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Making Jeddah Government Entrepreneurial: A Hypothetical Case


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  • 1.                     Making  Jeddah  Government  More  Entrepreneurial     and       The  Case  of  Jeddah  Municipality           Prepared  by:       Osama  M.  Ashri       In  fulfillment  of  the  requirements  of  the  course:       Public  Policy  Entrepreneurship   (EPS  9555)           Abridged  Version     2012                        
  • 2.   INTRODUCTION:       “Institutions  such  as  government  agencies  […]  need  to  be  entrepreneurial  and   innovative  fully  as  much  as  any  business  does.  Indeed,  they  may  need  it  more.”     -­‐  Peter  Drucker.     Making   a   government   more   entrepreneurial   might   sound   oxymoron.   However,   the   tumultuous   environment   of   today’s   ever-­‐changing   world   poses   both   threats   and   opportunities.  To  manage  risk  and  exploit  opportunities,  Jeddah  Government  must   reinvent  itself.  It  needs  to  do  things  in  a  new  way  so  as  to  ensure  the  prosperity  of   the  city.     This   paper   examines   how   entrepreneurial   practices   will   enhance   Jeddah   Government’s  performance  and  cultivate  a  culture  of  entrepreneurism.  The  paper  is   divided   in   two   parts.   The   first   part   proposes   ways   to   make   Jeddah   Government   more   entrepreneurial.   The   second   part   illustrates   how   Jeddah   municipality   can   become  more  entrepreneurial  through  improving  customer  service.    (See  Exhibit  ‘A’   for  an  overview  of  Jeddah.)     PART  I:  BUILDING  AN  ENTREPRENEURIAL  GOVERNMENT  (E-­‐GOVERNEMENT):     Effecting  change  in  the  public  sector  is  notoriously  difficult.  Entrenched  employees   and   complex   procedures   constrain   ambitious   change   efforts.   The   following   is   a   proposed   approach   to   spearheading   the   challenging   transformation   effort   to   make   Jeddah  Government  more  entrepreneurial.  The  initiative  is  designed  in  such  a  way   that   addresses   and   tackles   the   following   challenges:   (1)   Lack   of   customer   orientation;   (2)   Change-­‐resistant   culture;   (3)   Self-­‐preservation   system;   (4)   Lack   of   risk-­‐reward  formula.     THE  VISION:     The   role   of   the   Jeddah   Government   has   been   mainly   administrative.   The   government   has   been   primarily   taking   on   a   supervisory   role   over   the   city’s   municipality  activities.  However,  to  shape  the  city’s  future,  a  new  vision  of  creating   an   entrepreneurially   driven   government   must   be   shared   between   all   constituents.   The   government   entrepreneurial   practices   will,   then,   reverberate   to   cultivate   an   entrepreneurship  ecosystem  for  the  entire  city.    To  communicate  this  vision,  the  city   will  use  every  media  outlet  possible  from  formal  address  to  newspaper.                
  • 3.   THE  E-­‐GOVERNMENT  TEAM:       The  city  government  will  form  a  steering  committee  for  entrepreneurship  made  up   of   entrepreneurially   minded   leaders   from   both   the   private   and   public   sectors.   The   committee   will   comprise   different   subcommittees,   each   addressing   and   tackling   major   issues   of   healthcare,   education,   commerce,   and   city   development.   In   addition,   the  committee  will  be  leading  the  E-­‐Government  transformation  efforts.       DEVELOPING  AN  ENTREPRENEURIAL  CULTURE  AND  VALUE:     To   weave   entrepreneurism   into   the   fabrics   of   Jeddah   Government,   the   following   measures  will  be  taken:     • Action   trumps   everything!   Jeddah   government   used   to   be   hobbled   by   long-­‐ term  plans  that  led  to  major  catastrophes;  mainly  the  two  consecutive  flood   events.   Jeddah   Government   can   remain   agile   in   the   face   of   crises   only   by   taking  immediate  action  based  on  the  resources  available.  The  goal  is  to  learn   along  the  way  and  build  off  that  learning  to  realize  the  goals       • Freeing  the  city  government  of  the  shackles  of  bureaucracy.  Employees  are  at   the   forefront   of   the   government   operations   and   interface   excessively   with   the   public.   Therefore,   employees   must   be   empowered   through   involvement   in   the   decision-­‐making   process,   realignment   of   performance   appraisal,   recognition  of  outstanding  efforts,  and  tolerance  for  risk-­‐taking.  