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Talent management in Russia: not
so much war for talent as
wariness of talent
Nigel Holden
Centre for International Business University of Leeds (CIBUL),
Leeds University Business School, Leeds, UK, and
Vlad Vaiman
School of Business, Reykjavik University, Reykjavik, Iceland
Abstract
Purpose – The purpose of this paper is to supply insights into talent management (TM) in Russia in
the light of Soviet experience and the contemporary officially sanctioned business-antagonistic
political culture.
Design/methodology/approach – A diachronic approach, whereby a key dictum of Karl Marx
which underlays Soviet thinking and methods is contextualized and applied to post-communist
Russia, and TM practice in Russian firms and foreign firms in Russia is contrasted.
Findings – A key finding is that there is seemingly greater value placed on Russian employees’
talents by foreign companies. Six influential factors are identified which give Russian-style TM a
dysfunctional character: Russia’s default position (i.e. instinctive gravitation to authoritarian rule),
mistrust of institutions, entrenched “bossdom”, persistence of “Soviet mental software”, negative
selection, and limited tradition of empowerment.
Research limitations/implications – The paper highlights needs for: comparative empirical
studies, contrasting Russian firms’ and foreign firms’ understanding and application of TM;
investigation into the relationship of Russian-style TM and career progression in Russian companies;
and studies into contrasting ways of transferring TM concepts and practices by Western firms.
Practical implications – Foreign firms must be prepared to engage with Russia’s prevailing
officially sanctioned business-antagonistic, occasionally xenophobic political culture.
Originality/value – The paper demonstrates how engagement with contemporary Russia for
management research purposes requires a deep appreciation of the Soviet period and the complexities
of its legacy and judicious use of Russian-language material adds credibility.
Keywords Russia, Soviet Union, Talent management, Careers, Institutional mistrust,
Career development, Political systems, Trust
Paper type Research paper
Do not believe anyone, be not afraid, do not ask for favours (Russian entrepreneurs’ slogan,
cited in Chernysh (2008)).
Introduction
This article treats an important theme that is rarely discussed by Russian management
writers and that only receives at best tangential treatment by Western specialists. The
theme is talent management (TM) as understood and practiced in Russia. This is a
curious omission for three important factors:
.the forebear of Russia today, the Soviet Union, was established on the premise
that the new revolutionary society, initiated by Lenin, would need to develop and
use human talent in ways unthinkable in Tsarist Russia;
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1742-2043.htm
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management in
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critical perspectives on international
business
Vol. 9 No. 1/2, 2013
pp. 129-146
qEmerald Group Publishing Limited
1742-2043
DOI 10.1108/17422041311299987
.the new post-Soviet Russia human talent would need to develop and use human
talent in ways unimaginable in Soviet times; and
.many thousands of Russians are these days working for Western corporations,
in which TM is a recognised aspect of their Human Resource (HR) systems.
These points explicitly emphasize that the nature of TM as other HR-related fields of
practice in Russia must to some extent be viewed through the prism of history. Not for
nothing did the great Polish journalist, Ryszard Kapuscinski (1994, p. 307) observe:
“History in this country is an active volcano, continually churning, and there is no sign
of its wanting to calm down.” The point is that in Russia history is no passive,
fast-receding past; it is an elemental force jutting into the present, into private lives as
well as into corporate space – anyone’s corporate space, even that of foreign firms, as
we shall see. If you engage with Russia professionally, this elemental force comes with
the context. Any discussion of TM would be deficient without it.
With this in mind, this article will first supply the key context by outlining with ex
post facto insights about TM in the Soviet era (1917-1991). This setting of the scene will
lead to a discussion of TM before a review of the status of TM in contemporary Russia.
We will ponder TM as a facet of Russia’s so-called “institutional void”, comment on a
possibly unexpected Russian source of writing about TM, and tentatively map out
Russia’s TM landscape. This discussion will in turn allow us to reflect on the particular
challenges and opportunities of TM in Russia.
With the help of Russian-language sources, we draw two important deductions:
first, that Russian TM has dysfunctional characteristics owing to the persistence of a
political culture in an institutional void that is wary of talent in the business sector;
and, second, that Russian employees find that their talents are more greatly valued by
foreign employers based in Russia than by Russian firms. Neither of these deductions
is necessarily obvious from the outside. TM in Russia, in common with other former
socialist countries, has “a TM landscape [that is] unusually challenging to apprehend
in theory and in practice” (Vaiman and Holden, 2011, p. 178). Russia, as we shall see, is
shackled to its Soviet and even pre-Soviet past in ways that may confound us. It is no
exaggeration to say that this past is a living element in its contemporary TM
landscape. This conviction permeates this entire article.
Talent management in Russia: a complex context
Russia is a country of considerable geopolitical importance: just as in Soviet times
what is decided in the Kremlin often has worldwide repercussions. Yet this great if
baffling country remains extraordinarily under-represented in the current
management literature. Why this is so is beyond the scope of this article, but one
regrettable reason is that Russia is still in catch-up phase, so is assumed to be not a
source of enlightenment to foreign management researchers (Michailova and
Jormanainen, 2011). Yet, as the eminent historian Geoffrey Hosking (2001, p. xi)
reminds us: Russia is “the great Other, understood yet not understood, the culture in
whose mirror we appreciate our own”. Those concerned with management education
and research in the West have yet to take that as a general starting point for
understanding the nature of Russia’s transition to the market economy. Until they do,
negative perceptions of Russia will abound, and that helps nobody.
