PM. Mr. Butusov. A couple of words about the background of your company.

      - It would appear most logical to start with myself. The company is much younger than my track record in this business. After graduating from St. Petersburg University with a degree in sports psychology, I initially pursued a professional sports career. Then, there were various training workshops, studies in the US, so-called on-job training, and a six-months employment with an American company. I also attended the Manchester School of Business, followed by two attempts to obtain an MBA degree. Unfortunately, they were not successful. Initially, I studied in St. Petersburg, but was forced to drop out: I had simply no time to spare. Later, when I moved to Moscow, I enrolled for an evening MBA course at Public Economy Academy. However, I ended up somewhat disappointed, as I saw that everything offered there could be, in principle, mastered on one's own. The kind of matters I got to resolve in my everyday practice. Maybe it was better to complete MBA in order to have a better understanding of macroeconomic processes, but then I could have been tempted to get involved in politics. Something I rather wouldn't do.

      In 1989 I opened the first office of an international recruitment company in Russia. It was Hill International, an Austrian company quite prominent on East European market at that time since they had 13 regional offices. The fourteenth was opened by me in Russia in 1989.

      This was the first attempt to recruit mid-level professionals: young English-speaking graduates with degrees in various field of economics. Our first clients included some big names: Coca-Cola, Minolta, Bosch, Unilever. They had a history of business with Hill International in other East European countries, and continued this relationship once we opened the Russian office.

      The company developed quite successfully, being a market leader, when in 1993 we first encountered a situation where professionals of the relevant qualification no longer responded to ads, no matter how appealing those were. And we had naturally developed an understanding that possibly we had to search for people using other methods as well.

      Thus, the concept of direct targeted executive search was born. After reading all related literature available then, I contacted a number of companies and established a connection with Korn / Ferry, a global leader in this field. In 1995, I opened the first Korn / Ferry office in Moscow, and later, in St. Petersburg. I was their Country Manager. The new business was strikingly different from what we have been doing previously, although both approaches were based on the concept of assessment of human abilities and qualities. The most important thing in recruitment is the assessment and selection of the best from a pool of people willing to change something in their lives. Executive Search business involves enticing people who already have clear career positioning. With Korn / Ferry, I was at the helm for 2 years. No doubt, I learned a lot from the company in terms of certain standards of doing business. Korn / Ferry was at the time, and still is, one of the global leaders in setting standards in this business and implementation of a step-by-step standardization of search process.

      PM. Ste-by-step standardization of search process is a Western innovation, isn't it? How applicable is it in Russia?

      - Absolutely applicable. If one makes a comparison with other companies (and we had an opportunity to compare with Ward Howell, Neumann, Egon Zehnder), standards of work are essentially similar everywhere. The search process sequence, from the initial meeting with a customer, to placement of the candidate, is quite uniform. Be it Russia or the West. However, the information environment is much more developed in the West, so search for one specialist may take one mouse click, and all 120 chief financial officers working for similar companies in the given city will be displayed on the monitor. I saw this when I was an intern in the US. Then, enticing letters are sent out, with the bottom line being: "Fellows, who's up for a new career opportunity?". 10-15 people respond, a consultant takes a flight or a car ride, meets with them and selects the one who, he believes, best meets the customer's requirements.

      Russia had none of these facilities, and we started from scratch. There was a need to find best people, there was Western technology, there was powerful market research. In early 90es, we had no competitive market. If, for instance, Bosch commissions search for a specialist, today we will search for him/her among companies operating in a similar market sector, but it was a whole other story then. Research involved a survey of 200-400 companies, i.e. all of managers successfully operating in the relevant field.

