Meet the consultant helping with KSA’s transformation strategy — and quest for happiness

Updated 18 July 2017
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Meet the consultant helping with KSA’s transformation strategy — and quest for happiness

Saudi Arabia’s Vision 2030 has been compared to a road map for the Kingdom’s future. It is intended to be a far-reaching, ambitious and transformational strategy that 13 years from now will have fundamentally changed the country’s economy, culture and society. But how will policymakers know, in the course of their journey, that they have not mistakenly taken a lengthy detour or strayed off the route altogether?
They will look to Esteban Gomez Nadal, the Dubai-based managing director of global consulting firm Palladium Group, for directions. The 54-year-old Spaniard is responsible for the performance management systems installed in the Kingdom’s government infrastructure to tell the leadership if it needs to go faster or slow down, or if it has got the pace of change just about right.
After a career as a top executive in the telecommunications and media sectors, which took him from his native country to New York, he joined Palladium in 2002. “I’m one of these strange consultants who had executive managerial experience before I became a consultant. Usually, it’s the other way round,” he said. That experience gives him an expert eye for strategy development and implementation.
He is in no doubt that the Saudi experiment deserves to succeed. “The transformation strategy, in my view, is the only way for Saudi Arabia to go. There are challenges, of course. The involvement of the private sector in the diversification strategy is crucial. You have to get alignment between priorities and the available skill set, which raises issues of education and gender,” he said.
Having worked on women’s empowerment projects worldwide, he believes this aspect of the strategy is crucial. “The incorporation of women into the strategy is a big opportunity. Saudi women are among the most talented, intelligent and hardworking I’ve come across anywhere in the world,” he said.
We met in Palladium’s offices in Dubai, located on Happiness Street in the Business Bay district. The address is appropriate because Palladium’s aim is to maximize happiness in societies and economies. The 50-year-old organization is a management consulting firm owing much to the influence of two top executive theorists, Robert Kaplan and David Norton — but with a difference, as Nadal explained.
“We focus on designing and managing complex multi-actor products with a view to implementation and execution. That’s key. It’s easy to sit down and think up a plan, but implementing it is the challenge. Execution should be an integral part of the management process,” he said.
Palladium’s guiding principle is “positive impact.” Nadal said: “We define this as ‘the intentional creation of enduring economic and social value,’ and each of those words is very carefully chosen. It’s not only about making money. You have to create the right conditions to be able to share that value with the communities you’re dealing with. There has to be a connection between competitive commercial advantage in the business world and corporate social responsibility.”
Palladium’s Saudi office in Riyadh has 48 permanent staff, of whom 70 percent are nationals. Saudi policymakers have hired an army of consultants and advisers such as McKinsey, the Boston Consulting Group and others to help work out the strategy, but it has to be implemented at a local level.
It is essential, Nadal believes, to get buy-in from the national community and from the ranks of middle executives, who are generally responsible for implementation of a strategy that has been decided by senior management.
“The other key is that the plan has a better chance of success if it’s coming from inside the company, rather than being imposed on it from outside. So you have to try to enable the executives of the company to do it for themselves, to make them responsible and to take charge of it. We have to persuade people in Saudi Arabia to take responsibility for the transformation process. In my experience, they’re more and more willing to do that,” he said.
Nadal’s involvement in Saudi Arabia came via the Labor Ministry when Palladium was hired by then-Minister Adel Fakeih in 2008. When Fakeih later moved to the Ministry of Economy and Planning, he remembered the work Nadal had done on youth employment projects, and when the time came for work to begin on the National Transformation Program (NTP) 2020 and Vision 2030, Palladium was well-placed to help deliver the strategy.
A stream of consulting projects followed. “We also worked on the Affordable Housing Plan and the Sustainable Agriculture Initiative, as well as the Municipal Management System for Jeddah. We did some work for the Riyadh Chamber of Commerce on the role of the private sector in the Vision 2030 strategy, and for the Saudi Arabian Monetary Authority (SAMA) a couple of years ago on financial strategy and implementation,” said Nadal.