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In this article we discuss the status of TM inRussia. At first glance it would seem that
TM (which we specify in the following) is yet another of those Western management
concepts that is only partially understood in Russia. But this is to overlook a fact of
incalculable historical significance. The forebear of today’s Russia, the once all-powerful
Soviet Union, was the first country in the world to establish itself with a talent-specific
raison d’e
ˆtre, which was enshrined in the famous Marxist principle: “from each
according to his abilities, to each according to his needs.” Indeed the Russian Revolution
of 1917 envisaged a future socialist state in which “there would be no distinction of
material reward. Each individual would have the fullest opportunity to develop potential
talent” (Service, 2000, p. 296). Even though there is an obvious contradiction to a
contemporary vision on talent management stating that in order to stimulate an
individual to develop talent, there should be some sort of a “distinction of material
reward”, the Leninist conviction still made sense to revolutionaries.
Not only that: the revolutionary state would of its own accord generate a new kind
of human being (Hosking, 2001; note 1). According to Trotsky, writing in 1923, this
new person, imbued with revolutionary fervor and commitment, “will become
incomparably stronger, more intelligent, more subtle. His body will be more
harmonious, his movements more rhythmical, his voice for musical; the forms of daily
existence will acquire a dynamic theatricality. The average human type will rise to the
level of Aristotle, Goethe, Marx” (cited in Service, 2009, p. 313).
But the future-oriented idealism of the immediate post-Revolution years rapidly
proved to be no match for the practicalities of running an entire country along socialist
lines so that it would be a model for virtually instant imitation by Germany and other
European countries (Figes, 1996; Service, 2000). Not only did many revolutionary
leaders lack competences for running the socialist commissariats (departments of
state), but daily government required ever-growing hordes of bureaucrats with a talent
for paper-pushing and the stamping of documents (Figes, 1996). In short, the new
regime suffered from what one might call dysfunctional TM.
Throughout the seventy years’ existence of the Soviet Union human talent was
subordinated to the will, needs and whims of the Communist Party. Ordinary citizens
did not just need talent for doing their jobs; they needed it to survive in a society in
which an unguarded statement or a false accusation could variously lead to
imprisonment in the Gulag, banishment, ostracism or the firing squad. No wonder then
the Soviet regime became “a palsied system that leached out vigor and talent”
(Moynahan, 1994, p. 227). And yet there was one area which was a magnet for the
talented. That was education. A telling outsider commentary comes from the great
American writer, John Steinbeck, on a visit to the Soviet Union in 1947. Noting that
competition to get into schools and universities is “constant”, he writes:
One takes examinations for schools and the highest grade wins; the highest grade gets the
scholarship. There are always more applicants for the universities than there are places, so
the competition is very keen. And everywhere the honors and emoluments go to the most
effective person. There is no such thing as reliance on past performance, or on the
performance of your father or grandfather. One’s position is entirely dependent on one’s own
intelligence and one’s own effort (Steinbeck, 2000/1948, p. 32).
Of course, there were certain limitations to the system of equality in education, since if
one’s father, for example, held an important position, one would have an easier time
entering, studying, and finishing the university than his/her “commoner” counterpart. In
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general, however, it would be fair to say that it was this system of emulation described
by Steinbeck that bequeathed to post-Soviet Russia its greatest resource: a highly
educated society. But overall, the communist years and especially the Stalinist period
still cast a long shadow over Russia. Not for nothing has Meier (2003) perceptively
pointed out that Russians today are more afraid of the past than the future. The past calls
to mind Imperial Russia and the Soviet Union, when central government was not only
stern and authoritarian, but also vicious and even arbitrary in repression; draconian
measures were the order of the day whether in peace time or war. For centuries Russian
rulers have feared great risings-up by restive, uncontrollable malcontents: the
uneducated serfs in the eighteenth and nineteenth centuries and “the toiling masses’
of the twentieth century, the nominal beneficiaries of the 1917 revolution. A reflex of
these experiences is that Russians do not put much trust in the organs of state, which are
seen as repressive tools in the hands of the powerful.
That explains why informal trust, based on close personal acquaintance, is as in
Soviet times so important: it is all about trusting people, never institutions (see Ayios,
2004; Holden, 2011; Puffer and McCarthy, 2011; Sarno, 2008). This also helps to explain
why Russia has been a problematical terrain for implementing alien Western
management practices which stress openness in workplace relationships, knowledge
creation and the importance of initiative, and why Soviet-style management with its
emphasis on tight, virtually autocratic control of people and procedures and top-down
communication has been so persistent. From this it follows that TM in Russia can only
be appreciated in its “complex, context-rich, transitioning business environment”
(Randall and Jaya, 2006). We accordingly regard TM as shaped by a particular set of
“challenges, drivers and strategic issues” (Schuler et al., 2011) that are conditioned by
the Soviet past as well as by contemporary experience of the transition process.