      In late 1995, a difference of opinions between me and Korn / Ferry management occurred regarding development of our business in Russia. We had achieved good revenues, almost on par with Ward Howell, who then were and still are the market leaders in Russia. We were given a target of outstripping them next year. In other words, we were supposed to boost the turnover twofold and hire an X number of personnel. Consultants professionally capable for this job then headed Ward Howell, a company they created (all of them were my ex-partners at Hill International). All other specialists from recruitment agencies didn't qualify as being of a different caliber. When you sell to a client a position worth $80-100 thousand, you have to speak in a certain language, and the client has to have full trust in you. This is big money. So, there were no prepared people available on the market, and training someone displaying some potential required considerable time.

      Multinational powerhouses started entering Russia, and all of them needed top of the crop. To take, for example, a package of orders for 10 CFO's or 10 marketing directors meant that one client would get the best person, while all others would get whatever remains. At the end of the day, this would affect reputation of the firm. Therefore, it is best to take one powerful client and "husband" them across all positions they may need. But my voice was not heard: "This is the way Korn / Ferry works around the globe, and Russia will be no exception."

      Our differences with Korn / Ferry progressed to the point of being irresolvable, and we had split. At that point, I signed a commitment not to engage in similar business for next eighteen months, in return for a certain compensation. However, about one month later they notified me that they void our agreement and release me from the obligation, since key accounts left Korn / Ferry after my departure. Our business is more personal than simple preference of a certain company. The customers may have been satisfied with the quality of my work, but many things had changed after my departure. Nothing restrained me any longer, and I decided to found my own company. This is how Prime Chase was born.

      The name occurred to me in late 1996 in a quite romantic setting. As I was sitting on the beach of Indian Ocean in South Africa, a poem by Robert Burns kept running through my mind:

      My heart's in the Highlands, my heart is not here,
      My heart's in the Highlands a-chasing the deer.

      Together with the sounds of wash and the ocean breeze, this developed into "Prime Chase"; and chasing the best is what I essentially do.

      PM. Executive search. What are the specifics of this business in Russia compared to its origins in the West?

      - If we look at the roots, this business was created in the West by people with a long and successful history in management consulting. At a certain stage, about 35 years ago, certain management consultants realized that a client often needs fresh human resources to achieve their targets. This is how executive search came about.

      Speaking in terms of qualitative differences, in the West it is people with a profound knowledge of issues of management who enter this business. Usually, these are experienced people with serious training in management and a track record of running companies, who shortly before retirement age realize that they have a certain competence to advise other companies on whom and how to hire. Therefore, the key players on the Western market are elderly people with a very good understanding of the core issues of business. In Russia, it is, as usual, the other way around. I think this is our main peculiarity.

      PM. Do you believe we will ever embrace the Western way of Executive Search?

      - Maybe when we, the founders of this business in Russia, get old. Generally speaking, we have many experienced managers. When the wave of mass privatization occurred, the "red directors" privatized enterprises they managed. About 15 percent of them are successful managers, the rest are hopeless in terms of managing modern businesses. The successful ones, once they become the owners, make much more money than an executive search or management consultant.

      If we look at a different category, these are effective owners, people who probably own 80% of property in Russia. These are young people, and we monitor all of them as part of the Russia's Golden Treasury of Executives in the XXI Century project. We know most of them personally and maintain contacts. The level of their income is, of course, significant and incomparable to fees of consultants. Will a day come when these managers and owners realize that they can advise others on whom to hire? Not likely. I don't believe this will happen in Russia. Because hired managers are almost nonexistent here. In the West, if a person has been building his career for 40 years and reached an income of $500 thousand to $1 million, when he enters executive search business, he retains his level of income. This is not the case in Russia, and the situation here is historically different.

      PM. You are one of the founders of the executive search market in Russia. What has changed for better, and what for worse?

      - What changed for better is probably the situation with the quantity of qualified people on the market, i.e. if in the past graduates of Western business schools were out of reach, now you can find them. Previously, they stayed in the West and it made no sense for them to return to Russia. But in 1998, Ward Howell recruited vast professional force into Russia, our Russian fellows who received education abroad and who saw prospects for application of their knowledge in Russia. There are now more qualified managers and it is easier to find them. There are now many more examples of effective business management. Top-class managers are moving from Moscow to the regions, which is another good indicator. Today, for a young fellow with a good background it is much more interesting to helm a factory in Nizhny Tagil than to wear out the seat of his pants in a Western-style office in Moscow.. It is now possible to make a faster and better career in the regions.

