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It has been a heady few years for Rosneft, Russia’s state-run company that became the country’s largest oil group a little more than two years ago.
Now the company has launched an executive MBA programme with the St Petersburg State University Graduate School of Management to ensure that its top officials not only catch up with its new-found growth but are able to lead it into the future.
Twenty-seven of the company’s managers were chosen for the two-year programme, which combines 12 modules and distance learning. The EMBA began in April with a module devoted to economics for managers. The second module, held last month, focused on strategic and resource management.
“Highly professional, versatile, prepared personnel aren’t just a certainty for the future but are, above all, the foundation for fulfilling the new strategic tasks that the company puts before itself,” says Sergei Karaganov, Rosneft vice-president.
In 2007, Rosneft achieved its goal of becoming the country’s largest oil company after buying up the assets of Yukos, the oil group bankrupted after the fall from grace of Mikhail Khodorkovsky, its former chief executive. The bankruptcy auctions meant that Rosneft grew at breakneck speed, going from Russia’s eighth-largest oil company to its biggest in a matter of months. In the midst of that growth, it listed in London in one of the world’s largest initial public offerings to date.
Now Rosneft’s managers have to adjust to its size and mission of leading the Russian oil industry into the future. Added to this is the fact that the majority of Rosneft’s 167,000 employees, including its managers, have an educational background in technical studies such as engineering – a legacy from the Soviet days.
Andrei Votinov has worked at Rosneft for 17 years and is now general director of Tuapsenefteprodukt, a Rosneft subsidiary that runs a large oil export terminal in southern Russia. He finished at a military academy and graduated from a state-run oil and petroleum university and has the Russian equivalent of a PhD in science. The EMBA, he says, will help him acquire the managerial skills he needs to better head a team of his own and to systemise the knowledge he has already acquired.
“It’s interesting also to see how the experience of global companies can help our abilities,” he says. “Rosneft has ambitious plans. Lately, there is an understanding that it is the people and people’s understanding of how to move further that will fulfil the goals of the company. It is a means of explaining company strategy.”
Mr Votinov, like many of his colleagues, devotes a minimum of 1½ hours a day to course homework. A website allows students to ask questions of professors.
GSOM, one of Russia’s premier business schools, has customised the programme to suit Rosneft’s needs – a Russian company that is seeking better global integration.
Of the 12 modules, two will take place overseas – one at Duke’s Fuqua School of Business and one at the Norwegian School of Management. Fuqua is one of the international schools with which GSOM has a partnership and the two offer a variety of short management development programmes. The Norwegian School of Management was chosen because of its long experience with the oil sector, says Olga Udovichenko, director of GSOM’s EMBA.
“The idea is to give students best practices. We understand we’re dealing with a Russian company, with a set of challenges that are typical for a Russian company. But we understand that they need to be global. The idea is to give them global vision, global expertise, global best practices.”
The programme focuses mainly on building corporate leadership through modules that allow students to build skills in resource, strategic and operational management, financial analysis, marketing and sales. It draws on GSOM’s pool of 65 full-time professors.
The modules are held about once every six weeks, with managers coming from more than a dozen regions in Russia to convene at GSOM’s campus, a grand pre-revolutionary building in central St Petersburg.
Rosneft chose the 27 students – all male – from a larger applicant pool. Applicants were required to have been in a managerial position for at least three years, have a university degree and be aged under 40.
One of the participants, Andrei Zhestkov, 37, has been working at Rosneft since he was 21 and manages Tambovnefteprodukt, a former Yukos asset 480km south of Moscow.
“Among the students, there is a large range of responsibilities and locations, from Irkutsk to Moscow, from Murmansk to Tuapse,” he says.
“I hope what we learn isn’t only applied where we work but in the main office,” he adds. “I’d like to take part in projects, apply the new technologies that we study.”
Rosneft is a behemoth of a company used to top-down leadership in the Soviet tradition. Yet Mr Karaganov insists the MBA programme signals a shift in management style, putting more faith in managers across the board.
The GSOM programme is not the first time Rosneft has organised an EMBA for its managers. Since 2005, it has enrolled students in an MBA offered by the International Institute for Energy Policy and Diplomacy at the prestigious Moscow State Institute of International Relations, in partnership with Norway’s Bodo Graduate School of Business. Two groups, comprising a total of 40 Rosneft managers, have already completed the course and a further 23 are enrolled.
The St Petersburg programme was attractive to Rosneft because it complies with international, as well as Russian, MBA standards, says Mr Karaganov, and the coursework offered to its managers best suits the company’s strategic goals. GSOM has tailored coursework to apply to practical problems faced by Rosneft.
“Such an approach allows us to successfully combine all the necessary elements of classical business education . . . with practical skills in managing major oil and gas sector projects,” adds Mr Karaganov.
Sergei Bogdanchikov, Rosneft’s long-standing chief executive officer, sits on GSOM’s advisory board.
The project is a coup for GSOM, one of Russia’s premier business schools. Its presence has recently been overshadowed by newcomer Skolkovo, the private business school in Moscow that began aggressively marketing MBAs in 2006.
Skolkovo, located in the heart of the newly formed high-technology hub that has been dubbed Russia’s answer to Silicon Valley, launched its full-time MBA at the end of last year, while its 18-month executive MBA programme has been running since the school’s founding. It maintains links with MIT’s Sloan School of Business and a host of schools in emerging markets, such as India and China.
GSOM has a more established pedigree. St Petersburg State University first agreed to create a school of management in 1992.
GSOM believes that the fact the Rosneft course is taught in Russian, by professors well acquainted with the peculiarities of working in Russia, worked to its advantage, says Ms Udovichenko. GSOM had already organised several executive education programmes for Rosneft before taking on the full MBA.
“The top management is fixedly following the career development of each participant and graduate of the corporate MBA programme, placing on them a bigger hope as future agents of strategic change inside the company,” adds Mr Karaganov.