Interview with Vahe Danielyan, Manager External Affairs, Scientific Engagement and Innovations of Philip Morris Armenia, taken from American Chamber of Commerce business magazine. Mr. Danielyan talks about the importance of transnational corporations bringing transparency and business culture, technology and experience to Armenian market. Mr. Danielyan believes that companies should act for the benefit of business, for the good of society.
Mr. Danielyan, please tell us about yourself, your educational background and work experience and what is your best accomplishment that you are proud of?
Every stage in my life was characterized by different achievements. During my university years, together with my friends we managed to establish an Armenian committee of AIESEC, international youth-run NGO, which is in consultative status with the United Nations Economic and Social Council. When I joined the Central Bank many years later, our young ambitious team developed Armenia’s first macroeconomic model that embraced all areas of economy and made it possible to make forecasts.
I am proud of my achievements in the field of public administration, among them developing the Nagorno-Karabakh Republic’s regional statistical office into a state institution walking in line with modern trends. The next step was to bring Armenia’s statistical system in compliance with the standards of the OECD member states. As for my achievements after joining the Ministry of Economy, I would like to highlight importance of Armenia’s joining GSP+ tariff system. Since I was coordinating certain areas during the negotiations with the European Union, I was one of the participants of the team that managed to introduce “E-Society and Innovation for Competitiveness” project. The project was designed to ensure future development of e-society and enterprise innovation in Armenia and was the first ever project of this kind introduced in Eastern Europe. I can say that it is due to this assistance and comprehensive measures that we have managed to build e-society, super technological parks and to ensure high availability of computers for the population here in Armenia.
My latest considerable achievements are with Philip Morris Armenia. As a result of negotiations with the Government of the Republic of Armenia, the transnational corporation decided to expand its existing research and development footprint in the direction of Armenia as well. By the way, Armenia hosts Philip Morris International’s third largest research and development facility (R&D) in the world. The R&D center will be located on the territory of the National Polytechnic University of Armenia, and the construction works are underway. For three years now, Philip Morris has been contributing to the development of science in Armenia by assisting students and researchers and by working with Armenia’s research and technology centers and institutes.
Please tell us about Philip Morris International’s operations in Armenia?
Philip Morris International (PMI) is an international company operating in tobacco industry. At the same time, the company is undergoing transformation at the international level to become a technology company and to deliver innovative products that will totally replace tobacco industry in the future. In the past, we used to be simply a large importer in Armenia, but this has changed. In addition to supplying products in Armenia, Philip Morris has turned into a company creating science and technology values. Thanks to building close cooperation with Armenia’s research companies, we in fact started doing research and development in Armenia. Our company’s unique model is not about having dozens of people who are doing research in company’s own labs, but about expanding cooperation with Armenia’s research institutes and contributing to their modernization. This creates a multiplier effect and has the greatest indirect impact on promoting scientific research. This is the reason our company is being perceived in Armenia as a technological partner, a company consuming technological products and an importer of scientific innovation.
Important to add is that Philip Morris is bringing advanced business culture which is typical for an international corporation. Our company was named the Top Employer in Armenia by the Top Employer Institute for the second consecutive year, and this, among other things, is due to ensuring the good conditions for our employees and building a constructive work environment. Our partners mention that Philip Morris somehow has set a benchmark in various areas and introduced exemplary experience of developing business environment. I think our culture of setting and solving tasks is even more important than being among top ten taxpayers. That is why the company is perceived in Armenia’s business circles as a trendsetter in business culture.
What immediate actions did you take to address the challenges of COVID-19?
The company, of course, had to display the top-level example of business culture during the fight against novel coronavirus. If we consider us a part of society, we definitely should not stand aside in times of universal challenges. Problems of the society are company’s problems too. And, this is not about corporate social responsibility but a wider framework. Being an integral part of the society, what can Philip Morris do to be useful? Philip Morris has provided nearly $35 million assistance internationally. In Armenia, our company joined an important initiative of the leading charity foundations to support economically vulnerable families that lost their income due to pandemic. Thanks to the support of $150,000 provided by our company, it has become possible to obtain 14-day packages including food and essential items for people who had been self-isolated. The company also provided funds to purchase tablet PCs for children from vulnerable families so that they could continue distance education. With our support, personal protective equipment was provided to hospitals. The beneficiaries of the projects were selected based on the data received by the Ministry of Labor and Social Affairs as well as Commandant’s Office.
How did Philip Morris transform the working process to address pandemics? How do you keep your employees motivated?
As for business culture, I would like to mention that the key point in the fight against Covid-19 was our approach towards employees. At Philip Morris, we decided to provide all our employees with an opportunity to work remotely before the state of emergency was declared; to some extent we even insisted that people who have necessary conditions for working at home, should stay at home. Thus, we reduced the risk for our employees and their families, setting an example for other companies. In fact, remote work is not a new thing for us; our employees had all technical equipment to work remotely even before. Of course, there is a psychological problem: when working remotely for a long period one may face the risk of losing touch with business. We tried to be flexible and developed business culture for remote work. We tried to do even more: after seemingly endless online meetings and consultations, we gather in front of PC each Friday to discuss our daily routine and sometimes even to drink wine together. We have remote meetings with business coaches and psychologists. There is a chance to have a home workout with a fitness trainer. So, we tried to use all options to make it comfortable for our employees to work at home without choosing between health, family and their job.
Mr. Danielyan, what challenges do you face in the very competitive sector in Armenia and what steps do you undertake to overcome the competition? What is the uniqueness of your company?
Your last question is the answer. PMI is unique because it has competitive brands, and is capable of growing global brands. The key feature of Philip Morris International is to foresee what will happen in the future and to adapt to the predicted future realities. The process of transformation that our company is going through proves that by observing and analyzing business environment today, we foresee possible developments that may occur tomorrow and make huge investments in the development of new technologies. Today we introduce a new product on the market, which is different from technological viewpoint. This will definitely have a considerable impact on the future behavior of the global market. Perhaps PMI’s challenge today is to develop a new generation of products and to create an entire ecosystem around it, at the same time educating and raising awareness of the public. Reassessment of company’s internal processes and approaches, including business models, employee’s way of thinking and other components, is an integral part of this.
Mr. Danielyan, can you tell us about the PMI strategic cooperation with the RA Government on establishing the PMI Science R&D center in Armenia?
Public private partnership is the principle for establishing Philip Morris International’s R&D center in Armenia, and I do believe in its effectiveness. On the one hand, the government believes in the future of technological progress and the attraction of investments in Armenia. On the other, Philip Morris had experience and knowledge in that field and was capable to contribute to the development of respective infrastructure. The government is a great impetus to technology development, but eventually business community is its driving force. Business finds what is in the scope of its interests after having understanding of the directions and priorities for the development of the country. Running business in a way that the society could benefit from it is the concept of sharing values with the society and the key to future success.
We, of course, are not a non-profit organization, but we are developing in line with the country for the benefit of business and for the good of society. Being a company that has its own advanced research center, it was a logical move to express readiness to work with the government in this direction. Our Swiss partners, who were considering possibility of establishing a research facility in Armenia, discovered a huge potential for the development of physics, mathematics, chemistry, materials science, engineering in Armenia as well as potential of our advanced scientists. This is a good background to build an ecosystem. The existing research institutions are being financed to ensure development, while other research centers are set up to scale up the process. Creation of a favorable environment by the government with support provided by business is the idea behind the research center.