More risk and the development of creative thinking skills could boost productivity among Gulf-based workforces, according to a study released by PA Consulting Group.
The report highlights the belief that leadership of organisations in the UAE, Saudi Arabia and Qatar is not good at nurturing innovation, and further claims that companies in these Gulf states are not big risk-takers when it comes to innovation, and only 27% are striving to be pioneers or pursuing risky but high potential innovations.
The survey of 750 senior executives, spanning 15 countries and nine sectors concluded is that innovation, one of the key factors that determine productivity levels, is broken.
Jason Harborow, head of PA Consulting Group MENA region, said: “Seven years on from the global financial crisis, many executives still refuse to invest in projects that do not guarantee a strong ROI. Yet these tight expenditure controls are actually stifling future growth by preventing potentially brilliant ideas from making it to market.”
According to 67% of survey respondents in the Gulf, less risky types of incremental innovation deliver greater value to them than breakthroughs. Only 22% say they talk more about innovation than they do it.
“These figures are encouraging, but a low failure rate does not mean the best ideas are being developed in the Gulf,” said Harborow. “Managers in the region appear to acknowledge the need for more creative approaches, with 78% saying they need to develop staff to think more creatively. Taken together, it points to a deeply ingrained culture of risk-aversion where cost-cutting almost always takes precedence and investment in innovation is viewed as a ‘nice to have’, said Harborow.
“Our overall view is that companies need to shake up the board and bring in new skills and talent, create a Chief Innovation Officer role; focus on value, not profit and loss; make innovation a whole-company priority and incentivise employees by making innovation part of their total reward. We think getting innovation right, and preventing brilliant ideas failing for avoidable reasons, can solve the productivity crisis.”
Private sector respondents comprised 75% of the total, and of these 47% had annual revenues between $100 million and $1 billion, and 32% had revenues exceeding $1 billion.
