Interview with an expert in strategic management and business efficiency

— It’s always very difficult for me to answer this question because someone great (I’m always trying to find out who) said that we now live so long and so well, in terms of health, that over the course of our lives, we can live two or three lives and change two or three careers. Currently, I am a mentor, and this is already my fourth or fifth career.

I was born into a very intellectual, hereditary family with architects, builders, and scientists with very prominent names. When I got married, I kept my maiden name because it is very well-known in the scientific community. If you type “Tsytovich” into Yandex, the first link will be to my grandfather, a very famous builder and engineer who pioneered construction on permafrost. Then you will find my father, a renowned theoretical physicist, and only then you will find me.

I graduated from Lomonosov Moscow State University, where I also attended and completed graduate school, defended my PhD dissertation, and went to work at an educational institute. I worked there for about ten years as an associate professor in the Department of Biotechnology, intending to work in science my entire life. However, I chose chemistry over physics because I liked it more.

And it was at this Institute in the 1990s that a turning point occurred. A professor from England came to our department and invited me to work with him. I agreed and spent a year and a half at his University. It was a very interesting time for someone who had come from the empty shelves of the Soviet Union to a place where everything was new. In these new conditions, I had to learn to live alone and adapt because there was no one to help.

After a year and a half, I returned and it became clear that science was in deep decline and there would be no money in it. At that point, my daughter was growing up and would soon be entering university, which meant someone had to earn money. So, I decided to go into business.

— I wrote a resume, went to several recruitment agencies, which turned out to be very reputable and well-known, although I didn’t know that at the time. I asked friends who had tried their hand in various business structures for advice. They advised me to take the first job that offered a satisfactory salary, even if the field was very different from what I was used to.

I became an office manager for a Turkish entrepreneur who was importing well-known household chemicals into our country. It was at this job that I learned to manage a business because the entrepreneur traveled a lot, and I had to handle issues beyond my job description. My responsibilities included organizing logistics: loading goods in Istanbul, receiving them in Krasnodar, then loading those containers onto trucks, delivering them to Moscow, and handling customs clearance. I, a professor’s daughter, immersed myself in a completely new and unfamiliar world. After leaving the institute, I changed about five jobs in two or three years until chance intervened in my life again.

An American recruitment agency introduced me to a large insurance company called Rosno, which is now known as Allianz after being acquired by a German multinational company. This marked the beginning of my career in large companies.

— I worked in insurance for about eight years and made every effort to join an American insurance company. At that time, this company was the largest in the world, with offices in more than a hundred countries. Everything I know about sales has stayed with me since those years because we were taught in ways that no one else ever was. Instructors at the level of Tony Robbins came to train us, and all the sales technologies that some trainers now present as “proprietary technologies” were instilled in us back then, 20 years ago. For example, the “Seven Steps of Sales” technique was drilled into me by an American top manager of this insurance company, if I remember correctly, back in 2002, and I used all of it in my work.

I quickly became the top salesperson, winning the position of best salesperson in the region among 15 countries multiple times. I was soon promoted to sales director, and then they began teaching me how to manage people and sales.

— Not exactly. It was in this large company that I realized you can learn to play by all the internal rules and be as smart as you want, but seniority plays a significant role. I understood this when, instead of the next position that I could have been promoted to, they appointed a purely technical and not very smart guy, simply because he had worked in the company for five years longer than I had. I was upset and accepted an offer from an American bank, where I was also introduced by recruiters, and thus my banking career began.

— And more lessons. I worked in the banking sector for over 15 years and changed four banks. Again, the American bank taught me a lot, especially how to manage a business from an owner’s perspective. I quickly became a top manager, deputy chairman of the board, within about a year and a half. Many thanks to their management; they truly recognized people and promoted them.

My boss taught me how to properly look at numbers, at finances, and what to pay attention to. He taught me how to read Excel correctly. For example, when you open an Excel spreadsheet on your computer, you need to pay attention to certain patterns: a formula is not extended to the end in this row, the numbers in the last two rows are not what they should be.

