In 2003, my father, my sister and I founded Kormotech, a Ukrainian family-run company producing cat and dog food; in 2008, I became its CEO. I made decisions quickly, trusted my intuition and didn’t believe in lengthy approval processes. Over 23 years, the company has grown into a business with revenue of $210 million, and we’ve become one of the world’s top 50 pet food manufacturers.
When, in 2021, we set ourselves the goal of becoming a global company, I realized that my management style, which had helped Kormotech grow, was now holding it back. I had become the bottleneck in my own business.
In the spring of 2022, at the start of Russia’s full-scale invasion of Ukraine, we began looking for independent directors for the supervisory board. It wasn’t the best time for a major transformation, but we had only two options: to globalize or to disappear in the face of the new challenges posed by the war. The board began its work in early 2024. We gave the independent directors the majority of the votes – five out of nine – meaning they had the right to block even my decisions.
Agreeing to this was easier than actually sharing power and relinquishing some control. It was only once the board was running that I realized what this meant in practice. Here are three things it taught me.
The owner must evolve alongside the company
When we were just starting out and looking for a way to get into supermarkets, there were five of us. We didn’t even have an office, and we’d discuss how to do it over lunch at our first factory. We operated like a startup. I knew every member of the team; we’d stay late coming up with new ideas, and back then, building a management system wasn’t on the agenda.
We acted quickly, even when decisions seemed risky. For a young company, this was a competitive advantage over multinational corporations. Eventually, we captured over 30% of our home market, overtaking Nestlé Purina and Mars.
Today, Kormotech employs 1,500 people across five countries, including the U.S. I can no longer afford to make all decisions as quickly and unilaterally as before, because they affect far more people and processes. What once made me a strong CEO is something I now have to consciously learn to rein in. When you’re both CEO and owner, it’s a whole new level of complexity, because changing your management approach means, in part, changing yourself.
A willingness to share power means a willingness to hear the word “no”
Being prepared to hear “no” from the board is the key condition under which it makes any sense at all. If the owner wants to retain the ability to override the board’s decisions at any moment, then it is an advisory panel, not a supervisory board.
Recently, we were preparing to acquire a Ukrainian company; the term sheet had already been signed, and the lawyers were finalizing the agreement. But the board blocked it. Naturally, I wasn’t pleased: I was ready to move on, but I had to return to the negotiating table. In the end, we agreed on significantly better terms than those initially proposed. For me, this confirmed why the board needs the right not only to advise the CEO, but also to stop them.
The hardest thing to accept is that people who didn’t build this company alongside you can see things you don’t. Sometimes I even regret that I didn’t come up with certain ideas proposed by the board myself. But that’s precisely why it’s needed: not to rubber-stamp the owner’s decisions, but to broaden the boundaries of their experience.
The owner must step back from day-to-day management in time
My sister and I each have two daughters, and the eldest have already said they don’t see themselves taking on day-to-day management at Kormotech. I’m not going to try to persuade them – I didn’t want to get into the business myself until I was twenty-four; back then, I wanted to open a nightclub. But we’re a family business, and naturally we’re thinking about handing it over to the next generation. I’m not going to leave my children a folder of instructions saying “do it the way Dad did.” On the contrary, the company must be able to develop in the future without being tied to my way of running it.
At the moment, I’m wearing three hats at once – owner, member of the supervisory board and CEO. For a family business, this is a risk, because it makes the company too dependent on one person, and as long as I remain irreplaceable, the problem isn’t solved.
Over the next few years, Kormotech should be led by a hired CEO, while I step back from day-to-day management. It is quite likely that this person will prove to be stronger at this than me. If that happens, it will mean that I, as the owner, have done my job properly.
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