Project Management Institute

The editor's perspective

May 1991

ACTION

Fran Webster, Delegate and Editor-in-Chief

At the rate of change in the USSR and Eastern Europe, the relevance of these observations may be passe. Nevertheless, the experience of visiting the scene of the action in massive societal change was too moving to ignore the feelings and impressions that resulted.

Three things stick in the mind of this observer as being the most vivid impressions from the trip.

First, was just standing in Red Square. Them was Lenin's Tomb and the reviewing stand which has been shown so many times on television as the leaders of the USSR watch the display of military might roll by. You could almost hear the thunder of the engines and tracks as the vehicles passed. We saw the changing of the guard, the black sedans taking Soviet leaders from the Kremlin, stood next to Soviet military personnel, and photographed St. Basil's Church where a bride and groom celebrated their marriage in this officially atheistic country.

Second, was the folly of armed conflict. Seeing the pockmarks which remain in magnificent buildings -especially the marble columns of St. Isaac's Cathedral in Leningrad, the pictures of the damage to Peter's Summer Palace, and the monuments to those lost in the Battle of Leningrad and the fighting in the Kharkov area, reminded me of reading, many years ago, the current events of World War II and the 900-day siege of Leningrad. Perhaps our sensitivity to these observations in the USSR were heightened by similar sights in the other countries my wife and I visited during June. Perhaps it was the conversations with our friends who reflected on the past and present tensions. Perhaps it was seeing in every country we visited families of three generations showing their concern and happiness with their youngest generation … regardless of where we were. The fundamental concerns of most people are the same the world over.

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We enjoyed walking and shopping on Arbat Street where vendors lined the sidewalks and you could purchase a wide variety of art and craft wares.

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Looking south across Red Square with St. Basil's on the left and one of the tower entrances to the Kremlin on the right. Lenin's Tomb is just out of the picture to our right.

The third most vivid impression was standing in a room in the Hermitage in Leningrad, viewing twelve Rembrandts, and going through many other rooms where works of the great masters were displayed. It would hardly have been more awesome were the masters actually present themselves.

These are the ones that stand out. There were many others, some of which have been triggered by questions asked upon our return. Some are serious, some are facetious.

THE HUMOR

Much can be observed about a society by the popular humor. We heard a few jokes; for example, the six paradoxes of the USSR

1. There is no unemployment, but nobody works.

2. Nobody works, but the Plan is fulfilled.

3. The Plan is fulfilled, but the shelves are empty.

4. The shelves are empty, but everyone's refrigerator is fully stocked.

5. Everyone's refrigerator is stocked, but nobody is happy.

6. Nobody is happy, but everyone votes yes.*

The storyteller noted that item six has changed recently.

Ivan was standing in line to get cigarettes. He grew tired of waiting and told Yuri that he was leaving to give Gorbachev a word or two about the sorry state of affairs. A few hours latter Ivan returned to where Yuri was now standing in the line for cigarettes.

“Well, did you tell Gorbachev off,” asked Yuri?

Ivan replied, “Nyet, the line was too long!”

Ivan then started criticizing Breshnev, even calling him an idiot. The KGB took him in and Ivan was given fifteen days for insulting the Soviet President and fifteen years of hard labor for divulging a state secret.

President Gorbachev and President Bush were playing one-upmanship about the political and scientific achievements of their respective countries. Bush bragged about the U.S. computer and telephone system. He said, “Our system is so good I can call hell and talk to the devil.” Gorbachev bragged about the USSR‘s rockets and social system. It was a draw. They parted, but were talking later on the phone. Gorbachev asked Bush if he had called the devil yet. Bush said that he had and that it only cost $30,000. Gorbachev asked why so much; his call to the devil had only cost 2 kopeks. Bush was astounded and asked Gorbachev how he did it so cheaply, to which Gorbachev replied, “It's a local call.”

INDUSTRY

We came away with an interesting perception of Soviet industry. Having existed in a large manufacturing organization, many of the complaints of the plant management personnel seemed very familiar. Then it occurred to me that similar complaints were made by plant personnel in the large corporations with which I was familiar. This made me conjecture that Soviet industry is organized as one very large company with corporate headquarters in Moscow. All decisions on quantities, prices, and physical facilities, and therefore capacities, are made there. Each industry is like a division and their “division staff” is organized as an Institute.

Institutes seem to be sort of a combination university, technical college, and corporate staff function all in one. Research is carried out, product design is done, and training of personnel for that industry all seem to be done here.

Whether this perception is consistent with the facts or not, it certainly provides a framework for thinking about what we saw and is consistent with some behaviors of Soviet industry we have read.

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We had concerns about their perception of a free-market economy. One plant had on display miscellaneous consumer goods which they had produced. They were very nicely done and were probably selling well within the Eastern countries where alternatives are scare. The plant management was anxious to find markets in the West for these goods. We had doubts about these products competing with similar goods produced in the West and designed based on consumer research and competitive analysis.

Another manifestation of these differences is what would appear to have been a freezing of wages and prices at early revolution levels. For example, we heard that the price of an Aeroflot ticket from Moscow to Leningrad for a Soviet citizen was only 18 rubles. That is roughly equivalent to $3.00 U.S. But, it is just less than 10 percent of the typical family income of 230 rubles (about $40.00 U.S.). A graduate engineer's starting salary is about 120 rubles ($20.00 U.S.) per month.

Nearly all housing is owned by the government and the rent and utilities for an apartment are about 30 rubles … if an apartment is available. Other prices are on the same scale except that some items are quite expensive. For example, it was reported that shoes ” could easily cost the better part of a month's wages, and several complaints were heard that autos were priced substantially in excess of cost. (On the other hand, we heard that the consumer art is not in “buying,” but in “getting” what you need.)

