Cultural intelligence plays a huge role in business success. It can boost sales through more efficient sales channel cooperation, increase productivity in partnerships and help exporters make more informed business decisions.
I have always admired those Finnish managers who can navigate the Russian business environment smoothly.
In contrast, many others struggle and seem to feel really out of their comfort zone as the game rules are so different from the home country.
That difference is why I think you need to consider cultural intelligence as a skill worth pursuing.
The trouble is that we often forget that the Russian business environment is distinctively different in a few important ways and expect the same skillset to work in business regardless of the culture and in any country.
If you don’t take any time to map out these differences and prepare for them, you’ll likely run into some cultural issues that affect your business in a significant way.
But even if you want to prepare, you might find yourself asking what actual factors you need to consider when working in the Russian business environment.
That’s absolutely the right attitude! Asking that question minimises the probability of running into unexpected issues that are difficult to solve using the prevailing thinking and logic in your own culture. This, in turn, maximises your positive business results.
That’s why we’ve put together a list of 6 questions to ask to be successful when doing business in Russian-speaking countries.
These questions are based on the analysis tools developed by Hofstede Insights for comparing cultures at the level of values and will help you gain a deeper understanding of the differences between your background and other national cultures.
As associate partners of Hofstede Insights, we use these validated and well-known models to help global managers daily.
These questions apply best to Nordic companies planning to start exporting to Russian-speaking countries or already growing export business. For other countries, these dimensions and differences will manifest themselves differently, and we’ll be happy to walk you through how they apply to your specific background and situation.
LEADERSHIP AND RELATIONSHIPS
1 How do you deal with hierarchy?
Hierarchy is a genuine challenge for Nordic businesses in Russia because it dictates who can make decisions and what is expected in meetings, negotiations, and partnerships in general. It also has big implications on how you as a manager and decision-maker should change your behaviour to be taken seriously and be respected in Russia.
At the same time, a strict hierarchy with its top-down decision-making is not something most Nordic managers are familiar with or expect to encounter in practice. Dividing people into categories by who should be respected, who should talk in meetings etc., goes against the deep values for Nordic managers whose prevailing thinking is that all people should be treated equally well.
Still, it is an integral part of Russian business culture and, therefore, Russian business etiquette that exporters also need to follow. It would help if you tried to understand the concept of hierarchy in Russia, for example, by reading case studies and blogs that cover Russian business culture, talking to other exporters or consultants and using contacts from your own country working in Russia.
2 Should you invest time in developing better business relationships and a network?
Cultural intelligence is important, but it is no magic solution to everything. It needs to be applied at the same time as putting effort into developing business relationships. Russian cultural collectivism and long-term orientation mean that businesses prefer long-term partnerships with trusted business partners.
That trust, in the Russian culture, is built between individuals instead of companies.
As an exporter, you need to make sure your sales channel partners have the required network and relationships for growing the business and ensure you are seen as a trusted partner in that partnership. Russians prefer to do business with people who they genuinely like on a personal level.
Nordic companies can struggle with including business relationships and networks as part of their strategy because they are used to everyone being treated the same and business being less about personal relationships.
3 Have you planned how to motivate and support your sales channel partners?
Besides having the right relationships, you should also think about what kind of support your sales channel partner will need. They will usually expect you to develop the market together, drive initiatives and actively join the marketing and sales efforts.
In the Nordic countries and Russia, people are motivated by similar things like cooperation between peers. Not investing in this might mean you eventually discover your local partners are not putting in much effort to sell your products and might be focusing on other initiatives.
STRATEGY AND MEASURING RESULTS
4 Do you have a clear and realistic way to handle uncertainty avoidance inherent in the Russian business environment?
In cultural models, Russia scores very high on uncertainty avoidance. Simply put, it means people and businesses will be inclined to avoid uncertainty and ambiguity and want to plan ahead of time and know all the details.
It might often be okay in Nordic countries to iron out most details during in project presentations and business discussions. Still, it is better to equip yourself with all possible details and answers to questions from the start in Russia.
This might require your organisation to regard thorough planning as more of a priority before negotiations and meetings with Russians. It also means that you have to be emotionally ready and have patience for more bureaucracy and detail orientation in all business paperwork.
Your partners are likely to accept many paths to achieving results instead of the idea that there is one right way to do things in the bureaucratic environment – but their willingness to be flexible depends on the mutual relationship.
5 How do you measure the success of your export business and individual projects?
Each export business is different, and you need to define your success metrics in the changing Russian market accordingly. However, one thing to take into account is that Russians tend to look at business success over the long term and prefer benchmarks like market share overlooking sales figures and the bottom line quarterly or even annually.
This is perfectly understandable in the volatile and unpredictable business environment they are coping with. It’s often good to keep this in mind and include metrics that give a complete picture of your export business in the longer term. Export business is about the long game, in any case.
6. Do you have access to a high-level understanding of local norms and customs?
A high-level understanding of cultural differences and customs is a requirement for success in a foreign market.
In Russia, it carries even more importance compared, for example, to the Nordic countries. The social norms are stricter, and hierarchy overrules some other attitudes and values in some business situations. This is why you should take the need to develop cultural intelligence and understand the culture into account when considering strategy and training needs.
What’s next?
The steps you need to take in your business are a little different for each exporter. Generally speaking, the more information you have at your disposal, the better.
Most managers need practical explanations of value level dimensions to adapt to cultural differences. If you’d like to learn about the models that allow us to help you in this process, you can check out this detailed article.
We hope this post helps you look at your export business in a new light and apply more cultural intelligence.
Need help in delivering better results through implementing cultural intelligence in your business? We’ve helped over 200 businesses and would love to help yours too. Get in touch with us here.