Nikolay Garnev: From zero to managing a region with thousands of employees

An interview with the EY Bulgaria, N. Macedonia, Albania, and Kosovo Country Managing Partner for Capital Weekly, September 18th, 2020 

How did you cope at EY during quarantine and what action did you take?

Overall, this crisis came quite unexpected. As a risk management leader for our region, I can say that so far, we have mentioned pandemic risks in some way in our business continuity plans, but without considering them as a danger of high probability – virtually, we have not encountered such a risk in recent decades. So, suddenly we had to address a risk that not only we as an organization, but the whole world was not fully prepared for, especially when it comes to a virus that still remains unknown.

We had to take very quick action – at the first lessons learned from China, the company began to prepare. Guidelines were developed globally, a working group was set up with specialists on these risks in order to have a comprehensive plan to respond to the crisis. When we started taking active measures in March, we already had a pretty good set of instructions, tools and materials from the global company.

This was a new situation for all of us and our efforts were focused on three areas:

  • First, to protect and ensure the health and safety of our people;
  • Second – the business and its sustainability
  • Third – to support our clients and society as a whole – through the measures taken in the company, we believe that this affects the entire public health.

We had to secure the company’s IT infrastructure very quickly so that people could work remotely. If before the crisis we had the capacity of about 30% of the team to work from home, this rate quickly jumped to over 100. This required a great focus on information security and people’s behavior in this regard. Technology development was part of our strategy, but this emergency accelerated the whole process.

I wonder how we would have reacted and what the effect would have been on business if this crisis had occurred 10 years ago, when technology was less developed. The current rapid response would not be possible and the effect on business and the economy would have been far more serious. Obviously, this was a new way of working, and in this reality, we did our best to support people purely emotionally and mentally. We carried out surveys among them on how they feel, what their problems are, so that we can address them in the best possible way.

The second direction was the measures we had to take for the sustainability of the business, with different scenarios – from worst to best. For me, in such a situation, the most important thing is not to deal with the problem in the short term, but the long-term vision for preserving the company’s capacity, the ability of people for professional development so that we can get out of the crisis without losing potential.

At the same time, our clients were also facing this situation, and we, being consultants by nature, immediately started thinking about how we could help them. We started organizing webinars and webcasts, where we presented the news, the legislative changes, the opportunities to cope with difficulties. This all happened in March when we are usually very busy reporting to companies, and everything has to be brought to the attention of clients very quickly. We developed a comprehensive framework for business sustainability in this situation, which generally contains nine components – the issues that need to be addressed with a view to diminishing the effects of the crisis. Based on this global knowledge, we turned to our clients with concrete steps.

What were the biggest challenges for you as a leader during this period?

This crisis is unique and has largely caught us off guard. In any case, we expected an economic crisis after years of growth. For me as a leader, apart from purely dealing with the issue of human security, what measures to take was also a serious issue, to make the offices safe places, and this in all countries of the region, as my role is that of a risk management leader for the CESA region (Central, Eastern and Southeastern Europe and Central Asia). Suddenly, everyone started expecting instructions, help, advice and support from me. We set up crisis headquarters very quickly in the region, where we discussed all the arising daily challenges. We started to share experience between the countries, which was very useful for the individual leaders in the respective fields.

However, for me personally, a big challenge was the connection and contact with people. At one point, we all isolated ourselves at home, and, in a time of crisis, we are set up to look for leaders, authorities, a strategy to guide us. This was exactly the biggest challenge for me as a leader: how to ensure the connection with people so that they do not feel abandoned and isolated, to see that we are doing everything possible as a company to take all necessary measures. We organized regular communication with people so that we can present what we were doing.

Were they all working from home?

Yes, as a matter of fact, 100%, and throughout Europe and the whole world – over 300,000 employees of the company.

Do you give the people the option to return to the office?

Yes, to date we have developed rules and policies for returning to the office. Anyone who wants to return has such an opportunity. Surveys have shown that some people feel very comfortable working in remote mode. Others are just the opposite – they have absolutely no desire and conditions to work from home and, therefore, return to the office. I believe that in the future and after the COVID crisis, our model of work will be a hybrid between what it was before and what it is now. Definitely, the flexibility to work remotely will be greater so that everyone can adapt their work to their own style and needs.

We expect to see what the autumn and winter months will be like in order to assess whether we need to make a complete restructuring of even the physical space in the office.

How did EY’s business develop in Bulgaria in 2019, what is the impact of COVID-19 this year?

