Nick Hluszko, Managing Director & Chief Operating Officer at Karofilm Russia

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How long have you been working in Moscow, what brought you here?

I first came to Moscow in the summer of 2005, when I was offered the job of Chief Operating Officer with a company called Yum brands – the global owner of KFC, Pizza Hut, Taco Bell, Long John Silvers, A&M Burger, etc. I was previously working in Sydney within the South Pacific operations of that company. Yum Brands had just completed a joint venture with Rostiner Restaurants International with its’ Rostik’s brand. Yum bosses fundamentally said, “Nick, you have a Slavic last name, would you like to go to Russia for this job?” I said: “Err, slight problem… I don’t speak Russian.” Their response was…. that’s OK, we will send you on an immersion course in Sydney for a few weeks and this should get you started! Curiosity got the better of me so I agreed to do the course which saw my Russian vocabulary going from 5 words to a hundred or so very quickly. Buoyed by this success, I spoke to my family and then decided to at least come to here to objectively assess the opportunity. I was stunned by the beauty of Moscow – the heritage, the culture, life in general. This all was hard at first to absorb because the mental picture and expectations that I had were diametrically opposed to what was reality. Then I vividly recall meeting with Mr Rostislav Ordovsky-Tanaevsky Blanco – President & owner of Rosinter. It didn’t take Rostislav long to convince me that I would be a great fit for the job and that I would enjoy working and living in Russia. This led to me signing a two-year contract. That was nearly 10 years ago now!

What are the main differences in the way that you do business in Russia and the way that you have done business elsewhere in the world?

I’ve been fortunate enough to work in different markets – in developing markets, in developed markets, in markets that are growing and those that are not. For example I have worked not only in my native Australia extensively but also throughout Central and Latin America, the US, the South Pacific and many other markets. Russia is different, but not that different. I think Russia is different because of the stage of development of the economy and infrastructure as well as where it sits in terms of stage of evolution of society. We have seen a country go from hundreds of years of rule under Tsars, to Communist rule to an economy still heavily influenced from the top down. It is still evolving and I believe that Russia will evolve it’s own unique identity – one reflecting the culture and soul of its people. It is also influenced heavily by its geographic location and this will also shape how things evolve here. While Russia leads the world in many areas, it is still playing ‘catch-up’ in many other areas. Doing business here is a challenge. For example, it still relies to a great extent on manual systems, as opposed to automated systems, therein lie a lot of bureaucratic processes, which take some getting used to if at all. It is getting better but there is a long road ahead! Red tape is a real issue still.

There has been a steady improvement in things like diminishing corruption at all levels. Although corruption hasn’t been obliterated, it is considerably better than it used to be, in my view. In 10 years I have seen good progress in this area in both business and general economy.

When I first came here I was struck by the quality of the education system and the talented people that it produced. Even compared to mature western countries Russia can hold its head high in this area. But what was and to a lessor extent today is different is that there wasn’t a work ethic of taking full responsibility or accountability by workers. In the past people were told what to do and that was all. Today, as more western companies enter and expand in Russia, western corporate culture and work ethic is being promulgated. I am seeing a big shift in this area – one that will make Russian labour in another generation very exportable. But today, in some pockets of business a more ‘hands-on’ style of management is still needed.

How do you sell to Russians, is that possible?

It depends what you mean by selling, in the retail sense, or selling concepts?

I guess both.

Let me break this down into two parts. Firstly lets talk about concepts. Certain cultural paradigms are engrained into people’s consciousness here, and that affects how they work. For example, I came along and said: “this job can be done by one person and a computer, not by ten” and everyone said: “no, it can’t be done by one person.” That ‘can’t be done’ mentality still exists today. It takes a lot of ‘leading by example’ to demonstrate what is possible. As a manager, when you do this, you can take people along with you; you have to show people how it works and that it is not dangerous to them or their careers to take risks. You only have to do this once from my experience and people here quickly adapt and adopt what can help them their work and their lives.

In the retail sense, the Russian consumer is fundamentally no different from any other consumer anywhere else in the world in terms of their wants, their needs, all of those things. What differentiates a Russian consumer is their need to demonstrate their affluence, their success. That’s really important, so from a consumer marketing perspective, or even from a service marketing perspective, one has to link into the underlying want or need.

In the past, if people took on board accountability for something, they would get either punished or rewarded commensurately, and things went horrible wrong then there could have been dire consequences. But when you come from a western mind-set, you are encouraged to take risk, because risk can pay massive dividends. If you take 10 actions and get 8 right, you will get rewarded many, many times over and learn from the ones that you didn’t get right. It’s that sort of mentality. So installing a sense of confidence that calculated risk can be good is mandatory in my view. I actually found making organisational changes or business process changes more difficult in mature markets than I did here in Russia to be frank.

I know you have been an expat for a long time, but what are the main cultural differences between living here and living back home in Australia?

I have an advantage because my parents were both born in Russia. They came to Australia as refugees of the Second World War, met and married there. With the horrors of the war fresh in their minds my parents decided that their children would be raised as ‘Aussies’. So this meant cricket and the beach in summer and Rugby League in winter. While Russian was spoken from time-to-time in various social and family situations, we spoke English at home. I really knew nothing about my Russian background until I started doing research into my Russian genealogy when I came to Russia.

Ironically, I was exposed to enough Russian culture in Australia growing up to make me feel some sort of linkage when I came to live here. When I arrived here, I felt that from the way people communicate, the intonation in their voices, the way that food is prepared and many other things, that Russia is not at all a foreign country [for me]. If I had come here cold, I probably would have been scared off to be honest because if you do not understand the language and culture people here can be taken to be aggressive by how they communicate and act when the opposite is true.

In very general terms, I think that a typical Russian is very concerned about the world, and about what the world is thinking of him or her. I don’t live in an expat compound, I live downtown and talk to people, and I get the message all the time of Russians wondering ‘why is the west is picking on us, what have we done…’ so I don’t see that there is a great deal of difference in terms of personal fears and aspirations. Moscow’s a tough city, and like any big city of over 10 million people, it can be difficult to live in but can also be a real pleasure. Russia is a lot more than Moscow and St. Petersburg. When you get out into the countryside, into the wide-open spaces of Siberia, people tend to be far more gregarious, open and warm, which reminds me of Australians. Here in Moscow, it is different, it’s a bit like when I was living in the States, people don’t know who their neighbours are, its’ that sort of more insular lifestyle.

What do you do at the weekends?

From time to time I catch up with some of my expat mates and we’ll go see a good live match somewhere, especially if the Wallabies are playing against the Kiwis. The results sadly are usually the same, which is that we lose! But one day… I’m an optimist that we will one day win a World Cup or a Bledisloe again. Apart from that my partner and I go to the theatre a lot, parks, sight-seeing, etc.