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

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 Historical reference: “Japan reopening for business due to lessons learned from Opium wars.”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, Interna'onal Edi'on

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

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

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

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

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

Business

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