Dr. Mohamed A. Ramady
Publication Date: 
Mon, 2006-06-05 03:00

A week ago something remarkable happened in Jeddah. For the first time in Saudi public sector history, a state owned enterprise contemplating privatization, held a frank dialogue between its senior management and its employees on the opportunities and challenges facing them before and after privatization. Under the banner “Future Horizons”, Saudi Arabian Airlines — Saudia — explored concepts such as change, competition, customer orientation, adaptation and survival without government financial assistance in the long term. This powerful message of change, privatization of the airline and the opportunities it provides was delivered in unambiguous language by Saudia’s Director General Dr. Khalid Ben-Bakr to the somewhat astonished managers of the company.

For the first time, a sensitive topic such as privatization, with all its ramification of change, personal employment uncertainties, and doing business in a different way from the past, was discussed in a frank and transparent manner. All too often the privatization process is a fait accompli to employees and this causes a lot of resentment and fear. One other option is to engage employees, a company’s most valuable asset, in the dialogue and get their commitment. Saudia has chosen the latter path. Senior Saudia management went on to explain in some detail how the privatization process is being contemplated, the various parties involved in such a complex operation, and the various options being considered for the airline’s restructuring. Managers were taken into confidence on the challenges and opportunities that this will entail and further dialogue between Senior Management and employees was promised as a lot of interest was generated at the meeting.

The mood of these participating in the event was palpable — some eager for the changes and challenges ahead, others more contemplative and somewhat fearful as is human nature when confronted with uncertainty. There was general appreciation however, that for the first time a major Saudi pubic sector entity was directly engaging its work force to participate and discusses, head-on, the issues that will face them all. Dr. Bakr made it clear that only as a team will Saudia survive and flourish in the face of more “open-sky” international and domestic aviation competition. To illustrate this teamwork approach, all Saudia managers attending were encouraged to take part in a team painting exercise, each team concentrating on small sections of a bigger picture which could only be fully comprehended when the individual team work was completed and put together.

The final result was astonishing — a giant mural of Saudia’s achievements over the years, and their ambitions for the future. It was not a Leonardo da Vinci masterpiece, but it served its purpose, as all those participated saw how they fitted together as a team and recognized gaps that needed to be filled going forward. Change and survival in a globalization age is what the Saudia gathering was all about, and the fact that privatization was at last discussed so openly was an encouraging sign for all other Saudi public sector entities still yet to be privatized. The conference did not of course address in detail major questions that employees sought to address straight away, such as what happens to their benefits after privatization, would their current Saudia pensions continue, how would they be rewarded and evaluated, would they remain at the same pay structures under a privatized airline and so on.

Saudia’s senior management were keen to emphasize that there will be no drastic measures taken initially, and that the privatization of Saudia would take into consideration all social and economic concerns until the new management and investors established their own operating markers and guidelines. To have falsely lulled employees that there would be absolutely no changes following privatization would have been unfair to many, and the Jeddah meeting got Saudia employees to at least think of the “bigger picture”. For carrying out this “first” dialogue in the Kingdom, Saudia is owed a lot of thanks, and it will be interesting to see if other Saudi public sector privatization candidates engage their employees in such transparent dialogues. The privatization path will not be easy, as witnessed in many countries, but at least Saudia employees will be able to judge for themselves whether they can or cannot be part of the coming changes from now. Those that do wish to remain will be committed to being part of the “big picture”. Thank you Saudia for showing the way ...

(Dr. Mohamed A. Ramady is visiting associate professor finance and economics at King Fahd University of Petroleum and Minerals.)

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