x Abu Dhabi, UAEFriday 28 July 2017

Change for change's sake

The Life: Tommy Weir writes that the rate of leadership change in the Middle East has been excessive - and if you want to know why that matters, look to Nokia.

Stephen Elop, the chief executive of Nokia, speaks during the launch of the Lumia Windows smartphone in Beijing, China. Nelson Ching / Bloomberg News
Stephen Elop, the chief executive of Nokia, speaks during the launch of the Lumia Windows smartphone in Beijing, China. Nelson Ching / Bloomberg News

"I've been in this company for five years now and there has been lots of change," confessed a senior leader from one of the region's leading construction firms. His sentiments echoed through the room - and they can be heard in most organisations across the region.

The rate of leadership change has been excessive: this company is now on to its third chief executive in five years. Unfortunately, this story is not limited; it is the rare company that has not experienced repeated leadership change.

If my anecdotal insight is accurate, the region is experiencing another wave of leadership changes. In the past few weeks, I have been informed of seven or eight chief executive changes that are under way.

Senior leadership changes cause lots of frustration for their teams. Typically when a new leader comes in he has a mandate to create rapid results and the assumption is the previous strategy was flawed.

So immediately, the previous work is undone and a new path is charted. This change is perceptively premature, as the existing strategy has not had time to deliver the goods given the brief result period and changes in the market conditions.

Every leader who has been in the region for five years or more has first-hand experience of the market changes as we went from boom times to a screeching halt and now into a healthy recovery. The senior leader's frustration was the challenge that these market changes brought to delivering the ever- changing plans that shifted from grow at all cost, then cut all cost, and now grow more but with less.

Nokia is an example of a company that went through amazing growth and change. In eight years (1992-2000), it went from a near-bankrupt conglomerate to a global leader in mobile telephony, maintained it then drifted back to near-bankruptcy. It did the right thing in one era but then did the opposite, and all of the great work was unwound. Now, with its renewed focus Nokia is clawing its way back with the launch of the Lumia.

Thinking about the volume of change in the past decade brings me to the topic of the year, "doubling my business in the next five years". And this raises a simple question that emerged from my dialogue with the chief executive of one of the region's leading banks: "Do you expect your team to be around in five years?"

If so, then is there a lesson we can learn from the past five years? There was lots of change and there will be again. The focus needs to be on creating the ability to compete in the future market. When a business doubles in a five-year period of time it is a different business. Building your leaders and organisation to be enable them to succeed in your changing market and bigger company is the differentiator for companies that successfully manage change.

Preparing your leaders for the future is more than just sending a memo informing them that change is happening. This cold approach causes confusion and uncertainty, opening up the rumour mill. Handling change means nurturing your leaders ahead of time.

Tommy Weir is an authority on fast-growth and emerging-market leadership, an adviser and the author of The CEO Shift. He is the founder of the Emerging Markets Leadership Center