Orascom Development Group … Accelerating the Future

December 5, 2018 at El Gouna, Egypt (2 days)

Orascom Development Holding (ODH) is a leading developer of fully integrated towns, like the one here alongside the Red Sea in La Gouna. Escape from the bustle, crowds and pollution of big cities to live a better life.

That’s how billionaire Egyptian Samih Sawaris started out. He loved fishing. He found the perfect place in the peace and tranquility at a site 40 minutes north of Hurghada. He built a house here. Then started building more homes for his friends.

But is was isolated. They also wanted a community, so he set about creating one. Add everything from a marina to restaurants, cinema to fitness clubs, school and hospital, library and social clubs, horse stables to golf courses. Soon more people wanted to be part of the community too. Even for a more temporary visit, so hotels started to emerge. Its even a great place to locate your new business, and all your staff too.

ODH now has a diverse portfolio of worldwide destinations covering Egypt, the United Arab Emirates, Oman, Morocco, Montenegro, Switzerland and the United Kingdom. The group operates a total of 35 hotels with 8,016 rooms and controls approximately 100.3 million sqm of land. Only a third of it developed so far.

The opportunities for growth are immense. Also the ability to realise a vision of a truly integrated town. A place where people can love, laugh and live together. How life should be.

As for Samih, he has now stepped back from ODH to enable a new generation of professional management to lead the business. He is the second of three sons of Onsi Sawiris, the other two being Naguib Sawiris and Nassef Sawiris. He remains executive Chairman of the Board of Directors. As of 2011 his net worth was estimated at $1.4 billion, making him the 879th richest person in the world. He became a Montenegrin citizen in 2011, the location of one of his latest towns.

Sawiris family business … the back story

The Sawiris family is the wealthiest in Egypt, running a conglomerate with global interests that stretch from mobile phones in North Korea a new hotel resort in Switzerland, according to a recent profile in The Gaurdian newspaper

One of the Sawiris brothers is also an investor in a highly influential Egyptian newspaper and the owner of TV interests. Father figure Onsi, was born in 1930, the son of a lawyer in southern Egypt. He started out in agriculture, before switching to construction and becoming one of the country’s largest contractors. But his early business career was frustrated by the socialist government of Gamal Abdel Nasser, which prevented him from leaving the country for six years in the 1960s.

After a spell in Libya, he returned to Egypt during the more business-friendly regime of the next Egyptian president, Anwar Sadat. The Sawiris family have continued to prosper over the past three decades under Hosni Mubarak’s government. With Osni Sawiris now effectively retired, his three sons – all educated in western universities – each run different arms of the family empire, Orascom.

Eldest son Naguib, who was educated in Zurich, is executive chairman of Orascom Telecom and a media owner in Egypt. Nassef, a graduate of Chicago University, is chief executive of Orascom Construction Industries. Naguib is said to be the intellectual guru of the family, with strong connections in the Cairo political elite and liberal sympathies.

The Guardian suggests that he is said to be close to Mubarak’s son and heir apparent, Gamal, who has advanced some of the country’s neoliberal economic reforms. Observers of the Egyptian political scene say he is an advocate of a progressive, liberal future for Egypt. He is an investor in the newspaper al-Masry al-Youm, which was launched in 2004 and has earned a strong reputation for pioneering an independent editorial agenda. He also launched the satellite TV network OTV, which he describes on its website as a service “for young people, without religious or loud content”.

“We want to report on the good and bad qualities of Egyptian society but without being neither vulgar nor superficial [sic]. The aim is to attract the public’s attention onto itself and to make people reflect on who they are. Recently, television in Egypt has enjoyed more freedom and, though it’s not enough, it’s better than nothing.”

The Sawiris family’s wealth has made them a visible symbol of the huge gulf between Egypt’s rich elite and its impoverished millions. They are drawn from Egypt’s Coptic Christian minority, who form roughly 10% of the population, and Naguib has spoken of the importance of faith in his life. “What gives me strength and confidence is my belief in God,” he told US interviewer Charlie Rose. “I’m a very strong believer and this has been always the source of my strength, not the money.” Like his father and brothers, Naguib is undoubtedly a rich man: his wealth was estimated at $3bn, putting him just outside Forbes magazine’s list of the world’s top 200 billionaires in November.