This was, of course, an immense experience. He taught me how to manage people properly because, when I became vice president of business development, I had hundreds of people under my supervision, and I had to learn to manage a structure with 500 people below me. He revealed a secret to me that I didn’t know: it’s impossible to build a structure where each manager has more than five subordinates. This is purely a psychological point. You can only manage a manageable structure where each layer of management has only five subordinates and no more. Until you have four salespeople and a fifth head of the department, you shouldn’t form the department. Don’t create a department with just one manager and one salesperson. It’s pointless.

— Absolutely. My boss taught me that building the correct structure of the entire company should be based on the functionality of the future structure.

— The idea is that we first create a functional structure and then place people into it. You shouldn’t appoint someone just because they are good; our task is to find the right place for each person.

There is a chairman, there is a CEO. It’s important to see who is below them, which people, and who their subordinates are. As the chairman of the board, what divisions are under me? What divisions do each of my deputy directors have? There can’t be more than five deputy directors; so, what do they have under them? This is a very important point. He also explained some unspoken financial rules to me.

— A financially stable business must have a profit margin of at least 30% of the revenue. For instance, if you have a revenue of one million, the pre-tax profit, also known as “gross profit,” should be 300,000. If it’s less, any market fluctuation can throw you off balance. If there’s a significant market fluctuation, you might drop by 30%, but at least you’ll break even, meaning you won’t need to inject additional funds. But if your profit margin is 10-20%, a slight market shift or an increase in rent by a crazy landlord by 10-15%, and you’ll be in trouble.

You can’t put yourself in a situation where a rent increase makes your business unprofitable. Many of our businesses operate with a 10-15% margin, and that’s risky.

— Absolutely. I’m not inherently smart. Everything I know and can do, I gradually learned from all my supervisors. So, I guess I’m smart because I remembered all the lessons and apply them in life.

— Over the years, I worked in five large banks, and my final place of employment was Vostochny Bank, which merged with Sovcombank last year. I was the chairman of the board at the predecessor of Vostochny Bank for almost five years. It was a very interesting story because they initially hired me as the deputy chairman of the board for business development, essentially the chief salesperson. Then, at a certain point, the shareholders honestly told me they were planning to sell the bank. The bank’s shareholders were based in Cyprus, and the European Central Bank instructed them to dispose of all foreign assets because Cyprus was experiencing a default at that time. The shareholders didn’t want to bring in a chairman of the board from outside and offered the position to me.

— I resisted desperately. After all, I am a professional salesperson, and the chairman of the board is a position with significant legal responsibility. God forbid you sign something wrong and face criminal liability.

But I remembered an important lesson from my first mentors: “Even if you know only up to 20%, get reliable people who will do the remaining 80. Moreover, find people who are equal to you in strength or even stronger.”

Some of the people were already in the bank where I was offered to become the chairman of the board, and some I brought in from the market. So, I agreed.

— I started working in the new position. I thought this banking story would continue for quite a long time, but in 2015 serious turbulence began in the banking market. While I was chairman of the board, the bank was sold twice. Interestingly, they kept me as chairman of the board each time instead of appointing their own person, but there were increasing complaints against all banks. Eventually, the shareholders decided to merge with a larger bank, Vostochny Bank. It was a very difficult and painful process because we had to explain to people what would happen to them when the banks merged. Do you know how the sale of a bank works?

— Selling a bank involves several months of intensive work: you prepare a bunch of documents that you show to potential buyers so they can delve into every detail and check for hidden risks, hidden losses, and ensure that all processes are functioning. Perhaps thanks to this experience, I now easily help my wards prepare materials for financing lawsuits and find investors. I understand how investors think and know what needs to be shown in a presentation to make investors willingly invest money, whether it’s a bank giving you a loan, a private investor, or a government fund. Their requirements are roughly the same; they mainly look at the company’s finances, but finances must be packaged in a certain way. So, if you’re selling your company, you need to package it like candy in the right wrapper: not sugar-coat it, but present all the facts correctly.
That’s a very valuable skill that isn’t taught anywhere. You just have to go through it.

