Doing business in Russia

Five Ways to Succeed Five Ways to Fail

Be patient	Criticize Russia
Be firm, even tough, in your negotiations — the Russians value leadership and strength	Compromise too early in a negotiation
Respect the Russian calendar: their meeting times may not be the same as yours	Show disunity in the team
Pay attention to the hierarchy: it’s important to give due respect to the boss.	Neglect to check what lies behind the prosperous front
Show personal warmth: Russians build business on personal relationships	Use ‘hard sell’ rather than ‘academic sell’ tactics in negotiating

Overview
If you’re going to be dealing with Russia, you’d better first consider the great topic of the ‘Russian Soul’. Note that we said consider, and not understand, because even the Russians and some of their greatest writers continually debate the subject. Russians are certainly different from Westerners: they themselves claim that they are more spiritual. The vastness of their land, the harsh winters. and the country’s tragic-glorious history have all contributed to the forging of the Russian soul.
Remember that Russia lost tens of millions of people — some historians claim 40 million — during Stalin’s purges in the 1930s, and up to 27 million in the Second World War. From all this, Russians maintain a sense of endurance and faith in life, and they do not seem to make the clear distinction between hard logic and emotion that is prevalent in many Western business cultures They often value intuition more than rationality. Certainly, Russians will want to feel that they like you before they do business with you.
Destiny now appears to be rewarding Russia’s fortitude. Oil and gas revenues have transformed its economic situation and its world standing after its loss of superpower status in the 1990s. There is an expanding middle class, and a consumer economy thrives, at least in major cities. However, for the business community, Russia can still seem a daunting prospect. The country derives the bulk of its export revenue from commodities, which can leave it exposed to fluctuating prices. It must modernize its manufacturing industry, reduce corruption and crime and make its banking and other business infrastructures more welcoming to foreign investors. Even so, Russia is now enjoying greater stability than at any time since the momentous dismantling of the USSR in the 1990s.
Values and attitudes
Billionaires who can buy British Premiership football teams with the cash in their back pocket may have given a false impression of what Russians are really like. Most of them share a highly communal and collective spirit. This dates not just from the decades of Communist rule in the twentieth century, but from long before the industrial era, when agrarian life was dominated by village communes and the traditional artels, cooperative associations of workers.
The analyst and former Russian Minister of Economics, Yevgeny Yasin, notes the following traditional values among his countrymen:
• An emphasis on spiritual principles and moral laws;
• A propensity for teamwork based on a history of collectivism;
• Sobornost—the community of the individual will and the endeavours of the people;
• The joy of working;
• A tendency to make far-reaching plans and sweeping actions.
Some of these can have unfortunate reverse implications — collectivism can lead to the suppression of individuality and the creep of authoritarianism — but overall he believes that the Russian people’s qualities can enable to them to adapt to their challenges.

Cultural style
Russian business depends on good relationships. Proceedings usually start formally, but the business will only develop if good informal bonds are created. Russians would describe themselves as polychronic and relaxed about time:
it’s more important to complete the business in hand rather than stick to strict timetables. Initially, Russians may appear reserved, but they are happiest in an environment where they can freely express their emotions.

Communication
Good speaking skills are valued in Russia, but they will also note your tone of voice and body language. Russians appreciate a warm, relaxed approach, and will often ask you personal questions about your family and life in your home country. They can be quite tactile with people they regards as friends, but they are also direct and blunt, and mean what they say. This is unlike most relationship-focused countries, but learn to appreciate their candour rather than fear it.
Russians are interested in the credibility of the speaker in terms of experience, qualifications and knowledge and you must establish this. Strong eye contact is important, and you should shake hands firmly. It will help if you have your business card printed in two languages — yours and Russian.
Russians have a moderate attention span of 30-45 minutes. They will not appreciate you starting off with a joke, so keep your presentation serious, and include facts and technical details. But given what we’ve already said about the Russian personality, you can feel free to inject some emotion into your proposals. Russians enjoy looking at new ideas, but they distrust anything that sounds too official. Avoid words such as ‘aggressive’ and ‘compromise’:
instead, talk about meeting each other halfway, or propose actions that depend on equal concessions from both sides.
Russians are sensitive to what they consider nyeculturny (uncultured) behaviour. This includes swearing, not depositing outer garments in the garderobe, lounging and standing with hands in pockets, shouting or laughing loudly in public and whistling indoors. People shake hands on meeting and leave-taking (older men may kiss a woman’s hand). Smiling on greeting is not automatic (it helps to explain the tradition of surly service in Russian restaurants, shops and hotels), but shaking fists and the American A-OK gesture is considered rude.
Organization
Business hours are 9am-5pm Monday to Friday. It’s important to allow plenty of time for appointments. Meetings can start late and run much longer than planned: punctuality is not generally a Russian virtue.

