Good business leaders create a vision, articulate the
vision, passionately own the vision, and relentlessly drive
it to completion.
– John Welch
Effective leadership is not about
making speeches or being liked; leadership is defined by
results not attributes.
– Peter Drucker
Difficulties mastered are
– Winston Churchill
Leadership: The art of getting someone
else to do something you want done because he wants to do
– Dwight D. Eisenhower
Innovation distinguishes between a
leader and a follower.
– Steve Jobs
A leader is one who knows the way,
goes the way, and shows the way.
– John Maxwell
The key to successful leadership today
is influence, not authority.
– Ken Blanchard
times of turbulence
By Sunil Fernandes,
Mayank Singh and Visvas Paul D Karra
It is only when the tide goes away, that you know who is
swimming naked,” is a proverb that has been often quoted by
captains of industry in the last few years. And, perhaps
rightly so, as the tide of the last couple of years, has
seen behemoths collapse, companies being taken over, bailed
out, or simply restructured. Such has been the global
debacle after the Lehman Brothers collapse, that when the
economy history of the 21st century is written it would be
well segregated as pre and post Lehmann eras.
Of course, during the heydays, many sins were hidden, that
have now come to light. Over exposure, bonus excesses,
exorbitant salaries etc., were some of the cardinal sins
that are not pardonable anymore.
In all the economic mayhem, what may have come to the fore,
are leaderships that have managed to tide over the crisis,
and successfully weather the storm. So why has effective
corporate leadership assumed such significance in the last
few years? It is simply because corporate captains have had
to deal with crisis in several areas, at one go. Crisis of
consumer confidence, sagging employee morale, demanding
customers, tough bankers et al. The recession or the global
economic downturn, as the case maybe, has separated the good
leaders from the mediocre ones. Effective leaders may have
been the ones that were able to motivate employees; ensure
nimble-footedness; remain astute while negotiating with
bankers; and last but not the least ones that were able to
boost demand. In fact, the present recession has bought
about the best in some leaders, who were able to deliver
extraordinary reactions to a crisis. In Oman, it was a case
of business downturn, more thawn a recession. The Oman
Economic Review spoke to several corporate chieftains here
in Oman on the role of a leader and how they managed to
overcome the crisis. We got some thought provoking and
interesting insight into how some of them responded to the
Take for example the case of boosting employee morale. Ali
Mohammed Juma, Chief Executive of Vision Investment Services
SAOC, dealt with employee morale by ensuring transparency
with employees on the company’s performance, creating a fun
environment, and helping employees focus on opportunities
that had arisen because of the crisis. At the Al Sulaimi
Group, it was a contrarian call of hiring. “During the
crisis, employees all around the world were concerned about
job security. At the Al-Sulaimi Group we assured all our
employees that we won’t lay off anyone and we explained to
them the reasons for the decision. In fact, we went about
hiring people, as quality talent was available,” says
Haitham Al Fannah, COO of the Al Sulaimi Group.
These are just a few examples of corporate czars managing
the crisis. We got examples where visionary leadership,
astute business acumen paid rich dividends in boosting
demand, employee morale and overall business conditions.
Clearly, the crisis had found effective leaders, who were
separated from the ordinary ones; just like wheat is
separated from the chaff.
leaders need to be calm in times of crisis and never panic,
says Bhaskar Datta, CEO, Al Jazeera Steel Products Company
are the essential qualities of a leader that come to the
fore during a crisis like the global financial crisis?
Never Panic. Immediately plan actions that need to be
taken for survival of the organisation. Ensure that you
collect all outstandings, even if you have to make certain
concessions. Open-up all avenues to dilute your stocks and
have a management meeting with the work-force, to explore
all avenues of cost cutting that do not lead to more damages
in the future. Essential capital goods expenditure can’t be
just put on abeyance. These choices are of prime importance
during a crisis.
Is it right to say that leaders are catalysts and
facilitators who make effective use of talents and resources
during a crisis?
Yes, but they can’t do it alone. They have to build-up
confidence in the management and the work-force with
positive action and seek their assisstance in the goal and
objectives set out to tide over the crisis.
How did you manage your manpower effectively without
hurting employee morale during the past two years?
A joint decision with the management and work-force was
taken for a salary cut and all incentive schemes temporarily
suspended. Furthermore, other steps included a judicious use
of overtime work and reduction of contract labourers to a
How should a leader manage customer expectations during a
crisis as everything seems to be unknown and fuzzy?
