World Economy

Mideast Firms Lack Leadership

Mideast Firms Lack LeadershipMideast Firms Lack Leadership

Businesses and organizations in the Middle East are failing to create professionals equipped with the necessary skills to head industry, according to a study by Mercer, a leading human resources management consultancy.

Companies in the region are struggling to identify future leaders and lacking strong and deep leadership pipelines, a situation that is likely to result in a continued reliance on expatriates for their senior roles for years to come, the study said, TradeArabia reported.

“The primary purpose of the study was to develop insights into the current state of leadership strategy, assessment, development and succession management in the Middle East,” said Khaled Alturki, principal, Middle East.

“The study identified serious deficiencies in this aspect of regional companies’ operations. In the best case scenario, this means an ongoing need to fill senior roles with non-nationals. In the worst case, it means a leadership vacuum in the future which could have serious ramifications for the region’s economic growth,” he added.

Of all the companies contacted, only half had a defined and agreed leadership development strategy, a smaller percentage than found in Asia Pacific companies and a much smaller percentage than those in Latin America. Sixty two percent reported that their top executives spent 10 percent or less of their time developing current and future leaders, with only 10 percent of top executives spending over 20 percent of their time on this activity.

Only 58 percent of companies participating in the survey provided favorable rewards or development opportunities to critical or high potential talent in contrast to 81 percent of companies in Asia Pacific and in Latin America who offer talent special development opportunities.

Although half of the companies surveyed had defined leadership development strategies, they reported that the sense of urgency necessary to focus new attention and resources on this issue just does not exist, according to the report. There is a lack of time, resources and focus on nurturing future talent – these are the three main barriers to leadership development in the region.

Classroom training is by far the most common form of professional development used by companies in the Middle East, yet it is considered less effective than many less-widely used methods.

When it comes to funding leadership development, companies in the region are spending far less than peers in mature markets. Research shows that US companies with leadership development programs spend approximately $12,400 per person on this activity annually.