Meetings and negotiations
Meetings in Russia tend to be long, and often followed by meals. They’re also quite formal, reflecting the hierarchical structure of Russian business, although it is important to preserve uravnilovka — egalitarianism, or the idea that nobody is better than anybody else. You should respect this formality in your style and dress, especially at first encounters. Russians may start and finish late, so be flexible in timing. Meetings may also be subject to interruptions.
When it comes to negotiating in Russia, good personal relationships are what get you through. Your counterpart should like you and trust you. Russian business depends to some extent on blat, a network of contacts and favour. Although it is less strong than it was once was, it will help if you can operate in the spirit of blat.
Most business is done face-to-face, so frequent visits or phone calls to Russia are important. Russians have a variable negotiation style ranging from extreme patience — sitting you out — to strong confrontation. Stay calm: patience is also the strongest card that you can play. Russian negotiations may proceed by concession, so it’s important to build some into your proposal and offer them at appropriate moments.
If there is disagreement, try to show that you understand their difficulties. Be direct and straightforward. Share in their soul-searching of what is wrong or causing problems. Talk in terms of personal recommendation rather than of direct orders or regulations. Build up trust through clarity of action, keep your inner circle small and at all times aim to build trust.
However, it is important to monitor subsequent performance. Don’t put facts before feelings and don’t be sophisticated or devious because Russians are privately quite straightforward.
Russians often send a written confirmation after an agreement has been reached to protect themselves. They are, however, prepared to renegotiate the fine print of a contract after it has been signed if it seems appropriate.

Team-working
Teams need to be built on individual trust, so it’s important to establish a personal link with each member of the group you’re dealing with, and to know them well. Asking advice is important, and is not seen as a weakness. Once people cooperate with you, it is then important not to disappoint them. Make sure the working process is highly organized and structured, and that you and they know who is responsible for what. Unofficial channels and processes are as important as official ones, and can cut through red tape.
Team strengths in Russia tend to be their ability to forge relationships, and come up with imaginative solutions. They’re less strong on implementing and completing tasks. Team members are selected primarily on their competence for the role, although educational qualifications and family connections can also be influential. The team leader makes all decisions, and is usually well connected to other decision-makers.
Leadership and decision-making
It’s important to bear in mind that Russia only began to evolve from its combination of traditional patterns and Soviet coercion in the early 1990s, so it is hardly surprising that Russian business tends to be hierarchical. The top man in the company makes all the decisions, which has two corollaries:
it slows down the process, and it means that you must make sure that you’re negotiating with the right person.
In Russia, it’s who you know, not what you know. As in many other countries, the exchange of favours ensures that things get done: in Russia, this system is known as blat. Although women have equal status to men in many areas of business, especially in academia and administration, at top levels posts are mainly held by men. Women visitors may be subject to ‘old world’ courtesy and gallantry, but may also feel patronized as senior Russian businessmen are less used to dealing with female executives on an equal basis. Russian senior managers, both men and women, tend to dress to impress, and observe some formality in their attire and public behaviour. You should do the same.

Socializing and gift-giving
Don’t go empty-handed: gifts may be exchanged with a foreign visitor if a meeting has gone well. Russian executives appreciate the offer of good quality presents, especially those carrying a well-known logo. On the other hand, a small business gift may not be treated seriously.
An invitation to a Russian home is something to be prized —you should definitely accept. Dinners tend to take place early (around 6pm), and it’s important to prepare something complimentary to say as toasting the host, the country and the relationship is common.
In a meeting, the table may be laid with zakuski (snacks) and even vodka. If so, eat and drink sparingly. If you are hosting the meeting it will be appreciated if you provide some snacks, but alcohol is not necessary.
Great gifts: good quality brand-name products. Flowers, alcohol or a luxury food item are appreciated at a home visit.
Avoid giving: Poor-quality items - the days when you could get away with secondhand jeans, tights or magazines are 30 years out of date.

Conversation topics

Дата добавления: 2015-11-16