Enjoyable Work Rewards Russian Entrepreneurs

FOUR years ago when the chief engineer of a large defense-related manufacturer on the Volga River took his ideas to the general director, he was kicked out of the office.

Today, says Slava Sudakov, manager of a 350-member collective that subcontracts with the company, the director tells him, "Just do it."

Pioneering the first privatization venture at Tantal Production Amalgamation, a large manufacturer of machine tools and electronic equipment in Saratov (500 miles southeast of Moscow), Mr. Sudakov points to a fundamental change in the workers' thinking as the key to his collective's success.

Sudakov was in Cambridge, Mass., in February after visiting an Indiana manufacturer to begin joint development of a high-precision machining tool. Sudakov and Sergei Zaitsev, research director at Tantal, earlier participated in a management case study on Russian-American collaboration at Harvard Business School. They are seeking markets, investment, and joint technological ventures.

In the 1970s Tantal primarily manufactured microwave, laser, and communications equipment for Soviet defense. Since the mid-1980s, however, the 15,000-worker company has shifted to commercial products. Seventy percent of its production involves machine tools, communications and medical equipment, video technology, and scale-model automobiles. Last year its biggest sales came from videocassette recorders and VCR parts. That is where the collective run by Sudakov has led the way.

In 1987 Tantal directors saw the need to convert from defense-related production, and decided to adapt machinery to mass produce VCR parts. Sudakov and 50 of his best employees agreed to take on the project, but on their own terms. They would form a collective and keep the profits.

From these profits they would purchase new equipment. Facilities and R & D capabilities would be leased from Tantal.

Sudakov says that the motivation to risk everything in this project stemmed from his own dissatisfaction with work: "People who really cared about anything were always dissatisfied with the way things were working." He also credits the changed atmosphere at the top. Not only were encouraging signals coming from former President Mikhail Gorbachev, but Tantal's director, Georgi Umnov, also began to see privatization as a promising way to respond to cuts in state orders and unemployment.

Sudakov's group moved to address the workers' basic needs. "The first step was to buy a farm, because of the shortage of products," says Sudakov. This move has proved especially fortuitous with this winter's food shortages and price destabilization.

"They don't need to worry, or queue up for milk," says Sudakov, "and they are getting it with their own money."

Employees could immediately see the benefit of investing in their own company. The collective recently delivered more than 100 pounds of meat and fish to each employee, helping families through acute food shortages.

Sudakov says his workers also trusted him because he had worked with them for 17 years. "They are my friends," he says. Sudakov has used the trust and reliance of friends and families to build discipline and high standards. There is also the benefit of free labor as family members, including Sudakov's 15-year-old son, often come to the factory during free hours to help.

As Tantal's chief engineer, Sudakov had previously dismissed workers for sloppy work, he says. But in three years, he has not had to fire any of his employees. His style? "Manage by being a good example."

Initially there were a few incidents of sabotage from other industry workers. Today, however, workers wait months for an opening at Sudakov's collective.

During the start-up period, Sudakov says he often spent 24 hours a day at the plant. The employees also had to work much harder. Sudakov says that one woman, recommended to his company by her husband, worked for three days then quit, saying the work was too strenuous. But one day later she returned and asked for her job again. She realized that work with a stake in the outcome is more interesting than just putting in time, he says.

The first entity to privatize at the Saratov plant, Sudakov's collective is one of seven such ventures at Tantal. The success of Sudakov's collective, and Tantal, however, depends on economic and political stability in Russia and the Commonwealth of Independent States, Sudakov says.

Since the breakup of the Soviet Union, Tantal has had to deal with disruption of shipments from other republics, a maze of new licensing requirements, shortages of local supplies, and decreased state orders.

Sudakov hopes that hard currency stemming from business with US firms in Indiana, Pennsylvania, and Alabama will help his collective survive. Still, Sudakov and Zaitsev prefer their new lives as industrial entrepreneurs. "Now life's more interesting," says Dudakov. "It's exciting. It's harder."