In this article we will discuss six factors or rather six varieties of pressure which
influence the nature of Russia’s TM landscape and as such inhibit TM acceptance in
contemporary Russia. In Figure 1 we represent these factors, each of which will be
discussed in the following paragraphs.
However, before we can grasp the idiosyncrasies of Russian understandings and
practice, we need to consider our key term, TM, about which there is no unitary view of
its precise scope.
About Talent Management
There is considerable discussion between scholars in the West with respect to their
understanding of the meaning of TM. While some researchers look at TM from a
mainly human capital perspective (Cappelli, 2008), others see it as primarily a mindset
with talent as the key to organisational success (Mellahi and Collings, 2010). Still other
researchers see the linking of TM closely to the business strategy and the corporate
culture as a key feature of TM (Farndale et al., 2010; Kim and Scullion, 2011). The field
of TM, or better yet, our understanding of it, still remains hazy, as both researchers and
practitioners struggle to find precise definitions of what constitutes talent and TM
(Mellahi and Collings, 2010; Collings and Scullion, 2009).
Despite this lack of conceptual and intellectual foundation (Lewis and Hackman,
2006; Scullion and Collings, 2011), some recent work has addressed this issue and has
contributed theoretically to the study of TM (Cappelli, 2008; Lengnick-Hall and
Andrade, 2008; Tarique and Schuler, 2010; McDonnell et al., 2010; Vance and Vaiman,
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2008; Collings and Mellahi, 2009; Scullion et al., 2010). Most of the literature on the
topic, however, remains practitioner in nature rather than academic and is generally
based on limited empirical evidence (e.g. Guthridge et al., 2008). The concept of TM,
therefore, is still quite open to criticism in terms of inadequate definitions, theoretical
development, and practical evidence – and particularly so in the global context (Lewis
and Hackman, 2006; Collings and Mellahi, 2009; Scullion et al., 2010).
In more general terms, Lewis and Hackman (2006) identify three fundamental
directions that literature on TM normally pursues. The scholars following the first
direction tend to use TM as a substitute definition for more efficient and aligned
strategic HR processes. The second direction limits TM to particular HR practices such
as recruitment, staffing, perhaps also succession planning and the like. The third
stream focuses on managing employee performance or leadership development. More
recently, Vance and Vaiman (2008) and Collings and Mellahi (2009) pinpoint a fourth
direction that concentrates on the identification of key positions which have the
potential to positively impact the competitive advantage of the firm.
With the view on the last direction, we propose the more culture-neutral and precise
Vance and Vaiman (2008) definitions of both talent and TM, which refer to talent as
key people in critical job roles, as well as employees who possess and are pursuing
specialized and in-demand knowledge and skills, and identifies TM as a set of
organisational processes designed to attract, develop, motivate, and retain key people.
With these definitions in mind, we are going to discuss TM in Russia next, where the
topic is said by one Russian commentator, to “produce stormy debates” (Konstantinov,
2011), and where, too, the very concept of key people is problematical.
Figure 1.
Pressures on TM
acceptance in Russia
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Talent management in Russia: new impulses
As mentioned previously, the global context provides additional difficulties in
developing the field of TM, since complexities related to each cultural setting strongly
affect its landscape and make it increasingly challenging to capture in both theory and
practice. In their most recent work about TM in Central and Eastern Europe (CEE),
Vaiman and Holden (2011) note that the region should not be approached by simply
imposing Western frameworks, since they make no allowance for local mood, tone, and
past legacy (see also Hofstede and Fink, 2007).
TM, as identified previously, in CEE is somewhat a new concept to both scholars
and practitioners. Most extant academic work concentrates on either case studies of
Western MNC subsidiaries or general descriptions of Human Resource Management
(HRM) and HR practices in specific CEE countries, sometimes just briefly mentioning
TM issues (for an overview see Vaiman and Holden, 2011). This is expected, since
Western companies tend to give much more consideration to strategic HRM issues (like
TM) than their CEE counterparts (Mills, 1998; Zupan and Kase, 2005). Alternatively,
most domestic organisations owned by their respective CEE shareholders employ
mainly centralized and administrative HR practices, thereby disregarding or
neglecting strategic issues of TM. And although the need to move from purely
administrative to more strategic HRM (and TM issues) has already emerged, there is
still little evidence that this shift has actually materialized.
Just like in its CEE counterparts, the issues of TM in Russia are only now starting to
get some more attention from both scholars and practitioners. Although previously
published literature pointed to the importance of HRM in post-Soviet Russia, no
specific connections to a comprehensive set of organisational processes aimed at
attracting, developing, motivating, and retaining key people (TM, as defined in this
paper), have been made (e.g. Vikhanski and Puffer, 1993; Puffer, 1993; Shekshnia, 1994,
1998; May et al., 1998).
