Tamkeen Strategy 2015-2017 CONTENTS EXECUTIVE SUMMARY ........................................................................................... 3 REVIEW OF TAMKEEN’S 2010-2014 STRATEGY AND PROGRAMMES .............. 7 I. Review of 2010-2014 Strategy ...................................................................................................... 7 II. Critical Insights from the Previous Strategy ............................................................................ 19 III. Analytical Assessment of Tamkeen’s Programmes ................................................................ 23 BACKGROUND TO THE DEVELOPMENT OF TAMKEEN’S NEW STRATEGY ... 31 I. The Strategy Development Approach ....................................................................................... 34 II. New Programme Approach ........................................................................................................ 35 TAMKEEN’S NEW STRATEGY .............................................................................. 40 I. Tamkeen’s Strategic Objectives ................................................................................................ 44 II. The New Segmentation of Customers ...................................................................................... 45 III. Specific Objectives of the New Customer Segmentation ....................................................... 48 IV. Tamkeen’s Intervention Areas ................................................................................................... 59 V. Proposed Programmes per Segment ........................................................................................ 64 VI. Sector Review .............................................................................................................................. 68 OPERATIONAL CONSIDERATIONS ...................................................................... 75 I. Organisational Implementation Model ...................................................................................... 76 CONCLUSION ......................................................................................................... 91 APPENDIX I ............................................................................................................. 95 APPENDIX II .......................................................................................................... 100 2 Purpose This document provides a summary of Tamkeen’s updated strategy for 2015-2017. The intended audience for this document is key stakeholders, including Tamkeen Board members, Tamkeen management, and external stakeholders – such as government agencies, NGOs, the private sector, and all of Tamkeen’s customers. The focus of this document is on providing a summary of the background, analysis and key conclusions of the updated strategy. It also provides an implementation plan for the organisation to follow. Executive Summary The need for Tamkeen to update its strategy for the 2015 to 2017 timeframe arose with the requirement for comprehensive, actionable, impact driven approach to operating, that will enable it to play its role in tackling the relevant labour market and private sector challenges, support the NES (National Economic Strategy) and fulfil its mandate. In summary, the updated strategy gives Tamkeen an impactful, distinct and critical role in the national economic development landscape. The strategy explicitly serves the requirements of the NES and cements Tamkeen’s position as a key enabler of Bahrain’s economic vision. The successful implementation of the new strategy will lead to a more effective organisation that will demonstrate significant impact on the Bahraini economy and society as a whole. Since Tamkeen’s inception in 2006, the organisation has worked towards achieving consistent broad objectives. Throughout the years Tamkeen has offered over 200 products which have impacted approximately 100,000 customers, and has had a substantial impact on the Bahraini economy. One of Tamkeen’s critical success factors is its adaptability, due to the ever-changing economic, social, and political circumstances Bahrain faces. For Tamkeen to continue its effective role serving the private sector, it is therefore necessary to constantly evaluate the needs of the market and respond to them accordingly. Despite the sharp and often unexpected changes Tamkeen has seen, its goal has remained consistent: Enhancing the productivity and sustainable growth of individuals and businesses. In this regard, the challenges which Tamkeen faces to respond to ever-evolving markets were identified in joint consultation with the private sector. Understanding their priorities and concerns has helped Tamkeen to develop a strategic, proactive approach to serve the private sector needs. Tamkeen’s current focus is on ensuring effectiveness and quality of services rather than reaching the largest number of people. Tamkeen has resolved to continuously measure the impact and effectiveness of the programmes in the upcoming strategy cycle. 3 The previous strategy (2010-2014) was based around the following strategic priorities: 1. Make Bahrainis the employee of choice for existing semi-skilled and skilled jobs 2. Make Bahrainis the employee of choice for growth: new investors (foreign and indigenous) and expansion 3. Make Bahrainis the employee of choice as unskilled jobs are substituted with capital plus higher skilled jobs 4. Improve labour and capital productivity of Bahraini businesses to support growth of the overall economy 5. Support growth to develop new opportunities for Bahrainis and enlarge the economy As is evident from the strategic priorities, the focus of the previous strategy was on two primary areas: one being the continuous development of human capital, and the other the support of the private sector. These two focus areas enabled Tamkeen to provide customised solutions by the type of support it aimed to offer. Though the aforementioned was effective, Tamkeen has found it necessary to revise this strategy to make it more customer-centric. Rather than clustering the priorities by type of support, the new approach is to address the needs of each customer type. Customers. For example, entrepreneurs will be addressed separately from already established businesses. Further, students will be addressed differently than employees. The following section further explains the establishment of these new segments. Finally, based on the feedback from consultations with stakeholders, Tamkeen has outlined three focus themes for the next 3 years (2015-2017), with a view to meet the dynamic needs of Bahrainis and private sector businesses: 1. Quality: Effective and result oriented delivery 2. Customers: Satisfied customers 3. Results: Enhance productivity and sustainable growth of individuals and businesses Intervention Approach At the core of the new strategy are six major segments that have defined the new programmes; these segments are broken down by customer type. Each group of customers, representing a single segment, have similar needs and concerns. As a result, the programmes which Tamkeen develops going forward will be in accordance with the specific objectives of these segments. The below programmes are similar to those which are already offered by Tamkeen, however they have been re-grouped and packaged to be high impact solutions for the purpose of bridging the gaps required based on each segment’s demands. 4 This new approach will help to address market needs and intervene effectively to address economic challenges within the Kingdom of Bahrain. The key imperatives in terms of selecting the targeted segments are as follows: Recognising focus areas in terms of demographics (individuals and businesses) Selecting the key segments that Tamkeen needs to focus on during the next strategy cycle Understanding the business cycle requirements at each stage The below is an outline of the new segment-based programmes which Tamkeen will offer. The basis for the programmes is a study of the market needs of both businesses and individuals. This study was used to create programmes, which will provide sufficient support to the private sector for the achievement of sustainable growth. PROGRAMMES SEGMENT: BUSINESSES 1. 2. 3. Startup Startup Funding Support Startup Consultancy and Mentorship Encourage Startup Innovation Startup Marketing and Exposure Support Growth Provide Funding for Technology and Growth Support Business Process Re-engineering and Innovation Support Marketing and Customer Outreach Workforce Capacity Building and Support Maturity Product and Service Innovation Support Internationalisation and Franchising Support Foreign Investment and Joint Venture Support SEGMENT: INDIVIDUALS 4. 5. Students Career Guidance Support Entrepreneurship Exposure Support Jobseekers & Entrepreneurs Employment Channelling Support Up-skilling for Market Alignment 5 6. Career Counselling and Work Readiness Support Entrepreneurship Guidance and Mentorship Employees On-job Skills Optimisation Tamkeen will work in coordination with other government agencies to develop and deliver these programmes. In the long term, Tamkeen is committed to support and actively engage all the economic sectors, which will eventually have an impact on Bahrain’s economic development objectives and promote the overall progress of a diversified private sector. However, in this regard, Tamkeen recognises the different needs and priorities of each of the sectors to accordingly will offer customised “fit” solutions for each to best serve the growth and development of Bahrainis. The subsequent sections look into the background behind the development of the strategy, and the approach which was taken towards its renewal. 6 Review of Tamkeen’s 2010-2014 Strategy and Programmes I. Review of 2010-2014 Strategy The following sections will illustrate how the organisation has performed relative to the previous strategy (2010 – 2014) at both a strategic and programme level. Tamkeen’s previous strategy (2010 – 2014) was developed in 2009 to support the objectives of Bahrain’s Economic Vision. The foundations of the 2010 – 2014 strategy focused on major Strategic Priorities that described the strategic objectives at a high level; all of which were aligned with Bahrain’s Economic Vision. . The below Strategic Priorities were developed to be the key drivers of the organisation and were intended to guide decisions within Tamkeen, where priorities one to three aimed at closing the Bahraini employment gap and priorities four and five targeted improving the private sector productivity and growth. Tamkeen’s previous strategy focused more on internal operations and had broad targets. The following describes some of the key facets of the previous strategy. The strategy was based on five strategic priorities: STRATEGIC PRIORITIES 1-3: CLOSING THE BAHRAINI EMPLOYMENT GAP The first three Strategic Priorities were related to closing the gap between the Bahraini labour market supply and demand. Economic analysis suggested that the main issue was not the absence of jobs for Bahrainis; rather that Bahrainis lack the necessary skills to fill 7 new jobs and existing semi-skilled expat jobs. The ultimate objective of these priorities was to make Bahrainis the employee of choice for their share of these opportunities. Each of the Strategic Priorities provides a way to mitigate the employment gap. 1. Make Bahrainis the employee of choice for existing semi-skilled and skilled jobs Enables Bahrainis to capture existing skilled and semi-skilled jobs currently held by expatriate workers. These jobs could potentially be captured by vocational shortterm Bahraini trainees as openings arise. There are jobs held by expatriates with a higher skilled nature, which represents a longer term opportunity for Bahrainis. 2. Make Bahrainis the employee of choice for growth: new investors (foreign or indigenous) and expansion This highlights another potential area for employment opportunities for Bahrainis other than existing companies, and that is new investments both foreign and local. 3. Make Bahrainis the employee of choice as unskilled jobs are substituted with capital plus higher skilled jobs This is a third front for tackling the employment gap through the development of an environment where unskilled labour is no longer needed, and is replaced with capital and higher skilled professions. STRATEGIC PRIORITIES 4-5: IMPROVING PRIVATE SECTOR PRODUCTIVITY AND GROWTH Strategic Priorities four and five focus on private sector productivity improvement and growth support. These are areas which, with improved performance, can yield substantial results in the Bahraini economy. There is significant room for improvement of labour and capital productivity in Bahrain, and the growth of the private sector is critical to diversifying the economy away from oil and gas related areas. The priorities are as follows: 4. Improve labour and capital productivity of Bahraini businesses to support growth of the overall economy This strategic priority aims to increase productivity of businesses through the introduction of different tools and systems. An example of this is via the use of technology to enhance productivity. 5. Support growth to develop new opportunities for Bahrainis and enlarge the economy The creation of new opportunities within the Bahraini market in terms of jobs, diversity of potential offerings, and others will inevitably lead to growth within Bahrain’s economy. 8 Certain fundamental schemes were developed to address these strategic objectives. The initiatives and programmes that were developed addressed one or more of the above Strategic Priorities for each respective area in Tamkeen: Human Capital Development o Fund gap training: Finance internal or outsourced training to fill “skills gaps” apparent in the Bahraini labour force. Gaps include technical/vocational skills as well as business leadership/management skills o Design gap training: Designing training programmes and curriculum to fill skills gaps (as defined above) and identifying appropriate delivery mechanisms o Acquire trainees for gap training: Acquiring participants for gap training programmes. Key success factor will be recruiting or screening and selecting applicants that are “high impact” (committed to training and to pursuing relevant career opportunities post-programme) o Deliver gaps training: Delivering gap training directly or outsourcing it to qualified and best practices 3rd party providers o Place trainees in employment: Upon successful programme completion, enabling trainees to secure value-added jobs in which they can leverage skills gained in training – potentially by working with employees from the start of the process o Bridge wage and productivity gap: Provide and manage subsidies to firms to support wages for Bahraini employees while providing training to employees to increase their productivity Private Sector Development o Drive innovation for productivity & growth: Increase technology and innovation in Bahrain aimed to enhance productivity (of Bahrainis and Bahraini enterprises) and toward growth (of enterprises and the national economy) o Encourage competition: Increase the competitiveness of Bahrain’s private sector; may include easing market entry, improving the external business environment, implementing legislation, etc. o Fund enterprise productivity improvement: Fund and monitor productivity improvement opportunities for Bahraini enterprises. May include productivity-targeted provision of capital, technology, systems, etc. o Provide expansion & productivity advice to businesses: Identifying, assessing and recommending expansion-led opportunities for Bahraini enterprises. May include business consulting services, linking firms in partnerships and mergers, providing ICT, etc. 9 o Drive entrepreneurship: Initiating and supporting entrepreneurship in Bahrain; potential mechanisms include grants, incubators, business advice, entrepreneurial skills training, etc. o Provide growth finance: As a bank does, directly provide debt or equity finance to enterprises or start-ups. NB: BDB/Tamkeen/Ithmaar relationship is seen as supporting the provision of finance, not directly providing it Direct Investment o Secure FDI: Play the leading role in identifying and attracting foreign companies to enter Bahrain. Providing human capital support is seen as a supporting role to this activity o Attract local investments through supporting local ventures o Make development-led direct investments: Make direct investments with an objective of economic development (versus profit maximisation alone) As mentioned, the need for a new strategy (2015 – 2017) arose due to dynamic market conditions and the desire for Tamkeen to focus its efforts on more impactful programmes. The focus of the upcoming strategy will be to propose programmes, projects and activities that focus on customer, quality and impact. The upcoming sections will provide an analysis on the current issues and challenges that are being faced in light of Tamkeen’s current strategic objectives (2010-2014) A level below the strategic priorities were eleven strategic objectives: 1. STRATEGIC OBJECTIVE 1: DEVELOP AND MAINTAIN OPTIMUM ASSET ALLOCATION AND FINANCIAL MANAGEMENT Fund management is an integral part of Tamkeen’s activities that should be carried out on a continuous basis throughout the business cycle. This entails effective allocation of funds to well-studied opportunities that deliver the best return, adequate risk, and are Sharia compliant. The ability to optimise financials by capitalising on high value projects and investments is crucial, especially over the long term. The organisation has great scope for growth in this area. 2. STRATEGIC OBJECTIVE 2: BUILD AWARENESS OF TAMKEEN’S PROGRAMMES & PROJECTS One of the core areas Tamkeen focuses on is building awareness of its role and Corporate Social Responsibility, as well as ensuring wide-spread awareness of programmes and projects. This is done by managing user-friendly interfaces for individuals, enterprises, and partners. Building awareness of the offerings will ultimately lead to a more prosperous and thriving economy as individuals and enterprises are given the opportunity to advance in their respective fields. 10 The public’s awareness of Tamkeen as a separate entity from other similar or related organisations (such as the LMRA) is now definitive. Tamkeen is now associated with either employment or training or business support. The marketing of Tamkeen as a complete solution to both individuals and businesses has been successful; Tamkeen is in existence to support businesses gain new opportunities to grow and flourish in terms of human capital and business needs. Further, there is common understanding that Tamkeen trains locals for career advancement, trains private sector employees, provides loans to start up business and are involved in enterprise development. However, the awareness of specific projects and an understanding of how they function is still confusing and ambiguous to the public. This is mainly due to the differing requirements from the applicant for each project or unclear communication. 3. STRATEGIC OBJECTIVE 3: EXCEL IN THE MANAGEMENT OF PROJECTS AND PROGRAMMES AS A PORTFOLIO TO DELIVER ECONOMIC AND SOCIAL BENEFITS Having the right systems and tools in place for selecting, prioritising, managing, and measuring project performance and ensuring the continuous review of projects is of utmost importance. This review should reflect economic and social benefits based on pre-defined criteria. The communication of the performance to the entire organisation is essential to drive awareness. All engagements need to be selected based on a rigorous evaluation criterion to ensure that business value is maximised given the available resources. These projects need to be assessed periodically based on their value add. Proper measures need to be in place in order to accurately measure their performance once completed. The proper implementation of this portfolio management framework and its tools in Tamkeen will deliver business value in three key areas: Consensus on prioritisation criterion: the criterion may include assessing the level of risk, impact, duration, budget, etc. This criterion will be used to evaluate, prioritise, and select all engagements Decision tool for the organisation: o Manage a balanced portfolio of engagements by evaluating engagements against a set criterion. o Provide management reports and dashboards that show the linkage of the Portfolio Performance to Corporate Performance. These reports are to be used management to make decisions. o Capture prioritised engagements in a single repository: the tool will illustrate that engagements are managed responsibly. This framework will be made accessible with a tool for selecting the best fit strategic projects that demonstrate the highest impact to Tamkeen’s strategic objectives. This 11 will ensure the selection and monitoring of the most suitable portfolio of projects for Tamkeen to adopt. Project Management is an area where changes have become embedded within the organisation, mainly the necessity for documenting and approving projects prior to their launch. However, the essence of Project Management is still lacking: how to run effective projects using all of the Project Management tools available and the proper flow of data and communication within Tamkeen. It is apparent that this area’s performance is limited due to the lack of the necessary tools. 