The Vagabond VibesThe Sheikh CEO is written by Dr Yasar Jarrar, who worked directly with Sheikh Mohammed Bin Rashid Al Maktoum in The Executive Office (2001-2008) as Director of Strategy. This book talks about the remarkable rise of Dubai and the key secret ingredient that transformed Dubai’s success into a ‘Model’ – The Sheikh CEO!
Here’s something that will give you a perspective on the Dubai story. Between 1995 and 2015, Dubai increased its GDP from $11bn to $101bn. It raised GDP per capita from $16000 to $42500 during the same period, all while reducing the contribution of oil revenues to its GDP from 18% to 1.2%. The population increased from 700,000 in 1995 to more than 2.75mn in 2017. Dubai’s exports saw a 645% increase over the same period, while gross fixed capital formation increased by 733%! Below is my interpretation of the book –
- Sheikh Mohammed is not a magician, a global economic guru or a leading academic. He is a great leader! He delivers on his promises, he is passionate about moving forward and he is always one step ahead. He takes risks, he believes in nurturing human capital and developing leaders around him, and he knows how to fail fast and succeed quick
- On seeing his father redevelop the creek to reposition Dubai as the trading hub, he thought in his mind, this is what a ruler does! He acts, innovates, builds and is always serving the people. Dubai’s story can be called the story of the Maktoum Tradition. It is characterised by a belief in free enterprise, self-confidence, fairness, risk taking, rapid decision making, and it is based on a simple idea that the government should create an enabling economy in which private enterprise can flourish. Where in the world the government fights for free trade?
- The sheikh details 4 tenets that he calls the Emirate’s unwritten constitution:
- preservation of justice
- balanced relationships with all
- a firm belief in free trade
- and a diversified economy
- The 3 turnkey lessons he learned from his father:
- you always have more to learn
- surround yourself with strong leaders and
- stay out of politics
- In 2004, he decided to setup the Dubai School of Government to ensure continual Innovation in Government Modernisation. We partnered with Harvard Kennedy school and held classes and seminars under a new Harvard programme titles the ‘Dubai initiative’ (The success was still too young for it to be termed a ‘Model’)
- His 8 principles for UAE:
- Union is the foundation for UAE
- No one is above the law. Justice delayed is justice denied. Injustice anywhere is a threat to justice everywhere
- We are a business capital. Dubai needs to own its economic model and destiny. It can’t rely on pearls or oil or any resources
- Economic diversification has been the foundation of our unwritten constitution in Dubai since 1833. Our goal is to create at least a new economic sector every three years that will be productive, contribute to our GDP and generate jobs
- Core pillars of Dubai: a credible, resilient and excellent government; an active, fair and open private sector; public and government owned flagship companies that compete globally and generate and income for the government, jobs for its citizens and assets for future generations. In most parts either the government suffocates the private sector or the private sector weakens and corrupts the government
- Our society has a unique personality
- Dubai is a land for talent. The Emirate’s prominence, sustainability and competitiveness depend on its capacity to continue attracting skilled and talented people, and nurturing the brightest minds to generate innovative ideas
- We care about future generations. He lays down a rule that the government should, under all circumstances, own economic assets worth at least 20 times the value of its annual budget ( basics of value investing)
- Dubai was building the three Ts of its success story: Transport, Trade and Tourism
- Understanding your selective disadvantage has a critical role to play in building a nation’s competitiveness. Few examples to demonstrate this are:
- Japan – accepting “we are an island nation with no natural resources” led to most spectacular industrial revolution
- Singapore – “we are a price taker and not a price maker” has kept it agile
- Dubai – “as pearling died, oil also won’t be there forever”. Diversify! The Dutch disease: “it is the apparent causal relationship between an increase in a resource dependent sector, such as oil or timber, and a decline in other sectors, like manufacturing or agriculture”. As the currency grows strong, the nation’s other export becomes expensive for those sectors and imports becoming cheaper leads to making those sectors less competitive. Eg decline of manufacturing in Netherlands
- The Birth of Emirates Airlines –
