Мartin Schneider, BRAINFORCE AG: Mr. Maganov, what does “CEO of the Year” Gold Award mean to you?
As far as I understand, the results are calculated based on publicly available financial statements, which rules out subjective judgment. I am pleased to see the results of our activity recognized by an independent Swiss research institute.
What does it mean for you – to be the General Director of a large group of companies, i.e. PJSC “Tatneft”?
Indeed, I have been entrusted to manage a unique company with its own traditions, vast experience, and a long history. The company’s biography began during a hard time period for the country, in the middle of World War II. Commercial reserves of oil were discovered in the south-west of the Tatarstan in 1943 near the settlement of Shugurovo. (The new major oil field attracted specialists from all over the Soviet Union. They and the first petroleum workers from the local population began active development of oil reserves). The first barrels of oil were immediately sent to the war frontline. The oil from Tatarstan made an enormous contribution towards the victory over the German Nazis, and the post-war restoration of our economy, turning the once agrarian republic into one of the country’s most powerful industrial centers.
In fact, our “oil history” dates back to old times, the first official references are from the 17th century. Researchers even believe that the extraction of “earth oil” had started in the area much earlier. Our forefathers were not only able to produce the “black gold”, but also to process oil. In particular, the first finished products – petroleum tar and lubrication oils were produced from bitumen sands at Shugurovsky’s oil and bitumen plant in 1877.
The subsequent history of Tatarstan’s petroleum industry reveals numerous similar impressive facts, so we have a lot to remember and to be proud of. First of all, it is our people. The Petroleum industry professionals of the republic were among the first in the country to master a wide range of front-edge technologies for oil fields exploration and development, including the application of efficient oil recovery enhancement methods. Every operational accomplishment, a research discovery or technical advance had been authored by a cohort of talented operations managers, highly qualified specialists and production workers, all of them being true professionals of their trade.
We carefully keep the company’s gathered experience and traditions, passing them from generation to generation as supreme values of the company. They help us to survive in the difficult times and provide us with a reliable foundation for new development stages of the joint-stock company.
Beyond doubt, managing such a company entails enormous responsibility and many obligations – to shareholders, staff, and residents of the territories, where the company is present.
How do you personally see your role in this top management position?
The role of top manager derives from the mission, strategy, and goals of the company – in our case – these include improvement of production management, operating costs reduction, doubling the value of capitalization. The accomplishment of these goals would be impossible without effective and efficient managers capable of working in times of global economic challenges, financial instability, and ever-growing geopolitical competition. Moreover, these are times of rapid changes. As the conditions of doing business are becoming more and more adverse, our company has to become faster, more flexible and efficient. Let me emphasize again, how important it is to rely on people capable of offering skills to go this direction. Therefore, human resources appear to be the key strategic asset. Being able to allocate staff and to delegate authority is the key to success of a good strategically minded manager.
How do you pick managers for the company? What criteria are of highest importance for you?
I believe that a manager is, first and foremost, an efficient professional. His or her work will, eventually, affect the company’s success. A real specialist has to be in a continuous development and training mode. I adhere to lifelong learning myself, and I expect others to do the same. As part of our corporate continuous learning initiative, we have established our Corporate University, and we put high hopes on it. I dedicate special attention to the recruitment and training of talented and prospective youth, who are ready to adapt themselves and drive change in the organization and its environment.
A professional manager must have the “feel of the market”, sensing its development vector. Highly significant, in my view, is the ability to foresee long ahead – the ability to think strategically and adapt your action models to various environments. In addition, of course, leadership properties are crucial – the skill to inspire, to lead people and to choose correct tools for doing so.
What personal characteristics of the staff are important for you? What type of personality appeals to you?
As I noted, the company’s success depends on effective specialists, who can work in a team for common benefit. As for personality type, I prefer dealing with energetic and goal-seeking innovators.
In 2015, your company set up the platform “Business Ideas Auction”. What is it exactly? How does it work? What are the advantages for employees for active participation?
Our project “Business Ideas Auction” is implemented on the basis of crowdsourcing, which enables us to draw-in an unlimited number of participants.