He is not, so far, involved in the Vision’s flagship initiative: The planned initial public offering (IPO) of Saudi Aramco. “I’d love to get involved in that. It’s so crucial,” he said.
Palladium’s main project regarding the transformation strategy is being done via Adaa (Arabic for “performance”), the National Center for Performance Management. “It’s designed to measure progress in implementation and achieving set milestones over monthly, quarterly and yearly timeframes. If there are, for example, 15 measurement criteria, Adaa will measure each one to see how much progress has been achieved toward reaching those targets,” Nadal explained.
Vision 2030 is not the first time Palladium has been called in to help with a national strategic plan. In 2006, Nadal was part of the team that worked for Abu Dhabi’s government to produce the Vision 2020 Plan, which also aimed to reduce the emirate’s economic dependence on oil. That led to other projects in the UAE, notably the implementation of the Emirates ID system of registering residents’ details on a central computer.
Now everybody living and working in the UAE has to have an ID card, which Palladium was instrumental in introducing. “We created the strategy from A to Z, and had such buy-in from the whole team that they were convinced they did it themselves,” said Nadal.
That led to Palladium’s involvement with Dubai’s plan for “smart city” status, an ongoing project designed to integrate communications and information technology into the emirate’s urban infrastructure. Launched in 2016, the plan will affect all aspects of life, from government services to transport and education.
“Dubai is actually pretty efficient compared to some other places in the region. It has managed the execution process better than some others,” he said
He related a story about Shiekh Mohammed bin Rashid Al-Maktoum, ruler of Dubai, receiving reports from experts all recommending the introduction of an income tax, but he dismissed them all.
“He thought that if his officials came to rely on tax for their income, they’d cease to care about money and be less efficient. Smart Dubai is a typical multi-sector product that cuts across all groups and interests. It has a big database that allows the Dubai government to run the city efficiently,” added Nadal.
The end product of the “smart city” initiative is to increase happiness in Dubai. Last year, the UAE government launched its “happiness” initiative, which involved setting up a ministry to promote happiness as a goal of government strategy, complete with its own happiness minister. Skeptics worldwide derided the idea as a meaningless concept, but Nadal insists it is a practical strategy for organizing a political entity.
“It’s a customer-centric approach to running a country or a city. Traditionally, government and politicians tend to forget about their citizens and residents, but we’re taking that aim to the frontline of government action. It’s a bit like the sentiments behind the Gettysburg address (the famous speech by US President Abraham Lincoln during the civil war in the 19th century) — government of the people, by the people, for the people,” Nadal said.
On the cynical reaction to the happiness strategy, he added: “I don’t think the West really understands the Middle East. It’s impossible to measure what happens here with the same practices that take place in the West. I think we’ve already seen a change for the better. Dubai will survive and thrive if it can keep its citizens happy and attract permanent residents. It could be a bit like Miami.” But Nadal said the issues of retirement and residence would have to be resolved first.
Palladium’s role in the happiness project is to measure and evaluate the impact of government initiatives in six key areas: Information technology, the environment, productivity, social inclusion, quality of life and physical infrastructure. It will coordinate and collate data with reference to key performance indicators (KPIs) that will enable the project’s strategy head, Noora Al-Suwaidi, to assess progress toward its achievement.
While the idea of a “happiness meter” will be greeted with skepticism in some areas, it is becoming an increasingly important yardstick for policymakers and strategists worldwide. “Organizations, public or private, that make conscious, data-driven decisions to create positive impacts for their customers, employees, suppliers and communities are setting themselves up for sustainable economic prosperity and urban living,” said Nadal.
Sustainable economic prosperity is also the aim of Saudi Arabia’s Vision 2030. “This is all part of the transformation that Mohammed bin Salman, the crown prince, wants to promote. Can the Saudis achieve it all despite the challenges? Yes, I think they can do it because they have one key advantage: Leadership. They have all the elements for success, and now it’s in their hands. We’re pleased to be helping them,” Nadal said.


