Changing Zain

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Saad Al Barrak turned Zain into a telecoms giant with $8bn in revenues

Saad Al Barrak turned Zain into a telecoms giant with $8bn in revenues

Dr Saad Al Barrak begins his speech at the 6th Arabian Business Forum more than aware of the challenges of being the last speaker before lunch. “I’ll be giving a bikini speech,” he tells the audience. “Short enough to be attractive and long enough to cover the basics,” he laughs.

Al Barrak’s speech is peppered with anecdotes and jokes about government bureaucracy in Kuwait and how he persuaded consultancy firm McKinsey to come on board and provide his former company Zain — then known as MTC – with a diagnostics report despite not being able to afford its services. But at the heart of his 30-minute talk is the story behind the Kuwait telco’s success.

In just seven and a half years Al Barrak transformed the provincial telco into a global giant. Under his guidance the former-state owned operator grew from a customer base of 500,000 operating in one Gulf state to 72 million customers across 23 countries. Over the same period, revenues at the company jumped from $570m to $8bn.

Al Barrak’s time at Zain will probably be best remembered for the firm’s 2005, $3.36bn acquisition of Celtel Africa, the African telecommunications firm founded by the Sudanese billionaire, Mo Ibrahim. The deal added a further five million customers to Zain’s operations and thirteen countries.

But its substantial growth didn’t come easily, Al Barrak says, recalling dozens of conversations he would have with staff at the firm who told him, that despite being the only player in the market “it is a great company — because for 17 years we were number one”. It was tough, he adds, turning that mindset into a highly competitive one and dealing with a company “stymied by government culture for sixteen years”.

Al Barrak refers to John Kotter, the Harvard professor that wrote the international bestseller, Leading Change, which outlines an actionable, eight-step process for implementing change, as a prime example of how to deal with implementing change. “The essence of leadership is change; if you do not change your company, you are not a leader,” he adds. He also agrees with the previous speaker, Fadi Ghandour, who said you cannot plan ahead by more than six months in the Arab world. “It’s more like six days,” he jokes.

Al Barrak left Zain in the first quarter of 2010 after its shareholders, keen to raise cash to support their longstanding family-owned businesses, started to intervene in the running of the company, at first persuading Zain to sell its Africa operations before later pushing for a sale of its entire operations. Al Barrak, who oversaw the sale of its African operations to India’s Bharti Airtel prior to his departure, admits that the company “has changed its strategy completely since I left”. But he has no criticism for his former employers — saying that the economic crisis has hurt the firm more than his revenue. “In the circumstances, for Zain to reduce its size has been a virtue." He's also not keen to comment too heavily on Zain's share price — “you'll have to ask the people at Zain”. “The way it is now, is not good,” he says, when pushed, of the company’s stock price.

Al Barrak plans to take the lessons he learned growing Zain and apply them to small to medium-sized companies.

 Judging from the success he had at Zain, it won’t be too long before SMEs are knocking his door down in a bid to get his expert advice.

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