Businesses across the GCC are today facing unprecedented challenges. Lower oil revenues driven by a drop off in global demand, cutbacks in public expenditure, regional instability, along with fast-changing consumer sentiments and population shifts; have all contributed to this turbulence. And things do not look like abating any time soon.

So, what are leadership teams doing to keep their organizations afloat amidst these currents? The retail industry in the region provides a stark illustration of what happens when leadership teams get it right. Highly competitive, large volume with low margins, complex supply chains; compounded with the delicate demands of sale and after sale customer experiences – represent the inherent complexities of this sector.

Consider one of the largest retail groups – a family business with a long-standing tradition of serving the region for more than 70 years. With its extensive retail network and product distribution channels, this organization was effectively operating unchallenged in the marketplace. However, once the economic downturn had struck, even prior to the COVID-19 pandemic, its seemingly immune status as a monopoly across many product and service lines was rocked.

After years of continuous growth of +17%, the situation had ground to a halt with four quarters of negative growth. The leadership was faced with the hard fact that strategies, priorities and behaviour had to change. Towards what exactly, was vague at best. However, what was clear was the need for a far more nimble and agile leadership in dealing with this new normal of commercial uncertainty.

Having acknowledged the need, the leadership team’s first step involved a self and collective examination of their DNA. What were their strengths and weaknesses when it comes to leading the organization on a culture and agile transformation? It became immediately clear that due to years of aggressive growth, parallel to regional development and prosperity, the leadership team was the driving force when it came to their successful strategy execution. They knew what they stood for, clearly understanding their shared purpose and how this enabled them to set a clear direction for the rest of the organization.

Unbeknown to them, however, was the fact that this fast-paced mission-fueled growth, had created long-term wear and tear on high performance. This was especially the case when it came to creating streamlined systems and processes that increased the speed and effectiveness in keeping up with consumer trends and demographics. Worryingly, it became apparent that critical business intelligence was not reaching the right decision makers for the group. Archaic CRM analytics couldn’t keep pace with the rate of organization growth, let alone with the changing demands of consumers.

Not only were decisions made from inadequate or outdated sources of business intelligence and analytics. Once a risk or opportunity was identified, the leadership team was paralysed in their ability to respond. With a misaligned corporate governance structure, the group’s separate businesses found themselves embarking on their siloed strategies with vigour. Yet, when it came to creating and leveraging group-wide marketing analytics platform or entering into new markets such as Asia, mistakes were repeated by many of the business units. No shared learnings, data or enterprise risk management assets were being utilized effectively. It was recognized that this was due to the sensitivities of working across businesses, the stigma attached to failure, and the absence of continuous learning throughout the family business.

Our research shows that leadership teams able to build on each other’s energies and talents around a shared purpose; are likely to drive a 21.8% boost in performance throughout their organization.

Upon diagnosing the state of their leadership team as ‘One’ Group, rather than separate business units, we were able to quickly diagnose what needed immediate attention in order to adjust to the changing market landscape. Their unique results, as reflected in their Adaptive Culture Indicator Heat Map, illustrated strong leadership capabilities and a heightened sense of purpose of values them when setting the course. However, what required serious work was the team’s absence of fostering a challenge culture and an inability to focus on addressing organizational skills gaps.

In tackling this head-on, the Leadership team focused on institutionalizing their behaviour at the top by only focusing on 2 symbiotic behavioural elements:

1. total respect for each other; but
2. the courage to speak out and challenge each other with good intentions. 

Greater emphasis was subsequently put towards the executive team members driving these behaviours within their respective functions and business units throughout the family group.

The next step was more medium term in nature, enhancing the talent development and enterprise risk management processes and systems throughout the organization. So far, these have gone a long way in resolving the skills gap challenges, as well as creating a stronger risk culture and capability. These tangible wins, have ensured the family business’s ongoing transformation sees them well positioned in becoming a strategic global player, even during a period of market stagnation.

