Standard & Poor’s international rating agency assessed Russia long-term sovereign rating as B- on May 4, 2001, which means limited safety and high vulnerability. A similar rating was given to Turkey. Mongolia, Romania and Surinam have been rated a pitch higher, at B. Next on the list, at B+, come Pakistan and Senegal, followed by Bulgaria, Lebanon and Jamaica (BB) and Kazakstan, Bolivia and Papua, New Guinea (BB). Even the latter are still 11 grades below the leaders, the United States and Great Britain, rated at AAA.

In fact, Russia is not at the very bottom of the Standard & Poor’s rating list. Next to last on the list of 88 countries, Russia still managed to outpace Ecuador, which was rated at CCC+, which means an extremely vulnerable market.

From the recent research report published by PricewaterhouseCoopers it follows that Russia is the world leader in terms of corruption rate. The companies specializing in credit-rating assessments characterize Russia as a country with extremely high business risk and unfavorable investment climate.

The very same world leading rating companies that feed their clients with bloodcurdling stories about flagrant lawlessness and arbitrariness in our far-away northern country have long since been operating in our country, where they rent luxurious offices and employ large staffs. What for? Haven’t they gone out of their minds? Or are they looking for trouble?

The questions have a very simple answer: The tales about "terrible Russia" have nothing to do with the reality. These tales are composed and disseminated by quite calculating and professional PR specialists who are driven by their cynical interests. The assumption is that the more dangerous the country is painted the more money it can bring. The more the client is scared the more he or she will pay for consulting services.

It’s true that Russia is neither an alpine meadow nor a Garden of Eden. There are bureaucrats and there are bribes here. But one thing is surprising. The results of our own research – an opinion poll (done in the form of extended interviews) among top managers of leading world corporations — clearly indicates that Russia is viewed as a unique country in which to do big business.

Russia – a rare chance

As we have found out, Western top managers view Russia neither as a faraway barbarian land, nor as an exile destination, nor as a banana republic, but as a country offering real chances to do big business, make a name for oneself and acquire excellent prospects for making a career in the parent company. The idea is: If you have managed to show off well here, it means that you can manage everything and everywhere.

It is totally wrong to think that foreigners come here to live their years before retirement while getting well paid (in Russia they are paid quite well). Of course, this happens sometimes, especially in big corporations that employ special manager corps specializing in "difficult" countries. But this institution is dying out and being replaced by a new generation of managers with global thinking and a flexible mentality who love to surf the Internet and stress that they don’t see any difference between working, say, in Russia, in Germany or in Singapore. Therefore, Russia is in no way a "sedimentation tank" for the failures. Our respondents stressed time and again that Russia is a far from divided market that offers rich and versatile opportunities. Russia’s market is characterized by a stronger factor of uncertainty, less planning and higher risks. To work here one has to be a simultaneously venturesome and calculating player who knows how to take reasonable risks. Russia is a favorable land for adventurous entrepreneurs, in the good sense of the term.

The extensive business opportunities offered by Russia do not mean that only adventurers and filibusters are coming here with the aim to board, plunder and leave. Such types were abundant during the first years of Russia’s reforms, but later they either found a niche for themselves and set up a decent business, or went to work for big corporations, or wrapped up and fled.

Situation is stabilizing

The interviews have demonstrated that to do business in Russia it is not at all necessary to have criminal connections, evade paying taxes and bribe the officials. Russia’s legal system is developing toward the normal and business infrastructures are being established. Of course, the bureaucratic red tape remains a serious problem and business-regulation mechanisms and procedures are extremely complicated. Meanwhile, a network of consulting and legal services is developing and business associations and communities have appeared. A good example is the European Business Club: Its members hold regular discussions with Russian ministers seeking to resolve specific problems (the customs regime, transition to international accounting standards, taxation, company registration, etc.) in order to improve the business climate in general.

The present situation gives strong competitive advantages to foreign companies operating in Russia because they are transparent, law-abiding and have learned to pay taxes and survive. Now domestic businesses have to catch up with them and master such boring sciences as cost-efficiency, sales promotion, expanding the range of products, etc. This is far from easy.

