PLANS ON A TABLE-NAPKIN*: Andrei Zdesenko from ‘Biosphere’ on the rules of investing, business transfer, Captain Nemo and the main HR issue
We are sitting in the ‘One Ocean’ restaurant in Barcelona amongst Ukrainian businessmen. Andrei Zdesenko is sharing his plans for the future with inspiration. One moment he is leaning back in his chair with laughter; the next moment he impressively depicts a serious entrepreneur, then he is taking an appearance of a demanding gourmet by discouraging the waiter with unexpected questions.
Savva Libkin, an ingenious Odessa restaurateur, begins a story with the words: “You know, my brother … he is different.” “How is that?” Andrei Zdesenko is trying to find out. “Well … completely different!” Libkin tries to explain. “How? Is he Russian?”
A burst of laughter. A new joke has just been born. Andrew, with shining eyes, punches his right hand in the open palm of his left hand and exclaims, “Is not it funny? Well, is not it paradoxical?
He has forgotten that he is on the Forbes list, and acted merrily and spontaneously like a schoolboy who scored a goal during a break. In his behavior, there is not even an attempt to be restrained, not even the thought of presenting himself in a favorable light. That is the way he is – spontaneous and bold, charismatic and original. And also successful. He has built a business empire from scratch with a turnover of over 4 billion hryvnias.
What do you feel when you see yourself on the Forbes list?
I will put it another way. If I do not find myself on the Forbes list, then I am experiencing a childish such … boyish bewilderment, annoyance. For me, this is like a kind of pedestal or a wall of honor in the world of businessmen, a fact of my solvency. If I am not there, and the guys from other yards are, then it is a shame. I have, as all ambitious people do, a portion of vanity.
Recently, a rating was published in “Novoye Vremya” (A Ukrainian weekly – Ed), but I was not there. Understanding perfectly the turnover and value of my business, I was puzzled. I think that the fund that owns this edition has some bias towards me. (Laughs.) I am sure that the market ultimately appreciates the company.
Entrepreneurs see opportunities everywhere. Sometimes giving up an opportunity is like cutting off your hand. By what principle do you choose which projects to go to and which ones not?
I have my own system of coordinates and values. I am responsible for the development of businesses through the development of opportunities. First, I identify the opportunities that integrate into an existing business. There are projects that cannot be ignored. For example, infrastructure, production, food, in which you have to invest because without investment we will not be successful in the long term.
There are also projects that are outside the core business, but I want to engage in them anyway. These are the projects that I feel high when I do them. ‘Charisma’ and ‘Vapiano’ became such businesses for me.
What is more important for you when making a decision – numbers or feelings?
First, sex should be in the project. Business should light me. When I first saw the ‘Vapiano’ restaurants full of people, it was such a drive! I said, «I want this project.» The same was with ‘Charisma’. I love fashion, this world, brands, products, and these emotions. This is passion. This is my world.
Second, the numbers. I cannot do without numbers, budgeting, P&L, and control. Even small projects should fit into a tough financial picture. Because I am a businessman.
When they say there is a promising niche, but I cannot feel the project, taste the project, I do not have an assessment to understand it, to figure out the source of success or failure — then such a project is not interesting to me for any money.
Sometimes successful businessmen go out of business or, as they say, «gone to cash.» Have you ever wanted to do this?
No, never. Even though FMCG (fast moving consumer goods) is a very difficult business. Maybe someday I will sell part of the shares of ‘Biosphere’ and create an investment fund.
At the same time, I believe that in some cases, going out of business is the only way. If you are tired of the project, if it does not drive you, if you can give the company neither energy, nor impulse, nor ambition, nor coaching, then you definitely need to either sell or take the CEO as a junior partner and entrust him the management. Sometimes it takes time to recover and be carried away with a business again.
In your business, you are the majority shareholder. Are you ready to be a minority partner?
Yes, in the future, the role of a minority shareholder is fine with me. For example, in ‘Vapiano’, I am ready to become a minority shareholder. I have given life to the project, and now I want to find people who will take responsibility for the business and drive it. Therefore, it all depends on people, projects and my involvement.
In the direction of fashion, I am also ready to share part of the business, if a strong partner appears on the horizon. As for the ‘Biosphere’ company, I am not ready to give up the role of the majority shareholder. This is a very dynamic business, which drives me.
