From Transformation to Performance: What the Next Phase of Vision 2030 Means for Saudi Organisations
Saudi Arabia’s transformation over the past decade has been substantial and measurable. According to the Vision 2030 Annual Report 2025, non-oil activities now account for 55 percent of real GDP, the private sector’s contribution has grown from 44 to 51 percent, foreign direct investment stock has risen by 119 percent since 2017, and more than 1.7 million small and medium enterprises employ 8.8 million people. These are structural changes, not cyclical ones, and they represent a decade of serious institutional work.
But the environment in which Saudi companies now operate is materially different from the one in which they grew. Borrowing costs are no longer trivial. Investors are less willing to underwrite expansion on the strength of a growth narrative alone. Competition is intensifying across sectors once characterised by scarcity. In that context, the question shifts – from whether Saudi Arabia can build new sectors and institutions, which it has done, to whether what has been built can perform: generating margins, returns on capital, and cash flows that justify the investment already made and attract the private capital that the next stage of growth requires.
In the first phase, capital was the constraint. Sectors needed funding, institutions needed establishing, and the state provided both at speed. In the next phase, the constraint is capability – the ability to govern organisations rigorously, deploy capital with discipline, operate efficiently at scale, and develop the management depth that sustains performance across leadership generations. No annual report can measure this gap. But senior executives across the Saudi private sector encounter it regularly.
Governance is where the challenge is most consequential, and most consistently underestimated.
The majority of Saudi private sector enterprises are family-owned, and many still carry governance structures shaped by a different commercial era – one in which a founder’s judgment substituted for formal oversight, ownership arrangements were maintained informally rather than documented legally, and the board, where one existed, functioned more as an advisory assembly than an accountable decision-making body.
This is not universal. A number of leading Saudi groups have, over the past decade, invested heavily in formal governance, professional management, and institutional processes. But across the broader market, governance maturity remains uneven. What worked in an environment where relationships and trust were the primary mechanisms of coordination is now being tested under more formal, investor-driven conditions.
The route to capital – whether through an IPO on Tadawul, a private placement with institutional investors, or participation in PIF-linked programmes – runs increasingly through governance quality. Boards must provide genuine oversight, not endorsement. Audit and risk functions need to be embedded in day-to-day operations, not assembled for transactions. Ownership structures must be formalised, documented, and defensible under external scrutiny. The gap between where some organisations are and where they need to be is real, and the time required to close it is consistently underestimated from within. Governance reform is not a project with a neat endpoint. It is a change in how decisions are made and accountability enforced – and it takes years, not months.
The second challenge is operational, and it tends to be invisible until margin pressure makes it visible.
Across healthcare, retail, logistics, and education, the past decade of expansion produced significant growth in capacity. What expanded less consistently, in parts of the market, was the discipline required to run that capacity efficiently – standardised processes, shared service functions, clear accountability for cost and revenue performance, and the management information systems that show where value is lost.
The healthcare sector illustrates the pattern clearly. Saudi private healthcare has grown substantially in both volume and coverage. But growth in clinical capacity and efficiency in revenue collection are separate problems. In a number of providers, revenue cycle management – the process by which services delivered become cash collected – remains a source of avoidable leakage: claims submitted with errors that trigger rejection and rework cycles; reconciliation managed manually rather than systematised; billing functions without sufficient authority or data to challenge payer decisions. These are operational fundamentals that determine whether scale generates returns or simply generates size.
Similar patterns can be observed in other sectors. In retail, multi-site expansion has, in some cases, preceded the shared back-office functions needed to understand unit economics. In logistics, volume growth has, at times, outpaced the process standardisation required to protect margins. Companies that used the growth years to embed operational rigour will find the transition manageable. Those that deferred it will find it considerably more costly to address under pressure than it would have been in advance.
The increasing focus on artificial intelligence and advanced data capabilities reinforces this dynamic. Significant investment is being directed toward building AI infrastructure and digital capacity at the national level. But at the level of individual organisations, the ability to capture value from these technologies depends on the same operational fundamentals—data quality, process discipline, and management oversight. Where these are weak, technology does not compensate; it scales the problem.
Capital discipline is the third dimension, and one that has historically received less attention than growth.
In parts of the market, companies have operated in an environment where access to capital – from government programmes, bank relationships, or the commercial momentum of a growing economy – was relatively accessible. Investment decisions have often been made against optimistic projections rather than consistently stress-tested assumptions. In that context, the question asked before committing capital has, at times, been “Can we afford to do this?” rather than “What return will this generate, and how does that compare with our alternatives?”
