Difficulties of Work in Transition Market


Frank PUCELIK

President of Pucelik Consulting Group

Ukraine today is one of the most attractive markets for Western investors and international companies, being a sticking point for most of them at the same time. The territory of great power with all its resources became available for entrepreneurs and businessmen of world society after Soviet Union breakup and the fall of “iron curtain”. Having much more experience in business they’ve decided to take in their hands entrepreneurship in a new country. But this idea came to grief, which became the first failure for these companies in spite of their many years experience. Many of Western companies didn’t dare to take a risk and come to Ukrainian market till now, because the reasons of failure of the first commers were not eliminated.


Closed Market

Bright representative of the system which is called “closed market” is the way of making business in Soviet Union (if it is possible to say so). The main goal of this system was enrichment of some small group of people, who possess almost absolute power. This system was based upon the “grey mass” – workers, who did the minimum amount of required job, they were scared or had absolutely no interest in what they do, so they didn’t pry into their bosses’ business. It is worth to notice that closed market brilliantly managed almost impossible task – it made people stop being humans. Such things as aspiration for success and becoming part of something big people have at genetic level. Nevertheless, most of Ukrainian market employees can be characterized by two peculiarities: on the one hand, there is absolute indifference towards their job and no desire to develop or change something, on the other hand – general antipathy as to personal work so to the company and staff in general.


Such situation inhabited Ukrainian companies with “ghosts” – employees, whose perfect working day is defined by two factors: to work as less as possible having minimum interactions with chief. At that, situation is so common and ordinary that even young people, who have no work experience yet, are getting their first job with readiness for this; “consultations” with parents and more “experienced” friends formed some definite believes. The most popular among them are:


My future boss doesn’t care about me or my problems – I’ll be just a “small crew” in a big mechanism and only results of my work matter.

Results of my work will have no influence on my career growth – there always will be closed friend or relative of my boss, who will get advancement sooner than me in spite of lower productivity level and dissatisfied results.

Anyway, there is always way out of such situation because any company has corruption both at higher levels (government institutes, public officials) and lower levels – any employee can be compromised and manipulated.


Unfortunately, these beliefs are true and bosses really behave this way. But the most embarrassing is the fact that the majority of bosses do that unconsciously at the example of their predecessors. Though, it is not the best example to follow…

As stated above, closed market had a purpose and reaching it required definite principles of work. “Power game” became the main principle, such notions as personal development, effectiveness, decency shifted to the back front giving place to closed market three “keys of success” – control, connections and fear. It affected the ways of work with information. In the closed market information was used as a weapon, the way to get power that’s why it wasn’t spread but thoroughly controlled. Perhaps this feature became the reason of failure for Western companies in Ukraine. Fortunately, closed market stayed in past for Ukraine…but not much was forgotten.


Transition Market

Ukrainian market started to transform slowly but confidently with the fall of the regime. Unfortunately this is not a quick process, however in the case with Ukraine, the speed of this process is really unique – history doesn’t remember that amount of changes per time unit which is happening here. However, this precipitancy is advantage and disadvantage at the same time. It is an advantage because Ukraine is getting closer to “competitive” market every day (sometimes “opened”). Disadvantage – because this is what world companies are waiting for, which can work only in competitive market and doing that so well that only few Ukrainian companies will be able to compete with them. But this is your country and you have a right, and most important – abilities, to run your business in your country. But you have to give up some bad habits, which migrated from the closed market system.


Managers’ Behavior

There are so many differences between closed and opened market systems that it is impossible to cover all of them by means of one article. But it is worth to touch one aspect – this is managers’ habits which can prevent development of any business. Of course, such habits were not sudden in closed market – all of them were directed on “power game” maintenance.


