Elena Lokteva is a co-founder of SI Capital Partners, an independent investment company. An accomplished CEO/CFO and Operating Partner. Elena has 17 years board experience across Europe and the Middle East in PLC and PE-backed companies. She excels at value creation within start-up, growth and turnaround situations. Through a combination of detailed strategic planning, discipline in finance and diligence of execution, she delivers ROI of 300% on average. Her zone of expertise is within the Automotive, Agri- and Food sectors across manufacturing, distribution, and retail. She holds a CPA (US), MA in Economics and Audit and an MSc in Biotechnology.
Tell me how you define a successful leader.
The people that I admire the most have a clear vision and total commitment. It is how you enthuse other people to pursue the vision that defines a successful leader.
When in your career did you find you really began to be an impactful leader and what gave you proof of this?
Two things, it was 2002, my 3rd year as CFO of the first automotive holding in the Former Soviet Union and people with much more business experience started asking for my opinion. Around the same time, my subordinate whom I grew to the position of Corporate Controller got an offer to become a CFO at Yandex – the Russian equivalent of Google. I always encourage those team members who are bright, open for challenge and genuinely interested in strategy and underling operations go for CFO positions. I am proud that I’ve contributed to the career development of many brilliant people currently leading major finance teams across Europe.
Share with me your greatest leadership success/experience.
In July 2009 I flew into Finland as CFO / Operating Partner to save the 3rd biggest automotive holding from what appeared to be inevitable bankruptcy. The task was to solve liquidity problems and reverse a downward spiral of negative profitability. The company’s affairs were a mess:
· The main financial creditor was reducing facilities, thus forcing the company into liquidation
· There were severe cash flow constraints because of the 2008-9 market downturn, mismanagement, and bank actions
· Employees were demotivated due to lack of shareholder’s interest and self-isolated top management
· OEMs were very nervous about holding’s future, especially given that it fully controlled retail sales for two big brands in Finland.
Despite this, within 2 weeks I had designed the financial plan for the turnaround program which was presented to the Court. My work resulted in the release of €77M of capital which allowed the company to repay all its creditors.
Learning Finnish culture as you go created some interesting experiences, it was challenging, to say the least, to convince people to get on board. But I did, and I am extremely proud to set the Finnish record for the shortest period for a company to be under Court protection, 6 months vs 10 years on average.
Recall your biggest managerial challenge. Tell me how you handled this. What did you learn that you might do differently next time?
In 2013 I become an interim CEO in one of our portfolio companies. I vividly remember the shareholders meeting: my six partners and I were discussing what to do with a Russian agricultural equipment distribution business. The business was in despair, the main supplier was threatening to cancel the distribution contract, the previous CEO had resigned, and the employees were totally unmotivated.
Clearly, there was no need for additional funding, what was required was one of us to fully dedicate our time to turn this company’s fortunes around. There was a slim chance of success and none of my partners were willing to commit so I stepped forward. At that time, I had substantial operating experience as a CFO/turnaround director, but I had never been a CEO of the company before and this one has spread across a territory five times the size of Germany. Despite this, I was trusted and given carte blanche to do whatever was needed to save the business.
I went in with two top priorities:
· Get a second chance from the supplier
· Motivate managers, I had to be absolutely sure I could rely on staff to help design and execute a turnaround plan.
Within two months I had gained everyone’s confidence by showing them I was 100% committed to the project. I did this by being transparent about difficulties and limitations and showing I was not afraid to make bold decisions.
Within 8 months the company had become the benchmarking dealer and by the end of 2014, we exited to a strategic buyer generating an IRR of 275%.
What I learnt was:
· Don’t be shy to nominate yourself
· Intelligent, hard-working people are the majority, not the minority. We, as bosses, must create a vision that turns them on and provides an atmosphere for them to flourish.
Who has been your greatest mentor(s)? Where they a colleague or did you hire a professional coach? What about this person or the experience had the biggest impact on your growth?
