John Wills says most executives fall off the management track. Sammy Dallal / The National
John Wills says most executives fall off the management track. Sammy Dallal / The National
John Wills says most executives fall off the management track. Sammy Dallal / The National
John Wills says most executives fall off the management track. Sammy Dallal / The National

High flyers sometimes in for a crash landing


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John Wills is the London Business School's director of accelerated development programme. On a recent visit to Dubai, he explained why so many executives are falling off the management track.

You've looked closely at what is called "executive derailment". What does that mean?

It's really what per cent of individuals do not reach the next level in their career. They were on track, they're high potential and looking like they'll make it to the senior level of their organisation - but something happens and they suddenly derail.

So what happens?

They suddenly find themselves where they're no longer able to advance because there's a misfit between their personal skills and the new job they're meant to take on. What happens is something about the work that they do changes.

And they don't change to adapt to that new job?

Yes, that's quite the problem. They don't change. The work changes around them.

What portion of executives get derailed?

The numbers are a little scary. If you had 100 managers identified as high potentials by their employer, only 25 per cent would still be on track after five years.

That means three quarters of them are out of contention for top spots at that company. What happens to these managers?

About 25 per cent plateau. Another 25 per cent get fired or are made redundant. Another 25 per cent leave the organisation because they either get recruited away, or they decide to leave.

At what point in their careers are managers most likely to derail?

You could derail at various stages of a career: early on, when you're going into your first management role. Any point between there and your second major career transition, from head of market or sales to running a business unit or country as part of a big conglomerate. The third [most common] point is when you move from running a subsidiary or business unit to an entire organisation.

Is this much of a problem in this region?

I get the sense this is the same in the Middle East, because of talent shortages with managers. You make these investments in people and they fail to deliver. That's quite expensive for the organisation.

How can companies help prevent this from happening?

Selfishly, we'd like to allow for continued opportunities for executive education. That's one of the more measurable and valuable ways. The second is the organisational culture, and understanding that individuals need to succeed and to get rid of barriers. Provide training. Individuals going into the most senior levels need to be mentored.

What should managers be doing to better their chances for advancement?

An individual has to take responsibility of this. They have to recognise they need to re-develop and continuously develop. They think they can do what they did in the past, and that's not going to work.

nparmar@thenational.ae

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

RESULT

Leeds United 1 Manchester City 1
Leeds:
 Rodrigo (59')
Man City: Sterling (17')

Man of the Match: Rodrigo Moreno (Leeds)