Why should I read this document?
Trust is a “human universal” - the basis of functional organizations, leadership, relationships. You need to trust the people you do business with. There are three components of trust that we usually use to assess in the other party: his/her intention, competence/capability and reputation.
What makes it more complex is that inside the three components we tend to evaluate different things in different cultures.
1. Personal relationship building is crucial in Russia. Russians want to do business with people they like.
2. Without investing your time in face-to-face meetings, you cannot create or maintain a good relationship needed in business.
3. The ‘trust but verify’ rule applies in Russia. Don’t be overly trusting.
4. Your status (job title, for example) determines who will negotiate with you. Russia is hierarchical, they always want to see the boss who is able to make decisions.
5. The first stages of business negotiations are usually quite formal, so you should behave formally, too. When the formal stage has passed, you have created trust and can proceed better in business.
As a foreigner it is not always so easy to create trusting relationships. According to Hofstede, Russia is a highly uncertainty avoiding culture which means that new things and people are taken with caution. If something goes wrong in the workplace, often the foreigner is the last person to know about it. As a foreigner, you don’t get inside information as easily.
“Trust but verify” is a known Russian proverb which tells about the general culture of the combination of uncertainty avoidance, high power distance, and collectivism. There is no “trust by default”. Usually, people who come to Russia from western countries have the tendency to trust other people unless they prove they can’t be trusted, and for Russians it is the opposite, they only trust when you first prove you can be trusted. In Russia, in general it is better not to be overly trusting.
Competence - Formality
As Russia is a high power distance country, job titles are important. Bosses expect to negotiate with bosses and it is not easy to cross certain lines in the hierarchy, etc.
When you are a boss or in a higher managerial position, you are expected to behave accordingly – it builds the perception of your competence. In Russia it means quite formal behaviour and “space taking” in discussions, usage of signs of power (branded dressing and accessories, cars etc). In Russian larger organizations there are also different in-depth experts in their competence areas – they are the ones to provide the information for the decision taking by the top management. Experts are also highly valued.
From formality to personal relationships by proving your good intentions
Even though Russians are emotional, they are also formal in the beginning. If you are able to pass the level of formality and create personal relationship with your business partners, the formality disappears. If you don’t reach this level of trust, you can expect the Russians to try to take the bigger slice of the business profits to themselves. You can’t get to the next level without investing your time to several face-to-face meetings, proving your good intentions and willingness to build long-term relationship and cooperation.
Emotions - reliability and proximity
In Russia, it is quite true that you do business with people you like rather than between companies. For this you need to have proven your reliability and likability. The aim is to build feeling of your personal and your company’s reputation as reliable partner. As a representative of your company, you personally guarantee your company’s reliability in the eyes of the Russian partner.
To get to the level of good relationships, 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. And you must maintain the trust by regular face-to-face meetings with your partners. Business is never just business in Russia.
In Russia you must always remember the principle of reciprocity: “I give to you, you give to me”. It is a main factor in collectivistic cultures in which the loyalty to in-groups is very important. You build lifelong relationships and network. You help your network find solutions to their business and personal problems, and they help you in return. In Russia, there is very low trust to authorities, doctors, social systems, etc., which means that people help each other a lot. If it seems that you are only looking after your own benefit, the trust gets lower.
Russian behavior is usually quite emotional and intuitive. In negotiations you often hear: “ I feel that this business will bring profit. Part of this is explained by the fact that it is hard to make prognoses in the quite unstable Russian business environment, but part of it can be explained by the emotional point of view. A “cold facts” justification alone is often not the best way to persuade Russians in business.
Way of communication
Russia is a mix of different communication styles. You can often hear “maybe”, “perhaps”, “about”, “approximately”, in the conversation. Accurate expressions are often avoided and straight answers to ‘simple’ questions not given. This can be partly explained in the unpredictability of the country and its business environment, but also by the culture of high power distance which includes a culture of punishing for making mistakes. Nobody wants to ‘get caught’ by stating too clear predictions, prognoses, numbers, etc.
Perhaps due to the above reasons (high uncertainty avoidance), Russians tend to need a lot of facts and check all details given by you for making business decisions. This sometimes makes the decision making process a bit slow. But never say never. In smaller companies, the boss can make surprisingly quick decisions very emotionally and intuitively.
What should you not do
You should not be overly trusting to unknown people or potential business partners. Check and verify facts when needed, but at least in the beginning of the relationship.
If you don’t have a health reason, it is not a good idea to turn down a proposal to have a vodka toast. Nowadays it is not as common to drink during business meetings, but after making a deal, for example, you can have a good dinner with vodka drinking. Refusing to raise a vodka toast can be taken as a sign of disrespect. You can even put it to your lips and pretend to drink a bit.
As Russian culture is not highly masculine, it is better not to brag about your achievements too much. If you are a boss, it is tolerated better.
What are you expected to disclose
Russians can ask very direct questions that you consider taboos or company secrets. It is ok to say that this is a company secret. In the Soviet Union, salaries were also an open topic for discussion. When shifting to a market economy, the topic stayed but is now getting less common. You can circumvent the question, if it is inconvenient for you.
On the contrary, you are expected to share some personal information about your family, hobbies, etc., to help the Russians to get to know you personally and form a trusting relationship.
What are good conversation topics
Russians like talking about travelling, leisure time activities, sports and their families and they like to get to know you, too. They will tell you which places to visit and what to do in their home towns or in Russia in general.
You can ask about the market and your business-sector situation, Russian bureaucracy, and the operating system as well. Your Russian counterpart is usually happy to show his/her competency and tell you valuable information. They will be happy to hear about the same things in your country or globally.
For some foreign women it can be a surprise to hear compliments about their looks, dresses, etc., as it is not practiced everywhere in the world in business.
World politics is a topic that many want to discuss, but it is a delicate issue and you must be ready for differences in opinions, and do not criticize the Russian president and foreign policies. Crimean conflict and Chechnya war are topics that you might want to avoid.
Also, a woman’s age is a taboo in Russia.
In Russia, you are expected to look people in the eyes during discussions, but not too intensively, so that you would not look too aggressive.
The physical personal space between people is quite short. Russians also can touch people (arms, for example) that they know during discussions. It is not a sign of sexual harassment.
It is worth mentioning that smiling is a special thing in Russian culture. You are not expected to smile to strangers or people on the street, especially in big cities. Smiling is not considered as a sign of politeness in the same way as in many countries. A “keep smiling” look can be taken as a sign of dishonesty (you have something to hide), disrespect or stupidity, even. In the beginning of a business meeting Russians do not usually smile, as they prefer to be formal and it would look like they don’t take the meeting seriously. When you get to know people, you smile more, of course.
Short case study
A Finnish company had created a trusting relationship with a Russian governor. Their plan was to invest in a production plant in the region ruled by the governor. Things proceeded well, as the governor is a very influential person in advancing business in the region (remember high power distance and collectivism). The plans were at an advanced level and construction about to start. Suddenly, the governor was killed in a car accident.
After this tragic accident, the company management understood that the agreed things were not valid anymore and if they wanted to go on with the plans, the process had to be started from scratch with the new governor. Usually, new governors bring their own people to all important posts, too. The change of the powerful decision maker meant that the company had to withdraw from the project.