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Leadership

Lessons from inside Ukraine on dealing with a crisis 

Published 6 April 2022 in Leadership • 10 min read

Putting contingency plans in place, prioritizing staff safety, and identifying business critical roles are all crucial for organizations that find their operations ensnared by geopolitical conflict. 

 

On the evening of 23 February Dimitri Chichlo was flying from Geneva to Kyiv to attend a supervisory board meeting the next day to decide on the new Chief Executive of Ukreximbank, the state import and export bank of Ukraine. He changed planes in Warsaw, and after a delay of several hours, his flight eventually departed in the early hours of Thursday morning. 

“After 30 minutes the captain announced: ‘Ukrainian airspace is closed. We are flying back to Warsaw,’” said Chichlo, who understood immediately the significance of the diversion. 

Russia’s invasion has underscored the perils and complexities facing many companies as they figure out how to keep employees safe and insulate business operations in the face of an unpredictable crisis with no set end date. 

“In the case of a fire in a building, you more or less know what is going to happen. You have evacuation plans,” said Chichlo.  “In the case of a war, it’s extremely difficult. It’s full chaos and you don’t know when, where and how it is going to hit.” 

The conflict has forced many Ukrainian and foreign-owned businesses to shutter factories and close offices, particularly those operating in the regions around Kyiv and Kharkiv, which have suffered some of the most intense shelling. Brewer Carlsberg, agriculture company Bunge and a Coca-Cola bottler are among the companies that have suspended production. Inditex has closed stores while food giant Nestlé has halted the manufacturing and distribution of its products in Ukraine. 

Before the war, Avrora, a chain of stores selling household goods at discount prices, was growing rapidly, opening around 30 new stores each month. Once the invasion started, management had to pivot into crisis mode to ensure the shops, which serve around four million Ukrainians, could keep operating safely as the bombs and rockets fell on the country. 

As of April 4, 738 of Avrora’s stores were open. Around 70 premises have either been destroyed by shelling or looted by Russian troops. Other stores remain closed because they are in parts of the country subject to attacks or occupied territory 

Drawing on the experience of Avrora and Ukreximbank, here are six lessons on how to prepare your leadership team to take quick and careful decisions when confronted with geopolitical conflict: 

1. Make sure contingency plans are in place

When Russian troops started amassing on the Ukrainian border in April 2021, the supervisory board of Ukreximbank decided it was time to update the bank’s Business Continuity Plans and asked the Executive Committee to start thinking about practical measures the bank would take if Moscow did decide to invade.  

This included making plans for when and how to close branches, how to keep sensitive documents safe and how critical IT infrastructure could continue to operate according to different scenarios to serve business and customers, said Chichlo. 

The bank evacuated paper documents from its branches in risk areas, made plans to destroy equipment that shouldn’t fall into enemy hands and updated its disaster recovery plans in the case of its own or third parties’ IT infrastructure being hit during combat. And because war is now the new normal, the bank also had to draft new business continuity plans. 

“Anything can happen, especially in areas where the geopolitical situation is tense,” said Chichlo. “If I were in Norway, Sweden and especially Finland or the Baltic states, I would do the same. You have to sit around the table and think about how you are going to respond if a conflict erupts with your neighbor.” 

Taras Panasenko stands in front of an Avrora store in Ukraine
Steps have been taken to ensure the safety of staff continuing to work in Avrora shops around Ukraine

2. Put employee safety first

In the early days of the invasion, Avrora evacuated many of its staff from Kharkiv, Ukraine’s second-largest city in the country’s industrial heartland, and brought them to Poltava, the site of the company’s HQ around 340km to the southeast of Kyiv. For those uncomfortable staying so close to the Russian border, they offered to move them further west to Vinnytsia where they also have an office. 

JSC Ukreximbank partnered with the Ukrainian railways to help evacuate employees and families to western Ukraine. On the first day of the invasion, half of its management committee relocated to safer territories in Ukraine. By day five, the whole executive board was up and running on the other side of the country. 

Many IT professionals, who have the liberty of being able to work anywhere they have a laptop and an internet connection, have fled to cities such as Lviv or the mountainous region of Transcarpathia. Other companies have helped staff leave the country completely.  Israeli website builder Wix offered to evacuate its nearly 1,000 Ukraine-based workers and their families to Turkey and Poland.   

Jérick Develle, Head of the Crisis Operation Team at global temporary staffing agency Adecco, said companies need to prioritize both the physical and psychological safety of employees. 

“Even if your organization does not have operations in Ukraine, you may have workers from there who are worried about family members,” said Develle. Adecco, for example, has offered to support employees by bringing relatives to safe places in Romania and Poland.  

The German consumer goods group Henkel is providing emergency financial aid to staff in Ukraine, as well as paid time-off for all volunteers who support refugees or aid organizations at the border. 

