Business Coaching in the Former Soviet Union, By Michael J. Horner

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Having spent the past seven years in the Republic of Kazakhstan, part of the former Soviet Union, I can say that it will be an uphill road to see business coaching done there with any degree of success. When we went to Kazakhstan in 2001, it was as volunteer humanitarian aid workers joining a NGO (nongovernmental organization) that asked us to design and build a microenterprise development project for the villages around the main economic capital of Almaty. After a couple months of language instruction, we launched into full-scale training and held our first seminar in February 2002. Almost 50 people attended from the city and many of the small villages, and we taught them how to come up with a business idea, how to formulate that idea into a plan and then, in one-on-one meetings after the seminar, we helped them to write a business plan including a full three-year cash flow.

In the summer of 2002, we funded our first group of business owners. We continued this type of training through December 2004 when we returned to the US for a couple of months break after coming close to nervous breakdowns. In total in the first four years, we trained more than 100 people and personally funded 25 people. This formed the basis for our return in June 2005, when we decided that in order to move through the obstacles I will describe in a moment, we needed to open a for-profit consulting and micro-lending firm, which we did in the fall of 2005. Little did we know that this move, combined with me going into partnership with a Kazakh man in a combined law/real estate/investment firm, would open us up to new and adventurous challenges.

The challenges that will face anybody (including Russian or local nationals) in the former Soviet Union are real, but not insurmountable. However, the cost of overcoming them must be counted before attempting to launch any type of venture in the former Soviet republics.

  1. Corruption - Corruption was bad when we arrived in Kazakhstan in the summer of 2001, but with the increased amount of oil money and governmental controls, it is getting worse, not better. When we arrived, there was corruption in the government but it was mainly in the customs control and tax police. In 2001, I was working with a Pakistani national who was opening one of the first sports stores in Almaty. During one of our sessions he told me that if I wanted to I could become extremely wealthy, but one thing was standing in my way. He told me that I was too honest and advised that I stop paying my taxes like I had been doing and applying for my business license like the law called for. He said if I would just pay a bribe to the officials that they would always look the other way. Well, corruption has become worse; now it is like a mold that grows and grows. At every level of government, bribes are not just commonplace, but expected. If you want to register land you bought as agricultural land and actually want to farm, you have to pay the register's office a bribe to register your land as what it is instead of something different. If you want to register it as something different, the bribe gets higher. And any and all officials' signatures and pichat (the all-important Russian stamp) are for sale. Corruption will not go away as long as the price of oil remains high and as long as the current regimes are in place, so be prepared to have to make very tough choices. We chose not to pay a lot of these bribes and it was part of the reason we are no longer working or doing business in the former Soviet Union.
  2. Distrust - Nobody trusts anybody! During the long, hard years of the Soviet Union, nobody knew who was an informer for the KGB, the dreaded secret police. Nothing has changed since the dissolution of the Soviet Union. In order to gain trust, you have to trust people who are not always going to trust you back. In order to be an effective coach, you have to be able to trust and be trusted. The key to overcoming this is to take on a lot of stress and continue to trust people even when it isn't reciprocated. This trust can have another effect. It can make you constantly look over your shoulder wondering when one of the people you have a trust relationship with will get caught up in the system of corruption, become too big (next point), and then be turned by the authorities into an informer. Will they put your name out there to get the spotlight off of them? My partner was somebody I trusted. When he overstepped the invisible boundary that is placed around you in business (almost like the caste system of India), he became a target. He eased the stress by pointing the arrow toward me, which very directly led to our leaving Kazakhstan. There are ways to overcome this distrust, but it is still many years from happening and with the current political maneuverings, I wonder if it is even possible.
  3. Invisible Boundary - When we first started to do business training, one of the people we funded told us that his plans for his cattle business were to build his herd up to 25 cattle and then all other cattle he would register in a relative's name. When I asked him why he would do such a thing, he looked at me like I was an idiot, and then explained the way the "mafia" works. Depending on the clan you were born into, you have certain rights and a set boundary as to just how much money and how large your personal business enterprise may become. If you overstep this invisible boundary, then you will be visited by the local official (may be government, may just be some guy who everybody knows is connected to the right clan—that the locals call the "mafia") who will inform you that your entire business is being bought by another "buyer." This "buyer" will give you a very "attractive" offer for your business, which you do not have the right to refuse. If you choose to refuse this "offer," then other things will happen and you will have no money at all. So the way to keep the spotlight off of you is to only grow your business as high as what you "think" the invisible boundary may be. This is at best a guess, but it is real and there are many small businesspeople today who, through hard work and perseverance, grew their business too big and then paid the price and had to start all over again. The going rate for a "buyout" of a business is about ten cents on the dollar. You will always know the "buyout" person, because they never seem to work but drive Hummer H2s, Porsche Cayennes, or whatever other $100,000 vehicle you can imagine. They live in the largest house in the village and have no apparent source of income, yet have large spending tastes. And they own everything around you: the largest plots of land, the best buildings in the region, you name it, they own it. The only way to overcome this challenge (especially as a foreigner) is to grow a small enterprise. Once that enterprise has grown to a size where you get your first visit from these guys (they call themselves "agashkas" meaning "older father" in Kazakh), it is time to downsize or outsource and create an entirely different business from the one that is now successful. This does mean more taxes and more outlay of capital in the beginning, but it is better than having your entire business taken away.

