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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 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, 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.
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.
- MILE seeks your input, ideas and collaboration to enrich this discussion and get more stakeholders involved.
MILE does not intend to limit its services and membership to Arab and Muslims executives only. We seek everyone’s involvement for the sole purpose of developing human capital all over the globe. Everyone is welcomed; including:
· Senior managers and executives from any country who seek development opportunities
· Multinational companies and businesses entrepreneurs who seek to understand management practices and leadership styles in our region and wish to build their local business network and explore business development opportunities in our region.
· business professors and researchers who seek to conduct business reach and develop local case studies
· Executive Education institutions and training providers who wish to contribute in program delivery and development training and development materials tailored to our local challanges
