Andy Gibbins, managing director of GLAS Consulting, and Kefah El Ghobas, senior specialist at Dubai’s Road and Transport Authority (RTA), discuss how the Middle East is understanding and addressing the need for operational excellence.
The Middle East is a rapidly evolving region. New industries are growing fast and there is much change taking place. This is very exciting for the people in the region but it does create challenges as the new industries and government services strive to achieve excellence in all aspects of their activities.
Countries in the region (particularly in the Gulf Cooperation Summit, which includes Saudi Arabia, Oman, United Arab Emirates, Kuwait, Bahrain and Qatar) have seen substantial investment in infrastructure and industrial projects in recent years and this trend is set to continue into the foreseeable future as nations use their hydrocarbon wealth to diversify and grow their economies. This led to a construction boom (and bust), to the growth of new industries and to mass immigration to provide the workforce to support this growth.
The other unique challenge and opportunity for the Middle East is the multicultural diversity that exists in society and in the workplace. People from 176 different nationalities work in Dubai, for example. This brings about a cultural dimension which is enriching but also challenging, given the differing cultural norms and styles that exist for each group.
Many Middle Eastern companies are competing in global markets. Taking the oil, gas and petrochemicals sector as an example, the region certainly benefits from cheap and abundant feedstock. Given that assets are relatively new, there are also the benefits of economies of scale. However, competition is strong and downturns in the global economy have negatively impacted demand.
Such industries are highly competitive and highly cost sensitive and there is an increasing realisation in boardrooms that more needs to be done in management and operations in order to be truly ‘world class’. This is particularly critical for the multi-billion dollar projects in the energy sector, where investors are demanding good returns on their significant capital investments.
Established multinational organisations have, of course, a long history and a strong experience base in lean and six sigma, but many ‘local’ companies and government organisations too are now aware of the need for change and try to deliver operational excellence.
There is, however, something of a talent gap. Most current green belts and black belts are expatriates and most training is provided by international training providers. There is undoubtedly a need for better training provision in the Middle East, so that organisations can develop and utilise skilled practitioners in order to drive change.
Most Gulf countries are pursuing ‘localisation’ programmes, designed to develop skills in native populations. The development of operational excellence capabilities needs to be a significant element of this upskilling, if future practitioners are to come from the local workforce.
One particularly positive note is the recognition of the need for operational excellence in public services. In many countries, service provision has had to develop very quickly, to keep up with extraordinary levels of population and industry growth.
Taking Dubai as an example, the city has grown extensively over a very short period of time: infrastructure such as roads and mass transport systems had to be put in place very quickly.
As a major international business hub, Dubai had to enhance governmental services quickly, in line with international best practice. To do this, the Dubai government developed an excellence model specifically for public service bodies in 2007. This model of excellence created a desire for change and catalysed the development of systems and processes, so that the government of Dubai could show itself as a global centre of excellence to its various stakeholders. Although there is still work to do, services are improving quickly, making Dubai a popular location for international business.
The Dubai RTA, formed by royal decree in 2005 to enhance the public transport facilities and improve roads across the emirate to make travel safer and smoother, is perhaps the best example.
When the government recognised the need to provide an advanced and highly efficient transport network for the city, RTA assumed responsibility for planning and meeting the requirements of transport, roads and traffic in the Emirate of Dubai, and between Dubai and its neighbouring emirates and countries. The remit was to provide an effective and integrated transport system capable of achieving Dubai’s global vision and serving the vital interests of the Emirate and its people.
Within a few years, RTA has achieved a major success. Road accidents had represented a big issue, with a fatality rate of 21.9 per 100,000 people in 2006: in 2010 it was 12.5 per 100,000 people. This was achieved via systematic improvement of roads network and by establishing an advanced public transport network on land and water.
Such results from a newly established governmental entity would be impossible to achieve without a strong operational excellence vision and culture. The success of RTA came from its clear vision and objectives, the development of a highly capable team with a strong operational excellence focus and by using highly capable cross functional teams to work on improvement initiatives.
Dubai RTA reached its goal for excellence and gained ten prestigious awards from the Dubai Government’s Excellence Programme (DGEP) in 2009. This was done by developing a solid operational excellence based methodology to implement strategies at an operational level, developing the right organisational structure to deliver objectives and carefully managing budgets to deliver improved services to customer without cost increases. Continuous improvement has become a way of life for this very young government entity.
Growth and capital investment in the region are set to continue. There is also a strong recognition of the need to develop more ‘downstream’ manufacturing industries – to supply products locally and to provide more jobs for local populations.
This continued growth will bring opportunity but it will challenge industry to adopt operational excellence as a way of life. Organisations need to ensure that they have OE as part of their strategy and must ensure that they recruit, develop and retain people with the right skills to drive this effort. In particular, this means developing local talent and reducing the reliance on expatriates, who will, eventually, leave.