Bourse and Bazaar | Esfandyar Batmanghelidj: In multinational companies, the prospect of promotion is largely tied to the ability to meet targets and hit milestones with speed. Working on Iran-related projects in the present environment makes this difficult to do. When asked to evaluate the pace of trade and investment as part of a recent Bourse & Bazaar survey, commissioned by International Crisis Group, 83 percent of senior managers at multinational companies indicate that companies “are moving slower than they could” to engage in the Iranian market. These delays are not minor: 39 percent of executives report being delayed by six to twelve months, 16 percent report being delayed by one to two years, and 33 percent report delays of more than two years.
Some multinational executives are facing delays equivalent to the total time they have spent in the Iran job role; the majority of executives surveyed have been working on Iran for less than three years. As sanctions-relief neared, new teams and offices were established to handle Iran business, with companies often relocated executives to Iran. For these executives, who arrived in their job roles full of promise, the mounting delays have a personal and career impact. For employers, longer project timeframes make management and staffing more difficult.
Iran can be an isolating assignment within large organizations. Companies are increasingly separating Iran from the management of the GCC in response to regional politics, sometimes placing the country among Turkey or Central Asian markets. But very often, Iran is treated as a kind of an island unto itself, meaning that country managers are even more dependent to demonstrate success within the business unit.
In the assessment of one aviation finance executive, who asked to remain anonymous due to the sensitivity of the issues discussed, delays in aircraft sales to Iran, like other commercial deals, see executives repeatedly hitting “roadblocks out of their control.” The frustrations inherent in working with Iran mean that many of these executives and advisors may opt “to move away from Iran for the benefit of their career path.” For example, business development executives may seek to shift focus to markets where they are more likely to hit their sales targets, “in order to get their bonuses.” Likewise, lawyers working on Iran projects are “often incentivized with success fees. If those fees seem unlikely to materialize, they will move on to other projects.”
When asked whether he is concerned about such attrition within his own team, the aircraft finance executive notes, “I have started thinking about it. If I lose a member of my legal team, or if there is a change in the sales team at one of our client companies, it makes the Iran project really complicated. For the replacements, a learning process starts all over again and in some cases expertise won’t be easy to replicate or replace.”
But in the view of Marc Mulder, who leads Wise&Miller, an executive search firm active in Iran, the importance of succession planning is already a central part of the recruitment strategies of both multinational and Iranian companies.
While nearly half of executives surveyed presently expect to work in Iran for less than five years, Mulder observes that this is “a perfectly normal level of churn for senior roles in such companies.” In fact, many companies are hiring with specific regard to managing employee turnover. For example, Mulder describes how “a company might hire an international CFO knowing that they will spend just three years in Iran. But in that period, they will be expected to train the local finance VP so that they can become the long-term CFO.”
Importantly, Iran remains an attractive destination for international managers. Mulder believes that for certain executives, Iran is appealing precisely because of the challenges it poses: “Candidates often move to Iran eagerly. They know it is a complex market, but they like the idea that they will be tested in the role. Working in an emerging market is exciting for them.”
In the current environment, the more difficult aspect of human resource management is not recruitment, but retention. The main risk in succession planning is low employee loyalty. Iranian executives are easily lured away by a salary bump and are even more concerned with career stagnation than their international peers. After all, Iranian employees are less at liberty to look for opportunities beyond the Iranian market. “Retention becomes a problem if the VP you just spent three years training moves away from the company after just one year as CFO. Then you really are starting from scratch,” notes Mulder.
To improve retention, companies are investing in human resources management. Mulder has observed strong interest among Iranian companies “for help in developing the soft management skills that keep people engaged within an organization, such as coaching and team-building. It is part of an effort to make people feel invested in the business.” If companies can develop these competencies, they will be able to better manage the delays, sufficiently encouraging and incentivizing their teams to push through roadblocks.
Overall, companies need to find ways to encourage and reward persistence. For the most experienced country managers, an opportunity to test these qualities of management is often what brought them to Iran in the first instance. These qualities are difficult to pass on, but it is clear that the employees they oversee will have no shortage of opportunities to test their persistence as they advance their careers in challenging Iran.