In  addition,   employees  will  be  looked  at  as  internal  customers  whose  views  and  feedback   are  sought  seriously  for  continuous  improvement.         • Customer-­‐driven   and   result-­‐oriented.   Customers   are   defined   as   any   individuals  or  corporations  doing  business  with  Jeddah  Government.  The  city   government   will   continuously   look   for   ways   to   improve   the   quality   of   its   customer   service.   In   addition,   the   government   will   conduct   all   of   its   processes   in   a   result-­‐oriented   manner,   meaning   that   transactions   and   activities   are   measurable   and   subject   to   continual   improvement   in   order   to   satisfy  evolving  customer  needs.           FOSTERING  INNOVATION     Jeddah  Government  will  establish  Jeddah  Entrepreneurship  Center  (JEF)  to  broaden   and   deepen   support   to   innovation.   JEF   aims   at   fostering   entrepreneurism   in   the   city   by   conducting   an   ongoing   research   to   identify   opportunities   and   cultivating   an   entrepreneurship   ecosystem.   In   addition   to   the   fact   that   Saudi   Arabia   is   a   tax-­‐free   country,  the  following  initiatives  will  be  undertaken  to  further  foster  innovation  in   the  city:    
  • 4.   • • Inviting   thought   leaders   in   public   policy   and   entrepreneurship   to   share   their   expertise  through  consulting  and  speaking  engagements.       Hosting   a   monthly   Jeddah  Startup  Weekend   and   an   annual   Jeddah  Challenge   to  support  nascent  ventures.       •     Investing   in   the   three   capitals   of   Human,   Financial,   and   Physical.   The   amalgam   of   these   capitals   shall   create   an   enabling   environment   for   innovation.       o Human   Capital.   Jeddah   is   home   to   many   local   initiatives   that   have   gone   national,   such   as   the   National   Green   Movement   that   was   spearheaded   by   a   group   of   talented   female   students.     Jeddah   Government   will   capitalize   on   the   new   generation   of   creative   and   forward-­‐looking  entrepreneurs  by  investing  in  them  through  training   and  mentoring  programs.       o Financial   Capital.   The   city   government   will   allocate   a   budget   for   funding   startups   that   have   the   potential   to   bolster   the   economy   and   well-­‐being  of  the  city.   o Physical   Capital.   The   government   will   invest   in   building   incubators   and  accelerators  to  help  entrepreneurs  harvest  their  ideas.     DEVELOPING  PRIVATE-­‐PUBLIC  PARTNERSHIPS     No  city  government  is  an  island!  Thus,  Jeddah  Government  will  forge  partnerships   with  key  stakeholders;  namely:     • Jeddah   Chamber   of   Commerce   to   tape   into   the   rich   network   of   local   businesses  that  can  support  entrepreneurship  initiatives.             • Local   universities.     The   city   government   will   mainly   form   an   alliance   with   King  Abdullah  University  of  Science  and  Technology  (KAUST).  The  university   is   undertaking   many   entrepreneurship   initiatives   and   it   enrolls   students   from  45  countries.  The  collaboration  will  help  with  the  commercialization  of   many  technologies  developed  at  the  university  through  research.             • Major  Development  Contractors  to  facilitate  the  ongoing  development  of  city.              
  • 5.   MEASURING  PROGRESS     The   city   government   will   use   the   following   key   metrics   to   measure   and,   hence,   manage  progress.  The  year  of  2013  will  be  used  as  a  baseline.     • Startups     o Number  of  startups  per  year   o Aggregate  valuation  of  new  businesses   o Number  of  jobs  created   o Survival  rate  of  the  new  businesses     o Outcomes  of  Jeddah  Startup  Weekend  and  Jeddah  Challenge  in  terms   of  how  many  businesses  got  off  the  ground.     o Number   of   participants   in   the   Jeddah   Annual   Challenge   to   get   an   indication  of  the  growing  interest  in  entrepreneurship     • Survey  results  of  the  following:   o Customer  satisfaction  on  the  performance  of  Jeddah  Government  and   perceived  improvement  in  the  city   o Employee  satisfaction  about  the  new  entrepreneurial  government     • Contribution  of  the  city  to  the  national  GDP.     • Entrepreneurship  conferences  and  whitepapers  delivered  to  the  city.     • Productivity   measured   by   the   number   of   transactions   completed   and   time   taken.     • Number   of   technologies   commercialized   through   the   alliance   program   with   KAUST.                                  
  • 6.   PART  II:  IMPROVING  CUSTOMER  SERVICE  IN  JEDDAH  MUNICIPALITY.     The  Jeddah  Government  will  launch  an  initiative  that  intends  to  improve  customer   service  in  the  city  municipality.       The  vision     The  vision  is  to  make  customer  service  seamless  and  robust  in  the  Municipality  of   Jeddah.   Customers   are   broadly   defined   to   include   all   those   who   deal   with   municipality  such  as  residents,  companies,  contractors  and  developers.           Embracing   an   entrepreneurial   mindset   to   discover   emerging   customer   needs.   The   municipality  will:     • Continually   ask   constituents   questions   and   listen   to   their   concerns.   A   customer   service   center   will   be   fully   dedicated   to   coordinating   the   communication   activities   either   through   face-­‐to-­‐face   interaction   or   electronically.   • Adjust   services   based   on   customer   feedback.   The   Act-­‐learn-­‐build   approach   will  be  adopted  for  incremental  improvements.       Delivering  the  vision  through  entrepreneurial  action     As   in   the   case   with   the   city   government,   the   municipality   will   take   the   same   measures   to   create   an   enabling   environment   that   encourages   risk-­‐taking   and   rewards   desired   performance.   In   addition,   old   processes   will   be   reengineered   to   enhance   customer   experience.   For   example,   a   revamped   portal   will   enable   customers  to  track  the  progression  of  their  transactions  in  a  transparent  manner.       Implementing  an  Entrepreneurial  Value  Chain         In   order   for   the   municipality   to   deliver   improved   services,   it   will   implement   an   entrepreneurial   value   chain   (see   exhibit   ‘B’.)       The   activities   described   above   will   be   translated   throughout   the   value   chain.   The   municipality   employees’   satisfaction   is   pivotal   to   increasing   their   productivity   and   loyalty   that,   in   turn,   drive   customer   satisfaction.   To   make   the   value   chain   more   entrepreneurial,   the   municipality   will   promote  a  culture  of  innovation  that  is  risk-­‐tolerant  and  customer-­‐driven.                        
  • 7.   Measuring  Progress:     The  following  metrics  will  be  used  to  measure  progress:     Criteria  for  measuring  Customer  Satisfaction   • Results  in  terms  of  whether  the  desired  service  has  been  obtained.     • Responsiveness  assessed  based  on  the  turnaround  time  stated  in  the  process   flowchart.   • Courtesy   gauged   through   follow-­‐up   surveys   about   customers   recent   experience.     The  Net  Promoter  Score  will  be  used  to  measure  customer-­‐relationship  as  follows:   • How   likely   constituents,   whether   businesses   or   individuals,   are   to   contribute   (monetarily   on   non-­‐monetarily)   to   support   the   city’s   entrepreneurial   initiatives.   • How  likely  a  contractor  would  recommend  Jeddah  Municipality  (based  on  the   effectiveness  of  transaction  and  ease  of  doing  business.)     Metrics  for  measuring  internal  processes  are:   • Time  taken  to  resolve  an  issue  or  deliver  a  service   • Retention  rate  of  the  municipality  employees   • Logs  of  best  practices  developed  to  improve  processes     The   above   metrics   will   be   used   in   an   iterative   fashion   to   identify   areas   for   improvement.           Milestones:       The   project   for   improving   customer   service   will   kick   off   at   the   beginning   of   2013   with  the  following  millstones:     Millstone   one   (Quarter   1):   Resources   identified,   allocated   and   approved.   This   involves   conducting   an   assessment   of   the   status   quo   and   identifying   the   gaps   in   qualification  level  of  staff  and  resource  availability.         Millstone  Two  (Quarter  2):  The  new  processes  as  described  above  will  be  effective.     Millstone   Three   (Quarter   3):   Employee   readied.   Customer   service   training   workshops  will  be  provided  to  employees  to  help  them  get  acquainted  with  the  new   culture.     Millstone   Four   (Quarter   4):   The   municipality   will   announce   its   new   entrepreneurial   service  to  public.            
  • 8.   Exhibit  (A)     Jeddah  is  a  Saudi  city  located  in  the  middle  of  the  eastern  coast  of  the  Red  Sea  and  is   known   as   the   'Bride   of   the   Red   Sea'.   The   city   is   a   major   tourism   destination   and   considered  the  economic  capital  of  the  country.  Its  population  is  estimated  around   3.4  million.  Jeddah’s  geographical   location   places   it   at   the   heart   of   the  Middle  East   and  North  Africa  (MENA),  with  all  their  capitals  within  two  hours  flying  distance.                                    
  • 9.     Exhibit  (B)                                                
  • 10.     BIBLIOGRAPHY     Blanchard,  K.  &  Bowles,  S.  (1993).  Raving  fans:  A  revolutionary  approach  to   customer  service.  New  York:  Morrow.     Heskett,  J.  L.,  Jones,  T.O.,  Loveman,  G.  O.,  Sasser,  W.  E.,  Schlesinger,  L.  A.,  (1994).  Putting   the  service  profit  chain  to  work,  Harvard  Business  Review,  72,  164-­‐174.     Kawasaki,  Guy.  (2005).  The  Art  of  the  Start:  The  Time-­‐tested,  Battle-­‐  hardened   Guide  for  Anyone  Starting  Anything.  New  York       Minniti,  Maria.  (2008)  The  Role  of  Government  Policy  on  Entrepreneurial  Activities:   Productive,  Unproductive,  or  Destructive?.  A  special  issue  of  Entrepreneurship   Theory  and  Practice  on  government  policy  and  entrepreneurial  Activity.  Baylor   University.     Hamod,  David.  (2010).  Cultivating  the  Entrepreneurial  Ecosystem  in  Saudi  Arabia,   U.S-­‐Arab  Tradeline,  XVIII,  2.       Other:     Governor Craig Benson’s Inaugural Address