Orascom Telecom runs Egypt’s leading mobile network, Mobinil, and has expanded into Algeria, Tunisia, Pakistan, Bangladesh and even North Korea, where it became the secretive communist state’s first mobile phone operator. But global expansion can be difficult: after Algeria defeated Egypt in a World Cup playoff in November, sparking violence in both countries, rioters in Algeria attacked Orascom’s offices at a time when the Algerian government had slapped the company with a huge tax bill.

And Naguib sold the company’s mobile business in Iraq over concerns about the need for fresh investment amid the country’s instability, while he has also spoken of the difficulties of doing business in China and India. He has also entered the European mobile market, with his Weather Investments vehicle, buying mobile operators in Italy and Greece.

Samih Sawiris has been active abroad too. Responsible for holiday resorts in the Middle East such as El Couna and Taba Heights, he has turned his attention to an eye-catching development in Switzerland, where he is turning a disused barracks at Andermatt into a resort with an artificial beach and a golf course.

Accelerating the Future … rethinking strategy and progress

We live in an incredible time. More change in the next 10 years than in the last 250 years.

New technologies are transforming the ways in which we live and work. Technologies enable incredible change. It is how we unlock their potential that matters.

The most innovative businesses see the world differently.

They don’t just seek to imitate the success of others, to compete in the markets of today, to frame themselves by their relative differences to competitors. Instead they play their own game.

I call them “gamechangers”, and have spent the last 24 months running competitions around the world, to find and rank the world’s most innovative companies by sector and geography.

So what’s the “game”? Well, in simple terms, it’s the market.

These companies go beyond innovating their products and services, their customer experienes and business models. They seek to innovate how their markets work.

Think of it like a sports game. How could you change the game? It could be anything from the pitch dimensions to rules of play, the team composition to the measures of success, the role of the referee to the participation of fans. Even the name of the game.

Now look at today’s most disruptive innovators – 23andMe to Airbnb, Brewdog to Buzzfeed, Casper to Coursera – they reframe, reimagine and redefine the market on their terms – who is it for, why people buy, what they pay and get, and how they work.

I’ve met and profiled over 250 “gamechanger” companies on my travels, in almost every sector, and in every part of the world. Corporate giants and start-ups, from Abu Dhabi to Berlin, Colombo to Qingdao.

There is no one way to change the game, but there are definitely some common traits:

  • Audacious – Gamechangers are visionary and innovative, but also daring and original; they seek to shape the future to their advantage.
  • Purposeful – They seek to make life better, in some relevant and inspiring way; they have a higher motive than just making money.
  • Networked – Gamechangers harness the power of networks, digital and physical, both business and customer networks, to exponentially reach further faster.
  • Intelligent – They use big data analytics and algorithms, machine learning and AI, to be smart and efficient, personal and predictive.
  • Collaborative – Gamechangers work with others, from ecosystems to platforms, social networks and co-creation, to achieve more together.
  • Enabling – They focus not on what they do, but what they enable people to do; and thereby redefine their marketspace, find new opportunities and redefine value.
  • Commercial – Gamechangers take a longer-term perspective, adopting new business models, and recalibrating the measures of progress and success.

Do you have a future mindset?

Today’s business leaders need a future mindset. That sounds obvious, but isn’t.

Most leaders have a “fixed mindset”. They keep stretching the old models of success. They stay loyal to the model that made them great, seeking to squeeze and tweak it for as long as possible. They seek perfection – to optimise what they currently do – which leads to efficiency and incremental gains.

Instead a “future mindset” is prepared to let go of the past. To explore the future, to experiment with new ways of working and winning. Failure is a way to learn, and innovation becomes the norm. Change is relentless inside, as it is outside. Innovation is their lifeblood. Like Jeff Bezos loves to say “it is always day one”.

