leadership deficit and the future of executive and leadership development in the arab and muslim...

Leadership Deficit and the Future of Executive and Leadership Development in the Arab and Muslim World

Dr. M. M. Mahmoud

Executive Director

Madinah Institute for Leadership and Entrepreneurship (MILE)

Madinah Knowledge Economic City, Madinah,

Kingdom of Saudi Arabia

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Abstract

This presentation highlights the immense leadership deficit that our region suffers from. It also demonstrates how our educational and training institutions, both at corporate and government levels, fall short in catering for the enormous leadership development requirements in the region. The presentation sheds light on a new strategic initiative to establish a world-class executive and leadership development institution which aims at bridging this gap. The initiative aims at building local intellectual capital and is based on a business model that ensures sustainability and provision of high quality, affordable and relevant life-long development opportunities to our future business leaders. The Madinah Institute for Leadership and Entrepreneurship (MILE) was initiated as one of Savola Group’s CSR programs. MILE is a non-profit organization and will be established at the heart of the Arab and Muslim World at the Madinah Knowledge Economic City. MILE’s first pilot program which attracted more than 150 senior executives from 16 countries has provided strong evidence of the viability of the proposed model.

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The Case for Change

The resilience of nations lies not only in the physical infrastructures that enable their development but also in their ‘soft’ infrastructure – their human capital or more appropriately, their intellectual assets. It is the intellectual assets that breathes and gives life to the physical make-up and ensures sustainable development and prosperity.

The 2009 Arab Human Capital Challenges Report (1) has revealed that “Exceptional economic growth in the Arab region over the past decade has not coincided with equally buoyant labor and human resource development, raising obvious concerns for sustainable and balanced growth. Survey results reveal that only 38% of Arab CEOs believe that there is ample supply of qualified national labor, which therefore translates to a heavy reliance on the recruitment of expatriates. Survey results show that 90% of Gulf CEOs value their expatriate senior management whereas only 68% shared similar views towards their national senior management. The report revealed that the difficulty associated with recruiting national senior management is largely a result of the limited availability of experienced national professionals. This is the case, in part because historically the older generation in the Gulf region has had lower labor force participation rates. Lower levels of education as well as the fact that the older age cohort is less accustomed to working in a modern day competitive environment have also presented an issue. To add to this dilemma, the Arab world also has one of the lowest labor productivity growth rates. This is a serious concern for many in the business community, especially as the region moves towards greater participation in the global economy.

Core Challenges in Executive Development

The immense leadership deficit that our region suffers from (the demand side) is coupled with major limitation of our local training and education institutions in offering the development support needed to upgrade the leadership and management capabilities of our senior executives (the supply side). Below is a brief description of the major limitations at the supply side:

1. Low Quality Business Schools: Our region suffers from low quality business schools at all levels; undergraduate, graduate and Executive Education. The latest ranking of the world top 100 business school and top 65 executive education programs by FT.Com, indicates that none of them is located in a Muslim or an Arab country.

2. Lack of Corporate Universities: Multinational companies enjoy the economies of scale which enables them to establish corporate universities offering the needed development for a large number of their executives across the globe. The great majority of business organizations in our region are considered to be either medium or small in size (with few exceptions; e.g. Aramco, Sabic, Emirates Airlines, Savola …etc) which make establishment of in-house training facilities non-economical. Few large companies managed to establish in-house training capabilities to equip their new recruits with the required technical skills and to sharpen the skills of their supervisors and middle managers. The majority of our local large business corporations do not have in-house

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capabilities to offer needed developmental support to their senior executives and in most cases they -or the fortunate ones- are enrolled to attend Executive Education programs offered at top business schools in the US and Europe.

3. The Limited Role of Multinational Companies: Many multinational companies are operating in our region. As indicated earlier a majority of them employ best practices in offering executive development programs. Benefiting from such programs is however limited to those working for them. Usually those “fortunate” local managers who have working experience at one of the multinational companies are considered to be a target for head hunting by local companies with high price tags on their heads.

4. Lack of localized Executive Development tools: There is an obvious lack of local business case studies and qualified local trainers who have both academic and practical experience. Majority of professors at local business schools do not have the practical exposure to real business life either in practicing or consulting roles. There is also a lack of autobiographies or documentary films that portray success stories of local role model business leaders.

