As a global leader, it is certain that you will come across cultural norms that conflict with your own. After all, what makes global lead­er­ship so extreme is the fact that the context always involves weaving together the seem­ingly incom­pat­ible. 

What defines your success is your ability to take very distinct cultural iden­ti­ties, ideas and visions, and estab­lish cohe­sion. The diffi­culty is that global managers inherit existing frame­works; frame­works that govern things like the values employees have, or the types of manage­ment styles that moti­vate them to be produc­tive.

These frame­works become powerful bound­aries. Some of those can be moved and others simply have to be honored and catered to. In this action­able summary of this case study to follow, we are going to look at two very distinct cultures; one being Amer­ican culture and the other, Russian culture. 

One culture from an enduring history of indi­vid­u­alism. The other is rooted in gener­a­tions of collec­tivism. How does that affect manage­ment prac­tices? As Russia emerges from life under Soviet dicta­tor­ship and looks to build busi­nesses that reflect the success seen in America, can the two cultures come together?

Read on to find out.

Post Soviet Russia: Collec­tivism, Nepo­tism, Dogma­tism

In the wake of a disman­tled Soviet Union in the deep winter of 1991, Russian society stands on the edge of a new era. Despite best efforts to control the outcome of so many things, the dicta­tor­ship is over and uncer­tainty around what life is going to look like remains. 

The fall of the Soviet regime has left many things in a state of chaos. But one thing is certain. The economy needs to get moving. The best way to do this is through kick­starting entre­pre­neur­ship; new Russian busi­nesses that could stand in local and global markets and be successful. 

But exciting entre­pre­neur­ship that is agile and dynamic requires people who stand out from the crowd. It requires that inno­va­tion is rewarded and allowed to shine regard­less of where that inno­va­tion comes from. It also requires a commit­ment to changing systems that don’t work. 

The Strength of Collec­tivism

Russia’s commu­nity struc­ture post-Soviet Union was such that the harmony of the collec­tive group was prized above all else. Anybody seen to be aiming above their station was viewed as untrust­worthy and risked losing the support of the wider group. 

Compe­ti­tion and indi­vid­u­al­istic traits were not encour­aged and as such, they disap­peared under the radar under Soviet rule. While this kind of view is great at getting every­body behind a common vision, it creates fear around trying some­thing new, thereby limiting progress.

Within the context of busi­ness prac­tice in Russia, employees sought to blend in and just do what manage­ment expected of them. Training would be needed to empower those lower down in an orga­ni­za­tion to take more initia­tive.

The System of Nepo­tism

In addi­tion to this, the case study noted that meri­toc­racy was less of a feature in Russian manage­ment prac­tice. Instead, networks were of the utmost impor­tance. Anyone who wanted to get ahead or receive favors did so because of strong networks they had. Part­ner­ships were really key and would remain as such.

We’d all agree that networks in busi­ness are impor­tant, but when it comes to raising the best talent, nepo­tism can become very limiting. Knowl­edge tends to be found in unex­pected places. If an entire system of promo­tion and progress is based on the networks people have and how loyal they are to those in authority, then the busi­ness misses out on ideas and systems that could give the orga­ni­za­tion a compet­i­tive edge.

Never­the­less, a global leader would not be able to ignore the exis­tence of this system. Little gifts and the right word in the right person’s ear continue to feature heavily in Russian busi­ness today and its power can’t be over­looked.

The Commit­ment to Dogma­tism

Sticking to the status quo was a huge part of Russian manage­ment prac­tice. Ways of doing things became gener­a­tional. Managers would inherit prac­tices from their prede­ces­sors and not look to change them if they had seen success. This means there was less focus on stream­lining oper­a­tions or opti­mizing for effi­ciency. 

Soviet Russia had very rigid laws and processes in place around how to do things and when to do things. They set high targets for people in authority, with heavy conse­quences if these targets were not met. Such a concrete struc­ture really didn’t allow scope for flex­i­bility in busi­ness prac­tices. As every­thing was pretty much state-owned and controlled by the govern­ment, being agile wasn’t high on the list of prior­i­ties.

For managers in this envi­ron­ment, work was guar­an­teed, and the system was designed to the last detail to produce a partic­ular result. Trying to change things in this kind of envi­ron­ment becomes some­what point­less. Managers just needed to follow the struc­ture given to them.

