Page 293 - Aamir Rehman - Dubai & Co Global Strategies for Doing Business in the Gulf States-McGraw-Hill (2007)

Enabled Organization: Setting Up for Success 275

degree of adaptation in order to achieve widespread success. The
adaptation can be in the form of packaging, marketing messages,
product mix, or even product development specifically for the Gulf
market. In the early stages of a firm’s market presence, it is only nat-
ural to prefer a low-investment, minimal-risk approach. Business
leaders must be sure, however, that a lack of adaptation is not cost-
ing the firm more in terms of lost sales than it would cost to make
slight modifications for the region.
As a business grows, a more subtle form of underinvestment
can appear. Companies that view the Gulf as an afterthought or a
marginal market may treat the region as a passive source of income.
They may choose to have almost all profits from the region come
straight back to the global balance sheet, with few or no “retained
earnings” for the local business. The danger of this approach is that
it can deprive the Gulf business of any chance it might have had of
flourishing by building out its product proposition, infrastructure,
and staff. Especially when there are few or no staff members whose
sole responsibility is for the GCC, adopting a passive approach is a
real risk—there’s nobody to advocate for reinvesting more of the
profits in order to make the business grow.
Alack of human resources fully allocated to the region, besides
having the obvious effect of limiting a firm’s regional productivity,
can distort the incentives of staff partly dedicated to Gulf activities.
Distorted incentives have, at times, become a real issue in profes-
sional services firms such as investment banks and consulting
firms. A London-based banker “stuck” on a deal with a Gulf-based
client may likely view the deal as a chore and a lifestyle drain that
keeps him or her away from friends and family. Building a long-
term relationship with the client through outstanding service
might, ironically, make his or her life more difficult, requiring the
inconvenient travel to continue. Professional standards and per-
formance reviews will, of course, keep such bankers from slacking
off. The incentive to build a long-term relationship can, nonethe-
less, be far less for a fly-in team based elsewhere than it is for a local
team responsible for building business exclusively in the region.
Having worked with both fly-in and local teams, I have seen the dif-
ferences firsthand.
Investment in a Gulf business, like investment in any business,
cannot be made without a strong case and a visible path toward