4. STRATEGIC OBJECTIVE 4: DEVELOP AN ENABLING ENVIRONMENT FOR A VIBRANT PRIVATE SECTOR The development of an enabling environment for enterprises is vital for the growth of the private sector. The foundation of this relies on supportive policies that tackle market, system and government impediments. Policies should support new market entrants, healthy enterprises and high-growth SMEs. All of which will aid in creating a favourable entrepreneurial business environment, facilitating the internationalisation of enterprises, improving SME knowledge of available tools and systems, and enhancing entrepreneurship skills. Such policies minimises regulatory, administrative, and other burdens, which will encourage the opening of the Bahrain business environment to international investors. This strategic objective is considered to be one of the gateways that will enable more enterprises to enter and survive within the economy, thus enhancing the activity and growth of the private sector. Tamkeen’s efforts in building ties with the below entities were limited during the past strategy cycle: o Government organisations: The strategic regulatory and administrative issues facing the private sector have not been sufficiently identified o Private sector: no projects have been developed to build ties with the private sector. The introduction of projects that help in overcoming private sector obstacles will increase the participation of existing enterprises, and encourage new enterprises to join the market. o Communities: linkages with professional communities have been initiated; however efforts in this respect need to be ramped up to better understand social needs in specific areas. For this strategic objective, the following programme offerings were provided to the market: Documentary Film Bahrain Training Institute – Facility Support Supporting Bahrain Chamber of Commerce and Industry Road show and International Exhibitions 12 5. STRATEGIC OBJECTIVE 5: DEVELOP HUMAN CAPITAL & MATCH SKILLS TO DEMAND A capable workforce is an imperative foundation for sustainable economic growth; countries that invest heavily in human capital usually demonstrate the most lasting and significant economic growth and impact. With the increase in awareness on the importance of education, whether academically or professionally, and the rise in population, reaching out to the public has become a major economic and social challenge. This increasing pressure on education and skills training resources has been identified by Tamkeen and is regarded as one of Tamkeen’s core focus areas. The right set of skills will enable students, existing employees and jobseekers to take advantage of growth opportunities thus strengthening the economy. Through this strategic objective, Tamkeen aims to build and enhance the competencies required for employment opportunities within identified target sectors. In addition, the up-skilling of current Bahraini employees is imperative to increase efficiency and productivity at the workplace. The projects under this objective also capitalise on opportunities in non-traditional sectors and jobs by developing Bahrainis as business leaders and entrepreneurs. The majority of the human capital development portfolio is under this strategic objective, where it has succeeded in both creating awareness in the market on the importance and necessity of continuously improving skills to exploit better opportunities, as well as exhibiting the gaps in the market or target sectors. The logistics and hospitality/retail sectors, for example, were untapped fields of study before the introduction of Tamkeen’s schemes. For this strategic objective, the following programme offerings were provided to the market: o Work Ethics Campaigns o Employability and Short-Term Internships o Bahrain Centre of Excellence Programmes o Career Guidance Schemes o Support Existing Youth Schemes o Support Occupational Systems and Standards o Career Progression Schemes o Women Technology Enablement o Labour Law for Trade Unions o Tamkeen Professional Certifications Support Scheme o Skills Gap Schemes o Finance and Accountancy Professionals o Nursing and Healthcare Programme o Training and Education Providers Support Workshops 13 o o o o o o o o o o o o o Basic Skills Training Conference Attendance Support Bahrain Polytechnic Scholarship Scheme Tradeshow Management Skills Training Legal Apprentices Tamkeen Diploma for Quran Teachers in conjunction with the Ministry of Justice and Islamic Affairs Pilot Financing Scheme by Bahrain Development Bank Human Resources and Leadership Workshops Leadership Certifications Human Resources Certifications Customised Employment Schemes Apprenticeship Schemes Employment Schemes 6. STRATEGIC OBJECTIVE 6: DELIVER ACCESSIBLE BUSINESS SUPPORT SERVICES Providing enterprises with the adequate tools to easily access business support services will ultimately drive enhanced competitiveness and productivity; where these services are tailored to each enterprise based on its development phase. Aiding enterprises in identifying business support needs, developing appropriate offerings and ensuring their accessibility is a priority to Tamkeen. As well, SME internationalisation is key to their growth and competitiveness as SMEs are currently under-represented in international markets and innovation collaborations. This strategic objective reinforces the necessity for SMEs to realise the need for adopting a culture of innovation; strategic Objective 8 ‘Promote Innovation’ is dedicated to ensuring that Tamkeen has a supporting role in this awareness. For this strategic objective, the following programme offerings were provided to the market: o Enterprise Growth Management Marketing Assistance Scheme (Tasweeq) Business Development Scheme (Istishara) Quality Management Scheme (Jawda) Growth Assistance Programme (Tarweej) Technical Assistance Programme (Techania) o Large Enterprises Support o Business Diversification- Pilot Phase o Tarweej – Mantoojati for Productive Families o Al Basta o Farmer’s Market @ Hawrat A’li 14 o MEGA Enterprises Support o Sector Specific Support Schemes Bahraini Fisherman Support Scheme Bahraini Farmers Support Scheme Trainer and Education Providers Support o General Support Scheme Provide funding & advice on SME management & financial accounting (Mohasaba) - Accounting and Auditing Provide funding & advice on SME management & financial accounting (Mohasaba) - Auditing o Business Sustainability Support o Intellectual Property Scheme o Administer Awards Programme 7. STRATEGIC OBJECTIVE 7: ENSURE ADEQUATE AND APPROPRIATE FINANCIAL SUPPORT Easy access to finance is one of the most critical driving forces for businesses to utilise various tools to expand their business and to employ the latest technologies. This will enable companies to gain competitiveness in leading areas, leading to continuous growth and sustenance of their businesses. The main problem for many businesses is a lack of ‘availability' and 'easy access' to finance. Despite various reforms and guidelines by authorities, such as the Central Bank, the availability of timely and sufficient credit remains a road-block in the development process. Commercial banks and institutional and private investors have proven at times to be reluctant to serve SMEs for already established reasons. Thus, Tamkeen embarked on initiatives that aim to ease this problem by introducing financial support schemes in collaboration with financial institutions. These enterprise funding schemes are highly demanded in the private sector as they provide Bahraini enterprises easier access to credit and financing facilities. For this strategic objective, the following programme offerings were provided to the market: o Finance Scheme Support o ICT Finance Scheme o Micro Finance Scheme 15 8. STRATEGIC OBJECTIVE 8: PROMOTE INNOVATION New businesses and high-growth SMEs account for a substantial part of job creation in any given economy. Enterprises in developing countries, such as the Bahrain, require greater access to innovation, as well as awareness about new and emerging technologies. These advanced innovation concepts will support enterprises in increasing their productivity and sustainability. Entrepreneurs are required to innovate in order to be successful, by thinking of new ways to produce products or improved solutions. The need for innovation is greater in smaller businesses as it is one of the key success factors for enterprises during challenging times of economic crisis. Innovation allows for the creation of competitive and resilient enterprises that are able to compete with their unique products and services. Competition in day to day business activities is another factor that highlights the importance of creating a culture of innovation in entrepreneurship. Small enterprises should promote innovation as a central part of their organisational development since it creates business success. There were two conferences that were held to raise awareness on this topic: Innovation Bahrain in 2010 and the 10th International Entrepreneurship Forum in 2011. During the past years, Tamkeen’s primary objective was to build a knowledge innovation foundation, however some of these initiatives were not followed through due to other priorities. As entrepreneurship innovation is, without doubt, a substantial element in fuelling the economy, this topic is of utmost importance to the Government, and is considered to be a National Strategic Priority going forward. The Kingdom of Bahrain is competing in an aggressive market and a crucial differentiating factor that Bahrain can adopt to compete in this market is to successfully embed elements of innovation, whether in physical products or service-based businesses. 9. STRATEGIC OBJECTIVE 9: ENCOURAGE AND SUPPORT INVESTMENT By developing an enabling environment for the private sector (strategic objective 4), this will encourage investments in the Kingdom of Bahrain thus helping the GDP vastly. As well, Foreign Direct Investment (FDI) aids in international expansion, which in turn helps in increased collaboration between countries. Government support in easing and encouraging investments has long term benefits in that it allows for the introduction of modern technology, training of higher calibre, adoption of world-wide proved management concepts and knowledge, etc. The attractiveness of supporting FDI would be maximised if 16 sufficient sourcing is done from local SMEs as this will strengthen and motivate such enterprises. This strategic objective includes local investment support as well, through support of local ventures and joint ventures between local and foreign companies. Tamkeen’s support of investment opportunities is currently done on an ad hoc basis; there is no strategy in place to indicate the priority sectors or areas of focus that Tamkeen should pursue. Having said the aforementioned, Tamkeen has recently picked up pace on this initiative by capturing investment opportunities that support Bahrain’s economic development objectives. Tamkeen are effectively working with the Economic Development Board (EDB) in screening, securing and improving the benefits captured from investment opportunities. For this strategic objective, the following programme offerings were provided to the market: o Investment Support in Services o Investment Support in industry o Investment in Training Centres 10. STRATEGIC OBJECTIVE 10: ENCOURAGE INDIGENOUS ENTREPRENEURSHIP & GROWTH Creating a suitable and sustainable entrepreneurship environment in the Kingdom of Bahrain feeds directly into encouraging local entrepreneurship activities and growth; both strategic objectives four and ten cannot work in isolation. Tamkeen’s support towards encouraging entrepreneurship and growth has been focused on two main audiences: women and the youth. Over the last decade, women are starting to play a central role as income earners in society. It is unfortunate that they face significant hurdles to fully and effectively participate in economies as employees, employers, and entrepreneurs. This is often due to legal, social, regulatory, and cultural barriers. Tamkeen has initiated three different projects under the Women Entrepreneurship Support Scheme in collaboration with the Supreme Council; all of which targeted the encouragement of women to take up entrepreneurial roles. Having only three dedicated schemes that support women during the past strategy cycle was not sufficient to target all segments of women. Therefore, to further enhance Tamkeen’s involvement in providing women with adequate support, it should extend the support provided to this segment. For this strategic objective, the following programme offerings were provided to the market: 17 o Women Entrepreneur Support Scheme (Photography, Fashion Design and Transportation) o Provide Entrepreneurship workshops, including preseed and feasibility study support o Form Entrepreneur networking events o Start up Support Scheme o Business Plan Competition for Youth (Mashroo3i) o INJAZ - The Company Programme 11. STRATEGIC OBJECTIVE 11: PROVIDE STRATEGIC OVERSIGHT & COORDINATION OF PRIVATE SECTOR DEVELOPMENT The private sector is the driving force behind sustainable economic growth. Developing countries with diverse and healthy private sectors typically have greater levels of growth and decline in unemployment figures. Enhancing the overall competitiveness and productivity of enterprises in developing countries is a critical element of fuelling economic growth and generating new or enhanced employment opportunities. It is crucial for Tamkeen to provide oversight and coordination for the development of the private sector. Tamkeen embarked on two main initiatives: the development of a productivity movement strategy and the development of cluster strategies. However, these efforts were limited in the previous strategy cycle due to the prioritisation of other initiatives. The concept of ‘productivity’ is a national strategic priority for the government going forward. Tamkeen’s goal for this strategic objective was to build awareness around the notion of productivity and its increasing importance and relevance to today’s world. The target audience of these awareness sessions were to engage three main players: government, business community, and unions. However, this initiative was put on hold. In addition, a proposal was developed for the implementation phase of the Productivity Movement in Bahrain, taking into account the existing work practices, the social and cultural factors as well as the organisational and administrative structures to support and sustain the movement. Similar to the aforementioned initiative this was also put on hold. Similar to Strategic Objective 8 (Promote Innovation), going forward Tamkeen will need to adopt projects for the benefit of the three parties mentioned above. These projects need to help in developing productivity tools, which will in turn reflect on their performance as entities. 18 II. Critical Insights from the Previous Strategy As a result of the approach highlighted above, some important insights into the Tamkeen’s challenges and areas for improvement were identified. Analysis highlighted many issues impeding the growth and improvement of Bahrain’s private sector. It emphasised the fact that Tamkeen’s programmes must target specific segments if the private sector situation is to be improved. Moreover, it highlighted the fact that Bahrain has a major opportunity to improve the overall and sector specific performance of its industries Some of the critical insights which were identified during these consultations made it essential for Tamkeen to revise its strategy to better meet the needs of all stakeholders. DELIVERY STANDARDS: The programmes which are created need to be delivered in a way that puts the customer first. There should be more emphasis on customer service and offering customers a simple and quick solution. The absence of a relationship management culture with customers, especially businesses caused many customers to highlight the need for an Account Officer to deal with directly throughout the lifecycle of their business. There was a lack of customer involvement in sector specific advisory, which was reflected in the design of the programmes offered by Tamkeen as not all projects reflect the needs of the sector. There is a need to revamp Tamkeen’s website to better serve our customers and potential customers. The website should be dynamic, interactive and user-friendly. The service delivery channels should be enhanced by developing an e-Channel, relationship management, and CRM or e-Channel – set up of e-Channel to capture feedback assessments on existing or potential projects/services Tamkeen should focus even more efforts on training Tamkeen staff to be more customer-oriented. Tamkeen should develop a system to capture all of Tamkeen’s customer data, this will not only provide a valuable tool for product analysis, but will also significantly reduce processing time of subsequent applications. TARGETED AND EFFECTIVE PROGRAMMES: It was noticed that the programmes offered by Tamkeen were large in number and scope; however they needed to more accurately address the needs of the segment and sector. While helping as many customers as possible is also high on Tamkeen’s priorities, it is essential that it be done while maintaining effective programmes. This 19 will be addressed through the new customer segment-specific programme development. It was noted that many of Tamkeen’s programmes in recent years were aimed at achieving economic stability and supporting businesses through the economic downturn. INFORMATION SHARING – RESEARCH AND MARKET STUDIES: There was a need to conduct routine consultations between Tamkeen and the labour market (private sector, governmental entities and educational institutions) due to evidence of a disconnect between these stakeholders. The periodic consultations will establish a needed connection between stakeholders, and serve as a tool for Tamkeen to keep up with the requirements of the market and educational institutions. In addition, Tamkeen needs to consistently update various studies such as the Skills Gaps and Market Gaps Studies, which analyse the needs of the market across various sectors. It is vital that Tamkeen study market changes periodically to cater to the sectors’ needs efficiently by designing suitable training and business support programmes. The studies conducted by Tamkeen should further be shared with the public on Tamkeen’s website and through other mediums. Also imperative for Tamkeen is to facilitate the link between organisations and universities in order to act as a meeting point for job seekers and employers: there seems to be a disconnect between companies and educational institutions, thus developing efforts to link and promote cooperation between them will increase the chances of the market employing graduates over time. CONTINUOUS MONITORING AND ENFORCEMENT: There is a need for more stringent monitoring of customers and service providers to reduce the prevalence of fraud, abuse and immoral conduct. The prevalence of such activities has cost Tamkeen greatly. One solution may be a centralised database with prices of services and offerings from suppliers. There is a need for a rigid penalisation policy for the abusers of the system. Impact assessments for Tamkeen’s programmes should be conducted regularly to monitor their performance and measure how well they meet KPIs, and the reflection of the recommendations should be taken as an input into subsequent project designs. Tamkeen should also ensure an extensive KPI framework is created to measure the effectiveness of their programmes related to various types of programmes and customers. 20 AWARENESS ACTIVITIES: Tamkeen needs to intensify community outreach efforts; this is crucial to ensure that the public is aware of Tamkeen’s programmes and their benefits. Community outreach involves direct interactions with potential Tamkeen customers in order to understand their needs and inform them of programmes. In addition, Tamkeen should accelerate the ‘awareness campaigns’ initiative and adopt a comprehensive marketing strategy, which will lead to higher number of customers: there is a lack of awareness of Tamkeen’s programmes, as well as the guidelines and procedures of the programmes. Tamkeen should develop campaigns that raise the awareness of ‘less attractive’ sectors to reduce resistance for some jobs: certain sectors may be considered ‘unattractive’ for many reasons; this may be due to cultural resistance, salary scales, or working conditions. Tamkeen needs to focus more efforts on highlighting the benefits of joining these less attractive sectors. ORGANISATIONAL TRANSPARENCY: Tamkeen’s performance measures and assessments need to be shared with the public; also Tamkeen should accelerate the implementation of the Performance Management System, while continuing to develop impact assessments and publish them periodically There are many questions from the public around the impact of Tamkeen on the economy. Though this is difficult to measure accurately, Tamkeen will continue to develop impact assessments for its various programmes, as well as potentially develop a broader assessment of the economic impact Tamkeen has had. ENTERPRISES SUPPORT: There needs to be greater support for start-ups as new entrepreneurs require support. This could be provided through various intervention methods to help them initiate smooth running of their businesses. A revised support limit of medium and large businesses is also needed; the requirements of these segments deem the need for increased caps to fully benefit from Tamkeen’s offerings. As well, Tamkeen should continue to support distressed companies. Many business owners are still suffering from the economic downturn and need Tamkeen’s help in recovering. SMEs across almost all sectors highlight the top three challenges as: lack of skilled employees, reduction in business profitability, and lack of training. 21 STREAMLINING OF OPERATIONS: Lack of an online system to track applications is a top priority for Tamkeen to achieve smooth operations. Tamkeen lacks a real-time easy access interface for customers to apply and track their applications via an online system or mobile phone application. Developing such an application and the automation of these lengthy processes will serve as a basis for more efficient and effective interactions with the customer. This will also allow for a more complete and accurate database of all customers and their information. In addition, this online tool will increase customer satisfaction immensely as the applicant will be able to track their applications via an online userfriendly system. STRATEGIC ALIGNMENT: Tamkeen should ensure the alignment between its programmes and the overall strategic objectives. This has been addressed in the strategy and the method of ensuring this is outlined in the organisation implementation model. Operations should be driven by a strategic focus, while maintaining a balance between customers, people, and ensuring the adequate financing and facilities are in place. INTERNAL COMMUNICATION: At an organisational level there was also a need for an improvement in departmental communication and synergy. Departments within the organisation need processes and systems to help take advantage of synergies that often exist between departments in functions such as operations, monitoring and planning. For a better understanding of Tamkeen’s strategy and to ensure the new strategy addresses all previous issues and concerns, a thorough analysis of the previous strategy was conducted at a programme level. The next section summarises the study of the previous strategy in terms of programme success with respect to planning and execution. 22 III. Analytical Assessment of Tamkeen’s Programmes This section of this strategy provides an overview of the results of an assessment model developed by Tamkeen which was used to measure the performance of its programmes. A mechanism was developed for evaluating and filtering Tamkeen’s current programmes based on their performance in terms of Planning and Execution: Planning refers to how well defined and clearly set out the programme’s plans were Execution measures the implementation of the programmes Programmes performance was assessed by comparing the execution of programmes relative to the original plans. (Refer to Appendix I for details of the evaluation measures). In order to measure programmes’ performance in terms of Planning and Execution, the programmes were assessed from different angles, these angles were: 1. 2. 3. 4. 5. Objectives and KPIs Scope- Project Reach Functions and Operations Financials Customers and Market Demand It was concluded that one of the main areas for improvement was in the area of outlining clearly defined objectives and KPIs, as many programmes had broad high level indicators which could not be accurately measured. Another area was the limited project reach, which reflected insufficient marketing or the lack of a comprehensive marketing strategy. Some other issues programmes had were the lack of streamlined operations, often caused by process limitations. Risk management and financial planning had scope for improvement, through a top-down budgeting approach and more cost-benefit analyses of programmes. Programmes should further be better targeted to reach customers and meet market demand through better target planning. KEY ISSUES RELATED TO TAMKEEN’S PROGRAMMES A need for clearly defined and measurable objectives & KPIs to better assess performance The study has found investment opportunities and projects selection were highly dependent on the availability of funds, and often underwent insufficient due diligence. The organisation needs a robust portfolio management system to aid in the selection of the most attractive investments and measure the performance of these investments. The current approach to selecting projects lacks rigorous analysis and systemic filtration, which often does not allow for effective allocation of resources (time, budget, and human 23 resources) to the highest value add engagements. More importantly, some of the implemented projects are not in alignment with Tamkeen’s strategy. Tamkeen needs to ensure that all implemented engagements are directly linked to the strategy. For example, with regards to many of Tamkeen’s training schemes, the key overarching issue with the portfolio of projects under this strategic objective remains that Tamkeen’s impact in this area appears to be under-performing; however a large part of this is due to the fact that outcomes of many projects are intangible. The assessment of the impact of these schemes is largely based on numbers of customers, rather than strategic measures. The lack of proper and well defined key performance indicators to define the parameters of the projects have made the projects under this strategic objective seem to be underperforming. This is primarily due to unclear objectives and a large diversified portfolio being handled under this strategic objective, which appears to lack focus and direction. In addition, the expenditure on some training schemes has been costly to Tamkeen’s budget; this further necessitates the measurement of their impact. The lack of clarity on the objectives of this scheme, and thus strategic key performance indicators has led to inconclusive impact of the scheme on the customers. On the other hand, Tamkeen has excelled in meeting its operational key performance indicators, in terms of serving the mass and through maximum outreach. This is evident in many of Tamkeen schemes, e.g. Techania, Jawda, Tarweej, Tasweeq, Istishara, Finance Scheme, etc. However, going forward Tamkeen should prioritise serving strategic key performance indicators and re-design its approach in terms of selection an offerings in order to serve the specific needs of businesses in addition to generate utmost impact in the market. KPIs in Tamkeen’s Context Tamkeen has a mandate which is wide in scope and many potential activities could fall under it. In addition, this wide spectrum of scope has elements in common with the scope of other organisations in the economy when it pertains to the high level objectives. In other words, the ultimate result for achieving the objective cannot be solely attributed to Tamkeen. However, the contribution of each organisation to achieving the objectives can be tracked down should there be the necessary data and information. 