Perhaps the first light on the relationship between HRM practices and firm
performance in Russia has been shed by Fey et al., in 2000, when they investigated the
role of such HRM outcomes as motivation, retention, and development as a mediating
variable in this relationship. Their study persuasively showed that employee
performance in a Russian firm largely depends upon their skills, capabilities, and high
motivation. The authors have also demonstrated that in addition to capability
development and motivation, employee retention is also essential to the success of the
organisation (Fey et al., 2000). In other words, taking into consideration our TM
definition shown previously, it is possible to state that TM efforts are rather significant
to employee performance in Russia, and therefore, to that of the organisation as a whole.
In their next work, Fey and Bjo
¨rkman (2001) argue that employee development may
be of even greater significance in Russia than in Western countries. That is due to the
fact that many Russians lack some basic business skills – mostly because of the
absence of “capitalist” business education in the Soviet Union – and therefore,
employee training and development, especially Western-style, is considered an
essential source of competitive advantage (Fey and Bjo
¨rkman, 2001). Hence, the
authors continue, HRM practices aimed at the development of Russian managers
should be expected to be in positive relationship to firm performance. Their point about
Russians acknowledging their professional limitations is endorsed by Michailova and
Jormanainen (2011, p. 252), who contend that “Russian firms’ painful awareness of
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their capital and economic dependency on their Western partners in the beginning of
the new era has motivated them to engage in a fierce competition for knowledge.”
TM in Russia: the debate takes off
Other than mentioned previously, the literature on TM in Russia is not exactly
extensive. There are, however, some recent studies and anecdotal evidence that
demonstrate the increasing importance of TM efforts in Russian companies, be it
Russian subsidiaries of Western multinational corporations (MNCs) or purely Russian
companies. In the next section we will discuss some of these findings. First, though, let
us turn to one notable source, the Russian-language edition of the Harvard Business
Review, where the word “talent” is cited some 70 times in issues going back to 2004, but
it mostly crops up in interviews, book reviews and occasional references. In recent
issues there are six articles in which the word is featured in the title with a short
description. We comment on three of those contributions now, where one is Russian,
and the other two are non-Russian, but we cite them on the presumption that their
ideas are endorsed by the Russian editor of HBR as being relevant to Russia.
The first of these authors, Konstantinov (2011), already cited previously, argues that
“to manage talent, you need wisdom”, which he defines as “the capability to link the new
with the old, to use past experience to solve new problems.” The wise manager then is
someone who co-operates with talented people in the search for solutions’ and abhors –
to translate the author’s words literally – “knout and gingerbread” in preference to
“temptations and passion.” In other words, the wise manager knows how to incentivize
and motivate talented people. Another aspect of TM is highlighted by the second author,
Fryer (2011), who takes a societal perspective. He notes that “top managers are not
popular”. They are seen as “overpaid” and “scandal-ridden”. This author calls for “an
ethical concept of talent” which will “help those managers secure the trust of society.”
The third contribution, by Jonas Ridderstrale (2011), an influential Swedish management
thinker, is summarised as follows on the contents page: “managing talented employees
in the old way does not work. You have to apply a completely new, more sensitive
approach.” With specific reference to Russia, whilst noting in passing that “we are all
playthings in a global game”, Ridderstrale bemoans Russia’s brain drain and argues that
the all-important “influx” requires Darwin-style natural selection. The conditions that
will facilitate this are unmistakably Scandinavian, given their egalitarian underpinnings:
.Accessibility, premised on sound infrastructure and “info-structure”, where
“knowledge workers understand the value of time”.
.Stability, whereby rules and regulations are transparent and consistent.
.Professional knowledge, which is based on life-long learning and access to
universities and other educational institutions.
.Living conditions, which do not neglect the concerns of children and the elderly,
if the rest of us are working 24/7.
.Climate: we may not be able to change the weather, but we all need ecologically
favourable working environments.
Other talent-related topics in the Russian edition of HBR include education of the talented
as well as the relationship between talent and creativity. From this brief overview we may
conclude that Russian business leaders are exposed to several concepts of TM. To what
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extent these concepts have real impact is impossible to say. Furthermore, we have to
remember that prescriptions for promoting TM as a form of good practice have to be
viable in, and compatible with, a business culture that is in many ways hostile to foreign
intrusion and a severe testing ground for international companies (see Fey et al., 2004 for
an overview). In the following sections, we will consider key aspects of Russia’s somewhat
disconcerting TM landscape (refer back to Figure 1).
Mistrust of institutions
Recent clashes between Russian companies and their UK business partners, one being
BP, were so bruising that the Moscow correspondent of The Times newspaper
commented that “even the most powerful foreign companies find it hard to defend their
interests here”, adding that “capitalism in Russia remains red in tooth and claw, with
force rather than best practice winning the day far too often” (Times, 6 July 2011).
Russia, it seems, has to recover from “the cultural trauma” (Chernysh, 2008) that the
post-Soviet market reforms swept into the nation’s life; which means that Russia has
not yet developed an environment in which TM can easily take root and flourish.
In a word, TM in Russia is influenced by a long-standing societal mistrust of
institutions and the “untouchable” people at the top. This attitude in fact predates the
Soviet Union (note 2). In the Soviet era purely instrumental (i.e. patronage-based)
relationships – as between, say, a senior apparatchik and a lower ranking fixer (see
note 3) – could be risky to either party. “That’s why informal trust, based on close
personal acquaintance, was so important, and it was all about trusting people, never
institutions. The same mistrust of institutions applies today too” (Holden, 2011, p. 351),
and this state of affairs has given rise to what Puffer and McCarthy (2011) call Russia’s
“institutional void”, where the government arrogates to itself powers and competences
that belong to an independent private sector in a modern market economy.
