Navigating the Storm of War: Key challenges and action steps for CEOs managing agribusiness companies in Ukraine during the war with Russia
The ongoing full-scale Russian invasion of Ukraine has created a highly challenging business environment for Ukrainian private and state-owned companies alike, leading to CEOs grappling with complex issues and challenges. These challenges include economic instability, supply chain issues, operational disruptions, and security and personnel safety concerns, leading to a brain drain as skilled professionals leave the country.
As the Country Manager of Ukraine at Pedersen &Partners, I have engaged in insightful discussions with fellow Ukrainian CEOs to explore the key leadership challenges they face and uncover strategies to counteract them. I have decided to start by discussing agribusiness, given my extensive network in this sector. This is particularly topical considering recent events: the collapse of the grain deal, the explosion at the Kakhovska Hydroelectric Power Station which has led to a failure to irrigate 600,000 hectares of land, and the embargo on Ukrainian grain.
In this article, I share the views of:
- Alex Lissitsa – President, Ukranian AgribusinessClub, CEO of Warsaw-listed IMC agro company
- Aleksey Derkach - General Director, Viterra
- Oliver Gierlichs - CEO & CFO Ukraine, Bayer Ltd.
- Sergiy Tymoshenko – CEO, Mas Seeds Ukraine
To navigate the storm of war, agribusiness leaders have the following recommendations:
- Prioritise Safety: value human life and relationships over material goods.
- Plan Strategically for Resilience: pivot from long-term to short-term planning.
- Foster Compassionate Leadership: create inclusive work environments that support and motivate employees during these difficult times, by offering psychological and material support.
- Adapt to changing market demands: develop alternative supply chains and export routes.
Volodymyr Kolomoets: How did the war change you personally as a leader?
Sergiy Tymoshenko: I have come to understand that the most crucial aspects of life are not material possessions, but human life itself. Supporting relatives, friends, colleagues, and those in need has become the paramount priority.
Alex Lissitsa: The war has profoundly impacted me as a leader. It has taught me the invaluable qualities of resilience, adaptability, and decisive decision-making in the face of adversity. Strengthening my commitment to creating a supportive and inclusive work environment has become my top priority.
Oleksiy Derkach: The full-scale invasion launched by the aggressor on 24 February 2022 marked a significant shift in leadership practices. During peaceful times, leaders foster a well-balanced approach, encouraging team collaboration and suggesting various solutions. Conversely, decisive action and sole responsibility become imperative at a time of war due to limited time and resources.
Oliver Gierlichs: The war served as a profound learning experience on both a personal and leadership level. Spending significant time with our team in Ukraine, aiding and supporting them has reinforced the importance of empathy and care in leadership. The experience has made me more resilient and prompted a recalibration of my life values, highlighting the significance of human connections and the impact of our actions during crises.
What are your current biggest needs and pain points in terms of leadership during the war?
Sergiy Tymoshenko: During this time of conflict, the people are at the heart of our needs and concerns. Offering both psychological and material support to our team and to others is crucial. This support is driven by effective communication and proper coordination within the management team.
Oleksiy Derkach: Another concern is the continuous outflow of educated and mobile talent from the country. While we have managed to retain most of our colleagues in the team, the potential future shortage of qualified employees is becoming evident.
Alex Lissitsa: The ongoing conflict has introduced new risks and uncertainties, demanding effective communication channels and robust emergency protocols.
Oliver Gierlichs: Managing high levels of uncertainty and ambiguity, maintaining team morale and motivation, and making quick and effective decisions in a constantly changing environment are my most significant needs and pain points.
How have you balanced the need of immediate challenges with the need to plan for the future of your business?
Sergiy Tymoshenko: In these trying times, we have shifted our focus towards ad-hoc tactical actions, prioritising immediate challenges. However, we understand the significance of revisiting and adjusting our company strategy, developing various scenarios (optimistic, realistic, pessimistic), and implementing the most suitable approach. Creating a contingency plan and a crisis team have proven indispensable for business operations during the war.
Oleksiy Derkach: Once we have analysed and implemented safety measures, we shift our focus to business planning. We have adapted our planning periods, transitioning from “years” to “months” and from “months” to “weeks”, considering the unpredictability of external factors during wartime.
Alex Lissitsa: Addressing urgent matters is essential, but we nevertheless recognise the significance of maintaining a long-term perspective. To this end, we have developed a new IMC smart green strategy for the next 10 years, aligning with the requirements of the European Green Deal.
How has the Black Sea blockade and damage to agricultural facilities increased costs and risks to grain production and exports?
Sergiy Tymoshenko: As a company involved in seed production and sales, a stable and accessible market for crops is crucial. When export opportunities for commodities are limited, it directly impacts the market size and seed sales. Ensuring stable commodity exports with affordable logistics costs remains a priority for us.
Alex Lissitsa: The Black Sea blockade and damage to agricultural facilities have significantly impacted the grain production and export industry. Disrupted transportation routes have led to increased costs and logistical challenges. Moreover, the damage to agricultural facilities has resulted in a decline in productivity, further compounding the situation. To address these challenges, we have implemented alternative supply chains, invested in infrastructure repairs, and sought innovative solutions to mitigate the impact on grain production and exports.
Oliver Gierlichs: The Black Sea blockade has significantly impacted the large agricultural holdings which are our customers. They have had to alter their export routes and adjust the planting areas of certain crops due to war zones, affecting our seed and crop protection business. However, we have adapted by increasing our seed corn exports to EU markets.