Managing Director (DataArt New York), DataArt
Making Decisions Isn’t Hard, Taking Action on the Decision is Hard with Alexei Miller
Making decisions isn’t always hard, but taking action on the decisions can be hard. Alexei Miller is a leader who lived that firsthand when his company’s locations were caught in the middle of international conflict. When Russia invaded Ukraine, Data Art’s “people first” philosophy was put to the test.
A decision for their Ukrainian employees felt like a betrayal of their Russian colleagues. And a decision for their Russian colleagues felt like a betrayal of their Ukrainian colleagues. Which people do you put first when global politics interrupts everything? And you have employees who need t...
Transcript (33 segments)
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Stephanie Kevans0:11
We live in a world where wars may be local but the impact is global and we very much felt it. Hey there my friend, you're listening to the Hot Mess Hotline and this is Stephanie Kevans. You are totally in the right place if you are an ambitious leader who wants to pull off a big transformational project. Today's guest is Alexei Miller, a member of a group of founders that has worked at DataArt since day one. He cares deeply about his people. Let's dig in. All right, Alexei, tell us about your hot mess, please.
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Alexei Miller2:06
On February 24th, 2022, I found myself as one of the leaders of a company that employed several thousand people in both Ukraine and Russia in addition to about 20 other countries. That morning, Russia launched a full-scale invasion of Ukraine. Bombs started to go off. This was a hot mess first and foremost for humans, for people who were in Ukraine, and secondarily for the business because our two largest locations were at war. Our clients were scared. Russia came under sanctions. So it was a human mess.
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Stephanie Kevans4:21
Oh my gosh, yes. Any time someone starts an episode with a specific date, it's usually heart-wrenching because those are days you don't ever forget. So much uncertainty and so much of it was out of your control.
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Alexei Miller4:47
Exactly. I remember that date very well. We have an Emergency Response Team channel. On the night of February 23rd, people in Ukraine started writing, 'We're hearing explosions, the war has started.' The next several days were a blur of tactical decisions. For example, we quickly decided to exit our Russia business and committed to Ukraine. We also had to decide how to support people moving to safety. Because we are a very distributed company, we trusted our regional leaders to make local decisions. That model helped a great deal. We also set financial limits for humanitarian support and empowered local leaders to spend within that. Communications were critical too.
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Stephanie Kevans6:12
Yes, so you know, just the next 24 to 48 hours, what were some of those decisions that you and your team had to make?
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Alexei Miller6:23
Before we talk about decisions, let me set some context. DataArt is a technology services business with about 400 clients. We have teams globally. When the war started, the first decisions were humanitarian: how to help people move to safety, how to support them financially and logistically. We also had to communicate with clients about whether we could continue work. The first few days were a blur of tactical decisions, and over the next few weeks patterns emerged that created bigger strategic decisions. Because we are distributed, we trusted people on the ground. That was not a decision we made during the war; it was a decision to set up the company that way. The second group of decisions was about money. We determined an umbrella amount for humanitarian support and let local leaders spend it. That sped things up dramatically. And third was communications: explaining our position to our people and to our clients was critical.
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Stephanie Kevans10:27
Amazing. So that covers money and communications. Can you tell us more about the communications aspect?
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Alexei Miller11:47
I'm happy to talk about that. Communications internally and externally were extremely important. In the first hours, we had to clearly condemn the war and take a stand. We said we were against Russia's aggression. Then, within about ten days, we decided to shut down our Russia operation, which was painful because we were there for over 20 years and employed 1,600 people. But we could no longer continue there. Explaining that decision to people in Ukraine, who demanded clarity, and to people in Russia, who asked why they had to lose their jobs, was hard. Also, explaining to clients, some of whom welcomed it and some not so much, was equally important. Making the decision was clear, but executing and explaining it was the real challenge.
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Stephanie Kevans12:05
Yes, oh my gosh, so couple of points. In disaster recovery, you learn that in the first 48 hours you can't make strategic decisions, just tactical ones. The same applies to pandemic response and war. I've learned that every disaster has patterns. That's how we could respond to COVID-19. It helps ground people. And it's interesting that you mentioned COVID-19 because it prepared you for this.
