Fadi Ghandour: Culture is the ultimate differentiator

Company culture is the ultimate competitive differentiator, says Fadi Ghandour, Jordanian entrepreneur, investor and initiator of a whole entrepreneurial movement in the Middle East.

Ghandour led his company Aramex from startup through scale-up to global publicly traded giant facing different challenges at each growth phase. The company employs 14,000 people and trades with a $1.3 billion market capitalization on the Dubai stock exchange. Ghandour now concentrates on helping entrepreneurs in the Middle East.

A company that enters a market with the ambition to grow and win must have a strong culture and shared values, he says in our boatside chat.

The old model of command and control does not work in fast-growing customer-focused companies with a dispersed organization – which is what most modern companies are. The values that the organization shares must be present inside the organization and also outside it. Every employee is a standard-bearer for the company, both at work and outside it.

The people may represent many different national cultures and ethnicities, yet as employees they all stand for the same set of values. To enable the company to grow fast while being highly customer-focused, organizational hierarchies need to be as flat as possible. Strategy and culture is global while customer service is local.

Company culture is something you arrive at and write down, advices Ghandour. Then you can use it to inform potential new hires and train those who join the company. Employees who don’t subscribe to the company culture will find more suitable careers elsewhere.

As you distill the culture of your own organization, here are some practical hints from Fadi Ghandour:

Culture is glue

  • Corporate culture is the glue that keeps the company together.
  • The key persons building the company culture are the CEO and the senior management team. If they don’t do it, no one else will. To do this they need to be open to input and influence from the organization. Culture trickles down and trickles up at the same time.
  • The culture must be talked and walked and made to happen by engaging those inside the organization. Culture takes time to happen. It is not a policy. Everyday behavior must be consistent with the culture. It is not possible to talk about it one day and not do it the other day.
  • Although a strong company culture will not change much, it is not a culture if it doesn’t change with time. Companies evolve and the culture needs to keep up with reality.
  • Customer centric culture will not happen without immediate and quick communication within the organization. Middlemen translating between senior management and people on the front lines are a hindrance.
  • Democratizing the organization makes it human and so does caring about the community outside the business. As a result, employees and customers become more committed to the company.
  • Every employee needs to be trained in the culture. The culture should be a story that is communicated to everyone and a requirement for every single person that comes into the organization. Culture defines how people treat each other and conduct themselves inside the organization.

TRANSCRIPT

Marten: Welcome to the School of Herring, Fadi Ghandour, Jordanian entrepreneur and investor. Actually you have started a whole entrepreneurial movement in the Middle East. You’re based in Amman and Dubai, and a lot of new start-ups are coming up in that region.

Fadi: Thank you very much, it’s so good to be here. It’s exciting to be in Stockholm, enjoying fantastic weather for a change.

Marten: Exactly, Stockholm is a wonderful city. Let’s talk about culture now. When you give advice to a start-up CEO, how do you build company culture? How do you deal with a company with multiple ethnicities and cultures involved? How do you go outside of your own country?

Fadi: I’m one of those people that say culture is the ultimate differentiator in a business. It’s extremely strategic. It’s extremely important for any CEO that wants to build a business and build it for the long run, and build for value, and keep employees inside the organization, and attract fantastic talent. Other than having technology, and other than having a proper product, which is important for every company.

What distinguishes a company from any other company that keeps the most important asset which is fantastic talent, is what sort of culture you want your organization to be.

What values does it have? How do you actually deal with each other, how do you conduct your business, how do you portray yourself to the world. What do you want the world to think about, when they think about you, other than your products. Why should you be the company that people want to come to?

These are very serious issues that CEOs at any level of a business, at any level, from a start-up stage, up to growth, up to really big businesses. They need to think very seriously and go out and actually talk that culture, walk that culture, make it happen, engage the people that are inside the organization. Because it will take a while for that culture to happen. It’s not a policy.

Marten: Do you think that culture is just the CEO and the personality of the CEO, or does the culture start in the organization?

Fadi: It definitely starts in the organization, but the key person in this company in this story is the CEO and the senior team. Because if they don’t play ball, if they don’t want to be part of that process, if they don’t lead it, if they don’t walk it, if they don’t make it, people won’t believe.

It has to trickle down, and it has to trickle up at the same time. It’s a bottom-up and a top-down part of a process because in today’s world, organizations are really very flat and everybody engages. It’s the team and networked organizations, but leaders are so critical to make a difference.

Culture requires leadership, it requires very strict adherence to that. You can’t just talk about it one day and not do it the other day, you will have serious problems in that. Having a discussion inside the organization as to how do we want to really look like, from the very early days, is critical for the future.

This is what makes you. Look at the Googles, the Facebooks, the Microsofts, each has it’s own different way of doing things. They don’t all look the same, they start looking like something and eventually look like something else. Everything evolves.

Nothing is written in stone, you will evolve. You will change because in the world of the 21st century, and the world of accelerated change and development. You have to change with it, but you need to be conscious of it.

Marten: Give me a concrete example, like when you built Aramex. What was the defining cultural element of that company?

