Negotiating with Russians

Foreword

These notes are offered as a guide to help you as a foreigner living and working in Russia to succeed as a negotiator or contribute to the success of your company or team’s negotiations with Russians, whether they are with private business or with the public sector. They are based on my personal experience of Russia (and the Soviet Union before it) over three decades. Having worked in the public sector of a distant western country – New Zealand - for thirty years I moved to the “dark side”, establishing my own company Prior Group in 2006 to promote business with the new Russia. Why? Because of the amazing opportunities for contributing, via business, to the development of this exotic, great country whose future shape matters to the world. I hope that the picture that emerges from these notes is that of a country of present promise going through an understandable and essentially normal processes of change. It is an exciting time to be here in Russia – it is hard work but it can also be a lot of fun. This is a country with the “wow factor”!

INTRODUCTION

Russia today is a true negotiators’ paradise. It is a “can do, must do” society, rather than a “can’t do, won’t do” society, and the question constantly asked is “why not?” rather than the negative “why?” But everything has to be negotiated. Positions in the economy have to be fought for and won, defended, given up, fought for again and again, as the economic battles ebb and flow. If it sounds like a “peaceful war” – that’s what it is. The negotiating process provides as many ups and downs, twists and turns, tests of mettle - and tests of metal - as a negotiator could possibly wish for. It gives wonderful insights into Russia and its peoples. You will have the chance of eyeball-to-eyeball confrontations with proverbial “bad cops” and subtle and elegant negotiations with proverbial “good cops”. The funny thing is, they almost always are singing from the same song sheet. You will learn that there is almost certainly a “good cop-bad cop” genetic marker that sets Russians apart.

The good news is that to do well in Moscow, and in Russia, gives the visitor professional and personal skills and knowledge that will transfer to any environment in the world. The good news is that everything is possible and that you can be as good as you can be. The bad news is that pretty well everything is hard and success in negotiations, as well as in life with the Russians generally, does not come easily. You can’t come to Russia, hit the ground running and expect to be doing the big deals immediately (not unless somebody else has set them up for you). The big deals will come – but only after a lot of hard work and thorough preparation, may be after two to three years, or more. Then it’s time to move quickly: “Russians take a long time to saddle up, but ride very quickly.” 

The bad news is that it is not a zoo but a jungle out there. The good news is that seeing a real Russian bear – both of the literal and metaphorical variety - in the wild is a unique and unforgettable experience. The good news is that you should never be bored – Russia will guarantee you a roller coaster ride that will exhilarate and appal. But Mother Russia does not discriminate – this is the reality for Russians as well as the reality for you as a foreigner living in Russia. Don’t forget: if it’s hard and uncertain for you, it’s harder and more uncertain for the locals. This is a country living on the edge.

Russia demonstrates the energy of what I like to describe as constructive anarchy. Moving at the rapid pace of a flying BRIC (the acronym coined for the dynamically developing economies of Brazil, Russia, India and China), the Russian economy provides for every level of negotiator: from the trainee, wet-behind-the-ears novice, to the seasoned multinational negotiators and traders in all types of goods and services. Within Russia you will meet every form of commerce - ancient, modern and post-modern – practised everywhere from humble stalls to huge and sophisticated malls and high fashion stores, which rival anything in the world. It’s an economy on steroids demonstrating the powerful, not to say earthshaking drive, of a mighty Russian rocket lifting off from the Baikonur spaceport. The Russian economy thrusts forward with a mixture of refinement and brute force – it may not be pretty – but it is effective.

For contrarians who believe in the true, untrammelled, unmitigated forces of capitalism, Russia provides a haven, probably, alas, only temporary, from the management gobbledegook and political correctness that bedevil creativity and innovation in other, more mature economies. Here success is measured in profits and failure in bankruptcy. Nobody has time to write stacks of internal strategy and policy documents which serve only to deplete the world’s forests and hasten global warming.

PREPARATION FOR NEGOTIATION

Environment Scanning

Preparation for the Moscow assignment includes recalibrating one’s mental compass. I have found the following two Russian works of great help in understanding who the Russians are and, therefore, how to prepare mentally for negotiations.

My indispensable guide to the Russian mentality and business practice is the 1830s novel by Nikolai Gogol “Dead Souls”. Don’t be put off by stories of blockbuster Russian novels that take years to read. This one is under 1000 pages long, so, as Russian novels go, it’s a quick and easy read. Even after nearly two hundred years, this is one of the keys to modern Russia. Admittedly a bit light on the Russian “soul”, it is a brilliant exposition of Russian business types who you will find to be alive and well in the 21^st century.

No matter what one’s role or purpose in Moscow, it is essential to learn as much about Russia, its peoples and its history as possible before embarking on your assignment here, let alone negotiations. If you can learn something of the language, too, that is a bonus. Personally, I fell in love with the Russian alphabet when I was at high school, and was lured by its fascinating letters into the literary, cultural and historical world of Russia, without ever making progress as a linguist. The spoken language is not the only medium of communication – as every negotiator knows. Context really does matter. Russia is a political economy going through a period of intense and rapid change. Once you get to Moscow you will be sinking or swimming in the torrent (sometimes as a result of flash flooding which is far from unknown during a summer downpour). On-the-job learning is exhilarating, but stressful and forewarned is definitely forearmed.

Russia is the sum of all that it has met – and it has met a lot. Over centuries of human history its space has been crisscrossed by peoples from East and West, pretty well all of whom have left their traces. The space occupied today by the Russian Federation is as rich and diverse in its peoples and cultures as any area on earth. Russia is not only the bridge between Asia and Europe. It has pathways to the Middle East and the Mediterranean, with all the rich business histories and traditions of those trading cultures.

Not surprisingly, business in Russia pulls together many and varied elements of domestic and foreign business cultures. “Mentality” is one of the key Russian business concepts. The Russian way of looking at business is varied, sometimes in the extreme. “European face but Asian mentality” is a useful way of approaching the task of understanding. But this is far from the whole story. For a start, it leaves out the element of passion: Russians are a passionate people. Yes, they know how to make money and how to keep money, but they will often do things against their monetary best interest because they want to do so. For example, protecting honour and saving face can combine in interesting ways in Russia. “Don’t get mad, get even” does not always apply to Russians: getting mad and getting even can be very satisfying.