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					                       Project: EUROPEAID/115381/C/SV/RU
            ”Science and technology commercialisation, Russian Federation”
The Project is managed by Inno AG on behalf of consortium Inno – AEA Technology –
                                         TNO




                                 Working package 3.


       Support for Pilot Centers for Scientific Research Commercialisation


                    HOW TO COMMUNICATE EFFICIENTLY
                  WITH YOUR FOREIGN BUSINESS PARTNERS




 Contract #                ToR Code: 3.3-3
 Name:                     Communication Assistance Pilot Sub-Project


 Executive from the        Full name: junior expert: Michael Mizhinski
 Project:                  E-mail address: interact@inbox.ru
 Coordinator from          Full name: leading senior expert: Alistair Brett
 the Project:              E-mail address: a.brett@att.net
                                   Table of Contents


Introduction                                              3
Part 1. Cases with explanations                           9
Case 1: The cost of right information at the right time   9
Case 2: The Russian diplomacy                             13
Case 3: Negotiation games                                 17
Case 4: A strong will to succeed                          23
Case 5: Differences between Vodka and Whiskey             27
Part 2. Analysis and hypothesis                           32




                                                               2
                                     INTRODUCTION


                                               “The greatest enemy of communication is the
                                               illusion of it”
                                                                         Pierre Martineau


This report is based on the results of the research which has been conducted within
Communication Assistance Pilot Sub-Project as a part of the European Commission
project “Science and Technology Commercialization, Russian Federation” under
coordination of Dr. Alistair Brett. The study is aimed at analysis of the problem of
inefficient communication between Russian scientists and foreign commercial partners
within science and technology transfer projects and working out recommendations for the
technology commercialization managers on facilitating communication between scientists
and foreign partners. In order to fulfill this aim we looked at the communication between
Russian scientists and foreign business partners (including strategic and financial
investors) that should be professionally managed by the PCCs managers in the future.


It should be understood that this report focuses on problems of inefficient communication
between Russian scientists and foreign commercial partners, with the aim of improving
such communications. There are many cases of highly efficient communications between
foreign partners and Russian scientists leading to productive results. There are lessons to
be learned from these cases, just as there are lessons to be learned from cases where the
behaviour of the foreign partner is the source of all difficulties. It is planned to extend this
study to determine the key elements which have contributed to effective communications
and partnerships.


Communication within international technology transfer projects


International cooperation is one of the necessary factors for efficient technology transfer
projects in Russia. However, cooperation with foreign partners requires high valid
reputation. Reputation of Russian scientific institutions and technology-based start-ups is
based on two factors: a) competencies in certain technologies and b) the quality of
management. While most foreign investors appear in Russia because of the first-ranked
technical competencies of the Russian scientific institutions, low quality of management
on the Russian side often becomes a reason why these investors do not develop long-term
relationships with Russian partners.
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Good information flow between the company and its foreign business partners is crucial
for overall success of a technology transfer project. Over the last decade the experience of
those involved with technology commercialization in Russia has shown that one of the
biggest barriers to efficient technology commercialization is the lack of efficient
communication management on the Russian side. Inefficient communication can be
caused by both Russian and foreign parties’ actions within a technology transfer project.
However, foreign business partners usually have much more experience and understanding
of the importance of business communication and pay much more attention to it than
Russian partners. Many commercialization projects have failed because of this.


Communication is a two-way operation that involves sending and receiving ideas,
information, opinions, and emotions. These must be interpreted and reacted on through
feedback before the communication process is completed. Moreover, efficient
communication is not just a sharing of information, but sharing of information in order to
achieve a certain planned or expected result. There are broadly four components of any
communication: communicator, medium, message, recipient. If any of these components
is ignored, this leads to a communication breakdown. Thus, excellent communication
between Russian and foreign partners does not happen naturally. Communication
problems lead to uncertainty and make it impossible to develop strategic partnerships in
the long run.


Methodology and data


In order to fulfill the aim of the research – to find out ways of minimizing the risks of
communication problems between scientists and foreign commercial partners within
technology transfer projects - qualitative methodology has been applied. A combination
of several methods has been used: unstructured interviewing, semi-structured
interviewing, direct observation, and documents’ analysis. The fieldwork took place
between the 20th of March and the 30th of June 2006.


Interviews


Data were collected with the help of different interviewing techniques from semi-
structured interview to informal conversations. This variety of techniques have allowed,

                                                                                          4
on the one hand, to have a number of initial guiding questions and core concepts to ask
about, and, on the other, to keep them broad and loosely structured, and to move the
conversation freely in any direction of interest that came up. It was useful for both steps:
(1) exploring a topic broadly, (2) going into details following the intent of research
questions. All the interviews were conducted in the native language of the respondents –
Russian or English, which prevented us from being misunderstood by the interpreter
during the process of data collection.


Observations


Direct observations were an important part of the data collection process. Direct
observation was appropriate during meetings of scientists with foreign partners. It was
impossible to become a participant in this context. The main limitation of direct
observation as a method was too short a period of time given for approaching the field and
building relations of trust with respondents.


Document analysis


Written material, including some confidential, has been used for background information
and in preparation for the interviews.


Respondents


We conducted 55 interviews with:
   11 respondents from the institutes of the Russian Academy of Science, and
independent research laboratories from different regions of Russia;
   12 managers of start-up companies;
   6 respondents from venture investment funds;
   12 coordinators and managers of the EuropeAid Project Pilot Commercialization
Centers;
   13 technology transfer consultants and experts from Russia and abroad;
The real names of respondents and participating organizations, and the names and
descriptions of the technologies are not used in this paper for reasons of confidentiality.




                                                                                              5
Each category of the respondents was chosen in accordance with the aim of the research.
The individual respondents were chosen on the bases of their relevant experience and
accessibility. Thus, data obtained from the respondents representing institutes of the
Russian Academy of Science and independent research laboratories were used to analyze
cultural specificities of scientists as a professional group, which influence the
communication process. We also studied their perceptions of foreign partners and attitudes
towards S&T commercialization.


Respondents from start-up companies shared with us their experience of investor relations
and technology transfer communication management, which was very useful for
formulating our hypothesis. Interviews with venture investors helped us to find out what
they expect from Russian business partners and what they do not expect at all. We also
studied their business communication culture to formulate recommendations on successful
business communication management for the managers of the PCCs. The interviews with
the coordinators and managers of the Pilot Commercialization Centers allowed us to
identify their level of experience in communication assistance within technology transfer
projects and their managers’ needs in development of business communication skills. Last
but not least, technology transfer consultants and experts from Russia and abroad provided
us with very useful and valuable insights on the particularities of business communication
within technology commercialization projects and on the aspects to be improved.


Respondents representing foreign commercial organizations dealing with Russian
scientific institutions are mostly European with rare exceptions. Among them are Dutch,
British, German, and American businessmen, who have a long history of cooperation with
Russian partners.


Structure of the research


The research was organized in two stages. The first stage was devoted to collecting
information on communication problems between Russian and foreign technology
commercialization partners. As a result, we have gathered about 10 cases, where
communication breakdowns played a crucial role. It was decided to present 5 cases to
demonstrate negative outcomes of inefficient communication between Russian scientists
and their foreign partners and the high importance of minimizing risks of communication
breakdowns within international technology transfer projects. Data collected in the course

                                                                                        6
of the interviews allowed us to extract and formulate explanations of the possible reasons
for communication breakdowns given by different groups of respondents.


