By Ludmila (Mila) Rusakova Golovine
Russia has always been an intriguing land. Since the time of Queen Elizabeth I, Westerners have sought to conduct commerce and business there. That enthusiasm should be no less zealous today than it was then. Russia is the ninth global economy. It is the largest exporter of both oil and natural gas with seemingly limitless mineral wealth. Russia boasts a highly educated and industrious emerging middle class. Moscow, the capital, now has more billionaires than any other city on Earth. The evidence shows clearly that now is an excellent time to do business in Russia. Nevertheless, Russia has been included as one of the most difficult places to do business. The simple fact of the matter is that many businesspeople have overlooked the cultural differences between Russia and the West. However, through proper cultural preparation and sensitivity, you can certainly succeed in Russian business.
The major impediment to doing business in Russia is the labyrinthine nature of the system itself. Half of the industries in Russia are intertwined with the government. Therefore, there is bureaucracy on top of bureaucracy. In order to get anything accomplished, you must have “svyazi” or connections. Like in many cultures, Russians prefer to do business with people that they already know. In addition, due to the complicated bureaucracy and endless paperwork, it takes someone well-connected to cut through all of the red tape and actually make a deal. The best advice is to research thoroughly the company with which you want to do business and try to contact the most influential person there. Bear in mind that Russians respect authority, age, and hierarchy so the most senior person will obviously be the decision-maker.
One key tool that can give you an advantage when dealing with Russians is the language. Russians know that their language is difficult and have high regard for those who learn it even to an intermediate level. If you take the time to learn as much as you can and demonstrate this to your counterparts then you will gain their respect. Remember that respect cannot be bought or traded. It can only be earned. Speaking the language may not close the deal for you but it will certainly gain you the lead in the beginning negotiations; and in the world of business, every opportunity to gain an edge should be taken.
Business is fairly formal in Russia. Men wear dark business suits and women wear dark dresses or jackets with skirts. Upon greeting your Russian counterpart, it is customary to shake hands and maintain firm eye contact. If both you and your counterpart are men, then the handshake will be very firm, almost bone crushing. If your counterpart is a female then the handshake will be softer. Do not proceed immediately to the business at hand. Your Russian counterpart will most likely want to get to know you better before proceeding to the next step.
Once the business discussion has begun, do not pressure the Russian representatives to quick decisions. This approach will not work and most likely will backfire as Russian businesspeople prefer to take their time to make a decision. Be aware that Russians are shrewd negotiators and will go so far as to walk out of a meeting in order to gain concessions. In this situation, it is important not to show weakness or desperation. The best course of action would be to continue pursuing the venture in a calm and collected manner. That said, at some point you will have to make a few concessions just to placate your Russian counterpart’s mind. Russians view negotiations as a win/lose proposition. If they yield concessions, they lose. If not, they win. In order to make a deal, you must allow them to have a sense of winning.
As previously stated, Russian businesspeople are well-educated. They like to see logical, evidence-based presentations. Flash and flair will not win them over. Your presentation must be well-researched. Furthermore, it is a good idea to bring along a few technical experts. They will add extra credence to your proposal. Should your venture proceed well, ensure that you have translated versions of all contracts. It is highly likely that your counterpart will want to make last minute changes or additions. Be sure you have experienced translators who can verify that both sides’ obligations are clear and understood.
Winston Churchill may have said that Russia was “a riddle, wrapped in a mystery, inside an enigma.” No one can look at Russian business and doubt the validity of this statement. Nevertheless, the riddle is solvable. The solution is diligence, patience, and willingness to engage in cultural sensitivity. Through preparedness and determination, you can certainly succeed in Russian business.
Ludmila (Mila) Rusakova Golovine, Founder, CEO and President, MasterWord Services, Inc., can be reached at mgolovine@masterword.com ; by phone at 281-589-0810, or via www.masterword.com .
Biography of Ludmila (Mila) Rusakova Golovine
Founder, CEO and President of MasterWord Services, Inc.
As a graduate of the Wolff Center for Entrepreneurship at the University of Houston, Mila started her company with a vision of seamlessly connecting people across any language, any time, any culture so she understands the complexities of the global marketplace and excels at providing language solutions based on creative thinking and strategic planning.
