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They want to built corporation №1 in the world
Karlygash Ezhenova
Muhtar Ablyazov, Chairman of BTA Bank Directors Council: We are on the way with those who are willing to find their destiny.
- BTA has recently revised its ambitions in a very original manner so as to survive in crisis and strive for becoming one of the leading financial groups in the world. What are you figuring on?
- There is a rule in chess – to struggle until the very end by using any possible resources. And eventually you will be rewarded.
True, we have revised our plans by focusing on internal sources of growth rather than external funding. Here we are speaking about qualitative categories: adequate strategy, efficient management, corporate governance, competitive product line, enhancement of technology, development of the principal markets of our activities: Kazakhstan, Russia, Ukraine.
First of all, in no circumstances are we going to lose our leading position in Kazakhstan. Quite the contrary, we are expecting at least 20 per cent annual growth. I think you understand that it is quite a serious decision in the current environment. BTA has started to search for new resources and managed to find plenty of them. If you look closer, you will see lots of undeveloped market segments that we are often unable to reveal. For example, a more aggressive policy on the mass segment level in Kazakhstan only will allow attracting at least 600 million US dollars of deposits until the end of the year. BTA Russia has already increased deposited amounts in Moscow only from 50-60 thousand to 2 million US dollars a day. Within the coming two years we are intended to raise this volume and reach the figure of 10 million US dollars. Target-oriented operation in the Russian, Ukrainian and Kazakh markets only should produce about 4-5 billion US dollars of deposits placed by individuals. That’s quite a modest figure. The crisis has made us gather all our strength. And become more mobile.
- Why did you claim 2% of the Russian market until 2015?
- We are expecting that the Russian BTA Bank assets in 2008 will grow more than twice and amount to 3 billion US dollars. I am sure that in the current condition of the Russian market we can grow 2-3 times a year throughout 4-5 years. And it is possible to grow in a similar way in Ukraine. These markets have a huge potential. There are still a lot of people who avoid bank services and prefer to keep their money at home. Even in Europe – taking into account its level of development – up to 40% of population do not employ bank services. In think in the CIS countries this figure is about 5-7%. We do understand that the income level here cannot be compared with the world average figure. But it will grow for sure.
I may probably seem too optimistic. But that’s the human nature: when everything is OK people believe that it will for ever be like that. And when things take a turn for the worse everybody is sure that it will never be better. I think we need to analyze the trends and then we can see that even in such situation there are opportunities for rapid development.
I am sure all the current problems are temporary. There is a more systematic, important and long-term challenge – human capital. And this is a critical issue not only for BTA and Kazakhstan but for the entire post-Soviet region. I am afraid that in this regard we have almost exhausted the stable reserve that was formed in the times of the USSR.
- To which extent is your approach applicable to Ukraine with its more specific market?
- I do agree that the Ukrainian financial market is regarded as more competitive – almost all the five largest banks are owned by western investors. But on the other hand, there are plenty of possibilities for rapid growth in Ukraine. For example, now when the whole world is suffering from the food crisis, the Ukrainian lands are in huge demand. The market has a serious energy potential. There is a possibility of integrating in Europe – it is a largest energy consumer. Owing to its geopolitical position, Ukraine will inevitably develop its transport infrastructure and machine building. The Ukrainian population – which is about 48 million – is highly educated. That’s the most important resource in the country. Huge potential. This means that the western companies operating in the market will be unable to absorb the Ukrainian growth. So I am sure that everybody will find their niche in the market.
- You have also mentioned your plans for expansion outside the CIS region. Could you tell about the time limits and basic areas of expansion?
- We have several interconnected and simultaneous areas of development. First of all, strengthening our position in the CIS countries. Second, emerging markets of Turkey and China and, most probably, Middle East. The third area includes Europe and America. In some areas we are rapidly moving forward, in others – making first steps. We have already obtained a foothold in the CIS region. Now it’s time to expand our activities to Turkey and China.
All these targets require the establishment of a vertically integrated holding patterned after the largest international financial groups. Due to the fact that the next step of our development is connected with strengthening of our position in the CIS region, probably the holding management will be located not only in Almaty but also in Moscow. That’s a logical step taking into account the fact that in the coming 5-10 years at least 80% of BTA Bank’s activities will be focused on CIS countries.
But simultaneously – as a natural growth condition – BTA will continue its integration into the international financial system. Before the year 2030, BTA is intended to be ranked among the leading banks of the world. I do understand that this may seem too ambitious. But the experience shows that in many cases the champions are those who did not have any pre-requisites to become successful. For example, HSBC, being a leader of the world financial system even in the current conditions, began to operate in post-colonial Hong-Kong, on a territory with scanty population and almost non-existent economy. Starting from 1992, HSBC has made its last huge jerk. Such examples are numerous. A number of European banks have made a large progress within the past 15 years.
To make a similar breakthrough, it is necessary to set the right goals. When BTA began to pursue an expansion strategy, it laid the basis for its growth. Not to use these opportunities means to mock the effects of the people who were building this basis. And using the opportunities means to move further, even if others start to criticize us – just as they did when we decided to expand outside Kazakhstan.
In fact, time is on our side. Let us assume that the European markets have standardized within the past 10 years in terms of entry possibilities. If we open BTA in Germany, the current legislation of the European Union will make it possible to establish branches in all states of the region quite quickly without regulators’ approval. Furthermore, the financial institutions that were intending to expand their activities in the CIS region a year ago, have revised their plans for at least 2-3 years. And BTA Bank is “hungry” in the good sense of this word, we are in good athletic shape, not used to comfort and are constantly moving forward.
- There is a massive discussion concerning the portfolio quality and growth of impaired loans. What can you say in this regard?
- Of course, the deterioration of the portfolio is obvious. But we are looking at the overall situation. We do realize that business is rapidly restructuring. The arrears amount is within reasonable limits. I can cite our bank as an example. At the end of 2007 the reserve volume was 5.4 per cent, and on 1 April 2008 the amount of provisions for the loan portfolio made up about 7 per cent. And we continue to raise it. It’s a kind of a pad for possible portfolio deterioration. The amount of profit compares well with the last year figure. So if we continue to earn a lot, it means that the market allows us to do that. In such conditions we can work for at least 12-18 months. Within this period of time everything will be restructured and adjusted. And then new growing points will arise – a new challenge.
What was the reason for postponing IPO entry until 2010?
IPO is not an end in itself. The profit that we are currently earning is sufficient for our growth. We have not cancelled our plans for autumn 2009, yet we are afraid that the hard situation in the financial market will hold. Multipliers are low. On this price level there is no necessity in joining IPO.
- What is leadership for BTA – geographic expansion or technology breakthrough?
- Globalization has to a certain extent leveled the geographic factor. Therefore, apart from strengthening out position in the markets, we are planning to achieve technological leadership that will ensure high-quality services provided to our customers. In general, leadership is being actively shifted to the delicate sphere: intellectual, ideological, cultural. I consider this to be a progressive trend.
