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Regular version of the site

 

About the project «Success Builder»

How do you find your place in life? How do you find something to do that both comes naturally to you and makes you happy? The answer is that you have to apply the knowledge you’ve gained from university and from life itself correctly. The Success Builder Project features graduates from the Higher School of Economics who have discovered themselves through an interesting business or an unexpected profession. The protagonists share their experiences, and talk about the big shots they’ve schmoozed and how they’ve made the most of the opportunities they were given.

 

Faculty of Management (now Faculty of Business and Management) graduate Roman Malov is the director and owner of the Chapaev Chuvash horse ranch and the Yadrinmoloko dairy factory whose products we buy every day in Moscow stores. He told the HSE's news service how experience on the university comedy team has proven helpful in agricultural work, how he brings his master’s degree knowledge down to earth in the fields of Chuvashia, why he isn’t ashamed of running a ‘collective farm’ business and how he plans to elevate Russian horse breeding to the international level.

Why did you choose HSE University and the Faculty of Management?

I first tried getting into the Faculty of Economics at Moscow State University (MSU) in 2003, but that didn’t work out. I then entered the Faculty of Management at HSE University. I thought I would study for one year and then transfer to MSU. But after one year, I had completely forgotten about that plan because HSE had unexpectedly become an important part of my life. This was largely due to various extracurricular activities: I began performing with a KVN comedy team, took part in a music movement that Andrei Vershinin led at that time, and literally lived in a creative environment, like many of my fellow students. Even after we graduated from HSE, the KVN team stayed together and even arranged professional engagements. For example, Arsen Ashomo, Yan Oskin and I worked at Gameland.

Has the thick skin you needed for public performances helped you in other areas of life?

Of course. I often say that a sense of humour is essential for working in Russia’s agricultural sector.

But you earned a master’s degree even before you began working in agriculture. What was your goal?

I entered the Human Resource Management programme because it was led by Azer Efendiev. I really liked the way he taught and communicated.

I was once in an elevator with Professor Efendiev after I had performed for first-year students. He said to me: ‘You’re a good singer, Malov, but your jokes are terrible.’ Only he used stronger language than that.

This was when I realized there was some kind of connection between us. It was only later that he expelled me from the second year of my master’s studies because I didn’t show up to retake an exam: I had gone to Minsk to compete in the pre-quarterfinal of the KVN First League. But I later got reinstated to the programme and defended my master’s thesis.

In your opinion, is management more a function of an education in business or of performing your duties well in a company?

It seems to me that management is all about successful communication with people in a business format. Our programme had a strong focus on sociology and that’s why, for me, management is a practical form of sociology that has universal application. This is exactly what I do all the time as I work with people. As a master’s student, I did a study on the motivation of agricultural workers. Now I deal with this issue constantly: how to make people work, and work well. HSE gave me a clear understanding of deadlines and the ability to set priorities, and the learning process itself greatly helped in further management work.

Why did you decide to undertake your current line of work despite having a good job at Gameland?

I have been involved with agriculture since childhood. All of my relatives are connected with it in one way or another.

When my father stopped running the dairy farm to pursue a career in politics, the family business began to suffer. I tried running it from Moscow because I didn’t want to move to the village.

In relatively short order, I maximized production volume by signing agreements with national retail chains. That was when we decided we needed to build another dairy farm. It was a very ambitious goal and one that finally pulled me out of my warm office chair in Moscow and compelled me to move to Chuvashia. When you have the necessary resources, the desire to do something and a clear goal, it’s crazy not to start a new business.

As Barney Stinson would say, “Challenge accepted!” I’ve always liked taking on new challenges, and this started a new life for me. My first step was to drive around and visit more than 90 other businesses before starting my own. I saw how it was done, but more importantly, how it shouldn’t be done, so that I would not repeat others’ mistakes. But I still made plenty of my own. We’ve now increased output to 220 tons of milk and we plan to increase it to 500 tons. The dairy produces the main financial turnover of 2.5 billion rubles ($39.8 million) annually. We supply milk to the Vkusvill chain, make products for the Dmitrov milk factory, and cottage cheese and cultured yoghurt for the Dixie and Ashan chains. We work with practically all of Russia’s retail chains. Right now, we’re in talks with Valio of Finland about launching a line of baby food under their brand.

