process, we are training employees in a particular profession, send them to advanced training courses, develop individual training programs, and invite experienced coaches and trainers. We actually created an educational base within the company.
Is there any economic effect from training young specialists?
In business, everything must have an economic effect. For example, you can calculate efficiency of the training for production personnel by the decrease of the share of manufacturing defects. You can evaluate the efficiency of a logistician training based on the optimization of the cost of loading cars.
Today, enterprises are increasingly taking responsibility for employees training
It is difficult to calculate the economic performance of team building but you easily notice a better communication and collaboration of team members, which affects business processes in general. Today, enterprises are increasingly taking responsibility for the employees training.
Of course, the companies incur costs. But people say, better to send an employee to expensive training than no training at all. As a result, the company gets a professional in its staff, and the employee feels he is needed. It also affects the status of the profession and the cost of such a specialist in the market.
What is your attitude to special business education? Some of your colleagues believe that training is useful for a manager but harmful for an entrepreneur, whom the body of knowledge will simply drive into a rigid framework. They say, entrepreneurship is an inborn talent, but a manager can be trained.
I do not have an MBA degree, but I am surprised that someone might think so. Because the question is not what you have learned, but how you apply this knowledge. I am against introducing into the company a specific model, proposed by an expert or a scientist.
I saw how people were copying Adizes’s methods (Ichak Adizes, business consultant in management efficiency – Ed) or Hubbard’s methods (Ronald Hubbard, creator of the Hubbard Management System – Ed), which had failed.
Of course, it is important to take into account the stages of the company’s development, because different models are good in due time. I am in favor of not copying entirely, but of introducing individual elements, which together will give the main thing – the result.
By the way, who of the gurus cooperates with your company?
Michael Wader (guru of “lean manufacturing”, president of the international consulting corporation Leadership Excellence Inc. – Ed) comes to us at least once every six months with his training on lean manufacturing. This allows us to optimize processes using visualization and various tools. Besides Wader, Svetlana Krit, our specialist in the department of standardization, certification, and quality, conducts internal training sessions on this topic.
Could you give some “survival tips” for colleagues and partners?
First of all, never lose courage. Do not leave the country; do not sell your business for any price. I notice such moods now. Instead, you need to look for resources, optimize your business, enter new markets, introduce innovations, and automate processes. Besides this, keep track of new trends in management and find in them what is good for your company. For example, if today vertical control is no longer relevant, then you need to move to the horizontal.
Every sane person is simply obliged to lift himself up by his hair from time to time
Development is a major thing. If you do not stop, even in a crisis you will find where to go. You need to look for strength in yourself even at burnout. Do you remember a quote by Baron Munchausen? “Every sane person is simply obliged to lift himself up by his hair from time to time.”