— After I finished working in the banking sector, I took a long time to study myself, try on different roles, and think about what to do next, where to apply all this bouquet of knowledge I had. Firstly, I decided I wanted to start my own business. Secondly, mentoring started naturally for me. Entrepreneurs began coming to me and saying, “Alla, help me with this, help me with that. This is my business, I’ve been struggling with it for three years, it’s not making money but it’s close to my heart.” I started helping and realized I enjoyed it immensely. I derive huge pleasure when I transform a struggling, unprofitable company into, well, not exactly thriving, but sufficiently strong and competitive, where sales start to grow.
I have some wonderful cases where I’ve helped hundreds of entrepreneurs with financial development, staffing, scaling, and so on.

— I really enjoy talking to clients, so one of the techniques we use is deep client interviews, which most entrepreneurs are afraid to conduct, but I find immense satisfaction in them. You don’t need to invent the meaning of your company for people, just ask, ask, and ask again. Record phrases you hear from people and turn them into an offer. This is also one of the lessons from my teachers: “The worm should appeal to the fish, not the fisherman.”

— Everyone makes mistakes and I’m grateful for each one because now I know what not to do. After leaving the bank, I quickly opened two businesses, buying into a franchise. I closed one business within six months and lost one and a half million rubles on it. Despite knowing everything about finances and business development, I made all the mistakes that novice entrepreneurs make.

The second business, a hotel business, was doing very well until the pandemic hit, but during the lockdown, it naturally faced difficulties. Someone advised me to consult a competent lawyer when I realized things were going badly and I was about to lose money. This old-school lawyer said to me, “Kid, sit down and think carefully. Maybe you don’t need to come up with various legal constructs, you just need to record your losses? You don’t know when this will end, your revenue has dropped by 90%, you have no money to pay rent, and your rent is 600 thousand per month for one hostel. Now multiply that by the number of hostels and the number of months you won’t have money to pay rent. Sit down and think.”

There is such a wonderful concept in business: you must be ready to sell it at any moment and ready to close it at any moment. And that’s also an important lesson.

I didn’t listen to the lawyer, and now I have tremendous experience working with our arbitration courts. Fortunately, it was a positive experience because we achieved everything we wanted there. But again, all along the way, we had to calculate very carefully and make many financial decisions.

I opened the first hostel under a franchise, meaning they gave me a financial model, approved the premises, and their designer created the layout for me, although I bent their rules at every step, and quietly chuckled at their financial model.

— For instance, I asked how much money would be needed to open the hostel. They told me 3.5 million. I looked at the financial model and saw that they hadn’t accounted for the first months of operation when the hostel would be unprofitable. Any business you open typically incurs losses in the first 2-3 months until you reach what the English call “break-even” and we call “the point of breakeven”. And you physically need to have this money. So, if in the first month you operate at a loss of 100 thousand, in the second month 50 thousand, in the third month 20 thousand, and by the fourth month your expenses equal your revenue, everything is fine. But you need to have these 150 and 20 somewhere upfront. You need to have them when you start the business; this is part of your initial investment. The guys from the European franchise didn’t know this. So, it turned out that instead of investing 3.5 million, we needed 5 million.

And, accordingly, there were many decisions afterwards. For example, the owners from whom we rented space for the first hostel freed up another floor, they came to us and asked, “Guys, will you take it?” We sat down again with my team and started calculating: what will we do there, the same hostel or a mini-hotel? What initial investments will be needed? What client flow do we forecast? Will it be the same property or will we register two separate entities – one floor for the hostel, another for the hotel? And indeed, we ended up creating two separate entities, realizing that we had economies of scale because one of the floors was already operating as a hostel, and we probably saved a third of the money, a third of the investment, just by opening another hotel floor to it. But we had to consider all of this at that moment!

— What an interesting question. Well, you remember that I mentor entrepreneurs. I help people grow their businesses, sales, and profits. I help make their business systematic so that it operates like a well-oiled machine and reproduces results in the form of consistent sales volume and revenue. My task is to ensure that the entrepreneur knows how to increase performance, how to make the company sustainable, so that it runs smoothly for several years without significant changes to its mechanisms.

So, the biggest challenge for me is probably the unwillingness of the mentees themselves to change. For example, I had a case where we worked with an entrepreneur for several months. I explained, showed, and tried many excellent mechanisms and technologies. After all that, the entrepreneur simply froze and didn’t implement any of the things I suggested, even though I provided all the technologies with every tiny detail. It turned out that he couldn’t shift from the mindset of an employee to that of a business owner. It’s not his fault, but it’s a completely different psychology. He couldn’t manage his time effectively, despite us doing several exercises on task prioritization and compiling a comprehensive list of tasks categorized by importance, urgency, and so on.

