Question: Embracing Change Through Operational Leadership
From a Lebanese family-owned small business to a leading multi-line conglomerate in the Middle East and North Africa (MENA) region, Khalil Fattal & Fils (KFF) Holding (www.kff.com.lb) is the exclusive agent and distributor of many multinational brands within the following categories: food and beverages, home and personal care, beauty and accessories, household and office equipment, consumer electronics, and pharmaceuticals. The corporation now employs more than 2,100 individuals with a turnover of approximately US$650 million. Over the course of 114 years (1897-2011), the corporation has gone through many successful structural changes hat have shaped the business and contributed to its success.
At the base of this success is the owners' philosophy, which drove the corporation toward its vision and instilled solid corporate values that have increased performance and created a spirit of unity among its members. At the beginning of 2002, the owners gathered 30 of their top managers in a retreat to define the corporate culture in the coming years. The team succeeded in drafting a mission that enlarged the scope of the corporation's activities to "reach out to millions of consumers in the Levant and North African countries." (The Levant is comprised of Lebanon, Syria, Jordan, and Iraq.) The team also adopted a set of corporate values that were disseminated to all other employees through workshops and group discussions. The corporation's core values revolve around trust, respect, sharing, and courage, with a specific set of expected behaviors for each value.
Under the value of courage, embracing change was selected as the main behavior for individuals who aspire to succeed in their careers with the group. This is now stated in the corporate manual as "embrace change as an opportunity to grow," and employees are invited to accept rotation in their assignments every four to five years, or whenever needed, not only in Lebanon but also throughout the region where the corporation operates. To conduct business in the MENA region, it is a legal requirement that local partners and employees be engaged. Hence, to ensure the operation's success, the corporation decided to relocate part of the management team to its subsidiaries in Syria, Jordan, Iraq, Sudan, Algeria, and Egypt. Although these countries share a common language (Arabic) with Lebanon, their social, economic, and political systems differ.
As a result, some managers were reluctant to relocate outside their home country. This became a major obstacle that needed to be resolved. To overcome this impediment, the KFF's CEO took the initiative and moved ahead of everyone else to ensure a satisfactory setup and even asked some members of his family to accept these new foreign assignments, thereby setting the example for others to follow suit, and many managers did. To further motivate these managers, an attractive financial package was offered, including fringe benefits such as housing, schooling for children, expatriate allowances, and longer vacations. This rotational path has since become part of KFF management's recognized fast track for career progression within the group. KFF's expansion throughout the region exposed the corporation to new kinds of customers, such as hypermarket chains. This necessitated a change in the business model, which required new knowledge and techniques and raised awareness of the need to enhance employee skills. Accordingly, the corporation took the initiative and provided employees with intensive training and workshops aimed at improving the competences and skills of its workforce. As a result, it was better able to meet the expectations of its customers and suppliers alike.
1. What were the forces that necessitated change in the organization?
2. Why is it so difficult for individuals to accept change?
3. What were the forces that helped make the change process smoother.