Serhii Hvozdiov, Ph.D, Lecturer at the Kyiv School of Economics, discusses the impact of business education in Ukraine.
War… Many important events take place during the war. Some of them happen for obvious reasons, others don’t. For a long time, the Ukrainians have been heroically holding back the offensive of numerous ferocious Russian troops. The whole Western world, struck by the fortitude of the Ukrainians asks one question – how and when did the Ukrainians become so united and strong?
I at once want to avoid accusations that I am dragging business education in as the only or determining reason for the persistence of our people. But it would be a mistake not to pay tribute to it.
Looking back to the beginning of the contemporary history of Ukraine, this period was characterised by the privatisation of natural resources and the redistribution of seed capital. The “gifted” independence stood quietly on the sidelines of the administrative takeovers of some former komsomol bosses by others. It was the power of force not law. GDP per capita remained firmly around the same rate from 1991 to 2010.
And what was happening near our borders? Four Central European countries – Poland, the Czech Republic, Hungary and Slovakia – have signed an agreement on mutual support in economic development. At the end of 2010 the Visegrad Group countries almost doubled their GDP per capita.
When right to your face the partners who started with worse economic indicators are so significantly ahead of you on key economic indicators, it becomes clear that our inaction is a separate activity beneficial to 1% of Ukraine and harmful to 99%.
Bill Davidson, a philanthropist and a successful businessman, said in the early 1990s: ‘What we do today – through action or inaction – will shape the world for future generations. At no other time have the need for success and the consequences of failure been so great.’ And we heard this warning.
Ukrainians want to join the EU, as if all our problems will be solved by joining the EU. This is not the case, as evidenced by the various problems inherent in EU member states for a long time.
If you look closely at the countries of Western Europe, you can see significant deviations from the pipe dream. A prominent Ukrainian scholar, Professor Bohdan Havrylyshyn, described the signs of an imperfect level of democracy as follows:
- At the political level – different groups of the EU have different opportunities to be “heard”
- At the economic level – a huge gap in material situation between a large number of low-income and a very small group of billionaires
- At the social level – unequal access to social benefits (education, medical treatment, legal protection)
- At the ecological level – business destroys the planet for the sake of super profits
Each of those societal flaws sounds to Ukrainians like a long-running music part. Why should one head to a community that has the same flaws that we want to get rid of? According to Professor Havrylyshyn only 5 countries have learned to control the attitude of their citizens through each of these 4 areas – Sweden, Norway, Austria, Denmark and Switzerland. They should be taken as an example and studied. They are said to be on the path of sustainable development. So what is it?
Sustainable development is development that meets the needs of the current generation without harming future generations. In other words, managers need to take care of both short-term and long-term results. Obviously, this is a difficult dilemma. But an even more difficult dilemma lies in the combination of the interests of a stable society with the interests of personal development.
Examples of how the government in some countries “stabilises” society through the invariability of the head of state are well known. In such situations the personality of citizens first falls asleep, and then turns into a dumb consumer. All dictators are frightened by the possibility of personality expression. Individuals are persecuted, arrested, raped so that they would remain silent.
To identify factors that influence the solution of these two dilemmas in Ukraine, here you should pay attention to the role of business education. I will point out that the term “business education” should be understood as a combination of: (1) business education as such, (2) an array of training programs and consulting services provided professionally in the country, (3) the results of market trends research, (4) field-specific conferences and speeches of opinion leaders in business and economics, (5) business literature promoted in the country. After numerous false starts Ukrainian business education began to shine with a special beauty like streaks of precious metal in a solid mass of gray stone.
The first ten years of independence, business school products were imported from US universities, and a large number of programs were taught by visiting professors from the US and Western Europe. However, the market for these programs has not yet been formed. The tasks that Ukrainian entrepreneurs and managers were solving hardly intersected with the content of business education programs.
The second 10th anniversary of business education in Ukraine, overcoming the crisis of 1998, taught schools to take an interest in the needs of business. Komsomol leaders of the 1990s turned into market managers. Programs began to be segmented by industry and category of management. Business owners started to study apart from hired managers. Social developments dictated new standards and requirements for business programs. This reflected in tuition prices, which doubled. But 2008 was a shock to everyone. The economic crisis “fueled” by the Russian Federation’s attack on Georgia seemed to have mocked attempts to have a long-term vision not only in business but also in life.
It was at the end of the 2008 crisis when Ukrainian business schools formed their own special style of work. They did not stop personalizing programs for the customer; schools did not abandon the study of best practices in business education, but added an important software component. The best Ukrainian schools combined business knowledge and skills with adherence to those human values that are truly important to most of us. Honesty in the commitments made, respect for other people’s property, intolerance of attempts to fool, opening of opportunities for talent development regardless of their wealth – it turned out that these are the fundamental things that are not only valued by the Ukrainians but also something that can become a real basis for sustainable development even in times of economic crisis.
