Perspectives from ISB

Boring may not be the first thing that comes to mind when thinking of growing a business. But it does play an integral part of the thinking of the Kanoo Group, one of the UAE’s biggest family conglomerates that is grooming itself for expansion and getting a professional management to run the business while family members take care of shareholder issues.

“In any business you need exciting and you always need boring,” says chairman Mishal Kanoo, a fourth generation member of the family. “Boring is sustainable. Boring is consistent. Boring is doing the same thing but getting it right again and again. It is that boring that keeps you in business. It is what is exciting and pleasurable or painful that does not keep you in business.”

The group, which was established in 1890 in Bahrain, finds its roots in the wood and coal trade in the island kingdom. The conglomerate expanded into Saudi Arabia in the 1930s and then into the UAE in the 1960s.

The company is preparing smoothly for succession, a hot topic among the region’s family groups. Putting in place a new structure of management is part and parcel of the transition process. The conglomerate appointed a chief executive officer, a chief financial officer and other senior executives in the last few years to run day-to-day operations and leave the family members in charge of shareholder affairs.

“We are trying to remove family succession from the operation and try to bring it into the boards and shareholder side,” says Mr Kanoo. “We are hopping the impact will be nullified simply by having different family members of different ages on the board.”

Succession planning is important because the group needs to make sure they have enough old hands to take care of the business and younger members who come up with new ideas, he adds.

This formula has teething problems, but still is an “adventure” the group is embracing, according to Mr Kanoo.

“It is tough because there will be times when the professional manager wants to move in a direction the family does not want to move into because the family can’t understand what is happening,” he says. “There will be times when the manager does not understand what the family wants and then there will be a clash. This is an adventure. Some managers are spot on, a lovely balance of understanding and what the family needs and what the family wants in comparison with what the business needs. Then there are others who are focused purely on the business and do not care about the family.”

“The biggest challenge is always getting the right people because all the people who are working with you represent you and that is always the hardest part of any business,” says Mr Kanoo.

Source: Saadi, Dania., April 19, 2018;