Defining and modelling resilience as an emerging markets leader

As chief executive of Dubai-based retail conglomerate Majid Al Futtaim, Alain Bejjani gained a respect for the importance of resilience during the Covid‑19 pandemic. Here he describes how he managed the unprecedented impact of the pandemic, the importance of servant leadership, multi-stakeholder engagement and his long-term view

During this time of great uncertainty – marked by protracted pandemic-related risks, rising geopolitical tensions, expanding cyber threats and talent market upheavals – senior leaders are sharpening their focus on resilience. What makes some companies so much more resilient than others? How can resilience be built into organisations? How should we think about potential trade-offs between resilience and more immediately obvious benefits such as speed, efficiency and cost?

McKinsey & Company recently hosted a virtual leaders’ summit on building resilience in uncertain times. Among the guest speakers was Alain Bejjani, chief executive of Dubai-based Majid Al Futtaim – a shopping mall, retail, communities and leisure conglomerate with operations in 17 markets across the Middle East, Africa and Central Asia. Bejjani also serves on the board of directors for several of the company’s joint ventures, as executive director of the Majid Al Futtaim board of directors and as co-chair of the World Economic Forum’s Middle East and North Africa meetings.

He was interviewed by McKinsey senior partner Gemma D’Auria, a Milan-based leader of the firm’s people and organisational performance practice in the Middle East.

How is Majid Al Futtaim’s approach to resilience influenced by the regions in which it operates?

Alain Bejjani, Majid Al Futtaim

Alain Bejjani: We operate in the Middle East, Africa and Central Asia, which are volatile by nature. This volatility spans the political, economic, security and legislative domains, among others. As a business that started out in these emerging markets, Majid Al Futtaim has focused on resilience from the very beginning. We are always operating somewhere on the crisis continuum, which unfortunately comes at the cost of efficiency, effectiveness and growth at times. But our people are also hard-wired to perform under these conditions. No business operating in the region can survive without a high degree of resilience.

How did your experiences with other crises prepare you to address the challenges of the Covid-19 pandemic?

Alain Bejjani: Although Majid Al Futtaim may be relatively better prepared than some other companies for different crises – for example, a military conflict in the Middle East, drastic currency devaluation in a country we operate in or even a supply chain disruption – no one could have prepared for a crisis of the scale and scope of the pandemic. In my view, the whole notion of preparedness only goes so far; you will only truly know if you are resilient when you are being shot at from left, right and centre. If you survive the battle, then you were resilient. We were all just lucky in 2020 that the internet did not melt down. Even now I can’t imagine how any business could have been resilient in that situation.

What lessons have you learned from your pandemic response?

Alain Bejjani: The biggest lesson I’ve learned is that resilience matters. We can easily forget that, as recently as January 2020, we took a lot for granted and didn’t consider resilience to be very important. We thought we were covered by having multiple business continuity plans in place. What mattered at the time, first and foremost, was efficiency and how to improve it to support growth and margins. Then, in the span of 10 days, we discovered resilience matters above all else. In a normal operating environment, it’s difficult to justify prioritising resilience over efficiency because it comes at a cost. Chief executives and other business leaders need to become skilled at conveying to stakeholders the magnitude and long-term significance of resilience and the consequences of failing to prioritise it.

A colleague used to talk about the importance of having “one eye in the microscope and the other in the telescope”. Again, this is easier to do in normal times but is crucial in times of crisis. Today we are living through a great example of organisations having both eyes in the microscope. Policy and business decisions made in 2020 to deal with the immediacy of the pandemic are now prompting huge social unrest, especially in developed markets. Having encouraged people to stay home, including by providing financial incentives, to cope with the initial disruption, we now are dealing with a new level of disruption as people resist attempts to swing the pendulum back to normal operations. As leaders, we must be mindful of the consequences of an action, not only in the next week, month or year, but over the horizon. Planning for long-term recovery – taking into account changes to normal business operations that are likely to become permanent – is yet another dimension of resilience.

Speaking of the telescope, when you became chief executive of Majid Al Futtaim, you wanted to develop a 25-year strategic direction, which many thought was a fool’s errand. You also embraced multi-stakeholder capitalism before it was in vogue. How has your adherence to these two principles contributed to Maji Al Futtaim’s resilience?

Alain Bejjani: Having a clear ‘North Star’ and a well-articulated set of values contribute to resilience by guiding the choices we make every day as leaders and providing stability and continuity. Especially in times of crisis, when events are unfolding quickly and there is tremendous uncertainty, your strategic direction and values will anchor you and make decision-making much easier. This is also true for the people in your organisation. Your North Star and values unify people and naturally guide their actions. Combine that with their skills and capabilities and we, as leaders, can stand on the shoulders of giants, rather than the other way around.

During the pandemic, you took 1,000 workers from cinemas that you had shut down and redeployed them to supermarkets and grocery stores in a matter of days. How did you manage that?

Alain Bejjani: We were faced with disruptions across multiple industries, with the cinema business being among those hardest hit. At the same time, although the grocery industry was disrupted, it became more essential than ever and business grew. We needed all hands on deck to fulfil grocery orders and deliver them safely to people in their homes. The obvious pool of available workers came from the cinemas we shut down. We were able to leverage our prior investments in our people infrastructure and systems, and create an opportunity for them to continue working in a meaningful way that gave them a sense of purpose. People jumped at the chance to contribute to the pandemic response and support the business.

How has your thinking about resilience evolved in the seven years you’ve been chief executive at Majid Al Futtaim?

Alain Bejjani: Going forward I will keep resilience – not just business continuity – front and centre of what we do. This includes maintaining a strong core business and not making moves that could shake the core. Next, I will double down on people. We’ve done well by people, but can do even better, including improving engagement with the communities in which we operate. An organisation that does not serve a purpose for its community through servant leadership has no reason to exist. We need to bring hope, inspiration and a sustainable future – with net positive, not just net zero, contributions to reduce greenhouse gases – to our communities.

At the same time, we need to sustainably create shareholder value. Majid Al Futtaim needs to be an organisation that creates jobs that help people build their futures, have families and educate their kids. We need to do all this in good times but especially in difficult times – whether economically, environmentally or socially. As well as being resilient, we must remain relevant. If an organisation doesn’t continually innovate to stay relevant to its stakeholders, then it doesn’t matter and you therefore don’t matter as a leader.

How do you approach resilience with respect to third-party suppliers and strategic partners?

Alain Bejjani: Our third-party suppliers are not part of our delineated core, but they are very much part of the web of organisations that allow us to be in business. We have programmes in place to improve the financial resilience of our suppliers because, if they’re not doing well, we cannot do well. Also, we work to ensure we are a company that suppliers want to – rather than need to – do business with, because we’re good for them.

Resilience gives businesses the ability to place strategic bets in times of crisis. What strategic bets have you been able to make only because of your resilience?

Alain Bejjani: The biggest bet we placed during the Covid-19 crisis was on people. We pledged publicly that we wouldn’t make people redundant during the crisis. We’ve made important investments in food supply and security, for example, to make sure our communities are resilient. We also focused on continuing to grow. We opened two shopping malls during the pandemic. I’m not sure any other company around the world did that.

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