There are family allegiance, social standing and economic rivalry to consider. Around $4 billion is estimated to be locked in family feuds in Saudi Arabia alone.
Few family businesses in the Middle East seem to survive beyond the third generation, which in a context of increased competition, puts Middle Eastern economies at a disadvantage. Companies are therefore having to be more proactive about ensuring the continuity of their business when it comes to succession planning.
Pressure from international companies to conform to Western-style management practices is another factor which has forced companies to review their leadership selection process. Many of them have turned to recruitment consultants for help, but the largest of them have actually started devising their own internal selection programmes with psychometric and leadership tests. Some businesses have also started separating ownership and management in a bid to offer more transparency and objectivity in business practices.
But the key to all these changes is planning. On average, companies devote three years to grooming their potential heir, when five years would actually be more appropriate to see people in action and steer their career in relevant directions. This is obviously a costly process, but succession planning should be thought of as an investment in the company's future, well worth the time and money.
Source: Succession planning in the Middle East
CEO Middle East
February 2006, Vol 1 Issue 1
Review by Emilie Filou