Ordinary Russian people

Almost all of our respondents maintained that there are no barriers for an ordinary Russian to make a good career in a foreign company. All what he or she needs is to be a good manager or specialist and this is enough to climb to a leading position in a Russian branch or even in the parent company. The best tactic in making a career is a zigzag way, for example: department head in the Russian arm – vice president in Chile – department head in the parental company – director of the Russian arm. It is not necessary to have a special Western education, but knowledge of the language is essential. It is also very important to get inspired with the corporate spirit, to understand the company’s goals, its strategy and ideology. This is important to become a trusted member of the team. It is also important to be a good team player, to assume responsibilities and to be able and willing to discuss everything in a positive way, including your own work-plan, plans of your department, your group and the company as a whole.

Advantages

More so than in other fields, Russians show themselves in such spheres as industrial manufacturing, sales, technology, engineering and, specifically, in IT and high technologies. They have a lesser success in the field of finance, but this is rather not a national feature but an inheritance of the Soviet past.

A strong advantage of Russian businesspeople and managers is their flair for innovation, risk, new approaches and entrepreneurship in general. Russians are ambitious, adventurous and not afraid of risk. They are critical, not prone to servility and, in appraising a person, they look at specific deeds, not positions or ranks.

Russian businessmen are intuitive. They are good psychologists and masters of finding weak points in their competitors and using them to their advantage. Foreigners often do not understand that and lose in competition. At the same time, Russians are prone to render disinterested assistance even to those whom they hardly know. This trait often captivates foreigners and helps create an atmosphere of confidence.

Russian specialists and managers love to study and to achieve career growth. The best way to get a Russian interested is to present him or her with an education and career program.

Drawbacks

Russians are prone to self-humiliation and humiliation of their country. This is stupid and provokes some of their foreign partners into dishonesty – it is always a pleasure to shortchange a half-wit.

Another drawback of the Russian style of management, most strongly manifested in big companies, is authoritarianism and voluntarism where the boss concentrates all power in his hands and is not prone to delegate anything to anybody. This style is rarely met in companies that operate in a competitive medium.

The Russian style of management to a considerable extent involves concentration on the ultimate goal rather than developing a system and technology of business. In this sense, Russian style of management is more American than European.

Russian management is strongly politicized in the sense of an excessive role being given to personal connections and informal relations.

Squandering and profligacy have become less widespread after the crisis, but such an important resource as time is still undervalued. Russians have not yet come to understand that time is money.

Other serious drawbacks are egocentricity and greed. Russian business is strongly oriented on immediate success and enrichment at the partner’s expense. Not enough attention is devoted to such things as long-term prospects and corporate culture, which leads to conflicts between managers and shareholders. Incidentally, some Western top managers disagree with this thesis saying that Russians are, on the contrary, good team players.

How to do business in Russia

First of all, one has to understand that Russia is a dynamically developing country with undivided markets. Therefore, success here is most likely to be achieved by those with a flair for entrepreneurship, risk, initiative, ability to overcome inertia and sluggishness in decision-making often characteristic of big corporations and to assume responsibilities. But as long as the situation tends to stabilize, regular, traditional management is becoming increasingly important.

A foreign manager in Russia should forget about arrogance and should not expect irrevocable obedience from his subordinates only because he is the boss. In order to win respect of his employees he should prove his competence with deeds.

Russia is not a barbaric country. People here are well-educated, knowledgeable and quirky. Therefore, the tactic of "buying factories for a handful of coins" will not work. At the same time, one should not be too trusting – there are enough swindlers here.

Russia still lacks effective working rules and regulations as well as market infrastructures and information channels. Therefore, it is necessary to acquire contacts, connections, information sources and personal friends who will help you if and when the system comes to a crash. Consequently, a knowledge of the Russian language is important, although almost all of Russia’s young specialists and managers can speak English.

Information is priceless. Any potential partner and/or employee should be tested through all attainable channels of information. No time or money should be spared to get more information. Advertising and especially PR are also very important.

It is essential to develop into the provinces. There are a lot of problems there. People are less knowledgeable and less well-educated and it is more difficult to organize logistics, but the main prospects are precisely there.

It is important to use bonuses and career opportunities for your personnel as much as possible. This is the best way to make Russian employees interested, especially managers. It is necessary to encourage private-property instincts – it’s better to pay an employee a bonus so that he could buy a car than to provide him with a service car.

(The authors are journalists at Expert magazine, where this article first appeared in Russian.)