Learnings from our latest Forum in Dubai on why organisations may view the region as a fertile base for international growth and what the critical success factors might be.
A benign environment for growth
The Middle East has long been a trading and communications hub, connecting Asia and Europe. Now, in a rapidly digitalising, decentralising and decarbonising world, it can also provide a benign environment for accelerated innovation and international growth.
Here, concentrated private capital looks for sustainable growth and legacy over an inter-generational time horizon, whilst stable governments with ambitious visions create business and talent-friendly environments, encouraging world-class innovation and long-term investment.
Dubai and the UAE may have established the model. Now, Saudi Arabia, with its much larger market, is racing to catch up and get ahead.
So why don’t we see more global brands and businesses born and built out of the region? And what other ingredients might be required in the recipe for success?
Combining consistency and difference
Achieving sustainable international brand or business scale requires consistency: of purpose, mission, culture, control, and leadership. But there are significant differences between neighbouring states in the Middle East, even within the Gulf Cooperation Council (GCC) countries: in market size, freedom, maturity, regulation, ways (and days) of working, and neighbourly relations, so something more subtle than a cookie-cutter approach is required.
Examples of success from multiple sectors point to the benefits of a hybrid approach; combining global mission-control leadership, centres of excellence and corporate functions, with local empowered operational leadership, local scalable support and partnerships (and, where required, local legal entities).
It may look different depending on where you choose to headquarter the business but might there be a blueprint for Middle East-based growth?
From a revolving door to an escalator for leadership talent
Achieving sustained, intergenerational growth requires a sustained, intergenerational approach to leadership development. But historically, the GCC region has relied heavily on expat senior managers, often on short-term secondment with insecure tenure, perhaps motivated by money more than mission, sometimes leading to permanent residency, but too frequently leaving a gap in local capability.
The challenge remains to develop and retain homegrown talent and long-term leaders. Different countries are helping in different ways. Saudi Arabia develops local leadership capability by sending nationals to Ivy League colleges in the US, whilst Dubai is doing more to attract expat leaders to live permanently in the Emirate.
But businesses themselves need to do more:
attract talent on the basis of mission as much as money
shift remuneration to reward longer-term growth
a better planned approach to succession at all levels of leadership
build a smart, sustained approach to growing in-house leadership capability (including second and third generations who will be relied upon to drive innovation, secure founders’ legacies and ensure long-term sustainability).
Perhaps it is time to judge today’s expat leaders not on short-term results but on the legacy of leadership capability they leave behind to deliver long term growth?
From command and control to mission and climate control
Delivering sustainable success at scale, across multiple markets, in an increasingly uncertain and unpredictable world, depends on developing aligned, empowered, agile, effective leadership at all levels, across all parts of the organisation.
Imagine running an education business with many schools across multiple countries. The successful delivery of the educational proposition and experience day in, day out will depend on leaders at all levels, in all schools, understanding and believing in the mission of the business, being aligned to its values in their attitudes and behaviours, and having the agency to act and adapt as necessary.
Your role in that scenario is to develop and sustain that leadership, creating the alignment to ‘mission’ and the ‘climate’ for empowered, agile, effective leadership at all levels.
However, within many businesses in the region, in part due to overreliance on expat leaders with insecure tenure, there is a prevailing ‘low trust’ controlling environment. The challenge in these businesses is to encourage ‘psychological safety’ – where people lose their fear of ‘doing the wrong thing’ and have space to test, learn and improve, with greater delegated authority for self-organising teams, building reciprocal trust at all levels.
Perhaps it is time for leaders to think of their role as being less about ‘command and control’ and more about ‘mission control’ and, more importantly, ‘climate control’ – with a focus on organisational culture, context, and creating the conditions for teams and individuals to thrive.
For more information on our roundtable discussions, visit our Forum page.