#55 - December 2016 by CPI Financial

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he final issue of 2016 is finally here, and what a year it has been. Britain voted to leave the EU, we lost a slew of talented celebrities, and Donald Trump is America’s President-elect. What that means for relations between the US and the rest of the world, particularly the Middle East, is anyone’s guess. A few of our commentators share their speculations with us in our News analysis (Pg 05) but we really do have to wait and see what his policies will entail. It’s not all doom and gloom as we are happy to announce that this issue is closing off the editorial year on a positive note as we feature entrepreneurs who are trying to make the world a slightly better place. Zaina and Rania Kanaan, Co-Founders of Charicycles were the recent winners of the ‘Best Giving Back Initiative’ at FinanceME’s Business Vision Awards, and they are featured in this month’s Case study (Pg 34). They discuss the fundraising struggles faced by social businesses, which tend to be overlooked by investors, as well as their work with displaced refuges within the MENA region. Their focus is to help incentivise children to attend school and work hard, in spite of their current circumstances. Our Behind the Scenes section explores another child- and family-focussed business in this issue–Abeer Altamimi’s community centre, Kids HQ (Pg 48). We explore the facilities that cater to children of all ages, as well as their parents and grandparent, and we discuss the workshops she facilitates. She also speaks frankly about the challenges of being a mother with two young children and an entrepreneur who is trying to get her business up and running. She also peels back the veneer of the perceived glamour around owning your own business. Stay tuned for her video interview and in-depth article that will appear exclusively on our website. Finally, we’re wrapping up with our franchise section (Pg 42) that combines two of the best things about the festive season–family and good food. Govinda’s is a family-run, vegetarian and vegan Indian restaurant that prepares its dishes in the traditional Vedic way. Prepared without garlic, oil, or spices, the restaurant offers a respite from the overindulgence synonymous with this time of year. On that delicious note we are signing off for 2016, and we look forward to sharing some great stories with you in the New Year.

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Jessica Combes Read my blog at: http://www.cpifinancial.net/blog/author/112/jessicacombes Follow us on Twitter: @FinanceMidEast and on Instagram: @finance_middle_east

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PUBLISHED BY

NEWS ANALYSIS President Trump–what now?

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FEATURE Now hiring!

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Chief Executive Officer ROBIN AMLÔT robin@cpifinancial.net Tel: +971 4 391 4681

FEATURE Find the right partner

CASE STUDY Ride on!

Managing Editor GEORGINA ENZER georgina@cpifinancial.net Tel: +971 4 391 3728

FACE TIME Navigating the threat landscape

OPINION Kick-starting an SME public relations campaign

Chief Commercial Officer OMER HUSSAIN omer@cpifinancial.net Tel: +971 4 391 5419

FACETIME Strategy execution: the holy grail of business

OPINION Building a business

FRANCHISE Get to Govinda’s

LEGAL FOCUS What is an SME?

START-UP Flowers by the boxful

CHALK TALK Roy Nouhra

FREEZONE FOCUS SMEs supported by SOHAR

CEO CHAT Digital developments

FAST FACTS Retail franchise supports entrepreneurs TOP TIPS Five tips to choose the right consultancy

COUNTRY FOCUS Keeping up with Qatar

BEHIND THE SCENES Abeer Altamimi

LAST WORD The admiral among the ensigns

Editors JESSICA COMBES jessica@cpifinancial.net Tel: +971 4 364 2024 SARAH OWERMOHLE sarah@cpifinancial.net Tel: +971 4 375 2527

Chief Designer BUENAVENTURA R. JALUAG, JR. jun@cpifinancial.net

DECEMBER 2016

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DIGITAL DEVELOPMENT

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NEWS ANALYSIS

President Trump –what now? President-elect Donald Trump has raised questions over his foreign policy, particularly regarding America’s relationship with Iran

