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Vladimir Potanin: entrepreneur, like a surgeon, should be able to inflict pain

The president of Norilsk Nickel in the TASS special project Top Officials
Andrey Vandenko 
Andrey Vandenko

Andrey Vandenko was born on November 8, 1959 in Lugansk, Ukrainian SSR. In 1982, he graduated from the Taras Shevchenko National University of Kiev with a degree in journalism. Since 1989, he has been living and working in Moscow. For over 20 years, he has built his career as a journalist specializing in interviews. His work is published predominantly in Russia’s leading mass media outlets, and he is the recipient of numerous professional awards.

Part 1
About victory podium, soul strings, allergy and sulphur emissions


 Vladimir, what is it like to feel yourself the richest person in Russia?

— My friend Slava Fetisov says that the first step from the victory podium is always down… On any top it is important to be able to soberly evaluate the situation. The best way is to start with answering the question how did you get there, was your way honest and worthy, so do you deserve a place you are in. Then it’s easier to get used to the thought that sooner or later you’ll have to descend to the pediment. There are no absolute champions. So, you should have time to enjoy the feeling of height and opening views but without too much zeal, without being intoxicated with your own success. To step down on the ground, to become second, third, fifth, tenth… And to continue living. Besides, Forbes rating is not exactly the height which is so nice to be at.

 Are you posing?

— You see, it’s a list based on wealth, money, not on pucks and goals scored or matches won. In other words, in the Forbes case we’re talking about weighing a money bag. The one I’m carrying is heavier today. That’s it.

I’ve been persistently trying to deliver to my countrymen a message that it’s immoral and wrong to brag about your wealth, showing it off

 I suspect there would be a lot of champions who would gladly exchange their gold medals for you bag.

— Yes, I’m leading in a prestigious nomination but it really doesn’t give me much inner joy. I’m talking without generalizations, about myself. In the civilized world there has long existed the idea of pay back, something like returning debts to society. And I’ve been persistently trying to deliver to my countrymen a message that it’s immoral and wrong to brag about your wealth, showing it off. In my opinion, there isn’t much to be proud of, as well as nothing to be ashamed of. If the money was earned honestly, it’s just silly to have complexes about it. In the world of market economy a financial situation of a person is a measure of success, and of course I admit the significance of this fact but at the same time I don’t feel any excitement or euphoria of being on top of the list. 

 In the 'Forbes club' the company is ambitious, so it must feel nice to be ahead of them.

— Modesty, of course, makes one look good but among successful people you will hardly find an unambitious one. It relates not only to businessmen but to politicians, athletes, artists, journalists. In the major league of any kind of human activities only those who are strong-willed and goal-oriented survive and take leading positions. That’s why the statement of successes gives satisfaction but what I’m trying to explain to you is the balance of this feeling. It doesn’t touch deeper strings in my soul associated with highest values. What example shall I give you? In the early 70s I took up judo and sambo. The first fights won were bringing a feeling of real overcoming. Then I got keen on football and had the same emotions from beautiful goals scored and bright victories over strong rivals. When I had to switch to badminton due to a serious trauma, the progress in the new kind of sport gave me a real joy. Now it’s hockey’s turn: each puck delivered is a reason for pride. If I’ve done it I can achieve something on the ice. In this sense emotional burst from being Forbes list number one is more modest, however surprising it may sound. Believe it or not.

 One thing left – to find out how you managed to climb this height?

— In such situations it’s always difficult to tell about yourself… Many people mark that over the 2 years I have been the CEO of Norilsk Nickel, there have been obvious positive shifts in the company. I brought a new team, we formed a strategy and started implementing it. We have improved financial discipline, cut down working capital, introduced KPI for the employees, dealt with assets, singled out Tier I ones and started getting rid of the rest, carried out a lot of other internal work. We focused on the modernization of production. This program is being implemented, as the British say, in time on budget. By 2018 we hope to overcome bottlenecks caused by old infrastructure and move on. I mean geological exploration, increasing overall metal recovery, implementing an environmental project on capturing sulphur dioxide emissions at the Nadezhdinsky plant, finalizing the closure of the Nickel plant. To put it simply, taking care of the company’s efficiency has grown into an analysis of growth possibilities. And the state, I believe, should know that the company is managed efficiently. One more change touched reconsideration of what we call human capital. Norilsk Nickel should become an attractive employer. So that people will come to Norilsk and live there voluntarily, as we say, not because they can’t come back to the ‘mainland’. It’s a complex program – professional orientation, training of highly qualified personnel, right incentives for employees motivating them. Plus changing the environment. This didn’t have place before. Properly speaking, modern people don’t want to live in a city which smells sulphur. 

 Smells is putting it mildly…

— Well, yes, I agree. Though in the Soviet time the situation with emissions was even worse. Now our main problem is sulphur dioxide. Not that it’s very dangerous but unpleasant. I’m allergic and I know what it feels like. When I’m in Norilsk and there’re sulphur emissions I feel, frankly speaking, not so good. And people have lived in this atmosphere for decades…. 