Public criticism. Up to now great amount of managers are confident about the advantages of public criticism, it teaches how not to do things and the more people are present at that process the better it works. But anyone, who was on the “other side”, knows that any public criticism not only teaches how not to do things but discourages to do anything at all. Not only criticized employees are discouraged but also those who have heard or seen this process. In that way one criticism is able to destroy motivation of huge number of people. There are five simple rules of criticism in the competitive market system. They are constantly broken by our managers in spite of their evidence:


Criticism should be private according to the reason mentioned above.


Criticism should be soft. As soon as manager raises his/her voice, allows usage of unquotable phrases, etc., criticized person moves to “defense” – stops listening and looks for excuses. One of most common mistakes is misbelieve that “some people understand only this language” and it was disproved by experienced managers.


Critics must be fast. This process is unpleasant at its nature, that’s why the more laconically and faster manager can state his/her claims, the better.


Criticism must be behaviorally specific, not personally oriented. No manager is allowed to judge on public his/her employee as a person, but he/she is allowed to criticize certain behaviors.


Criticism should be of recommendation character. It is easy to find the mistakes in the work that was done and criticize those who did them. It is much more difficult to suggest ways to correct them and eliminate in future.


Lateness. This habit is perfectly illustrated by famous Russian proverb: “boss doesn’t late, boss stays too long”. When manager was late for meeting, in the closed system, he claimed privately: “my time is more valuable than those I’m going to meet with”. This was another demonstration of power – the longer manager kept people waiting for him/her; the more important he/she seemed to be. In the opened market respect is of double-sided character – if person demonstrates disrespect towards time of other people he/she will get the same disrespect back which will definitely influence on his/her possibility to work with those who are around.


Retardation of meeting. If some managers have fixed the problem mentioned above, it became much more difficult to finish meetings on time. This habit is even more destructive, because one unplanned meeting may break the day of all who are present turning usual day into solution of sudden backlog of problems.


Broken promises. “Image” of manager in closed system played a greater part than certain results – boss shouldn’t work, his duty is to make others work and solve other “issues”! At that, solution of such “issues” was not necessarily supported by actions: it is important just to claim that the problem will be solved; it was either impossible to check its actual solution or was not relevant. Simple but hard rule functions in an opened market system – “if your word worth nothing, then you worth nothing”. None will deal with a man who doesn’t keep his word.


Means of communication. Phones and other means of communication were created to help people, but in closed system telephones became more disturbing, rather than helpful. Constant derivation to answer the phone suited many bosses – the more often it was happening, the more important and successful he seemed to be. Non-managerial staff had to answer immediately at manager’s and client’s calls – otherwise, they may loose their job. In contrast, immediate availability on the phone is considered a bad form in the competitive market – if it is possible to get the person on phone any time it may mean only one thing – he has no work to do. If such behavior is demonstrated during the meeting, it is considered an extreme form of disrespect to the interlocutors – a phone call a priori cannot be more important than physical presence of a person.


Rumors. It became a common thing to complain about your job, boss, or colleagues in the companies of closed market, as well as spreading negative rumors about them. Usually artificial information system surpasses official one, that’s why it was one more way to get control in closed system. If this system bears destructive character, it will become a sticking point in company’s development – effective growth and development in such atmosphere are impossible.


It is not easy to stop rumors, but the first striking difference between closed and opened systems are people, who adore their job and are happy for the successes of their colleagues. Though, many bosses of closed system are convinced that this happiness is feigned and deep inside they also hate their job, just don’t tell anybody. This is sad mistake which strengthens confidence of our managers in their rightfulness.


Working on the territory of CIS for more than 15 years already, Pucelik Consulting Group has obtained unique experience. Studying and understanding principles of closed market work we could adapt knowledge, gained because of many years of work in the competitive market, to the peculiarities of transition market. Thankfully to our system of trainings and intercorporate consulting we help the companies of former Soviet republics to develop their business corresponding to the high standards of International business. Though this process is not always smooth, a lot of examples of our clients have proved the effectiveness of created system and the most important is the rightfulness of chosen direction...


At the materials of “Upravlenie Personalom” magazine #07 (154) 2006