|At Suq Al Mal, we continuously drill down to leverage key learnings to synergistically align our core competencies and core values to create scalable opportunities to move the needle while maintaining bandwidth capacity best practices .....|
One further introductory note.
What follows is not so much a criticism of GFH’s new strategy as a commentary on how that strategy was presented.
Image, morale all have their part to play in corporate success. As a participant in such exercises, AA always felt that these rituals and the rhetoric that accompanies them need to be controlled to avoid overstatement–which can well undermine their fundamental intent.
To start things off a headline blurb from GFH’s 2014 Annual Report (AR):
“There are those who prepare for change and grow stronger because of it, while others struggle to come to terms with the inevitable. We believe our remarkable brand needed a bold and considered change and we have been preparing for the right time to make the required transformation.That time is now.”
“Bold” yet “considered”. Launched at just the “right time” to make a “transformation”.
Some initial reflections on the above:
“Come to terms with the inevitable” sounds rather ominous. Apparently, it wasn’t only a question of business. GFH didn’t see much of a future as a mere investment bank nor retaining the Gulf Finance House moniker--one element of the “remarkable brand” that unfortunately had to be jettisoned. Coming to terms has also resulted in a strategic decision to continue what the ill-destined investment bank GFH was doing but not to do so much in real estate. Luckily GFH’s preparations were finalized in time! From a more philosophical and perhaps even theological perspective does the new GFH’s change in strategy represent a repudiation of the regional adage that “real estate may get sick, but it never dies”?
“Remarkable brand” – it’s interesting that the focus is on “brand” rather than “business”. A case of corporate babblespeak? Or an indication that image rather than substance is the key focus? Sadly of late, the brand has been remarkable primarily for unremarkable (two euphemisms in a single post!) results.
“Bold and considered change”—what does it entail?
Besides changing its name, GFH the “financial group” has boldly separated out activities that Gulf Finance House—the apparently inevitably doomed investment bank—undertook. Its new strategy is to develop these businesses under newly created LOBs and thus diversify its portfolio.
In AA’s opinion this seems less bold than proclaimed.
Essentially it is largely more of the same in terms of activities. GFH is not entering the insurance business or exiting real estate completely. Either of these would be bold moves. The plan to diversify the business away from real estate is eminently reasonable given performance. Sensible rather than bold. Yet real estate will remain the core business. Fine-tuning not radical change.
From investment bank to financial group. By AA’s reckoning none of the new LOBs are outside the range of investment banking activity. Even the Goldmine and Morgan Stanley are now pitching middle market commercial banking services. And shudder some are into retail lending! Diversification is also a concept that is not foreign to most investment banks.
So why is “GFH transforming from investment bank into a financial group designated to offer a unique financial portfolio and maximize value potential to its shareholders” as we’re told on page 33 of the 2014 AR? For that matter why is GFH more concerned about maximizing value potential than in maximizing value realization? Should it be pursuing return of financial portfolios rather than their uniqueness?
Is there a compelling business reason or is this corporate imaging?
From where AA sits, this seems to be either
(1) rebranding: an attempt to create a new corporate persona to put some “daylight” between the new brand and what then is highly likely to be the old tarnished brand and/or
(2) kotodama. Names have power. If we change our name, our fate will change. In earlier days those who perceived the need for a name change consulted religious figures, numerologists, astrologers, etc. to help find appropriate and powerful new names and symbols. In these imagined more enlightened times, corporations hire corporate image consultants.
GFH now ventures forward as a self-identified “financial group” under a somewhat new (brand) name with a new and no doubt more powerful logo and apparently new corporate colors—all part of the customary and sacred corporate rituals that accompany this exercise. AA sadly did not notice if the preferred corporate font had changed—a step that some consultants say irrevocably seals the transformation.
In case you’re wondering given the apparent cynicism of the remarks above, AA bears his employer’s logo and corporate colors proudly by day with pitchbooks (yes, we have a preferred font and font size!) and by night with specially made pajamas. Pinstripe of course! And a more casual pair but only for use on nights of officially sanctioned casual dress days.
Before closing one further quote, this from GFH’s 2015 Annual Report cover which is a nice collection of corporate babblespeak favorite terms Boldface and comments are AA’s.
GFH Financial Group is on course to achieve steady and sure financial growth by following a clearly defined strategy [AA’s practical business experience suggests clearly defined is a key element in a good strategy, but while necessary, not sufficient]. As our 2015 Annual Report & Accounts illustrates, our brand’s vision to discover, innovate, and realise value potential [perhaps proof not that any is needed of corporate personhood. It’s unclear though if “vision” relates to imaginings of things that never were or of things that might be, etc. Special kudos for linking “vision” to action verbs.], has empowered us to diversify our sectors of excellence, as well as expand our geographical footprint.
I was hoping for “one-stop shopping”, “leverage”, “best of breed”, “best practices”, “global architecture”, and maybe even “evisculate”.
Something perhaps for 2016.