Dear Friends It is with great pleasure that I herewith introduce the report on the Continuum Family Business Conference, which was held on July 6th-8th in London. For the first time in its 5 years of activities the Tharawat Family Business Forum ventured outside the Middle East and invited an exclusive international audience to gather, network and exchange thoughts. After three intensive days together, discussing, debating and learning we come away from this conference with new insights and a refreshed mind. Thanks to our sponsors and partners, as well as to the excellent content presented by our illustrious speakers, the feedback from the participants and our international guests was overwhelming and we hope that the conference has strengthened existing ties, along with laying the foundation for new collaborations - internationally, as well as regionally. Dr. Hischam El Agamy Tharawat Family Busines Forum www.tharawat.org
About Continuumâ€Ś The Continuum Family Business Conference was an exclusive gathering of family business members from the Middle East and Europe in July 2011. Throughout three very animated conference days, attendees enjoyed a varied social program, heard from experts on relevant issues facing international family businesses, and most importantly shared their knowledge and insight with their peers. Sponsored by RBS Coutts and in partnership with Al Khabeer Capital, the Conference quickly developed into a platform for innovation and exclusive networking, as well as a hub for the young generation of family businesses. Continuum wasâ€Ś
In Partnership with
In Collaboration with:
What did we speak about? The main aim of Continuum was to provide family business members with a three-day “time out” from daily business to focus on some different questions - questions that even though essential, so often get set aside due to lack of time or that have to make place for more pressing issues. The interactive program featured presentations and workgroups focused on opportunities for business families in the three areas of - continuity - sustainability - innovation and saw the start of cross border “Business Talks”.
Who did we speak about? Part of the conference revolved around the story of a fictional Kuwaiti-Egyptian family business – the Al Mamnoon Family. The story had been developed as a point of reference for attendees to test the theories presented by the speakers and to challenge the decisions made by the family. The Al Mamnoon family business was presented as a diversified, 2nd generation-run family business with business interests in the Gulf and in Egypt and with a 3rd generation that did not have clear plans with the business. The full case can be downloaded from www.continuum2011.org or obtained from firstname.lastname@example.org in an e-book.
Wednesday July 6th 2011 Really, how else to kick off the conference than with a session for the young generation of family businesses? The Continuum Family Business conference started with the first ever Arabian NextGen Session (www.arabian-nextgen.org), welcoming an overwhelming number of extremely active young participants from family businesses from the Middle East and Europe.
Thoughts on Motivation The session started with a lively presentation by academic and family business member Abdullah A. Al Zamil. Mr. Al Zamil, who advises the Zamil Group in Saudi Arabia on governance matters and is a scholar at the University of London, set out to address a topic that is highly relevant and very personal at the same time: Motivation! With the help of the audience, during his presentation â€œThoughts on Motivationâ€? he explored the various types of motivation and why it is important for organizations, as well as for employees to understand it as a driving force behind success.
Family Business and Career Ambitions
The Young Generation Whish list
A Cultural Excursion
The Arabian NextGen session continued with an interactive session by Audette Hanna on “Family Business and Career Ambitions”. Ms. Hanna is a widely experienced HR expert and started her presentation by showing how non-family members view a family business – its great advantages and its challenges. Ms. Hanna ended her presentation with a checklist that would help a successful career in family businesses.
The third part of the Arabian NextGen Session was lead by the Executive Director of the Tharawat Family Business Forum Dr. Hischam El Agamy and involved participants in two areas: In four groups, they were asked to first of all list the main challenges they are facing as young family business member. Secondly, the participants had then to come up with a “whish list” to their families, to address these challenges.
In the afternoon, all the participants took a bus ride to visit the traditional auctioneer Christies’ in the heart of London. After attending a live auction, the Christies’ team introduced several aspects of the international art market, such as post-modern and contemporary art and jewelry. Astonishing facts were presented on the sheer size of the art market as well as some background stories behind the world’s most famous artworks.
Needless to say that some heated debates were going on in the room…
The first day was rounded off with the official Gala Dinner at the beautiful Corinthia ballroom.