The second stage of the research was focused on the analysis of positive experience of
communication problem solving. We found out that professional managers responsible for
communication assistance between scientists and foreign partners/investors need to be
introduced. The managers of the PCCs can play the role of such intermediaries if their
business communication competencies will be improved. As a result of the second stage of
the research, the hypothesis about competencies required for the technology transfer
managers was formulated. Detailed recommendations on how to develop these
competencies will be presented in the “How to Communicate Efficiently with your
Foreign Business Partner Guide”.


The key findings


Our study showed that there are all sorts of communication breakdowns between Russian
scientists and foreign business partners within international technology commercialization
projects. These breakdowns lead to the situation when most projects with high potential
fail from very beginning or are not even started. In the case of international business
communication there are additional factors such as language barriers and cultural
differences that can further complicate the communication process. The aim of an efficient
communicator is to develop communication patterns between individuals and groups that
are meaningful, direct, open and honest. In order to be professional manager-
communicator, capable of facilitating efficient and stable communications between
Russian and foreign business partners in a long run, additional competences need to be
developed. These managerial and social skills can be developed by practice and by
studying.


As a result of the investigation we have formulated reasons for the main communication
problems that arise between Russian scientists and foreign commercial partners within
technology transfer projects. The study has shown that the most frequent reasons for
communication problems between Russian and foreign partners within technology transfer
projects are: (1) lack of trust between partners, (2) wrong expectations, (3) preconceptions
and stereotypes, (4) language barrier, (5) lack of business communication skills, (6) fear of
punishment for honest (open) communicating bad news.

                                                                                           7
Finally, recommendations about competencies required for technology commercialization
managers to be capable of facilitating efficient and stable communication between Russian
scientists and foreign business partners were elaborated. Thus, the most important
competences are: (1) international team-style communication skills; (2) social networking
skills; (3) expectation management skills; (4) negotiation skills; (5) business
communication etiquette.


Road map


The whole document consists of five integrated parts: “Introduction”, “Cases with
Explanations”, “Analysis and Hypothesis”, “Recommendations”, and “Conclusions”.


The first chapter - “Cases with Explanations” - represents five models of situations with
discourse of participants on the situations and explanations of possible reasons for them.
Each case includes a description of a certain communication breakdown situation and
comments of available participants and non-participants. All cases together create a story.
This story tells what are the main expectations and preconceptions of Russian and foreign
partners about each other in the process of technology transfer. The described situations
are analyzed from multiple standpoints and provide an all-embracing picture.


The second chapter called “Analysis and Hypothesis” includes explanations of the most
common reasons for communication breakdowns and communication barriers based on in-
depth analysis of the interview results.


In the third chapter “Recommendations” the author gives guidelines concerning
competences that are required for a PCC’s manager to be an efficient communication
facilitator between Russian scientists and foreign business partners and the steps managers
need to take. Thus, the author gives the general description of competencies and
communication assistance techniques that should be developed by the PCCs’ managers in
order to be able to ensure efficient and stable communication between their Russian and
foreign clients and minimize risks of communication breakdowns. The recommendations
are the results of the interview analysis and are aimed at mapping the areas of the
communication skills development for the PCCs managers.



                                                                                         8
“Conclusions” contains information about key findings of the research and a summary of
recommendations to the PCCs managers.




                                                                                    9
                      PART 1. CASES WITH EXPLANATIONS


In order to collect reliable information on the problem of communication breakdowns
between scientists and their foreign partners and analyze which aspects of inefficient
communication bother the different participants of the communication process on
technology transfer and commercialization, mostly we conducted interviews with Russian
scientists, foreign managers of companies, and Russian and foreign experts in technology
transfer and commercialization. Their replies have been put together and analyzed in the
format of cases. The cases and explanations are presented below.


Confidentiality clause: The real names of respondents and participating organizations, the
names and descriptions of the technologies are not indicated, because respondents were
ready to disclose all the necessary information only under the condition of confidentiality.




                                           CASE 1.
           THE COST OF RIGHT INFORMATION AT THE RIGHT TIME


The foreign venture investment company (Investor) was looking for Russian technologies to
invest in their development. Investor got in contact with the Innovation center of one of the
leading scientific institutes in Russia that had good reputation in conducting research in the
required field. The Investor did not communicate directly with the scientists conducting
research but with the management of the Innovation center, representing the scientists. All the
communications were conducted by phone and during meetings.


Investor got a short general description of the technology from the Innovation center and
found it to be interesting. Investor asked whether the IP rights were protected by a patent and
got a positive reply from the Innovation center. Investor asked the Innovation center to send
him a copy of the patent and received a positive reply that the patent would be sent as soon as
possible. Several weeks later the Investor contacted the Innovation center to ask about the
patent. He was told that the Innovation center had to know first what would be the sum of
money invested. Investor explained that to evaluate the expertise he first needed a patent with
full description of the technology. The Innovation center agreed that this was reasonable and
promised to send a patent as soon as possible. In two months there still was no patent sent.
The Investor contacted the Innovation center again and got the reply that they needed

                                                                                          10
additional time for administrative procedures before they could send a patent. Investor had to
wait another two months. During that period the answer of the Innovation center was that
more time is required for administrative procedures. Investor decided to visit the Innovation
center to get to know what the real reason for that situation was. The answer was that some
changes into the technology were planed and the Innovation center would send a new patent
as soon as they had it. Investor asked to send him the old patent in any case. The answer was
positive again, but no patent appeared in next several weeks.


At the end Investor contacted the Russian patent service and got the patent of the required
technology directly from there. Investor has not contacted the Innovation center any more
since then. The Investor decided that although the technology is interesting, the costs of
communicating with the Russian partner were too high.




Even though Russian science and technologies are very attractive for foreign investors and
could be widely used for outsourcing by foreign companies many cooperation projects can
not even be launched or fail from the very beginning because of communication problems.
The situation described is a typical example of failure in cooperation on the very initial
stage, because of a problem which emerges in the process of communication. Many
foreign investors, who try to start commercialization of Russian technologies, face the
problem of not being given information by the Russian side without any reasonable
explanation.


It seems that in the presented case, there was no motivation to give a patent on the Russian
side. Why? Almost all Russian and foreign respondents have pointed out an unclear
situation with IPR in Russian scientific institutions as an important factor of such
behaviour. According to their opinion, unclear IPR status of Russian technologies is the
main problem for cooperation with foreign partners. The Russian respondents have
pointed to the high risk that after getting the patent with description of the technology the
foreign partner will simply disappear and the technology will be used on a foreign market
without the scientist’s permission. The interviewed scientists have raised an issue that a
Russian patent can not be used as a defense in a foreign state and it is impossible for a
Russian scientific institute or Innovation center to protect their IPR by foreign patent
because it is too expensive to obtain one.



                                                                                          11
As the interview results show, knowledge-sharing is treated as creating serious risks. Once
knowledge is articulated, the risk of imitation or coping of the idea increases dramatically.
This is a problem of lack of trust towards foreign partners and lack of confidence on the
Russian side because of unprotected IPR. Consequently, scientists always prefer to get
money first and only after that they are ready to give out information about the
technology. Thus, any investor needs to assure scientists from the very beginning that he
can be trusted.


The issue is even more complicated, because many Russian scientists do not know how to
talk about their technology with interested foreign potential partners. Moreover, many of
them have no idea how to evaluate technologies or know-how and how to charge partners
for their technologies. In this context, it must be taken into account, that the old post-
soviet functional structure of Russian scientific institutes does not imply good
management, which could solve this problem. It is also true that neither a scientists nor so-
called management of Russian scientific institutes are experienced in investor relations.
The newly created Innovation centers either do not have professional managers, capable of
dealing with investors, or they do not have money to pay appropriate salaries to their
managers. In most cases these centers have to work under a self-repayment scheme: “They
get money only if they succeed in commercialization of technology. That is a vicious
circle. Most of these centers have maximum from two to three managers, most of whom
have no experience in technology transfer”, one of the managers of the Innovation center
have claimed. Frequently, managers of these centers as well as scientists do not know
which information to give to a foreign partner and in which format. Even if there is a
professional manager, he is not capable of dealing with all technologies of huge Russian
scientific institutions.


Another issue which should be raised in relation to the described case is that Russian
scientists tend to very much overestimate the importance of their technologies. They are
always sure that they are the only people with this technical competence. They do not
understand that there are often possibilities for foreign partner to find another scientist
who will be able to do the same work, but in time. Both scientists and investors agree that
the only way to ‘treat the self-overestimation illness’ is to find another scientist who will
be ready to cooperate more efficiently. At the same time, the overall majority of the
foreign respondents have pointed out that if a Russian partner is not a responsive one,
which means is not giving the required information in right format and due the right time,

                                                                                          12
investors try to avoid working with such a partner, because he is not reliable. The costs of
such cooperation for the investor will be very high and even if the technology is
interesting the investor will stop cooperating with a partner who does not communicate
efficiently without any reasonable explanation. It is easier for the investor to find another
partner.


Thus, giving the right information at the right time is the crucial factor for efficient
communication with foreign partners. At the same time, there are different reasons for
Russian partners why they do not give information properly. The most important question
here, however, is not ‘Whether the Russian partner has serious reasons not to give
information or has not?’, but ‘Whether he should inform his foreign partner about this
reason?’ No one could guarantee that giving bad news instead of giving no news will save
the project. But when no information is given there is no chance to find solution of a
problem and to learn from mistakes.




                                                                                          13
                                           CASE 2.
                                 RUSSIAN DIPLOMACY


In 2003 a UK biotech company was looking for a Russian partner who could provide it with a
new technique for making vaccines. With assistance of the UK embassy the UK company
contacted a potential partner in Novosibirsk. The Russian state scientific center showed the
results of their research that stated they had enough competencies to develop the required
technology. The Russian scientists seemed to be very interested in possible commercialization
of their technology. The UK company was very much interested as well and sent an offer for
cooperation by e-mail which contained information on proposed technical and organizational
matters. They expected a rapid reply but in two months there was still no reaction.


At the same time the UK embassy got a mail from the director of this state scientific center
that stated that the center had received the proposal from the UK company and was happy to
develop further cooperation. This mail was redirected to the UK company. The UK company
sent another letter to the state center and asked whether the state center was going to discuss
the conditions of the offer. There was no response again.


The Russian speaking manager was invited to get the problem solved. It became clear from
informal talks that the director of the state institute was not very much interested in
cooperation with the UK company, because scientists did not want to waste time on
cooperation which was not providing them with “real” money but required a lot of work to be
done in advance.


The UK Company was expecting first of all to get information on whether its offer was
interesting for the center or not, taking into account certain technical requirements. Foreign
respondents have reported that they are quite aware of possible problems of bureaucratic
decision-making process within the state scientific centers, but they could not understand why
in that case no one from the state scientific center has sent a letter explaining the problem.
Because innovation companies are small and they are working in markets that grow very
rapidly, they have to make all the decisions very quickly. That is why they decided to quit
communication with this Russian institution.




                                                                                         14
As the comments of Russian scientists show, directors of most of the Russian state
scientific centers are not very much concerned about commercialization projects with
foreign business companies, because they perceive such project as a very time consuming
business with unclear financial results. As many respondent agreed, the overall
management of Russian public research institutes is very poor. “Even if you have agreed
with the director that you will get the required information in three days, you hardly
expect it to come in time. The director will tell someone to prepare and send the
information in three days, but no one will do it on time. There is simply no discipline
there!” one of the respondents has claimed. Russian scientists prefer to focus more on
Russian state funding opportunities, because that means “real” money in advance and on
understandable conditions. At the same time, according to the interviews with scientists, it
is good for the reputation of a scientific center that it has contacts with the British
Embassy and that foreign partners are offering cooperation. Thus, the UK Embassy was
granted a higher priority because it was a state body. The UK Company was granted low
priority because it was a business company. Therefore, all the mails were addressed to the
state organization and not the potential business partner.


As one of the respondents states: “Many great minds from the Russian Academy of
Science think that scientists should get money just because they are scientists, and not
because they produce promised results of research according to deadlines. They do not
like situations when they have to work for someone from business organizations.” Russian
scientists are logically expecting that a business partner brings money. But they are not
expecting a business partner to organize full-length due diligence procedures. As other
interviews show, if scientists are not sure whether or not they will be paid, they are not
motivated to do any extra work, while foreign partners tend to pay much more attention to
investigation of technological and legal backgrounds of each technology. As the foreign
expert have explained, “professional investors always undertake careful due diligence
before making investments and retain oversight rights afterwards.”


Most of the foreign respondents have reported that one of the most serious problems in
cooperation with Russian partners is caused by wrong expectations on the Russian side.
Most of the Russian scientists expect that the foreign partner will give them money
immediately. They are very happy to start cooperation, but as soon as they understand that
the foreign company is not going to pay them money the next day, they loose all the
motivation and stop communicating. At the same time, Russian respondents have reported

                                                                                         15
that while working with a foreign partner during a due-diligence procedure there is a great
risk that they will waste a lot of time, but get nothing,. As one Russian scientist has said,
Russian scientists “are not going to work for free anymore. We have too much negative
experience, when a foreign partner got our ideas for free and we got nothing.”


But as the foreign expert says, foreign companies “are not coming to give money, but
coming to make money. First they have to get work started, get results and than try to sell
these results in order to get money together.” This scheme is unacceptable for scientists in
most of the cases. As one of the foreign investors claims, “Russian scientists are not ready
for long-term and intensive preparations in order to launch a serious project. They want
money right here and right now.” It is unacceptable for foreign partners. The main
problem in this situation, as most of the interviewed Russian scientists have explained, is
that they will not tell their expectations directly to their foreign partner. That is a problem
of “expectation management”. It is not explained to either Russian scientists, nor foreign
managers and investors, what kind of cooperation process structure is expected by each
participant. There is much space for action here.


Additionally, scientists and managers represent two different professional cultures. They
speak different languages, have different time regimes and frequently do not understand
each other but are “human beings from different planets”. However, there are some
scientists who are more entrepreneurial than others and take a risk to start cooperation
with foreign partners even if they are not experienced in business matters at all.
Consequently, there is no guarantee that such an entrepreneurial scientist will complete
what he has promised to do for the foreign partner after he realizes what kind of problems
such business cooperation could cause.


The majority of both Russian and foreign respondents have admitted that there is a
significant lack of professional managers at scientific institutions. Institutions do not have
enough money to employ them. Thus the whole communication process is managed by a
scientist appointed by the director of the scientific institution. This scientist has no
motivation to act as a manger. He has no skills, but moreover he has no interest to change
his way of thinking. He is a scientist; he wants to stay a scientist. When someone from a
business company tries to make this scientist act as a manager, he uses all possible defense
mechanisms. He can ‘run away’ or try to ‘hide himself’. Most of the Russian scientists
interviewed have claimed that there is no reflection in reward mechanisms. Scientists see

                                                                                            16
no connection between potential commercialization project and their rewards. Thus,
efficient communication is not reflected in reward mechanisms. At the end both parties are
fully dissatisfied.


In sum, at a certain stage of cooperation, inefficient communication between scientists and
foreign companies might be caused by lack of scientists’ will to give information and even
to cooperate further. In this situation inefficient communication is an efficient instrument
to slow down the progress of cooperation or even to stop it. The inefficient communication
is an indicator for a more serious cooperation problem in such a case.




                                                                                         17
                                         CASE 3.
                               NEGOTIATION GAMES


A large international company was interested in Russian technologies. They found the
required public research institute and started negotiations. At some point the company
faced communication breakdowns. No one could explain what was going on. Scientists
neither replied to the company’s e-mails nor answered phone calls. The company sent its
Russian-speaking representative to the Institute. He was told by the Russian partners that
they had some problems because of their very complicated decision making process.
However, the manager succeeded in convincing scientists to communicate with the
company regularly.


Several months later, the negotiation process reached a point when the contract between
the research institute and the company had to be written and signed. In order to create
document which would satisfy both sides, they started exchanging agreement drafts.
Communication did not go smoothly again, because scientists needed a long time to
consult with their lawyer and each reply was seriously delayed. But the problem was even
more difficult to solve, because Russian scientists were not satisfied with very standard
points of the agreement, and the company’s lawyers and managers were very confused.


Everything went wrong. The foreign company tried to settle down the dispute per phone.
Regular teleconferences as a tool for communication were suggested. The Russian partner
had high-quality equipment for video- and teleconferences. The foreign company was
ready to cover all costs for international calls. Moreover, the foreign company involved
Russian speaking managers to participate in these teleconferences. But the Russian partner
refused to negotiate via phone and continued to communicate in the form of officially
written replies.


At the end a Russian speaking manager of the foreign company was sent to the public
research institute. After some informal talks he found out that in fact scientists were
unsure about the IP rights of the technologies and were not sure if they could cooperate
further. After approximately one year of negotiations the contract has not been signed yet.




                                                                                        18
One of the main risks for any transfer technology project is the problem of protection of
intellectual property rights. Risks caused by unclear status of intellectual property of the
RAS institutions were mentioned by almost all respondents as the main barrier to
commercialization of technologies in Russia. It is a legal and political problem, and, from
the first view, has nothing to do with communication. But it is important to investigate
how this problem affects the behavior of both Russian and foreign partners of international
technology transfer projects. According to a Russian expert, “most Russian scientists try to
hide this problem till the very last moment. And even when it is already obvious that the
situation with IPR is not clear and is quite problematic, they are afraid to inform a partner
about it. Moreover, they are afraid of putting information down on paper in the form of
contract or agreement, because in spite of the fact that scientists want to cooperate, they
have to be very careful with the confusing status of the state property.” Most of them try to
defend themselves or escape if they cannot manage the situation. Defense mechanisms
involve a variety of ways to circumvent anxiety by distorting or denying threatening
situations. In the presented case, it seems that scientists were presenting all the time
objections concerning very standard points in order to hide this problem and slow down
the process till they find a solution.


The interview results show that interaction between Russian scientists and foreign
companies involves mainly two kinds of self-positioning. While Russian respondents have
mainly mentioned the problem of ‘power and resources’, foreign respondents have
focused on difficulties of communication with scientists. Russian respondents tell more
about ignorance of their interests by foreign partners and about illegitimate transfer of
intellectual property. The behavior of Russian scientists in the described situation may be
explained as a behavior of self-protection and of willingness to gain as much profit from
the project as it is possible in the given circumstances. Representatives of foreign
companies describe breakdowns in cooperation in terms of communication problems and
perceive those problems as a result of interpersonal misunderstandings and the soviet
mentality of scientists. This attitude is expressed not only in their words, but also in their
practices. According to the Russian expert, this situation can be explained in terms of
‘willed ignorance’ of real circumstances by powerful international companies, which
means that the real reasons for frictions remain ignored by foreign companies’ managers
and employed consultants and that the problem remains unsolved and most probably will
repeat in the future.



                                                                                           19
The interview results show that when a foreign investor or a commercial company and
Russian scientists begin cooperation, most frequently their roles are already prescribed:
the foreign commercial partner as an actor who comes with his money occupies a
dominant position and feels that he has all the rights to establish rules of cooperation,
while scientists are having a subordinated position and are not allowed to dictate the ‘rules
of the game’. One of the Russian scientists has commented on the situation in the
following way: “Foreign companies have great interest in Russian technologies. But they
are not ready to treat Russian scientists as equal partners. They want us to be their ‘farm
hands’.”   Another Russian scientist made the following comment on the situation:
“Russian scientists have a lot of negative experience of dealing with foreign commercial
partners. The main problems are that foreigners do not treat us seriously. They come to
exploit our intellectual resources. Therefore, there is nothing strange that Russian people
do everything to make this process more difficult, apart from the ‘normal’ difficulties
related to Russian legislation and the hierarchical system within RAS institutes.”


Thus, the problem of trust is one of the main barriers to commercialization of Russian
technologies. Russian scientists feel very much unsecured. Most scientists feel that they
need to be very careful with foreign partners. The majority of respondents from Russia
have agreed, that Russia has to participate in the international division of labor in any case,
but argue that foreign companies are trying to exploit Russian intellectual resources for
free or very cheap. While many respondents support the idea that Russia has to participate
in the international economy and cooperate on an international level, there are many
comments stating that openness in the process of international cooperation may cause
some risks. “We are open – they are ‘cleaning’ our pockets” (Russian scientist). As a
result, one of the most common stereotypes presented by most of the respondents from
Russia is that “foreign investors try to get ‘for three cents’ sophisticated Russian
technologies that could be sold for millions” (Russian scientist). This is a problem of
preconceptions. The majority of foreign respondents have pointed out that Russian
scientists have no communication skills and this is one of the main reasons why
communication is so inefficient. At the same time, the majority of the Russian respondents
have mentioned that their interests are ignored by a foreign partner - if it is a large
multinational company. They are not treated seriously, and as a result their interests are
ignored, because of difference in the ‘weight category’.




                                                                                            20
The reason for these misperceptions is a previous negative experience that many Russian
scientists have had. In this situation the Russian scientists are not motivated to work and
cooperate efficiently. A foreign expert commented this situation in the following way:
“The problem is the assumption that one of us always has to loose if the other wins. But
we are more interested in a win-win solution. This is a business: we just need to keep each
other informed about the real situation.”


Many Russian respondents have specially pointed out that the real reason for a
communication breakdown is the behavior of foreign business partners. According to
interview results, inefficient communication is not a consequence of lack of skills of
Russian partners. “All the skills required for that are responsibility and punctuality. You
get them all if you motivate a person to cooperate with you” (Russian scientist). In some
situations it is a reasonable reaction on the actions of a foreign partner. Thus, the main
complaints of Russian scientists include: ignorance of interests of a Russian partner by
foreign partners, wrong expectations of both partners, and exploitation of intellectual
resources of a Russian partner. While the main complaints of the foreign respondents
include: wrong expectations and lack of communication skills.


