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Russia starts to beat its own path
With any fast-developing economy comes a need for skilled leaders, strategists and managers to take that economy forward. With a country as vast and well-resourced as Russia the need is paramount and the country’s ambitious MBAs have always looked overseas for their business education. Until now.
Not long ago the idea of a Russian MBA would have been met with a polite shake of the head from many western academics and businesspeople. The roots of the long-entrenched planned economy would take more than two decades to sever, many felt. Meanwhile case studies, the core of MBA learning methods for top business schools from Harvard onwards, were harder to find from recent Russian history. Unless it meant chewing over the bones of the defunct socialist system, Russian business education would have to look abroad for case studies; so why wouldn’t a simply Russian study an MBA course abroad?
The foundation of quality education in most of 20th century Russia was rooted in the sciences, driven largely by political interests. While the west developed market economies, Russian business education took a different tack.
“Economics was about studying the principles of the socialist system,” says Ruben Vardanyan, President of the Moscow School of Management Skolkovo and CEO of Troika Dialog. “It didn’t give any sufficient understanding on how the capital market economy operates.”
As the Cold War thawed and ex-USSR nations moved towards market economies, the need for business leaders radically increased. However as Andrei Movchan, CEO of Renaissance Investment Management, a part of Renaissance Group and Chicago GSB Executive MBA alumnus, observes, business education often takes time to catch up: “[Most] local business schools are composed around the old economics departments of universities with the old tradition of teaching economics of socialism and hardly changed professorial staff.”
For Andrei Movchan, clearly, the level of education is not as a satisfactory level yet. “[They] are often farther from real economics and management than astrologists from astronomy, full of ‘planned economy’ ideas and teaching local accounting standards as a main subject.”
Explosion
The explosion of wealth generation in Russia during the 1990s produced many famous examples of oligarchs making vast amounts of money. According to charitable onlookers, this was achieved by cleverly manipulating the rules and regulations of the newly developed Russian market economy. However legitimately this money was generated, business flourished and a new generation of educated leaders became a necessity to manage the boom.
Ruben Vardanyan witnessed this first-hand. “Many people successful in the nineties were self-made. They realized that with the economy growing, the lack of managerial talent was a big obstacle for development of their business. Good managers were hard to find. They were forced either to hire foreigners or Russians who had been to study abroad and then returned.”
The MBA, already well-known in the west as the standard-bearer of general management education, was barely developed within Russia itself until recently. This in itself was a major influence in forcing ambitious young business leaders, knowing the needs of Russian employers, to study overseas. Indeed in the QS World MBA Tour Applicant Surveys of 2005-2008, an average of only eight per cent of Russians said that they would consider studying an MBA in their home country.
One example is Galina Petrova, winner of the QS Chicago GSB 2008 scholarship from the QS World MBA Tour. She chose to study abroad to benefit from the teaching style, as well as the clear benefits an overseas experience brings. “I had a passion for business; while most Russian universities taught economics in academic fashion, I aspired to learn as much as possible about different sides of business – how it is done in different industries, in different countries, what makes companies successful and how one can manage them correctly.”
Studying at home
As always with business needs, in a market economy times change fast. Russian businesses, and therefore their potential employees, Galina continues, are coming to acknowledge the MBA’s benefits: “When people around me first heard I’d been accepted to Chicago, they asked why on earth I would need an MBA. The next day they would approach me and ask how they could apply too!”
Zoya Zaitseva, QS World MBA Tour Global Operations Manager and an expert in the Russian MBA field, says that more Russians are looking to study within the country but that state involvement is complicating matters: “The cost of a year abroad, out of business is too high, so professionals might prefer Executive MBA or local schools which give an opportunity to combine work and study instead of full-time programs abroad. There are some good programs in Russia - and not necessarily in Moscow - but there is still a lot of bureaucracy and conservatism in the official system. State accredited programs cannot react fast enough to market needs introducing new courses and writing relevant cases, so sometimes candidates end up with a selection of executive education courses from different providers, rather than a proper MBA.”
At the forefront of Russian business education are progressive schools such as Graduate School of Management St. Petersburg State University and Skolkovo. As president of Skolkovo, Ruben Vardanyan appreciates the market for Russians to be educated at home. “Business education will play a significant role in Russia’s transition economy [and this] is not an easy task. By establishing Skolkovo, we want to help these talented people learn to make decisions in an uncertain and risky environment.”
“The demand is there,” says Zaitseva. “Every year nearly 3,000 people register for the QS World MBA Tour and QS World ExecMBA Tour in Moscow and St. Petersburg. Not more than 200-250 of them will actually leave the country to do an MBA abroad.
“The rest is exactly the audience that progressive/advanced Russian business schools should target - those candidates interested in developing their careers through business education, who speak English and understand what it takes to get an MBA degree, having done the initial research.”