Thursday July 7th 2011
The second day of the Continuum Conference was dedicated to discussing regional and international family business challenges with a focus on “continuity, sustainability and innovation”. In the six sessions of the day high profile speakers challenged the audience with their thoughts and reflections and provoked indepth debates…
“Understanding the Region – A Macroeconomic Overview” Dr. Raja Al Marzoqi, Chief Economist, Al Khabir Capital, KSA Dr. Al Marzoqi started off by giving an overview over the global economic challenges and their impact on business. He identified three major global challenges, global imbalance and the fragile Euro zone, globalization and the aftermath of the 2008 financial crisis. Following these three challenges are several serious implications business people have to be aware of. Here Dr. Al Marzoqi pointed out the currencies risk, the increase of business volatility, high unemployment rates, as well as a shift of political powers and stagflation. In the MENA region, Dr. Al Marzoqi differentiated between oil importing and oil exporting countries and listed the main challenges of the region, such as the instability of political systems, the lack of adequate infrastructure, unfair competition, difficulty to access finance and weak educational systems. However, he concluded that the Middle East also has several competitive advantages that the business community needs to focus on: • A young and growing population • Government budgets for infrastructure projects • Inflow of capital • Increased competition with diminishing monopoly • Better distribution of income • Affordable labor • Strategic geographic location
“Sustainability - Business opportunities of a low carbon economy”
“Continuity in the Family Business – Scenario Planning”
H.E. Jose Maria Figueres, Managing Partner, IJ Partners, Switzerland Former President of Costa Rica
Dr. Denise Kenyon- Rouvinez, Head of International Family Business and Philanthropy, RBS Coutts
The morning sessions continued with a presentation by the former President of Costa Rica H.E. Jose Maria Figueres. In a highly dynamic session, President Figueres presented attendees with new ways of looking at traditional business models. He suggested that businesses should be drivers of change towards a low carbon economy. With the exponential growth of world population and cities becoming the hubs of human settlement, the past century has had a greater impact on the environment than the several centuries together preceding it. Thanks to his global experience, both as a political leader and a businessman, President Figueres pointed out the responsibility of business owners and showed the business opportunities that lie in more environmentally friendly business models. He was also able to show Continuum attendees how simple steps can render businesses more efficient and save energy expenses and at the same time protect the environment, thus creating a win-win situation for all.
The afternoon sessions began with a group-work session during which Dr. Kenyon built on the Al Mamnoon family story. She suggested several possible problematic situations especially relating to the succession in the Al Mamnoon family business and the audience was asked to take decisions as to the best form of action to address the family’s issues. Following the results from each workgroup, Dr. Kenyon summarized that if family businesses are willing to focus on continuity, there are several elements they need to consider: • Understand the family’s competitive advantage • Focus on their competence • Develop a strong governance system • Attract and retain talent • Ensure transparency, fairness and inclusion to reduce family tensions
“Creativity and Innovation in your Organisation”
“Understanding the UK Context”
Prof. Roger Neill, Director, Centre for Creativity in Professional Practice, City University, London
Prof. Lorna Collins, Principal Lecturer, Family Business Research Unit, University of West of England, UK
During Prof. Neill’s session, the audience was introduced to the world of creativity and innovation. In a rapidly changing world, companies are constantly seeking to innovate on their business model or in their business development. However, and as Prof. Neill pointed out, it is important to understand where creativity and innovation comes from and what barriers exist in companies and prevent turning good ideas into actions. Overall, Prof. Neills held that next to many other things companies can do to improve their innovation record, it is the top management that has to play the role of “innovation masters”. He suggested that top managers should: • be trained in creativity, problem-solving and facilitation skills • become excellent role models as creative leaders • be enablers, not judge/juries • become champion of one key innovation project
The day ended with by Prof. Collins shedding some light on the situation of UK family businesses. According to Prof. Collins, 65% of privately owned businesses in the UK are family businesses, 42% of private sector employment is by family businesses, 38% of the UK GDP is contributed by family-owned companies and 32% of the UK’s top 100 privately owned companies are family owned. The facts and figures showed the great importance of family businesses in the UK, and through a discussion with the audience, it became clear that despite great regional differences, several core challenges might well be the same in family businesses across the world.
