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From survival mode to expansion: how one Ukrainian business leader took a risk that paid off

20 April 2023 in Leadership

When Russia invaded Ukraine in late February 2022, Taras Panasenko (IMD EMBA 2023), CEO and co-founder of dollar store chain Avrora, was plunged into crisis mode. Then he decided to expand his...

When Russia invaded Ukraine in late February 2022, Taras Panasenko (IMD EMBA 2023), CEO and co-founder of dollar store chain Avrora, was plunged into crisis mode. Then he decided to expand his business.

In the early days of the war in Ukraine, Taras Panasenko, CEO and co-founder of dollar store chain Avrora, faced a tough business decision. As Russian missiles pummeled the country, he needed to let his Chinese suppliers know whether he planned to place a new order. 

Panasenko, 35, epitomizes the steely resolve and resilience of many Ukrainian leaders including President Zelensky. The war has crippled large parts of Ukraine’s economy, with more than three-quarters of companies stopping or scaling back production over the past year, but Avrora is not among them. 

With the Chinese demanding payment upfront and Russia choking off the vital Black Sea port, it was uncertain whether the goods would even make it to Ukraine. But with delivery times of at least two months, holding off could jeopardize the firm’s ability to keep operating. Without fresh stock, Avrora would be forced to shutter its stores, which sell household goods and hygiene products as well as power banks, canned food, and flashlights – items increasingly necessary for the war effort. 

Avrora
The majority of Avrora's management team stuck together and stayed in Ukraine, rather than fleeing abroad

Panasenko decided to take the risk. “I realized that if we didn’t do it, we would definitely lose our business. If we did it, then at least we had a chance,” he recalls. “The majority of our competitors took the first decision to stop their operations and to get some cash in. But we believed that Ukraine would resist, and that’s why we continued. It was a bold decision, but it paid off.” 

Drawing on his experience over the past year, here are five lessons from Panasenko on how to lead and take bold bets during a crisis. 

Prioritize the safety of your staff 

Panasenko was originally due to graduate from IMD in April 2022, but Russia’s invasion forced him to suspend his studies while he focused on the survival of his business. The first few months were chaotic. Panasenko worked 24/7 ensuring the safety of his staff, helping evacuate employees from cities that were being heavily shelled, and opening an in-house kindergarten in a bomb-proof building at Avrora’s headquarters in Poltava, around 115km from the Russian border. 

Avrora also provided body armor, helmets, and first-aid kits to the husbands of its employees and around 300 of its own workers, equivalent to around 20% of its male staff, who are serving in the military. 

Be a calm, caring, and confident leader 

Since Panasenko first started studying for his EMBA in 2019, first the COVID-19 pandemic, and now the war, have given him ample opportunity to hone his crisis leadership skills. He believes a wartime leader must provide clear instructions, while equally showing that you can listen to the concerns of your staff. You must appear confident, no matter how you are feeling, he said, adding: “My leadership classes helped prepare me a lot for that.” 

Avrora has grown to become the third-largest non-food discount retailer in Central and Eastern Europe
Since 2011, Avrora has grown to become the third-largest non-food discount retailer in Central and Eastern Europe

He is proud that the majority of his management team stuck together and stayed in Ukraine, rather than fleeing abroad, believing this sends a strong signal to the workforce that they are in this together. 

Never waste a good crisis 

Panasenko first came across the concept of a dollar store – a chain of shops selling inexpensive household goods – when he worked in a caviar processing and packaging plant in Alaska following his degree in metallurgical engineering. In 2011, after returning to Ukraine, he co-founded Avrora which has since grown to become the third-largest non-food discount retailer in Central and Eastern Europe. 

When the Russian tanks rolled across the border on 24 February 2022, Panasenko was focused on the survival of the business, reorganizing supply chains so that goods could arrive via the port of Gdansk and be transported to land onto Ukraine. Yet after a few months he began to sense an opportunity. 

Referencing the famous quote by British wartime Prime Minister Winston Churchill, ‘Never waste a good crisis’, Panasenko decided to expand the business, and now operates around 900 stores across Ukraine, more than even prior to the invasion, with plans to expand to over 1,300 by the end of 2023.  

His EMBA and the war in Ukraine have made Panasenko more convinced than ever that companies can no longer run their businesses purely to make profit.
His EMBA and the war in Ukraine have made Panasenko more convinced than ever that companies can no longer run their businesses purely to make profit. Panasenko believes in providing help and assistance in the wider community

Panasenko credits the support of Avrora’s board of directors who backed his vision. “It’s difficult when you’re only one, but when you’re a good team of like-minded people, we decided that this is an opportunity for us and during the war,” he said. 

Seek inspiration from the outside 

Once Panasenko started to view the crisis as an opportunity, his thoughts also started to return to his degree. 

With a desire to grow the business beyond Ukraine’s borders, he realized he needed to gain a fresh outside perspective rather than just focusing on the day-to-day operations. He switched the topic of his EMBA strategy assignment from e-commerce to expanding into Romania. “It was an ‘Aha!’ moment because you go over all the methodology, and you structure your thoughts, and it was really helpful,” he said. “You talk to another leaders, they support you, and you get inspiration from them.” 

The company, which is backed by private equity firm Horizon Capital, has now expanded into north-eastern Romania and has long-term plans for an initial public offering. 

Think about the broader purpose of your business  

His EMBA and the war in Ukraine have made Panasenko more convinced than ever that companies can no longer run their businesses purely to make profit.  

Avrora dollar store
The Ukrainian war has crippled large parts of Ukraine’s economy, with more than three-quarters of companies stopping or scaling back production over the past year, but Avrora is not among them

Panasenko believes in providing help and assistance in the wider community. The company paid around UAH 1.5 bn or CHF 40m in tax to the Ukrainian government in 2022 and supplied them with trucks to help move internally displaced people. “I think this is what responsible business must do during a crisis,” he says. “Doing business just for money, no longer works.” 

While Panasenko has big plans for his business, he also has ambitions for his leadership, although he denies any desire to go into politics. 

“I see myself as a leader, not only for me and my country, but for society as well,” he said. He is optimistic about Ukraine’s future, citing the country’s vast natural resources and human capital, as well as new anti-corruption reforms. “I believe that in several years  Ukraine will be a hotspot for business leadership. And I want to be one of the people who is making life better for others.” 

Running a business in Ukraine amid Russia’s invasion

Expert

Avrora CEO Taras Panasenko stands in front of one of his stores in January 2022

Taras Panasenko

CEO and co-founder of Avrora

Taras Panasenko is CEO and co-founder of Avrora. He graduated from the IMD EMBA program in April 2023.

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