Caution is the word of the day GCC Economies

Caution-GCC Economies

 

  • We live in an interconnected world and geopolitical developments in Ukraine and Syria are bound to add volatility in global geopolitical environment and influence small and large economies around the world.
  • Further, the economic environment is undergoing an unusual shift, through unorthodox and new policy making in Japan, US and Europe.
  • In such a situation small sized GCC economies, which are also dependent heavily on commodity prices and transit of goods, should exercise caution, and not get swayed by the rosy pictures stock markets around the world are painting.

 

Recent events in Ukraine and the long term unresolved situation in Syria have been the source of many questions about long term effects to the geopolitical and economic environment. Needless to say we live in a very interconnected and globalized world and such events are bound to add to an increasing volatility in the global geopolitical environment that is bound to influence economies around the world. 

Such events come on the back of a very unusual economic environment whereby we are witnessing the unfolding of unorthodox and new policy making: Japan’s monetary policy, Fed’s unwinding or fiscal stimulus, the Euro ever present crisis and a US stock market that seems to no longer relate to the real economy. Therefore, regardless of the personal opinions we may hold on any particular event it is necessary to process these events and reconcile their potential effects with the economic decisions that we make today or that we plan to make tomorrow.

CAUTION is therefore the word that comes to mind when I reconcile geopolitical events in progress with economic indicators coming out of several G7 economies. And therefore CAUTION applies to smaller size economies like the UAE or the GULF that are much dependent on both commodities prices and transit of goods. The recent over-subscription of the Dubai IPO of Marka is a sign that ought to be evaluated carefully.

I would like to motivate my CAUTION advice by aggregating some key facts from around the globe as it is often difficult to cut through the clout of main stream media and especially the halo effect of the new Dow Jones records. Following are some of the warning signs around the globe:

  • Japan: Abenomics shock economic therapy is generating concerning effects: the plunging yen has crushed the Japenese purchasing power in spite of the growth in the stock market may have given the illusion for someone to get richer. The recent 15% correction may make the illusion disappear, especially if the USD/JPY breaks below 102. At the end all that will be left for the Japanese people is a soaring energy bill and ever increasing food prices. Japanese wages have been falling for 22 straight months with a fall of 0.4% in March only. In the latest news, Sony slashes profit outlook by 70% thanks to Abenomics.
  • China: The official Chinese PMI index misses expectations. As a correlated ripple effect: Australian PMI (greatly correlated to China) declined by more than 3 percentage points to its lowest point in nine months (6 consequent months of contraction);
  • USD: While the Dow Jones seems to continue its rally some of the fundamentals of the US economy don’t seem very rosy, signaling once again a strong decoupling between the stock market and the “real” economy. The below data doesn’t give us much confidence in US consumer spending and overall US demand.
    • During the “recovery” period 2010-14 employment gains have taken place only in low-wage industries while during the recession employment losses took place mostly in high to mid wage industries
    • While the US population has kept growing since 2007 there are approximately 1.3 million jobs less
    • 20% of US families don’t have at least a family member employed
    • Consumer spending for durable goods in the USA has dropped 3.23% since last November 2013
      • Lower-wage industries constituted 22 percent of recession losses, but 44 percent of recovery growth.
      • Mid-wage industries constituted 37 percent of recession losses, but only 26 percent of recovery growth.
      • Higher-wage industries constituted 41 percent of recession losses, and 30 percent of recovery growth.
    • As of today 56% of US citizen own subprime credit
    • 90% of the jobs in the USA pay an average of less than 35,000 USD per year
  • Ukraine: the instability is bound to generate a more rigid contraposition between Russia on one side and the USD & Europe on the other. While sanctions so far have been more formal than substantial the rhetoric is increasing on both sides and there may be instability pass onto the economic system increasing its volatility and impacting energy prices.
  • EU parliamentary elections: while the EU periphery keeps on evidencing clear signs of weakness (Italy, Greece, Spain, Portugal) new elections are looming. Word from the street is that parties against the EURO are gaining significant strength and are bound to acquire a sizeable stake in the new European parliament. If that turns into reality there may be some hard questions put on the plate of the European Union leadership and whether fundamental union regulations are to be readdressed.

Therefore, CAUTION must be the word of the day. In the post 2008 world we have accepted as systemic a much higher volatility index which makes it a bit more difficult to evaluate wider base economic and stock market swings. We just need to analyze the speeches of the heads of the Central Banks to realize that they are leaving for themselves wide arrays of options sometimes at odds with each other. Economic indicators are more difficult to read. In such an environment positions should be short, optimism measured and cash an invaluable asset to give investors the ability to ride with profits both the “bull” and perhaps the “bear” coming our way. 

Sources:

http://economyincrisis.org/content/all-sign-point-to-a-servant-economy

http://www.nelp.org/page/content/lowwagerecovery2014/

http://time.com/2742/nearly-half-of-america-lives-paycheck-to-paycheck/

http://www.bls.gov/news.release/ocwage.nr0.htm?_ga=1.73666065.22471688.1396473081

 

The article is written by Luca Gorlero for Arab Business Review

To read more thought-leadership stuff by leaders from Arab Region, please visit Arab Business Review

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Business Transformation – A way forward to Refresh & Re-build the Market Positioning

Business Transformation

 

  • Continuously re-creating market positioning is a challenge faced by every organization in today’s highly competitive market.
  • Progressive organizations are able to deal with this on a pro-active basis, nut most others are unable to match their internal shifts with the fast changing external market dynamics
  • Therefore, ongoing and periodic business transformation is not only a good to have activity, but one of the most critical business driver today.

In today’s competitive era, every organization is facing the critical challenge on; 

“How to stay Competitive & continuously re-create it’s market positioning”? 

If I dwell into fundamental of this question, it gets started with the past success formula which itself can become bottleneck in staying agile or bring fresh perspective to organizational reality.

While a progressive organization is able to deal with this on a pro-active basis, quite a few organizations are almost hitting the “Death Curve” as they are not able to cope up with the external changes and lack speed of internal shift.

I have tried substantiating my perspective with a real case study … 

This company which has been into existence for more than 20 years, holding market leadership and has highest manufacturing capacity to serve the market demand. The earlier success had contributed in the company culture of working at the internal comfort and did not realize that in an external world “Go to Market” time has been reducing for any new entrant in the market.

This company was hit by the crisis as one of their largest customer turned into a competition. The situation had worsened when the departed customer had poached talented team members across the levels. The company’s other facts also had become a bottleneck like retaining internal resources, encourage employment opportunity in generations, operating from remote work locations, decision making time, & already built extra production capacity.

