Harsh times

If there was any doubt about the challenges regional businesses face in the coming few months, recent headlines will have dispelled it.

Slumps in regional stock markets and tightening credit have prompted a series of job cut announcements by property companies - the heartbeat of new Gulf economies.

The likes of Damac and Omniyat have all revealed redundancies, with the latter's top executives also agreeing to take a 30% pay cut. Is this a sign of things to come? With staff morale tumbling, the return on investment provided by senior managers will come under more scrutiny than ever. CEOs, in particular, need to prove their worth.

For top bosses, now is a time for cool heads. With job insecurity affecting employee morale, it is crucial that regional CEOs take command of the situation their firms are facing.

Emotions run high in circumstances like this, but staff will look to their bosses to stay calm, remain focused on ‘the big picture' and deliver rational business decisions. Pay packets that are tied more closely to company performance, as apparently implemented by Omniyat's management, are a great place to start.

This is also an opportunity to take a much closer look at the value being delivered across organisations - not just by staff. With liquidity at a premium, it is doubly important to ensure balance sheets remain solid, capital is conserved and that funds can still be raised if absolutely necessary.

Many best practices are forgotten when profits come easily - but those who take the pain now will emerge stronger when the good times return.

Rob Morris is the deputy editor of CEO Middle East.

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