Ichak Adizes says: “Directors need big ears and a small mouth”

Ichak Adizes says: “Directors need big ears and a small mouth”

Management guru, founder of the Adizes Institute Ichak Adizes told RBC two fatal problems of Russian companies and explained why business in Russia build as clumsy as public administration

“When in free-thinking managers, they immediately squeeze”

— Recently you often in Russia — assist the leadership of Sberbank and “SIBUR” to rebuild and change the mentality of managers. What is the problem, in your opinion, typical for Russian business?

— The biggest trouble of your companies is autocracy, the roots of which lie in the country’s history. In the tsarist era, when the Soviet Union people alienated from the work that they were doing; they were not the owners, did not understand what is their interest from exhausting labor. This mentality is indestructible and now: on the one hand, all want of democratization, on the other — when in open, free-thinking managers, they immediately squeezed out.

It’s a trap, because even if the leader is not going to be autocratic, people want to see him like this, otherwise it just will not be respected. And on top of this situation can’t change — it must change with the level of ordinary employees, who are also accustomed to legislative governance. That’s what we’re trying to do in Russia, helping companies to restructure their operations.

And so the managers in our companies are so shy of new management practices?

— Yes, it is for this reason. The heads of your companies willingly talk about fashion practices: Agile, gamification, work without an office. But how can you release people from the office, if you want to control even how they smile? All new management require the participation of employees, their involvement in the case, but this is impossible while maintaining the hypercontrol. In Russian with great minds, they are perfectly able to learn. But all this is not being used, drowning in bureaucracy and suspicion. It is heartbreaking to see!

— What questions would you have helped to solve their Russian customers?

I can’t talk about the details — it’s a secret. But can you name another major problem in most companies with which I dealt in Russia. It is emerging from its era of Communist Central planning: first, you figure out what to do, and then the whole company is working to implement the plan. And the motivation of the employees — as a joke of Soviet times, where the President of Czechoslovakia, speaking to a crowd of demonstrators, saying, why do you not want to build communism, in communism everyone will have strawberries and cream?! A voice from the crowd: because we don’t like strawberries with cream. The President: nothing, under communism you are forced to love her.

Your company good managers for production, but extremely poor marketing, especially the part that deals with the study of the market. Inventing the product, the company is not interested in whether it is needed: going from the production and need to go from marketing and sales, that is, from the market. This is the most difficult change that you want in Russian companies, it needs to rebuild the whole structure and system of priorities.

— If it is the Soviet legacy, perhaps it is the case not only in Russia but also in all the former republics of the Soviet Union?

— No, in the former republics are all very different. A planned economy was imposed from Moscow, and this is where his vestiges of decorum. The farther from the capital, the less inclined the company to Central planning. Even in Russia the corporate mentality is very different from Moscow: for example, in Saint-Petersburg entrepreneurs are not so focused on planning. I’m not talking about the cities as Kazan, Irkutsk, Novosibirsk, where companies are much freer from centralist thinking. If we take the former republics, than before they walked away from the former centre, the better: for example, Baltic companies almost European. And even in Ukraine companies often build their work from the market.

Who is Isaac Adizes

Isaac Calderon Adizes the founder of Adizes Institute (California), business consultant to hundreds of companies (Bank of America, Coca-Cola, IBM, etc.), consultant on political Affairs in the governments of Sweden, Brazil, Israel and Mexico. Dr. Adizes teaches courses at Stanford, tel Aviv University, the program of training of top managers at Columbia University. He is scientific consultant of the Executive MBA and MBA in Institute of business administration at Ranepa, the author of 20 books on management, published in 26 languages. One of the highest paid consultants in the world.

Since 2011 Ichak Adizes Russia conducts workshops for executives, participates in the investment forum. Prime Minister Dmitry Medvedev gave the following assessment of his statements: “the recommendation of Professor Adizes sometimes striking in their simplicity and versatility, and capacious, well-honed phrase and apt definition — one of the most quoted in the business community”. Since 2012, the Adizes helps Sberbank and petrochemical company “SIBUR” to carry out organizational restructuring of the Central office. In the same year, Russia started the Adizes Institute, its activities in our country is supervised by the Vice President for development in Eastern and Mediterranean Europe of Adizes Institute Peter Strom. Among clients of the Institute in Russia — the company “1C-Rarus”, “Rolf”, etc.

