The case describes the conundrum of Pierre Frankel, a devoted employee of H-IT which is a global IT company. He was sent to the Russian subsidiary of H-IT in Moscow, to improve the subsidiary’s performance and increase profitability. The environment that greeted Pierre on reaching the Moscow office is not at all welcoming: (i) Lebedev, who is the MD for the Russian subsidiary tried to hire a number two for himself but his move was rejected by the upper management. He knew that Pierre was the replacement and considers him a threat. (ii) The subsidiary’s 450 odd workforce considered Pierre as an outsider who is trying to bring with him a lot of structural changes and break the status quo. (iii) Many guidelines were in place, to ensure efficient functioning of the organization and were followed globally.
But they were hardly ever implemented here, in the Russian subsidiary. (iv) The atmosphere that had been a result of Lebedev’s micromanagement discouraged teamwork and expression of new ideas. Not a single file could move from one desk to another without the knowledge of the MD. (v) All this can also be seen as a direct cultural implication of the disintegration of the Soviet Union in 1991, as a result of which, the “Trust, but verify” ideology had been instilled into the Russian way of thinking. Essentially, Frankel had to act as a change catalyst and unfreeze the current state of affairs at the Russian subsidiary. If he is able to change the status quo, he will be able to reveal the drawbacks of the current situation. This is necessary because if the Russians were to improve their ways, it was necessary for them to believe that change is needed.
Some constructive steps that he took to learn the Russian ways were: (i) In the first few weeks, he met all the relevent leaders in the organization including the line of business leaders to learn more about the subsidiary’s operations and laying the ground work for change. (ii) He tried to get into the good books of Nadia Abramova, the head of HR and who was rumored to be very close to Lebedev. (iii) He tried to identify people who were open to learn and willing to change. (iv) He tried to hire a native Russian to assist him with his agenda for change. He was opposed by Lebedev in this endeavor but Frankel managed to get some resumes with the help of Nadia Abramova.
The priority areas identified by Frankel were: increasing business predictability, improve sales efficiency and focus on strategic internal processes. To bring about a change in the organization, he had to change the way the employees thought and worked. He had to make the work environment full of energy, collaboration and trust for each other. To bring about this, Frankel had to change himself because the Russians were not going to mould their ways at the command of an outsider. It was just how they had become culturally. To do this, Frankel was correct in looking to hire a Russian guy who could help him connect with the other employees better. He should then try and communicate with Lebedev with a clear-cut agenda and get him on board. Lebedev’s change of outlook is key if productivity is to be increased at H-IT’s Russian subsidiary, otherwise, his services can be done away with. However great his connections may be and however good his communication skills may be, if his management style is proving detrimental to the company, he is no good.