My parents raised me with great self-belief, they taught me I could achieve anything, so I have always been driven to prove myself.
In the early 90s, I was fortunate to join a group of Western investors who actively encouraged diversity of thinking and leadership style. They were open to promoting women and created an atmosphere of trust. I was given challenging projects and could work confidently as I knew I could turn to any of them at any time if I needed.
My MBA was earned on the job. In 2000 I joined the Board of an automotive holding and worked side by side with giants of industry, too numerous to mention by name for it wouldn’t be fair to mention some and not others. These remarkable people bought huge international brands to the former Soviet Union and I had a chance to learn directly from them and this experience has been absolutely integral to my career.
The only coach I’ve hired is my yoga teacher, she expands my perspective on life both business and personal in myriad ways.
Common opinion states that in order to succeed in business one has to be ruthless. A quick survey of world’s most domineering companies seems to support that view. Do you think it’s possible to be very successful in business and still be a nice person?
I looked at the Oxford dictionary for a definition of a nice person and found that they are good-natured i.e. kind, friendly, and patient. All key components needed for a leader which want to build a successful business:
Friendly leaders are more successful at stimulating staff to deliver their best and maintaining long-lasting relations with other stakeholders
Patient leaders leave a greater legacy as they invest in developing their people.
And the finally, strong leadership and kindness are not mutually exclusive. Kindness for me is a combination of objectivism and fairness. It is kind to shut loss-making line which may pull an entire business down, it is kind to fire a hundred people to save thousands of jobs, it is kind to kill the “we always do it this way” attitude. A leader takes lots of actions which may look ruthless short term but are kind for the future of the business and its stakeholders, therefore. So, I concluded yes, it is possible!
Let’s talk about managing pressure – how do you control your own emotions and temper when things don’t go to plan? Not lashing out at those around you is a skill – what are your tips?
I am not an emotional person, so I don’t have a temper to take out on others. I have a committed yoga and meditation practice. which I find the most helpful to process events, relieve any frustrations and recharge. Morning walks help to get my thoughts in order.
At times we all hit a low point. How do you motivate yourself?
I recognise I belong to a very fortunate generation, so I don’t take my lows too seriously.
To calibrate my “lows” I volunteer at a mental health charity facilitating groups which help people locked in a constant battle with themselves.
I also find very helpful to re-read “One Day in the Life of Ivan Denisovich by Solzhenitsyn. The story is set in one of Stalin’s labor camps and reminds me just how strong the human spirit is.
What are your top three book titles that you were most impactful for your leadership development?
To answer this question lets go to my bookcase and see what books I religiously moved with me as I worked and lived in Moscow, Abu Dhabi, Helsinki, Erbil and now London.
· Atlas Shrugged by Ayn Rand. A prophetic novel it depicts a dystopian United States in which private businesses suffer under increasingly burdensome laws and regulations. Bottom line: have a dream, work hard and never give up. Bottom line: have a dream, work hard and never give up.
· Beep! Beep!: Competing In The Age Of The Road Runner by Chip R. Bell and Oren Harari
· My grandma’s cooking recipe notebook. A collection of handwritten recipes my grandma inherited from her mum and expanded over her 97 years life.
Bottom line: learn from your roots, cultivate can do attitude and give a personal touch to everything you do.
Some managers believe in strict hierarchy and the “do what I say approach”, sighting cultural norm as an excuse. What are your thoughts on this?
I prefer to listen closely. The lower down management you go the more information is available and these people have potential solutions. I encourage people, to think and act. My task as a manager is to build a confidence and a can-do attitude, then provide the appropriate resources.
Tell me how you decide what to delegate and to whom.
I always ask myself, can only I do this task? If not, I delegate.
To grow people, you must give them a little bit more than they think they are capable of while being careful to avoid failure and shattered confidences.
Stretch your subordinates. Looking back, I realize that was what my bosses were doing to me.
