Much of the success of Severstal, Russia’s biggest steelmaker and said to be one of Russia’s best-run businesses, can be attributed to its links with Newcastle Business School.
Severstal’s chairman and majority shareholder is Alexei Mordashov, reputedly Russia’s seventh-richest man. He holds an MBA degree from the school, part of Northumbria University, where he took a correspondence course in the late 1990’s.
He first visited Newcastle shortly after being promoted from financial director to chairman of Severstal in 1996.
Many of the ideas for how Severstal could be transformed are explored in a dissertation, Leading Strategic Change, written during his stint at Newcastle.
Part of the $1bn raised last month in a listing on the London stock exchange will be invested in acquisitions.
The London float reduced Mr Mordashov’s interest in Severstal to 70 per cent, a high concentration of control at the top even by Russian corporate standards.
He is said to have been obsessed with introducing modern management methods to Severstal since studying at Newcastle business school, to where 25 managers are sent every year.
Paul Croney, the dean of Newcastle business school, says: “All the top Severstal managers have come to Newcastle. During the past seven years, we have watched these executives climb a steep corporate learning curve and put their education into practice with highly successful results.”
Severstal accounts for about £500,000 of Newcastle business school’s £21m annual revenues. Newcastle business school helped Severstal set up its own corporate university in Cherepovets five years ago, the first of its kind in Russia.
Dmitri Afanasyev, the dean of Severstal’s corporate university, says: “It was a logical step. We were on the threshold of globalisation. We needed to take steps to learn the language of international business and to know and understand western practice and management.”
Newcastle tailors courses to fit Severstal’s fast-evolving needs. Before entering, all students must prove a high level of proficiency in English.
Mr Afanasyev, an early Severstal graduate from Newcastle, says the business school taught him how to succeed in the fast-moving capitalist business environment.
He says: “I gained – firstly – an understanding that change is eternal, so we have to be on the look-out for opportunities every hour of every day, and – second – that we have to manage diversity, harnessing differing opinions, visions and approaches.”
British business education is described by Mr Afanasyev as “high quality, flexible and customer-oriented”. Russian business education tends to be academic, but courses at Newcastle are practical and outward-looking.
Severstal managers are taken on visits to the nearby Nissan car factory, one of Europe’s most efficient.
Interest has focused on corporate governance since Severstal’s abortive bid for Arcelor fell apart amid international concern about the Russian company’s corporate governance.
The London listing forced managers to learn about transparency and open accounting.
Mr Croney says managers with a western business education, fluent in English and with experience of working in Russia are “like gold dust”, and particularly sought-after by international companies operating in Russia.
Now, a key challenge is to prevent high-performance managers being tempted by rival companies.
How times have changed.