Professor Krzysztof Obłój, the Faculty of Management at the University of Warsaw and the Kozminski University: I wrote a book about that entitled “Passion and Discipline of Strategy ” which was published a month ago by Poltex (in Polish). I presented this subject based on the research on Polish entrepreneurs, which I began in 1990. Passion and discipline are extremely important for an enterprise.

Dreams are necessary so that a company can be more optimistic, reach into the future and attempt at a bit unreal leap forward. It is important to remember that such a leap always involves risk and some of these companies disappear on the way. I believe it is as Oscar Wilde once wrote: the people who are lying in the gutter can be divided into two categories: those who dream about turning their face up to catch a breath and those who dream about reaching the stars. Such is the logic in a company. There are companies which dream about a gulp of fresh air in the following year, about a 3% growth or introduction of a new product. They want to live their life without any great ecstasies or emotions, but also without any tensions and stress. There are also companies which treat themselves to such tensions and then pay for them with a heart attack or a disaster. Such companies leap high from time to time.

Izabela Blimel, Warsaw Business Guide: Looking from the perspective of your knowledge and experience, does the success of Polish entrepreneurs refer to the American dream in any way?

Professor Krzysztof Obłój, the Faculty of Management at the University of Warsaw and the Kozminski University: I wrote a book about that entitled “Passion and Discipline of Strategy ” which was published a month ago by Poltex (in Polish). I presented this subject based on the research on Polish entrepreneurs, which I began in 1990. Passion and discipline are extremely important for an enterprise. Dreams are necessary so that a company can be more optimistic, reach into the future and attempt at a bit unreal leap forward. It is important to remember that such a leap always involves risk and some of these companies disappear on the way. I believe it is as Oscar Wilde once wrote: the people who are lying in the gutter can be divided into two categories: those who dream about turning their face up to catch a breath and those who dream about reaching the stars. Such is the logic in a company. There are companies which dream about a gulp of fresh air in the following year, about a 3% growth or introduction of a new product. They want to live their life without any great ecstasies or emotions, but also without any tensions and stress. There are also companies which treat themselves to such tensions and then pay for them with a heart attack or a disaster. Such companies leap high from time to time.However, discipline is necessary for such a leap to be effective – iron business discipline, which supports dreams. Passion is the source of innovations and changes. It makes us reach into the future, set ambitious goals, cross the obvious limits and break the established patterns. Passion builds motivation and involvement, which give sense to the existence of a company and provide managers and employees with an opportunity of real involvement and a little bit of common joy. Only a combination of passion and discipline creates real winning strategies. These are two sides of the same coin. The coin is called success. You have to reach really far to be successful and do it in a disciplined manner because only those who are well prepared are fortunate.

I.B.: Are luck and coincidence the success conditioning factors which are most crucial as regards the issue of success? I mean Bill Gates, who was accidentally fortunate as regards the access to one of the first computers when no one else in the world had even seen them. From the perspective of your knowledge and experience, what leads people to success?

K.O.: I will refer here to a discussion which has been going on for many years on the subject: how do entrepreneurs make use of the opportunities? Are opportunities like old suitcases standing on a platform when a passerby says: ’Oh, a suitcase!’ and takes it? Or are opportunities like suitcase which do not exist, but somebody has seen them because they have just imagined them? This discussion is insoluble although it has been held in a very scientific manner and regards the problem of whether opportunities are created by entrepreneurs or perceived by them. Probably, as it usually happens, there is a little bit of both points of view involved in the problem. The most important thing is that the market is indifferent. It is not interested in success or failure. It is not interested in anything. That is why the market neither helps nor disturbs anybody. It is like a river which keeps flowing and, from time to time, somebody happens not exactly to be lucky enough, but to be in the right place of the river at the right moment. They make a great intellectual and often financial investment in this very risky moment. The truth is that others also see the moment, see the opportunity, but they either see it in a different way or are not ready to invest in it. They see a suitcase phantom on a platform and think whether the suitcase is really there or not. Somebody says: ’There’s a suitcase.’ and jumps to take it. And then, if the suitcase is not there, the person who jumped usually dies. Sometimes the suitcase is there and then people say: ’He was lucky.’ This is not like that, however. Those who drowned were not lucky, while he saw something and was the only one to decide to jump and take it. Bill Gates and Steve Jobs are visionaries who have made irreversible decisions based on very limited amount of information. These decisions were profitable. Some Polish entrepreneurs have done exactly the same in such corporations as Atlas, Toruńskie Zakłady Materiałów Opatrunkowych, Koral, Vigo System or Nowy Styl. You need passion and discipline. Passion is enough to start and discipline is necessary to grow. When you have grown, you need passion again. This is what many Polish entrepreneurs now lack, but what they used to have back in the 1990s. They were really hungry for success. They took risk, pushed forward and built companies. Today they are naturally rich and the risk they take is much less frequent because they risk much more. What we know in theory is discovered by practitioners like by small children – the phenomenon of losing momentum. The whole problem is how to start a new life. Usually, for an organisation, this is a new owner or a new management board or a visionary or somebody who sustains the passion.

I.B.: What is in the space between the strategy of an enterprise and its success?