To deal with this near to death situation, company had to give a hard look to it’s current situation and draw a comprehensive transformational plan. They had to choose any one from the below two options:

Business Transformation-1

As they were known to build sustainable management practice rather than adopting the quick fix approach, they chose to work on the later option..

Business Transformation-2

The company had to build internal change team from various functional groups and the task force was led by one of the board member. The design and implementation of Business Transformation Framework was accomplished in 5- 8 months’ time frame.

The massive project ended on the following notes:

  • Company has started reusing 85 % of the capacity and re captured 8 % lost market share.
  • The company built it’s human resources with equal balance of home grown and vibrant fresh talent from outside
  • The new well-articulated competency framework has allowed to create two level back up for each critical position
  • Built internal organizational excellence team who will continuously focus on making internal business processes to keep it agile
  • Resilience has been ingrained as part of the DNA in organization culture

This experience has helped the company to build internal business case and put up a mandate at board level to auto-run the transformation activities every 3-5 years irrespective of crisis situation.

As an Organizational transformation specialist, I strongly believe that Business transformation is not a “Good to have activity” but “The most Critical Business Driver” in today’s competitive world.

 

The article is written by Ashish Patel for Arab Business Review

To read more thought-leadership stuff by leaders from Arab Region, please visit Arab Business Review

 

 

The MENA Franchising Opportunity and Success Factors

The MENA Franchising Opportunity

 

  • The franchise economy in Middle East and North Africa (MENA) is worth $30 billion and is growing by 27% per annum. High disposable income of consumers, favorable regulations, and a young and upwardly mobile consumer market are the key factors driving growth. GCC nations are at the forefront of growing the franchise economy in the Middle East, while Egypt is the leading franchising destination among African nations.
  • Food and beverage (particularly fast food) sector is the biggest beneficiary of the growing franchise economy, while other sectors like education, maintenance and health services, are underdeveloped and are growing slowly.
  • International brands looking to expand rapidly into the MENA region usually prefer to opt for the master franchising (also called as sub-franchising or multi franchising) format.
  • A strategic entry into the franchise market of the region must also take into account the legal, regulatory, cultural, religious and social norms that define the preferences of the governments and consumers.
  • Just Falafel stands out as a success story – adopting the franchising route has this Middle Eastern start-up expand to 18 different countries with more than 900 outlets, increase its sales by 35 times, and become the Biggest Falafel Franchise in the World.

 

The franchise economy in Middle East and North Africa (MENA) is worth $30 billion and is growing rapidly. As per Middle East and North Africa Franchise Association (MENAFA), the franchise industry in the Middle East and North Africa is worth over $30 billion today, and is growing at a CAGR of around 27% annually. Concentration of high net-worth individuals, favorable regulations, and a young and upwardly mobile consumer market are the key attractions for franchisors looking to expand their operations within the region. On the other hand, the driving factors for franchises and local governments are the entrepreneurial opportunities presented by the franchising model, job creation, and the ability to inject international grade skills and processes into the economy. Further, investors also feel more confident opening a store under the umbrella of a large, multi-national corporation, as they expect franchises to respect the strict quality standards issued by the mother company, and also benefit from the well-established operating, marketing, and accounting practices of the franchisor. 

Not surprisingly, GCC nations are at the forefront of growing the franchise economy in the Middle East, while Egypt is the leading franchising destination among African nations. With a combined population of 1.4 billion, a GDP of $1.9 trillionan affluent customer base and (relatively) business friendly environment, the Gulf Cooperative Council (GCC) – Saudi Arabia, United Arab Emirates, Kuwait, Qatar, Bahrain and Oman – presents the biggest opportunity for existing and potential franchisors and franchisees in MENA. 

GCC consumers demand exclusive, superior and high quality product, and therefore are the right target segment for international brands looking to make an inroad into the region via the franchise mode. This is clearly reflected in the fact that in GCC, more than 50% of retail sales are generated from international brands and in the leading malls the retail mix is as much as 80/20 (international brands versus home-grown).  As a result, GCC malls tend to host a department store franchisee location, e.g. Saks at Kingdom Mall in Riyadh, Bloomingdale’s at Dubai Mall, or Harvey Nichols at the Mall of the Emirates in Dubai. 

Within Africa, the Egyptian franchise sector grew from 25 international brands in 1999 to 360 in 2010 and 430 in 2012, as per the Egyptian Franchise Development Association (EFDA). The biggest drivers of franchising in Egypt have been 1) the knowledge transfer from foreign franchisors (who wish to collaborate with franchises having the requisite local knowledge); and 2) job creation – the franchise sector in the country employees more than 55,000 nationals and this number is expected to grow further in the coming years as franchisors target the upper and upper-middle classes in the country. 

Food and beverage (particularly fast food) sector is the biggest beneficiary of the growing franchise economy in MENA. Franchised and licensed business have permeated all sectors including education, transportation and tourism; however, like with the rest of the world, the franchising model has found a natural home in the retail and food and beverage (F&B) sectors.  Within the GCC countries, fast food is expected to account for 40% of the franchising market, as eating out in a part of the region’s culture and tourism practices.  In addition, the liking for U.S. style casual dining has further helped drive the entry and growth of international fast food joints in the region. 

The popular international food franchises in GCC region include Burger King, Popeye, Hard Rock, McDonalds, Hardees, Pizza Hut, Pizza Inn, Fuddruckers, TGI, Chilies, and Wendy’s, while Just Falafel is the leading example of a Middle East-based fast food chain that has expanded rapidly in the region and worldwide over the past five to seven years.  Even in Egypt, nearly 75% of franchises opt to represent retail and food brands.  Industry experts and leading franchising consulting firms expect the region’s F&B franchises to grow by >25% in the coming years, and maintain their dominance over other sectors like education, maintenance and health services, which are underdeveloped and are growing slowly.  

Interestingly, while some leading hospitality brands like Sheraton, Holiday Inn, Meridian, and Ramada have adopted the franchise route in the region, others like Hilton, Marriott, & IFA remain apprehensive because of 1) lack of faith in local franchise’s ability to maintain the brand; and 2) question mark over the model’s profitability without economies of scale.  

While the MENA franchising opportunity (especially F&B) seemvery attractive, we recommend potential franchises and franchisors to follow the below guidelines to help build a successful franchise business in the region. MENA consumers have high disposable incomes, are perceived as luxury- and brand- conscious, and seem unrelenting in pursuit of the bestthereby encouraging domestic and international franchises to set-up shop in the region. However, the region’s market is idiosyncratic and a strategic entry into the region must also take into account the legal, regulatory, cultural, religious and social norms that define the preferences of the governments and citizens of the region. 