- “We refused their request for a simple reason: we believe that competition, not protectionism, is healthiest for our country.” We rented 2 aeroplanes from Pakistan and created an airline we called Emirates – This was on gulf air requesting to protect their market share against open skies policy or they would decrease its services to Dubai. When the specialist advisors who had designed the initial strategy for Emirates also advised the Sheikh to drop the open skies policy to allow the new airline to grow, Sheikh Mohammed refused. In 2017, it had announced 26 years of consecutive profit (audited by one of the Big4)
- Imitation and collaboration are indeed the sincerest form of flattery
- Nothing is impossible. He pushes himself and pushes us to beyond what we think we can deliver
- His belief in us and his vision and courage drive us forward and make us achieve and deliver. He never changed his belief, course or vision over 30 years. Consistency is the hallmark of his leadership style. He takes a long term view with an amazing consistency of vision. He builds and builds, learns from mistakes, adjusts the tools and refines his messages, but the long term direction remains the same. During a KPI setting for UAE National agenda, he would not accept numbers of targets in the top 20, top 15 or anything similar. We only aim for number ONE
- The only limits to what we can achieve are the limits of our imagination
- Everybody starts small. We begin life as a single cell. Every business starts as one person with an idea. How fast you go, and how far you get, is in your hands. The bigger your vision, the bigger your achievement will be. Will you stumble on the way? Perhaps, but we cannot let fear keep us small. We have to be brave to be big! (if Burj would have been built on its original design, it would have been just 90 floors: very tall but not tallest)
- On expansion plans for Dubai airport –
- I do not want an airport for Dubai. I want to transform Dubai into an airport for the world. Opportunities are made, they do not just lie around waiting for someone to grab them. Your determination and energy will be proportionate to your goal. Therefore, set a high goal for yourself and do not settle for anything less than the very best. The best is exactly what you will get if you accept nothing less. Every goal should be a moonshot!
- A lesson in foresight and scenario planning –
- He aimed to make Dubai the commercial capital of a region defined as anywhere within a 7 hour flight from Dubai (Middle East, Africa, Southeast Asia and the CIS group of former soviet countries in Eurasia). The 7 hour flight radius was not selected through an exact science or an economist’s formula. It stemmed from ambition. The sheikh simply looked at the world’s financial and commercial capitals. To the west, London, Paris and Berlin. To the east Hong Kong, Singapore and Shanghai. In between, there is a vast region with billions of people, huge wealth resources and ancient civilisations but virtually no hub for commerce, business or logistics. This is what the sheikh termed as ‘Dubai region’ and rebranded in 2018 as ‘Dubai Silk Road’
- Do not be distracted by naysayers and those who are critical of ambition and future vision. Many suffer short-sightedness and can only see the world as it is today. Being able to imagine tomorrow’s world is a critical leadership capability
- The Sheikh CEO has dedicated a whole ministry (the ministry of Cabinet Affairs and the Future). There are winners because there is uncertainty
- Dismantle barriers and if it works, repeat it
- When faced with outdated regulations and complex labour laws, Dubai focused on setting up free zones (more business friendly regulations than mainland). Dubai did not invent it, but pushed it to the max. The concept behind adopting it was simple. Instead of spending decades trying to improve the overall business environment and change economy and labor market regulations, which were subject to federal law, Dubai to set up a zone that had the best regulation for doing business from day one. As Buckminster Fuller put it: ‘You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.’ Out of the box new system creates pressure on the existing system to change. If you try to change from within, the resistance to change from incumbents would always be high
- Another example of free zone was internet city. He directly asked the biggest technology companies what they wished to see offered in Dubai in order to encourage them to relocate to Emirate. He did not ask for studies, reports or consultants. Straight to the technology companies and design Dubai’s offering according to their needs. If you want to attract business, capital or talent, ask them what they want and design the offering around that. (When Jack Dorsey arrived in Dubai, his stamp on the passport was twitter logo and the Dubai skyline; eventually there’s a twitter office in Dubai). Like DIC, Media city, DIFC (with own regulator and independent courts) and now Dubai healthcare city to attract medical tourists generating $300mn for the Emirate.
