Transcript of an Interview for a Russian News Website

Speaker 1: Doctor Adizes, your theory is used in many countries. Management theories change all the time. Are there some crucial changes in approaches to management worldwide?

Dr. Adizes: The world is changing at an unprecedented rate. There are more scientists today than there have been cumulatively in the history of mankind. And the rate of change is true for management theory, too. What was used to be applicable to agricultural and industrial society is under stress today. In the agricultural and industrial society, you could run a company hierarchically. You were the boss, you were the owner and possibly you knew better than the workers on the line knew what to do. And you would take the responsibility for your decisions. That is not true anymore because of the rate of change. The top does not necessarily know what is happening at the bottom of an organization. Organizations are becoming enormous and international, spread all over the globe. Today’s world is calling for integration. It is the source of success. Integration means information not only flows from the top down but also flows from the bottom up. This way, the top will know what’s happening at the bottom. Using an analogy from medicine, the head should listen to the body. The head should not be disconnected from the body. When the head doesn’t have healthy relations with the body, that’s how you get sick. And this is what is happening to many companies in the world. They are still managed as if they were small industrial companies or agricultural farms.

Russia has an extra problem with modern management requirements. Russian management still suffers from the Soviet Union legacy. The Soviet Union system was not focused on the market and its demands. It was oriented towards production. It had five-year plans and a production schedule. And companies were selling what was produced rather than the factories producing what was sold or the market wanted to buy. It was not a market-oriented system. It was a production-oriented system.

Today management style in Russia is autocratic because of the culture and because of the production orientation: “I’ll tell you what to do and you just go and do it.” When your focus is on the market, you have to listen to sales people and you have to ask the marketing people. You have to ask those who know, “What’s going on?” You have to listen, so there is a major difference in the managerial process. You should speak less and listen more. In an industrial society, you could listen less and talk more. This is a big difference.

Speaker 1: You spoke about some changes in management. You said that the pace has increased. Is it because of information technologies or might there be some other reasons for the process?

Dr. Adizes: People are more educated now than ever before. They are not just selling just their physical power anymore. They think and want to use their brains. And IT can be a blessing or a curse. Information technology is used to provide information, not just data. Information is data organized for decision making. If you get data and you cannot make a decision based on the data, you are producing only data, not information. People don’t know what to do with the data. They don’t know how to use data to make decisions. Many organizations established IT systems while ignoring the organization structure. Information should flow to those who have the authority to make a decision based on specific data. And that does not always happen. You have to integrate IT systems with the organization structure. They should be mirrors of each other. If the data does not allow leaders to generate a solution, it is a total waste of information. You have to synchronize the structure of responsibilities with the structure of authority with the structure of reward systems and they should be reflected in the IT system.

Speaker 1: You worked a lot in CIS (former Soviet Union) countries for companies and governments. Why do you think we have in CIS countries a lot of very successful IT companies? What is the reason for such growth?

Dr. Adizes: The Soviet Union system was very autocratic. Russia inherited it from the Soviet Union. Autocratic means I don’t have to relate to people very well. I tell them what to do and that’s it. If you are in IT you do not necessarily need to have listening skills. You do some programming and you produce a software and you are done. You are escaping the real issue of dealing with people. You can see everything on a computer. You don’t want to talk to people.

The Soviet Union was strongest in physics and in mathematics. And computer programming is mathematical. Your weakness is organization, people, management of people, and listening to people. You are running away from your weakness and going to where your strength is, which is dealing with mathematical models. You should be working more on your weaknesses. And that is what Adizes is all about. We are working on your weakness; we are working on your organization, we are working on teamwork, we are working on how to communicate with each other and listen to each other.

Speaker 1: You entered a project from Belarus, the CopPay project. Why did you enter it if you know about the Soviet Union syndrome?

Dr. Adizes: Crypto currency does not require people participation. What you really need is a good strategy and you need a good solution to a problem. In my judgment, CopPay will solve an enormous problem. There is an enormous opportunity. What is it? Look. There is $120 billion worth of crypto currency today in the market and it is growing daily. In few years there will be $240 billion worth of crypto currency in the market. Every day and every week someone else is coming up with another crypto currency. What is happening here? Crypto currency today is very speculative. People are buying and selling but they are not part of the world economy yet. People are buying bitcoin because someone else is going to buy it too and at a higher price, so the value is going to go up. That’s why it is speculative. However, if somebody comes up with a solution that allows people to use the bitcoin to buy a television, to buy a car, to buy a room in a hotel, this $120 billion or this $240 billion will penetrate the market economy. Right now, we don’t have that capability. It is not so easy to convert crypto currency into cash. You can, but it’s not so easy because of the volatility of their price.

CopPay has come with a solution to that problem. It is a virtual terminal you can put on any computer, mobile or desktop computer, for free, and it enables a person to buy real goods with crypto currency, any crypto currency which is traded. The store will be paid in cash in the local currency through the CopPay terminal. The terminal processes the exchange from crypto currency to cash in local currency through 800 exchange centers. And it is all in real time: the store gets the cash in their local currency in the bank account and the buyer gets the television and pays from the electronic wallet. Peer-to-peer transaction in real time, no banks involved. And we get our 2% commission for doing that.

