Category Archives: Leadership

Strategic Planning in Transformations and Turnarounds

January 22, 2020 By in Strategy, Leadership, Corporate Turnaround, Corporate Transformation Tags: , ,
This entry is part 3 of 4 in the series Corporate Transformation

This is the third in a series of articles on corporate transformation, focused on my experience in the GCC. In the first article I developed a framework to define the current state of a company: leader, obsolete, stressed, and distressed. Identifying the current state then allows me to select a strategy type to develop: innovate, transform, transition, and turnaround. In the second article I introduced the first phase of strategic planing, which is the organizational diagnostic. This  first phase determines which of the four states the company is currently in. In this third article I describe the main phase of strategic planning that I use.

Organizational triage

The organizational diagnostic will usually result in identifying some quick wins that will have a material impact on the business. When a company calls in external executive management to manage change there are usually two main reasons:

  1. The existing executive management is competent in its job and just needs support planning and executing change while they continue to run the business; and/or
  2. The existing management cannot or will not effect change.

Which scenario is present will come out during the organizational diagnostic phase. If the second scenario is present it is critical to resolve the issue immediately. This leads to two immediate tactical changes necessary for the development and execution of a transformation / turnaround strategy.

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A letter from the CEO you should have had

August 11, 2017 By in Leadership, HR, Leadership Cornerstone Tags: , 1 Comment

CEOs have not valued their employees equal to the rest of their stakeholders.

Today I write the letter that your chief executive should have written to you. I’m assuming you are a man, but it is the same for a woman. Well, most of it, I won’t get into the issue of sexism as that would require whole volumes.

Dear Employee,

I would like to apologise to you. The past three years have been challenging, stressful and, quite frankly, confusing. It is a situation that I have never seen before, that no executive can be prepared for. This situation has created multiple dilemmas for me on how to manage the company. I have focused on profits, I have focused on the board, I have focused on shareholders, I have focused on suppliers, I have focused on clients. To my greatest shame I have not focused on you.

Did I start this letter with “Dear Employee”? I should have said “Dear Valued Employee”.

To apologise and to make amends I must first walk you through what I faced. In mid-2014 oil prices dropped fast. These things happen. It was a point of concern, but not much. All media reports and announcements from the relevant authorities pointed to a short-term price correction. Every indication was that the oil price would recover back to over US$100 per barrel within months. Continue reading →

Souq’s success reveals the kind of CEOs we need

April 25, 2017 By in Leadership, Management Tags: ,

Souq.com, a private entrepreneurial company, sold for more than Dh2 billion this year while in the same period at least two large listed companies, one with a sovereign wealth fund backing it, required Dh500 million to Dh1.5bn in new capital.

Understanding the difference between why an entrepreneurial company was so successful in a period when organisations previously perceived as successful now need huge amounts of capital injections and/or lay-offs is key to understanding the future of our economy.

I have been on both sides of the equation – an executive at Union National Bank, Shuaa and Credit Suisse Saudi Arabia as well as an independent investor and entrepreneur. Importantly, these are not two separate parts of my life, I have crossed back and forth several times.

I have spoken numerous times on how our social culture, which is non-confrontational, is unfortunately transferred to our business culture, leading to a large number of “yes” men.

Here is why this is not optimal. CBS News has an article that describes the institutionalised management environment that I have seen. The article uses as its basis a study by researchers from Northwestern University’s Kellogg School of Management and the University of Michigan, Set up for a Fall: The Insidious Effects of Flattery and Opinion Conformity toward Corporate Leaders, in Administrative Science Quarterly.

The study finds that chief executives “who have acquired positions of relatively high social status in the corporate elite tend to be attractive targets of flattery and opinion conformity from colleagues”, which can harm the company increasing the “CEOs’ overconfidence in their strategic judgment and leadership capability”, which results in a reduction in “the likelihood that CEOs will initiate needed strategic change in response to poor firm performance.” Importantly, the study found that this leads to a long-term continuation of the company’s bad performance.

The former British prime minister Tony Blair says it more succinctly: “The art of leadership is saying no, not saying yes. It is very easy to say yes.”