24 External \ Macro Performance Market Survey (Wide Scope) Result \ Strategic Performance Key Performance Indicators Market Indicators Market Survey (Limited Scope) Operation Performance Key Performance Indicators The above diagram explains the framework that Tamkeen could engage in measuring the performance of programmes and ultimately its strategic objectives. The following is a brief explanation of each of the above categories of performance levels. Operational performance is an efficiency indicator which is an essential tool to keep projects on track. Usually operational related performance is benchmarked against set of predefined standards which companies have to identify based on their pervious performance level i.e. measuring Tamkeen’s service delivery in terms of efficiency and effectiveness of services delivered. Tamkeen so far has identified and maintained a good level of data on the operations level, which would allow for a healthy construction of KPIs in that area. Result/Strategic Performance Result performance is Tamkeen’s objective oriented performance which is based on the programme strategic effectiveness. Result performance category is based on two types of inputs, KPIs measures and market surveys. KPI measures is categorised into two types as shown in the below figure, base KPIs and unique KPIs. Base KPIs are indicators that are common across a portfolio of projects and thus can be aggregated into one performance indicator for a programme. Unique KPIs on the other hand are indicators that relate to special attributes of the project and could not exist in any other projects. Ideally common KPIs are more frequent in terms of usage compared to the unique KPIs. Market Surveys are also used as a tool for gauging the performance of certain projects. These engagements are limited to direct customers of Tamkeen who have utilised certain 25 type of projects. The combination of both tools would ideally reflect the performance of the projects and the objectives that it relates to. Having said that, the challenge still arises when syncing the operational KPIs into the strategic one. Naturally, strategic performance is based on the collective output of all projects’ performance. This is an issue that the future strategy has to address in order to overcome and External/Macro performance: Many of Tamkeen’s mandates share the same objectives with other responsible bodies in the economy as well. In other words, achieving or complying with these mandates is a joint effort of a number of organisations and thus the ultimate results cannot be attributed to a single organisation. Reflecting Tamkeen’s performance in a macro environment would be challenging because of the various factors that contribute or disturb the overall outcomes. However, the contribution of each organisation to achieving the mandates can be tracked down should there be the necessary data and information. The KPI exercise will focus primarily on developing KPIs and setting up measures that will assist Tamkeen to objectively gauge its impact on different layers in the private sector. It is worth mentioning that these KPIs can be revisited and measures can be adjusted based on the changing environment factors or internal elements Limited project reach and scope leads to less effective programmes Tamkeen lacks a clearly defined Programmes Awareness Strategy. This strategy should define phased approaches to be taken in order to ultimately ensure that communication to the public is both effective and adequate. The absence of a comprehensive strategy led to apparent barriers in effectively reaching out to potential customers, these barriers included: language used in communications to the public, the approach to which schemes are presented, and the tactics used to publicise Tamkeen’s programmes. The current direct advertisement channels utilised by Tamkeen are local newspapers, radio, and the website. Both the use of local newspapers and the radio to educate the public on Tamkeen’s services have been effective due to the popularity of these channels, however with Tamkeen’s previous combination of communication from within and communication through its previous outsourced model these campaigns haven’t been part of a larger strategy or a clear communication plan. This affects the ability of Tamkeen to be both consistent and effective in responding to the public. Tamkeen’s website, though helpful in terms of information, needs to be more interactive and dynamic to serve the needs of Tamkeen’s customers. With the available resources, Tamkeen has taken striving steps to engage with the different Governorates and segments; however these efforts need to be accelerated. Tamkeen has 26 recently been more active in engaging enterprises and the community with the current resources; however the efforts in this vital area are far behind. Engaging with the public and targeting governorates and different segments enables a better understanding of the public’s expectations from Tamkeen, and will help explore how to improve and optimise its services and offerings. This activity is imperative as understanding such issues will help Tamkeen better position its communication and outreach strategy more effectively, and help achieve its goals by offering services in line with market needs. The current offerings at Tamkeen are portrayed to the public as ‘human capital’ programmes and ‘business support’ programmes – as two distinct areas. The absence of such packaged products in a way that a potential customer can easily understand Tamkeen’s offerings as a complete solution inhibits maximum value adds. In terms of creativity of campaigns, the mass public campaigns should be more creative, and tend to use traditional above the line media channels. Tamkeen needs unconventional campaigns and tools that allows for more original and targeted approaches. The aforementioned raises the need for a fully-fledged market and communication strategy in order to enable establishing right communication messages and channels. Need for more relevant functions & streamlined operations The evaluation of this area included looking at both internal and service providers’ procedures, operations and monitoring processes. Internally, a robust mechanism for measuring the performance of investments is required. With the absence of such tools, sound tracking of the type and number of changes that projects go through during their lifecycle, the extent of impact and return of these projects and investments will become a challenge. Variations of projects from the baseline (cash flow, schedule, scope, etc.) is an essential measure that needs to be taken into account. In addition, monitoring processes, tools and undertaken activities were not sufficient for some of Tamkeen’s schemes. Also, public consultations have shown that Tamkeen’s applicants and customers are concerned over the lengthy approval processes, which consequently hinders achieving optimal results from the support. Current processes are limiting Tamkeen’s involvement in evaluating the cases to be financed for some of the schemes, as cases are assessed by an agency. The current model does not allow for a proper risk analysis, nor the identification of the applicants ‘pain points’, which could be resolved via enhanced package offering, by leveraging other more suitable schemes. 27 With regards to its relationship with partners (service providers) of different schemes, the conducted evaluation of Tamkeen’s programmes has shown that there is a need for clear, strict and enforced rules and penalties to effectively manage the schemes and insure optimal performance, use of funds and quality of service provided to customers. All the above reflects the need for clearer and improved processes both internally and externally with its customers and service providers. A need for risk management and proper financial planning: With regards to the budgeting process, a bottom-up approach, starting from the business units is obtained instead of a top-down approach starting with a budget being allocated at a higher level. The following is also witnessed in terms of annual budget preparation and allocation to different projects, data is manually maintained and difficult to analyse, minimal historical data, trend analysis and forecasting; and lack of tracking budget versus actuals in continuous basis. The aforementioned has resulted in deviation from the allocated budget in some of the programmes both in terms of over or under expenditure. This emphasises the need for improving financial control in the organisation. On the other hand, the evaluation exercise has looked into the cost-benefit element of Tamkeen programmes. Although many of the programmes had high benefits realised in comparison to the spent funds, it was yet very challenging to determine this ratio for many of programmes, given the intangible nature of expected outcome, in addition to mass targeting approach. Going forward, Tamkeen should have a holistic approach in planning its support programmes with the aim to achieve its strategic objectives and by enforcing strong financial control in order to achieve optimal utilisation of available funds. Better targeting of customers and addressing market demand During the evaluation exercise, it was evident in many Tamkeen’s programmes that targets are not achieved in terms of number of customers. By analysing the issue it was found that this is due to improper planning of targets rather than an indication of lack of market demand. Insuring sound planning phase is critical for the success of the programme, as it allows for better resource planning resulting in higher quality offerings for the markets. In addition, several programmes have the target of serving the public or extend their outreach to high number of customers as the main objective of the programme. For the coming strategy cycle Tamkeen should move towards providing the market with customtailored support, for higher economic impact and customers’ needs fulfilment. 28 Figure I: Illustrates an average of all Tamkeen’s programmes results in terms of ‘Planning’ and ‘Execution’. Each programme was assessed in 5 aspects which are listed on the X axis. Each of these aspects was then evaluated based on how well the planning was done, and then how well it was executed. The programmes’ scores were then averaged and this is what is depicted in this diagram. Figure II: This figure maps the performance of Tamkeen’s programmes in terms of ’Planning’ and ‘Execution’ factors. The scores of each programme is a result of listed measures in this section (Objectives & KPIs, Project Reach, Functions & Operations, Financials and Customers & Market Demand). Many programmes performed well in these areas, and key problems were identified with regards to programmes which underperformed. Tamkeen’s Programmes 29 Though the previous strategy faced a number of challenges in terms of planning and execution, the achievements of the previous strategy cycle should not be overlooked. The subsequent sections summarise the main achievements of the same. IV. Highlight of Tamkeen’s Achievements in the 2010-2014 Constant consultation with the private sector to adapt to their evolving market needs and understanding their priorities and concerns. Bahrain Qualification Framework project transformed into a unit with the development of the National Authority for Qualifications and Quality Assurance Education and Training (2009/2010). Launched a9eel, a wide-ranging work ethics campaign for the general public and schools (2010/2011) Launched a unique funding scheme for Bahrainis to obtain professional certifications (2011/2012) More than 130,000 direct contacts with individuals and enterprises through various outreach channels in 2013 Since the launch of the Enterprise Growth Management Programme in 2007, 8,530 enterprises were served across 15 sectors 14,000 customers have been served through Tamkeen’s career progression schemes since 2007 Tamkeen has engaged more than 30,000 youth since 2007 Over 5,400 start-ups have been served across all Private Sector Support schemes since Tamkeen’s inception 30 Background to the Development of Tamkeen’s New Strategy This section highlights some of the background information which led to the development of the new strategy. Its purpose is to aid readers in the understanding of this document. LABOUR MARKET REFORM The government of Bahrain has been implementing reforms in education, business licensing, the labour market, health and Bahrain’s broader economic systems, which together comprise the backbone of success and prosperity for any nation. Through these and other steps Bahrain will strive to realise the vision that has been outlined in Bahrain’s Economic Vision and create long-term prosperity for the Kingdom. The labour market reform is one of these reforms which upon development led to the formation of Tamkeen and the Labour Market Regulatory Authority (LMRA). Tamkeen now acts as Bahrain’s independent authority, which formulates plans to invest in Bahraini employability. The following diagram illustrates the nature of the labour market reform, how fees are collected, and where Tamkeen falls relative to other entities. Tamkeen plays an active role in the Bahrain’s economy through developing human capital and supporting the private sector. In order to demonstrate impact in the market and fulfil the requirements and needs of our customers, constant collaboration is required with quasigovernment and government entities. This collaboration mainly revolves around the following areas: the regulatory framework in Bahrain, information exchanging, and engaging in projects. The below schematic illustrates how Tamkeen collaborates with the entities. 31 TAMKEEN’S MANDATE Tamkeen’s mandate is to help develop, enhance, up-skill and re-skill Bahrainis to allow their effective competition in the labour market and take advantage of employment opportunities. Additionally, Tamkeen is also mandated to drive increased productivity and improved efficiency in Businesses for sustainable competitiveness and growth, as well as to help generate value-added job opportunities in the Kingdom. NATIONAL AUDIT COURT RECOMMENDATIONS Tamkeen’s new strategy takes into account the most recent National Audit Court report which recommends certain actions be taken in order to enable the organisation to function optimally and achieve its objectives. Some of these matters which are addressed in the strategy include the need for more regular and systematic due diligence through impact assessments and feasibility studies, as well as matters such as streamlining operations, and improving transparency, project management and budgeting. TAMKEEN’S CURRENT STRATEGY 2010-2014 Tamkeen’s current strategy, 2010-2014 along with its initial strategy ratified by the board in July 2007, was formulated for the period from Tamkeen’s inception to the end of 2014. Both strategies were validated with the public through consultative forums. In addition, the strategy was reviewed and validated by international experts. 32 Tamkeen’s updated strategy of 2015-2017 will enable the organisation to fulfil its objectives while reflecting changes to the local and global business and public sector environment. Tamkeen therefore required a comprehensive, actionable, impact driven strategy that will enable it to tackle the relevant current and evolving labour market and private sector challenges. This updated strategy is described in the subsequent sections of this document. The following section will outline the approach taken towards the development of Tamkeen’s new strategy. 33 I. The Strategy Development Approach The approach taken for the new strategy had a bilateral focus: one being on external analysis, and the other on internal consultations. This helped guide the development of a high impact updated strategy for Tamkeen. The approach involved two parallel work-streams. For the first work-stream an “outside-in” analysis was conducted to get an external perspective on the direction Tamkeen has taken, and how it should amend this going forward. The focus was on reviewing the current strategy and initiatives performance from an external stakeholder perspective (being customers and government entities) as well as considering the feedback from the conducted impact assessments and other due diligence studies that highlighted the impact Tamkeen has had on the external environment. Moreover, a thorough analysis of Bahrain’s economic fundamentals, including the Kingdom’s economic baseline and key industries, drivers and trends and potential opportunities was conducted to ensure the strategy’s economic relevance. For the second work-stream, an “inside-out” consultation programme with key internal stakeholders was conducted to gain insight into the organisation’s operational performance with respect to its current initiatives and Tamkeen’s internal strengths, challenges and needs. It also considered these stakeholders’ understanding of Tamkeen’s vision and mission and how the internal environment could be changed to deliver higher quality services and stronger impact, with analysis of different perspectives on the role it should play in the future. 34 II. New Programme Approach Post reviewing Tamkeen’s previous objectives and strategy, and in accordance with the new themes (quality, customers, results), there was a need for a different approach towards the creation and selection of programmes, one which benchmarked Tamkeen relative to other similar institutions across the world. The following section outlines a screening process which Tamkeen underwent in the selection of new programmes in a way that will better serve the needs of the public. Through this exhaustive process, Tamkeen found that it is already offering most of the programmes which are available worldwide, occasionally with different packaging and names. However, this process also highlighted the need for Tamkeen to focus its upcoming programmes on segments. The process of identifying and filtering programmes is further explained in detail below. Filtration of Initiatives Based on the information assimilated during the Tamkeen Needs Assessment and Public Opinion survey, factors influencing the direction and expectations set by the public towards Tamkeen’s programmes and recommended engagements were identified. This determined the gap between the present state and the desired state of the ecosystem of support extended in line with the predefined strategic and segment objectives. Given that the approach to this strategy is segments-driven, the same played a crucial role in deliberating an intervention framework that would be best suited to address the challenges faced by the segments in conjunction with recommended solutions (programmes) that serve the needs and objectives identified for each segment. Solutions were therefore developed as part of a secondary research conducted to benchmark Tamkeen’s initiatives against those that are being implemented in other countries to tackle the identified challenges faced by each of the target segments. Such programmes were then looked at in isolation in terms of their objectives, viability, and desired outcome. In hindsight, most of the initiatives found were ones that Tamkeen has either already implemented or is planning to adopt as part of its operation plan - this was especially the case with enterprise development programmes. The next step after looking into the segments’ needs and the ecosystem of support made available worldwide to support the development of individuals and enterprises was to identify a filtration method that would shortlist the most suitable potential initiatives to replicate and adopt internally. 35 The filtration methodology constituted a set of cut-off variables that would determine the feasibility of the proposed initiatives. The cut-off variables were grouped into two categories; the Primary and Secondary variables as follows: Primary: o The proposed solutions should comply with Tamkeen’s mandate which is primarily initiatives that serve to strengthen the economy and boost labour efficiency and accordingly increase the employability skills of Bahrainis. Similarly, proposed solutions ought to be related to the identified segment objectives along with the organisation’s strategic objectives. Consequently, initiatives that fail to meet the bylaw objectives of Tamkeen become automatically eliminated. o Similarly, proposed solutions must be deemed viable and doable by Tamkeen whereas it doesn’t conflict with the mandate and it strictly serves the target end customers of Tamkeen - being the private sector and Bahraini individuals. For example, proposed initiatives that serve government entities or social societies and NGOs are not part of Tamkeen’s mandate and offerings. o The third primary measure was the budget element, whereby the proposed initiatives are aligned with the budget allocated for initiatives from a similar nature. Initiatives that serve the strategic objectives but are considered too costly for Tamkeen to replicate and operate will be automatically deleted (examples could include projects that provide land and major construction grants to large businesses). Secondary: Impact reiterates the gap between the desired stage and the present stage of a certain strategic objective. Initiatives that fall under the strategic objectives of the organisation should be measurable in terms of their impact and deliverables. When a proposed initiative passes the above primary variables of “mandate, doability and costliness”, the secondary variables will play a role in determining whether or not the proposed initiatives are perceived to be feasible for Tamkeen to operate from a monitoring and value-add perspective to its current portfolio of programme offerings. The same taps into the question of whether or not the proposed scheme would add a significant value to the current stream of activities given the predefined segment objectives. o The final measure of filtration is the element of complexity; whereby the proposed initiatives can in fact be operated given the available resources and are not 36 considered to be overly challenging in terms of the duration and efforts required for their implementation. Given the above cut-off variables, the outcome of the secondary research initially resulted in a total of a hundred proposed projects and grants that governments worldwide are offering to empower both businesses and individuals. The nature of these solutions varied from funding support to capacity building support. Screening Process: Screening of Initiatives (100) Shortisting (cutoff variables) Identify similar existing programmes Highlight the Focus Areas After identifying solutions that are offered worldwide to cater for the needs of the target segments identified by Tamkeen, the same was subject to filtration through the cut-off variables as illustrated in the below graphic: The primary objectives (mandate, viability and funding) led to filtering the one hundred project propositions into a total of eighty-two initiatives. The majority of the eighteen eliminated projects were divided as follows: Approximately 60% (10 projects) were targeting social enterprises which conflicts with Tamkeen’s mandate of support and target segments 37 20% (4 projects) were deemed to be costly for Tamkeen to consider as they were financing schemes for large and mega enterprises that entailed constructive incentives of manufacturing and undergoing major business renovations The remaining 20% (4 projects) were not feasible and sustainable for Tamkeen to operate as they entailed resource centres, welfare benefits, and indigenous employment services that were more likely to be carried out by the Ministry of Labour. Further, the shortlisted 82 projects were then addressed from an impact perspective along with the aptness of operating such initiatives, whereby a further exclusion of 44% projects (36 projects). Generally the majority of the projects and their objectives were very similar to existing initiatives that were implemented by Tamkeen, however their scope was reckoned to be complex as they were tailored to suit the country in which they operate, thus are more likely to be less impactful. The final 36 projects were then subject to the last filter being that Tamkeen is currently engaged in similar initiatives as shown in the following chart: Intervention Financing Grants Identify Similar Existing Projects Advocacy & Information Sharing Once the similar initiatives were eliminated, the remaining projects were grouped and categorised under a set of initiatives that would be aligned with the strategic objectives. The below is an illustrative snapshot of the proposed projects that passed the last filtration criteria: 38 1. 