< Previous10 C EO M I D D L E E A S T MAY 2 0 21 LEADING SUSTAINABLY MANY COMPANIES ARE BECOMING MORE CONCERNED WITH HOW TO BE A FORCE FOR GOOD IN THE SOCIETIES IN WHICH THEY OPERATE. FROM MINIMIZING THEIR FOOTPRINT TO SOCIAL CAMPAIGNS, CSR IS NO LONGER JUST AN OPTIONAL ADD-ON FOR CONSCIENTIOUS AND CONSCIENCE-DRIVEN LEADERS. LEADING FMCG COMPANY P&G IS A TRAILBLAZER IN THIS REGARD. OMAR CHANNAWI, PRESIDENT & GENERAL MANAGER IN THE REGION, SHARES AN INSIDER INSIGHT INTO MAKING SUSTAINABLE DECISIONS THAT WILL IMPACT THE BUSINESS AND THE PLANET FOR THE LONG TERM By JOLA CHUDY SUSTAINABILITYMAY 2 0 21 CEO MIDDLE E A ST 11 SUSTAINABILITY &G is deliberate about stepping up as a force for good. The com- pany is determined to make a difference through comprehensive inter- ventions across climate, water and waste. We do this across four vectors – brands, supply chain, society and through our employees. P&G has set specific goals for each of these areas that they believe will help enable and inspire positive impact. Its global reach, understanding of the 5 billion consumers it serves and its inno- vation capabilities give it a unique ability to make a positive difference across UN Sustainable Development Goals. Consumers want more than just great performing products. They want to know that the products they purchase come from a responsible company. P&G has been leading in environmental sustain- ability for decades and has met many of its 2020 goals ahead of schedule. The company recently announced a major global initiative, P&G #Forests- ForGood, which has launched first in the UAE, partnering with Emirates Marine Environmental Group (EMEG), a key lo- cal partner. P&G is aligning with Dubai 2040 announcement for more green space and will be making a contribution towards this within 2021 with the P&G Dubai Mangrove Forest. Using blockchain technology to en- sure traceability, the aim of the pro- gramme is to offer full transparency with tree-planting projects, allowing each individual to view their trees that have been planted through the EcoMatcher website in line with P&G’s mission to ensure sustainable growth and account- ability. Other #ForestForGood initiatives will be rolling out in the following months of 2021 around the Asia, Middle East and Africa region too, something we are really excited about. What are some of the targets that P&G is working towards? Ambition 2030 sets new goals and new practices that will not only reduce our footprints and preserve resources, but will more importantly, help restore the world. When P&G sets a goal, we also put the steps in place to achieve it. An ex- ample of this is our 2020 goals, many of which we’ve met ahead of schedule, especially across the Middle East. • ENERGY EFFICIENCY: met our energy goal four years ahead of schedule. • WATER SUSTAINABILITY: We achieved our water reduction goal of 20 percent four years early (now at 27 percent). • WASTE REDUCTION: 100 percent of our manufacturing sites are zero manufac- turing waste to landfill. This means that the only thing that leaves our manufac- turing sites is finished product. By 2030, we are committed to make a difference on all our environmental footprint actions – and not only the vis- ible ones. P&G’s Ambition 2030 goals include: • BRANDS: Inspire responsible consump- tion through packaging that is 100 percent recyclable or reusable, launch- ing more sustainable innovations, and building trust through transparency and sharing our safety science. • SUPPLY CHAIN: P&G manufacturing sites will cut greenhouse gas emis- sions in half and will purchase enough renewable electricity to power 100 percent of our plants. The company will also source at least 5 billion litres of water from circular sources. • SOCIETY: P&G will continue to create transformative partnerships that ena- ble people, the planet and our business P “EACH CRISIS IS AN OPPORTUNITY FOR US TO BE A FORCE FOR GOOD”12 C EO M I D D L E E A S T MAY 2 0 21 SUSTAINABILITY to thrive, including those that stem the flow of plastic into the world’s ocean, protect and enhance forests, expand recycling solutions for absorbent hygiene products, and protect water in priority basins around the world. • EMPLOYEES: P&G will engage, equip and reward employees for building sustainability thinking and practices into their everyday work. What is key for a corporate entity to consider when planning a cohesive, compelling and effective sustainability drive? We recognise that our sustainability im- pact must be comprehensive and partner- ship with experts is key. Providing access to basic human needs to everyone and safeguarding the environment for future generations is the top priority for govern- ments, industry, NGOs, and consumers. Multi-stakeholder partnerships are criti- cal to achieving our United Nations Sus- tainable Development Goals (UNSDGs). P&G’s strength lies in our global reach, our understanding of the 5 billion consumers we serve, and our innovation capabilities give us a unique ability to make a positive difference. We track and measure all we do and set higher stand- ards for our supply chain, through pack- aging recyclability amongst other ar- eas for example, and we put measurable plans in place to achieve those standards. For a