As 2013 disappears over the horizon I am also waving goodbye to the project that has kept me busy, pretty well full-time for the past two-and-a bit years and moving on in search of something new. Those who know me will appreciate that what gets me out of bed in the morning is a challenge and the task of taking a Saudi-owned fmcg manufacturer and retailer to their first IPO, as I have been for over two years, is a challenge that I’m going to find difficult to equal.
I’ve been in my element of course. Every day held a lesson (or ten) and when you consider we were transforming a very traditional family business into an IPO-ready organisation and at the same time launching an aggressive international expansion programme you’ll realise that wherever I go next, my life is likely to be much simpler, but that’s only half of it.
Last month I wrote about “adaptive management” and, if nothing else, the past two years have proven to me, beyond doubt, how important the ideas of people like Professor Ronald Heifetz are. As we grow to better understand the role of marketing in modern business and appreciate that marketing influences every discipline in every area of business the vastness of this subject is beginning to dawn on people. Combine this with the pace of change that delivers the continuous flow of unique challenges that drive Heifetz’s concept and you begin to realise that there aren’t any cookie-cutter solutions anymore. The most important skill required by a marketer these days is problem-solving – adaptive management. You can’t teach this of course, It comes with practice – many years of it.
In the past couple of years alone I have been engrossed, among many other things, in product design and development, store design, process development, Human Resources management, recruitment and training, data collection and analysis, brand development, internal marketing, channel development, digital marketing, franchise modelling, magazine publishing and media sales, telemarketing, loyalty development and direct marketing and all the communications from press and TV advertising to PR that any business has to plan and manage. Add more than a sprinkling of cultural, religious and social constraints – How do you represent a woman’s personality without showing a woman? – and you have a recipe for a major challenge?
I’m also delighted when I look back on our achievements of the past two-and-a-bit years to know that while modern businesses invest 10-20% of their revenue in marketing (see LinkedIn discussion) by adopting the Full Effect approach to marketing we delivered the 25% year on year growth that the owners of the businesses were demanding, for three consecutive years with a mere 5% investment.
One of the greatest challenges faced by Western marketers in the Middle East is the lack of trust local business owners have in the western managers that run their businesses. Its a fascinating and complex relationship. The lack of experience and skills of Arabs whose unique good fortune has placed them in the position of owners of sizeable businesses, means that to survive in the face of international competitors who are invading their markets these days, it is essential for them to employ Western managers. However, absence of the very skills and experience they are forced to seek abroad leaves them ill-equipped to judge a good consultant from a dreadful one and as a result they’ve employed many of the latter over the years. The inevitable consequence of this has been the failure of many Arabian businesses to realise their potential and even the demise of some at the hands of self-proclaimed marketers from the West. There’s also a naivetae among locals that leads them to believe that ownership of a business makes them both superior and entitled to all the rewards. No wonder there’s mistrust.
This mistrust is working in nobody’s favour. The local businesses whose past successes have been the gift of weaker or non-existent local competition are failing as international players, with more know-how supported by franchisees with pockets deep enough to bring US or European strategies to life, arrive to take ownership of Middle East markets. Meanwhile the new wave of Western experts who find their way to the region aren’t finding the trip as lucrative as it used to be. This in turn has dissuaded many of the consultants who can actually do the job from taking on the challenges and the void is increasingly being filled by younger, wholly unsuitable candidates. And the cycle continues …
Already, it’s tempting to dismiss this as a terminal spiral, but we are still only acknowledging part of the scene. Innumerable unexpected issues impact on the natural progress of businesses on a daily basis. For example, many Arab business owners still fail to acknowledge that their success to date has been largely due to the absence of high calibre competitors. Nor do they realise how far ahead of them the newly emerging western competitors are. There are also still government departments in Saudi Arabia that don’t use computers and one significant business I visited had no computers in their accounts department as recently as three years ago. Even some of the most advanced local businessmen I met are unable to separate good from truly awful business services like advertising agencies, logistics companies and
But don’t think this makes some of these Arab markets easy pickings for Western businesses. The cultural and attitudinal influences are inpenetrable to Westerners. Just when you think you understand their motivations something happens to make you realise that you don’t have a clue. I’ve witnessed consultants wheel out their Western sales pitches or construct elaborate argument in support of initiatives that failed totally because, though the argument would be bang on the nail in the West the considerations of the local investors they were talking to were totally different. This kind of stuff isn’t new to those of us who have operated in diverse markets but in the Middle East the differences are far more extreme. You really do need a local guide to help you through the challenges of the local markets. You also have to be an adaptive manager and have many miles and loads of international experience under your belt.
However, we are getting closer. In markets other than Saudi Arabia (which is a law unto itself) westernisation of consumers and better understanding by those of us who have taken the time to see what is really happening there are creating a convergence. With the 20/20 Expo in Dubai and the World Cup in Qatar opportunities are emerging again after the economic slump that ravaged Dubai and shook the confidence of many of its neighbours. Smart Western businesses and entrepreneurial locals are finally working out how to combine to exploit these opportunities and where partnerships like these come together the mediocrity of their single culture competitors means that, for them at least, success is pretty well assured.
Phil Darby
December 31, 2013