We definitely need to support our customers and must
also understand that they are in the same shoes as us.
Therefore, we gave some concessions on prices and also
extended the time for outstanding repayments. We can now
boast that despite all these facilities provided to our
customers, we did not have a single bad debt during the
crisis and till date.
How did you manage customer, employee and shareholders
expectations at Al Jazeera Steel in 2009?
I must appreciate the full support that I got from all
concerned, namely: customer, employee and shareholders.
Everyone understood the gravity of the situation and
supported the management in full. It was difficult to
convince banks to lend during this period. The board took
personal pains to approach bank, who having the goodwill for
Jazeera Steel also supported us with rescheduling of loans.
We are proud to say that we met all the committments with
the bank before the promised dates.
apply vision needed”
leader should be a visionary, who has the passion to apply
his vision to steer the company forward, says Haitham Al
Fannah, Chief Operating Officer, Al Sulaimi Group
attributes of a leader have come to light, due to the global
The financial crisis was not something that anyone
anticipated; that’s precisely why leadership qualities
played a major role in the survival of organisations, during
turbulent times. We have seen large corporate behemoths
collapsing during the financial crisis and of course that
can be attributed to many factors. I believe the most
important quality a leader should have is his vision; a good
vision that will determine how you tackle a crises. It is
always easy to say let’s cut cost and lay off employees but
what are the consequences of that? You might end up losing
good employees that contributed a lot to the organisation
during the good times and would have contributed more in the
future. Any organisation’s strength lies in its employees
and once you start laying-off employees, a crisis could
Therefore, a good leader should be a visionary, who has the
passion to apply his vision and steer the company forward.
Leadership qualities are best known and best used during
tough times, and as the saying goes “tough times requires
Does a good leader make effective use of talents and
Most certainly. Leaders are catalysts and facilitators
who make effective use of talents and resources at all
times, not only during a crisis. During a crisis we could
say that a leader can effectively maintain good productivity
as supply is more than the demand.
How did you manage your manpower effectively without
hurting employee morale during the past two years?
This is a very interesting question. At the Al-Sulaimi
Group, we did not layoff any employees. When the financial
crisis erupted, we had a group board meeting to discuss our
strategy for dealing with the financial crises and chalked
out plans to tackle the crisis.
After careful analysis of all financial implications, the
board took a decision not to layoff, in fact we started
hiring. You must be wondering “why hire?” Well, it was the
right time to pick and choose as there was abundance of
talent. We thought this was an investment for the future,
and we now have an immensely talented crop of employees. Our
employees have always felt confident and secure and we have
always received optimum performance, despite the financial
crisis. Now that the markets have recovered, we are very
well equipped to handle a bigger share of the market, with a
talented pool of employees.
How should a leader manage customer expectations during a
crisis as everything seems to be unknown and fuzzy?
During the crisis supply was more than the demand, (i.e.
buyer’s market) competition was at its peak and customer
expectations increased drastically. As you said everything
was unknown, it was a time when you had to work with several
scenarios (Plan “A” and Plan “B” simply weren’t enough). At
the Al-Sulaimi Group our goal has not only been to meet
customer’s expectations but rather to exceed it. Therefore,
we had a real challenge as expectations were very high. We
have been determined to meet and exceed customer
expectations and that is something we will not compromise
How did you manage customer, employee and shareholders
expectations at the Al Sulaimi Group in 2009, which was
largely a difficult year?
For us, the customer comes above the rest. Our endeavour
has always been to meet customer’s expectations simply by
offering them high quality service. At the Al-Sulaimi Group
customers are share holders, they are the owners of our
business, without them we would not have existed.
For us, employees are the soul of our organisation, and we
work like a family. During the crisis, employees all around
the world were concerned about job security. At the Al-Sulaimi
Group we assured all our employees that we won’t lay off
anyone and we explained to them the reasons why we had taken
that decision. As for our shareholders, I would like to note
that our shareholders believe that a successful business
entails a good vision supported by satisfied customers and
employees. That’s why by formulating a vision for the
future; satisfying our customers and employees we have
created a recipe for a successful business, which in turn
has met our shareholders’ expectations.
going gets tough… the tough get going"
Mohammed Juma, Chief Executive of Vision Investment Services
outlines the attributes of a good leader that come to light,
especially during challenging times
are the attributes that a good leader should have during
I believe that preparedness is the key and a leader’s
role starts way before challenging times hit. In this
context I am reminded of the phrase, “If you fail to plan,
you plan to fail.” It is the role of the leader to ensure
that macro risk related factors are well thought of in
advance and contingency plans are formulated. More
importantly the leader should proactively inculcate the
habit of being vigilant and realistic in all the team
members. By setting a blue print in place the leader is
well-equipped with the required armour to deal with risks
arising from macro events.