2. 3. 4. 5. 6. 7. Attractive Areas to Consider 8. 9. 10. 11. 12. 13. 14. 15. Business development centres to support businesses A getaway programme which encourages global growth Programmes which focus on the acceleration of growth R&D support & advisory programmes Support programmes for the manufacturing sector Programmes that provide enterprise innovation support Schemes to help marketing of exports Support for finance patent registration Programmes to support virtual presence Customised Incubations (franchise, disruptive, ICT…etc) Leadership training courses for entrepreneurs A scheme to help businesses access export markets A career portal to help youth internships Employment programmes and the support of career fairs An SME portal to support SMEs Based on the above initiative filtration, Tamkeen was able to identify areas of focus which have been tried and tested internationally. This exercise served to ensure that all options and avenues for focus are being considered, including areas which may not have resulted from local internal and external consultations. This further substantiated the need for Tamkeen to adopt a segment specific approach to its programmes. Further, it confirmed the fact that Tamkeen is already offering an extensive variety of programmes, as most initiatives which were identified have already been offered. 39 Tamkeen’s New Strategy Tamkeen’s new strategy encompasses the goals and initiatives which are a priority going forward. The recommendations have been developed based on thorough assessments of the internal and external environment in which Tamkeen operates, as well as the resources available to the organisation. It is an effort to codify the wealth of insight which the public has offered through the many conducted consultations, and through the internal experience and expertise the organisation possesses. There are several values that guide the development and growth of the organisation. These values underlie all of the new initiatives going forward, and are elements which helped to drive the new strategy. The strategy emphasises on Tamkeen’s new strategic objective; these are the goals which Tamkeen will need to achieve in order to deliver value add services to the appropriate customers, in the best way possible. The objectives ensure that each segment of customers receives services which cater to their specific needs. The segments are further defined in the strategy to show the rationale behind their selection. The types of intervention and the list of new programmes are then highlighted to better understand what services Tamkeen will be offering in order to ensure all its objectives are met. These offerings have been assessed and deemed to be strategically ideal for maximum impact. Three themes form the foundation on which Tamkeen’s new strategy was built, and those are: Quality, Customers, and Results or Impact, to outline the strategic objectives which it aims to achieve. Quality: Effective and result oriented delivery Being a service company means that in order for Tamkeen to best achieve its goals it must deliver its services and programmes as effectively as possible, in a way which will yield maximum impact. The key focus here is the delivery of the highest quality services in the most efficient manner possible. Quality enhancement will be demonstrated through improved programmes, services, processes and practices. Quality will be measured through new tracking systems, and will be ensured through systematic procedures and processes. This will serve the sustainable empowerment and achievement of excellence and leadership among Bahraini individuals and enterprises. In order for Tamkeen to achieve its strategic objectives, and in view of its desire for a more customer-centric approach, there is a need for a stronger focus on the quality of the services it provides. Quality is directly related to the effectiveness of offerings. In order to address this issue it is necessary for Tamkeen to thoroughly evaluate existing programmes to determine their success in terms of the objectives which are set out. By doing this a better understanding of their weaknesses can be achieved, and the 40 organisation can work to strengthen its financial and operating framework in order to better meet customers’ needs. This evaluation should be done systematically and regularly to maintain the level of quality. In order to achieve effected and result oriented delivery, therefore, Tamkeen will require: o o Operational changes Improved data collection Strong monitoring systems Tamkeen has taken vital steps towards improving the programme offerings, services, processes and practices with an emphasis on enhancing quality and improving delivery time through: Business process re-engineering, automated processes and improved monitoring. To enhance the effectiveness of the programmes, Tamkeen turned to more flexible models for training and business solutions to cater to a more diverse audience and enhance their sustainability as well as to lead the way in supporting the private sector in the face of market challenges. There will be a shift to more market-driven initiatives to enhance the employment opportunities for the customers. This shift will enable the Organisation to fill many vacancies with qualified and well-trained Bahrainis across a wide range of sectors and fields. To further streamline initiatives and provide a better level of service to the everincreasing number of customers, many operations are set to be in-sourced. This will enable Tamkeen to be more responsive to customer needs and exercise better control over the programmes. Tamkeen is continuously looking for ways to improve and refine its respective services to meet the needs of our stakeholders. Based on extensive consultation sessions, the current programme objectives were re-visited in order to improve the processes involved. In terms of Tamkeen’s commitment to excellence and continuous improvement, a major exercise was undertaken prior to developing the strategy to evaluate the entire portfolio of the organisation and accumulated all the gaps and learning’s along with identified risks. Moving forward, this valuable information will enable Tamkeen to develop best practices and standards in all functions, as well as facilitate sustainable and competitive performance indicators and benchmarks. This will enable further alignment of the initiatives to the corporate strategy while maintaining high standards of excellence and quality across the board to ultimately benefit the customers. Customers: Satisfied Customers 41 The success of Tamkeen is dependent entirely on the satisfaction of its customers. In order to ensure their satisfaction, programmes must be customer-centric, service must be quick and responsive, and there must be efficient and effective monitoring of results. This was addressed in the new strategy through the new segmentation approach. Customers were divided into segments to better determine the varying needs of each segment of society. A customer-focused approach will refocus Tamkeen’s initiatives towards creating impact. This approach takes into consideration the feedback of stakeholders via focus groups and consultation sessions etc. It seeks to ensure a higher level of customer satisfaction through: Offering scalable funding solutions, Set up new Tamkeen branches, Counselling and mentorship programmes as well as Local community engagement. Prioritising customer engagements underscores the fact that interaction represents a strategic priority for Tamkeen to ensure core customer relationships are built over time. In this regards, taking Tamkeen’s customer outreach to the next level was one of the primary focuses over the past year. The impetus behind this focus stemmed from the sheer breadth and number of Tamkeen’s programmes, coupled with the surge in number of customers served and Tamkeen’s commitment to more direct and transparent engagement. These trends required targeted community outreach activities to help improve the understanding of Tamkeen's various programmes among the people. In this regard, Tamkeen has been heavily engaged in valuable two-way communication with its stakeholders; in terms of disseminating information about Tamkeen’s programmes, as well as acting as a depository for the feedback, collecting it and analysing the same to facilitate process enhancement and new project development opportunities. Tamkeen's regular and constant engagement with the customers not only further entrenched its name in the public consciousness as being synonymous with development and transparency, but also generated many potential joint initiatives and valuable suggestions for further improvement. In the course of developing the strategy, the public’s feedback has supported the evaluation of the current processes and recommend improvements, helped it avoid a lot of mistakes, and evolve a vision statement that will help serve the clients better and become more competitive. Building on this momentum, enhancing service is the prime focus of the updated corporate strategy whereby extensive efforts were made to create new formalised functions and procedures. This will contribute considerably to Tamkeen’s drive in 42 building awareness and bringing even more clarity to Tamkeen’s multitude of support programmes. Tamkeen remains committed to continuing to identify opportunities to upgrade the services and support, while at the same time engaging with individuals, enterprises, and communities all across Bahrain to identify and address their respective needs. Results: Enhance productivity and sustainable growth of individuals and businesses The end objective which Tamkeen seeks is to see growth in both individuals and businesses’ productivity in a sustainable manner. Programmes need to facilitate the independent growth of individuals and businesses. They should increase their productive capacities so that they can prosper. Performance follow-up and impact assessment for the various programmes will underpin this approach. Thus, Tamkeen is moving towards quality over quantity; private sector stability and sustainability, and higher level of customer service – to ensure empowerment and not just enablement. As a service organisation, listening to and responding to the market is at the very core of Tamkeen's work. As such, Tamkeen’s approach has become increasingly integrated and flexible over the years. Over time, Tamkeen has invested in proactively identifying the Kingdom’s market needs so as to be able to introduce initiatives with maximum impact for the Bahrainis - in terms of skills-training and jobs, and assist businesses to grow and expand. In the course of the strategy update, Tamkeen has been exposed to valuable market feedback that has been influential in shaping new and existing programmes. The organisations’ priority will be to continue to build awareness of Tamkeen’s programmes in a more focused and targeted manner. Many challenges made it imperative to re-think the strategic objectives and modify them to suit new market realities and priorities in order to ensure that the programmes stay in line with market needs. Tamkeen’s current Corporate Strategy was reviewed by evaluating the impact of the existing initiatives performance, projects and activities for further project development. Tamkeen will continue to conduct comprehensive impact studies on the flagship support programmes, targeting Bahrainis and enterprises, to measure the overall effectiveness of the customers. In addition to this, Tamkeen will be commissioning various feasibility studies and due diligence reports on proposed programmes and activities to address labour and market challenges and stay in lockstep with the objectives and mandates of the Organisation. Tamkeen will also 43 initiate a number of key sector based cluster strategies to enhance the outreach and programme portfolio. Given that the approach to the updated corporate strategy is segments-driven, a new intervention framework was developed that would be best suited to address the challenges faced by the segments in conjunction with recommended solutions (programmes) that went through a stringent filtration process in order to achieve results in terms of serving the needs and objectives identified for each respectively. From a monitoring perspective, considering the magnitude of Tamkeen’s services and scope of operations, Tamkeen will further enhance the tools and systems along with well-defined approaches to support the organisation’s ability to monitor, track and resolve issues of underperformance related to service providers and customer performance. This will ultimately ensure quality execution of the programmes and confirming that the scheme’s/initiatives are on course towards achieving their set objectives. The monitoring and evaluation of Tamkeen’s programmes and using this knowledge to drive learning is critical to both demonstrating impact externally and ensuring that every investment achieves its potential. Integrating best practice evaluation and monitoring approaches with Tamkeen’s balanced scorecard framework will drive learning and unlock programme potential. The above values have been translated into strategic objectives that will better help Tamkeen define its role in the economy. These objectives by customer type are detailed below, as well as the new segmentation approach to classifying customers. I. Tamkeen’s Strategic Objectives High Level Objective by Customer Types The high level objectives of each segment of Businesses and Individuals are detailed below; these broad objectives were the driving force behind the creation of the various segments. Also, they served to guide for the new programmes which Tamkeen will develop going forward for both businesses and individuals. The below highlights the main goals to be achieved by customer type. 44 The graphic below defines the specific objectives related to each customer type. Within both customer types, businesses and individuals, more specific objectives were created to allow for better programme definition going forward. These objectives were as follows: II. The New Segmentation of Customers By defining strategic objectives clearly and succinctly, Tamkeen can approach programme development more critically. These strategic objectives target six segments which Tamkeen will be focusing on in the upcoming years. These six segments are outlined and below. 45 Segment Strategic Objectives Defined: These strategic objectives tackle the same issues as the previous strategy but with customer-centric objectives. A more detailed explanation of each is provided in the following section. Businesses: Start-up Objective: Foster entrepreneurship and the creation of businesses to stimulate job creation. Explanation: The first stage of the enterprise lifecycle is to help businesses start up their operations. Guidance and mentorship is critical at this stage, and ensuring that businesses are not ‘left alone’ is the ultimate objective. The identification of high potential entrepreneurs who will add greatest value to the economy is the prime focus. As well, Tamkeen aims to help in providing exposure to these businesses by different basic but customised marketing tools and strategies. Growth Objective: Promote the sustainable development of existing enterprises to fuel growth. Explanation: Providing technology capabilities for business for the purpose of increased productivity for growth is one element under this objective. In addition, helping businesses re-engineer their processes to enhance innovation is crucial for businesses at this stage. Businesses at this stage in their lifecycle should have: 46 o A solid customer base: thus the aim of providing customised marketing support tools is to help the business further expand its market outreach. o A reliable workforce: hence the goal here is to support businesses in developing their existing workforce to reach the high potential of the business Maturity Objective: Encourage diversification and expansion within businesses to generate alternative revenue sources. Explanation: Innovation and internationalisation are two key elements that need to be focused on for mature businesses to further increase their revenues. One avenue to promote innovation within mature businesses is to help their linkage with universities. Another mean is to aid businesses in expanding via outward bound franchising to reach further growth opportunities. Individuals: Students Objective: Nurture students to make optimal career choices through the dissemination of market and entrepreneurial knowledge. Explanation: At an early age, to guide students about the degrees that they could invest in and highlighting the attractive career opportunities. Building career awareness and the explanation of potential value added jobs will pose as a great factor in aiding their future study/career decisions. This objective also entails exposing students to the concept of ‘entrepreneurship’ and that it is a viable path for them to follow after graduating from university. These awareness activities will encompass explaining the risks behind being an entrepreneur and the appropriate steps to be taken to become a successful entrepreneur. Job-Seekers Objective: Enhance occupational opportunities and promote the local workforce. Explanation: This segment require an array of supporting activities the objective of which to either be employable or start their own business. Although Tamkeen is not in a position to force businesses to employ Bahrainis, Tamkeen will help in developing projects that create these opportunities for the local workforce and help Bahrainis to 47 access job opportunities. In doing so, Tamkeen will ensure that all projects are aligned with the market needs for better development of projects. Also, supporting job-seekers in terms of understanding the jobs available in the market, the expected salaries and the skills required for each job will better serve this objective. Another track that job-seekers might take is going into entrepreneurship; Tamkeen will create awareness about potential entrepreneurship chances and provide guidance and mentorship on the processes of obtaining CRs, parents, and other legal obligations. Employees Objective: Improve employees’ capabilities and encourage professional growth. Explanation: Those who are already employed in the workforce will have the chance to develop their capabilities to advance in the labour market through various specialised programmes. After having defined the overall strategic objective of each segment, the objectives of each new segment will be defined in the subsequent section. III. Specific Objectives of the New Customer Segmentation As can be seen, within ‘Businesses’ segment, enterprises will be clustered according to their stage of development: Startup, Growth and Maturity. As for ‘Individuals’ they are grouped under the following categories: Students, Job Seekers, and Employees. Individuals: The needs of the customer type ‘individuals’ was broken down further by looking at the groups Students, Job Seekers/Entrepreneurs, and Employees and their specific needs, as outlined in the figure below. As stated above, the broad objective of this segment is to enhance individuals’ capacities to drive their future prosperity. One important aspect of support will be through information- be it information on market needs, awareness of career opportunities, or career guidance. The importance of the dissemination of knowledge and information should not be overlooked, and should be the basis for all the support Tamkeen offers. As can be seen in the figure below, career guidance is an offering relevant to students, jobseekers/entrepreneurs and employees. 48 However in addition to that, another new aspect of Tamkeen’s support will be the encouragement of entrepreneurship to all these segments. Whether the main request they have is skill or guidance related, it is imperative that these customers be made aware of the potential risks and benefits of starting their own businesses. Individuals Students Job Seekers / Entrepreneurs Employees 1. Provide information on market needs 2. Guide skillsets required by the market 3. Introduce to career opportunities 4. Provide career guidance 5. Encourage entrepreneurship 1. Introduce to career opportunities 2. Provide career guidance and market information 3. Develop skillset for chosen field 4. Encourage entrepreneurship if relevant 5. Support employers to hire 1. Provide skills required to advance in careers 2. Provide career counseling and market information Businesses: The broad encompassing objective for all types of businesses is to encourage new venture development and support existing businesses to grow to the next level. In the chart below, specific objectives for each business segment have been outlined. Here, the needs of entrepreneurs are addressed more specifically than above. The difference between the segment above ‘Job Seekers/Entrepreneurs’ and ‘Start-ups’ below is in the needs which are being addressed. Entrepreneurs are supported as individuals through developing their skills, encouraging entrepreneurship, providing career guidance etc. However, they are addressed below as a business in the earliest stage of development. This is the stage where the business needs exposure opportunities, office space, advisory etc. The growth phase objectives were developed for businesses which have already been established, are running but are going through growth related changes. For example, a fast increasing number of employees, developing new products or services, or undergoing structural changes. Tamkeen’s support here will be centered on facilitating the growth of the organisation, and providing it with the means necessary to achieve a smooth and stable transition. Maturity is the phase of growth in which the business is stable and is looking to improve in different areas, whether they are diversification, improving efficiency or access to international markets, and others. Here Tamkeen aims to support them by helping with exposure, facilitating access to capital for them to grow; it also will encourage these businesses to hire Bahrainis. 