A boss’ visit distracts people from normal work

 That’s why you’re not such a frequent visitor in Taimyr?

— I go there not so often only partly because of sulphur. Not even that much. I believe that a boss’ visit distracts people from normal work. I come to Norilsk to look the people in the eyes, to feel «the air they breathe»…


— Rather figuratively speaking. I know pretty well what it’s like, I’ve had a lot of «tasting.» It’s important for me to understand the mood of the team, to feel their discontents and readiness to implement the tasks set. As for giving orders on site and teaching workers how to turn the screws – it’s not who I am. The art of being a manager is about being able to delegate powers so that people will have independence and responsibility for the delegated part. And a boss is to control. Exactly like the Bolsheviks taught us…

About closures and openings, the 'divorce' with Prokhorov and the conflict with Deripaska

About the peacemaker Yumashev, balancing Abramovich, phantom pains and the difference between male bonding and marriage

About the skill to grab hold and not leave out, a portrait of a strong leader and specifics of treating businessmen in Russia

About the rules of the genre, strict teachers and balance between business and politics

About head wind, agenda of the power, CEO's mistakes and iterations of the president

About the amnesty of capital, endowment, charity and foreign agents

Part 2
About closures and openings, the 'divorce' with Prokhorov and the conflict with Deripaska


 What in your opinion worries Norilsk residents?

— We can’t invite people to work in a city without proper working conditions. Everyone should have an opportunity to come there and rent a flat, to work for 3-5 years and then leave easily. Without any health damage. I’ve already mentioned clean air. It’s a number one task for us. I regard it as very important for myself, including morally and psychologically.

We were waiting for this digital inequality to be solved at a state level but we came to realize that it’s a «sink or swim» situation

There is still no broadband Internet in Norilsk. We were waiting for this digital inequality to be solved at a state level but we came to realize that it’s a «sink or swim» situation. So now we’re installing radio Internet along both banks of the Yenisei river and later we’ll install a proper optical fibre. It is necessary not only to run the company more efficiently – with different volume of information and accountability, opportunities for outsourcing, setting up shared service centers (accounting, legals, HR, IT). It’s not all about that but also about attracting young professional workers. People under 30 just do not even consider living in places where there’s no proper Internet.

So, the city is facing major changes.

 You’re going to close in 2016 the Nickel plant which was in fact the beginning of Norilsk, aren’t you?

— Not just going to, we will do it. It’s all going as scheduled…. The plant was built in inhuman conditions, it was launched in record terms and as early as in 1942 it gave the first thousand tons of nickel for T-34 tanks so the people of Norilsk really have a right to talk about their contribution to the common Victory. But since then over 70 years have passed, the production facilities are extremely outdated, the technological time-lag is awful, the plant can not be modernized, so to close it is the only reasonable way out. Besides, the Nickel plant is within the city borders and is the reason for most environmental problems. The Nadezhdinsky plant will take on the operational load of the closing production so there’ll be no capacity reduction, rather even its increase.

If today the company is able to process about 1,800,000 tons of concentrate, after a complex of measures including modernization of the Talnakh concentrator and an increase of its capacity up to 10.5 million tons of ore, we’ll be able to smelt up to 2.4 million tons of concentrate. In other words, we’re planning a 30% growth despite shutting down the Nickel plant. It’s a bright example of overcoming the bottlenecks I’ve told you about. The outdated production facilities didn’t allow us to expand ore mining as we had nowhere to process it. That’s why we’re changing ore treatment capacities and making our metallurgy more up to date. By 2018 we expect to have the program fully implemented.  

 You taking the position of  Norilsk Nickel President was a forced step, Vladimir, wasn’t it?

— Yes and no. To a certain extent it was a necessary condition of the long expected peace in the company after prolonged corporate wars in it. This designation was an element which consolidated and made such agreements possible. The configuration suited me and my partners – Oleg Deripaska and Roman Abramovich. Our desires and aims coincided, no matter how we treated each other. 

 How exactly, by the way?

— Differently. Sometimes – with competition. Due to understandable ambitions, which we’ve already discussed, each one wants to prove that his ability to manage is better, he can run the company better and achieve successes with it. Regardless this and the mutual offences accumulated over the years of the conflict we treat each other positively in general. Besides, the colleagues understand: if a person deals with something personally it’s a kind of guarantee. As the French say, noblesse oblige.

 Risking the name?

— In a certain way. A signed agreement stipulates my personal responsibility for various possible cases of incompetence. But I agreed to that deliberately. For a long time a had a wish to change my paradigm of activity in business and switch from a strategic management of  large scale investment to running a specific company with a specific corporate structure, tasks, budget, etc. Putting it simply, I decided to be closer to the ground.

 You had never before managed operational activities in such conditions, had you? 

— On this scale – surely not. The more interesting it was to see in action how efficient my understanding and my methods related to the system of hierarchy, delegation of authorities, distribution of responsibilities, internal functionality, accountability, and reporting are… I wanted to check if I could cope. Of course for me it became a serious test despite an over 20 years experience in business. The main problem of Norilsk Nickel in 2012 was that the conflict of its main shareholders didn’t allow the company to properly develop, Oleg Deripaska and me, we couldn’t reach an agreement…

 It all was dating back to 2007, to your ‘divorce’ with Mikhail Prokhorov, wasn’t it?

