“Gulf’s Family Firms Face Critical Transition Period”
In the January 16, 2011 issue of The National, Booz & Company Partner Ahmed Youssef (Middle East) said the longtime Middle Eastern business model in which family businesses were run by patriarchs is increasingly becoming a relic of the past. “This is how business was done when the business was not as large and debt was not as prevalent,” said Youssef of the “patriarch model,” which often operated with handshake deals and minimal management oversight. “It is different when you are making an investment of Dh50 million and when you are making one of Dh500 million.” Youssef said there are two extremes among family businesses in recent years, with some expanding too rapidly and taking on too much debt, while others grew cautiously and managed cash conservatively.