Entrenched bossdom
This void is no abstract notion. The resulting “lack of effective formal institutions”
(Puffer and McCarthy, 2011) impacts negatively on corporate governance, triggering
“management and ownership excesses, such as mistreatment of majority shareholders,
opaqueness regarding company operations and results, and crony boards of directors
and management” (Puffer and McCarthy, 2011, p. 25). It is such governance behaviour
that sustains what Holden (2011) has called “entrenched bossdom”, a unique brand of
management that somehow combines authoritarian sternness with paternalism,
frenzied networking with isolation of those at the top who decide everything.
Russia’s default position
The contradictory tendencies described previously constitute what the historian
Sixsmith (2011) in his thousand-year survey of Russian history called Russia’s “default
position” and the political scientist Hanson (2011) termed the country’s “oldest
tradition”: the instinctive gravitation on the part of leaders towards autocratic rule to
avoid democratic reform and to ensure “immunity from challenge” (Wood, 2007).
Hanson (2011) has concisely and brilliantly characterised Russia’s peculiar, if
historically explicable form of governance that combines “free-market pieties with
quasi-Soviet practicalities.” So it is then that once again when we attempt to establish
the status of modern management ideas and practices in Russia – of which TM is but
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one – we are forced to view them not as neatly bounded contemporary phenomena, but
against the wider backdrop of centuries of Russian history (Holden, 2011).
These factors help to explain why Russians are said to need charismatic leaders
(Puffer and McCarthy, 2011; Vlachoutsicos, 2011). According to Maslov (2004, p. 38) in
slightly ponderous formulation, this need is “based on a variety of social and
psychological characteristics of the Russian mentality”, and he notes that
“authoritarian methods of management are common to the majority of Russian
enterprises”. But one should not assume that subordinates are meek and mild.
Employees expect to be listened to by those at the top (which actually continues a
centuries-long tradition of petitioning of leaders by lesser beings (Hosking, 1997,
2001)), and they expect to be heard. So it is that Fey and Shekshnia (2011) argue that
those foreign executives who recognise the importance of using their authority to
promote openness, engagement, and innovation often succeed in Russia. They
understand what most modern Russian employees – people with good education and
superior skills – seek from their foreign employers, and that is fairness, transparency,
meritocracy, and the opportunity to have an impact on their organisation (Fey and
Shekshnia, 2011). In short, Russian employees feel that they and their talents are more
valued by foreign companies than by Russian ones.
This is no mere conjecture. In surveys of 657 Russian managers in 2000, 1,007 in
2001, and of 1,005 in 2003, the Finnish researcher Sarno (2008) reported that “the most
successful, steadily prospering firms appear to be those that are either in part or
completely in foreign possession.” She adds that these firms are characterised by their
active participation in “programs that raise their innovational potential”, concluding
that “there is no doubt that firms today which are partly or completely in foreign
possession, outstrip Russian firms in terms of quality and novelty of design as well as
technological development” (Sarno, 2008, p. 81). This leads us to an important
observation: that the behaviour of foreign firms in Russia is a legitimate factor in any
description of the Russian TM landscape.
Limited tradition of empowerment
As several sources make clear, Mars is a very good example of a successful MNC
operating in Russia, which bears out Sarno’s (2008) findings. As authors point out,
Mars’ corporate culture, underpinned with a responsible leadership and
cross-culturally astute internal policies, promotes openness, fairness, respect for
individual, and employee involvement, among others, which helps them to maintain a
strong, loyal, and motivated workforce (Fey and Shekshnia, 2011; Harvard Business
Review, 2010). It is worthwhile emphasising Mars’ successes with employee
involvement, as many Western firms often struggle with trying to empower Russian
employees. This phenomenon can also be attributed to the Soviet legacy of highly
hierarchical relationships in Russian organisations, limited tradition of empowerment,
and severe organisational punishment for mistakes. Now, however, some Western
companies operating in Russia have showed that empowerment can be built into
Russian organisational “psyche”. This is no mean achievement, for, as Michailova
(2002, p. 186) has noted, “Western managers and expatriates are able to break
previously installed patterns of thinking and behaviour in Russian organisations,
although only slowly and with difficulty.” In order to succeed in such an undertaking,
it is essential to rely on the employees themselves, especially those Russians with
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advanced degrees, who highly value chances to express their views and to be heard. In
traditional Russian companies, of course, the practice of empowerment is quite rare
(Michailova, 2002). It is after all not easily compatible with management as entrenched
bossdom. So, the success in involving employees in Russia comes only to a very few.
Indeed, some say that involving employees in a Russian organisation is one of the
greatest management challenges in the modern-day Russia (Fey, 2008).
Fey (2008) contends that the main challenge for involving employees – encouraging
them to constantly look for more effective and efficient ways for the firm to operate and
suggesting how to improve them, trying to contribute their best efforts to the company,
thus becoming more empowered – is to combine strong organisational leadership with
the leadership that encourages and rewards high employee involvement. The resulting
empowerment will bring great returns to the organisation, when employees slowly
begin to contribute ideas, work more independently, become more engaged, be proud of
and loyal to their work, etc. This in turn will increase their overall level of motivation,
which is one of the main objectives of TM efforts. All in all, foreign companies
attempting to create their Russian operations by duplicating how local organisations
conduct business do fail quite often, while those that smartly apply and adapt the
business models that proved to be successful elsewhere often thrive (Fey, 2008).
Soviet mental software
There is much discussion among management scholars as to the degree to which
Soviet attitudes permeate Russian society today (Hanson, 2011; Holden et al., 2008;
Kuznetsov et al., 2009; Solomon, 2008). The consensus seems to be that the Soviet
experience remains influential even if one cannot accurately quantify it. For its part the
British magazine The Economist has no doubts. Its Moscow correspondent filed a story
under the telling title “The long life of homo Sovieticus”, in which it was reported that
in the Russia of Vladimir Putin “the Soviet mental software has proved more durable
than the [defunct communist] ideology itself” (Economist, 2011), adding that:
Stories of bureaucrats, and especially security services, putting pressure on business are now
common. The most famous example is that of Mikhail Khodorkovsky and the
dismemberment of the Yukos oil company. But there are thousands of others. The
statistics are staggering: one in six businessmen in Russia has been prosecuted for an alleged
economic crime over the past decade. Most of the cases have no plaintiff and the number of
acquittals is close to zero, according to studies by Russia’s Center of Legal and Economic
Research. This means that the vast numbers of Russian businessmen in jail are victims of
corrupt prosecutors, police and courts, which can expropriate a business without impunity
(Economist, 2011, pp. 30-1).
The point to grasp about this putative Soviet mental software is that it does not
necessarily represent any deep yearning for the good old days of central planning and
Marxist-Leninism, but is a manifestation, to paraphrase Moynahan (1994, p. 3), of the
persistence of the coercion and brutishness that came with Soviet totalitarianism. In
other words, it is a projection of “the mailed fist” (Hingley, 1977, p. 169) into
post-communist times.
Negative selection
It follows that the Russian state depends on approved enforcers, who are selected on
their willingness to make life difficult and unpleasant for business people. According to
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The Economist (2011) this situation “adds up to a Soviet-style policy of negative
selection, where the best and most active are suppressed or eliminated while parasitic
bureaucrats and law enforcers are rewarded.” In other words, we have a post-Soviet form
of dysfunctional TM, which arises out of a need to preserve and protect state power.
It cannot be otherwise that the anti-business stance of the authorities must influence
corporate governance in Russia, making entrepreneurs and employees wary and
dispirited. Indeed, as the Finnish researcher Blom (2008) has noted: “The whole
environment of managerial action is shaped by the old type of bureaucratic elite.” We
cannot produce evidence for how this unhealthy state of affairs directly affects TM, but
the possibility must surely be regarded as a feature of Russia’s TM landscape. On that
premise we draw particular attention to two major issues that distinguish nearly all
Russian organisations from their Western counterparts with respect to TM efforts. The
first issue concerns both the perceived importance of HRM and the subsequent level of
investment in human resources (especially in management development), which are
significantly higher in the West. The second issue of vital importance to local
employers as well as foreign firms making significant investments in Russia is
motivating and retaining young talented employees (Vaiman and Holden, 2011).
Concerning the first challenge, namely management development, some experts
note that most Russians nowadays still lack high-class business experience, which in
part may be explained by a relatively young age of Russian business culture and rigid
educational system (Puffer and McCarthy, 2011; Fey and Shekshnia, 2011; Fey, 2008).
A further reason is offered by Professor V.S. Kat’kalo, Dean of the St Petersburg
University’s Faculty of Management, who notes that Russian managers are not up to
date with the latest ideas in management in other countries (Kat’kalo, 2009). So, the
development of qualified managers, which began in the late 1980s, has been not only a
gradual process, but also an uneven one.
For example, the Vice President of Sales and Marketing of IBM Russia notes that
she sees three types of employees in Russia today. The first are simply fascinated by
management practices, but prefer to watch them from a distance, while the second are
the “techies” who are largely oblivious to management processes. The third, and
probably, the most common type of employees are those who view their job merely as a
source of income. These people are in the majority, chiefly because of the lack of career
opportunities offered by Russian organisations (Harvard Business Review, 2010). Most
Russian companies are still headed by their owners and creators, who are unlikely to
leave their positions and make way for the new generation outside of the owner’s
“inner circle” – and this creates career dynamics that is challenging – if not
frustrating –for young talented employees.
Feeling that there are no career growth and professional development opportunities
in the organisation, young employees look for better opportunities elsewhere. Indeed
many leave Russia altogether along with other business people, including bankers and
financiers who have been driven out of Russia by “Vladimir Putin’s ever-tightening
grip on the country’s political and commercial life” (Daily Telegraph, 2011)[1]. Those
who stay measure their loyalty and commitment exclusively by the amount of
compensation they receive (Harvard Business Review, 2010).
