Interview with Dr. Anders Liljenberg, SSE Russia Dean

15/09/2015

FINANCE
Millionaire International magazine (Moscow), 2015

ANDERS LILJENBERG: "IT IS POSSIBLE TO EARN MONEY DURING THE CRISIS"

– People around speak only about the crisis. How much did it influence your company?
– We (Stockholm School of Economics – note of the editorial board) came to Russia in 1997 and already in 1998 there happened a crisis that was repeated in 2008. Afterwards, there followed the war in Georgia and a new political economic crisis grew mature now. And today we are permanently asked, "Situation is difficult, probably you are going to stop working in Russia? Our answer is, "Of course, no!" Because this is the period of crisis and perturbations that opens a perfect opportunity for consolidation of your efforts and accumulation of force to worse even more successfully further.
– What is the secret of long-lasting activity of the school in Russia? What are your trump cards?
– First of all, we had an advantage of the first step. We were the first in the segment of foreign business schools to come to the Russian market. But when you are among the first you should not forget about development and responsibility, otherwise there is a risk of losing of the leading position. It is necessary to move further permanently and not to stand on one place and we have managed to do this. The second important point is our approach to Russia. We have come here with a long-term program of activity. You know, I have understood a long time ago that it is not very efficient when companies run short-term business and use resources to receive profit quickly and to quit the market. We treat countries where we work respectfully from the start and plan business not for a year or two. Finally, the third and one of the most important reasons is in the fact that we have managed to create a unique case for running of business in conditions of Russian reality. And calculation of this "formula" took years. Naturally, there are many companies that offer perfect business solutions or demonstrate perfect understanding of Russian reality but separately, which means that they do not have combination of these elements. In our school this combination exists, moreover, we have developed it and we share it actively with participants of the courses.
– What is the Russian reality like? How would you characterize business in Russia now, taking into account the recent events?
– Now, like often earlier, majority of companies aim at short-term projects for the purpose of obtaining of quick profit. We propose undertaking of long-term obligations intended for ten years and more. As you understand, it is especially difficult to do this now. Nonetheless, it is in the difficult time when you collect all forces you are more convinced of your own success because in a short-term project you may be lucky incidentally but this does not mean that afterwards, years later, you will stay afloat and will be able to work with equal success. As a rule, when a project implies big risk you also expect to receive a bigger payback. However, probability of high risks is obvious in the business environment now and it is difficult to guarantee an impressive size of profit. That is why now it is worth staking at success: if, for example, you invest in your own development (additional education, improvement of qualification, new knowledge), in time you will be much higher and much more successful than competitors, which means that this is investment for the future that will yield its result not immediately but in the future.
– Is the economic crisis that we see now in Russia a result of aggravation of international political economic situation rather than a local economic fault inside of the country?
– I think and many people will agree with me that the current crisis is caused by combination of all these factors. I as a foreigner who works in Russia for a long time have noticed that there are many original ideas there, as well as interesting projects and active entrepreneurs but due to some reasons many of these ideas remain not implemented: as if something hinder development of business and does not let a project take off. Psychological factors such as, for example, currency exchange rates are also strong in the current situation. For those whose revenue is in Russian rubles and all expenses are in foreign currency this aspect is very important. Due to these and other circumstances many companies have quit or plan to quit Russia. It seems to me that all the matter is about perception and analysis of the situation: naturally, if a Western company is concentrated only on risks and difficulties it will find a lot of them in Russian business today. But there are also positive aspects and everything depends on approach and development strategy. On my part I can say that our school has received good support from Stockholm and so despite the crisis we plan to continue the work and fulfillment of plans.
– Situation is not simple but understandable. Is there any aspect of life in Russia that you have not managed to understand yet?
– I wish to mention another interesting aspect, I call it "Russian paradox": two incompatible things coexist in Russia, that is raw materials economy on the one hand and refined culture on the other hand. Such opposites are encountered simultaneously seldom and either one or the other appears in a state.
– You know, some people consider the situation that has appeared in Russia a crisis of self-determination: we do not understand who is a Russian person.
– Of course, it is fairly difficult for me as a foreigner to speak about this issue. Nonetheless, I have been working in Russia for more than ten years already and I can say that I understand the "secret" of the Russian soul partially. In Russia market economy has existed for 26-27 years and, it is necessary to say, that this is not such a long period of development. Despite the market reforms the society retains certain "self" that does not change despite the unfavorable external circumstances and it is necessary to try to preserve it despite some not very positive new habits, for instance, consumerism. I can remark that certain key core always remains in Russia that does not change despite the external circumstances. There are symbols that are, although they are collected from different epochs, "eternal": there was the two-headed eagle first that was replaced with the cycle and hammer. Now there are symbols that remind Beeline and Russian Standard.

