Interview Logistics and transportation

Superiority price: the main investment of DHL is an investment into people

Conversation with Vadim Sidoruk about the present values of the company, history of development and its future

Availability of the top manager of the known international company  is an unexpected surprised and arranged line, not always a characteristic to the Ukrainian management. As it became clear in the process of the dialogue, the word absolutely corresponds to matter not only in a case personally with the Vadim Sidoruk, a CEO of DHL Express in Ukraine but also to the companies in general.  The readiness to conduct a dialogue with any client who addressed with the note or the offer and  gratitude to such client for attention to the DHL service also are not the purposes. The superiority price, in this case, doesn’t raise questions.

L.D.: Vadim, could you tell about  years of working for the DHL Express Company in Ukraine. What was the most difficult and how such difficulties were transformed? What tendencies, bad or good,  is it possible to state now?

V.Sidoruk: First of all, we speak about 25 years of a company performance of DHL in Ukraine, which have been turned this year. We came here in 1991 and now we have been occupying a special segment which shouldn’t be confused to post services: DHL Express is the international avia and express transportations. It is  the transport service which came to Ukraine as an innovative service. As you understand, our first clients were, of course, the banking sector and the Western Companies which began to work in Ukraine. Further, there was a formation and development.

What has been changing within these 25 years? The company has become tempered and  stronger due to an experience of the employees. I consider that the basic in this business  is a team of professionals. A third of employees have been working in our company  more than 15 years, and it is that “frame” on which shoulders a lot of things keep.

L.D.: Does the company have  so-called “an employee turnover”? 

V.Sidoruk: You know it is but it doesn’t exceed admissible regulations. A “routine” is considered as normal up to 10%, 15% has been already a red bulb. Last year  “routine” was at the level of 5% at our company. However, nowadays “routine” has arisen but it is necessary to understand about what segment and  line items we mean.There are very heavy sites of work, for example, delivery, and you could believe that to work as the courier of 10 or 15 years is an extremely difficult task, though we have such cases too in our company.

I pay a special attention to our policy. We initially employ people with the prospect of growth. A part of them grows up in the company, another  part  leaves. Many people leave not just the couriers,  supervisors, heads of departments. We are as a courier company which  conduct an active work with personnel. I, for example, estimate business also from corporate and social liability as a certain institute of accomplishment and education. The given standards   are really demanded in the market. It became especially noticeable when the active development of the Ukrainian companies began. Both small and medium business began to advance the services in the western markets, inviting to work of our employees.

As for changes: yes, finally, it has been changed. As for  me, it is pleasant to say that we were conductors of these changes. For example, until July 1, 2012, when  the new customs code has begun to work, it was very difficult to work with individuals. The matter is that any received abroad sending was assessed with a duty from 1 cent. Many people didn’t know about a large number of returns which  created a huge problem.  What could we make? We waited for the moment when Ukraine declared that it would  be strictly guided by the European standards and began to work with the government. As a result of laborious work changes which were made to the Ukrainian customs legislation. For today, there is a duty-free limit of 150 euros both for the companies and for individuals.

L.D.: Have you come to that changes difficult and long?

V.Sidoruk: Yes, I have come. It is necessary to tell that nobody threw a monkey-wrench into the works of us. Of course, the sizes of duties and the state losses were carefully estimated.We had to put a lot of effort to convince the Ukrainian government of their cancellation and of what, eventually, such change which doesn’t give more money, will unambiguously allow saving. As soon as we were heard and collection of this duty was cancelled, the niche began to be filled with more expensive freights from which, naturally, duties. Therefore, the state didn’t lose kopeks were removed.

We, by the way, are guided only by international standards. We don’t construct something. We want the same standards have been worked also in Ukraine. Before to change something, we study a situation. We are helped by the group of consultants of DHL. The work is difficult and laborious. As the practice  shows, it is paid the evidence. Now I absolutely precisely can claim that if in logistics something works not as should, it happens because they didn’t pay to this site a due attention. Now with absolutely precisely I can claim that the team of professionals can deal with issues of any complexity.

L.D.: Team of professionals is an absolute trump card of the company?

V.Sidoruk: Absolutely. Not only in Ukraine. If to return on 10 years ago, we will see a big difference between how we and our competitors looked, especially in material and technical resources. The company actively grew around the world and there came the question moment:what we should differ from competitors in? Coming to a conclusion that the main investment is an investment into people. As a result of such decision, the “Welcome to DHL”corporate program  has appeared.

According to the program which has been working many years, each employee in the company is certified as the international specialist. It begins with general representations, in particular, from DHL purposes, and further is multistaging, multistaging,multistaging. We don’t want to train managers. We invest in all personnel.

What do we prove in such program? First of all, the fact that business begins with motivated personnel. It is so important that it is impossible to replace with neither a beautiful marketing campaign nor the loyalty program that is nothing. If  the motivated personnel works in the company, there will be a fine quality of service. As a result  here will appear  both loyal clients and all the rest. If  this chain to clean motivation of personnel, the return process will begin.

L.D.: How is measured the motivation of personnel?

V.Sidoruk: Annually we have conducted an employee survey. How? In writing and absolutely anonymously. Each of them receives a questionnaire on e-mail with reference to the website of the independent company which conducts a research. We aren’t interested in a specific name. We are interested in general indicators of the company. Also, we work on that they improved annually. If we see the falling tendency even for 5-7%, we already have understood that it is necessary to pay attention to something though general data can be high. Then a number of events: communication, round tables, examinations, the creation of working plans is hold. It is a lot more what. By the way, there are very interesting moments with which it is necessary to work.

