In Conversation with Mishal Kanoo

[Music] good morning ladies and gentlemen I hope you're having a good time I can sense this Positive Vibes over here um and uh it's a great pleasure to be on stage with you again uh Michel you know I've been I've been having panels with Michel I think for the past four or five years and what's so interesting about it is every time I do learn something in you um today we will not talk about the past of koog group but I'll take this opportunity for the next 20 minutes to talk about the future with the uh master of strategies himself uh Michelle and uh Michelle you flatter me let's start with with the Strategic Vision kog Group have been founded more than 100 years ago but if we would talk about the next 10 years and now you are in more than 10 Industries where do you see the group going to um first and foremost you have to keep in mind that this is a an unusual time in the world an unusual time because it used to take a long time for an idea to come uh be understood absorbed and then utilized today in the last 5 10 years we've seen a flurry of new ideas that possibly would not have been possible 20 years ago 40 years ago and they're coming in Fast and Furious and the question is which one do I aim for the problem is I can't aim for just one you have to try and put your fingers in as many pies as possible because if you you don't maybe the one that you missed out because you thought it was not important becomes the most important thing um e-commerce at one point was considered something trivial um insignificant then it became very important then with the technology that allowed Ecommerce to to Really flourish it became the challenging part that to the point that most retailers are now suffering because of that if you're not in e-commerce you have a challenger and the Challenger is not a a regional Challenger it's not a local Challenger region Challenger it's a global Challenger so how do you face such uh changes now the only way anyone can do it at this present time honestly is either one of two ways you create yourself uh something within a bracket of uh um an industry that you see is going to go forward or the alternative is to buy into several of the companies that out there be it from the private side as in the private Market through uh venture capital and and uh um VCS sorry um venture capital or private Equity or wait until it becomes public and then you start buying pieces of it it's incredibly hard to say this is going to be the industry I need to focus on I I don't know which one is going to be just just to give you a simple idea two years ago those who were in artificial intelligence knew were something was going to happen most people in the world do not know anything about artificial intelligence to the degree we talking about it today chat gbt changed that it gave people the impression this is going to be something significant and then you had all the other companies start to pop up in the artificial intelligence phas how am I supposed to have guessed that four years ago this is a problem so it's incredibly hard not to say this is what's going to be and this is what I have to be in and this is what I'm going to do because in six months from now I don't know what's going to be a new strategy and and I don't sorry a new industry that's going to be significant and who is going to be the main player in it it's a difficult very difficult question but the question most companies have to think about is if I'm either in it or in some cases I might be dead not immediately but in the long term I might be dead I might be insignificant and that's why probably maybe you founded the JV and started investing in VCS last several years M but also some especially in the family offices family businesses when they want to implement the new strategies and bring technology and Innovation it's a very slow progress yes do you face this at can like any organization uh the bigger you are the harder it is to get an idea across because you have to get a lot of people to buy in and the people who are the hardest people to get a Buy in I know I'm going to sound really bad and forgive me but the older you are the harder it is for an idea to sink in and when you try to explain something to somebody who's in the 70s and 80s and they look at you like what what is this I'll give you I'll just give you a small story and this happened to me when I was um in my 20s um the the at that time my chairman was my uncle Ahmed uh who was a well wellknown well respected person in the whole region this was 95 memory servman and he asked me a question what's the internet and I started thinking in my head very quickly to explain to you what is the internet I have to explain to you what is what is a personal computer then I have to explain to you what is networking then I have to explain to you uh rout routers I said I don't know because it was an easier answer than trying to explain all of that aspect to him it's not easy when you have to encounter people again it's not the the middle people the middle management or the U um the management as a whole who don't understand ideas it's when you have to have the decision maker and that decision maker is not able to comprehend What's Happening by the way I don't know everything about anything um I'm constantly learning and um I'm actually happy have kids because now whenever I get a new remote control which I don't understand how to use I go please read the instructions and explain it to me because these things are moving at such a high pace and it's how do you keep up with it it's becoming really how do I keep up with all these new ideas that are popping up and to be honest you it can