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Dr. Zakoshansky’s look at ILLA’s history

- The R&D company ILLA International was founded in 1992 on the basis of a laboratory of the scientific and production association Lenneftekhim (Russia). How did you come to the idea of founding a company?

- The American company General Electric showed quite an interest to the technology we had developed and was eager to buy it. The rights to this technology (patent) were owned only by its author. When you buy a piece of intellectual property you have to protect the rights of both the owner of the patent and the purchaser. But the contract is signed not with the owner himself, but between the company that sells and the company that acquires a license. To sell the license to my process to GE, I established a private company. This is how the company ILLA International was created and registered. To tell the truth, a private company in 1992 was kind of nonsense, it was an eyesore for people who worked in our institute. I was a black sheep, really. Besides, owning a private company was even dangerous, nobody knew to which side the political pendulum would swing at those times. People who established private companies ran certain risk; perhaps, they didn’t dice with death but surely with their future. But I decided to take a risk and it paid off. During the perestroika period the majority of the research laboratories and sections in our institute (and not only our institute) burst like soap bubbles, they stopped to exist. People lost their jobs. On the contrary, the direction of our scientific research became the one which the country can be proud of. And it is not even the matter of pride, many people in our company are engaged in an extremely interesting research which is paid quite well. And keep in mind that science in our country is in a position of an outcast…

- So the company was not established as your fancy…

- I had to do that to realize my idea, to sell the technology—which at that time was the best in the world—to a western company, GE in particular. At that time no one understood nor recognized this technology or even our line of research activities. I created a company and a whole scientific direction, and this longing for freedom was a must for me.

- What else was the company engaged in?

- At that time just in phenol process. A small laboratory smoothly transformed into a company. It was the name that changed—a laboratory became an independent company. While our researchers and engineers continued studying phenol process and ways of its cardinal improvements, just what they had been doing before. Although the rearrangement of the summands (names) did affect the sum!

- When you sold your technology, did you dream of anything else? Did you foresee any perspectives?

- Well, the first thing I have to say is that once our fist technology was sold, our target was to drastically improve the whole process. In fact, none of the approaches developed in the laboratory and, therefore, in the company was of use. Everything had to be changed. The name of the process and final products (phenol and acetone) are the same, but all the concepts of the process design, the technology itself as well as the composition of the feedstock (which the whole technology depends on) used in the West were different. So we had to create a new process. And not one process, but many of them, since the process comprises at least seven independent chemical processes that operate absolutely independently and at the same time they are interconnected as a whole. Actually, our grandiose aim was to completely discard what was invented 50 years ago by the first authors of the phenol process, to reject everything we had created within the previous 20 years and to create a new, up-to-date technology which values would considerably outperform world standards. If you don’t do this, if you don’t have a technology which would feature the values that leave competitive technologies far behind, then you are doomed—nobody will buy a technology from a small company. The technology will be acquired from those who are well known in the world. I repeat it—if you want your technology (or technologies) bought, your technologies must be much better compared to the competitors’ offer in the world market. Eventually, our company succeeded, and we became world leaders in phenol process. That’s not a nice slogan, we prove it with the fact that the bulk of world phenol and acetone is produced using our technologies.

- How many people did you have in the laboratory?

- Well, there were a few people… First, I was at the head of a group, then a sector and then I became a head of the laboratory, but it was so small… Phenol direction in our institute was always outcast, it was unpopular and considered to have no prospects. No people, no equipment provided. This scientific direction was not financed, we had to learn to earn money long before the perestroika came. I talk about it without any intention to tar the reputation of those who were wrong in their estimations of the prospective of this direction, those who at that time decided to close it and stop financing. But that is how we lived in Soviet times. But time proved that institute administration and academic council were absolutely wrong. This also contributed to the creation of an independent company where we could decide on the concept to choose. We knew this process would work all over the world, we were sure of it and proved it is true during all the following years. For all the period of existence of the institute, only our process was recognized at the world level and our process values really surpassed world standards. Our process is very popular. In a way ILLA is a trend setter, it determines technical philosophy and new concepts of phenol process development. That is the status of ILLA’s technologies for the beginning of the 21st century.

- Did all people from your laboratory join the company? Or was there any selection?

- At that moment, the laboratory counted only several people. But the institute was at the edge of breaking up, people who worked there got no salary and they were looking for a job. That is when we got a chance to select. Whom we want to employ, who is really hard-working, who has a potential, who has future. We surely made a selection, but by simple criteria—professionalism and desire to work hard.

- Who of those who started work with you is still working for the company?

- Basically, nobody. Later, some people joined me and they still work for ILLA. For example, Irina Vasilyeva. There were other people, Valeriy Tchulkov, Andrey Gryaznov, but unfortunately, they are gone now. The bulk of the researchers came to ILLA later. Perhaps, Sasha Tyutyunnik, who started to work for ILLA practically at the moment when the company was established, and she is with us for about 15 years already. She was engaged as an interpreter, because we were unable to understand and translate into English, and she was a very good interpreter. Then Sasha became Alexandra Valeryevna—the head of the translation department directing the work of three or four people, and now she is in the management.

