Executive Magazine

Morning briefing: 27 Mar 2013

by Executive Staff March 27, 2013

written by Executive Staff

Economics and Politics

The Lebanese Central Bank has taken the necessary measures to maintain the stability of local lenders, according to Governor Riad Salameh.

More from Arabian Business

Kuwait's Jazeera Airways said on Tuesday it was optimistic it will exceed its business plan targets this year following a record-breaking year in 2012.

More from Arabian Business

Patients from the Middle East have controversially spent up to US$1.5m on acquiring replacement livers from donors in the UK.

More from Arabian Business

March 27, 2013 0 comments

Business

‘Time to stop the talking’

by Joe Dyke March 27, 2013

written by Joe Dyke

With entrepreneurship becoming something of a buzzword in the Middle East, it would be easy to assume that it is booming. But while support for new companies is certainly growing, for some it is not nearly fast enough.

Usama Fayyad, Executive Chairman of Oasis 500 – Jordan’s largest fund for supporting early stage start-ups – believes the Arab world is still lagging behind when it comes to supporting innovation.

The company has invested $2.3 million in 58 startups since September 2010, and claim that the first half million of investment they made attracted $8 million from outside investors. But Fayyad believes the time has come for governments to take more action to stimulate entrepreneurship.

We keep hearing about how fast entrepreneurship is developing in the Arab world, but do you believe the hype?

The talk is much, much more than the action. People tend to talk a lot, talking as if they have launched something a year before they do, and when they launch it they tend to not execute.

We have heard about lots of early stage funds that have come up in Dubai and Beirut, and what happens is they show up in the news and we are sitting waiting for them to invest [but it doesn’t happen].

What is happening is a lot of people have an idealized model in their head – they think you create a fund, hear some pitches and make some investments. But [entrepreneur development] is really hard work. You have to work with them; you have to find ways to localize it so it works. It is not [just] ‘put it up’ and customers will show up.

With Oasis 500, we really didn’t talk about it until we did our first five investments. Then we said ‘OK, now we have got it, we understand what we are doing, we have a plan for the next 10, now we will talk.’

ArabNet founder Omar Christidis recently said that people had created too much hype around entrepreneurship as it has become ‘en vogue’. Is that a danger?

I don’t know if it is a danger, I think it is a fact. I am happy they are bragging about wanting to be an entrepreneur, rather than bragging about wanting to buy the latest clothes or wanting a job in the government. So it is a good trend.

But I think what will really change behaviors is when we start seeing true success factors: people who have the will and the determination will start looking at it and seeing it as a serious career. Then I think the hype helps because what happens is when they take that perceived dangerous step of quitting their day job to try and build a company, they will not feel like they are doing something very unusual or out of favor.

How far are we from those success stories?

I think there have been a few, not enough but [attitudes are changing]. For example, when we started Oasis 500 the biggest complaint I used to hear from participants in our bootcamps were their families thinking they were crazy for taking a week off to get trained, saying ‘what are you doing risking your job?’

Now, two years later, I have seen a real change where people are saying ‘my mother or father has pushed me to take this because our neighbor did this, raised $200,000 and are in the news shaking hands with the king.’ That changes the norms of what is success.

It is beginning to happen, but my biggest worries remain. In a region like ours with over 300 million people and a lot of oil, it is pathetic [to have so little support for startups].

Oasis 500, for all the noise we make, is just $6 million dollars so far. We are going to raise it to 10 and then to 30, but so what? That is nothing. People spend $200 million on a building all the time. Yet you still don’t see these funds and they are needed.

It is sad right now and I am not seeing where the solution is going to come from. In other countries it came from the government – in the US and Israel they pumped lots of money into venture capital funds.

But would you really want governments in the Arab world, many of which are deeply inefficient, doing this?

Governments should reallocate resources but should not manage these things. Governments are terrible managers of entrepreneurial things, but they are enablers. A government should pave the road and make sure the traffic rules apply, but they shouldn’t be running the restaurants on the road as they would give terrible service. We need to pave the way with funding, we need to make sure funding is available…they already do this for buildings, for leases, for economic programs – they just don’t think of doing it for companies.

And have you seen a change in mindset from Arab governments yet?

No. None. I think the hype around entrepreneurship is making it noticeable, so they are maybe starting to ask about it.

