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What comes after Putin? And why care now

23rd April 2019


The recent historical record is littered with spectacularly false predictions about the results of elections and the future of political leaders. Russia is no exception, spawning multiple ‘After Putin’ scenarios that will quickly be forgotten once the president steps down.  

Leaving predictions to the special breed of ‘political scientists’, we will instead concentrate on three fundamental questions:

  1. Can the political system under Putin collapse, and if so, under what circumstances?
  2. What are the underlying principles that will guide Putin as he chooses his successor / institutionalizes his power in a transition?
  3. How should business embrace the lack of predictability in Russian politics?

The Non-Systemic Scenario

The common belief that ‘nothing is going to change in Russia till 2024’ is dangerous for the stability of the Russian state. 

Some experts in the Presidential Administration and the Federal Security Service understand only too well that a chain of destructive, unforeseen events can undermine the inviolability of power at any moment. The current fragmentation of the opposition is an obstacle, but could also be a prerequisite for a domino effect leading to major political changes. 

Such scenarios have played out many times throughout modern history, from the Russian Revolution in 1917 to the color revolution at the beginning of the 21st century. 

For unforeseen social upheavals on this scale to happen, three conditions may suffice:

  1. a fragmented opposition (unable to unite under one leader in a ‘normal’ way);
  2. doubts that the majority supports the ruling elite;
  3. an inadequate reaction from the authorities to provocative actions by the opposition.

The first condition may sound counter-intuitive. It is often claimed that the opposition should unite to win. This may be right for elections, but when it comes to street protests, 3-5% of the electorate supporting the opposition may be enough to start a total realignment of political power. The history of revolutionary changes over the last 150 years and recent results from the computer modelling of social processes testify to this fact.

The second condition is more self-evident. If there are doubts that the majority still supports the ruling elite, we may become more susceptible to the belief that change is afoot. Biologically programmed to fear being isolated from society, people may even be driven to think and act against their personal interests (hence the irrationality of behavior during revolutions). 

Under the third condition, the inadequate reaction of the authorities may be manifested not only in a disproportionately forceful response, but also in a refusal to enforce order in certain circumstances, or even a poorly judged public statements on a heated public issue.

Some experts up the chain of command understand this. Hence the deliberate lack of resistance to the actions and public statements of Alexey Navalny, who strives to unite the opposition under his leadership. Navalny ensures that Condition no. 1 will not be fulfilled in the short-term, which is in the interests of the Kremlin. Navalny also tries to contribute to the fulfilment of Condition no. 2 – planting doubts that the holders of political power continue to enjoy overwhelming support – but, so far, he has succeeded only in vaccinating public opinion against these very thoughts, which is also in the strategic interests of the Kremlin.

The most successful contributors to the fulfilment of Condition no. 2 have so far been the Russian authorities themselves though. The popular meme ‘people are the new oil’ is based on the concrete actions / inaction of those in power, leading to the gradual decline in people’s income and increases in taxes and indirect fees due to the infamous pension reform. Until our aforementioned experts, led by the President (Putin understands the gravity of the situation all too well which was manifested in his address to the Federal Assembly in February 2019), explain to those in power in very plain terms that the patience of the electorate may wear thin very quickly and unexpectedly, this suicidal trend of taking badly-calculated decisions will continue. 

It is beginning to dawn on political parties, especially those in ‘systemic opposition’, that the situation may spiral out of control, but they are at a loss as to what to do. At various seminars and conferences, they share concerns that the anti-establishment wave has reached Russia and dream of repeating the success of the election bloc Edinstvo (Medved’) who defeated Our Home – Russia (NDR) and later transformed into a ruling political party Edinaya Rossia. They fail to understand, however, that in 1999 there was a universal demand for strong power so as to be able to rein in the oligarchs, while today more and more people expect the whole political system to be overhauled.  

Social upheavals and revolutions will bring people no good, especially in Russia. To continue ignoring the possibility that such scenarios could happen is, however, very  dangerous.

The Transition Scenario

Guessing who Vladimir Putin may appoint as his successor makes no sense at this point. 

There is no doubt, however, that Putin will choose only those candidates who share his values, think and act not only in the national interest but also in the national spirit – in the way Putin conceptualizes it. 

Putin’s understanding of Volksgeist, based largely on his ancestors’ beliefs, is therefore key to figuring out what criteria his successor will be measured against. 
 “My father was born in St Petersburg in 1911, – says Vladimir Putin. When World War I began, life in St Petersburg became hard, people were starving, so the entire family moved to Pominovo, a village in the Tver region where my grandmother came from”. Pominovo is close to the State Residence Rus in Zavidovo, where Putin takes his most important decisions.  

