INTERVIEW: Bohdan Budzan on the work and goals of the International Management Institute

Bohdan P. Budzan assumed the position of director general of the International Management Institute Kyiv (IMI-Kyiv) in January 1997. In that role he seeks to strengthen the leading position of IMI-Kyiv in Ukrainian business education. At the same time, Dr. Budzan is a senior lecturer and teaches upper-level management courses at the institute.

Dr. Budzan is a candidate of science (equivalent to a Ph.D.). He completed the International Senior Managers Program at Harvard University and became a member of the Academy of Sciences of National Progress of Ukraine.

Previously he served as: head of the Department of Relations with International Financial Organizations of the Cabinet of Ministers of Ukraine, where he helped structure Ukraine's first institutional loan; liaison officer with the World Bank, European Bank for Reconstruction and Development, International Monetary Fund, U.S. Agency for International Development and the European Union; head of the Department of Privatization and Entrepreneurship Development of the Cabinet of Ministers of Ukraine; and supervisor of the development of economic reform structures and the promotion of privatization and entrepreneurship following the collapse of the USSR.

From April 1993 to December 1996 Dr. Budzan was executive director of the International Renaissance Foundation (a charitable foundation), where he worked for the development of an open society in Ukraine.

The interview below was conducted by Roma Hadzewycz in 1999 and 2000 at The Ukrainian Weekly's editorial offices in Parsippany, N.J., and via e-mail.

Q: What's the difference between IMI-Kyiv, which you manage, and other higher educational institutions?

A: First of all, I'd like to emphasize that IMI-Kyiv was the first educational institution not just in Ukraine, but in the entire former USSR, which started training specialists through its MBA program as far back as 1989, just before the collapse of the socialist superpower. Dr. Bohdan Hawrylyshyn, a Canadian of Ukrainian descent and well-known scientist and economist, was the founder of IMI-Kyiv and foresaw the necessity of training top professional managers for Ukraine.

IMI-Kyiv is a non-governmental educational institution that enjoys foreign financial and material support and the status of a Ukrainian-Swiss joint venture that was established as a post-graduate business school.

From the beginning the institute was committed to the adaptation and implementation of the world's most advanced management theories and methods of teaching, while simultaneously taking into account the specific character of the Ukrainian economy during its transition to the free market. Our main goal is quality; therefore, we are committed to be not only the largest, but also the most modern and successful business school in Ukraine.

By the way, courses at our institute are given in Ukrainian, although this is not easy, and in English.

Q: Whom do you teach, and what are your specific goals?

A: I'll start from the second part of the question. Our stated purpose includes two main tasks.

On the one hand, for many decades Ukraine didn't have its own independent state and never in its previous history, contrary to Western European countries, did it have experience with a real market economy. This is now happening for the first time ever - and I might add from the very basics, from scratch. That means that we have a strong need for as rapid as possible an infusion into the economy of highly educated business managers for enterprises of all ownership types. We are working assiduously to satisfy this need and to resolve this problem.

On the other hand, there is a growing number of foreign investors who want to do business in Ukraine. Those people are experienced and quite well prepared for the design and management of business in their own respective countries, but in Ukraine they are facing quite different and specific conditions, and unique problems. That's why we see our mission in the training and retraining of specialists for foreign firms that have come to Ukraine or that have been founded here, and are looking for success in the Ukrainian market.

Let me now address the first part of the question: Whom do we teach? Inasmuch as the program time is limited, we are oriented to people who have already had basic higher education and are able to follow a program of intensive study - for a full-time program, one year, for a part-time program, two years - to acquire competencies and further advance their business skills through a fast-paced, high-quality and intensive MBA program.

As IMI's 10-year experience shows, our graduates - we've already had 700 of them - easily enter the real economy of the competitive business community and achieve success as business practitioners, managers and government officials in Ukraine, and enjoy rapid promotion and success in corporate, government and private business careers.