- There is only now, tomorrow never comes
- DIC was setup in 365 days, on plan without public funds to be operated like a private sector with bank loan
- Dubai marina was designed as only locals could own real estate and construction was majorly controlled by the government catering to limited supply. Dubai marina opened up a multi-billion dollar construction industry as people could own land parcels (size and prices were reduced) but they were supposed to build on it within 2 years. Done!
- Everything has risk. Everything! That should never stop anything
- We can, and should, deploy good risk management frameworks for better outcomes, but never stop moving forward and innovating. Flight from Dubai to Mumbai by British overseas airways corporation after opening Dubai airport. Sheikh Rashid pledged to pay for vacant seats but requested them to start flying. He never had to pay but without that risk, there would be no flight, budget of Dubai metro was equal to the expense of Dubai for that year
- When confronted with difficulty, a person has 2 options: to stop and admit defeat, OR to innovate and triumph
- Why would anyone come to Dubai as a tourist? This was the question posed by people when the Sheikh CEO wanted to make Dubai a tourism hub, Dubai now has over 21 mn tourists annually and 142000 hotel rooms with (75-96% room utilisation) compared to 114000 hotel rooms in India. Burj Khalifa Dubai mall downtown area was a barren land used for military training in 2003
- Most governments have prepared many plans and reports with the aid of expensive consultants produced in very fancy designs with aspirational titles for a better future in 2020,2025 or 2040. Most fail! While many people believe it is related to the content of their government reform, whereas typically, it is a result of failed implementation
- ‘Deliverology’ is an emerging process in government and public administration, and it is all about reaching the desired status. Coined by PMDU (delivery unit) under Tony Blair in Britain. Way before it was coined, it was a way of life in the Sheikh’s Executive Office. We simply called it ‘done’. The world will not listen to the UAE poem (story) unless it is punctuated by actions and woven on a rhythm of innovation and uniqueness. History is not concerned with visions that are not implemented (you can still find him drive around in his car in Dubai to construction sites breaking down any barriers before they become show stoppers)
- The Executive Office approach was simple, and in hindsight, resembles how a private equity or a venture capital accelerator would approach any opportunity. Once an opportunity is identified, a leader should define the full potential (not accepting an average target) and develop a clear and compelling version to describe and outline that potential. The next step would be to develop the blueprint (tactical strategy) that would allow this potential to be realised. For the system to work, it needed to reside outside of the system’s traditional hierarchy and it could not be managed by any of the people or organisations it was attempting to influence, nor it should it directly manage those people or organisations
- A big opportunity is a short, accurate and emotionally compelling description of an opportunity that will move an organisation (or country) forward in a substantial way
- Then the leader must set out a clear and compelling vision by describing what success looks like, before moving on to detail the strategic initiatives and activities which, if executed well enough and fast enough, will lead to realisation of the vision. Start from where others have finished. Do not reinvent the wheel. Go and learn what others have done, deconstruct it, adapt it to Dubai’s context, then innovate and make it better – faster, taller, cheaper, and deliver it fast
- During the planning phase, the sheikh listens to advice from experts ranging from Global Management Consulting firms, experts, CEO’s and his own Government team. More the inputs, the better as it gives many lenses to study an issue. Once opportunity is clear, execution starts from day 1
- Use Military’s OODA approach – Observe, Orient, Decide, Act; which is a recurring cycle of decision making that acknowledges and exploits the uncertainty and complexity of the battlefield.