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Alexei Miller14:44
It's interesting that you mentioned COVID-19. One side effect was that it forced us to upgrade our infrastructure so anyone with a laptop could work safely from anywhere. When the war started and our six large offices in Ukraine became unsafe, many people were still able to continue working because of that infrastructure. So COVID hardened our business continuity. I'm not generally grateful for COVID, but in this sense it improved our preparedness.
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Stephanie Kevans16:03
It feels unempathetic to say that, but resilient companies are able to take amazing lessons from hard times. One of the big lessons from this was the importance of communications, both internal and external.
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Alexei Miller16:18
Yes. Communications about principles and where you stand are extremely important. When the war started, we had to clearly state our position. We condemned the war. Then we had to decide to exit Russia. That was painful, but clear. Executing that decision and explaining it to employees in Ukraine and Russia, and to clients, was hard work. Making decisions is sometimes glorified, but pulling through on those decisions is the real work.
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Stephanie Kevans21:34
So I want to ask you one more question about this hot mess. As DataArt was going through it, what did you come to see about the people-first mantra that you didn't know before February 2022?
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Alexei Miller22:17
The people-first mantra is easier said than done. It's tested when you have people from different backgrounds and with different needs. We are more clear-eyed about its limits now. Claiming people-first does not absolve you from making tough choices when the existence of the company is at risk. People-first also extends to clients and shareholders. There are no simple rules. It's a difficult conversation every single time. We have resigned to that. So far, it's holding up, but not without cracks.
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Stephanie Kevans25:44
Gotcha. All right, let's take a quick break. I want to share with you a new tool I have. I believe that meetings don't have to suck. If you want more resources for productive meetings, go to my website at stephaniekavens.com/lead-kickass-meetings. Now let's get back into that conversation.
All right, so Alexei, DataArt has committed to holding this tension. What are ways that you've seen the struggle with people-first really pay off for the company?
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Alexei Miller27:10
It would be cliché but correct to say that despite all the difficulty, it doesn't prove loyalty for everyone, but our retention rate is quite high, higher than many of our peers. It also creates commitment. When you treat people well, you can ask for more in difficult situations. It's not absolute, but it holds.
Cogs in the machine who walk in eight hours a day and hopefully they appreciate this attitude from the companies that are willing to go an extra mile when the situation demands it. That's a very practical outcome of this, but it would be wrong to say that we chose people first as it was one of our guiding principles for practical reasons. I think the founding group — I'm one of, you know, the group of founders of the company, by no means the only one — I think we all wanted to work in a company and create something that would match with us. Maybe this is one of the reasons we don't work for another firm and we chose to build this one, although this may not be the most pleasant or profitable way to spend our lives, but I think it gives us all great satisfaction of not being in constant conflict. We live in the company the way we live outside of it, and I think it's important for balance in life and for feeling at peace. So it's rewarding to know that that position, that value, was compatible with thousands of people who want to live similarly and maybe inspiring to some people who want to make a career in a place like this. Yes, and funny enough, when we started the company we didn't formulate that this is how the company will operate; it's just natural, this is what we wanted to be like. It didn't seem particularly special or unique, and it was only years later, 10, 15 years after the company was started, then we realized, oh, this is actually different. Companies generally, and companies in our sector in particular, are usually organized differently. They usually operate based on a different set of principles, and you know some of them are very successful, highly profitable, and maybe some of their operations we could copy, but we don't because that's a different foundation. So this is a little bit of a post-factum rationalization, but this being in peace with how the company operates is extremely important and I think makes it sustainable for the future. It's less dependent on individual managers, it's less cynical in its decision-making. Yeah, sometimes it's more efficient, sometimes it's less efficient than the others, but it's certainly more sustainable and I think that's important for us.
