State-owned enterprises in Oman are striving for excellence by redesigning their organizational work cultures.

State-owned enterprises (SOEs) are an “important feature of the economic landscape in the Middle East and North Africa (MENA) region,” according to a report published by the OECD. An SOE is a legal entity that is created by a government that allows the entity to carry out commercial activities on the government’s behalf. These commercial activities vary and include things such as postal services, public transportation, shipping services, and so on.

While SOEs in the MENA region are frequently seen as “inefficient and subject to sub-optimal governance arrangements,” at the same time, paradoxically, they are given ambitious “developmental mandates that typically go beyond their stated commercial objectives.” This is mainly due to the fact that the state has played a key role in the economic development of the region historically.

Recently, Oman, a member of the Gulf Cooperation Council, has been trying to transform SOEs into anchors of national industrialization and growth. However, the Omani public sector has faced many challenges in its attempt to achieve this goal.

The main challenge has been its inability to effectively manage and enhance employee performance to meet organizational goals.

While these enterprises have witnessed positive changes in terms of employee productivity, as a result of their ongoing efforts to invest in people and shift mindsets through policy change and talent development, they continue to struggle.

Furthermore, the scramble to attract and retain talent continues as the private sector undergoes rapid transformation that is attracting far more talent, thus causing the public sector to fall further behind.

Leaders in Oman’s SOEs have explored different ways to improve the efficiency of their organizations. However, many suggest that the real problem in the workplace stems from the public sector mindset and how it limits the ability of SOE’s to change, innovate, and therefore improve.

A new organizational trend is emerging in Oman, which is prioritizing efforts to change the strategic design of workplace cultures in the public sector.

The recent attitude shift in public institutions in Oman is vital for the long-term growth of the country’s economy. It is expected to foster the sustainable change needed to unlock the full potential of the public sector and its employees. This is more important than ever in an era where digital transformation is constantly disrupting the way that organizations and their workplaces operate.   

Many countries in the MENA region, suffer from similar problems in their SOEs. According to Shatha Al Maskiry, a managing director at Protiviti Oman, a global consulting firm, there are three main problems that are currently preventing Omani SOEs from achieving organizational change and growth.

Young Omani nationals graduating from higher education institutions in Oman are not well prepared for the workplace and its ever-evolving needs, she said. “When we look at the caliber of our fresh grads, the industries feel they’re not ready, or equipped, with the right competencies and attitude [needed] to acclimate and progress with organizations,” Al Maskiry told Inside Arabia.   

Although public service institutions spend a considerable amount of money designing training programs that tackle the lack of a fully equipped workforce, they do not do enough to measure the efficacy of their training programs. Moreover, not enough is being done to ascertain whether the skills being taught are actually increasing the productivity of employees and the overall quality of the services being offered to the public.

Another significant hindrance to organizational change in the Omani public sector is the fact that mentorship culture in the MENA region is still in its infancy. The traditional way of assessing performance in the workplace through conducting annual performance appraisals is still widespread.

Annual performance reviews are considered to be ineffective, because they lack the continuous feedback mechanisms that empower employees to develop themselves. The absence of a two-way dialogue in the assessment process makes employees feel that it is “more of a lecture” than a constructive learning opportunity, according to Al Maskiry.

Also, the lack of smart and well-defined key performance indicators in SOEs frequently causes younger employees to feel disconnected and under-appreciated, because they feel that their employers’ assessments do not accurately reflect their past achievements or future potential.

In the past, this problem would have been solved by hiring an expatriate with the requisite skill set. But making Omani nationals redundant is not the solution, according to Al Maskiry. SOEs are “partially responsible for not constructively shaping a formal and strong organizational culture that engages and challenges workers,” she told Inside Arabia. Al Maskiry added that the SOEs are still lagging to establish “an energetic [work] environment that keeps their workforce proud, happy and promotes their development and growth.”

Now, the boards and management of Omani SOEs are seeking to reform their workplace cultures to develop national employees.