Transforming Culture in the Kingdom: How 'stc' focused on people to compete in the digital age

Riyadh: Professors from The Stephen M. Ross School of Business  at the University of Michigan (Michigan Ross) published a study on stc Group’s successful transformation journey into the digital era. The study is titled “Transforming Culture in the Kingdom: How ‘stc’ Focused on People to Compete in the Digital Age.”

In just six years after launching its cultural transformation, the Group established its position as one of the Kingdom’s leading entities, providing innovative services and solutions, earning customer trust and enriching society. stc became one of the leading companies in enabling digital transformation in the Kingdom, operating eleven subsidiaries in eight countries. stc’s brand value grew from $2.8 billion to $8.024 billion and is now one of the top three brands in the Middle East. Scores on the McKinsey Organizational Health Index (OHI), initially among the lowest in the world in 2013, soared from 33 on a 100-point scale to 71, the largest 5-year increase in the McKinsey database.

Eng. Nasser Sulaiman Al Nasser took over as Group CEO after being one of the key transformers of the culture-change initiative. The change constituted a qualitative leap and was critical to the success of the country as a whole. The case study explores how the company achieved this level of success and the issues and challenges facing Group CEO Nasser to sustain and accelerate the momentum going forward. His humility had him connect to the employees at a deep level, and doing so unleashed the energy of the organization to complete an astonishing business transformation.

Dr Khalid Biyari, the company’s former CEO, applied a new leadership approach that became the driving force behind one of the most remarkable culture-change success stories of the last decade.

Authored by Michigan Ross Professors Kim Cameron and John Branch, the case is intended to convey key learning points for companies looking to learn from stc’s example, and business schools who would like to teach using a timely and relevant example from the GCC region. Key learning points are around the importance of focusing on people first to drive organizational change, the unique challenges facing a CEO after a cultural transition, and the need to keep the strategy fresh and vital to grow for the future.

“We hope this business case inspires knowledge seekers around the world. Leadership humility is a virtuous practice that has recently received some attention in its association with effectiveness in organizational performance. stc’s humble and transformational leadership has built a strong foundation upon which the company continues to maintain its position as the main enabler of Saudi Arabia’s Vision 2030,” said Kim Cameron.

“stc is an inspiring role model of a government-run entity transforming into a nimble, forward-looking privatized business with digital-ready leadership. At the core of the company’s digitally powered success and regional growth are the goal-oriented initiatives for cultural change and collaboration. The company is focused on promoting a culture that values employees from the bottom-up rather than top-down,” said John Branch.

stc Group CEO Eng Nasser Sulaiman Al Nasser remarked, “At stc, our benchmark is beyond Saudi or other telecom companies. We have raised the bar by leading the digital transformation process, accelerating the performance of our core assets, reinventing the customer experience to world-class standards, and expanding our scale and scope. We are keen to attract the best talents and leaders, harness their capabilities and prepare them as one of our most important assets. We, at stc, continue to empower the nation's next generation of entrepreneurs and build local capabilities. We assume our responsibility as leaders in the Kingdom’s digital transformation and will continue to invest in this area.”

The stc group has worked to encourage creativity and enhance the innovative spirit of the youth to establish small and medium enterprises (SME) through several initiatives. In 2015, stc launched InspireU - a business incubator, to support SMEs and their transformation into smart projects. The program has incubated 38 startups since launch and supports them with services such as financing, training and consulting. The incubated companies have obtained investments amounting to 60 million SAR, while the market value of these investments is 300 million SAR. Till date, InspireU projects have created 160,000 jobs, including part-time jobs.

stc Group, in cooperation with Michigan Ross University, launched a specialized three-year Executive Education program to develop High Potential (“Hi Po”) future leaders. The Ross faculty team worked with stc to design a customized, multi-year learning journey to upskill the workforce to be digital leaders. The The stc High Potential program was named “Best Talent Program in the Gulf” by the Arab Society for Human Resources Management “Ashram” (ASHRM) in 2018.

"stc" has also established the "Saudi Telecom Academy", an advanced educational center, aimed at developing the next generation of digital leaders in the Kingdom. It offers several programs focused on the mindsets and skill sets needed to grow digital competence.

The full case study is available for download via WDI Publishing, part of the William Davidson Institute at the University of Michigan, publisher of cutting-edge business cases and teaching materials for business schools around the globe.

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About “stc”

stc Group, headquartered in the capital, Riyadh, is the largest telecommunications company in the Middle East and North Africa, with the group’s revenues amounting to more than 54,368 billion SAR (14,498 billion USD) during 2019, and its net profit amounting to 665 billion SAR (2,844 Billion dollar). STC was established in 1998. The company focuses on providing services to customers through a fiber-optic network extending to more than 217,000 km across the various regions of the Kingdom. In the Kingdom of Saudi Arabia (the group’s main headquarters), stc Group operates the largest modern mobile network in the Middle East as it covers more than 99% of the country’s populated areas in addition to providing 4G mobile  broadband. Besides its main 100% owned operation in Saudi Arabia, STC’s investments include 100% ownership in Viva stc Bahrain, 51.8% shares in Viva stc Kuwait, 25% shares in Binariang GSM Holding Group in Malaysia, which owns 62% of the Malaysian Maxis Holding Group. In addition to the above-mentioned, STC has several investments in information technology, content, distribution, call centers, and real estate, all of which support its telecom operations across the Middle East.

About the Stephen M. Ross School of Business at the University of Michigan

Named a Top 5 global provider by the Financial Times, Michigan Ross Executive Education provides transformational experiences that elevate thinking and enable breakthrough business results. Michigan Ross is a vibrant and distinctive learning community grounded in the principle that business can be an extraordinary vehicle for positive change in today's dynamic global economy. The Ross School of Business' mission is to develop leaders who make a positive difference in the world. Through thought and action, members of the Ross community drive change and innovation that improves business and society.

© Press Release 2020