Those are the three biggest challenges to business coaching in the former Soviet Union. As one who has experienced all three of these challenges and lived to leave, this is not something that should deter somebody from wanting to start a coaching enterprise in this region. However, you should go with your eyes wide open and make great use of your local embassy. The local embassy can't keep things from happening to you, but they can keep you from going to a local prison on some trumped up charge that was only brought to separate you from the work you have started so somebody else can reap the benefits of your investment (if you don't believe this just read what is happening to the big oil companies today in these republics). You can grow a coaching business in these areas, but the ideal way is to find somebody who is well connected, pay them a large salary to stay away from the business and just use them as your shield. Be aware that when this person loses their shield through a change in governance, you should be ready to pack up and leave.

This article first appeared in Business Coaching Worldwide (June Issue 2009, Volume 5, Issue 2). Copyright © 2012 WABC Coaches Inc. All rights reserved.

Michael J. Horner spent seven years in the former Soviet Union, initially doing microenterprise training and advancing into coaching those business owners upon their successful funding. Now returned to the US, he continues to coach small business owners on how to be more structured and invest themselves fully in their businesses. Contact Michael.
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Power, Responsibility, and Wisdom: Exploring the Issues at the Core of Ethical Decision Making and Leadership.

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By Dr. Bruce Lloyd 1

The objective is simple: Better decision making. The only issue is that there are so many different views on what we mean by "better." At the core of all decision making is the need to balance power with responsibility as the vehicle for resolving the ‘better' question. This article explores why that is so difficult. It also argues that exploring the concept of wisdom can provide invaluable insights into how to achieve the most effective balance between power and responsibility, which is central to what our values mean in practice, as well as about how we incorporate ethics into our decision making.

Wise decision making, inevitably, involves moral/ethical choices. It is not surprising that comments we might define as wisdom are essentially comments about the relationship between people, or their relationship with society and the universe as a whole. These statements are generally globally recognized as relatively timeless and are insights that help us provide meaning to the world about us. Yet how often do they seem to be almost totally ignored in futurist, strategy, knowledge management, coaching, and even ethics literature? We appear to spend more and more time focused on learning knowledge, or facts—which have a relatively short shelf life-and less and less time on knowledge that overlaps with wisdom, which has a long shelf life. Why is that? What can we do about it?

Western sociological and management/leadership literature is full of references to power. How to get it? How to keep it? And how to prevent it being taken away? In parallel, but rarely in the same studies, there is also an enormous amount of literature on the concept of responsibility.