And then I encounter this impasse: the entrepreneur doesn’t follow through on our agreements. He still can’t prioritize his tasks, and there are many tasks because the business is already growing. Family matters also interfere, and he works alone, afraid to hire assistants. Essentially, I spent three months in vain.

So, despite pouring my heart and soul into giving him these technologies, they didn’t benefit him because he isn’t psychologically ready to be the owner of his business. But I’m not a psychologist; I can’t help with that. That’s why I recommend excellent psychologists I know, although entrepreneurs aren’t very eager to go to them. They prefer staying in their comfort zone and don’t want to develop further. I can try to help with inspiring speeches, examples, and motivation, but it doesn’t always work. And that’s the most challenging part for me.

— I’m not a coach, I’m a mentor. I find it very easy to work with proactive, motivated entrepreneurs who absorb my information like a sponge, immediately run to implement it, and start brainstorming on their own what else could be done. I see their minds engage; they begin to come up with other methods of promoting their company similar to the free ones we devised together. I simply rejoice for them, and within a month, they genuinely have fantastic initial results.

Unfortunately, there are entrepreneurs who sit and wait for me to do things for them. Or they constantly say, “I don’t understand, I can’t do it.” I explain things to them with examples, show scripts, videos, help with client negotiations, but as long as I am actively involved in their business, everything goes well. As soon as I say, “Enough, I’m not a crutch; you must learn to work independently,” everything falls apart. This passivity and unwillingness to psychologically become the owner of their business is the biggest challenge. Perhaps such people are not meant to be entrepreneurs.

— As far as I remember, the term “financial literacy” was introduced by the government to label initiatives aimed at teaching children from a very young age how to manage money wisely and build their financial well-being. The need for this education arose when various financial pyramids started appearing and later, decades later, when the population began feverishly taking out loans in huge quantities, even taking loans to pay off previous loans, without counting or understanding all the consequences. This is what the government understands by the term “financial literacy,” and this is actually the most accurate interpretation of this term.


On any trendy topic, there’s immediately a surge of hype. As soon as people who want to make quick money, without anything to their name, saw that “financial literacy” was gaining traction, they decided to latch onto it and started writing their semi-literate courses or giving unqualified advice. There’s no benefit from them, but they’ve firmly attached themselves to the topic.

— Here we return to the concept of “financial literacy.” Anything related to cryptocurrency, blockchain, is surrounded by a large number of myths. For me, someone with a natural science background, it’s akin to legends of the Loch Ness monster, aliens, and, you know, ancient lost civilizations. That is, those who speculate on digital currencies, cryptocurrencies, and blockchain concepts simply caught onto the hype and are trying to profit from a population not fully financially literate.

Cryptocurrency arbitrage… It’s a complex term that not every financial expert understands. Will it be easy for an ordinary person, who understands nothing about trading stocks of different companies, working on the stock exchange, really to understand and profit from it? I know, literally, a few dozen serious stock traders who can successfully pick stocks that will grow, know all the workings of exchanges, know when to buy and when to sell, but even they make mistakes and, by and large, throughout the year they are always in a good loss. This is an art, like playing Tchaikovsky’s first symphony or making a Fabergé egg. It’s the kind of art that takes a long time to learn, where you need intuition, talented brains, and skilled hands. And everything else is just another financial pyramid, where the public is persuaded that here we will give you a simple, understandable, easy mechanism on which you can easily earn.

You know, there’s also the phenomenon that with the advent of capitalism, our population started learning that there are ways to get rich quickly, you just have to learn to work with cryptocurrencies and learn to play the stock market. It’s a beautiful tale, it’s a beautiful legend. Perhaps there are examples of quick enrichment, but it’s not a widespread phenomenon.