- Once results start to show, scale fast or fail fast
- I think leaders should have their feet firmly on the ground, living with people, understanding the issues they go through, what makes them happy and what makes them sad
- Action and management by walking around is what gets things done. As a leader or a Chief Executive, you have to make tough decisions quickly. The better the information, the better the decision. I find that when I’m on the ground, mingling with residents or the business community, the flow of information is more accurate
- During the 2008 crises, Dubai’s real estate faced massive meltdown. However, other countries, financial institutions, business considered Dubai’s success and stability essential to them. When each stakeholder has a role to put you back on your feet. These are true moats
- Delivery is an endless cycle of ideation and implementation
- With each new day in Africa, a gazelle wakes up knowing he must outrun the fastest lion or perish. At the same time, a lion stirs and stretches, knowing he must outrun the fastest gazelle or starve. Whatever side you’re on, you’ve to run faster that others to survive, everyday. Your work is never over. The question the Sheikh posed then was would the same thinking and ethos apply to governments? Are governments ageing and past their validity as a model? Yes. In their current model, yes. Government entrepreneurs is not any oxymoron for him
- Open your door and your mind
- He shares his number with anyone who asks. The 1% rule. No matter how clever you are, how much research you have done and how confident you are in your data – keep in mind that there is a 1% chance that you might be wrong. Always listen with an open mind. The best ideas come from for soldiers, not the generals. As a leader, create that environment
- His take on the Arab world –
- We have a surplus of politicians in the Arab world and a shortage of managers. Our crisis is a managerial one, not one of resources. Leadership is a service, not a gateway to privilege
- Beneficiaries are not the same as customers; they are recipient of services that governments can deliver on their own terms. Beneficiaries should be grateful, not satisfied
- Competition and Recognition are major motivators and key management levers to change behaviour
- GDP does not fully measure well-being
- If a city is wrecked by a hurricane and then experiences a surge of construction activity, GDP goes up. If people lead an unhealthy life and need excessive medical care, the GDP goes up. Leisure, walk in the desert, meditation. He has Ministry of Happiness and Well-being
- Walter Lippmann once said that the ultimate test of a leader is that he leaves behind him in other men and women the conviction and will to carry on. At the end of the day, systems become outdated, buildings deteriorate and machinery wears, but people are an asset that truly appreciates
- Creating a second and a third line in any organisation is key
- He sees it as a critical competitive advantage, a key part of business continuity and an essential part of agility is decision making. In a hierarchy, the leader at the top received all the information and makes the decisions. However, when there is a crisis or an unexpected event and the system is under stress, hierarchies can be unresponsive – even dangerously dysfunctional – should decision making bottlenecks form at the top. Entities risk paralysis when faces with a strategic shock, and world today is too complex and changing too quickly for those at the top to have all the answers
- My home is where I can make a living
- USA is leading because it is able to attract the best global talent. This is a classic example of the loss of talent that has afflicted developing countries for decades. “These countries spend scarce resources educating doctors, engineers and scientists in the hope that they will become engines of prosperity. Then we watch with dismay as they migrate to the west, taking with them the promise of their talent”. Where great minds go today, great things will happen tomorrow
- The making of great leaders is a secret granted only to those who have overcome their own ego and who understand that their greatest achievement is to build people, not edifices. Creating talent pool with women and diversity is what he focuses on. Institutionalised and not network based!
- The sheikh would always have many people competing to deliver the same project or studying the same policy, and even various state owned companies working on similar mandates
- When Emaar properties became a giant with an estimated value of $20 Bn, Sheikh Mohammed decided it needed some competition (he launched Nakheel and Dubai properties as part of Dubai holding) to hedge against the possibility of Emaar growing into a monopoly or – even worse – becoming complacent. He always has 3 horses running in any important race. He also knows when to stop the race. This leads to Co-opetition!
- Being a great communicator should not be confused with being a great orator, although some leaders have been both. The ability to communicate is the ability to use various tools and skills to deliver a message to your followers and win their hearts and minds. Some practical tips on communication –
- Listen, listen, listen
- Communicate across platforms
- Simplify your messages
- Paint vivid images
- Build on your credibility and show confidence
- Master the art of storytelling