While power is the ability to make things happen, responsibility is driven by attempting to answer the question: In whose interest is the power being used? Yet the two concepts of power and responsibility are simply different sides of the same coin; they are the yin and yang of our behavior; they are how we balance our relations with ourselves with the interests of others, which is at the core of what we mean by our values. Power makes things happen, but it is the exercise of an appropriate balance between power and responsibility that helps ensure that as many ‘good' things happen as possible.

Leadership is nothing more than the well-informed, responsible use of power. The more that leadership-related decisions are responsibility-driven (i.e., the more they are genuinely concerned with the wider interest), not only will they be better informed decisions, but the results are much more likely to genuinely reflect the long-term interests of all concerned, which also happens to be a sound foundation for improving their ethical quality and sustainability.

In essence, the above leadership definition is exactly what could also be called ‘Wise Leadership.' In this context, the concepts of leader, leading, and leadership are used interchangeably, although it could be argued that ‘leaders' are individuals (including their intentions, beliefs, assumptions, etc.), while ‘leading' entails their actions in relation to others, and ‘leadership' is the whole system of individual and social relationships that result in efforts to create change/progress. However, the above definition can be used to cover the integrated interrelationship of those three dimensions.

Briefly, wisdom can be considered as: "Making the best use of knowledge...by exercising good judgment...the capacity to realize what is of value in life for oneself and others...." Or as "the end point of a process that encompasses the idea of making sound judgments in the face of uncertainty."2

Of course, wisdom is one thing and ‘being wise' is quite another. Being wise is certainly more than the ability to recycle wisdom. In essence, ‘being wise' involves the ability to apply wisdom effectively in practice.

Wisdom is by far the most sustainable dimension of the information/knowledge industry. But is it teachable? It is learned somehow, and as far as I know, there is no values/wisdom gene. Consequently, there are things that we can all do to help manage the learning processes more effectively, although detailed consideration of these are outside the scope of this article.

In the end, the quality of our decisions depends on the quality of our conversations/dialogue; not only dialogue about information but, perhaps even more important, about the best way to use that information. In other words, it is about how our values influence the decision-making process. Dialogue both facilitates the transfer of technical knowledge and is an invaluable part of personal development. Having a quality dialogue about values is not only the most important issue we need to address, but it is often the most difficult.

We need to recognize that the more change that is going on in society, the more important it is that we make sure that our learning is as effective as possible. That is the only way we have any chance of being able to equate change with progress. If we want to have a better future, the first—and most important—thing that we have to do is improve the quality and effectiveness of our learning.

In recent years we have seen considerable effort to move people from the idea of 'working harder' to 'working smarter.' But what is really needed is to move beyond 'working smarter' to 'working wiser.' We need to move from being the ‘Knowledge Society' to the ‘Wise Society.' And, the more we move along that progression, the more we need to recognize that we are moving to a situation where the important issues primarily reflect the quality of our values rather than the quantity of our physical effort. If we want to improve the quality of our decision making, the focus needs not only to be on the quality of our information but, even more importantly, on the ‘right' use of that information; hence the importance of improving the dialogue-related issues mentioned earlier.

Why are we interested in ethics and the future? The answer is, simply, that we are concerned with trying to make the world a ‘better' place. But for whom? And how? To answer both questions we need to re-ask fundamental questions: Why do we not spend more time to ensure that the important messages that we have learned in the past ('wisdom') can be passed on to future generations? How do we ensure these messages are learned more effectively? These are critical strategy questions, and lie at the very foundation of anything we might want to call the ‘Knowledge Economy,' although what is really needed is to focus on trying to move toward a concept closer to the ‘Wise Economy.' This focus naturally overlaps with the greater attention now being given to values and ethical-related issues and ‘the search for meaning' in management/leadership literature.

Overall, wisdom is a very practical body of sustainable knowledge (/information) that has an incredibly useful contribution to our understanding of our world. Such an approach would enable us all to make ‘better' (wiser) decisions, lead ‘better' lives, and experience wiser leadership, particularly in areas that involve (either explicit or implicit) ethics- and values-related issues. This is also closely linked to establishing more appropriate relationships between power and responsibility.