As far as the soft issues are concerned; during challenging
times employees tend to go into a state of confusion, panic
and sometimes even depression. In such circumstances the
primary responsibility of a leader is to boost the morale of
the employees while channelising their energy towards
managing risks and identifying opportunities that may arise
How would an effective leader manage employees during a
Communication is the mantra during challenging times.
One cannot over emphasise the importance of being close to
the team and keeping an open and interactive channel of
communication with the employees. A leader must be
transparent about the challenges the company is facing and
should promote a participative environment. This will
enhance the sense of ownership in the employees and as a
result retain talented people who will work efficiently and
effectively during such times.
On a personal note, I strongly believe that nothing works
better than creating an ambiance of fun; and during
challenging times it becomes even more important that the
leader lead by example. He should maintain an upbeat
attitude with frequent sessions of fun and laughter.
That brings forth one of the most important challenges a
leader faces during such times: managing oneself. If the
leader fails to properly manage his state of mind and have
clarity of direction in which he wants to lead the
organisation; it will obviously limit his ability to lead
and may have a negative impact on the company.
What about seizing opportunities that may come during lean
This is a very interesting question. Usually during
challenging times organisations are busy managing the
consequences and ramifications or exercising a ‘wait and
see’ approach. However, I believe a good leader must have
the ability to distance himself and have a birds’ eye view
of the whole situation to identify and seize opportunities.
For example, during the current global financial crises, we
launched our 3rd Fund, Vision Real Economy GCC Fund.
Initially we were reluctant and it required strong
conviction to swim against the tide. This is where while
building our team and company, the preparations we had taken
to keep focus and spirit during tough times, held us in good
stead and resulted in a very successful launch.
How does a good leader manage customer expectation during
times of crisis?
In our industry managing customer expectation is one of
the real challenges. We are an investment company and here
it’s all about customer’s money. As I often mention “For
human beings ‘Money Matters’ matter the most”.On a serious
note, the leader has to ensure that there is no lax in the
services provided. It is his responsibility to reinforce the
need to add value to the customers to manage their risk and
As far as our industry is concerned, we operate in a highly
regulated structure and therefore, there is little scope for
us to adjust on the pricing front. Professional ethics and
excellence in service are the two binding factors that help
retain customers. We capitalised on the current financial
crisis by utilising this time to build on our customer base.
Our service model, research information, and infrastructure
support have always found to offer impeccable standards and
we have used this opportunity, to meet, listen and
strengthen customer requirements, wherever there was a need
communication with employees and a customer focus on
addressing global changes will help to overcome challenging
times, says KS Cheema, Executive Director, (Legal &
Hardly anyone would think that a one and a half litre
water bottle would contribute to a 60 per cent reduction in
expenses. But that was what the Omzest group of companies
was able to achieve – merely by replacing the half litre
water bottle with a one and a half litre one. What’s more,
this gem of an idea came, not from a top management
executive, but from the lower rungs of the organisation when
the management invited all its employees to share ideas
during the turbulent times of the past year.
“Most of the ideas which are needed to steer a company
during a crisis come from within the organisation and a
resourceful leadership should be able to create
brainstorming sessions to look for inputs from different
people at different levels,” says KS Cheema, executive
director (Legal & Projects) of Omzest. “A leader has to be
resourceful at all times but this ability comes into focus
during a crisis,” he adds.
“Sometimes you tend to ignore important inputs just because
the person is not at the right position. So I think you need
to be open while communicating with your employees, your
customers, as well as with your peers and get whatever best
ideas you can. Getting an idea is one part but putting it to
use is the more important part of it,” Cheema says.
Basically having open communication which motivates your
employees and adopting changes in management policy like in
terms of newer ways of doing business and addressing changes
which take place at a global level are areas which leaders
of organisations need to focus on.
According to Cheema, some of the biggest concerns
confronting businesses are the reduced demand for products,
pressure on prices, longer sales cycles and uncertainty over
raw material prices, longer receivables and cash conversion
cycles and lower employee morale and job security. In order
to address these concerns, an organisation needs to focus on
developing new markets, on cost competitiveness, on higher
employee productivity, speeder inventory management and on
collection and receivables management.
