Thanks largely to record oil prices, prudent economic policies and a series of reforms initiated by Custodian of the Two Holy Mosques King Abdullah, Saudi Arabia is currently enjoying an unprecedented boom. In a world beset by recession and layoffs, the Kingdom stands out as a center of attraction for foreign direct investment. In a little over three years, Saudi Arabia notched up 23rd rank on the World Bank’s Ease of Doing Business Index. It was previously listed at 67. However, with rapid growth comes challenges. With a view to getting an insight into these challenges, Arab News spoke to Tommy Weir, the managing director of the Beirut-based EM Leadership Center. Weir specializes in strategic leadership development for fast-growth and emerging markets. According to Weir, the Kingdom is facing a shortage of nationals with corporate leadership qualities. He feels there is an unprecedented imbalance in the expat-national ratio when it comes to holding private sector leadership postings. In such a scenario, he feels his center can play a decisive role in providing unique leadership solutions.
Following are excerpts from the interview:
Saudi Arabia is undergoing major economic reforms. The private sector is also playing an important role in the Kingdom’s development. However, it seems there is a dearth of local leaders. How can this gap be filled?
If I were the government of Saudi Arabia, this is the issue I’d be most concerned about. The Kingdom is experiencing one of the largest youth bulges in the world and what this means is that unemployment is going to escalate if Saudi Arabia does not tackle the shortage of Saudi leaders in the private sector. Currently there is an imbalance in leadership. On the surface the solution is simple, but the implementation is long and difficult. The remedy for this rests with both the government and private sector. Both are going to have to work in partnership and make substantive changes. For example, the government needs to encourage the local population to seek employment in the private sector. And they need to continue to invest in developing Saudi leadership skills to be able to compete with the expat leaders. The two hardest parts of filling this gap will be (1) convincing the expat private sector leaders to make the necessary (and appropriate) investment in developing Saudis to be the leaders of the private sector and then stepping out of the way to allow them to lead.
(2) For the local leaders not to fall into the trap of some of the other GCC (Gulf Cooperation Council) countries and expect to be leaders in a way of entitlement. Rather, they need to understand what it takes to lead in the private sector and work hard to achieve it. On both sides, this can be summarized as a paradigm shift in thinking. It is achievable, but only with focused hard work.
What is your understanding: Are the two sides, the public sector and the private sector, ready to work hand in hand and not just pay lip service?
Hard and possible unpopular word is what it will take. The advisers who are just giving policy input and not dealing with the social/organizational issues need to be removed and replaced with people who understand the complexity of the issue and have innovative suggestions to offer.
The Kingdom has a huge young population. What is lacking is talent. How can this be addressed?
Talent is not the real issue; it is just the manifestation of the real issue. For decades Saudis have preferred public sector employment and the family business patriarchs have preferred hiring expats. The real issue in the lack of talent is in regards to a performance mindset. Throughout the region the concept of performance is not at globally competitive standards and there are reasons for this. For example, the public sector (all over the world) is not known for producing performance-oriented employees; couple this with Saudi Arabia being a first-generation corporate society and what surfaces is that professionally, socially, and familiarly, the ideals of performance are not embedded into the fiber of life. Reports suggest that expats are hired because of the high pay demands of Saudis and that expats will work for lower wages. Yet privately, the leaders (Saudi and non-Saudis) talk about the fact the local work force does not work hard enough. So, what is the real issue? If we want to tackle the lack of talent, we need to be sure and tackle the real issue. To do so, we need to understand how talent is developed. Talent is not created by attending a training program or by getting a university degree. In the case of Saudis, it will happen by (1) understanding what the local development needs are; they are different than other markets, and need to be addressed accordingly. (2) Belief. By this I mean belief that Saudi talent can be developed. The unspoken reality is that both locals and expats question if it is possible to develop a competitive Saudi work force. We believe that it is possible, but the leaders of the private sector have to believe it.
Saudi Arabia has adopted various educational reforms. Do you think the educational system needs a major overhaul?
I am not an expert on Saudi Arabia’s educational system. Rather I am an expert on growing leaders and specifically on Arab leadership development. What we can say is that in addition to the efforts that are being made for Saudi educational reform, the focus also needs to be on how leaders develop. This happens through deliberate practice and giving youth opportunities to develop competitiveness, communication skills and commercial thinking. If you look at Western markets, you see those embedded in the culture and learned from childhood.
Saudi Arabia is dependent on a large number of expatriates. Should this reliance be curtailed or phased out or...?
A. Because of the youth bulge that Saudi Arabia is experiencing, the expat dependency needs to be curtailed in a timely and proper fashion; otherwise it will cripple the economy and the private sector. Saudi Arabia is in a very unique position because of the imbalance of the age of its population. As a result, heavy investment is needed in leadership development on the front end. The market will experience waves of people joining the work force and moving through it. Therefore, it is needed for the development activities and legislation to match this.
Saudi students invariably head West for higher studies. This surely is good, isn’t it?
I am curious about how many people this really affects. For those who do have the opportunity to study abroad, they will be exposed to alternative forms of doing business. Exposure is one of the fundamental elements in creating broader thinking.
Here many of the businesses are owned by single families. Is this healthy for the market?
Saudi Arabia and other parts of the GCC have exceptionally large family businesses. We do not need to focus on doing away with them, rather on what they will do to populate the private sector with locals and what they are going to do to develop future leaders.
The work force dynamics is changing in Saudi Arabia. How will Saudis adjust to such a situation?
If Saudis do not adjust, we can look into history and see what will happen. A work force reformation is the hopeful and possible question. On the surface, great amounts of adjustments are to be made. I am not privy to the private workings so I cannot comment in-depth except to say something must happen for the preservation of the Kingdom and its critical role locally and in the future global economy.