If we cannot take wisdom seriously, we will pay a very high price for this neglect. We need to foster greater respect for other people, particularly those who have views or reflect values that we do not agree with. This requires us to develop our capacity to have constructive conversations about the issues that divide us; that, in itself, would go a long way toward ensuring that we improve the quality of our decision making for the benefit of all in the long term. So help us move toward a ‘Wiser Society.'

This article first appeared in Business Coaching Worldwide (February Issue 2009, Volume 5, Issue 2). Copyright © 2012 WABC Coaches Inc. All rights reserved.

1 A longer version of this article can be found in Integral Leadership Review, 2008, Vol. VIII, No. 5, October.

2 www.collectivewisdominitiative.org/files_people/Lloyd_Bruce.htm
Dr. Bruce LloydDr Bruce Lloyd is Emeritus Professor of Strategic Management at London South Bank University.

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Cultural Intelligence: The Key to Global Leadership, By Nerella Campigotto

Posted by Nerella Campigotto

We live and work in a world that is an integrated entity, increasingly influenced by external cultural factors. For those in leadership positions it is now not only necessary to have a high IQ and EQ (emotional intelligence), but strong Cultural Intelligence (CQ) is also increasingly regarded as a necessary skill to succeed in today's global business community.

Leadership entails communicating a vision and influencing others towards a goal; achieving this across cultures is no easy feat. Defining the characteristics that make a good leader can be daunting. Much of the research and information we are exposed to about this topic is U.S., or at least Western-focused, where leadership skills tend to be measured by organizational performance such as productivity and morale. Nevertheless, universally there are basically two types of leadership—task-oriented and relationship-oriented. People from different cultures react differently to these styles.

In addition, leadership quality, as with charisma, is often about perception; a person perceived as a leader will gain respect, power and authority. Indeed, we may say that it is the followers who determine a leader's greatness. Successful global leaders understand how leadership is viewed in other cultures and how the expectations of culturally diverse followers influence leadership behavior.

Let's look at three ways leaders can demonstrate cultural intelligence.

1. Building awareness

Culturally intelligent leaders are open to knowledge and develop new skills to help them succeed. This means understanding the cultural attributes of the followers and what their expectations are. These attributes can be in a number of areas, such as the relationship between the leaders and their followers, what role seniority plays, how problems are handled and attitudes towards efficiency, punctuality, deadlines, etc. Often tradition will prevail over logic, so it is important for the global leader to learn about the history and values of the followers' culture. This may be achieved by developing alliances with other leaders from different cultural backgrounds who can provide different perspectives for comparison.

2. Adapting

Culturally intelligent leaders are comfortable in adapting their behavior to suit different circumstances without changing their inherent leadership style. With stronger awareness they can determine whether, for example, their followers are from an individualistic versus a collectivist culture, whether they work better in an autocratic versus a bureaucratic environment, whether they are motivated by incentives versus punishment, whether they respond to an informal versus formal approach, etc. Successful global leaders spend time with their followers to understand their comfort level and listen to what is said and not said.

3. Communicating

Culturally intelligent leaders understand that the way they communicate is critical to their success. Once they are aware of the cultural attributes of their followers and have adapted to their environment, it will be easier to tweak their communication style accordingly. Apart from the obvious need to use clear language, this may also mean determining how much information needs to be imparted in order to achieve the required goal and what the consequences and/or rewards are for the followers. It also means adjusting communication styles to take into account whether the follower's culture is one that exhibits an implicit rather than explicit manner, as well as non-verbal communication traits.

To summarize, whether a leader's style is task-oriented or relationship-oriented, he or she can work towards increasing cultural intelligence by applying the three steps above. By being aware of the cultural attributes of their followers, adapting to the cultural environment and communicating accordingly, leaders are more likely to achieve success. There is no doubt that a healthy dose of CQ is an indispensable asset for today's global leader.

This article first appeared in Business Coaching Worldwide (October 2008, Volume 4, Issue 3). Copyright © 2011 WABC Coaches Inc. All rights reserved.

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