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Stephanie Kevans31:12
Oh my gosh, absolutely. And to think about the possibilities because of the decisions that you made in 2020 and 2022 that DataArt can exist in 2082 and 2092. Like that to me sounds how powerful, edifying. You know, that's part of you and your other founders' legacies. You know, that means something to the world and to the families that will be employed and served by you between now and then.
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Alexei Miller31:40
Well, it's funny you say it like this. We used to joke, and it was always only part joke, one of my partners, Mikhail, who lives in London now, used to say that we're not in a rush. You know, I've done the math and at the current rate of growth we will be the largest company in the world in about 250 years. Yeah, yeah, we won't see it, but we all have children and grandchildren and someone will see it, and that's okay. You know, why rush? The knowledge of it all should give us some reassurance. And I think, well, of course it was mostly joke. This not being in the rush is sometimes a necessary component in business. It's too much sometimes about making the new milestone, making money this year, extracting profit this year. Often times it comes at the expense of long-term sustainability. We're a for-profit corporation, of course we want to make money, of course we want to grow today and tomorrow and the day after tomorrow, but it's very important to balance it out. Making extracting extra two percentage points in margin this year may have real world implications five years down the road, and always keeping both sides in mind is absolutely critical. And you know, funny enough, people first helps us, you know, because the choice: do you want to make money today or five years from now? It's a mechanical choice. How do you make it? You know, pocketbook is not always the easiest decision-making guide, but what's better for the people — you as a people, your employees as a people, your client as a people — actually helps you make that choice.
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Stephanie Kevans33:27
Absolutely well, and I want to connect that to something earlier you said because, you know, as part of your helping folks in Ukraine, they got cash stipends to do what they needed to do with their life at that time. And no company has an endless supply of cash, and cash is the thing that keeps us open because we can make payroll not only two weeks from now, two months from now, two years from now, right? And companies just can't borrow cash to support things like this because it costs the company its livelihood in a matter of months and years, right? What do you wish people knew that aren't yet in the C-suite about these types of decisions where you would love to be able to help but you don't have the endless cash to help in the way that you would love to as a human being? Like there's a tension there that you always have to balance. What does it feel like to be in that tension?
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Alexei Miller34:25
As I mentioned before, we were fortunate to be in a fairly strong financial position. We were always very conservatively managed, we were always consistently profitable, and we had the backing of our private equity investors, FTV Capital and others, and I'm very grateful to them. They behaved extremely honorably and were super supportive throughout. So we were lucky because we did have cash — not an endless amount of cash, no one does, right? — but enough to follow through on some of those decisions on support and client commitments, backfilling our own investments, infrastructure rebuild, and so it was a multi-million dollar effort. Of course, you're right to point out this tension that you don't have an endless amount of cash, so everything everyone wants will not be able to fulfill. A couple things come to mind. First, I think as leaders of the company, you want to not just show but actually be in the same boat. You don't want to be excessive with your spending, you don't want to be excessive with your compensation during those difficult times. When the situation returns to normal, you can get things back to normal. The line between normal operations and abuse is not always financial abuse, not always visible, so we always wanted to be very careful by behaving and being true to our word about implementing and subjecting ourselves to austerity measures when and if they are required. So for example, obviously this war happened late February 2022, so one of the first decisions was — typically in corporations, management gets bonuses based on last year's results, and it just happened to be that time frame. So of course all of that was suspended. We got back to those payments many months later when the situation stabilized somewhat, but of course even though results of last year were sort of done and dusted, none of those payments were being made. We also made a choice to be very clear with our people about financial limits. So whatever overall financial commitments we made, we said this is the money, this is what it means on an individual level, on a regional level, so everyone knew that this is not some kind guy or gal sitting in the office and issuing money; this is the overall commitment that the board has authorized and we're operating within that commitment. We're clear about the actual amounts. The people understand the economic reality they're working with, so you don't have to say simple things like the company doesn't have an endless amount of money — people get that, people are intelligent and educated, and that much is obvious — but you have to translate what it means for them. So sometimes you just have to speak a different language, translated to the words that strike close to home. For example, I've been in the leadership group of the company for many years, but I'm not a finance professional, so it's still difficult for me to read a balance sheet. And when our financial department starts to speak in terms that are clear for them, it's not easy for me. Similarly, when I'm discussing with our teams these overall financial commitments, I have to translate what it means for them, what it means for the margin of the company. If our margin falls below a certain threshold or indeed becomes negative, what kind of decisions it triggers for them, even though we may have financial reserves and so on. And that technique of speaking the language of your audience — I mean, it's obvious, you have those situations every day, but it's particularly prominent when it comes to money because money is a dry subject. Money is, you know, in society we no longer use bags of cash; money is lines in Excel somewhere or numbers in accounting software. So one of the techniques that I and many others had to learn is explaining what money means for an individual client, an individual person, and groups of people. And it continues to be not an easy subject; I continue to learn that.