company like us – innovation is the lifeblood of our success. This single- minded focus gets results. For instance, in just a year, we’ve prevented over 63,070 metric tonnes of waste – the weight of six Eiffel towers – from ending up in land- fills. Instead, this waste was recovered and reused for energy or recycled. Since 2016, we have been working with supply chain partners to reduce their impact on the environment and therefore decrease our products’ overall footprint. To date, this initiative has saved the equivalent of the energy consumption of heating 1 million homes for one year. egy into our business plans, which in turn are tied to executive compensation. We’ve established ambitious goals to minimise our environmental foot- print, to innovate with the best and safest ingredients from both science and nature and to create products that make responsible consumption irre- sistible for people everywhere. In July Why is CSR such a non-negotiable part of a business’s overall plan in 2021 and what must an effective one include? The next decade represents a critical window to significantly decrease the carbon emitted into the atmosphere and ensure a healthy planet for present and future generations. We are focussed on integrating sustainability as a key strat- Action plan Channawi says P&G is committed to make a difference in all of its environmental footprint actions by 2030MAY 2 0 21 CEO MIDDLE E A ST 13 SUSTAINABILITY 2020, P&G announced a new environ- mental commitment: to be carbon neu- tral this decade. This means achieving a balance between emitting and absorbing carbon from the atmosphere, so that the net amount is zero. Working closely with Conservation International, World Wildlife Fund and other leading climate experts, P&G will fund a range of projects designed to protect, improve and restore for- ests, wetlands, grasslands and peat- lands, that increase carbon storage or avoid greenhouse gas emissions while supporting local communities and eco- nomic recovery. How can leaders engage their staff to be proactive members of a drive to ensure it is carried out? We must keep our people engaged and equipped. There are three effective ways to achieve that: 1. Integrate sustainability as a key strategy in business plans 2. Educate and raise awareness of our employees across all levels 3. Reward progress and integrate recognition in employee performance assessments We have developed a detailed plan across all levels and organisations to engage P&G employees in how they can embed social and environmental sustain- ability in the work they do. We will also implement a system to recognise those employees who have made significant contributions to advancing progress vs. our goals. Sustainability is now part of all business plan reviews and our lead- ers are now incorporating this into their business strategies. We have created an online training about our environmental efforts and what employees can do. Importantly with Earth Day around the corner, all employees in Asia-Pacific, Middle East and Africa will be commemorating AMA Sustainability Month where there will be a summit with expert speak- ers, awards to recognise employee and business contributions to protecting our planet. Our organisation has made tremen- dous progress against our goals and that’s driven largely by the passion and ingenuity of our employees. Between industries, the CSR contribu- tion will of course differ, what is key for P&G in its sustainability drive and how might this be relevant to CEOs looking at implementing similar in their industries? Creating sustainable impact leads to long term impact and growth of communities and business. Short term aid or contri- bution is not sustainable. We are in it for the long haul. At P&G, each crisis is an opportunity for us to be a force for good and a force for growth. We have a strong and increasingly diverse partner ecosys- tem that we encourage to follow a similar path to our own as we lead by example and collaborate on initiatives together. Sustainability should be everyone’s job and hardwired into every employ- ees workplan. This year, we have made a commitment to 2,021 acts of good for 2021. These acts of good represent the next chapter of P&G’s Lead with Love consumer campaign, which includes a call to action to make 2021 the year we all come together to do more and do better – for communities, equality and our planet. “OUR ORGANISATION HAS MADE TREMENDOUS PROGRESS AGAINST OUR GOALS AND THAT’S DRIVEN LARGELY BY THE PASSION OF OUR EMPLOYEES” Conservation P&G believes sustainability should be everyone’s job and hardwired into every employees workplan14 C EO M I D D L E E A S T MAY 2 0 21 t is easy to overlook the fact that many of the most success- ful businesses through history started their journey owned and run by families, from Ford to JP Morgan to Walmart. Family businesses have always been a crucial part of every economy, how- ever, within the GCC their contribution to economic growth can’t be overstated. Research from the International Monetary Fund in 2018 showed that family-owned businesses contributed about 60 percent of the region’s gross do- mestic product and employed more than 80 perecent of the GCC’s labour force. Similarly in the UAE and Saudi