      Among the examples of changes for worse I can point to vulgarization of our business, examples of which there are plenty. This has always been the case. From the very beginning, there were companies claiming to perform executive search, although I think that there are still only 2 or 3 companies in Russia that provide quality search. However, if in the past there were 20 such companies, with 2 working on a high-quality level, today there are 200, of which still only 2 work well.

      PM. Any names? Who you believe sets the standard and operates on a good quality level?

      - I believe we provide the best quality. Why? It is very easy to explain. We have very few clients. The philosophy I formulated back in 1993-1994 has developed within our company. We have 2-3 very powerful customers that are aware how much they win recruiting best and most talented employees. When I worked with UNEXIM and Interros Group, Mr. Potanin used to say: "I need a genius, the best person in the field, no matter where he is - in Russia or abroad." Naturally, when you have few clients, your hands are untied in regard to the rest of the market. When you have 30-50 clients, you are forced to violate standards of ethics. I know that all companies, even the successful ones, violate these standards, unfortunately.

      There are plenty of rumors in the industry that such violations are ubiquitous. The technology is as follows: you hire a facade team or a person who contacts the best of the best employees you have placed 3 months ago and offers them a new job. If this is exposed, your reputation naturally suffers.

      It is a different story that these best of the best are usually careerists in the good sense, who wouldn't leave for a different position in three months, not even in one year. In the West, to build a successful career within a company takes at least 5 years. Then, you feel justified to make a new step. In Russia, these terms are shorter. Usually, it is one to one and a half years. However, when an enticing offer comes in, when the salary is boosted one and a half times, when new opportunities and prospects open wide, people sometimes sacrifice their reputation, as they understand it is justified at the time.

      PM. Which Russian companies are successfully operating on the executive search market?

      - We have not encountered a single successful Russian company on the executive search market. The fact is, none of them ever dealt with very tough moral standards. I worked with Mr. Khodorkovsky when we just launched Prime Chase, and it was clearly an invaluable experience. He is a very peculiar man, very sensitive about any expression of free-thinking or any deviation from his understanding of a matter. I was then involved in creation of a Western-standards human resources department at Yukos. We had to hire a team of about 15 persons, and every one of them had to be the best human resources expert on the market. We have conducted a full research of the market of human resources specialists. This was the first step that allowed me to say the we did the best research in the country. No one had done it before us.

      Later, when we started working with Mr. Potanin, he structured our relations even tougher. Leaving us no margin for error. Any error: a missed call; a late report; an omission; data not fully prepared. In other words, if you claim that a person was on a business trip or on a sick leave, or is not up to requirements, while in reality you simply couldn't reach him, God save you from this ever coming to light. Mr. Potanin probably never intentionally checked my activities, but at any given time I felt that I had no margin for error. If I said that all of the best companies in the sector were covered, this could only mean that we had actually made every effort to obtain all information and bring research to its logical completion. If three best candidates were presented, this meant three really best candidates. And every one of the best, hired by the Client, is yet another indicator of our reputation.

      PM. You said it is good for a company to have 2-3 big clients. How many executive search orders to you get from these clients? How many placements you actually achieve a year? Are you interested in any expansion of your client base?

      - We achieve about 12 - 15 placements a year. At this point, we are not interested in increasing the number of our clients, because the money we make is re-invested into the Russia's Golden Treasury of Executives in the XXI Century project. So far, this money is sufficient. What concerns the future, we are now building a recruitment platform that in three years will give us the maximum coverage of business in Russia.

