Managerial Problems of Russia
(Accepted for publication by Harvard Business review in Russian)
This paper is based on two and a half years of experience being exposed to Russian management through lecturing, consulting or conversing. The paper does not claim to be scientifically proven; it could be biased; the data source is limited.
I have identified twelve characteristics of Russian managerial practices that impact the Russian managerial effectiveness.
1. Russian culture lacks systematization. It starts with the amorphic language structure. There are multiple ways, all legitimate, how to structure a sentence like: “I love you” You can say it four different ways: I love you, you love I, you I love, love I you and love you I. And they all mean the same. There is no one-way to structure it right. If one watches how Russians drive, it is how they structure the sentence: Anything goes. No rules that are really adhered to.
In Adizes language, it is lack of (A) reflected in no discipline.
2. Lack of Discipline: Watch how people drive. How they park. How they handle their garbage. There is no discipline, no rules that get adhered to. As if people do not take rules seriously unless there is a serious repercussion to their deviation from the rule.
As a result, managers have to overuse power to get discipline. Serious punishments. Levying penalties. Heavy ones. Mild ones do not work. It seems as if the populations has been so heavily punished that they are immune to mild punishments. (The more power is used, even more has to be used to get the same results; on the margin, power has a declining effectiveness).
3. Autocratic management: The need to punish in order to get discipline is fed by another characteristic of Russian management which is not necessarily a remnant of communism but of the general history of Russia, and it is authoritarianism. A manager, leader, seeks and will fight whoever challenges their authority. There is an air of superiority that any leader in Russian organization has to demonstrate. Cannot admit to be fallible. A leader, by admitting to not knowing it all, fears he or she might lose authority because it is expected from them to know it all.
4. “Control Orientation”: Autocracy leads to the need to control. The way one region is organized has to be the way all regions should be organized. The purpose is to get sameness as much as possible. That increases the capability to control what is going on. But this orientation impacts performance. For performance, one has to pay attention to the peculiarities of each geography, each market; Sameness impact performance adversely. It is another cause of ineffectiveness.
5. Moscow Centric: The autocratic style and the need to control are not only personalized. It is institutionalized in where decisions are being made. Moscow is the center of the Russian universe. Moscow decides often without listening to what the rest of Russia needs or has to say. And I am not referring just to government. It is also true for corporations.
6. Fear: Autocracy and control breed fear and one of the characteristics of the Russian managerial culture is fear: People are afraid to challenge, to speak up. It is wiser to lie down and be compliant; not to get into trouble. In Russia when the top person shows in the meeting, there is fear that if one challenges the leader in pubic that is considered insubordination, which can be dangerous for the survivability of the person expressing himself.
7. Ineffective Efficiency: The Soviet Union was not market and profit oriented but efficiency oriented. The assumption was that sameness, control and autocracy increase efficiency. Thus, sameness. Thus, centralization of services and authority. The assumption apparently was that it creates economies of scale. With the fall of the Soviet Union, market forces were introduced and over control and the sameness impeded the flexibility needed in a market economy. The result is that the system produced ineffectiveness.
8. HOW rather than WHY: This legacy of focusing on efficiency, had its ramifications in organizing a company or in the decision making process. Inordinate percentage of energy is dedicated to answer the question of HOW rather than WHY we do what we do. Again, the driving force is efficiency rather than effectiveness.
9. Waste: Excessive efficiency orientation has its price. One of them is diseconomy of scale. On the margin more control costs more than it contributes value. On the margin excessive efficiency produces inefficiency.
10. Corruption: The overkill on efficiency creates bureaucracy which has its negative repercussions not reflected only in waste. It gives corrupt people the possibility to be corrupt. They are either the one who know how to maneuver the system so that it can deliver what it exists for, or they are the ones that provide the permits. They can then require extra payment for their service or for abusing their power.
11. Organization organized around people: The Soviet Union not just discouraged economic entrepreneurship but also even jailed entrepreneurs. They were considered spekulants. It created a whole class of bureaucrats. The end result is that people who are entrepreneurial and can lead are missing. The shortage of people with business acumen is causing many organizations to get organized around the people they have or can find and not around the tasks the company needs to be performed
12. Searching for whom to blame: Ineffective bureaucracy, corruption, can yield wrong diagnosis of problems: it is interesting to note how problems get diagnosed. The discussion moves fast from why a problem exists to who is to blame for the problem.
Is there hope?
I would say yes.
Individually, Russian executives are bright, intelligent, even cunning, very creative when allowed to be; extremely capable individuals.
The problem is not with people but with the culture created by a history of autocracy. And culture can be changed. It only needs committed leadership on micro mezzo or macro level.
Dr. Ichak Kalderon Adizes