Good quality of our assets, corporate management and advanced IT-technology should allow us to update continuously without changing our essence. It’s impossible to implement an established strategy ignoring the changing world. The ability to feel the slightest changes in the environment is the guarantee of successful growth. Finally, the most important thing is that our customers should always feel that we are greatly interested in their well-being, and, therefore, we are working for the sake of their business growth, and working better than the customers expect.
- BTA Bank is also known for its nontrivial step – you have invited the renowned writer Chingiz Aitmatov as an Independent Director in the Board of Directors. Unfortunately, your plans were not to be implemented. Nevertheless, what prompted such an unusual decision?
- Any business implies something else besides money. The financial system is a mechanism that ensures the dialog between economies. And, as a consequence, it is a dialogue between people, cultures, civilizations. We cannot underestimate this factor. The BTA Group strategy is currently focused on the dialogue between people that have the same cultural background, and Aitmatov is one of its brightest representatives. The generation that makes decisions today includes the people who were growing with Aitmatov’s books. Nowadays business lacks culture in the global sense of this word. And vice versa. For me personally, Aitmatov is especially close because he managed to remind people about eternal human values in his original manner. That’s what makes me also close to Okudzhava. His songs help you to remain true to yourself. All his creative works are filled with struggle for internal human freedom.
Roman Solodchenko, BTA Bank Chairman of Board: We must shift from “management” to “leadership”.
«There is something predefined in everybody’s life. As for me, it shows itself in the fact that I went to school with the English language base. I liked learning the language so much that later I started learning it on my own; I’m still learning it and exploring more and more new facets. On graduating from the institute, at first I was going to become a scientist, then a broker at the goods and raw materials exchange, and in the end I entered the Kazakhstan Institute of Management, Economics, and Strategic Research that was the only educational institution where instructors were live foreigners. Thanks to my previous language training I was taken to the advanced group that was instructed by an American journalist; in two months I found myself in the list of candidates to work for the representative office of Canadian consulting company СESO. In spite of the fact that I kept saying 'well… well…’ at the interview (I thought that I was saying “хорошо-хорошо” and in the fact it was “ну…ну…”) they hired me; and those $300 that I got for the representative office opening were the best present for my mother’s birthday in my life. With that my career began; and whatever skills I’ve acquired afterward, while introducing me to someone my chiefs and colleagues invariably start my characterization with my language knowledge.»
- You told once that you like learning but not working. Are you a pathological A-student?
- Good God, no! I just got marvelous training. At Republican School of Physics and Mathematics I was a C-student most of the times, but not a hard worker; but my knowledge was enough to graduate from the institute with honors. We were taught to study, not to drill. When one masters the “mechanics” of this process, one can independently study almost any discipline. In my opinion it is the main basic skill that school should develop. I like learning and comprehending something new, at first I acquired knowledge, then as memory cells are being filled up the accent moves to skills accumulation. This process is never-ending, but one enjoys it properly only after the minimum necessary for life is accumulated and one is able to choose what to study next. Four years ago I made so to speak an inventory of accumulated experience and made a list of skills that I’d like to acquire. I must say that 70% of the list I fulfilled while working at Turan Alem Bank. These are skills of leadership, conflict management, communication, and presentation. Among unfulfilled remained sport and creative work; I still dream to dance; I’d like to master French which I started learning after I left public service.
- Can one say that you program yourself?
- Only to a certain extent. I never define strictly the ways of object achieving and let the destiny choose the best course. At the same time I clearly picture the final result. This approach has deep historical roots. Our ancestors whichever religion they belonged to never forgot to start the statements about future plans with a saying “God grant”. Any statements regarding future events are strictly regulated even in the modern prospects of securities emission. The most important in this approach is to keep to the centre of the event stream and not to hinder defined objectives in their realization. One can found oneself in the back-water, we call it deadlock situations. In this case one should carefully (not to hit the bank) try one way or another until one pull oneself to the rapids.
- It is a very strange position for a top-manager.
- Perhaps, but on the other hand I don’t tend to consider myself as a model top-manager. On the contrary, every day I try to prove to myself and to others that I’m qualified enough to hold this position.
-What do you prefer: to manage staff or processes?
- I don’t quite understand the essence of such a choice; to manage processes without staff is possible only on completely robotized factory, as for staff management I think that nowadays this notion is applicable only to strictly regulated organizations, for instance an army or Emergency Control Ministry, where a subordinate is to follow orders without any exception. Such a command system doesn’t work in organizations that aim at higher work efficiency. The only way to get an employee’s maximum is to create such conditions in which he or she would seek after it. It means that the notion “management” is slowly being replaced by the notion “leadership”. A leader doesn’t give orders, but sets goals and inspires people to realize them.
- What do you consider your strong and weak points?
- The answer on this question is fuller and more argumentative when it’s given by a direct executive or by direct subordinates. I think that my main characteristics are orientation toward common humane values, positive spirit, and perhaps a sense of humor. Though they say that a person who says that he or she appreciate sense of humor in fact seeks an auditory that would laughed at their jokes, as for me, it is an important skill for survival like a skill in swimming. As many things in our life these characteristics have a reverse side. I can hardly handle the situations requiring strict administration; I can underestimate the gravity of a problem or take an unnecessarily principled stand. Everyone has their flaws, and for an organization it is important not to struggle with them but to know how they are compensated with the strong points of the other team members.
- What do you think caused the growth of Turan Alem Bank?
- First of all, it is the same factors that contributed to the growth of all Kazakhstan banks: (i) rapid development of bank sector called forth by the favorable regulatory climate and general economical growth in the growing energy carrier prices environment and (ii) prolonged quite period at the financial world markets. Our strategy fundamentally differed from that of other banks in the realization of opportunities concerning the low barriers of neighbor countries markets entering. Today it is impossible even for a big international bank to repeat such a breakthrough to the CIS and neighboring foreign countries markets; the reason of it is that the situation has changed and a window of opportunities has been shut. For instance, Raiffeisen Bank that announced more than once its strategic interests at the Kazakhstan financial market was not able to provide its presence here on a grand scale. The other foreign banks operating here were moved from 3-4th position far below the top ten; and they will hardly return their positions in the foreseeable future. On the other hand, it will be difficult for our close competitors to expand their activity in the CIS and even in Turkey as such a strategy requires heavy withdrawal of resources. The second distinguishing feature of our bank is the very idea of the creation of a single bank for the CIS and neighboring foreign countries. As any other grandiose idea it gets a response from our investors, our clients and our employees as well; it gives us a considerable credit limit that helps us to overcome the situations of downturn at world financial markets. We didn’t aim at counting the value of our main non-material assets, but I’m sure it amounts to hundreds of millions if not billions dollars.
- What do you consider your uniqueness for Turan Alem Bank?