The Contrast of America

In America, the climate is very different. It’s almost the polar oppo­site of post-Soviet Russia. Manage­ment concepts are based on the fact that the market itself is the supreme judge of whether a busi­ness or indeed an individual’s career, should exist or not. 

Let’s have a look at the contrast.

Indi­vid­u­alism: Decen­tralised Power

Power and respon­si­bility are much more readily shared in Amer­ican orga­ni­za­tions. Indi­vid­uals have the confi­dence to comment and shape manage­rial deci­sions. Amer­ican CEO’s are more likely to expect that someone from the bottom of the orga­ni­za­tion could unseat them if they’re tena­cious enough.

Managers are expected to take the lead and take respon­si­bility for their team meeting targets. Indi­vid­uals are expected to be able to prove and justify how they have contributed to the team. This massively increases the sense of compe­ti­tion and, in some fields, the scramble to get ahead can get pretty vicious. Collec­tivist ideals fall by the wayside as employees focus on making “their mark”. 

Eyes are on the prize. 

Meri­toc­racy: Standing Out Brings Rewards 

In direct contrast to the Russian aver­sion to standing out, Amer­ican manage­ment concepts cause people to fear complete assim­i­la­tion. If you don’t stand out, you’re forgotten. Amer­ican employees strive to have their talents noticed as this is the only way to reach a level of indis­pens­ability.

Rather than being widely condemned as we see in Russian work­forces, the behavior is praised and visibly rewarded. Networks are impor­tant, yes, but there is greater emphasis on the idea that the person with the best skillset should get the oppor­tu­nity to progress. 

The idea of someone elevating them­selves into greater levels of authority is seen as a desir­able trait. It’s odd if you don’t progress to have greater influ­ence and greater finan­cial and social bene­fits.

Prag­ma­tism: Change or Die

Amer­ican manage­ment concepts are centered in the ideology that the market reigns. If customer appetites change, or new tech­nology is intro­duced, change is the only way to stay afloat. As such, Amer­ican managers are always looking for what will give them the edge in the market.

They are far less risk-averse in that they’ll try out different things, knowing that the outcome is not secure because trying is better than staying still and being over­whelmed.

Clearly, we can see that the two models appear to be in oppo­si­tion to one another. 

A Nation in Tran­si­tion

Tradi­tional Russian society had shaped people to respond to authority, inno­va­tion, and indeed busi­ness in a partic­ular way. For Amer­ican manage­ment prac­tices to inte­grate into Russian busi­nesses, the biggest task of all is getting employees to change their mindset about how they view work and the power of their indi­vidual contri­bu­tion. 

Striking the balance here is para­mount. Veer too far away from people’s comfort zone, and a posi­tive result will not be achieved. Just as Rome wasn’t built in a day, you cannot simply undo a collec­tivist mindset that has been forged by gener­a­tions of commu­ni­ties. But now that things in Russia are no longer so central­ized and controlled by the state, the market itself demands a new way of doing things.

The Russian-Amer­ican Hybrid Manage­ment System

The answer lies in taking different elements of Amer­ican manage­ment prac­tices, reshaping them slightly and attaching them to familiar cultural ideas to achieve progress in this area and birth a new era of modern Russian busi­nesses.

Let’s look at some recom­men­da­tions for doing this.

Getting the Tension Right: Indi­vid­u­alism versus Collec­tivism

Collec­tivism is not inher­ently bad. Too much indi­vid­u­alism and every­body runs off in different direc­tions. Too much collec­tivism and there’s not enough inno­va­tion. For Russian busi­nesses, there’s a distinct need to find the sweet spot.

Collec­tivism becomes a strength when uniting a work­force behind a common purpose. So getting rid of that entirely is unwise. Instead, a global leader would choose to retain that sense of commu­nity but devolve power more effec­tively to managers. 

Managers can then help to embody and commu­ni­cate the vision of top-level manage­ment by utilizing a natural incli­na­tion of the team to work towards a common purpose. Doing this will give Russian managers the balance between self-interest and common interest.

Changing the Rela­tion­ship with Authority

A huge mindset shift is needed around changing Russian power struc­tures. Histor­i­cally, power was central­ized and shared only if absolutely neces­sary. The Amer­ican model, in contrast, gives as much autonomy and respon­si­bility as possible. Busi­nesses within this frame­work acknowl­edge this and prepare all indi­vid­uals to take the reigns and take respon­si­bility for their progres­sion.