2019 was one of the most successful year for us – we recorded a growth of 20%, one of our highest so far. In fact, in the last 7–8 years, we have doubled our business in Bulgaria in terms of revenue and staff. Of course, growth is healthy for any business. To me, however, growth is not always quantifiable, it is not important to be the greatest. To me, and in our business, reputation is extremely important, and our goal has always been to have a good proper image befitting the quality of the services we provide. To me, that is a more important criterion for market leadership.

As for this year, it is too early to say how the crisis will affect us. Our business, of course, is a function of our clients. So far, I am moderately optimistic – the first two months of this financial year – July and August – we are not observing a decline compared to the same period last year in the region. We have a very wide portfolio of clients in all industries and this diversifies the risk for us.

Which segment of your business is the most affected by the coronavirus and in which do you see the greatest opportunities in the current environment?

In the context of this crisis, I would not divide our business into business lines, as usual, but into two large groups. One is the so-called compliance business, which is guided by compliance with laws and regulations. A major part of our work is concentrated here – audit, tax consulting, payroll services, etc. Whatever the situation, the business simply needs to comply with them and with the laws and reporting requirements. We do not see a big decline here.

The other big part of our business is the consulting one. It can be divided again into one related to compliance with regulatory requirements, which is not so affected. The other, generally speaking, aims to improve the performance of companies. This type of business has more opportunities to postpone projects. And we have such areas where projects have been postponed and clients say that this is temporary. Therefore, here we observe a certain delay.

Is there a sharp decline in M&A activity this year?

I would not say that we are seeing a drastic decline. Even before the crisis, activity was not very high, for various reasons. As much as it sounds like a cliché, every crisis brings opportunities as well. Some companies see an opportunity to reshape their investment portfolios, to look at other segments, some to leave the business, others to enter the country. So, there is no drastic decline. Even if we see a relative lull at the moment, the intentions of the companies do not seem to have changed dramatically and definitely in the direction of freezing. Relatively recently, we published a study at European level on the attractiveness of Europe for foreign investment, in different regions and countries – EY Europe Attractiveness Survey 2020. Expectations are for a reduction, but the majority of respondents say they do not foresee a significant reduction in intentions. Even in some cases, there is a need for regionalization – the return of the supply chain to a more regional rather than global level. Hopefully, Eastern Europe, and respectively Bulgaria, will be a region that will be attractive for this.

Do you see an opportunity in these uncertain times for a demand of more consulting services, such as yours?

Yes, history shows that in crises, when we tailor our services to client needs, even volatility creates opportunities. We have cases from previous crises in which, in some countries where there was the greatest decline, our business developed well because we ourselves have helped many businesses in difficult predicament. We see our business as a mission. It is no coincidence that our motto is Building a Better Working World – to build a better business and work environment not only for our employees, but also for our clients, business partners, families, close communities and society in general, and in difficult economic times, this is perhaps more important.

Tell us about a difficult decision in your career

In my more distant career, I have had difficult decisions related to, for example, changing companies – in fact, in my life, I have worked in two companies in our industry. But a more recent example is when, to my surprise, the regional leadership offered me the regional role that I am still holding. To me, it was somewhat surprising because I did not expect to receive such an offer from a relatively small practice like Bulgaria. But apparently the regional leadership had noticed the efforts and successes of the whole team in Bulgaria.

Then, I had to decide whether to accept the role of a risk management partner for the region and I had only one weekend to decide. Overall, this is a good event in a person’s career, you are being offered a promotion after all. And you think that’s one of those offers you can’t refuse. But then you think about all the new responsibilities, about whether you will be able to cope, as they say, whether it is not a too “big spoon” for your mouth. The responsibility of the role is very big, and one has to consider very well not only whether you can take on this responsibility, but also whether you will be able to contribute to this role. I was very hesitant, although I had almost decided to accept. Eventually, the decision to take on the challenge and do my best prevailed. And I have been in this position for five years now, and, in the meantime, the region has grown after the merger of two regions – the former Eastern Europe and the one for Russia and the former Soviet republics. After the merger, I kept my role.

How different is it to manage 300 people in Bulgaria and thousands throughout the whole region? Do you delegate?