To enter a project, I must understand this project, its DNA, see the prospects and imagine its future. Moreover, I must understand what I can give this project. If I do not have this understanding, I would rather refuse.
TO GO INTO ANY PROJECT, I MUST UNDERSTAND ITS DNA
Businesses that are built on maximizing profits for a shareholder are losing their competitiveness. Outstanding companies formulate missions with lofty goals …
You took the words out of my mouth! The mission of a business is very important to me – a contribution of this business to the world. I think, in 5–7 years I will invest only in businesses that will be significant for humanity: ecology, medicine, education, and possibly space colonization. It is not interesting to have no mission.
You are one of the few Ukrainian producers who are investing in waste and secondary raw materials recycling. How relevant are such projects for Ukraine?
‘Biosphere’ has invested approximately 5 million euros in the ‘PolyGreen’ plant, which produces secondary polyethylene granules. This was an investment not only in equipment, but also in complex infrastructure, and ‘bumps on the forehead’.
On the one hand, it is pure pragmatism. Worldwide, garbage bags are made of recycled polyethylene. If we do not do this, we will lose competitiveness. On the other hand, it is a real contribution to the environment. Now we recycle 800 tons of garbage a month, that is, about 50–70 trucks. Today, the ‘Biosphere’ plant has already become the number 1 recycler in Ukraine. Our goal is to recycle 2,000–3,000 tons in five years.
Today ‘PolyGreen’ is the most high-tech and modern enterprise, which has no analogs in the country.
Honestly, when I am sitting in a restaurant and see how the drinks packaging film is collected in a garbage bin, I think: “Damn! I could have recycled this. And how much is there collected across the country? This is gold under your feet. ” I am really mad about recycling.
I am curious, do you wrap your suitcase in polyethylene at the airport, as many of our compatriots do?
Of course not. It is clear that you need to start everything with yourself. But from the point of view of ecology, there are much more destructive processes nobody is thinking about, although they are a thousand times more relevant for Ukraine. For example, separate garbage collection. This is crucial and demonstrates the awareness and maturity of people. In Europe, there are four tanks in every yard, in any public place. And inside them – packages of different colors made of recyclables. It is immediately clear which garbage where to sort. I use to take photos of all these because this is the way to do in Ukraine. Unfortunately, today the country (government) makes populist statements but does not provide infrastructure. I am not prepared yet to lobby the environmental changes at the state level.
Some businessmen take loans with ease, while others invest mostly from profits: “We earn, we grow; we don’t earn, we wait”. Which path is closer to you?
To work exclusively on your money is the last century, an anachronism. A businessman’s task is not to lose market opportunities. Missed opportunities are not comparable with the interest on the loan. Although I personally think that, I took a little risk. I am pretty careful.
Over the years, you become bored with everything; it is more difficult to find motivation even in your favorite business. What is your motivation?
Not money, for sure. Rather, ambitions, challenge, the complexity of projects, the desire to be a leader. I do not accept mediocre results. For me it is unnatural. All my projects are uncompromising towards a mediocre result. This is my tuning fork.
You have repeatedly said that in your companies you are building a culture of effectiveness. What does it remind more – sports, army, jazz or anything else?
Sport. Football. Team play is important to me. The team includes the players in the field, substitute players, doctors, and administrators. If the team wins, then everyone is on our pedestal.
In some companies, the process is under control, while in others — only the result. What is more important to you?
Both. A result in business depends on a wide range of solutions, ideas, time management, resources, and luck. A process is fundamental for me. In some cases, we can play on-the-go and take a chance, but the process should be (under control). Even the process of innovation. If the process is correct, then you have more chances for a good result.
Your HR manager, who has been working for the company for 10 years, for many years had a sticker on the table with a question from Andrei Zdesenko: “Is ‘Biosphere’ still attractive to talented and highly productive people?” Is this the main question for you?
Yes, the most important. Because we self-realize only through people. Only people provide competitiveness, efficiency and effectiveness. As they say, the corporation is moving at the speed of the slowest ‘top’.
I believe that from the point of view of the company and its capabilities, ‘Biosphere’ is attractive – we have set a good pace. But if you ask my personal assessment of the ‘Biosphere’s attractiveness on a 10- point scale, it would be 7. We do have things to improve.
