Dennis Hopple, President of CBSD/Thunderbird Russia, is telling us about his values and why living the values is so important for success in business.
1. Are values important for business?
Well, in two views, are really more about short term vs. long term. In the short term money is the measure. And, yes, in a rapidly changing economic system, you can shortcut, actually, even in the United States. Things like Enron happen; it's about people looking at life through a short term - I want to win quickly, and the heck with values, or - I want to build an organization that is going to stay for a long time. We were fortunate in that we were a training provider to Rolf during that time. And I have immense respect for Sergey Petrov. He built an amazing organization. And he was one of the first Russian clients that we had, maybe the first. I believe the same thing, that long term you going to have a much stronger, much more profitable organization, if you decide early on the values and you live them.
2. Which values your organization lives?
Our business is all about credibility. Clients use us because they believe in us. They know that we are going to do certain things. If we were just in business to get the money, during the time like this where anybody in business could do business. You don't have to be good; you just have to be there. I continue to think about long term because all business is cyclical, what goes up will eventually come down. When things start to come down CBSD is going to be in a position to have credible clients, to have an organization that people can believe in, that we do give quality, that we do have a set of values where we are honest, where we do everything white. It's not always easy, just accidentally in this climate, things happen and we are scrambling all the time to make sure that we are doing everything right. As a small business, I have to rely a lot at my friends at the American Chamber of Commerce and other places to make sure I understand what's going on. But we absolutely live the values. We continue to develop our people internally and externally; we send at least two or three people each year outside of Russia to learn new programs. We work together to build this organization and that's the only way it's going to work. As an organization grows if you don't have this foundation, like Sergey says, you'll lose control and I absolutely believe that.
3. How in particular values work in your business?
If people have a certain set of guidelines that they can call their foundation, then they know how to act. If we didn't have values, if we didn't have a specific mission or vision that we were going for, managers and employees wouldn't have anything to guide them. What these values provide is a guideline. If you are making decision within them, if you are moving towards the vision, you are OK. The decisions you make will be approved. If you deviate, you got to know, you are going to have a problem. It makes it so much easier for everybody to understand: this is where we are going and this how we are going to go there, if you have that as a foundation. We made the decision early, that we are going to be around a long time, and we are going to lead not only our own people by example but our clients. Our customers are coming to us asking us to teach them best practices in business. We'd better be doing best practices in business because they are going to look at us and say: "Wait a minute, what they do and what they say are two different things". We train all our logistics employees, all our housekeepers, all our receptionists to make sure they give the best customer service. And there is a culture inside the building that our clients will tell you they feel when they come.
4. Isn't it hard to do business with values in Russia?
It's one of the reasons why I like the business I'm in, we're bellow the radar... to be honest. I don't have to live with that constant pressure of corruption.
So, you are not providing services to Gazprom?
Actually, we are! But all the business that we are doing with large Russian companies is absolutely transparent. We have a price; we charge everybody the same price. We give everybody the same set of discounts based on volume. One of the first and most interesting things I did was to say: "It's going to be this price". One of the things that noticed, especially in Moscow, is that people move around but it's a small community. The buyer that I have at this company today will be the buyer I have over here tomorrow. And if I've got two different sets of pricing, I loose my credibility. So, we don't do it. Everybody gets the same price and then discounts based on volume. You do more volume, you get better discounts, and it's all published.
5. How do you do business with values with large Russian companies?
Most of the Russian business that we have started as a tender. We just give our price. When the market is growing as fast as this one, you have the ability to select what to participate in and what not to participate in. Have there been instances where people have asked? - Yes. We just don't do it. I would rather turn down business in the short term and maintain our credibility on the long term. It's important to us. And market is changing. Our basic clients initially were multinationals and that was one of the reasons. When we sat down in 1996 and said: "Wow, we got to figure out how to run this business". We had two criteria: One - client got to understand the need for training, if they don't, we are not going to sell them anything; two - they got to be ready to pay for it. That started to work with multinationals. But it has moved to now 50% of our business is Russian companies that respect the same thing. Most of our Russian business has come from former managers of multinationals that have moved to Russian companies and they know what we do. For us it's a referral business. Everyone who goes through these doors is potentially a customer, somewhere, sometime. So, we are very careful because you never know where they will end up, what they might do. Life is too short to compromise. We are not going to compromise our values. And, thank goodness, we are in the business where it's not necessary.
6. Can you tell me a story when you had to turn down a business offer because of values?
I've got two stories. Both of them are form our early years. One was when we were ... in business and we were asked to take part in a tender with a very large Russian government-owned mineral organization. It's actually wasn't a tender it was an offer. "We will give you a $1.500.000 contract; half a million goes to our broker in Switzerland, million goes to you, to your project". When we first started out it was a tremendous temptation because that was our entire first year's revenue at plus. We said "no". Although, the senior manager that brought the deal left the company, voluntarily. We just said: "No, we are not going to do that". And that person left within a couple of months because he had different set of values. It was important to us and, by the way, I was still fresh in Russia and foreign corrupt practices act in the United States was fresh in my mind. And I was thinking: "I want to go back to the US sometime". It was difficult to convince the organization it was the right thing to do but we did.
7. Are there some other interesting stories like that?
We also, when our grant ended had to buy some vehicles. Because the original vehicles were on the temporary import, so they all left; we had no buses, no cars, no anything. So we said: "Ok, we are going to buy two buses". We went on, we made the purchase, ordered the buses. Buses were made in Germany; they got to customs; they stayed in customs for eleven months until President Clinton was coming to Moscow and wanted to visit a successful USAID project. So they contacted us. The embassy contacted us and the secret service came and visited Izmailovo... Amazingly we got a call from customs: "Your vans are ready". But I just couldn't pay the bribe and it was "if you want this it's going to cost excellent thousands of dollars to get them". I said: "No, I'm not going to do it". So, for eleven months we rented a van to get our participants from the metro and then, it just went away. We've mentioned to the embassy we still having a problem with our vans and they magically were released.
8. However it isn't so easy to live the values in business, is it?
Not everything has turned out so nicely but in a long term you learn to live with what you get. Every time we've moved into a facility, you go through a process of inspections and approvals, and we've gotten pretty good at avoiding the situation. And we are relatively small. We can kind of play the card of "we are poor, we are non for profit, we are education, we don't have much". Our people are pretty good at all ... things in the past like loan computers. When we were asked for a contribution, typically a large monetary contribution, we said: "No, but we'll loan you a computer until next year, and you'll bring it back next year and then we'll talk". That seems to have worked in a loan case where we had to deal with certain approvals. Is it a compromise? - probably but it felt its OK given the environment and the fact that they had something worthwhile to work with rather than cash to go spend on something. Do we make compromises? Everybody has to, nobody is perfect.
Prepared by Liza Barzova, Good2Work Intern, on October 21, 2008
