McKinsey Quarterly

Stay visible—but don’t be needed: How Alain Bejjani is leading through the unexpected

A five-year, purpose-driven digital transformation has helped the CEO of Majid Al Futtaim, and his organization, to cope with the coronavirus pandemic.

Alain Bejjani is CEO of Majid Al Futtaim (MAF), a Dubai-based holding company that operates shopping malls, residential properties, supermarkets, movie theaters, and other ventures in 16 markets, primarily in the Middle East, Africa, and Central Asia. In his five years as CEO, Bejjani has redefined the company’s purpose as creating “great moments for everyone, every day,” brought digital technology to every part of the company, delivered stellar financial performance, and ensured that MAF has several years of liquidity. In this interview with McKinsey’s Gemma D’Auria, he reflected on his “CEO moment” and explained why the work involved in that transformation came in handy when COVID-19 hit, what it’s been like to manage through the crisis, and the two leadership behaviors he tries most to embody.

The Quarterly: Tell us about the change journey you have been leading at Majid Al Futtaim.

Sidebar

Alain Bejjani: When I became CEO, the first meaningful action I took was to redefine our sense of purpose. I wanted us to have a customer brand that would be meaningful 25 years from now. I personally don’t think 25 years is very long term, but, still, it is long term in the world that we live in. And if you want to look 25 years ahead, you have to have a clear answer to the question “What is our purpose?” We needed to crystallize what drives us as individuals and as a company. So we engaged the organization at large and came to define our vision as “great moments for everyone, every day.” Then we asked, “What are the values we must live to support such a vision?” We had always been a values-driven organization but had never crystallized our values; we finally articulated them as “bold, passionate, and together.”

The Quarterly: Why did you feel that it was necessary to reappraise the company’s purpose?

Alain Bejjani: The balance of power has shifted over the last decade. Once, our future was determined by the result of our strategies, our operational excellence, our ability to deliver our financial results. There is much more to it than that today. Now, the customer decides. Social media and access gave our customers a great voice, and that very loud voice is what defines the future of the organization. The reality is that continuing to be in business is now simply the result of the customer giving us license to be in business. So you need to earn that trust on a daily basis, with every interaction. At Majid Al Futtaim, that means creating “great moments, for everyone, every day,” so we can continue to be in business. It was a holistic transformation to take the business from a good place to a great place. We had to rewire the organization, we had to deliver operational excellence—but it’s done with purpose, and a North Star. [For more, see sidebar, “Majid Al Futtaim’s ‘great moments’ transformation.”]

In five years as CEO, Alain Bejjani has engineered a complete transformation of Majid Al Futtaim (MAF), the Emirati conglomerate, based in Dubai, that owns grocery stores, shopping malls (some with indoor ski slopes), leisure and entertainment brands, residential communities, hotels, and other assets in 16 markets. In an edited version of two interviews conducted over two weeks in May, Bejjani explained how MAF, founded in 1992, managed to move a largely brick-and-mortar business “from a good place to a great place.”

This is a business that has performed very well ever since it was founded, in 1992. The question I posed when I became CEO, in 2015, was how do we make sure that we have a business that has the ability and the intrinsic strengths to withstand the test of time and continue to outperform the competition? It’s a holistic transformation.

The first thing we did was to define clearly what we stand for as an organization. This was a facilitated process, with workshops and town halls that engaged the entire company. We wanted to articulate our vision and our values—the values that we had been living and role modeling but not crystallizing. We settled on a clear vision: “creating great moments for everyone, every day.” Then we asked, “What are the values we unconsciously live up to as we support that vision?” We came up with “bold, passionate, and together.” These values form the organization’s DNA.

We translated our values into behavioral norms that everyone could understand and apply in their day-to-day jobs. We asked ourselves, “What do this vision and these values mean for each employee?” This became the norm for defining everyday actions. For example, we say, “Be bold or nothing.” If you are a customer-service officer, this has implications for what you are willing to do for your customer. We say, “We sell experiences, not services.” That changes the very act of selling you a cinema ticket—I think of selling you an experience, not a seat. We say, “Live in the customer’s mind.” We want all employees to never forget that they are customers in everything they do, whether cleaning the shop floor, designing a promotion, or writing a contract. The same values inform everything we do, no matter which part of the enterprise you belong to. This is how you build an institution and create value.

Our vision might come across as utopian. But in the markets we are in, it has been the key to giving people the opportunity to enjoy a modern lifestyle that did not exist in this part of the world. The shopping centers we created have always been very different from the chaos around them: the very poor urban planning that existed in the Middle East, and still does today in some parts of the region. Outside, you couldn’t park your car, you couldn’t safely cross a street, the weather was unpleasant. You walk into our mall and you go, “Wow.” It’s so different.

By rewiring the company, we have augmented these physical spaces, giving them an additional dimension. Digital is just an extension of who and what we are. It’s a channel to create a stronger, more profound, and more intimate bond with our customers. Technology allows me to know you and to understand you better, without necessarily having to interact with you. It’s the key to letting me know you as a customer rather than a consumer. When you come into a store, I can acknowledge you digitally. I know your name, who you are, what you do, what you like, and so on. I can do that better than I could with just the physical dimension. And I can do it at scale, thanks to technology. Generating these insights and translating them into business decisions have been transformational, representing an inflection point for our business.