Going, going, gone: A slice of Europe on Dubai’s doorstep

Updated 17 August 2018
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Going, going, gone: A slice of Europe on Dubai’s doorstep

DUBAI: Billionaire investors from Saudi Arabia are snapping up a slice of Europe — minutes from Dubai’s coast — as work on a luxurious man-made archipelago gathers pace.
On the emirate’s “The World” archipelago, the Heart of Europe project provides a series of island destinations, made up of opulent palaces, island villas and 13 luxury hotels on six small islands. Each offers a different aspect of European life and aims to bring European hospitality “with a Maldivian twist” to the Middle East’s Arabian Sea.
According to its developer, Joseph Kleindienst, chairman of the Dubai property developer Kleindienst Group, wealthy investors across the Kingdom are among the most prominent buyers of the multimillion-dollar properties being developed on the island, with almost a quarter of investments to date being made by Saudi nationals.
“We have a very good interest from Saudis in the Heart of Europe project,” said Kleindienst, speaking to Arab News during a private tour of Sweden Island. “Here in Sweden Island, soon you will find very, very famous Saudi names. It is not for us to disclose these names, but later on, as the development grows, you will meet very interesting Saudis here.”
The Heart of Europe is the first big project to go ahead as part of The World project, a 60-square-kilometer archipelago of more than 200 islands laid out in the shape of a world map, which was created from millions of tons of sand and rock. Currently, Lebanon Island is the only one open to the public; it operates The World Island Beach Club.
Construction of the Heart of Europe project was due to begin in November 2008 but was delayed by the global financial crisis. Development finally began in 2014. The project’s value has grown from an initial Dh1.5 billion ($408 million) equity undertaking by the Kleindienst Group to Dh5 billion ($1.36 billion) after sales.
On Monday thousands of workers at Heart of Europe were busy across the islands striving to get the project ready for the completion deadline of 2020, ahead of Dubai’s Expo; with an initial focus on Germany Island and Sweden Island.
The Heart of Europe has 10 beach palaces on Sweden, 32 beach villas on Germany and 131 “Floating Seahorse” villas, marketed as the world’s “first luxury underwater living experience.”
Kleindienst expects that all of the homes for sale across the Heart of Europe project will be handed over by the end of this year.
In total, 4,000 residential and hotel units will eventually be available across the project, about 1,000 of which have already been bought by investors, Kleindienst said.
Besides handing over residences to owners by the end of the year, The Heart of Europe is due to have the first of its planned hotel “soft openings,” at the Portofino Hotel in Italy, in December.
Lying five kilometers (3.1 miles) off mainland Dubai, the Heart of Europe will feature Italian, Spanish, Swedish, Swiss and German architecture as well as landscaped gardens and streets that will, in some cases, feature artificial snow, due to climate control technology. And, for those who miss Europe’s winter drizzle, some streets will also feature artificial rain.
Sweden will feature 10 Scandinavian-style villas. This week, the Kleindienst Group unveiled the first completed six-floor Sweden Beach Palace, and invited Arab News for a viewing.
With a price tag of Dh100million, the villa comes with Bentley Home interiors, seven bedrooms, a fitness center, an underground “snow room” that can be set as low as minus 5C, a Swedish massage room, an entertainment room and an observation deck — designed to mimic the upturned hull of a Viking ship — with 360-degree views of the Arabian Gulf.
Each property has its own private section of beach. The palaces also own a piece of the marine area plot, including a private coral reef.
Of the 10 for sale, three have already been bought by investors based in Saudi Arabia, said Kleindienst.
Saudis, along with other wealthy Middle Eastern residents, are an important segment of the investors the Kleindienst Group hopes to attract. “It is an excellent product for investors from Saudi Arabia because we are selling this ‘second-home’ concept here in the Heart of Europe.
“People from Saudi Arabia can travel to Dubai and enjoy their time in the Heart of Europe. And when they are not here, we hope they can rent their homes out and produce an income from the property,” he said.
Heart of Europe properties are not for people to live in 365 days a year, but for the uber-rich looking to snap up a second home in the Middle East, with a unique setting.
Kleindienst said that the project is Dubai’s first purpose-built luxury area offering UAE residents a holiday property in their own country, rather than in the Maldives, Mauritius or Seychelles.
“The second-home market is a new concept for Dubai,” he said, adding that while New York has places such as The Hamptons and many cities in Europe have countryside and seaside getaways, Dubai has lacked a luxury weekender destination.
“The Heart of Europe is a unique and ambitious project aiming to develop Dubai’s luxury freehold second-home market in an idyllic island location,” he said. “Our journey to date has taken us to the unveiling of the Sweden Beach Palaces, one of the most luxurious freehold second homes in the UAE. Our vision is turning into reality.”
Aside from Sweden Island, Saudis are also snapping up the Floating Seahorse vessels, which come with a slightly less eye-watering price tag of Dh16million, said Kleindienst. Of the 131 for sale, 60 have already been bought, he said. Figures from April show that about 40 percent of the buyers are from the Kingdom.
On the tour, Arab News saw a completed prototype. The bespoke one, two or three-bed floating homes have bathrooms and bedrooms below sea level so owners have only a pane of glass separating them from hundreds of fish and an abundance of marine life as they sleep and bathe.
Kleindienst hopes the Heart of Europe project will be the catalyst for world-breaking firsts, including a record he aims to break this year.
The soft opening of the 488-room Portofino Hotel, located on the Main Europe Island, will take place on the last quarter of 2018, despite only breaking ground on the construction site this year.
“No one has broken ground on a hotel, then completed it the same year,” he said. “We want to show that it is possible. That anything is possible. That there is the ability to build a hotel in a year on an island.”