Among the institute's graduates are: Serhii Zavadskyi, manager of the European office of Du Pont de Nemours International S.A. (Switzerland), Tetiana Kunina, Cash Flow Department manager, Philip Morris Representative Office in Ukraine; Oleh Mozgovyi, head of the State Commission on Securities and Stock Market; Roman Shpek, head of the National Agency of Ukraine on Development and European Integration; Yurii Sakva, vice minister of energy of Ukraine; and many others. We are also very honored to have our graduates serve on the faculty of our institute.

We also gladly provide short-term executive management programs to experienced specialists who have already worked in business or government administration and who seek to update their skills, background and qualifications but can't leave their jobs for an extended period of a year or two. Through such specialized programs we provide students with the latest information that supplements their previous professional experience.

Q: Could you describe the programs at IMI-Kyiv and the careers into which your graduates move?

A: Our proudest accomplishments are IMI-Kyiv's programs. Real progress was achieved in terms of enrollment: 264 students are presently following seven MBA programs. These seven MBA programs include: a full-time MBA program (one year), three part-time MBA programs (two-years), an MBA program with special emphasis on international banking and an MBA program with special emphasis on the energy sector. A new modular format of the MBA program was introduced this year.

The two-year modular MBA program consists of one-week study units delivered every two months. It is mainly intended for executives from outside of Kyiv. The new program format employs a distance-learning method, which allows for training students outside of Kyiv. Another element is computer simulation sessions through the Internet.

The institute supports small and medium-sized businesses and provides short-term management programs for government and business executives through its Small Business Incubator Program.

IMI-Kyiv also conducts a Partnership for Effective Management Program (PEM), ensuring a link between management education and management practice. This program plays a key role in the establishment of continuous relations with business through the creation of a network of business contacts centered at IMI-Kyiv.

The question concerning our graduates requires perhaps a longer answer, but let me offer a brief overview. Most of our graduates are in middle management - around 59 percent - and 38 percent of them are chief administrators of supervisory boards and top managers, that is general directors, presidents, financial directors and chief accounting managers.

Our institution continues to be in touch with former students through the Alumni Association. All IMI-Kyiv alumni are invited to attend the annual alumni meetings on the first Saturday of April. The meetings are organized by the Alumni Association and supported by the institute's administration. As the alumni body is growing in number and becoming more diverse and noteworthy in terms of positions and professional fields, the alumni meeting turns into a discussion forum of Ukrainian and international business and a well-thought-of networking site.

Q: You came to the United States last June to attend the Joint Conferences of Ukrainian American organizations, and you were one of the major presenters at the conference. Would you care to share with our readers your message to that conference?

A: I spoke about partnerships in the business area between Ukrainian American specialists and Ukrainian American companies and so on. And I emphasized that it is a most important investment for Ukraine today - it is an investment in human and social capital, and human and social development.

I think the biggest problem we have in Ukraine today depends on the real level of management. We need not simply managers as specialists, we need managers dedicated to this country, to be moral and to be patriotic, and to think about the future of this country, their future and their children's future. It is crucial that our leaders be both professional and patriotic.

I also expounded on Ukrainian-American partnership programs, particularly in management and business development, that are oriented not only on Kyiv, but also on the regions, Kharkiv, Lviv, Odesa and Dnipropetrovsk and other cities. We have a $5 million project for the development of management education in various regions that is being implemented by the University of Minnesota. We also have a big new project involving the United States, Poland and Ukraine, through which we will try to use the Polish experience to build Ukraine's democratic and civil society; this program also includes management in business education.

We also have very good relations and partnerships with several American universities. Our partners are: Loyola College, Carnegie Mellon University and the University of Minnesota, as well as the Harvard Business School because that is where we train our professors. For example, I graduated from the Harvard Business School in 1996, completing its advanced management program.

What is very important is that we work very closely with American institutions, such as Barons Group and the Institute of International Education, through which we conduct programs to train bankers and especially managers for the energy sector. Each year many of our students visit the United States for a three-week internship.

And one of our partners, incidentally, is Self-Reliance (New York) Federal Credit Union, whose CEO and president is Bohdan Kekish. Every year our students spend a few days in this credit union and learn something about insurance about credit activity.