— Yes, since then everything went awry. To be compatible in modern business you need to be able to do everything on time, skillfully, not worse but rather better than others. Then you survive. If you lose your chance and do nothing – neither bad nor good – you can forget about success. Standing still is already a defeat. While the conflict of shareholders was going on nothing drastic wasn’t happening in Norilsk: plans were fulfilled, taxes were paid, people were getting their salaries, the plant was bringing certain profit to its shareholders, everything seemed to be going in a normal way. But we were losing time, failing to deal with strategy and the development of the company, the management wasn’t able to rely on the shareholders. All this is possible now, the interests of all the participants of this process have matched.

Inside and outside observers are watching the process carefully as investors, bankers, analysts and experts are perfectly aware that such unity is a key condition of a normal corporate functioning and following necessary management procedures. There’s no business when shareholders are fighting while the management is uncontrolled or not really motivated. Investors don’t like it at all. Today we’ve been able to prove to the world that the conflict was resolved and we have all common goals, we work together on solving the same task.

An ability to keep promise and fulfill all the taken responsibilities to the full extent is really valued in business. With the announced strategy and high aims set, the way to them is assessed by each step. You remember that in the Soviet time the aim was to achieve the victory of communism by 1980, though they didn’t promise to feed you on the way, so nobody believed in this idea.

We not only pay taxes to the state, salary to people and dividends to shareholders but achieve tangible results. Smelters are launched on time at the Nadezda plant, the deep mine Skalistaya, which will provide increased volumes of high grade after 2020, is being constructed on schedule. So demonstrating that we really mean what we say increases the trust to the company and provokes additional interest of investors despite what is now going on in Russia.

 You mean the crisis?

— Everyone calls it different ways. I prefer the expression "head wind." 

Part 3
About the peacemaker Yumashev, balancing Abramovich, phantom pains and the difference between male bonding and marriage


 Did you fight so long with Deripaska due to a mutual lack of trust?

— We couldn’t decide who of us was more important. As imperialists would put it, who is in charge.

Time showed that we had to submerge into a certain period of negative emotions and only then pass to positive ones

 Matching, to put it simply?

— This too. Time showed that we had to submerge into a certain period of negative emotions and only then pass to positive ones. Ulyanov-Lenin described a similar situation as follows: to disunite before uniting. It’s exactly about Oleg Deripaska and me. It took us some time to understand that it would be bad if we didn’t reach an agreement. Maybe we wanted to check how bad. We needed a certain outside catalyser, a fresh unbiased opinion of a person who was able to provide a reasonable opinion on the situation we were in. Valentin Yumashev took this role. He had our respect and helped to restore our trust. Both Oleg and me, we were taking calmly what he said as we understood that there was nothing personal in his words. 

Then it became easier. We corrected our incompatible positions. Then Roman Abramovich got involved in this process. As an investor. He was playing a balancing role in case the conflict resumed, and gave us all peace of mind. Besides, he invested his money in the project and Deripaska and me got an additional responsibility to the third party. Roman did us only good, didn’t he? But all this is in a distant past. The situation as compared to 2012 has changed drastically. Now it’s not just a very good but an extremely high level of trust among the main shareholders. As the CEO over the last year I have had no problems with approving any steps demanding corporate approval. Issues are solved more technologically. Oleg Vladimirovich Deripaska, Roman Arkadyevich Abramovich and me don’t have to meet for minor things, we rather discuss strategy and global topics.

 Do you address each other that officially?

— Of course not, we are on first name terms. Our communication came to a totally new level and it means we had worked really hard on this agreement, it reflects the aspirations of all sides. Everyone found what he had looked for and everyone received from their investments into Norilsk Nickel what they had expected. It took some time to understand: the conflict was concluded. We didn’t pretend it didn’t exist, we really put a period to it.

Destiny gave us a chance to sign a right agreement all elements of which are working for the common benefit

 But do you still have ‘supervisors’ from Abramovich and Deripaska?

— Yes, according to our agreement each major shareholder nominated his financial controller, they have special rights but work in the general structure of the company’s audit department and do useful work. It’s for our own good if some inefficiencies, wrongly structured competencies and procedures carried out become evident promptly. We’re not interested in hiding anything. Strictly speaking, I was the one to offer such a scheme: I manage, you watch. Yes, I’m totally open for control but I have large authority; otherwise all the structure will have no use. It’s a rare case in business but we obviously had suffered enough till 2012 and to make up for this destiny gave us a chance to sign a right agreement all elements of which are working for the common benefit. 

 Knock on wood.

— I’m not superstitious. 

 No phantom pains? You once did get burned with Prokhorov though you were best friends, lived in perfect harmony. Now you’re talking euphorically about the alliance with Deripaska. Instead of keeping to the principle ‘once bitten twice shy’. 

