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Ask an Expert: Doing business in Russia

Question sent by Olivia and answered by our expert, Pia Kähärä.

— What is the most important thing to know when doing business in Russia? What is the first thing you tell your customer?  —

 

Dear Olivia,

Thank you for sending us that very interesting question, if I have to choose only one thing to tell a customer about doing business in Russia, I would definitely say that business is never just business in Russia: personal relations are the key to success. Russians do business with people they like and trust, and Russia is a country of high uncertainty avoidance, meaning also that they generally do not trust strangers in the beginning. Trust and relationship building usually takes several face-to-face meetings and/or dinner conversations (and deeper trust preferably even some leisure time together): you have to prove your personal likability and reliability, not only talk about the products and company you represent.

Relationship building in a collective country like Russia is a lifelong journey. If you change the company, the relations you have made follow you personally, not your company. Your relations trust you and want to do business with you in the future, too, perhaps with the next company you work for also. If your contact changes, you usually have to start from zero with a new negotiator, if you don’t have a wider network in the company to support and ”guarantee” you. Sometimes it is hard to get to know the successor, even if you understand its importance and try to prepare yourself for the possible risk of your contact changing.

There was a case about ten years ago when a Finnish company had agreed to build a factory in one of the Russian regions. The conditions of the deal had been agreed with the governor of the region. The governor died in a car accident. Suddenly the deal was off, as the next governor did not support it with the previously agreed terms. The project had taken more than two years of work and 20 M€ invested by the Finnish company.

In Russia, you must always remember the principle of reciprocity: “I give to you, you give to me”. It is a main factor in collectivist cultures in which the loyalty to in-groups (eg. extended family, friends, work team) is very important. You help your network find solutions to their business and personal problems, and they help you in return. It is natural for your Russian partner to ask you to look for a vacation place for his family in your country, for example.

To get to the level of good relationships (proximity), it is good to remember your partners’ birthdays, their family stories and other personal things. Small human signs of care and personal attention are valued. Remember to bring small gifts when you meet.  Business is never just business in Russia.

Check the scores of Russia and compare them to those of your own country. 

OUR EXPERT OF THE MONTH

PIA KÄHÄRÄ

Pia works as a consultant helping Finnish companies in their ’go to market’ efforts in Russian-speaking countries like Russia, Ukraine, Kazakhstan, and Belarus, as well as helping companies from those countries come to Finland.

In addition to her native Finnish, Pia speaks fluent Russian and English. Pia’s aim is to help managers perform better in business between countries and in multicultural teams – diminishing stereotypes between societies. Her broad practical business experience with European and Russian-speaking countries helps her to deliver tailored programs and trainings that are firmly anchored in solving real-life business situations.