Employers invest in training in the Middle East

17 November 2011

Demand from Middle East conglomerates wanting to professionalise their management teams will spark a revival in in-house training and executive education programmes

For executives in banking or management consultancy, a master’s in business administration (MBA) or executive master’s in business administration (EMBA) is a well-trodden path: a fast-track to career advancement. Investment banks and management consultancies are more likely than other employers to seek out MBA graduates.

There’s a lot of mistrust about the old ways of doing things that led to the financial crisis

Oliver Harrison, Health Authority Abu Dhabi

“An MBA is not just desirable; it’s our main recruiting ground,” says one Dubai-based management consultant. “We systematically target the top MBA courses internationally and recruit their top students. We recruit new graduates directly from the 10 top ranked MBA courses.”

There has been an influx of global business schools and universities into the Middle East and North Africa (Mena) region since 2005. To succeed, these schools need to recruit students from ever more diverse backgrounds and business sectors.

MBAs losing appeal

MEED informally spoke to two dozen major regional employers, from metals manufacturers to aviation and from government health bodies to shipping companies, to gauge interest in recruiting or sponsoring executives with MBAs. Companies showed a marked lack of enthusiasm. Some were downright sceptical.

Many of the most traditional Arab conglomerates are investing in business education for top staff

Laurent Belle-Perat, Schneider Electric

“An MBA was in fashion until three or five years ago,” says Oliver Harrison, director of public health and policy at regulatory body, Health Authority Abu Dhabi (Haad). “We saw a big increase in the number of available programmes. Now, although, MBAs do not seem so attractive.

“The world is more cynical, now, about how business and finance was structured in the past. There’s a lot of mistrust about the old ways of doing things that led to the financial crisis … and a feeling that MBAs are light on content and heavy on networking; that these are soft degrees that lack academic rigour or depth of knowledge.

“The fashion, now, is for what is real and tangible. There’s a feeling that doing business is not rocket-science. That business requires a generic skill set and that what really matters is real-world experience. What’s needed now is outcome-based executive development programmes.”

Executive education survey results
Impact of global downturn on GCC employers’ staff development budgets
Very much affected51
Somewhat affected44
Not at all affected5
Source:  The Executive Education Market In the GCC Countries, Manchester Business School, 2011

The UK’s Manchester Business School (MBS) launched a major survey of GCC employer attitudes to management education earlier this year. It sent an online questionnaire to 27,000 GCC managers, but received just 537 replies.

MBS published its findings, The Executive Education Market in the GCC Countries, in March. It found that “a significant proportion” of regional employers did not invest in executive education. “There is a strong belief that the global economic downturn has had a negative impact on learning and development spend within the region,” the report said.

Of the employers who spoke to MEED, most were committed to management development. Some ran in-house training programmes; others sent staff on management courses. None sponsored their executives to study for an E/MBA – although Dubai Airports is considering this option – or expressed preference for hiring candidates with E/MBA degrees.

The view held by Dubai port operator DP World was typical. “We don’t consider an MBA vital for recruiting or for promoting people,” a spokeswoman said.

Expected changes in spending on executive education in the coming three years
Spend will increase moderately41
Spend will stay the same35
Spend will reduce moderately10
Spend will reduce significantly8
Spend will increase significantly6
Source:  The Executive Education Market In the GCC Countries, Manchester Business School, 2011

DP World invests in some training, but meets most of its needs in-house, via the DP World Institute (DPWI). Similarly, Turkish construction giant TAV has its own in-house training company, the TAV Academy. Dubai-based logistics firm GAC Group delivers workshops and e-learning via the GAC Corporate Academy, based at Jebel Ali.

Haad sponsors executives to join distance education master’s and doctorate programmes at Baltimore’s John Hopkins Bloomberg School of Public Health in the US.

These four companies share a common determination to put concrete, workplace-based needs first. This begs the question whether business schools can win employers back to the benefits of MBAs.

Soft skills

Simon Learmount, EMBA programme director at the UK’s Judge Business School, says employers need to re-evaluate the importance of soft management skills that E/MBAs provide. “Hard skills are easy to teach,” he says. “That’s about learning from best practice… about professors communicating models and concepts and helping participants to apply them.

“But soft skills are student-centric. That’s all about helping executives to understand themselves. It’s about reflexivity and thinking about one’s own behaviour. A lot of that may seem like common sense, but an EMBA offers the opportunity to unpack and understand those behaviours. It goes deeper than teaching people presentation or diplomacy skills.”