Putin’s ancestors were peasants from Tver County – a special belt of villages populated by old believers – those who stood against the reforms of Patriarch Nikon of Moscow between 1652 and 1666, resisting the accommodation of Russian piety with the contemporary forms of Greek Orthodox worship. “Why should Russia – which had survived the onslaught of the Tatars and the Poles and stood the test of suffering – align itself with Greek scholarship, when the entire Greek clergy at that time was under the power of the Turkish sultans?” is the key question the dissenters still ask.

Not every Pominovo villager was an old believer. However, the mentality, the Volksgeist of the Tver region, is very close to that of opponents of Patriarch Nikon’s reforms. Their and, therefore, Putin’s, founding principles are as follows:

  1. The good of the country is pre-eminent – collectivism and solidarity is the basis for every individual’s life.
  2. Traditionalism (moral statutes).
  3. Dedication to friendship, to a (narrow) circle of close friends who share the same values.
  4. The belief that laws contradicting these values should be changed over time. A secret fight against the reformists taught Putin’s ancestors to implement desired changes without open confrontation. What’s more, they can temporarily and publicly support the ‘wrong’ values, predominant now in the government, only to gradually have them replaced with new ‘true’ values and practices. 
  5. The ability to compromise and focus on the solving of fundamental challenges while ignoring small issues.

Old believers and those who share their values are scattered throughout Russia. They are well established in Russian society, with the most prominent being Pavel Tretyakov, the founder of the leading depository of Russian fine art in the world, Konstantin Stanislavski, the man of the theatre who developed his own system of training actors, and Sergey Botkin, the famous Russian clinician and one of the key founders of modern Russian medical science and education. 

Those who share the old believers’ life principles are members of Putin’s closest circle, the best known being defense minister Sergey Shoigu and Moscow Mayor Sergey Sobyanin. 

Interestingly, those who do not belong to this circle of Putin’s unconditional trust are top leaders of the Russian state: Prime Minister Medvedev and both speakers of the Federal Assembly – Matvienko and Volodin. They perform the most important state functions but play technical roles.

Shoygu

Sergey Shoygu is the only top-level politician, and founder of the modern state’s ideology, who became very popular before Putin and has every chance of retaining his influence after Putin under almost any scenario for the transformation of political power, i.e. not only as a result of the ‘successor’ scenario.

Shoygu is an unsurpassed master of creating and implementing popular scalable projects which aim to boost the prestige of the country and the president personally. He does not aim to burnish his popularity; instead, Shoygu deliberately stays in the shadows.

Over the past 25 years, Shoygu has helped formulate the state ideology and changed the political paradigm in Russia (Unity and Edinaya Rossia) and made the Emercom and the Ministry of Defense unattainable for any other state official in the foreseeable future. 

Shoygu achieved his outstanding results in many ways, but primarily thanks to conceiving and implementing ambitious ‘image projects’. Here is Shoygu’s methodology in a nutshell:

1. A unique system of intelligence and interaction with the media

Sergey Shoygu personally oversees and constantly improves a system of monitoring and analyzing the social, economic, political and military situation in Russia and the rest of the world. He also controls the current Ministry of Defense’s media relations, likening information to a modern weapon being actively used in an ‘undeclared war’.

2. Infrastructure projects

This does not only mean military and Arctic infrastructure. Less high-profile are infrastructure for sport (e.g. CSKA’s multi-layer system), education (from cadet schools to military higher education institutions) and healthcare (including the new national telemedicine system and military hospitals). Ideological infrastructure (from the Victory Parade and Immortal Regiments to the All-Russian Volunteering Organization and producing patriotic movies) stands out as the platform for Shoygu’s scalable image projects.

3. A system of competitions and contests

During his first month as Minister of Defense, Sergey Shoygu initiated the AviaDarts contest (pilots from Russia and abroad compete in aerial reconnaissance, piloting technique, combat deployment against ground targets etc.) leading to the establishment of the International Army Games (IAG), which has gained popularity in more than 30 countries already, including China and India.

There is no doubt that the IAG has contributed greatly to strengthening the reputation of the Russian army, the country and the president personally.

Leaders of Russia (a competition which gives ordinary citizens the chance to govern) and The Most Beautiful Country photo contest by the Russian Geographical Society – are examples of other contests which evidence Shoygu’s success in mobilizing resources for the implementation of ambitious image projects.

4. Non-governmental organizations and third-party resources

The Russian Geographical Society (RGO), of which Shoygu is the president, is the most powerful lobbying NGO in Russia. RGO runs big social projects involving millions of the most active citizens who form a core of the electorate in Russia.

The consistent flow of largescale, popular image projects enables Sergy Shogy to shape the country’s public agenda proactively and make administrative and media resources work in the interests of the president and Shoygu himself. In the end, this will be key to Shoygu’s political success beyond Putin’s rule.