Arabia various studies estimate that between 60 – 90 percent of the private sector is made up of family-owned businesses. In many GCC countries, family busi- nesses are the private sector, with their economic success directly linked to the prosperity of the region. Despite this dominance within the Middle Eastern economy, family busi- nesses face a unique set of challenges including resistance to change among family members and inter-generational conflict. Over the past twelve months these challenges have been compounded by the economic disruption and tech- nological transformation accelerated by the coronavirus pandemic. This set of unprecedented challenges comes at a time when, within the GCC, roughly 80 percent of family businesses are at a critical transition phase of first to second, or second to third generation. It is estimated that assets worth $1 trillion will be transferred to the third generation over the next five years. The period of disruption we are living through means all businesses need to adapt, and it’s at such periods of inter- generational change that conflict is most likely to occur among family businesses. These transitions must be navigated sensitively and intelligently to protect family business growth and prosperity across the region. A large part of this continuity plan- ning hinges on the families themselves. I BY ENABLING SMOOTH TRANSFERS OF OWNERSHIP AND MANAGEMENT FOR FAMILY BUSINESSES, WE CAN SUPPORT A MORE SUSTAINABLE PRIVATE SECTOR AND THE SHIFT TO A KNOWLEDGE-BASED ECONOMY, WRITES OMAR ALGHANIM, CHAIRMAN OF THE FAMILY BUSINESS COUNCIL – GULF THE FAMILY WAY FAMILY BUSINESSESMAY 2 0 21 CEO MIDDLE E A ST 15 This is at the heart of our mission at the Family Business Council Gulf (FBCG). We help and advise our members on putting their house in order – in par- ticular through a robust family govern- ance system, and provide a vehicle for families to learn and share their own knowledge and experience with each other. Yet some of this continuity plan- ning hinges on the external environment, namely the legal options and legisla- tive processes in place in different GCC countries which need to act as a catalyst for the smooth transition of power from one generation to the next. Collaborating with policymakers and government to help address legal op- portunities that can support continuity of family businesses is critical. This is a practice many of FBCG’s peers around the globe have carried out successfully in the past and over the past few years we have been working with government stakeholders on identifying regulatory support for family businesses. We have also established concrete partnerships, such as our Memorandum of Under- standing with the Dubai Chamber of Commerce last year to collaborate on re- search, education and awareness raising of the changing needs of family business in Dubai. The Family Ownership Law (9) for 2020 was created which allows new fam- ily ownership contracts to be formed set- ting out the rights and responsibilities of family members. For the family owner- ship contract to become legally binding, the new law also states that all parties of the contract must be members of the same family and have a single common interest. The law has been described as ‘the culmination of a legislative revolu- tion’ by Fadi Hammadeh, the creator of the original bill in 2013 and General Counsel to the Al Futtaim Group, a FBCG member family. At the federal level in the UAE, we are in a joint collaboration with the Ministry of Economy to develop a roadmap to regulate operations of family-owned businesses in the country and ensure their continuity over succes- sive generations as part of a wider effort to build a more flexible and sustainable economic model. We have seen engagement with poli- cymakers used to similar effect in Saudi Arabia, with the establishment of the National Centre for Family Businesses (NCFB) in 2019 which collaborates with Saudi authorities to support the sustain- able development of family businesses in the country. The new Dubai law and the crea- tion of the NCFB in Saudi Arabia are two examples of where steps have been taken to protect the continuity of family businesses in the region, but the op- portunity is there for all GCC countries to take action. I do not think it is an exaggeration to say that the economic prosperity of the GCC rests on the success of its family businesses. This is an opportune time to collaborate strategically with policymak- ers to not only support the continuity of family businesses but also to drive their overall transformation. By supporting the process of transfer of ownership and management for family businesses, we can in turn support a more sustainable private sector and the shift to a knowledge-based economy. “I DO NOT THINK IT IS AN EXAGGERATION TO SAY THAT THE PROSPERITY OF THE GCC RESTS ON THE SUCCESS OF ITS FAMILY BUSINESSES” Changing times Family businesses face a set of challenges including resistance to change among family members FAMIL BUSINESSES Partnership FBCG has collaborated with Dubai Chamber on research, education and awareness of the changing needs of family business in Dubai16 C EO M I D D L E E A S T MAY 2 0 21 XXXXXXXXXBUSINESS LEADERSHIPMAY 2 0 21 CEO MIDDLE E A