x Abu Dhabi, UAETuesday 25 July 2017

Tommy Weir: company growth must be carefully nurtured

For so many leaders, bureaucracy is like a “wet blanket” smothering a roaring fire’s chance of blazing ahead.

“The bureaucracy is standing in the way of our business. It is stifling any chance we have of a real growth,” confesses one chief executive speaking about others sticking their pencils into his business.

He went on to talk of the way the group auditors had lost focus on their role and shifted into trying to shape policy rather than ensuring the company’s policy is being followed.

This long-seasoned chief executive remembers what it was like to grow his business over the past two decades and now he says: “How are we to grow when the bureaucrats are stifling it, yet we have one of the greatest opportunities for growth?”

For so many leaders, bureaucracy is like a “wet blanket” smothering a roaring fire’s chance of blazing ahead. In effect these excessively complicated and misaligned administrative procedures are suffocating the business, taking the oxygen and life right out of it. When employees say: “Boss we can’t do this because the auditors won’t allow us,” yet it is in the board-approved company policies, then there is a real problem – a disconnect with reality.

That is what has this chief executive on his soapbox. He is pro-governance, but believes that governance should be in place to help the business realise its potential to grow.

Listening to this conversation, the question needs to be asked: “Do we need a hard reset when it comes to our approach to corporate governance in the region?”

It seems like too many businesses are joining the governance craze by importing foreign practices to protect against any possible ills. Governance is important and no business wants corrupt practices to slip in. So the idea of governance is not what is stifling leadership, rather it is the practice that has gone awry.

We must never forget our market dynamics allow us a welcomed growth curve. The UAE is incredibly fortunate to be in the spotlight of growth and is still ripe for unrivalled growth rates. The temptation is to prematurely mature the business. When this happens it decelerates the rate of growth and lowers the growth trajectory moving you out of the growth phase and into the maturing phase.

Rather you should work to elongate the growth phase for as long as possible. Most of the companies that make the cover of the Financial Times that we hold up as aspirational have actually moved out of the growth phase and are mature companies. Of course they are still growing, but as mature companies rather than growth companies. Our youthfulness as a market allows us the chance to grow in a way others can only dream about.

What we need is sleek, fit-for-purpose governance that can fuel growth, not stifle it.

I am going to simplify, perhaps oversimplify, what fit-for-purpose governance in a fast-growth market should look at. When you examine your governance approach, you need to ask:

• Do we have the right approach for our market?

• Does it help us to know the path to growth?

• Does it remove the barriers to growth?

• Does it keep us from crashing?

Let’s concentrate on the last two questions. To grow speedily, companies need to remove the hurdles, barriers and obstacles that stand in the way of growth. Already too many of these exist. Instead of creating more, you need an approach to governance that removes the ones that are already in place. As an example, instead of adding more signatures to the delegation of authority sign-off to make sure that no one can misspend their budget, you should identify and remove the unnecessary ones to speed up decision-making.

One way to keep a car from crashing is to leave it in the garage, but this defeats the purpose of the car. Another approach is to burden all of the drivers on the road with too many restrictions because of the errant driving patterns of a few. This may make the trip safe, but slows everyone down to a snail’s pace.

Given the projected growth rates, we do not have the luxury to go slow in the coming years. We need another approach to keep from crashing, one that allows business to move forward swiftly.

Given that we are a first-generation corporate society, we need to make sure all of our leaders, even governance specialists and auditors know what to do to keep the business safely but growing fast.

Tommy Weir is a leadership adviser, author of 10 Tips for Leading in the Middle East and other leadership writings and the founder of the Emerging Markets Leadership Center

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