Strategy is... a look at strategy in the UAE before 1971

My Strategy class starts up next week - this will be a ten week intensive course after the students' internships to cap off their undergraduate degree in business.

As regular readers of this blog know I love strategy - and my goal is for my students to love it as much as me - and be able to use it in their lives, their organisations and their future work with their communities.

This blogpost is about their first assignment - yes, it's an essay (bonus points for those who guessed). The purpose of this essay is to find out what strategy was before the UAE became the UAE in 1971... with this I hope students can think of how to adapt from the past, combine with some Western theory and come up with a personal strategy suited for here - the culture, the environment and the societal goals of Emirati (which, from reading about 60 of these essays so far, has not changed much).

The students' task is to interview someone over 60 years old and ask them how things were and how they planned and organised and survived - over 60 because I want them to have been old enough to remember what it was like when the seven Emirates were brought together... this wisdom needs to be captured and written down, or these stories could be forgotten...

A normal complaint it that people don't use the word strategy and won't understand what it means - I say to that - "I know" - explain what strategy is in their words, listen to their stories and make the links between the theory presented in class and what your interviewee is saying...

I haven't sat down to analyse the results of the previous essays - but I will when this batch is handed in. I can tell you that he basic strategy was survival - but not personal survival - survival of family, tribe and community. I heard that one time an interviewee was out fishing for days, but returned with little to sell - so he jumped in his car and became an "on the spot" cab driver.

One student discovered his Dad had been a pearl diver when he was very young, another that his grandfather had travelled to many countries in the region trading ... now we could say there was a diversified strategy in place, that changed with the seasons... and camels really were the ships of the desert...

I am looking forward to this semester's essays... and hearing the stories first hand of what it was like... and seeing the students learn from the past and adapt those lessons for the future.

What is competitive advantage?

My Introduction to Management boys (uhm, young men, sorry) are working on their interview assignment as we speak... deadline is November 14! This semester we decided, as a class, to look into the theory of competitive advantage and how it is interpreted and applied by managers here in the UAE.

The three questions all 29 students will ask are the following:

1. Please define quality for your organisation
2. What is the basis of your competitive advantage?
3. What do you do to maintain your competitive advantage?

Using the data (answers) from the interviews the students (hopefully) will analyse the responses from their interviewees and compare it with the management theory we have seen in class.

So what exactly is the theory on competitive advantage that I teach? You might be thinking competitive advantage is simply being better than your competition - so you can sell more stuff, sell it for a higher price or be so awesome that people put themselves on waiting lists or travel 100s of km to buy your product or service.

Well, there is that - but nerdy researchers (like me in case you are new to this blog) look for patterns (patterns make us giddy) that explain the why of things. We always need to know why (yes, kind of like a three year old that is never satisfied with an answer...).

So, after looking at these patterns the simplest theory (I prefer simple and I prefer to teach the simplest theories... usually they explain the most) is that there are four ways to build competitive advantage in your organisation:

• Quality
• Responsiveness to customers
• Efficiency
• Innovation

Now quality means different things to different people. I have a 75 dhs phone (about 20$ I guess) that I bought three years ago and it even came with 75 dhs free credit. It is read and I like it - the quality is just fine with me. Would the quality of this phone be fine with my students? Uhm, not exactly (even my housekeeper has a better phone than me...).

Quality, as every successful business person knows, is in the eye of the beholder. Target your customer right - give them consistent, reliable quality and they will keep coming back for more.

The second way to build competitive advantage is through efficiency. So what is efficiency exactly? A lot of people get this word mixed up with effective, and while the two should go hand in hand - effective means getting the job done right and efficient means getting the job done right while using less resources (contrary to the belief of many managers I encounter on a daily basis).

So efficiency is using less resources (time, money, people, material, energy, etc.) to get the product made, the service given or any "value" delivered to the customer. But - we cannot sacrifice saving time or money with actually getting the job done to the quality demanded by our customer or to the specifications required by law (sorry, mini-rant).

When we think of efficiency, we think of the Japanese of course - Toyota and the Just-In-Time supply chain. Here I think of the Lebanese restaurants who are able to deliver and produce copious amounts of food in a very short amount of time.