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uring President-elect Donald Trump’s election campaign, he stated that his priority would be to dismantle the ‘disastrous deal with Iran’, referring to the Joint Comprehensive Plan of Action (JCPOA). The deal is not simply between the US and Iran, but between seven governments, not all of which share Trump’s sentiments. His victory in the elections has left a number of unknowns with regards to his stance on international policy. The Republican platform indicated it wanted to abolish the JCPOA agreement but it’s telling that they did not challenge it in congress when they could have, nor did they take it to court to get it overturned, even though they controlled both houses, said Inderjeet Parmar, Professor in International Politics of City, University Of London. This could point to the Republican Party being slightly more pragmatic. “The big contradiction is that President-elect Trump has named Iran, along with Russia, as one of the key fighters against ISIS, so it does raise the issue that if he wants to build a stronger resistance against ISIS, alienating Iran by tinkering with the nuclear agreement could well jeopardise that,” he said. “If improving the relationship with Russia is a priority, it may actually strengthen Iran’s confidence in Trump’s foreign policy.” Jameel Ahmad, Vice President of Corporate Development and Market

Research at FXTM said there probably will be questions asked on what the stance of Donald Trump is towards the recently eased economic sanctions on Iran, but international policy on a wider scale is something that still remains as a question mark when it comes to a Trump Presidency. This uncertainty is not something that is restricted to Iran, but also relates to how Trump will handle diplomatic ties with nations such as China and Mexico. A Donald Trump presidency may mean that free trade agreements put in place over the past two decades have the potential for a major shakeup, said Mattias Hedwall, Global Chair for International Commercial & Trade, Baker & McKenzie, adding that well-established trade agreements, like the North American Free Trade Agreement (NAFTA), could be renegotiated or even revoked. “On a larger scale, if the Trump presidency chooses to withdraw the US from NAFTA, the world would enter into uncharted territory. The question will be whether any change to existing rules regulating NAFTA trade would require further congressional action, or whether a presidential order would dismantle a system built around NAFTA, pushing us back by default to general World Trade Organisation (WTO) rules on tariffs and trade. Trump's stated policy is also to withdraw from The Trans-Pacific Partnership (TPP), which has not been ratified, and we will have

to wait and see whether or how this will be implemented,” he said. He added that a wait-and-see approach will have to be adopted as President-elect Trump unfolds his Middle East foreign policy as well as his approach to Iran sanctions. In the meantime, global businesses will have to operate in an environment of uncertainty. On Iran’s domestic front the Central Bank of Iran (CBI) has confirmed its commitment to developing the private sector. In October this year, Valiollah Seif, CBI Governor announced nothing is holding back the banking system from financing small and medium-sized enterprises, and by the end of the current fiscal year in March 2017, all production units will have sufficient cash. According to Iran’s Small Industries and Industrial Parks Organisation, enterprises run by 50 workers or less, and 100 workers or less are considered small- and medium-sized businesses respectively. Ninety-six per cent of the 88,000 licenced businesses in the Republic are considered SMEs and to date more than $2.8 billion worth of loans have been allocated to 12,361 SMEs throughout the country. Lenders and credit institutions were ordered by official decree of the central bank to allocate a minimum of 10 per cent of their loan funds to these businesses to help create jobs and improve the SME sector.

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STRENGTHENING OF UAE’S LEGAL INFRASTRUCTURE TO ATTRACT FOREIGN INVESTORS

PORTAL CREATED FOR DESIGNERS AND ARCHITECTS HomesScope.com, a platform dedicated to interior designers and architects, has introduced a portal providing access to world companies that has over 2,000 visitors per day. The online platform serves as a directory that has more than 300 companies listed under a number of different categories. “Established designers and companies have experience and understanding of the market. They are backed up with a proven history and a well-known brand name. New designers have fresh ways of working but they may struggle initially to carve their niche in the market. Whether a designer is new or established we feature them on the platform that is looked upon as a trustworthy site to source all interior designing products and services,” said Kashish Sajnani, CEO and Founder of HomesScope. He added that every effort is made to help designers become known in the Middle East region, even if they are based elsewhere.

The continued strengthening of the UAE’s legal infrastructure will bring more foreign investment to the region, according to Links Group, a UAE-based commercial facilitator. As part of the UAE’s National Vision 2021, there have been several upgrades in major legislations, particularly those related to economic infrastructure and investment in the country. John Martin St.Valery, Founder and CEO of Links Group, said the recent opening of specialist barristers’ chambers by London’s Outer Temple Chambers (OTC) in the Dubai International Financial Centre (DIFC) reinforces the progressive measures Dubai is taking to provide a secure business environment for foreign investors. Risk mitigation and beneficial ownership protection are main concerns of foreign companies, which is why recognition of international judiciaries is so important for strengthening legal and trade relations. “We are not seeing any confidence in funding of smaller businesses; SMEs that we speak to are finding that getting funding from banks just as difficult as it was back in 2010. It’s still better for them to tap into the angel investor networks and individual investors in the market, which are still lending quite well,” he said.

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FAST FACTS

RETAIL FRANCHISE SUPPORTS ENTREPRENEURS Entrepreneurs registered with Dubai SME will be allowed to operate franchised retail outlets under the brand name ‘aswaaq mart’ according to a Memorandum of Understanding (MoU) signed between Dubai SME, the Dubai Department of Economic Development (DED) agency mandated to develop the small and medium enterprise (SME) sector, and ‘aswaaq,’. The initiative is designed to promote entrepreneurship and provide investment opportunities for entrepreneurs in the UAE, enabling them to contribute to the development of the national economy. Dubai SME members brought in as franchisees will be trained by aswaaq and will receive a manual on the conditions governing the franchise, store operations and management. The manual will also serve as a record of the daily performance of the store. “What sets the ‘aswaaq mart’ initiative apart in terms of how it will help the SME sector grow is that it allows entrepreneurs into a sector they cannot usually access due to competition by larger retailers,” said Saeed Matar Al Marri, Deputy CEO, Dubai SME. The franchisee will be entitled to source products and services from authorised suppliers of aswaaq at preferential rates and also be part of the special promotions launched by the franchiser as well as their loyalty programmes, email marketing and social media campaigns.

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NYUAD INTRODUCES LAUNCHPAD FOR ASPIRING ENTREPRENEURS New York University Abu Dhabi (NYUAD) announced the introduction of Venture Launchpad, an immersive 10-day entrepreneurship programme, as part of its startAD platform. startAD is an entrepreneurship platform anchored at NYUAD that supports the ecosystem through education, in line with Abu Dhabi Economic Vision 2030. It targets the local, regional, and global communities. "Open to everyone across the UAE at no cost, the 10-day Venture Launchpad course will help participants graduate from a start-up idea to execution stage, and train them in the process of developing scalable and efficient ventures. I am confident that this will be of great value to aspiring entrepreneurs and professionals in the region who want to jump start their entrepreneurship journey," said Ramesh Jagannathan, Managing Director, startAD. The programme will be conducted by Owen Davis, adjunct professor at Columbia University, venture capitalist, and the Managing Director at NYC Seed, an early stage fund. Participants will learn from leading technology companies, government institutions, investors, and start-up founders. They will work in teams to formulate new business ideas through the process of ideation, testing viability in the marketplace, and ultimately finding a scalable, repeatable business model. Aside from the in-class study component, the teams will also interview target customers in order to refine their business model.

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IFC AND THOMSON REUTERS SIGN MOU TO SUPPORT MENA SMES The International Finance Corporation (IFC), a member of the World Bank Group, signed a Memorandum of Understanding (MoU) with Thomson Reuters to help develop SMEs in the Middle East and North Africa (MENA) and drive economic growth, improve their governance framework, and boost access to finance, networks, skills, information, and markets. Thomson Reuters already operates the Accelerate SME platform in the region, which helps smaller businesses obtain the information they need to grow, while supporting SMEs better access to finance and advice is one of IFCâ&#x20AC;&#x2122;s strategic priorities in MENA. SMEs represent about 80 per cent of all business in MENA countries, and make up close to 40 per cent of employment in some MENA markets. â&#x20AC;&#x153;Supporting SMEs to grow contributes to creating jobs, but many entrepreneurs in emerging markets lack the right skills. In fact, studies show that training and skills development is significantly lower in SMEs than in large corporation in particular in areas such as marketing, management and pricing. We believe that improving the managerial capacity, business performance and competitiveness of smaller firms will help them grow which will ultimately create more jobs in the region," said Mouayed Makhlouf, IFC Director for the Middle East and North Africa. During fiscal year 2016, IFC committed over $1.3 billion in the MENA region, including $330 million in mobilisation, and approved 20 new projects with a total value of over $21 million.