— These are still different stories. With Oleg we’re partners in business, out mutual interests are in it. With Mikhail it is much more complicated. For about 15 years we were spending a lot of time together that’s why the divorce proved so painful and that period — emotionally difficult. And people who communicated with both of us had to choose sides.

As for business one can always come to terms. Another thing is that with Mikhail we should have also parted in a simpler way, should have split the business more pragmatically, but for our friendship.

 It no longer hurts?

— No, it doesn’t. We meet with Mikhail from time to time, communicate in a normal way… Why rake up the past?

 Ex-partners rarely keep warm feelings to each other. Like in a marriage. 

— To my mind, male bonding is really different from bonds of matrimony. I’ve tried both, so to say, and I can compare.

 Ready to share the experience?

— No, I’m not going to expose my private space, I’ll only say that it feels totally different. Coming back to Prokhorov, I can say that I have no phantom pains, we’ve restored our good relations but we don’t have any more joint projects — either in business, or in any other sphere. We have turned the page, we live on.

Part 4
About the skill to grab hold and not leave out, a portrait of a strong leader and specifics of treating businessmen in Russia


 Has you workload in the new position grown considerably?

— The first year – year and a half – very much. I literally plunged into the atmosphere of the early 90s. I wanted to check everything myself, to get into all the details, to meet each of newly invited employees. At first it was really hard. I got out of the habit of such schedule, and after all, age is taking its toll. But about 12-13 hours a day I would spend in vigour. I work very intensively, I think, above average compared to my peers but that’s why I get more tired. It’s in my nature that I can’t work 16 hours a day every day for a long period non-stop, it damages my efficiency, I need a pause for rest. I need to relax at least for a week, to do sports, not to think about anything, to wash off this tiredness after which I’m ready again to switch on at full steam.

My ability to focus on something is my competitive advantage. I can grab hold and go to the end until I achieve the aim set

Colleagues say — and I admit it — that my ability to focus on something is my competitive advantage. I can grab hold and go to the end until I achieve the aim set. But it requires a lot of emotional and intellectual outburst after which I need a recharge. In such regime I worked all the year 2013. And as the process started to work out my operational load started to diminish. Today I can focus on conceptual issues.

 Did you have to rake the debris of your predecessors in the chair of the CEO? 

— Of course, I had to settle many processes but I’m thankful to Vladimir Strzhalkovsky: he was on this watch for four years and a half and he did it quite well. Especially in the conditions of that period. I think no one will cast a stone at him. You can’t measure that period with the logic of peaceful times. The personal achievement of Strzhalkovsky is that nothing bad happened to the company under his management.

 That is why he was given the golden parachute of 100 million dollars? The sum impressed many people.

— Yes, I offered to let Vladimir go on a good note. We stopped his career and dismissed him into nowhere. I think in such cases one should know how to be grateful. As for the sum, it was offered by other people though I agreed with it, of course. Actually, this «parachute» looks a bit odious and provoking from aside but if you split in into almost five years which Strzhalkovsky worked in Norilsk Nickel and kept it afloat, having left to us a stable basis allowing us to further develop the company, the sum is not so outrageous. Especially considering the income on share capital over that period. Strzhalkovsky’s team brought several billion dollars to shareholders. To be even more precise, ten. 100 million against this background does not look such an astronomical sum, does it? It all depends on the point of view.

 Your logic is understandable but I don’t think everyone will agree with it.

— And I don’t need everyone’s agreement, more important is that reasonable people will hear that the golden parachute of Strzhalkovsky is not a payment for his leaving. It’s only 1% of 10 billions which his team had earned. 

Somehow we respect doctors, teachers, militaries and firefighters, we admit even the need for policemen and only at businessmen we look with suspicion, like at some blood-suckers which should be cold-shouldered

 In any case such smart money does not add to the love of society to businessmen. Both to those who sign away such money and those who receive it.

— No arguing, that’s true. But let’s look at this problem from a wider angle. In our society attitude to such category of citizens hasn’t formed yet. Somehow we respect doctors, teachers, militaries and firefighters, we admit even the need for policemen and only at businessmen we look with suspicion, like at some blood-suckers which should be cold-shouldered.

Firstly, the person who chose this profession takes certain risks, by his nature he has to be very resistant to outside challenges. According to statistics, only up to 10% of people are psychologically prone to such model of behavior. Many agree to have less but with more guarantees. Secondly, the entrepreneur, like a surgeon, should be able to inflict pain. Not everyone is able to do it and not everyone likes it. Thirdly, a businessman must have a certain gift. You won’t be a good musician without a good musical ear, artist — without imagination, writer — without mastering the word. The same in our work. It’s not enough to be able to count with a calculator and create competent financial models. You need to have a vision. You should treat  business process like a living creature, feel its melody. You know, a good chess player doesn’t need much time to evaluate his position, sometimes it’s enough to look at the chess board to understand if the position is good or bad. Maybe in business emotional and creative tension is not that high but this element exists there too. I don’t want to seem to you a too romantic figure but believe me, this topic is important. 