The main motivation for our managers is an annual award which depends on the level of “Active leadership”, the main indicator of the program. It is, first of all, communication with employees. If the process of communication is constructed correctly and based on respect, “Active leadership” will always be on the ball. But, as soon as something was kept back or played a cunning trick, an environment would react instantly.Managers will feel in terms of money.

Of course, we  came to it not directly. There was a time when we understood that it is necessary to change, especially sharply. It was felt on heavy sites of work. I want to pay attention that for corresponding changes the main condition is an availability of the head. For example, I consider that the biggest achievement is an opportunity for any employee to address me personally through e-mail.It will be surely heard. It is really bargaining chip. By the way, we are very grateful for similar addresses and letters because they allow enhancing business.

L.D.: Do You agree with the statement that is rather difficult to organise such communication in Ukraine, often occurs on the contrary and many prefer to maintain subordination?  

V.Sidoruk: I agree with you. I study the experience of many Ukrainian companies and I want to tell that it would be worth beginning transformations to the companies with such availability then to work much with clients in order to understand that their letters have reached the head. It is very pleasant to see that the Ukrainian companies begin to adopt gradually such system of online communication with the client and not by means of the existing base,through the actual provision of service.

By the way, any clients who address  are very valuable because they aren’t indifferent and  very important. The indifferent client who has no loyalty to the company will just leave because today the market has already saturated in any area.

L.D.: Have anti-crisis  measures ever been provided in the DHL company?

V.Sidoruk: If business was reduced, probably, it should have had to take care. However, in our situation, it turned out that we grew in hard times. We continue to grow now. How is it  occurred? The matter is that since 2014 the Ukrainian companies have begun to bring to the new markets : Southeast Asia, Europe, America, new samples of the products. Therefore we are as a courier company, in the last 2 years have been  in a privileged position whereas many complained that business slowed down and someone, in general, was closed.

The food was especially actively exported. The market for these goods was just enormous. By the way, the closing of the market of Russia also pushed the Ukrainian companies to search for the new markets. However, for this purpose it was necessary to make more efforts  to somewhere enhance packaging, somewhere to a quality.

In general , there is no “flashes” in business. Some segment was in a favorable situation,  some in minus but in pluses. As a result, there has been more. The most important turned out the fact that the Ukrainian companies haven’t lowered a hand small and medium business which had very strong retention (resilience  is the author’s note) was and will the engine of progress.

L.D.: Vadim, what is in your opinion,  the most difficult in business  for our country?

V.Sidoruk: I will tell about work with external suppliers. The period of a strong devaluation of our currency has had the most difficult in recent years. What about me, 70% of services “are tied up” under euro and when in the country fluctuations of hryvnia began, we agreed with suppliers. I don’t want to brag but nevertheless we could agree in all cases. I believe that it was hard. However we could make the prices  to change not more often than 2 times a year. The clients managed to adapt under corresponding to changes that allowed us just not to lose the market and even to increase  a little during this time.

L.D.: Is an ability to agree the most appropriate thing which isn’t enough for many Ukrainian businessmen?

V.Sidoruk: For some people the answer is yes but isn’t enough. The desire to receive quickly, just today-tomorrow, without thinking what it will cost in the future, often ruins a lot of things. For example, DHL will never go for optimization, salary reduction or the number of managers. I say it to what at the initial stage of a construction of business should be understood. It is necessary to develop a process  that  could work also in 10 years.

One of the main shortcomings of  Ukranian business is an attempt of optimization in any way. The level of a shadow economy in Ukraine remains to the highest in Europe. The latest data of GFS demonstrate that more than 40% of GDP are in a shadow. From those examples which are known to me, it is unambiguously possible to tell that that economy which the company receives today will turn back millions of half-received profit in the future economy which the company receives today, will turn back millions of half-received profit in the future.

L.D.: Is Your company the monopolist in Ukraine ?

V.Sidoruk: 4 international avia express carrier are working at the Ukrainian market now. The competitive market and our share in it consists  more than 60%.It is a lot  but it is not the monopoly.

To my opinion, the most difficult for the head  is to work without competitors. Foreseeing your question “why”, directly I will tell that the competition keeps the company in the positive suspense. Therefore it is necessary to be alert always and to regularly improve service. By the way, when service prices raise, we announce it to our clients in advance and we provide an economic case for such decision. Why we so do? Price policy is a part of service and shall correspond to service quality. Otherwise, our clients will leave to competitors. We also constantly conduct a dialogue with our employees about it.

L.D.: Do we consider DHL as new segments for development?

V.Sidoruk: My line item is the focus. We are experts in the international avia express delivery. We hire resources and their cost much above than if we were engaged in delivery only in Ukraine. There are many conditions, at least knowledge of a foreign language, own material and technical resources for working in DHL. If to consider the possibility to occupy other niches, it can turn out so expensively that the company can enter the deepest crisis. We had a similar experience,and repeatedly,  our choice is  focusing that we are able. We do better than others.

But it doesn’t mean at all that we don’t monitor the market. Now actively e-commerce, online stores are developed. We have the finger on the pulse of events.

Zhanna Garashchuk

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