Choose the country to enter and ensure compliance with the laws of the landMENA nations have different varying laws and ownership caps for franchisees looking to set-up operations in the respective nation. The table below from a report by DLA Piper Middle East lists the percentage of GCC- and Foreign- franchisee ownership allowed by different GCC nations. 

Apart from the ownership structure, it also important to ensure that you comply with the various franchising related laws, namely, Agency laws, Commercial codes, Companies law, Civil Codes, Judicial Procedural Code, Trade Mark law, Trade secrets/unfair competition law, Employment law, and other laws which regulate import of goods, labelling. 

Maximum percentages of ownership in the share capital of a corporate franchisee by GCC nationals and foreigners in each country 

The MENA Franchising Opportunity-2

 Source: DLA Piper Middle East

Choose the right franchising format and partners:

International brands looking to expand rapidly into the MENA region usually prefer to opt for the master franchising (also called as sub-franchising or multi franchising) format. In this format, the master franchisee, or the locally present master licensee, has the rights to further market and sell franchises within a specific territory/country. These partners or ‘franchisees’ open an agreed number of brand stores or outlets in the assigned area.  This format is best suited for sectors like F&Bretail, education, beauty services, etc., and is usually adopted by franchisors looking to establish a wide footprint in a short period of time.  However, selection of the right master franchise is extremely critical under this model, as choosing the wrong master franchise can result in break-down of the complete franchising ecosystem. 

The product or single-unit franchising format allows franchisees to sells products and/or services on behalf of the franchisor and functions independently with limited assistance. It is best suited for businesses like retailing of jewellery, apparel, and footwear.

The license to manufacture format allows franchisors to grant a license to the franchisee to manufacture products under its brand name in accordance with its specifications and quality standards to be sold in a selective market segment. 

Adjust your product/menu for cultural preferences, tastes, guidelines (including religious observance) and customer expectations. This is applicable to all sectors and countries, but is especially true for the F&B sector where companies can gain or lose market share based on their ability to adapt to cultural preferences. The strategy to offer falafels which combined the authentic falafel with global flavors like Emirati, Lebanese, Indian, Greek, Italian, Japanese, Mexican and American is one of keys to the huge success of the Just Falafel food chain (discussed in case study below).  Further, Herfy’s strategy of upsizing their chicken pieces with extra batter and adding more fries at a value price helped it displace KFC as the dominant fast food chain in the Saudi Arabia. 

Choose culturally appropriate ambiance. For example, café’s in Saudi Arabia generally have a lounge feel with segregated retail space – families and single men. 

Location, location, location: with insufficient new properties, rising rentals and property cost, it is difficult to run a profitable franchising business and attract consumer footfalls at the same time.  Therefore, it is advisable to look for older properties that require innovative remodelling and renovation. 

Build brand and goodwill by participating in philanthropic and CSR activities. Franchises and franchisors should expand the brand by interacting with the local communities, considering geographic issues, political climate, linguistic and cultural nuances, and taking CSR initiatives. 

 

Case Study:  Just Falafel – From a Start-up to the Biggest Falafel Franchise in the World

Just Falafel started what it calls the “falafel revolution”, when it was founded as a single restaurant in Abu Dhabi in 2007.  The focus at that time was on creating a 100% vegetarian falafel (a traditional Middle Eastern sandwich), that would combine the authentic falafel with global flavors like Emirati, Lebanese, Indian, Greek, Italian, Japanese, Mexican, American, etc.

However, the turning point in the company’s growth story came in 2011 when the company hired Fadi Malas as its CEO and decided to adopt the franchising model to grow. The company pitched itself to franchises on the basis of 7 factors: clever positioning, brand equity, strong growth, great reputation, commitment to quality, robust franchise system and an innovative menu. The company pushed its franchising agenda aggressively through social media platforms like Facebook. During a 12-month campaign, the company received more than 2,300 requests for franchising from 73 different countries.

Ever since, Just Falafel has grown to be the biggest falafel franchise in the world, with agreements signed with commitment of developing more than 903 outlets in 18 different countries, including rolling out 100 stores in Egypt, 200 stores in the UK, 50 stores  in Turkey, 50 stores in New York, US, and 125 stores in Saudi Arabia.

As per Malas, adopting the franchising route helped Just Falafel increase its sales by 35 times and attract USD 200 million to reinvest its brand.

Just Falafel is headquartered in Dubai, UAE, and has regional offices in UK, Egypt, Lebanon, and Turkey. It currently employs more than 400 people worldwide, including 28 in the head office.

The MENA Franchising Opportunity-1

 

Source: Just Falafel

The article was originally published at: Arab Business Review

To read more thought-leadership stuff by leaders from Arab Region, please visit Arab Business Review

 

The Economics of World Cup 2014, and Lessons for Qatar

The Economics of World Cup 2014

  • The month long football bonanza in Brazil is now over, and fans and administrators worldwide have now their eyes set on the next two versions in Russia (2018) and Qatar (2022). While Germany have stamped their authority on-filed, we analyze the off-field economics and events to see what the future hosts can learn from the Brazil experience.
  • The key learnings from Brazil include moderate expectations on investment, higher knowledge and skill transfer, increased tourism, importance of the climate control technology, among others.
  • However, Qatar also faces unique challenges in the form of corruption charges related to the World Cup 2022 bid, and reports of  inhumane working and living conditions for thousands of expat workers involved in the infrastructure development activities in the country.

The month long football bonanza in Brazil is now over, and fans and administrators worldwide have now their eyes set on the next two versions in Russia (2018) and Qatar (2022). While Germany have stamped their authority on-filed, we analyze the off-field economics and events to see what the future hosts can learn from the Brazil experience. 

How much did Brazil spend to prepare itself for FIFA 2014?

The Brazilian government is estimated to have spent $11 billion on stadium and infrastructure development, in addition to another $2 billion spent on security arrangements.

Now that number may seem a huge jump from the $2.3 billion spent by South Africa in 2010, but it pales in comparison to the whopping $200 billion that Qatar plans to spend on infrastructure development in the run-up to FIFA 2022 World Cup. Now, not all of this amount will be spent on direct World Cup infrastructure like stadiums, as a large part (~85%) will be spent on additional infrastructure required (new airport, a new seaport, a rail and metro system, etc.) to make the nation ready for the expected influx of international tourists and create a global brand for Qatar.

Infrastructure Spend by Host Nations on FIFA World Cup Preparations

The Economics of World Cup 2014-1

 Source: Arab Business Review Research

Now that we know the amount invested, let’s look at who earned what from the FIFA 2014 World Cup

Well, on-field, it’s safe to say that Brazil did not earn anything more than anguish and disappointment. The story off the field is not much different, though not as disappointing as the performance on the pitch.