For me a portrait of a strong leader includes several obligatory elements. First of all, a clear understanding of business strategy. Not in the form of an abstract black box but knowing how it all works, where and what to tune. Secondly, a leader has to deal with his personnel, recruit them, to understand how authorities are distributed among his subordinates, isn’t there an unhealthy conflict due to overlapping functions. It is necessary to carry out arbitration of positions. And thirdly — feedback. You can also call it controlling, reporting, measuring temperature. That is all. The leader shouldn’t deal with anything else. Or he will substitute those who he hired. At least that’s what it looks like in my management model. And what for? Why pay money to people if you try to do everything yourself? And most likely you will do it worse than they will.

The burden of any manager, anyone in charge of a major project is to say not only pleasantries to people

 How often do you have to pronounce the phrase ‘You’re fired’?

— You know, when the TV show Candidate was on I got used to pronouncing these words regularly, then they left my vocabulary and after I became CEO they came back. Yes, I have changed not only much but also many. Nothing doing. The burden of any manager, anyone in charge of a major project is to say not only pleasantries to people. There’s one more thing to it. In our country the tradition is to think that mostly officials have a special feeling of responsibility. Allegedly they know that they’re accountable to the state and their people. And businessmen allegedly spend their own money so what to expect from them? How could those bourgeois full of themselves think about the needs of a working man?

 Because wealth and success in business for many are still synonyms of deceit.

— To my greatest sorrow, yes. It has deep historical roots.

 Like the Soviet poet Mayakovsky said ‘Eat pineapples, guzzle hazel grouse…’?

— In my opinion, it goes even deeper in history. That was the case before the revolution of 1917, with the following attempts to build communism in a separate country. I think, the origin is in the community based relations which formed in Russia in the previous centuries. We’ve always had strong material stratification; nobody has ever seriously tried to beat poverty here…

But this is a topic for a separate historical and philosophical conversation, we’re talking about present where attitude to businessmen, alas, is still not really positive. To change it first one should distinguish between honest entrepreneurs from the rest, not to measure everyone with the same yardstick. People can admit that among decent and honest doctors there might be charlatans but do not judge all the doctors based on them, do they? Along with honest policemen there are corrupted ones. Nevertheless, there’s always an alternative. In the case with businessmen, there’s almost none. Belonging to our profession is like a stigma. What is, naturally, wrong and bad.

Part 5
About the rules of the genre, strict teachers and balance between business and politics


 But your colleagues had their part in creating a certain image. Especially in the 90s.

— Yes, it’s water under the bridge but nevertheless people still remember how some fortunes were made. Negative stories are often brighter than positive, they engrave into our memory. These are the rules of the genre. Criminal news, scandals and investigations interest the audience more than reports on harvesting the crop or launching a rolling mill.

It’s normal — to improve the environment. You yourself will live more comfortably then

No arguing, businessmen gave reasons for talking and writing about them not in the best key. Besides, an awful material differentiation in the society affects it, plus a purposeful, that is, offensive for less well-off strata of society, demonstration of wealth. We’ve talked about it: if you’re lucky and you’ve become successful, you shouldn’t boast it but should share it with other, less successful citizens. It’s normal — to improve the environment. You yourself will live more comfortably then. Unfortunately, in our country businessmen have not been really involved in it and now they’re reaping the fruits of distrust to themselves. Many people take with caution and suspicion even reasonable initiatives of business representatives, a lot of time should pass to change this vector of attitude.

We need positive examples of deeds beneficial for the society, charity actions, patronship, etc. But I’m afraid this will not happen in our lifetime, several generations of businessmen have to change before people start treating them differently. Such things don’t happen fast.

The success and economic prosperity of Russia directly depend on whether the class of respected businessmen appears in our country

 And the state, in you opinion, is it interested in solving this problem?

— What shall I tell you… Personally, I don’t see any official propaganda on how the profession of businessmen can be useful for the society, and it’s no secret that information policy in our country is determined by the state and major mass media are controlled by it. So it means there hasn’t been such an order. Nevertheless it doesn’t mean that we won’t be able to change the situation in future. I’m strongly convinced that the success and economic prosperity of Russia directly depend on whether the class of respected businessmen appears in our country. My words may seem too sumptuous to you but that is the case. Entrepreneurs may work for their own, state or a private company benefit but altogether they move the economy forward.

 And how does the story of your old friend Mikhail Khodorkovsky fit in this scheme?

— It does not, why beat about the bush? Former leader of the Forbes list turned into a prisoner. Of course it provokes in me a deep sympathy for Mikhail, disappointment that all this happened. It influenced the reputation of all businessmen, business climate in Russia. What else can I say? I don’t want to repeat platitudes. I regard what happened to Khorodkovsky as a very personal tragedy of a person who spent maybe the best years of his life God knows where.

 Obviously after the imprisonment of Mikhail the relations between big business and power have drastically changed. Is his example a lesson to others?

— We’re not guilty schoolboys or whipping boys. Though we shouldn’t be regarded as arbiters of fate either. Both images are wrong. What happened in Russia was that in the 90s businessmen gave orders to politicians, wreaking the havoc in state management. We used to call it oligarchy though this term means a totally different thing.  

