Russia Direct recently ran an interview with Oleg Buklemishev, former assistant to the Finance Minister and Prime Minister of Russia, where he explained what needed to happen for the Russian economy to start growing again. Though the article contains great insights it fails to address the most critical questions of all - how can businesses can do anything about this at the local level?
Learning to see
“During a crisis" the article starts "it's possible to see clearly what one’s weaknesses are, and even at the current stage, Russia can actually turn itself into a new and successful economy”
Arguably, the biggest problem for Russia with the 2008 crises was that it was over too soon. The Russian economy this century was a ‘tornado’ and even turkeys fly in them. When the challenges of 2009 arrived it triggered many cold hard stares at the real (in)capabilities of Russian businesses (I spent the year at the heart of one large Russian business doing this). Yet, by 2010 ‘green shoots’ of recovery conned people back into the mindset that one only needed to ‘turn up and take the money lying on the table’ again (as one executive described it to me). So, the economy didn’t reform or diversify (again): Russia wasted its crisis.
However, the current L-shaped crisis engulfing Russia doesn’t appear to have an exit any time soon. Though no-one really knows where the oil price will be in 12 months the fundamentals clearly aren’t good  and, as this time last year showed, whither oil goes the Ruble follows. This uncertainty is placing immense pressure on businesses and while some - without the aid of 200kph winds - will go to the wall, others will learn how to adapt and prosper. The question is - which one will your business be?
For many business leaders the insurmountable challenge today is ‘how can we try something different when we don’t have any spare resources?’
Starvation of resources - like pressure - is a necessary but insufficient pre-condition for breakthrough growth. The status quo of incremental improvement is only challenged when the external environment makes that change non-negotiable. Further, it’s only a mis-match between ‘current’ and ‘required’ capabilities that triggers fresh ways of doing things. Without crises we would never need do anything differently, for we'd have enough resources to justify doing things the way we’d always done them.
Crises are nature's way of telling you it’s time to evolve
Russia has been hit by some of the biggest crisis to hit any country (outside of a war on its territory) in recent history (1991, 1998, 2008, 2014) and, while calls to diversify the economy have continually been made from the very top, it’s probably only from the bottom that the meaningful change that will turn Russia into a new and successful economy can happen. So, taking Mr. Buklemishev’s interview as a starting point, this blog over the next few issues will explore in more detail what businesses can do about the challenges they face today - not in spite of the pressure and absence of resources, but because of them.
If any of the ideas in this series interests you please contact me at email@example.com for a discussion about how you can apply them to help your business adapt better to the current realities of this market.
Shape the Future
Don't just adapt to it