Responsiveness to customers is the third "way" to build competitive advantage. What this means is giving your customer what they want, when they want it, or maybe even before they know they want it. For example, the produce and store manager of your favorite grocery store (Waitrose on Reem Island in Abu Dhabi) figuring out how to make up a fruit basket for you to bring to your friend's house for Eid - when they don't do fruit baskets really (I heart Waitrose).

I ask my students why they choose to get their kandoras made at the specific tailor they use - they tell me my Dad has always gone there, they know my measurements and my style and what I like (yes, in a class of 29 boys, there will be exactly 29 different kandoras).

The last way to build competitive advantage - the most important way maybe, is innovation. During my PhD I spent months working on the definitions of innovation and value - so I get excited about this topic... When I ask my students to define innovation I get a lot of superlatives - the first (Metro in the Gulf), the tallest (building in the world, the Burj Khalifa), the best and the fanciest hotels in the world (Burj al Arab and the Emirates Palace). And they are right - but innovation is more than that.

When I first came to the UAE I asked my female students what was the best innovation for them in Abu Dhabi - in the past few years. I got the most awesome answer ever - "Dr. Connie, the best innovation in a long time is that KFC delivers". And she was right - I don't know which fast food chain started delivering in Abu Dhabi first - but I am sure when they told head office that they wanted to hire a delivery guy the people sitting in a Western office someplace said "huh? We don't deliver - people come to us - we are fast food!". But gas and labour is inexpensive and traffic and parking is horrible here - so fast food restaurants deliver. And fast food delivery is an innovation.

Wow - this turned out a bit longer than I had planned - and I didn't even give all the examples I like to give in class... Of course when the students hand in their brilliant reports I will be writing about the results... cause I am a nerd and that is what nerds do for fun!

Eid Mubarak everyone!

Management is important in the UAE because...

Since I began teaching at Zayed University, the first assignment I give students in an essay…. It began with the topic, “Men are better managers than women” (to both my female and male students), then “Management is…” and now “Management is important to the UAE because…”.

I have always had brilliant essays and well thought out work (and some rushed assignments which reminds me of my own undergraduate courses) – and sometimes the simplest arguments, with solid evidence are the essays which receive the top marks.

This past essay is another case in point. When my 29 male Emirati students were asked why management is important to the UAE I got some interesting answers. In general they said that there are scarce resources, so we need management to ensure that the benefits of a finite resource are available for future generations. We need management because there are over 200 cultures and nationalities working in the UAE – and we need to work together to achieve a common vision, although we do not have a common background.

Some spoke of issues of the day such as the dress code – and that new residents and visitors should have information about what is proper and what is not to wear – and also why, explaining the culture and the importance of modesty.

A few others spoke of management innovations such as Saeed (the traffic police in Abu Dhabi) and Mawaqif (metered parking in Abu Dhabi) and others spoke of managing projects such as the Burj Khalifa. Economic diversification was mentioned by more than a couple, and how Abu Dhabi and Dubai need management to plan and organise the development of the tourism industry.

Two students cited my blog (yes, feels even better than receiving an apple J) and more than a couple cited Abu Dhabi 2030 (OK, I might have sent them the pdf and suggested it might be a good document to start from).

All of them agreed though… management is important, and that the basic steps of planning, organising, leading and controlling (feedback) can be used in all different situations and are a very  simple process to use and reuse to make sure things get done, the way they were supposed to, in the time allotted and with a happy workforce.

Because, they all know that the greatest resource in the UAE is not oil, it’s …

Managing and Managers in the UAE: an Investigation by Zayed University Students in Abu Dhabi

Article written in collaboration with the young women in BUS-309-001 & 002 – Fall Semester 2009 AUH.

 It is that time of year again when the interview assignment is given to my Introduction to Management students. Here are the results from my first attempt with this project three years ago.

There is very little written about managers and managing in the UAE.  This makes it hard for new management professors to use relevant, local examples in class.  However, it makes it even harder for students as they must listen and then try to put into context examples from North America and Europe (and my students have had an even tougher time of it as many of my best examples are from the dreadfully exciting Canadian forest products industry).  As a first step to remedy this situation I asked the students in my two Introduction to Management classes to interview a manager.  Not just interview for interest and curiosity though, interview for research.  Yes, there is a difference, as my students found out.

