Monday, January 30, 2012

Russia, Business and Two-Headed Eagles

If you feel like an Asian in the West and like a European in Asia, then you must be a Russian.

Today at work I had a discussion with a colleague of mine on the subject of sustainability of using the natural resources to keep the Russian economy afloat. My argument was that fossil fuels is not the answer, while he maintained that Russia can afford for good many years not invest into its science and technology, because we can buy whatever we want with the money flowing from the ground. Oil, gas, diamonds, gold - we are hostages of our own wealth.

Surely, I stuck to my guns maintaining that the only competitive advantage a country might have is its flexibility and ability to learn. Nobody knows what will happen tomorrow. For the sake of an argument let's assume that very soon a new source of energy will be discovered that could be available anywhere and cost less than water.  The cost of oil & gas will plummet and all the OPEC nations together with Russia will go around the world with a beggar's cup jingling it periodically to squeeze morsels of pity from the richer neighbors for old days' sake. State hospitals are in ruinous conditions, children at school have problems reciting classical 18th century poems (the Golden Age of Russian poetry!!!) and all brains have been drained back in the 90s. The government are doing everything to ensure that the remainder of those who can make a difference leave the country as well... I don't know why Russian science is stifled - maybe to ensure that nothing is invented that might distort the natural (stagnant) way of modern Russian history. Even though I do not believe in the conspiracy theory, it is difficult to explain why the Michelin No Air Tires are not still in production, unless the major tire and automotive producers block any innovation as they need to recover their sunk costs invested in current production facilities.  At the same time, what is the probability of the improbable? I hope you have read the Black Swan to know the answer... In short, should the proverbial mass hit the fan, what will Russia do to compete with other countries?

To explain how things are, I'll give just two examples that were shared with me by a friend who recently started his new job with a large energy company, 100% Russian-owned and controlled.

Example 1: The first story is about initiative and silos. My friend discovered very soon that such a tool as Outlook Calendar is not used in the company at all. Naturally, he inquired with his colleagues why they did not use it - it is so convenient. The colleagues looked at him with bewilderment,
"Why would we need it?"
"Well", reasoned my friend, "what if you would like to book some time to discuss an issue with your boss?"
The colleagues got seriously concerned with my friend's mental health,
"If our boss wants to talk to us, he will ORDER us to come, it does not work the other way around."
My friend was insistent. After all, he is hopelessly spoiled by the Western management practices,
"And in case you want to arrange a meeting with your co-workers from other teams".
The colleagues recoiled in shock,
"If our bosses want us to meet, then my boss will talk to your boss, and they will arrange for us to meet."

Example 2: The second story is about unsubstantiated arrogance and close-mindedness. Since this Russian company is desperate for money, it has to set up JVs and deal with foreign companies. Cash is still king, whether you are a Russian energy company or a Chinese lemonade stand. The Finance Director of a foreign JV sent an email to the Chief Accountant of our Russian company. After waiting for the answer for a month, he forwarded the message to his counterpart asking to chase up. This message eventually landed in the hands of my friend, who went to the Chief Accountant lady to set things straight. She blankly negated the very fact of receiving such email. When my friend showed the email to her (where she was copied), she exclaimed:
"But of course! It's in English! Since I don't speak it, I deleted the message".

Is the message clear yet? Come tomorrow and that tomorrow is not about fossil fuels, what does Russia has to offer? Its imperial ambitions? Its 98% literacy rate? Its nuclear arsenal. I'm afraid all that is already in the past, and the future is too smeared to see clearly through the political mud. We see Russia all beautiful and powerful, but aren't we looking in the rear view mirror?

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