      Successful owners, today helming the most successful businesses in the regions, in 2 or 3 years will contact us, saying: "Fellows, could you find managers to replace us? We will go into strategy development, we will oversee diversification of the business." Therefore, in 3-4 years we will enjoy an essentially new client base that will undoubtedly help us to remain No. 1 on the market.

      PM. Russia's Golden Treasury of Executives in the XXI Century is your main project? Who is the customer?

      - It happened historically that in the summer of 1998 I managed to bring to notice of Prime Minister Kirienko a notion that before announcing large-scale economic reforms, one should consider whether there are people in the country capable of implementing them. Surprisingly, this information was actually passed to him. Three months later he contacted me saying: "What was that summer letter about human resources audit across the country?"

      When we met, I was very impressed with his profound understanding of the problem. So, we decided to act jointly. We created this project. He took part in it from the very start as a person who really knows what "personnel shortage in the government" means.

      We found money for a six-months pilot run of the project, and pursued two issues simultaneously. On the one hand, it was the type of work we continue today: thorough and comprehensive audit of human resources, top managers and executives in the regions. And the second part were the competitions, i.e. mostly PR events. We would arrive, say, to Krasnoyarsk Krai, launch a strong media campaign, announcing a regional competition for three titles: best in business, best in public service and most promising student in business and economics. Then, all of the interested contenders passed a selection, and the best ones entered a three-day management games course. Mr. Kirienko then arrived for the final round and presented awards to the winners. Normally, there were 2-4 winners.

      Early in the summer of 1999, when the pilot phase of the project was nearing its end, Mr. Kirienko got very involved in political campaign, and the project's chief financier said: "I no longer want to be part of this."

      And this was where our paths diverged radically, since the project was initially conceived as absolutely apolitical, and has been widely publicized as such.

      We have managed to register this brand, we reserved the right to it and continue the systematic survey of the regions. Today 32 regions are under our coverage. By the end of this year we will have complete data from these 32 regions. We now have a co-investor. It is Mr. Zelenin, a prominent figure among successful entrepreneurs. At that time, I was working with Norilsk Nickel, and made several successful placements there. This is how we met. He saw and appreciated the importance of the Russia's Golden Treasury of Executives in the XXI Century Project as a unique and promising undertaking. Today, he actively participates in the process together with me. He heads the Russian Association of Managers, the first professional association of managers with a new philosophy. I am a co-founder and the vice-president of the Association. Thus, together with the Association and the Russia's Golden Treasury of Executives in the XXI Century project, we cover a vast range of Russia's human resources.

      PM. Mr. Butusov, do you believe that under Kasyanov or the next Prime Minister, your work will be in demand with the government, or you initially counted on its applications for private business?

      - Certainly, when we just launched the project we expected this work to be in demand with the government. Every high-ranking government official should have a clear understanding that the resources we offer, covered by no one else in the country, can and should be used. However, at this point we are not making any steps to position our project: our time has not yet come.

      PM. If the government contacts you regarding recruitment of candidates from Russia's Golden Treasury for public service, will you cooperate?

      - Of course, we will. But a government official should not be poor. It should be clear that we work with quite wealthy people. Everybody understands that people who work for the government and wear a $10,000 watch on their wrist, while their salary is $200-500, - unless they have their own business behind them - accept "favors" or camouflaged bribes for lobbying someone's interest. The people we represent have their own effective businesses, and wouldn't steal once they join the government.

      There is a different risk: that they would lobby interests of the companies they represent. Now, this depends on a person. You have to study every one of them to make sure how well they can disengage themselves from the interests of their region or business. Among 20-30 people, it is possible to find one who is perfect for public service in terms of ethics and personality, for whom professional reputation is a matter of principle.

      PM. Were there any cases of unauthorized access to your database or pressure on your people performing selection in the regions?

      - Thank God, no. The reason for this, I believe, is simple: none of the people capable of this understand the importance of our project.

      PM. Besides moral gratification, what else do people nominated candidates in the Russia's Golden Treasury of Executives in the XXI Century project get?

