Why Family Offices in the Middle East Need External Leadership

How do family-run businesses in the Middle East navigate transformation, professionalization, and expansion while preserving their legacy?

In this episode of Conversations with Executive Interim Managers, host Bohuslav Lipovsky, Managing Partner at CE Interim, sits down with Xander Kruger, a seasoned international executive interim manager and cross-cultural expert.

With over 18 years of experience in the Middle East, Xander shares insights into the transformation of family-managed businesses in the region, the challenges they face, and how interim managers help drive strategic change.

1. The Evolution of Family Businesses in the Middle East

Bohuslav:

Xander, welcome to the podcast! Tell us a bit about your background and journey in the Middle East.

Xander:

Thank you, Bohuslav. It’s great to be here! My journey started in Europe, leading multinational organizations. Then, I was approached by an interim management firm, which was my first introduction to this field. Over time, I transitioned to the Middle East, where I’ve now been operating for almost two decades.

I’ve had the privilege of leading transformation efforts for family-run businesses in the Middle East, also in Saudi Arabia.

The Middle East has become my second home. Seeing the region evolve—especially Dubai, which has transformed from a quiet trading hub in the early ’90s into a global business powerhouse—has been incredible.

2. Key Challenges in Transforming Family-Run Businesses

Bohuslav:

You’ve worked extensively with family-run businesses. What are some of the key takeaways from these transformations?

Xander:

The first challenge is understanding the values and traditions of the families. Many of these businesses have built their success on strong family legacies, so stepping in as an outsider requires a high level of cultural awareness and humility.

One of the biggest challenges is corporate structuring. Many businesses need to shift from a traditional, family-driven model to a structured corporate governance system. Change management is another hurdle, as resistance to external leadership is common. Scaling internationally is a goal for many, but they often lack the expertise to do so effectively.

Additionally, technology integration is critical but frequently delayed due to legacy processes.

3. The Role of Interim Managers in Business Transformation

Bohuslav:

What triggers family businesses to seek external help? Is it family succession, IPO aspirations, or international expansion?

Xander:

It’s a mix. Sometimes, the realization comes during a family dinner conversation—”We need to grow. We need a structure. We need to corporatize.” Other times, external triggers like market competition or regulatory changes force action.

The biggest hurdle is often alignment among family members. The vision might be clear at the top, but operational teams or middle management may not have the same perspective. That’s where interim managers step in—to bridge this gap and turn strategic discussions into actionable plans.

4. Decision-Making in Family Businesses vs. Corporations

Bohuslav:

Family businesses manage billions in assets. How does decision-making in these firms compare to large corporations?

Xander:

It’s much less structured in family businesses. Decisions are often driven by hierarchy and emotions, not boardroom analytics. The eldest family member—usually the chairman—often sets the vision, which is then debated among family members.

Corporations, on the other hand, have clear governance structures, defined roles, and established processes. A multinational firm operates like a well-oiled diesel engine, while a family business can feel like a sports car—sometimes speeding ahead, sometimes slowing down unpredictably.

5. Interim Managers: Driving Change in a Rapidly Growing Market

Bohuslav:

Many new managers—both permanent and interim—are moving to the Middle East. What advice would you give to interim managers stepping into family businesses here?

Xander:

Communication and listening are key. Learn the family’s values and vision before making recommendations. Don’t rush into execution—build trust first. Be transparent in decision-making and keep key stakeholders informed. Most importantly, understand that you are not there to take a family member’s seat, but to enable growth and transition.

6. Handling Leadership Transitions: First 48 Hours to First 48 Days

Bohuslav:

Let’s say an interim manager lands in the Middle East to take over a struggling company. What should they prioritize in the first 48 hours and the first 48 days?

Xander:

The first 48 hours are about establishing credibility and securing support. Ensure the hiring party fully backs you—without their endorsement, making real change is impossible. Stabilize the team, as uncertainty can cause anxiety, especially if the previous leader was there for a long time. Most importantly, set the tone: “We’re not here to shut down the business; we’re here to fix and grow.”

Over the next 48 days, the focus should shift to diagnosing the company’s challenges. Identify the root causes, communicate regularly with leadership and employees, and prioritize quick wins to build momentum. Setting a clear roadmap for transformation is critical at this stage.

7. Common Misconceptions About Turnarounds in the Middle East

Bohuslav:

Many assume that with the wealth in the Middle East, there’s no need for turnarounds. What’s your take?

Xander:

That’s a myth. Even billion-dollar companies face financial and operational challenges. Declining revenues and profitability, operational inefficiencies, and unstructured expansion can all create instability. Growing too fast without governance often leads to internal misalignment.

Bohuslav:

What do you see more in the region—financial or operational turnarounds?

Xander:

More operational turnarounds. Companies here often scale rapidly without refining internal structures. While financial distress does happen, most challenges stem from inefficiencies, lack of strategic direction, or leadership gaps.

Final Thoughts: The Future of Family Businesses in the Middle East

Bohuslav:

What’s the future for family-run businesses in this region?

Xander:

The trend is clear. More family businesses are embracing structured governance and professionalizing operations. Digital transformation is accelerating, and companies that don’t adapt will struggle. Interim management is growing as businesses realize the need for external expertise in corporate structuring, expansion, and leadership transitions.

The future is bright, but businesses must evolve. Family legacy is important, but sustainable growth requires modern leadership approaches.

Bohuslav:

Xander, thank you for this insightful conversation!

Xander:

My pleasure! Looking forward to seeing how these businesses continue to transform.

Need expert leadership for your family office? CE Interim connects you with seasoned interim managers to drive transformation and sustainable growth.

Let’s talk! Contact us today.