5. The Limitations of International Executive Development Programs: Sending local senior executives to participate in Executive Development programs offered at the world top business schools provides the opportunity to acquire state-of-the-art management techniques and leadership skill; however this option has its own downside. The cost of participation is prohibitive. In a cost survey conducted by the author (see Appendix A), the average cost of participating in one program (excluding travel cost) is SR 97,524 with an average cost per day of SR 7,717. In addition, some of the topics covered have weak relevance to our local needs. Most of the presented case studies and portrayed business leader role models are not related to our local culture and challenges. The networking opportunities during these programs are usually of top quality, however are not practically relevant for doing business or sharing ideas in the future. Visa restrictions in the last decade were also a major barrier for many local executives to make it to the programs they have enrolled in.

6. Unsustainable National Leadership Development Initiatives: The last decade has witnessed several national initiatives to develop local leaders; some are government sponsored while others are sponsored by major local corporations as part of their corporate social responsibility. The intentions of these programs are very noble; and the academic content and external vendor selection are usually of top quality. The problem with these initiatives is that they are mainly executed as ‘batch processing” where group of emerging leaders are selected to be trained at a very high fee; major portion of which reflects the cost of using the logo of the service provider. The cost of these programs can be classified as “OPEX” rather than a “CAPEX” so it does not contribute to building intellectual capital nor to our long term capacity to offer these programs. These programs are non-sustainable in nature and many of them were adversely affected when the recent economic crisis affected the financial position of their sponsors.

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A Proposed Model

A new initiative that aims at establishing a local sustainable model for providing affordable, top quality and relevant executive development opportunities is currently explored by Savola Group as part of its CSR programs. The initiative is to establish The Madinah Institute for Leadership and Entrepreneurship (MILE) as non-profit institute located at the heart of the Muslim and Arab world at the Knowledge Economic City in Madinah. MILE is attracting CSR sponsorship of several other local corporations to establish MILE endowment. Many of the international top executive education programs have actually started as a collaborative initiative by several business corporations; in some cases a few of them were in the same business sector.

The MILE vision is to become the premier executive and entrepreneurship education provider in the Arab and Muslim world. It aims at becoming ranked among the top 100 Executive Education Providers in 2020. MILE aspires to achieve its vision through building an effective collaborative network; leveraging information technology; offering relevant holistic life-long developmental services; ensuring sustainability and continuous development of intellectual capital; and striving in being a role model in applying the most advanced and ethical management practice. Figure (1) depicts the key seven strategic themes of MILE.

Figure (1) MILE 7 Strategic Themes

Strategic Theme (1) Collaboration:

To achieve collaboration, MILE identified its key stakeholders and developed for each one the main features of a win-win relationship. Figure (2) below illustrates MILE key stakeholders.

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Figure (2) MILE Key Stakeholders

For each stakeholder group a concise identification of what is in it for MILE and what is in it for the Stakeholder was done as follows:

1. CSR Sponsorso What is in it for them:

A cost-effective CSR project to achieve the highest return on investment An opportunity to give their executives a priority in benefiting from MILE

services Developing case studies and applied research for the sponsor company Publicizing donors logos in all of MILE’s publications

o What is in it for MILE: Financial contribution to the endowment Guarantee participation in MILE programs

2. Leading Business Schoolso What is in it for them:

A channel through which Business Schools can offer and promote their programs

The opportunity to participate in joint research Offering joint programs of interest to multinational executives who

are/plan doing business in our region. Facilitate internship opportunities for their MBA students in local

corporations. Development of case studies for local companies

o What is in it for MILE:

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Cutting-edge content, case studies and lecturers Access to on-line resources. Cross listing of joint programs

3. Management Consulting Firms: Most top world management consulting firms have regional offices in our region. Consulting firms usually have their own best practices knowledge base and are usually paid high fees to undertake major consulting assignments for large local corporations. These assignments provide an excellent resource for live-case studies. To test the viability of this assumption, MILE has invited 5 international management consulting firms in its first Executive Development Program to co-present case studies jointly with a senior executive representing the ‘client’ corporate side. This not only gives credibility to the presented methodology but provide in addition a relevant case and a channel to feed the outcome of the participants’ discussion to the concerned corporation.

o What is in it for them:

An opportunity to present their experiences and capabilities An opportunity to display the portfolio of their products and services An opportunity to offer a community service and have their logo displayed

throughout the programs in which they participate.

o What is in it for MILE: Adding to MILE intellectual capital a documentation of real-life case

studies Educating participants on the state-of-the-art management consulting

techniques Having senior consultants offer Webinars or moderate MILE’s blogs or

forums. 4. Arab and Muslim Professor at World Top Business Schoolso What is in it for them:

An opportunity to serve their original home countries and contribute to their development

An opportunity for Muslims to visit Makah and have a short stay in Madinah

An opportunity to enrich their business network An opportunity to conduct applied research on local organizations An opportunity to develop local case studies

o What is in it for MILE: Having faculty members to contribute in MILE’s programs who

understand or appreciate local values, culture and traditions

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Having distinguished faculty offer Webinars or moderate MILE’s blogs or forums.