- Thanks to my previous experience in business I am a bearer of the western values; at the same time my soul is flesh of my motherland flesh. The combination of these characteristics is most likely to determine a call for me working in the bank at the transitional stage. During our development we faced both the period of wild market and the period of unrestrained growth. Now it is time for a position struggle when business competition is shifting from logical to emotional sphere, when the fight is arising for every client, but not for dominance in this or another region, when one hundredth percent matters, when our direct rivals aren’t people known from youth, but experienced western bankers of the second or third generation. New times make new demands; and bank administration should be in the hands of different professionals. A sprinter should give place to a stayer; a winner of “Paris-Dakar” rally should take the steering-wheel instead of a motocross winner. The Kazakhstan bank sector forces alignment for the next five years depends on the speed and effectiveness of this process.
Henry Holodzinskiy, deputy of BTA Bank Chairman of Board: Who wants to realize their dreams find the ways, those who don’t want to – look for reasons.
- You are one of those few BTA Top Managers who can speak about the Bank in terms of succession, management, and traditions. What is BTA like now: a bank with 87-year history or a young ambitious bank established in 1998?
- I can tell you part of my story, and then you can make your own judgment. I was 22 when a new director came to the factory. On Sunday, he looked round the factory for the very first time. Obviously, the security guards told him that there was a worker in the design department. Then an unfamiliar man entered the department without introducing himself. At that moment I was standing at the drawing board making a project on the “theory of mechanisms and machines”. As a graduate of an aircraft institute, he became interested. He checked the drawings, noted the high accuracy of graphic calculations, talked to me for a while and left.
On Monday I was invited to the Director’s office. I was very surprised to see the previous day interlocutor in front of me, his name was V.G. Pankratov. He said he had an idea to create a complex of auxiliary services at the factory and offered me…. to be the head of this complex. I decided it was a joke and asked for some time to think it over. Director said, “This means you a man of no character”. I objected, and he replied that I had to take a decision that very moment, otherwise he would never offer me anything.
Young age had its effect. I agreed saying that I would be working day and night, but if I did not manage to do something, I shouldn’t be blamed. He was satisfied with my reply and an hour later a got my appointment. Actually that work rhythm remained for the whole of my life. I think this person predetermined a lot in my life. During those Soviet Union times this was, to put it mildly, a nonstandard decision taken by the head of a factory.
From the very first day there was a lot of responsibility. On the second day I tried to make excuses, then Director asked me to go back to the reception, leave the door open and read loudly the bronze slogan on the poster: “those who want to do something look for the ways, those who do not – look for the reasons”. This type of influence was used twice again. But for me it became a most important rule in business and life. Ten years later I became head of the factory.
We do understand – life is cyclic. Everything is repeated, only on a new, more sophisticated level. When I left politics in August 1991, I was offered to head a branch of Vnesheconombank of Kazakhstan. This was something new for me, and I agreed. The branch started its operation having two people on the staff – me and the accountant, and one room on the fourth floor of the building which is now the Regional Akimat (administration). Vnesheconombank of Kazakhstan had no resources as it became autonomous from the USSR Vnesheconombank.
We collected the authorized capital on our own, for five months we lived on our personal savings only. At that tine I worked out the plan of the branch development for 10 years. By the end of the period it was planned to reach the profit margin of 10-15 million US dollars. Everybody thought I was mad. But we succeeded… thought with adjustments, due to numerous bank restructurings. No one can avoid them. In fact, the branch was operating as “a bank in the bank. A bit later I was dreaming of establishing a regional bank that would have relationships with Russia. I succeeded again… only in BTА. And now – a new wave of CIS and foreign countries. Life is a wonderful thing.
- Do you think BTA began to work with the small and medium business segment at the right moment?
- If we look 10-15 years back, we can say that the banks Turan and Alem, and since 1997 the consolidated bank TuranAlem, were focusing on corporate customers. The corporate unit is still the largest sector of the Bank that has a highly organized management and adequate bank service provided to customers.
Except for a few branches, the bank began to develop its SMB unit since 2000 only. A more active stage of development started in 2006. Within 18 months, the lending volume has grown from 650 mln. to 2,200 mln. US dollars in Kazakhstan only. The market share has increased from 11.2 to 18.6 per cent. Almost 100 mln. US dollars of profit in 2007 was earned by SMB unit.
- Small and medium businesses are not experiencing their best times now. How are you planning to grow?
- Unfortunately, this problem exists. Imbalance in Kazakhstan housing construction and the world financial crisis have influenced small and medium business development.
We had to make a pause in the lending process, reveal the essence of the current events, and work out the appropriate measures. We were mostly concerned about the crisis in housing construction rather than the world crisis. It was necessary to understand the profundity of these problems, breadth of economic sectors, the number of companies involved in construction. Actually, this pause was also important for the customers. We have analyzed the challenges within a very short time and made conclusions. Then we made stress tests, updated the existing banking products and are currently developing the new products for SMB. We find the quality of the portfolio quite satisfactory. This can be proved by the fact that the share of debts over 90 days past due amounts to only 0.85%, and in large branches this figure is twice as low. My experience proves that MSB is the first sector that suffers from crises, but it is also the first that can be restored.
We are beginning to increase the volume of loans extended. The market share is gradually growing after the overall pause in Kazakhstan. We are working out different approaches for our CIS and foreign subdivisions. And we intend to go on consistently implementing our part of BTA strategic development plan.
- But why should an entrepreneur choose BTA?
- The entrepreneurs have chosen BTA long ago. Apart from all other features: reliability, conditions, service, we have always succeeded in being more focused on the market – not on politics. You can believe me that’s an important issue which is proved by the fact that during the lending pause, the number of our customers did not drop – it only increased.
We are more attentive to the customers’ business development. We have developed a program for nascent entrepreneurs and created the adequate products. It is very important in the current conditions. Besides, BTA network in CIS and foreign countries will be able to offer very good product packages to entrepreneurs in the near future.
- What is the current status of SMB in Kazakhstan and CIS countries? What are the actual problems of the middle class? And what would you advise them?
- SMB in Kazakhstan is experiencing the consequences of crisis in housing construction, businesses and loans are leveling out. This process will last up to 1-2 years.
Crisis has certainly squeezed up small and medium business and created uncomfortable conditions for many entrepreneurs. But on the other hand, crisis has made business less vulnerable. Business is developing protective immunity against crises. You can see it in many firms.
In CIS this problem is less painful for us since the market share is not significant.
My advice for entrepreneurs is to be tolerant and persistently overcome hardships that may arise in a possible emergency situation.
- You have a wonderful Soviet background. But the putsch has ruined everything. Or hasn’t’? Do you miss the Soviet Union times? Which experience is mostly important for BTA that is planning to operate in the post-Soviet region?
- I do have an interesting life. The putsch did not do any harm to me personally. I am only sorry that such a vast power has collapsed. Today it might have been a powerful domestic market. Just imagine everything owned by CIS countries at present – twice or thrice as much, what a huge potential that might be.
However, those times cannot be returned. We need to live in real life mode and make all possible efforts to let our business grow. We should do our best to make the countries where BTA is operating wealthier and people happier.
