Part 1. German Khan on Leadership, Business, Apprentices and Himself

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Since 2003 German B. Khan has been the Executive Director and a member of the Management Board of at JSC “TNK-BP Management”, the managing company of TNK-BP. Mr. Khan is also a member of the Supervisory Board of Directors at Alfa Group Consortium and a member of the Board of Directors at JSC “NGK Slavneft”, Alfa Finance Holdings S.A. (oil and financial assets) and ABH Holdings Corp. (holding company of Alfa-Banking Group). Mr. Khan graduated from the Moscow Steel and Alloy Institute. From 1992 to 1998 he held various managing positions within Alfa-Group – one of Russia’s largest privately owned financial-industrial conglomerates. German B. Khan is one of the founders of Alfa Group Consortium. From 1995 to 1998 Mr. Khan was the director of raw- materials department at Alfa-Eco – the largest trading company within Alfa Group Consortium. Between 2000 and 2003 he was a Deputy Chairman of the Management Board at JSC “TNK”.

Talent Equity Exclusive: We would like to start off with a question that is usually saved for last. If your favorite student asked for your advice on how to become a productive executive, what advice would that be?

German Khan: I have never taken it upon myself to create a group of students, or anyone for that matter, who would consider me a teacher. I never intentionally teach anyone. There are, however, a number of people who have grown with the company. So in that regard I believe that I have played a part in what they have become as a result. As for productive management, it’s all pretty simple. In business, just as in everyday life, such as in family relations, you have the very same, at times humdrum, processes. If someone knows how to build normal relationships in everyday life through finding a reasonable balance in interests, then doing the same in business is a snap. There are no special secrets here. When I discuss business situations with my colleagues, I try to explain them by using examples from everydaylife, which generally works.

«If I were to give any advice, it would be to follow the simplest events in life very attentively.»

No one can say what they would be doing for a living if they were born ten years earlier. Each and every one of us is lucky to have been born when and where we were — not in regard to any financial position we may have been born into, but rather with regard to the sequence of events that allowed us to discover the abilities we were endowed with.

Therefore if I were to give any advice, it would be to follow the simplest events in life very attentively and take your behavior during these events very seriously. If you are able to create a type of behavior model that gives you a balanced state of mind in your personal life, then this will lay the foundation for success in business.

And one more thing: If someone has a certain range of abilities, what is most important is that he be dedicated to the idea of achieving success. I simply cannot stand people who start explaining why something cannot be done or always see things at the beginning as being bad. Here’s what I say: anything bad serves as the base for making something good through business decisions and situation management. Sidanko for some reason lost its assets, while we got a hold of them. Were things really any better for us at that time? We were all in the same boat, only they lost and we won. Business philosophy comes down to when the market is in good shape, there is no time to kick back and relax. This is when one needs to accumulate energy for overcoming the next economic crisis, which is bound to hit sooner or later. This is where you have to use your strength in a way that it makes you even stronger when surmounting the coming crisis.

People who love overcoming difficulties will be successful sooner or later.

Talent Equity Exclusive: Were there any instances in your life that have had a distinct influence on shaping your leadership mindset and character?

German Khan: I can recall several. When I was around 13 years old I tangled a few times with kids my age and lost. This motivated me to start working out to obtain a certain amount of independence and confidence. Before this I played a few sports, but they were nothing more than hobbies. But after having lost the fights I got into, I felt that I didn’t have enough confidence, strength and the ability to stand up for myself. That’s when I started to take up boxing seriously. I continue to keep in shape to this day. After sometime had past I felt confident in myselfin a variety of situations, and this confidence was obvious to others as well. When you start to feel confident in yourself is an important time in your life.

The second moment happened while I was in school, where I wasn’t exactly a great student. I wouldn’t say that I was a trouble maker, but I was known to disrupt class. I took part in activities and had a social life, but didn’t take to studying. By seventh or eighth grade no one laida finger on me: I usually came to school, headed for the library, chose a book, sat at the back desk and read.

After I finished school I didn’t go to college, but rather worked at a factory for a year until I was admitted to an engineering school. There came a time where my parents, my father a doctor of engineering sciences and my mother a professor, gave up on me: my dad thought I was hopeless. My classmates in engineering school were ordinary guys from the provinces, many of them older than me who had served their time in the army. Suddenly I became ashamed to be a poor student among them, so I started to take my studies seriously, graduated with honors, which my dad didn’t believe until I brought him my diploma.That’s when I understood that you can achieve almost anything if you really want it. Here again I felt very confident.

The third moment happened when I was 21 and had just enteredeng ineering school at a time when people were already finishing up their studies. After some time I realized that Moscow was full ofopportunities, while at the same time I wasn’t a youngster any more and was far short of having enough money to take advantage of the situation. I began to work with several cooperatives as an administrator. After some time I realized that we were very inefficient in ourwork. I understood how to change this and said “Let me organize things differently.” And explained how. I began to organize processes my way and was convinced that this worked very well. I then began to analyze, improve on and obtain results. This was the third important instance in my having become who I am.

Talent Equity Exclusive: You say that you didn’t like studying in schools. What happened next? What role did education play in making you a leader?

German Khan: I didn’t like studying in school, but then I somehow buckled down and took things seriously. I wouldn’t say that I had a passion for my studies, but rather I was in the heat of competition trying to be productive. When I entered my freshman year after engineering school, I had a lot of trouble with my studies, especially in the exact sciences. I did, however, put a lot of effort into it, met with the professors, left campus last and arrived first, and aced our first exams. Despite all of that, I didn’t really enjoy school. What I enjoyed was achieving a result: when I got a good grade, I would leave and feel great that I had achieved something..

In business the learning process continues and I learn from my mistakes. Just as my colleagues say, I am always on my toes. I listen, take things in, and if understand, I react quickly. The main question for me is always “why”. This is what any decisions I make depend on.

Talent Equity Exclusive: Of the seven leadership roles, there are: administrator, strategist, energizer, mentor, innovator, ambassador and owner. Which one are you closest to?

German Khan: Probably an energizer and mentor.

Talent Equity Exclusive: What about an owner?

German Khan: Frankly speaking there isn’t much weight in that; this role could be made less important... When I speak with our managers, I try to explain to them that right now I am not the owner, rather a manager as well. When I arrive at a board of directors meeting, I carry out my duties as owner when necessary. 80% of the time I position myself as a manager.

Talent Equity Exclusive: How did you end up switching from an entrepreneur to a manager?

German Khan: I don’t think I actually did make the switch at all. Don’t get me wrong, my job title is executive director, I have certain responsibilities and functions that go with a certain position. That being said, I remainan entrepreneur with my main goal being to retain the company’s entrepreneurial spirit despite it’s becoming rather big and full of bureaucracy. Having success is impossible without knowing how to manage professionally, just like long-term success for any company is impossible without entrepreneurial elements. The problem for most entrepreneurs is that they don’t know how to manage when things are steady, leading to the loss of their business.

This publication is part of the interview with German Khan from Talent Equity Exclusive "German Khan on Leadership, Business, Apprentices and Himself".

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