Only Losers will win

By Pavel Verblyudenko

Only Losers Will Win is a book about business as an occasion to think about the essence of what is happening to us and the world. It’s 222 pages of travel diaries and sketches from all over the world, precious memories, stories that life itself comes up with, side by side with reflections on the most challenging problems of the modern business world.
Only Losers Will Win consists from 12 chapters covering most of the fundamentals of the modern business practice from strategy, vision, mission, hiring, cultural differences to project management and challenges of execution.
Book contains the drawings done by the author, was published in December 2021 and available in e-book version, soft cover and hard cover versions.

• Language: English
• Publisher: Lulu.com
• Release date: Jan 17, 2022
• ISBN: 9781678189815

Book preview

Only Losers will win

Only Losers will win

Pavel Verblyudenko

Title Page

Copyright © 2021 by Pavel Verblyudenko

All rights reserved.

No part of this book may be reproduced in any form or by any electronic or mechanical means, including information storage and retrieval systems, without written permission from the author, except for the use of brief quotations in a book review.

EBOOK ISBN: 978-1-6781-8981-5

Contents

Prologue

I

Strategy and Wishful Thinking Are Not the Same

II

Pros and Cons of High Resilience

III

If You Are Making Less than 50% of Hiring Mistakes, You Are a Genius

IV

Do Cultural Differences Really Exist?

V

Yes, Cultural Differences Do Exist. So What?

VI

Do You Need a Great Team?

VII

It Takes All the Running You Can do to Keep in the Same Place. Efficiency.

VIII

If You Want to Get Somewhere Else, You Must Run at Least Twice as Fast… Innovations. So, Where Do We Go?

IX

Dead by Execution or Killing Quality

X

Great Project Management Doesn’t Exist

XI

What’s Wrong with the Ministry?

XII

We All Live in the Matrix… Don’t We?

Epilogue

Notes & References

Footnotes

Prologue

It was November 2020, and this year had already been full of surprises! I’d just learned a week ago that Ontex, the company I’d been working at for the past seven years and thought I would retire from, no longer had a job for me. The world had changed once again, and I was free to look for a new job, or write a book, or I could probably try to do both. Another consequence of such a dramatic change was that in the last ten days, dozens of people called me from all over the world: from Shanghai and Casablanca, from Russia, of course, Addis Ababa, Istanbul and Karachi, Amsterdam, and Johannesburg. All my friends were so supportive, kind, and warm that I felt like it was my birthday. To some extent, it was indeed my ‘birthday’. Besides sharing their sympathy with me, all the callers were asking the same question again and again: ‘What went wrong with your company?’ This and the quick succession of changes in my lifestyle made me ponder, and this is how I came to the idea behind this book. I wrote it as an open dialogue, a conversation with friends who might be going through similar experiences.

But first, I should probably start with a brief introduction. There are a few things I truly like: I like to travel, talk to people, and do new things. Travelling, for one, has been a life-lasting addiction. I was born in a small city in the Ural Mountains but I spent a significant part of my childhood in Pakistan—that’s how it started. Later, while working at Procter & Gamble, I managed to visit almost all the corners of Russia, Ukraine, Belarus, and even went as far as South Africa, where I resided in Joburg for a few years, flying back and forth between Harare, Maputo, Durban, and Cape Town with my distribution partners. The best way to travel for me is by car. As cliché as this might sound, while driving, I have enough time in isolation to think. One time, I took a car from Las Vegas, and five days later returned it in Nashville. Driving and making stops from time to time gives me enormous motivation and food for thought, as it helps me dive into local customs and cultures. In the past few years with Ontex, I extended my exploratory ambitions to North Africa, Turkey, the Middle East, China, and South Korea. I’m pretty much a business traveller, and each trip is full of meetings and business talks. Yet, I see every trip as a small expedition where I get to study not just the business but also the people, their culture, habits, and behaviours.

