INSEAD seminar highlights challenges for local businesses
The future success of major family-run businesses in the Gulf is a prerequisite to the region’s continuous emergence as a leading global commercial, tourism, financial and trade center, according to INSEAD Professor Randel Carlock, the first Berghmans Lhoist Chaired Professor in Entrepreneurial Leadership and founding Director of the Wendel International Centre for Family Enterprise at INSEAD. Maintaining their success through a management and ownership transition process however remains a challenge, he argues.
Addressing a very senior group of executives from the GCC’s leading business conglomerates during a one day seminar co-organized by INSEAD Abu Dhabi Center for Executive Education, JPMorgan Private Bank and Young Presidents’ Organization, INSEAD Professor Carlock said that the challenge facing UAE and other home-grown regional businesses is to develop leaders and owners from the family who are capable of adapting to changing social values, new technology, as well as increased competition.
“Family enterprises will remain the pillars of the region’s burgeoning economic outlook. Even on a global level, family firms make up more than two out of three companies and employ more than 50 per cent of the international manpower,” said INSEAD Professor Carlock.
International studies have shown that seven out of ten family businesses fail to make the transition to the second generation. And only one of ten makes it to the third generation. That's a 60 per cent failure rate per generation.
“Most senior-generation family business leaders across the Middle East will tell you that their greatest fear is that their children will not be prepared for the leadership responsibilities that a successful family enterprise demands, or that family conflicts will arise that threaten harmony and ownership continuity. Yet, the challenges that both current family leaders and the next generation face are not insurmountable”.
“Each Middle Eastern family business is unique; therefore, to develop the next generation successfully, a family business needs to think about best processes, not best practices. Think about context and content, and ask ‘what is our family’s vision for the business?’ and ’how can the family contribute’?The answers are crucial to understanding the next generation’s developmental needs,” said Carlock.
Steve Klemme, managing director and head of JPMorgan Private Bank in the Middle East said “This was a very strategic seminar that responded to challenges that family-run businesses face in the stewardship and transfer of wealth. We have a very strong focus on family and entrepreneurial wealth and regularly support and guide our clients in this respect. Today’s event was a valuable opportunity for family businesses in the region to get more insight into how to sustain their businesses and maintain their performance for the long term”.
Young Presidents Organization also stressed the importance of this seminar. Its Regional Education and Social Responsibility Chairman - MENA, Mr.Waleed Al Banawi said: “the content of the seminar was tailored to the main concerns of family businesses and provided the right solutions and guidance for family businesses to secure a smooth transition between generations of leaders”.
About the INSEAD Centre for Executive Education and Research in Abu Dhabi
The INSEAD centre for executive education and research in Abu Dhabi was established in September 2007 as the Middle East centre for the leading international Business school (with campuses in Europe (France) and Asia (Singapore) to address the strategic business needs in the region. The Centre provides open-enrollment and customized executive programs to government and non-government organizations and businesses in the region, drawing on the long-standing and highly-sought after INSEAD business knowledge and innovative tradition. The programme offering o includes inter alia executive programs in leadership and strategy, entrepreneurship and family business, women and leadership in the Middle East and healthcare management.
About JPMorgan Private Bank
For over 160 years, JPMorgan Private Bank has offered advice, customized solutions and client service of the highest quality to solve the complex needs of wealthy individuals and their families around the world. Our comprehensive range of capabilities encompasses investment, tax and estate planning, family office management, philanthropy, credit and special advisory services. At JPMorgan Private Bank we employ an integrated approach to growing and sustaining our clients’ wealth, laying the foundation for a relationship that will last though generations. We recognize that each of our clients is different and we are exclusively focused on meeting their unique needs and helping them maximize their potential.
Our multi-disciplinary teams are able to leverage the limitless resources of JPMorgan Chase & Co., a leading global financial services firm with assets of US$1.6 trillion and presence in over 50 countries.
In everything that we do, excellence and integrity are our guiding principles. We believe that the unique combination of our much-admired heritage, extensive footprint and strong team ethos will continue to position JPMorgan Private Bank as the partner of choice for individuals and family businesses with highly sophisticated needs. For more information, visit, www.jpmorgan.com/privatebank
About Young Presidents’ Organization
Young Presidents' Organization, founded in 1950 in New York by manufacturer Ray Hickok, is the premier international network of young global leaders, connecting more than 11,000 members in 202 local chapters in 100 nations to learn and exchange ideas to address the challenges young leaders face today. All members of this worldwide, not-for-profit, executive education organization of peers are age 55 or younger. YPO was born with the express purpose to help build "Better Leaders Through Education and Idea Exchange" among its’ peer members and their families.
YPO’s mission still resonates worldwide 57 years after it was founded, and the organization continues to welcome new members and chapters from every corner of the world. For more information, visit www.YPO.org.