Looking back, I say to myself that I do not like the word career, but rather prefer professional development. Because one has to develop professionally and only then comes the career as a result of it. But whenever you reach the next level in your development, it is difficult to make the transition and leave some of the activities you performed before and start thinking more globally and looking at the big picture. In my role, I am required to supervise many functions – marketing, finance, human resources, the purely professional management of the projects we work on, etc. For all this, I rely on the people, on the whole team. Therefore, I wouldn’t call it delegation, but rather use the English word empowerment – to give people the opportunity to express themselves, empower them to work and contribute to achieving the company’s goals. In this sense, I do not insist that things necessarily be my way. I have also seen this type of management, in which things have to be done in the way of the boss, and this can be quite demotivating for the people. Sometimes, I give ‘carte blanche’ to the people and say, “I don’t think we should do it that way, but let it be your way.” And if things turn out well, it’s perfectly OK and there’s nothing better. If they don’t, they’ll think about it next time and maybe listen to my advice. But certainly, I do not insist and think that my opinion is the only right one.

In your opinion, how important is education for the creation of a manager or do experience and practice create the manager?

I have thought a lot about this. In our business, everyone starts from scratch, acquires skills and technical knowledge and, eventually, builds themselves as professionals. Knowledge comes first, of course, because our business is like that – in auditing, for example, you have to be qualified and trained to be able to do it. And from there, you upgrade purely soft skills and build yourself in this environment and business. And everyone has the opportunity to become a partner and lead the business.

So, personally, I do not have an unambiguous answer to this question. Rather, I believe that education is not the only factor to become a successful manager. In the same way, I think about my child now – how to encourage him, whether to study, whether to have the ambition by all means to be an excellent student, as we said and was important before. Or rather, the wisdom of life that a person accumulates and experience in the things he likes to do help him more than education itself. After all, it is more important for me that my son is not arrogant towards others, that he respects certain values, that he is not aggressive, and so on. I believe that these qualities will help him for future realization.

If you could turn back time, would you change anything in your career?

Professional development has two aspects – one is luck, chance or just a series of circumstances in a person’s life. The other is personal effort and aspiration to be good at what you do, to give your best, to be a good professional. And the combination of these two circumstances largely determines a person’s career. And in that sense, I can’t think what I would change if I could turn back time. It’s like in a relationship where you feel well, to say to yourself if you would fall in love with someone else if you could go back in time – probably, but if the circumstances were different. I have fallen in love with this profession, this company and this job of mine, and accordingly, it has given certain results. I don’t see what I would change.

Q&A
Is there such a thing as balance between personal and professional life?

Before COVID, I didn’t like the word balance between personal and professional life because it’s very difficult to trace where one ends and the other begins. You can’t distinguish between them when you like your job and burn in it. But during the isolation, we saw that there was a kind of full integration between personal life and work, to the extent that you couldn’t tell them apart, and it even started to become burdensome. And I went back to the notion of balance, and I think that’s what we need to look for. Balance between work, study (self-improvement) and free time (leisure activities). In this regard, we have a study of megatrends in the world, Megatrends 2020 and beyond, and one of them is a totally different attitude to work, which is emerging from now on. In the future, this model of a five-day working week, two days off, work and then retirement, will obviously develop towards greater flexibility, to adapt your way of working to your needs and capabilities. And accordingly, we have to adapt as a business to this reality; otherwise, we will not be attractive to the new generations.

What devices do you use in your daily life?

I recently came across the word nomophobia – the stress of not having your phone in you. And it turns out that 70% of people experience it. Obviously, I’m one of those 70%, not in the most extreme form, but I definitely need it all the time, because it’s all in it – the office, my friends, the news, my fitness club schedule, the recipes I love to cook, and so on. Therefore, it’s the most commonly used device I have, along with the tablet lately. There are, of course, other types of devices that are important to me. In order to ensure balance in one’s life, one must indulge in pleasures. I don’t focus on one hobby; I try to do different things. So, if I enjoy photography today, the device is my camera. This year, along with my son, I take lessons in horseback riding which I really like, and then the only device I need is just a helmet.

Are you still reading business literature?

In our profession, we read constantly – for innovations in legislation, in regulatory requirements, in best business practices, best technologies, etc. We read to learn and develop in order to be adequate and useful to our clients. The best thing for me in our profession is precisely this continuous training and learning. But otherwise I would not say that any economic literature, concept or management theory have impressed me immensely and I follow unequivocally – everything I read has enriched me, but from then on, I make my own interpretations and adapt things in my practice. The type of media that I read the most and get informed is something like Wikipedia – which presents the facts in the most systematic and objective way possible. This allows me to make well-informed decisions.