Petr Aven presentation at SKOLKOVO

On July 26 Petr Olegovich Aven, President of Alfa-Bank – one of the largest Russian banks – was a guest speaker at SKOLKOVO MBA programme.

Mr. Aven told about corporate management style in Alfa-Bank Group, and the students had an opportunity to ask all their questions.

The short video from the meeting is in Russian and doesn't have subtitles, but you may find the most interesting statements below.

“We initially had very formal relationships at "Alfa". All partners’ relations were written by the British lawyers… We have a very strict rule: no agreement can be violated. If having any disagreements we are trying to solve them between ourselves, involving no lawyers. Written agreements make us be honest.”

“It is impossible to get a job in "Alfa" through connections. If I take anyone through connections – I will violate my liabilities.”

“Business has nothing to do with humanism. Business can be compared to a cruel war operation…. If someone doesn’t want to give back his loan – we will get our money back anyway... Business for us is about abidance by rules. We are a very aggressive structure. We are using any legal opportunity to defend our interests and make money. Our legal service is the best one in Russia. We have never forgiven anyone for anything.”

An article by Pierre Casse: Crisis as a corporate responsibility challenge

Here is the translation of the article by Pierre Casse, SKOLKOVO Leadership Professor, published on Slon.ru. The original text in Russian is available here.

Crisis as a corporate responsibility challenge

Why does Warren Buffett ask the US Congress to impose higher taxes for American billionaires, and why do investment bankers renounce their bonuses?

How do you think, why Warren Buffett may ask the US Congress to impose higher taxes for American billionaires? And what could make US investment bankers renounce not only their bonuses but salaries in 2008-2010? The answer is almost clear: public opinion becomes more and more important for the companies. Top managers feel the pressure of public opinion and can’t ignore it if they want to stay on the top.

World financial crisis has stressed the issue of corporate social responsibility. Taxpayers now really doubt if they can trust leaders – they saw the latest show no concern about public finance and disability to cope with unexpected circumstances.

Press publications kept aggravating the anger. Stories about top managers’ immense income and spending showed their total unconsciousness and no feeling of remorse. People saw that the bankers played with their money, lost everything, but stayed with their bonuses. You’d bet, nobody can like that.

The first wave of discontent has passed, being redeemed by the bankers’ renouncement of their bonuses and government’s appeal to social responsibility; but the second time wouldn’t work out like that – people are now more careful about their money and those whom they trust them. Now public wants to know not only what managers do with their clients’ money, but also what they do with their own.

Make your customers love your brand - an article by Helen Edwards

Here is the translation of the article by Helen Edwards, SKOLKOVO Library Project Manager, published on Slon.ru. The original text in Russian is available here.

Make your customers love your brand

What the “relationship capital” is and why you should give a lot of time and effort to developing loyalty in your clients

“You call is very important to us…” – do you still believe in these words? You’re not alone if you don’t. Calls to client support service usually end up with half-hour waiting and then an uninteresting talk to an indifferent staff member. Is this kind of hypocrisy helpful in business?

In his new book, The Thank You Economy, Gary Vaynerchuk, entrepreneur, gives a new term – “relationship capital”. He says, this is the key asset of today’s business. Only those brands can survive in future that will be able to create and keep an emotional contact with their customers. Corporations should build their business in a way that their clients not only buy their products but also act as brand’s advocates, Vaynerchuk argues.

The topic of creating a really loyal client is also revealed by Guy Kawasaki, Apple’s ex-evangelist, in his new book, Enchantment. The magic is in constantly making people happy with your product or service, Kawasaki says. It is important that the customers identify themselves with the brands that correspond with their perception of themselves. That is why the process of developing the loyalty is three-staged:

1. Imitation: Pushed by their friends, colleagues and relatives people start buying the same products but don’t feel any affection to the brand.
2. Identification: Buying the same products with others people start feeling themselves as part of the group with similar interests.
3. Internalization: Development of sustainable personal connection to the brand and self-identification with it.

Advice on business literature from Helen Edwards

A new summer selection of business literature from SKOLKOVO Library Project Manager Helen Edwards includes books written by marketing gurus Guy Kawasaki and Seth Godin (check a book jacket). Do not miss!

1. Little bets: how breakthrough ideas emerge from small discoveries
Peter Sims
Random House, 2011.
224 pages
ISBN: 9781847940476

Instead of large scale innovation and R&D this book advocates running lots of small experiments to see what works. As even the most innovative companies grow, managers become subject to "the tyranny of large numbers", only big projects in areas where there are already large markets seem worth pursuing. But most successful entrepreneurs do not begin with brilliant ideas - they discover them. Consultant Peter Sims describes how to use negativity to positive effect, how finding out what does not work can in the long run lead to success.

