THE INTREDPID TRAVELS OF THE ITINERANT CEO – UPDATE MOSCOW, RUSSIAN FEDERATION

THE INTREDPID TRAVELS OF THE ITINERANT CEO – UPDATE - MOSCOW, RUSSIAN FEDERATION

By Dr. David J. Height

As I wrote in my last article, I would once again be traveling to Europe for business. This particular trip would be comprised of visitations to Germany, Switzerland and the Russian Federation. Although my original intent was to continue on with my European travelogues I decided for a variety of reasons to digress from my original intent. Simply put I had the distinct pleasure of a lengthy repartee with a major international corporate executive. This conversation in sum involved Russian/European politics, history and economics. As a consequence this discussion put a clearer perspective on Mother Russia and the Country’s role in the European and International scene. The sum of which I thought would share with you.

If you may recall from history, Russia is a country that on a continuous basis has expanded and contracted over the millenniums. It is by far not a new country only the territory that it controls waxes and wanes. You may recall from your historical studies some the more notables in Russian history; Ivan the Terrible, who in 1552 became the first “Czar” of all Russia, Petr the Great, who in 1689 began the modernization of all Russia, Katerina the Great, who began in 1762 to re-unite all of Russia. In more modern history some the more notables included; Lenin, Stalin, Khrushchev, Gorbachev, Yeltsin and today, Mr. Vladimir Putin. Throughout Russian history the borders have waxed and waned through the intrusions by: Swedish Empire, the Polish Empire, the Mongolia Empire, France under Napoleon and Germany under Hitler. It follows of course that Mother Russia’s borders are the result of the same activities. After the end of the cold war we have once again seen the split up of Russia formerly known as the USSR (CCCP in Cyrillic). Poland, Latvia, Lithuania, Estonia, Georgia, Ukraine, Czechoslovakia (now the Czech Republic and other Slovenian nations) and Hungary to name a few became once again independent. Now today we see emerging as a true economic powerhouse to reckon with the Russian Federation.

This country that we once envisioned as the bastion of Marxism where true power was entrusted into the hands of the “power elite” is undergoing major changes. These changes, “rights” we as Americans take for granted include among others, politics, free trade and freedom of expression (our 1^st Amendment Rights). Mother Russia is striving for this goal and herein lays the rub. Some of the problem stems from the historical perspective. The one thousand year history of Mother Russia is steeped in blood (much like our own). The constant invasions and re-conquests of lost territory have either manifestly or hidden cast a major influence on Russian society. Revanchism is subconsciously exigent in every Russian’s mind. Under the communistic regime a modified carpe diem existed. Stories, as relayed to me by my friend and major executive included checking into hotels and learning afterwards “there is no food” and for that matter none expected. Hence the average Russian living under these conditions “lived for the day” because no one knew what tomorrow might bring. This thought process then carries over into the conduct of business. In essence to be a successful business (and remember no one knows what tomorrow may bring) one must then exist only from “deal to deal”. This in sum destroys the very concept of building long lasting business relationships and as a matter of course developing on-going business.

As an example of the aforementioned: rather than creating pricing structures that reflect a smaller profit however a building process, the Russian business ideal is to charge the highest price and not worry about tomorrow – remember it may never come!

All the while the Russian economy is exploding thanks to the Siberian oil reserves. With oil pricing topping $100.00 per barrel (for the first time since 1982 in corrected inflation dollars) the economy is enjoying a boom akin to our pre 1929 stock market crash. The result being huge oil profits earned with the resultant impact on the local economy. In essence this becomes the creation of the Nouveau Riche Class within the Russian populace. The questions therefore become: does this new wealth begin to change revanchism thinking? Does this new found wealth mold common Russian business practices to the more customary western style of doing business? Will the search for immediate wealth (remember tomorrow may never come) change over to long term business thinking and practices with the resultant to numerous to name possibilities?

Time will tell.

(Dr. David J. Height resides with his family in Chicago. He is the President/CEO of SPPGROUP USA and TNI Group International www.sppgroupusa.com and www.tnigroup-international.com)