Ukraine’s managerial revolution

Two years ago Maksym Ustinskyi, a 30-year-old country manager with Ukraine International Airlines in Kiev, reviewed his professional achievements and pondered his future career path.

“I needed something more,” he says. “I felt a lack of business understanding. I was interested in the vice-president position and, though I was professionally qualified in several respects, notably sales and marketing, I realised that it was not enough.”

At the same time, he saw colleagues with business masters degrees becoming more successful. “So in order to talk the same language and understand a wider spectrum of business issues, I decided to go for an MBA.”

Many young Ukrainian professionals have come to similar conclusions. The trend for western-style business education began almost two decades ago. But whereas in the early years it was driven by foreign companies, today domestic companies and their employees increasingly see the need. What they want is modern, motivational-based business education, says Maryana Lozynska, marketing director at the International Management Institute, MIM-Kiev, Ukraine’s oldest business school.

Ms Lozynska says: “Five years ago, demand for MBA education in Ukraine was primarily formed by foreign and multi­national companies. Now local companies are more and more convinced that highly qualified managers are the most important and valuable resource for the company.”

Alexander Mertens, president of the International Institute of Business, a rival Kiev-based school, agrees. “Even the largest [and traditionally most conservative] Ukrainian state-owned companies have started to recognise the importance of continuous education for top and middle management,” he says. “This is a very important [element] in the demand for business education.”

Prof Mertens says this trend is supported both by continuing economic growth, which has resulted in a rise in disposable income of 20 to 25 per cent in recent years, and increasing competition in all aspects of business.

He says: “In order to compete successfully in such industries as food and drinks, retailing, distribution, IT, engineering and even construction, companies should have efficient management systems – and they understand this.”

Growth in demand

The impact on enrolment has in some cases been spectacular. Numbers on the IIB’s international MBA programme (a joint degree offered with Canada’s University of New Brunswick) have jumped to 24 from 14 students in the inaugural year of 2005. “Our absolute figures are probably not very impressive compared to large western schools,” Prof Mertens says, but the numbers illustrate the fast growth potential in the sector.

For some executives, improved business education in Ukraine cannot come fast enough.

Yuri Zastavny, Ukraine country head of the agribusiness group Syngenta, says too many managers in the post-Soviet era still shun responsibility and too often refer to the department head rather than taking personal action.

Rather than encourage students to attend MBA programmes, Syngenta Ukraine designed its own in-house management development programmes with Kiev Mohyla Business School. Mr Zastavny feels these are more effective given Syngenta’s circumstances.

He says: “It is true that in-house programmes lack full exposure to other MBA team-mates, but they save students’ time while giving them the education. In-house education is better for people who have already achieved something and don’t want to lose one to two valuable years off-line, especially in fast-developing economies.”

Judging by growth in demand at KMBS, the in-house option has plenty of supporters. While 30 per cent more students enrolled in the business school last year than in 2005, the number of long-term tailor-made company programmes jumped fourfold, from two in 2005 to eight last year, says Svetlana Chernyshova, director of corporate and diploma programmes.

Often in such partnerships, the company’s top managers not only play a role in designing the programme; they also participate as co-trainers or guest speakers. The process can have some intriguing by-products. Prof Chernyshova says: “They often use this opportunity to communicate company plans to staff and then get feedback from the participants.”

This booming market in Ukraine has not gone unnoticed inter­nationally, although in terms of attracting foreign students the results so far appear muted.

Stephen Adamson, associate director at the admissions department of Madrid’s Instituto de Empresa Business School, has attended two MBA fairs in Kiev in 14 months and observed considerable changes in that time.

Satisfying

“On our first visit, there were a large number of interested candidates who were not especially aware of what exactly an MBA involved or why they should study in Europe or the US,” he says. “On my second visit, it was noticeable that many of the candidates I had met the first time had returned, obviously better in­formed, and were now either applying or at least seriously considering applying for our programme.”

But Mr Adamson sees Ukraine as having a good market for its own business schools in the medium to long term. The cost of MBAs at western schools is relatively high and students are afraid to desert Ukraine’s rapidly changing business world for a year or more to study abroad.

Mr Ustinskyi, now director of the representative office division for AeroSvit Airlines, Ukraine’s biggest carrier, chose IIB’s international MBA programme after extensive research.

Although in some disciplines he found the approach “too theoretical”, overall he says the programme was “rather satisfying”. And having paid for the course himself, at a cost equivalent to 60 per cent of his annual salary, he has no regrets.