Photo: Roman Malov

Is it necessary to have the mindset of an entrepreneur in order to start your own business, or can a person develop this quality?

Some people want it and strive for it, while others cannot be forced to go into business. This is because it is a lot of responsibility and stress: the buck stops with you, and there’s no one to give you advice when you have to make a decision. Many people prefer having a quiet job working for others. It’s not a question of opportunity or ability: simply, people either want it or they don’t. I have more than 1,000 employees and I see some who can wait 17 hours to go home and forget about everything, and who do an excellent job. But they can’t manage a project, do something new, take initiative — they are great at carrying out orders, but nothing more. An entrepreneur, however, is a ‘restless’ person with a particular mindset.

At the same time, I do not consider myself a ‘pure’ entrepreneur. I often undertake new projects on a bet or to prove something to someone. But if I do start something, I do it thoroughly, down to the smallest detail. That is why, although I often see promising ideas or projects, I don’t undertake them because I see in advance what a headache they would be.

Which management skill have you found to be the most important?

Establishing your personal authority. As soon as I came out to manage the dairy, the staff began testing me for my weaknesses. But this wasn’t new for me: I had gone through the military department at HSE University. I started by competing with one of my respected colleagues: who could come to work the earliest? The workday started at 8 a.m., so I would arrive at 7:30. He came at 7:20, so the next day I got there at 7:10. He would then come by 7, and so on. When we both started coming at 6 a.m., we shook hands and called it a draw. In general, I have positive relations with everyone now. When you work in a team, you immediately see who’s who. There’s no need to make a show of impressing others: just do your job extremely well.

I became a director at the age of 23. Just imagine it: I was surrounded by engineers who knew the business like the back of their hands, and then I showed up without any specialized knowledge, but with tremendous motivation. I walked around the place and took note of every detail, figured out why things weren’t working, issued a request to put things right. I can be rather annoying in this regard. But the result is that employees know I am truly interested in what’s happening and that just pretending that they’re doing their jobs won’t cut it with me.

I am afraid to overdo it, though. If I am too tough, I can offend people, and especially my female co-workers.

I think the work ethic is important and should also be studied at the university. Now I think I’m not so confrontational, but I used to be very abrupt and emotional about such things. For example, in 2014 I could not come to any sort of agreement with distributors, and the result was that I had to personally organize the sale of our products in the 2,000 stores of the Nizhny Novgorod region.

Many billionaire businesspeople say that it’s necessary to first learn the work yourself before hiring subordinates? Do you agree?

Yes and no. Of course, it is better and easier to work when you understand all the processes involved, but one person cannot know everything in detail. Ideally, a department head is responsible for each stage of work. But you should be prepared to sort out questions yourself so that employees feel you are in control and supporting them. In our case, this applies to every stage of production, from the technology for fermenting cultured yoghurt to working out the logistical routes for the distribution of finished products.

From the very beginning, I never avoided addressing problems and I always ‘got to the bottom’ of them. Now, my main rule of management is to maintain logic and order in everything. If you do that, the business will run like clockwork — maybe not Swiss clockwork, but at least Russian. What’s more, if you close your eyes to problems at work, those problems will appear during your time off or in your social life.

What is unique about the dairy business and its relationship with the market?

In this business, you need to work every day. You can’t earn a certain amount and then take it easy for a while. You must always be at work because the business can’t stop. People drink milk every day. We have fresh, pasteurized products with a shelf life of 5-10 days. This is important for people — especially for the regulators, who inspect food factories constantly.

Do they really conduct random spot checks, or are inspections carried out according to certain legal norms or rules?

When you build a new plant and do everything honestly, but inspectors come and say, ‘We’re sorry, but we have to give you a fine you for something;’ when you invest millions of your own money and take billions out in loans for equipment in order to optimize production, and then you are forced to find something wrong with your business anyway, you want to say ‘What the f---?!’ Taxes are another big issue. I could go on for hours about VAT. For example, major food and dairy traders buy goods from producers without VAT, but then turn around and sell those same goods with VAT, simply pocketing that 10% markup. That is the sort of market we have, and to do business here, you have to accept it and be a realist. Justice and order are still a long way off.

