Corporate diplomacy challenges in the Middle East: the need to redefine roles and alliances

  • The Middle East seems to have its own internal dynamics of regional cooperation, stakeholder’s interactions for economic growth and business development strategies

  • Corporations need to develop ad hoc diplomatic strategies, partnering with public and private stakeholders

Today the world economy is being impacted by simultaneous global challenges as never before. Multiple game changing factors are overlapping, making the future of business development more complex than ever. Environmental challenges, technological impacts, health threats, security concerns, global consumers’ growing awareness and global competitiveness are accelerating the need to reinforce international companies’ priorities, narratives, visions and strategies. All these impacts require rethinking and reinforcing alliances among partners and new stakeholders. 

The nature of the world's geopolitical and economic competition today is based more on reputation, competitiveness and sustainability. There is a renewed global competition to promote and strengthen business and investment, to attract international talent and innovation, to bring quality flows of tourism and to improve the sophistication of the companies’ strategies to consolidate and grow internationally.

Ad hoc diplomatic strategies

In this international context, the Middle East appears to be essential in this global battle of geographic and symbolic redefinition of trade and geopolitics. But the region seems to have its own internal dynamics of regional cooperation, stakeholder’s interactions for economic growth and business development strategies. International players need to translate their own corporate approach into the regional language in order to understand how to deploy their own regional strategies.

In a challenging context like today’s Middle East, corporations need to develop ad hoc diplomatic strategies, partnering with public and private stakeholders in a landscape undergoing intense redefinition. These new strategies need to be inclusive to secure both their business and reputation while navigating the waves of potential adversity.

The economic ecosystem in the region is complex, with a dense and sometimes confusing net of public business and financial institutions playing a significant role in business development. Having a deep and comprehensive knowledge of the rules of the game and the stakeholder’s constellation is itself a complicated task.

The countries of the Middle East have witnessed in last few years how digital social activism is having a growing impact on business reputation due to the involvement of Millennials, representing more than 60% of the population in many of these societies. This digitally savvy segment is increasingly assertive and demanding with respect to business behaviour and brand reputation. And they can be partners or haters.

This complex regional geopolitical and socioeconomic puzzle has inevitably evolved the business and managerial role of the Chief Executive Officer (CEO) of big corporations: it has become rather a sort of Chief Geopolitical Officer (CGO). This position requires taking into consideration many more non-business variables and stakeholders in the decision making process.

Thus, for organisations and companies that struggle to grow in the Middle East, public affairs teams have a critical role to play in navigating their Executive teams through these troubled waters. Deep analysis, better strategic risk planning, trustful understanding of the main dynamics and sharper tactical execution are all important tools to deploy in this context. 

As reputation is a holistic factor, it requires adapting the purpose of the company to the new regional context that is quickly being redefined. It requires embracing the local values in a context of uncertainty. Companies interested in the Middle East should update and redefine their corporate strategies to promote their legitimate interests acknowledging today’s high regional sensitivity for good corporate reputation.

As an example, today cities and citizens are becoming more influential and powerful in the region, demanding a greater role in the development ecosystem. Corporate strategies should identify relevant players and interests of both and incorporate them into their reputational schemes. The social needs and economic potential of the cities are growing, offering opportunities for different sorts of public-private cooperation schemes, beneficial for all the involved: society, authorities and the partner company.

A unique momentum for corporations

The social and economic impact of Covid-19 has brought to the public and political debate the need for improved public-private cooperation schemes, bringing an opportunity to improve trust among these regional historical reluctant partners: the private and the public sectors. This context offers corporations a unique momentum to establish long term partnerships with both public and social stakeholders that can generate virtuous circles of cooperation and reputation. Developing innovative approaches and cooperation schemes in the context of such special needs can have a longstanding reputational impact for the companies involved, as well as a positive social impact.

Another significant challenge that companies need to increasingly incorporate in their external strategies is how to attract the new audience of young generations using their own channels of communication. Grass root open innovation initiatives; university developed digital technology entrepreneurship ecosystems; or regional influencers are all blossoming in the main cities of the Middle East. Understanding their needs and including them in the corporation strategy of growth is of critical relevance. This inclusion would help corporations to define the ‘next generation’ of corporate reputation that will have to be addressed directly to the future generation of decision makers and agenda shapers. Several global technological and service multinationals have already involved themselves in this sort of value added partnerships and entrepreneurship promotion, weaving new synergies.

Social grass roots involvement and engagement of corporations is increasingly relevant to generate constructive synergies among stakeholders. Thus, some Middle Eastern multinational have already seen the benefits of establishing national or regional business competitions in fields that deliver social benefits. Contents and awards in sectors such as green or circular economy promote incentives to entrepreneurship and innovation, bring reputation to the companies involved and give responses to real social needs. By developing these win-win engagements, alliances among relevant stakeholders, public and private, grow stronger, become more stable and generate mutual trust. 

Corporations permanently need to understand and adapt to the ecosystem in which they operate. In a changing Middle East, with a challenging global innovation attractiveness, value added economic growth dynamics, multicultural societies and international geopolitical tensions, public affairs are an absolute needed tool for corporations to establish complicities, manoeuvre, adapt and succeed in the region.

By Javier Albarracin, MENA Director

Public Affairs Experts - November 25th, 2020

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