Another side of the same coin is the attitude of superiors in Russian companies
towards development. Russian business people are very short-term oriented (another
important cultural dimension), and when a company hires a manager, he/she is placed in
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jobs that require his/her current expertise, and normally no consideration is given to the
set of skills and abilities this manager should develop in the future in order to be more
instrumental to his/her company. For the same reason of organisational myopia, most
employers in Russia have no patience to develop their star players, because stars are
needed now, and not necessarily in the future. In short, it appears to be problematic for
Russian companies to regard HRM issues as strategic. As one Russian HR specialist,
noting the limitations of old-style administrative approaches to management, has
uncompromisingly observed: “the recognition of strategic HRM will be an absolute
precondition of successful management as a whole” (Maslov, 2004, p. 276).
A senior Partner of McKinsey and Co. Russia admits that she does not even know of
a company in today’s Russia which would have its own system of attraction,
motivation, and development of specialists over the five to seven year time horizon
(Harvard Business Review, 2010). In other words, Russians working for Western
companies inhabit a very different world than those working for Russian concerns,
emotionally and psychologically speaking. Hence these Russians find that their
self-images are challenged (Hulte
´n, 2006); which can be a kind of culture shock in its
own right, especially as the Western companies tend to offer clear career growth and
development prospects to their talent – which can be another form of shock.
Some experts feel, however, that the overall situation in this area is changing in a
positive direction, since most organisations, Russian including, understand the importance
of management quality. A clue here is the growth of business education in Russia
(Michailova and Jormanainen, 2011; Shabrova, 2011). Indeed, as Gerchikova (2005), the
author of one of the standard textbooks on management in Russia, has noted the manager
is “obliged” among other things “to facilitate the attainment of higher qualifications of staff
and the augmentation of their talents” (note the plural). She no doubt reflects the thinking
of progressive people with this observation about management:
The purpose of personnel management is to motivate staff to develop their competences for
more intensive and productive results. The manager is seen as someone who should not give
orders to subordinates, but direct their efforts, bring their competences to the fore, and create
around themselves a group of like-minded people (Gerchikova, 2005, p. 481).
The second challenge concerns retention and motivation of key employees. Although
many strategies and techniques engaged by Russian companies are not necessarily so
very different from those of their Western counterparts, plainly some local specificity
exists. For instance, unlike their Western counterparts, employees in Russia are used to
being promoted rather quickly, and this has to be taken into consideration. Otherwise,
experts mention that many Western-style retention strategies prove to be valid in
Russia. Among the most successful are such essential components of a meaningful
retention system as establishing a strong corporate culture of openness and fairness,
offering possibilities to try different career directions within the organization,
providing clear career paths and mentoring programs, providing possibility to work
abroad, flexible work schedule, and performance based rewards, creating and
maintaining healthy work environment, etc. (Harvard Business Review, 2010).
Supplying a Russian perspective on this issue, Maslov (2004) notes that labor market
instabilities make it necessary to appraise and promote staff “quickly.” But this
situation causes “negative reactions” among established staff, whereby newcomers
expect speedy promotion and regard delays in advancement as “career failure” and
seek employment elsewhere “for a more rapid career boost” (Maslov, 2004).
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In terms of motivation, challenges sometimes appear where no one expects them.
For example, the Chairman of the Board of a large Russian-based international
software producer “Kaspersky Laboratories” mentions that there are two types of
employees in her company – key managers and specialists. These two types have
different motivations: while we already mentioned those essential to managers, for the
second group it is important how much responsibility and authority they have. It is
paramount for them to see positive results of their efforts and even more important to
have enough autonomy so that their superiors do not interfere in their everyday
activities. Most Russian managers, unfortunately, often do not understand that need
for autonomy (Harvard Business Review, 2010).
In general, experts agree that real talents in Russia are not motivated solely by money.
There are many other measures that managers can use in order to motivate (and retain)
their key employees. Among the most successful ones are helping employees reach their
professional goals, establishing less rigid organisational structures where talent can
emerge, survive, and flourish, maintaining close trusted relationship with superiors,
creating the atmosphere of transparency and mutual support, etc. In other words, in order
to be motivated and stay with the current organisation, Russian managers should have a
possibility for career and professional growth, as well as new and perhaps increasingly
challenging responsibilities, collaboration with other talented people, and meaningful
leadership development programs (Harvard Business Review, 2010).
Conclusion and suggestions for further research
In this contribution we have attempted to characterise Russia’s TM landscape today.
Our account began with Karl Marx; we cited Trotsky; we noted how in the Soviet
period human talent was subordinated to the will, needs and whims of the Communist
Party; we described TM as “dysfunctional.” We then attempted to show how the
persistence of “Soviet mental software”, on the one hand, and Russia’s “institutional
void”, on the other, influence the nature of TM in post-Soviet Russia. Not for the first
time Western frameworks – in this case concerning TM – are given short shrift by
Russian realities. Although our commentary makes absolutely no claim to be
comprehensive, the evidence before us forces us to characterise TM in Russia, when
viewed from the perspective of the Russian state, as once again dysfunctional.
