A.T. Kearney launches National Transformations Institute in the Middle East

28 February 2018 Consultancy-me.com

The global management consulting firm A.T. Kearney has launched a National Transformations Institute in the Middle East to support local governments and organisations with strategic planning as the region embarks on a series of ambitious economic reforms.

As an era of economic and social change sweeps through the Middle East in response to the dramatic plunge in oil prices, the Global Business Policy Council, an international A.T. Kearney strategic think-thank which advises on developments in the geopolitical, economic, social, and technological realms, has unveiled a dedicated regional operations unit to be based in Dubai.

The National Transformations Institute, to be led by Rudolph Lohmeyer, the Vice President of the Global Business Policy Council and a recognised international expert in long-term strategic planning, will offer support services to the Middle East’s public and private sectors as the region undergoes a period of recalibration through a number of bold national transformation programmes.

Following in the wake of the dive in global oil prices, and the consequent need to diversify local economies away from a reliance on resources, numerous Middle East governments, and in particular those of the GCC, have set course for new frontiers with a broad range of measures that will have an enduring impact on the region at large, laid out in enterprising national agendas such as the Vision 2030 and Vision 2021 projects of Saudi Arabia and the UAE.A.T. Kearney launches National Transformations Institute in the Middle East“The Middle East is one of the most rapidly and deeply transforming regions in the world. We are seeing governments courageously committed to driving historic change with unprecedented speed for the benefit of future generations,” Lohmeyer said at the launch of the new A.T. Kearney Institute, “It is therefore the ideal place to create a laboratory for understanding the changing nature of national transformations and the levers of action for guiding them to the desired results.”

But the consulting firm also warned that the next three to five years would be critical, with Lohmeyer adding; “This is a finite window with a time limit. The choices made now will really extend influence even more than they usually would into the long term… It’s a very favourable window, a very attractive set of circumstances. However, there are no easy fixes and on the contrary the hard day-to-day work on reform is going to be crucial.”

Lohmeyer cited several specific challenges and opportunities facing the region's policymakers if their efforts are to pay off, including greater intraregional economic integration, capturing the increasing volumes of trade-flow, and attracting significantly higher levels of untapped foreign direct investment, with the firm already firing its first shot across the bow in respect to the latter, suggesting that countries in the Middle East will need to promote the ‘transparent enforcement of the rule of law” in order to so. 

Just recently, fellow strategy and management consulting outfit Strategy& has further suggested that the governments of the GCC should consider setting up behavioural insight units to better ensure the success of the region's transformation endeavours. 

Do consultants have a legitimising effect in the Middle East?

19 April 2019 Consultancy-me.com

Do the often kowtowing international consultants operating in the Gulf simply grant legitimacy to local rulers? The answer’s not so simple says regional expert Calvert Jones, who has conducted a fascinating research study on the local consulting industry.

Now valued at $3 billion annually in the GCC alone, the Middle East management consulting industry has exploded since the global financial crisis, growing at a heady 20 percent clip up until 2014 when the dive in global oil prices and attendant austerity measures briefly applied the brakes; ‘brakes’, in this context, meaning growth which at its lowest point in 2015 dropped to around 6 percent.

The slow-down was brief. With the plummet in oil prices spurring regional governments to act on economic diversification – captured in a range of ambitious national transformation agendas – together with the emergence of a range of digital advances now sweeping the public and private sectors, fresh impetus was given to the local consulting market; this year forecast to return to double-digit growth.

Of that $3 billion consultancy price tag – with close to half of it handed over in Saudi Arabia – the public sector accounts for approximately a third of the take, the vast majority of that paid to foreign consultancies and in particular the advisory wings of the Big Four and global strategy giants such as McKinsey and BCG. Scrutiny of these practices – especially in the wake of the Khashoggi killing – has also increased.

Copping much of the media flak, McKinsey for its part has backed itself as a force for good in the region, contributing greatly toward local economic, education and healthcare development. But the question remains, even if making a positive difference, do international consultancies confer legitimacy on authoritarian governments – “helping to prop up and even strengthen repressive, illiberal regimes?”Does the Middle East consulting industry have a legitimising effect?One person well-placed to address that question is Calvert W. Jones, an Assistant Professor in the Department of Government & Politics at the University of Maryland and author of ‘Bedouins into Bourgeois: Remaking Citizens for Globalization’. Jones spent 19 months between 2009 and 2017 conducting field research in the region, including into the consulting industry and the notion of conferred legitimacy.

According to Jones, some of the consultants she interviewed themselves expressed this concern, particularly when due a range of market factors they may have grown less inclined over time to voice too strong of an opinion. Yet, whether this is indeed the case is not so clear. Among other findings and areas of research, Jones conducted several experiments on the subject of legitimacy at universities in Kuwait, involving some 650 students.

“Conventional thinking about experts in politics suggests not only that experts rationalise governmental decision-making, but also that they confer legitimacy – meaning that the public may be more likely to support government initiatives when experts with the relevant knowledge, training, and experience are involved. In the Gulf, both experts and ruling elites tend to think along these technocratic lines,” she states in an article for the Harvard Business Review.

Experiments

While not addressing potential international legitimacy or other geopolitical or business and trade issues, Jones sought to test the idea of conferred legitimacy as to public opinion in the local polity. For the experiments, she asked participants to imagine that their country’s leaders were launching a major reform to improve either education or infrastructure, exposing them to a variety of mock news articles outlining the likely benefits from the government initiative.

In the first experiment, half of the reports featured reference to a team of top international experts assisting with the hypothetical reform, including their credentials and extensive experience elsewhere, with this detail absent from the remaining half. She found that subjects who read that experts were involved were far less likely to support the reform – indicating the ‘involvement of experts’ may have led to a significant drop in legitimacy. The results, however, are somewhat murky.

In the second experiment, Jones explored the impact of nationality on opinion, with otherwise identical reports on expert-advised infrastructure reform referring to either American, Chinese, or Kuwaiti advisers. She found two surprising results. Support for the reform did not differ significantly whether led by Chinese or Kuwaiti experts, but did however for the American-led reports, with subjects expressing significantly lower support.

The Chinese were also considered far more capable than their American counterparts, which may in itself provide a clue. “It’s not necessarily evidence of profound anti-Americanism, let alone a new love for Chinese experts,” Jones cautions; “Most likely, it reflects Kuwaitis’ longer experience with American experts, which includes their frustration with the lack of progress on various reforms.” The Kuwaitis, she suspects, are just far less familiar with Chinese consultants.

“This experimental evidence raises doubts about the ability of experts to rationalise and legitimise authoritarian rule,” Jones concludes. “Indeed, my research suggests that international experts can actually undermine legitimacy, potentially reducing domestic support for autocrats and weakening their regimes… In my experience, residents of these countries are increasingly critical of their governments paying hefty fees to foreign experts and consultants for little in return.”