How Russian tycoon became a game changer in business and sport

Dean’s column: Konstantin Krotov of St Petersburg GSOM on Magnit’s Sergey Galitskiy

Against a background of modern Moscow through the windows of the Federation Tower, the tallest skyscraper in Europe, stood a tall man with enigmatic eyes and a sincere smile. He was in the midst of 100 of Russia’s most influential individuals — business owners, top managers, politicians and media people. While he was part of the crowd, he stood there friendly but somehow different to the others.

I met Sergey Galitskiy at the reception hosted by Andrey Kostin, president of VTB, the Russian bank, and director-general of St Petersburg University’s Graduate School of Management, where I am dean. I was lucky enough to be drawn into a conversation with Galitskiy that gave me belief in a simple maxim: everyone should be given a chance to become great and change the world.

What took me by surprise was that during our three-hour conversation he said little about his core business, even though it definitely merited attention. One of the most esteemed businessmen in Russia, Galitskiy created Magnit, the country’s largest retail chain, with a philosophy that the regions, rather than Moscow or St Petersburg, which dominate Russian business, should be the starting point and remain the prime focus. He founded Magnit in the southern city of Krasnodar and it has grown largely in provincial centres — an unusual but successful approach. The chain now has more than 13,000 stores in 2,400 towns and cities across Russia.

Galitskiy’s success story first caught my attention 10 years ago. I started my career at a Russian aluminium company, managing marketing and sales of household aluminium foil in the north-west of the country.

Magnit, our biggest customer, had just had its initial public offering. Later, when I had switched to an academic career at St Petersburg GSOM, I used Magnit as a case study in my classes on supply chain management. Magnit was a great example of Russian business that could be compared to the world-renowned US retailer Walmart and Barilla, the food multinational.

The topic of our first conversation, however, was not retailing but football. I was not a football fan but my attitude to the game changed dramatically after our discussion. I learnt how Galitskiy had taken on the challenge of developing a football club, FC Krasnodar, not only by engaging with local business but also by changing the whole football system.

Football is the most popular sport in Russia. At the same time, it has become a national tragedy. The Soviet Union enjoyed its greatest success at the Uefa European Nations’ Cup in 1960, which it won, but since then the national team has had some extremely poor results — and very few good ones. However, 1960 remains still so strong in the Russian memory that it is mentioned by the media during each big competition.

The Russian Premier League is one of these. Its popularity has lured large Russian and international companies to fund the leading teams. Their sponsorship of star players and experienced coaches has led to some outstanding results in the recent past.

Krasnodar, though, the youngest senior football club in Russia, has rewritten the rules. Galitskiy founded the club in 2008, investing his time and money and achieving the seemingly impossible by using his talent as an entrepreneur.

His ultimate goal, however, was not just to have a football team. He also had an ambitious plan to improve football in Russia by changing the whole approach to the game. He established an academy at Krasnodar for boys who dream about football as he did when he was a child. The academy has become a community of hundreds of prospective footballers aged 12 to 17, training and studying all week. The idea at its core is a devotion to football, the club and the city, creating a foundation for future success. Graduates of the academy have already surpassed expectations, playing in the Russian Premier League and in Europe.

The club’s newly finished stadium has been another ambitious project. Galitskiy funded the construction of the 34,000-capacity arena, which has been built not for profit but for the dream of giving everyone a chance and leaving a mark on history.

These achievements, which Galitskiy revealed entirely without vanity during our conversation, were rooted in one big common idea: keep investing in the future and it will pay you back, both monetarily and morally. He is passionate about his city, his business, his football, his happiness and will do all it takes to move mountains while giving others the chance to live by the same conviction.

A man of change is not generally recognised as a hero. The changes Galitskiy brings about are not seen as heroic. They are the result of a thousand simple steps taken by someone who keeps going with the future in mind.

Konstantin Krotov is head of the Graduate School of Management at St Petersburg University

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