March 27, 2013 1 comment

The Buzz

Morning briefing: 26 Mar 2013

by Executive Staff March 26, 2013

written by Executive Staff

Economics and Politics

Oil prices at around $100 a barrel are reasonable for both consumers and producers, Saudi Arabia’s Oil Minister Ali Al Naimi said on Monday, again highlighting the top crude exporter’s preferred oil price.

Kirkuk: Iraq’s fault line

by Josh Wood March 26, 2013

written by Josh Wood

Brigadier General Sarhad Qader, the police chief of the troubled Iraqi city of Kirkuk, sighed as he flipped through the photos of the officers killed in bombings earlier in January. There was an older man with a dignified, thick moustache, a pale woman with bright pink lipstick and others, all wearing light blue uniforms against empty backdrops. Kirkuk’s police are being hunted, he said.

72 hours after our meeting, the fortified police headquarters complex was hit by a devastating attack. A powerful suicide car bomb detonated, breaching the perimeter. Gunmen rushed in. Dozens were killed and Qader was sent to the hospital. As usual, there was no outright claim of responsibility, but like similar attacks, it has the hallmarks of Al Qaeda in Iraq.

Ten years after the American invasion of Iraq and just a year since US troops finally left, Kirkuk finds itself at the frontline of a blooming conflict between the Iraqi central government in Baghdad and the semi-autonomous Kurdistan Regional Government (KRG). Both sides claim the resource-rich city as their own and as tensions rise, extremist groups have taken advantage of the relative security vacuum resulting from the withdrawal of US troops, stepping up attacks and reintroducing suicide bombings in an attempt to further wedge the divide.

Kirkuk’s oil fields are currently pumping out around a quarter of a million barrels per day, but are capable of producing hundreds of thousands more. But the redevelopment of the fields has been stalled by ongoing spats between the Iraqi government and the KRG.

These disputes over land, oil and the level of Kurdish autonomy in Iraq’s precarious federalist state are longstanding. But recently the Kurds have been more aggressive in their assertions of autonomy and their defiance of the central government.

To Baghdad’s ire, the KRG has arranged its own oil contracts with international companies and begun exporting oil overland through Turkey — moves the central government describes as illegal. No progress has been made on the issue of disputed territories and a referendum to decide the issue has been delayed for nearly six years now. “Not resolving these issues could lead to a larger conflict, perhaps a military showdown between both sides,” said Najmaldin Karim, the governor of Kirkuk.

In the past year there have been a number of tense standoffs between the Peshmerga, the KRG’s military force, and the Iraqi Army. In Novermber Peshmerga and central government forces clashed in Tuz Khurmutu, just south of Kirkuk, leaving one dead.

The creation last autumn of a new Iraqi military command headquarters, the Tigris Operations Command – which is tasked with watching over the security of disputed Kirkuk, Salaheddine and Diyala – also fueled Kurdish anger. Many Kurds view the command as unconstitutional and provocative, particularly given that the man tipped to lead the forces, Abdul Amir al-Zaidi, is accused of taking part in Saddam Hussein’s bloody al-Anfal campaign in which at least 50,000 Kurds were killed.

So far the sides have eventually stepped down from standoffs, but the central grievances have not been addressed and both have asserted that they are ready for a fight if it comes to it.

There are great gains and rewards to be had. An hour away from Kirkuk’s edgy streets, the KRG’s capital Erbil reflects the prosperity that Kurds have been able to harness. Hotels are popping up, the airport is modern and wide highways ring the city.

The use of petrodollars has allowed the rapid development of the Kurdistan region since 2003, laying the foundations for a state with the potential to survive independently of the central government.

Next door in Syria, Kurdish groups have carved out a region of their own in the country’s oil-rich northeast amid the chaos of the civil war. As such, the KRG could broaden its regional influence as de facto Kurdish rule emerges outside of Iraq.

To the south, Baghdad is bogged down facing a Sunni-led protest against the Shia-led government of Nouri al-Maliki, as sectarianism boils again and violence continues. Representative of the broader conflicts that the Kurds are trying to separate themselves from, the latest crisis is perhaps an opportunity to further challenge Baghdad with fewer consequences as the central government is focused on more immediate matters.

A loosening of Baghdad’s tethers could help the Kurds finally spread their influence. But with such heated disputes over oil, land, money, power and identity stitched into Kurdish-Arab fault line in northern Iraq, the route forward is unpredictable and potentially explosive.