3. Activate crisis communication

Avrora holds twice-weekly Zoom townhall meetings with its 7,000 employees. No subject is off limits, even if some topics are inconvenient for management. Recent questions have included why the company is not replenishing stores in parts of the country that are occupied by Russian troops. “Of course, they feel like they’ve been abandoned,” said Chief Executive Taras Panasenko. “I explain that we are trying to find different ways to deliver there but currently there is no safe route. But we haven’t forgotten about them, and we still continue to pay their salaries.”  

Regular meetings are not only a way of gauging the mood of staff but also keeping morale high. Panasenko starts every call by telling employees how many customers came through their doors the previous day.  “When I say we served 250,000 people that means we helped a quarter of a million families fulfil their basic needs. This is a major motivating factor,” he said. 

For many employees, coming to work is also a welcome distraction from worrying about the safety of family members as missiles continue to pummel cities. The company’s HQ in Poltava is based on a former military site and has a bomb shelter solid enough to resist a nuclear attack a kilometer away. To help parents, the company has opened an in-house kindergarten to take care of the children of staff. “If your employees feel you care about them, they reward you with loyalty,” said Panasenko. 

Dozens of Avrova stores have been subject to looting by Russian troops or destroyed by shelling

4. Identify business critical roles and infrastructure

Just as Ukreximbank took steps to identify critical components and implement measures to ensure continuity of its IT services, companies also need to identify the jobs that are critical for keeping operations running.  

For Avrora, the most essential workers (and those facing the greatest danger) are drivers who often need to travel long distances to restock stores. Dialogue with drivers has been essential to understand their worries and overcome initial resistance, said Panasenko. The management team meets twice a day to pour over updated maps with the latest intelligence on unsafe roads, missile strikes and areas under Russian military control, enabling them to work out the safest routes. 

“Our whole management is working on how to deliver goods as safely as we can and avoid routes where there is military action,” said Panasenko 

The war has also put Avrora’s expansion plans on hold, meaning some roles, like those in the e-commerce or business development teams are no longer relevant. To keep staff employed, it has redeployed some people working in HR to its distribution center where they are picking and collecting goods. 

Avrora management teams meet twice daily to plot safe routes for delivery drivers

5. Insulate and diversify supply chains

Undoubtedly, the biggest challenge for Avrora right now is finding goods to replenish its stores. Many of its suppliers were based in the Kyiv and Kharkiv regions and have suspended operations. “A lot of distributors were bombed, and their warehouses destroyed,” said Panasenko. 

Those companies that are beginning to re-start production are struggling to find staff after many workers fled the country. A further challenge is a shortage of raw materials. Russian naval ships have gathered just outside Ukraine’s territorial waters in the Black Sea disrupting trade through the country’s main port in Odesa. 

With many European truck drivers unwilling to make the journey to Ukraine, the cost of transporting goods from other parts of Europe has more than doubled, said Panasenko. As a result, Avrora is looking to renegotiate with its Chinese suppliers, which account for 40% of the goods sold in its shops, to send stock by sea to the Polish coast and then transport the stock by road to the Ukrainian border. 

 6. Think long term

The UNHCR estimates that some four million people have fled Ukraine and a further 6.5 million have become internally displaced since the war began. Global staffing group Adecco has set up a jobs board connecting Ukrainians displaced by the conflict with employers in Europe. More than 900 companies have posted jobs and some 2,000 Ukrainians have registered on the platform, said Adecco’s Develle. 

For companies, it is not just an opportunity to fill vacancies but also a way to provide help to those displaced by the conflict. More than a quarter of the jobs advertised include offers of accommodation, while one company is opening a large training center in Warsaw and is looking for people to fill it.  

By providing accommodation and training, companies can build a loyal pool of workers who will be ready to work once operations within Ukraine resume, said Develle. 

He also encourages companies to think creatively – both in terms of how they can train workers to match the skills they require and support those in need of employment. “If companies don’t have job vacancies available, maybe their suppliers will,” he said. 

While it may sound crazy to think about expanding your business in the middle of a war, Avrora plans to do just that. Eyeing a potential to serve up to 10 million customers, the chain is planning to open three new stores in April.  “A lot of customers who previously shopped in the premium segment are now coming to Avrora,” said Panasenko. “Once we solve our issue with international orders, we plan to open more new stores.” 

For Ukreximbank, the conflict has accelerated its existing digital transformation plans. The changes will ensure that staff can work from any office, or even any apartment building, in the country, said Chichlo. 

The bank is supporting its customers by suspending interest payments and has realigned its business to provide financing to the Ukrainian military, pharmaceutical companies and agricultural sector. 

“Business is very resilient,” said Panasenko. “It tries to find ways to overcome problems. I think this will be the power that can bring prosperity to Ukraine in the future.” 

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