We visit many, many banks, the stock exchange and some universities, too. All of my students have a three-week internship in the United States or in Western Europe. This gives them an opportunity to see the world through another looking glass.

Q: And for many of these students such internships are their first trip abroad?

A: Some of them, particularly the students from the energy sector, came to us from various regions of Ukraine, maybe 80 percent of them never visited the United States or Western Europe. For them it's the discovery of a new world.

The mentality of these people changes for the better. They become more demanding and more professional as bosses: it's no longer just do what I say you should do, sometimes it's a discussion, sometimes an alternative decision is reached. They change. I have examples of how they behave after such studies abroad. They are more inquisitive, they are much more responsible, they also become more confident in what they do as professionals.

Q: I'm interested in the difference in psyche between the Soviet-era manager and the graduates that you produce. Can you give us some examples?

A: I can give you a perfect example. Last year one of our advanced students made a speech and said to a minister, "Mr. Minister now you will report to us how you managed us." The minister said "What? What did you say? I will report to you?" He said, "No, no I will not report, because that is not accepted." You see here we had 34 students from the energy sector who have a different vision. This was confusing for the minister because these people were so honest, so open. They were so confident in themselves that they allowed themselves to question the minister of energy - and this ministry is almost like the military.

Second point: my students sometimes ask me, "What should I do when my boss is crazy?" I say that you should replace him. First of all, you should try to train him to become better. If you don't succeed, you should replace him or her.

I teach the course on self-management and such questions arise very frequently when people tell us: You are telling us how it should be, but in reality in my life there is a boss who cannot even understand this. What a shame that I am here, and not him, listening to your lecture so that he could change his attitude.

Others say: You know, because of your courses, my bosses have begun to treat me differently. At first they were very displeased with how I behaved toward them, and now they have begun to use the fact that I now have a different management style and sometimes, indirectly, they half-consciously learn from me. But they do not admit this.

You see what is happening? A boss treats you in the manner that you allow yourself to be treated. What is important - and this should be underlined - people at our institute are very concretely and progressively forming their own values. And when they go into an organization with these changed values, a different atmosphere is created around them. Some fight these changes, while others say: Perhaps I should try this. Teach me how you did this.

All these factors exist, but nonetheless they move in the direction of an awareness that there are certain values and that they should mesh with the values of the organization - and thus a critical mass of new thinking is created. Sometimes, two or three good people in one organization can create a totally different environment.

And that is why when people come to us to study from an organization, we say don't send only one student, send two or three. Because if there is only one, he will be the white crow and it will be very difficult for him; if there are more like-minded people a critical mass is created and there is a different line of development.

Q: What are some of those different values to which you have been referring?

A: The first of these is that people take responsibility upon themselves for the decisions they make. In the old system the decision came from above - I did as I was told. Now I participate in a discussion about how a decision is applicable and how it fits my needs and how it coincides with our goals. Furthermore, I now take responsibility for implementing that decision.

So the first very real difference is that people start to take responsibility for what they do - not what the party committee or the director told them to do.

A second very important factor is that people are much more confident and brave; they stand up for their point of view because they have enough knowledge, and that knowledge often is stronger than that of the people assigning them tasks. They search for alternatives, more effective ways of executing a task or implementing a program. They have more of a basis on which to assume such responsibility and thus have more confidence.

Third, there is more ethical responsibility, more morality. Less and less among such people do we see a multiple morality: I say one thing, think another and do a third. More and more often we see that people have something inside themselves in which they believe and which they defend. And they are not afraid to do this. Therefore, the fear of having an individual opinion and defending it disappears. This is extremely important. It is another concrete example of a change in mentality.

Q: Explain to me the difference between a boss of the old times, and a boss who has graduated from your institute. What is his attitude toward his colleagues, his co-workers, his employees?

A: It is difficult to make a general statement, but I would say that they are more able to work as a team, they are more able to listen to someone else's opinion, they are able to invest more in the development of personnel, which was quite rare in the past.