Josh Wood is a regular contributor to The International Herald Tribune and Esquire Middle East

March 26, 2013 0 comments

Economics & Policy

Finding new ways to extract

by David Branson, Sean Wheeler Asheesh Sastry & Alain Masuy March 26, 2013

written by David Branson, Sean Wheeler Asheesh Sastry & Alain Masuy

The exploration of new resources is not often a top priority for Middle Eastern national oil companies (NOCs). Thanks to giant oil fields discovered between 1940 and 1970, the region’s NOCs produce 35 percent of global oil output and hold more than 50 percent of the world’s proven oil reserves. For practical reasons, these companies today focus primarily on growing or maintaining production levels. This helps to generate revenue for the region’s governments but also helps to stimulate the development and diversification of the broader economy by providing employment opportunities and supporting local companies in the oil and gas supply chain.

Undiscovered oil in the Middle East may only amount to a fraction of what has already been found. Nevertheless, exploration can unearth substantial discoveries. For example, Statoil, a Norwegian NOC, helped to discover a two-billion barrel oil field in 2010 within an area in Norway that had been explored by numerous companies over the preceding four decades. Such discoveries are made possible because of complex geological knowledge and two technological advances: seismic imaging that can identify new fields more effectively and drilling techniques that go deeper and can locate less productive, but still lucrative, reservoirs.

Redefining exploration

Despite the possible resources awaiting discovery, NOCs’ efforts in the Middle East are focused primarily on producing assets. This means that exploration is overlooked in the region, and delegated to International Oil Companies (IOCs) who work on a contract basis, and are compensated for the upfront risk and expenditure. Their work involves conventional exploration, the exploration for well-defined oil and gas fields that target known producing geological horizons at manageable depths, onshore or in shallow water. Yet given diminishing returns, exploration efforts now increasingly involve exploration in offshore deep-water areas, and on deep gas, shale gas and tight oil.

To improve their exploration performance, and to help them in managing their IOC partners, NOCs can learn from this new breed of IOCs that have combined strong geoscience and operational capabilities, with an organizational culture — focusing on people, processes and organization structure — that supports the disciplined risk-taking that is necessary for sustained exploration success.

Successful exploration companies place a high value on geoscience talent and have simple, widely understood processes that they consistently apply, with open discussions on successes and failures facilitating learning and adaptation to new situations. This is best supported by a non-hierarchical organization that fosters communication and discussion, and provides geoscience teams with open access to management, as well as offers centralized standards that are balanced with local autonomy to act.

Keys to success

The first step to establishing a strong organizational culture is securing the right people who can interpret data in new ways. They also need to ensure that IOC partners for exploration ventures are selected on criteria that include their exploration track record, and that the IOC deploys its best explorers. NOCs should structure their own exploration conversations, and their reviews of IOC-operated ventures, to specifically address the “what-if” questions that challenge conventional wisdom and generate the innovative ideas that can unlock remaining exploration potential.

The second step involves enhancing processes related to exploration decision-making. Primarily, NOCs should review the financial thresholds applied by IOCs (applied as tight contractual terms to make the largest discoveries attractive for the IOC). Upon review, NOCs should ensure that IOC partners are adequately incentivized to invest, taking into account the risk and reward profile of the exploration opportunities on offer.

Strengthening the overall organization to align with the exploration vision is the third step. NOC leaders must recognize that exploration can provide valuable additional resources to their portfolio, and thus need to ensure that it is given sufficient weight in the organization and is resourced accordingly. Re-emphasizing the role of exploration as a core function in the NOC will help to attract the best talent and build strong exploration competencies.

Production optimization is, and should remain, the key priority for NOCs in the region as the main driver of government revenue and a stimulus to the development of the broader economy. However, while there is no simple solution for exploration success, the adoption of some of the practices of successful explorers is an important step that NOCs should take to “rediscover the art of exploration”. This will go a long way to maximizing discovery volumes and ensuring that NOCs are best-placed to fulfill their mandates to maximize the contribution of the oil and gas sector to the national economy.