With a future mindset, the CEO needs new attributes:

  • Sense maker – to interpret a fast and confusing world, to see new patterns and opportunities, what is relevant and not, to shape your own vision.
  • Radical optimist – to inspire people with a stretching ambition, positive and distinctive, to be audacious, to see the possibilities when others only see risk.
  • Future hacker – they start from the “future back”, with clarity of purpose and intent, encouraging ideas and experiments, leveraging resource and scale.
  • Ideas connector – da Vinci said innovation is about making unusual connections;  connecting new people, new partners, new capabilities and new ideas.
  • Emotionally agile – whilst organisational agility is essential, emotional agility matters even more; to cope with change, to be intuitive in making sense, and making choices.
  • Entrepreneur at large – keeping the founders mentality alive, hands-on working with project teams to infuse the mindset, to be the catalyst and coach.
  • Having grit – “gamechanger” leaders need to go against the grain, to persist but know when to move on, to have self belief and confidence, guts and resilience.

The future is a better place to start

Start from the “future back”.

Trying to evolve in today’s complex and confused world is unlikely to lead you towards a bright and distinctive future. It will extend your life a little longer, but it will be tough and uninspiring, with diminishing returns.

Instead jump to the future. I tend to start with five years ahead, although it may differ by company. 5 years is long enough to change the world, but close enough to be real. Start by creating a positive, collective and inspiring vision of the future market. What will it be like? What will people want? Why? How? Where? Then consider how to win in this new world.

This is where “moonshot thinking” can be really useful. “Why be 10% better, when you could be 10 times better?” 10 times more profits, more customers, more quality, reduced cost, reduced time. Whatever. By giving yourself a “How could we do it 10x better” challenge you take a new perspective, solve problems in different ways.

Be inspired by ideas from other places.

Explore how ARM or GE, Inditex or Netflix, Glossier or Novo Nordisk have changed their markets. Choose any of my 100+ “gamechanger” companies! How did they do it? How did customers respond? (Remember, they often serve the same customers as you!). You can’t learn much from competitors, but you can learn a lot from relevant parallels.

Copy. Adapt. Paste.

Customer insight also matters. Deep dives and design thinking, exploring the emerging trends and deviant behaviours. This can enhance and validate your ideas, but the problem with most customer insight is that it is filtered by our current world. You need something to disrupt your thinking.

I have a great box of disruptive techniques. Some are really simple – like break then remake the rules, like imagine its free then find a way to make money, like reverse polarities and many more. The point is to disrupt your conventional thinking.

From this, ideas rapidly emerge. You need lots of ideas about the future. But these are fragments of the real answer. The real creativity comes in fusing together into bigger “concepts”. These could be customer solutions, or new ways of working, new revenue streams, or new business models, and new market scenarios.

Once you have a clear and collective ambition for the future, it’s time to work backwards.  “If this is how we want to be in 5 years, where do we need to get to in 3 years, and then in 1 year?  Therefore what do we need to start doing now?” You develop a “horizon plan” for your business; a strategy roadmap if you like, but developed backwards.

The important thing is that by working backwards, you have jumped out of the morass of today. You’ve avoided the assumptions, limitations, problems and priorities of today’s thinking. You have a more inspiring “gamechanging” future, and have started to map out the steps to get there. Most likely with different priorities in the short-term too.

Of course the steps on this journey might change, but it’s going to be an exciting adventure.

Change the way we think, resolve the conflicts

In today’s busineses, we have created artificial divides in how we think and operate. Digital and physical seem like two different worlds, global and local seem like alternative strategies that cannot combine, many still struggle to align value to customers and shareholders in a mutually reinforcing way, and short and long-termism continues to confuse our priorities.

Our thinking within business, has created separate and apparently conflicting approaches. The opportunity is to make the combination of both approaches world – “fusions” if you like – to be innovative in the way you combine apparent opposites.

Digital and physical are two sides of the same coin.

There is only one world, unless you believe Ray Kurzweil, and it is the real one. It’s human and physical. Digital technologies are incredibly powerful, enabling people to connect, to work, to learn, to play in new ways. From mobile phones to blockchains, 3D printing and augmented reality, digital allows us to do more, do it faster, do things we could never do before. But it’s still about humanity.

Start with people. How can you enable them to achieve more? To live better, to have more fun, to do better for the world. Whatever matters. I work closely with Richard Branson and his Virgin teams. Their mindset is to “start from the outside, and then work in”. Design a better customer experience. Built on your ambition and insight, and then explore how you could deliver it with new and existing capabilities.

Global and local are opportunities for every business.