49 Businesses Growth Maturity Diversification 1. Provide relevant skills training to existing employees 2. Encourage Bahraini hiring 3. Provide expansion support and exposure opportunities 4. Facilitate access to capital for scale-up and expansion 5. Facilitate access to advisory services for opportunity identification 1. Provide diversification support and exposure opportunities for new product development 2. Encourage Bahraini hiring 3. Facilitate access to capital for diversification plans 4. Facilitate access to advisory services for international positioning 5. Provide training packages for employees 6. Provide access to relevant international market information Start Up 1. Provide exposure opportunities 2. Provide office space and incubation 3. Provide skills training 4. Provide advisory support 5. Facilitate access to initial capital 6. Provide access to relevant market information Segment Definitions: All of Tamkeen’s customers going forward will fall into one of these clustered segments, as defined by the below graphic. 1. Segmentation (businesses) 50 The Businesses segments have been defined to be in alignment with the needs of business at each stage of their lifecycle: start-up, growth and maturity. Similar to the above table, the challenges facing the businesses have been examined. The findings show that there are common high level challenges across each stage, however the nature of support required at each phase is different. p p p p p p p Regulatory challenges (CRs) p Lack of robust market info Need for business incubator support p Lack of Export support Limited Advisory support Diversify p p Need for Business Skills Training Growth Lack of Marketing support Start-up Funding Limited Bahraini talent / wage subsidy ‘Businesses’ Segments Challenges p p p p p Potential challenges where Tamkeen may help overcome 2. Segmentation (individuals) The Individual based segments have been evaluated based on the challenges faced by each segment. These challenges were obtained through numerous public consultations and regular interactions with customers. The below table illustrates that there are common challenges faced by all of these segments, however the nature of support that will be 51 required to address and cater to the needs of each will differ. For this reason, the Individuals segments have not been clustered further. Job-Seekers p p Employees p p p p Narrow options in higher education p Below expectation salaries p Limited avenues to search for jobs Lack of experienced career guidance/ orientation/ counseling Students Absence of skills development opportunities Lack of employment opportunities ‘Individual’ Segments Challenges p Potential challenges where Tamkeen may help overcome 52 Business Life Cycle Challenges: The challenges and focus of each stage differs and requires customised attention, as explained below. During the growth of businesses, companies go through the stages of the business life cycle and encounter different challenges that require different attention (financing, advisory, availability of resources, etc.). As businesses mature, priorities and focus areas change leading to the development and adoption of different strategies in terms of market penetration, business development, and retaining market share. PHASE 1: START-UP The start-up phase consists of two stages Development and testing of the business idea In testing the business idea, businesses should ideally conduct research regarding the industry they will operate including gathering feedback from potential customers and industry specialists, statistics, market reports, etc. This is the stage when entrepreneurs are determining whether the business idea that they had is worth pursuing and if so it will be the birth of the new business. The challenges pertaining to this stage are as follows Business idea profitability o Market acceptance o Establishing business structure o Getting ready to launch the product or service: Once the business idea is tested and proved successful, minor tweaking of offerings might be done based on the initial feedback received from customers and according to market demand. This process also entails refining the business model to ensure that it is marketable and profitable. The challenges pertaining to this stage are as follows o o o o o Managing cash reserves Managing sales expectations Accounting management Establishing customer base Establishing market presence 53 PHASE 2: GROWTH This phase should ideally be where the business is consistently generating income and adding to its customer base. The generated income will aid businesses in operating expenses and opening new business opportunities. Also, this is the time where the business might be facing competition from local, regional or international markets. Again, the process of refining the business model is required to meet the requirements of the business. The challenges pertaining to this stage are as follows o o o o o Dealing with increasing revenue Dealing with increasing customers Accounting management Effective management Market competition PHASE 3: MATURITY This stage is characterised by a well-established business presence in the market, thus allowing the business to expand and enter into new markets and explore different distribution channels. In order to start capitalising on the success of the business, businesses will need to capture a larger market share and find new revenue streams. The challenges pertaining to this stage are as follows: o o o o o Increasing market competition Accounting management Moving into new markets Adding new products/services Expanding existing business Every stage of the business lifecycle brings new or pre-existing challenges. Solutions that may have worked for one stage may not work in another stage, thus customising the type of support offered by Tamkeen is imperative to ensure maximum benefit and impact to the business. The development of projects will be customised for each of the above ‘clustered segments’, which represents the lifecycle of businesses. 54 Business Life Cycle Requirements One of the studies that contributed to the classification of the above segments is the businesses’ business life cycle requirements, which will be discussed in this section. There are three phases to entrepreneurship, and Tamkeen must tailor its programmes to the requirements of each phase. Adopting this approach will enable the maximum benefit and impact on businesses, and will allow them to grow from one stage to another in the most efficient way. Beneficiary Type: Businesses 4 Start-Up 5 Growth 6 Maturity Diversify Characteristics / Potential Business’ requirements • Low collateral loans • Access to business angels • Access to grants • Mentoring and guidance • Minimum human capital requirements • Commercialization • Scale-up and expansion finance • Opportunity identification • Sales and marketing skills • Scale-up operations • Resource acquisition • Access to suitable new human capital to support growth • Product and process improvements • International capital market access • Mergers and acquisitions • International positioning • Leverage capabilities to new opportunities • International resources • New product development • Adaptation to new markets *Note: may include investment projects The following three considerations are imperative for a successful entrepreneurial lifecycle: 1. Raise the level of entrepreneurship and business growth; High-growth businesses are the minority in most economies. They contribute disproportionally to economic growth, which is also illustrated in a Global Survey – “High-aspiration entrepreneurs are less than 10% of the population, yet they were responsible for up to 80% of total new job creation”. Slow-growth businesses constitute the majority of businesses in an economy (typically more than 90%) that at inception contribute substantially to job creation, 55 provide subsistence for an important section of the economy and offer Bahrain a portfolio of opportunities and help diversify. 56 Both types of businesses play a crucial role in Bahrain's economic development, and Tamkeen should develop a portfolio of programmes to meet the needs of each group: For high-growth businesses, Tamkeen should offer the following: o Develop focused and highly selective entrepreneurship and business support programmes o Proactively seek out these businesses for support and build a coaching/mentoring relationship with them For lower-growth businesses, Tamkeen should offer the following: o Encourage an on-going high volume of start-ups o Provide support to help firms improve and to help good firms survive In order to support the development of these types of businesses, Tamkeen will need to consider the four stages of entrepreneurship1: Opportunity Exposure; Opportunity Framing; Pre-Launch; and Market Launch. Critical factors and implications are described in the below table, where an effective entrepreneurship programme will require tailored policy responses to each stage of entrepreneurship. Entrepreneurial lifecycle Phase Threshold 1 Opportunity Exposure Opportunity Framing Pre-Launch Market Launch Opportunity recognition Entrepreneurial commitment Launching platform Legitimacy • Business planning • Resource mobilization and access: facilities, management team, finance, technology, complementary assets, businesses services • Pre-acceptance by supply chain and customers • Firm launch • Establishment of business relationships • Testing and consolidating a business model • Creating administrative and fiscal routines • Building momentum and market share • Facilitate resource provision, seed finance • Provide business infrastructure • Provide advice • Facilitate social capital networks • Facilitate small-large firm relationships • Facilitate market entry • Reduce compliance costs • Trim, streamline regulatory framework • Provide advice, consulting services Critical factors contributing to threshold achievement • Market and industry knowledge • Knowledge of customer needs • Identification of a route to market • Commercial and entrepreneurial incentives • Alertness to entrepreneurial career choice Policy implications • Strengthen opportunity • Strengthen entrepreneurial evaluation skills, alertness, opportunity entrepreneurial competence identification skills • Reduce entrepreneurial • Strengthen population’s trade-offs entrepreneurial competence • Secure availability of • Promote entrepreneurial resources, business career choice services • Estimation of initial opportunity size and feasibility • Estimation of resource requirements • Estimation of career, life impact • Identification of feasible business model Finland Ministry of Trade and Industry, 2007, High Growth SME Support Initiatives in Nine Countries: Analysis, Categorisation and Recommendations 57 2. Enable a range of financial products for business Best practices point to the development of an effective financial system which provides the private sector with access to finance at a reasonable cost through a variety of instruments at all phases of enterprise development. The specific finance requirements of a firm will vary through the firm’s lifecycle and must be tailored appropriately. Tamkeen should facilitate the provision of financing by existing or new financial institutes and directing private sector businesses to the most suitable available options. There are a range of phase specific programmes and initiatives that will need to be developed to ensure comprehensive options are available for the private sector. Once formed, firms pass through four phases; Tamkeen must tailor the type and level of support per phase, as depicted in the below figure. Business support requirements throughout a firm’s lifecycle Medium Diversify Maturity High Growth IPO Small Start ups & Micro Home Business Owners Break-even Potential losses Time 3. Provide phase specific services and support Following the above approach, ensuring phase-specific services and support in terms of both business and human capital support is imperative for the success of businesses: Business Services: Best practice suggest offering a range of high quality services to provide comprehensive support to private sector and ensure access, with offerings tailored to the development phase of the firm, as indicated in the above figure. Tamkeen’s role can be to identify business support needs, develop appropriate offerings and ensure they are accessible (such as providing financial support). Human Capital Support: Best practices include ensuring a supply of appropriately skilled and motivated human capital for firm creation and growth at all phases of development. Tamkeen must take a leading role in ensuring human capital development offerings are available that meets the needs of firms. 58 Level of Tamkeen support Start-up Large Low Firm growth: Revenue /number of employees Firm Development Phases IV. Tamkeen’s Intervention Areas This section focuses on identifying the types of interventions required to enable the target segments to respond to challenges more effectively. These intervention areas define how Tamkeen will operate going forward, taking into consideration the implications on the following: Development of new projects Marketing of new projects Customer receptiveness of project packaging 1. Types of intervention: The Interventions Triple Helix Target: individuals and businesses Financing Grants • Subsidies • Capacity Building Advocacy & Information Sharing Since the inception of Tamkeen, the organisation has been exploring new projects and different ways to create impact in the market. The below proposed intervention areas cater for both individuals and businesses. The implication of the above on smaller businesses Encourage an on-going high volume of start-ups Provide support to help firms improve and to help high potential firms survive The implication of the above on high growth businesses Develop focused and highly selective entrepreneurship and business support programmes Proactively seek out high growth businesses for support 59 The implication of the above on individuals Encourage advancement in careers Provide customised mentorship and guidance to individuals across all levels The three intervention areas in the above figure are detailed below: Financing: Businesses have limited access to commercial channels of financing, forcing them to use self-financing. It is evident that instruments customised to different stages of development of a business can prove valuable, as opposed to a one-size-fits-all approach. The flexibility of these mechanisms is essential to respond to the needs of businesses, and thus demonstrate maximum sustenance, growth and impact on the businesses. Since inception, Tamkeen has been a prominent actor in Bahrain to mitigate the financial constraints faced by the private sector (across all stages and maturity levels) to finance businesses at a reasonable cost through constant collaboration with banks. Tamkeen has aided in tackling the major obstacle for small and medium business financing: lack of collateral, which is a pre-requisite to financing. Tamkeen will continue to facilitate the provision of finance by existing or new financial institutes and direct the private sector to these available options, in addition to initiatives that will help in human capital development. The elements entailed under this intervention include the following: Facilitate funds (loans) to businesses to assist in capital expenditure Facilitate the provision of different financial instruments to businesses depending on their maturity level and needs (Letter of credit, letter of guarantee, working capital finance, growth/expansion finance, import finance, etc.) Utilise partners (primarily retail banks) to provide financing support Restructure of finance support re-payment options Cover training costs for individuals, whether they are students, job seekers, or employees It is worth noting that the ‘Financing’ intervention limits Tamkeen’s authority to impose conditions on the customers. The reason for this is that businesses and individuals are still liable to pay back the financial obligations to the financing arm. Grants: Grants are non-repayable funds disbursed by one party to a recipient (in Tamkeen’s case, to businesses and individuals); this fund is to be used for defined purposes. 60 Grants are not expected to be repaid as there is typically a lengthy application process to qualify and be approved for a grant. Most grants are made to fund a specific project and require some level of compliance and reporting. This type of intervention allows Tamkeen to ask for proof of proper usage of the grant via periodic reports, site visits, questionnaires, etc. As with the ‘Financing’ intervention area, this intervention also applies to both businesses and individuals; this will be elaborated on further below. Subsidies: Subsidies cover various forms of funding, such as direct payment and loan guarantees, where they may be made in full or partial (co-funding/co-financing). Subsidies can be used by businesses to offset operating and management costs over a lengthy time period. Tamkeen has been providing this financing mechanism through various schemes, examples include: Incubator support scheme – rent subsidies to offset operating costs Career progression programme – wage subsidies to offset employee productivity loss Certification schemes – human capital development training subsidies The reasoning for offering subsidies is to stimulate a certain investment that would otherwise have been too costly for businesses to pursue. Capacity Building: Capacity building consists of two key elements: Understanding the obstacles that prevent people and organisations from fulfilling goals Enhancing and strengthening the skills, competencies, and abilities of individuals and businesses to help them achieve measurable and sustainable results Tamkeen has been working towards the supply of appropriately skilled and motivated human capital for the development and growth of businesses at all phases of the business lifecycle. The key areas that will be introduced under this intervention will tackle the challenges faced by businesses and individuals in terms of capacity building. The examples given below under each area should not be seen as an exhaustive list of activities. 61 Advisory and mentoring services o Advisory services often require short discussions on one-off situations where certain questions or concerns are addressed o Mentoring services are more geared towards long term improvement plans, such as the necessity to improve productivity. This service requires the right strategy to be put into place, whether for individuals or businesses. For businesses: the ‘strategy’ should take into account the following aspects: people, processes & systems, workflow, and any change management challenges that the business might face should it follow mergers, acquisitions and/or internal restructuring. In addition, this includes the support given to businesses in terms of providing ‘business studies schemes’ such as help in Business Plans, Feasibilities, Expansion strategies, Export strategies For individuals: career guidance and setting career progression plans, as well as the right type of training that Tamkeen can offer The purpose of this service is to work with the customer collaboratively to achieve tailored and sustainable results. Capacity development programmes o Low-cost training services such as short in-house training for SME employees o Local and international internship schemes o Apprenticeship Schemes o Focused workshops and training o Basic skills training o Certification schemes Career guidance and work readiness schemes for individuals Exhibitions and Fairs o Career fairs Internship fairs – for the purpose of employment Work readiness programmes for individuals Advocacy and Information Sharing: This intervention aims at creating a platform whereby knowledge resources are made accessible to Tamkeen’s customers in the most efficient way. This area consists of generating, collecting, distilling, and disseminating the most relevant and up-to-date information. 62 The purpose of this intervention is for Tamkeen’s customers to have a better and informed decision making process. The examples given below under each area should not be seen as an exhaustive list of activities. Advocacy o Industry support bodies to explore opportunities outside of Bahrain (for larger businesses) Facilitating access to markets o Online portals market place for entrepreneurs to market their products and services o Centres to help businesses network in the region Information dissemination sessions o Information and orientation sessions o Campaigns dealing with the mass, such as the a9eel Programme in schools Information collecting sessions o Consultation forums to collect comments from the public on the challenges they are facing and solutions they recommend (such as the semi-annual forums held) o Focused discussion sessions to gather feedback on specific areas o Surveys and studies that collect the responses of the public on certain issues/ideas Sector Level Interventions: The previous strategy cycle of 2010-2014 was more focused towards sector priorities and developing targeted projects accordingly. The direction of the current strategy is more related to serving the needs of businesses and individuals via segment-based analysis. The upcoming strategy realises the importance of taking into consideration both the segment and sector into consideration when defining specific programmes for Tamkeen’s target audience, however the recommended programmes will be linked to segments. Focused attention regarding sectors will be given at a detailed project level, where the creation of proper variations of the proposed projects will take into account the needs of each sector. The segmentation and intervention strategies are the building blocks to the refinement of existing programmes and the development of new solutions for Tamkeen to pursue. The subsequent sections of the strategy document will detail the approach taken for this. 63 V. Proposed Programmes per Segment This section shows the new programmes which have been created based on the segmentation of Tamkeen’s customers into cluster segments to better focus its efforts. These programmes were developed based on international benchmarking, public consultations, and experience from previous programmes. Tamkeen’s programmes were linked back to the law and mandate based on which the organisation was formed. The new programmes are as follows: The new programmes address some of the key issues which Tamkeen has identified through interactions with its customers. Solutions were designed to cater to the most prominent problems pertaining to each segment. For students, it was important to have a programme addressing career guidance, to ensure that they are given proper training and mentorship to help choose their careers going forward. Entrepreneurship is a key theme which Tamkeen wants to introduce to students going forward, to make them aware of the options which they have. For jobseekers and entrepreneurs, the focus going forward will be on channelling employment opportunities to them, improving their skillset to better meet market needs. 64 They will also receive career guidance and counselling as well as entrepreneurship mentoring. Businesses will receive catered support based on the stage of growth. Startups will avail support through funding as this is one of the key barriers they face. Consultancy and mentorship are also high on the list of priorities for startup, since many of them are inexperienced they are most likely to benefit from such programmes. As well, innovation and marketing support are highly relevant for this segment. Growth companies support will be focused on encouraging expansion through programmes which provide funding, support business process reengineering, marketing and improving workforce capacities. As for mature companies, they will be supported through product and service innovation programmes, as well as internationalisation. Finally Tamkeen will support these programmes by making companies aware of opportunities for joint ventures with foreign companies. Proposed Programme Definitions The universe of potential programmes mentioned earlier were a result of the paradigm shift of this strategy direction relative to the previous one; being segment-driven. Each segment would therefore drive the potential set of programmes that directly serve its needs and its identified challenges. 