George Iosifyan, member of the Board BTA: All you need is corporate governance and strong IT.
- At present we are actively trying to introduce something which is referred to as “international (western) standards”. These principles might work or will be working, or can only work within a certain system that is based on a stable foundation. But the trouble is that for the time being they are not quite suitable for CIS due to the lack of system, rules of play or proper institutions…
- Based on my own experience I cannot fully agree with that. The Russian company ROSNO invited me for the purpose of implementing its strategy of development, performing takeover/merger transactions and expanding its activities to other regions. It is quite obvious that I started working in an American style, i.e. applying American principles of work. And of course I encountered great resistance. Although some Germans from Alliance head office had already been working in Rosno, they were mainly dealing with technical and technological issues, estimating insurance risks and underwriting. And as far as corporate development and strategy are concerned, this was still a Russian company. At that time many people told me that here it will not work, the Russians have a different mentality, that it is hardly possible to introduce all this. But then it turned out that it is. Thought it was not me who did it. This happened after Alliance purchased the whole Rosno and replaced several managers. Now everything is just fine, and Rosno is moving forward becoming increasingly strong insurance company.
- Do you mean that replacement of management is the only way out?
- What I want to say is that if we analyze return to share capital and growth of shares, even among the Russian companies the leaders are the companies that have strong corporate governance. No matter how strange this may seem, effectiveness of corporate governance depends on efficient IT. One of the main principles of corporate governance is the system of checks and balances, accountability and control which implies that all directions are to be regularly checked, controlled and provided with feedback. This system does not only apply to financial, PNL and balance sheet statements. It applies to all indicators in all areas. Efficient IT system which makes it possible to provide timely and adequate information enables management to properly organize its work, make appropriate decisions and efficiently govern the process. If we want to achieve the results we are talking about we need a modern efficient IT-system. I believe we should not hesitate to invest in its installation.
Another direction is not as complex as the first two (corporate governance and IT-system) – it is necessary to analyze the western financial products. I dare say that in spite of all the current problems in the American market of mortgage securities, American banking system and products they offer to their customers are the most developed ones. This is true about everything: product line, positioning, marketing and even giving the customer an opportunity to choose the credit card design, for example, with the picture of landscape, national flag, etc. I am not specializing in this field, I can rely on my own experience: what I have seen, felt and gained in America. But I do understand that what we need to do is accepting the decisions that have already been made. We are not going to re-invent the wheel. While our banks are still at embryonal stage of development, the American financial market has achieved everything that might be achieved within 200 years of financial system existence. So we should just blindly adopt products, and there are plenty of them. I am sure this will extend our customer base and may become our competitive advantage.
- What is your personal competitive advantage?
- Besides professional skills and knowledge obtained during the studies in the business school, working in American and Russian markets, my advantage is that I feel investors. I can speak their language and to a certain extent change their opinion in our favour. I don’t really like boasting. It is the result of the person’s work that can describe him in the best way. I was pleased to hear from your colleagues that currently I am the most needed speaker at their banking and financial conferences. Only within the last two days I received lots of invitations from conference producers as a speaker on the Kazakh banking market. Probably I can do it.
- What do you think are our vulnerable areas?
- Actually I am used to solving the tasks on my own and reporting later. Unfortunately the rule here is to remind the shareholders all the time about oneself and, curiously enough, it works. But I am not going to change.
- Do you feel lonely in Kazakhstan?
- No, I understood long ago that if you enjoy your job it becomes your lifestyle. I love my job and, therefore, when I arrive at work at 8 a.m. and leave at 10 p.m., I do not notice the time and don’t feel tired.
Murat Yuldashev, deputy of BTA Bank Chairman of Board: Bank is a balance between risk and conservatism.
- What do you think made the Bank grow thus far?
- First of all, BTA top management took proper decisions in due time. One of such decisions was extension of branch network. At that time there was no elaborate business plan that would determine how many branches should be opened in which region and why. But this was the right decision that laid the basis for appearance of a large financial institution in Kazakhstan. I should say that taking right decisions that have not been thoroughly scrutinized is typical of a certain stage of business development in all post-Soviet countries. It is a matter of common sense rather than accurate calculation. There appear several leaders that have a definite idea concerning what and how things should be done, consolidate people around themselves, and the business starts operating. And if they manage to overcome difficulties at the initial stage, the business begins to move in the right direction.
It is the personality that catalyzes development of the whole business. That is the model that worked almost everywhere including banking business. But now many companies and banks are extending the scope of their activities on a national – and in the case of BTA – on an international level, therefore time has come to create a stable system that would develop without being dependant on one person.
- Moreover, I think that in an unstable system charismatic leaders play an important role as they ensure stability and vectorial development. But in a strong political and economic system the role of a personality is devaluated, which besides stability often has certain disadvantages. Therefore, in such conditions charismatic people mostly remain uncalled. However, even now BTA expansion strategy has not been welcomed by everybody.
- Honestly, at first there were a lot of people who did not approve of this decision. The state authorities, financial regulators, rating agencies and even some of BTA employees criticized the idea of expansion. The reaction of the markets we were entering – Armenia, Georgia, Ukraine, Russia, Kyrgyzstan, Turkey – was also different… We did and are still doing our best to convince both parties that we have taken the right decision.
Now many people who used to reject this process regard it as being quite logical, and many Kazakh banks have started to adopt our experience. One of the most important things we managed to do last year was creating a single brand which is already being materialized – at least visualized. At last BTA is being comprehended as a single whole which until recently seemed a kind of abstraction.
And we are also beginning to understand what sort of content should fill that brand. Previously the whole idea of what are trying to build was simplified, but the events that occurred in the second half of 2007 demonstrated that we cannot simplify our strategy making a fetish of figures. We need a complex approach and definite aims to strive for. If we are willing to move from point А to point B, we need to have a clear idea of what is point B. What are we going to be like in 5 or 10 year?
If we claim that we would like to become a leading bank, we need to have a clear understanding of what is implied by being a leader. There are lots of questions to be answered. Should a leading bank be represented in each country? Or it is sufficient to perform activities in the most developed countries of the world? Is it necessary to be actively operating in each city or town where we have a branch? Or it is sufficient to operate in megalopolises only? Are we supposed to cover all segments of population? Or we should focus on the most solvent part only? Should we sell the whole typical product line? Or we need to pick a few products? These questions that are still to be answered are numerous.
- But as you have admitted BTA has been growing until now without a clear idea of what is point B? In many cases success is based on intuition.
- This approach worked at the initial stage of business development – in 1990s, early 2000s. And this psychology is to a great extent still typical of small business. Thus, if somebody is thinking of opening a hairdressing salon, I am sure that out of 100 candidates 90 do not have an elaborate business plan. This approach may be successful in a developing market until a business begins to grow. We have already crossed this threshold.