The prices are low for at least two reasons—government subsidy and accounting differences. Since the plants are owned by the government, performance measures can be simply the degree to which they meet the plan, not whether they make a profit. Thus, prices set centrally need have nothing to do with the full cost of production. Further, with government ownership, the cost of the capital facilities is immaterial in determining cost of the product produced. Depreciation expense has no significance. Decisions on additional plant capacity are apparently made centrally and depend more on perceived social need and availability of funds rather than on return on investment.

With disparities such as this, roughly a factor of 50 times in wages and most prices relative to Western comparable, it is easier to understand the wrenching changes in store as they adjust to an open-market economy.

HOUSING

By far, the majority of housing in the areas we visited is in apartment buildings. There are some 300-400 apartments in a building and 20-50 buildings in a complex. The first floor of most of these apartments is retail space. Apparently, most of the needs of those in the complex are met by these retail shops. The real plus from this is that we saw no shopping centers with acres of asphalt paving for parking cars. Therefore, the need for cars is not as great; which is important, because the service station as we know it is practically nonexistent. And, those we did see had very long lines of cars waiting for fuel. In one instance, we saw a gasoline truck stopped on a street dispensing gasoline into what appeared to be 5-gallon jerry cans which customers then carried back to their cars. News accounts of the price of gasoline in Poland made this even more poignant.

On the other hand, public transportation is at least adequate and in some cases excellent. There are lots of buses, many of which are electric trolley-type. The subways, particularly in Moscow, are close to if not excellent. Service is frequent and inexpensive, the cars and stations clean, and, particularly in Moscow, the stations are micro-museums in that they have beautiful chandeliers and the walls are not only tile-covered, but have really magnificent mosaics. Several members of the team rode the subway from the Cosmos Hotel on the north side of Moscow to Gorky Park on the southwest side, stopping at each station along the way to view the art.

THE PEOPLE

With the exception of a few young couples, the people on the Moscow subway seemed morose, avoiding eye contact to a greaterdegree than on any other subway we have ridden. On the other hand, while visiting the Kremlin and Red Square, there seemed to be little difference in the behavior of people from anywhere else we have visited. In Tbilisi, Kharkov, and Leningrad we seemed to have more opportunities to interact with ordinary folks. On landing at Tbilisi we wondered if they realized we were coming as the bus had not arrived to pick us up. Some adventurous members of the team found the cafe/bar downstairs. One group of young men joined us in conversation and invited us to sit at their table. Soon there was some degree of indifference about when the bus would come. It was the same in the bars at the hotel in Tbilisi and Kharkov, where other clientele readily joined in conversation, and in our roaming around Leningrad.

At no time during our visit was there any evidence of negative attitudes toward us or our respective countries. Indeed, there were numerous expressions that verged on a respect and thankfulness that Western countries had maintained a model of freedom and effective economies from which Soviet citizens could derive a vision of what could be in their country.

Our hosts were especially gracious, often in the face of mutual frustrations resulting from misunderstandings about expectations of our visit. (They had visualized the Project Management Institute as being similar to their institutes, as described above.) All were willing to talk. Some were quite frank. Some were quite surprised to learn of the effectiveness of modern project management methods such as the design and construction of a 20-story office building in 24 months. In most instances, while expectations probably had not been met by either side, the experience had positive elements that seemed rewarding to both.

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The absence of a free-market economy is in part as myth. There area large number of “budding” entrepreneurs, or should we say, hustlers. Young and old alike have merchandise to sell to the tourist, ranging from elements of Red Army uniforms to very nicely done art and books. These could be obtained for anything from a pack of cigarette to “hard currency,” i.e., other than rubles. These vendors were immediately around whenever a bus stopped. They were along the streets. They were in the restaurants, often disguised as waiters. They were even on Aeroflot, serving part-time as stewardesses. Yes, on our flight from Moscow to Tbilisi, the stewardess was selling a variety of gift items, apparently for her own account. Speaking of Aeroflot, that is the only airline of our experience which sells SRO tickets. Three people completed one leg of our trip standing during takeoff, the entire flight, during landing, and, yes, even during the taxiing to the ramp. They seemed perfectly happy with that arrangement, especially when compared to the alternative of not flying at all.

FEELINGS

Team members can speak for themselves in this respect, but a majority seemed to share most of the following

  • There was a strong sense of wanting to be friends with the people we met. Indeed, a statue in front of the Cosmos Hotel in Moscow epitomized the purpose of the trip … a lady holding an olive branch in one hand and a dove in the other … friendship and peace, a toast that was repeated often.
  • There was a sense of sorrow that a people with so much potential had realized so little of it. While there are many good things about their situation, clearly it is not satisfactory to many of them.
  • There was a desire to be of help to them as they struggle with the changes they are trying to make in their society. Yet there was a recognition that help could only be effective if it was sought.
  • There was a fear that their expectations far exceeded their capability to make new concepts work effectively and efficiently. This was probably one of the most serious concerns as we conjectured as to what could happen if their expectations are not met and they become subject to demagoguery.
  • There was a sense of the anomalies in their society when compared to many Western societies. While much of their technology seems antiquated, they have some very advanced technology. It would seem that there has been less technology transfer from the military/space industries to the consumer industries than has been the case in the West. They seem to value the arts more than possessions. They seem to value children more, as witnessed by the Children's Theater in Moscow. They seem to value family at least as much as anywhere else we have visited. They certainly value education, as evidenced by a 97 percent literacy rate.
  • Finally, for me at least, there was a sense that as they progress in adopting and adapting the market economy, they will be formidable competitors. But, in the analysis, it is far better to be vigorous competitors in the economic environment than on the battlefield.

Das vidanyah!

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