This conclusion is based on completely objective information. Namely, at the end of the second decade of the XXI century the traditional list of the richest people in Ukraine, which for decades consisted of owners of natural resources and energy companies, was enlarged with the founders of successful startups. Companies with a capitalization of $ 1 billion are called Unicorns. This list includes such Ukrainian companies as:
- People.ai – a service that collects and analyzes data generated by sales managers. The system issues recommendations and as a result deals can be closed faster and more efficiently.
- GitLab and DevOps collaboration platform, which allows you to conveniently work with general code and its versions from around the world;
- Grammarly online service, which uses artificial intelligence to help write texts in English;
- Bitfury, a company that manufactures equipment and software for cryptocurrency mining.
You may be wondering how just a few companies can influence the culture of a nation as big as Ukraine? These companies have demonstrated that it is not necessary to have an administrative advantage to be successful in business. If you do something valuable for customers, they will thank you with their money. If you are appreciated by your consumer, the door is open for you to grow regardless of your origin. Symptoms of meritocracy have appeared in Ukrainian business.
Sales management theory argues that the emergence of the first “other” products or services is perceived by a very small proportion of consumers. They are called innovators, typically from 1.5 to 2.5%. The key role is played by the second wave of consumers – the first imitators of innovators. Owners of small and medium-sized companies became the first imitators of unicorns in Ukraine.
The events of the war that has been raging since February 24, 2022, made me think about Business Education 3.0. Until now our business school – KSE – has been training the ATO veterans for 4 years, helping to implement their dreams of starting their own businesses. For our ATO students and for us such communication became valuable and allowed us to open our personalities towards each other. We painted together, travelled to Ukrainian companies, met with famous people from business or politics. We exchanged sincere beliefs gained from our own experience. We have created an environment in which we said what we truly meant and did as we said. Of the 200 students almost 40% started their dream businesses. These startups had neither family ties to the authorities, nor did they join the ruling party. They started a business that solves someone’s problems, which is based on their unique skills and for which customers are willing to pay big enough money as for an entrepreneur.
With the beginning of the Russian aggression, almost 100% of our ATO graduates returned to their military units. And many of the KSE’s employees found their place in this war in combining requests from our defenders with medical suppliers or benefactors who were willing to share not excessive savings. They just wanted to know that their money would be used to buy the most necessary and that it would be delivered exactly where it was needed. We are not talking about large institutional funds that play an important role. I’m talking about micro-teams of 3-5 people who respond quickly, targeted and efficiently to military requests. What happened? In our cynical up to 2000, sceptical up to 2010 and wounded in 2014 society at a personal level there was a sense of mutual responsibility for each other, trust in each other. It’s these features that are inherent in the societies of the countries from the list of Professor Havrylyshyn, societies where an individual is respected and everything possible is done to preserve it. But every member of such a community does everything possible to protect it.
The massive selfless behaviour of the Ukrainians can be compared to how the Anglo-French corps was evacuated from Dunkirk in 1940. The Germans surrounded the Allied corps and pressed it to the coast. There was a catastrophic shortage of ships to transport the besieged soldiers. And then the owners of small sailing boats came to the rescue of the army. 933 small fleet owners saved the lives of 338,226 Allied troops.
Now it is difficult to say how many volunteer micro-teams are “digging the ground” to deliver medicines on time, where they are needed. We do not know how many high-quality certified tunicates saved the wounded from blood loss. However, I have every reason to believe that after our victory Ukraine will be cited as an example of a country with sustainable development, a country where personal development is no less valuable than the development of society.
The events of February 24 highlighted new features of the Ukrainians – we quickly grew up as a country and society. At first, we faced confusion, in which almost all the knowledge acquired before turned out to be ineffective, we had to adapt and gain new experience much faster.
It is possible that the Ukrainian people are the one who became an example of Nassim Taleb’s well-known anti-fragility – not just strong and invincible, but those whom unpredictable blows of fate make more stable and teach to use them for their own benefit. The new reality has forced us to make inquiries and solve such problems and cases for which there are no instructions or examples.
So, we at the KSE have decided to create an MBA program that would meet the current demands of the present day. This is a joint program with POLIMI Graduate School of Management, which combines best international practices, Ukrainian experience and current military cases. We create it for managers who are ready to work for the benefit and reconstruction of our country in war – and post-war times. For those who have antifragility in them.
As a conclusion, what role does Ukrainian business education play in shaping a sustainable development society?
- Business education in Ukraine plays an important and natural role – the development of a personality not only professionally but also at the level of values.
- A society that promotes personal development forms such a critical mass of people who are able to think independently that it affects the viability of society itself even in times of the highest crisis.
- The ability of citizens to protect their society from internal attacks of corruption and from external economic and political aggression forms the basis for a longer horizon of personal and organizational development planning.
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