One of our businesses is grocery retailing. Let’s say you’re a vegetarian. Until recently, the world was dominated by the supply chain. If I have good prices on meat, I’m going to push meat at you. I didn’t care if you were a vegetarian. It’s a blanket approach. However, now when you come into the store, I can point out the bargains on vegetables. If you’ve told me you’re on a diet, I can tell you that you can fill your basket with products that total 8,400 calories, not the 12,000 you’ve got in there now. And you develop an appreciation for me, of course. If you come to my theater and I know you like action movies, I’m not going to invite you to a romantic Bollywood feature. I’ll invite you to an action movie, and since you have kids I’ll offer you a treat.

This digital addition works in other ways, too. In the past four years, my main competition changed. My main competitor isn’t the guy across the street or at the other end of town anymore. Instead, my competition has become those global giants that have very meaningful capabilities, technology, research, funding, and brand appeal. Suddenly, my main competitor is not another great mall; it’s Amazon. It’s not another cinema; it’s Netflix. It’s not a better hotel; it’s Airbnb. These disruptors are fundamentally changing business models across the world, and no business can claim to be immune to these changes.

This gets to why we had to transform ourselves. For us to continue to be in business, we simply must be better than these new competitors in our markets. It’s not even a matter for discussion. If we’re not better, our customer is going to leave us because, in five years’ time, the world will be in my customer’s hand. This may already have existed in Europe and the United States five years ago, but it only existed notionally here. Now it’s our reality.

The Quarterly: So has this transformation helped you weather the COVID-19 storm?

Alain Bejjani: This is a scenario that you could have never imagined possible, even in our worst-case risk and business-continuity planning [exercises]—to shut down the business for an indefinite period of time, with no idea whether people are going to come back to you or how much they will consume if they do come back.

Had this happened to us in 2016, we would have been left on the curb. But because of all that we have done in the past few years to accelerate digitization and drive a step change in our understanding of our customers through data and analytics, we have been able to continue to serve our customers in the best possible way, continue to be their option of choice despite the difficulties.

Our rewiring of the organization was extremely handy—we have a high-performing online business; we continue to be the number-one grocery retailer for this part of the world; and we are growing at scale. We wouldn’t have been able to do that in 2018 or ’17 or ’16, even if we had all the money in the world. It’s not about money. This is about the ability of your organization to shift gears dramatically, 180 degrees, in a span of ten days.

We continue to have a physical, brick-and-mortar network, and our customers will come back to that. But if we didn’t have well-developed digital capabilities, we would lose out on a once-in-a-lifetime opportunity to acquire customers and establish a strong bond with them. The biggest problem in digital is the cost of acquiring a customer. Now, the customer is coming to us and saying, “I want to be your digital customer.”

The Quarterly: You talked about tremendous uncertainty. How do you try to interpret what’s a speed bump and what’s a real, permanent inflection point?

Alain Bejjani: In times of uncertainty, you just have to do the right thing and forget that there are speed bumps. You cannot be defined by the speed bumps you may encounter on your path—we simply plan for the worst and work for the best. The only thing that you can actually control in this situation is your costs. You can’t control revenue or profits. Anything beyond that is just luxury, and you can’t afford luxury in such times.

The Quarterly: How do you cuts costs in a way that’s consistent with your purpose?

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‘People are our most important asset’

Alain Bejjani: It’s actually very simple. The reality on costs is that in a growth environment, you develop a higher tolerance for costs building up. You live with a high cost base, and it all makes sense. But then this kind of situation comes along, and it’s a great opportunity because it gives us the ability to ask, “What do we really need?”

The first cost to slash for most organizations is people. When companies are not clear about their purpose, they simply cut people first, because other costs you have to negotiate—you have legal obligations, you have commitments, and so on. We’re very clear: people are our most important, precious asset. With people, we can rebuild. Without our people, we can’t. So we have committed that we’ll have no layoffs or cuts to basic salaries because of COVID-19; however, we may let people go during this time, due to performance issues. Other organizations are slashing people and saying, “I don’t need you today.” You can’t treat your people as fungible assets.

The Quarterly: How resilient has MAF been during this crisis?

Alain Bejjani: If you haven’t built resilience during good times, you’re not going to find resilience during bad times. You have to build an organization to withstand adverse economic conditions. Being prudent is critical.

The most important buffer right now is liquidity. When you lose your liquidity, all the financial markers become red and everything gets impacted. We have developed, over time, a buffer of about 36 months of liquidity, which we did not need during good times, but now it will prove very critical to our ability to weather the storm and thrive after it is over.

This is not the last pandemic. Companies should think about that as they reflect on what they did before COVID and whether they were prepared or not. Companies should ask themselves, “Why don’t we have more liquidity on hand? What actions did we take in the past that were short sighted, and where did we trade our future in order to save our present?” Guess what? Sometimes it rains in the summer. I think people are going to discover, during COVID, the benefits of being prudent from time to time.