First, we had to decide on the purpose of the interview.  We wanted to see if what Henry Mintzberg and Henri Fayol wrote about the roles of managers in the West is applicable to managers in the GCC.  (Dr. Mintzberg is a contemporary Canadian management guru who has written many influential books on strategy and the roles of management.  M. Fayol, wrote the Principles of Management when he was the CEO of a mining company at the beginning of the 20 th century in France.)  Then we had to decide on the questions, which actually took a few weeks as we debated the best questions to ask and the best way in which to ask them.  Before we could venture into the “field” though we had to write generic query emails.  Which again took more time than many had thought it would.  Finally, into the field.

Students interviewed by telephone, email and face-to-face (and one by proxy, with follow-up emails to verify the gathered information).  Some students found they had to use more than one method to verify information, and one student used all three!  We soon found out that managers are busy people, but that for the most part are very willing to share their knowledge with students.

The knowledge that was shared with students was priceless.  There were managers from all levels of the organization, CEOs and Board Members of major corporations and senior officials of ZU, senior military officers, senior government officials, owners of SMEs, men, women, Nationals and expats.  However, even with all these differences there were many similarities in their answers.

The first question asked managers what was their greatest challenge managing in the UAE.  There were many diverse answers of course, but the responses fell into four main themes: recruiting skilled Nationals, the great cultural differences of employees, motivating and guiding employees, and managing change.  The drive for Emiratisation was not seen in a negative light, rather it was just the challenge of finding qualified people to fill positions at every level of the organization. Of course, for my students this can only be considered a good thing – there are many challenging and rewarding opportunities out there for them when they graduate.  The challenge of cultural diversity was also not seen as a “problem”, but rather it was considered as a source of competitive advantage in a globalised marketplace to have a global employee base.  However, managers did mention that they had to learn about these different cultures in order to manage effectively.

The follow-up question was to ask what managers had done to overcome these challenges.  Here there was an overwhelming insistence on the importance of training and continuing education, for both the manager and employees.  Training was done in house, through continuing education and through seminars and conferences abroad.  Managers insisted that “learning” can never stop, it is just part of the continuous evolution of the organization and the individual.  The need for communication, open communication based on trust, was also mentioned by several managers.  Some said they had an “open-door” policy, others had regularly scheduled meetings and others used on-site visits.

Managers were then asked what they considered as their most important role.  There were many roles listed here, the most commonly listed were the role of leader and mentor, the role of decision maker, recruiting and supporting qualified employees (both Nationals and expats), creating a positive work environment, creating a culture of continuous improvement and working towards achieving the organization’s mission and goals.

The final question asked about how the role of manager had changed over the years.  The word increased was used a lot.  Increased competition, both global and local, increased focus on innovation, increased work load, increased attention to strategic plans and increased need for continuous training.

The feedback from the students was overwhelmingly positive.  Many said that they wished that they could have followed-up and would like to interview more managers and compare answers.  They even enjoyed analyzing the answers by comparing what their managers’ said to the theory we have covered in class.  And there were some powerful insights made that will help me next semester when I teach the course to another few groups.

Finally, there were a few enterprising students who asked their managers for advice.  They were told to enjoy their jobs, listen, respect, make goals, work hard, challenge yourself, be loyal, don’t take short cuts and to continually develop their skills.  What wonderful advice from generous people.  This valuable new knowledge would not have been possible without the generous support of the fantastic managers interviewed by my students.  So thank you for your time and wisdom, your interviewee learned from the interview, the rest of the class did through each presentation, I did by reading and listening to your words and the general ZU community through this mini-article.

Managing and managers in the UAE… a story to be continued.

Entrepreneurs and their networks

You are an entrepreneur – or you are thinking about becoming an entrepreneur… who do you go to for advice? Who do you trust for advice? Why?  Well, according to the research in the UAE and MENA (Middle East and North Africa) I have participated in (and as soon as the articles and reports are published I will write about the specifics of our findings) – entrepreneurs in the region turn to family and friends first and professionals (accountants, banks, professional services firms) last.

