4 March 2020

State & Business: ”There are many clichés that prevent us from understanding each other.”

Serving Customers – Serving Voters: Entrepreneur & Politician

Between pragmatists and keepers of the process: SKOLKOVO Business School President Andrey Sharonov talks with METRO about how revolving doors between administration and business have enriched his views – helping him today to foster the dialogue between both worlds.

Andrei Sharonov Keynote

Andrei Sharonov is president of the renowned SKOLKOVO Business School in Moscow. He is one of the most famous economists in Russia – and spangled with an array of orders and awards. Born in Ufa, the capital of the Republic of Bashkortostan in the far east of the country, Sharonov was drawn quickly into the political Moscow. First as deputy, later in leading positions in the Ministry of Economy and Trade. After an excursion into the world of investments, he was responsible for economic policy as Deputy Mayor in the Government of Moscow City. In 2013, he was appointed Dean of the Skolkovo Business School. Since then, shaping manager carreers are the center of his work.

Your professional path is marked by working in public service, in commercial organisations, and now also in the field of management education. In your opinion, are people who worked in business with their heads and hands well-suited for public service and politics?

They are indeed useful. Generally speaking, there are different traditions. In European countries – and here we can include Russia as well – it is not customary to switch from the public service to business and back. This is especially true for Germany. But in the American tradition, entrepreneurs often leave for public service and then after a while they might get back to business.

I prefer the American model, and I’m glad that I managed to implement it for myself. I think this model gives the possibility to understand the situation from different sides of the table. You are able to assess the quality of your work in public service from a consumer’s point of view – once you enter business, you can tell yourself: yes, we've made something useful, and it works. Or: no, it doesn’t work; we thought it was useful, but we were wrong. Or: it is useful, but we have failed to complete it, and business does not feel the charm and the importance of a certain regulatory act that we were so proud of.

Another advantage of such transfers is the difference of experiences. People become quickly one-sided if they are working in one place for a long time. Public servants have a lot of prejudice against businessmen: “All of them are at least small-time crooks”. Businessmen, at the same time, have the prejudice that all officials are either bribe-takers or idiots. Both opinions are pretty far from being true. And in this sense, having a personal work experience in this environment as well as a large number of contacts with people from both sides changes the picture. You begin to understand that most of the people working in both sectors are decent, upright and competent. But there are many clichés and patterns that impede our ability to understand each other, making life difficult for both sides.

Andrei Sharonov Profile

© SKOLKOVO Business School

You are familiar not only with the daily routine of the government machinery, but also understand business specifics. Does it help you in your current job in management education, and if so, how?

Yes. Especially if you work in adult education and communicate with government officials as well as businesspeople or company managers, - the ability to understand everyone is the key competence.

What are the similarities and differences between objectives in politics and business?

The similarity is that both fields have stressful production processes, KPIs, and a hierarchical system – somewhere with many levels, and in some other places with a flatter organisation structure, but there are probably no non-hierarchical systems. This is important to understand. On the other hand, the difference is that business objectives are in most cases more easily measurable: revenue, profit, completed projects, constructed facilities, established business processes, EBITDA. As for the government, the final result is much more difficult to be measured; it is considerably more indirect, so the processes are very frequently focused not on the final result, but on the process itself. They score the time spent, number of meetings held, number of documents composed and how many stages were passed. Very often, all this does not bring us closer to the final goal but becomes an end in itself. People who have been working in public service for a very long time, become process-keepers to a great extend and not keepers of final goals and values. And, unfortunately, this is also a professional deformation. Particularly in these cases, the transfer from public service to business is helpful.

 

When we talk to businesspeople, we often hear complaints about the government.

Both sides have biases and clichés in perceiving each other. As a result, businesses and officials often accuse each other – frequently even of non-existent flaws. The only way out of this is communication. Businesspeople have to understand officials and their logic because officials are engaged in solving tasks of a much more multicomponent character involving a larger number of interested parties, so that it is at least difficult to match a balance between them. The officials’ task is to prevent social explosions and excesses and to ensure a stable and peaceful life of society.

Comparing what makes you successful in politics, business, and education – what qualities matter?

In fact, it is rather the “fundamental” more than any narrow professional skills that will be playing an ever-increasing role. Today, it really doesn’t matter what kind of education a person received at the start of their career. For example, I graduated from an aviation institute, but my education is not very relevant for my current life.

Developing communication skills, the ability to manage the work of people with different competencies and of different ages, the ability to understand one’s own and other people’s emotions, to interpret them correctly without self-deception, to produce confidence, to set tasks in the right way, to motivate colleagues with both, positive and negative incentives – these things are of increasing importance to people who deal with any projects in any field and who work in large teams. Today, these are probably the most important competencies. Anyway, everybody who works in teams – be it politics, business, or non-governmental organisations – has to develop this set of competencies. These fields are similar in this respect.

In your opinion, what are the key problems in the relations between the state and businesses?

The state tries to reduce the number of risks that, in its opinion, create unforeseen situations for specific groups of the population and for the functioning of certain institutions. On the other hand, these actions also increase costs for businesses: for producing a product or a service, a business actually has to spend more effort, time, resources, and man-hours than it would facing less restrictions. This is well visible on the example of various state regulatory systems. With less regulation – and, accordingly, more trust – costs are lower and this enables a better product accessibility.

Given more restrictions even those established with best intentions, final product costs are higher, and no competition can reduce them, because these are objective expenses, and many of them are caused by some conscious or unconscious decision of the regulator. Therefore, when regulating something, requiring additional information, increasing transparency and creating additional protection levels, the state does good for the society, but the flip side of this coin is that everything becomes more expensive literally and therefore less accessible. Another episode from the serial “the road to hell is paved with good intentions”.

How well do these two worlds understand each other and to what extent do you consider yourself to be an intermediary between these two worlds?

They do understand each other, but not a hundred per cent. The longer they sit in their trenches, the more mutual suspicion and distrust they develop. In this sense, all over the world business schools serve as a good platform for building a dialogue. This is a meeting point for representatives of businesses, society and government: they communicate, find common goals and solve emerging contradictions.

Andrei Sharonov classroom

© SKOLKOVO Business School

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