Sergey Matsotsky: “The model of a large company is outdated.”
Sergey Matsotsky is a well-known IT entrepreneur and investor. He has headed the IBS Company for 27 years and is developing several IT companies within his GS-Invest Holding. He spoke about why he left the IBS business, what management challenges he faced and what his principles for being a team leader are.
Маtsotsky and the IBS
Sergey Matsotsky is a co-founder of the IBS system integrator. The company emerged at the end of 1992 and specialized in business process automation. At first, Sergey Matsotsky (Wikipedia) was its Executive Director, and as of 1997 – its General Director and Chairman of the Board. Later in 2020, he went out of business, focusing on projects of his own.
As Matsotsky recalls, the IT industry was very new and hardly controlled in the 90s. The government did not pay much attention to it; there was a lot of freedom and creativity at the time. “Of course, these were very interesting moments from the managerial point of view, from the point of view of how to manage a company, how to build a business, how to select people inside the company, and how to form a team. It was all very interesting,” says Sergey Matsotsky.
In the 2000s, the role of the IT industry began to grow. Some processes began, which were later called Digitalization. Matsotsky and the IBS faced the challenge of offering companies new technologies to help them manage marketing, finance, procurement, and supply chains more efficiently.
Creativity is digitalization
“I am not a very typical manager. I have always been interested in the projects that were developed by the company, as such. It was interesting for me to “squeeze” myself inside a project, to be creative with the team, to come up with some solutions,” recalls Matsotsky. Given their specialized education and extensive experience in implementing diverse projects at the start of their career, the benefits of such participation were tangible. Sergey Matsotsky is a good functional architect and a good software engineer.
“Many people think that creativity is only about venture investments. Like a team comes up with something unique, and then this technology is immediately purchased for a lot of money, and they are creating a new interesting product. Well, it often works quite differently. Just like it was in our case: we produced fantastically interesting projects, which resulted in the fact that we created unique solutions,” recalls Matsotsky.
How to generate innovative things in a big company?
It is tough to “spew out” something new and let it break through from within a large company, whether it be IBS or Microsoft, IBM or Google, Matsotsky says. “The reason for that is any large organization always has quite a few levels of management, levels of risk,” he explains. “And in this regard, it is very difficult for new ideas to germinate inside such an organization.”
In large organizations, Matsotsky continues, if they come up with something new, they would develop it within a separate company – which would be a by-product of a kind. It is only then that it is possible to provide the freedom and informality required for breakthrough products.
Mobility and the spirit of creation
“The model of a large company is outdated today,” says Sergey Matsotsky. — “Especially in a market like Russia, which is quite volatile and changes all the time. Here we need to create something more flexible.”
In addition, the second thing that is important for the success of an IT company is that the management are the shareholders, too. “And then you can bring in the entrepreneurial spirit — the spirit of creation and creativity, of risk and responsibility. All this must be combined in a company in order for it to develop,” Sergey Matsotsky believes.
This idea formed the basis of the new holding company of the entrepreneur – the GS-Invest. It is an IT industry conglomerate of various companies that can adapt to changing market conditions.
Matsotsky is not the boss, but a resource.
“I have companies in the GS-Invest that, at first glance, are in direct competition to each other. While at the same time, no one is very much worried about this – everyone keeps working and they achieve their targets. This would not be possible in a large company. If there were two departments that do roughly the same thing, they would need to merge. What would this merger mean? It would necessitate choosing one of the two leaders.” Decisions like these may be completely meaningless to the success of the business, but they are dictated by the allegedly “right” organizational system.
Sergei Matsotsky admits that the last two years, associated with establishing the GS-Invest, turned out to be very interesting for him. There was a lot of entrepreneurship, including design creativity – something that Matsotsky likes so much. “I am acting as an investor and a senior co-worker who is more of a resource than a boss these days,” he says.
A senior among equals
The main management principle for Sergei Matsotsky is to be on an equal footing. This attitude was established while operating at the IBS, also while launching the Luxoft, and now it has become a fundamental one for the GS-Invest. Do not press, but convince, do not order, but give advice. “I never impose my decisions on anyone. I want to have around me a number of independent, strong people who have their own point of view. And they can defend it,” says the entrepreneur.
He believes a key shareholder can manage companies fully and adequately only in the CEO position. Without that position, the owner can make only two decisions: the appointment of the general director and the allocation of funding for a project. And that would be all. “If there is a desire to do the managing, then there is no need for illusions – the owner becomes the general director,” says Matsotsky.
Today, Sergey Matsotsky continues to launch startups, develop IT companies that are very different in structure and spirit, and enjoy creating new solutions.