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Stephanie Kevans36:06
Oh, I love that. So what does money mean, Alexei, in our business?
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Alexei Miller36:12
There are about 400 projects going on at any point in time, and for each client we have certain obligations to deliver. The client pays us, and we have a fairly sophisticated mechanism of calculating economics of each individual client relationship: what we're spending, what we're earning, what's the margin profile, how it's changing over time, and so on. So over time we worked out a way to explain to our teams and to our clients that certain economic profiles of the client relationship make sense, some don't. So we are being very clear with people about how we attribute certain expenses to an individual client account, how the gross margin — what we call contribution margin — is calculated, and so on. So for example, when I take a business trip to see a client, that money — my plane ticket and my car rental and whatnot — is being attributed to that client account in a certain way. And each employee salary is attributable to a client account. So we were able over time to translate this dry subject of money into human-understandable statements about account economics. In addition to that, the company has certain reserves, and those reserves are spent on various programs, sometimes just to keep the lights on, to sustain operations, sometimes those are investments, and so on. So once you put it in those different categories — this is account money, this is business operations money, these are reserves for business continuity, those are investments we're making — and so on, for the different buckets of money, and these buckets touch you as an employee in this function, this money doesn't touch you because you have nothing to do with those accounts. So we're trying to bring it to specific categories, explain the limits on each bucket, and the impact on an individual project or a function, and so on. They're also, without getting too technical, compensation mechanisms. People want to make more money, and sometimes they need to understand that from their work and their team there are certain financial inflows that either allow us or do not allow us to pay them more in whatever form. Being honest about those mechanisms helps those conversations. All of it, I think, goes back in some ways to the people-first principle, because one of the first components of the people-first principle is being open and honest with your people about what's going on, including with money. So that helps a lot. All of this predates the war, but it helped us build this employee loyalty and being transparent about the financial impact of the decisions we made in the aftermath of the war, because we had this foundation of breaking down money into human language already in place.
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Stephanie Kevans42:27
Yes, yeah. That type of transparency builds trust and helps people understand the limits. That's one of the things that's striking me about this conversation is a lot of good leaders explain what's possible, which we need, and I think great leaders can also explain the limits of what's not possible or what resources don't exist or what decisions aren't on the table, because that creates a better context for people to do their work in.
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Alexei Miller42:55
Yeah, and sometimes it's not so easy to strike the balance between excessive information. Some people will say, 'I do this job, I only care about this, why are you telling me how the company works financially and what are all the other investments you're making?' And yeah, sometimes it's TMI, too much information for people. But that's the choice we make. We make much of that information available for those who are willing to listen. If you don't want to listen, of course we can't force you, but it helps. There are limits, of course, not all financial laundry should be available to everyone, so of course we have to draw the line somewhere, but by and large we try to err on the side of more transparency.
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Stephanie Kevans43:46
All right, one last question and I'll let you get back to changing your part of the world here. You know, I think about you and your fellow leadership team and the local folks on the ground in Russia and Ukraine in February of 2022. God forbid something like this ever happens in another part of the world, right? Like we're going to have other parts of your company that are mostly unaffected, right? And Americans, we live in a very privileged world because we are rarely physically attacked. Well, we've only been one time physically attacked that we know of from a foreign terrorist or foreign entity, right? But what do you wish that your employees who are sitting in a geographic area — you know, they read about it and hopefully their hearts go out to people, but really their lives are fairly unimpacted, right? — what do you wish that they knew about what it means to be in your seat during times like these in a way that they can contribute to the company?
