| 1861.The Forwarding Agency Became a Commercial Enterprise. |
The Forwarding Agency Became a Commercial Enterprise. High Labor Productivity, Implementation of Material Incentive Mechanism among the Forwarding Agency Employees.
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F. F. Winberg |
F. F. Winberg, who became the Forwarding Agency Director in 1861, could be considered one of the most successful managers of the Forwarding Agency throughout its history, who radically reformed the whole mechanism of the Enterprise operation and achieved excellent work results. Before F. Winberg became the Forwarding Agency Director, he had been the manager of its printing division and in 1856, together with other employees of the Forwarding Agency, he had been sent on a business trip to Europe to get acquainted with the western paper making and printing production.
By the end of the 1850ies it was decided to upgrade the Forwarding Agency in view of the growing number of orders and considerable progress of printing production and paper making in Europe and the US. It would be difficult to affirm that it was the visit to Europe that laid down the foundation for Winberg’s management reform plans, but one way or another great changes were launched after his return to the Forwarding Agency.In particular, Winberg made an agreement to purchase modern Donkin papermaking machines (England) for the Forwarding Agency. When he was appointed the Forwarding Agency Director it was he who had to implement its technical upgrade. A new production building was constructed, a new water supply pipeline with water purifier filters was installed and additional modern printing equipment was purchased.
 Foreign experts were invited to to help the employees master new technological ins and outs. In particular, in late 1850ies and in early 1860ies a group of experts from the American Bank Company worked at the Forwarding Agency to produce banknotes of the new design and train Russian specialists in new technique. Their expertise can be detected in the high quality of the 1866 banknotes the design of which resembles that of US dollars.
However, new more sophisticated machinery required not only the construction of new buildings and utility infrastructure, but also demanded more efficient business management.
Therefore, the business management reform, launched by Winberg, was of no less important. The new director managed to radically change the economic basis of the Forwarding Agency business, abolishing the old system when it was directly financed from the State Treasury. The Forwarding Agency has become a commercial enterprise. Now its relationship with the Government was based on the system of state orders and the Forwarding Agency had the right to fulfill private orders too at their own negotiated price. Fifty percent of profit were retained by the Forwarding Agency and were used for investment and as material incentives of the employees. Moreover, Winberg also abolished previous ineffective collective leadership system and now all the authority to make decisions was vested into a single Forwarding Agency Manager.
As a result of Winberg’s reforms, the Forwarding Agency has become one of the most advanced papermaking and printing companies in Europe. The transformation of the Forwarding Agency into a commercial company, the need to compete for private contracts and its bonus plan made it possible to increase labor productivity and quality and to encourage shop floor initiative.
The results came soon: in the 1860ies and 1870ies the Forwarding Agency became known as one of the best quality manufacturers on the paper and printing industry market. In particular, the Forwarding Agency was the first company in the world to learn to industrially manufacture portrait and picture watermarks. For the first time such products were displayed at the 1872 London World Fair. In 1872 “The Standard” (British newspaper) wrote in its report from the Fair: "The paper (of the Forwarding Agency) with watermarks was especially excellent and quite a surprise for English manufacturers". The Forwarding Agency awarded gold medal at the World Paris Exhibition in 1878. The management principles that had been laid down by Winberg at the Forwarding Agency did not change until 1917 and were the basis of its numerous achievements in future.
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