Strategy is the key

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Khalid M Ansari, Partner in Charge, KPMG Oman talks about his three decade plus experience with the firm, Oman’s business cycles and his vision for the future in a freewheeling interview with Mayank Singh.

You have recently been elevated as the partner in charge, KPMG, Oman and you have spent over three decades with the firm. What are your thoughts when you look back?

I have been with KPMG for 33 years. I started working for the firm in 1980 as an audit trainee in UK immediately after my graduation. I qualified as a Chartered Accountant in 1983 from UK and moved to Muscat in 1986. After working for over six years in UK, I requested my partners to send me to a KPMG office which is closer to home, where there was no rain and no tax. At that time in UK we only knew of Dubai and Bahrain. One day the partner came upto me and said, ‘There is nothing in Dubai and Bahrain but you can go to Muscat – where there is no tax, it never rains and it is only an hours flight from Karachi in Pakistan, which is my home city. Then he added, “There is a fourth advantage in Oman; after 2.30pm everyone goes home and sleeps.” I replied, “Fine, let’s try this for two years.” Then I came to Muscat in January 1986. Within 10 days of my landing in Oman, there was a devaluation of the Omani rial and I told my partner, ‘I am already 10 per cent down on my salary so I better go back as my budget is out’. But he asked me to stay and said that KPMG will make up for shortfall. So while my three wishes were fulfilled, I have never had the luxury of going home at 2.30pm. I joined the Muscat practice as an audit manager and at that time there were only around 18 people in KPMG Oman. We have grown from there to around 135-140 people today. I became a partner in 1995 and never thought of leaving Oman.

How has the growth in business been over these years?

Upto 1985, businesses was very busy, Oman was seeing a lot of construction and development activities and there was growth year on year. Then in January 1986, oil prices dropped from around $40 to $8 and as a result there was a recession in the country. This was the first time that the country had seen a recession and companies started making losses. From 1970 till 1986 very few companies had ever made losses, so it came as a surprise. After that, business environment became difficult and competitive. While I was training in England, the economy, post-Margaret Thatcher reforms, had gone through a recession, and a number of companies went bankrupt. As a result I spent a lot of time working on the restructuring of companies, revitalising and turning them around and that experience was very useful for me in Oman. While some clients were panicking, I told our clients if one made profits one also needed to absorb losses at times. Businesses needed to restructure, restrategise and be better prepared so that once the economy turned around, they could ride the wave and recover their losses. Those years were challenging for the economy and those companies which were focussed recovered and grew successfully, some who did not change disappeared.

How has KPMG’s operations and services changed over these last three decades?

Initially, we were primarily focussed on audit and tax services, and there was very little consulting or advisory work. In 1986, when the recession hit and the economy started changing its dynamics, we started providing consulting and advisory services. Over the years we have expanded our advisory range quite significantly encompassing business strategy, process improvement, IT, project management, human resource, mergers and acquisitions, due diligence etc. The advantage that we have as a firm is that we get to see deeply the businesses as auditors, tax and financial advisors and we bring in industry knowledge locally because of our presence in Oman and our wealth of knowledge gained through our global experience. In 2004 the stock market regulator introduced the mandatory rotation of audit firms every four years for listed companies which forced us to look at non-audit services. There was a time when we were auditing almost 50 per cent of the listed companies, and when we lost these clients due to rotation, KPMG had to look for substituting some of the lost audit income with advisory income.

You have had a long association with KPMG Oman. Can you point out a few things that you have initiated or contributed to the firm?

My role has changed over the years. In the early years, my primary responsibility was audit, but later on I took on a larger advisory role. My audit clients are primarily in banking, finance and power sectors and large private companies. The other area of my focus is developing strategy for clients. I advise a number of companies on business strategy. A lot of clients would come to us and talk about problems and solutions, and I realised that most of them did not have a clear strategy about what they wanted and how to go about. Instead of looking at adhoc solutions, my advice was to develop a right strategy and work on it.