It is said that leaders are facilitators and catalysts who
make effective use of talent during a crisis. In this
regard, managing human resources without affecting their
morale becomes critical. As a highly diversifiedgroup with
companies in various sectors like manufacturing and
automobiles, Omzest also had its ups and downs.
“In such a scenario, organisational restructuring is often a
very painful exercise when non-value adding processes and
sometimes personnel associated with those activities come
under the axe. We were very sensitive to this. We did cut
off some of the activities which were not value additions
but fortunately did not cut off our employees who are our
most important resources. And even when we had to change
people from one profile to another we ensured that they had
the right activity within the organisation and that kept
both the organisation’s and employees’ morale up,” explains
“Once you take care of your employee morale, they almost vow
to pay back in some form or other and that clearly boosts
the organisation,” he added.The group also made effective
use of lean management theories which, however, did not mean
retrenchment but utilisation of same people in multiple
activities. So if an employee was contributing only three
hours to a particular activity, the company tried to
understand where his balance six or seven hours could be
utilised. This helped to reduce costs.
“Earlier we used to have a separate receptionist and
telephone operator. We realised that both of them were not
only sitting idle but wasting each other’s time. Now we have
moved one of them to another department and we have realised
that both have become more productive and one of them can
multi-task. So it is as simple as looking for such ideas,”
Crisis of sentiment
Quite often it is negative sentiment that creates a crisis.
The best way to deal with this is to have open communication
with the people, assure them that as long you do your best,
the organisation will look after your needs. That does not
mean just paying salaries at the end of the month. In fact,
it also means treating employees with honour and respect as
before. And once employees are treated in such a way, I
think you win them over psychologically and if employees are
psychologically with the company, then their productivity
goes up four times higher than normal, says Cheema.
He also advises that sometimes when you do tend to lose your
temper you should know the art of putting your arm around
your employee and treating them like friends and family.
Just like for example when you shout at your wife, you kiss
and make up.
Another aspect of an effective communication is to lay the
company’s objectives on the table and notify what the
company is doing. Says Cheema, “A good leadership quality is
in being able to communicate to your team members about your
strategies to tackle a crisis and how you intend to steer
into the future. So communication and open discussion are
the keys to a successful leadership.”
It’s all about money
Ultimately, cash management becomes an overriding factor
during difficult situations. Manage your cash flows and you
will have managed the crisis, declares Cheema. And there are
various ways of doing it: Whether by reducing your input
costs or whether by increasing your turnover; whether by
reducing the cycle of your receivables or whether by
incentivising people to move inventories faster (promotion
sales). Whichever way, it applies across all sectors.
Giving examples, Cheema says that in the manufacturing
sector, companies are now trying to identify sources of
cheap raw materials and also scouting for new markets to
sell their produced goods in bulk. And then you can also put
more people in receivables. If your turnover is one $1mn and
you improve your receivables by five days it adds to almost
$50,000. Once you take care of these costings, it has a
multiple cascading effect. Because, if you reduce your debt
costs, your procurement will become cheaper as you are
buying in cash and you don’t have to pay interest.
Again, manufacturing companies dependent upon procurement
from open markets, must become innovative in procurement
procedures and philosophies. Like for instance, breaking
long term contracts for listed commodities which were based
on certain formulas and going to the open market to buy.
Accept the realities, clean your books and move forward.
the way forward.
“A long term
Ali Al Balushi, Managing Director, Iskan Oman Investment
Company believes that a good leader must have a vision and
ability to assess a crisis with an open mind. He outlines
other characteristics of a good leader, while talking to OER
What are the essential qualities of a leader that come to
the fore during a crisis, like the global financial crisis?
What’s important for a leader during difficult times is to
have a clear long-term vision for the business. A good
leader would know his strength and would need to believe in
it. An important attribute of a leader would be to discuss,
and get on board participation from all stakeholders
including employees and shareholders, even while motivating
and opening all communication channels. Communication with
shareholders would ensure that transparency is maintained
and that they are kept in the loop about all developments –
whether adverse or favourable. So clearly, a good leader is
one that is able to communicate, motivate and have a clear
long term vision about the company.
So, how did you as the Managing Director of Iskan Oman
Investment Company lead the company during the precarious
times of 2009?
We commenced our activities in 2008 and have had a very
strong set of shareholders. It was a conscious decision to
gradually grow the business and hence our exposure to the
real estate sector was minimal. Also, from our core business
which has been real estate, we gradually diversified to
other areas. As a leader one of the important attributes is
to make prudent decisions after taking into confidence
In what areas did you actually diversify?