Given the special and unique value of the City of Madinah, MILE could be able to attract business professors of Arab and Muslim origin to contribute to its programs.

5. Local Business Schoolso What is in it for them:

Providing the opportunity to motivated local business professors to participate in MILE program and have the opportunity to shadow invited speakers in order to transfer knowledge and experience in delivering Executive Education

Encouraging local business professors to develop local case studies MILE can play a major role in facilitating the coordination between

academic research and the business community

o What is in it for MILE: Local professors can act as tutors and supervise follow up activities Developing local capabilities

6. Multi-national Corporations: It is worth noting that Nestle is the largest global producer of halal food and that HSBC Bank is the largest global financial institution offering Shareeah Islamic financial services. Such corporation should be more inclined to enroll their senior executives, especially those assigned to work in our region, to attend MILE’s programs. This gives them the opportunity to have first-hand exposure to our local culture and the opportunity to build a network which is critical for their success in their local operations.

o What is in it for them:

Contribute to MILE intellectual capital through their Corporate Universities. Contribution can be in the form of speakers, training tools, or high productivity tools.

An opportunity to offer a community service and have their logo displayed throughout the programs in which they participate.

Have their managers enroll in MILE’s programs Sponsor events or offer Scholarship programs for MILE’s programs.

o What is in it for MILE: Contribution to MILE programs in the form of speakers or case studies. Access to knowledge resources available at MNC’s Corporate Universities Sponsoring of MILE’s events and participants.

Strategic Theme (2) Leveraging Information & Communication Technologies:

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MILE intends to make the best use of web technologies and social networking tools to facilitate dialogue among local executives. MILE has already established its presence in LinkedIn, YouTube, Facebook, Twitter, Flickers, Gmail, Yahoo …etc, to name a few. MILE intends as well to build a state-of-the-art Portal which aims to become the meeting place of our local managers who seek developmental resources and a platform to share and discuss issues of common concern.

Strategic Theme (3) Localization:

One of the distinguishing features of MILE is its capability to offer learning experience which is relevant to our local needs and challenges. MILE has already taken active steps to:

o Develop local case studies

o Produce documentary of successful local business leaders

o Provide guidance to invited speakers on areas of adjustments needed in their

training tools and materials to suite local requirementso Develop the skills of local university business professors in offering Executive

Education programs

Strategic Theme (4) Holistic Development:

MILE holistic approach to executive education is rooted in the Muslim worldview of human nature. It encompasses the four aspects of the human being; mental, physical, emotional and spiritual.

In MILE first pilot program, the concept of holistic development was tested and program evaluations have revealed outstanding satisfaction results. Examples of pilot program design elements at each of the four domains are as follows:

Mental: o Teaching Team: a very well selected team of speakers who represent four

different categories: Renowned business university professors Senior Management Consultants Role model successful local business leaders Professional trainers

o Well selected set of business case studies

o Pre-event on-line learning style assessment to enable participants to

understand their learning style and develop approaches to make the best use of the program to accelerate their learning. This process was supported by MILE’s Personal Development Advisor who provides personalized coaching

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o On-Line personality profiling

o One-on-one coaching and Personal Development Planning advice during

the programo A variety of training techniques: role play, case studies, simulation,

lectures, and videoso My Strength Mirror: A tool to enable participants to provide positive

feedback to each other by highlighting each other’s areas of strength.o Learning Logs: Each participant was provided with a Learning Log to document

the key learning and decisions that he/she intend to execute upon the completion of the program. Speakers allowed time for participants to use the learning log properly

Physical:o Offering healthy food throughout the program which constitutes more

fiber and less cholesterol. o Dietary advice

o Medical checkup

o Early morning aerobic exercises

o Mid-day stretching exercises.