ST 17 BUSINESS LEADERSHIP LEADERSHIP ASSESSMENTS FOR MIDDLE EAST EXECUTIVES: WHY NOW? LEADERSHIP IN AN ORGANISATION – REGIONAL OR INTERNATIONAL – IS AN INDISPENSABLE ASSET. BUT HOW PRECISELY CAN ORGANISATIONS IDENTIFY WHICH INDIVIDUALS HAVE THE CAPACITY TO LEAD IN THESE TIMES OF UNCERTAINTY? EXECUTIVE ADVISORY EXPERTS EGON ZEHNDER HAVE CREATED ASSESSMENT METHODOLOGIES WHICH COULD HELP COMPANIES FIND THE BEST TALENT By GOLNAZ BAHMANYAR, PATRICK NADER and HANA HABAYEB18 C EO M I D D L E E A S T MAY 2 0 21 BUSINESS LEADERSHIP iddle Eastern executives were already heavily weighed down by the economic burdens of the region’s oil crisis before Covid-19 presented them with innumerable new challenges. But behind every crisis – especially a double-pronged one, lies an opportunity for leaders to prove their true potential, as the scale of the enduring global pandemic demands a more exceptional kind of leadership than ever before. Fuelled by adrenaline at the start of the crisis, many leaders were able to exceed expectations. Sadly, they failed to sustain this high level of performance over time. This mirrors a typical reac- tion. When faced with a crisis, individu- als normally move through four stages: from “shock” to “response”, moving on to “resolve”, namely adopting new solutions, and finally “transform”, when individuals change and accept the new normal. Assessing the right leadership skills So, how precisely can you identify which individuals you can rely on and who has enough staying power to last the course? Based on years of experience in crisis management, Egon Zehnder has created assessment methodologies, which clearly show who can fight long-burning fires while remaining effective leaders. Since the start of Covid-19, Egon Zehnder has completed over 250 leader- ship assessments for clients in the Middle East to identify which existing executives or leadership candidates have sufficient resilience during a prolonged crisis, and how to develop them to become the right leaders for these difficult times. M “COMPANIES ARE TRYING TO IDENTIFY AND NURTURE NATIONAL TALENT” Expertise Golnaz Bahmanyar leads Egon Zehnder’s consumer and retail practice in the Middle EastMAY 2 0 21 CEO MIDDLE E A ST 19 BUSINESS LEADERSHIP As these assessments were conduct- ed virtually, Egon Zehnder could mobi- lize the right expert team, regardless of geographies. For example, one multina- tional client undergoing leadership tran- sitions in the GCC, wanted to identify his bench-strength, both in terms of its potential for delivery and its ability to complete transformation under duress. An Egon Zehnder team comprising regional and global leadership advisors was able to identify “hidden jewels” in the organisation and thereby advise the CEO and the board of directors which people would add most value where and how to bring them on-board. Factoring in triple strength personality We find that resilient, high-perform- ing leaders combine three types of strengths. Firstly, effective leadership competencies, allowing them to develop strategies, lead times and deliver com- mercial success. Secondly, the right personality traits, including emotional stability, and a willingness to change. Finally, they have the potential to grow and learn, even during a crisis. These, therefore, are the three factors Egon Zehnder measures in its leadership as- sessments to identify effective leader- ship in times of crisis. Leadership assessments are espe- cially useful right now in identifying and developing both expat and national talent in the Middle East, largely home to family-owned and government-based companies. On the back of a government drive to increase private sector partici- pation of the national population, com- panies are trying to identify and nurture national talent to take on key leadership roles. At the same time, they don’t want to block talented expats from assuming top positions. The assessments have helped one of Egon Zehnder’s key clients to successful- ly steer its succession planning exercise. As a result, the company has been able to appropriately develop younger na- tional talent, “take a bet” on nationals with less experience but high potential, and otherwise import talent with the right expertise. Leaders are increasingly keen to take part in these assessments to understand where their potential lies and how to grow, introducing a new type of energy to organ- isations. In the words of Egon Zehnder’s Chair Jill Ader, “Readiness to lead at the top levels in business and society re- quires leaders to develop a willingness to understand who they are and who they can become so that they can unlock their full potential – and help organisations unleash their potential as well.” The Covid-19 crisis has highlighted the need for leaders to react and act with agility and learn from their mistakes. Leadership assessments show who is the right person for the job and how to de- velop them – now and in the long-term. “THE COVID-19 CRISIS HAS HIGHLIGHTED THE NEED FOR LEADERS TO REACT AND ACT WITH AGILITY” Advisor Patrick Nader is part of Egon Zehnder’s consumer and services practices for the Middle East Technical background Hana Habayeb is responsible for Egon Zehnder’s technology and communications practiceNext >