Please tell us about your business here in Siberia.
I'm a senior partner in an American consultancy and
investment firm which is newly established in
Novosibirsk, although I've been here myself for over two
years. SDIC concentrates its efforts on finding both
established projects in which to invest, and on
developing projects which have great potential. Our goal
is to offer the highest levels of returns to our foreign
investors while also contributing to the development of
the region by setting an example to its business
community. My work involves anything from training
production managers to conducting feasibility studies for
projects which may be added to our portfolio.
What was your image of Siberia before you came here?
I suppose my attitude to Siberia was much the same as
everyone else's - cold, bleak, sparse and full of GULAG.
Immediately on my arrival however, my attitude changed
sharply. I now see that this is a land of huge
opportunities, much like the American West earlier this
century. Before I came I also didn't expect to find so
many extremely well educated and learned people. Despite
all of Russia's problems you still manage to produce high
class graduates, with a fully rounded education.
The Siberian people are extremely tough, but have a soft side which often leads them to stress the negative too often when they should take pride in their achievements and hope in the future.
What are the greatest challenges of doing business in Siberia?
In a word, bureaucracy. The only people who have
sufficient experience to deal with that are Russians.
That's the mistake many foreign businessmen make here,
they try to teach their local partners how to do what
they're already expert in. It's just one of those things
you have to accept. Of course there are times when a
foreigner can get something done more quickly, the doors
of power open more readily for them. But on the whole the
day to day business of accounting, taxation, law and
security should be left to the locals. What the foreigner
must have is a level of knowledge about the bureaucracy
sufficient to know when he is being conned. At SDIC we
are lucky enough to have local employees whom we can
trust, who will be loyal because we treat them with
respect and pay them a decent wage. Foreign businesses
here often get greedy with the payroll, but like anywhere
in the world, you get what you pay for. If you pay a
senior manager $500 a month and expect him to be
enthusiastic when he knows he would be paid a hundred
times that in the west, you're in for a surprise.
The other main challenge is publicizing Siberia among potential clients abroad. The word �Siberia� conjures up such a terrible picture in the minds of most that you have to try twice as hard to sell the soundest project to them. Some regions of Siberia are doing excellent work on correcting that, and my personal opinion is that Novosibirsk is in danger of being left behind, when it should be leading the way. All the business people of this area have a duty to do something about that, not only for their businesses but for their families and for their community.
What should people beware of in Siberia?
From a business point of view one shouldn't expect to
find anything resembling western practices here. Expect
long delays in everything and always have something else
to be working on while you're waiting, otherwise you will
not get anything done. This doesn't mean abandoning tried
and tested working patterns, it just means being a little
more flexible in your prioritization. Also you should
beware of looking down on local businessmen as
unsophisticated or organized criminals. I have met a
great deal of decent and honest people in my time here,
both rich and poor. The attitude that Russian's who drive
Mercedes are Russia's answer to the Cosa-nostra is
extreme. Of course organized crime exists, and it seems
so pervasive simply because it's a new phenomena and
hasn't been institutionalized as in other parts of the
world, it's still mostly in the street.
Also you should take more time to make personal links with your business contacts. In the absence of an information culture the old adage that "It's not what you know, it's who you know" goes double here. In Russia business and friendship go hand in hand. Yes, be professional, but don't be cold, no one will be impressed. On a personal safety level, take care on the streets at night. Never rely on the fact that you are a foreigner to scare away potential muggers etc. Women should always be escorted after dark, no matter how short the distance. Above all avoid groups of young men with short cut hair (you know whom I mean) at any time of the day. Try to think "Would I walk down this dark alley alone at 3 am if this were Los Angeles?" and you'll be OK. Always call the Militia if you have any concerns.
Is there a lot of competition with businessmen from other countries?
No, that's what makes it exciting. SDIC will be
responsible for bringing dozens of firms here over the
next few years and that situation will change. Other
companies, NGOs and so on are here of course, but the
opportunities are so huge that it will be some time
before we start really competing with each other. I hope
that will be sooner rather than later.
How many American businessmen are working now in Novosobirsk?
There are a dozen or so who say they live here, including
a few old soldiers. But the turnover is so high that
despite the best efforts of organizations such as "the
Friends of Novosibirsk" (to my shame I have never been to
a meeting) there is no real expat community here. SDIC
has another American and an English senior partner here
who have put in enough time here for shore leave, but
with the exception of a couple of others we seem to be
the only ones who stay. Maybe someone should open a
decent restaurant here and they would stay --
What makes a foreign firm successful here where others have failed?
I can answer that in three words. Persistence,
persistence and persistence. If you're willing to stick
at the job until it is done, to take the time (and the
money as I've said) to find the right staff, and to wait
it out when everything seems hopeless, you will succeed.
The trick is not to judge every project or deal by
western standards, that's like measuring temperature with
a ruler. You need to adapt your business values,
otherwise you will not know a sure thing when it smacks
you in the face, and then, believe me, you'll find a lot
of them here.
Can your experience teach other Americans who are interested in
doing business in Siberia?
Certainly, that is part of my role here. Our consultancy
department is set up to do exactly that, to utilize the
collective experience and knowledge of our partners in
order to save our clients time, money and problems, and
to provide them with the most up to date information
possible. We act as an interface between the local
markets and foreign businesses so that both parties have
a full understanding of what is going on. Two years ago I
didn't have a clue and was making several faux pas in
every meeting. Once when another of our partners was
having dinner with a rather important local dignitary he
spoke at length (in Russian) about his friend who is a
pediaphile, when he had meant to say pediatrician. I'm
sure that influenced a couple of deals for the worse.
Our clients don't have to go through that process by trial and error as I did. My advice to new clients, and to foreign business people I meet in a social capacity is be careful, but be enthusiastic; and most important of all, be persistent. I have seen dozens of foreign business people come here with some good ideas and a lot of energy, only to see them leave six months later because they have got their fingers burnt. Nobody said it would be easy and my attitude is that if a business isn't willing to take the rough with the smooth, it shouldn't be in Russia in the first place. That's just plain old-fashioned common sense to me.
How can one contact you to get more information?
My E-mail address is: [email protected] or you can get in
touch via the Review.
Thank you.