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TOP TIPS

Five tips to choose the right consultancy

When hiring an external consultant, and Nayef Shahin, Partner at METIS Management Consultancy advises which qualities SME owners should look for

1 FRESH PERSPECTIVE

Sometimes we reach out to family and friends to get their opinion on a specific issue that is affecting our personal lives. In the same way, companies often require some guidance or advice in making tough decisions. This is more efficient for SME owners because most of the time they do not have sufficient experience or the entrepreneur may have never come across such a situation. Therefore, an opinion from external experts would be welcomed.

2 TALENTED TEAM WITH GOOD CREDENTIALS

3 SPECIALISED KNOWLEDGE

This could be the most common and important reason to hire a consultant. By engaging an experienced consulting firm, you get access to a group of talented professionals that have diverse skills and knowledge. For most SMEs, it might be too costly to hire a specialised employee to act as an advisor or guide. Thus, a consultancy fills this gap perfectly.

4 TRUSTWORTHY

a doctor; you should find comfort in revealing intimate details about your business, otherwise, the consultant will not be able to provide the best solution or guidance.

5 GOOD RECORD KEEPING

Tracking your companyâ&#x20AC;&#x2122;s records is another important thing you should look for when choosing a consultancy. The right people will make sure you do not miss out on any detail, ensuring you have the right records to move forward. Track records show the value of your company, and you cannot get the value you expect without supporting your claims with proper numbers.

It is highly important to choose the right partner to ensure the success of your business. Choosing a consultancy is like choosing

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A consultant serves as a temporary, highly-skilled resource to address challenges. This would be more costeffective than a dedicated full-time employee. Also, since consultants work with multiple companies every day, they are able to adapt to and understand a

problem much faster and therefore they will be able to get started on a solution much quicker, compared to an employee.

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OPINION

ublic relations has long been an essential component of a holistic marketing strategy. Well executed, it can raise brand awareness, recognition and credibility, and educate the market about your organisation’s latest products, services, offerings and successes, all of which indirectly feed the sales pipeline. As an activity that involves regular sharing of company updates and information, public relations requires a fair degree of expertise and investment in terms of resources, including finances. For this reason, it is often considered ‘out of bounds’ for cash- and resourceconscious SMEs. But with the host of benefits it offers, particularly with its valuefor-money proposition, it’s an option worth considering. There are many misconceptions about what public relations professionals do. While closely linked to other branding activities such as advertising, social media marketing, events and the like, it is a comprehensive

Ian Saldanha

Kick-starting an SME Public Relations Campaign While larger corporations may use PR agencies regularly, Ian Saldanha of Procre8 explains how SMEs can use them too activity in its own right. To put it simply, public relations is the way an organisation communicates with the media and thereby its target audience. To accomplish this, the public relations professional has a number of tools that include press releases, by-lined articles, rapid response opportunities, case studies,

and interviews to name a few. It does involve the promotion of products, customer wins and other ‘newsworthy’ content but unlike advertising, public relations involves securing media coverage through unpaid or earned means. That is really the key here and a prime reason why outsourcing public relations

to a specialist agency is often the best strategy.

Why it works

Whether it’s a writeup in a relevant trade publication on market trends, a spokesperson quoted in a new article on a topic relevant to the business, or an interview conducted on a radio station, public

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For SMEs, public relations can then be a costeffective means to promote their business with greater impact.” – Ian Saldanha, Senior Account Manager, Procre8

relations is all about telling a compelling and newsworthy story to secure third-party coverage. By virtue of it being third-party, consumers attach a higher value to this content than they would an advertisement or other communication that is clearly controlled entirely by the organisation itself. ‘Earned’ coverage is seen to be more credible, as in effect it has received media endorsement. Much the same as people being reassured by positive reviews when purchasing a product, public relations delivers this positive reinforcement for the brand. For SMEs, public relations can then be a cost-effective means to promote their business with greater impact. A consistent campaign which regularly presents your target audience with news about your brand will highlight the investments you are making and can even make your business appear to be bigger and more established than it actually is. For an SME, any new undertaking can be a daunting challenge particularly when the skillssets needed to succeed are lacking within the organisation itself. This is particularly true of public relations wherein the ability to create newsworthy stories, and build and maintain working relationships with the media are vital to success. Luckily there are plenty of PR agencies in the Middle East that have years of

