Middle Eastern family businesses worth over USD 1 trillion are expected to be passed on to the next generation within the next 5 to 10 years, according to a published journal. Such businesses control more than 90 per cent of the region's commercial activity and yet many of them do not have key Organizational Development (OD) mechanisms in place, such as the family constitution and family institutions. SKOPOS Consulting notes that mission, vision and value (MVV) statements in particular are critical to their sustained viability and success, and are integral in defining and driving these mechanisms.
A mission statement reminds an organization of the reasons behind its existence, while a vision statement implies what the organization aspires to become. A value statement, on the other hand, states the organization's beliefs and the guiding principles it follows in all its activities. Together, MVV statements define the corporate identity, which guides how strategy, structure, recruitment and leadership can be managed.
An estimated 75 per cent of the Middle East's private economy is governed by around 5,000 families whose companies generate 70 per cent of regional employment. Despite their important roles, many family businesses in the Middle East do not have MVV statements and other key OD elements such as leadership development and succession planning in place.
"Family-run businesses in the Middle East should include Organizational Development tools and mechanisms in their succession and growth plans. This practice ensures the goals and beliefs of a particular business are not lost or changed as the years go by and as management changes. Good MVV statements prepared as part of an overall OD plan provide family businesses with the foundation for consistent and clear business directions and allow them to retain the original motivations of their founders," said Dr. Hussein El Kazzaz, Managing Director, SKOPOS Consulting.
SKOPOS Consulting, an OD solutions provider focusing on the MEA markets, advises family businesses to be aware of the various problems arising from the gradual growth of their organization, as well as the generic challenges commonly found in family businesses of complexity, lack of discipline and informality. The consultancy identifies three ownership stages that family-run businesses need to focus on. The first stage is the Founder(s) stage, the second is the Sibling Partnership, where responsibility has been transferred to the children of the founder, and the third stage is Cousin Confederation, where extended family becomes involved.
Among the major shareholder issues to watch out for during Stage 1 according to SKOPOS are leadership transition and succession. The consultancy points to sustained family ownership, succession, and teamwork and harmony as common problems in Stage 2. For Stage 3, SKOPOS notes the possibility of conflicts in the allocation of corporate capital, shareholder liquidity, mission and vision, member conflicts, business participation and roles, and linkage with the business.
"Family businesses address many unique issues that can easily be avoided through proper Organizational Development interventions at the board level. OD is especially important in regions such as the Middle East where such businesses hold a majority control over regional commerce," added El Kazzaz.
Founded in 1991 in San Jose, CA, SKOPOS Consulting moved to the Middle East in 2002 and is currently fully owned, managed and operated independently by the Middle East team. The company has offices in Dubai, Cairo and Bahrain serving various industries ranging from technology to government. SKOPOS Consulting facilitates organizational change with its clients in the Middle East and Africa through the implementation of various soft and hard management tools. The consultancy combines OD tools such as coaching, conflict management, team building, leadership development, communication, succession planning, and performance management to enhance the productivity of its clients.
