LESSONS FROM THE ‘WILD EAST’ 297foreign partners, acting as both vendors and buyers of goods and
services. Some of the organizations led by new - generation execu-
tives are actively pursuing foreign investment, attracting share-
holders globally. Some of them remain quite idealistic (perhaps
too idealistic), believing that Western management practices are
the answer to all ills — and they are very disappointed when this
idea proves wrong, as it inevitably does.Older Leaders: the Process of Unlearning
For the ‘ Russian ’ Russians the main challenge is unlearning. These
people are mainly the administrators and bureaucrats who used to super-
vise the 120 000 factories, farms, and other industrial units of the former
USSR, who will need to replace their authoritarian mentality with a
dramatically different mindset. This group is not homogeneous, however;
there are two distinct subgroups.
One belongs to Russia ’ s present business é lite. With deep roots in
com munism and a sturdy foundation of wea lth and power, many of them
were well - enough connected to retain their privileged positions through
the post - glasnost period. These people have used the new openness as an
opportunity to unleash their previously constrained entrepreneurial
potential. In setting up new enterprises, they are making a valuable
contribution to the market economy.
The other subgroup among the older generation, having retained
the Soviet mentality, focused on self - preservation. These people derived
their power from their political skills in the old Soviet bureaucracy and
from knowing both how to play the system and how to manipulate and
control their employees. Many of these are the political elite, heirs to
the old Soviet nomenklatura who saw how the wind was blowing and
took advantage of privatization programs, acquiring precious state com-
panies at well below their value. Aware that in today ’ s shifting Russian
society they could lose their privileges, they make whatever superfi cial
adjustments are needed to maintain their status. Despite giving lip
service to the new economy, they run their private monopolies in the
same way they ran the state monopoly. They apparently subscribe to the
‘ Russian doll ’ school of management: after the doll (or economic system)
is taken apart, a similar doll is found inside. Reluctant to make the kind
of dramatic adjustments needed to be truly effective in the new global
economy, and uncommitted to the new values that underlie such adjust-
ments, this group may not be able to master the skills needed to run an
enterprise without state protection.