Three urban legends about Russian business people

Moty Cristal. Drawing by Dmitry Divin

Moty Cristal. Drawing by Dmitry Divin

A Skolkovo professor dispels some myths about doing business with Russians.

There is a clear distinction between business in Russia and business with Russians. When people say, “doing business in Russia”, usually they have in mind a very old Soviet structure, very centralized government holdings, that actually doesn’t allow any free choice or doesn’t allow any Western capitalistic development of opportunities, and this is far from being the case in today’s economy.

Doing business with Russians

Most of the executive positions in the private sector, and many of the top posts in the government and the government-owned companies are held by young generation Russians, people between the age of 25 and 45. This is a generation that grew up in times of economic prosperity, under a market that offers a lot of opportunities. And from my experience, I find the new generation of young Russian entrepreneurs as being extremely curious, extremely open. They are to some extent nationalistic and are proud to be part of the ‘Rodina’, or the motherland. They want to do business in Russia or develop the Russian private sector. At the same time they have cultural awareness for the need to compete in the global markets. In other words, in order to bring to life the Russian spirit, the Russian entrepreneurship and the Russian creativity, they need to act on a global level, which requires adopting international business norms, not only negotiations.

There are several wrong perceptions about Russian business people, but they can be broadly classified into three Urban Legends.

Legend 1: All Russians are KGB agents

This is like saying every American who understands a little bit about foreign policy works for the CIA or that every Israeli is a Mossad agent. 

Not all Russians are KGB agents, and the intelligence agencies actually stay away from the business sector. If someone doesn’t have a very solid business experience, doesn’t understand business opportunities or how the supply chain works, you could be suspicious about him. However, the assumption that all Russians are KGB agents is far from reality. Some people benefit from creating an impression that they have links to intelligence agencies, as this may give them an aura of power while negotiating with a business counterpart.

Legend 2: Russians are tough

Russians are not tough if you know how to deal with them. The facade of toughness usually is a communication methodology, which has proven to be very successful when Russians deal with Russians. But when Russians deal with non-Russians, they know that their ‘vlast’, or ‘sila’, which are the words for ‘authority’ and ‘force’, may work against their benefit.

The very famous Russian ‘net’, which is ‘no’, is slowly developed to ‘well, basically no, but let’s see what we can do about it.’ I think this is a significant improvement in the way Russians negotiate.

Young executives are much more open not to say no at the beginning, and try to understand and in a Harvard manner, and try to seek common ground. Working globally, I would argue that Chinese are much tougher than Russians and still reflect this power mentality when they come to do business and to negotiate.

Legend 3: Russians don’t have or share emotions

Once, after finishing a very long educational project, I stood next to the vice-president of a big industrial company, and asked him, “Dmitry, are you finally happy?” He smiled and said, “Moty, I’m Russian. I cannot be happy. I’m satisfied.” And when I tell this anecdote, all my Russian audiences and students start to laugh, because it really reflects this Russian habit to hide emotions behind the poker face or behind a cold face. But this is far from being the truth.

Russians have feelings like any business people. They hate, they love, they’re enthusiastic, they’re anxious. The important thing is to attach, or get connected to the individual and to the emotion. How do you do it? You do it through informal meetings, informal gatherings, through relationship building.

Moty Cristal is Professor of Professional Practice in Negotiation Dynamics at the Skolkovo Moscow School of Management

 

Read Vladimir Putin's column on APEC: Toward open, equal cooperation in the interests of development

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