Volume 1 Issue 2 December 10, 2003


Wf360 on the Road: Reiling in Russia

Maria Reiling, Wf360’s COO, is back from Russia, where she participated in an extraordinary three-nation dialogue on leadership issues with a hand-picked group of young leaders from Russia, the U.S. and England.

BEV: What can you tell us about the economic situation in Russia today?
 MR: The energy and optimism generated by the country’s economic growth is palpable, markedly different from the cautious nature of US and Western European economies.

BEV: People talk about corruption and crime. Is it really an issue?
MR: Yes, a big one. Russia is a bureaucratic society with many people willing to "expedite" a problem for a fee. So people don’t trust the government and expect that officials line their pockets with tax-payers’ dollars. I was surprised by the number of businessmen who admitted paying less in taxes than they owed, and justified their actions with a need to stay competitive.

As to the Russian Mafia, I was told it’s more of a problem for Russian companies than others operating in Russia. But you do see metal detectors in top hotels or restaurants to keep weapons out or temporarily placed in a safe.

Street muggings have risen considerably. The day before we met, the head of security at the US Consulate in St. Petersburg was mugged and beaten by men claiming to be police "checking his papers."

BEV: What’s it like for American companies doing business in Russia?
MR: I was told or observed:
• A Soviet mentality still exists and Russian employees tend to want responsibility without accountability. Many companies prefer younger employees because although they lack practical experience, they are more easily trained to fit a company’s culture.

• The degree of regulation and bureaucracy can be astounding. To wire transfer a payment of any amount requires the head of the Russian subsidiary of a Fortune 500 company to sign off on 7 documents, and can still take 3-7 days to complete.

• Companies need to be committed for the long-term; there is still a great deal of flux in the political and economic situation
BEV: Tell us about some of the remarkable leaders you met?
MR: There were many. Top of my list is Mikhail Khordorkovsky, CEO of Yukos Oil, the $11 billion Russian oil company, who described how far Russia has come from the time when he stood in line to get food ration cards to now, with shops full of attractive goods, and opportunities to interact with foreigners and/or to travel are commonplace. Because he’s reputed to be one of the wealthiest men in Russia and Europe, Khodorkovsy’s recent arrest and imprisonment since my return have sent shock waves through the Russian government and economy.

Gennady Zyuganov, head of the Communist party and Grigory Yavlinksy, leader of the Yabloko party, both commented on Russia’s unique understanding of terrorism, valuable in a nation with so many neighboring countries in unrest. Yavlinsky also expressed concern that young people in Russia are becoming apolitical, turned off by the lies and corruption they see.

BEV: What struck you most about Russia?
MR: Several things:
• The Russian education system. They have deep bench strength on educated talent but need more familiarity with accountability and entrepreneurship.

• Russians care more about losing the Cold War than the West does about winning it. I believe it’s not just a complex sense of defeat but the end of a dream that they bought into.

• Russian women’s views on gender roles. There are few women in leadership positions. It’s clear that marriage and being taken care of by a husband is the focus for many, yet I heard repeatedly that because a generation of men were lost in WWII, Russian boys grew up without role models and tend to be weaker adults than Russian women, whose role models kept the country going (this is used by some to explain the high rate of alcoholism). Russia is the only developed country with a dropping life expectancy, now between 55 and 65 years of age.
BEV: What did you take away?
MR: While our countries have differences and similarities, we may not agree on just what those differences and similarities are. The importance of genuine interest and human connection for building relationships across cultures can’t be over-emphasized.

I’m even more convinced of the value of global exchange. I’ve got concerns about the messages each of us receives about the other through our press systems. Whether, as in Russia, it’s government controlled or, in the US, driven by consumer demand for stories we want to hear, we don’t appear to get the truth if we depend on media sources. You need to engage in global dialogue with others or go see for yourself.

I was also reminded of the value of being considerate and exceptionally courteous when working overseas. The qualities of being patient, inclusive, moderate in tone and remark are widely valued.

BEV: Ready to go back?
MR: Without question. I loved Russia. The trip to the Bolshoi alone was an incredible experience for all of us regardless of nationality. It showed how art transcends culture.