2. Enchantment: the art of changing hearts, minds and actions
Guy Kawasaki
Portfolio Penguin, 2011
xxi, 211 pages
ISBN: 9780241953648

Former Chief Evangelist at Apple Guy Kawasaki tells us how to delight customers, employees and bosses. The book is full of practical advice: how to achieve likability and trustworthiness; how to overcome resistance; how to prepare, launch and maintain interest in products and services; and how to make good use of social media. Kawasaki refers to his experience at Apple to illustrate his points, from describing how the work on the Macintosh was separated from the mainstream in its own building to "separate the believers" to reporting on the effort Steve Jobs puts into his presentations.

3. One page talent management: eliminating complexity, adding value
Marc Efron and Miriam Ort
Harvard Business Press, 2010.
208 pages
ISBN: 978-1422166734

The goal of this book is to provide a streamlined approach for developing highly capable employees and future leaders. Directed at HR professionals, the plant managers at the talent factory, the authors recommend three steps: start with the science, the academic research into behavior at work; eliminate unnecessary complexity, and encourage accountability and transparency. An evaluation scale on the basis of "do much more, do more, don't change, do less, do much less" works on all counts. And research shows that those employees whose values are aligned with that of the company show statistically significant positive performance in the long term.

Forest Lab - SKOLKOVO MBA graduates' project in the field of woodworking.

It seems that a great many students of the first SKOLKOVO MBA class have firmly decided to establish their own businesses.We have already told you about the "Knopka Zhizni" project ("Life Button") by Irina Linnik and Dmitry Yurchenko; about Marina Parfeonova's geolocation service; and recently - about Artemy Subbotin and the quality control technology for metal industry. Today we are presenting another technology project - Forest Lab.

Tigran Chibukhchyan and Murat Halishov, the founders of the Forest Lab project, became friends in SKOLKOVO while working on a project to develop an investment programme for the town of Svetly in Kaliningrad Region. The backgrounds of the young men are very different: Murat worked for five years in financial advisory services (Unicon, Delimiter) and Tigran was a medical school drop-out who helped to develop Apaga, a family business specialising in eco-tourism in Armenia. He also had his own business, a flooring company. During trips to Svetly, the young men came to understand that their views on the project are the same and they are comfortable working with each other. Why not come up with a joint business?

“I wanted to make use of the resources that the business school gave us,” said Murat.

An article by Pierre Casse: "Logic or Intuition: What Works for Russia"

Here is the translation of the article by Pierre Casse, SKOLKOVO Leadership Professor, published on Slon.ru. The original text in Russian is available here.

Logic or Intuition: What Works for Russia

Why Russian managers should better rely on their instincts and sociability than on MBA degrees

It is said that those are lucky who have good intuition. They feel the storm approaching when others open their sun umbrellas. They can read between the lines and can see the whole picture when others perceive just the first sketch. They can find the best way out when the situation is just in its starting point.

It was for a long time that good intuition was the main success factor for Russia. It was not at once that market economy was built here; business environment was shaped by lobbyists’ groups, local “big wheels” and political landscape. For creating a strategy facts were meaningless, their analysis and any estimations – worthless – because what was right today could become wrong tomorrow. Many successful leaders got used to spontaneous decision making, relying on their god feeling and emotions rather than on rational reasoning. It can be often seen even now: a boss gathers his staff members, asks for advice and evidences and then – chooses the decision that is the closest one to their own thoughts. In other words, they are just seeking for confirmation of their own rightness.

SKOLKOVO MBA Corporate Module: Mysterious India

We’ll speak of India today. Dmitry Yusov, SKOLKOVO MBA student, is speaking about his experience from a corporate module in that distinctive country. You may also learn about students’ corporate projects in China in the article by Maria Fomina and in the interview with Igor Korotkiy.

- 2/3 of the students have chosen China to go for a corporate project. Why did you decide to go to India?

- Actually that was my fifth visit to India, that’s why I understood quite well what I was going to face there in terms of local culture and way of life. And I’d like to note that in spite of China’s intensive growth India keeps up – and soon may draw ahead of China in terms of economic development rates.

- Tell us something about the project, please.

- We worked for a large Charity Foundation that asked us to make a business model for a rural hospital so that it can become self sufficient. Our client – and the head of the Foundation – turned out to be a really unique person, and we were very happy to get to know him. Being a philosopher, a philanthrope, and a fashion designer, he is Gandhi’s follower and a very influential person in India. In France he was awarded a Blue Cross for his active support of Indian poor people. We were really happy to communicate with him, talk on various subjects, and he also seems pleased with the results of our work. What is of extra pleasure for us is the fact that our project will be brought to life, one way or another.

Last year the first class of SKOLKOVO MBA students already prepared a project for him, and they gave a very good account for their work. So we had to justify very high expectations for SKOLKOVO he had, and I think we managed to do so.