The Young Generation Session Tying into the innovation theme, representatives of the four Arabian NextGen workgroups took the floor to present the challenges they crystallized from their discussions on the previous day. Some identified challenges were: • Decision to join the family business, to set up an own venture or to join another company • Unclear expectations and unclear entry strategies for family members newly joining the family business •U nclear governance systems and compensation schemes • Lack of authority matrix for family members/ organizational structure between the employed family members
•L ack of communication and insufficient flow of information •B lurring of boundaries between personal life/ business life •P erception of family members by non-family employees •O ver-estimation of own capacities They also presented the “wish lists” to their families of how they believe the integration of the young generation could be improved. The “wish lists” contained several ideas such as establishment of career plans, better communication, openness towards innovation and space for experiments, performance related
compensation packages and more. The detailed results of this session will be available on www.arabian-nextgen.org and from email@example.com shortly.
Friday 8th July 2011 The Business Talks
The “Business Talks” took place on the third day of the Continuum Family Business Conference. Leaders of various family-owned corporations had expressed the need for a more in-depth dialogue amongst the leaders of the business community to address certain pressing issues and to be able to learn from the experience of their peers.
“The Challenges of Cross Border Joint Ventures”
“Panel: On the benefits of Cross Border Partnerships”
As the keynote speaker of the Business Talks, Mr. Salah Al Wazzan, Managing Director of Nafais Holding Co., Kuwait took the stage, and spoke about the general challenges of cross border joint ventures and partnerships. Highlighting the difficulty of finding the right partners and understanding the cross border technicalities, Mr. Al Wazzan also focused on shedding light on the “soft issues” in such ventures. He emphasized that as much as joint ventures are business transactions with financial and strategic aspects, at the same time they are also very much a about matching two different corporate cultures. If there is no fundamental agreement and understanding between the partners, it may well be that such a collaboration could become a painful experience.
In a distinguished panel discussion with Mr. Essa Al Ghurair, Chairman of Al Ghurair Foods and Visce Chairman of Al Ghurair Investments, UAE, Mr. Abdallah Obeikan, CEO of the Obeikan Investment Group, Saudi Arabia and moderated by Mr. Al Wazzan the business leaders addressed their experiences with cross border joint ventures and the challenges they faced. The panelists highlighted the major difference between entering a joint venture to enter a new market or to partner with a company that wants to enter your own market. In both cases they highlighted the importance of a well structured approach. especially when partners from other parts of the world are involved. Mr. Obeikan also expanded on five reasons for entering a joint venture and mentioned the importance of conflict resolution procedures.
“Why Joint Ventures fail - and what to do about it!”
“Family Business as a Competitive Advantage”
Following the panel Mr. Rami Alturki, President, Khalid Ali Alturki&Sons took the floor to present his family business’ experience in joint ventures with multinational companies. By taking his own experience as an example, Mr. Alturki eloquently lead the audience through a very dynamic session and outlined the journey of establishing a partnership with non-family owned corporations and the challenges that can lead to difficult stand-off situations. He emphasized the importance of strong negotiating positions and excellent knowledge of one’s own market space.
Mr. Mohammed Hajjar, Chief Business Development Office and Executive Partner at Al Khabeer Capital then took the floor to highlight the dos and don’ts of joint ventures. In his presentation “Why joint ventures fail” he explained that several factors can lead to the failure of a joint venture. The main grounds for failure, according to Mr. Hajjar, were: • The business partners have no shared vision • The business partners are blinded by their ego • There are different aspirations • Misunderstandings due to different cultures • A lack of synergy • Danger of duplication and redundancy • Partners lack real interest and want to cash out
The closing session was lead by Mr. Andrew Haigh, Managing Partner, Entrepreneurs Client Group at Coutts&Co, who concluded the business talks by touching upon the essential competitive advantages of family businesses both in the UK and in other regions. He emphasized that despite all the challenges, it is their inherent strength and inspiration to continuously go forward and grow that makes the family business model the most successful model of all.