Talking to locals, listening to their stories, and telling mine is another part of my personality. Every person is unique, and while talking to them, I get to discover another universe. I discovered the world through the eyes and experiences of other people and still remember many of the lessons learnt along the way.

One such lesson came many years ago when I was working as a Distribution Manager in South Africa and had to move Duracell's business to new distributors. It was a very sensitive mission having to call the owners of the businesses and tell them we had terminated the contract. The young woman at the other end of the line reacted so calmly and positively that I was indeed puzzled. We started talking, and she asked me if I knew the meaning of ‘Insha’Allah’, which, of course, I didn’t. She explained it to me this way: ‘Allah never closes all doors for a person. If He closes a door, then He certainly opens another one. It’s a person’s duty to find the door that was opened for them’. Since then, ‘Insha’Allah’ has been with me, and trust me, it works!

I guess my passion for doing new things came from my scientific background—I have a Ph.D. in applied mathematics. It’s a unique feeling when you are touching something undiscovered, coming up with your hypothesis, and you see step by step how this immaterial idea is coming to life, starts to influence others, and finally lives on its own.

One summer evening, I was chilling in the Nelson Mandela Square in Sandton and what caught my attention was a quote from Nelson Mandela just in front of me, saying, ‘It always seems impossible until it’s done’. It’s so relatable to me. When I came to Hawassa for the first time, with the idea to build a factory there, all I could see before me was just a green field. Two years later, the factory manufactured the very first Ethiopian baby diaper. It seemed totally impossible at the beginning of those sunny September days at the edge of the field…

I need to explain why the name of this book is so unconventional. In general, there are two types of business books on the market today. The first type comes in a list format something like this: ‘7 habits…’, ‘10 principles…’, and so on. It’s a good read, of course, though you always run the risk of getting trapped in ‘survivorship bias’ by the end. Personally, I have a very strong feeling that by only sharing optimistic beliefs, those books tend to ignore the voices of businesses or individuals that have failed miserably. Survivorship bias can easily lead to the false belief that a group’s shared success has some special property, rather than being merely coincidental.

The second type of books includes one of my all-time favourites, ‘Good To Great’ by Jim Collins. Once again, a great read, yet I often found it ‘too heavy’, too academical, and focusing more on executive teams and CEOs. Of course, there is nothing wrong with either type—all are great books—but the storyteller in me has always been looking for something more grounded and close to the humans around us.

So, this book is not an academic study, nor is it a complete step-by-step guide on HOW TO DO THINGS. It’s rather a collection of stories I’ve been putting together for the past 25 years on HOW NOT TO DO THINGS. Or rather HOW NOT TO MAKE TOO MANY CRITICAL MISTAKES.

I

Strategy and Wishful Thinking Are Not the Same

Before we start, can you please take your time and read those three corporate strategies from three different multinationals? To give you a bit more context, the first one is a corporate giant with a revenue of around $70–80 billion, the second one is ten times smaller with around $3–4 billion, and the third one is even smaller with a revenue of around €2 billion.

Now, here are their strategies:

1. Our integrated strategy is the foundation for strong, balanced growth and value creation for the near and long term: to focus and strengthen our portfolio in daily use categories where performance drives brand choice; to establish and extend the superiority of our brands across product, packaging, communication, retail execution, and value; to make productivity as integral to our culture as innovation; to lead constructive disruption across the value chain; and to improve organisation focus, agility, and accountability. These are not independent strategic choices. They reinforce and build on each other, and when executed well, lead to balanced top- and bottom-line growth and value creation.

2. Alcohol Responsibility: Actively creating a responsible drinking culture where we reduce alcohol-related harm, promote responsible consumption, and practice responsible marketing.

Diversity & Inclusion: Creating an environment where leveraging diversity and inclusion occurs naturally, giving us a sustainable marketplace advantage.

Community: Enriching life in our communities through charitable contributions and employee engagement activities.

Environmental Sustainability: Responsibly growing our brands and company while protecting and enriching the natural environment on which we depend.