“To change the economy, it is necessary to firmly hold the reins”

According to the concepts in your books, all companies undergo the same life cycle: founding, growth, maturity, aging, death. If you imagine Russia as one big Corporation, in what state it is in?

— Russia — at the singular point, which is called “trap of the founder”. You are very strong, but not in a harmonized way. Your whole country looks like one big plant — the government is obsessed with the idea: if you build a mathematical model of how it should be, and enter all the relationships of people and organizations in the computer will be able to build an efficient economy. But it all turns out neorganichno, not like they want the people themselves.

Ichak Adizes

Photo: from personal archive

Moscow — symbol of this broken approach! People are accommodated in high-rise buildings and “telescribe” that’s good from an economic point of view, but a concept that looked nice on paper, life doesn’t work: in these homes uncomfortable. You are hostages of the system — like a child who wants to play, wants to live, but, alas, dressed in a suit and tight tie. And “SKOLKOVO” is a good example, as it does not support state initiatives: it is impossible to create a “silicon valley” where it has already started to occur by itself! Although, of course, if “SKOLKOVO” it was not Medvedev, but Putin’s project would go better.

— How do you like Vladimir Putin as a Manager? What is the strengths and weaknesses of his management style?

— It gives the impression of: skillfully holds the power and uses it skillfully. But Putin is not something that would be an open book: he’s very good at the art of concealment that he had in mind. So I’d said nothing and made no conclusions.

— What can the Russian government to bring Russian economy out of crisis?

— I would suggest you to create a Ministry of debureaucratization, and his head must simultaneously be Prime Minister. If you want to use human capital and the innovation, and not lose it abroad, you need first of all to do away with bureaucracy. There are areas in which Russia could make a breakthrough in a few years. For example, high-tech: you have the best programmers and mathematicians in the world, you could become an advanced digital power. But your bureaucrats do not give anything to develop, and eventually the money created in Russia, the doing of a foreign company. Now, to deal with officials and have a Ministry of debureaucratization.

— You have a candidate for the presidency of this Ministry?

— I’d like to see on this post Herman Gref. This person would be able to change all the government. He is fearless in the struggle with difficulties. Look at the savings Bank, where he innovates, attracting people from Silicon valley and forcing managers to study at Stanford project management. I dedicated one of my books as the most creative Manager in Russia (book, “New reflections on management” published in Russian in 2016, the publishing house “Mann. Ivanov. Ferber”. — RBC).

— Is it possible the country’s economic reform without political?

— Of course, you have to democratize the political sphere. But you need to do it in the right sequence, do not start with policy. This is an error that did Gorbachev: first publicity, then perestroika. Starting with political reforms, he quickly lost power in the country and in the end was not able to carry out economic transformation. To change the economy, it is necessary to firmly hold the reins.

Let it be a one-party system and a stable elite. But spend a decentralization of economic governance, change the business environment, loosen the control over the companies. Let there true middle class and many rich people who will leave money in Russia. And only in the end of all this — political reforms. So while I would support Putin in curbing political forces that are trying to compete with him.

In other words, you for the Chinese way of reforms?

Yes. And of course, over time China will become more democratic than it is now. In China, more billionaires than in America, and they are gradually changing the system from within.

“People at some point simply will not be able to make corruption”

— If Russia’s government will block reform for the sake of “stability,” is there a chance that the situation in our country will go on the Ukrainian scenario?

— You have raised a very interesting question. I’m sure Putin three years ago took the demonization of Ukraine is because he feared the “export of revolution”. But deterrence of the Maidan, the concealment of problems with propaganda is not salvation, but the way to shocks. The main problem is corruption: it is in Russia can’t last longer, it will lead to an explosion. People at some point simply will not be able to stand her. And the impetus from which it will fall, may be outside war: Syria can now play the same role as once Afghanistan.

— But corruption is the product of a political system, isn’t it?

— Do you think corruption is a problem in countries where there is no democracy? It is everywhere where I worked; well, maybe, except that in Switzerland it is not, I guess. In the US lacks corruption and localism, believe me. Of course, everything is not so open as in Russia. But Ukraine, which is on the path of democratization, corruption is much more open and brazen than in Russia.