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Alexei Miller44:43
You know, it's interesting because I want to start my comment by saying that there's no such place and no such individual who is largely unaffected, even in our company. You know, it would be a huge mistake of me not to acknowledge what people who were not in Russia and Ukraine did to help people and the company survive and ultimately prosper. I'll give you a few examples. Obviously Poland is just across the border from Ukraine, and our folks in Poland — we had sizable operations in the country — did an enormous amount of work: people accepting people from Ukraine, supporting them, taking over some of the infrastructure, supplying humanitarian goods across the border in the opposite direction. It was — I mean, hundreds of people left Ukraine, needed to be somewhere, and they by and large were in Poland, and the way our people and the broader Polish population received them, it's nothing short of admirable. So Poland was hugely affected. Another example: Armenia. Armenia was one of the places that Russian citizens could arrive and not have problems with visas and finding local employment, and so on. And when we decided that our business in Russia would have to end, about half of the people previously employed there decided to move and stay with the company in different directions, and the lion's share of those people ended up in Armenia and a few other countries. And Armenia in particular had to do an enormous amount of work to receive them, help them settle, find housing, register for employment, change their payroll, acclimate to local cultural ways of living. Hundreds and hundreds of people were received, and the hospitality and generosity that people in Armenia and other countries like Kazakhstan, eventually Bulgaria, Germany, Romania, Cyprus, all the countries where we had operations — Georgia — that's been enormous. And even places further away, folks in Argentina and other countries in Latin America that were very far geographically from the war, they had to put in an extra shift because folks in Ukraine could not work for a while. 'We'll help out, how can we help?' So amazing. We live in a world where wars may be local, but the impact is global, and we very much felt it. And so there was no such place or person in the company that was unaffected, and I'm genuinely and honestly really grateful for everyone, whether they are in Ukraine or very far from Ukraine. And so going back to your question, certainly hope that nothing like this will ever happen again, but thinking about it makes me hope that multinational corporations — we're not a giant company, we're a large company but not a giant giant company — but in some ways they have an important social function. They provide this connectivity between countries that surpasses national borders, and they build teams and loyalty and friendly relations between peoples, sometimes maybe more effectively than all the government efforts and cultural exchanges and so forth, by giving teams joint projects to work on, some shared mindset, forcing them to accept each other's cultural differences. And so I think that the capitalist system and the open borders, the open economy, that does have its issues and does seem unfair at times, does a whole lot of good in terms of building these cross-cultural, cross-regional, cross-country relationships, which makes the whole system a lot more resilient. And I think even though we were heavily impacted by the war, we survived and sustained and now we're growing again. I think our contribution to the world, if you will, is making the whole system more resilient because of this shared mindset between the people. At the risk of being too exultant about it, I really think that's an important takeaway from this whole thing.
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Stephanie Kevans49:15
Oh my gosh, that's beautiful. And you know, as you described that, I was realizing, man, did I ask that question from a very American perspective, because I do feel like Americans — I agree with you, we're all connected in all the ways that you know spiritually, economically, business-wise, service-wise, we're connected in all the ways around the globe. I feel like Americans, we feel like we're safe and largely unaffected from a lot of that because we're — I don't know what word I want to use — isolated, protected in a lot of ways that other countries are not. And I think it's easier for Americans to kind of sit here and say — I'm not trying to do political commentary — but we sit here and we can say with a high degree of certainty that we probably won't be bombed in the middle of America here in Indiana where I'm at, and we have a sense of safety that I think allows us to disconnect in a way that is not helpful.
