American Express has been in Russia a long time. The Leader speaks with Richard Weden, CEO of the company’s Russia operations, about its — and his — experiences in this country.

Richard Weden, CEO of American Express’ Russian operations and chairman of AmCham in Russian, certainly has staying power. He has been with American Express for more than 34 years, serving at numerous international postings in countries with different economic and political systems. He shared his views about professional ethics and his impressions of Russia with The Leader.

Could you tell us a bit about your educational background?

I graduated from the University of New Hampshire in 1964 and later served in Panama as a captain in the U.S. army. After that, I got an advanced degree from the Thunderbird School of Inter-national Management in Phoenix, Arizona, in 1967.

Where did you work before relocating to Russia?

All my past professional background has been international. I have spent about 34 years with American Express, which I joined as a trainee in a special program in the card department’s international division in 1968. The cards business was an up-coming business then. I spent 18 months in the program in New York, and moved over to Miami.
In the ‘70s, I was assigned to Latin America to open American Express’ card operations there. First, I went to Venezuela in 1973. Other postings included Mexico, where I served three times, Argentina, and [then I moved to] Hong Kong. My overseas postings continued till 1994, when I wanted to terminate my international assignments and run the Latin American operations from Miami. It was then the Russian position opened up, which immediately appealed to me. Besides, the management of American Express wanted someone with a broad and diversified international background to come here and oversee its operations at the formative stage. So, I was initially posted here for a two-year assignment. I have been here for the past seven years.

Having had this international background, what were your expectations — both personal and professional — when you were asked to relocate to Russia?

Frankly speaking, I was enthralled with trying to understand the socialist-communist system.
While in China, I saw tremendous changes in the Chinese system from 1984 to 1987. This was a period of huge transition in China. So, having worked in China, I thought it would be interesting, at least from a comparative point of view, to see the changes also underway in Russia, which like China is also a former communist country.

Were your expectations met?

They were more than met. The fact that I came for only two years and I’m still here after seven years simply means that I have not been disappointed. Besides, my two kids, now aged 14 and 18, consider Moscow [and Russia] their home because they are very happy here, which is also very important.
Of course, there are always problems, but they are not insurmountable. For example, I have worked through a number of financial crises in the world as an American Express employee, including two in Mexico in 1976 and 1982. So, when the Russian crisis struck in August 1998, I had a lot of experience in crisis management, which enabled me to weather the meltdown with minimal losses to the company and its clients, unlike most of our competitors, who either scaled down their operations, or, worse still, left the market entirely.

Prior to your relocation, did you have any foreknowledge of the Russian people – their language, culture and social life? And if not, how did you cope with these issues at the initial stage?

I have always been interested in Russia. I studied Russian history as a part of my core subjects in the university. When I came here for the two-year assignment, there was so much to do, that over the years I have yet to master the Russian language. Business-wise, there is no problem on the language issue, as English is widely spoken in our office, and almost all clients at my level, including government officials, speak English. However, I’m not very proud of my inability so far to master the language. My consolation, though, is that my two kids speak good Russian.

American Express is very well-known in Russia. However, could you briefly highlight its position and objectives on the Russian market?

Contrary to popular belief, American Express has had a checkered history in Russia. It first opened in 1887 and, stationed in St. Petersburg, it operated till 1917 and was eventually closed in 1918. Operations were restarted in 1921.
However, the history of the present American Express in Russia actually started in 1954, when our first Moscow office was opened at the Metropol Hotel.
The main objective then was to service the diplomatic missions and establish relations with the Intourist tour organisation as well to help service tourists who were American Express’ clients.
However, with the opening up Russia in the early ‘90s, and with more and more foreign businesses moving onto the Russian market, it became absolutely clear that it was time to broaden the spectrum from just servicing the tourism sector to include multinational corporations and Russian companies.
Presently, we have signed more than 160 contracts with multinational corporations. Besides, we are also working with Russian corporate clients in need of a company with a global presence. This will gradually pave the way for the introduction of American Express cards in Russia.

What is the employment policy at American Express? In other words, is the emphasis placed more on foreigners or on the locally groomed staff?

When I first came here in 1995, there were five expats here, and now we have just two. This is line with our long-term objective of eventually handling the management to Russians.
However, the Russian environment is a bit more complicated than other Eastern European countries, where the management has already been transferred to locally groomed managers. Consequently, a top manager with a lot of expertise and skills is still needed here to help navigate through these issues. This is why handing the management to the local staff will take a bit longer than in other countries.

What is your relationship like with the competition?

I’m glad to say that there is lot of competition in our sector, including foreign operators such as Carlson and the BTI Group, and domestic operators, including AeroClub, Niko Tours and Continent Express, which are strong competitors on the Western business-travel market. We lose some clients to some and gain clients from others. This is my idea of healthy competition, which is reigning in the sector.
Though we are competitors, we co-operate on other fronts to defend our mutual corporate interests such as fraud protection in the cards sector, or joint negotiations with the airlines when they cut our commissions. We also co-operate in situations when an employee moves from company to another, and his new company decides to run a background check on his qualities and track record — reliability, character and professionalism. This is done as honestly as possible so as to protect the interests of the companies and their clients.

Where do you think Russia is moving economically?

I’m really grateful to former President Boris Yeltsin for keeping the momentum going on the political and economic changes, especially during his second term, when he forged ahead, despite his failing health, to make sure that the country did not slide back into communism, which was almost a possibility.
Then came President Vladimir Putin, who immediately took another positive giant step towards a market economy. In my opinion, Putin has done a wonderful job for the past two years, especially when one considers the types of issues — land reform, agrarian reform, tax reform, crime and other social problems — he is tackling.
Secondly, he demonstrated a lot of statesmanship when he joined the Western alliance to fight against terrorism, supplying and swapping data with the coalition members. He went ahead, and did all these though it was a bit risky. This type of co-operation for mutual benefit has taken place in several other fronts too. So, I would like to conclude by saying that Russia is moving both politically and economically in the right direction and that I’m happy to be here at this time to see these changes.
As the head of AmCham in Russia, what is your opinion on the steel and chicken saga?
I’m not an expert on either chicken or steel. I’m told they are not related, and I believe it. However, I have my own personal view. If there were problems, such as bacteria, in the chicken, I think it should be explained somehow. On the steel side, I think the problem is more or less due the labor cost, which is higher in the States than anywhere else. But knowing the expertise of our diplomats, I think both sides should be able to find fair solutions to these issues.

Considering your more than tight daily schedule, do you have any free time at all?

I have two kids and my wife, Mary, who is a professional Yoga teacher. She is my hero. I’m an active skier, golfer and play tennis. We try to spend as much of our free time together as possible. Besides, I’m also on the board of the Russian National Orchestra, as I love music a lot.