EBA PERSONALITY: Peter Chernyshov, Kyivstar CEO

Issue 77, March 2015.

Can we start with an introduction of yourself and an overview of your company?

Mr. Chernyshov was appointed Kyivstar CEO on June 25, 2014. Before that, he worked at the Carlsberg Group. In 2006, Mr. Chernyshov was ranked among the top-10 Ukrainian executives by Companion magazine, and in 2007 was named the best executive in beer and beverages category in the annual rating TOP-100. Ukraine’s Best Top Managers. Before moving to Ukraine, Petro worked in Great Britain (United Utilities Plc), Italy (ABB), Sweden (BBH), and Russia (Baltica and Vena). In 1990, he graduated from the Mathematics and Mechanical Department of the Ural State University in Yekaterinburg, and in 2000 he received his master’s degree from the Moscow Academy of Economy. While working in BBH, he successfully completed an MBA course in Kingston University, UK. Kyivstar is a nationwide operator leading Ukraine’s telecommunications market. We have almost 26 million subscribers across all regions.

What drives you in your professional and personal life?

My goal lies not in making my employees happy, but in increasing market share and revenue. If I manage to make my employees happy along this, that’ll make the whole thing even better. Work takes up so much space in my life that it’s hard to distinguish between my personal and corporate goals now. My goal is to make Kyivstar a prosperous company. As for the goals unrelated to business, it’s giving my kids the best education I can pay for.

What are your personal recommendations for anyone who wants to be successful in business?

Doing business entails taking unpopular decisions. Often making people sad or forcing them to do things simply comes with the territory. Doing your job is not all fun and games, as they say. It’s not quite like that. You often have to cut costs, or spearhead the projects that many don't agree with, but that have to be done anyway. Eventually, it’s the ability to take unpopular, unpleasant, and often rough decisions that gets to be valued most in you. And that’s something most politicians usually try to avoid. If you are in business and suffer too much populism, you’ll find it hard to move on.

Could you share your business success story?

I believe every top manager has to set daring objectives to his or her employees. Of course, I realize that sometimes people leave the meeting thinking: “Our boss must be going nuts”. If that’s the kind of thought they get after every meeting, then there’s definitely something wrong with you. But if your crazy goal is combined with the right motivation and alternates with realistic tasks, such approach bears fruit. Oftentimes, executives think they’re smarter than their subordinates. What I think, you’ve got to be a really stupid manager to come up with all the ideas yourself. When you are a smart manager, your goal is to wake up your employees to conceiving new ideas and surprising you with those. I personally believe that my employees themselves know quite well what to do. Sometimes they don’t tell about it, remembering the saying that ‘no good deed ever goes unpunished’, and sometimes they doubt they proposal will ever be implemented. Thus, my goal here is to create an environment in which people are willing to share their vision. It happens sometimes that a company has too many people generating ideas, but only a few that are able to have those properly and diligently executed. That’s an extremely dangerous situation, which hinted me at adopting my current management approach: “Execute or be executed”.

What is the most important management lesson you have learned?

Ability to say “No” Managers are usually judged by their projects. However, I believe it’s also important to look at what projects the manager was able to turn down. In companies like Kyivstar, you have about 200 projects discussed every year. We implement part of those, and discard the rest. There’s that common mistake of jumping in on a project that won’t be successful. What projects you give up on is what you get judged by at the end of the day. The company is unable to handle all 200 projects. That said, try to concentrate not on the projects you accomplished, but on the ones you discarded, even though they go unnoticed to anyone else.

How do you position your company on the market?

Kyivstar is a nationwide operator leading Ukraine’s telecommunications market. We almost 26 million subscribers across all regions. Our mission lies in providing top-quality service and affordable and reasonable price. That’s why we’re investing hundreds of millions of hryvnias annually into the infrastructure development. In 2014, we paid almost UAH 4 billion in tax to the country’s treasury. That’s 1% of all taxes collected in Ukraine within the last year.

What is your top priorities for the next 12 months?

Do everything to make 3G connectivity available to Ukrainians in the shortest possible term. We are already testing new generation Internet connection in Kyivstar’s headquarters with many experts with broad international background involved in rolling out the 3G network.

Do you have any plans for expansion? What are your growth ambitions?

All our plans are related to introducing next generation connectivity in Ukraine. We are hopeful that the state, the regulator,and the Defense Ministry (which still has to perform frequency conversion to free up the required bands) will do all they can to assist operators (including Kyivstar) in the fastest 3G deployment. Kyivstar is actively updating the infrastructure, invests into the network, and will be ready to provide 3G services within the set timeframe. One of our main ambitions is building and launching top-quality mobile Internet.

What key market drivers are positively impacting your business?

It’s hard to talk about the drivers positively impacting the business now. Today, exchange rate is the major influence, which may impact pace at which 3G network will be deployed in Ukraine. We buy a lot of equipment with foreign currency, while all our revenues are in hryvnia. That said, an average mobile bill in our country is UAH 36 (a bit more than a dollar). At the same time, in Belarus and Moldova this number goes up to USD 5-6. However, I’d like to note that there are still some positive aspects to the situation. Like the transparent 3G bidding procedure proving that corruption is lowering its pressure and we’re getting a good sign the upcoming reformsmay turn out quite successful.

The EBA focuses its actions on 7 vectors of economic development- Corruption fighting, Court system and Land reform, Currency regulation, VAT refund activation, Customs Procedures simplification and Technical barriers to trade elimination. Which one(s) so youforesee as the most vital and why?

Corruption fighting. 2. Court reform 3. Eliminating technical barriers

What in your opinion can be done to improve investment attractiveness of Ukraine? 

If we see the companies like Ikea and EasyJet voicing their intention to enter Ukrainian market in 2015, this will mean we have reforms going on in the country. If this doesn’t happen, there are no reforms. You can endlessly tell about cancelled licenses, dismissed officers, some other activities – I don’t believe in that. Investment climate remains the key indicator of every reform’s efficiency. These are the two companies that are painfully intolerant to bribery, and they act as an acid test for our reforms.

How do you think what reforms or actions should be made by Ukrainian government in order to improve business climate in Ukraine and Lviv region in particular?

One of my colleagues from Amsterdam and I have recently had a meeting with an ambassador of one of European countries. He told us that companies in his country are willing to invest into Ukraine, but they want to receive that signal – the signal that we have a stable political situation in the country and an ongoing judicial reform. That’s their number one concern. Even the tax reform is secondary. The major Ukrainian issue is the protection of private assets, that’s the major problem. When you invest in the country without being sure that you won’t have some oligarch, MP’s son, or fire safety inspector come to you and say that your assets now belong to him, because I tempered with the registry’s entries, and you lost a legal proceeding you had no idea about, or because I imposed a tax fine on you that you won’t be able to pay. While things like this remain possible, good investments will only come from the companies like our, having powerful legal department able to protect our rights. An average European business is afraid of things of the sort. If we have an appropriate judicial reform launched in Ukraine, if we have this process up and running – Ukraine will be alright.