LIFE IS THE ART OF ENGAGEMENT. YOU EITHER ENGAGE OR ARE ENGAGED
What is your challenge now?
This is a deliberate replacement of people who have been successful in the past with people who are truly productive and ambitious, capable to create and compete faster and better than others. And here is the moral and ethical dilemma. It is hard for you to say, “Look, the employee has no result.” Or, for example, a new person comes, who also shows a good result, but you understand that he will not drive the way the company needs. He may not fit the company’s values, or incapable to upgrade personally and professionally, to lead and develop a team. Further, it will be more and more difficult.
Do you give subordinates a margin for errors? What big mistake have you forgiven?
A recent example. When the first signals came about the problems of a well-known foreign bank, our responsible employee did not attach any importance to this. As a result, the company’s capital could have been immobilized or completely lost. Fortunately, we were able to find a quick solution and exit with the lowest possible losses. The situation was extremely unpleasant, but we did not dismiss the employee whose inexperience cost the company so dearly.
And what will you never be able to forgive a person?
Stealing, lies, manipulation of people and facts.
It happens that you have a manager trained, upgraded to a good level, and he goes to another company. If he wants to return, will you take him back?
Yes, it happened more than once. It depends on how the person has left: if he has left and behaved decently in relation to the company, then we will take him back. There are positive examples when people came back and worked well.
Now companies are competing who is more digital.
I am just now figuring out what it is to be digital and we are preparing for the transformation of the company.
Speaking on digitalization … The leaders of China have launched a system of social rating of their citizens. It will form a rating of trustworthiness of citizens, given their behavior in society. How do you feel about this?
If it really is a balanced integrated system, then it is generally fine. But it is important that it does not limit creative and inventive people. In our country, by the way, Evgeny Utkin and partners are developing a similar startup.
You and your wife are members of the Family Business Owners Association (FBN). Are you pushing your children to entrepreneurship?
I want them to be entrepreneurs in the areas they would be happier and most competitive. Entrepreneurs – photographers, fashion designers, cooks, IT people — are changing the world. I would like them to self-realize to the limit in the business they choose.
Sting said in an interview that he did not plan to leave a fortune of 600 million to his children. Is this approach close to you?
Absolutely. I have two children. Children will not get my fortune and they know about it. They will have a start-up capital to launch their own business, and then they will have to make money and develop themselves. I liked the joke of the son of one of the founders of ‘Troika Dialog’, Ruben Vardanyan. Dad said: “You won’t get my one-billion fortune.” To which the son replied, “Okay, papa. Only do not leave debts”.
Many leaders challenge themselves with (participation in) ‘Ironman’, ‘Ocean man’, “Velo100’. They get up almost at five in the morning, do sports for an hour and a half, and then work until late at night. Do you set yourself such challenges?
I doubt that people who wake up every day at five in the morning and spend a lot of time training for competitions have any energy, to say nothing of motivation. After all, sports and business are different things. This is a strong de-focus (diffused focus).
My day begins with jogging, swimming or yoga – that is enough for me. I used to play squash and football. In addition, I have a dream – to dance hip-hop with my children at the upcoming my 50th anniversary’s party. This inspires me more.
On the back of your business cards, it says, «Open for you».
For me, this is a personal approach. However, the mission of ‘Biosphere’ – “We create value” is on the new business cards. Both are important to me.
You have recently participated in the Aspen seminar ‘Responsible Leadership’. What prompted a successful businessman, whose calendar is scheduled a year in advance, to go to the Carpathians for a five-days seminar?
I never stop learning. And curiosity, openness are the qualities that I profess and which are the key to my development, especially in new businesses, new experiences, new knowledge, and ideas. Again (the motto) “Open for you” broadcasts these. Aspen is a mirror, an opportunity to look at yourself from the outside, through wisdom, through the manifestation of other people. It means to stop; it means for five days to get out of the usual role of a boss, a leader of the company and spend time amongst equal people and contemplate on leadership, management, approaches. Plus, to be a contribution for others.
As for people I have met – I want them to be in my further life. The Aspen movement is unique in its content, energy, and most importantly – the contribution that can be made by uniting.
* Wet napkins are one of the main products of ‘Biosphere’.