For Ukrainian businesses, Russia’s full-scale invasion was an unprecedented challenge. The war destroyed the entire previous economic model on which the Ukrainian economy had been built for decades. The country’s infrastructure has been severely damaged, supply chains have been disrupted, and access to key resources and markets has been greatly hampered. Businesses were forced to close, especially in the areas of active hostilities. Even in these circumstances, the Ukrainian economy has demonstrated resilience, and businesses that have been able to adapt have discovered new opportunities and ways to grow. Such challenges forced entrepreneurs to act quickly, revising their strategies and business models to ensure survival in the new reality. This was a time of lessons that transformed the way they did business and strengthened their willingness to act even in the most difficult conditions.
Lessons from the war for Ukrainian entrepreneurs
Roman Anzin, CEO of VARTIS, in his assessment of the challenges Ukrainian business faced during the war, notes that Russia’s invasion in February 2022 did not just change the business climate in Ukraine – it destroyed the foundation of the economy on which the country had stood for decades. Infrastructure was damaged, logistics chains were disrupted, and access to key resources and markets became problematic. As a result, many businesses have been forced to close, especially those in regions that have been under intense attack.
According to Anzin, the Ukrainian economy has nevertheless shown incredible resilience thanks to the rapid reorientation of some sectors. The metallurgy sector has suffered serious losses due to the fighting in eastern Ukraine and the destruction of large steel mills. However, activity in the production of steel structures for the defence and construction sectors has increased, especially in the west of the country.
In the construction industry, which also suffered significant losses, there is a logical trend of increasing demand for reconstruction work, particularly for infrastructure projects. Entrepreneurs have been forced to refocus on rebuilding destroyed facilities and implementing new infrastructure projects that meet safety and energy efficiency requirements. New markets, especially in Western Europe, opened up for companies that were able to quickly reorganise logistics and production processes.
Survival strategies for Ukrainian businesses
According to the expert, Ukrainian entrepreneurs were forced to radically restructure many processes in their companies. Businesses survived by learning on the go and introducing innovations into operational processes. Before the war, Ukrainian companies could plan their activities for years ahead, but now the main thing is to ensure flexibility and readiness to adapt for the next 3-6 months.
Anzin emphasises that special attention is now being paid to human capital management. Due to mobilisation and forced relocation, many skilled workers have become unavailable, so companies are facing an acute shortage of staff. To address this problem, companies that had the resources introduced internal training programmes. Companies serving the state defence order, from light industry to drone and weapons production, were particularly active in training employees. However, in the context of mobilisation, companies need to focus on creating jobs that can be filled by women demobilised from the Defence Forces, as well as by professionals of pre-retirement and retirement age.
Roman Anzin cites the example of his company Vartis, which operates in the rolled metal and metal fabrication market.
“The experience of our company, Vartis, which operates in the rolled metal products and metal fabrication market, proves the need for flexible management of available resources and response to changing market and customer needs. Over the past 2 years, we have opened 10 new metal centres across the country, focusing on the demand of large, medium and small customers for metal availability here and now. We understand that our customers’ need for quick solutions from us is driven by their production needs and the same requests from clients and customers. This need is currently being faced by manufacturers of steel structures for the defence industry and the construction of infrastructure facilities. That is why it is a priority for us to ensure fast delivery of high-quality rolled steel that meets all the standards and requirements for the construction of such facilities. This allows Vartis not only to maintain its customer base but also to expand it,’ says the businessman.
Innovations and changes in financial planning
According to Anzin, innovations, especially in the IT sector, and changes in financial planning have become key factors in business survival. Rapid digitalisation has allowed companies to reduce costs and improve resource management. Whereas digitalisation used to be a competitive advantage in a stable market, it is now a prerequisite for survival, especially for companies focused on mass consumers.
In the area of finance, most successful companies and large industrial holdings have focused on internal investments and seeking financing with a short payback cycle. In times of war, it is critical to have reserves and maintain liquidity, so most investment decisions are focused on projects with high capital turnover and areas with established cash flow.
Interaction between business and the state
According to Anzin, the model of interaction between business and the state has changed dramatically during the war. Businesses are actively supporting the army, funding volunteer initiatives and helping IDPs. At the same time, business expects stability and predictability in cooperation from the state. It is important to have a stable hryvnia exchange rate and lower inflation, which facilitates obtaining loans on favourable terms.
The end of the war will not mean a return to the pre-war reality. Anzin is convinced that the government needs to build a partnership with business to ensure a rapid economic recovery. In this partnership, the state should play the role of arbitrator, and business should be the engine of economic revival, job creation and social welfare.
The main lesson of the war
Roman Anzin notes that the war has become a catalyst for transformations in the way Ukrainian entrepreneurs think, do business, and manage people and resources.
“The war has become a catalyst for transformations in the way businessmen think, how they do business, and how they manage people and resources. Entrepreneurs found themselves in an environment that required quick decisions and strategic flexibility to survive. The main lessons learnt from this crisis outline a new reality in which companies are ready not only to adapt their business model to the war, but also to actively participate in the further recovery of the state.
With the state guaranteeing transparent and clear rules for doing business and entrepreneurs being able to plan their activities in a stable environment, the country has a chance to successfully complete the recovery and become a new economic phenomenon in post-war Europe. The most important thing for us now is to realise the experience gained and convert it into Ukraine’s economic expansion and economic success,” the entrepreneur concludes.
