The successors of family business should have trust

Dubai: Abdullah Al Gurg, the third-generation owner of Easa Saleh Al Gurg Group (ESAG), one of the UAE’s well-known family business conglomerates, attributes the success of the family-owned company’s succession process to the harmony in power and responsibilities between the older and younger generations.

According to Abdullah, it is a cliché that any generational transition in a family business is doomed to failure.

The ESAG Group was founded in 1960 by Easa Saleh Al Gurg, Abdullah’s grandfather. It is a multidivisional conglomerate with 24 companies and a range of diverse products and business interests that predominantly include retail, building and construction, industrial and joint ventures.

It has a partnership with over 370 international brands such as Siemens, British American Tobacco, United Colours of Benetton, Dunlop and others. The group has an active presence throughout the UAE, Oman, Saudi Arabia and Qatar. Its reach stretches across Asia, the Middle East, Africa, parts of America, Australia and New Zealand.

Abdullah, the group general manager, is the eldest son of Mrs Raja Al Gurg, managing director of the ESAG Group, who contributes a lot to the day-to-day progress and expansion of the family business.

Abdullah says he is trying to retain the valuable legacy while instilling a progressive culture within the multi-generational workforce.

He said that he could maintain his position in the company by accepting that he doesn’t know everything, thus necessitating the need to learn from everyone around him.

“It was a perfect mix of enthusiasm and [the] progressive attitude of the third generation [coupled] with the wisdom and knowledge of the senior generation,” he said.

Abdullah believes that the older generation can always teach the younger generation. For this reason, he meets daily with his grandfather.

To achieve a balance between the older and the younger generations in family business management, it is very important to ensure that family members understand their roles in the business, Abdullah said.

“The wise vision of my grandfather and the sound strategy he developed decades ago have clearly defined roles and responsibilities of everyone,” he said. “My grandfather established ground rules and every one of family members sticks to them and understand where to stand. I live everyday through the first generation.”

New knowledge

Abdullah never dreamt of playing a leading role in the family business, but he says the trust his family has in him granted him this privilege to build on what has gone on before, while bringing in new knowledge and modernisation.

“I am managing the wealth of the entire family and my aunts and cousins do trust me as it should be in any family business. They don’t even question my decisions or management process,” Abdullah said.

Currently the ESAG group is owned by 17 members, including members of the third generation.

Not all stakeholders are working in the family group. Most of them have businesses outside. Only three from the latest generation work in the company. There is not always a vacancy for anyone who wants to work, Abdullah said.

Abdullah started his career in executive sales in Tejari.com before handling different positions in several government entities. He then moved to the position of general manager in the family group.

“I had to work 12 years outside the family business before handling the general managerial position in our family group,” he said.

He said that in a family business, the younger generation should not expect to have their way and even the older generation should not think they hold the sole responsibility to make the final decision.

“We are sharing ideas. No one has unlimited authority. No one can dominate a conversation. Everyone must listen then have a chance to speak and be heard,” he said.

“I am lucky to have the opportunity to really get to know my grandfather and my mother’s work ethic through this process of merging new and old ideas. It is an opportunity that I treasure. Our business model is very successful and we will continue with the same strategy.”

According to Abdullah the choice of successors is very important for the progress of the business.

“The successors should have a presence of trust, have the capacity to lead, managerial skills and a commitment to take over the business” when it is time to do so.

Scepticism

Abdullah, 33, a holder of a Master’s degree in Business Concepts from Regis University, Denver, Colorado, has gone from being the grandson of the boss to being the boss since joining the group in 2009.

He admits that implementing new ways of running the family business is sometimes met with scepticism from the founder of the family. It is a generation gap issue that is always a problem even in the most enlightened families.

“I am here because I was identified and approved by the stakeholders. I love what I do, and our stakeholders believe in me and my capability,” he said.

Family constitution

“Our first generation is wise enough that there is proper succession planning.” He said a family constitution has been developed and has been signed off by a Dubai court.

The ESAG Group’s family charter was signed six years ago with the help of international and local lawyers, working together to ensure that it represents Sharia within the confines of a modern governance system.

It regulates the businesses succession plan which defines the business strategy and addresses a set of needs and concerns of the stakeholders as well as provide transparency in business dealings.

In case of disputes the group’s share should be sold internally to other family members and according to the market price, he said.

Abdullah said that he also has an agreement with the board, which is represented by the older generation that defines his authority within the group.

“All strategic decisions should be approved by the board,” he said.