hard-earned expertise in precisely these areas. These range from large multinational organisations to boutique agencies that tend to specialise in servicing one particular industry. For SMEs, the latter is almost always the better option–not only because their service packaging tends to be more flexible and affordable–but also because as small businesses themselves, they value each and every client irrespective of size and brand value. This means you get the attention you need from a partner that sees itself as an extension of your organisation. The one trait of a PR agency that journalists and clients rate most highly is proactivity. As an SME, one of the biggest challenges you could potentially face is dealing with an agency that is entirely reliant on you to drive the PR campaign. Not only could this lead to missed opportunities and the failure to meet contract deliverables, it undermines the value of outsourcing in the first place. Extending on this, it’s essential to discuss from the start how the agency intends to help shape your brand image and their expectations from your organisation. Having a marketing manager or marketing executive who can liaise regularly with the agency helps abundantly, but if such a position doesn’t exist in your organisation, you need to

ensure that you have the ability to support the agency by providing the information it will periodically require.

Retainers vs. ad hoc projects

Finally, after you’ve made the decision to invest in a PR campaign, allocated the internal resources and selected an external specialist agency, you need to decide whether or not it makes sense to conduct this via a monthly retainer-based contract or as a per-project basis. The true impact of PR is best realised through a long term sustained campaign which is the approach for most enterprise scale organisations. Smaller businesses however, may simply lack the ability to consistently churn out meaningful public relations content. My suggestion, therefore, would be to start relatively small. Perhaps a press release announcing a new product or service, or even better, announcing a big customer win as this is not only very well received by the media in the Middle East but also helps you ride on the coattails of a bigger and more recognisable brand. By following these tips, you will have the foundation you need to kickstart your PR campaign. Remember, start small and aim high! I do not doubt that after you’ve got your feet wet, you will see tangible results that will justify a public relations spot in your marketing arsenal.

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OPINION

Building a business Not doing a complete analysis of your own business, as well as that of competititors, can have dire consequences, warns Andrew Prince of DeVere Acuma

magine for one moment you have saved diligently for a long time and are on the cusp of having your dream home built. You’ve found the plot, had the designs agreed with the planning department and your builders are about to lay the first bricks. When suddenly, there is a wave of fear and panic looming large over you. The builders are laying the first bricks of your dream home, you should be happy. But you realise they have omitted to put in any foundations first. If that sounds ridiculous, I suggest you take a critical review of the business you’ve worked hard for and examine the many known and unknowns that lurk within it–any one of which can trip you up and create a potential disaster, akin to building a house without foundations.

CONSIDERATIONS It is important to review your recruitment and retention strategy.

Ask what the staff turnover is like as a percentage of the workforce and if it is in line with the market average, or higher than your competitors. Also, consider the incentives offered to retain staff. These are not only financial, but also include recognition of achievements. The second step is looking at how effective your employee engagement strategy is, assuming you have one, and checking when it was last reviewed. Ensure your HR functions have adequate capabilities and if not, hire an external expert to oversee any changes. Next, revisit partnership agreements with cross options. Determine which resources are in place to ensure the surviving partner has the means to buy your spouse /family out, in the event of your untimely death. Define your exit strategy. Consider the impact of the End of Service Benefit (EoSB) liability on your company’s value.

A potential purchaser will have a very different view on how much the EoSB liability impacts the value of your business.

DOING REPAIRS Take some time out to review your business and if necessary, hire an independent consultant. Depending on the size of your business, this could be one of the big four accountancy firms, or perhaps your auditors can recommend someone. Find a consultant with a successful track record in working with owners and developing businesses for sale resulting in a higher value for them upon selling. This does take time but is a worthwhile investment of time and resources. Consider hiring a specialist HR company that focuses on bringing the benefit of an impartial review to your business with a focus on compensation and benefits. Find firms with sufficient experience