As the investigation shows, there are reasons why scientists may feel abused: a) their
intellectual property rights are not protected, b) their work is not paid enough. As a result,
scientists may feel exploited by the foreign company and are afraid to be deceived. This is
one of the reasons of communication problems. Probably, there will be no success in
solving a communication problem until the problem of treatment of cooperation as
exploitation of one group of people by the other remains unsolved. One of the Russian
scientists argues: “I can tell you the reason of a communication breakdown in two
minutes, if you tell me that the Russian scientists are not paid for their extra work.”


Another important factor that should be taken into account is scientists’ fear of making
mistakes. As the Russian scientist comments, “sometimes your mistake is so silly that you
can not tell anyone about it. You are so ashamed about what you have done that you better
hide yourself and do not tell to your partner about it.” Russian scientists do not connect
mistakes with a potential for learning while conducting business. Such principles as “Any
problem should be avoided at any costs” or “We can not afford mistakes” are deep in the
organizational culture. According to a foreign expert, “evaluation of mistakes differs
greatly in different countries. In Russia if you have worked for the company that has

                                                                                           21
become bankrupt it will be difficult to find a new job. In the Europe more people start
looking for such specialists, because they are deemed to have unique experience and thus
they know how not to go bankrupt.”


Finally, the important issue is the resistance of Russian scientists to use communication
tools, such as tele- and videoconferences. Foreign partners often explain that they need to
meet regularly to discuss all the aspects of development phase. But they can not fly all the
time to Moscow and Russian regions. It is too much time-consuming. That is why it is
very useful to communicate through telephone conferences. “By some strange reasons,
Russian partners are reluctant to use this instrument. That makes the negotiation process
very difficult and time-consuming”, claims one of the foreign investors.


The past decade has shown that it is viable to negotiate technology commercialization with
institutions that are miles and oceans away. Required facilities include meeting rooms with
access to videoconferencing and high-speed internet resources. These technologies and
techniques enable partners around the world to communicate with each other for
consultation, coordination, and training events in a timely and cost-effective manner,
which is not the case for Russia. Thus, the lack of technical skills or equipment is a
significant communication barrier for international cooperation. As one of the interviewed
Russian scientists has told, he has never used telephone- and videoconferences before. He
is not sure what exactly the reason for that is: “Maybe the equipment is too expensive...
Who will pay for the call? Anyway, even if you have it in Moscow, in most of the Russian
regions the telecom networks are of very bad quality.”


But there must be some reasons for Russian scientists not to communicate by means of
teleconferencing in the described situation: the cost of the equipment and calls is too high
for the Russian regional institutions. Most of respondents from Russia argue that it is
inefficient to communicate by phone in many cases, because the process of technology
development requires face-to-face contact. The major ‘eye contact’ aspect of the process
relates primarily to the essential trust and confidence that each party has for the other.”
Often, communicating parties do not feel that it is secure enough to discuss confidential
information by phone. This aspect leaves room for further discussions about the ways of
making exchange of information by means of modern technologies more secure.
Positions of Russian and foreign respondents concerning foreign laboratories at Russian
public research institutions differ as well. Foreign partners find establishing their own

                                                                                         22
laboratories at Russian public research institutions and hiring Russian scientists to be the
most efficient way to cooperate with Russian partners. This would allow foreign
companies to avoid many organizational and communication problems. Additionally, most
of the Russian respondents have agreed that this way of cooperation is attractive for
Russian scientists as well, as far as they get stable salaries. At the same time, many
Russian scientists have complained that this is the cheapest way of exploiting Russian
intellectual capital.


In sum, preconceptions and biases of both partners about each other based on previous
negative experience is a strong factor that hinders creation of trust that is required for
long-term cooperation. Russian scientists have had bad experience of cooperation with
foreigners partly because of the fact that the first foreign businessmen in Russia during the
process of market liberalization were not always the best representatives of “Western
capitalism”. Preconceptions and biases play an important role and can be a reason for
communication breakdown if not treated properly. Most preconceptions are based on real
negative experience.     However it is true that many of them are the results of
misunderstandings that remain unexplained and because of this reason - unsolved. These
preconceptions should not be extrapolated on all Russian scientists. Results of interview
analysis show, that many scientists with leading positions at the RAS, are looking forward
to develop international projects with foreign commercial partners, because it helps to
develop an innovation culture in Russia. What is even more important is the fact that,
despite their negative experience, the overall majority of Russian scientists are open
towards cooperation with foreign business partners.




                                                                                          23
                                       CASE 4.
                         A STRONG WILL TO SUCCEED


Right after the collapse of the Soviet Union a Russian scientist started his first spin-
off company, based on technology he had developed during the Soviet time at a
public research institute. During the next ten years he studied management and
accountancy and, thus, gained required management skills. In 2004 manager already
had more than 10 years of commercial experience.


A European firm was looking for a certain technology in Russia and found the
described company. They decided that they would try to develop the required
technology together. An agreement was signed. A group of scientists from the
Russian public research institute participated in the development phase. The Russian
company had to manage the whole process and deliver products according to certain
technical specifications on certain deadlines.


The whole process of cooperation was full of unexpected contradictions. During the
project the manager had to overcome all sorts of problems and communication
breakdowns between Russian scientists and foreign managers. The most difficult
problem for the manager was to explain to the scientists that giving the right
information at the right time was important for their mutual success. Scientists did not
want to have any deadlines. Moreover if they decided to change something during a
development phase they did not take into account that it would postpone the delivery
of results. They did not care much whether the foreign company was expecting to get
it in time or not, because they were sure, the new results would be much better. When
they did not succeed in the research they did not stop in order to let the manager know
about their mistake. On the contrary, they organized new experiments in order to
check other possibilities to improve the quality.


As a result manager had to control every step of the scientists’ work and had to
explain to scientists that if the results were not delivered in time, the company would
loose the partner. Manager had to devote considerable efforts in persuading scientists
to follow the deadlines. At the same time he had to find reasons for breaking the
deadlines and explain to the foreign partner what was going on. He constantly

                                                                                           24
contacted the foreign partner in order to keep him informed about all changes in
deadlines and explained the reasons for the changes.


There were many different problems of technical and human nature. Some deadlines
were not kept; some technical problems emerged, etc. As a result, the foreign partner
was not fully satisfied with the technical progress. But there was a strong will for
cooperation from the Russian side. Manager had to spare no effort in order to
persuade the company that despite all breakdowns they would manage to succeed. As
a result both parties were satisfied. They prolonged their contract afterwards.


The overall majority of investors find quality of management of a company to be the most
crucial factor that determines the success of an investment project. Investor is not going to
deal with scientists directly. He wants to have a good manager who will be responsible for
doing right things on right time. Organization of a business is based on discipline, i.e.
deadlines, reports, planning. Scientists strongly believe that it is all about useless and
unimportant formalities. Scientists do not want to do everything punctually. They can not
stop trying to create extra results, and they find time by reducing other pieces of work. For
businessmen “time is money”, but for scientists “all costs are good if the result is great”.


