The Art of Business gets tougher for Middle East Consultancy Firms

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According to industry experts who spoke at a recent London Business School thought leadership forum, Middle East’s consultancy sector is increasingly facing various challenges. Photo-Simon Q/Flickr

With liberalization of economies and privatisation in the Middle East, business consultancy agencies had a major role to play in bridging the East Vs West business cultural etiquette & practice conundrum. In the Middle East, there is a great variation in business culture not only from nation to nation but also within countries too. Partnerships are based on mutual trust and principles. According to Arab tradition , the core focus of any successful business venture is about establishing a personal rapport with their partners. Businesses in the Middle East are therefore built on mutual friendship and trust.

A person’s word is given much more importance than any written agreement. It was therefore imperative for foreign companies to approach Middle Eastern businesses through soft diplomacy and development & relationship building meetings than through any contracts. Business consultancies during this period had a big role to play providing information on cultural sensitivity of the region, business development, sales and marketing & project management, strategy and market research, depending upon client requirement.

However in the recent years, post recession, it has got tougher for business consultancy companies in the Middle East to make their mark. Increasingly sophisticated clients, growing consulting cynicism, a shortage of home-grown talent and complex family-based corporate governance are just some of the latest challenges the consultancy sector faces in this region, according to industry experts who spoke at a recent London Business School thought leadership forum.

Speaking at the School’s ‘Consulting Insights’ event in Dubai, representatives from the consultancy sector discussed and analysed the growing trends and patterns they are experiencing in the region. Panelists from leading international companies agreed that whilst the sector is currently experiencing an “adjustment period”, change is being embraced.

Experts from Peppers and Rogers Group, Aleron Partners, Boyden Middle East and Booz and Company also agreed that Middle Eastern clients are today becoming more and more “consulting exhausted”.

“Our Middle Eastern clients aren’t spending in the same way as they did before the financial crisis, they are becoming increasingly sophisticated buyers,” said Katie Sumpton, Principal at Booz and Company. “On one hand, we are seeing a shift towards large scale implementation programmes, and a greater need for consultants to work ‘sleeves rolled up’ with clients to execute the strategy, rather than pure strategy assignments. At the other end of the spectrum, we are
seeing demand for very specialised, niche advice in a particular business line or function.”

“Our response has to deliver more value now there is a growing scepticism amongst clients,” added Peter Clark, Partner at Aleron Partners. “We can’t sit in our offices typing up a bit of theory – a growing trend is linking our remuneration to their bottom line. We have to think about where the real expertise lies, delivering a team where the top consultant and all levels underneath have credibility.” Recruiting consulting talent from the region is proving one of the greater challenges facing consultancies, the panelists said. Increased demand for specialist advice is driving recruitment at a higher level from within the industry, yet changes in the business landscape are requiring a different skill- set that is still in short supply in the Middle East.

Mounir Ariss, Partner at Peppers and Rogers Group, said: “The consulting world has changed significantly. Client organisations expect consultants to become more operational and demonstrate their direct impact on the client’s business, whilst ensuring a good level of knowledge transfer to the client’s team and an increasing level of subject matter expertise and specialization from their consultants”.

“One such area of expertise is business analytics. Driven by social media proliferation and mobile ubiquity, companies will face a huge explosion in data production. In the next five years companies will be increasingly challenged to make sense of this onslaught of data and use it to respond to their customers with value. Customers on the other hand will have increasing expectations in the level of services and customisation they receive across any available channel. We are going to need different skill-sets to what we have today to deliver real-time insight and multi-channel marketing.”

An increasing challenge facing experts in the Middle East is the complex and opaque family sensitivities often at play within local organisations. Whilst executive boards and hierarchical teams appear transparent on the surface, consultants are increasingly learning that job titles are not indicative of where the true corporate power lies.

“Particularly in this region, the family organisations transitioning to the second or third generation can be difficult for consultants, where the lines between power, ownership and management become blurred,” says Matthew Lewis, Managing Director at Boyden Middle East.

“The independently wealthy, internationally educated new generation have brand awareness, and social media know-how. But they can’t lead the organization. Our challenge concerns hiring senior management with the right soft skills to put the framework in place around the younger generation and fill that gap.”

Last, in case you are wondering on how to hire a Consultant, here’s 10 Tips for Hiring a Consultant from EDP Consulting.

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