Succession planning in family owned business in Saudi Arabia by Nawaf Dhubaib
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Succession planning in family owned business in Saudi Arabia by Nawaf Dhubaib

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A presentation that was given in the Kingdom Human Resources Summit that was conducted in Riyadh on February 05th - 06th 2013.

A presentation that was given in the Kingdom Human Resources Summit that was conducted in Riyadh on February 05th - 06th 2013.

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    Succession planning in family owned business in Saudi Arabia by Nawaf Dhubaib Succession planning in family owned business in Saudi Arabia by Nawaf Dhubaib Document Transcript

    • h"p://sa.linkedin.com/pub/nawaf-­‐dhubaib-­‐mhrmgt/6/531/b84/   1  
    • Hypothesis:  Succession  planning  will  not  be  successful  without  addressing  the  cultural  change  needed  to  be  associated.     2  
    • Choice  for  HR  professionals:  •  Where  to  work  in.  (show  of  hand  of  how  many  was  approached  by  head-­‐hunters   last  month?).  What’s  HR  role  in  the  organizaMon?  Business  leaders’  execuMoner  or   consultant?  Make  sure  your  business  leaders  has  longer  term  vision  than  yours.  HR   cycles  are  at  least  one  year  long.  •  What  organizaMon  dynamics  we  stride  towards?  StaMc  or  dynamic?  ASer  we  answer  that,  we  look  at  FOB’s:  On  the  risk  of  falling  for:  “If  you  have  a  hammer,  everything  you  see  becomes  a  nail!”,  FOB’s  problems  can  be  fixed  instrumentally  by  HR  leadership  with  a  major  change  management  program.  Historical  reference:  “Japan  reopening  for  business  due  to  lessons  learned  from  Opium  wars.”  =  “OrganizaMons  can’t  afford  having  closed  staMc  cultures”   3  
    • FOB  makes  big  percentage  of  GDP  PotenMal  is  high  to  be  able  to  share  the  burden  of  naMonal  unemployment  PotenMal  to  increase  GDP  diversity.  We  will  discuss  further  what  possible  reasons  for  the  low  rate  of  transiMon.    Source:    “Family  businesses  in  Saudi  Arabia  make  up  25%  to  GDP”  The  Economic  Times,  Internaonal  Edion  h"p://arMcles.economicMmes.indiaMmes.com/2012-­‐07-­‐26/news/32869781_1_businesses-­‐saudi-­‐arabia-­‐investment-­‐strategy   4  
    • The  challenge  for  FOB  is  the  level  of  complexity  management  capabiliMes.  External  Complexity  (globalizaMon)  and  internal  (survival)  All  business  is  affected  by  globalizaMon:  global  supply  chains  i.e.  more  sensiMve  to  geopoliMcal  volaMlity  Business  conMnuity  complexity  increases  by  the  very  definiMon  of  survival.  If  it  is  compeMMve  then  it  has  a  loop  to  capture  the  needful  tweaks  to  maintain  its  advantages.  Successful  business  tend  to  deal  with  li"le  changes,  thus  resistant  to  change  becomes  part  of  the  culture  (which  has  a  winning  argument  against  change)  i.e.  what  made  you  could  break  you.  Dealing  with  complexity:  Division  of  complexity:  insMtuMonalizing  funcMons  in  organizaMons  (no  more  one-­‐man-­‐show)  that  deals  with  complexity  from  different  angles.  e.g.  HR,  OperaMons,  finance  etc.  insMtuMonalizing:  funcMons  having  enough  autonomy  to  develop  a  sustainable  business  model.    Outsourcing  complexity:  pushing  non-­‐value-­‐added  acMviMes  to  companies  that  use  economy  of  scale  to  deal  with  it.  e.g.  bakery,  mechanics,  restaurants  etc…  Another  aspects  that  is  ‘PercepMons’:  does  it  make  a  difference  to  know  whether  you  are  a  captain  of  a  tugboat  or  Titanic?  Percep&on  is  important   5  
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    • Need  for  change  of  the  Shareholder’s  paradigm:  Maslows  pyramid  of  needs,  self  actualizaMon.  FOB  need  to  adopt  division  of  problems/complexity  and  outsource  unneeded  business.  CorrelaMon  between  business  capability  to  breakdown  problems  and  it  capacity  and  size.  How  does  the  FOB  owner  sees  himself  as  with  regards  to  the  FOB?  Car  mechanic?  Or  passenger?  Is  he/she  under  the  hood?  Or  behind  the  wheel?  We  agree  to  pay  extra  for  extra  features,  such  in  cars  (speed  control).  Autonomy  and  self-­‐sustainable  is  an  organizaMon  feature  that  will  have  an  extra  cost.    Change  of  paradigm  induces  a  change  of  vision  which  enMtles  a  change  of  culture  uMlizing  change  management.  HR  has  an  instrumental  role  in  change  management.   10  
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    • Idiosyncrasy:    Process  (having  a  process  linked  to  obsolete  business  goal)  Tool:  Having  an  obsolete  tool  or  technology  People:  Having  an  outdated  skill  sets  Resistance  to  change:  Cultural  values  are  reinforced  by  Mme   12  
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    • The  magnitude  of  change,  shows  that  many  will  feel  threaten  by  what  change  will  bring.   14  
    • Knowledge  power  is  strongly  manifested  in  FOB.  System  runners,  AccounMng  systems  masters  etc…  Problem  with  people  who  wears  the  gate-­‐keeper  hats.  Their  job  is  to  minimize  change,  with  operaMonal  mindset.    Last  HR  manager  or  last  consultant  tried  that  and  it  didn’t  work  before,  why  would  it  work  now?  The  percepMon  of  what  the  change  will  yield  to  No  common  source  of  pain  for  all  organizaMon  members.  EmoMonal  a"achment  to  a  person,  process  or  tool  due  to  emoMonal  investment  in  the  past.   15  
    • Transparency  is  a  good  remedy  to  Knowledge  power  by:  •  Tool:  IT  •  Process:  creaMng  check  and  balance.  •  People:  IntroducMon  of  new  members.  Scaffolding  is  creaMng  a  funcMonal  redundancy  in  an  organizaMon  to  minimize  dependency  on:  •  Tool:  Paper,  IT    •  Process:  create  alternaMve  processes  or  introduce  choices  to  process  users.    •  People:  IntroducMon  of  new  skill  sets  by  new  members.  Efficiency  is  not  a  virtue  at  a  &me  of  change  Quick  success  to  build  on  trust  by  having  a  track  record.  Never  personalize  the  problem  to  be  addressed:  Process:  The  easiest  technically  to  address,  but  poliMcally  difficult  Tool:  it  is  relaMvely  easy  to  scapegoat  the  old  tool  and  bring  new  one  People:  win  all  the  people  to  align  their  efforts   16  
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