Now we are trying to understand who we are, where we are going and why? We are already above that level on which somebody gives us a strategy in the form of a tome that is shown to all investors and completely unknown to our own employees. Now we are beginning to realize that nobody will do anything instead of all. If we clear out what we are striving for and how we are going to implement our policy and inform each employee, our movement forward will be purposeful and conscious.
- I have often witnessed the cases in which well-grounded concepts failed and the ideas doomed to failure proved to be a success. How can you explain it?
- If we look at the statistics, those companies that are guided by logics and regard business as a system have far more chances to survive and prosper than those that were guided by intuition. Among the latter group only a few become successful. Any business requires a system approach that allows combining conservatism and aggression, technology and tradition, profitability and risks, etc.
Let us compare the human society, and business community as its integral part, with the laws of nature. These are identical worlds. If the first animal did not venture to prefer land to sea, there would be no land species. If the first animal did not venture to jump from the mountain and fly, there would be no birds. Development is a reasonable combination of opposites that results in a certain achievement. What is actually bank doing? - taking advantage of purchase and sale of risks. So in banking business the bank that opts for optimal and balanced solution of all issues, reasonable combination of opposites that will bring result, i.e. the bank that applies a system approach has a chance to survive and flourish.
- Where do you find yourself on this scale between risk and profitability?
- As a person with a scientific background I am trying to find this optimum. But I do not always succeed. This means that I am ready to take a risk if the risk is manageable and estimated. And I am ready to remain conservative if I see that the risk cannot be managed. Within an effective system a good leader can achieve much greater results and a poor leader will be able to avoid fatal mistakes. For all that, I do not eliminate the role of a personality. Sometimes a professional driver can drive Zhiguli better, faster and safer than a less professional diver would do with Mercedes. Though, statistically Mercedes drivers will always have a better result than those who drive Zhiguli.
- What do you think are the ways in which BTA may continue to grow?
- Let us again look at our environment. Which wolf would be more successful in a pack: a fast one or a strong one? Or which population would be more successful: a population of wolves or that of hares? Or let us take a wider example – the mammals or reptiles? Evolution of the fauna shows that at different stages of development one or another group turned to be more successful. This proves that there is no universal recipe that might work at all the times. The first thing we need to understand is that at each stage of development of modern business it is important to answer the question: who are we supposed to be at this stage? - a wolf, a hare or a snake? We cannot constantly continue at what we have achieved. I don’t like workshops because they promote someone else’s ideas. Let’s take the successful models of Toyota, Boeing, or General Electrics. If we blindly adopt any of these models, they will not work. We need to look at them closely, study, analyze, adopt the best ideas and move forward on our own since our environment is changing each day. Today we are not what we used to be. So the processes that enable us to adapt, modify, and be flexible must be continuous. The models that had been designed for yesterday will never work today. We need constant modernization. Therefore, one of our main principles should be not to preserve either organization structure or processes or products. Everyone should have a clear understanding of our strategy at each stage of development. It is impossible to design a strategy and implement it for seven years without any modification. It should be adjusted in due time.
The second thing is that if we want to grow successfully, besides the ability of being a dolphin in water and a lion overland, etc, the changes should not affect our essence. Otherwise we will stop being what we are, i.e. our ability to change should not involve such modifications that might change our identity. If we claim that we are BTA Group, we are supposed to remain BTA Group. We should all the time preserve a number of essential attributes.
Thought the history of humankind, the notions of love, hatred, tenderness, good and evil have remained unchanged, these are eternal values. The contents of these notions may change and it did change many times. What seemed to be good may now be regarded as evil, or vice versa. But the notions themselves and their value being a person’s essential attributes will remain as long as we consider ourselves human. Therefore, in our system we need to have something eternal that cannot change – our pivot.
The third important thing is the readiness for innovations. If we are not capable of introducing anything brand new, we will always copy someone else and will always be number two. We should introduce innovations that might allow us to grow in the right direction and leave others behind. This allows us to be ahead of market. Keeping pace with the market does not result in growth – it is mere natural development. Any ordinary healthy man can achieve good results in sport by training hard and become a champion. But in order to become an international champion, persistence is not sufficient – this required a talent, preternatural physical and mental abilities. Likewise in business, if you want to keep step with the market you can be a mediocre businessman. But we want to grow, and grow more rapidly than the market, to be a leader. Thus, it is innovativeness that enables anticipatory growth.
To sum it up, I may say that from my perspective we can grow in the right way if we manage to build up a management system and create a team that will be flexible and mobile enough to respond to changes in due time; stable enough to withstand failures and overcome challenges; proactive and creative - to leave competitors behind.
Asylmurat Ramasanov, managing director, member of the Board BTA: We must be as “family doctor” for our clients.
- To what degree do you think you are holding the right position? Is it your option or the things just happened in this way?
– This is my choice. I’ve been in the banking industry for more than twelve years, tried myself out in various market segments like retail, small and medium-sized businesses. The work in the corporate block is a successive stage of my activity in which I have been for six years. I think this is my cup of tea because during this period we practically reformed the corporate block.
- What exactly have you done?
– We have done some work in the corporate block close to the present situation, that is more market one. I have experienced everything by myself and it wasn’t that easy.
- But it was Bank TuranAlem that was considered to be the strongest corporate bank in the banking industry of Kazakhstan. Anyway, what is the difference between the corporative Bank TuranAlem and the present BTA Bank?
– The difference is great as earlier TuranAlem was a purely corporate and credit bank practically focused on a single product, namely on lending. But the time has shown that it is necessary to make diversification and offer the complete range of the products like in a big supermarket. That is the essence of the market. Lending has become one of the types of the products.
- When did you feel it? Was it first for the market need or did you get it ahead of time? When did it happen?
– The first signs appeared in 2003. This is the period when we started to work with big foreign enterprises forming a company town. Previously BTA mainly worked with the local companies whose needs were limited to the credit products while the requirements of the foreign companies were wider and stricter but the local market couldn’t provide the service of such level. We feel the situation at the right time and began to overhaul. We came out on top in 2004.
- I know that it was not only BTA that realized the situation. Besides the major local banks some big foreign financial groups have come to the market. What is your advantage?
– First of all we know the local market very well. The main ting that we are to do now is to become “a family doctor” for our clients. They can apply to us not as to a bank but as the consultants in various aspects of the local market. My mobile phone is switched on twenty four hours a day and sometimes the clients are calling for the most unexpected reasons. The owners of the companies themselves refer to us for some business advice, sometimes they even happen to ask for an advice over some family affairs like there is no time to register a card or get financial services…
- Quite that, but you are to be either branch-wise or macroeconomic experts. Do you have enough resources available for this? Do you have enough range of services to become “a family doctor” and do the clients need it?
– BTA External Analysis Division provides information of macroeconomic nature. Now their analysts co-operate with our analysts who work in the lending block. And when two obtained analyses are compared we get the real macroeconomic and micro- analyses. But the work should be improved as well. The question is that in the past the lending subdivisions were engaged both in attracting clients and processing the material. As a result there was no quality in both directions. Now we have clearly concentrated them on the interindustry analysis, the understanding of the market structure, and forming the principal trends. Unfortunately we are still at the very beginning. But even now it lets us create the products package necessary for the participants of this or that industry.