In this project, crowdsourcing helps the company to accomplish its pressing operational issues and to generate ideas to address the identified challenge.
In other words, it is an IT-platform, where any employee may publish his or her existing problem case for the collective search for the most optimal solution, while innovators and experts can offer their ideas and sharing experiences.
Speaking of advantages for auction participants: These include, first of all, resolving a problem within the shortest time possible, and finding several alternative solutions offered by different participants. The best contribution is recognized with a material benefit. Evaluation results from participation and innovative activities of our staff are also taken into account in our staff rotation decision-making process.
How would you describe your personal management style?
My management style...? It is a difficult question to answer. It is probably best described by my colleagues. It is definitely not directive, but rather democratic. In any case, I do my best to adhere to a democratic style – delegating authority, entrusting people, stimulating them to think creatively in order to generate new ideas. In general, I believe that there are no managers with a particular single style of management. It is nearly always a combination of many. Within a team, there always are managers with different management styles... The key performance evaluation criterion for me is the measurable result.
Do you believe this style would be effective in any country?
Management style depends on the mentality in that country, and on psychological characteristics and business qualities of the manager him/herself. Things that work well in the West may be unacceptable or not feasible in the East. At the same time, an efficient goal-oriented manager, a true professional seeking success and prepared for dynamic environments, will always be a valuable resource in any country.
Do you adapt your management style depending on the situation, for instance, in a crisis situation, or in a situation of growth?
The situation in business is changing constantly, pushing us to keep close track of the current environment and being sure to respond in the most appropriate manner at any given moment in time. I believe that the overall management style should be recognizable. However, when circumstances call for prompt intervention, a manager must sometimes take tough, strong-willed and personal decisions. A good top manager should possess a set of tools and management strategies. He or she should be as proficient with them like a professional hockey player is skillful with skates or stick. Every time, it is important to choose those action models, which precisely match the moment at hand. A game well played, as we all know, also bears its fruit.
How would you describe the international business development strategy of PJSC “Tatneft”?
Although the Republic of Tatarstan has always been and will remain our priority region of development, we also contemplate an increase of production capacity outside of the Russian Federation. We already own assets in Libya and Syria, which are, unfortunately, idle at present due to causes we are all familiar with. In addition, we plan to expand to new prospective territories. We are planning further advances abroad, for gaining new experience, for mastering front-edge oil production technologies and for seeking applications for our own unique developments in oil recovery enhancement. At present, we are assessing the prospects of participating in projects, for example, in Iran, where Tatneft’s experience of operations at depleted fields may be highly relevant. Beyond doubt, all companies of the group, which are oriented towards the production of commercial commodities, have the goal to enter foreign markets, given the present devaluation of oil.
Imagine that low oil price will remain for a long time, how will this affect your business? How would you change the company’s strategy?
Financial results in 2015 have supported the correct choice of the strategy adopted by the company. We entered the low oil price period with assurance; while our key strategic goals remain unchanged. If the oil price should see any adverse adjustments, it will only be for targets becoming more ambitious to reach.
Last year, we focused a lot on detailed development and adjustment of our strategies taking into account proper considerations of the existing oil price level. We pinpointed our main efforts on reducing costs in all areas of business. Paradoxical as it may sound, it is thanks to the crisis in the global oil market which caused the company to find unprecedented tools to improve operational efficiency and ensure production growth to the level, which seemed extraordinary just a few years ago. Our priority projects will remain those for expansion of the high-viscosity oil production and oil processing development at TANECO.
You have been working in the petroleum industry virtually all of your life. Would you like to try a different industry at a certain point?
Go to a different industry... why? Nowadays, “Tatneft” is a company, which not only produces oil but also incorporates all other aspects. It has grown to a holding company, which concentrates most diverse domains: processing, petrochemical industry, tire manufacturer, gas stations, a block of service structures. We are present in the banking and insurance business, and we foresee a large potential in the IT-segment. All these interesting areas generate enormous experience and strong opportunities for investments.
