Executive Lounge

Posted on Nov. 14, 2011
Russia in a New Dimension, From a Brazilian Perspective
Russia in a New Dimension, From a Brazilian Perspective

Alfredo José Assumpção, CEO & Partner of IIC Partners' Brazilian member firm Fesa Global Executive Search , writes about his personal experience and impressions after being invited to speak at the recent 2011 Association of European Business, Russian Federation, conference in Moscow

As a guest speaker of AEB (Association of European Business, Russian Federation), I delivered a lecture in Moscow on May 19, 2011 about leadership to a group of around 200 senior executives, representing several European countries. I could not steal from myself this unique experience by turning it over to someone else. Russia is the largest country in the world with approximately 17 million square kilometres of territory. Moscow is the largest capital in Europe, with a population of 10.5 million; the largest concentration of billionaires on the planet live there. Russia's total population is 142 million. It is an energy superpower, with the biggest natural gas reserves in the world and also exports oil and gas. It has rich metal and mineral deposits, great forestry resources and is the fourth largest grain producer with 1.2 million square kilometres of cultivated land. From 1999 to 2009 its agricultural development was so immense that it transformed from being an importer of grain to the third largest exporter in the world, behind the European Union and the USA.

With an economy already highly internationally interconnected, it is a nation that is striding swiftly towards economic globalization, having adopted, in the early 1990s, liberal principles of market economy. It is now gathering benefits from such measures. It is the greatest example that a communist economic system is flawed and destined to fail. Contrary to the current Brazilian government, which has strong statist leanings, Russia continues to privatize its economy, maintaining a system of absolute and total respect for private property, with a police force that enforces effective laws. Looking from the political administration point of view they are more likely to achieve pure capitalism than Brazil. For example, people pay only 13% income tax while Brazilians pay 27%. Approximately 40% of the wealth constructed in Brazil goes to the government, while in Russia only 23%. Is it possible that in 20 years as a capitalist country Russia has learned the lesson better than Brazil?

To continue with the Brazilian government statist developments and rising tax burden, without mentioning all the landless or homeless movements, with total disregard to the existing constitution and our laws, our police force is somewhat inoperable. Very soon Brazil will be a country of communists initiating an absurd process of destructing our wealth for future generations. Let's expect that common sense prevails and we rid ourselves of this path already so battered, worn and discredited, under penalty of countries such as Russia which will begin to see us in the rearview mirror, more and more distant. They will continue to grow and evolve economically and we'll be here watching the caravan go by, with our arms crossed to our political parties that seem to exist only to wrestle in the scramble for government handouts. That's the big conclusion that can be made when comparing the model of governance and economic policy of modern Russia with ours in Brazil. We run the risk of coming late (because the world has already gotten rid of communism) to the wrong side of history and reversing these trends will cost us dearly in the near future.

Leaving the political economic sphere, that is more acid, less friendly; we can speak of the common Russian people, their managers and leaders of the corporate world. The people are good and cordial, friends, owners of a diverse culture, inherited in the form of art and science with theatres and ballet companies, living a rich history of military confrontation, conquests and struggles to defend their territory against invading states on all boarders, European or Asian. You can clearly see that executives and managers understand that the largest battle to confront with globalization and economic interdependence among people will not be won with bombs. But rather, with free market economy encouraged by, balanced and centered on the basis of knowledge and the use of modern technology, being in operational, tactical or strategic plans, resorting to open minded managers who are ready to adapt healthy management principals, moving quickly from the traditional bureaucratic model (Max Weber), with its impersonal and concentrated administration methods, "whoever has the power gives orders, and subordinates obey", to a contingency model, "to be of service", where there isn't a single predetermined way of doing "something" ("there isn't the best way"), but another model, "it depends", where all the installed human capital participates and servers in its totality the corporate world.

This is the Russia I met, where there is great certainty about the absolute dependence of the means of production to the talent available. They are also facing a talent blackout as we are in Brazil. So they know that they must educate their people and change the way they manage in order to secure the best talent, with clear objectives for building good organizational environments so they may attract, retain and motivate the best talent. This is how in Russia the multinational companies that are being installed and the national companies will win the new market war. Brazil, be it in the government or in businesses, has to restart thinking and acting in this way in order to compete in equal conditions in the global arena.

Alfredo José Assumpção is the leading business author and commentator. For information on his nine books, please visit www.alfredoassumpcao.com.br

 

Posted By: Alfredo Assumpcao