- Does it make any sense to introduce an additional option as a financial adviser over the whole range of questions that may arise among the clients?
– Yes, there is a great necessity in it. Confidence is also very important and it appears after a long and fruitful collaboration. Corporate Finance Division has been formed in our subdivision. This division offers such services as transactions advices concerning mergers and acquisitions; the opportunity to bring the companies to the IPO, to the alternative funding sources, the internal exchanges, and the stocks issuing projects. Considering this the private banking is so important. Currently there is a pilot period but the first projects have already testified that the company is in a great need of the corporate management, and the development of the algorithm of its introduction taking into account our specific character. In this connection the clients take the banking system as one of the leading institutions that has already got through these processes. - Where do you find people? I know that the corporate business is most of all subject to the “personnel erosion” …
– The entire corporate block consists of about 200 people. In other words its framework is the team that is working with me at the very beginning. This is an engine. Now the new generation has already grown. It distinguishes itself by a special creativity. One doesn’t see it yet. But some day it will move to the front line.
- Corporate business is connected with the bank image but many things depend on the personal qualities of an individual like charisma, ability to listen to another person, and say welcome words. How do you train your people?
– To tell the truth we started creating the relation management in the bank from scratch. The relations mainly were headed by loan officers at those times when lending was a deficit and it was simply enough to grant it in the right way. Later, when the market had become saturated, of course, there appeared a need of people of another standard. It took us two years to form the first team of the personnel. Only 30% of the original personnel were retained. People are longing to get to BTA for good salary and connections but when a person gets down to the work it is felt that he or she is unwilling to go into the problems of the client. So, it shows that they can’t be a family doctor. Those are left who are cultivating the client-oriented ideology.
- As a matter of fact we still consider corporate business to be first of all personal relationships and as a rule the personal relationships of the shareholders. There is nothing to do without the relationships. Has the situation changed? According to what principles do you feel it?
- The top level relationships really exist. But these are the big companies to create the co-operation based on personal friendship. If you don’t maintain relationships and don’t build them up not only on the top level but on the low level as well you will get nothing. Let’s take a big national company as an example. Even if there was an agreement between the top managers it took two years to “introduce” it completely into the bank. And this is about 30 enterprises! This is about 30 thousand people including small and medium-sized business, co-operative, and retail. To cover all this it is necessary to get coordinated the activities of all the business segments, go into correctly, run correctly, and deliver competent services. If you don’t do it no friendly relations could help. Now the time is for the relation management: a client can call us at all hours and we are able to help them promptly. The one-window principle is very important: when a person applies to the bank they know that a certain manager maintains their company and they can ask the manager any question.
- Taking into consideration everything you are talking about now and the fact that BTA is going to become a leading company in the world, maybe we should “give a dry run” to these ambitions in Kazakhstan and then go further?
- The working principles are the same wherever you are. Roughly speaking when we “were capturing” the foreign companies Ajip, Tengiz Chevron I was in their offices in the USA and the Hague and I understood that the business was the same. The main idea is to be interesting for the client. If we cultivate in ourselves the principles of focusing on the market and strengthen them then it makes no difference where the office is either in Belarus, or in Georgia, or even in Africa.
- Who are BTA’s business rivals in CIS?
- Let us suppose that HSBC didn’t come to us completely but what I saw in London is professionalism. They have the strong top-level relation management. It was strongly felt when we were struggling over the Ajip tender. BTA passed ahead of everyone except HSBC. They actively use the opportunities of entering the head companies and it might have settled the matter. Fortunately Ajip ultimately preferred the local bank.
- Will we probably “beat” Russia?
- Let me give you an example. I sent two managers and two managing directors of mine to the conference on relation management. There were VTB, Sberbank, Alfa Bank among the Russian banks at the conference. Our representatives created a furor there, the audience was applauding them when they told how we were doing business, how we had built the structure as well as the work with the clients. The Russian thought that they were talking about something unreal bookish. But when they gave the real examples the people came to them and asked to share their experience.
- To sum it up then in spite of your professional optimism, anyway, there is some inner scepsis; it is also the relations, the knowledge of the market and nuances. With hand on heart, do you believe that CIS is waiting for BTA?
- I think it is possible. This is a matter of time. And, of course, BTA is to become more producible to do it. This is the question of cloning our ideology. Our bank is more focused on the personality but this should be a symbiosis of personality and technology, i.e. relation management and its good technical systemic maintenance. At the same time the more the structure is growing the more it should be methodologically grounded. We need to create our own statute book, to understand what the relation management is, how it should work, to attract clients, hold and serve them, and to go through the inner procedures.
- How do you think what you personally do better in business or in life?
- Balancing. But my wife says that I am very ambitious and stubborn. If I caught an idea I absorb it and live it. If there is something appeared in my head I move forward and no matter how I will do it. It takes a lot of time.
- You take a great interest in the idea but if something is going wrong… It happens very frequently. What do you think about it?
- I hold on to the principle that everything you are doing doesn’t pass away. If I didn’t cope with something I put it aside and start doing another type of business and then stem from the other. The work done can always be stuck to a new project.
- You said that your advantage was balancing …
- Yes, when it is about making a decision. In some everyday situations there can be a frustration but when I am focused I am trying to make decisions carefully. Maybe it is connected with the type of my occupation. I’ve been in the banking area for twelve years and I am always taking the positions when I have to make decisions.
- In Kazakhstan corporate business is not very big, it covers about a hundred people. Do you always have to face the conflict of the interests of the clients? Under the condition when you are not to lose them…
- It often happens. In Kazakhstan we practically work with everyone and know them. But we have to compromise. Let us think that you make concessions to this client for another client you’ll do something better in other cases. Theoretically I am a relation manager and I build up relationships. I like it. I still remember when I got an offer from Kazcommercebank to work on problem lending. I thought it over and I openly said that it wasn’t for me. I could do that but the work connected with conflicts could kill me. I like work of a positive character most of all when you are supposed to think a lot and create something new. The most interesting was at the very beginning when we started major projects in Turan. We designed, attracted by ourselves relying on our intuition and we coped with it. At that time I belonged to the middle level when you weren’t supposed to work with major clients. It was always considered that the chairperson or its deputy was to work with them … But everything was going well, very well.
Khalil Kamalov, member of the Board BTA: I advance and so does the bank…
- Why have you accepted BTA’s offer? (BTA – Bank Turan Alem) Certainly, you have examined sites and gleaned additional information. What is your impression?