What is the role of “Zenit” bank in your activity? Does the bank play a key role only within PJSC “Tatneft”, or it is more focused on external activity? Or both of these roles equally important?
“Tatneft” has been cooperating closely with “Zenit” for its current operations, and historically has been the bank’s partner in a number of projects. The investment strategy of PJSC “Tatneft” is targeted to maximize the profitability of existing investments, including in the banking sector. Meanwhile, the bank develops towards a standalone business in order to strengthen its standing in key segments.
You support an ice hockey club. What does hockey mean for you personally?
It is hard to imagine our country without hockey, due to its long and snowy winters. Hockey is the number one sport in Tatarstan, too. When I was a boy, like all other boys, I enjoyed playing hockey with my friends. Hockey is a team sport, where a lot depends on the coach, the team’s common mood and spirit. It is a mass sport, which brings together lots of fans. Hockey helps to develop patriotism in youth – the love for the home team, home city, and our home country. This year your hockey team “Neftyanik” has granted great joy to all of its fans by winning the “Bratina” Cup of the Supreme Hockey League. Now we have our own champions! In general, a lot is being done in our Republic to support hockey in particular and sports in general – new hockey stadiums, and outdoor courts are being built, numerous youth and children’s teams are being sponsored.
Major western petroleum companies often focus only on their primary business. PJSC “Tatneft” also has other business, e.g. tires manufacture and banking. What is your motivation to become an ever more vertically integrated company compared with others?
The key motivation in building a highly diversified business is to support a long-term ambitious target of ensuring capital growth for our shareholders. As we enter new market segments or choose acquisition targets, we first consider the amount of profit and cash flow, secondly their trends and thirdly the existence of synergies with existing group companies. Beyond doubt, the products play a strong role.
PJSC “Tatneft” is one of the key companies of the republic of Tatarstan. We are historically closely linked to the development of our Republic, and, accordingly, interested in creating new, highly qualified jobs. This is our incentive for vertical integration. For instance, the petrochemical complex of PJSC “Tatneft” includes 11 companies, which not only produce tires, but also technical carbon. The average staff list of the petrochemical complex is nearly 6,400 jobs, which, in my view, reflects the value of petroleum assets to the company and the republic as well.
How do you motivate yourself to keep up bringing your vast personal energy into the accomplishment of all your projects?
Motivation is the primary incentive to action. Work must not only bring money but, above of all must be something you truly enjoy. My work really suits me, and it is the strongest motivator.
Based on your activity in different companies, primarily in PJSC “Tatneft”, you are a very busy man. Do you have any time left for leisure? What do you usually do when you manage to get some free time?
It is true that I have very little spare time. You know a saying that “only he who does nothing never gets anything done on time”. The rhythm of my life is such that I have to manage everything and plan my time carefully trying to dedicate enough of it to my family, sport, books and outdoors.
What does family mean for you?
For me, the family, where I grew up, and the family, which I created – is the most important in life. It is a powerful source of energy, strength, love, it is our strong roots, which hold us on the ground, nourish us and give the wish to live, grow and develop ourselves.
What does the (Chinese) Qi Gong practice mean for you, and how does it affect your business activity?
Oriental practices are inspired by life, and they all really do work. They help me to organize myself for productive work, to maintain my spiritual and physical health even in conditions of very intense work.
What problems can truly upset you?
When I do not get the result, which I counted on, having invested a lot of effort and energy.
When do you feel proud of yourself?
I admire the success and achievements of my colleagues and the company. It is them that I am really proud of!
What is the next big objective for “Tatneft”? What is “Tatneft’s “ strategy for the 10 years to come?
We continuously think about the development of the company, which is impossible without the implementation of innovations and improvement in operational efficiency. “Tatneft” is a production company, and we intend to increase the amount of production to achieve the level of 30 mln. ton per year by 2025. In combination with other key targets – further increase of oil processing at TANECO, the further development of our tire manufacture complex, the improvement of our sales network efficiency etc. – this should enable us to double the company’s value within the following 10 years, and therefore to accomplish the goals set by our shareholders.