Emotional:o Effective ice breaking to boost start rapport building among the group

o Teambuilding exercises

o Networking opportunities among the group during breaks and

extracurricular activitieso Gala networking dinners with local business leaders

Spiritual:o Leading by values

o Visits to holy places

Strategic Theme (5) Life-Long Learning:

MILE believes that its relation with program participants starts the day they graduate. Developing executive capability is a journey not an event. Figure (3) illustrates some of the support tools that MILE intends to employ to provide life-long development support to our executives.

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Figure (3) MILE Life-Long Development Approaches

Strategic Theme (6) Sustainability:

MILE aspires to achieve sustainability through several means among which:

o Proper corporate governance

o Sound business model based on best use of the endowment fund

o Forging long term win-win collaborations with multiple stakeholders

Strategic Theme (7) Role Modeling:

MILE aspires to be a role model through employing best management practices and adhering to the highest standards of business ethics.

References

(1) Arab Human Capital Challenge – The Voice of the CEOs, Mohammed Bin Rashid Al Maktoum Foundation, UAE, 2009

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Appendix (A) Sample Cost of Open Executive Education Program at top Business Schools

University ProgramDuration

DaysTuition in USD

Tuition in SR

Accommodation

Total Cost

Cost per day

Harvard Business School Advanced Management Program 40 60,000 225,000 225,000 5,625

INSEAD International Executive Program 30 54,129 202,985 11,250 214,235 7,141

Harvard Business School General Management Program 20 55,000 206,250 206,250 10,313

Stanford Graduate School of Business

The Stanford Executive Program 30 54,000 202,500 202,500 6,750

Wharton University of Pennsylvania

Advanced Management Program 25 50,000 187,500 187,500 7,500

INSEAD Advanced Management Program 20 41,802 156,756 7,500 164,256 8,213

INSEAD The Challenge of Leadership(COL) Program

19 42,510 159,413 7,125 166,538 8,765

London Business School Senior Executive Program 20 38,901 145,878 145,878 7,294

Harvard Business School Program for Leadership Development

10 37,500 140,625 140,625 14,063

London Business School Accelerated Development Program

20 35,500 133,125 133,125 6,656

Oxford SAID Business School The Saudi Oxford Advanced Management Program

15 32,500 121,875 121,875 8,125

Oxford SAID Business School The Oxford High performance Leadership Program

15 32,500 121,875 121,875 8,125

Ashridge Business School Advanced Management Program 12 26,400 99,000 99,000 8,250

Oxford SAID Business School The Oxford Advanced Management & Leadership Program

15 25,200 94,500 94,500 6,300

Oxford SAID Business School The Oxford in Organizational Leadership

15 25,200 94,500 94,500 6,300


Executive Development Program 12 24,750 92,813 92,813 7,734

London Business School Emerging Leaders Program 15 24,500 91,875 91,875 6,125

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Executive Program for Growing Companies

9 20,000 75,000 75,000 8,333

Ashridge Business School Senior Executive Program 9 17,800 66,750 66,750 7,417

INSEAD The Leadership Transition(LT) Program

7 13,887 52,075 2,625 54,700 7,814

Ashridge Business School Developing Business & Leadership Skills

10 13,500 50,625 50,625 5,063


NIDA/Wharton Leadership Program

5 12,504 46,889 46,889 9,378

Harvard Business School High Leadership Potential Program

5 11,500 43,125 43,125 8,625


Executive Program in Leadership 5 11,000 41,250 41,250 8,250

London Business School High Performance People Skills for Leaders

5 10,700 40,125 40,125 8,025

Harvard Business School Leadership for Senior Executives 4 10,500 39,375 39,375 9,844

Harvard Business School The Corporate Leader Program 5 9,750 36,563 36,563 7,313

London Business School Essentials for Leadership 5 9,700 36,375 36,375 7,275


Leading Organizational Change 4 7,450 27,938 27,938 6,984

Ashridge Business School Accelerating Management Effectiveness

5 6,100 22,875 22,875 4,575

INSEAD Learning to Lead (LLD) Program 3 5,526 20,724 1,125 21,849 7,283

London Business School Coaching for Performance 2 4,000 15,000 15,000 7,500

Average 13 25,760 96,599 97,524 7,717

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leadership deficit and the future of executive and leadership development in the arab and muslim...

Education

arab region

executive development

development support

sustainable development

executive education

gulf region

business model

business community