We have moved into the education sector, as we believe that
we can cater to the growing needs of imparting quality
education. We have taken over one school and are planning to
expand with more campuses. We have also diversified into the
Food and Beverage industry and gradually will consider other
services sector like healthcare.
How does a good leader meet customer expectations?
A good leader would always ensure timely delivery of the
customers’ promises and expectations. For example, for our
real estate project at Salalah, the approach we adopted was
not to rush into selling theproject. Instead, we have first
appointed leading international consultants to design a
quality product that is affordable and now we are focusing
on project development and construction. The construction on
the project site has already commenced, before we begin to
sell the project, thus ensuring that we have put in place
what it takes to ensure that customers know what they are
We are certain to deliver what we promise and they can see
the construction on site before they pledge a single Rial to
the project. In short, we are building the trust and
confidence of our customers for the very long term and this
is what effective leadership means.
Were you compelled to take tough decisions in 2009, say
for example salary cuts?
As mentioned earlier, Iskan Oman commenced operation only in
2008 and began a gradual process of building the
organisation. Since then, we have been a nimble footed and a
lean company. So obviously, there was no question of cost
cutting and other demoralising decisions to take.
A good leader would make use of opportunities. Did you
see any opportunities that came by in 2009?
Bad times always bring with it opportunities. Our Salalah
project is once again a good example. With the downturn in
the real estate sector, we did not shelve or postpone our
project instead we seized the opportunity and took advantage
of low construction prices and invested our resources in
project development. This will ensure our project is on
schedule as planned and we are benefitted by the low prices
and the benefits will be shared with our customers with very
affordable pricing – a win-win situation for all.
How would you summarise the qualities of a good leader?
I believe that there are five measures that a good leader
must look into, particularly during times of crisis. The
first is to assess the situation and do so with an open
mind. The second step would be to work on a worst case
scenario; thus preparing staff, shareholders and other
partners would be important. The next step would be to look
at cash flows and not solely profits. The fourth would be to
involve your people in all decision making. And finally, a
leader must lead the company to be aggressive and innovative
during difficult times, something that we have done here at
Hansen, Managing Director, Oman Marketing and Services
Company feels that while long term strategic vision remains
constant, short term goals change according to the
exigencies of the situation
How important is it for people to see that the leader has
the right vision that they can follow him?
I think it is extremely important and the reason for that is
because part of my work is like a coach, I have to get my
team to understand the vision that we are trying to pursue.
I need to communicate with them asking for ideas to develop
strategies that will take us to market areas that we wish to
compete in and to develop strategies for doing so. As a
company we want to differentiate ourselves and get financial
returns. If we deploy resources into a certain set of
objectives, we need to analyse whether they will meet our
The leadership aspect is important as I need to be aware of
what my team expects from me. Overall, they want to see
behaviour that is passionate, committed, that they feel
comfortable, energetic and want to share in. This in turn
helps me to shape their behaviour towards the objectives
that we have set and then helps us to steer the business
using our team skills. What the team expects from me are
integrity, good values, honesty so that they can say, “I
like this leader and want to be a part of this vision that
the team is trying to achieve and want to be involved and
committed to making these business strategies a reality.”
Leaders should provide leadership that is critical in its
sustainability and commitment to achieving goals.
Do leadership styles change according to the exigencies
of the situation?
Leadership styles do change according to the situation, but
it operates at two levels – one, there is a strategic
perspective that does not change too much. This is a long
term vision about where we want to compete, how we want to
run our business and how we behave in our values and these
remain constant. But in the short term, it changes quite a
During challenging times, objectives that one may have
wanted to reach in a period of time might require an
extension. In a crisis the team focuses on core profit
streams and core behaviours. The team starts listening to
what the market is saying, changed customer expectations and
trying to meet those needs. What we noticed during 2009 was
that in the first six months of the year, the market was
affected emotionally by what was happening globally and
regionally (in Dubai) and it made us prudent. The underlying
fundamentals of this country, its people, the wise
government leadership, the sustained spending on
infrastructure projects all meant that there was an
underlying business need that would continue. In summary,
plans need to be developed for the long term, but tactically
some decisions have to change rapidly in the short term.
Did you change your leadership style at OMASCO last year?
Yes of course. If you take OMASCO we have a three year
development strategy, that is updated annually and for the
last eight years the vision has been the same to be the No.
