JEDDAH: There is a plentiful supply of big businesses and mega projects in the region, but they are often hindered by a lack of accountability and transparency, poor communication and an unwillingness to adapt to change, delegates were told at the Top CEO Conference.
But the problems that often impede business in the region are not just with the management, the conference at the Bay La Sun Hotel in King Abdullah Economic City heard.
There is also a reluctance among individuals lower down the ranks to ask questions, or come forward and say “I don’t know,” or admit to having made a mistake.
Miguel Sousa Lobo, a professor in decision sciences, currently based in Abu Dhabi, said that a recent Google study found that influences over an individual’s performance were not just about their ability.
“They (Google) were surprised to find that psychological safety was more important factor for their performance than the technical skills,” Lobo explained.
Staff need to feel confident, he said, to be able to come forward when they needed support without fearing repercussions.
Having the right people is key
In 2009 Iyad Malas was brought in as the CEO of the Majid Al-Futaim group, which has a number of shopping malls in the Gulf and also holds the franchise for Carrefour, after the financial crisis.
He remained with the company until April 2015. He is now a partner at the equity firm Gateway Partners.
For him the key to success was to think strategically, assess the priorities and admit there are problems.
“A big problem that big companies have,” Malas said, “is that they are in self-denial.”
He said managers needed to look at the grass roots of the company, reassess the team and exploit the opportunities that came with the crisis.
“Execution is about having the right people.” Malas added.
The key to good management, he said, was enabling staff to own tasks.
“(Managers need to) delegate the responsibilities to the people at a lower level of the company who can make the decision,” Malas explained. “Because if you want to grow, you can’t have everything going up.”
But when the company that is being expected to make these changes is family owned, then convincing the managers/owners to adapt to change becomes the challenge, Malas explained.
Where the owner is involved, Malas said, there was often a reluctance to accept people from different backgrounds into the organization. They own the business and risk making the job of running the business personal.
“You need to professionalize the business.” He said
One-size doesn't fit all - local knowledge matters
And with bigger companies, that have multiple branches, there is also a need for the top end management to allow each branch’s managers to take control.
“The larger the organization, the larger is the responsibility and accountability on employees in senior and junior positions,” Malas said, adding: “Each store manager operates as the owner of that store.”
He said the locally-based managers would have a greater understanding of the needs of their customers – adding that “the consumers are different in each city.”
And it was this local knowledge, he said, that placed more responsibility on the people on the ground.
Of course, the success of a business is not based on the people alone. Companies need to be flexible in their approach.
This means that the initial vision for a project, however big or small, is not necessarily what comes into being when the project is complete.
At the Top CEO 2018 conference Fahd Al-Rasheed, CEO and managing director of the King Abdullah Economic City project, admitted that the initial plan for the city had changed dramatically.
Mega projects can only succeed if they adapt
He told delegates during his opening remarks of the day-long conference, that there were critics who had opposed the decision to allocate vast plots of the site to arts, leisure and entertainment.
“Mega projects are based on a master plan,” Al-Rasheed said. “Master plans must be flexible, we changed it (the King Abdullah Economic City project) four times during the last 12 years to adapt to the changes we have seen socially and economically.”
And he added: “For example, since we are in an age of entertainment, we took 10 million square meters out of the masterplan and designed an integrated a theme park-based development.”
The Gulf region has an abundance of mega-projects. But Al-Rasheed said several problems often hindered managing such projects.
He said the costs were often underestimated, while the perceived benefits were oversold and there was often a shortfall in the efforts at the design phase, as well as a lack of organization.
“20 percent of the cost can be saved buy spending more time in the design phase,” he said.
The discussion concluded that business in the region could be improved if they gave more focus on accountability, managed expectations, were more transparent and learned to listen more.