Brazilian government claims that the 2014 World Cup has added $15 billion to the economy and created a one million jobs. However, $15 billion is less than 1% of Brazil’s $2.2 trillion GDP, and seems an inadequate return on time and investment spent by a nation battling low growth and high inflation. Further, most of the one million jobs created are temporary (infrastructure, tourism, etc.), and are unlikely to be sustained once the festivities are over.

The impact on the tourism industry is unclear and is a matter of debate. The government claims that 1 million foreign tourists visited Brazil during the World Cup, beating expectations of 600,000 international visitors. In addition, 3 million Brazilian nationals traveled around the country (slightly lower than the expected 3.1 million). Combined, these are expected to have added $3 billion to Brazil’s economy. However, as per the Wall Street Journal and Brazilian Airline Association, total air travel in Brazil is estimated to have declined by 11-15% during the World Cup, and domestic tourism went down by 35-40% in June and July as compared to last year.

FIFA, on the other hand, is estimated to have earned $4 billion in revenues from marketing rights, television broadcasting rights, and other sources like sales of sport merchandise. The profit earned by FIFA is expected to be $2.6 billion, up from $2.3 billion in South Africa 2010.

Profit Made by FIFA in Various World Cup Editions

The Economics of World Cup 2014-2Source: Arab Business Review Research, Visual Capitalist

So what can Qatar learn from Brazil 2014?

Qatar and Brazil are culturally, economically, and geographically different, but some of the learnings from the Brazil experience are still relevant for Qatar. We discuss these below.

  1. The return on investment will be low and slow. Qatar has the world’s highest per capita income, and money is not a big concern, but with $200 billion being invested, return considerations will be high. However, as shown by the case of Brazil and other host countries, the return on investment on hosting large sporting events like Olympics and the football World Cup is always very low, and expenditure usually exceeds the initially planned amount. Qatari’s and the Qatar government – most notably the Supreme Committee for Delivery and Legacy (SCDL)that is planning the 2022 event – will need to be mindful of this fact, and have moderate return expectations. Long-term infrastructure development will perhaps be the biggest positive to emerge out of this exercise.
  2. Intangible returns (knowledge transfer, global brand building) will be higher, and will drive economic diversification and help build a stronger non-hydrocarbon economy. Like all its GCC peers, Qatar has also been trying to reduce its dependence on oil and gas revenues and build  stronger services sector, and the social and physical infrastructure development efforts will further this cause. The knowledge gain and transfer in the field of infrastructure-related technological issues and in the field of hospitality/tourism, will enhance the overall skill levels in the nation. Also, the 2022 event will be used by the Qatari authorities to enhance the brand value of the nation in the eyes of investors, tourists, sporting bodies, and among other nations worldwide.
  3. Tourism will be boosted; however, Qatari’s will need to go the extra mile and break cultural barriers to make foreign nationals feel at home. An influx of tourists can be expected during the World Cup period. However, sustenance of tourist volume post the World Cup will depend on how the foreign nationals are treated during their stay. Unlike Brazilian nationals, Qatari’s are not known to mingle with tourists and foreign nationals, and it will require conscious effort on part of the people to break down cultural barriers and extend hospitality beyond the grandiose of their larger-than-life hotels.  This point also assumes higher importance in light of the fact that Qatar currently doesn’t have an international tourist destination like Rio de Janeiro.
  4. Climate control technology will be critical. The second half of the Brazil World Cup saw players battling with heat, which has led to increased concerns about hosting the 2022 edition in Qatar, where temperature can cross 50 degrees Celsius during summer months. While moving the tournament to winters is one option, SCDL’s promise to develop carbon-neutral cooling technology for the venues, training pitches and fan zones will be critical.
  5. Security arrangements will need to be world class, as in Brazil. Another area where Brazil came out on tops. Despite the poor performance of the host nation in the semi-finals, there were no untoward incidents and the cup was by-and-large peaceful. Qatar will need to ensure that security arrangements are similar or of higher standards, and emotions emanating from on-field performance don’t have any impact on the streets.
  6. Project delays must be avoided. This is perhaps the one area where Brazil didn’t measure up to expectations, as some stadiums weren’t completed until a few days before the kick-off. Now some of this delay was due to protest by Brazilian nationals over the extravagant expenditure on preparations, but most of it can be attributed to poor planning and execution, an area which SCDL should start monitoring right away. 

In addition, Qatar 2022 faces some unique challenges as well.

The above learnings were based on the Brazil experience. However, Qatar 2022 also faces additional challenges, which are specific to Qatar.

  1. Charges of corruption could result in bid-loss and will have serious financial implications. Charges of corruption related to World Cup bid have surfaced, and could result in Qatar losing the right to host the 2022 edition.  Apart from the huge damage to Qatar’s credibility, this will negatively impact the $16 billion currently earmarked for development of 12 new state of the art football stadiums, and will also delay other infrastructure development efforts, which are currently being expedited to get Qatar in shape by 2022.
  2. Human rights issues related to poor working conditions need to be addressed immediately. Qatar’s workforce, especially workers in the construction sector, is made up of expats from Nepal, India, and other Asian countries. However, as per a report by the International Trade Union Confederation, more than 1,200 such workers have lost their lives due to inhumane working and living conditions. The report goes on to say that while the influx of such workers will increase as infrastructure developments gathers pace; however, continuing poor working conditions could result in a loss of more than 4,000 lives through 2022. This issue is gathering steam in the global human rights circle, and Qatar will need to fix this situation soon to protect its workers and brand.

It is important that the Supreme Committee for Delivery and Legacy (SCDL) in Qatar takes cognizance of the above learnings and challenges, and addresses them promptly as the nation prepares to host the beautiful game in the magnificent stadiums currently being designed by leading architects like Zaha Hadid.

Design of one of the New Football Stadiums in Qatar

The Economics of World Cup 2014-3

 Source: Dezeen, Zaha Hadid Architects

The article was originally published at: Arab Business Review

To read more thought-leadership stuff by leaders from Arab Region, please visit Arab Business Review

MH370 and lessons for the Aviation Industry, Governments, & the Media

MH370

 

  • The MH370 strategy has created learnings for all involved – mostly for the aviation industry including airlines, manufacturers, and regulatory authorities, and also for governments and the covering media. 
  • The key ones for the aviation industry include improving tracking mechanism by developing transponder and communication equipment that can’t be disabled, globalizing air traffic control and monitoring, improving black box design and strengthening passport control. 
  • Governments worldwide need to ensure more cooperation among themselves, and also treat the affected families with care and empathy, largely through effective communication. 
  • Finally, the media needs to act more responsibly and gather enough evidence before advocating any conspiracy or terrorism theories.

