Leading change: how to develop business and society in times of war

24/ 07/ 2024

Where are we now and where are we heading? We posed these and other complex questions to the participants of the European Business Association conference Leading Change: Business Reflections of the Present, which took place on July 19th. Together with public figures, experts, and business representatives, we pondered what lies ahead, how to maintain balance, endure, and emerge stronger from all the challenges that the full-scale war poses to businesses, people, and the country. As Yevhen Hlibovytsky, Director of the Frontier Institute, noted, the last ties with the Soviet past are being severed in Ukraine, including the destruction of Soviet energy, infrastructure, and industrial economy. We are on the verge of change, and the future depends on how boldly we think and how ready we are to defend our own in the broadest sense of the word. To counteract the constant russian threat, which will not disappear, we must be protected, free, and capable, he says. It is precisely this capability, according to Yevhen, that we will have to build, as we are currently in a situation of dynamic equilibrium, with volatility on each side that will continue to grow. The war will continue, and there will be new challenges. We should not ask when it will end, we should ask how we can strengthen our resilience. Pavlo Klimkin, Minister of Foreign Affairs of Ukraine in 2014-2019, believes that Ukraine has already passed the point of no return. However, the new Ukraine, as we would like to see it, does not yet exist. Mr. Klimkin draws a parallel between the current situation and riding a bicycle - as long as we move, we are stable, we stop - and we can fall. The next year, 2025, will definitely be different, with a different geopolitical landscape and a new American administration. However, the russian line on the destruction of Ukrainian statehood will not change, so resilience is key. Mr. Klimkin expects a decrease in the American presence in Europe and believes that some Europeans already understand the change in the security paradigm. However, Europe should start to consider security as a value again. Serhiy Prytula, founder of the Prytula Foundation and public figure, noted that we are on the verge of a new and interesting path. This is not yet the Ukraine we strive to build, but progress has already begun, and there is hope that we will not turn away from this path. The best security guarantee for Ukraine would be NATO membership, but this requires changes in the judicial system and a real fight against corruption. After all, NATO does not take armies, NATO takes countries. At the same time, the list of Ukraines obligations under bilateral security agreements, which we are now signing with dozens of states, is very similar to the list of requirements for joining the EU and NATO. Serhiy emphasized that any pause in the war is not an option, there is a huge demand for justice in society, and there can be no easy solution to end the war. Ukrainian society is currently mobilized but at the same time susceptible to russian narratives. Business in Ukraine is effective and should be that effective community that can encourage the government to make the necessary changes. We can only survive in the synergy of government, society, and the Armed Forces. Serhiy also sees the mission of the Prytula Foundation in uniting society. We discussed the situation with electricity in the near future and in winter with Serhii Kovalenko, CEO of Yasno. Due to the damaged generation, Ukrainian citizens and businesses have already experienced massive power outages in the summer. Consumption will be even higher in winter, but Mr. Kovalenko notes that by then, energy workers should have repaired as much capacity as possible so that the national dispatcher has more room for maneuver. In addition, work is underway to expand the capacity for electricity imports. Therefore, according to the baseline scenario, there will be an electricity deficit in winter, but it should be moderate. Given the complexity of forecasting and the influence of various factors, businesses are advised to take care of their autonomy, the necessary means to continue working, and provide their employees with equipment that will help during power outages. During the business panel, we discussed the current state and challenges in the work of companies, their forecasts and thoughts on the near future, and business development in wartime. Mykhailo Sakun, Investment Director of Dragon Capital, spoke about the experience of insuring the companys project against war risks with the World Banks Multilateral Investment Guarantee Agency (MIGA). He noted that in addition to the very fact of insuring war risks, obtaining guarantees also has a positive impact on the development of international partnerships and allows attracting creditors. Mykhailo Rizak, Director of Government Relations at Nibulon, noted that many of the companys assets need to be restored. Although international partners are involved in various reconstruction projects, international support is still slow and insufficient. The recovery is also taking place in the context of a number of internal challenges, one of which is the lack of specialists. Mr. Rizak emphasized that for the smooth operation of the company, it is not enough just to reserve employees, it is necessary to reserve the entire production cycle. Despite the difficulties, the company continues to invest in people, improve logistics, particularly in the Danube region, digitalization, and social responsibility projects such as humanitarian demining. The importance of people development and investment in staff training was also noted by Halyna Vorobiova, Head of the Board of Imperial Tobacco Production Ukraine. With trust and support from the head office, the company in Ukraine is investing significant resources in restoring production after the destruction, developing autonomy, and ensuring the safety and well-being of employees. At the same time, the working environment, especially the regulatory one, is very important for business. Thus, Ms. Vorobiova said that in addition to the difficult conditions of wartime, the companys work is complicated by constant changes in the rules of the game in the tobacco market. We sincerely thank the participants and speakers for the lively discussion and discussion of issues that concern business and society. We thank the main partner of the event, Imperial Brands, for their support.