– Is it possible to say that Russia is a perfect source of brands that are often not used by its residents?
– Definitely! A very good example in this aspect was presented by the Olympics of 2014 in Sochi where many Russian symbols were used actively, namely snow, grannies etc. Interestingly, foreigners who arrived to Sochi saw what they did not expect in Russia, for example, such simply thing familiar for Russians like smiling people! Foreigners have seen that people here smile! Russia is usually perceived in the following way: everything is bad, life is difficult, there is no joy and there are no smiles. It is also necessary to convert the strong and the bright aspect of Russian nature like positive thinking, ability to enjoy life and inventiveness into branding. The event in Sochi that was posed correctly and well organized showed that Russians could do this! It was a pity only that these two weeks passed and everyone forgot about the Olympics.
– Events in Ukraine that followed further changed attitude of the international community to Russia in many aspects. Many people think that there has happened a "point of no return" and it will be very difficult to return the established relations with the West. What do you think about this?
– I agree that partnership relations between Russia and the West have suffered. Both the West and Russia should listen to each other and establish a dialog. Incidentally, it exists in separate areas, for example, in the sector of education (despite the difficult situation our foreign school is working in Russia and we are not going to stop cooperation). Unfortunately, in some areas it is more difficult to establish dialog now.
– How promising and expedient is this in the light of observed worsening of relations with Europe and because people speak about Asian way of Russia?
– It is not a secret that speed of economic development is low now in many countries of the European Union: Italy, Span and Greece experience difficulties. This situation is aggravated by problems of geopolitical nature and so there is a temptation to reorient our attention to countries of Asia and Latin America. But we should not forget that for establishment of business and economic relations with these countries it is necessary to spend much more forces and resources than on establishment of relations with Europe. There also exist noticeable cultural differences. In any case, Russia is a part of Europe with which it has been historically connected by partnership relations. Just agree that, for example, a Swede is closer and more understandable for a Russian person than a Chinese. That is why I think: we should not agree with the option "let I turn away from Europe and start working with Asia" easily. Naturally, it is necessary to remember that it is necessary to put "eggs" into different baskets but let their major part be European.
– According to many people, crisis is a perfect moment for earning money. How to act to earn money?
– I agree that it is possible to receive profit during the crisis too. A perfect example was in Greece where the crisis opened opportunities for establishment of new relations that it was not difficult to create in other economic conditions. However, if you are going to start business during the crisis you need resources including the monetary ones. You also need to take into account that payback of your investments will happen not tomorrow or the day after tomorrow but when the economic situation is normalized. It seems to me that there has been an excessive quantity of money in Russia for a long time, which is not always positive. People start putting on airs, take les effort to receive profit and those who do not have proper competence achieve success – recall the 1990s in Russia. Along with this, the best people manifest themselves and "break through" during the crisis, these are the specialists who, as I put this, can "look around the corner," can build a strategy and long-term plans. But, I repeat, resources are necessary for successful development. These are resources invested in business during the period of economic recession and they will pay back later, in the period of stabilization and growth.
– What are the most promising areas of development of business, goods and services?
– I do not recommend investing money into something gigantic and huge now like people in Russia like to do, "on a big scale." This will be something big but fragile. Gradual development step by step is necessary now: it is necessary to build business slowly, obtaining knowledge and learning the sphere of activity. What is it possible to do today? During the crisis people keep buying and consuming food products, using cosmetics and wearing clothes anyway and thus it makes sense investing into such consumer sectors now and not building another "nuclear station." Creation of business today requires attraction of clever people whom it is possible to make interested not as much by high salaries like this happens in quiet times when specialists compete in salaries as by the format of business or project that will make a qualified specialist interested. During development of business today it is necessary to get patent and it is better not to be a revolutionary and it is more promising to develop and modernize existing ideas. It is necessary to offer familiar goods and services now.
– What is your recipe of harmonious life: name five principles that help you to be successful?
– First, this is curiosity. I try to be mobile and learn new things. Second, I learn from others permanently studying the literate. For example, reading Dostoevsky you can understand human entity and this knowledge helps perfectly in marketing. Physical shape is also important: I try to keep my tone up, I like skiing and tennis. Another important principle is permanent throwing of challenge to yourself. So, I try to look at events in a non-commonplace way, from different positions and question my past statements. Finally, it is important to understand the value of life and presence of close people in life.

Photocopy 1
Photocopy 2 
Photocopy 3 
Photocopy 4