 

The tragic MH370 flight and the ongoing search for its whereabouts involving more than 25 nations has resulted in a lot of emotional and political outbursts, speculations, conspiracy theories, cost, verbal wars, and above all, grave news for the families of 239 passengers and crew on-board. A tragedy of this magnitude has created learnings for all involved – mostly for the aviation industry including airlines, manufacturers, and regulatory authorities, and also for governments and the covering media. 

Lesson #1: Tracking mechanisms need to be improved, and planes should not be allowed to disable their transponder and communication equipment. The transponder and communication equipment in Malaysia Airlines MH370 flight was disabled. Disabling these equipment means that a plane can’t send and receive information to the world outside the flight, thus making it untraceable (like MH370!). According to a CBS News article carrying views of Mary Kirby, aviation expert and the founder of aviation news company Runway Girl Network, it is important for manufacturers to develop communication systems that simply can’t be switched off from within a plane. Even when forced to shut-down, such systems should move into a back-up mode and should continue to transmit data thereby enhancing tracking. The aviation industry needs to move beyond cost considerations and develop and install such systems. And given the stakes involved, aviation authorities worldwide should make the installation of such a system a necessary safety perquisite. 

Lesson #2: Air traffic control and monitoring needs to be global and satellite-based. A report by The Sydney Morning Herald (SMH) mentions that “the backbone of the global commercial aircraft monitoring system is land-based radar, augmented by a secondary radar on the plane that emits a signal pinpointing its location with a particular signature that identifies the aircraft.” However, such radars only cover 10% of the planet, creating a large void with respect to tracking planes over deserts, oceans and other remote areas. The need of the hour is to develop satellite-based air-traffic control service that covers the entire world. Bear in mind that such a system would need considerable time and money, so a phased roll-out of such a technology seems more likely. 

Lesson #3: Black-box design and technology needs to improve considerably. The black box is critical to any aircraft investigation, but the current technology leaves a lot to be desired. For one, current black box technology does not support live streaming of data from flights and as per the SMH report, these boxes can currently record only two hours of cockpit conversation (smartphones these days have more capacity!). Further, a black box has a range of as little as 10 nautical miles and runs out in 30 days. Finally, a black box doesn’t float so it is not surprising that it took two years to find the black box of Air France 447, which crashed into the Atlantic Ocean in 2009. The Air France incident had highlighted the glaring gaps in black box design, and the latest MH370 episode has created a feeling of nothing but déjà vu. Therefore, it is important for manufacturers to step up their efforts towards designing a black box that addresses most of the above concerns. 

Lesson #4: Don’t forget that pilot errors are still the biggest cause for airline accidents, so spreading conspiracy- and terrorism- theories without evidence can only worsen the situation. According to a database compiled by PlaneCrashInfo.com, there were 100 large commercial airline accidents worldwide between 2000 and 2009, and 54% of these accidents were caused by pilot errors and 24% by mechanical failures. Only 9% accidents were caused by acts of sabotage like explosive devices/shoot downs/hijackings, etc. (poor weather conditions accounted for 8% accidents and another 5% were caused by air traffic control/improper maintenance/etc.). Therefore, given the historical data, media channels and publications need to act more responsibly and gather sufficient evidence before advocating any conspiracy or terrorism or alien abduction theory through “experts”. Please note that we are we are by no means saying that the MH370 incident took place due to pilot incompetence, but only that a proper investigation into all possible causes should be carried out before airing views on media outlets, especially given the high emotional quotient among affected families and the gullible nature of general public in such situations. 

Lesson #5: Information sharing and cooperation among nations leaves a lot be desired. Managing a search and rescue involving 26 countries and their respective authorities is never going to be easy, but the current cooperation levels leave a lot to be desired. The SMH report cites that the Malaysian military was slow in sharing satellite information with other countries and China took three days to release its grainy footage of debris in the South China Sea. Similarly, Australia took four days to share images of debris in the southern Indian Ocean, while Thailand did not share its knowledge it picked up MH370 on its radar for 10 days, saying it was never asked. In crisis situation like the current one, where speed is the key to locating the aircraft and finding and saving the people on-board, nations need to step-up and enhance cooperation.

Lesson #6: Affected families must be treated care and empathy, and communication should be transparent, timely and well-managed. Be it withholding information for longer than necessary or communicating visa sms the final unfortunate finding that all aboard were lost, the MH370 incident is a case study for governments and authorities on ‘How not to manage communication during such a crisis’. Governments should ensure that communication is fact driven, routed through a single channel, and is done in timely fashion so as to avoid the spread of any rumors. Also, it is important to communicate the steps being taken for the affected families so as to convey a sense of empathy and support. Additionally, the affected families should be kept aware from media glare (ideally in a different hotel) so that they are spared the continuous hounding by media personnel looking for ‘bites’.

Lesson #7: Passport control needs to be strengthened. Two Iranian nationals boarded MH370 with stolen passports. While these people do not have terrorist background, the alarming thing is the ease with which they got on-board. The SMH report highlights that Interpol has an estimated 40 million lost or stolen passports in its database, and passengers boarded planes 1 billion times last year without their passports being checked against that database. So, it is important to design a system which checks against this database at all airports worldwide, thereby reducing safety related risk.

 

The article was originally published at: Arab Business Review

To read more thought-leadership stuff by leaders from Arab Region, please visit Arab Business Review

Online Marketplaces: The new commerce power players

Online Marketplaces

  • Smart start-ups win traditional and new marketplace categories in the Arab world while traditional players stay on the sidelines.
  • While, early online marketplaces were initially launched as an extension of traditional marketplace categories, innovative marketplaces are now making their way into the Arab world.
  • The traditional marketplaces would do best to acknowledge this trend and react in-time to be a part of this growth opportunity 

Marketplaces have been at the core of commerce for thousands of years, and they continue to serve in gathering merchants and people who come together for the purchase and sale of goods and services. While marketplaces have always been at the core of economic prosperity for the cities and nations that had them, they have evolved over time –not the least from seasonal marketplaces where traders gathered in old time to permanent geographic locations, such as the famous Souk al-Khalili in Cairo and Souk al-Hamidiya in Damascus, and into modern malls such as Dubai Mall, in the Emirate of Dubai.

