The way a prototypical local organisation in the Gulf is led stands out from how it is done elsewhere. That is the case, whether you look at most family-owned groups that have branched out into multiple subsidiaries over a few decades or at government entities that are not well into a transformation like the one that Dubai’s government has been through. While the local culture is certainly a factor, it can far from explain the uniqueness.
A business in a double digit growth environment puts different demands on a leader than one in a market that is increasing by only a few per cent a year. While a leader of the latter must continuously fine-tune the business just to maintain the current market share and margin, the former does not need to be as concerned about costs and customer service. Instead, he or she should consider how to utilise the further big potential in the market and how to avoid the business getting out of hand.
The Gulf has grown like few other places on earth. The communities along the Gulf coast of the Arabian Peninsula have been among the poorest anywhere, and the wealth did not start to spread until the Organisation of Petroleum Exporting Countries exercised its bargaining power in the early 1970s. Just four decades later, there are Gulf countries at the top of the tables for gross domestic product per capita and size of sovereign wealth funds per national.
There is a reason seasoned patriarchs of family businesses here are deeply concerned about being defrauded; many of them have actually experienced that. The massive growth of an organisation leaves cracks through which employees and business partners can manipulate.
When you observe local organisations, you will notice a tension that is not visible to the same extent elsewhere. In the past, demand was increasing at a pace with which the supply in any industry struggled to keep up. Much of the business was done through sponsorships. Foreign companies had the products, while the local sponsor had the market presence. When you fast forward to today, most industries in the region have become intensely competitive. Multinational corporations tend not to address the Gulf opportunistically anymore and are instead treating the region as a strategic priority. The requirements of running a business have changed significantly within the last 10 years.
There is another reason why you should not get too hung up about culture when you reflect on good leadership. The most effective leaders share certain powerful characteristics around the globe, while less effective leaders are much more different from each other across the various parts of the world. Bob Anderson and Bill Adams are publishing a study later this year, in which they conclude this using the data from 360-degree feedback assessments of 60,000 leaders based on their Leadership Circle method. (Full disclosure: I work with Bob and Bill.)
Their numbers show that leaders who are assessed to be in the lower end in terms of leadership effectiveness are primarily reacting to the world around them. They can comply with it by trying to please others or do like everybody else. They can protect themselves either by becoming distant when there are problems, or by hiding their own thoughts behind arrogance or criticism. Alternatively, they can try to control their surroundings through micro-management or autocratic decision-making.
It is the way in which less effective leaders react that differs among geographies. The assessments from the Middle East show a higher level of compliance, as it is common in most of the Eastern hemisphere, and that the leader with a median level of effectiveness is much more controlling than the global average.
Meanwhile, highly effective leaders score moderately on reactiveness. They instead create space for people to perform and develop through purposeful visions and by fostering teamwork. Their awareness about themselves and their surroundings allows them not to be pushed around as easily by circumstances but rather to engage others in dealing with them. Anderson and Adams show that a high level of consciousness is a fundamental prerequisite for the most effective form of leadership, and that this is irrespective of culture.
A peculiarity in terms of culture in the Gulf is that many leaders who are otherwise proud of their culture react to ongoing change by uncritically implementing management principles imported from the West. When the leading organisations in Japan, India and China needed to raise their professionalism, they were inspired by the West but introduced ways of working that clearly reflected their respective local cultures. Times of great change require outstanding leadership, which has more to do with conscious choices than doing what everyone else around you is doing.
Nicolai Tillisch is a leadership coach and author of Effective Business in the Gulf