Case Study: Al-Futtaim Group, Dubai “We needed a new way of leading”

04 July 2016

Author: Kirsty Tuxford


Case Study: Al-Futtaim Group, Dubai

Why all 46,000 employees at a family-owned conglomerate had to understand what it means to be a leader

It started four years ago: a new HR strategy that included leadership development as one of the core components. Borne out of conversations with group directors, Al-Futtaim’s HR and L&D departments were considering how HR could support the vast conglomerate’s business goals. Chief HR officer John Harker admits that, when he joined the company four years ago, it lacked a coherent human capital strategy to help grow the business into the future, and didn’t seem to have the right people in the right place who were equipped to do the job. That’s a huge people management challenge in an organisation comprised of more than 200 businesses, across 30 countries in the Middle East, Africa, Europe and Asia, with more than 46,000 employees. Al-Futtaim operates in several sectors – retail, financial services, real estate and automotive – and holds the franchise and distribution rights to some of the world’s leading brands, including Ikea, Toyota and InterContinental Dubai Festival City.
 
One aspect of the solution to the group’s human capital needs was a leadership development programme. Together with Hay Group, L&D consulted on what success and leadership should look like, and put in place a ‘leadership success profile’ made up of different competencies. All leaders across the organisation experience a nine-month development journey, helping them realise who they are as a leader. It includes a ‘workplace challenge’, where teams of employees are presented with key organisational challenges from the vice chairman and group directors. Each team leader then has the opportunity to make recommendations to the company heads on what could be improved.
 
“We’ve had 1,013 leaders come through the programme in two years,” says Debbie Chatten, chief learning officer. “There’s one project [originated by workplace challenge teams] around sustainability that would actually pay for the leadership programme for every leader who has attended so far. It’s not been implemented yet, but we’re confident it will bring us savings. More importantly, it has helped us identify leaders who are using a broad range of styles and developing their people.”
 
Workplace challenge teams have also been active in helping directors figure out how to better incorporate newly acquired businesses into the Al-Futtaim group – proving that those lower in the organisational hierarchy are listened to at the top.
 
So what kind of leaders does Al-Futtaim value? “The ones who partner with their peers, or their customers,” says Chatten. “Also, the leaders who manage to navigate organisational complexities and are contributing to the greater good of the company. A good leader creates the right environment for learning.”
 
Leadership development is just one aspect of how HR is helping drive business – the bigger picture began with a significant culture change for Al-Futtaim. The human capital strategy is now more business-centred. “We’re creating a group of leaders who are thinking and acting like Al-Futtaim, which we have never really had before,” says Harker. “The strategy is called ‘talent for growth’ – it’s based around diversification and growth. HR’s task was to develop an integrated plan that would ensure we were able to reach our growth agendas by nurturing the right capital, and so we created this agenda we call ‘capital growth’ – it’s a multi-layer programme, which comes as a range of initiatives including how to attract, retain, develop and engage people. It’s quite broad. We’ve run a pretty ambitious set of projects over the past four years.”
 
Training and development is not just for leaders – the group has worked hard to ensure all staff feel engaged. There’s a learning centre that supports the whole of the organisation, offering support around core interpersonal and technical skills, plus online learning for all employees.
 
More broadly, HR is doing a good job of retaining staff despite the transient nature of workers in the GCC. Four years ago, the average length of service at Al-Futtaim was four years, but it’s now getting close to five. Previously, only about 12 per cent of positions were filled internally. “As a result of changing a number of our policies and processes we now fill 26 per cent internally,” says Harker. “We used to have fixed-term contracts, so expats were only working three or four years and going somewhere else. We’ve changed that, and now people can stay here as long as they wish, as long as they’re performing.”
 
Although Al-Futtaim does not operate in an industry with a quota for nationals, attracting and retaining national talent is firmly on the organisation’s agenda. But it has had to work to understand what drives nationals’ career goals. “One reason is the sense of pride in your nation, and working for the government is a manifestation of that,” explains Harker. “The public sector has generous benefits and working hours are shorter than in the private sector. The private sector attracts people who are more entrepreneurial – those who want to see themselves advance based on merit. We need to try and identify those people.”
 
Al-Futtaim is currently sponsoring a new public-private initiative, and working with the government to create a “more level playing field”, making it easier for locals to join private companies.
 
“We have an owner who is passionate about playing our part in employing and developing national talent,” says Harker. “Through his sponsorship, we’ve done a pretty good job. The other side of the coin is that we have hired more nationals, but I’m not sure the quality has always been up to scratch. So now we focus more on that, and ensure the people we recruit are the best fit for the role.”
 
Generally, UAE employment law can be difficult to keep up with, and Al-Futtaim has worked hard to stay one step ahead. “The policies that we have adopted go above and beyond what the legislation demands,” says Harker. “For example, when they outlawed the keeping of passports, we had stopped it long before. We work very closely with the regulator on these issues.” The group’s policies also ensure female employees gain equal access to leadership and development training, he says.
 
Al-Futtaim employs 106 nationalities, and operates in multiple sectors with a workforce scattered around the world. Aligning them, and maintaining common standards across the organisation, are issues for HR on a macro level. But Harker is confident the group is negotiating the challenges: “I wouldn’t say that we are yet at the level of the most developed companies in the western world, but we are in a really good space.”