Business | General
Arab firms need new strategies to stay in business
Regional corporate leaders arrive in Dubai to attend a forum that will help them clarify their visions and turn them into action.
- By Cleofe Maceda, Staff Reporter
- Published: 00:48 March 29, 2008
Dubai: Arab firms need to be more open to change and develop effective strategies to stay in the business, industry experts said.
According to Salam International Qatar executive director Sulaiman Al Khateeb, a family-owned business will be more susceptible to disintegration after the third generation.
Some business leaders in the Gulf gathered in Dubai for an ongoing forum that tackled "balanced scorecard", a concept originated by Harvard Business School professor Robert Kaplan and Renaissance Solutions president David Norton, to help businesses clarify their visions and turn them into action.
It is a planning and management system used in some major companies such as national oil giant Saudi Aramco and Salam International, as well as in government and non-profit organisations worldwide.
According to the Institute for International Research Middle East, a recent survey showed that 80 per cent of over 1,000 organisations that regularly use balanced scorecard reported improvements in operating performance.
About 66 per cent reported an increase in profits, while 61 per cent reported better bottom-lines.
Catalyst
"It is a catalyst that makes a difference in our business. We want our executives to actually talk to each other and understand their own businesses and improve them using the balanced scorecard," Al Khateeb said.
He said his company, which is over half a century old, started its transformation process in 2000 when the business was getting increasingly complex and diversified, and sustainability became a growing issue of concern.
"In early 2000, we started talking about how to preserve this family business into the future, or how this family-owned business will survive the challenges of today's market - the opening up, the diversifications, and so forth," said Al Khateeb. "We are currently into the third generation and we feel that after the third generation, we will be more susceptible towards disintegration or even not existing in two years. So, to preserve the business, we decided to start a transformation program before going public."
The company became a public shareholding firm in June 2002. Its turnover today is around 1.4 billion riyals and it accounts for about 11,000 shareholders throughout the region.
Ahmad Al Salim, a Saudi Aramco official, said his company has also introduced balanced scorecard to realign itself, but the move for change proves to be challenging.
"We do believe that balanced scorecard is a long journey in a dry valley. It's not a quick transition and you need to ensure you have the right resources. You need to change gear as you drive through because sometimes, you have to go at high speed, and sometimes you slow down," Al Salim said.
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