How GCC executives should approach leadership in 2019

Looking oneself in the eyes can be peculiar. There I am, staring at myself through the glass door of the new bookstore in Dubai Motor City. The eyes meeting me are assertive and a bit younger, there on the front cover of my little book Effective Business in the Gulf, about how to take lead in the region’s dynamic and diverse environment.

The sight sparks curiosity. When I enter, the lady in the shop tells me that three or four times she has had to order more copies since the recent opening. Her customers apparently want to read about the challenging circumstances that I foresaw in 2012, when the book was first published.

The surprising new conditions

The future builds on the past. The previous four decades were enough to take the Gulf countries through the same level of development that it took Europe several centuries to accomplish. The skyrocketing demand created heydays for anybody supplying anything, which then attracted all sorts of companies with international ambitions to do business in the region. And even though the economies have kept moving along upward trajectories, the market dynamics have shifted irreversibly each time the supply capabilities in one industry after another have caught up and kept pace with the incremental demand growth. More and more supply gives less and less space for sameness. Chances of pricing favourably dilute, while cost structures come under pressure and excess capacity loses value.

Foreseeing a new reality does not exclude being surprised when it comes to pass. Books are printed in black on white, while the real world is coloured from a much larger palette, enabling blurred lines and shades.

What surprises me the most today is how executives throughout the Gulf are talking about their new conditions. Many make it sound as though the ‘market’ has its own consciousness and is managing them. One simply says ‘it’s the market’, while another expresses a deep-felt wish for everything to just get back to normal. Some are shocked, some in denial; others struggle to regain their orientation.

The sneaking nature of complexity

The new reality is becoming rapidly more complex, blurring the visibility of what is going on. Few business leaders have the luxury of just keeping up with the growth anymore, as was the case when the region somewhat predictably grew two-digits almost every year.

Competitors’ entry and the addition of new organisational levels and subsidiaries have made business more complicated. What worked in the past doesn’t necessarily work now. Executives who previously were trusted by their boards or superiors might not still be in favour today. Something is wrong, and it might be them.

There were leaders who, early on, spotted the trends and defied sameness by choosing to focus on customer experience, innovation or cost efficiency. Those are the three basic strategic options of any business. And yet, shadows now interfere with these leaders’ clear sight.

Disruptive technologies have, for instance, not been as high on CEOs’ agendas in the region compared with elsewhere. Now, new ways of doing business – including e-commerce – are striding in, shaking up industry boundaries and adding uncertainty to most buyer–seller relationships. ‘Software is eating the world,’ Silicon Valley venture capitalist Marc Andreessen famously said, and technology is right now binge-consuming every business in the Gulf, as if they were delicately arranged as a lively Friday brunch buffet.

The essential choice of leaders

The recommendations of Effective Business in the Gulf regarding what to do differ from those in mainstream leadership books. It is not just a matter of setting a new and better direction and engaging your organisation accordingly. First, you must ask what your business truly needs and for what you personally stand for.

My observation was then – and is still – that business leaders working in this dynamic and diverse environment are facing their own evolving set of opportunities and challenges. The unique nature of these depends on their specific business and who they are. They resemble those beautiful, richly coloured mosaics that are displayed across the region. Each business leader receives their own coloured pieces and must assemble the best possible mosaic, adapting it over time as they gain new pieces and lose old ones.

It is a stretch of anyone’s ability to make sense of what is happening at the moment. The relevance of making new predictions is diminishing and leading through command-and-control is becoming less effective. It is essential to understand both the core drivers of value in a business and the major challenges and opportunities ahead. Business leaders must see the world as it is, and not how they wish it to be. This is an on-going learning process, however, and not just a quick fix. Such effort involves experimentation and mistakes.

That is why executives must not only ask what their business needs but also reflect on who they are. Making mistakes goes against human instinct; we are all naturally inclined to hide whatever is wrong, to try to look good – even leaders. And that tendency is stronger still in a place that attracts talent from all over the world, making misunderstandings more likely and increasing the possible costs of losing jobs.

Business leaders influence how their organisations make sense of situations. Instinctive reactions in difficult moments can spark fear and anxiety in middle managers and front-line staff alike. A constant sense of urgency causes negative stress and reduces human potential. Meanwhile, leaders operating from a so-called creative mindset, which among other things is characterised by being able to paint purposeful visions and foster team spirit, can get the best out of their people even in the worst times. The market is as paralysing or as opportune as leaders make it, whether those leaders act intentionally or not. The rest of us see the future partly through their eyes.

So it’s definitely worthwhile to look yourself in the eyes occasionally.

Nicolai Tillisch is the regional partner of The Leadership Circle and author of Effective Business in the Gulf