We tend to think about entrepreneurs as independent beings, succeeding and failing solely by their own efforts. Of course, this is not a totally accurate view. Entrepreneurs are part of a larger network made up of social and professional actors. These actors provide resources and support which entrepreneurs capitalize on to achieve their goals. Networks are the  relationships that each entrepreneur as an individual is involved in that provides resources – for the subject of this blogpost: knowledge/information/advice – one resource commonly needed across all phases of the entrepreneurial process.

A network is the “set” of contacts (individuals, organisations,  around an entrepreneur who provide a resource (advice) to an entrepreneur. Networks should be considered as social entities.  An entrepreneur’s social network supports her business network (in fact it could be the same network viewed from two different angles) as these networks promote trust and reduce transaction costs (for services, resources, etc.).  This is done through superior information gathering and a reduction in opportunistic behavior – because network actors could and would lose reputation through a misuse of information or erroneous information/advice. 

Networks are also a key means of accessing external knowledge, knowledge we don’t possess.  This knowledge involves both formal and informal exchanges and the exchange and creation of both tacit and explicit knowledge. Tacit knowledge is know-how, know-why and our instincts developed through experience. Explicit knowledge is what is written down, but which also often needs interpretation.

Trust of course is the key to these networks working – which is maybe why entrepreneurs turn to family and friends before the professionals – at least in developing economies where professional infrastructures are not as “trustworthy” or are simply unknown to entrepreneurs.

From research we know that the use of different kinds of networks leads to different results. For example, the more contact a person has internationally, the more innovative their products or services and of course the more likely they are to export their products or services internationally.

More innovative products and services are also more likely to come from entrepreneurs with closer and a greater number of links in their industry/market. When an entrepreneur knows what her competitors are offering, the more likely she will try to be a little different – offer something newer, better – more innovative! Also, links with suppliers (e.g. a fabric manufacturer for an abbaya designer) will although the entrepreneur to know more about what will be available in the future – raw material wise – which will help her creative more innovative designs which better incorporate the new materials.

My PhD thesis was about knowledge and technology transfer from universities to industry – well, you can imagine not many entrepreneurs in the MENA region use the results of university research … hopefully that will change, because a knowledge economy is built on – uhm, well knowledge – and the most cutting edge knowledge is produced by universities and working researchers… Yes, the Google guys are university “drop outs” – but they dropped out of a PhD program and Google is a direct result of their (and their professors) research there…

Finally, an entrepreneur or future entrepreneur can seek and gather advice for years – but it is making the leap which is the most difficult part – which is perhaps why the support we receive from our family and friends (and professors J) might be the best resource any network can produce.

Charity group project for Intro to Management - an experiment

A  school new year and new classes have started. I want to write about an experimental project I will be doing with my Introduction to Management class on the male campus - and ask for input from any reader who is involved in a charity in the UAE.

Past group projects in this class I have taught for 3 years now, have included a focus on Abu Dhabi Plan 2030, organizing a charity event on campus and focusing on an innovation introduced in an Emirati company in the last five years. Now I want (well am forcing) my students to be innovative themselves and organize something in collaboration with an organization operating in the UAE.

The project involves choosing a charity in the UAE, contacting them and working with them to discover their needs - then planning, organizing and leading an event, awareness campaign, fundraiser, etc and then explaining the results and all the feedback loops involved (the control phase). The final report will be a one page summary outlining the highlights of POLC and a five minute video of the POLC process they took.

Now, given cultural and other boundaries, the video will force them to be innovative and creative and sensitive (all things they actually excel at). I think it will go well, but then again (as any regular reader will know) I am extremely biased concerning the outstanding talents of my students.

The input I could need from you – do you run a charity that needs some support? Do you know of a charity that needs support? If so please contact me at the email listed in my profile.

Of course I will keep you updated as to the results of the project, and also keep you updated of several other completely awesome projects students in my other classes are working on.

Smile and courage J

Entrepreneurship as Process

Although many believe that entrepreneurship is a singular concept – as any entrepreneur will tell you, it isn’t. In the scientific literature, entrepreneurship is described as a process which entrepreneurs take from opportunity recognition to established business to harvesting the rewards of hard work, through sale or closing down or continued success (or well-earned experience). Each phase of the entrepreneurial process requires support from the local entrepreneurial ecosystem and each has its own learning curve for the entrepreneur.