3. Our goal to deliver sustainable, profitable growth rests on a two-pillared strategy: strengthen current leadership positions in its three divisions, and expand into new businesses and geographies in core categories.

I hope you read and took some time to digest these companies’ propositions. Let’s put them aside for now and try to explain what strategy is in very simple terms—not how it is seen from the top of the food chain, but how stakeholders from the middle or the bottom of a company perceive it. Of course, most often, people mix up strategy, mission, and goals.

---

A company’s mission or values are perfectly described by the ‘golden circle’ by Simon Sinek. Most companies use marketing to communicate what they do, what products they sell, what services they offer—the so-called ‘what’ outbound circle. Some organisations go a step further and talk about how they do what they do, what differentiates them from their competitors—the ‘how’ inner circle. But a company with a really good marketing strategy goes right to the centre of the circle to address why they do what they do. In other words, they talk about their values or their ‘why’ inner core. So, the ‘why’ core is, in essence, the reason behind your objectives and decision-making.

Now, let’s take a look at a few mission statements that are more or less successful:

Tesla’s mission is to accelerate the world’s transition to sustainable energy. Not just ‘selling electric cars and solar panels’.

TED devote themselves to ‘ideas worth spreading’, they don’t just ‘do presentations’.

LinkedIn’s mission is to connect the world’s professionals to make them more productive and successful; it’s not just a ‘social net for professionals’.

Nike bring inspiration and innovation to every athlete in the world. They’re not just ‘selling sports shoes and clothes’.

I could go on to give plenty of other examples, but one thing is obvious: A company’s mission and values are NOT the same as its strategy. Your mission is the reason WHY your employees will love your company and WHY consumers will love your brands. By the way, I see no issues if different departments within a company would develop their own secondary missions. I can imagine the company operating across different continents and categories.

During my time with Ontex, our emerging markets department had its own mission: to grow local heroes, anything from brands, private labels, local teams, people, and partners. Honestly, yes, sometimes companies mix up mission and strategy, but not too often. The real issue is with setting their goal and vision.

In a very simplistic way, a goal or vision is where we want to be in the long term. ‘To be in the top five players on the market by 2030’, ‘Achieve €5 million revenue by 2023’, ‘Get market leadership in ten key markets in the next five years’, are all goals. Yet when asking companies about the strategy they pursue, you can’t imagine how many times I’ve heard: ‘Our strategy is to grow our market share by 5% by the end of the year’ or ‘Our strategy is to grow our revenue profitably’. This is NOT a strategy; this is wishful thinking. A strategy is NOT WHAT you want or WHAT you stand for. A strategy is WHERE and HOW you move.

It had always been my dream to see the Zambezi. We flew from Harare to Lusaka, and I got to see the Zambezi from the plane for the first time. For a good half an hour flying above the river, I could notice that the earth beneath it was full of roads. I could see them begin to curl quite bizarrely, becoming wider and wider with some islands in the middle, only to realise that they were not roads at all. They were many smaller rivers flowing through the mountains and hills—all of them merging into one gigantic Zambezi.

Life was good in Zambia in 2008. One Euro cost around 5 Zambian Kwachas, not 25 as it does now. The price for copper—the Copperbelt is the main source of the country’s wealth—was at its high at $4 per pound, not $2–3 as it is now. In Lusaka, an enormous number of Chinese and Japanese entrepreneurs were building hotels and roads. I even took a picture of a huge street poster, saying, ‘Japan helps Zambia build roads’. Our sub-distributor there was a small company owned by a very nice South African couple. They had a very good office, warehouse, sales team, and VANs. The issue was they were not selling. They knew perfectly well where they were and what they wanted to achieve—everything looked perfect on paper. But nothing was happening. I spent only a few days on the ground, with the couple asking me again and again, ‘Are we moving in the right direction?’ I would try to reassure them despite my inner reservations, but by the end of the trip, I finally exploded: ‘Guys, your direction is perfectly FINE. The issue is that YOU ARE NOT MOVING.’