David Branson is executive advisor, Sean Wheeler a partner, and Asheesh Sastry and Alain Masuy principals at Booz & Company

March 26, 2013 0 comments

Economics & Policy

Developing human capital

by Thomas Schellen March 25, 2013

written by Thomas Schellen

Talent management, leadership development and strategic workforce planning are the three paramount challenges that corporations across global markets have yet to master, said a recent study by The Boston Consulting Group (BCG) in collaboration with the World Federation of People Management Associations. In a survey of executives underlying the study, a small part of responses — some 115 out of 4,228 worldwide — came from corporate leaders and human resources (HR) managers in the wider Middle East and North Africa. Executive wanted to know how well the study reflects the people management situation in the MENA and how relevant its insights are for the region. Sven-Olaf Vathje, partner and managing director at BCG Middle East talked to Executive while racing across a rural highway in Saudi Arabia to his next consultancy meeting.

You have identified top needs in human capital development for companies globally in your report. How relevant are these topics as priorities for companies in the Arabian Gulf?

As you know from the report, we covered corporations and HR departments throughout the world for this study. The finding was that these topics are relevant in developed and developing economies, including the Middle East. However, the flavors are a bit different. What we see in the United Arab Emirates and the Middle East in general is a strong increase in efforts and focus that executives put on their HR departments. Historically, at many corporations, HR was mainly about supporting the growth of the corporation and making sure that the right quantity of labor was bought, all the way up to management positions. What we have seen happening, at least structurally, is a shift in HR departments from being focused more on the transactional side of HR to the quality part of HR, like identifying talent that can qualify for higher roles and starting to take individuals within the corporation to make full-fledged managers out of them, which is something that rarely happened in the past.

Your data collection on MENA included 37 survey responses from the UAE, five from other Gulf Cooperation Council countries and 39 from Turkey. On a statistical level, how much do these responses tell us about the Middle East?

If you applied the pure rules of statistics, you would have to have a couple of hundred more interviews, but we combine the formal statistical input that we receive with the qualitative experience in the marketplace where we have been working on numerous HR assignments with regional firms. The evidence we got from the formal survey was very much in line with the discussions we have on a regular basis with managements of corporations within the region. We feel very comfortable that the findings of the survey reflect the reality of the marketplace.

In the global study you speak of a two-speed economy of slowing developed markets and accelerating emerging markets. In the region, we see a two-speed economy of another sort, between oil and non-oil. Is there a regional two-speed world for HR priorities in non-oil versus oil?

That is a very good question. There is also another way for seeing a two-speed economy in the Middle East besides oil and non-oil. If I had to choose which the two speeds are, I would go for state-owned and non-state-owned or family-owned enterprises. What we have perceived in [state-owned] oil companies was that they face many of the HR challenges that are similar to those of other state-owned companies in the region.

One of the topics that the state-owned companies are working on is the whole element of strategic workforce planning and understanding where the real value creators are positioned within the organization. A second challenge that is specific to the state-owned companies, much more so than to the privately held ones, is the whole topic of nationalization of the work force. The key challenge here is how to strike the balance between promoting the local workforce and bringing in the right international expertise that allows these companies to play in the international arena, which many have an ambition for. The region’s oil companies have this kind of reach, but also telecoms companies are in fact international players [as well].

On overall development of talent and people management, is the UAE ahead of the regional curve on HR?

If you look at the GCC economies, the scarcity of natural HR resources within the countries is strongest in the UAE, and the share of foreigners in the economy relative to the indigenous population is also the highest. The UAE also has the longest experience in bringing expatriates into the country and working with expatriates and has also needed to retain them in a more and more competitive environment. So I would say that the UAE is generally ahead of the curve regarding HR.

Is the gap between the UAE and other countries in this respect decreasing or is it still widening?

That is a good question. In my view, the gap is decreasing at this point in time and not because the UAE is losing speed but because other geographies are picking up. Qatar is doing a lot to make the country a more attractive place for key talent. We see the same thing happening in Saudi Arabia but there the flavor is more about ensuring that the much larger pool of local talent is trained in the right way.

BCG states a case for integrating sourcing management and holistic people sourcing. What do you mean by that?

What we mean by that is the stronger linkage between the HR department and the business department. What we have seen in the past was that HR and business departments each moved in their own spheres, and very often HR departments recruited or identified talents which were not in line with the needs on the business side.

In the new world we have HR heads that are deeply embedded within the management team, dealing with internal and external business units in defining the right recruitment profiles and working hand in hand with the business managers on bringing the right talents on board.

How large or advanced is the awareness of HR importance in the GCC? Is it adequate to the needs or still behind the curve?

The awareness is awakening right now. It is not yet at the point where it should be, but the awareness is rising that the people side is the key differentiator between success and failure.