be very daunting it can be very overwhelming question is how do you you slice it piece by piece so that you can absorb it and then and this is the most important thing in organizations you have two types of people you have those who are and they're usually the younger ones the innovators and the ones who are coming up with new ideas and want to try and test new ideas and then they have the older ones the Elder members of the family usually in the family business who go it's not our tradition we don't understand this it's not our business basically meaning I'm not going to bother myself don't bother me so um trying to get them to understand I'm not I'm not doing these things for you forgive me if you're 70 years old how many how many more years do you have ahead of you I'm doing it for the 20 year old and the 14 year old and 25 year old and the 30 year old who have another 30 or 40 50 years coming up your decision making is going to affect their lives I don't really I'm not really focus on what you're looking at I'm focusing on what they're looking at because they are going to be the ones who are going to carry the torch not you and this is what brings me to the question about the governance and family offices and I I just heard it this early morning that um 4% of family businesses uh keep going after the fourth generations and more than 96 probably disappear uh so I think now you are maybe the sixth generation I am Fifth Fifth and then the next I have a so I'm fourth I have a fifth generation sitting over there okay and I have a cousin whose son if he joins us in his 20s would be a sixth generation sixth generation so how do you keep this family business you know going after 100 years uh there's one teach us something about governance here there's a lovely thing in family businesses that most people don't talk about the glue that keeps most family together is fear fear either fear of having a comfy job fear of not keeping up to what my father or or my uncle did fear of affecting the family's reputation fear of an opportunity that pops up I know this might sound negative actually fear is a a good driver fear keeps you alive I promise you fear keeps you alive greed adds to it but fear keeps you alive and it's not a bad thing because we in our in the nor clature we think fear is a negative word it's not when you fear something you protect yourself when you fear something you push yourself I fear failure so I push myself harder right so it's fear is not necessarily a wrong one but having that Concept in and around what you call the business is not a bad thing of course I would be um remiss to say that the the one thing I have learned significantly for my family what keeps us together is a key word and that's respect I have to I have to learn how to respect and we brought we brought up with this concept of idea of respect yes we can have differences of opinion yes we can fight yes we can argue but there has to be a certain amount of respect if we if that breaks up if that starts to go away then you have a problem and I think a lot of the family businesses break up from the fourth by the way I've always wondered why this is the case and I'm trying to think about this the first generation the person who's building this the entrepreneur who's building this he's building this with the idea of I'm protecting my family I I want to do something for my family that's what he tells himself what he's doing is I'm doing something for me which is fine there's nothing wrong with that people want to be selfish that's that's a good driver as well so you build something the second generation who might have taken part in the building but who are not the driver themselves see what the parents have gone through or their uncles or whatever they whoever is the person who had made it and have felt a bit of the pain have seen what is like to go from um nothing to something so they understand that feel the pain so they become custodians they are trying to ensure what was built I will follow suit then he come to the third generation and the third generation is completely this disconnected from the first generation they were born where everything was prepared and given to them so as far as they're concerned what's the problem why is it so hard everything spoiled to some exent okay I use that and then then there is another problem they cannot connect with what was the driver at the time so if I can't connect with what it was a driver that would cause this family business to come into existence then I don't feel it negative if I break away from it or if if I create something else or if I don't like following suit in this business because I don't feel the connection it's not a bad thing because from that you can instigate a new uh Dynasty but it's how we treat it we look at the person who does that who splits away as a negative thing I think is a if you if a person has an idea and wants to split away it's not a bad idea it's not a bad thing I I give you a cas point you have um one that comes to my mind is uh the split between ma andd okay you could have said when a split happened as a bad thing the family split up no no no because you ended up having two instead of one two um Empires and two economic drivers in this economy has been beneficial for for uh the economy I don't think this has been necessarily being a bad thing it's how it's approached so you wouldn't mind the business to be sped up at some stage in the future if somebody if somebody can come up with something and the others are not willing to support what's the what's the why is it possible that this person takes his or her share and goes on his merry way or her Merry way I'm not saying this