The interview for this profile was different from the other 24 undertaken for this book. Our interviewee is in a bomb shelter. At one point we hear the signal for the “all clear” from the Ukrainian air defence. Taras Panasenko is in the head office of the highly profitable and expanding discount retail chain Avrora, that he set up at the very young age of 23 in 2011. The office is in Poltava, eastern Ukraine, around 150-200 kilometers from the front line of the conflict, as at late August 2024.
He is calm, business-like and uses the word “optimism”, but there is no doubt as to the perils he and his colleagues have faced, since Vladimir Putin’s regime launched its offensive to seek to seize the whole of Ukraine in February 2022.
“When you have a strong sense of purpose, it’s easier to communicate. You don’t have to over-explain”
Taras and his leadership team had to close 100 stores – they were either destroyed by enemy bombs or were in areas taken over by Russian forces. “We closed all the stores in occupied territories. We will not have any cooperation with the aggressor.”
Remarkably, the business has begun to expand again. In 2023 the first stores opened in Romania, a European Union country. There were 25 in mid-2024, with plans for a further 17 by the end of the year. Store openings in Moldova and Bulgaria are set to follow, and Taras has ambitions for an IPO by 2027. His ambitions go beyond business, he says; he wants to be part of a wider movement to promote Ukraine and its image, so that it is known for more than borscht and conflict with Russia. He also refers to being a global citizen, and to the impact of the IMD Discovery Expedition to Kenya, where he met brilliant entrepreneurs who struggled to access startup capital.
In appearance, Avrora is conventional, but in its business model it is innovative. Taras’ early studies and experience were in engineering, not retail. He became aware of the social usefulness of discount stores while on an internship in Alaska, and recognized that conventional stores were inefficiently run.
“We are successful because I actually didn’t know anything about retail before we started.”
He decided that the proportion of goods on the shelves should be proportionate to sales turnover, with sales and stocking data automated and updated in real time. Retail, he says, is about logic. “Using my engineering background, I invented this replenishment system.”
As a result, stock turnover is 40 days in Avrora, compared with 100 days for a typical primarily non-food retailer. In addition, Avrora was the subject of an assignment on digitalization while he was studying the EMBA, enabling him further to enhance efficiency.
The Avrora retail chain, with its friendly red-and-orange logo adorning store fronts around the country, offers lessons in in-shoring. There are partnerships with more than 460 local producers, with some textiles and plastic products manufactured in Ukraine. Around 15% of the stores’ revenues come from food, 90% of which is produced locally.
“We are successful because I actually didn’t know anything about retail before we started”
Supply chains were hugely disrupted by the invasion, which came soon after the Covid-19 pandemic. Ukraine’s principal Black Sea port Odessa is functioning, but most supplies from outside Europe arrive overland from Gdansk in Poland or from Amsterdam.
Personnel management is very different in a war setting. A high proportion of male staff are eligible for military service. Some roles, such as drivers, and Taras’ own as an executive, are exempt because the supplies made by Avrora are essentials – including items such as power banks and candles that are used during power blackouts. Many staff evacuated from eastern Ukraine have been relocated to stores in the west. The stores have 900,000 customers daily, covering around three quarters of the country’s population.
For all the trauma that he and his staff have endured, there is a sense of social cohesion allied to purpose. The nation’s very survival provides the emotional petrol for the business’s journey. He adds: “When you have a strong sense of purpose it’s much easier to communicate… you don’t need to over-explain.”
Initially he signed up for the Foundations for Business Leadership (FBL) course at IMD, before opting for the full EMBA. He was due to graduate from the EMBA in early 2022 – this was postponed for a year owing to the invasion.
His leadership style has matured. He has become less directive, adopting a coaching approach. At IMD, he says, he learned, “not to be the best individual, but to be a team player”. Leadership, he adds: “is like your software, your human software”. Also influential from IMD studies was learning about prioritization; the ability to focus on the real problem you need to solve.
Leadership should serve society, he adds: “My ideology previously was that ESG was part of the business, but now it’s other way around – business is a part of ESG.”
Every business leader has to adapt to unexpected shocks. Taras has lived through more upheaval in five years than many executives would experience in their whole career. The original application to study the FBL was in November 2019, four months before Covid, two and a quarter years before Putin’s invasion. “It was an absolutely different world.”