Yet the Internet introduced a new dimension to marketplaces, allowing pioneering start-ups to build and own generic and specialized marketplaces, focused on bringing together sellers and buyers on a technology and marketing platform. The Internet has also allowed these start-ups to own such marketplaces while extending their business models from renting spaces to charging a commission on every transaction taking place in these new digital marketplaces, and offering value added services to merchants and users. Most importantly, while traditional marketplaces were exclusive territory for owners of large capital and real-estate, new online marketplaces are now being built by smart entrepreneurs capable of recognizing an opportunity and executing on it in an efficient and aggressive manner. Moreover, the cost of building an online marketplace today is only a fraction of the cost of building a traditional one, with potential and scalability that is an infinite multiple of that of traditional markets.

Early online marketplaces were initially launched as an extension of traditional marketplace categories, such as fashion, electronics, and books. Today, generic online marketplaces, which include the famous Amazon.com and eBay, have grown over time to encompass all kinds of goods and services.  Furthermore, the nature of the Internet as a ubiquitous and seamless network allowed for the creation of new specialized markets for industries that never had their own marketplaces. Examples of such categories include transportation, healthcare, and financial services. The creation of these marketplaces has allowed consumers to request services from local and regional organizations across borders. This in turn led to the creation of several billion dollar companies, including the likes of Uber in the transportation sector, which connects passengers with limousines, MoneySuperMarket, which lets users compare financial services and products (more recently automotive services and home repair services) and procure them online from providers.

With the growth of Internet users in the Arab world reaching more than 135 million users today, and the proliferation of smartphone devices reaching 84% in countries such as the United Arab Emirates and Saudi Arabia, the time for online marketplaces in the Arab world has come. During the past two years or so several marketplace categories have emerged as mature categories in the Arab world, with undisputed leaders operating efficient marketplaces and growing at record rates, all while requiring a fraction of the investment of a traditional marketplace.

In the automotive sector, traditional car dealership markets have now been replaced by startups that allow users to sell their cars in record time and with a fraction of the hassle of selling through traditional car dealerships. SellAnyCar.com is one such startup; it was founded in the UAE and has now expanded into Turkey and Saudi Arabia.  Another is the automotive section of the leading Arabic classifieds website, Opensooq.com, which offers more cars for sale and requests to buy cars than any traditional cars marketplace in the Arab world, all at a fraction of the cost it takes to build and operate a traditional car dealership, and with unsurpassed convenience and market efficiency.

In the transportation sector, startups like EasyTaxi now allow users in Saudi Arabia, Jordan, Kuwait, Qatar, and Bahrain to order taxis with a tap of a button on their smartphones, using a free app that automatically matches users with taxi drivers nearby. Not only does this startup improve the efficiency of taxi drivers, saving them the hassle of wandering in the streets, but it also offers safety and comfort especially for passenger categories such as women and teens, and reduces pollution and power consumption.

Innovative marketplaces that did not exist before the Internet are now also available in the Arab world. They include ReserveOut.com, which acts as a marketplace for restaurant reservations, allowing users to discover new venues and guarantee immediate and free reservations from the comfort of their desks or through their smartphones. Online food ordering marketplace, hellofood, is now probably the largest food court in Saudi Arabia, Jordan, Qatar, and Lebanon, allowing users to order in food from their favorite restaurants, rendering old business models such as food ordering by phone or through catalogues obsolete.

The technology and user experience components of online marketplaces have already been commoditized. This in turn means that marketing and execution are the key aspects for the success of online marketplaces. First mover advantage has also become key to leading marketplaces; early market entrants tend accumulate the largest number of service providers and users, and therefore they get even bigger and more successful with time. Furthermore, unlike traditional marketplaces, which allow competition the opportunity to start in new geographic locations in the same country, the national and cross-border nature of the Internet means that the leading online marketplace will make it very difficult for competition to gain market share. In fact, in many of the cases there is only a handful of winners in each category.

So far, new start-ups built by smart founders and supported by strategic value-adding investors are winning marketplace categories one by one in the Arab world. Meanwhile, very few traditional marketplace players have understood the major shifts taking place in the market, in addition to the change in tastes and the consumer behavior of new millennials in the Arab world. This does not appear to be changing in the near future. Smart stakeholders should move fast to leverage any remaining value proposition they have through their existing relationships or capital availability, and partner-up with leading Internet market players before it’s too late.

The article is written by Khaldoon Tabaza for Arab Business Review

To read more thought-leadership stuff by leaders from Arab Region, please visit Arab Business Review

Needed: A Strong Patent System & An Innovation Friendly Culture in the Arab World

Needed_A Strong Patent System1

  • The on-going transition from oil to non-oil based economy has heightened the pace of patent development in the Arab World, with Saudi Arabia leading the region.
  • However, patent development activity in the region pales in comparison to other countries worldwide, and is reflective of a lack of innovation friendly culture in the Arab world.
  • The pace of innovation and patent development needs to increase rather quickly in order to protect new technology being developed by Arab countries, and also to attract more foreign investments.

The on-going transition from oil to non-oil based economy has heightened the pace of patent development in the Arab World. In the past 3-4 decades, most of the economic output in the MENA region was generated from the hydrocarbon sector, and other sectors were undeveloped leading to low levels of innovation and patent development. However, the trend has started to change in recent years as MENA nations (especially GCC) look to diversify their revenue base by increasing focus on non-oil sectors like technology, hospitality, tourism, infrastructure development, etc. This has led to increased patent filing in the region, which has gone up from 41 in 2003 to 403 in 2013, a jump of nearly 10 times, as per a recent report by Orient Planet and MADAR Research & Development.

Saudi Arabia has consistently led the region in patent filings and continued its dominance in 2013 as well with 237 patents. The kingdom is currently home to ~50% of the patents in the Arab world, followed by Kuwait and Egypt with 272 and 212 patents respectively. UAE, which has the most vibrant non-oil sector in the region, stands fourth with 120 patents. Comparing the number of patents issued per million of a country’s population makes the above numbers more significant and drives home the dominance of GCC nations. In 2013, Kuwait had 21.24 patents per million, while Saudi Arabia followed with 7.79 patents per million and UAE was placed third with 1.90 patents per million. Qatar, which is gearing-up to host the 2022 FIFA World Cup, currently has 3.42 patents per million, and this number is likely to go-up as it plans to invest USD 200 billion on infrastructure development over the course of next 8-10 years.

