Prospects to thrive in times of disruption from Dubai

They discussed the same challenge as their colleagues at events in London and New York: how do you succeed in times of disruption? The conversation was moderated by Herminia Ibarra, Charles Handy Professor of Organizational Behavior at LBS and author of Act Like a Leader, Think Like a Leader.

Three pillars of sustainability

How do you build the resilience needed to deal with disruption? Jafar identified three key areas:

People, technology and management are fundamental foundations for organizational sustainability. As social and environmental goals are increasingly seen as two sides of the same coin, the flip side of that coin is governance, which ties everything together and enables businesses to generate sustainable value creation across generations,” says Jafar.

People are the starting point and the end point of any successful venture or organization. Create an environment that encourages people to engage their passions and energies, and they will work with you to weather the storm. Then there is technology. Although a fundamental enabler for any organization, technology should be seen as a tool rather than the primary driver of change. The people who use this technology are the real agents of change. And we can choose to use technology to improve humanity and our habitat, or simply to exacerbate our human failings.

The third factor, governance, is an issue of particular importance to the region, Jafar said. “Because 85% of our regional non-oil GDP is generated by family businesses and the majority of these businesses are second generation or transitioning to third generation. Research shows that traditionally the greatest destruction of value occurs during these transitions. You lose about 15% going from the first to the second generation and another 60% from the second to the third generation. A major reason for this is the lack of appropriate management systems to protect this transition.”

Over the next 15 years, there will be a global wealth transition of $78 trillion in family businesses, Jafar noted, including $5 to 10 trillion in the region alone. Most of this wealth transition will occur between the second and third generations. “But what if we could build governance models that not only protect value, but create a multiplier effect on that value?”

Maintaining social impact activities during times of stress

A challenge with improving areas such as management is that when organizations face tough and uncertain economic times, there is a tendency to “go around in circles”, Professor Ibarra noted, stopping activities that might be seen as non-essential. This is when socially responsible organizational goals, such as profit alignment and purpose, for example, can falter. How can organizations sustain these activities in difficult times, she asked, when many of the great societal challenges seem to require a response that goes beyond a primary focus on profit.

In an ideal world, these types of activities, such as focusing on specific areas of social impact, would be woven into the fabric of the organization, suggested Al Gurg. Realistically, however, a crisis may mean a temporary shift in focus to preserve business. The important thing is to resume these activities as soon as possible. Rest can even give you a bigger boost. “We started the conversation about the diversity and inclusion program in our business about three years ago, but during the pandemic it took a back seat because the focus shifted to thinking about new ways of working and surviving,” she said. “But after that crisis subsided, we went back to the drawing board and now there’s a big focus on gender equality, diversity and inclusion.”

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