Why did you also take up horse breeding?

I have loved horses since childhood. My grandmother worked her whole life on a collective farm, first as a milkmaid and then as an inseminator. I spent a lot of time on the farm and rode horses like all village boys. When I returned to Chuvashia, I often drove past a dilapidated horse farm. To prevent everything from being looted, I bought it. I then spent four years in a court battle and finally obtained title to the land. In 2011, we resumed cultivating the land of the horse farm and spent about 120 million rubles ($1.9 million) on combines, seeders, and repairs. We began reclaiming 3,200 hectares (7,900 acres). All of this is being done so that in three or four years the dairy would become the feed base for a mega-farm for milk production. We use the horse ranch land to learn how to work with the soil and to test different varieties of cereals and herbs.

But what about the horses? Don’t they also have to be ‘reclaimed’ somehow?

I read quite a bit on this topic. When my wife lived in Sweden and our child was born in Stockholm, I had to visit them often. It happens that Sweden is a leader in trotter horse breeding. I visited various horse ranches, got acquainted with practitioners and developed opportunities for cooperation. I was one of the first to import frozen semen to Russia from the best producers, and to do it officially. Now we are leaders in Russia in the insemination of horses using frozen semen, and our own herd numbers approximately 100 trotters.

Were you ever uncomfortable in this environment? It’s difficult to imagine someone with a master’s degree handling a shovel for manure in the fields of Chuvashia.

It was unfamiliar at first, but I had an IDEA — to build a new factory in an open field. I was focused entirely on this idea and did not care about anything else.

It turned out just like my having attended HSE University instead of MSU. I’m already used to being here and don’t want to go back to Moscow.

And this is not because I ‘lowered the bar’ or gave up on my ambitions. It’s because here I can accomplish more and on a larger scale than in Moscow. And, of course, it’s about rising to the challenge.

But there is a problem concerning the unattractiveness of the Russian provinces. I often talk about agriculture with Swedes, Americans, and Frenchmen. There, families have worked on the land and raised livestock for several generations. They learn it from childhood, attend university, and then return to the farm. That is normal for them. The Soviet era instilled in us an aversion to the land — all those collective farms, five-year plans, and ugly padded farmer’s jackets are things we want to distance ourselves from and forget about. So we move as quickly as we can to the cities with their liberal values and clean shoes. But the West does not have these negative stereotypes and there is nothing shameful about working the land.

What do you plan next for your horse breeding business?

I want my horses to be able to compete with those in Europe. For that, I need to earn a certain status for them. I am holding Russia’s first-ever national auction of trotting horses at the Ramenskoye hippodrome, races and other events such as the Ice Cup of horse racing, the Russian Trot Weekend, and the Chuvashia Cup for horse racing. On July 12, we will hold a match between riders of Finland and Chuvashia. This winter we’ll hold an Ice Cup in which the horses run on the ice. I have set a goal of developing the horse racing culture in Chuvashia, and we have already had success with the Chuvashia Cup that is actually a festival that attracts 6,000 spectators.

Where do you get funding for all of this?

Now I mostly spend my own money. It has always been difficult for me to ask for money because the average Russian doesn’t easily lend support to other people’s causes — and the people of Chuvashia are even less willing. But I am actively studying the European practice of sponsorship and it has become easier to solicit support. The prize fund for the Chuvashia Cup has grown every year, and now totals 300,000 rubles – 400,000 rubles ($4,800 - $6,400). We have to show people that it is important and interesting and that horses are fashionable — and not just the closed segment of the Russian elite, but on the scale of at least the middle class. It is no secret that Gazprom owns all of Russia’s hippodromes and that big money is involved. The World of Horses TV channel receives funding of approximately 250 million rubles ($4 million) annually, and the presidential horse race gets about 100 million rubles, but ordinary people never see that money and continue to think that equine sport and everything connected with it is only for the elite. I would like to break this stereotype and popularize equine sport and horse breeding as an interesting, useful, engaging pastime with a rich history.