Utopian Transformers and New Models

The world is changing rapidly, and business processes are transforming along with it. Regardless of industry, competitive environment, or location, changes are taking place, and their pace and depth depend directly on the context. Oleg Beriev, founder of Mildberry and co-founder of Yummy United, talks about process transformation, innovative employees, and dynamic business models.

On Visionaries Who Set Out to Transform Business

— Oleg, what do you think lies at the heart of business transformation? Can we say that change is a forced consequence of technological progress?

At the heart of change are modern digital technologies, which have acquired a new function: replacing and eliminating entire business processes. This is a consequence of more fundamental changes in the ways, means, and channels of communication that are changing how we interact and make decisions. In fact, it is not so much technology that is changing the world, but the way technology has changed how we make decisions.

— Where do transformations within companies begin?

“In the beginning was the Word.” At the beginning of transformation are the paths along which the word travels. Transformation begins when people start talking about it and opening up information flows. Words prompt discussions, discussions generate ideas, and ideas are brought to life. Staying informed about events, tasks, plans, the latest trends, technological innovations, and outstanding global case studies is the first priority for any company. Make employees see and know: open the boundaries and make information and the people who carry it accessible.

— So, is it necessary to establish communication within the company?

A guide for new Tesla employees published online says: “Any Tesla employee can and should reach out to anyone they believe is the fastest way to solve a problem for the benefit of the whole company. You can talk to your manager, you can talk to your manager’s manager, you can talk directly to a vice president in another department, you can talk to Elon.”

There, perhaps more than anywhere else, they understand that the fate of the company and its innovative developments depends on open dialogue. All the most remarkable projects we have taken part in were initiated by people who were happy to share information, experience, and inspiration.

— What is the more sensible way to launch a company transformation: gradually, or by moving immediately to new “rules”?

Change involves risks that need to be managed. To manage these risks, a company needs to build a culture of change. It is a long process, but it starts small. You should not draw the whole company into it at once; it makes more sense to create an internal “change team” that will gradually build momentum for the transformation process and engage others.

A change team is a key element of a modern company. In large corporations, such a team may operate autonomously. For example, in 2010 Google created a separate company, X (The Moonshot Company). The organization develops the most promising innovative technologies, which Google implements in its services: AI Brain machine learning is used in Google Translate, Google Photos, and YouTube recommendation algorithms.

People and Change

— Change will surely lead to staffing decisions as well?

Yes. Far from every employee can become part of such a team; it is difficult for people to change themselves. People are accustomed to living within the paradigm: “The older I get, the better and more experienced I become in my field.”

During transformation, people who had not previously demonstrated outstanding results may survive and prove themselves, while experienced and respected specialists may leave. We lost key employees every time we launched major transformations, but we also gained new ones.

— Is it possible to understand in advance which employees will be receptive to change?

Curiosity and romanticism are the two human qualities you need. Identify curious romantics: they are open to change, capable of changing, and ready to do so; they are open to discussion and actively engage with what is happening.

A skeptical and rational approach will only get in the way in this case. There are already enough barriers around, and they will put everything in its place. The most innovative companies take this into account when looking for new people. Netflix says it expects applicants to be curious, creative, and willing to take risks, because the company “avoids rules.” Apple sees every employee as an innovator, or as someone who will become one.

— Yet even innovators surely need time to adapt to brand transformation?

It is important to act consistently, without affecting fundamental processes whose alteration carries fatal risks. Bring people together around specific tasks. There is always something in a company that can be changed without substantial risk. Efforts should be focused on where change is most feasible and where victories are obvious and attainable. A culture of change is formed through a series of small victories along the path of transformation.

Strategy and Adaptation

— Why does a business need a global restructuring of its processes in the first place?

The need for transformation usually arises under pressure from a large number of factors. Some of them are objective, some subjective, and the older the business, the more difficult it is to restructure.

All of us inevitably have to think about transformation and change, but there is nothing inevitable about implementing them. Ideas of transformation inspire and captivate people, but they need to be treated with caution: transformers often turn into utopians who lose touch with the real world.

At times, it is useful to view transformation through the lens of the nature of business: in a competitive environment, we must create competitive advantages using the least possible resources. And if we already possess those advantages, substantial transformation may be unnecessary.

— Can strategic planning anticipate all of this?

In the modern world, it is impossible to define precise goals; it is impossible to plan that we will move from point A to point B. The future is variable, and it is almost impossible to predict. Therefore, strategy does not define the goal; strategy defines an approach to doing business. It is a strategy for managing change.

Amazon, the world’s largest online retailer, began as a store selling printed books and publications, only gradually expanding its catalog into other categories. Today, however, the company manages a vast number of products, develops streaming services and smart voice-control technologies, and even has its own film studio.

In 1994, its management was unlikely to have had such ambitious plans. Today’s Amazon is the result of constant adaptation and brilliant business management in an ever-changing world.

— Amazon is a positive example, but does business transformation always lead to success?

No, of course not. But the transformation process has a positive side effect: even if an ambitious idea or project is not fully realized, work on it changes and improves internal processes and introduces new tools and models.

Yummy United

— Can your Yummy United project be considered the result of a successful transformation?

Essentially, we did not transform anything; we created a new model from the very beginning. The Yummy United project became the embodiment of all our experience, ideas, experiments, and ambitions. We created and developed a unique business concept for a company run by children.

Traditionally, the market had industrial models in which marketing served the production capabilities of manufacturers. Yummy United was a company that produced food products for children and made its audience the essence of the business, around which it built the entire business.

To the best of my knowledge, it was the only company in the world with a permanent Children’s Board of Directors that could influence what the company produced.

Yummy United was a very dynamic project, with a startup culture that had to endure over time. We were constantly searching, modernizing, and experimenting, and we did not want to stop, because in today’s world, the only constant was change.