Dubailand Perdier Has Five Days

Dubailand

Perdier has five days to table a comprehensive vision to bring Dubailand to fruition. This plan has several parameters that must be considered. The first set of parameters are the three critical elements -- credibility, investors and customer experience. The second parameter is the hurdle rate of 15% on all components of the project. The third set of parameters relates to Perdier's ability to balance the needs of all stakeholders on this project.

Perdier must specifically address each of Saeed al Muntafiq's concerns, since his response will be measured against these. He must be more comprehensive, however, since the project's vast scope demands it. Over the coming five days, Perdier must do a few key things in order to table a strategy to al Muntafiq on time. He must first understand his task. He must develop a framework for the strategy. He must choose a team of advisors and receive their input as well. Perdier must have a clear set of objectives for the content of the strategy and he must write the strategy within the context of having to deliver on its contents.

Credibility

As al Muntafiq views it, credibility relates to the company's ability to deliver on its promises. There will be dozens if not hundreds of strategic partners in the Dubailand project, so it is essential that the holding company meet its commitments to each stakeholder. To that end, the defining characteristics of Perdier's plan must be time frames and cost estimates that are realistic and attainable. With these, Dubailand will be able to not only meet its commitments but to have its partners meet theirs as well. This latter concept is important because the other tenants and investors in Dubailand will in part rely on their fellow tenants to help drive the business. If investors fail to live up to expectations, other investors will also be hurt. Realistic and attainable goals for all are essential to reducing the risk of non-performance on the part of either the Dubailand holding company or any other stakeholder.

Investors

Related to credibility, Dubailand has certain expectations placed upon it by the investors. These include most of the infrastructure, but also the holding company must work closely with the government to ensure that all details are worked out in advance, with respect to visitors and with respect to guest workers. There are many areas where the investors depend on Dubailand. Perdier's plan needs to ensure that these needs are met.

Customer Experience

In light of the nature of the consumer base, which initially will be transit passengers from the Dubai and Abu Dhabi airports (Emirates and Etihad Airways respectively), there will be little margin for error with respect to either the boldness of the vision or the execution of excellence, simply because these customers can easily choose not to extend their Dubai stays. Thus, there is not only a threat from competition (other resort areas) but from consumer non-action (simply continuing on their journey without a stop in Dubai). As such, the Dubailand project depends heavily on the company's ability to master all aspects of the customer experience.

This aspect of Dubailand relates primarily to the post-completion phase of the project but contains elements that must be addressed during the planning phase. The parameters for the customer experience are made clear by Saeed al Muntafiq -- that the customer must be completely satisfied with every aspect of the operation. To achieve this, Perdier must consider two separate components of customer service. The first is what is delivered and the second is what is not delivered. Studies of satisfaction among workers can be readily applied to the customer experience, in particular as al Muntafiq understands it. Herzberg's motivation-hygiene theory, if adapted to a customer experience paradigm, holds true -- that dissatisfaction derives from an absence of hygiene factors such as cleanliness, security, friendly staff, entertainment options, good weather, quality food and dozens are other variables in the hospitality industry (Balmer & Baum, 1993). Thus, the customer experience will be shaped by the absence of negative aspects to the visit. In order to attain this, Perdier needs to do three things. First, he needs to set high standards of performance and put these into contract. Second, he needs to have mechanisms in place to measure the performance of third party operators with respect to those standards and have enforcement mechanisms in place. Third, Perdier needs to develop a partner selection process that will deliver partners that understand and can meet the performance objectives.

The second element of customer service is the positive experience (the motivator factors, using Herzberg's theory). Just as Dubailand has a hurdle rate for its projects, so too do consumers of entertainment. If an entertainment product is merely adequate, the consumer will be less likely to recommend the experience to others. In order to garner a recommendation from the consumer, the experience must exceed a certain threshold of expectation for the consumer. Al Muntafiq expects that word of mouth will play a large role in the development of Dubailand's customer base. This expectation is reasonable given the development process of other multi-attraction destinations such as Las Vegas and Orlando. These destinations grew organically, one resort and hotel at a time, building on increasing amounts of positive word of mouth regarding both the anchor attractions and the totality of the experience.

It is therefore critical that Perdier's plan be both sufficiently grand in scale to capture the imagination of the public but also sufficiently concerned with minutiae as to prevent negative customer experience outcomes from occurring. The two components are entirely distinct from one another. To address the former, Perdier must have much of this vision himself, and this will drive that vision in others. To address the latter, Perdier must enact strict controls on the third-party partners. Attaining and enforcing such controls will be one of Perdier's most significant challenges.

Content

The five day timeframe may be tight by Perdier's standards, but as mentioned by al Muntafiq, Western-style planning is not the same as planning in the developing world. Thus, Perdier should expect that his boss expects him to table a full scale plan in the five day time frame. If I were in Perdier's shoes, I would table a detailed outline of this plan. Where smaller details are necessary, I would include in the plan the delegation that has been conducted in order to hammer out those details. While five days is unreasonable for a strategy regarding a $70 billion project, it is expected that the version tabled will comprise a strong framework upon which to build the final, definitive strategy.