1 in customer experience and that has not changed. In a
difficult year, it is important to develop strategies to
meet this vision. We require the continued deployment of
resources, we need to find people that have the right skill
set and attitudes to help this business to become great and
that continues apace. On the other hand, some of the
expenditure that we would have liked to make on new
buildings, a bigger network had to be delayed as we wanted
to see as to how the market developed. For us the key
success factor is keeping the team motivated by providing
them an environment of learning and involvement. As a team
we can discuss strategies for business continuity and
growth. This process is not entirely directed by me as a
leader but is based on an involved sharing approach in which
everyone has a say.
Does meeting customer expectations become more difficult
in a tough year?
Yes it does; in a tough year the customer sees opportunity.
In Oman, some players offered discounts to get rid of excess
stock, and the customer quickly linked value to price. In
our opinion, offering a better price is a short term gain.
Instead, once we saw the market deteriorating, we tried to
match our stock levels to the demand curve and thus
protected longer term values such as resale value and an
ability to bring in new models. OMASCO has moved away from
price to an emotional relationship with the customer that is
linked to confidence in the brand, receiving the right
advice and protecting the inherent value of the product. We
have seen wholesale discounting by some of our competitors
which over the ensuing months will significantly destroy the
resale value of these vehicles. In fact, it takes away real
value from customers and we have kept away from such an
How difficult is it to control inventory as forecasting
for vehicles is done in advance?
We look at a yearly target but it is tested and adjusted on
a monthly basis against market conditions and the prevailing
outlook. Right now we feel that we are starting to see a
growth phase, so we are looking at increasing inventory
levels slightly. This is being done on our core volume
models but we are not taking a risk on sports cars or highly
accessorised vehicles. As the market improves we look at
real value, real advice and real customer needs.
How did the year 2009 work out from a business point of
The year 2009 was like a hockey stick, the first three
months saw a definite slowdown in customer activity, but
from April, particularly from August onwards there was an
increase in sales volume. Overall, the actual impact was not
so huge, but it provided a good opportunity for customers to
bargain for better prices. In the beginning of 2009, there
was an element of fear, certainly concern for the future. On
a global basis none of us had foreseen the situation that we
saw in late 2008 or early 2009. But having a great team,
good brands, courage and taking swift action to reposition
the business by reinterpreting consumer needs and moving
ahead with a lot of hard work helped us to come across 2009
in a most satisfactory manner. A combination of clear
directives and a sense of humour aided the process.
What are the leadership essentials that you use at your
A lot of my role entails being visible, listening and having
the courage to take swift actions to achieve business
continuity and growth. The year 2009 was an opportunity to
revisit certain parts of the business, to study them and to
see how to do the business better.
“Take care of
leader has a vision and foresight, but the challenge is to
convert this into a successful strategy, says Aftab Patel,
CEO, Al Omaniya Financial Services
The business model followed by Al Omaniya Financial Services
(AOFS) has stood it in good stead over the years. Can you
share some details about the model with us?
At AOFS we have a number of advantages like having an
opportunity to build this business brick-by-brick since its
inception. Being here since the beginning has helped me to
create every aspect of this business model and this has
proved to be a big advantage as we did not have to deal with
legacy issues. Our effort has been to create a business
model that is a win-win for every stakeholder – our
shareholders, directors, employees, the government (as we
pay taxes) and customers. If anyone in this loop feels that
he is not getting value he will not be in the business.
Employees want better salaries, job satisfaction and avenues
of self-actualisation. Customers want the best service,
consistency and low prices; the government wants higher
taxes. These are all conflicting objectives. So you need to
create a business model that balances all these conflicting
objectives and delivers value in terms of higher earnings
and dividends for stakeholders.
Do you believe that leadership styles change according to
the exigencies of the situation?
Everyone has a vision and foresight, but the challenge is to
convert this into a strategy and to create something. At
AOFS we have been fortunate in having the right ideas and
putting a step-by-step game plan to meet these expectations.
I do not feel that there is anything called situational
leadership. Leaders have multi-layered personality traits
and based upon the situation one of those personality traits
emerges to address that specific situation or threat at a
critical point of time. We know that business cycles go up
and down, so our strategy is to reward our shareholders well
during good times and to reward them reasonably well during
bad times. The idea being to build long term sustainability
in the business plan. Once you come to execute this you need
to have a clear idea of the products that you are selling so
that you can create a value proposition for that product. It
is easy to launch a product but very difficult to sustain
We have changed with the times. When we started we were seen
as a car finance company and our corporate slogan was, ‘The
first name in car loans.’ When we moved into the second
phase, our slogan changed to, ‘We understand finance
better,’ and we started machinery and heavy equipment
financing.Today, we call ourselves, ‘Corporate finance
specialists’ as we cater to a large number of companies on a
variety of products, just like mainstream banks. When you
change, it has to be genuine and substantial rather than
merely cosmetic. As management theories will tell you, the
external environment is a given and one cannot change it; a
business leader has to adapt to this and still create value.