What value, if any, do you see in exercises of ranking companies for being great workplaces in the UAE or GCC?

I think these rankings are going to gain in importance and there are many reasons for this. Increasingly, young management talents are looking for more than financial remuneration when it comes to choosing a workplace. There are a lot of questions about work-life balance and personal development. A second element is that these rankings are also going to be a driver of workforce retention.

The ratio of women in top HR positions worldwide seems high when compared with other female executive and board roles. Is HR in this region a domain where women can become leaders more than in other areas?

That is another good question. We have noticed that, as in many other parts of the world, women in the Middle East have a stronger interest in pursuing a career in HR departments than in other divisions. There is a natural inclination for females to work in HR. On the other hand there is also the notion among the male part of the management teams that females may have an overall better capabilities spectrum for HR jobs than males. It is quite interesting for the Middle East that the female share in the overall workforce is still below the level that it should be and the more we have HR departments which understand the capabilities of female applicants for upper managerial positions, the more I think they will have a chance in being successful in corporations as well.

March 25, 2013 0 comments

The Buzz

Morning briefing: 25 Mar 2013

by Executive Staff March 25, 2013

written by Executive Staff

Economics and policy

Arab leaders are expected to take a final decision on the plan of establishing the Greater Arab Free Trade Zone (FTZ) in the coming months.

More from Arabian Business

Lebanon will proceed with the prequalifying bid for offshore oil and gas exploration as scheduled despite the resignation of the Cabinet, caretaker Energy and Water Minister Gebran Bassil has said.

More from The Daily Star

Saudi Arabia’s real estate share index rose to a 10-month high on bets the sector will benefit from a new mortgage law being introduced, and Egypt’s Orascom Construction Industries helped lift Cairo’s bourse.

More from Arabian Business

Total passenger traffic through Muscat International Airport increased by 10 percent in the first two months of 2013, latest figures reveal.

More from Arabian Business

Dubai-based Al-Braik Investments on Sunday said it planned to set up a $200 million silicon smelter in Abu Dhabi, the first facility of its kind among Gulf Arab countries.

More from Arabian Business

Standard Chartered would consider acquiring a bank in Egypt to ride an expected boom in one of the Middle East's largest economies, the firm's regional head said.

More from Reuters

March 25, 2013 0 comments

Advertising Special Report

Network Communication Group

by Maya Sioufi March 24, 2013

written by Maya Sioufi

The big guns are fighting hard to survive and people are wondering what are we doing [competing] with these big guns,” says Saad el-Zein, chief executive of the Network Communication Group, a Dubai-based holding company made up of four distinct communication companies.

With seven offices in the Middle East and more than 150 employees, the group’s total revenues amounted to $24 million last year, the majority coming from AGA ADK, the group’s marketing arm established in 1997 by Roger Sahyoun, chairman of the holding group. Starting off in Beirut in 1997 then moving the head offices to Dubai, Sahyoun established Arabian Gulf Advertising (AGA) to cover the advertising industry in the Middle East. After securing the regional accounts of Siemens mobile phones and Movenpick Hotels and Resorts in 1999, he rushed to open two additional offices, one in Jeddah and one in Jordan. “From then on, we started growing the network,” says Sahyoun.

Three years later, Sahyoun turned the public relations department of AGA into a separate company called Pencell, the second company in the holding. By 2007, on AGA’s 10th anniversary, a strategic partnership was established with Japan’s third largest advertising company Asatsu-DK (ADK). Twenty percent owned by British multinational agency WPP, ADK bought a minority stake in AGA, with Sahyoun unwilling to disclose the exact percentage.

This year, the group has bigger plans with the launching of the third and fourth companies of the holding. Wet Paint, a web design and online brand activation company, had a soft launch last year and is a key focus for revenue growth for the group going forward. Equation Media, the media planning and buying unit of the network, was launched in February this year in Beirut, Dubai and Riyadh. With these new companies on board, Sahyoun projects revenues to reach $37 million in 2013, solidly up on 2012. It has not been all rosy for the holding though. When the 2008 financial crisis arrived in Dubai, it hit Network Communication Group hard too. Between 2008 and 2011, the holding saw revenues dive from $28 million to $12 million, a staggering 60 percent drop. While revenues have started picking up in 2012, they are still below the pre-crisis peak.