K.O.: Are you asking what strategy is really like? From the scientific point of view, strategy is the theory of company effectiveness. It is a difficult technical discipline which tells us how to analyse the environment, how to diagnose the organisation, how to formulate long-term goals and how to build a business model which allows us to meet these goals in a certain environment. This is the definition of the enterprise strategy in short. It has never been a simple discipline and, in addition, in the current market reality, it has become even more complicated. Strategy, not on the theoretical, but practical level, is an attempt at an intelligent reaction to phenomena occurring in the environment in such a way that allows for gaining an advantage over the competitors to be faster, better, cheaper, more beautiful and more sophisticated than them. Between success and strategy, which might be treated like a set of choices, there is one nice enemy – it is a shark called risk. The higher strategic aims we set, the greater our dreams are, which corresponds to the fact that the more ambitious our strategic aims, the more our enemy becomes a man-eater. This means that every great aim is followed by a great risk. It is worth remembering. This is not an empty space and it is not that the strongest ones are the winners or the lucky ones are successful. The ones who are really successful are those who managed to minimize the risk or skip the potential problems on the way. The risks are the result of several things. One of them is uncertainty of the future environment as there might be some technological changes or we may underestimate the organizational problems. This uncertainty is omnipresent. Secondly, there is uncertainty as to what will happen in the environment, what the government will do, how the social trends will change or how people will react to demographic phenomena. A strategy is irreversible if you have already made certain choices. I call it the funnel situation after Stanisław Lem– it is easy to enter, but difficult to exit. A strategy is like “entering” into a funnel. The risk you take while entering is huge and involves the costs connected to the fact that some investments or projects are irreversible. I mean here a situation like for example when a manager decided to double the factory productive power or lengthened the chain of values by adding a paint shop, an assembly shop or a yeast shop or internationalised his activity and it turned out to be ineffective. The manager is left with the losses. This is the charm of a strategy. A strategy is like a drawbridge to the future. The thing is that the future is uncertain and you do not know whether the bridge on the other side stands on a hard pillar or hangs in an absolute vacuum.
When we talk about a strategy there is another issue. It is not obvious at all how to measure the strategic success. Most often, we measure success through the speed of company’s development. The company’s growth is, first of all, connected with its share in the market and then there are financial indexes, profits, cash flow, goodwill, etc. Furthermore, there is its innovative character, satisfaction of the employees and clients. If a company achieves very good results in all these areas, from the technical point of view, it is a winner as regards the strategy. At the end of the day, strategic management is only interested in winners. Losers are interesting for us only in the context of a better understanding of the winners’ logic of acting.

I.B.: What are your reflections on the subject: business is a human thing?

K.O.: People have always been the source of company’s success and failure. On the one hand, it is not people that manufacture machines or products, but a company and it is worth remembering this. In this context, the idea of a company is something more than people. On the other hand, there is no better company than people who manage it and work for it. This is the nature of the existence and, in this respect, a company is a very human thing. For this reason, good companies invest in their people and choose their employees carefully. Consulting agencies know best that the choice of people for a company is a very important thing. They also know that thorough training of people, their observation, motivation and evaluation are the key to success. Such knowledge is also in possession of large international companies, which implement their high potentials and high professionals programmes acting in accordance with specific systems for “fishing” people, motivating them, training them and transferring various types of techniques as well as improving them. Small and medium size companies, on the other hand, still lack in knowledge and money to create such a concept. Very often there is not enough knowledge on how important this factor is. I mean people as a certain set of competences and motivations.

I.B.: What is the situation in Polish enterprises as regards knowledge and competence? What, in your opinion, is the awareness of Polish managers about the problem?

K.O.: It is the same all over the world. Small companies are managed by entrepreneurs. It is the same in Poland and in China. The only difference is the amount of the company’s turnover. In China, turnover of a small company is about 30 – 40 million dollars, while in Poland a company with 100 million zloty turnover belongs to large companies. Furthermore, in China, organizations employing about 100 people are managed by one person. There is no human resources management, no knowledge, competence, resources or motivation to invest in people. It is like that everywhere. These factors, however, are present in large companies which have knowledge on investments in people.

I.B.: Jack Welch points to winning as the main social responsibility in business. How will you comment on the responsibility of Polish entrepreneurs perceived in this way? Why is winning everything and losing nothing?

K.O.: Winning can have different meanings. Spartacus won many times to die in the end. But he remains a symbol of strategic thinking and persistence – so did he win of loose? Farmers did not fight wars through the history but usually were the greatest winners because when a war was over, the land fertilised with blood started to yield the best crops. There are a lot of battles in business and you have to win – to create markets, to create new products, build market share and make money. In short – winning means value creation. Therefore, it is the responsibility of the leaders to build and implement a strategy which allows for achieving the best results in this regard. The second responsibility is that the company should last in time and the managers should not take any risk which could cause a disaster and catastrophe. The middle of this path, in my opinion, is somewhere between a dream about winning and an obligation to provide the continuity of a company. Real leaders walking the path, who change their roles between being a warrior and a farmer, do one and the other. This is the essence of effective business. Jack Welch was tipped in favour of winning, but had a certain luxury while managing General Electric, which has existed since the moment it was founded by Edison and is too large to collapse. Therefore, Welch had a lot of space for risk and sometimes made mistakes. This occasionally upset the company’s financial result, but not its fate. Large companies always have the optics of being number 1 because they hardly ever face the danger of a collapse, which is quite a normal thing for smaller companies. So winning for large and small firms does not have to have the same meaning.

I.B.: Thank you for the interview.