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Where are we now and where are we heading? We posed these and other complex questions to the participants of the European Business Association conference “Leading Change: Business Reflections of the Present,” which took place on July 19th. Together with public figures, experts, and business representatives, we pondered what lies ahead, how to maintain balance, endure, and emerge stronger from all the challenges that the full-scale war poses to businesses, people, and the country.

As Yevhen Hlibovytsky, Director of the Frontier Institute, noted, the last ties with the Soviet past are being severed in Ukraine, including the destruction of Soviet energy, infrastructure, and industrial economy.

“We are on the verge of change, and the future depends on how boldly we think and how ready we are to defend our own in the broadest sense of the word. To counteract the constant russian threat, which will not disappear, we must be protected, free, and capable,” he says.

It is precisely this capability, according to Yevhen, that we will have to build, as we are currently in a situation of dynamic equilibrium, with volatility on each side that will continue to grow. “The war will continue, and there will be new challenges. We should not ask when it will end, we should ask how we can strengthen our resilience.”

Pavlo Klimkin, Minister of Foreign Affairs of Ukraine in 2014-2019, believes that Ukraine has already passed the point of no return. However, the new Ukraine, as we would like to see it, does not yet exist. Mr. Klimkin draws a parallel between the current situation and riding a bicycle – as long as we move, we are stable, we stop – and we can fall. The next year, 2025, will definitely be different, with a different geopolitical landscape and a new American administration. However, the russian line on the destruction of Ukrainian statehood will not change, so resilience is key. Mr. Klimkin expects a decrease in the American presence in Europe and believes that some Europeans already understand the change in the security paradigm. However, Europe should start to consider security as a value again.

Serhiy Prytula, founder of the Prytula Foundation and public figure, noted that we are on the verge of a new and interesting path. This is not yet the Ukraine we strive to build, but progress has already begun, and there is hope that we will not turn away from this path. The best security guarantee for Ukraine would be NATO membership, but this requires changes in the judicial system and a real fight against corruption. After all, NATO does not take armies, NATO takes countries. At the same time, the list of Ukraine’s obligations under bilateral security agreements, which we are now signing with dozens of states, is very similar to the list of requirements for joining the EU and NATO.

Serhiy emphasized that any pause in the war is not an option, there is a huge demand for justice in society, and there can be no easy solution to end the war. Ukrainian society is currently mobilized but at the same time susceptible to russian narratives.

Business in Ukraine is effective and should be that effective community that can encourage the government to make the necessary changes. We can only survive in the synergy of government, society, and the Armed Forces. Serhiy also sees the mission of the Prytula Foundation in uniting society.

We discussed the situation with electricity in the near future and in winter with Serhii Kovalenko, CEO of Yasno. Due to the damaged generation, Ukrainian citizens and businesses have already experienced massive power outages in the summer. Consumption will be even higher in winter, but Mr. Kovalenko notes that by then, energy workers should have repaired as much capacity as possible so that the national dispatcher has more room for maneuver. In addition, work is underway to expand the capacity for electricity imports. Therefore, according to the baseline scenario, there will be an electricity deficit in winter, but it should be moderate. Given the complexity of forecasting and the influence of various factors, businesses are advised to take care of their autonomy, the necessary means to continue working, and provide their employees with equipment that will help during power outages.

During the business panel, we discussed the current state and challenges in the work of companies, their forecasts and thoughts on the near future, and business development in wartime. Mykhailo Sakun, Investment Director of Dragon Capital, spoke about the experience of insuring the company’s project against war risks with the World Bank’s Multilateral Investment Guarantee Agency (MIGA). He noted that in addition to the very fact of insuring war risks, obtaining guarantees also has a positive impact on the development of international partnerships and allows attracting creditors.

Mykhailo Rizak, Director of Government Relations at Nibulon, noted that many of the company’s assets need to be restored. Although international partners are involved in various reconstruction projects, international support is still slow and insufficient. The recovery is also taking place in the context of a number of internal challenges, one of which is the lack of specialists. Mr. Rizak emphasized that for the smooth operation of the company, it is not enough just to reserve employees, it is necessary to “reserve” the entire production cycle. Despite the difficulties, the company continues to invest in people, improve logistics, particularly in the Danube region, digitalization, and social responsibility projects such as humanitarian demining.

The importance of people development and investment in staff training was also noted by Halyna Vorobiova, Head of the Board of Imperial Tobacco Production Ukraine. With trust and support from the head office, the company in Ukraine is investing significant resources in restoring production after the destruction, developing autonomy, and ensuring the safety and well-being of employees. At the same time, the working environment, especially the regulatory one, is very important for business. Thus, Ms. Vorobiova said that in addition to the difficult conditions of wartime, the company’s work is complicated by constant changes in the rules of the game in the tobacco market.

We sincerely thank the participants and speakers for the lively discussion and discussion of issues that concern business and society. We thank the main partner of the event, Imperial Brands, for their support.