65 Below is an overview of the scope of the proposed programmes and their definitions: 1. Startup: 1.1 Startup funding support: offer financial support through providing or facilitating access to grants and financing for the purpose of business formation through all stages of business development from early concept to pre-launch and validation. 1.2 Startup consultancy and mentorship: identify business support requirements and provide knowledge with regards to the available array of financial and general support available to start-ups 1.3 Encourage startup innovation: encourage innovation in service/product development and processes from which new innovative offerings with a clear competitive edge would emerge 1.4 Startup marketing and exposure support: provide funding support to facilitate exposure and market outreach to start-ups and entrepreneurs to communicate, market and promote their product and services to the public. 2. Growth: 2.1 Provide funding for technology and growth: provide funding for initiatives that help building up organisational systems and resources with emphasis on technology adoption that meet international technical and quality standards to increase firm’s productivity 2.2 Support business process reengineering and innovation: provide customised advice, information, and financial assistance to restructure business and improve operations and business performance by applying creative and innovative solutions 2.3 Support marketing and customer outreach: provide financial/advisory support to businesses to help them increase their market outreach and customer acquisition through effective marketing strategies, advertising, and promotion (this would include export promotion and exposure through trade fairs/exhibitions) 2.4 Workforce capacity building and support: provide management and leadership training to SMEs and to Bahrainis employed in the private sector to improve productivity, instil best practices, and build business knowledge that can enable them to improve / expand their businesses 3. Maturity: 3.1 Product and service innovation support: provide financial support through providing or facilitating access to grants and financing as well as advisory support to encourage business development in advanced/mature business stages through diversification and innovation in product and service lines/offerings 66 3.2 Internationalisation and franchising support: offer services that will enable businesses to expand its operations and introduce the idea of outward bound franchising to reach further growth opportunities 3.3 Foreign Investment and joint venture support: provide support in attracting FDI’s, establishing JVs between local businesses and foreign organisations 4. Students: 4.1 Career guidance support: Enable students to make informative decisions about their educational and occupational attainments. The programme will offer a set of tools that will act as a career guide to students in order to assist them with making choices after graduation, post-graduate education and career planning and development. 4.2 Entrepreneurship exposure support: This programme will arm students with the relevant mindset and necessary guidance to increase the potential for selfemployment and business generation. This programme is designed to encourage a culture of entrepreneurial guidance and support from an early age of a student life. 5. Job Seekers: 5.1 Employment channelling support: This programme aims to create opportunities for Bahrainis to access the job market and create awareness around the availability of these opportunities 5.2 Up-skilling for market alignment: This programme focuses on the process of equipping prospective market entrants with additional skills in order to increase their knowledge and capabilities in certain disciplines and knowledge areas. Upskilling for market alignment is a comprehensive programme based on future potential that allows individuals to upgrade their capabilities in order to have marketable skills and meet the challenges of new endeavours. 5.3 Career counselling and work readiness support: The programme is designed to ensure that customers get the appropriate and needed exposure before taking on a job search or an actual job. This programme focuses on enabling individuals to make an educated choice of career and providing them with a proper set of work entry skills in order to increase the chances of being successful. 5.4 Entrepreneurship guidance and mentorship: This programme focuses on providing entrepreneurs the opportunity to tap into the experience and knowledge of mentors during their entrepreneurship journey. Entrepreneurs can utilise the guidance expertise to shape their conceptual ideas and shape their entrepreneurship skills before commercialising their ideas. 67 6. Employees: 6.1 On-job skills optimisation: This programme will offer training to employees addressing their occupational needs/requirements in order to up-skill them, improve productivity, make them professionally attractive and increase their chances of career progression. Having defined the programmes in more details and the objective of each, the upcoming strategy realises the importance of taking into consideration both the segment and sector into account when defining specific programmes. Focused attention regarding sectors will be given at a detailed project level, where the creation of proper variations of the proposed projects will take into account the needs of each sector. The following section VI. Sector Review This section outlines an essential sectoral analysis which has enabled Tamkeen to align its programmes with market demands. Each sector has its own unique demands which will be addressed based on each segment’s needs. The type of intervention will depend on what the most prominent issues each segment faces within the sector. Therefore, customised support will be developed based on the economic conditions of the sectors. The outlook of each sector has been analysed and project definitions will be based on the findings. The below section provides an overview of the macroeconomic environment and performance/attractiveness of each sector. Macroeconomic Environment: Bahrain’s economy continued its healthy growth after two major setbacks in 2009 and 2011. The well-diversified economy and well-regulated environment made it easier to dodge the severe impact of recession which other economies were experiencing at that time. Some of this recovery can be attributed to government support through increased spending and support for businesses. The economy has recorded positive growth for two consecutive years, which was led by the growth in the hydrocarbons industry followed by other non-oil related industries. Estimates for the coming years show a slower pace of growth. In 2014 Bahrain is projected to have a growth higher than the MENA average and some GCC countries. Bahrain’s economy has also been recording a positive average growth in service industries which has consistently outperformed the goods producing industries. However, the latest records for 2013 show that backed by oil production, goods 68 producing industries have had a spike in growth rate to 8.4% after a decline in growth in 2012. The service industry growth was attributed to the increased activities in transport, communications and hotel and restaurant services, the latter recorded a growth of 9.5% in 2013. The non-oil sector continues to be the major contributor to the GDP, emphasising the strategic commitment for a diversified economy. Bahrain Oil contribution counted for just above 20% of the total industries. The non-oil industries led majorly by high performing sectors such as financial corporations and manufacturing have respectively contributed 16.8% and 14.3% to the GDP in 2013. Regardless of the oil sector contribution to the GDP, revenues generated from the sector remains one of government’s main source of funding for infrastructure projects in the country. As with other GCC countries, data shows that Bahrain continues to record a healthy growth rate, driven by non-oil sectors as mentioned above and other staring sectors such as transportation & communication and construction. A number of major sectors remain major contributors to the overall economy. Hydrocarbons, which are represented in the crude petroleum and natural gas followed by the financial sector and manufacturing contributed more than half to the economy. Whereas, there are other sectors that signals promising contribution to the GDP i.e. Real Estate and Business activities, Construction, Trade and Transportation and communications Tamkeen’s new approach will be to serve all the economic sectors to enable maximum impact on supporting Bahrain’s economic development objectives. The output of this work will allow for actionable Tamkeen programmes to be developed over the short, medium and longer term. The core of this approach was assessing each sector’s stand-alone fundamental attractiveness and also its fit with Bahrain. “Fundamental attractiveness” is a sector’s attractiveness on a global industry-wide level. “Fit” is a sector’s fit with Bahrain’s capabilities and comparative advantages. Manufacturing: The manufacturing sector is anticipated to continue to grow and maintain its foothold amongst other sectors. This will put a direct emphasis on capitalising on new technologies and developing the right skills in order to keep up with the distinct requirements of the sector. The nature of skills and level of specialisation in terms of vocational training will highly be in demand as the sector grows. Average salaries for Bahrainis in the Manufacturing sector have always been higher than non-Bahraini average wages. This is mainly due the fact the majority of high 69 skilled occupations and roles are favoured by Bahrainis in most big companies that operate in the manufacturing sector. The unbalanced composition and the huge number of establishments raises an opportunity for identifying areas of support where the required skills can be acquired, along with working an improved environment which is believed to be one of the factors that hinders Bahrainis from penetrating the sector. 70 Financial Corporations: The progress in Financial Corporations has been a result of robust regulations and a dynamic market in which different composition of insurance activities try to offer their products and service to the local and regional market. Despite this growth, regulators are constantly guiding institutions to adhere to the best international practices in the market, resulting in new or existing areas to be developed and maintained which would require intervention in terms of training and development. One prevailing area is the risk management discipline which regulators are now emphasising be incorporated in insurance price building. Implementing risk management policy and strategy, whereby underwriting, pricing, investment and operation risk are managed effectively, is vital for achieving profitable growth. Average wages in the financial sector are considered one of the highest compared to other sectors in Bahrain. The gap between the Bahraini and non-Bahraini average salaries is minimal and has been fairly static over the past couple of years. Construction: Although the most labour concentrated sector and the highest in terms of numbers, the gap between the Bahraini workers and non-Bahraini is the highest compared to other active sectors. The average wages in construction is in favour of Bahraini workers despite making only 8.6% of total workers. This clearly indicates that most of the jobs occupied by non-Bahrainis are labour intensive and low skilled occupations which Bahrainis repel from. The number of workers in this sector is expected to grow in the coming couple of years due to major government and private sector projects that are related to infrastructure and housing. Despite being an unattractive sector to Bahrainis, the construction sector has various bands of jobs that can offer Bahrainis acceptable salary ranges and better working environment. Construction sector has been for long perceived as having a rigorous working environment and low pay jobs. However, there are other areas in construction sector that could offer good pay, unfortunately, these areas have being in the shadow of construction sectors’ prevailing conditions. This drawback could be addressed by making the public aware of different types and nature of jobs available to Bahrainis. 71 Trade: As the focus of growth in the economy moves away from the oil sector, trade is one of the sectors that have the potential to be in the frontline while the economy grows, especially with announced projects that will highly contribute to the sectors. Average wages in the trade sector have been in favour of Bahrainis despite the huge gap between the number of Bahrainis and non-Bahrainis working in the sector. Bahrainis’ average wage was BD 425 at end 2013, an increase of 8.7% since 2010. On the other hand, non-Bahrainis average wage was BD 179 in 2013; the wages have actually decreased since 2010 by 4.8%. The number of Bahrainis working in the trade sector has not had a major increase over the year unlike non-Bahrainis. The trade sector along with construction and manufacturing are characterised to be a major source of employment, and the likelihood that Bahrainis penetrate potential jobs is deemed to be very high should they be equipped with the necessary skills and competencies. In addition, there are a lot of value added jobs that make up different parts of trade sector which could absorb Bahrainis in the short to medium term. Hotels and Restaurants: In spite of its marginal relative contribution to the total economy, hotels and restaurants industry is considered one of the star sectors with optimistic growth rates over the coming years. The growth in the number of employees over the past 4 years has been slow especially for Bahraini citizens; total growth from 2010 to 2013 was only 1.5% for Bahrainis. This pace has been majorly attributed to the unattractiveness of the sector to Bahrainis. On the other hand, average wages for Bahrainis increased from BD 271 in 2010 to BD 327 in 2013, an increase of 20% compared to 18% for non-Bahrainis. Transport and Communication: Transport and communication is one of the promising sectors that are expected to contribute positively and boost the overall contribution of the non-oil industry to the national economy. There has been a remarkable growth in the transport and communication, since 2009 it has recorded a 6.5% average growth rate. Average wages in this sector is categorised in the upper tier with manufacturing and financial corporation sector. Bahraini employees average wages have recorded at end of 2013 BD 908, compared to BD 505 for Non – Bahrainis. There were nearly 1,600 establishments in this sector employing just above 16,000 workers. Bahrainis represented 44%, a relatively high percentage considering other economic sectors. 72 The nature of transport and communication sector necessitates a different band of job categories, including jobs with technical skills requirements. Health: The healthcare sector contribution over the past years has been growing marginally; it is also expected to keep its positive growth in the coming years. Private healthcare service is considered limited compared to the services offered by the government however it is growing very rapidly within the dominance of the government sector, leaving little room for development and expansion in general medication very prosperous in terms of specialisation of services. A major challenge for private healthcare service provider is the public sector dominance in the healthcare space. Another dimension of the challenge that faces the industry is specialised manpower, the insufficient or the availability of qualified and experienced manpower, ranging from doctors to nurses to specialised personnel. In addition to that, the licensing of medical manpower and the time taken for the same is also regarded by industry experts as a concern. The focus of the government has been directed towards greater public – private sector cooperation and joint investments in the health sector. This focus is expected to attract more investments in order to serve not only the local market but regional as well. Average wages in the health industry for Bahrainis and non-Bahrainis are nearly the same. Education: Despite the steady growth, Bahrain is yet to compete with other GCC countries in terms of improving quality of the educational system. As of 2013 Bahrain ranked 48 th in the global competitiveness report falling behind Qatar 4 th, UAE 15th and Saudi Arabia 39th. This parameter is an indication of how well an educational system in a country meets the needs of a competitive economy. Other important parameters also include the level of technology integration in the schooling system or how widespread the internet is in schools. Bahrain ranked 3 rd amongst other GCC members. There is an obvious gap in average wages between the Non Bahrainis and Bahrainis, this gap has widened since 2010. In 2013 Non Bahrainis averages wages recorded BD 645, an increase of nearly 110%. On the other hand, Bahraini average wages was BD 473 for the same period, an increase of 108%. 73 Agriculture and Fishing: The agriculture and fishing sectors are considered the smallest contributor to the economy due to its limited spread in terms of activities and infrastructure. The agriculture sector which includes activities such as growing crops, fruits and farming animals had a minimal contribution of 0.2% to the national economy. Since 2010 the contribution of this sector seemed to cap to this rate without any notable increase. The agricultural sector is dominated by non-Bahraini workers which have maintained an increasing trend since 2011. Bahrainis on the other hand recorded a decrease of 25% since 2010. Despite the non-Bahraini dominance of this sector, average wages for Bahrainis are higher compared to non-Bahrainis. The agriculture and farming sectors face many challenges that hinder its expansion and development, one of the main challenges is the lack of soilable lands and the absence of a proper distribution channel when it comes to local farming houses. Tamkeen has developed an insight into the economy by studying the various sectors, their growth rates, the challenges they face and their scope for growth. This has allowed Tamkeen to develop its new strategy in a way that addresses sectoral needs and attributes. Through an analysis of the various sectors, Tamkeen was able to identify the strengths and weaknesses, as well as a path for the development of each. It is imperative that Tamkeen provide sufficient support across sectors, without favouring any sectors over others. Rather it will support all sectors in the areas which will yield maximum impact, and resolve the most prevalent issues which they face. This will fuel the development of the private sector, increase employment, and enhance productivity. The shift which Tamkeen has made from a sector-driven towards a segment-driven approach will not prevent it from addressing challenges unique to certain sectors. For example, programmes for start-ups will be structured in a way that allows for flexibility relative to the sector that the start-up is in. The same applies to students or job-seekers seeking to apply for work in various sectors. Naturally, the needs will differ per sector, and therefore the types of programmes which will be offered will be tweaked to meet those needs. The implementation of the new strategy will require a continuous and efficient flow of operations, monitoring and planning which all work towards achieving the ultimate goal, and that is customer satisfaction. Good planning underpins the success of any organisation, and Tamkeen, in implementing its new strategy, must ensure that there is sufficient planning prior to the execution of projects. 74 Operational Considerations The implementation of the new strategy will require a continuous and efficient flow of operations, monitoring and planning which all work towards achieving the ultimate goal, and that is customer satisfaction. Good planning underpins the success of any organisation, and Tamkeen, in implementing its new strategy, must ensure that there is sufficient planning prior to the execution of projects. By doing so, resources will be allocated effectively and operations will flow more smoothly. Good monitoring systems also ensure that high delivery standards are met, thus further strengthening the organisation’s customer focus. In order for any strategy to be effective, a detailed implementation model is required to translate the strategic objectives into actionable items for the organisation to execute. The organisational implementation model takes into consideration all the impact assessments, feasibility studies, market studies and public consultations conducted by Tamkeen over the years. It also emphases the strategic direction that will best translate Tamkeen’s internal processes into impact and output. 75 I. Organisational Implementation Model In the process of formulating practical steps towards accomplishing the objectives of Tamkeen’s corporate strategy, implementing its annual operational plan, and providing the building-blocks for future initiatives, the following areas were identified as general themes to guide the organisation’s development: Quality enhancement: continuously improving the current portfolio of Tamkeen’s offerings, services, processes and practices with an emphasis on enhancing quality and improving delivery time, Customer focus: adopting a customer-centric approach by taking into consideration the feedback of stakeholders to ensure a higher level of customer satisfaction, and Results oriented approach: by closely monitoring and measuring the impact and the success of different programmes to ensure the fulfilment of the programmes and Tamkeen’s objectives. However, the above mentioned themes face a number of key issues relating to processes and procedures, roles and responsibilities, as well as organisational structure and resources. Chronic fragmentation of functions and redundancies are evident across the organisation leading to confusion, and the absence of well-defined accountability. In order to enable change, Tamkeen needs to drive this notion by improving the current business model and strengthening relationships between departments through adopting a logical approach to defining workflows and priorities. The current organisation structure adopted by Tamkeen, combined with the increase in the number of staff in certain departments, has affected the ability to effectively work together towards a common objective. This is partly due to the lack of proper tools and mechanisms for managing the large number of employees in an effective manner. Moreover, the main contribution to the inability of Tamkeen to build an effective team environment and collectively fulfil the corporate strategic objectives is attributed to the structure of the organisation. The current set up of the organisation is in a way that encourages departments and teams to operate in silos. This, in turn, has resulted in the absence of implementable checks and balances within the organisation towards effective quality and control, thus delivery to an extent. The structure has two distinct Implementation Departments, where each are responsible for planning, implementation, and monitoring their own set of projects. Each department has their own set of plans and objectives going forward, as opposed to analysing the entire ecosystem and portfolio of Tamkeen and working together towards a common objective. As a result, this limitation in seeing the bigger picture to Tamkeen’s activities has caused a disconnect between departments. 