ALMAZ-BLUES: Alexey Shokh from the Almaz Group on how mathematics and guitar help in business
How to become one of the largest car dealers? A simple recipe from Alexey Shokh: become an aircraft design engineer and learn playing blues perfectly. Now Shokh’s company, the Almaz Group automobile holding, operates a network of authorized Toyota, Lexus, Porsche, Scania, and MAN service centers in different regions of Ukraine. Almost every year, the company is on the lists of the best authorized service centers in Europe.
Leadership Journey asked Alexey, how a novice entrepreneur can avoid getting lost himself in the colorful world of opportunities and choose the right way, as well as how Shokh himself managed to build a “grown-up” business in a young country.
Leadership Journey (LJ): How did your business start, what preceded it? How did you feel that this was your kind of business?
Alexey Shokh (A.S.): I had graduated from the Faculty of Physics and Technology (at the Dnepropetrovsk State University – Ed.). My father realized that I had an analytical mind and predicted my engineering future. He was right because I had acquired a profession that primarily disciplines your mind. Higher mathematics, theoretical physics were complex subjects, but I studied above average. I even received an “increased” stipend. After graduating, I decided that I should choose a path to my own freedom. After all, you could easily “get stuck” in a state defense organization; get a job in a design bureau not being able to leave a “closed” city. Therefore, I had joined the army. It was a serious test, but after the (military) service, I had the opportunity to choose my job myself. It was a design institute, with good prospects, money, a promising career, an apartment, and benefits. However, perestroika has broken out in the country.
The wind of change literally swept over, and I resigned from the institute. The director tried to keep me but to no avail. I really wanted to work on my own. I started to carry out projects on orders of various enterprises. A year later, I was able to buy a one-room apartment, a car, and to open an office. Talented people had come along, who wanted to work with me. However, it was a difficult period, it was necessary to determine the direction. Computers started to emerge and technologies were developing. There appeared the prospects precisely in the implementation of something new in enterprises, institutions, and trade. That was what I was doing.
LJ: All this was happening in Dnieper city (Dnepropetrovsk until 2016 – Ed.).), a very provincial city at that time, and there were hardly large businesses with great contacts? What was it that helped you?
A.S.: Although I got used to a measured, provincial lifestyle, in my heart, I did want to go to another level. Then only Moscow could let you do it. By that time many of my friends from military service, from Kyiv, Samara, and Kharkiv had moved there … It was such a strong, intelligent community. Many of them were graduates of Moscow Engineering and Physics Institute, Moscow Aviation Institute — prominent educational institutions. They began to invite me persistently, and when I had arrived, I visited an exhibition of Japanese companies. I looked at the stands, I saw with my own eyes the Japanese products and offers. This information fell very precisely on my concept of business. It was in 1991, I was thinking about the prospects and was encouraged.
It was in 1991, I was thinking about the prospects and was encouraged
Later, I had bumped into the automobile topic and realized – this was mine! When you are a design engineer, you can calculate prospects. I wanted to do business in the car sector. At that time, in our country, the car business was in its infancy. However, I knew that cars would always be relevant, and I had completely immersed in the topic.
Now, remembering that time, I wonder how many obstacles were to overcome to arrange the car supplies. It was necessary to occupy a niche and gain confidence. I could not come to an agreement with Nissan. The contacts of the Japanese trading houses came to help, kept from the exhibition that was a turning point for me. Eventually, I had set contacts with them and started to work.
I knew that cars would always be relevant, and I had completely immersed in the topic
It was the “pioneer” period of business; even our first office was located in the Dnieper city in the Palace of Pioneers. It was there, to the palace, that the Japanese came to me from the famous Toyota. I do not know why, but they believed in me. They probably understood that I am a stubborn and consistent person. Japanese value these qualities very much.
We ordered their cars and spare parts. I am asking them “How to provide service?”. They are saying “Next time we’ll fly in and show everything!”
LJ: How was your team created? Who were those people, where did you find them?
A.S.: I was always lucky with people. I myself have selected the personnel of my company. Only those who thoroughly knew their field. All of them are directors of my enterprises and each is a star in their profession! I am very proud that in due time I was able “to light” these stars. They believed me, showed remarkable persistence and became super specialists in the industry. Their fame makes me happy. My employees understand which brands we work with. These are the best global companies that do not have to be advertised. Their reputation alone can pull you and your business into any market.
I was always lucky with people
LJ: You have almost no staff turnover. What determines the atmosphere in the team? How can you keep a good specialist?
A.S.: Some (people) attempted to find better jobs. Many burned in new places and tried to return. However, I have set the “one-way ticket” rule. After all, I think if I have raised a professional, invested money in him, sent him to training courses, taught him, and he takes the certificates and leaves, then I have the right to say: “Boy, you will not come back here.” I take it as a betrayal. Who betrayed once, will do it again. And there is a lot of evidence to prove I’m right.
I have set the “one-way ticket” rule
Many of those who are still with me, I remember as young people, because we have been together for 20-30 years. These are reliable people. Some are already pensioners. However, we do not cut them, regardless of their health or psychological fatigue. We support people. Well, how can you cut a person who has been working with you for so many years?
Now we are not one single team. There are several teams. Our service centers employ more than 400 people.
LJ: You prefer to hire professionals. But if a person is promising, but is lacking knowledge and experience?
A.S.: Then we teach him! When we tried to adapt specialists from other companies to our conditions, this did not work. It is better to find young people to make professionals, to raise them. Yes, this is troublesome, but there definitely be a return on these investments. You should wait for a couple of years – and the person becomes just our specialist! This is the way teams are formed.
LJ: What does it mean for you to be a leader?