In the new millennium there was a leap to another extremity: now entrepreneurs are pushed away or neglected.

Two extremes! One should always leave some space for maneuvering. Business mustn’t take more than it should but it’s wrong to diminish its role. It creates value, produces products, offers services. And the country lives with its help. And politicians must care to fill everything with necessary meaning, to point out the right aim. Then there’ll be no skew to either side. We need a fair balance. 

 You’re painting an idyllic picture…

— What can I do if I’m an idealist by nature?

 Is that possible? Shouldn’t businessmen be pragmatics and cynics. 

— They’re not synonyms, one doesn’t come out of another. An idealist will  hardly make a cynic but he can easily be pragmatic at the same time…

On the other hand, what is so strange in the picture I offered? All countries — I mean civilized ones of course — fight for this balance. Conservators and labourists,  democrats and republicans… There are certain nuances in accents but the principle is the same. All tax policy is based on it, duties for the use of mineral resources, demands of the environment protection, social deductions, etc.… It’s a dialogue between business and society resulting in a compromise. Why else do we need the government and parliament if not for setting the rules of the game and the following control over their strict implementation by all sides? It’s important to find this balance when business doesn’t lose incentives for its development and the distribution of the products received is for the benefit of the society, according to its demands.

 Then why at the meetings with the president of the state respected Forbes ‘numbers’ — members of the Russian Union of Industrialists and Entrepreneurs, play the role of modest petitioners? Shouldn’t it rather be a dialogue of peers?

— Frankly speaking, I don’t see anything humiliating in it. The arrangement of our country for many centuries has been centered around a figure of a strong and charismatic leader. If you look back to the past you’ll see that all successful periods in Russian history coincided with outstanding personalities at the steering wheel, no matter a prince, a monarch or a leader from the mass. Take for example Minin and Pozharsky who at a critical moment took all the responsibility for their country. During WWII marshal Zhukov came forward, whose contribution to the victory over fascism can’t be overestimated.

In this respect a belief of people in a strong leader able to protect in a desperate situation hasn’t disappeared. And businessmen are only a part of our people…

 … on which a lot depends.

— Of course. But mentally businessmen are inseparable from the Russian society. We haven’t come from the moon, have we? We grew up here, absorbed these traditions from birth…

One needs to feel border between fawning and captation on the one hand and piety to the leader, a person bearing the burden of responsibility for the country on the other

 Including servility to rank?

— Yes, it’s in our blood. It was and still is. I’ve already talked about historical specifics and national culture, I don’t want to repeat myself. In certain dosage there’s nothing bad about servility to rank. There’s a huge distance between kissing the well-known part of our body and a respectful attitude to superordinates. One needs to feel border between fawning and captation on the one hand and piety to the leader, a person bearing the burden of responsibility for the country on the other.

 But still: in which key, in your opinion, should meetings of the representatives of big business and political leaders take place?

— I can tell you for sure: arguing is not the best form of communication in this case. We’re meeting not to have a dispute with the president. It’s a feedback channel, a possibility to convey the opinion of the Russian Union of Industrialists and Entrepreneurs board on key issues, to tell about the problems of business and options of their solution. We inform the head of the state what we live with, what biggest concerns we have. In response the president speaks out on some of our initiatives, expresses his opinion on difficult situations.

By the way, it’s good when such meetings are well prepared. It allows not to turn a conversation into a chaos. One has one thought on his mind, another — a different one… As a result each can speak about his or her own issues without following a general logic. It’s important to discuss not some particulars but what concerns everyone. Then it’s easier for the president in his turn to give a detailed reaction to key issues and system problems.

My thoughts may seem not popular and not liberal to you but I really believe that at a meeting of big business with the head of the state one shouldn’t argue.

Part 6
About head wind, agenda of the power, CEO's mistakes and iterations of the president


 But look, Vladimir. What you call a head wind has not directly touched the business of your company, luckily for you, nickel and palladium are still carrying a price. However some colleagues are not that lucky. Sanctions have hit them really hard.

— Right, Norilsk Nickel still has access to the market of capital, which is very important. And the rating of the company is higher than the sovereign credit rating. Yes, the price of loans has increased but as we live in the epoch of cheap money we can say that the sanctions haven’t seriously touched us. Though I understand where you’re going. We started the discussion from the businessmen coming to the power like petitioners, making advances to it, etc.  Naturally, at the meetings with the president my colleagues try to deliver their concerns to the first person in the state. But I don't see any point for discussion here. What to argue about? About whether the Crimea is ours or not? The decision has already been made anyway.

 Shouldn't you know what is the power's agenda for tomorrow?

— I'm afraid you may not like my answer again. No, we shouldn't. Do you suppose I have to report out to you about what I'm going to do tomorrow at a specific mine belonging to the company Norilsk Nickel? I don't think so.

— Only if I don't work at this mine or don't live in a neighboring village. Then it concerns me directly.

