Business Agility for a Competitive Advantage in the Middle East’s Evolving Markets
With ICT investment and digital transformation efforts growing across the GCC, driven by initiatives like the ‘We are the UAE’ 2031’ Vision, many organisations still face challenges with legacy systems and rigid processes. As we move beyond a quieter-than-expected summer in the UAE, it’s worth reflecting on how businesses in the region can build resilience and agility through digital transformation, especially in today's uncertain economic landscape.
Key Insights from the Past Four Years
As I reviewed trends from the last four years, some important patterns emerged:
Digital adoption reduces operational costs and improves customer experience
Companies continuing their digital transformation journeys during economic tightening report better customer retention and faster recovery
The data offers a powerful message: organisations that invest in digital agility are weathering uncertainty better.
While these insights may be well understood by those in the tech and digital sectors, the path to achieving a progressive, agile business model is often far from straightforward. For well-established businesses, particularly those with deep roots in tradition and legacy operations, this journey requires careful, sustained effort, continuous improvement, and thoughtful investment across all areas of the business.
In my role as an Enterprise Agile Coach, I emphasise the need for digital transformation through a shift in mindset. For seasoned business leaders, especially within esteemed legacy businesses, it's about building upon the strong foundation they’ve established and progressively positioning their operations for a global stage.
Establishing a mindset shift requires a shared understanding among leaders that transformation is not a project, and agile is not a goal. Rather, transformation is an emergent and ever-evolving journey. In today’s dynamic economic landscape, particularly in the Middle East, embedded agility will be crucial in steering organisations toward success.
AGILITY & TRANSFORMATION STATS OVER THE PAST 4 YEARS
With global economic shifts impacting businesses in the region like never before, the question arises:
how can the UAE continue to thrive in times of uncertainty and deliver on the ambitions laid out in the ‘We the UAE 2031’ vision?
As highlighted in the UAE's strategic vision, the government is striving for:
“A competitive value-adding, diversified economy that grows at a high rate, that focuses on new strategic areas, excels in well-established key sectors and dominates future potential sectors, while positioning the UAE at the forefront of the digital economy and strengthening its role as a leading force in the energy sector.”
2020-2021: Accelerating Digital Agility
McKinsey reported that COVID-19 sped up digital transformation by seven years across industries.
Source: McKinsey Study, Published October 2020
2022: Customer-Centric Agility Driving Growth
The Business Agility Institute’s (BAI) 2022 Report revealed that companies adopting customer-centric agile models saw a 32% increase in customer retention and a 25% improvement in revenue growth. However, resistance to change remained a key challenge, even as agility gained momentum post-pandemic.
While global business agility saw improvement, the report’s limited Middle Eastern coverage (just 6% representation from the region) suggests there’s room for local insights into these trends.
2023: Navigating Economic Pressures Through Agility
Amidst economic downturns organisations typically deprioritise innovation and transformation, consolidating focus on cost-cutting efforts. According to the BAI’s 2023 Report, this was the first year in five where global agility regressed. Companies turned inward, reducing transformation efforts, which led to a drop in the number of organisations reporting cross-functional agility from 26% in 2022 to 18% in 2023.
Despite this trend, high-performing companies continued to thrive by emphasising efficiency, dynamic funding models, and value stream management.
While I’ve unfortunately witnessed the layoffs of many highly experienced peers over the past year, both in the UAE and among my network in London, it’s essential to clarify what true efficiency looks like within the context of transformation. It goes far beyond cost-cutting or layoffs.
Moving away from agility-focused initiatives and transformation roadmaps in the name of cost savings is a short-sighted approach. This strategy risks long-term harm to the organisation.
At the core of an agility transformation journey, organisations must tackle the root causes of inefficiencies, such as:
Complex structure / organisational design
Unclear roles and responsibilities
Unwieldy governance model
Redundant activities
Unclear processes
Slow approval mechanisms
Too much time on low value activities
Looking Forward: What’s Next for the Middle East?
The Middle East's economic outlook for 2024 remains optimistic, with the IMF projecting higher GDP growth in the GCC compared to the US, China and many European economies. This creates an opportune moment for businesses in the region to leverage agility to future-proof their operations.
As reported by Deloitte in their Digital Frontier report, the Middle East region is actively embracing emerging technologies, which is part of larger efforts toward economic diversification and sustainable development. This includes digitalisation strategies driven by e-government services, cybersecurity initiatives, and cloud-first strategies.
The potential is clear: organisations that continue to invest in agility while implementing digital transformations are positioning themselves for sustainable growth and resilience in an evolving market.
Takeaways for Middle Eastern Organisations
Identify and address organisational inefficiencies - Streamlining operations by pinpointing inefficiencies such as redundant processes, unclear responsibilities, and bureaucratic delays allows for more agile, responsive decision-making
Agility improves resilience - Companies that embrace agile practices are better equipped to handle economic uncertainty and market volatility
Customer-centricity is key - Organisations that focus on customer-centric agile models see increased retention and revenue growth
Overcoming resistance to change is essential - Business agility requires cultural shifts, especially within long-established organisations
Agile transformation fuels innovation - In a region looking to accelerate digital transformation, agility enables faster adoption of technologies and future-proofing strategies
How has your organisation navigated digital transformation and agility in the Middle East’s evolving markets?
What challenges are you facing, and how are you overcoming them?
A Little Disclaimer:
My words are my own. Whilst Chat GPT is an amazing resource to check my grammar, suggest better formatting and provide catchier headlines when my brain fog sets it, it cannot provide verifiable data without substantiation. It cannot replace experience or the passions and inspirations which fuel our professional lives. The data and trends I have included have been substantiated via the sources detailed below. The insights given in this article are based on my +21 years professional experience, my +6 years in senior leadership roles in The UAE and my own wide-ranging research. If this article has resonated with you please feel free to comment and share, feedback is always welcome and appreciated.
Sources:
McKinsey ‘How COVID-19 has pushed companies over the technology tipping point - and transformed business forever’ Published October 2020.
Business Agility Institute ‘The Business Agility Report - Business is the New Normal 5th Edition 2022’
Business Agility Institute ‘The Business Agility Report - Leading Through Uncertainty 6th Edition 2023’
International Monetary Fund ‘Steady But Slow: Resilience Amid Divergence’ Published April 2024
Deloitte ‘Qatar’s Digital Frontier: Mapping the future of Skills’ Published February 2024