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Long Term Planning

David Friedberg, on the All In Podcast, said something interesting - not all monopolies stifle innovation and profit for themselves. He said this in regard to a book on Bell Labs - the powerhouse that gave us - among other things - information theory, UNIX, fiber optics and even lasers! (The book is called The Idea Factory).

What I find fascinating about this is that similar conditions existed in the GCC and yet, no innovation was made possible. You see, majority of the big organizations in the GCC are family businesses. In the past, each family ran a different aspect of commerce in a single country. They had one or two competitors - they were most likely other families. Profits were made. Innovation, sadly, wasn’t.

And it’s not the fault of the owners - god knows they’ve burned millions of their profits in innovation. It’s the leadership they hired.

Consider this - the CEO tenure in UAE for retail organizations is 2-5 years. And their C-Suite is much lower. I’ve been in organizations where the CXOs churned every 2 years.
Now, if you’re a member of that C-suite - ask yourself - what will you do?

On one side, you’re more than likely to be replaced in 2-3 years. And, it’ll take around a year or so for your projects to be implemented and another year for them to take shape, and another year for them to show signs of profitability.

If the rest of your team is thinking the same, where will you focus your energy? Obviously not on long-term projects. You’d want to create impact in the short term - this could mean shutting down old projects that are not yet viable, or starting projects that are good for your personal trajectory.

And that is the curse that most organizations face - lacking a long term incentive to improve the organizations bottom/top line, the executives tend to favor self-interest over the interests of the organization.

Do this long enough and you’ve created an organization that experiments with new things every 2 years, but doesn’t learn from it. All the knowledge is lost - since the people churn - and mistakes of the past are repeated.

The only way long-term thinking can exist is when the individuals responsible have a sense of security about their job - meaning they can let go of a short-term pay-off for a bigger long-term pay-off, provided it is secure.

Sadly, the culture of the country didn’t promote that. People are out of themselves - which means they’re ready to sacrifice others for the their own gain. Things are fortunately changing - the long term VISA which guarantees you stay in the country without a job is a welcome change in that direction.

This is happening while the monopolies are slowly dismantled. So, while innovation is being fostered through govt intervention, the organizations themselves are yet to catch up on it.

In the end, my hope is that orgs are not just assessed on their ability to generate profits, but also as having a long-term impact on their industry.

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