Ilya Savchuk

I always start with problems. For example, when I first came to a company K., I immediately said: "Guys, you've got big problems. You're number two, you're clearly lagging behind, and you're operating in a market segment that is turning into a commodity." This means fierce competition.

At that time, the company K. was one of the market leaders and actively growing. Now, though, they're massively downsizing divisions one after another. Everything is happening exactly as I predicted: they're being pushed out by more agile and digital players who can build supply chains that are far more flexible thanks to technology.

If a company doesn't acknowledge its problems, it's pointless to do anything.

For a company to recognize its problem, it needs to realize:

• Current methods of doing business no longer work.
• This applies to any area: production, management, client interactions, internal processes.

If a company says, "Everything's fine, just help improve the processes," it won't work. Only if the problem is acknowledged, then you can move forward and figure out where it really lies.

Often, the real problem isn't where the "sparks are flying." It's usually either higher or lower in the chain. It has to be uncovered. Here, I use approaches from the Russian school of philosophy, particularly the work of Georgy Shchedrovitsky, creator of the system-thinking methodology.

Define the delta of change:

• The step of change shouldn't be too big, or you'll lack resources, competencies, or time.
• Consider time windows—they're not infinite.

Set the system boundaries:

• Understand which system you're changing.
• Define the success parameters and how they'll be measured.

If the boundaries aren't set, it creates the illusion that everything needs to be changed. But changing everything is impossible. You can change one piece, which then triggers changes elsewhere.

Box 1: The company's activity that we're changing.

Box 2: Those impacted by the results of Box 1's activity.

Each box has its components:

• What is produced (outcome).
• What is sold (product).
• What is paid for (value proposition).

These three concepts are different. For instance, I may pay for a subscription, purchase storage space for code, but in reality, I'm being sold a cloud service.

When I was analyzing ore enrichment, we uncovered a technological limitation:

• The grain size of the ore couldn't be reduced further without breaking the physics of the enrichment process.
• Instead of discussing operational processes, we had to shift to fundamentally rethinking the chemical process.

1. Organizational aspect

• Related to people's actions around the system.

2. Technological aspect

• Processes, algorithms, equipment.

3. Entrepreneurial aspect

• The value-driven component that keeps everything focused on results.

These parts are connected by an "institutional lid":

• Within the company, it's the board of directors.
• At the market level, it's infrastructures (both soft and hard).

1. Change isn't about improving quality by 3% or developing a slightly better product. It's about reaching a fundamentally new level that reshapes the market.

2. The step of change depends on the scale of the system.

3. Within a system, you need to analyze subsystems: digging deep enough to find the root problem but not so deep as to get lost.

4. Every system consists of organizational, technological, and entrepreneurial parts, governed by an institutional framework.