The content of the plan should otherwise by comprehensive. It should address the following key issues -- tasks, personnel, relationships, motivation and vision, deadlines and finances. The tasks component should outline all of the different tasks that will go into the creation of Dubailand, not including the task relating to other specific issue areas. For example, the resort will require a wide range of infrastructure tasks. The outline will lay out each of these tasks, along with critical subtasks, resource requirements and timeframes. The structure, therefore, will be along the lines of a project management outline. Also discussed in this section will be the constraints that Dubailand faces. It is not expected that the strategy will have a definitive solution for each constraint, but it is essential that these constraints are identified. For example, the construction equipment and labor shortages are constraints that put deadlines and budgets at risk. The solutions are likely to be multi-faceted and it is unreasonable that a workable solution to every problem be found within five days.

The personnel component of the strategy will specifically address the issues of human resources. One aspect of this will be the management team. An identification of the key areas required of Dubailand is essential, because it will give Tatweer the opportunity to begin executive searches to fill these posts. A plan also needs to be in place to bring in the initial 10,000 workers. These workers will fill a variety of labor and skilled positions, and in a number of industries. Because Dubailand often functions as a facilitator, the company must also have a strategy included to help its third party partners and investors meet some of their human resources needs, in particular with respect to construction labor. This type of local market assistance would be beneficial at the best of times, but given the shortages in the Dubai labor market and that market's historical dependence on labor outsourcing, it is critical that Dubailand act as a facilitator for human resources for its third parties, if it wishes to be credible and accountable to its investors.

The relationships part of the strategy addresses more succinctly the role of Dubailand as a facilitator. The company's success will depend on the ability of it to compel third parties ranging from private contractors to government agencies to support its plans. This will require a tremendous communications effort, in particular with respect to relationship building. Dubailand appears to have strong governmental support, but in a country subject to rapid change, smaller projects could supercede Dubailand for government attention and affection if they prove more valuable. Thus, strong relationships with government in particular will need to be nurtured in order to help Dubailand meet its infrastructure and financing targets.

Motivation and vision are vital parts of the plan. At this point, Dubailand still only exists in the conceptual stage. To move the project beyond that will require substantial motivation. While some of this will derive simply from getting construction work started, the strategy should be more detailed. The strategy should not just include the standard vision and mission statements, but will also need to address the means by which each individual employee and third-party employee is specifically motivated to perform to their highest potential. A plan must be in place to instill a spirit and a sense of community within the Dubailand family. This will help to drive motivation among the workers, most of whom are only in the country for the money. Moreover, the strategy must address the issue of maintaining high levels of motivation once the project has begun. It is difficult to maintain a high level of motivation or a consistency of vision for 250,000 workers, especially without a strong corporate heritage (as most organizations of that size would have) upon which to draw. Compounding the issue is the unique nature of the Dubai workforce, comprised almost entirely of foreign guest workers on restrictive visas and considered of a lower social status by the locals (Shaw, et al., 2003). Perdier's strategy must recognize the unique challenges of such a task and conceive of ways in which these challenges can be addressed.

The strategy must also address the project's finances. There are two main components to this. The first is the 15% hurdle rate. This has been imposed by the parent company, and as such Perdier's strategy must incorporate it. Controls must be implemented to ensure such a rate of return from partners. The second main component of the financial strategy is with respect to cash flow. One of the most pressing priorities for Perdier is the project's overdependence on residential housing sales in the early years. Once the project moves into more tangible, less conceptual phases, the costs will skyrocket. Moreover, residential sales do not constitute a reliable source of funding. This is true in all markets due to the cyclical nature of real estate prices, but in developing markets this cyclicality is typically amplified, in particular in Dubai because of the state's abnormally liquid real estate market and the sometimes limited capacity of its financial markets (Overfelt, 2009). The strategy must include a plan to diversify the sources of funding, and to increase the amount of funding to meet the company's needs going forward. These plans must also address the antecedents of the particular funding source being analyzed. For example, the threshold of earnings or earnings potential is different for venture capitalists than it is for an IPO.

Lastly, the content of the strategy must include deadlines. These deadlines will be to some extent a synthesis of the previous sections. Deadlines are the product of knowing what needs to be done, who is going to do it, what resources will be required and how it will be paid for. Each of these functions must support the others, so understanding them in turn will allow us to outline what our current timetables are. It is expected that Perdier, al Muntafiq or both will want to adjust some of the timetables, but at this point it is more important that these timetables are produced.

Key Priorities

With a five day timeframe, it is imperative that we prioritize the items we want in our strategy, as we may not have time to incorporate all of them to the degree we would wish. The most important priority is the vision component of the motivation/vision section. This vision will guide all of the other components of the plan and therefore must be in place on the first day.