The Quarterly: How about your employees? How have they responded to COVID-19?

Alain Bejjani: We’ve been making a big bet on localization for about ten years now. That’s important because suddenly you are a local company in these countries. People feel that it’s their company, not a foreign company operating in their market.

I am so impressed by how willing people are to go above and beyond for the organization—frontliners putting themselves in harm’s way to serve our community and customers; people working 20 hours a day, doing things that they have never done before.

On one hand, we experienced a big spike in demand for online grocery, while, on the other, we had malls and cinemas that were shut down. We redeployed some of our cinema employees into groceries, online, and the fulfillment centers. In two days, we reskilled 1,000 people. They went from doing something that they understood to doing something they didn’t know anything about. It has been amazing.

The Quarterly: Will people have the option of working from home or an office in the future? How would the organization evolve if that happens?

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The workplace is going to be much more transient

Alain Bejjani: We are going to be working more from home because we have realized it works very well and people enjoy it to a certain extent. I think workplace dynamics are going to change; the workplace is going to be much more transient. This trend is a fantastic opportunity because it may give us the opportunity to tap into global and regional talent. In the coming 12 to 24 months and beyond, we’ll be hiring people from Scotland or Maine or Tokyo—and they won’t have to relocate. I’m very excited about that prospect.

The Quarterly: Then what happens to the in-person experience?

Alain Bejjani: The in-person experience will always be important, but it’s not an either/or. Let’s say we have been relying, notionally, on a 100 percent in-person experience. Now, we’ll probably move to a 60/40 in-person/out-of-office experience and, eventually, to 40/60. Obviously, if you are in charge of a location-based activity, you have to be in that location. If you run a store or a cinema or a shopping mall—if you are in customer service—you will have to be there. But we will need to review our activities and be much more strategic and mindful about where an in-person presence is required and where it isn’t.

The Quarterly: As you look out at the future, what are the qualities in leadership that you’re looking for? Has COVID-19 changed that at all?

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Fit for purpose

Alain Bejjani: Going forward, resilience and agility will be extremely important—they were somewhat important before but are becoming much more so. I think we’re moving from a world of specialists toward a world of generalists. Generalists have been very underrated. We need more of them because the issues that are being raised by technology, AI, and machine learning are complex, and the problems we will need to solve are multidisciplinary in nature. Leaders need to adapt to all kinds of different circumstances, and generalists can succeed when life is so fast and volatile. We’re in the midst of a disruption no one anticipated, and I believe we will need more generalists to lead in disruptive times, whether they’re caused by technological shifts or this unimagined pandemic.

The Quarterly: What has changed most for you as a CEO during the COVID-19 crisis? And related to that, what are the unique things that only you, as CEO, can do to help the organization through this?

Alain Bejjani: There are similarities between leadership in normal times and leadership in crisis. However, during a storm, there is an accentuation of certain qualities. For example, you always have to be calm. But calmness is more appreciated when there is a tsunami than when the sea is calm.

I’d like to drive the organization to a point where people forget that I exist—they go about their lives, and they don’t need me for 99.9 percent of their decisions, but they know that I’m there if they need me. That’s an organization that is fit for purpose, that has the ability to lead itself without having to escalate all decisions.

So in my view, the CEO has to do two important things at once. You have to be calm, driving optimism and inspiration, and at the same time you have to vanish into the background. Managing in the background doesn’t mean that people don’t see you—but it does mean that they don’t need you. There’s a difference between people seeing you clearly and people needing you. If people need you, you’re a bottleneck. If people see you, you’re an inspiration and represent their North Star. That’s extremely important. In this time of crisis, I’m trying to be very visible but not needed.

The Quarterly: What challenges exposed by the pandemic should CEOs as a group come together to help address?

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If people need you, you’re a bottleneck

Alain Bejjani: I am a big advocate of rebuilding the partnership between the private sector and the public sector and making sure that business, government, and civil society have a truly constructive dialogue to drive things forward. In this kind of situation, we are all naked. We need institutions and constructive dialogue. That’s why multilateralism is going to come back, and much stronger. It shouldn’t come back in the same old way. Multilateralism matters even within a single society.

This crisis presents a great burning platform to bring people together. Employers have a big role to play because employers enjoy the highest level of trust compared to governments and even NGOs [nongovernmental organizations]. This capital of trust is very important and something CEOs should leverage going forward. We should be at the bridgehead for change. Governments cannot win, cannot deal with the complex issues of our time, without business. Business, in turn, cannot win without government and civil society.

The whole world is going to go through a rethink of the structures that sustain the global economy. We will even address issues like “What does value mean?” and “What is true worth?” Today we think in terms of returns and value. We don’t think about worth. For the past decade or two, many traditional businesses have had the least value allocated to them. But now we’ve seen that these sectors are the most worthy: healthcare, agriculture, food retail. This crisis has shown us that the greatest drivers of economic value creation are, in fact, the essentials, such as strong health and well-being. What’s really important in life if one cannot get a cucumber or a tomato?

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