No one will argue against the statement that scientists and managers in all countries
represent two different professional cultures, which have different approaches to practice.
Scientists are process-driven, while managers are result-driven. It is the same for all
countries, not only for Russia. However, in the case of scientist-investor relations, very
often scientists are expected to play the role of managers or to be managers-like. Business
partners often complain about scientists’ time perception: “They do not understand that
time is a limited resource, they do not follow timetables…” As the Russian scientists
explained, “we do not want to be managers. Even if we want they can not be managers. It
is simply impossible. If investor wants to have efficient communication, he has to find a
manager who will professionally mediate cooperation.”


As for the results expectations, the investor gives money to scientists in order to get a
product with the agreed quality. He is not expecting the scientists to create anything
additionally; he wants them to bring the agreed results on time. It takes time to
communicate this idea to scientists. Scientists do not want to have any binding obligations,
like deadlines. According to some of the interviews, scientists even feel offended if

                                                                                               25
someone tells them about deadlines. They are sure that time is not important if the result is
great.


Scientists always want to have room for creativity. Even at the development phase when
certain results are required, they continue experiments trying to make a technology better.
As a result they do not complete what they are expected to do on time. But they hide what
they are doing because they do not want anyone to stop their experiment. They find the
process of experiment to be much more important than the results. There should be always
someone who checks what the scientists are doing and controls the process, which is not
an easy task.


As interview results show, many foreign companies have already understood that they
need professional intermediaries to be efficient in Russia. It is more effective to come to a
professional manager who could find the best way to organize the work of scientists and to
help to find best competencies among Russian public and private research institutions. A
manager will control the whole process and will be responsible for results. Most foreign
managers have admitted that working with a company managed by a scientist with no
managerial experience makes the project unsuccessful. If this scientist tries to follow up
with his research at a scientific institute and manage a company at the same time, this will
bring a company to collapse as well. Some respondents have presented a description of a
situation that is common for Russia. Scientists have very promising technology. They find
an investor and establish a company. After a year of constant troubles they decide to look
for a professional manager. One of the respondents explained that it is a good sign for the
company, if the scientists realize the importance of good management so fast, because
companies who have no professional management have no future.


Russian scientists want to stay scientists, and do not want to become managers. Of course,
there are many examples of scientists who begin thinking as business people after several
years of experience of managing a spin-off company. But without such experience it is
impossible for scientists and business people to communicate, they just use different
languages. At the same time, the interview results show, that the majority of both Russian
scientists and foreign partners do not expect a professional manager with no scientific
background to succeed. “No professional manager can understand scientists. It is quite
impossible to make scientists to listen to manager at all.” These are the most common
statements of Russian scientists. At the same time, many Russian scientists and foreign

                                                                                          26
managers believe that one of the possible ways for a professional manager to make
scientists listen is to persuade them that he speaks on behalf of the investor and that the
investor will not transfer any money for the next part of the project before manager tells
him to do so.


Moreover, both Russian and foreign respondents have admitted that it is very difficult to
find a professional manager. Most Russian respondents have claimed that they do not have
money to pay the salary for a high-qualified manager. Moreover it is impossible to find a
manager who will understand a technology well enough. The positions of Russian and
foreign respondents concerning the question ‘Who should pay for a professional
manager?’ differ greatly. While most foreign respondents believe that the manager has to
be paid by the research institute he is working at, the Russian scientists think that a foreign
investor should employ a manager in order to reduce risks.


According to the results of interviews with foreign business managers, giving information
about all kinds of problems is crucial for the success of any project. Even if a problem is
caused by a mistake, it is important for a manager of a business company to get the
warning message on time. It helps to evaluate the risks and to react in a right way before it
is too late.


Thus, there are always one sort or another of communication breakdowns between Russian
and foreign partners. But if people really want to succeed they will always find a way to
understand each other. The problem is that it is impossible to attract and successfully
cooperate with a foreign partner without the support of professional mediator, who is able
to persuade scientists that they need to work now, and they will get money only
somewhere in the future if the project succeeds. In the presented case, manager succeeded
in making compromises with foreign partners all the time, despite all kinds of breakdowns.
The key for success was giving the foreign partner all the information about the progress
and problems in time.




                                                                                            27
                                           CASE 5.
                DIFFERENCES BETWEEN VODKA AND WHISKEY


There was a joint research and development project organized by a Russian state scientific
center and a foreign company. The research took place at one of the Russian regional state
scientific centers. Communication breakdowns between Russian team of scientists and
foreign team of managers happened regularly and that is why a professional facilitator
from the Russian S&T consulting group was invited. In order to make communication
between    Russian    scientists   and    foreign   managers   smooth   and   to   eliminate
misunderstandings between them, he had to meet with them regularly.


Every night he went out to a pub with Russian or foreign team members. When he went
out with Russians, they drunk vodka and discussed the behavior of foreign partners. The
next day he went out to the pub with the foreign team-members. They drunk whisky and
discussed how difficult it is to work with Russians. After that, the facilitator invited both
teams to the same pub together and explained to them which situation had resulted in
misunderstandings and how it could be solved. The facilitator received an invitation to
come to solve problems once a month and had to fly to this faraway city of Russia in order
to calm the situation down and to help people relieve the stress.


As facilitator has confessed, “Being an intermediary between scientists and business
managers is not an easy task. It is all about psychology. You need to listen carefully to
both scientists and managers. If you speak to them regularly, you begin to understand what
is real and what a trick in their behavior is.”


Only because of the professional facilitator’s help the project survived and both parties
were satisfied with the results at the end. The Russian scientific center and foreign
company continue working together and after years of experience of cooperation feel free
to communicate without help from outside. People made friends and keep in touch even
after some members of the teams had left the project.


Cultural differences play a key role in the creation of trust, since trust can be built in
different ways depending on the different cultural meanings of the same things around the
world. Certainly there are many cultural differences between Russian and European

                                                                                          28
business partners. But the difference is much more crucial in situations where national
cultural particularities are mixed with professional ones, as happened in the described case
of communication between Russian scientists and European businessmen.


However, the main question in this situation is “How to apply these cultural differences in
order to overcome misunderstandings within the multicultural team?” As previous studies
show, in most of the cases intercultural differences lead to misunderstandings. If
neglected, misunderstandings can cause serious conflict situations which can destroy the
whole project or at least slow it down significantly. That is why it is important to discuss
the issue of cultural peculiarities of two groups: Russian scientists and foreign business
partners.


It is important to take into account the preconceptions of both parties about each other.
Russian respondents have mentioned that American businesspeople treat Russian scientists
as “poor starving people” who will be happy to get one cent for all they have. Europeans
receive better marks, as far as they find Russian scientists to be brilliant minds with magic
technical competences. If you tell them what to do, you will get it the next day. The
quality will be high, the price will be cheap and, what is most important, you do not need
to tell them how to do it.


There are certainly many differences in business behavior between representatives of
different nations. As many respondents have pointed out, there are strong differences in
how people from different countries become friends. Moreover, these differences are
treated differently by Russian and foreign respondents. For instance, Americans first do
business and keep distance, if business goes fine, they start private relations. Germans do
business during the day, and become friends in the evening. In the morning, they do
business again. Citizens of the UK are somewhere in the middle between Americans and
Germans. Russians make friends all the day long. Sometimes they do business at the same
time.