Utility Patents by Country and Year

Needed_A Strong Patent System2

Source: USPTO, Orient Planet, MADAR Research & Development

Now the above numbers may seem impressive on a standalone basis, but pale in comparison to the patent development activity in other countries worldwide, and are reflective of a lack of innovation friendly culture in the Arab world. The US alone has 133,593 patents, ~75 times the 1,818 patents in all Arab countries combined. Therefore, it is not surprising that most of the next generation technology development happens to take place in the US, leading to birth of disruptive business models and companies. The US is followed by Japan, Germany and South Korea as shown below. Saudi Arabia is the only Arab country in the top 30, indicative of a lack of innovation friendly culture in the region.

Number of Utility Patents Granted – 2013

Needed_A Strong Patent System3

Source: USPTO, Orient Planet, MADAR Research & Development

The pace of innovation and patent development needs to increase rather quickly in order to protect new technology being developed by Arab countries, and also to attract more foreign investments. Arab nations are currently undertaking massive projects that will require new technology development and it is imperative that these technologies are patented to ensure competitiveness of Arab nations and companies at a global scale. Some of these include Saudi Arabia’s King Fahd City, UAE’s Dubiotech research park, Masdar City Project in Abu Dhabi, and multiple infrastructure projects (special economic cities, carbon neutral climate technology, railway, metro, airport, power plant, hotels, etc.) being developed in Qatar and Dubai in the build to World Cup 2022 and Dubai Expo 2020, respectively.

Also, patented technology is essential to attract foreign investment. As per the latest UNCTAD 2014 World Investment Report, FDI inflows to West Asia have declined from USD 71.9 billion in 2009 to USD 44.3 billion in 2013. While part of the decline can be attributed to global recessionary conditions and geo-political volatility in MENA nations, slow pace of innovation and high dependence on oil revenues is also a key contributing factor that is keeping foreign investors at bay, thereby reducing the growth prospects of companies in the Arab world.

Therefore, it is imperative that Arab countries learn from other leading nations to develop a strong patent system and nurture an innovation friendly culture. Till they do it, opportunities in the Arab region will remain unused leading to a loss of billions of dollars.

The article was originally published at: Arab Business Review

To read more thought-leadership stuff by leaders from Arab Region, please visit Arab Business Review

Good Bye Training, Welcome Learning

Good Bye Training, Welcome Learning

  • The importance of training for individual and organizational development is evident from the fact that United States spent USD 210 billion on training budget in 2013
  • However, some governmental organizations started performing training activities because it is one of the key performance indicators or is just a part of the strategy to win awards of excellence.
  • I would suggest an approach where the focus is on the outcome of learning activities, and the learning process becomes a product of conscious activity

Nobody can deny the importance of training for individual and organizational performance improvement across all levels. In a country like the USA, the 2013 training budget that has been amounted is $ 210 billion, which in fact is equivalent of the national income sum of several countries.

However, researchers and specialists in the field of learning and development noticed that traditional training started losing its actual value. Nevertheless, some governmental organizations started performing only training activities because they become more focused on the outside noticeable image of their key performance indicators achievements or just for winning one more award of excellence. The latter is one of the things I can bravely share that I have noticed due to my experience in the region, as an assessor and arbitration team leader in several of excellence awards and it became one of my main points of concern as well.

The approach I would like to bring upon into the audience attention is related to suggesting focus on the learning activity’s outcomes.  In addition to that and regardless of its nature: i.e. formal or informal learning, learning process will be much more efficient if it becomes a product of conscious activity. In fact, the phrase “learning and development needs” has successfully replaced the term “training needs” and the 10:20:70 model has emerged to the effect that 70% of learning comes out of work itself. Problem solving, challenges, and 20% come out of co-workers and direct line manager interaction and 10% comes out from self- learning. This model is the foundation for a new thought where the Chief Learning Officer as a position and functions replaces the traditional training officer.

The Chief Learning Officer position holder is a person who performs strategic tasks and he is managed directly by the general manager or the chief executive.

The CLO becomes the hub of all learning activities. Assessment reports, market analysis results, competitors’ analysis results, benchmarking, and the best performances have to be submitted to him. Part of his duties also include gathering all conferences and workshops feedback  summaries that  employees participated in; conducting  proper analysis   of  data and figures afterwards ; spreading around awareness of the lessons learnt and changing, establishing policies and procedures  that promote innovation  and improvement solutions for the organization.

In conclusion of all listed above I would say that new methods should be introduced, implemented and followed in the organizational learning field and traditional learning have to be   replaced. It’s widely known fact that after attending traditional training trainees usually forget 80% of what they have been exposed to during the training in eight weeks’ time after training completion.

Last but not the least let us all remember some of the thoughts of the quality guru Deming in the context of importance of measurement: “What you cannot measure you cannot improve”

The article is written by Dr. Alaa Garad for Arab Business Review

To read more thought-leadership stuff by leaders from Arab Region, please visit Arab Business Review

Are you a business pirate or good captain?

Are you a business pirate or good captain

 

  • Research shows that many former employees reported that they were rarely engaged, inspired or recognized in a way which matched their professional and emotional needs.
  • Today’s employee is more aware about what he expects from the employer. The items that top the list are respect, honesty, appreciation, encouragement and a feeling of being on a path of growth within the organisations that they serve.
  • Most successful entrepreneurs would agree that their employees are their prize assets, to be treasured and supported. 
  • To succeed as an entrepreneur, you need to think about the people in your company as your potential passengers on a huge rowboat, and as a Captain of the boat you need to give your passengers compelling reason for why this journey will be interesting, rewarding and even fun.
Workshops on performance management generally end up bombarding you with terms like KPI Measurement, 360 Evaluation and other statistically based tools that you can use to get more out of people. It’s important to consider the following when business owners grapple with the question of how to get their own employees to perform more, do more and give back more:
 
Think of the time when someone else was calling the shots and before you became an entrepreneur.
 
Were they always fair, honest and engaging?
 
Did they inspire you, reward you and make you feel as if your role was both important and appreciated?
 
If they did, chances are rather high you might still be working for them and not be your own boss today.
 
The answer might be that many employers get distracted by their own pressures and often suffer a short-term memory loss of what it’s like to work for someone else.
 
Countless surveys have revealed that many former employees reported that they were rarely engaged, inspired or recognized in a way which matched their professional and emotional needs.
 
One ‘old school’ motivation technique for getting the most out of people was the fear- drama scenario was based on “do this or you’re fired!”
 
Today people who work in your company have more awareness of what they expect from an employer. The items that top the list are respect, honesty, appreciation, encouragement and a feeling of being on a path of growth within the organisations that they serve.
 
This is not a wish list, but common sense for any employer to embrace, empathize with and deliver. Employees today, as a rule, spend more time at the office than with their actual family. Employers who will retain their team members should not lose sight of the fact that they are the parents of these people too who devote their waking lives to make commerce possible within the enterprises.
 
