How We Build a Team

How do we build a team?

I remember a CEO being asked who the second most important person in the company was, after himself. He answered: the head of HR. I fully agree. Without a well-chosen team, it is extremely hard to achieve any result at all. That is why it is so important that the person at the top be able to assemble a team to carry out the tasks at hand, and that he do so relying entirely on his HR manager. In Kazakhstan, most companies fill key positions on the basis of fidelity rather than ability. Only a handful of progressive companies have just begun to use global recruitment to find top managers. The same cannot be said of the civil service, where closeness to the boss and personal loyalty still prevail.

Unfortunately, experience shows that the people who try hardest to display loyalty are the most disloyal. As soon as circumstances and surroundings change, their loyalty changes masters.

Neither efficiency nor growth should be expected from such people. Their goal is their own wealth and the preservation of their own power.

Working with professionals is extremely hard. Their opinion on a given subject will often differ from yours, and they always say exactly what they think. This can sometimes jar with our mentality, since here the role of a manager presupposes that he knows everything, which is deeply wrong from the standpoint of efficiency. If we hire a professional in a particular field, we must trust him completely and assume that he understands that field better than we do. The CEO's job is to set the strategic direction, to choose correctly among the options presented, and to know how to ask the right questions, the ones that help achieve strategic goals.

The second important part of hiring the right top manager is goals and motivation. Without clearly defined goals, and motivation for achieving them, a top manager's enthusiasm will not last long. The motivation has to be sufficiently material. Every top manager has a market price. If pay does not match the market, as is the case across quasi-state companies here, then, factoring in risk, he will be motivated not to work but to earn for himself. The higher the risk, the more he will try to earn.

In developed countries, companies use stock options: top executives are granted shares, or the right to buy shares at a discount, for achieving set targets. Quasi-state companies have no such option, which is why in many countries their top managers receive bonuses tied to financial indicators. Many have shown that a great deal depends on the CEO, and that the right CEO can bring shareholders many times more than the bonuses he is paid. There are plenty of examples: Tim Cook, under whom Apple became a trillion-dollar company; Robert Iger, who took Walt Disney to a fundamentally new level; and, closest to home, German Gref at Sberbank and Mikhail Lomtadze at Kaspi, among others.

Large business in Kazakhstan is now dominated by state-owned companies, yet the pay of their top managers falls nowhere near global standards. This is why we have no properly developed companies among the quasi-state ones, even though KazMunayGas, Kazatomprom, Samruk-Energo, Kazakhtelecom, QazaqGaz, KTZ and others could become industry leaders and significantly shape the country's economic landscape.