You won’t catch Arkadiy Dobkin signing up for week-long strategy planning retreats. If you ask him about his growth strategy, he answers with a shrug that is evident even over the telephone. "Whatever makes sense," says the native of Belarus, a country bordering Russia. "If there is a good opportunity to buy a company, then buy. Or grow organically."
Dobkin is the CEO of Epam Systems, which at age eight ranks 31 on the Inc. 500 list. The North American headquarters of the computer consulting firm is on Lenox Drive. With programmers working in Eastern Europe and Russia, it has 1,400 employees at 10 sites located in five countries, including Russia, Hungary, Belarus, and the United Kingdom, and soon it will open an office in the Ukraine. The firm had $30.1 million in revenues in 2004, and showed 1,840.8 percent growth over three years. Last year there were 1,001 employees. "We never lost money. We are a services business," says Dobkin.
Dobkin sums up his management style in two words: common sense. If he had taken the TAIS entrepreneurial test as discussed in this month’s Inc. Magazine, he would surely have scored high in "adapting on the fly."
"I don’t think I make decisions too quickly," says Dobkin. "I am not too confident – usually I have a lot of doubts. But I move ahead and do not stop. My success is due to a combination of different reasons, not just my personal strengths: some luck, the right timing, the right idea, and my understanding of, not just America, but Eastern Europe."
Dobkin, 45, grew up in Minsk, where his father was a watchmaker, and his mother was a medical assistant. An older brother was an engineer, and a sister was a programmer. He has an MS in electrical engineering from the Byelorusian National Technical University. In Russia he worked for several emerging software companies.
Programming, says Dobkin, brings a quick result. "You see the result of what you are doing by just playing with a computer. It’s not like building a house, which is much harder." Programming can also be compared to watchmaking because in both crafts, someone is searching for bugs, what doesn’t work.
Dobkin set up his own programming business in 1991, then emigrated in 1993, accompanied by his first wife and their daughter. He was 31 years old, and he could read a little bit of English but could not speak it. "I learned it on the job," says Dobkin. He had $2,000 in his pocket, and he used that to buy a car. The family lived in Cherry Hill with his sister, who is a programmer. His first job was for Prudential in Newark.
Then the ruble collapsed, ruining the company he had set up. With the help of a school chum, he set up another programming location in Minsk. Meanwhile, in the United States, he moved to Colgate Palmolive, and then to SAP Labs. "I started moonlighting and grabbed my first client," says Dobkin. He and his business partner, David Scott, opened the first office of Epam Systems on Emmons Drive. Scott is still with the firm. Dobkin’s oldest daughter is in college and his younger daughter is in grade school. His second wife, a physician, has a family medicine practice in northeast Philadelphia. The fortunes of his home country did not affect his business, nor did any government offer a helping hand. Ripples from the financial collapse in Russia in 1998 did not reach him. "Our client base was in Western Europe and the United States," he says.
What did affect him adversely was the downturn in U.S. technology stocks in 2001. His company’s biggest client, the one that provided 70 to 80 percent of its revenues was a high flying software company that had gone public, and it practically went out of business.
"What did we learn? Not to have one client for 70 to 80 percent of our business. Everybody knows it. It is pretty obvious. But real life is different," says Dobkin.
The fall-out from that loss was "a lot of stress," says Dobkin. Some salaries were cut. "We had very hard work to bring in new clients, but we were able to accomplish that, and we replaced most of that business the next year."
In the span of five years he has gone from being able to stay involved in some technology issues to being completely separated from the technology. "Right now I am doing high level management, managing hundreds of people, and in 10 locations and five countries."
"Initially I was selling the first jobs, and David (Scott) was helping as well. Now we have other people doing it, and we get involved from time to time, in special cases where the clients would like to see the executive presentation, or if there is some dispute that requires close understanding of the situation."
Dobkin recognizes that stereotypes have affected his business. While he does not admit to being prejudiced against Americans, he points out that, at the beginning of the 1990s, Americans had the idea that Russians were their enemies. That prejudice worked to his advantage, because no one else thought that outsourcing to Russia would work. "Because we started relatively early, when not too many other people were thinking about doing this in Eastern Europe, we are now the largest in the region."
He did, however, have to work to convince clients that Epam programmers would be trustworthy. "It did not happen overnight," he says. Potential clients turned to him when they ran out of options to accomplish a project and needed to do it inexpensively. "When it was successful, they trusted me with the next project."
India’s popularity as an outsourcing mecca has also worked to his advantage. "Three or four years ago, it was difficult to make sense to outsource to Eastern Europe," he says, "but now India has its problems." In an overheated market, with increased demand, it is difficult to retain a stable workforce of high quality.
American respect for Soviet engineering is also a plus. "Clearly the Soviet Union built up a pretty strong educational system in engineering technologies. We are not using it specifically but clearly we employ a lot of people who went through the schools, and they apply their knowledge to problem solving. I am pretty sure our clients feel some distinguished people are working for us."
A consulting firm lives and dies by its client list, and Dobkin is proud of his. It includes Reuters, Colgate-Palmolive, British Telecom, CareFirst BCBS, Empire BCBS, Encorus, Samsung America, Mandalay Resort Group, Halliburton, and the London Stock Exchange among others. To prove that he has a "pretty good" software engineering practice, he points to the leading software com panies that are his clients, such as SAP and Microsoft. "This differentiates us," he says. "It’s like asking, ‘What doctor does your doctor go to?’"
He is also proud of the level of these projects: "Big corporations trust us with pretty complex projects. Usually they are working with other outsourcers, but as far as we know the complex ones are coming to us." Epam’s latest clients for building portals: a major insurance company and an online travel service.
Fewer employees want to emigrate to the United States now. "In general the world is becoming more equal," says Dobkin. "Standards of living are going up. Right now, if someone wanted badly to come to the United States, it would be pretty easy."
Does he have a desire to go public? "Potentially yes. it is one of the options."
Other than common sense, hard work is his major mantra: "My father worked a lot. We always knew he was trying to do his best. He is 85 years old and still works. And my older brother was working a lot."
Asked what his entrepreneurial weaknesses are, Dobkin gives another verbal shrug. "It’s a stereotype about Russians that they never smile. Clearly I smile much less than Americans." So he would be a better CEO if he smiled more? "Maybe," says Dobkin, and then he can’t resist a quip: "It might destroy the business."
Like the CEO of Albridge Solutions, he is afraid to relax."We don’t know success," he insists. "We have a small company. All around us there are huge companies. We still need to grow. I would like to lose the feeling we don’t need to worry any more, but I don’t think it will happen soon. Even the big companies are not protected. As soon as someone thinks he is completely protected, he loses a client."
And making the Inc. 500 list is not a good enough reason to open champagne, says Dobkin. "We celebrated by working more."
Epam Systems, 989 Lenox Drive, Suite 305, Lawrenceville 08648; 609-844-0400; fax, 609-844-0415. Arkadiy Dobkin, CEO. Www.epam.com.