The Dilemma as Experienced in MENA — Alain Bejjani, CEO Majid Al Futtaim
The Industrialist’s Dilemma — February 20, 2020
When Alain Bejjani began his discussion after we finished teaching the Majid Al Futtaim case, he opened with the following statement:
We don’t know what will happen to our business in the future. Our goal is to build a team that can figure out where to take the company given the changes confronting our organization. We need to run fast and we have no idea what the world will become. Jeff Bezos isn’t telling people not to go to the mall — our customer is disrupting our business, and that is where we have to stay focused.
It was a comment that reminded us of the attitude that Hubert July of Best Buy shared a year ago — the sweeping changes to shopping, movies and hospitality are happening regardless of what incumbents want, and today’s leading global companies must meet the current needs of their customers or they will wither away and die. Bejjani argued that this is a conscious choice leaders and their companies will make, and he shared what he and his team are doing across the Middle East, Central Asia and Africa to confront these challenges.
The Physical Space Is a Multi-Sided Platform
Majid Al Futtaim is one of the most successful companies in the Middle East and North Africa (MENA), with revenues of almost $10 billion, EBITDA of $1.3 billion and more than 44,000 employees from 112 nations working in 16 countries. Its initial success came from pioneering destination shopping in MENA, including its flagship Mall of the Emirates, a physical location that provides not only retail commerce but also movie theaters, ski slopes and dining experiences that bring people from all over the world together. Today, the company operates in 13 industries, including residential real estate, hospitality, grocery retail, cinema, fashion and others. Bejjani shared that the company’s vision is to create “great moments” for their customers, and this is what keeps people coming to the destinations that Majid Al Futtaim owns and operates throughout the region.
In a world where the industrial revolution allowed companies to leverage the force of manufacturing standardized products at scale to drive success, Bejjani asserted that we are moving away from quantity being the key variable to success to a world where quality in customization and delivering value for individuals reigns supreme. Bejjani argued that meaningful human interactions will remain an essential part of people’s lives, and that data and personalized experiences will enable individuals to have superior encounters in physical locations where they seek entertainment, social interaction and sustenance.
To Bejjani, the threat of companies such as Amazon, Netflix, and Airbnb, as well as restaurant home delivery, also creates an opportunity for Majid Al Futtaim to better serve its customers. By delivering great physical experiences, often complemented by digital touchpoints, the company continues to attract visitors to its assets, and in turn encourages retail brands to retain their presence in the physical world, reaching customers where they spend their time.
Not One Part of the World but Rather 16 Different Markets
Majid Al Futtaim has invested heavily in its people by creating the Majid Al Futtaim Leadership Institute, its School of Analytics & Technology, and the School of Great Moments (which focuses on customer experiences). Our class had a lively discussion on the company’s need not only to bring in new talent and capabilities into the organization, but also the requirement to have local people in each of the areas in which it operates.
Bejjani claimed that this duality is a key attribute to the organization’s success — during the Arab Spring there were instances where local employees in impacted markets protected the company’s properties and stores as they felt that these were “their stores.” Majid Al Futtaim was not simply a Dubai-based organization operating in a foreign city, but rather it was a company that empowered and promoted people in each of its regions to senior levels of responsibility. Bejjani argued that this pillar — a focus on its people — and the appreciation of global know-how combined with local knowledge, was a key variable that has allowed the company to grow and thrive during times of both technological and political disruption. Just as the company needs to operate well in both the digital and physical worlds, the company does not lose sight of the places in which it operates. Bejjani stated that this focus on its people is a key driver of the company’s successes to date.
Keep One Eye in the Microscope and One Eye in the Telescope
In many ways Majid Al Futtaim is a company of dualities: simultaneously owned by a family but run by professional management throughout the region. It is an organization aware of its history and beginnings but also functioning as a meritocracy. Bejjani discussed that leaders need to be sure that they are seeing the big trends that are shaping their markets, while at the same time being acutely aware of the operational details that drive the company’s everyday activities. Bejjani mentioned that leaders need to simultaneously have “one eye in the microscope and one eye in the telescope.”
During one part of the case discussion we had a fierce debate on who is the biggest threat to the company: organizations that build competing malls or the digital disruptors who are entering the region with new solutions. We got the sense that Bejjani and the leadership lean towards the latter, as these organizations are delivering the personalized experience that customers seem to increasingly desire. For Bejjani and the Majid Al Futtaim team, their fundamental task will be to deliver unique and compelling experiences that keep people coming to their locations — to execute flawlessly on delivering great moments — and meet customers where they are as shaped by the mega-trends of digitization in eCommerce, leisure and entertainment. While they still need to execute in their everyday actions, they need to also look forward and anticipate what their customers need and want and need, while watching how unexpected entrants might help shape customer experiences.