because I want to push people out I'm saying it because a family business or any Enterprise should not be a prison it should be The Driver it should be the thing that helps you the springboard that helps you create something let's do something and remember um we create businesses not necessarily to uh make uh fill administrative jobs we create businesses because we think there's something that people will benefit from and if it's a family business we expect the family to benefit from but if I'm using this business to enslave the family then what's the use of the family business and mich with more Generations coming up do you think suc planning becomes even more difficult how do you approach this there's a in family business there's a concept that you either plan to S fail to plan or plan to fail right but I there's also another issue in the planning there's a planning for succession within an organization within the business itself that needs to happen because there's an organization and there are people's lives livelihoods stake but there's also something you need to be taken into consideration as in what if that person is more interested in something else do I help them create that something else if I can help them create it within the organization great they stay on board and I get the smart and intelligent people to come on board but if I make life so miserable and so tedious I'm pushing them away so to plan I need to think about two things two aspects to take into consideration there is the management planning and then there's a family planning do they mesh together if they don't I need to address both separately one is more significant than the other I don't need to have family members in a family business for the family business to flourish I can have professionals manage this but I do need to take into consideration what the family members need in a family succession again it's it's trying to understand that two types of successions are needed and required in a family business interesting um and now as you probably most of you know there's a trend of uh uh companies going uh public so we started with government entities there's a plan to push as well uh some family businesses to go public although they are trying to still hold on what's your views on this um each family will take the the concept of an IPO different some will look at it as a way to uh create a structure within govern a structure within a family by having a third party uh overse you you you're forcing the party to be a bit more transparent and to be more structured if that's what a family wants good for them what most families are not prepared for and I believe me they're not prepared for is to be questioned they like their own little Empire and everything is done within family members and yes you can negotiate within family members in terms of how things are done if somebody does a mistake you correct them in a certain way ex it's not public but when a shareholder a shareholder has that right to question you Mr chairman who thinks the world revolves around him and he's not prepared for that there's an issue that is a mindset you need to be prepared for I need to be able to explain and justify everything I do when you're when you're a public listed company most families are not prepared for that most families are happy to have it within the or family within the or organization um family structure where they can sit and talk to one another when they do something right or wrong when that changes and becomes a public thing it's a different mindset if they're not prepared for that don't do an IPO if you're prepared for that do an IPO because what people seem to forget is an IPO means I have a responsibility not just to my family but to all shareholders public included and that means even the one person the person who has one shareholding of my uh company I have a duty towards him or her to protect his or her um interest in the company that is a mindset do you think that this mindset could be changing with the Millennials or Generation Z everything's possible and with education everything's possible you you can have people come in with understanding saying you know what I don't want to be a dictator I don't want to be an autocrat I want to be more um incorporate uh sorry um uh inclusive I want to be more open to the idea because I can see the benefit of having more people on board the more people on board the more easier I can do my business so you have people who have that mindset and again it could be at any age and those people are the ones who are prepared for an IPO because they want more people on board because they can grow their business those who have a closed mindset and again s age doesn't really matter those people who have a closed mindset they're the ones who are going to really hate an IPO interesting I think I have less than a minute now final word to the family offices in this room here keep on investing this is the right time honestly we are sitting in one of the most um financially Bountiful places in the world the rest of the world is just discovering us we can position ourselves to make the most out of this one this place is going to be something significant and we can play a significant role in it the world has finally realized how important we are financially I hope you will make the most out of this and benefit not just yourself but the whole region around us we need to have good rules good regulations good families good business and we're lucky extremely lucky to have a good government that understands the requirements of this region the more we can do the better it is for us always ins sightful thank you very much M thank you thank