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Alexei Miller50:18
Well, I guess geographically and politically that is true, but I do want to mention the very human reactions that many of our clients here in the States and partners expressed, and they were very generous. I had dozens of messages from clients and suppliers to us here in the States who said, 'Well, if you have folks moving in from Europe, they can stay at my house,' literally, no reason to do that, coming out of the blue, very generous. I've had clients who in other circumstances would be sort of hardcore cynical, very money-driven American corporations send me messages saying, 'This month, I know your teams couldn't work, we'll still pay.' Wow. We never asked them for it, we gratefully received it, but they had no business reason to do that. So amazing. You know, despite this sense of protection from physical danger that I think many folks in America have, the human spirit very much lives on, and I'm very grateful to our clients and partners here in this country for that.
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Stephanie Kevans51:30
Oh, so so — oh, I'd love to hear that. That's fabulous. My gosh, well, thank you so much for this amazing conversation. Today I not only learned a lot, but I was just so inspired by what is possible through businesses and leaders like you. So thank you so much.
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Alexei Miller51:45
Thank you so much, Stephanie, my friend.
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Stephanie Kevans51:51
I don't know about you, but I had immense joy listening to Alexei's empathy and thought process of how to work through something really tough with his entire company. And clearly what they were able to accomplish from the impacts of the war in Ukraine, those foundations were being built years and decades before they got to the war. And that's what I hope that you'll begin to take away from what you're learning on this podcast too: that the foundations that you build through a strong culture, regardless of what your values are, when you use those values consistently, when things get really tough, people will band together and step up and serve the company and serve each other because of the strength of the culture. And so I challenge each of you listening in to find ways to strengthen your culture using your values from wherever you are today, so that when the next crisis hits — because it's not a matter of if, it's a matter of when — your culture is stronger and more ready and more resilient because of that. And I just want to share with you quickly my top takeaways, and I'd love to hear yours wherever you're listening in from. Alexei's leadership: we talked so much about the tension of making decisions from the perspective of people first. Prior to the war in Ukraine, people first seemed really straightforward, right? We choose our humans first, and sometimes humans might be our employees over our clients, but we choose our people first. And the war really battle-tested that, and they came to learn — and I hope you heard this through the conversation — that one, people first does not equal loyalty at all costs, right? Those are two different things. But then the second is, when you have a really strongly held value, there will always be tension in that value that forces you to make tough decisions. That is true for any strongly held value. So I think sometimes we think, 'Oh, we have our value, so answers will become crystal clear if we use that value or set of criteria to make decisions.' No, the tension never goes away, but it does give you a place of confidence and integrity from which you can make decisions, and your team can make decisions. So that's part of what helps us as leaders sleep at night: that sense of integrity. But we also have to acknowledge that while we'll have integrity, we'll still have tension whenever we make the hard decisions. And with the hard decisions, as Alexei said, we can overestimate the ease of decision-making. We think, 'Oh, we made the decision.' No, it's about executing the decision. The hard part is executing the decision. That's where a second act of bravery has to kick in: when we go to make good on that decision, you have to again be in integrity with yourself and your values to hold through and push through on that action taking for the decision. That's really the part that takes tenacity and resilience. The third thing that I'll leave you with from this conversation that stuck with me, and I hope sticks with you as well, is we don't always have to be in such a rush. Sometimes having an eye on the long game, sometimes taking a deep breath and thinking about how will this pay off in a year, in five years, in ten years, or as Martha Beck's decision-making criteria is: how will this matter in ten minutes, ten days, ten months, or ten years? Looking through those longer time frames sometimes can help us make better decisions, again more aligned with our values, that would be great, more aligned with sustainability, that would be awesome. But this fast, frantic pace that we often get ourselves wrapped up into in our American work culture is not sustainable. It comes with huge costs: energy, mental wellness, cash, sometimes poor decision-making. So I just invite you today, if you haven't already, take a really deep breath and make some decisions that have an eye on the long game, the end game, not just what's most important or the fire that needs to be put out right now. All right, my friend, wherever you're listening in, thank you for being here. And if you got value from this episode, if you would share it with another pro troublemaker, I would be unbelievably grateful. I'll see you soon.