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Monday, April 4, 2011

On biathlon woes and business competition

The Russian national biathlon squad has failed at all key events of the outgoing season. I couldn’t care less for this in an economic context, I admit, unless we had as the head of Russia’s Biathlon Union one of this country’s most high-profile entrepreneurs, Mikhail Prokhorov—a billionaire who owns Onexim Group and a US basketball team, New Jersey Nets, and is the chairman of Russia’s largest gold producer, Polyus Gold . He is Russia’s second richest man and the 39th ultra high net-worth individual in the world according to the 2010 Forbes list with an estimated fortune of $13.4bn.

I have read perplexed comments from dismayed advocates of a market economy and winter sports: hey, where is the efficient management that we all know should be part of any private endeavor?

I think it is one of the most widespread illusions cherished by Russian society in transition. In fact, managers employed by private businesses are hardly any more efficient than those working for contemporary government corporations or even socialist enterprises in the Soviet times. In fact, it’s not ‘effective managers’ that are an advantage of a modern market economy; it’s competition helping people with good managerial skills surface and prove themselves that is. Outside competition any management system, be it a privately owned business or a government-run project, is doomed to degradation.

We still have hopes that it’s competition with the Norwegian, German, Swedish and other leading biathlon federations that can eventually improve the quality of management at Russia’s Biathlon Union, thus contributing to more medals.

I would recommend another ‘therapy,’ too, which may look a bit eccentric, though. The sport once brought Mr. Prokhorov into it, among other things, for the businessman to pony up funds to develop biathlon. So, why not attempt the reverse: rearrange the system so that the patron could stop spending but rather start gaining from the Union’s proceeds?

Maybe, the situation will be faster improved if the stakeholders start regarding the sport as a business project capable of generating money.

In any actual business, overinvesting may do harm unless applied to a healthy competitive and creative environment.

All that said, we can however be sincerely enthusiastic about the way Mr. Prokhorov’s ‘Yo-mobile’ hybrid car project is progressing. Odd on the face of it, the Yo project is undoubtedly business-oriented and able to ‘gnaw out’ its share of the automotive market.

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