- First, it’s a logical step of my career. I have been working in large companies, gradually going up. The last place was a deputy financial director. Of course I saw that I could work as a financial director. I mean that the questions and problems that were to be solved in BTA, were more complicated and thus more interesting for me. Moreover, the additional experience gathered by any manager in other countries will not make any harm. Judging from mentality, Kazakhstan is rather close to Russia. My father and grand father worked in Kazakhstan and I still have good recollections. Before now, I worked in the bank which had business relations with Kazakhstan, and people who I cooperate with nowadays are from Astana. I knew that I go to work in one of the leading banks of the Commonwealth of Independent States (CIS). Certainly, before coming here, I examined everything relating to financial statements and analysts’ reports concerning Kazakhstani banks. So, I was informed about the advantages and about the risks, and particularly about the considerable stake on the wholesale financing abroad. But nevertheless, I was attracted by the dynamic growth. And what is more significant is what or to be more exact who drew me was a shareholder. I always try to work for companies where the shareholder understands and attracts me. To cooperate with tedious shareholders is not for me. In Bashkiria, where I am from, I worked in the bank with a shareholder who was constantly thinking how to move forward. I mean exactly a shareholder and not a manager, because it is a shareholder who risks his money. Ablyazov builds a global bank from a Kazakhstani one. It cannot but actuates. And moreover, as it seemed to me, my business potential was highly appreciated, and there was no need to prove anything, I felt myself to be in real demand, and I knew my capability to work.
- What is your moving connected with? Did you leave when understood that have completely realized yourself in the frames of the project, or probably there were some personal reasons for that?
- Truly speaking, everything goes according to the plan. In 1994-1996 I was running an employment agency which was a part of a management advisory service company. Selecting personnel, making business plans, budgeting, and preparation of financial statements according to international standards – at those times these were the things known to just a few people. Since then I have known about what career planning is. I had a plan in a certain sense, but it has been exhausted as soon as I moved to Moscow, and the second one, which is more expanded, oriented to 45 years. The most relevant for me today is not to make a mistake and go the company, to the holding which is going to move forward and advance together with me. Can you imagine the following situation: I have come to BTA, solve the problems of a huge Kazakhstani bank, gradually it becomes a CIS Bank, then a Eurasian region in the whole… I correlate data, make conclusions, and communicate with local professionals. Afterwards China joins us and we enter Central and Eastern Europe. I advance and so does the bank… An ideal situation. Certainly, in some companies one cannot grow for a long time and meets the limit, such was the situation with me at the last place. I knew almost everything about the “Russkiy Standart” bank where I worked as a deputy director. But I see that I am able to work as a financial director. Loyalty is very good, but each company should acquire a set of employees working for 10-15 years, they form a so called skeleton of the company and they are the corporative culture bearers, and people of a new wave. It is really necessary for a developing bank to be able to work with professionals, mercenaries in a good sense of the meaning. Quite frequently I make such a parallel: the mercenaries are like DNAs like genes which improve and modify a growing organism – in our case it is BTA. I am that very piece of DNA, which I hope will bring some strength, understanding of problems and ways to solve them. If I bring something new to BTA, it will remain here forever. And, finally, one cannot but loves Almaty as a city. People here do love Russia and Russian people, and I like it. As for the comfortable living, sometimes it is even better to live here than in Moscow. And what is more important is an unusual history of BTA.
- What do you mean by saying history of BTA? The bank was organized in the chaos of a wild capitalism, so its history is typical of a post soviet chaotic development.
- I have a serious working experience in a banking system. 12 years. One may say it is not long enough but it was actually intensive. Those who have been working in BTA for the equal 10-12 years saw only BTA. They feel need to do something, to advance but they do not have a fresh and “different” sample. I have. Since 1996 I worked in really huge and outstanding banks, such as Uralsib (Уралсиб), Petrokommerts (Петрокоммерц), Renkap (Ренкап), Russkiy Standart (Русский стандарт) and now BTA. These are big financial institutions, which I know rather well from the inside. First, one should not expect order in young banks appeared in the post soviet space. Second, there should not be illusions that there is no disorder in big western banks. In a sense, that is an organized chaos, prearranged to the degree that is possible in human structures. I wonder why big western banks, taking into consideration all their praised organization and products promotion cannot obtain general recognition in the post soviet space. Why is it so? Here you come, everything is well organized, you know the business, have ages of experience, money, but why cannot you do that? The answer is because they have their own disorder. Quite frequently they do not know how to develop and whether to take risk or not. Their “planned rotations” cause disorder…
The business size often depends on something else but not on the organization process itself. Actually, the bigger you become the more risky your business running is. One may grow to US $50-100 billion even without an accurate and ordering everything organization. That is why I am not frightened by disorder and see what was expected; I precisely know my own role.
- By the way, let us discuss your role more meticulously. What do you see your role in?
- To decrease entropy. That is like in military organization, one cannot stake only on tanks and aviation. In order to consolidate in the country there should be some infantry. There is no need to bomb the dictator from the air as it was during the first Gulf War. We have a shareholder that is a strategic aviation which clears everything out; we have business – tanks have achieved their objectives. So we need to fortify our positions and this work belongs to sappers, engineers, kitchen and etc. In our case I am responsible for the financial director’s service: accounting, allocation, efficiency analysis, and reporting. So, in this case, that is the very organization which provides fortifying and advancing further to those tanks and aviation. Thus one can grow only with the help of tanks and aviation but the thing is that it may be rather risky. Too much regulation is another extreme measure.
There has been much discussion on how to maintain a holding. This process is constantly monitored by the shareholder who does not want to be satisfied with the second or fourth positions. That is correct, because as soon as the shareholder comes down the management will follow him.
Can you imagine Israel and its environment? How can this country survive? Israel is constantly at cock, it has to protect itself… So, if to put other countries to such conditions – about 70% or even more will be wrecked. What is Kazakhstan? It is an Israel in banking sense. It is a small country. 15 million people of population, gross national product has recently reached the level of $100 billion and then there comes a great amount of money in a specific ratio to the gross national product. It had to be distributed, so we were fighting for every client. Believe me, I can compare with Russia. Russia is a rare banking space. BTA entering Russian market is 2, 3, or even 10 steps forward in comparison with Russian banks in terms of competitiveness. BTA, having seen a worthy client, will start trying to attract him, instinctively thinking that other banks will do the same. As for the Russian banks, they differ in these terms. So, we have about 2 or 3 years to leave them behind only because we know what a competition is. And that is the advantage of BTA, particularly it concerns corporate business.
- What would you recommend to BTA as a Russian by birth?
- First, they should fall in love with Russia. To become successful they should love not just people but the country in general. If you do not feel affection to the country it will be noticed for sure and there will not be any opportunity to earn money. Russia should be cherished for the economic potential, business freedom, and for its “impossible is possible”. For example I have come here, I had to love Kazakhstan and I do it. If to compare with the Ukraine and even with Kazakhstan, the Russian concept is to help Russian business abroad and that is indisputable.
- What is your attitude towards the idea of restoration the former USSR economic borders? Do you consider it to be real?