— Those who should will explain to you your manoeuvre, introduce you to safety rules, tell you about your responsibilities and what your salary will be, let you read the contract and sign it… That’s it. And then — go ahead, to the mine. Because you’re a worker and I’m a CEO. You are to have the information within your competence. Knowledge may be harmful. If it is superfluous. 

The shareholders of the president are all his people voting for candidates at elections to the highest post in the state. The one elected will later be called to answer

— And can't the CEO be mistaken?

 He can. Of course, he can! But he operates within the delegated authorities, he’s controlled by shareholders who will make him answer to the fullest extent of the law, if the manager appointed by them screws up. In case of serious mistakes dismissal will follow. All is crystal clear and specific.

If we continue the analogy, which you're pushing me to, the shareholders of the president are all his people voting for candidates at elections to the highest post in the state. The one elected will later be called to answer. If he doesn’t manage with his responsibilities, they won’t elect him again. Another one will come. 

The constitution clearly states what the president should do. Initiate and sign laws, submit to the State Duma the candidacy of the head of the government, take measures to protect the sovereignty of Russia and its independence. But this list doesn’t say that the president is to let you in on his plans. There is an annual message to the Federal Assembly, «direct lines», press-conferences at which the president answers any questions. To consult and take decisions there is a circle of those whose responsibility is to know more than others. They’re the members of the Security Council, heads of law enforcement bodies and other state structures and agencies…. 

Of course, to be clear to his people the president needs to explain his steps. But I think no one will argue that Vladimir Putin has put a lot of efforts into explaining to people in general and business in particular the motives of his actions related to the Crimea and not only. President has done it many times in different iterations and in this very case we can’t complain.

— Does it mean that this situation doesn’t worry you?

 Yes, it does. I can’t even tell you how much I am worrying today! Starting from the fact that the cost of loans for Norilsk Nickel has grown (yes, we’ve been coping well with it so far but this increase wasn’t in our plans) and finishing with that I don’t like when people don’t like me. The hysteria around Russia doesn’t add joy to all of this, for sure.

— Did you feel it yourself?

 Didn’t you? I think everyone did. I don’t like when people speak badly about Russia. The Americans have an expression for it: my country might be not right but it’s my country. To put it differently, go to Jericho…

In this respect I’m a patriot and I’m always ready to stand for my position at any level. Though in my personal contacts nothing has changed for worse. On the contrary, foreigners who I’ve long known in what is called off the record talks do not hide their embarrassment about how aggressively politicians in their countries treat Russia.

— But public dialogues look totally different. Recently in an interview to the Bloomberg you had to answer sharp questions about the Kremlin’s policy…

 In that conversation I tried to deliver to the West audience the thought that the foam will settle down, superficial will disappear and some people will feel ashamed for their extreme emotionality and lack of restraint in their words. We won’t go away from Europe and the USA, neither will they. We’ll have if not to be friends, then at least to build relations. I’m sure, even our generation will live in a totally different paradigm of contacts with the outside world. In a much more comfortable one.

But so far we’ll keep out teeth tight and wait. As long as we need to. Or do you think that this conflict is pleasant for the West? Our counteractions are incompatible with sanctions applied to Russia, nevertheless Westernizers are screaming even louder than we do. Their pain barrier is much lower, they’re not used to inconveniences and discomfort. They can’t compete with us in this respect. We will overendure them. 100% sure.

In the situations of confrontation the winner is the one who’s ready to endure pain, who has a stronger leader enjoying trust. The mandate of our president is stronger than of any other politician in the West. That’s why I look to the future with a reserved optimism. We have time and ability to endure while among our opponents loud shouts and unsubstantiated hopes that we will break under the pressure on sanctions prevail. This will not happen for sure.

— Will you be enduring it here, in Russia?

 Of course. Where else? I couldn’t live anywhere else. I have my friends here, I want to speak in Russian…. No, I can speak English and French quite well, I can explain myself, hold negotiations and exchange information with my partners but I will still think in Russian. Though it’s not only about the language or friends. It’s difficult to put it into words… I’m grown to our soil. And a tree can’t live without roots.

Part 7
About the amnesty of capital, endowment, charity and foreign agents


 So that is why you decided to take your money out of England? The amnesty for capital?

— No, it's a different story. This amnesty doesn't apply to me personally or most of my friends as our assets have been transparent for many years. Both for the state and for different auditing and supervising bodies. Our business has been developing openly for many years. This amnesty might be relevant for those who are still facing a dilemma — to legalize themselves or not. We made our choice about 15 years ago.

But I've decided  to transfer my endowment to Russia, that's true. We call it in Russia a special fund, which is formed by donations.  In the first part of our long conversation I have already mentioned that I regard charity as an extremely important and useful thing, for two reasons at least. Firstly, it's a return of capital to the society, kind of royalty for your success. Plus you leave behind a positive memory of yourself. You start thinking about such things as you grow older. Secondly, it's an optimal way to protect your own kids from idleness, inactivity, lack of initiative, or in other words, from squandering their life.

 So your signature under the Giving Pledge initiative which you signed following Bill Gates and Warren Buffett is still effective?

