Next month I will visit Moscow for the first time in 32 years! Believe it or not, I was in Moscow when I found out that Elvis had died! I can't wait to see what's changed and perhaps more interestingly what's stayed the same.
As someone who grew up in the shadow of the Iron Curtain I was well accustomed to deriding the Soviet economic system. In 1977, as a fifteen-year old high schooler, I got to experience Soviet Russia first hand. During a ten-day stay in Moscow and St. Petersburg (then still called Leningrad), I witnessed the sparse selection of goods on offer in the massive GUM department store in Red Square, traded ballpoint pens for rubles with which I couldn’t find anything to buy, and listened to lecturers proudly proclaim the Soviet economic miracle. I well remember one chart that showed the rate of inflation in the USSR since the end of the Second World War. The graph showed a straight horizontal line at the zero percent level on the y-axis. It defied all logic and thirteen years later it all came tumbling down – literally in the case of the Berlin Wall.
All these experiences armed me with considerable biases that I had to suppress while reading the text of Russian prime-minster, Vladimir Putin’s speech to the World Economic Forum in Davos, Switzerland last week. Surely a Russian (and a former Communist) could not offer anything of value on the subject of managing in a world of turbulence? But some of Putin’s words made perfect sense. First he nailed the economic downturn of 2008 by describing it as: “The world is now facing the first truly global economic crisis, which is continuing to develop at an unprecedented pace.”
Putin went on to liken the events of 2008 to a perfect storm and offered sage advice to managers trying to cope in such an environment: “Responsible and knowledgeable people must prepare for it.” He went to outline some of the failings that resulted in a singular lack of preparation: weak regulation; greed; and a failure to acknowledge risk. However, to a Cold War baby like me, his most startling statement of all was that: “Excessive intervention in economic activity and blind faith in the state's omnipotence is another possible mistake.”
Wow! We’ve certainly come a long way in the last twenty years when a Russian warns America against excessive government intervention!!!