If the external environment was to your liking, then you
would not require business managers as anyone can buy and
How did you go about negotiating the downturn in late
2008 and 2009?
We could see the crisis coming before it actually hit in
2008. The role of a leader is to provide direction and as we
were prepared for the problems, the impact was minimal. We
put in place various measures to negotiate the slowdown.
One, we realigned our maturities. Second, we did a lot of
stress testing, with all the institutions that we deal with.
Third, the company started to maintain a much larger cash
position and triggered it’s contingency planning. For
example more focus started being given to housekeeping. The
corporate marketing and retail marketing teams started to
focus on remedial credit and managing debt rather than
adding new business. The first thing that I did at AOFS was
to call our staff and tell them in no uncertain terms that
no one would be terminated from this company. This gave
people the confidence and they pooled in their efforts.
These measures helped us to tide over the problems. In 2009
we made more money and profits than in 2008 and paid a 25
per cent dividend to our shareholders.
What are the values that a leader needs to have in
today’s business environment?
In business you have to be pragmatic, as one is sitting on
other people’s money. The two hallmarks of my leadership
philosophy is that we do not compromise on honesty and
transparency. The customers know that this company will not
take them for a ride. We follow all laws and regulations to
the T. These principles come from a belief that in business
you work with the community and not against it. My objective
is not just to maximise profits as that would be a short
term objective. Instead, our aim is to see whether we can
provide valuable service to the community that we work in.
By creating value for the community we create value for
ourselves. This guiding principle enables us to maintain the
asset quality that we have. AOFS has one of the best capital
structures. This has allowed us to have low capital
servicing, higher leverage capabilities, better lending
prowess and a solid capital base. That sums up why Al
Omaniya has been a forerunner and a consistent success.
How do you go about managing employee morale and
expectations in a downturn?
One can have the best strategy but you still require a team
to execute it. This in turn requires people who believe in
what the company stands for. Employees also require an
environment where they can grow and meet their own goals. We
have successfully created a company where there is no
conflict between the goals of the organisation and
individuals. By advancing the goals of everyone we ensure
that everyone is pulling in the same direction. AOFS has
created what in modern parlance is known as an ‘engaged
employee.’ For example, when someone rings up our company,
the person says, ‘How can I help you.’
If there is a query related to accounts and the call has
come to marketing, the executive will ring up the accounts
department, get the information and pass it onto the
customer. There are certain prerequisites for creating such
an environment. The company has few departmental or
functional barriers, enabling people to look at a situation
in a holistic way. Departmental barriers create power
centres and ego centre’s. When you manage to do away with
this and have a seamless organisation it creates an engaged
employee. It is a difficult process and happens over a
period of time. The command structure at AOFS is almost
flat, and though functionality is maintained, the doors are
open for everyone to come and speak to others. Overall,
barriers to communication are minimal and problems do not
develop into a crisis, as things get communicated quickly
in what you do is an advantage during difficult times says
Peter Hall, CEO of Al Hassan Engineering
Some companies by virtue of the nature of their business
are better placed than others to tide over difficult
periods. During the turbulent period of mid-2008 and 2009,
most companies in Oman, like their counterparts around the
world, went through challenging times. While many managed to
sustain their businesses with their opening order book
backlog, companies like Al Hassan Engineering Co (AHEC)
faired better. In such situations, it’s important to remain
focussed in order to stay ahead of the rest.
Says Peter Hall, CEO, AHEC, “If we were to review our
operations in 2009, we opened the year with a strong order
book. So in terms of revenue growth we had a good platform
on which to start. We also had a number of upcoming target
projects on which we based our order winning strategies.
These projects provided us with revenue for 2009 and a
backlog for 2010 and beyond. All this enabled the company to
achieve a good performance in 2009, giving greater value for
the shareholders. The turnover increased by over 20 per cent
and net profit increased by 30 per cent on 2008.”