For Russian managers, doing away with the hier­archy is too radical an approach. What they can do, is continue to expand the types of lead­er­ship utilized within the company. At present, you have the authority that is bestowed through a formal posi­tion. But there are other kinds of lead­er­ship.

Managers can wield influ­ence because they’re experts in their fields. They may also be able to wield influ­ence if they are given the tools to incen­tivize their teams. Lead­er­ship comes in many forms. The Russian model will benefit in moving away from a rigidly central­ized and at times, coer­cive style of lead­er­ship, into a more fluid struc­ture that draws the ability to influ­ence and inspire employees from a variety of lead­er­ship styles.

By keeping this exchange of power vertical rather than lateral, the hier­archy remains a feature, but empow­ering the employees makes them feel included and moti­vated to do their best.

Adding a Rewards-Based System

Networks are great but meri­toc­racy widens the scope for success. Incen­tivising produc­tivity with bonuses is another way to recog­nize talent within the orga­ni­za­tion while stim­u­lating a constant revi­sion of best prac­tice. In Amer­ican culture, there’s a heavy pref­er­ence to incen­tivize the indi­vidual. In Russia, that’s likely to be at odds with their predis­po­si­tion to a collec­tive iden­tity. The way to get around this is to incen­tivize the team instead. 

This means that you get the bene­fits of compe­ti­tion without sacri­ficing the commu­nity element. If rewards are set at firm inter­vals and every­body knows what they are working towards, it’s highly likely that Russian teams will work together effec­tively to achieve the goals they set.

Prag­ma­tism versus Dogma­tism

Previ­ously we briefly discussed how rigid Soviet Russia was. It’s human nature to defy laws that are in place and as such, it’s typcial Russian prac­tice to have an “offi­cial” way to do things and an “unof­fi­cial” way to do things. Russian managers in Soviet Russia would find prag­matic ways to fulfill dogmatic expec­ta­tions and they were exceed­ingly good at doing so.

So the recom­men­da­tion here is to loosen the reigns. Not having such a rigid struc­ture will bring greater trans­parency and draw together the best of the “offi­cial” and “unof­fi­cial”. The freedom to be flex­ible should encourage new and improved ways of doing things to come to fruition, making the orga­ni­za­tion as a whole more respon­sive.

Utilizing Russians’ Affinity for Networking

Russians rely heavily on their networks to get ahead. This is actu­ally a great advan­tage because it means they are already predis­posed to forming excel­lent part­ner­ships that will drive prof­itability and allow for the sharing of best prac­tices.

A lot of these networks are largely furthered via informal inter­ac­tions. This system not only trans­lates well at the very top of the orga­ni­za­tions but it can also be deployed further down the chain of command. 

Russians value commu­nity and to main­tain cohe­sion in their teams, this kind of struc­ture where manage­ment interact closely with their direct reports will raise produc­tivity and create an atmos­phere of collab­o­ra­tion. In those moments, new ideas can be explored and new talent can be iden­ti­fied and nurtured.

It’s also a great way of estab­lishing the kind of rela­tion­ships that allow a manager to give employees feed­back about their work.

In Conclu­sion

Today, Russian busi­nesses operate in the kind of hybrid atmos­phere that is to be expected when an economy is no longer controlled aggres­sively by the state, but controlled instead by the market itself. Culture change is happening but many things are still governed by soci­etal norms.

To answer the ques­tion, Russian busi­nesses can and already have incor­po­rated some Amer­ican manage­ment concepts into their own prac­tices. Often it’s not about doing away with every­thing and subscribing to a totally new view; it’s an unre­al­istic expec­ta­tion. However, there are some key prin­ci­ples that can be modi­fied and grafted into the existing frame­work.

There are going to be some things that will shift dramat­i­cally. One example is the devo­lu­tion of power from just the top of an orga­ni­za­tion, down the ranks within the busi­ness. Russia’s history has always been based on a model where power is held at the very top eche­lons of society. Shifting that requires a huge mindset change. Nowa­days, it’s advised that anyone doing busi­ness in Russia needs to be able to moti­vate and inspire their busi­ness part­ners and their employees. 

As a global leader, what would your response be? How would you go about taking two very different cultures and bringing them together? If you find your­self facing that chal­lenge and could do with a little help, have a look at how our program can help you operate in simi­larly chal­lenging circum­stances. If you wish to see more arti­cles and case studies on best global lead­er­ship prac­tices, please subscribe to our newsletter!