Here's a very pertinent example: The president of a recently privatized company came to study with us. When he came he saw that his staff was not prepared for this. The next year he sent two of his people to study with us at the institute - they learned what he had learned. This would never happen in earlier times. This boss decided to send his people so that they could all work together. Therefore, the new bosses invest more in people, they listen more to people. Along with this they become more involved in analyzing decision-making: they review alternatives and decisions are made in a more professional manner.

Previously, an order was executed simply because it was an order. This is a fundamental difference. This affects how work is done, how projects are accomplished, how money is counted.

Now you have to use an honest system of normal financial management. What also is very important is that we teach people about the international financial system - we have courses in the international accounting system and about the transformation of Ukrainian institutions to that system.

Quite often it is forgotten that Ukraine is a state that declared its entry into the European and world systems, and that within that system you have to speak the language that is understood. Our students are learning to speak in the language of worldwide management.

Q: About your students: are you afraid of a brain drain?

A: No, I am not afraid of this. First of all, I believe that Ukrainians travel beyond the borders of Ukraine not because they want to be outside of the country, but because they can find better personal fulfillment. Ukraine right now does not offer them the opportunities to do this. Most people who have left dream of returning to Ukraine. It is only natural for a person to want to realize himself.

Here is a telling example: Ninety-seven percent of my graduates did not leave Ukraine. They live and work in Ukraine. Ninety-seven percent! And they work in joint ventures in Ukaine, they have created their own businesses, they work in Ukrainian banks, even in Ukrainian companies, for the Ukrainian government. Our graduates may be found at the ministries of energy, the National Bank of Ukraine and other government bodies.

Q: You are now celebrating IMI-Kyiv's 10th anniversary. You must be quite proud of this major accomplishment.

A: The institute's 10th anniversary is being celebrated through a number of special events during 1999 and 2000. The main and concluding event will be a conference to be held on April 8 dealing with "The Role of Management Education and Management Development for the Ukrainian Economy." Conference participants will be representatives of businesses, education, government, the Parliament and mass media of Ukraine, our international partners and donors, and, of course, our alumni. This event will help us to bring together a highly professional group from all our friends and partners, and we are expecting an international group of guests and conferees. It is very important for IMI-Kyiv as an international institution to create and develop strong partner relations with Western businesses and business schools.

And speaking of strengthening these relations and creating new ones, I would like to let you know that we have invited a group of successful U.S. and Canadian businessmen of Ukrainian ancestry to our institution for the purpose of familiarizing them with IMI-Kyiv - its faculty, staff, students, alumni, local supporters and facilities, as well as sharing with them our plans for the institute's future development.

We wish to have this group of distinguished businesspersons share their valuable experiences with IMI-Kyiv students. In this way we hope to expand the circle of enthusiastic supporters of our institution who will join with us in our efforts to educate entrepreneurial, qualified and ethical managers who will enable Ukraine to participate successfully in the world's global economy.

This idea, by the way, came about following a discussion one evening at the home of American businessman George Chopivsky in June 1999, when he invited me, Walter Baranetsky, Walter Nazarewicz and others, to his home for a friendly gathering. I would like to use this opportunity to express my appreciation to all the people who were involved in this project, who created this idea and developed it.

Q: During our discussion before this interview you mentioned the Ukrainian-Polish conference on Business Development and Management Education in the Context of Globalization, which was held in Kyiv on September 16-18, 1999. What was significant about that conference?

A: This conference became the first step in implementing the Cooperation Agreement between IMI-Kyiv and the Leon Kozminsky Academy of Entrepreneurship and Management.

The importance of the conference was recognized at the highest level. Representatives of the Polish and Ukrainian governments offered statements of welcome - from President Alexander Kwasniewski of Poland and from President Leonid Kuchma of Ukraine, both of whom described the event in the context of Ukrainian-Polish cooperative arrangements.

We were also delighted to receive as our honored guest from America Prof. Roman Szporluk, director of the Ukrainian Research Institute, Harvard University.