There are four basic phases of the process :

1.      Recognising opportunities

2.      Assembling resources

3.      Launch of venture

4.      Harvesting and succeeding

The process (GEM terminology in brackets)

Phase 1: Recognizing  Opportunities

How do some entrepreneurs recognise opportunities and others don’t?  What types of training or backgrounds support this (e.g. international experience, wide interests, specialised knowledge, etc.) and what factors impede it (e.g. fear of failure, limited interests, lack of access to R&D findings, etc.).

Also, how do we support recognising opportunities within organisations (be it governmental or private firms)? In the UAE we can look to successful intrapreneurial ventures such as Saaed traffic unit of the Abu Dhabi police which are responsible for traffic related accidents in the Emirate (I had a group of students do an excellent report on this) or the start of the Entrepreneurship Club at Zayed University in Abu Dhabi J. In global firms my favorite example is Nestle’s Nespresso – now one of the main profit centres for the huge multinational (and the innovation that makes me smile every morning).

Phase 2: Assembling Resources

From idea to beginning to assemble resources takes support – and courage, and gathering the necessary resources for any new entrepreneur can be a daunting task. Here is where the entrepreneurial ecosystem of the nation, city, region, economy, really plays a supporting role. There are several parts of the ecosystem which can be used to support this sometimes difficult process, including physical infrastructure such as roads and ports (like the newly opened Khalifa Port in Abu Dhabi will create many opportunities for entrepreneurs in the Emirate and the country) and telecommunications systems; non-physical infrastructures such as supporting networks of external advice for entrepreneurs (e.g. RUWAD, Khalifa Funds, Saud bin Rashed funds,  Mohammed Bin Rashid Est. for Small & Medium Enterprises), access to capital markets,  availability of necessary data needed for researching opportunities and the general supportive culture of the economy (e.g. awards, and television programs such as The Entrepreneur to launch this fall).

Phase 3:  Launch of New Venture

What are the rules, regulations and costs associated with starting a new business? Where can a potential entrepreneur go to get the licenses and permissions? Future entrepreneurs will not launch new ventures if the environment in which they want to operate is not considered supportive. This environment, or entrepreneurship ecosystem is an absolute requirement in any economy that wishes to foster entrepreneurship risk taking.

Entrepreneurship Ecosystem: Ecosystems are inherently local. While national policies shape the economy in profound ways, the institutions and activities of regions differ. Indeed, multiple actors that share an interest in entrepreneurship —large firms and organisations (e.g. banks, large scale manufacturers), government entities, educational institutions, community non-profits, etc.—must come together to enrich the ecosystem.

Previous research has found that start-ups that become dominant players have strong early-stage relationships with established companies. Large companies could give smaller suppliers access to internal resources helping them break into global export markets through referral or international assistance.

Clusters of Innovation: Often arise out of large physical infrastructure (e.g. ports) and large anchor companies (such as Aluminum smelters, Yas Marina Sports Complex, etc.) – they spur smaller entrepreneurs to take advantage of the customers that are drawn to these places, or the companies and people working in them (e.g. a laundry service to service hotels).

Phase 4: Success and Harvest

The final, and perhaps most enduring phase of the entrepreneurial process is the success, or continued existence of the new venture and could even mean the exit of the entrepreneur through the sale of the firm to another.  A great example of an Emirati SME that is “harvesting” their hard work is Just Falafel – which is now franchising around the world.

Of course, many SME ventures do not succeed – but, in the West (especially in the United States and most especially in Silicon Valley) a failure of a venture is seen as a badge of honour and courage and experience. So the first “failure” might teach the entrepreneur to be a better entrepreneur the next time, or might inspire another to take the leap themselves.

So, the basic four phases – the story will continue with a more in-depth look at each phase and some local entrepreneurs and their stories (so if you have a story to share, please contact me). Entrepreneurship (and intrapreneurship) is exciting and a key to economic diversification and personal job satisfaction – if our jobs were just about pushing paper how boring would life be?