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NBAD and FGB's Merger Challenge: Work Culture

July 12, 2016 By in Leadership Tags: , , , 1 Comment

In my last article I talked about the two main paths that the merger of FGB and National Bank of Abu Dhabi could take. The first is simply extending the current business of each by using the path of acquisition rather than organic growth. The second is to trigger a radical redesign of the business model. I concluded that it made strategic sense for FGB and NBAD to take the second path. In this article I touch on how that can happen.

FGB and NBAD are banks and banks, in the end, are predominantly about service. The product part is simple. Money: you can deposit it with them and you can borrow it from them.

The price part, interest rates, is also simple. It has nothing to do with the cost of manufacture as banks don’t manufacture money and besides it is mostly electronic. No, price is driven by the human resources running the banks as well as market supply and demand of money. Since this is driven by people, we can conclude that banks are in the services business.

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Tim Clark and Emirates Airlines get Proactive with a Three Pronged Counter-Attack

July 1, 2015 By in Leadership Tags: , ,

Emirates Airlines, headed by Tim Clark, are taking the role of a modern-day Rocky Balboa, climbing against all odds to the top of their business and getting attacked for it. Tim Clark’s proactive response is a relative first for a GCC company. As other regional companies grow globally they too will be faced with aging, inefficient behemoths that will try to spin doctor them out of their markets. These nascent GCC companies could learn a thing or two from Mr Clark and Emirates Airlines.

Wild unsubstantiated allegations against the GCC and playing to the xenophobic tendencies of certain groups are nothing new. What is completely new is the response. The modus operandi so far has been for the victims of such spin doctoring to meekly withdraw and try to protect their interests via back channels.

Tim Clark and Emirates decided to fight fire with fire and just as they have dominated the global long haul airline industry they look set to dominate this public debate.

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Leadership versus Management: Myth and Reality

April 21, 2015 By in Management, Leadership Cornerstone, Leadership Tags: ,

The “Leadership versus Management” debate has mushroomed, infesting every corner of the business media space. Sadly, the debate has devolved into a polarised view of leaders as empowering saints and managers as narcissistic hell-spawn. This is not only wrong, it is harmful.

Leadership and management are simply roles. Anyone in business who fills just one role and not the other will fail spectacularly. Not knowing when each role is appropriate will also stifle an executive’s career.

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The Importance of a Culture of Trust

April 7, 2015 By in Leadership, Management, Leadership Cornerstone Tags: , , 1 Comment

This blog recently talked about the importance of trust-based systems, as opposed to personal trust. This article continues investigating the role of trust in business with a focus on the importance of building a culture of trust.

The prime mistake made with respect to building a culture of trust in a business is believing that the aim is to have senior employees trust more junior employees. This is the complete opposite of what is needed, and the core reason that so many corporate cultures lack an element of trust.

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The Breeding and Nurturing of Ideas

February 3, 2015 By in Leadership Cornerstone, Leadership Tags: ,

I must own up to something. I am not a prolific writer. I get that compliment quite often by readers of my articles. But I do not produce 3 to 5 major ideas a week. I harvest them.

What do I mean when I say that I harvest my ideas? Nobody can come up with so many ideas on a consistent basis. My ideas did not form in the days before I wrote an article. They formed over the period of my professional career, and even before that. And when I needed them, either to do my job or to write an article, well there they were.

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Leaders are the Drivers of Corporate Change

November 18, 2014 By in Leadership Tags: , ,

The Change Management industry is doomed. Change means uncertainty. Uncertainty means risk. Risk means danger. Humans are genetically coded to avoid danger. Therefore they will always resist corporate change.

Change management consultants (‘CMCs’) will advise that winning employee buy in is critical. But how do you do that? How do you convince employees that an unknown future is better than a known present? Maybe if the present is really bad, but by then things are usually too late. Continue reading →

Leadership ≠ Dictatorship

October 19, 2014 By in Leadership Tags: , ,

In an executive position that I previously held I was building out my team and the company had a policy of recruiting internally first. This policy appeals to me in principle in that it gives employees the chance to widen their skill set and reduces recruitment costs. In theory I should also have access to superior information on the employee, but as it turns out human nature and unethical behaviour circumvents that from happening. Continue reading →