The participants found the conference to be a positive and effective event, a crucial step towards understanding the role of Polish-Ukrainian relations in national business education and development. Ukrainian business representatives were unanimous in recognizing the importance of having effective communications at all company levels, interacting and sharing common approaches. They have shown their readiness to collaborate with business education today in order to prepare top-quality managers for tomorrow.

The conference concluded with the announcement of the subject for the next Polish-Ukrainian conference, namely "Knowledge Management for Transition," which is to be held in the autumn of this year in Warsaw.

Q: Does IMI-Kyiv have any problems or face any difficult challenges at this point in its development?

A: I wish I could reply positively but, in fact, we do face particular challenges and problems. These problems are in two areas: educational and financial.

The first area concerns a deficit of qualified professors on our staff who have international training experience. We are trying to solve this problem by intensifying the education and training of our teachers in such famous schools as the Harvard Business School, the Industrial Management School at Carnegie Mellon University in Pittsburgh, the London Business School, the Institute of Management Development in Lausanne, Switzerland and Loyola College in Baltimore.

Recently, on February 17, our institute and the Louvainium International Management Center in Belgium signed a partnership agreement. Cooperation between our two educational institutions will include student and faculty exchanges and will be expanded to include other projects in the near future. We also invite highly qualified visiting professors from Western business schools and universities to teach various courses at the IMI and to share their vast experience with our teaching staff.

The second problem - one that is very complex and perhaps is best characterized by the overall economic situation in the country - is a lack of funding for business education and financial difficulties in the institute's activities. To put it simply, we have sufficient funding for the basic educational process itself and that comes from the students' payments and grants - 10-12 percent of the budget. At the same time, however, we badly need additional resources to develop our facilities and to advance our informational and technical base.

We pay enormous rent because we don't have our own building. That is one of the major factors that inhibits our development. That factor motivated us to do our best in collecting funds to purchase our own building. Members of our supervising board, such as the previously mentioned Dr. Hawrylyshyn, as well as Mr. Chopivsky, Swiss banker Rudolf Mueller and Swedish businessman Adolf Lundin have made donations to purchase an unfinished building in downtown Kyiv. Therefore, the first step has been taken. The second step will be completing construction and equipping of the institute with modern facilities. For those purposes, our financial needs amount to approximately $1.2 million.

We would like to attract the attention of U.S., Canadian and domestic investors to contribute to the development of this competent institution that produces competent professionals for Ukrainian business and has an excellent reputation.

Investing in human resources is the most effective way to help Ukraine create a better life for its people. Those sponsors who do contribute, in addition to the personal satisfaction of being part of an important enterprise in Ukraine, will also be rewarded by the institute in having their names given to auditoriums, halls, a computer center and library. We also plan to honor these people by placing memorial plaques and inviting them to participate in the IMI's festive activities.

Moreover, for benefactors of IMI-Kyiv there is also the possibility that IMI-Kyiv can provide office space, computer support, experienced personnel and business consultation when such might be requested of IMI-Kyiv. We have already begun to engage in this worthwhile enterprise and are ready to extend it in the future.

Q: You said earlier that Ukraine desperately needs more specialists, managers. To conclude, let me ask: Do you see such leaders in Ukraine today?

A: Absolutely. First of all I see them among my students. I believe there will be more of them in the next generation of leaders. I think that in future elections we will see more such people. I believe that the next president will be a woman and that she will be a graduate of our Institute of Management. I may be kidding, but there have been so many cases where something I have said has come true.

Right now we are working on a women's program - we would like to attract women students from various regions who do not have money for studies. If we give them a scholarship, we will be able to train them in a year and they will enter the business world. They will be leaders, presidents of companies. That's really something.

I think we will develop into a school that will be for Ukraine what Harvard is for America.

For further information contact: International Management Institute, 19 Panas Myrnyi St., 01011 Kyiv, Ukraine; telephone, (38 044) 290-4330, 290-3352, 290-7246, fax, (38 044) 290-0495; e-mail, [email protected]; website, www.mim.kiev.ua.

Copyright © The Ukrainian Weekly, April 9, 2000, No. 15, Vol. LXVIII

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