Going forward, the network plans to increase hiring whether through recruitment or by acquiring home-grown agencies — a cheaper way to grow than pitching for new accounts according to Sahyoun. To continue expanding the key area that the network is focusing on is digital, and it aims to acquire different digital companies offering diverse services and to place them under the umbrella of Wet Paint. Zenith Optimedia, a research firm specialized in the advertising and media industry, expects advertising spending on the Internet to grow by 15 percent this year versus 2 percent growth for traditional media. It also expects Internet ad spending to amount to 20 percent of total ad spend this year and outgrow ad spending on newspapers, forecast to account for 18 percent of the total. “We cannot neglect the power and growth of digital,” says Zein.

In the coming three to five years, the holding company is set to add disciplines to its network and expand geographically. An office in Egypt is scheduled for April this year to cover the North African region and Sahyoun is in advanced talks with a local advertising agency in South Africa for a partnership to cover the east and west coast of Africa. [In Africa], “Even if you know the advertising business, you need the know-how and the client relationships,” says Sahyoun, as he explains why he decided to go for a partnership as opposed to venturing alone. “Most of our clients, especially in Dubai are not [covering just] MENA [Middle East and North Africa] anymore, they are becoming MEA [Middle East and Africa] and you have to capture those budgets and grow accordingly,” adds Zein. In the long term, the holding plans to expand to the Commonwealth of Independent States (CIS) markets — the former Soviet countries — as that is where most of their clients are turning to for growth of their businesses.

As the advertising industry sets itself for another testing year with clients’ budgets affected by the ongoing global economic conditions and accentuated by instability in the Arab world, competition is set to be fierce between the ad agencies operating in the region. The Network Communication Group, according to Zein, is unfazed by the challenge: “We want to stand out, grow and prove to the world that there is still room for local networks to rise again.”

March 24, 2013 0 comments

Advertising Special Report

H&C Leo Burnett

by Maya Sioufi March 24, 2013

written by Maya Sioufi

With Bank Audi, Exotica and Johnnie Walker among their clients in Lebanon, Leo Burnett Beirut recently received international recognition by being ranked the sixth most creative agency in the world, according to the Big Won 2012 Rankings, published by London-based Directory magazine. The report also ranked Bechara Mouzannar, chief creative officer (CCO) of the agency’s Middle East and North Africa (MENA) region, as fourth-best CCO in the world. To discuss what it takes for Lebanese advertisers and agencies to be internationally recognized, Executive sat with Mouzannar as well as Kamil Kuran, managing director of Leo Burnett Levant, and Nada Abi Saleh, deputy managing director of Leo Burnett Beirut.

Congratulations on Leo Burnett’s recent ranking. What does this recent recognition represent and what is the key to Lebanese success in the advertising industry?

Kamil Kuran (KK): It shows that anything is possible for any Lebanese. It can be done. It became reality through Lebanese people living and working here, and not abroad. Look at any [advertisement] that won; it tells something about the local culture, the Lebanese society, how we behave and communicate. This is what a lot of international judges and award shows find interesting.

Nada Abi Saleh (NAS): The beauty of the win is that it is based on Lebanese talent, that it is a local campaign with local insight and yet, it incorporated the window that Leo Burnett as a global network offers us. We are very receptive to integrate all global marketing and communication trends, yet what sets us apart is the local insight. We were true to what we stand for, to ourselves, to our culture, our people, our talent and our origins.

Bechara Mouzannar (BM): Today we are thinking local and acting global. From your office in Lebanon, you are doing a campaign in Lebanon but it has a resonance abroad. Today advertising and communication are not about the star product, the magic and the miracles. It is about an idea that is relevant to human beings. If you come with a new idea, an observation, something they feel, makes them talk, makes them part of your campaign, then you achieved something.

What campaign are you proudest of?

KK: What really transformed this agency in essence and time was the [2009 campaign] Khede Kassra [developed for the Hariri Foundation with an aim to empower women]. It was so simple and insightful.

NAS: We used to do [these sorts of campaigns] long before [Khede Kassra] with many brands. It has always been in our DNA but now we manage to package it and sell it more on an international map.