— All these new financial instruments are just tools, there’s no mystery, no deviation from traditional mechanisms, so to speak. The situation is such that someone brilliant, striving for freedom, invented blockchain and cryptocurrency, and now you can work peacefully without looking back at bone-headed, conservative, greedy bankers. But that’s not true! If you try to operate outside the general laws of the financial market, it will sooner or later lead to ruin. Do you know at least one practical example of blockchain application? I know, in mortgages, blockchain technology is used to ensure the security of money transfer and mortgage bonds issuance; parts of this process are already used by our banks. But everything else is myths and legends from ancient Greece.

— Let’s start with the fact that investors come in two types, that’s obvious: the one who simply, like a rentier, will give you money and wait for profit from you, and the one who, having given you money, will help you in your business with their competencies. These are two different types of investors, and discussing interaction with them needs to be approached differently.

I’ll begin with the easiest or simplest scenario, where the investor sees you as an alternative, for example, to a bank or to investing in any other business. I can give you an example: when I was looking for investors to scale up my hotel project, I had quite a few private investors interested in investing in this project. And when, out of curiosity, I asked who they compared me to, I was surprised to find out they compared me to professional esports, because the return on their money would be the same in my hotel project and in esports. Such an investor doesn’t care what kind of business you are in; they need to understand how much money they will get back on their investment – how quickly and how reliably.

Investors have clear criteria in their minds regarding certain financial parameters considered in advanced financial models. For example, parameters like IRR (Internal Rate of Return) – they expect figures starting from 40%. The payback period for investments nowadays is expected to be no more than one and a half years, roughly translating to 25-30% annual return. There are projects where such returns are indeed achievable, and investors are actively seeking them out.

Until recently, such money could be earned in real estate, esports, and there were individual trading projects where similar levels of return were also present. To ensure that the proposed project possesses these financial characteristics, an investor looks at a financial model, not just an Excel spreadsheet called P&L; they examine a real financial model with calculations of capital cost, changes in the value of money over time, and many other parameters. In other words, the investor needs to present a professional financial model that only a financial analyst can create: how business processes are structured, whether you are losing customers in the marketing or sales funnel, who is selling for you, what sales technologies you have, how you track compliance with sales standards, and so on. All of this must be clearly documented because the investor will delve into the smallest details of how your company operates. Why? To understand how guaranteed the return on their money is within the timelines and scope you discuss. They must be convinced that you have a well-oiled machine that will operate as described to them. An investor looks at the founder in terms of education, ability to interact with people, ability to build a team of like-minded individuals, and how well you can actually create and manage a business that will operate at least long enough to recover the investments.

And the second type of investor – those who, in addition to money, will contribute their competencies to you. It’s more complicated with them because naturally, they will make their own contribution with their knowledge and experience in your business, but you will have to take them into account. For this scheme to work, you need to agree upfront on the shore about who contributes what resources, both financial and knowledge, to the project, and who does what. In other words, responsibilities and tasks must be clearly divided. It’s important to immediately agree on how the performance of each partner will be measured and possibly the associated rewards. Moreover, the rewards themselves must be documented right from the start. Besides, you need to establish principles for parting ways. If you don’t do this right at the beginning of working with a partner-investor who not only gives you money but also knowledge, there is a big risk that either your business will be torn apart or it will simply go bankrupt because you cannot get along with the partner.

Personally, I have experience with both types of investors. Personally, I find it easier to work with a rentier investor who believes in me, my business experience, provides the funds, and expects their profit on specific dates. Accordingly, they also require reporting and updates on how the business is progressing. But when I have a partner who is equal in strength to me, and it doesn’t make sense to take another, who sometimes dictates their own rules, personally, it’s difficult for me. I am a sole manager, but it’s more convenient for someone to work with a partner who complements them.

— Ask questions, don’t worry about what others will think at that moment. “We will increase your sales to a million rubles in two weeks,” okay, how? Demand a step-by-step explanation. A person who can tell you how to do it is a real professional.

It’s easy to distinguish a charlatan from a professional by what they write. A charlatan boasts about how great they are, what accolades they have, whom they’ve helped earn millions, but never explains how to do it; they never reveal their secrets. Rather, “Pay me 300 thousand and I’ll reveal the secret to you.” However, the secret is not worth even 300 thousand, let alone 3000 thousand.

Finally, listen to your innate intuition and develop financial intuition.