CopPay is a solution to a $120 billion problem of today and a $240 billion dollar problem of tomorrow. We will be getting 2000 stores in Mexico to accept crypto currency. I will help them in some other countries where I have clients who have a chain of stores to accept crypto currency. This solution is going to change the crypto currency which today is a closed separate speculative market into real currency. This is going to be used for buying real products.

I believe CopPay is a needed solution to an incredible problem. It is an incredible opportunity and I want to be part of it. That’s why I joined.

Speaker 1: What advantages do you see in crypto currency to fiat money?

Dr Adizes: First, you cannot take money out of some countries. There are limitations of currency movements from one country to another. Another thing is you do it through the bank and they take high commissions. They also don’t do it in real time because it helps their reserves. Thirdly, you are exposed when you have paper money. Society does not use paper anymore, they use computers. For all these reasons, I believe crypto currency is the currency of the future. Now, the governments are not going to like it. But the people are going to like it and as people come to like it, you cannot stop billions of people. You cannot stop them. Maybe a government can stop crypto currencies inside the country but it cannot stop it globally. So, crypto currency is going to be doing to financial institutions what Amazon has done to the retail industry. Amazon destroyed the retail industry. If you go to a mall it is starting to look like a ghost town. If you want to buy anything you go to a computer and through the internet, you buy it on Amazon. You can buy food on Amazon, you can buy clothes on Amazon. You can buy everything on Amazon. And if it is not Amazon, there are other internet providers. You can buy jewelry. What Amazon and the internet have done to the retail industry, crypto currency will do to the financial institutions. The IMF said that they believe crypto currency is going to win the banks. If the banks do not adapt to this new reality, the banks—like the retail industries—will die. This is a new world. The $120 billion or $240 billion worth of crypto currency which is today in a separate world will penetrate the real world. CopPay will provide the vehicle for it to happen.

Speaker 1: What did you do yourself in this new world of crypto coins?

Dr. Adizes: I bought some because I want to learn how it works. Learn how to transfer money from one wallet to the other, how to turn my bank money into crypto currency. I remember when years ago I had to learn the computer technology. It took me some time to learn how to operate the computer. I am still learning. I had to learn how to surf the internet. Now I need to learn how to use the crypto currency.

Speaker 1: I see. You spoke about the new world. Is it a process of evolution or revolution? Will there be some sort of integration of crypto currency with the current system, will it be an evolutionary process or will it be a disruptive revolution? What do you think?

Dr. Adizes: The difference between evolution and revolution is how disruptive it will be. I believe it is going to be very disruptive. Many banks are going to be bankrupt just as many retail stores went bankrupt due to Amazon. Banks should open their eyes. They must join and adapt to the new world and plan what new services they should provide.
It will have to be a totally different system. If transactions are going to end, what are they going to provide which they are not providing today? The same thing is happening to the retail business. Retail businesses are not where you go to buy some clothes or to buy food. The internet can do it faster and cheaper. No real estate costs. So, what does a retail store have to do? They should not be selling products. They should be selling experiences which the internet cannot provide.

There is a wine store here in Santa Barbara. It does not just sell wine anymore because wine you can buy through the internet. They organize store parties. They provide store experiences, along with wine. So now people do not go to the store just for wine, they go for the experience of relating to other people face-to-face, with real presence, something they cannot get through the internet.

Banks will have to ask themselves what is it that they can provide, which is not just transactions anymore. They can provide tax planning. Retirement planning, private banking. They have to develop and provide customized services to the clients or they will die.

Speaker 1: I see. I see. Let’s go back to our project. There are a lot of startups now and there are a lot of competitors in crypto currency payments. Why did you choose the CopPay project?

Dr. Adizes: I was very impressed with the CopPay people. The founder established in Belarus a blockchain laboratory some years ago and became an expert in block-chain. The lab has many ideas about what to do with blockchain. CopPay, this virtual terminal, is one of them. The CEO has a western education. The programmers are very good, too. I think they have the right people, they do not suffer from the Soviet Union legacy, they have the right business model, and they have the right solution. So, I joined them because I believe in them and I think they are going to be winners.

Speaker 1: Today the creator of Kaspersky laboratory, Mr. Kaspersky, said that crypto currency is a really good thing but people will be ready for this thing only in 300 years. Is he right?

Dr. Adizes: Mr. Kaspersky is a very smart guy; I have no doubt about that. But the reason why people do not see the future well is very often because they are very successful in the present. The success makes them blind to changes. They stick to their success. He is very successful and because of that, he sticks to what he is successful in without looking at new things that are happening. International Monetary Fund Managing Director Ms. Laggard said crypto currency is going to win the world and the banks are going to die. CopPay is a game changer. CopPay is opening the bubble the crypto currency is in and will bring it into the real world. That is a major difference Mr. Kaspersky is ignoring.
There are going to be other companies that create virtual terminals. It’s going to be very competitive. That’s why CopPay has to move very fast, as fast as possible. I believe, I’ll give you three to five years and crypto currency is going to become a legitimate global currency. The world economy will have to accept it. It’s already happening. Japan legitimized crypto currency, Switzerland did, Germany did, Holland did. The small countries will have to join, too, because they cannot stop what is happening.

The trick is how to control it, not how to stop it…

Speaker 1: I see. Thank you, Dr. Adizes.

Dr. Adizes: Thank you

Speaker 1: Have a nice day.

Dr. Adizes: Thankyou, Good Bye.