The difference between failure and success for the North-Western European CEO of a GCC Family Business.
A few years ago we did strategy consulting for an HR restructure at a family run business in the GCC. The brothers that ran the company had decided that it was time to try and move into a new season, and hired a CEO from Switzerland who had previously turned around five family businesses in Europe.
North-Western European CEO, GCC Family Business, and a Failed HR Project
The KnowledgeWorkx consultants on the project gently probed to ascertain the new CEO’s ability to manage the relationships with the family stakeholders that owned the business. He said, “Don’t worry, I have full approval and full authority from the family to make decisions and take this business to the next level,” and they took him at his word.
Because they did not give the new CEO any intercultural stakeholder management coaching, he did not realize that he had to keep up to date with what happened in the family gatherings (the “majlis”), which is a decision-making body that can over-rule the executive team for family-run businesses in the GCC.
As a result, two months into rolling out a major HR restructuring process, we suddenly lost cooperation from the firm for a process we thought had the full backing of all stakeholders. When we asked the CEO what was going on, he said, “My hands are tied! The family is turning against me, and I have no idea where this came from!”
The CEO left within a year, and the whole restructuring process came to a halt. Today, the company is run the same way as it was before the project started.
Better Inter-Cultural Stakeholder Management Would Have Saved the CEO
We came away from this project convinced that the intercultural stakeholder management approach we had already developed should be a pre-requisite for intercultural change-management.
The Swiss CEO had an Achieved Status, Directive Destiny, and a strong Innocence / Guilt approach, along a Power / Fear element where he considered himself to have the necessary power because of the position that the family members placed him in.
Meanwhile, the family members point of view on the Three Colors of Worldview model was pure Honor/ Shame with a little bit of Power / Fear, from a Community Accountability and Directed-Destiny perspective. These vastly different points of view meant that the CEO was blindsided by crucial events that happened within the family context.
“Trust, But Verify” is Even More Important in Inter-Cultural Situations.
When the CEO said, “Don’t worry, I have full approval and full authority from the family to make decisions and take this business to the next level,” we should have known better, because in a situation with the combination of cultural factors listed above the CEO only has operational authority for as long as the stakeholders feel that what the CEO does enhances the honor of the company and/or the family in context of their society.
In order to pull this project off successfully we would have needed to coach the CEO in our inter-cultural stakeholder management approach, and use the tools we were developing to map the culture of all the stakeholders involved. Only then would we have had the intelligence we needed to manage the stakeholders successfully. And only then could our expertise strategy and change-management shine through.
As a result, we focused on the development of our Inter-Cultural Intelligence suite of products, from the Three Colors of Worldview and 12 Dimensions of Culture inventories, to the Inter-Cultural Intelligence (ICI) Certifications, and the very concept of Inter-Cultural Intelligence.
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