Despite all the challenges in Ukraine, business is thriving

If someone asked me today whether they should start a business in Ukraine, I’d say why no, says Ralabs’ Roman Rodomansky

A rescuer works in an apartment building partially destroyed by a missile strike in the western Ukrainian city of Lviv on July 6, 2023. Picture: Yuriy Dyachyshyn / AFP.

The first warning signs of war with Russia came in January last year. My co-founder, Andrew Yasynyshyn, and I decided it was time to start working on a business continuity plan, or BCP, for our six-year-old software-development company, Ralabs.

We and the directors of each department (delivery, human resources, finance, recruiting and engineering) worked to outline four scenarios, each representing a different level of Russian action, Ukrainian response and associated risk with respect to security, business infrastructure and market environment. We then planned decisions that would be triggered by various events.

Our planning paid off, of course, on February 24, when Russia invaded Ukraine. We had already helped about 30 per cent of our employees relocate to Poland and other countries; allocated budget for BCP-related activities; developed HR policies for emergency situations such as local evacuations, being drafted into the army and international relocation; and conducted a number of educational programs – on topics ranging from mental health, first-aid basics, managing in a crisis and putting together an emergency “bug-out” suitcase to legal information about military mobilisation and personal finances – to help our employees feel prepared.

As a result, although our performance took a hit in the immediate aftermath of the invasion, we were back at 90 per cent of typical output just a few weeks later. That has essentially continued, if not improved, over the past year, and sales to both new and existing customers have not been significantly affected. More important, we’ve been able to support our people through a frightening, dangerous time, and we continue to do everything we can to keep them safe, motivated and effective.

I’m hopeful the lessons we’ve learned may be helpful to other Ukrainian organisations managing their teams through this war and to leaders around the world faced with navigating any crisis.

A NEW NORMAL

Andrew and I launched the product-development firm Ralabs in 2016, he as the chief executive and I as the chief operating officer. By early February last year we’d decided to focus exclusively on software engineering and had built up a roster of more than a dozen clients in Ukraine and across the US and Europe. We had 67 full-time employees, 80 per cent of whom lived in Ukraine, and about half of those were working out of our headquarters in Lviv. Annual revenue was $US3.4m and growing at a rate of 25 per cent a year.

Even as political experts, the media and our business mentors grew increasingly worried about a Russian attack, and as we ourselves braced for it, we still hoped it wouldn’t come. When it did, everything changed.

The Ralabs leadership team knew we needed to be as calm and collected as possible to implement the plan we’d developed and support our employees in this moment of crisis. Following the HR policies we’d established, we made allowances for longer-term flexible or part-time work as needed.

We emailed all our clients to let them know that developers might have unpredictable or partial availability, and we relied on the 24/7 customer-support system we’d set up – staffed by eight employees who were based outside Ukraine – to provide rapid technical support to anyone with emergency needs.

Sales within Ukraine were understandably slower than usual given the business disruptions, so we did have to cut costs. But rather than laying anyone off, we limited raises and asked some customers for payment in advance. And although some international clients were initially hesitant to sign new deals with us, fearing a quick defeat for Ukraine, our BCP helped them overcome those jitters.

By summertime operations had settled, our revenue streams had stabilised, and the management team started meeting for forward-looking – rather than crisis-management – strategy sessions.

That autumn we also began to re-evaluate some elements of our BCP and operations. We decided to pull back on weekly updates to customers, which had begun to feel excessive; we rented a second office space to support our growing workforce; we increased support and compensation for coworking spaces as they became a more reliable option; and we shifted to a loan-based approach for generators and Starlinks so employees could get backup internet infrastructure as quickly as possible.

As I write this, in early April 2023, our company’s situation is stable. We’ve identified most of the risks related to the war and we know how to address them. This war is not over, of course, and my team and I are learning as we continue to navigate it. But four key elements have guided our approach so far and may be helpful to other business leaders facing similar risks and crises.

1. Scenario planning.When we began putting together our BCP, the idea of a full-blown Russian attack seemed far-fetched, but we still asked ourselves questions like “What will happen if employees have to relocate quickly? If electricity becomes unreliable? If bombings make Lviv uninhabitable?” Then we developed contingency plans and conducted informational sessions and trainings.

By keeping many scenarios – from the most to the least likely – in mind and preparing for each as if it really could happen, leaders can position themselves for success in even the most trying times.

2. Flexibility. Of course, effective scenario planning requires a mindset that’s flexible enough to adapt to whatever ultimately unfolds. In early 2022, for instance, we had set a growth target of 35 per cent year over year. After the Russian invasion we decided to put that goal on hold temporarily and focus on adapting our business to the new reality.

We also shifted our hiring strategy to incorporate more international recruiting than we had initially planned, and we normalised flexible working hours throughout the organisation.

3. Decisiveness. A decision not made today will cost twice as much tomorrow. The war has forced me and my team to make countless tough calls, and I’ve learned not to put them off. In times of crisis, leaders must invite input and collaboration but will ultimately have to make (and stick to) the right choice for the team, the business and the country.

4. Support through uncertainty. Finally, the true task of leadership is to support your customers and employees even when you’re uncertain and afraid yourself. That starts with remembering Maslow’s hierarchy of needs: safety is second only to physiological needs. When the war broke out, my team and I were singularly focused on that.

Empathy and emotional intelligence also became more necessary than ever for building trust and ensuring productive long-term relationships through a difficult time.

Roman Rodomansky is the chief operating officer of Ralabs.

Copyright 2023 Harvard Business Review/ Distributed by NYTimes Syndicate