Globalisation may drive new demand. As multinational companies flock to the Middle East and North Africa, the region is opening to the wider world. Multinationals aim to recruit managers with local market knowledge. And regional businesses face new competition at home and as they expand overseas.

“In an era where circulation of information occurs more rapidly than ever, the value of knowledge and information has grown exponentially,” says Yusuf Akcayoglu, Gulf regional director of TAV, who holds an MBA from California State University in the US.

“Education – more specifically, an international, advanced education – has become a crucial qualification [for] a senior businessman. As the furthest ends of the earth approach each other forming an inter-dependent world, an MBA [is] an opportunity to synchronise with global trends and the international business environment.”

Reviving interest in MBAs

Several senior executives who spoke to MEED expect globalisation to revive regional interest in E/MBA programmes. “HP has a regional office in Jordan now, with 100 staff,” says Nidal Qanadilo, head of the investment department at Jordan’s Information and Communications Technology Ministry.

“The [US’] Microsoft, [South Korea’s] LG and Samsung are here. IBM, Google and Dell [all from the US] are considering whether to come to Jordan. For these companies, looking to enter a new market like Jordan, if they have two candidates, one with an MBA and one without, I am sure they will hire the more qualified executive.”

Qanadilo has joined the Lancaster University Management School MBA programme in Amman. “Multinationals and medium-sized companies come here looking to hire talent,” he says. “And that has led to more awareness among managers, too, that they need to upgrade their skills.”

The management consultant agrees. “Initially, MBA students were mostly the usual suspects: consultants or investment bankers,” he says. “Now, there’s a move towards non-traditional segments pursuing a formal professional training through an MBA … across the region, there is a move towards investing in more formal management knowledge.”

One regional company doing just that is Schneider Electric Saudi Arabia. The French electrical equipment company has launched an MBA programme for its Riyadh employees. The in-house programme aims to strengthen the company’s market presence and to promote and develop talent.

Schneider Electric has enrolled 20 of its own employees and five from Saudi partner companies onto a programme delivered by France’s Grenoble Ecole de Management (GEM). The two Riyadh partner companies, panel builder Mesco and systems integrator Systech, pay their own employees’ fees.

GEM’s professors fly into Riyadh once a month to deliver weekend lectures at Schneider Electric’s offices. The programme started a year ago and the first intake will graduate in 2013. Schneider Electric will review progress in December, to decide whether to launch a second programme in early 2012.

Schneider Electric invited employees who had three years’ international experience to apply to the programme. Some were relative newcomers and others had spent 10 years at the firm. The successful candidates include staff from Saudi Arabia, the GCC, India, Egypt, Jordan, Lebanon and Syria. Two are women. “As employers, we had a lot of new recruits in Saudi Arabia and could see that we needed to invest in developing our people,” says Laurent Belle-Perat, Schneider Electric’s internal communication and learning and development manager. “In particular, we wanted to improve managers’ global understanding of business, inside and outside the company.

“As well as developing individual talent, we saw this as an investment in building a better business. Already, the course has brought an interesting new dynamic to the firm and its partners. The MBA students come together from different functions; from finance and technical, and they are working together more effectively than before,” Belle-Perat adds.

Schneider Electric has long encouraged staff to continue their management education. Before going into partnership with GEM, it used to pay top talent a fixed allowance towards the local or online MBA course of their choice.

However, as programme prices have soared, students ended up shouldering more and more of the costs. Bringing the programme in-house has also ensured students join a quality programme. The company will not say how much it has spent on the in-house MBA. But it has negotiated a deal with GEM.

Improved understanding

Belle-Perat says the company opted for an MBA programme, rather than a master’s or non-degree programme, to improve understanding of the global business environment. Schneider Electric has bases all over the world and felt that an MBA was the best way to prepare its employees for global challenges.

Sceptics might argue that the company risks scoring an own-goal. Employers across the GCC compete fiercely for local talent. In improving staff management skills and global know-how, the company risks making its most talented staff more poachable. But Belle-Perat disagrees with this view.

“This is a way to repay and retain our talent,” he says. “We have evaluation procedures to identify employees with high potential. We know they will not stay with us unless we offer them more responsibility.”

Whether other regional players will follow Schneider Electric’s example, only time will tell. “New demand is coming from conglomerates wanting to professionalise their management teams,” he says. “Many of the most traditional Arab conglomerates are investing in business education for top staff. There is particular interest in educating family members.”

A MEED Subscription...

Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications