Arabtec – A Case Study For Effective Change

Last week was certainly not the best of weeks for Arabtec, one of Dubai’s major regional construction players. With share prices plummeting, a departing leader’s stake up for sale, corporate rumours rife and restructuring underway, there is certainly no better opportunity to manage corporate change than this.

Why? Because change is an outcome of a redundant business issue and a response must be aligned and supported with specific actions. Regardless of what the real business issue was behind the scenes of Arabtec, confusion reigned publicly, and undoubtedly privately also, resulting in an unhealthy knee-jerk reaction in the market.

To effectively manage change, it requires three key actions amongst others:

• Executive Sponsorship

Change requires a figurehead or a face of the change, one that represents hope in a ‘better’ future. What specifically that future is must be clear to the executive sponsor. Clarity without belief simply won’t gel, so the hope is one of conviction. The way forward, the resources and scope of the plan will exist when clarity exists.

Yet those decisions must be backed with specific actions. Keeping the future state under wraps won’t reap partnerships or commitment of others. Leadership needs to be spreading its influence out in the market, being seen personifying the future, spreading the word transparently, answering questions and building strength in supporting coalitions. This responsibility can’t be delegated.

In the case of Arabtec, two days after ‘the situation’ hit the news, a statement came out from the chairman of Arabtec. Richard Dean, commentator on the ARN Business Breakfast Show announced after the statement was issued, that in his opinion, stocks had taken a positive turn not due to the content of the statement but more-so because of the fact that it came from the chairman. An executive sponsor had represented the future, shared the company personality and priorities whilst also demonstrating ownership of the future. Then and only then did stocks rebound. Executive sponsorship must not only take decisions but also act on those.

• Communication

Communication sends a firm and clear message during corporate chaos if and when it’s done by the right person at the right time in the right format for specific and differing audiences. Time was of essence for Arabtec’s public communication response.

So many variations must be considered with communication. In Arabtec’s case there are many different audiences, all needing varied, relevant messages on different levels to quell rumours, now and in the future. Consistency rules with communication, and currently all stakeholders are watching for this. One level must speak the same language and story as another; one stakeholder must not receive a message that conflicts with another.

People need to hear different messages from different senders. An employee wants to hear the ‘big story’ from the top, yet the details from the one closest to him.

• Resistance Management

Resistance can occur before, during and even after a change.

Without being ‘on the inside’, there is no way to say if there was resistance before the story broke. It is always better to anticipate resistance before it strikes, proactively giving it the attention it requires to dispel its full wrath. However if and when it can’t be anticipated, overt and covert reactions such as active and passive resistance will be evident. The share price drop was a great example of this, with those making it happen wanting many eyes and ears aware of it.

What quelled the market two days after ‘the situation’? Very simply – a point of effectively managing change. The resistance subsided once communication from the executive sponsor occurred (and hopefully will continue in a cascading method). However, with change initiatives being ongoing beyond a point, calculated and customised, and with shares still in a state of flux, there really is no choice; a strategic, planned and ongoing response is now a matter of survival.

Debbie Nicol, the MD of Dubai-based ‘business en motion’ specialises in leading corporate change initiatives, strategies and organisational development across the GCC.