— Sure. Moreover, the volume of my charity support is increasing. From this year on, the budget for my charitable activities, including my Foundation equals 1 billion rubles and it will increase in the years to come. Strictly speaking the issue is not about transferring money from Britain to Russia but about increasing financial support to various programs carried out by my Foundation — grants, fellowships, supporting existing museums and opening new ones… We're focusing on the development of endowments. I believe in their long term perspective, I saw how the system works in other countries. That is why almost 10 years ago I established an endowment in Britain, to check everything in my own experience.

And as the Head of the Charity Commission under the Civic Chamber of the Russian Federation, I have spent 8 years to provide favorable environment for such activities in our country. Now we have legislation on endowments in Russia. So we can start being more active in this sphere. I'd like to mention also that I have never financed anything in Britain, all the revenues were spent on financing programs in Russia.

— Which sum are we talking about?

— About 110 million dollars. This money will provide a basis for an endowment established in Russia. So in this respect nothing will change except a geographical address of this endowment. We have practiced it in the West and now we’re coming back home.

If the wrong people are pressed it means something is wrong with the procedure, it needs tuning and fixing. One shouldn't hurt good people but rather help them

 You've made this decision right in time. The Dynasty Foundation has been proclaimed a foreign agent…

— I have regarded the return of endowment in this perspective but maybe partly you're right. I wouldn't like to get such a label.

As for Dmitry Zimin who I have known well for many years… He is a very worthy man, a true patriot of Russia. I think in this case we're dealing with a flaw of target designation. Why was this term "foreign agent" introduced in the first place? Evidently, to limit the abilities of financing political activities in our country from abroad. And what we got in practice? A shameful stigma on Dynasty Foundation. This is unacceptable! But have in mind that I do not urge to apply a selective approach. It is not that the exception should be made for the Dynasty as Zimin is a cool guy, but the whole practice of applying this law should be changed. If the wrong people are pressed it means something is wrong with the procedure, it needs tuning and fixing. One shouldn't hurt good people but rather help them. It will bring more good as a result.

 Besides earning huge money and spending a part of it for charity what else gives you joy?

You know, my life isn’t so boring as it may seem to you. For example, this season I’ve resumed playing hockey, which I was a great fan in my childhood but then forgot how to play it.

 You even built a special hockey rink at the Luzhniki stadium.

— And I had been training there till early June until the ice totally melted…

Hockey isn’t just playing with a puck but a certain challenge, proving to themselves: yes, I can!

 Did you decide to start skating following Putin’s example? 

— For another reason. But I’ll tell you about Vladimir Vladimirovich too, we won’t leave him alone in this story either.

I’m playing with our legends — Vyacheslav Fetisov, Alexey Kasatonov, Valery Kamensky, Alexander Kozhevnikov, Pavel Bure… What can I tell? They’re stars! Yes, to come to skate with them is a pleasure, yes, ex-professionals of course give in to us, dummies. If they really played at their full capacity, we wouldn’t even touch the puck throughout the whole match, we would be only spinning our heads. But in any case you need to skate to the wright place, to position yourself in the right way, in a split of second set your stick under the puck… You see? Even a person who has achieved much in his life needs a systematic proof of his abilities, to see that he can still achieve his aims. I watch other obviously prominent people — Vladimir Putin, Sergey Shoigu, Gennady Timchenko, the Rotenberg brothers and see which passion they put into playing hockey, how they rejoice every action on ice, like kids. For instance, Shoigu has a strong, well trained sprint. Fetisov says: his puck is flying like from a sling. So it means that the Defence Minister trained at nights at the “Briz”, practicing his technique for hours. And Timchenko before couldn’t even stand on skates, while now he’s so fast that when an attack is failing he’s the first to come back to defence, to pick up the puck and to give a good serve. Citing Fetisov again, Timchenko has a hockey sense, understanding what to do on the rink.

What I am saying is that for each of those serious men hockey isn’t just playing with a puck but a certain challenge, proving to themselves: yes, I can! It’s an element of overcoming. I treat with great respect those people who at a mature age start doing something from scratch and achieve certain results.

 But eight pucks delivered in a recent match in Sochi — isn’t that over the top?

— I agree, a bit too much. But in the fervour of fighting you don’t count the goals. If a puck is coming to your stick, how can you help delivering it? Exhibition matches have their own rules and to a certain extent it’s a show where everyone has a chance to play, to feel their strength. Professionals are invited so that it will be interesting and people could enjoy keeping an incentive to train on. But if a person can’t skate and be ready in the rink no matter which serves you give him he won’t be able to hit on target. It’s a fact. Besides, we play not for the sake of score but for pleasure.

I like winning. Though I know how to lose too
Interviewed by Andrei Vandenko

Born November 8, 1959 in Luhansk, Ukraine. In 1982, Andrei Vandenko graduated from the Kiev National University of Taras Shevchenko specializing in journalism. Since 1989, he lives and works in Moscow. Vandenko has more than 20 years of experience in the interview genre. He was published in the major part of top Russian media outlets and is a winner of professional awards.

Andrey Vandenko