This is now becoming more difficult to sustain. Investors have always examined how capital is deployed and what returns it generates. What is changing is the consistency with which those disciplines are applied – and the consequences of not meeting them. As the investor base deepens and scrutiny of financial performance becomes more systematic, expectations are tightening. Organisations that cannot demonstrate how capital has been deployed, what returns it has generated, and how management allocates resources between competing priorities may find capital either less accessible or available only on less favourable terms.
Building this capability requires proper investment modelling, governance structures capable of challenging those models independently, and reporting systems that track performance against the original case over time. It is not a set of skills that can be introduced at the point of a transaction; it needs to be embedded in how the organisation operates.
The fourth challenge is the least visible and, in many cases, the most decisive.
Management depth – the layer of leaders capable of running complex operations, exercising sound judgment under uncertainty, and developing the people beneath them – is, in many organisations, less developed than the next phase will require. The reasons are structural. In many markets, succession planning and leadership development have historically received less attention than immediate operational priorities. In Saudi Arabia, a decade of rapid market expansion has amplified this dynamic, requiring organisations to scale leadership capacity quickly and bringing underlying gaps into sharper focus. Capable managers have therefore moved into roles that prioritised delivery speed and technical competence, often ahead of the slower work of building institutional processes and developing others. As a result, the deliberate development of organisational depth – through formal processes, capability building, and leadership development – has, in some organisations, lagged behind the pace of growth.
The consequence, in some organisations, is a degree of fragility that revenue growth can conceal. Remove one or two critical individuals from the senior layer – through succession, a competitor’s offer, or the dynamics of family business transition – and decision-making capacity can contract. A similar dynamic can be observed at board level. While formal governance structures have strengthened, succession planning for boards and senior leadership does not always receive the same depth of attention as initial appointments. Periodic board evaluations and renewal processes are increasingly formalised, but their effectiveness depends on how rigorously they are used to address capability gaps and future leadership needs.
Addressing this requires structured development for high-potential managers, succession planning that extends below the C-suite, and a more deliberate approach to board composition and renewal over time. Organisations that treat succession – both executive and board-level – as a continuous strategic priority, rather than a periodic exercise, are better positioned to sustain performance as they scale. By contrast, treating talent as a compliance function – meeting Saudisation ratios, running training programmes, completing annual reviews – may demonstrate activity, but does not in itself build the capability that sustained performance requires.
This gap is particularly visible in how leadership development is approached. Many organisations have invested in executive education and training programmes, including leading global institutions. These programmes provide valuable exposure. However, their impact depends on how they are integrated into a broader capability-building system. In practice, development initiatives are not always sufficiently differentiated by seniority or role, and are sometimes delivered as standalone interventions rather than as part of a structured leadership pipeline.
The more difficult question is what happens after the programme ends. How learning is applied, how performance is tracked, and how individuals are supported to translate exposure into capability are less consistently addressed. Without that follow-through, even high-quality programmes risk becoming episodic rather than cumulative – providing experience, but not always building the depth required for sustained organisational performance.
Where, then, will value be created in the years ahead?
The IPO market offers a clear opportunity, particularly for organisations that have undertaken the necessary preparatory work. Listing requirements and investor expectations are rising, and the window for capturing the next wave of Tadawul activity is not indefinitely open. Organisations that have addressed governance gaps, demonstrated operational efficiency, and built credible financial management have a meaningful opportunity. Others may face a more gradual and more demanding path to market.
Participation in PIF-linked value chains – across tourism, healthcare, advanced manufacturing, and digital infrastructure – represents a second opportunity, but one that is increasingly conditional on demonstrated execution capability, not simply commercial relationships. More broadly, in a market where many companies have benefited from the same wave of demand expansion, those that have built genuine operational capability are likely to differentiate themselves – reflected in margins, valuation, and the quality of partnerships they attract.
For Saudi business leaders, the priorities are clear in direction, even if demanding in execution. Address governance structures before a transaction or an investor forces the issue. Examine operating models with the same rigour applied to new investments. Build the financial management capacity to engage external capital on equal terms. And invest in the management layer that will determine whether the next decade delivers on what the last one built.
Vision 2030 has demonstrated what Saudi Arabia can construct. The next phase will be judged on what Saudi organisations can sustain – under tighter scrutiny, a higher cost of capital, and more demanding investor expectations. The answer will not appear in any annual report. It will be written in the decisions leaders make – or defer – as the final phase of Vision 2030 progresses.