Ильдар Хусаинов – The power of freedom (страница 15)

Working in our office in Sochi. October 2023

In public perception, entrepreneurs are often seen as people who splash out money. It bothers me when I see someone publicly flaunting their spending. If an entrepreneur is truly successful and everything goes well for them, they can certainly afford certain expenses. However, we must remember that we are role models for others, and this brings with it certain responsibilities.

Sometimes, businesses need to move quickly from point A to point B, which requires significant resources. Speed is not a luxury; it's a necessity. I don’t deny that I don’t always perfectly adhere to the principle that sometimes requires investing substantial resources for speed.

However, I’ve established a rule for myself: not to spend more than 10% of what I earn. This helps maintain balance and sets an example of responsibility for those around me. Currently, this figure has dropped to 3%. Some might ask, what’s the point of all this? Let me explain: I believe that all earned money belongs to the company. If an entrepreneur truly loves their company, they will never take vital resources away from it; instead, they will strive to support it. I love my company very much. Initially, I took half of what I earned from it, then reduced that to 30%, then to 10%, and now it's down to 3%. I've been through various stages in my life, and as I described in my first book, there was a time when I even lived in a rented apartment so that the business could grow.

I can publicly say that I drive a car that's 11 years old with 120,000 kilometers on it. And I don’t think I’m doing anything wrong. There are months when I earn more in an hour than my car is worth (once, I made that amount in just 30 minutes).

If you want to have a large and growing business, you must immediately say "no" to personal gain. If you agree with this, you can continue reading this book. If not, it will be difficult for you to understand it, and it may evoke negative feelings.

This philosophy is tied to the idea that finances do not fulfill the truly significant needs of a person. Often, people spend a lot of money on food and housing, but this only satisfies their basic needs. True human needs – personal growth, improving the lives of others, creativity, and the desire to create something new – go beyond mere financial transactions.

As a person grows spiritually, they feel less inclined to spend money; instead, their desire to create something great increases. This requires not money, but constant effective work, creativity, and the ability to change the world around them. A business has a chance of success only with such leaders on board. Businesses do not thrive where leaders are wasteful – not due to the finances deplete, but due to a certain inner world of those leaders. For them, creating a strong system is an overwhelming task. My perspective may seem harsh to some, but I sincerely believe that if I hadn't pursued continuous self-improvement, I would never have created anything at all.

Emotional and financial responsibility are key elements of successful leadership. Only this approach let you build a strong company and foster its growth.

If you want to cultivate a positive culture within your organization, you must start with yourself, and that begins with establishing your own philosophy. Society often promotes different values: spend all you earn and take out another loan. Marketers everywhere are primarily focused on your money.

However, you should not act according to what marketers want, but rather according to what is best for you in the long run. This is the foundation of a sound entrepreneurial approach.

Entrepreneurial culture is not uniform; it includes a variety of subsystems. These can include divisional structures, urban organizations, or network partners, as well as emotional groups composed of individuals with different emotional profiles. There are also intellectual subsystems where innovations are created and situational analyses are conducted. Each subsystem has its own unique qualities that leaders must take into account. Some subsystems can be quite isolated from one another. When building such links, it's crucial to consider the risks involved to avoid destabilization.

In one of our company's subsystems, we once encountered a situation like this. In the regional development department, a person with autocratic tendencies came into power. He quickly changed the culture within that subsystem but failed to meet the challenges, resulting in a disruption of balance. This manager possessed contradictory qualities that were incompatible with the needs of the system, which is unacceptable: a leader must have a deep understanding of the essence of the division they supervise. For our company, this department is particularly significant due to the high level of authority entrusted to it.

Chapter 8. Internal Entrepreneurship

Internal entrepreneurship is a system of rules within a company that guides how entrepreneurs operate. The company acts like a government, creating opportunities for employees and clearly defining the rules of engagement. Some risks are taken on by the company, while others are borne by the employees, who in turn gain nearly all the opportunities available. This leads to a different distribution of responsibility compared to traditional entrepreneurship, yet there are many similarities between the two.

In pure entrepreneurial activities, only about 2–3% of people may engage, but up to 40% can become internal entrepreneurs. The beauty of internal entrepreneurship is that only the most effective individuals "survive" within the company. In a traditional organization, low productivity can go unnoticed and often requires a heavy-handed control system. However, in a culture of entrepreneurship, ineffective employees are unlikely to last.

We apply this principle across our entire staff – from mortgage brokers to lawyers and even security personnel – focusing them on results and enhancing the overall profitability of the company. This shift didn’t happen overnight; we transitioned to these new values gradually, and it can be implemented in any company at any stage of its development. Here’s what happens during this transition: those who cannot keep up tend to leave on their own – there's no need for administrative oversight. Initially, this may lead to increased employee turnover and dissatisfaction, as people resist change and perceive it as chaos. However, over time, this transforms the company culture. Only true professionals remain – those who genuinely want to work and deliver results. This fosters a healthy entrepreneurial environment where everyone feels engaged and valued.

I fundamentally changed my approach around 2017–2018. A shift occurred in my mindset. I had always aspired to this but hadn’t embraced it as my core philosophy. Even when writing my first book, I didn’t have these thoughts – it barely mentioned this concept.

In the past five years, I have matured and tested many ideas without fearing risks. That’s why I decided to write this book. Even now, five years after my first book was published, I believe we must continue moving in this direction, and it is relevant not only for “Etagi.” Our company needs to further transform to uphold the principles of freedom in 99.99% of cases. I am convinced that out of 10,000 companies, only one may not need to pursue entrepreneurship. The rest must move in this direction. I even suggested to Russian government bodies to increase the degree of entrepreneurial freedom, which would benefit everyone. Often, a lack of authority at the grassroots level worsens situations because essential connections are missing.

While internal entrepreneurship may create some chaos during its initial implementation within companies, it ultimately establishes a strong foundation where the entrepreneurial spirit thrives at all levels. The wider this energy spreads, the more resilient and successful the organization becomes.

An important aspect of entrepreneurship that is often overlooked is the sense of satisfaction derived from one’s work. It’s crucial to understand that the foundation of an entrepreneurial culture is the principle of direct evaluation of each person’s contributions. Human nature dictates that people need their efforts to be recognized. I don’t believe anyone can work effectively without some form of feedback on their actions, even if that feedback comes from within. However, only a few individuals possess this level of self-awareness. Most people rely on the opinions of those close to them – people they trust and respect – and this validation is vital. For others, public opinion and what others think about them are also significant.

In this regard, entrepreneurship fosters a culture of assessment: the results of your work become evident to both others and yourself. I initiated reforms in my company when I realized how important this was. Traditional performance reviews are often too subjective; we tried implementing various rating systems, but they mostly turned out to be a waste of money. Evaluation has to be transparent: rewards must be directly linked to the value an employee creates. Otherwise, it simply doesn’t work: you can’t pay for one thing, expect another, and praise for something else. Internal entrepreneurship represents a natural way to structure an organization where evaluation is clear and objective. There’s no need to invent anything new; the problem resolves itself automatically. Understanding this has been the secret behind our company’s rapid growth.