The best leadership teams in the world frequently arise from volatility.  However, every team will have their own unique challenges and opportunities. By looking within and without bias, and understanding where your team sits, is only the first step in being able to get through the uncertainty of today. In the Gulf, the need for behavioural and enterprise-wide leadership shifts may not have been required in the past. The failure for some leaders to proactively adjust their energies and efforts, has caused irreparable consequences already. In contrast, those that have been able weather the storm, find themselves strongly positioned in how they explore options for growth. What will be your team’s next move?

Across reception areas and hallways throughout the MENA region, organizations proudly display their mission statements illuminating their identity and purpose. These guiding principles are considered central to the essence of the organization, especially for employees and the market. Often derived from corporate strategy, these statements are seen as the uniting banner that seeks to ferment a strong culture and drive performance.

However, such proclamations could be doing your organization more harm than good. According to Deloitte’s Core beliefs and culture survey, there is “a disconnect between organizations simply talking about their culture and those that are embedding their beliefs into their operations.” The biggest challenge here is that this creates a major disruption between leadership and the rest of the organization. Thus, organizations are left with employees feeling their roles don’t matter with the latter simply not subscribing to the fundamental mission of the organization.

When organizations are able to create the ‘role-mission’ connection, the result is a boost, not just to morale but to performance as well. Research indicates that performance increases and operating costs decrease. It is no secret that the cost of hiring an expatriate worker within the MENA region is sizable. Organizations are additionally having to tackle the challenge associated with attracting and retaining millennials, typically nationals, throughout the region. Regardless of how effective your hiring or Nationalization strategy is, employees who feel a connection with the heartbeat of their employer are more likely to serve longer tenure, and at peak performance.

A State of Waste
It is hard to surpass professional football when it comes to a high-stakes, high-visibility environment. Even in such a public arena, it’s astonishing how often clubs fail designing and executing a strategy at the cost of billions of dollars. Intricate coaching methodologies, expansive scouting networks, seemingly limitless chequebooks, and the latest sports medicine; all provide no certainty for success. According to Optima Football, “75% of all clubs in the top 5 leagues aren’t working with a sustainable model or strategy.” Whatever the reason for this lack of health, it’s clear this amount of waste wouldn’t be tolerated in any business.

Examining football’s current state, one club in particular stands out for the way it has looked to build a sustainable model to deliver results- the Liverpool Football Club (LFC). Upon closer examination, science, rather than coincidence, has been the driving force behind their recent successes making them the envy of their European rivals.

Philosophy and Vision
Fenway Sports Group’s (FSG) initial era at Liverpool was marked with continuous underperformance and misalignment at the operational level. Whilst the club did come close to winning the English Premier League (EPL) in 2013-14, it was clear to the Board that success needed to be built on an unwavering philosophy, vision and high-performance culture. Based on the use of mathematical analysis, made famous by their Moneyball modelling, enter Jurgen Klopp. Unproven in the EPL, and on the back of a below par run in the Bundesliga between 2013-15, he was identified based on a scientific selection process underpinned by predictive analytics that removed the biases such as reputation or track-record. The qualities the Board was after were for a manager to galvanize players, staff and the Board alike; towards a destination where the whole of the club had to be greater than the sum of its parts.

With the Board’s backing, Klopp began putting together the blueprints for the success in an uncompromising manner, avoiding the traps of short-termism prevalent in football and many industries today.

Stakeholder Management
Klopp was able to build trust rapidly with his Board and ensured whole-of-club alignment to this new philosophy and transformation. He established a strong coaching backroom based on total collaboration when it came to football strategy and analysis, player scouting and management. Furthermore, regarding talent, he refreshed the focus on the club’s Football Academy, where with Board approval, he created a single training site for both the Academy and senior teams. This was a statement of intent with LFC: betting on the future, as well as creating a source of motivation and integration between senior and youth squads.