Hall is obviously very happy with the results but admits
that it was a challenging year. But since the company had
put in place a number of strategies and initiatives to both
win the targetted projects and to ensure their commercial
performance through the execution phase, the desired results
Among others, the major new projects that AHEC won in 2009
included the 260 MW Amal Power Plant project from PDO. It
was also a particularly significant milestone as AHEC became
the first Omani contractor to take a full EPC contract for a
power plant in the country. This project is scheduled for
completion by mid-2011. Hall is quick to point out that over
the years AHEC has been involved in over 40 per cent of
power plants in the Sultanate including the 1000MW power
plant constructed for Sohar Aluminium by Alstom of France
for whom AHEC was a major subcontractor.
The second major project in 2009 was the Gas Depletion
Compression project at Kauther for PDO. This was another
significant milestone for AHEC as it gave an opportunity to
develop our business relationship with a new customer, the
internationally renowned main contractor Petrofac who
awarded AHEC a sub-contract for civil, mechanical,
electrical and instrumentation installation. Work on this
project is due to be completed in early 2012.
Elaborating on the strategies and initiatives implemented,
Hall says that in terms of business performance there are a
number of activities that were examined including internal
costs, efficiency andbusiness process re-engineering in
order to optimise the effectiveness and overall efficiency
of the organisation. One specific area was that of materials
management; many improvements were made in the supply chain
management cycle which have resulted in significant
improvements in the operational performance of the business.
We also made many improvements in our financial/accounting
reporting systems giving us greater transparency and timely
reporting of information on which we base our business
“The company went in for a major revamp of its website
keeping in mind its global audience of potential partners,
job seekers, customers, journalists and investors. Google
analytics reports have shown a 200 per cent increase in the
number of unique website visitors,” says Hall. The company’s
website www.al-hassan.com also won the First Prize in
Corporate Category at the prestigious Pan Arab web Awards in
Hall did not fully support the view that the industry was in
crisis management mode, more than that the dynamics of the
market had changed albeit significantly as a result of the
prevailing economic climate. Oman, however, was perhaps less
significantly affected as elsewhere in the region. “By that
I mean that very few, if any of the projects that we were
working on were cancelled or shelved. It may have taken them
longer to move through to the contract commitment stage but
they did not actually stop. In this regard, I would say that
Oman has demonstrated more stability than other parts of the
region thanks to the policies put in place by His Majesty’s
Government. So those projects that we had targeted went
ahead as planned and our winning strategy worked well,” Hall
Excellence in what you do is an advantage during difficult
times as it provides customers with confidence in your
delivery capabilities. And that was what AHEC did. “We
wanted to maintain our position in power generation where we
have a market share of 40 per cent. This consistency allowed
us to move up the value chain by undertaking the full EPC
for PDO’s power plant,” Hall points out.
Similarly, in winning the Kauther project, where AHEC is a
subcontractor to Petrofac, AHEC’s strong reputation in
successfully completing a number of gas projects was a key
factor. In particular, the more recent Burhan/Harmal Gas
pipeline project where AHEC in very close and open
collaboration with PDO were able to bring in the project
completion some four months ahead of schedule clearly helped
demonstrate their capabilities and gave tremendous support
in securing this work with Petrofac as a new customer.
An essential leadership quality is ability to build a good
team. A team that is able to carry on the good work with the
necessary help and support and with the right level of
autonomy to do their job. Staff retention is an area AHEC
paid attention to bringing in new people with essential
skills to grow the business.
The company appointed in early 2009 a professional and
experienced HR manager who has undertaken a number of
initiatives including structured staff development
programmes and a management development centre to formalise
and control how it trains and develops staff. “Since we
carried over good order books in 2008 and 2009, if anything,
we are increasing the numbers of our people as opposed to
cutting down because of our growth. In addition, we had to
refocus ourselves and rearrange ourselves and our processes
to optimise the efficiency of our organisation in order to
maximise our productivity,” says Hall.
Opportunities in Oman are good but clearly there is
increased competition which has challenged AHEC to implement
its strategies and initiatives to take advantage of the
situation and build on its reputation of safely delivering
quality projects on time.
“We’ve got a reputation of delivering projects on time and
most importantly safely without lost time injury (LTI). We
have a total of more than 35 million man-hours without LTI
since 2007. We are a flexible organisation and we understand
the needs of our customers and we always strive to fulfil
their requirements. At the same time with our management
systems we ensure that we complete projects within budget
which is a significant consideration for us,” Hall says. As
they say, leaders do some situational changes, AHEC improved
its communication process so that everyone knew about the
challenges the company was facing.
August - 2010
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