Team building has become a buzz word in the corporate world, yet many still not see the value in applying it to their group or organization. What are your beliefs and or successes around team building?
Team-building can be very fruitful if it’s arranged by experts and focused on a practical goal. Choose the right professionals and give them a very clear task of what you want to achieve.
I’ve found the best results are delivered when team building is focused on creating better communication for companies which are very geographically spread out. My takeaway from the best team building experiences is bosses too often work on the assumption that the staff knows much more than they do in reality.
How do you decide to be available to your team (i.e. text/Email/voice call/video call)? How do you determine the best way for them to contact you that does not interrupt your workflow?
I am very strict. All my professional life I’ve run two or three very different, large, complex projects in parallel. Managing my time well has always been very important. My staff all know the exact days and times I deal with such and such. That way I can give my entire focus on the task at hand at the moment. While there may be a little hysteria at first, frankly speaking, no one has died. People learn fast I respect their time and tasks and I expect the same in return.
How much do you value transparency of information at work? To what extent do you share information with your team?
Disclosure, clarity, and accuracy are vital to decision making.Transparency is a business strength, staff inclusion and efficient communication are crucial for success.
How do you best separate work like from personal life – for a healthy balance?
What are your biggest challenges around this? How does this impact you personally?
I enjoy my work so much I find no need to separate myself as a person and a business leader. My personal life informs my business life and vice versa.
Explain how you work with HR for recruiting and interviewing.
What works for you and how do you handle the interviewing process for vetting candidates?
The right team member is a vital part of the puzzle. I invest a lot of time during the search pre-launch stage and brief recruiters thoroughly. It’s important for them to understand my personality and my team’s needs and dynamics. I am very clear and accurate when communicating my needs and I’ve been told makes me very easy to work with and as such I have very few interviews for me to handle before I’ve found the right candidate.
How do you respond to employees/colleagues who are diagnosed with mental disorders, e.g. depression or anxiety?
Considering that turnaround was a big part of my work I have been reflecting on this and have realised what a huge impact change management has on people’s mental health. Looking back, I admit I hadn’t paid enough attention to the impact that these changes would have on employees’ personal situations but focused on employees’ confidence that business will be successful.
Sometimes an employee is not working out despite your best efforts and you know that this relationship is not serving them or the business. At which point do you decide to part company and how do you go about it?
My experience is it is more beneficial for business, employees, and yourself to assess the situation objectively and let them go as soon as possible. Don’t let the past color present performance. One example of a situation that unfolded was when I was an interim CEO and my CFO was a lady whom I had first hired 12 years ago. We had worked together seamlessly on big transactions: components manufacturer’s restructuring, the exit of an automotive dealership chain, merger with heavy machinery distributor. I admired her ability to recruit people, coach them and delegate, her professionalism and ethics were at the highest standards. Knowing her skills and loyalty, I left back-office operations to her and focused on the front end: supplier, regional managers, clients, within a few months I realized that (home front) was limping. I stretched myself covering more and more of her responsibilities thinking that it was a temporary glitch. It was a mistake. She just was not interested in the project and we parted exhausting each other by false expectations and demands.
· Familiarity breeds contempt, people get tired trapped in routines and they can lose the spark that made them brilliant in the first place
· Managers need to spend time, talking to, motivating, and nurturing long-term employees as well
Historical great performance is no guarantee for best performance today
What would you like to be remembered for when you retire?
I faced my first turnaround at the age of 22 when I graduated with MSc honors diploma in Biotechnology. The Soviet Union had just collapsed and all the decisions I had made regards my career 5 years up to that point had been based on a world that no longer existed. So, I learnt very early how to bid farewell to a solid plan and embrace new opportunities. The time was ripe for me and I excelled in finance and private equity. Right now, I am super excited about the tectonic shift of business to post-lean philosophy therefore, I would hope that I am remembered as a catalyst who lead by example, stimulated people and companies’ transformation and made them more entrepreneurial, fit for the future in this fast-changing World.