Sobyanin

Those who work closely with the Moscow Mayor’s office may already be aware that Sergey Sobyanin has been being prepared for a new top federal role.No one knows what role it will be, including Sobyanin himself, and when the transition will take place. It is almost inevitable that  the Moscow Mayor will become an even more prominent political figure during Putin’s tenure and, in the transition scenario, once the president steps down.

Sobyanin not only acts in Putin’s definition of the national spirit (not least because of his background), he also possesses some rare qualities that can become very helpful under certain circumstances:  

  1. Sobyanin can keep the Moscow ‘liberal elite’, which comprises the majority of the city’s most powerful businessmen and most influential public opinion formers, including the intelligentsia, agreeable – and not only from time to time, but on a systemic basis with some of his deputies focusing specifically on this task. Thanks to this system, Sobyanin is erroneously perceived as ‘liberal’ himself which, under certain circumstances, can be used to his advantage.
  2. The ability to get along with big business, launching city reconstruction and social projects that can be scaled up to the federal level are advantages that single Sobyanin out in the eyes of the president, despite the mayor’s minuses (e.g. his patchy relations with SMEs and heritage experts).
  3. Despite the unpopularity of social costs ‘optimization’, Sobyanin manages to prevent Moscow inhabitants from becoming unhappy. Firstly, thanks to the constant flow of large-scale projects which transform the city’s environment (although they are disliked by many). Secondly, thanks to establishing a unique feedback system (Active Citizen and Our City are just two of the internet portals that contribute to the way Muscovites can make their city more comfortable). Thirdly, thanks to Sobyanin’s ability to recognize his mistakes - for example, transforming his initial idea to demolish  old 5-story houses into a ‘Smart Reconstruction’ project, thus allowing him to accommodate the concerns of both the president and Muscovites.

Some shrewd CEOs of businesses have started to launch long-term partnership programs with the Mayor’s team. If these projects are easily scalable beyond Moscow, then the investments will surely pay back in the long run, under different ‘After Putin’ scenarios.

Wars of the Diadochi 

Even following the smoothest transition of power from Putin to his successor, the different factions of the elite will compete / fight with each other, until a new political balance is found.

This balance may well be reached when a compromise figure - a ‘dark horse’ – will eventually step forward as the new leader.

That might be anyone from minister Kobylkin / Zinichev to governor Mironov / Dyumin or any other person who is ‘not yet known’, as Putin himself hinted. 

More important is to understand the determining principles for the emergence of this ‘dark horse’. Sociologists, as well as ‘political scientists’, will be quick to provide their predictions, but these will likely be incorrect as they have been consistently over the last few years. Hard science may be more helpful here. For example, Dr Avetisov, member of the Chemistry and Physics Council of the Russian Academy of Science and the International Society for the Study of the Origin of Life (ISSOL), suggests that in such a situation, it is useful to understand how the network model of society operates.

The societal system tends to put forward as leaders elements which have considerably fewer positive contacts within society than outside – i.e. with elements from other systems. As a result of open competition (as opposed to the controlled transition scenario), only those who are not recognized as leaders by elements inside the system will actually become leaders, however counter-intuitive that may sound.

The dark horse scenario is, therefore, highly likely in the event of an open contest for the leadership. This also means than putting a bet on a ‘wild card’ will also be highly risky. In this situation, it is recommended to focus on… strategizing, however unpredictable the environment may be.

What to Do

The first thing to do is to get prepared for political crisis scenarios. Not only as a result of fundamental political changes but also ‘routine’ politically-driven situations – from the introduction of new sanctions to politically-driven pressure on (foreign) businesses.

Every business now has a crisis procedure which is regularly tested through special crisis management trainings and drills. However, political scenarios are often not included. Businesses should, of course stay away from politics as far as possible. However, continually ignoring politically-driven scenarios means being unprepared, which can often lead to an inadequate reaction and, sadly, big losses. At Grayling, we run special crisis management workshops focused on politically-driven scenarios that help our clients be better prepared to deal with ‘politically motivated’ regulation and enforcement.

Secondly, it is recommended that long-term strategies for unpredictable scenarios should be developed. This may seem to make little sense, but only at first glance.

A traditional strategic approach posits that businesses will operate in a predictable political, economic and regulatory environment which can be defined by a SWOT analysis and using other popular analytical methods. However, given the unpredictable nature of political scenarios, predicting future developments is next to impossible. Traditional strategists in these situations either persist in developing useless long-term plans or stay away from strategizing altogether, focusing on tactics instead.

Our approach is to put the traditional strategizing methods aside and, during strategic workshops together with our clients, brainstorm ideas that may change the agenda in the interests of the business under any (political) scenario – with adjustments as they occur. 

With this approach, taking a closer look at Shoygu’s communications tools and long-term scalable projects in cooperation with the Moscow Mayor’s office, for example, may not sound like the craziest idea after all.

A separate strategy to consider is long-term corporate social responsibility projects.