The desire to attach their “trough” — a normal human trait. If the situation in the country is unstable, who do I hire? Someone who I trust — son, brother, nephew, friend. Why in the US, this phenomenon is not as large as in developing countries? Because there is professional management with clearly defined system of rewards and penalties and any owner understands that employed in certain conditions, the Manager will work more efficiently than relative. It is useless to fight nepotism prohibitions only — instead, the need to nurture professionals who would be trusted more than relatives, and to create for them the work of the legislative regulation. Sooner or later the owners and the government officials will not choose personal loyalty, and professionalism.

Corruption arises wherever there is change, it is like a wall in which holes are formed after each new earthquake. So, to completely abandon changes? No, constantly, 24 hours a day, to update laws, patching those holes. This function could also be performed by the Ministry of debureaucratization.

— If to speak about the United States, do you think, will it have the trump to deal with the economic problems of the country?

Too many voted for trump in the hope that it will solve socio-economic problems. But my professional experience tells me that nothing will happen. A democratic society cannot be managed like a company. A business owner has the right to say: I created the company, I can hire people to fire, and when I get bored, I just close. But the United States are not property of their President, and he has no right to do what he wants: he can only be incorporated into a party that represents the interests of large groups of people, and try to make it work for the common good. America is on the path of disintegration, of collapse of a plurality of groups, each of which has its own interests, but it cannot be put together orders — only therapy. It’s like a family, which it is impossible to tell: and well, live together again and love each other!

“The days of autocracy were”

— You often say that all companies in the end of the life cycle are killed. But there is, for example, banks that have successfully existed for 100-200 years. Can the company achieve immortality and what do we need?

— Can, and not only companies but whole countries. I would say this: the key to immortality — change, while not separating into parts. You need to be modern.

— What it means for you a modern Manager? What qualities should he have?

— Until recently, the management worked in the same way as hundreds of years ago, when the owner of the farm or factory told workers where to go and what to do. Managers, figuratively speaking, had a large mouth and small ears, they acted on the principle: I the chief — you the fool: you do what I tell you. Today, when we live in an information society, it is not working: the leader cannot control the hierarchy of the company from 40 floors, not climbing down from the top of their power pyramid. Information is spilling out everywhere, and often good ideas and solutions come from the bottom.

Now and Directors and managers need big ears and small mouth: they must be able to obtain information from the organization to monitor what is happening in the team. The days of autocracy were: managers must become more humble, open and respectful to the opinions of their team members. Should be like in the human body where is the brain, but at the same time, each of the trillions of cells also “thinks” and the brain listens to coming from them signals.

— How affect the management of new technology and generational trends?

— Here are two examples. Business today does not need the premises, primarily due to the development of IT. Retailers in the US are going bankrupt, malls, outlets and grocery stores are empty: people order goods over the Internet. In line — restaurants and many other businesses. This means that managers must learn to manage employees remotely.

Ichak Adizes

Photo: from personal archive

The other trend is people today don’t work because without work they would starve. The Millennials cannot be motivated by money, and therefore a more Directive approach no longer works. You need to be able to infect their mission, purpose, in which they believed. And that calls for a transition to a participatory management approach in which employees receive part of the profits and participate in management].

Five tips managers from Dr. Adizes

1. No leader can be perfect. All he can do is to pick a team that would compensate for his shortcomings.

2. Each person is born with a specific personality type. If by nature you are a bureaucrat, you don’t become an entrepreneur. But if you learn to be flexible and to listen to others, you will be able to benefit the company. We can’t change ourselves, but can become more harmonious.

3. In our days, the Manager must be an informal leader is not to put pressure on the employees that they carried out his instructions, and to inspire the team idea, to command respect for their competence.

4. The fact that in modern companies, so a lot of managers-women, not the consequence of emancipation. This is a request from the employees themselves: they want to be ruled with your heart, not callous mind. It should learn any head.

5. Success is the result of dividing the external integration to internal disintegration. The first indicator is the energy that the company spends on detection of existing opportunities. The second is the level of distrust and disrespect within the company. The higher the first indicator and the second the lower, the better the result

Source: Ichak Adizes, “the Ideal Executive: why I can’t be and thus”. “Alpina Pablisher”, Moscow; 2014.