The second priority is the task list, including resources. The resource requirements will drive a large part of the sections on personnel and finance, so it must be completed first. Moreover, the task list must be as complete as possible when tabled. While the strategy need not be complete in some areas, al Muntafiq needs to know that Perdier knows all of the tasks required for Dubailand in order to have confidence in Perdier going forward.

The third priority is with respect to finances. Not only is Dubailand at risk of a cash crunch due to overdependence on a single source of financing, but without a means to finance the aforementioned tasks, the strategy's other elements will be moot. With no money, there is no Dubailand, especially now that the company is getting ready to actually do things rather than think about them.

In addition to money, another key antecedent is people. Thus, the human resources part of the strategy is the fourth key priority. There is currently a scarcity of quality talent, but Dubailand intends to be the best so it should also have a plan to attract the best. Without this talent the project's other goals, in particular with respect to the customer experience, are unlikely to succeed.

The remainder of the strategy is at that point more or less at the same priority level. It is not acceptable to turn in an incomplete strategy after the five days, but if the previous four priority areas are met in complete fashion, a more basic framework can be utilized for the remaining items and considerations.

What would I do with this strategy?

It will be difficult, given the tight timeframe, to share the strategy. However, some degree of feedback should be solicited. The higher priority items should be completed early, and can be tabled to key advisors not already working on the project.

Once the project is finished, it would be tabled to al Muntafiq as per his instructions. As a new member of the organization, I am not likely to do anything other than my superiors have instructed. At this point, I would also table the strategy with my other executives. While for lower managers it is important only to know the final strategy, the executives should be involved at all stages of the strategy development process. They helped to create the current strategy and therefore each should be party to it. Moreover, al Muntafiq considers it important that communication transcend internal divisions. By tabling the strategy to all the executives, I am better able to facilitate this communication by putting each executive on equal footing with regards to knowledge of the organizations's vision, strategies and objectives.

The same strategy tabled to al Muntafiq would be given simultaneously to the executive. The group would then meet over the weekend to discuss the strategy and work on improvements and revisions in advance of feedback from head office. We want to have answers to their questions before they ask them.

At this point, external stakeholders would not be made aware of our strategy, only our vision. The strategy's final version may be relevant to some stakeholders, such as high-ranking government officials, but the five day version cannot reasonably be expected to be the definitive strategy for a $70 billion project. Therefore, it will be withheld from external stakeholders and non-executive internal ones as well.

The Team

A project of this size and scope needs a wide range of top flight talent. Special attention will be paid to the following team members. The construction project manager will oversee the development of all of the physical infrastructure and buildings for Dubailand. The person in this role must be experienced and well-connected in Dubai, as we will need priority in obtaining key resources such as building materials and labor.

We will also need a government liaison, as we rely heavily on the Dubai government for key infrastructure development such as water, electricity, roads, telecommunications and transportation. The government is the most significant external stakeholder, since the project was spearheaded by the Emir. Each of these first two executives will come from the local Dubai community, since local expertise and connections are absolutely critical to the success of Dubailand.

Another key executive will be the finance director, whose role it will be to tap the global financial markets for the funding necessary to diversify Dubailand's finances. Other key executives will come from the telecommunications, marketing and resort hospitality industries. The headhunting for this talent will be global in nature.

With shortages of executive-level talent in many of these fields, competition will be fierce. We may need to hire talent away from already lucrative, prestigious positions. In order to do this, we will need not only top recruiting talent, but the best possible compensation packages. It is likely that we will need personal support from the highest-ranking Dubai officials in order to secure the people we need. Expense and effort were apparently spared five years ago when young local executives were hired, the result being the project's stagnation. Thus, no expense nor effort should be spared during this round of executive hiring.

Quality Assurance

With dozens if not hundreds of companies working on the Dubailand project both during and after construction, attaining quality will be Perdier's biggest challenge. It is, however, one that is of utmost importance, given the customer experience parameters set by al Muntafiq. There are several steps involved in assuring that third parties meet these parameters. The first is with respect to the selection process for partners. The second is with respect to the contractual terms with those third parties. The third step is the creation of measurement mechanisms. The fourth step is the creation and usage of enforcement mechanisms.

The selection process for partners is critical. Just as hiring inexperienced executives led to those people being overwhelmed by the scope of the Dubailand project, so too will third parties unaccustomed to delivering the customer experience desired by Dubailand be unable to deliver it even with the strictest of contractual terms and enforcement mechanisms. In short, if you skimp on quality at this stage, there is little hope that quality can ever be assured. Thus, Dubailand needs to seize control of the task of identifying potential partners. At this stage, this could be difficult, since third party investors were brought in to manage this part of the process. However, Dubailand needs to assert its rights and performance expectations now in order to maintain control over all of the third parties involved in the project. Perdier and his team need to be involved in the selection process for partners and need to have people undertaking primary and secondary research to properly vet potential partners for their ability to meet Dubailand's standards.