A.S.: It means knowing your strengths well. I am, for instance, a perfectionist in everything. Sometimes it gets in the way. Besides, I am persistent and stubborn. If I have caught a promising direction, nothing will stop me. Frankly speaking, I think I am a decent person. I take injustice very painfully and immediately distance myself from people who behave dishonorably.
I can afford not to like the (social) obligations. All these protocol dinners, events … I am a modest person by nature, not a public person; I don’t like to listen to meaningless conversations, I feel uncomfortable. I’d rather talk to an ordinary person or go for a walk. It would seem that I should like talking about cars. However, I know everything about them! Moreover, I’m bored talking about the cars «in general.» When customers want to discuss the benefits and qualities of cars, I switch them to experts.
I can afford not to like the (social) obligations
The Dnieper city, where I live, is a specific city. People judge others by highly misshapen patterns. I have an opportunity to shy away from judging other people and try to avoid being judged. I lead rather a modest life and stay down.
I want our society to start changing; we need more (positive) emotions, more smiles. Then I would behave in accordance with my status since I achieved this on my own. I feel the same when they ask me for a formality to perform on stage, play something or make a speech. While making a speech I rely on inspiration, as Ostap Bender advised, with music it is harder. Emotions rule music performance. And emotions tend to be ve-e-ery varying!
LJ: Now on the things, which one cannot overcome «by playing»: how does your company deal with crises? In our country, such periods do not stop.
A.S.: We always have a margin of safety. On that, we stand. And calculation. I have never sought to grow really fast and never was overloaded with loans. When I was told that in business 70% of borrowed money is normal, I replied “God forbid! I will never cross the barrier of 30%! ” Why? Because I know – the moment will come when you have to pay back. I preferred not a speedy development, but a gradual one. You should not take big steps. Therefore, you must quickly pay back the loans. Moreover, not with investment, but with working capital. Everything is transparent: the balance and accounts management. Banks love to deal with us, as we are a stable company. Besides, our company guarantees an income for them. We cope (with the crisis) because it is in our culture to follow the rules. Yes, I am very worried about the events in the country, and not only in relation to business … But I believe in the market even now, when nothing can be foreseen. Moreover, I believe in change. We create high-quality products; build enterprises to be ready for the times when the market will change.
It is in our culture to follow the rules
LJ: What is your most important achievement?
A.S.: My family is my main achievement. I was very lucky with my wife (Zhanna Kryuchkova, managing partner of Jansen Capital Management. – Ed.), and my son. I am very grateful to my parents for giving me abilities and helping me to do my studies. I am happy that I have such a family.
My family is my main achievement
I would not say that I am equally proud of my business. Yes, it gives me great pleasure; thanks to the business, I acquire self-sufficiency. Business is above all – this is understandable … But what is a businessman without a family?
LJ: I know that your spouse has dedicated 10 years to developing your business. Does working together affect the atmosphere in the family? How do you manage to maintain harmony in the relationship?
A.S.: Zhanna has an easy character; she is adaptive and very talented. If you list all her benefits – one interview will be not enough! I can only say that I prefer not to interfere in the processes and businesses where she will figure it out without me. I rarely meet such multi-faceted people as she is. She is a philologist by her first education, but sometimes it seems to me that no matter what Zhanna would be involved in, she would succeed! She made a great contribution to the development of the automobile sector. In addition, she created a consulting company. Moreover, our managers are consulting with her. I must admit, we lack competence in some things.
I completely trust my wife
I am an intuitive person, and in Zhanna’s company, they prefer to use a scientific and analytical approach. But I completely trust my wife; I know that if she is up to something, she will definitely do it qualitatively! Although we approach tasks from different angles, we are alike in one – perfectionism. Perfectionism is our common feature but we are very different in other aspects. In addition to her first education, she received a high-class business education in Europe. Without her (and her knowledge), it would be very difficult for me to create new directions. Our companies are located in several cities at once, which has some advantages. We do not see each other as often as we would like.
I was lucky with my spouse
We are very much interested in being together. There are many common topics. Our natures being completely different (she is impulsive and I am more restrained), we are not bored with each other. We are self-sufficient and autonomous. We still enjoy being together now, no matter talking or silent.
She is more talkative than I am; I am a conservative person, I mostly contemplate. Of course, I draw conclusions, but by intuition. Her driving force is knowledge. Therefore, we complement each other.
I constantly say to our managers “Learn, do not stop! As soon as we stop, we will immediately become like everyone else! ”And I do not want to be like everyone else. You have to be the best in your industry. The highest market share, the highest standards should be with us.
LJ: Despite everything that is happening in the country, does the company have a potential to grow further?
A.S.: I will not speak about the whole country. I will say about Odessa. This year we are launching two new centers: Lexus and MAN. The technical opening of Lexus took place three months ago, and the official opening will be on October 8. We cut the ribbons – and forward we go! It is like with a steam train. You need to accelerate it, but when it enters a smooth motion – then we can say that the mechanism is working. The second project in Odessa is the MAN freight service. I think it will be the best one in that region, besides, the project will add 60–70 jobs.
This year we will launch two new centers: Lexus and MAN
Now I shall boast. This year we received the Lexus Kiwami award. We are among the top ten service centers in Europe of 297
LJ: I know that you love to play guitar and you are good at it. Do you write music?
A.S.: No, I am not that talented. I can write some texts; even in my dreams, they are sometimes “written” by themselves. Author’s music is a complicated thing, and this is not mine (my talent), I guess. It is like in sports. There is fitness, and there is a professional sport. Music is a profession. I am not a musician; I look for and find additional emotions in playing the instrument.
Once I wanted to become a professional musician; but, thanks to my parents, they had talked me out of it.
I find additional emotions in playing the instrument