If this sounds too warm and fuzzy to some employers who see their staff as problems, overheads and liabilities, experts suggest that the owner might be doomed. They will experience high turnover, under performance, and be only left with incompetent staff who tolerate such pre-historic attitudes in people management, and care less about taking the company from where it is today to better one tomorrow. Or worse, harbour resentment about you more every day.
 
Do your employees all share your vision? Do you even have one now, as many entrepreneurs may have originally had a vision, but circumstances have put them in survival mode and turned them into fear and panic merchants.
 
If you are committed to being in business, think about the people in your company as your potential passengers on a huge rowboat.
 
Where are you taking them? Is there a safe way to get there? Are they boarding willingly?
 
Are they excited about the journey ahead?
 
Do they have a reason to paddle faster, more consistently and in rhythm with the rest of the rowing crew?
 
Is there any reason for them to wake up earlier, prepare for duty by doing pre-warm up exercises or studying navigation which is not even their job, but you got them interested, fascinated, totally engaged and excited.
 
Pirates may have whipped their crews in the past, or their captives on board, in order to move their ships when the winds died down. If this technique works for you today in your business, well, good luck!
 
However, most successful entrepreneurs would agree that their employees are their prize assets, to be treasured and supported. Funny, weren’t pirates actually looking for treasure?
 
Consider another scenario, what I call the ‘BBQ Test’. Imagine that some of the employees in your company were invited to a neighbourhood barbeque. Some of the other guests who worked in different companies began to chat about their work experiences as many often do. Then they turn to one of your employees and ask the magic question, “Hey, what’s it like working for your boss, my sister in law is looking for a job, would you recommend she apply for work there?”
 
The test is actually a testimony of your investment in goodwill, forward thinking, deliberate campaign of nurturing your team relentlessly by creating an eco-system of sharing and inspiring a compelling future. As a business owner, you will never be the proverbial ‘fly on the wall’, but today you have the opportunity to prepare your troops for this scenario.
 
This is not to say that KPI metrics will be overlooked, for that is the reason you need employees. However, the nuance is if they like it, sense they are appreciated and made to also feel part of a family that respects and encourages their future in that organization.
 
So the next time you feel frustrated by lack of productivity within your ranks, imagine that you have a boat, and are actually selling tickets to a join you on an
amazing voyage.
 
As the seller, you will have to give your potential ticket buyer a compelling reason why this particular voyage will be interesting, rewarding and even fun.
 
You would have to explain to these ticket buyers that as captain, you would ensure that the voyage would be safe, that they as passengers and ‘crew- members’ will be well looked after, appreciated and trained to do other tasks along the journey.
 
They will be part of a team that loves to win, a team that feels part of a family. Could you sell tickets to your team today?
 
If not, you perhaps need to rethink how you are engaging your passengers and getting them prepared to willingly row into the future and win races with you because you made them love it.
 
Be a great captain!
 

The article is written by Michael J. Tolan for Arab Business Review

To read more thought-leadership stuff by leaders from Arab Region, please visit Arab Business Review

 
 

 

Telling Business Tales from the ‘Wolf of Wall Street’

Telling Business Tales from the ‘Wolf of Wall Street’

 

  • In the recent Hollywood flick, beneath Jordan Belfort’s corruption, there are a number of key lessons that leaders need to learn from his success.
  • Leaders need to attract, engage and tantalize the imaginations of their team members, to get the best out of them.
  • They need to give their team members a compelling reason to take consistent action, through incentives and performance management techniques
  • Big dreams with a strong base of ethics is the right mix for being a strong and successful leader.
Martin Scorseses’ most recent Hollywood blockbuster has the business world talking and a few financial guys on Wall Street ducking for cover. The film unveils a brash lifestyle that claims to depict the real life escapades of Jordan Belfort and along with members of his company selling financial services and wealth management products.
 
Of course, for those who may not have read the book or seen the movie, expect a few spoilers in this article as it would make no sense at all otherwise.
 
Here are the 3 things that Jordan Belfort (The Wolf of Wall Street) did right as a leader:

1. Getting your team engaged in a powerful compelling vision: 

Leaders who are able to attract, engage and tantalize the imaginations of their fellow team members will build a fire of enthusiasm that will power their individual producers forward and spur others using the momentum.

Jordan set examples, led his team, was fearless in engaging in personal performance himself. He effectively got his team to buy into his dream of the future and these team members could begin to paint a picture of their new future with Belfort’s company in return.
 
This daily ritual of getting his team pumped and motivated could be emulated by leaders today provided that they engage in activities of an ethical nature that will provide win-win experiences for both the customer and the business.
 
 2. Creating amazing rewards for team members:
 
Giving them a compelling reason to take consistent action!
 
Telling Business Tales from the ‘Wolf of Wall Street’ 1
 
Leaders today who understand that success is a mix of both inspiration and perspiration can quickly take a page out of Jordan’s book. His leadership style, brazen and wild as depicted in the film, used incentives and performance management techniques that infected some of his team members with incredible drive.
 
As a result, and as preposterous and outlandish as it seemed, he rallied his team performance by creating an eco-system of rewards and incentives within his team that impacted his bottom line. (Pun unintended).
 
3. Dare to Dream Big:
 
The Wolf was not shy about dreaming big, in fact, few people of his age and background could have had the audacity to dream so big. Of course, if you consider that big dreams are not always ethical while considering the late Ronny Biggs of the Great Train Robbery, or Jordan Belfort’s tactics.
 
Telling Business Tales from the ‘Wolf of Wall Street’ 2
Ethical leaders who dare to dream big are contagious and will gather energy and enthusiasm just as a tornado gathers dust, becoming even more powerful at each new collection of souls who buy into the dream. Imagine Martin Luther King without a Big Dream, or Gandhi saying he was ready to give up, Mandela, or Steve Jobs, along with hundreds of other noteworthy examples in human history.
 
In the building of his company, Jordan used three leadership techniques and deployed them perfectly. The only problem was that he had forgotten where the line of ethical practices started and ended.
 
His short-lived rule of being the master of the universe could have been easily predicted by anyone who understands that success can never be measured in the short term trick, but the trick is to enjoy long term success ethically.
 
It is the mantle of the leader’s character that will sustain their attractiveness to others with their real inner enthusiasm, purpose, passion and integrity.
 
To know without question that your boss is honest, would support you, will always strive to do the right thing, to know that your boss does not engage or tolerate in unethical practices or behaviours helps team members sleep much better at night.
 

The article is written by Michael J. Tolan for Arab Business Review

To read more thought-leadership stuff by leaders from Arab Region, please visit Arab Business Review