In 2001, I attended a course in business strategy at INSEAD, which gave me the tools to work on strategy. We have KPMG chairman’s 25 programmes. It is run by INSEAD over one year and 25 partners are selected from Europe, Middle East and Africa and they go together to attend sessions with various strategists around the world. As part of the programme, we visited six different countries over a year and in each country we went and listened to the top strategists, visited successful companies and learnt from them. We went to Switzerland, Netherlands, South Africa, India, Germany and UK. This was a great learning experience for me.

Although you came to Oman with a two-year timeframe in mind, you have stayed back. What made you spend 33 years in the Sultanate?

Oman is a young economy and it offers a lot of opportunities. I believe under the leadership of His Majesty, the Government had a clear understanding of how to grow the economy from almost zero to where it is today. Being in Oman gave me a chance to be part of this success story and to contribute to the economy in my own little capacity. The most important reason why I chose to live here is that people in Oman are very friendly, the business environment is welcoming and there is a great deal of stability. Clients are ready to listen to your advice. They do not spend money and keep the recommendations on the shelf. I could see a lot of my advice being put to good use.

You are a KPMG lifer. What has made you stay with the firm?

I am very passionate about the firm. Job satisfaction is more important to me than the financial or other aspects. KPMG is a great firm to work with and it is a global partnership with operations in 155 countries. It is a firm that has been in existence for over 130 years now. Once you become a partner in the firm you act as a trustee for the next generation.

Now that you are the partner-in-charge, will your responsibilities change. If so, in what ways?

My biggest responsibility is to develop a second and third line of leadership within KPMG Oman, to ensure that the firm is not dependant on any individual. My challenge is to provide a strategic direction for the next ten years, leaving a road map for the second generation and third generation. This will ensure that there are enough leaders within the organisation to take the firm to new heights. Secondly, the Oman practice is a part of the UAE office which is called the Lower Gulf and I am a member of the Lower Gulf board, which comprises four people. We take strategic decisions for Oman and UAE together and those are my additional responsibilities.

Finally, where Oman economy go from here and how will it impact KPMG?

Oman’s economy will continue to grow though it will have its ups and downs like any other economy in the world, and one should be prepared to face those challenges. KPMG is here to stay for a long time. Business will grow and as a professional firm we will work along with our clients enabling them to grow and consequently grow ourselves.

I believe that we need to contribute to the economy in four different ways. One would be to ensure that apart from providing professional service to clients, we also contribute to the greater benefit of the economy. Keeping this in mind we always look at some projects of national importance and work on them passionately. For example, we were involved with the Salalah Port since the start of feasibility study. At that time most people thought that a container port in Salalah did not make sense, but today it is success story. And at KPMG we feel very proud of having been a part of this success story.

Secondly, we believe that SMEs are a very important sector. I have seen how they contribute to the economy in the UK and I have been an advisor on many SME initiatives. Now that the government has identified SMEs as a priority, we want to make sure that KPMG contributes significantly to this sector. Though there are challenges, I see a lot of potential and scope of improvement in the SME arena.

Thirdly, we believe that KPMG needs to train Omanis to become professionally qualified accountants. I started a training programme for Omanis back in 1990, when we chose Association of Chartered Certified Accountants (ACCA) as the qualification for Omani graduates and it was an uphill struggle to attract Omanis at that time. As Oman did not have a separate accounting institute, after doing a lot of research we came to the conclusion that ACCA would be the qualification for Omanis in the Sultanate, as it provided flexibility of training outside of UK. So we started working on that programme. Although it has been an uphill task, I am quite satisfied that KPMG has produced some good accountants over the years. Some have moved on to join industry while some others stayed; one of them, Ahmed Tufail, has become a partner, and we have 30 trainees who are going to soon join the ranks of qualified accountants.

Fourthly, I encourage all our staff to be involved in some social activity and give back to the country and society. A number of us are involved with charitable organisations and not-for-profit organisations in Oman helping them with volunteer work, raising money etc. We also assist organisations like NTI in independently managing the Biz Pro Awards selection process which recognises young Omani business professionals for their excellence. Excellence is a value that we inculcate in our people at KPMG.


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