The Human Paradox

Как бы там ни было, несмотря на все «национальные особенности», российская бизнес-культура все больше приближается к международным стандартам.

The Human Paradox

Как бы там ни было, несмотря на все «национальные особенности», российская бизнес-культура все больше приближается к международным стандартам.

Country Kirill Rubinski
Kirill Rubinski Country

Business has become more than a mere facet that reflects the world in all of its diversity; it is also the heartbeat of the material world we live in. Perhaps this is why we tend to think of business as an absolute, that it must be determined by common sense, dependable and objective, a science in its own right. Kirill Rubinski, a businessman who knows firsthand the realities of the trade in both the New and the Old World, shares with us how far this understanding strays from the truth.

It’s just business, nothing personal” — this is the line we’ve been fed time after time in the movies. And it’s not surprising, given that pattern dictates there is no place for emotions in business, that nothing human survives. There is only income, only cold calculation, economic expediency, conflict, or concurrence of interests. It’s a cliché into which business itself has invested no small effort, seeing as, the less we feel, the lesser the likelihood that something will go wrong.
In reality, everything is different. When working for a big corporation, whether in investment banking, consulting, or international manufacturing, all business decisions should be subordinate to logic, and your purpose is to make money. Here, the human factor is absolutely vital. There is no way to organise a business in which decision-making and problem solving are independent of the personal qualities, ambitions, fears, and frustrations of human beings.

In the so-called Western business world, formal documentation, anything cemented on paper, always prevails. Unofficial circumstances, such as verbal interactions, or anything unsupported by paperwork, are secondary. In Russia, things are somewhat different. Let me start by saying that, in the last ten or twelve years, the culture of conducting business in Russia has made great strides in approaching the level of that in Europe. But, still, business here is much more personalised; informal circumstances must always be considered in deal-making.

When, after many years of experience working in European or American companies, you transfer over to the Russian system, you will often enough come across those famous and successful businessmen who make decisions based not always on business sense, but on personal complexes, emotions, or fears: for example, the acquisition of an asset for the sole purpose of demonstrating to someone, or even just yourself, that you can do it.

Out of many such instances, I recall one in particular that involved a CEO in one of the larger cities in Eastern Russia, who underwent lengthy and complex negotiations to sell his business. After closing the multi-million dollar deal, all necessary forms already signed, he asked to be kept on as General Director for another two months, without any of the necessary signatures to do so. We explained to him that that was, of course, impossible, that the deal was done, the money paid, the shares apportioned, and that he didn’t have any official rights. He replied that that was no matter, offering a colossal sum just to continue working at his former position. When asked why, he explained the importance of celebrating his 50th birthday as a CEO; otherwise, the governor, mayor,

local FSB chief, and the other respectable townspeople wouldn’t attend his celebration.

I assured him that, if they didn’t come, it would mean that they cared more about his status than about him as a person, in which case he didn’t need them anyway. But this was of greater importance to him even than money, logic, or common sense.

Russia has a particular way of conducting business that was formed over the last 25 years, though much of it is left over from the Soviet era. Back then, and this is the fundamental distinction, there was never a guarantee that your property was yours.

We allowed him to continue on as General Director, lacking though he was of any formal powers, and he retained the official status until his birthday. Needless to say, we didn’t take his money, and his party was attended by everyone whom he had hoped to see. And that was that. We never quite got the point, or understood why it was so important to him. Well, other than the fact that this is yet another example of the kind of illogical, inexplicable decision-making that seems to occur with some frequency in matters of business.

In Russia, some things are hard to explain. You’re amid negotiations, for example, with an American businessman, and trying to explain to him how business is conducted in Russia. You say, “Well, you have the city council, and then there’s the IRS, and then the specific enforcement agencies, well, you know.” And he goes, “I know what?” For a foreigner, it’s almost impossible to understand that the government, or some such municipal structure, can conduct interactions with businesses, off the books. That this business is conducted not on paper, but on the principal of certain definitive rights. This manner of looking the other way is contrary to the Western approach; it’s not American, certainly.

Russia has a particular way of conducting business that was formed over the last 25 years, though much of it is left over from the Soviet era. Back then, and this is the fundamental distinction, there was never a guarantee that your property was yours. With the exception, perhaps, of flats, garages, and country homes, anything could be taken from you. I am, of course, exaggerating a bit, but, in any case, the majority of business owners keep in mind the possibility of losing their business to the government at any moment.

In the Western business environment, people spend less time on various methods of tax optimisation. They still exist, but are less sophisticated than we see in Russia, where people still exert a great deal of time and energy to paying the minimum in taxes. People in the West accept that they have to pay taxes, and they don’t allot much of their time to trying to save 1–2% through some dubious tax optimisation scheme. There are rules there, and there are also loopholes in the system, but people are afraid that finding those loopholes will later result in a tenfold fine.

Another peculiar feature of the Russian business environment is the differentiated gender approach. In the States, negotiations with a female head of company are identical to those with a man; I, at least, haven’t noticed any difference.

Women in Russia have a certain duality about them. In spite of the fact that women occupy top-level job positions, conducting their business with the same efficiency and capability as their male counterparts, they are still regarded both by society and themselves as “the softer sex.” Russian women enjoy when their colleagues, superiors, or employees present them with spe- cial displays of attention, like flowers and gifts. It’s considered good form. In the States, this violates business etiquette, and therefore rarely occurs. If you go into the workplace to fight on equal terms, you can’t then expect special treatment in other regards, just because you’re a girl. Sure, it’s nice to receive flowers and presents from men, but don’t be surprised, then, when they aren’t able to see the woman as an equal and serious negotiation partner.

In Russia, a woman of any status or occupation can always play the gen- der card by flirting and displaying her femininity at the negotiation table, and no one would be particularly shocked. Meanwhile, she can be an aggressive negotiator, very effective in developing creative ideas and making judgments, determined to implement that which has been agreed upon. In my view, when business and social traditions intertwine arbitrarily, when this results in the lack of clear business etiquette, the first to be inhibited are women.

Anyway, in spite of such cultural intricacies, the Russian business structure is gradually coming to resemble international standards. There is more professionalism, and official contracts are becoming the norm of business interactions. It’s a slow process, but the laws concerning business and finance are also seeing changes. Many young office managers are returning to Russia with Western educations and experience working abroad in teams of international colleagues, ready to bestow their expertise on Russian companies. On top of that, our businesswomen have come to position themselves in the workplace as professionals, first and foremost, rather than simply “the softer sex,” worthy of special treatment. And, about this, one cannot help but rejoice.