76 Tamkeen’s Structure - Current Issues The following issues are pervasive across the organisation. These challenges provide an indepth understanding of the key structural and process-related constraints that need to be rectified in order to implement the 2015-2017 strategy: o Tamkeen’s initiatives will need to be further aligned with the Corporate Strategy - Tamkeen’s efforts to drive its operational focus in a direction congruent with its strategic objectives have been less than successful. As a result, the process of identifying optimal objectives has also become a challenge where operational issues have at times obscured strategic targets. Moreover, as a result of the current project approval process and hence the absence of an independent control has resulted in disregarding a wider range of alternatives, which could align the department’s activities to the corporate strategic objectives. Specific Objectives: - To develop focused and specific objectives for some projects - Some objectives were general and not quantified or time bound. As a result, some of these projects’ objectives were changed or adjusted during the project lifecycle in order to justify its alignment with the corporate strategy. - To have consistent Key Performance Indicators - Most of the current KPIs are focused on issues such as customer pass rates and the service providers performance evaluation level with minimal consideration to other critical areas that would be indicative of the programmes’ true performance and achievement of objectives. - An independent evaluation in the Project Initiation Documents is deemed critical to ensure projects do always have the necessary comprehensive due diligence required - There are many instances where the projects, especially those that are received from the public, were not assessed in terms of their strategic fit to Tamkeen’s strategic objectives, cost estimates, market prioritisation, and most importantly value. o To eliminate fragmented activities across the organisation – This is evident in terms of the various initiatives being carried out without clear alignment to the organisational strategy, as well as market demand and priorities in some cases. In many areas, the programme objectives will need to be well defined to avoid creating a disconnect between what the programme was designed to achieve 77 and what was being measured. Independent assessment will be required to address this issue to direct efforts towards the set strategy. - Enhanced Communication with external stakeholders is deemed necessary- The fragmentation of activities across Tamkeen is making it difficult for internal departments to gain a comprehensive view of the organisation’s initiatives. This has been hindered further by the inconsistent data and information needed to be communicated for the various schemes. Hence, this factor was deemed to be an obstacle in the process of guiding the public towards a clearer perception of information regarding Tamkeen’s offerings and services. o Leveraging of competencies across departments has been minimal - Tamkeen has witnessed many challenges affecting the performance of the ongoing strategy, some are due to external factors but many of them are attributed to internal issues. There is an apparent need for greater resources and training in key project management and monitoring areas to ensure the effective utilisation of staff in their core fields. Specific Objectives: - Need for due-diligence for some of the projects launched – Due to time factor, some projects were launched without a prior detailed assessments, feasibility studies, and due diligence. This will have an adverse impact on Tamkeen’s ability to effectively evaluate the viability of the schemes. Moreover, the market fundamentals that support the premise behind directing projects towards a specific sector was not well justified in some of the cases. - Financial cost projections required greater due diligence and routine updated forecasting in order to continuously ensure that proper controls and risk mitigation concerns are managed effectively. - To avoid the persistence of vague measures of success - the performance KPIs adopted is measured either by the value of the portfolio distributed by its business partners or by the number of customers receiving support in some cases. These appear to be insufficient in determining the true impact of the programme. o Need for further emphasis to be laid on the core roles and functions across the Organisation – If this factor is not carefully considered, the implementation and operational excellence, as well as performance monitoring to support the corporate strategy might be hampered. The absence of complete planning in key areas could jeopardise project outcomes and ultimately, may result in low impact 78 and unsatisfied customers. Therefore, this calls for an urgent need to consider a mechanism whereby equal attention and effort is exerted individually into planning, implementing and monitoring the projects with the right expertise in place for each area respectively. Specific Objectives: - Cumbersome and time consuming processes and procedures for some schemes left a negative impression amongst Tamkeen’s stakeholders (as per consultation feedback and other public engagements). Streamlining of processes was deemed as critical steps to the viability of Tamkeen’s support schemes and need to be prioritised. o Tools and systems required for operational efficiency within the departments will need to be clearly addressed – Business Processes and systems were a major source of criticism across the organisation (public consultation forum feedback, management workshops) which highlighted the need for Tamkeen to revise many policies and procedures in this area. Time lags and delays in receiving payments were discussed repeatedly in all sectors and needed more attention and resources from Tamkeen to overcome. This is moreover, hindering the organisation from providing standard / constant /and consistent operational systems throughout the organisation (including the Management Information Systems and others). Specific Objectives: - Data collection will need to be a mandatory activity across the Organisation– Data collection approaches has not been formally considered as part of the programme set up to facilitate monitoring. - Operational bottlenecks in performing impact assessments to be reduced– this is mainly due to the lack of a coherent and systematised database for programmes and initiatives. Moreover, incomplete, non-comprehensive and timely up to date data for some projects can be a hindrance to conduct accurate impact assessments. o There is a need for a robust and transparent Enterprise Risk Management Framework - the lack of a comprehensive framework can hinder the ability of the organisation to prioritise activities and to meet new challenges in a structured manner 79 The absence of this framework can be an obstacle to the organisation in terms of the following: 1. Deciding on a sound basis for strategic planning 2. Effective allocation of resources 3. Improved level of accountability and responsibility 4. Better informed decisions about opportunities and new initiatives / projects Specific Objectives: - There needs to be a clear policy in place for performance of impact assessments – In order to ensure that unsuccessful project does not continue, taking into consideration remedial actions proposed through impact assessments and other feasibility studies. o Further empowerment of the role of support functions– In some cases, the organisation has been functioning in operational silos with individual operational departments exercising authority over all aspects of its projects (which should mainly be the responsibility of the support units). Consequently, the organisation will not be able to fully comprehend the broad spectrum of risks facing Tamkeen and ensuring that those risks are appropriately managed. Organisations that understand the intricacies of the roles and responsibilities of each department are able to recognise the individual characteristics required to deliver the best results. By adopting this frame of mind, Tamkeen will be better positioned to recruit, select, develop, reward, retain and position the most productive and promotable people. Proposed recommendations & solutions: General View: The current structure within Tamkeen inhibits the operations thus performance of projects to an extent. Therefore, solutions need to be developed in a manner that meets the needs of the organisation as a whole by regarding it as a unique entity. The structure of the departments encourages working in silos and does not fully promote the culture of knowledge sharing for the benefit of Tamkeen. Moreover, clarity on the roles and responsibilities of each department remains ambiguous, which affects the operation of work and ultimately the performance of the organisation due to duplication of efforts. Therefore, for the purpose of developing an efficient customer-centric organisation, Tamkeen is required to build an operating model around a thorough understanding of its 80 customers, what they value and the contribution each makes to the success of the organisation. This requires the following elements to be examined further: o Assessing the organisation structure against a customer-centric focus to provide a balanced perspective for evaluating the needs and resources. This will guide Tamkeen on where and how to invest funds to demonstrate the maximum impact. o Further simplifying and streamlining the processes and internal operations within Tamkeen’s support programmes. This will help to better plan for intensifying community outreach efforts to ensure that the public are aware of Tamkeen’s programmes and their benefits, as well as customising these programmes to match the unique requirements of each sector. o Redefining the roles and responsibilities in order to effectively design and deliver business processes that recognise different customer segment needs. o Delivering a positive and seamless customer experience by integrating their feedback and requirements into Tamkeen’s plans for future initiatives. Tamkeen needs to foster a culture that places the customer at the heart of the decision-making process. Proposed Changes: With a more conscious approach to channelling the organisation’s investment, the pressure to execute effectively has increased. The functional blueprint is a plan spelling out how to accomplish the best way forward for the departments to function as a whole and deliver the most value to the organisation while continuously raising performance. A well-designed and well-executed functional blueprint makes strategy execution and implementation easier. Once an open and a well-communicated set of priorities and an explicit, well-understood functional blueprint is developed and established, departments will no longer be operating in silos. The blueprints, or manual, will help reinforce a higher degree of alignment between the corporate strategy and operations of the organisation. Moreover, it will help in reducing multiple priorities and instead focusing on the most critical capabilities that will enhance the departments’ abilities to lead and shift Tamkeen to move in the direction of a capabilities-driven strategy. Tamkeen will introduce both new and modified functions within the organisation as deemed necessary with the ultimate goal of supporting the translation of its upcoming strategic intent all the way through to results in a clear and defined process. 81 A high level review of all the functions and processes was conducted to identify specific areas where certain functional gaps exist and accordingly proposed new approaches in terms of dependencies, tools & systems requirements and scenario planning for unexpected events that may arise in future. However, it must be noted that the “Project Manual” must be referred to for further guidance on all project-related matters documentations and governance from initiation to closure. Also, the document will not replace a full-fledged operational manual which is to be developed by each department for the activities and projects to be executed. 82 Objectives of the Functional Blueprints 1. Guide the departments entrusted with the responsibility of each function in efficient management and execution of their projects and associated activities. 2. Identify problems/gaps and recommend preventive and corrective actions to be taken to address the issue. 3. Provide a basis for decision-making on amendments and improvements of policies, strategies, programme management, procedures, and projects. 4. Promote accountability among departments and other stakeholders. 5. Establish leading practices and policies that enable effective operations. 6. Ensure compliance with the guidelines laid down by the Organisation 7. Raise the standards of corporate performance 8. Ensure that each function operates within the perspective of Tamkeen’s Corporate Strategy. 9. Educate personnel, provide transparency and facilitate a greater understanding of Tamkeen’s activities and various department functions along with roles and responsibilities, thereby avoiding any duplication of tasks. Identified Issues: Summary of the Common Strategic Gaps The identified issues and the proposed action plans are based on public consultation engagements, management strategy workshops, impact assessments, discussions with internal stakeholders, review of relevant documents / records and physical observation of the activities in the process. (As part of Tamkeen’s efforts to further develop and enhance the services offered in line with market needs, Tamkeen carried out several monitoring surveys to generate recommendations for future initiatives for Tamkeen to meet the current untapped needs and requirements in the market. o The Public Opinion Survey gauged the public’s perception about Tamkeen’s awareness and knowledge of its programmes, functions and activities as well as measured the perceptions of the public concerning Tamkeen’s impact on the workforce and the business environment. 83 o The Needs Assessment Survey was conducted to understand the public’s awareness and expectations of Tamkeen, as well as to obtain a broad range of views relating to how the organisation could improve its initiatives. o Public Consultation Engagements were conducted, whereby Tamkeen hosted a series of consultation workshops as part of its efforts to directly engage with the public. Through the workshops, Tamkeen aimed to understand the public’s expectations and proposals to Tamkeen, as well as listen to a broad variety of views relating to how Tamkeen could optimise and improve its services and offerings. The outcome of the workshops will be an input to Tamkeen's planned projects for 2014, as part of Tamkeen's efforts to further develop and enhance the services offered in line with market needs. o Several Impact Assessments which measures and analyses the impact of Tamkeen’s schemes and activities based upon their objectives, KPIs and strategic priorities and targets of Tamkeen). The general findings are briefed as below: (earlier circulated to Tamkeen’s management / to the public) General observation across the Organisation - Tamkeen’s Systems: The processes, communication, criteria and clarity seem to be the leading complaints by business owners (public engagements highlighted the presence of a high level bureaucracy involved with some projects). Tamkeen should further improve its communication with individuals including creating specific contact persons with whom customers (with proper customer segmentation) can coordinate regarding Tamkeen’s initiatives. Moreover, the documentations should be revised and the ongoing process by which the initiative continues forward should be clearer and more transparent to customers. General observation across the Organisation - Level of Public Awareness: General awareness of Tamkeen among the public is high. However, many respondents highlighted the need to further clarify how the public could benefit from its programmes. Moreover, different segments have associated Tamkeen according to their relevant need or requirement. Industry experts and other key stakeholders thought that Tamkeen had far too many different programmes to offer the public, obscuring the company’s image to an extent and what it has to offer, hence effecting its respective operations. 84 General observations for the Implementation Units - Operational Issues: It has been raised on numerous occasions during the sessions and across different sectors that Tamkeen has shown a lack of commitment in terms of first, terminating programmes before their completion, and second, not meeting employment obligations in schemes that promise employment. Moreover, almost all impact assessments and public engagements stressed on the need for maximising the quality and impact for each of the schemes. The public’s awareness of Tamkeen as a separate entity from other similar or related organisations (such as the LMRA) is now definitive. Further, there is common understanding that Tamkeen trains locals for career advancement, trains private sector employees, provides loans to start up business and are involved in enterprise development. However, the awareness of specific projects and an understanding of how they function is vague at some areas - This is mainly due to the differing requirements from the applicant for each project individually. Tamkeen’s focus now is on ensuring effectiveness and quality of services rather than reaching the largest number of people. Methods are being developed to measure impact and effectiveness of Tamkeen’s programmes. This will provide the input that’s required to improve the existing programmes and develop new ones. Based on the feedback from consultations with stakeholders, Tamkeen has outlined 3 pillars to focus on for the next 3 years (2015-2017) and beyond, with a view to meet the dynamic needs of Bahrainis and private sector enterprises: Quality enhancement, Customer-focused approach, and a Results-oriented strategy. Quality enhancement would be demonstrated through improved programmes, services, processes and practices. Customer-focused approach empathises with the stakeholder, considering feedback and opinions as valuable insights for creating impact. Finally, performance follow-up and impact assessment for the various programmes will underpin a results-oriented strategy. In this regard, the below gaps were common issues / gaps across the Organisation which requires to be addressed in pursuit of achieving the set corporate strategy: 1. Monitoring/operational issues: o Corporate culture obstacles in shifting from an “Outsourced” to an “Insourced Model” for core activities - The idea of having a large portion of Tamkeen’s activities outsourced seemed to be the ideal approach during its launch as it facilitated the start up by providing different capabilities and resources at that time to serve a wide range of clients through diverse services or offerings. 85 As Tamkeen’s operations grew larger and the client’s base grew exponentially, that lead to an increase in the size of the operational activities along with activities related to operations and monitoring. A decision to gradually insource Tamkeen’s operations was taken in order to have a better control over the processes. o A crucial requirement to introduce consistent and stable mechanism to acquire management commitment and buy-in - The organisation is in need for the full support of senior management in terms of consistency in direction setting and the will to enforce the much needed changes (wherever required to create a culture where responsibility for performance is pervasive, accountable, and aligned). o Currently, the Organisations’ corporate culture and department objectives are not being fully in sync/aligned with the set strategy and performance priorities. A consistent mechanism will more likely help to deliver consistent and growth results to the Organisation by generating regular reminders about the values, aspirations, and engagements that underlie Tamkeen’s success and reinforce its respective strategy. o However, it is noticed that the Organisations’ culture is in a way still operating with an outsourced approach/mindset to a certain extent, hence effecting operations and monitoring. Given the growing momentum of Tamkeen’s activities, the Organisation will not afford to grapple with the dynamic complexities of outsourcing model. While there are evident challenges to the insourcing model at this stage, the various benefits that stem from this model far exceeds any outsourcing approaches specially in terms of promoting a culture of continuous improvement. o From a monitoring perspective, there is a need to pay more emphasis on tracking and resolving issues of underperformance related to all the aspects of the projects. This ultimately impacts the ability of the Organisation to ensure programmes were on course to achieving their objectives. Dedicating an independent and an integrated monitoring function will be critical for effective internal control as it will help in reducing the risk of both erroneous and inappropriate actions. o To ensure ongoing synchronisation of all Tamkeen’s initiatives with the Corporate Strategy - Tamkeen’s efforts to drive its operational focus must be in a direction congruent with the corporate strategy. The role of an independent control/monitoring function will be crucial in terms of facilitating for effective 86 evaluation and neutral feedback to ensure that the Organisation is not disregarding a wider range of alternatives, which could align all activities to the corporate strategic objectives. o Quality of services delivered will need to be measured – to ensure quality management at all levels must be embedded in programme management. A set of indicators and tools to monitor the quality of service delivery at all levels will need to be well-defined and systematically implemented. o To enhance tracking Budget v/s Actual and Committed data on continuous basis Currently, because of the manual means of maintaining data, there is minimal tracking (on a continuous basis) of Budgets v/s the Actual Spend and Commitments for the year. Also, no red flags are raised if actual budget utilisation is alarming, or to know if actual funds available are not sufficient to meet the planned budgets and/or commitments. 2. Tools/system requirements: o Requirements for increased resources - Considering the multitude of Tamkeen’s schemes, there is a need to ensure adequate skilled human resources at all levels to ensure completion of all the defined tasks. Moreover, training in key project management areas (along with other specific skills) is needed to ensure consistent monitoring procedures/approaches for the purpose of reconciling what was planned for and what was achieved. o The need to institutionalise enhanced tools and systems - Tamkeen needs to further enhance its current tools and mechanism to collect and store core data and disseminate information from reliable data sources. Moreover, the analytical capacity of the systems to generate timely information to address challenges and improve programme implementation is deemed necessary. Hence, monitoring reports should be consistent to be further analysed, interpreted and used for informed decision-making. o Need for a robust and transparent Risk Management Framework: The absence of a robust risk management framework hinders the ability of the Organisation to prioritise activities and to meet new challenges in a structured manner. It results in an inability in deciding on a sound basis for strategic planning and an ineffective allocation of resources. 87 o The need to develop a strong legal framework - Legal policies will need to comprise of clear policies for taking action against unsuccessful projects with consideration of remedial actions proposed through impact assessments and other feasibility studies. Moreover, there is a need to develop an understanding of risk management based on commercial activities for the purpose of effectively evaluating alternative responses to expected and unexpected risks associated with the operational aspects of Tamkeen’s business support schemes. o Roles and responsibilities to be further defined with regards to the various processes within departments – especially with the absence of clear delineation of the functional blueprints and manuals and SLA’s showing department dependencies causing duplication of efforts. 