- It is inevitable. I love history. In the beginning of 1990-s there were people, who said: “We need to go and live abroad, this country does not have any perspectives”. I used to raise my head from books and say: “I do not understand your pessimism not just because I am an optimist by nature. You judge it on the basis of a short current period, when there are some problems with money and world respect. This is just a short historical term. What was before that? During ages we were valued, we were strong and sound, the economy was developing, though sometimes not gradually. Why do you ignore all the history of Russia? Russia always found strength to rise up. In ten years they will be talking about the Russian economic miracle, we will recover its economic power”. The most relevant thing is Russian people’s aptitude for constructive expansionism. Probably sometimes it may be excessive, but there is always an opportunity to unite bordering peoples and nationalities. Russian ability to cooperate, to work together “in a community” always united; by the way, this ability is much stronger than those that the British people have. The British are too commercial, they are profit directed and in this case it may repel. That was the reason why all the colonies broke apart so quickly. As for Russia, the territories are closely located; people are constantly communicating without need to cross sea. It is not a reconstruction of the Soviet Union. Now Russia has become more pragmatic. It had problems with ideology like Germany had problems with fascism. Thus, there will be ideology, but it will have a pragmatic course.
Today Russia is full of revanchism ideas. It is dangerous to humiliate a successful country historically capable to recover. It may cause revanchism, which is a desire to go back to a serious game and to prove that we can be winners.
Do you know who Mukhtar Kabulovich is? He is a revanchist, but the type of revenge is just a bit different. He is a vigorous, clever, and talented man, who saw the collapse of the system, where he was born, where he studied and in which he was ready to achieve success; so he lost the opportunity to realize his goals. Under the circumstances he was put into, he, probably, had to sell tights. So, his desire to revenge and to prove the whole world and himself particularly that he is able to create something significant and successful in the new circumstances. Nowadays he has chosen economics, investments, and banking system, and he will constantly demonstrate his drive. He has his desire to revenge and it will nourish him. The most important thing is to understand and utilize it as energy without excess.
Indira Izteleuova, member of the Board BTA: Business is creating something that has high value.
- You said once that the values are the most important, and I absolutely agree with you. I think everybody understands and share them but not always conforms to them. Where do you think the boundary between conforming to the values and professionalism is?
I suppose to oppose these two notions – the values and professionalism – isn’t worthy of it; both the values and professionalism should take place in a person’s life. It is a matter of choice to which every person has the right. People always have to face the necessity of making one or another choice. Some of us have more developed vector chains of values, others – less. But everybody makes their own decisions.
On this basically the degree of person’s conformism depends on. Everybody is unique, and one prescription doesn’t work for all. It isn’t right for an organization to create the situation when a person is forced to choose. It is interesting that talented people as a rule tend to have a strong system of values. And if it is important for a company to retain a talented employee, the administration should take this into consideration.
The point is that people while saying aloud words doesn’t always comprehend what stands for them. I mean that an organization should have a certain foundation. Very often an organization starts functioning when there is no such a foundation yet. It is as a basis, as a choice of course, because business is unstable in the long-term prospect without it. If there are considerable quantity of employees working for an organization some reference point are needed. Their lack will cause such a diversification of vectors that would demand more efforts to revise and readjust.
- Theoretically professionalism and the values should not be opposed, but we know several examples when an employee is quite professional, but we cannot say that he or she conform to any values. In depends upon which answer an organization chooses to follow and upon the importance an organization attributes to that problem.
- Nevertheless an organization as a rule chooses the professional ones. Here I can agree with you. The right combination of professionalism and ethics is difficult to find. But if an organization supporting professionalism to the prejudice of ethics sends to the auditory a message that its behavior is quite normal then people start copying such a behavior. At a certain stage an organization may choose a professional person without taking into account his or her ethical behavior, but its administration should be aware of deferred long-term and eventually more systemic risk.
This is a simple economic effect. After all it is the values that is the best behavior control in business, preventive action against all the risks of fraudulent activities, improper behavior, repute losses. It's quite another matter that they are difficult to identify. Nobody can insure oneself against mistakes. But if one has a system of reference points then let’s say that we got a white ball when we have a pile of black balls. An organization has two ways to go: to set itself out according to it or to divest it. If there is a foreign body and it starts to expand while an organization takes no measures it means that an organization has no value adjustment. It leads to the situation when black balls begin to drop out as they grow to feel uncomfortable.
- But how this value adjustment can be introduced?
Everything starts with the adjustments of main people. When analyzing and reacting to different situations they set with their behavior an example of what behavioral model they support, an organization studies from that. There are also formal means: they found committees on ethics, they provide certain consultations to employees. But the most important is the expressed estimate of top employees when they say this is good and this is not.
- But the very essence of business is that only the strongest survive as in jungle. In fact business as the institution of state is based on suppression of the weak by the strong, and that is not humane at all.
- I can’t quite agree with that. Business is the process of creation of something that is of some value: products or services. Business in fact has a deep justice laid in its base: everything is to be paid at a price known beforehand. Surviving of the strongest is also fair when business that is better thought-out and more aggressive wins a victory.
Competitiveness is an ability to produce a better product or to provide a better service than others.
- What is your personal mission at Turan Alem Bank?
For me it is very interesting to set HR system at Turan Alem Bank. HR system is a very complicated function. It is investigated and it isn’t understood, its different variations function in different organizations. Proving that HR system is necessary and being able to set this system is at some extent realization of our ambitions.
- Can you prove that in any other organization?
- One of the distinguishing features of Turan Alem Bank is the constant search of an answer to the following question: how to found proper business, how to set proper system of values. Our bank is very interested in these matters. Turan Alem Bank is sincere and gives a lead to numerous projects the outcome of which isn’t so evident but they bring something really new.
Very often without knowing an accurate answer to the question as it is impossible to know everything bank sets a situation when it initiates a conflict between two opposite opinions. What opinion is more tenacious of life? While accumulating the knowledge of what we want to be like it is necessary to step aside from such an approach; and the choice of more preferable opinion or approach shouldn’t concern the values by any means. We want to become an international bank and join the cohort of world leaders. With that we should remember that a certain ideology is necessary and we should support it. In order to proceed to new condition it is important to understand how we are going to support it. When something new enters a settled organization it is not of great vitality as it is only new to the others.
- What is the difference between principle compliance in life and in business?
- It is the age of the business. During the period of this market formation in order to be competitive people left the historic values behind. However that may be, honesty is an effective but expensive thing that people can hardly afford when they are only getting on their feet. To understand its significance it is necessary to accumulate a certain amount of life experience. It is this where the difference lies. One cannot understand it until one feels that the effect of fraudulent activities of one employee can outweigh everything good that this employee can make or bring to an organization. This is the distinguishing feature of the Kazakhstan business. When experience and comprehending come, these things are implanted more easily.
Later on the stability of business is more important, especially the long-term stability and ability to bring in return and profit not only at the present moment but also in prospects. The components that are to be place money in are such as manpower resources, brand quality, organization quality, and many other things that cannot be realized at once. But the money contributions are necessary at the moment.