Similarly, when it came to the fans, Klopp was quick to understand the Anfield mindset, one built on a legacy of pride, loyalty and hard work. This has been leveraged every week for the world to see with his sincere touchline passion. Creating this social contract with the club’s supporter-base early in his tenure had a telling impact on the energy and belief towards the club’s new culture.

Talent Through Science
Mathematical modelling was also extended in building the right squad. This was based on selecting fit-for-purpose players that can be plugged in to the playing methodology envisioned by Klopp. Player screening and selection was executed based on rigorous analytics and overseen by the coaching panel, rather than just one individual. Through the use of such analysis and assessment, LFC was able to bring greater certainty with their player selection and development. Past player performance and future potential, was shrewdly calculated with attitudinal and behavioural pre-dispositions towards creating the club’s envisioned winning culture.

Deploying such science did not require a high-profile squad, and the inflated price tags and risks that come with it. Rather, lesser known younger players along with the rejuvenation of forgotten stars created the right mix.

Develop and Measure
Building on the use of data for talent identification and selection, this was also utilized for the development and performance management of all players. LFC have been able to deploy data throughout games, to devastating effect. For instance, when games are in the balance, they are able to adopt defensive and counter-attacking options at ease through data-driven pitch control tactics. This is done in real-time and activated or de-activated at an instant, completely suffocating the opposition or attacking with the utmost precision. To be able to effectively capture this data LFC has used “missile-tracking technology to assess its players” during game time.
Just as important is the ongoing use of this business intelligence during games and training to sharpen player techniques through digital-monitoring and continuous feedback. This has enabled LFC’s squad to actively measure individual performance, but also set targets and create a sense of precision and ownership around them.

Build Momentum
Klopp’s first two seasons were about building the base and consolidating the defensive structure of the club, akin to a Corporate CFO or COO avoiding unnecessary leakage. However, once in their stride, the team was able to win and with ease, breaking numerous records over the past two EPL campaigns. In particular, LFC have mastered the art of smothering opponents through Klopp’s Gegenpressing Strategy. The instinctive activation of such tactics, could not have been achieved without the right players, being able to execute the envisioned playing strategy, supported by the right feedback and business intelligence. Importantly, this has been driven collectively by a tenacious desire and fortitude to win, a squad Klopp admirably labels “mentality monsters”.

The Results
LFC’s on-field successes now make the club one of Europe’s most financially secure boasting continuous growth and record profits. Klopp’s laser-like focus on executing his strategy around an enduring philosophy and vision, are only outdone by his people-management qualities connecting with supporters and players alike. His success has been infectious and acknowledged by the extension of his contract by FSG until 2024.

In an age of knee-jerk Board decisions, the LFC story tells of a powerful partnership between FSG and Klopp. Built on the use of both modern science and club history, the club has reinvented the way football can be played and won. Most importantly, it has done so organically with the Merseyside culture and fabric sitting at the core of these successes. The crowning of EPL Champions for 2019/20 stands as testimony for Leaders who wish to examine the state of their organizations, beyond a financial period or season, when looking to survive during these turbulent times.

How can you apply these lessons to your organizational transformation?
Following the “traditional” path may not be the right fit for your company. Here are the key LFC lessons you can explore when examining your business:

• Remember your transformation is long-term journey and must be sustainable.

• When building or buying your talent, remove biases from the equation. The most expensive and experienced candidates might not be the best fit when looking execute your strategy or deliver on objectives.

• Collect the right analytics and business intelligence ensuring it is human and technologically integrated (bionic), in order to enable performance, and remove any risks/ roadblocks.

• Objectively identify your critical stakeholders and how to tailor your approach when connecting with each. From front-line employees to clients and the Board of Directors, these are the people that will make your company successful.

• Invest adequate time to inspire and connect with stakeholders during your organizational transformation journey, connecting their day-to-day efforts with the destination.

• Leveraging a diversity of views and collective attitude in addressing key issues in the business, will ensure stronger risk assessment, governance practices and opportunity maximization.

This article first appeared in Forbes Middle East in Jun 2020