- What kind of a promotion do people get in ILLA? How do they “grow”?

- Well, the one who wants to grow, grows. Everybody has his or her own so to say niche. Actually, people who are engaged only in scientific research don’t really care about the hierarchy structure and that’s fair, I don’t care about it either. If we talk about knowledge, keep in mind that for the last ten years we invented many technologies, we changed the old process to create a new one, and of course ILLA’s employees took part in all that and the level of their knowledge increased immensely, and to my mind they really enjoyed it. Some people, naturally, got a good career development. Thus, Irina Vasilyeva came to ILLA as an ordinary researcher, now she is at the head of the R&D center, Andrey Gryaznov joined us as an engineer to become technical director. Basically, everybody grew… And many people really got a good promotion. But the burden of power is not too easy to bear it with honor. That is also true. I stop working with such people, just as the whole world does it. And I am going on searching for the best future-oriented model of the company management. My aim is to provide people with a chance to grow. And I give it to many. The rest depends on them.

- How did your clients come to you?

- A client is the one who buys your technology. If your technology is much better than your competitors’, you have good chances to sell it. If your technology is comparable in values with the technologies of the competitors who have quite a reputation in the world market, then a small and unknown company has very few chances to sell it. We succeeded in entering the cruel market world not because we were lucky, but because one of our technologies determining the concept of phenol process highly surpassed the technologies of all known competitors. A successful start of this technology in GE attracted attention of other clients. Besides we had to travel all over the world, we made a website, met with people, took part in international conferences, etc. This made us known, people got information about ILLA, about our processes, and, knowing that ILLA works successfully and at higher level, major companies started to apply to ILLA. Of course, ILLA’s management also addressed these companies with our proposals, lots of meetings and presentations were held. It was not that easy to enter a new market, and licensing and marketing were new to us, we were new people. This niche was occupied and we had to drive out those companies who were monsters, in a way. That was quite difficult. But my approach is simple and tough. Don’t intrigue or persuade, prove your uncontestable advantage with facts which can be easily checked. And the clients check it and come to a belief that your process is the best. If your process operation is beautiful and you can show how it works, if this process is talked about (and demonstrated) by those who operate it, and they show you practical results instead of appealing to “paper values”, when ordinary control room staff say it is not a process but a fabulous toy, a dream, then of course, all this makes certain impression on people, on new clients, who want to buy this process. But you have to prove and confirm your success all the time with new breakthroughs, new success. Only then clients will follow you and acquire your new technologies.

- It is a rule that any company has ups and downs. Did ILLA have them?

- Yes, sure. Ups and downs are typical for our life, for people and companies. They are normal phenomenon. Well, one of the downs I had was when I made a mistake and split my first license fee among the authors. Then we had nothing to live on. That was stupid of me, my big mistake. Instead of saving money for future I gave everything away. That is why I had to accept a proposal from the General Electric to work as a consultant for them. Luckily, it was me who loaded them with work, not they. They paid me for my job and the salary was quite high by that time. But I had to spend my money to sustain my company in Saint-Petersburg. That’s how it was. And of course, it was kind of a slavery which I had to submit to earn money and provide for my company. My salary was enough, though at that time sustaining my company cost me really cheap, about 50 times less than today. There were times when it seemed there was no way out and I even thought of dismissing people, because after we sold the process to GE nobody else was eager to buy it in spite of a tremendous success. Our potential clients were waiting for some time to pass to see what becomes of the process. I had no money and I was at the edge of announcing a severe reduction but instead of these words, I said “We’ll overcome!” I did find a solution. We developed an essentially new process for Phenolchemie (currently INEOS), world largest phenol and acetone producer. And not only developed but successfully started it up at a newly built plant. The plant capacity of 400 000 tons of phenol per year was really huge, that is what the whole Soviet Union produced at seven phenol plants in its palmy days. It was another fantastic start-up after GE. And it was, in a way, a launch for us. But then the phenol market went down, so did we. So, there is always this move up and down. It is the same with scientific research. We have been engaged in some developments for about 9 years, we have succeeded at some point but then you look at it and realize that it is not what you want. And the research starts again. So we are continuously moving up or down. Both in our scientific research and in our life. We have acquired a building for the company recently, it is very beautiful, well-equipped… and it is a success, it is an upswing! But at the same time we had invested a lot into the construction and ILLA’s future is a bit less secured. That is a down but it has a positive effect. Our employees work in very good conditions using modern equipment, and this provides a higher level of research and engineering. And our clients see it, they feel this continuous growth.

- What is your vision of ILLA’s future?

- My philosophy is pretty simple. If there is no future, what is the sense of investing? And I wouldn’t have invested into my company. Years ago it was my property, but I gave it all to my people, I mean the building, the rights, etc. I gave everything to my employees for the sake of their future. But there is one important thing: you can talk about future only when you have a unique marketable package of technologies and you have new developments which leave behind not only all your competitors but your own previous process. ILLA has both, that is why I believe in its future, in people who work for ILLA, in ILLA’s new management even if they are young and eager and make big mistakes… But I always believed and still believe in young people, that’s why I gave all myself to our WORK and require the same from them…



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