Russia has become one of the stealth markets of the 1990s for American companies. While the US public reads about mafia shakedowns and government turmoil in Moscow, corporations like Kodak, Xerox, Bausch & Lomb, and Mars invest millions of dollars there in anticipation of big returns in the future. Given the estimate by the London School of Economics that Russia could become the world's fastest-growing economy in the next three years, these firms may be playing their cards exactly right.
When President Clinton and Russian President Boris Yeltsin meet in Helsinki March 20 and 21, there will no doubt be complaining about business issues, as Americans insist on more rational Russian tax laws, and Russians try to make their case that the US government should channel more aid to business projects in Russia.
The good news is that some Americans companies are learning how to work with Russians. They pay attention to the Russian proverb: "Don't come to someone else's house with your own rules."
In working with Russian companies as well as in conducting training sessions for American companies, we have pinpointed a number of issues that, if handled wisely, can yield big dividends for American companies in Russia:
*Responsibility. Any company that has operated very long in Russia will know the signature "rule": Why put your name all alone on a document when you can get 15 other people to join you? Many American companies have become frustrated at this cumbersome Russian process of protecting yourself from blame if something goes wrong. However, in Soviet days, Russians had to be very cautious. Mistakes could have long-term repercussions. If your Russian partner seems to be trying to find some way to dodge responsibility, don't waste your - or his - time objecting. It's probably just the survival instinct. Instead, designate a person who will be responsible for your part of the project and bring him or her to meet your Russian partner. That will help establish the right atmosphere of accountability.
*Respect. It's very important in Russian business. In the US respect is a given in most business circumstances; in Russia it has to be shown. But compliments need to be genuine. Before you meet with the head of a Russian company, find some things about his career that are worthy of praise. Showing respect for what your Russian partner has accomplished (even under the Soviet system) will go a long way toward creating the right environment for business.
*Emotions. Where an American may hold inside what he really thinks, in order to maintain a calm business atmosphere, a Russian may not hesitate to let you know in an emotional way when he thinks you're wrong, even if it causes temporary discomfort. If you think about it, that's a real help to doing business - at least you know where you stand.
But how to handle emotionalism is sometimes tough for Americans. When you are faced with a genuine emotional outburst in the middle of negotiations (and such an outburst is much more often genuine than strategic), it's good to take a break immediately. Don't ignore the incident, because your Russian partner will probably be embarrassed about his loss of control. Instead, reconfirm your relationship by, say, talking about a mutual interest separate from business. Move to another issue, then get back to the disputed point when things have quieted down.
*Friendship. The president of a prominent Russian food company told us recently that his approach to sizing up a future partner is very simple: The person comes first; his ideas and money are secondary. Anyone who has done business with Russians successfully knows that relationships are all-important. Even if you have terrific ideas and lots of money, they will only get you so far if you have not established a good personal relationship with your Russian partner.
How to do that? Americans are friendly, but give it a rest sometimes. After an American leaves a room, it's not uncommon for Russians to say to each other, "Why was he smiling so much?" And the common belief that all you have to do is down a little vodka with Russians and you'll be friends is not only false but dangerous. Becoming "drinking buddies" has its own implications that are not always conducive to efficient business.
Doing business in Russia is not easy. There are many challenges besides those listed above. But, if Americans come to Russia willing to adapt their considerable business experience to the Russian environment, they are likely to be as successful, in the long run, as they have been in so many other countries of the world.
* Keith Collins and Irina Smetannikov are president and international communications head, respectively, of International Business Creative Inc., a Washington consulting firm.