Concerning Russian scientists, it is a widespread opinion, that they need inspiration to
work efficiently. They can create something brilliant if they are inspired or can do nothing
waiting for inspiration to come, while foreign managers work eight hours a day, planning
everything step-by-step, establishing and keeping deadlines; they make a small step
forward every day.

                                                                                          29
Differences in approaches to responsibility have been pointed out as one of the main
factors. If you ask who is responsible for this research, Russians will say the name of
research institution (collective responsibility), and foreigners will say the name of a certain
person (personal responsibility). Difference in approaches to life security is another
wonderful example. Foreign respondents have noticed that Russians do not pay much
attention to security, for example they do not fasten sit belts while driving a car. Even such
a small detail makes foreign partners feel unsecured while doing business with Russians.


Another particularity is that not all Russian scientists feel comfortable with foreigners.
During the Soviet time it was forbidden to communicate with foreigners. Even now some
people from that generation are afraid of it because they expect foreigners to work against
the Russian state. Moreover as the results of interviews show, there is a strange attitude of
Russian scientists to foreign businesspeople and managers. They are treated as some
mysterious creatures and not as real human beings. Some respondents admit that they
work with foreigners only because they bring money, otherwise they would prefer to stay
away from them. Thereby, one of the main communication barriers is the lack of trust of
foreigners. Most scientists agreed that they think of foreign companies as of coming to
Russia to look for something to steal. Ninety percent of Russian speaking respondents
have mentioned this point during the interviews.


At the same time, several respondents have pointed out that foreigners never tell their
Russian partners directly if they do not like something in them or their actions. They try to
put everything mildly and smoothly. As a result, little by little dissatisfaction builds up and
at the end foreign partners stop cooperation. The Russian partner cannot understand the
reasons for such behavior, because they were not told directly that something is going
wrong. One Russian scientist has emphasized that if his foreign partner tells him about his
weaknesses or mistakes he appreciates that very much, because it means that they trust
each other.


Certainly, it should always be remembered that even the most experienced Russian
businessmen have less than 15 years of experience in a free market economy, and even
much less in international business. The fact that a company manager may have decades of
‘industry’ experience does not mean that he knows much about commercial operations.



                                                                                            30
Sometimes he just does not realize all the things that can go wrong in a deal and may have
difficulty in understanding the foreign businessman’s point of view.


For instance, it often seems that many Russian scientists do not view the “contract” in
quite the same way as foreign businessmen do. In some cases, a contract seems to serve
more as a “statement of mutual intentions” which could be ignored if some initial
assumptions turn out to be invalid after a while, or if the situation suddenly changes. Thus,
a contract is seen as something flexible and informal. In addition, it is often the case that a
contract is less important than the “relationships.”


Mistrust in knowledge transferred by foreigners is still one of the main communication
barriers. Most Russian respondents are initially sure that knowledge possessed by
foreigners cannot be efficiently used in Russia. During the late nineties Russian scientists
faced many projects aimed at bringing foreign managerial experience to Russia. That was
all interesting and important for the prestige of public scientific institutions, but the
knowledge of foreign experts was local. They were not able to adapt this knowledge to
Russian realities. “To be honest, we are not expecting much from foreign experts any
more” tells one respondent. The words “This does not work in Russia” are very often
pronounced, but in very rare cases expressed directly to foreign experts and managers.
Therefore, Russian scientists do not expect much from the knowledge foreigners possess.
They are not likely to waste their time on giving any useful information or taking part in a
time-consuming communication processes.


Language differences are an obvious impediment to effective communication and to
building trust. Language difficulties can create many misunderstandings in intercultural
teams. First of all, language barrier increases the cost of sharing information. Scientific
institutions in Russia do not provide their employees with the skills needed for this job,
while it is perceived as normal by Western business partners that scientists should meet
these requirements. In order to get evaluation of available technologies, special technology
profiles should be created and a lot of information is required to negotiate with a partner
on the right format and content of such a profile. Filing all the required formats and
templates in English is a time and money consuming operation.


However, according to the interview results, language and additional costs related to the
language are not the main barriers in communication and cooperation. Russian scientists in

                                                                                            31
general are used to communicating in English with foreign partners. There are always
some possibilities to find a professional interpreter if it is important and really needed. The
technical terminology is not a problem too. The main problem is legal and commercial
terminology. As the Russian scientist explained, “Language barrier is not a problem. If
people want to cooperate they will find ways to communicate. We have to spend more
time to understand the partner in a right way, but it is not a problem.”


To sum up, there are typical cultural differences, which affect the process of cooperation
between Russian scientists and foreign business managers, and should not be ignored. It
should be taken into account, that knowing the cultural norms of a given group does not
predict the behavior of a member of that group, who may not conform to norms for
individual or contextual reasons. Cultural influences and identities become important
depending on context. When an aspect of cultural identity is threatened or misunderstood,
it may become relatively more important than other cultural identities and this fixed,
narrow identity may become the focus of stereotyping, negative projection, and conflict.
But, if treated properly, cultural differences are not a problem for commercialization
projects.




                                                                                            32
                      PART 2. ANALYSIS AND HYPOTHESIS


As the cases in Part 1 “Cases With Explanations” and interview analysis show, a
communication breakdown within cooperation projects between foreign partners and
Russian scientists can be a problem itself or can indicate a more serious problem in
cooperation. Therefore, on the one hand, it is important to know how to distinguish
between different types of communication problems. On the other hand, paying much
attention to the communication problems helps to identify more serious problems in
cooperation in order to find the best way for reaction and possible solution.


There are several types of communication breakdowns, that could emerge in cooperation
between Russian and foreign partners within technology commercialization project
implementation. The most common communication breakdowns are:                   a) not giving
information at all; b) not giving right information; c) giving information not at the right
time; d) giving information in a wrong format; e) giving non-relevant information; f)
sticking to formal instead of informal communications, etc.


In cases with Russian scientists a communication breakdown can indicate that the partner
is not interested in cooperation, but for some reasons do not feel free to express this
openly. If this lack of motivation to cooperate is not identified at an early stage, the
foreign partner and the intermediary organization face the risk of getting into trouble by
becoming involved in a negotiation process that consumes a lot of time but will result in
nothing.


When a scientist has a problem with the technology he develops, he can use a
communication breakdown situation to hide himself. However, the same situation of
communication breakdown can be used to build stable relationships between technology
transfer partners in cases where a professional manager-intermediary is involved.
Therefore, the main task of the intermediary (a PCC manager) is to build relationships
between Russian scientists and foreign business partners that will be based on trust,
overcoming negative preconceptions of both sides and helping them to communicate
openly in a most efficient and sustainable way.




                                                                                          33
Reasons for Communication Problems


Inefficient communication could have different sources. Some participants of
communication may lack motivation to cooperate; others lack authority to take
responsibility in establishing certain kinds of cooperation; some - lack professional
communication skills. In any case, it is important to recognize what is the reason for
communication problem that you face in order to solve it.


The interview analysis show that the most common reasons for communication problems
between Russian scientists and foreign commercial partners within technology transfer
project are:
1.     Lack of trust between partners;
2.     Preconceptions and stereotypes;
3.     Wrong expectations;
4.     Language barrier;
5.     Lack of business communication skills;
6.     Fear of punishment for honest (open) communicating.


