They're Kogan's Heros

Friday, March 1, 2013 - 11:55

Kogan.com founder Ruslan Kogan provides his staff with the freedom to choose their own hours and work on their own terms - and when it comes to hiring, he says age is just a number. By Amy Birchall

Ruslan Kogan has had a fascination with business since he started his first at age 10, finding lost golf balls, cleaning them and selling them back to golfers on Saturday mornings.

Twenty years and several business ventures later (he has started more than 20 businesses), Kogan is in charge of online electronics retailer Kogan.com - one of Australia's fastest growing businesses. Its business model cuts out the middle men so it can deliver the latest technology (televisions, smartphones, etc) for less than competitors, including JB Hi-Fi and Harvey Norman.

Kogan is the ultimate Gen Y CEO, with ideas heavily influenced by his own experiences and the spirit of the times. However, whether these ideas can succeed in the long term is yet to be discovered.

At least for now, his unconventional approach to business and management appears to be a runaway success. Kogan.com is valued at an estimated $200 million, while Kogan has been listed on the BRW Young Rich List, the BRW Fast 100, Men's Style magazine's 2012 Men of Influence and SmartCompany's Hot 30 Under 30 CEOs.

He describes his management style as "pretty laissez faire". For example, rather than worrying about trying to control or motivate employees, Kogan allows his staff to choose their own hours and work on their own terms - provided they get the job done.

"Want a day off? That's fine. Want to leave work early, work from home? That's fine too. We focus on what people can bring to the business rather than the time they're sitting at their desks," he says.

This arrangement could be exploited by the wrong type of employee, but Kogan says those who aren't doing their work are soon caught out.

"Everyone is accountable and held to action. Because of that, it quickly shows if they're not pulling their weight.

"The most important thing is having the right team. We look for people who are accountable, goal-focused and get a sense of achievement from their work."

His management philosophy is influenced by novelist Ayn Rand and her views on objectivism, as well as his time as a management consultant at Accenture.

"My days in the corporate world taught me what not to do in business," he says.

"There was competition on a daily basis to see who could be the last to leave. Managers looked favourably on people who stayed late, regardless of what work they were doing. It was bad for productivity because all of these people were exhausted from sitting at their desks from 7am to 9pm and trying to look like they were working hard.

"I was out of the office every day at 5pm. My manager used to ask why I was leaving and I'd say I've finished my work, I helped my team finish their projects and I designed a new way to make processes more efficient. They weren't interested in that."

He says he learnt to value input from team members after his contributions at Accenture were ignored by management.

"One day I was working on a project with 10 graduates and we were migrating data from one system to another... It was supposed to take a week to complete," he says.

"I found a pattern in the files and wrote a script that finished the task in half an hour. I told my manager, who said I had to do the work in the conventional way. He refused to even look at what I'd done. That's when I quit and started Kogan.com."

Potential Kogan.com employees must go through a rigorous recruitment process to gauge their suitability for the company. Kogan chooses only to interview job applicants who have their own Gmail account or domain name listed on their resume.

"If you use a Hotmail email account, for example, it sends the message that you're resistant to change, you don't understand technology and you probably created it while you were still in high school," he says.

"Straight away I can tell that you're not going to be a good fit. "Since starting Kogan.com, no [employee] has ever come up to me and asked how to do something. They don't need to. You can use Google to find out how to do open heart surgery. Employees know that they can find the answers themselves."

The now 30-year-old, who started Kogan.com when he was 23, says that in the digital world, age is just a number.

"It's not about how old you are, or the experience you have. It's about whether your service actually delivers. "Mark Zuckerberg started Facebook when he was in his early 20s.

Everyone uses Facebook. They don't stop and think, 'It was invented by a 20-something-year-old - will it still work?' They just use it," he says. "I've hired 19-year-olds who have had six pay rises and are now on the senior management team.

We ask people, 'What value can you bring to the table?' It doesn't matter how young or old they are or what experience they have. Any employee can put forward a business case."

On the other hand, Kogan has not found it a challenge to lead older workers who may not be used to his unconventional management style.

"When I was 23 I was hiring 35-year-olds and I didn't have any difficulties with that. I made sure everyone was accountable and let them see that I was working really hard too. If you hire right you avoid a lot of problems later on."