Fadi: When I was building Aramex (I started building Aramex before the internet), I was being told all the time you need to have a proper organization structure and the traditional pyramidal way. You are the boss, everybody talks through you. I was never convinced because we were going global. We were in many countries.

The process of communication between people in the center, or in the corporate office, and in the offices outside: you needed to make sure that there is quick communication. I immediately knew that we needed to have a flat corporate culture, a flat organization. No middlemen translating between senior management and people that are on the front lines. We needed to focus on customers. That customer-centric obsession is also a culture, and you need to communicate it.

Democratizing the organization, making it human. Thinking that we are an organization that also cares about our community, and the community outside the business. Yes, it’s important to be a profitable organization, but you need to also be conscious of the environment around you.

I was in the logistics business, so the issues of gas emissions, the issues of being environmentally friendly were very important for us. As a CEO I needed to communicate that. I needed to say we as an organization care – care about the environment, care about the community, care about being multicultural and diverse. Because a big chunk of our employee base was not from a single country. We had a lot of Indians, a lot of Jordanians, a lot of Palestinians, some Brits, some Americans.

That common culture of the company was the common culture of the whole organization. Whether you are American, or Indian, or Chinese, or Jordanian, that corporate culture actually was the glue that kept us together.

Marten: Did you have to change something in your own persona? You were the CEO, but did you learn something from the organization that made you change your own culture because of what the company was becoming?

Fadi: Totally, I think the company drove me to where I am today. It shaped me. I didn’t learn anything; I didn’t go to business school. There was nothing to learn in school for me. I learned in the business. Because I did not have that education in business, I didn’t have any preconceived ideas about how organizations should be shaped. Eventually, I learned as I was building the business.

It shaped me. The requirements of the clients and the marketplace and the expanding globally shaped my world view. Thus the organization was a learning, evolving, agile organization that effectively, eventually said, “Okay. Ah-ha.” I discovered how exactly a global organization should be run because it taught me. Our managers on the frontline told me, “We can’t wait for you to decide for us. You don’t know more than we do. We are closer to the client. We are the people that need to decide.”

I was competing with the DHLs, UPSs, Fedexes of this world. Who is this small company coming out of Jordan that’s going to beat multi-billion dollar organizations. We thought the best way for us to do it is to actually be much faster than they are.

Marten: Did you write down your culture?

Fadi: Totally.

Marten: On a paper so that everybody could see it?

Fadi: Totally. Not only that, I kept preaching that story and it is today a requirement for every single person that comes into the organization. Before he does anything, the first thing that he does is that “here’s who we are”. Here are our values. Here is our culture. Here is how we conduct ourselves inside the organization. We also tell them you’re expected to conduct yourself in a similar manner when you’re not in the organization because you are a representative of the company. You cannot have two personas and to be schizophrenic.

If you work in an organization that really cares about itself – that’s not very ideological. But, you need to be, generally, a person that fits into what we want to say to the world that we are. Because what you do with your neighbors, what you do in a restaurant is a reflection of you. Especially when you are a B2C company. When everybody knows who you are because you say “I work for this company.” Then, suddenly, you’re automatically branded. If you carry the brand, you better respect that brand.

Marten: You said your organization is flat hierarchies, customer focused, moving fast, multi-culture with multiple different people in the group. You train every employee in the culture.

Fadi: Has to. Initially, when we were building the culture, just to go back to the story if you please. Some of our managers could not take it and they left.

Marten: They left? Because of the culture?

Fadi: They said because we also changed the titles. The word manager doesn’t necessarily exist. We talk about leaders. We talk about teams. This is what people face today, but we were doing it 15-20 years ago. Some people felt that if you took away the title “manager” from them, you took away their life. We said, “Listen, we might, but you need to be agile. The world is changing.”

It’s so difficult. Especially when you’re growing in products and geographically. You need everybody to be in sync while, at the same time, giving them enough flexibility to customize what they do to that specific market. Yes, we have a unified culture but our managers, our people in India, will eventually go out and do what needs to be done within the framework of their whole overall culture. It’s a dual process. I am Indian, but I am also an Aramex person. There’s no conflict between both. If you don’t do that also, you will lose that local touch.

When you’re B2C you always need to have that local touch so that local clients that are touching you feel that value. You don’t come from up but you come from within that culture.

That old story of being global and local and et cetera. It’s a cliché but it’s critical. Global and local is critical. Decentralized is critical. Giving power to the people that touch the client is the ultimate story. Because in today’s world as you grow outside your borders, different cultures, different demands, different requirements of the market require you to be extremely agile, and extremely local.

Marten: Wonderful. Fadi, thank you for this advice on culture.
Fadi: My pleasure.
Marten: I think we can say like Peter Drucker, “Culture eats strategy for breakfast.”
Fadi: You know, and Peter Drucker has always been my ultimate hero.
Marten: Your ultimate hero?
Fadi: I followed him into every single conference he had to just go and listen to him. Funny that you mention him.
Marten: He is my ultimate hero as well.
Fadi: He was. He was a fantastic guy. I still go back to his books and read them.
Marten: Same here. Thank you. Thanks Fadi.
Fadi: Pleasure.

Leave a Reply

required