In US-Russia Joint Ventures, Emphasis Should Be on 'Joint'

Many American companies are frustrated with Russia. They see the market's potential but hear few success stories. The perpetual struggle between the Kremlin and the Duma over tax and other reforms is only one reason. Another seems so minor that Americans often ignore it, yet it's crucial: how Russians and Americans mesh personally.

Without mutual trust, Russians have a hard time working with anyone, and many Russians believe Americans don't respect them. In some cases, of course, the relationship has been profitable for everyone. But much of the time the association with Americans is trying for Russians, and when you don't like spinach, you take your time nibbling at the edges. Russians can drag their feet on business deals. Americans who have the courage to break new attitudinal ground will be rewarded with more cooperative business relations.

In one joint venture, the Americans tried to get their Russian partners to work with them in pursuing new business. The Americans spent lavishly on perks like corporate jets for the Russians. The Russians weren't impressed. The Americans then tried ultimatums, insisting they would quit the partnership if the Russian side did not act. The Russians saw this as a sign that Americans want to take Russian money and run, and the Russians slowed the process. There was little enthusiasm on either side for understanding the other, or for trying new approaches.

As resentment grew and the venture looked like it might fall apart, the Americans took a risky approach. They dropped their guard and became willing to meet the Russians on their own terms. At first they took small steps, like having a birthday party for one of the Russians at the start of a board meeting. Then bigger ones, like proposing that the lead Russian and American negotiators take time alone together in a nonbusiness setting (something the Russians knew would break the ice, but they didn't want to be the ones to propose it). The Russians, meanwhile, said they were trying to become less unpredictable.

There is a long way to go, but prospects are improving. At a recent meeting, negotiators didn't shout at each other (a first), and there were some positive results.

Knowing that they're not inferior to Americans, Russians don't want to be treated as such. Most Russians want a partnership, a team of mutually respected equals. They're looking for personal commitment from the Americans they work with, not just corporate commitment.

The price for not being willing to change can be ongoing frustration. The American general counsel of another joint venture joked at at recent conference that the Americans in the venture thought they knew how to do business - until they started working with Russians.

Beneath the humor, though, was outrage. The Russia general director was refusing to cooperate with the Americans in a number of areas - for instance, he was hiring people, including personal friends, without the Americans' permission. Rather than seeking some kind of common ground, the American general counsel was determined not to "let him win."

Many Americans who've had some involvement with Russia undoubtedly sympathize. But more experienced, or more perceptive, Americans know willingness to change their attitudes toward Russians can be a big part of the solution. A Russian proverb says, "Don't come to someone else's house with your own rules." Whether Americans are willing to take the risk of trusting Russians will be a determining factor in whether the Russian market opens up the way Americans want it to.

* Keith S. Collins is president of International Business Inc., a consulting firm in Washington.

To Our Readers:

Tuesday columnist Godfrey Sperling Jr. is on vacation.

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