The Wonder of Russia’s Young Managerial Talent

Part II

Dr. Deborah Anne Palmieri

The 1990s in Russia was a period during which Russian enterprises swapped old Soviet-style bureaucratic thinking for more innovative approaches inspired by a generation of new entrepreneurial managers. During the Soviet years, Russian managers were consumed by factors relating to the quantity of production geared to fulfill target quotas set by the central government.

Now, Russians understand they need to have a broader approach and one that focuses on factors including quality, cost, product delivery, product development, marketing, advertising and other market issues.

Russian managers today still place a greater emphasis on employer commitment programs and human resource development. They prefer team building to hierarchical structures. They are much less ideologically oriented than in the past and more comfortable with risk taking.

When compared to their American counterparts, Russian managers clearly reflect generational differences. In Russia, managers under 40 have responded very differently to management-style related questions, compared to the managers over 40. In the U.S. age plays a much less significant role. In Russia, older managers are less inclined to promote change and are more comfortable with the status quo, in contrast to their younger peers. Young managers embrace the rise in entrepreneurialism, unlike their older counterparts who may be more wary of it. Currently, the West will have to deal with both types. It is useful to better understand the thinking and outlooks of both.

Testimony to Russia’s new entrepreneurship is the fact that more Russians are running Western companies inside and even outside of Russia. There is fierce competition for talented managers from “blue-chip” Russian firms—especially from oil and financial companies. Russian firms are eager to hire foreign-trained Russian staff. Companies like Severstal, the Russian steel enterprise, for example, recently hired its CFO from the Moscow office of Morgan Stanley. Russia’s leading brokerage, Troika Dialog, lured away a young manager, who worked for Citibank in St. Petersburg, appointing him operations director in charge of business development.

For Russia’s new managers, money is no longer a sole deciding factor in their decision making calculus in choosing employment after the crisis of 1998. They also value job security. They want experience. “Pay is still important, but employees are as interested in extending their skills and experience,” says Kon Breken, managing director of employment agency Commonwealth Resources. Employees of both Russian and foreign firms are most attracted to companies that offer “a step up the management ladder into a job that offers them something new to do”, according to Ben Aris in a Business Russia article.

Belief systems about work vary from older, more Soviet-style managers and new entrepreneurial managers. Older senior managers place an emphasis on work as the central focus of life; hold highly humanistic values about the dignity of the workforce and the prominence of worker rights; and hold to paternalistic and power-oriented management styles. The younger management generation tends towards a strong work ethic (similar to the older generation) and shows great loyalty to the workplace.

In sum, today’s Russian managers want a piece of the global economic pie, and they have the skills to advance Russia’s economic interests in a way that country has not known before. It shows in the strong productivity rates Russia is now enjoying, and through other factors, such as increasing Russian investment abroad.

Research support provided by Vladimir Trigubenko.