      - They get hope that their talents for professional development will be realized. That's number one. They understand this will not happen overnight. But these are all young fellows: 28 to 42. We understand that once past 45, only one person in a hundred meets the requirements of modern business we use for selection criteria.

      Number two. We have already selected 120 persons from 12 regions. By end of the year, we will have about 280 people from 32 regions. We realized that these people would like to meet and get acquainted. Recently, we made the first attempt to bring them together. Of the 120 people, 60 accepted the offer. This is quite a few, and the rest simply couldn't come for valid reasons. We designed a powerful communication program, so that in 3 days people who were once absolute strangers would say goodbyes with tears in their eyes. So, this is the club we intend to create. We have come up with a rather amusing name for the club: Russian Business Prime League.

      Why Prime League? Most of the fellows are, to a various degree, into sports. And when we were thinking, under which flag to bring them all together, an idea was born which I can probably now publicize, because we are already making actual steps towards its implementation. It involves creation of a certain pool of businessmen, a Club 100 of people who support Russian football and know how to create a team that in 3 years will win Russian championship and in 5 years will play on par with world-class teams. This will be an absolutely non-political association, but the resources of these people - financial, personal, intellectual - will be invested into this team. We will find professional supermanagers who will not steal, as it is often the case today. Football is a very dirty, criminalized business. So, we buy a promising second-league team and in 3 years propel it into leaders of Russian football, and on this very concrete example show that the art of management does exist.

      PM. It would be a great shame if this colossal and much needed work you do with the Golden Treasury project is done in vain.

      - It would be in vain only in one case: if Russia takes the route that leads into a dead end. If a certain Renaissance comes, then it would, beyond any doubt, find its applications. Today, we clearly see that the people we know in the regions are quite competitive with the ones present on the Moscow market.

      A specific example. We now have a search request for the best executive in pharmaceutical production. This is a highly competitive business, quite well developed in Russia. The customer's ambition is to become within several years one of the key producers with a powerful distribution and retail network. We performed research of pharmaceutical market in each region we covered and saw that general directors of most successful pharmaceutical companies featured in various ratings are actually people working outside of Moscow. Usually, they own their businesses. Nevertheless, the situation is such that we can consider some of them possible candidates.

      However, we need to think over the ethical side of the matter: either we announce that we are forming the Golden Treasury of Executives in order to perform head hunting even more effectively, or we announce that we are uniting in a club, and will never steal anyone form each other, because there is a real shortage of people in the regions as well. Today, we are at the stage of comprehension of the purpose of our activities and the ethics and rules to underlie it.

      PM. Do you have your proprietary know-how in executive search? Anything you can disclose?

      - Frankly speaking, we have only one proprietary thing: we are very meticulous about observing the standards of technology declared by all other players on the market. We use no other means of penetration into a company or collection of information. We do not employ any special services or other companies to investigate background of a candidate. Our professional task is to attempt to establish whether a candidate meets the required criteria by conducting a personal interview and checking references.

      And this is where we may have a certain know-how, something that other contenders don't pay attention to: knowledge of the client. Personal knowledge of the client means 50% of success, or even more. If I work for a certain person, I select candidates that suit him best. This is very important. Personal characteristics of top thirty Russian entrepreneurs in terms of their attitude to business, criteria for team building or team work, are very different. Therefore, first we get familiar with the client, get into their business as much as it is possible, spend many hours in personal meetings trying to understand what kind of person this is, and if we understand and accept him or her, then we undertake the project. This is very important.

      PM. Thank you very much. I wish your program long and successful life to the benefit of your company and the country in general.

      - In conclusion I can say that those who know what I do, when they understand the depth and the potential of this business, and at the same time see the reality we live in, they call me the last of the romantics. We all live in this reality. If the country takes the luminous way, our program will find its applications. If we make no headway or get bogged down, then probably it will not. Time will tell.

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