Tell me about a campaign in which you faced significant challenges…

BM: During the war in 2006, some left and some stayed. Bridges were being blown up; people couldn’t move around. We wanted the world to know about it. How can we do that? CNN and other media [avenues] don’t relay this information. There were people in the office here that got the idea of a broken bridge with the man of Johnnie Walker on the other side of the bridge. The client loved it right away. He wanted to go to print straight away. The ad was featured on CNN, the Wall Street Journal, the International Herald Tribune, etc. Abroad they were very happy that Johnnie Walker was helping the Lebanese express an opinion but then [the client] forbade it. A whole argument arose that this is a conflict. Why is a brand taking a stand for Lebanon instead of Israel? A brand that is international should not take those stands. The president of Cannes Lions [International Festival of Creativity] wanted us to send [the campaign to be nominated for an award] and we could have won [a Cannes Lion] award three years earlier than when we won, but the client refused.

What are the biggest trends in the advertising industry? Is it still the growth of digital advertising?

KK: For Lebanon, the MENA region and globally, the biggest trend is that people don’t have time for you anymore. You are intrusive, so unless you can grab attention in an interesting way, you cannot achieve anything. It is not digital per se, it is everything. The mindset is totally different. The trend is engagement. It’s the name of the game.

March 24, 2013 0 comments

Advertising Special Report

Shadi Kandil

by Thomas Schellen March 24, 2013

written by Thomas Schellen

The Omnicom Group’s media and communications strategy business in the Middle East is carried by two main pillars: the OMD and PHD agencies. Executive visited Shadi Kandil, OMD chief executive for the Middle East and North Africa, in his corner office in Dubai Media City.

How do you see the media buying environment in 2013?

Media buying is a term that I don’t assimilate with. Our industry has evolved dramatically over, maybe, the past 10 years since the formation of these specialist entities. But to answer your question, the whole advertising landscape, and I would say the whole business landscape, has been challenged since the revolutions started at the closure of 2010. We, talking about the whole industry, haven’t gone back to normalcy and the key buzzword for 2013 is uncertainty.

You have mentioned the changes in the media industry. If I ask you to rank the business practices of media planning agencies on a scale from minus 10 for very dirty to plus 10 for absolutely clean, where is the region today?

I think we are in an organized chaos as our state of existence. If you look at the spectrum of players today, there are still agencies which are tapped in the transactional side of our business. They go out and buy media for the client at the cheapest rate, whether in a straightforward or in a dodgy manner. One can employ different tools to get to the lowest rate. The client is not concerned [with the tools]. All they want is the cheapest rate. These agencies still exist in the market.

Then, you have the agencies which have transitioned to a pseudo-strategic thinking type role. They still bank on the media buying platform but have added a layer of thinking that allows them to offer planning services. Then, there are your scientists which look at media as an investment that should be accountable toward a return. The more you move into the region of those agencies, the lower are the numbers of players that are operating in this space.

Do you expect media ethicists to be employed by the region’s top media agencies?

It is not an expectation as much as a plan. If you don’t plan for it and put the right mechanisms into place, it won’t happen. In our talent retention and talent acquisition programs we have shifted the thinking toward individuals of a scientific background who are able to engage in those discussions comfortably.

So you are not only out to hire individuals with marketing degrees?

Not really. We are trying for that balance, hiring people from more engineering and computer science backgrounds, mathematicians, statisticians, musicians, people who can balance the two worlds of art and science and then be exposed to the latest technology that the industry is offering.

What do you see as the driver of your generation of Lebanese decision makers under 40 in regional advertising?

The biggest change in our generation, in my opinion, is the awakening into governance and good practice. Today we live with companies that are owned by big conglomerates which are publicly listed on stock exchanges around the globe and driven by governance protocols, and we are supposed to be aligned along compliance rules and there are certain cultures that drive us.

Does it mean this work has become more of a job and conventional career, as opposed to an adventure?

I don’t want to give the perception that the environment is too rigid and too mathematical because that is not the reality. We still are about ideation and creativity. But at least we are more disciplined and more structured. If you want to draw a comparison, 20 years ago we were closer to a creative shop and today we are closer to management consultants, where 80 percent is structured and 20 percent is freely roaming in terms of individual innovation.

Given the Lebanese state of affairs, do you see something that you, as an expatriate Lebanese media and communications specialist, can contribute to improve the country between now and 2030?

Whoa. As far as Lebanon as a country is concerned, my personal view is very pessimistic. I love my country, but I don’t think there is any amount of energy or brain power that we can contribute to make Lebanon better. First and foremost, it has to be the Lebanese who are living in Lebanon who need to stop putting corrupt politicians in Parliament, and from there onwards, we will be happy to contribute.

March 24, 2013 0 comments