Kazakhstan’s National Business Magazine Interviews Dr. Adizes

March 3, 2017

This blog post was featured in the Huffington Post on February 27, 2017. According to your theory, every company has a "life cycle" - the path from birth to death. At each new stage of development, each organization faces a unique set of challenges and difficulties. At the same time, the organization's success depends on the ability of managers to manage the transition from one stage to another. What are the difficulties facing companies in Kazakhstan? I believe that in Kazakhstan companies are in two places of the lifecycle. Either there are in the “Go-go” stage still running entrepreneurially by owner as a manager, which are usually small companies privately owned. They have a problem of becoming more professionally managed. The other place in the lifecycle, is the big companies, like Samruk-kazyna, managed by government. And they have different problems. They are, on the one hand, still trying to run professionally, at the same time they are very bureaucratic. So, there is a lot of work to be done to change the culture in these companies in both stages. By the way, it is not only in Kazakhstan. All developing countries have the same problem... Either bureaucracy or small companies.Not so long ago you met with Nursultan Nazarbayev and shared views on key aspects of the interaction between government and business. You mentioned the importance of further implementation of the transformation program of "National Welfare Fund" Samruk-Kazyna ". Can you mention the main directions for reform that you recommend to national companies?Samruk Kazyna is going to be privatized. In my judgment, it is an attempt to debureaucratize government companies by making them profit-oriented and the belief is that if they and privately owned they will be more profit oriented and thus less bureaucratic. In my judgment, there could be a major side-effect, collateral damage. When privately owned PROFIT becomes THE DRIVING GOAL. Especially if they are owned by foreign investors. Because they are mainly, if not exclusively profit-oriented, they are going to fire a lot of people. They do not have as a goal social responsibility to provide employment and retrain people etc. That means that there is going to be a lot of political risks. May be social unrest.There are other ways to debureaucratize., You can have a company which is government owned and it is very, very efficient. I think it is depends on management. My suggestion to Nursultan Nazarbayev was to debureaucratize the company without selling it off, because the new owner will have a different goal than government has. The country needs to keep employment, but new owner could fire people.How long does it usually take, in countries like Kazakhstan, to debureaucratize corporations?It depends on the president, on the CEO. If they are really COMMITTED, you can do it in one or two years. It usually takes three years, but if really really pushed you can do it in one-two years.Should changes occur in people’s minds or in corporate culture? You have to change the environment, and people will open up. I don’t believe we can change people, we can change the environment. We can change the organizational structure, the reward system, your measurement goals, and measurement performance. If you do those things you debureaucratize the company. You don’t change people, you change the environment to make people open up.In one of the interviews, you said, you have skeptical attitude to business schools, MBA, as they try to grow perfect leaders, which is impossible. Every manager is good in two roles maximum of four, you described, the other two are usually not effective. How to improve those weakest two? You cannot improve your weaknesses; do you realize that? All this attempts to change a person, it is impossible. You don’t change people. What you need to do is when you know that you have weaknesses, acknowledge it, make your team COMPLEMENT your weaknesses. Get someone, who is strong in what you need to fix out. Together you can do better. Business schools are derived from schools of economics. In the schools of economics there are all theories, based on assumption. All business schools train a manager how to be a perfect manager. They don’t teach you togetherness, they teach how to think and how to be independent. Not how to work as a team. They teach individuals, and individuals cannot manage very well.How to deal with nepotism? Ok. Look. I told that to Nursultan Nazarbayev too. Kazakhstan historically is nomadic society and they survive by mutual helping. What you call nepotism is the outcome of a culture of helping each other. Now, when you don’t have professional management, when you don’t have budgetary control and systems, what do you do? You rely on people you trust. Whom do you trust? You trust your family. Thus, nepotism is a really cultural outcome and the result of the LACK of managerial sophistication in Kazakhstan. Let’s assume we prohibit it by law. It will stop the country. It will paralyze the country. So, nepotism is necessary evil in light of your tradition, in light of your managerial sophistication. The way to eliminate it is not to legally prohibit it, it would be dangerous to prohibit it. Instead, we should focus on managerial training and professionalization of management. Then you don’t have to trust your brother or sister to do your job, you can hire somebody, and supervise if they did a very good job. So, we have to substitute trust with professional management. As long as you hire people who are qualified and trustworthy, it’s ok. The danger with nepotism is that we hire and trust people, who are not qualified. So, you hire people you trust, but they cannot do the job. The problem is not nepotism. The problem is that you hire people nepotistically who are not qualified. If I hire someone who is qualified, that I trust and he is from my family, what is the problem?Then how to motivate people to improve their qualification?The problem of nepotism is that you hire people who are not qualified, because they are family. You cannot fire them, and now the company IS suffering. So, the problem, how to make them qualified. I think the best thing is to offer training. People will study, Kazakh people are smart, intelligent and capable. They will do it. We need TO provide enough training.The second and third stages of the program Adizes, transmitted by you on the Forum of Transformation of "Samruk-Kazyna" in October 2014, says - "it is necessary to give all the staff the opportunity to share their views and make their contribution to the common cause. But at this stage we should focus on discipline, because we are dealing with people who for long time had no opportunity to speak, so when it introduced, to speak all they want. " Given the shortage of qualified staff to make this step effective? How is the transformation now? What are your plans for the next stage? Kazakhstan like all other CIS countries suffer from the Soviet Union legacy of authoritarianism. People are not participating, they are not sharing their brain. They are not sharing their knowledge, because of that they are not working as intelligently as they could. So, they are not using their brain. The company is not encouraging people to express themselves to yield better result. The same problem in Ukraine, Russia, Belarus.You saw our government and top management; do you think they will follow your suggestions?I don’t know. (Laughing)Are they ready for those kinds of changes?I hope so. In Kazakhstan people are very open and I was really encouraged to work in Kazakhstan. Unfortunately, I got sick, otherwise I would move there to help the country. I love Kazakhstan, I liked people. I wish I moved for two years to Kazakhstan. People are looking to change, they are very eager to change, eager to move forward. And I wanted to be part of it. I found all the conditions for success, they just need to do it. too bad i got sick. but may be in the future it still can be done.

Written by
Dr. Ichak Adizes