I love Amazon’s “Treasure Truck” … Most of us have never connected with Amazon beyond the website and the delivery guy. Amazon is huge, global and anonymous. But the Treasure Truck is real. It travels around the country, bringing its pop-up store to local neighbourhoods, fun and games, bargains and demos. For Amazon, it’s a chance to make real connections, listen to people, and to be local.

We can all see a backlash in society against relentless globalisation, huge corporations, and social inequality. We see a lack of trust in brands, and know that authenticity matters. Etsy shows us that even the smallest and most local artisan businesses can also be global. For every business, local and global markets are within reach, however it’s also about combining scale and standardisation, with relevance and individuality.

Ideas and networks should be the core of your business.

Gamechanger businesses need a compelling idea, a core purpose, an inspiring proposition, that can spread fast and contagiously. In a digitally-fuelled world, the most innovative businesses embrace “ideas and networks” to drive exponential impact – like WhatsApp creating $19bn in three years, Airbnb $40bn in 9 years, Alibaba $476bn in 18 years, Amazon $740bn in 23 years.

Think about that concept of “exponential” … The power of networks – be it franchisees, or distributors, or customers and users – lies not in the number of members, but in the connections between them. Networks have a multiplying effect. Exponential. Consider, for example, Rapha, the sportwear brand that brings together people with a passion for cycling, who conveniently meet at their “Cycle Club” stores, and buy their premium gear. A fantastic “ideas and networks” business.

Finally this idea of short-term and long-term being in conflict with each other.

Jeff Bezos never has this problem, nor Elon Musk, nor Richard Branson. They focus on the long-term, recognising it will require some years of investment to get there. They all of course lead privately-owned companies. But every public company has the same ambition to innovate and grow. And so do most of their investors, actually.

The reality is that any company’s stock market performance is based on its future earnings potential, not its past. The better you can engage with equity analysts, journalists and investors themselves to explain why you will deliver a better future worth waiting for, then you get their support. If you don’t engage them in your future vision, plans and innovations, then they will default to looking for short-term evidence. It’s really in our hands, to work together to create a future we want to invest in. And to share the greater risk and rewards.

Time to embrace your future mindset

We live in an incredible time … More change in the next 10 years than in the last 250 years … remember? I know that sounds a little crazy, but think about Hyperloop in 3 years, a tipping point to electric cars in 5 years, Mars missions in 8 years. They are all real, and possible.

Digital platforms connecting buyers and sellers in new ways, blockchain having the potential to transform relationships and trust, 3d printing having the potential to transform value chains to deliver anything personalised and on-demand, AI and robotics giving us the capabilities to be superhuman in our minds and bodies.

These are just some of the fantastic new capabilities that enable us to innovate beyond what we can even imagine today. The future isn’t like the future used to be. We cannot just evolve or extrapolate the past. Today’s future is discontinuous, disruptive, different.

It is imagination that will move us forwards … unlocking the technological possibilities, applying them to real problems and opportunities, to drive innovation and growth in every industry, in every part of our lives.

Imagine a world where you press “print” to get the dress of your dreams, the food of your fantasies, or the spare parts for your car. Instantly, personalised and on demand. Think then what does that mean if we don’t need the huge scale of manufacturing plants, warehousing and transportation. Maybe we will even subscribe to the IP catalogues of brands, rather than buy standard products, in the ways we currently subscribe to Netflix.

Time to embrace your Musk mindset … Unlock your Einstein dreams and Picasso passion … Embrace your Mandela courage and Ghandi spirit. Be more curious, be more intuitive, be more human. Ask more questions. Don’t be afraid to have audacious ideas, to challenge the old models of success, and turn future ambitions into practical profitable reality.

How else did Zespri reinvent the Chinese gooseberry as the kiwi fruit? How else will SpaceX reach Mars by 2025? How else did Netflix came to be, or NuTonomy, or Nespresso, or Nyx?

This is why 23andMe’s Anne Wojicki wont give up in her quest to make DNA analysis available to everyone, and to ultimately find a cure for cancer. And it’s why Jack Ma didn’t give up as he rose from $1000-per year English teacher to technological royalty.

The secret is the future mindset.

To realise that the future is malleable. So we need to grab hold of it, and shape it in our own vision. To our advantage.

This is what “gamechangers” do.