My client was the Kamchatka Hydrophysical Institute, a research and production organization working at the intersection of marine research, hydroacoustics, engineering development, and applied technologies for ocean and shelf studies. By the time of our cooperation, the institute had a distributed structure: a management center in Moscow, a scientific and engineering direction in Saint Petersburg, and a production and testing base with laboratories in Kamchatka.
When I joined in 2013, the institute was in a deep financial crisis. The structure included the parent company and two branches, while at group level there were negative net assets and chronic cash gaps. The team was small — about 23 people for the whole institute — and a significant part of resources was spent on maintaining existing infrastructure, not on developing new projects. The financial model was actually based on the remaining effects of past contracts and did not give a clear path to stability.
I took the position of Deputy General Director and, at the same time, Director of the Saint Petersburg branch, with a mandate to develop and implement a financial recovery program. My task was to return manageability to the institute: stabilize cash flows, rebuild the project portfolio, remove loss-making directions, and create a basis for growth through commercialization of scientific and engineering competencies. The work went on two levels at the same time: strategic, through decisions of the Board of Directors, and operational, through daily management of the branch.
The first step was to prepare a comprehensive financial recovery program and present it to the Board of Directors. The program included analysis of the current financial position, assessment of the viability of key directions, a cost restructuring plan, and a mechanism for reaching break-even. It was important not only to reduce costs, but to change the economic model itself: to move from maintaining old infrastructure to a project logic where each direction had clear economics, a customer, and a financial result.
The program was approved by the Board of Directors, giving a formal mandate for implementation: review of the project portfolio, change of the accounting system, launch of new directions, and renewal of the team.
One of the key recovery tools was the implementation of project-based cost accounting. Before that, costs were recorded in a pooled way: a large part of expenses went into one general mass, which blurred responsibility and made it impossible to objectively assess the profitability of separate projects and directions.
I initiated the transition to project-based accounting: separate financial responsibility centers were created for each project, separate cost accounting was set up, resources were allocated directly, and actual cost was fixed. This made it possible to see the real economics: which directions generated profit, which needed revision, and which systematically pulled the organization down.
Based on this data, we consistently identified and closed loss-making directions, reallocating resources to projects with stable and predictable economics. The branch received a clear financial map: where the result was created, where money was lost, and which projects had to become the basis for further growth.
In parallel, I initiated research and development work focused on practical application of the institute's engineering competencies. We started to form a line of solutions at the intersection of hydroacoustics, data analysis, diagnostics, monitoring, and intelligent systems for industrial and research tasks.
This made it possible to turn part of the institute's scientific potential into specific products and services needed by customers. The institute stopped being perceived only as a scientific laboratory and started to build the position of an applied engineering partner able to solve business and industrial tasks.
During my cooperation with the institute, accumulated losses were compensated, and the financial result was brought into a stable positive zone. Total net profit for the period was about 18 million US dollars. The institute moved from the state of a crisis asset to the category of a growing project with clear economics and prospects for further development.
The staff of the branch grew to 50 people. This growth was not due to expansion of the administrative team, but due to strengthening the scientific, technical, and engineering team for specific projects. The branch moved from being a weak link to a profitable center and became a source of positive financial result for the group.
Under my leadership, the institute's intellectual property portfolio was formed: 5 patents were obtained and 10 utility models were registered. This fixed the results of scientific and engineering work and created a long-term intangible asset, increasing the value of the institute for partners, customers, and future projects.
The intellectual property portfolio became the basis for further commercialization of developments and strengthening the institute's position in the professional community. We moved from separate scientific results to a systematically structured base that supports both current and future projects.
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