A View From the Inside: How Philip Morris Team Works During the War

Russia’s full-scale military aggression against Ukraine caused chaos in the world economy. Some international companies had to close down their business in Ukraine. However, there were also those who understood that their further activity would allow filling the state budget with taxes, supporting employees and providing consumers with products.

Next, we will talk about one of such companies – Philip Morris Ukraine. At the beginning of February 2022, Maksym Barabash was appointed as a general director. This happened shortly before the invasion, so new responsibilities had to be mastered in completely different realities. Mr Barabash agreed to tell Smart Solutions about the company’s work after February 24. The full version of the interview can be seen on the YouTube channel ForHR.

War Requires Innovative Solutions

According to the results of 2021, Philip Morris took 18th place in the rating of the 100 largest private companies of Ukraine according to the Forbes rating and was among the best employers, according to the EY survey. However, with the beginning of a full-scale Russian invasion, the company paused the work of the Kharkiv factory, where about 650 people used to work. Since the beginning of the 2000s, more than 100 million dollars have been invested in it. The company took this forced step because active military operations were taking place on the territory of the region, so it was impossible to expose the team to danger.

This led to a problem with the supply of the products. How to continue business operations when all the production has stopped? The first thing that had to be fixed was imports, as Philip Morris International (PMI) has 39 factories in different countries. But it turned out that this is not the best way out, because:

a) it is a long process;

b) it is quite expensive.

The company spent 2-3 months buying all the necessary excise stamps, and production materials, manufacturing products, and bringing them to Ukraine. In addition, production in the EU countries is much more expensive, and delivery by plane, for example, from Mexico, would cost a lot of money.

The war in Ukraine has united not only citizens, but also businesses. Philip Morris Ukraine was able to optimize business processes and solve the problem of shortage of its products. The solution was cooperation with the Imperial Tobacco factory in Kyiv. Such cases of interaction between competitors have already occurred in global practice in the past, but the experience of both companies was new for Ukraine. The teams at Philip Morris and Imperial Tobacco have made incredible efforts to launch contract manufacturing of PMI-branded cigarettes in early August 2022.

The main challenge for the company remains the issue of people’s safety. Philip Morris took this very seriously. Therefore, during air raids, employees go to bomb shelters, which are close to the IQOS office and stores. This rule is strictly followed.

How Philip Morris International Helps Ukraine

The war in Ukraine could not fail to resonate in the heart of any conscious person. Therefore, employees of branches in Poland, Moldova, Romania, Switzerland, Slovakia, and Hungary joined humanitarian aid and the organization of evacuation of employees with their families from Ukraine from the first days of the Russian invasion. In total, the company’s employees from 80 countries have raised $550,000 as part of an internal charity project. The purchase of critical products and their shipment to Ukraine continues to this day. The company have purchased 22 ambulances and allocated $10 million to international humanitarian causes.

Caring for people is one of the main principles of the company. All conditions have been created for employees who were evacuated abroad and perform work duties remotely. Approximately 80 people work on projects in other PMI branches. Their experience will be useful to restore the business and economy of the state after the end of the war.

Evacuation of Employees and Team Coordination

Already from the morning of February 24 near Kharkiv, where most of the company’s employees live, active military actions took place: tanks moved in, and Russian artillery shellings were executed. The company’s management understood the risks to the lives of employees. Therefore, the management decided to take responsibility for the evacuation. Organized evacuation on such a scale is a serious challenge for anyone. “I don’t know another international company that would take hundreds of people out in an organized manner,” Maksym Barabash admits.

Before the beginning of the war, the personnel went to the factory in corporate buses, and they were used for the evacuation as well. The first evacuation took place at the beginning of March. As soon as other employees saw that it was successful, they also wanted to leave.

However, not everything always goes according to a plan. One of the five buses was involved in an accident as soon as it all started. Fortunately, there were no people in it, so there no one was injured. We had to take everyone out under the enemy`s fire. Everyone was happy when they heard the news that the bus had left Kharkiv, passed through Valky, Chutove, and reached Poltava.

The evacuation was coordinated by a cross-functional team, which included managers from different directions. Each bus was assigned a senior coordinator who was responsible for communication. People were distributed in advance, the route was written every minute so that there were no delays that might have increased the risks.

In general, the evacuation lasted several weeks and was not limited to employees. Colleagues took out parents, sisters, grandmothers, and pets. First of all, they went from Kharkiv to Poltava, the next stage was through Kremenchuk to Vinnytsia, and then to the EU countries.

Advices for Business

The war served as a kind of crash test for internal processes. Many of them still work in automatic mode, but the new realities require manual control. The war also showed the company’s readiness for rapid changes, it was an impact that helped to review activities, increase efficiency, and speed up reactions.

These extremely difficult conditions also showed who was the true partner and assistant. The new reality required solutions that did not fit into the usual framework. This includes cooperation with Imperial Tobacco and the rest of the ideas, the emergence of which was unlikely during peacetime. Maksym Barabash advises in crises:

1. Establish proper communication that promotes trust, greater responsibility, and collaboration between different departments. Philip Morris regularly organizes webcasts with the participation of more than a thousand employees, where they talk about business plans;
2. Feel free to delegate decision-making. When a decision has to be agreed upon with even one person, it can negatively affect speed;
3. Be flexible. The uncertainty of the future requires shortening planning horizons and moving to work in short sprints, which allows you to quickly adapt and change direction if necessary.

“Any business is, first of all, people,” Maxim defines this thesis as the main one. Therefore, well-organized communication is the basis for development. It is not only about general meetings, but also one-on-one communication. This will help eliminate the uncertainty that plagues many people these days. Even decisions that are considered unpopular must be made openly and transparently.

Regarding personal advice – Maksym recommends moving a lot, doing sports, and communicating with people to overcome stress. And the most important thing, when internal anxiety goes off the scale, is to report it. This is the best psychological release.

The Smart Solutions team joins the advice of the general director of Philip Morris Ukraine and advises everyone who can contribute to the victory!