Lack of Trust Between Partners


A lack of trust has been reported by the overall majority of respondents as a main barrier
to successful communication. The concept of trust may be framed as an expectation of
partner’s reliability with regard to his obligations, predictability of behavior, and fairness
in actions and negotiations while faced with the possibility to behave opportunistically.
Trust-building and transparency are nourished by a consistent and continual portrayal of
truthfulness, sincerity and commitment. Mere opportunism should not be the driving
factor, as it is seen in most cultures as self-serving. This is especially poignant in a
‘management by projects’ environment where the collective goals of the project supersede
a single individual’s agenda. Building trust is a critical step in the creation and
development of multicultural and/or geographically-dispersed teams.


The success of communication strongly depends on the quality of communication between
the partners and their “intimacy” level. Communication depends on how much knowledge
the partners are willing to make accessible to each other. The risk of losing critical

                                                                                           34
information or know-how due to accidental leakage or opportunistic behavior of the
partner is particularly high for scientific institutions and small firms in Russia, and, thus,
they are bound to be more protective. Transparency reflects the level of partners’ openness
and accessibility and is negatively correlated with the degree of protectiveness that each of
them elevates vis-à-vis the other. The more transparent the partners are - the more mutual
learning and trust is possible.


Once trust between the parties has been established, it must be maintained. Regular
communication is needed to keep the relationship alive and trust at a constant level;
otherwise, trust spontaneously decays over time, and one needs to reestablish it when the
next interaction takes place.


Examples from the USA and Europe:
Intermediaries or go-betweens play a significant role in building trust in many countries.
This role is limited in the U.S.A., where each person is assumed to stand on his or her own
merit. In this case, the key role of intermediaries consists in opening doors that may
otherwise remain closed. Once the intermediary has introduced the two parties, he or she
allows them to decide whether they want to do business together by themselves. By
contrast, intermediaries play a far more significant role in Europe. In many European
countries, the intermediary in effect “lends” its reputation to the party that asked for the
meeting to be arranged. By stating that “you should meet these people”, the intermediary
helps turn the initial mistrust into a positive attitude towards the party that asked for the
meeting. In some countries, the intermediary participates actively (both behind the scenes
and during meetings) in the discussions between the two parties he / she introduced.
Because Americans move more frequently than people in many other parts of the world,
they are accustomed to temporary relationships. They make friends in a new city or a new
company and start the process again when they change companies or cities. Americans
who have known each other for a while assume that whatever trust they had when they last
interacted is still there when they meet again, even when several years elapse between
these two events. In the countries of the European Union, where people are more likely to
remain in the same area, relationships between people take a long time to create and need
regular reaffirmation to remain effective. In particular, regular visits and communication
is needed to keep the relationship alive and trust at a constant level; otherwise, trust
spontaneously decays over time, and one needs to reestablish it when the next interaction
takes place.

                                                                                           35
Preconceptions and Stereotypes


Our research results show that there are still many stereotypes on both the Russian and
foreign sides. Stereotypes are over-generalizations that help people to make sense of what
goes on around them, but they often interfere with objectivity because they rely on
selective perceptions and portions of information which correspond with already-existing
beliefs. Preconceptions and stereotypes of business partners can be based on their
perception of ethnic, professional, cultural differences as well as on the previous negative
experience. They concretize reality – often incorrectly – and rationalize cultural prejudice.


As people from different cultural groups take on the challenge of working together,
cultural values sometimes conflict. There are typical cultural differences, which affect the
process of cooperation between Russian scientists and foreign business managers, and
should not be ignored. They often misunderstand each other, and react in ways that can
hinder what are otherwise promising partnerships. Managers of such teams need to
recognize that building trust between culturally different people is a complex process,
especially in the Russian context, where scientists do not trust foreigners because of their
previous negative experience. Moreover, each professional culture has its own way of
building trust and its own interpretation of what trust is. To be effective, this process often
requires a significant amount of time and communication.


Wrong Expectations


Expectations are the driving force in business. One of the greatest areas that lead to
communication breakdowns and projects’ failure is the difference between what
participants feel is reasonable to expect from anyone, and what they actually do receive, or
think that they have received. If mutually satisfying goals are not established and
objectives are not clearly defined, then much of the “gray area” as to what is reasonable
for each side is left. Both foreign and Russian parties have reported that they find wrong
expectations of partners to be one of the main reasons for a project failure.


Different parties of cooperation have different explicit or implicit expectations directed
towards a commercialization project. Investors tend to look for high return on their
investments, scientists look for long term working opportunities and better wages and

                                                                                            36
salaries, and customers search for high quality products at competitive prices, problem
solving etc. Expectation mismatch often leads to the situation when partners fail to
understand the thinking that is behind the actions of the other side. Essentially, this boils
down quite simply to ineffective communication. Therefore, to survive, a start-up
company should identify, prioritize and manage different expectations. Thus, it is
important to understand that technology commercialization project management is all
about expectation management.


Language Barrier


Language differences are an obvious impediment to effective communication and to
building trust. Both foreign and Russian partners have reported that the language barrier is
one of the main reasons for misunderstandings. Vocabulary, syntax, idioms, slang and
dialects all cause difficulty, but the person struggling with a different language is at least
aware when he/she is in difficulty. A more pronounced problem occurs when he/she thinks
he/she understands. The person clings to the meaning of a word or phrase in the new
language, regardless of connotation or context. The infinite variations are so impossible to
cope with that they are brushed aside.


As a result, the presence of high anxiety or stress is common in cross-cultural experiences
because of the uncertainties involved. The native of one country may be uncomfortable
when speaking with a person from another (foreign) country because he or she cannot
maintain the normal flow of conversation and non-verbal interaction to sustain
communication. The other person may experience a similar discomfort, with the added
tension of having to cope with the alien pace, climate and culture he or she in ensconced
within. Additionally, language barriers increases the cost of sharing information in
situations when professional translation is needed.


Lack of Business Communication Skills


Business people in all countries often face a problem of expecting proficiency in business
communication skills from scientists. As our study proved, many promising projects in
Russia fail because scientists are expected to behave as entrepreneurs or tend to behave as
a member of the business world themselves. Although science-to-science communication
has much in common with business-to-business communication, business communication

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is based on other principles than science communication. Among the most important
principles of business communication are high cost of time and high value of bad news.


Involving a professional intermediary-communicator, who can facilitate communication
between the scientific and business community has been introduced in European countries
long ago and still is a solution that helps to significantly minimize risks of communication
breakdowns caused by the parties of the technology transfer project.


Fear of Punishment for Honest (open) Communicating


As our study proved, fear of making mistakes, of delivering bad news and of expressing
opinions openly is one of the main communication barriers, because efficient
communication means that both good and bad news are transmitted in right format and at
the right time.


According to recent studies, making mistakes and failure are number 2 and 3 from the list
of the people’s most common fears in Western society. At the same time, businesspeople
have reported that making mistakes is a fact of everyday life in business, and that they find
mistakes to be one of the driving forces of progress, while most scientists admitted that
they would prefer to try to correct their mistake before communicating about it to a
business partner.


However, it is important to know that in the business world bad news is as important as
good news. Bad news has very high value for a business community as far as it is the main
information required for risk-management. Communication problems can be seen as one
of the risks that technology transfer projects imply. That is why it is important for the
project manager to apply risk management. Giving bad news is a fact of business life that
is as important as giving good news. The negative effect of bad news can be reduced by
explaining the reasons and communicating sensitively. Half the battle in communicating
successfully is recognizing that the entire process is sensitive and susceptible to a
breakdown.




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