Now, from this perspective, let’s look at the corporate strategies quoted at the beginning of the chapter. None of them are bad strategies, actually. They all belong to great companies, and I can imagine many beautiful minds working on them. Still, I’m missing this ‘HOW TO WIN’ component, and very often, ‘WHERE TO PLAY’ is also blurred. The typical trap for most companies—the bigger the company, the bigger the trap—is to PLAY everywhere and WIN somehow. Another trap is to replace strategy with goals. As a result, the further down the corporate ladder we go, the more disoriented the action plans are. Inevitably, the company will end up with no focus and resources being spread all around. For quite a while, the company may not feel any danger here: Sales are doing reasonably well, cash flow is healthy, account receivables are good. The real danger here, however, is the future of the company. With no choices and no strategical focus, you start to miss the pace of innovations. Simply, you may spend a significant amount of money on R&D, but it will be squandered with no focus on the ‘right’ innovations. We will come back to this later down the road. Apart from innovations, the company’s manufacturing efficiency is also at stake. In principle, manufacturing as a function is quite conservative and has a tendency towards marginal improvements every day. It’s not really common for manufacturing to come up with breakthrough ideas to move the plant to another location with a less expensive workforce or to introduce a new process, allowing to cut 20% of the current workforce. Thus, if there is no strategy or only a weak corporate strategy, you will inevitably be overtaken by your competition.

---

It was in 2003 that I flew to Brussels for the first time and fell in love with the city. We attended a training workshop in Brussels. By ‘we’, I mean six Russians: Igor, Vadim, Sergey, Andrey, Natasha, and me. The training ended on Friday morning, so we decided to go to Amsterdam. Vadim rented a minivan—so ‘mini’ there was barely enough space for the six of us—and we took off. It was 2003 with no Internet, and for some reason, not even navigation was available. So, we had only common sense and road signs to direct us, and our road trip went on to be insanely fun. Just imagine six people, all freshly promoted P&G-ers with hypertrophied egos in one car trying to lead and give directions. Every ten minutes, someone would grab the wheel and yell aggressively, ‘Where are you going? You’re supposed to go the other way!’ The others would then immediately jump in and create total chaos with controversial directions—shouted loudly—and renewed efforts to take the wheel. Vadim yelled at everyone and drove wherever he wanted, which also happened to be the most reasonable direction. We drove for four hours instead of two, and finally, we ended up not in Paris but Amsterdam.

Somehow my mindset was that Peter the Great had made St. Petersburg a copy of Amsterdam. Of course, I expected to find wide canals, solemn palace houses, some kind of cold and imperial type of architecture. So, you can imagine how surprised I was when Amsterdam turned out to be nothing but cosy—as if I had truly arrived home.

It was very late in the evening, but the fun had just started. We parked next to the central train station and started to look for a place to sleep. Something went wrong with the booking, and our reservation got cancelled. So, we walked from one hotel to another. Since that night, the phrase ‘Do you have rooms available?’ stayed stuck in my mind, never to be forgotten. In the end, we found a room with six beds—€30 per person. But we didn’t care. We fell asleep immediately.

So, sometimes with executive leadership multiplied by six and going through the roof, you can still achieve your goal despite the lack of a good strategy—apparently, all you need is an idea to see Amsterdam and a small van.

---

Talking strategy, I can’t help but mention ‘after-strategy life’. Everything has its beginning and end, including strategy. But what happens after we've exhausted a strategy, or we have to change it for whatever reason? What does it take to change a strategy? Let’s take a look at the evolutionary or rather revolutionary changes a business can apply to its strategy and beyond.

My favourite example would be IBM and how they managed to change strategy consistently for over 100 years. The story of IBM starts in 1911 with the Computing-Tabulating-Recording Company (CTR), a manufacturer of a wide range of products, including employee time-keeping systems, weighing scales, automatic meat slicers, and punched card equipment. CTR was renamed International Business Machines (IBM) in 1924 and