3. Market Intelligence Requirements: o More emphasis to be laid on conducting due diligence/feasibility exercises for all projects: This will have an impact on Tamkeen’s ability to effectively evaluate the feasibility/viability of the schemes. Hence, financial cost projections will require a thorough study to continuously ensure that proper controls and risk mitigation concerns are managed effectively. o Need for consistent process documentation- Strategy and planning as well as monitoring, and the need to respond quickly to change, needs to be based on accurate market data. Inconsistent, inaccurate and inaccessible information will hinder sound business decisions. Hence, there needs to be a mechanism to provide accurate, up-to-date and easily-accessible data to help in sound evaluation and planning for the future. With a more conscious approach to channeling the Organisation’s investment, the pressure to execute effectively has increased. The department functional blueprint is a plan spelling out how to accomplish the best way forward for the departments to function as a whole and deliver the most value to the organisation while continuously raising performance in terms of ensuring -quality offerings, customer focus and a result oriented approach. In this regard, a well-defined functional blueprint was developed to make strategy execution and implementation easier. This will further support an open and a well-communicated set of priorities where departments will no longer be operating in silos. The functional strategies will help reinforce a higher degree of alignment between the corporate strategy, the management, and departmental teams. Moreover, it will also help in reducing multiple priorities and instead focusing on the most critical capabilities that will enhance the 88 departments’ abilities to lead and shift Tamkeen to move in the direction of a capabilitiesdriven strategy. Therefore, with the increase in Tamkeen’s offerings, the Organisations’ operational activities has further evolved with the development and introduction of a set of tools, methodologies and approaches which are used to continuously improve the effectiveness and efficiency of its respective implementation functions. Tamkeen's activities have developed over time which is reflected through comprehensive impact studies on a number of existing flagship support programmes to measure its overall effectiveness. However, there is still room for further improvement in order to enable the delivery of greater value from the business operations. As a matter of urgency, accurate data collection will need to be emphasised upon as part of the programmes set up to facilitate monitoring. Measurable performance indicators will need to be formalised in line with specific programme objectives to ensure that all of the departments’ efforts are effective in terms of delivering valuable services to the target audience, as well as achieving the greater macroeconomic benefits for which the fund was established. Moreover, every function’s priority will be to support the building and management of differentiating capabilities. Therefore, it is essential to define and measure explicitly how much value each function is delivering through: Quantifiable impact - Measure all the function’s activities against definable business outcomes that are aligned with the corporate strategic priorities and tied to a specific time frame. Clear drivers of value - Identify the sources of the function’s greatest contributions to the Organisation such as having sophisticated analytical tools that can provide streamlined access to data, greater scale, and the bundling of expertise. Cost-effectiveness - Continue to track the relationship between expenses and outcomes. measured through financial performance improvement where the outcome—must outweigh the cost of the activity. Internal market validation – Continuously seek out and incorporate feedback from stakeholder to drive the function’s effectiveness and efficiency wherever possible. To deploy rigorous processes and tools to ensure the alignment of ongoing and proposed functional activities with the functional priorities and the operating model, and to ensure maximum value creation. Within the context of continuing pressure 89 on set budgets, this helps the departments to allocate their resources to the activities with the highest value. Rationale behind the suggested changes: To create organisational effectiveness, Tamkeen needs to focus on aligning the structure and capabilities (including organisational culture) to the strategy. The fragmentation of functions and redundancies across the organisation is hampering Tamkeen’s drive from achieving sustainable business results. The current model highlights that departments are not mutually reinforcing each other and will eventually dilute their respective focus and alignment to effectively achieve the desired tangible impact. In this regard, the evaluation of the relationships between resources employed and results achieved (i.e. efficiency of utilisation of human, financial and other resources, including examination of information systems, performance measures and monitoring arrangements, and procedures) underlined that Tamkeen demonstrated sub-optimal economical use of resources and sound administrative principles and practices in the pursuit of the departments’ activities in accordance with corporate best practices. o To provide clear, consistent and accurate messages to Internal and External Stakeholders - The current offerings at Tamkeen are portrayed (both internally and externally) as ‘human capital’ programmes and ‘business support’ programmes – as two distinct areas. The absence of such packaged products in a way that a potential customer can easily understand Tamkeen’s offerings as a complete solution inhibits maximum value adds. Moreover, the public’s awareness of Tamkeen’s current offerings must be clearly defined and communicated. The awareness of specific projects and an understanding of how they function are at times confusing and ambiguous. This is mainly due to the evident distinction of two separate streams of activities (HCD related and PSS related) without a unified planning process (as highlighted in public opinion survey). The organisation has delivered programmes to a broad spectrum of customers throughout the Kingdom. However, overall, there needs to be a greater emphasis on centralising and integrating the organisations efforts and activities to avoid the flow of fragmented information both internally and externally. This will ultimately encourage the development of an optimal operations environment within Tamkeen. o The need for unified planning efforts across the Organisation is deemed crucial - The inability to conduct comprehensive and robust planning exercises will impact the ability of the organisation to evaluate the market fundamentals that support the premise behind directing the overall activities. This direction should clarify the specific industry or sector to be focused on, as well as the development of valid assumptions to 90 determine the required programme target and the resources required to achieve the stated objectives. o From a monitoring perspective, there is a need to pay more emphasis on tracking and resolving issues of underperformance related to all the aspects of the projects. This ultimately impacts the ability of the Organisation to ensure programmes were on course to achieving their objectives. Dedicating an independent monitoring department will be critical for effective internal control as it will help in reducing the risk of both erroneous and inappropriate actions. o Quality control issues – Proper organisational structures should allow for checks and balances; this will ensure stringent levels of quality control are embedded within the organisation. However, with the current structure, the checks and balances in Tamkeen are absent. The following section outlines the new proposed programmes based on the new strategic direction. Conclusion Tamkeen has, throughout the years, remained consistent in the value driven principles which have underpinned its activities. One of the elements which remain at the core of its strategy is the transparency and public engagements that drive its evolution. The majority of the strategic recommendations and solutions have been derived from some sort of public involvement. As a result, the development of new guiding principles served to better focus the organisation towards meeting the needs of the public in general, and its customers in particular. These principles were established as a result of the need for a new direction, one which crystalised the ever flowing ideas and recommendations that were proposed. The themes of Tamkeen’s new strategy are: 1. Quality: Effective and result oriented delivery 2. Customers: Satisfied customers 3. Results: Enhance productivity and sustainable growth of individuals and businesses The strategy addresses the need for more quality driven programmes, rather than quantity. The previous strategy led an organisation that was more driven by the type of support it offered, rather than the people whom it supported. This intrinsic flaw reduced the 91 programmes scope for impact. As a result of the more customer driven approach, customers were divided into segments. These segments serve to allow for more focused programmes that address segment needs rather than the needs of all customers. Consultations with the public produced a wide array of issues that were addressed in this strategy. The public requested improved delivery standards, and more targeted and effective programmes. They saw a need for more information sharing and transparency, and increased research and market studies. The need for stricter monitoring and enforcement has been apparent to many stakeholders, as was the need for further streamlining of operations. Awareness is critical and has often been insufficient, as has been internal communication. Finally, the need for internal strategic alignment was highlighted and addressed in the strategy. The strategy also reflects an internal assessment of Tamkeen’s programmes. This assessment compared Tamkeen’s execution of programmes relative to their original plans. It found that planning should be improved, by attributing KPIs to each project to measure its performance. In the planning process clear goals and objectives need to be defined and adhered to. Project reach can be extended through appropriate public campaigns. Function and operations should further be defined and streamlined according to the programmes. Strict financial control is also required for each programme to ensure the budget is well planned and execution follows this plan. Finally, programmes should focus on meeting the market demand more, to ensure that they are addressing the areas which need attention. In order to better serve customer needs, several target segments were created. The higher level grouping was Individuals and Businesses. Within these, segments were defined as follows: BUSINESSES: 1. 2. 3. Startup: businesses or entrepreneurs in the process of starting up Growth: existing businesses seeking growth opportunities, businesses which are established but not yet fully independent and mature Maturity: established businesses that are relatively independent, those looking for increased revenue through diversification, investment projects relevant to mature businesses The programmes for each segment are as follows: 1. Startup: o Startup funding support o Startup consultancy and mentorship o Encourage startup innovation o Startup marketing and exposure support 92 2. Growth o Provide funding for technology and growth o Support business process reengineering and innovation o Support marketing and customer outreach o Workforce capacity building and support 3. Maturity o Product and service innovation support o Internationalisation and franchising support o Foreign Investment and joint venture support INDIVIDUALS 1. 2. 3. Students: Studying at university (16 years +), as well as those who are pursuing further academic and professional studies Job Seekers/Entrepreneurs: Unemployed individuals who are looking for opportunities Employees: Employed individuals in the public or private sector The programmes for each segment are as follows: 1. 2. 3. Students: o Career guidance support o Entrepreneurship exposure support Job Seekers: o Employment channeling support: o Up-skilling for market alignment o Career counselling and work readiness support: o Entrepreneurship guidance and mentorship Employees: o On-job skills optimisation Objectives were defined for each of these segments based on the needs which were highlighted from that specific customer group. Based on these objectives, Tamkeen has developed a new list of programmes. Tamkeen will continue to provide support to all sectors, but the needs of certain sectors may differ from others, and accordingly schemes may be altered to meet those demands. The successful implementation of Tamkeen’s strategy will depend on the combined efforts of internal and external stakeholders. Some specific organisational objectives which are aimed at are as follows: 93 Initiatives will need to be further aligned with the Corporate Strategy. To eliminate fragmented activities ensure further emphasis to be laid on the core roles and functions across the Organisation. Tools and systems required for operational efficiency within the departments will need to be clearly addressed. Further empowerment of the support units’ role. To provide clear, consistent and accurate messages to Internal and External Stakeholders. The need for unified planning efforts across the organisation is deemed crucial. From a monitoring perspective, there is a need to pay attention to tracking and resolving issues of underperformance related to all the aspects of the projects. Quality control will require proper organisational structures which allow for checks and balances. Ensure regular data collection is performed with respect to customers and market information. Conduct impact assessments and due diligence for all projects Tamkeen undertakes. Internal operational issues have been highlighted to ensure that the organisation continuously improves its processes and systems and to better meet the needs which the strategy has highlighted. This will enable Tamkeen to continue to serve the Bahraini public, by helping to drive the growth in the public sector and the enhancement of individuals’ skills, in order to ensure that they are better suited to meet the demands of the Bahraini labour market. 94 Appendix I Planning and Execution Measures The following measures provides a mechanism for assessing Tamkeen’s current programmes based on their ‘Planning’ and ’Execution’ factors. Objectives & KPIs An evaluation of the objectives and KPIs (operational and strategic) is crucial to the process of understanding whether programmes exhibit the intended value add and have been committed to the performance expected. The definition of clear objectives and KPIs is the main driver of project definition and all the subsequent areas in planning a project. Planning - Defined Objectives & KPIs Execution - Meeting Objectives & KPIs / Change in Objectives & KPIs Low Medium 0-3 4-6 Objectives and KPIs Objectives and KPIs are not well partially reflect defined programme’s concept Objectives and KPIs do not serve the programme but compliments other Tamkeen initiatives Objectives and KPIs Objectives and KPIs have not been met have been partially met Objectives and KPIs have been changed Objectives and KPIs to suit have been changed performance justifiably High 7-10 Objectives and KPIs are well defined and reflects programme’s concept Objectives and KPIs directly reflect the programme strategic objective Objectives and KPIs have been met Objectives and KPIs have been adhered to 95 Scope- Project Reach Following proper definition of objectives and KPIs, the programmes should have a welldefined and targeted approach to defining the scope. This will enable project managers to be more focused in their delivery and planning for project specifics. The geographical location in this context does not mean that Tamkeen should target certain locations and ignore others. Depending on the nature of the scheme, this could be capturing this data for the purpose of analysing market needs, which should enable better customer outreach through sound planning, design, customer service and marketing methodologies. Planning - Project Reach Execution - Project Reach Low Medium High 0-3 4-6 7-10 Undefined scope Partially defined scope including Undefined targeted some focus areas sector, segment and geographical Partially defined location targeted sector, (Governorate) segment and geographical location (Governorate) Unable to measure Partially achieved performance due scope to lack of sufficient data Weak performance Well defined scope including all its focus areas Well defined targeted sector, segment and geographical location (Governorate) Achieved scope (available and reliable data) 96 Functions & Operations Depending on the complexity of the programme, scheduling is an important project management tool for effective delivery of projects. In addition, the development of a robust framework that monitors different aspects of programmes is crucial. This continuous monitoring will enable project managers to track progress and proactively react on risks and issues. Planning Monitoring / Tools & Systems Execution Monitoring / Tools & Systems Low 0-3 No defined systems, tools, processes and monitoring framework, thus no performance was tracked No plan for the scope No scheduling methodology adopted Medium 4-6 Basic/simple systems, tools, processes and monitoring framework, mediocre performance Basic plan for the scope Project depends on variables, however these can be managed easily Basic scheduling methodology adopted No successful Basic monitoring monitoring was adopted Actual vs. baseline Actual vs. baseline schedule variance schedule variance ≥15% is 5% to <15% High 7-10 Effective/fullfledged systems, tools, processes and monitoring framework in place that allows for capture of performance results Proper plan for the scope Highly complex projects that is dependent on many variables Proper scheduling methodology adopted Successful and robust monitoring process adopted Actual vs. baseline schedule are in sync Actual schedule < baseline schedule Actual vs. baseline schedule variance < 5% 97 Financials Budget forecasting and anticipations in any changes that might occur during the project needs to be built on a proper methodology as this is detrimental to the success of Tamkeen as a whole. In addition, the benefits of executed programmes should justify the allocated funds. Planning – Cost/Benefit Execution – Budget (BDs) Low 0-3 Cost exceeds the benefits Absence of detailed budgeting methodology Actual vs. baseline budget variance ≥ 15%, whether an increase or decrease Budget has been increased/decreas ed without CR Medium 4-6 Cost is equal to benefit. However this ratio has the potential to be positive with proper budgeting Some logic is followed in the budgeting process High 7-10 Benefit exceeds cost Proper budgeting methodology is followed Actual vs. baseline budget variance is 5% to < 15% Actual vs. baseline budget variance < 5% 98 Customers and Market Demand This parameter should gauge if generic demand is present in the market, and whether this demand is considered to be real / genuine. Unjustified changes in the number of targeted customers across the lifecycle of the project may reflect improper planning and forecasting. Planning – Customers and Market Demand Execution Customers (in numbers) Low 0-3 Low demand for the programme: number of application is 0% > target Medium 4-6 Limited demand within customers: number of application is 1%15% > target Actual vs. baseline customers variance ≥ 15%, whether an increase or decrease No basis to which number of customers have been changed Change in number due to improper planning and evaluation or risks Actual vs. baseline customers variance is 5% to < 15% Change in number of customers due to reactive situation High 7-10 Demand is high within customers from all segments: number of application >15% above target Actual vs. baseline customers variance < 5% No change in committed customers Justifiable change in number of customers 99 Appendix II KPI Framework: Tamkeen has a number of mandates that are considered wide in scope and virtually many potential activities could be classifies under each of those mandates. In addition, many of those mandates have other responsible bodies in the economy as well. In other words, achieving or complying with these mandates is a joint effort of a number of organisations and thus the ultimate results cannot be attributed to a single organisation. However, the contribution of each organisation to achieving the mandates can be tracked down should there be the necessary data and information. The establishment of a relevant KPI framework is therefore necessary to properly measure the achievement of Tamkeen’s results. (See figure 4.2) The above diagram explains the framework that Tamkeen could engage in measuring the performance of programmes and ultimately its strategic objectives. The following is a brief explanation of each of the above categories of performance levels. o Operational Performance: The category pertains to the first three layers of KPIs. The three layers are KPIs related to Input and resources that are mobilised in order to initiate a project. Process layer is where the previous input is converted into operational activities and thus measuring Tamkeen’s service delivery in terms of efficiency and effectiveness of services delivered. The last aspect of the operational performance is the output Layer which is the combination result of the previous two layers the input and process. Output has to do mostly with direct results that are achieved from projects’ key milestones. 100 o Result/Strategic Performance: Result performance is Tamkeen’s objective oriented performance which is based on the programme strategic effectiveness. Result performance category is based on two types of inputs, KPI measures and market survey. BKPI 1 BKPI 1 Project 1 Project 2 UKPI 2 UKPI 1 UKPI 2 UKPI 1 UKPI 3 UKPI 2 UKPI 1 KPI measures is categorised into two types as shown in the below figure, base KPIs and unique KPIs. Base KPIs are indicators that are common across a portfolio of projects and thus can be aggregated into one performance indicator for a programme. Unique KPIs on the other hand are indicators that relate to special attributes of the project and could not exist in any other projects. Ideally common KPIs are more frequent in terms of usage compared to the unique KPIs. BKPI 1 Project 3 Market Survey is also used as a tool for gauging the performance of certain projects. These engagements are limited to direct customers of Tamkeen who have utilised certain type of projects. The combination of both tools would ideally reflect the performance of the projects and the objectives that it relates to. o External/Macro performance: Tamkeen has a number of mandates that are considered wide in scope and virtually many potential activities could be classified under each of those mandates. In addition, many of those mandates have other responsible bodies in the economy as well. In other words, achieving or complying with these mandates is a joint effort of a number of organisations and thus the ultimate results cannot be attributed to a single organisation. Reflecting Tamkeen’s performance in a macro environment would be challenging because of the various factors that contribute or disturb the overall outcomes. However, the contribution of each organisation to achieving the mandates can be tracked down should there be the necessary data and information. This KPI exercise will focus primarily on developing KPIs and setting up measures that will assist Tamkeen to objectively gauge its impact on different layers in the private sector. It is worth mentioning that these KPIs can be revisited and measures can be adjusted based on the changing environment factors or internal elements 101
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