Despite Western sanctions, many foreign investors still consider Russia as a priority market for their business, inter alia, they eye opportunities for social initiatives in cooperation with the Russian business community, the Government and NGOs.

On the other hand, Russian companies are also interested in synergies from cooperation with foreign partners in order to use innovative technologies for the implementation of social projects and impact investing.

Grayling asked major Russian and foreign companies to identify the most interesting opportunities for cooperation between domestic and foreign businesses, the government and  society. Here are the six most popular initiatives (listed by their potential in terms of extracting maximum synergies and their positive impact on the economic and social development of Russia):

1. The development of social entrepreneurship

University students design and implement social entrepreneurship projects. These projects are evaluated by the program’s jury (of company representatives, Russian and international experts etc.). The program offers rewards to the winners using a special prize fund.

Much interest is drawn to creating social innovation labs in cooperation with leading Moscow and regional universities (like those operating in European and American universities). The labs should have the following features:

  • An open door for innovative ideas: The involvement of various social and expert groups, including those targeted.
  • A test bed for various innovative ideas for social projects. Successful projects would be able to participate in the contest for social entrepreneurship projects.
  • Projects designed to eliminate the causes of social problems (instead of tackling the consequences) would be prioritized.

Over time, an open information exchange platform for social entrepreneurs, local communities, business representatives, government officials, volunteers and potential investors can be established. The new platform may use best practice from socialexchange.ru and other similar Russian platforms. This platform may potentially become a platform for a Russian version of Impact Investment Exchange Asia.

2. The creation of an innovative training system for highly qualified workers

Today, Russia is experiencing an acute shortage of highly qualified workers (including those simultaneously demanded by several industries) across all hi-tech industries. This shortage slows down technological progress in Russia and prevents the further localization of foreign manufacturing. Being a worker is not considered prestigious. This leads to low levels of demand for professional education. However, Russia does need highly qualified workers in order to keep pace with technological advances globally. These professionals are demanded by both Russian and international companies, as their expansion plans depend on an available, qualified workforce.

A new solution is to implement a triple system for professional education based on cooperation between training centers, factories and centers of excellence in order to create a unified federal training network for various industries. The idea is to join the forces of various clusters/regions/enterprises and create a unified flexible training system using international best practice. This system will help to accelerate the growth of manufacturing and innovation in Russia.

Using governmental support or acting independently, Russian and international companies can create nationwide centers of excellence based on the exchange of expertise between various industries.

3. ‘Safe and Accessible Smart City’ projects

Partners use their technologies in order to improve the quality of life for urban citizens across Russia. Here are some examples of initiatives in this area:

  • The creation of electronic devices and mobile apps equipped with geolocation services in order to provide navigation help for tourists or visually impaired people. The creation of information systems, hotlines etc.
  • The nationwide implementation of safety technologies built for the Olympic Games in Sochi
  • Cooperation with Russian Traffic Police (GIBDD) to distribute safety reflection tapes and other technologies which improve road safety for children
  • Volunteering projects around trash collection and recycling
  • Eco-festivals designed to improve public awareness around environmental protection.

4. Innovative education projects

Cooperation with universities is a traditional CSR route which many businesses take. The focus, however, is being moved to newer, non-traditional projects, e.g. re-training the elderly, additional education in schools (Digital Lesson or Urok Tsifry, ‘quantoriums’ etc.), helping students acquire soft skills and establishing a system of cooperation between business and universities. 

5. Social and cultural cooperation partnership projects

Today, Russia suspends political and economic cooperation with countries which impose sanctions against it. However foreign (especially European) and Russian companies may focus on social and cultural cooperation. Looking back in history, we see,= that this type of cooperation has been quite successful in the past and served as a good platform for the restoration of strong relationships between countries.

In order to improve relationships in non-political and non-economic areas, Russian and foreign companies may work together on social and cultural cooperation projects. By following this path, participating companies may use existing social projects (modified in order to involve other members). The projects may be selected using the following criteria: (1) the non-political nature of the selected projects; (2) mutual respect for fundamental values; (3) the potential social impact.

6. Art & Brands

Industry leaders may join forces in order to organize Art & Science contests for Russian and foreign artists / scientists, where they can use their talents to promote new industrial technologies.

On a separate note, Grayling’s head of corporate communications, Anastasia Elaeva, has developed her own, internationally recognized, Art and Brands practice. Anastasia helps businesses find platforms and ways of engaging with the arts (e.g. Brand-collaborator, Brand-mentor, Brand-art experience creator, Brand-art content creator, Brand-educator etc.) which perfectly suit their needs. 

Great change looms large on the horizon. The future is hardly predictable but requires preparation now. ‘What comes after Putin?’ is a timely question. For business, this question is not political as much as strategic.

By Vladimir Melnikov, Grayling Russia.
 


Grayling Team

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