Paradoxically, the operations of Western firms in Russia actually add to the
dysfunctions. The point is that their distinctly foreign forms of TM are, as it were,
running parallel to practices in Russian firms with their tendency not to delegate and
empower otherwise competent people, and the actions of the Russian state to use
“negative selection” to recruit bureaucrats and enforcers tasked with preventing Russian
businesses from entering any preserve that the authorities deem undesirable and a
potential threat to their omnipotence. This is not an immediately obvious conclusion, but
it provides in our view an important critical stance for those who are interested in one of
the central challenges of understanding management in contemporary Russia: namely,
how to account for the way in which Western corporate practices and philosophies are
resisted on pragmatic grounds (“that kind of thing won’t work here”) and self-protective
intellectual grounds (“you foreigners simply cannot understand our problems”). But this
insight (if that is what it is) may be helpful to foreign firms, for whom operating in the
restless Russian market requires confronting – possibly on a daily basis – the tensions
between market knowledge and market commitment (Johanson, 2002).
Talent
management in
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141
A well-known cliche
´to TM specialists is the notion of the so-called “War for
Talent”, derived from a book produced by McKinsey consultants (Michaels et al., 2001).
In Russia it seems sometimes to be more of a case of wariness of talent. In the meantime
managers must do their best to be “important forerunners of a new way of life” (Blom,
2008) in Russia. It will be a long and challenging journey. Influenced then by such
powerful culture-specific factors, TM in Russia has enormous potential to offer
management scholars a rich and fertile terrain of research enquiry. However, as this
article has suggested, scholars must be prepared to observe and analyse Russian-style
TM and the application of TM by Western firms in Russia in the context of the
peculiarities and vicissitudes of this most enigmatic of countries.
But those who in their quest discount the sweep of Russian history may well forfeit
opportunity to deliver significant insights (see Holden, 2011), whilst those without a
command of Russian should ideally work with suitably qualified Russian collaborators
on these topics. With those words of caution we would especially like to encourage three
interconnected directions for future TM research in Russia which stem from this article:
(1) Comparative empirical studies, contrasting Russian firms’ and foreign firms’
understanding and application of TM.
(2) Investigation into the relationship of Russian-style TM and career progression
in Russian companies.
(3) Studies into contrasting ways of transferring TM concepts and practices by
Western firms given the arduous nature of cross-cultural knowledge sharing in
Russian business culture.
Academically it is relatively easy to characterize TM as a corporate function related to
HRM. However, in the Russian context it can be used a heuristic of considerable
explanatory power, given that, as this article has demonstrated, the notion of talent has
wider societal connotations which are nourished by latent culture-specific features in
Russia’s complex business environment. The three topics above all challenge the
researcher to take account of this environment not just as “mere” backdrop, but as a
potent influence in its own right in ways that narrow Western concepts of TM cannot
anticipate.
Translations
Both authors are responsible for translating Russian-language source material into
English.
Notes
As Hosking (2001, p. 434) notes: “What gave the Russian revolution its impetus and the
Soviet state its authority was the project of creating a new kind of human being
[chelovek novogo tipa ], more harmonious, versatile, and socially conscious than people
could be in a society scarred by class conflict and division of labour.” In today’s Russia
HRM expert Maslov (2004, p. 276) has recognised “workers of a new kind” [rabotniki
novogo tipa ], who are created in “learning organisations.”
In his novel August 1914, the great Russian writer, Alexander Solzhenitsyn (1974,
p. 51), describes a school for the children of the well-to-do, where ‘the chief aim of
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education [was regarded] to bring up young people as citizens, that is to say as
individuals with an inherent mistrust of authority.’
According to Berliner (1957) and Solomon (2008), fixer (tolkach in Russian)in the
Russian context is a person unofficially charged by his/her employing organisation to
get things done. For example, in order to get supply of raw materials delivered on time
and in necessary quantity to his/her company, tolkach was supposed to establish good
personal relationship with the supplier organisation and get the order fulfilled in a
timely fashion.
Note
1. Available at: www.telegraph.co.uk/news/worldnews/europe/russia/8892285/Tens-of-
thousands-of-businessmen-forced-to-flee-Russia-claims-former-top-banker.html
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About the authors
Nigel Holden is a Visiting Research Fellow at the Centre for International Business at the
University of Leeds. He is author of the well-regarded Cross-cultural Management: A Knowledge
Perspective (2002), which was published in a Russian version in 2005, a co-founder of the
European Journal of International Management (2007), and consultant editor of the Routledge
Companion to Cross-cultural Management (due to be published in 2014). He has a background in
Russian and Soviet studies and has published widely on Russian management issues.
Vlad Vaiman is Professor of International Management at Reykjavik University School of
Business (Iceland). He is the author and editor of three widely acclaimed books on talent
management (2008, 2010, and 2013) as well as a number of academic and practitioner-oriented
articles in the fields of talent management and international HRM. Dr Vaiman is a founding
editor-in-chief of an ISI/SSCI-indexed European Journal of International Management (EJIM).
Vlad Vaiman is the corresponding author and can be contacted at: vlad@ru.is
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