Sponsored: How to lead businesses during tough times in the GCC

With low oil prices digging into GCC state coffers, the regional economy has slumped, with the International Monetary Fund (IMF) predicting minimal to stagnant growth over the next two years.

Several regional firms have also been forced to lay off staff and restructure operations as they seek to manage the tough times. In some cases this has also involved changes to the senior and upper management levels as new talent is brought in to steer the company in a different and leaner direction.

Leading organisations in such challenging times is not easy, but keeping in mind some key tactics will ensure a smoother transition and an easier journey into the next phase, advises Tarun Khanna, the Jorge Paulo Lemann professor at Harvard Business School.

The first thing for a leader to do is to create a more optimistic vision of the destination where he/she would like to get to, so that employees have something to look forward to, Khanna explains.

“Individual leaders can construct their own future and create a vision that people want to get behind.

“The vision might be technology-centric, it might be about building a brand or it might be about cultivating a new core – whatever is motivational to that person,” he states.

The leader must clearly paint the vision and try and show employees the path that the company would like to go on.

Once the vision has been created, the next step is to look at the talent that the manager has either inherited or is recruiting.

“The leader will find that there is a subset of employees that he/she should bank on and there is a subset of them not likely to sign up to any kind of new vision because they are so deeply anchored in the past and don’t have the psychological wherewithal to transition. With that group there’s not much that can be done, other than treating everyone in a fair and humane manner. Of course, society will have to address their needs in a different way,” explains Khanna.

Employees should be allowed to self identify whether they are going to get on the path towards the vision or not.

“Many will, and some won’t. And I don’t even think it’s based on age –there will be plenty of experienced older managers who will be happy to jump on for a newer challenge, while there will be plenty of young people who will have different plans for their own futures. It’s the mindset – and in some ways the optimistic mindsets will win out because they will roll up their sleeves and say we can get something done,” he adds.

But Khanna also warns that in a multicultural place like the GCC, where expatriates form the majority of the population, leaders coming in from international destinations and those moving across companies should be cautious when taking the reins at a new organisation.

Khanna, who has coined the concept of ‘contextual intelligence’, says “trying to apply management practices uniformly across geographies is a fool’s errand”.

“Best practices simply don’t travel well across borders. That’s because conditions not just of economic development but of institutional maturity, educational norms, language, and culture vary enormously from place to place.”

According to him, the application of the tools gathered from past experience requires contextual intelligence – “the ability to understand the limits of our knowledge and to adapt that knowledge to a context different from the one in which it was acquired.”

For instance he says, the most common mistake that new executives make is to jump into action “right away.”

“Leaders have to go through an introspective, humble phase, ask questions – almost behaving like an amateur anthropologist. That’s a very tricky thing to do in business in particular because generally there’s quarterly reports, stock price movements, plans, etc. that also require attention.

“But according to my own research, jumping before you look can lead to disaster,” he emphasises.

His advice?

There should be a huge priority placed on small experiments, he says, since executives don’t really know what’s going to work. While some of the knowledge that’s brought in will be useful, it’s important to investigate what will be of use.

“So in that way leaders can jump in and try small things and be creative about deciding what experiments they are going to run – with whom and how – and then learn rapidly from it. And I think there the element of speed is of essence,” elaborates Khanna.

“So it’s not a question of not doing anything or not moving quickly or not jumping in – do all that – but do it in the right dimension,” he adds.

Tarun Khanna is the chair of Senior Executive Leadership Program—Middle East from Harvard Business School (HBS), which will be held in a series of modules across Boston and Dubai from December to May. This programme will help companies transform experienced senior executives into leaders with vision who can seize opportunities for sustained business growth.

To learn more, visit the programme website.