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Evidence suggests that engaged staff who value their contribution to the company are highly beneficial to the overall business.” –Andrew Prince, Financial Advisor, DeVere Acuma

that have worked with SMEs and international companies. When looking at your business, they may evaluate whether your staff turnover could be improved by investing in a range of benefits that fits both the company’s budget and the needs of the staff. They could suggest a revamp of the employee handbook so there is better engagement of the staff meaning they feel more valued. Evidence suggests that engaged staff who value their contribution to the company are highly beneficial to the overall business. That has got to be good for everyone and the bottom line. If this sounds a bit too impractical then perhaps you should consider how much it costs you in recruitment fees (typically 25 per cent of the first year’s salary) and how many staff would need to remain for a review to be cost effective. There is strong evidence to suggest that the biggest form of absenteeism

is from stress, of which financial stress is a major contributing factor. Whilst it may be unspoken, since people lack the confidence to share their struggles with school fees, credit card bills or the rental payments with their family, let alone their employer. Yet it has a profound effect on their health. Many progressive employers, particularly in developed countries recognise this and provide a combination of workplace health assessments and financial advice surgeries, where employees can drop in during their lunchtime and have a confidential conversation with a professionally qualified person. Some insurance companies will even incentivise them to regularly visit the gym or adopt a healthier lifestyle. Finally, conduct a SWOT (strengths, weaknesses, opportunities and threat) analysis, whereby you, as the business owner, review from start to finish how the competition fares in terms of their complete business. This is not only how much they charge

for the same goods, but their staff turnover, and how the businesses are run–in other words, a complete analysis from the ground up. ‘I do not have time’ or ‘we are the best anyway’ are excuses and will often lead to failure. What systems are in place for the imminent introduction of VAT, which staff members are specifically trained in crossborder applications of VAT charging and reclamation? Do you have the appropriate software? Medical insurance recently became government mandated in the UAE, but how prepared is the business for the time when a proper pension replacing the EoSB comes into effect? Leaving these things to the last minute gives your forward-thinking, progressive competitors the edge. The above is not an exhaustive list, but merely an example highlighting some of the elements you need to consider when running a business. As with the opening property analogy, a business, like a house, needs regular maintenance and upkeep.

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LEGAL FOCUS

What is an SME? It now more important than ever to define SMEs, because businesses in certain categories will not benefit from the effects of the new insolvency law

n 10 September, 2016 the UAE Council of Ministers issued resolution no.13 of 2016 which defined SMEs by the verticals in which they operate: trade, industry and services. In the trade sectors, SMEs range from micro-enterprises, where the number of workers is not more than five persons, or whose annual revenues are not more than AED 3 million, to small enterprises where the number of workers is more than six employees and less than 50 persons, or whose annual revenues are not more than AED 50 million to medium enterprises, where the number of workers is more than 51 and less than 200 or whose annual revenues are not more than AED 250 million. In the industry sector, SMEs range from the micro-enterprises category, where the number of workers is not

more than nine or whose annual revenues are not more than AED 3 million to small enterprises, where the number of workers is more than 10 and less than 100 or whose annual revenues are not more than AED 50 million and medium enterprises, where the number of workers is more than 101 persons and less than 250 or whose annual revenues are not more than AED 250 million. Finally in the services sector, SMEs range from micro-enterprises category, where the number of workers is not more than five or whose annual revenues are not more than AED 2 million to small enterprises, where the number of workers is more than six and less than 50 or whose annual revenues are not more than AED 20 million and medium enterprises, where the number of workers is more than 51 and less than 200 or

whose annual revenues are not more than AED 200 million. One would wonder why the council of ministers that was supposed to define SMEs after consulting with concerned parties, would divide economic activities into three distinct sectors, especially since the law did not make such a distinction. The distinctions are related to the current insolvency law that is neither applicable to services professionals nor to micro-enterprises and farmers, as none of them are considered to be traders, therefore they do not benefit from the effects of the law. The upper and lower limits of number of employees in SMEs provided the in the council of ministers resolution are similar to what is applied in a number of jurisdictions, particularly in EU Countries.

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A number of laws are being drafted more specifically to encourage SMEs and to facilitate lending to them.” –Mazen Boustany, Partner, Baker & McKenzie Habib Al Mulla

It is undisputed that SMEs constitute the backbone of the UAE economy as some figures indicate that it encompasses around 95 per cent of commercial establishments. A number of laws are being drafted more specifically to encourage SMEs and to facilitate lending to them. Without access to medium- and long-term finance SMEs would not be able to exercise fully their substantial role in the economy, since SMEs are major players and employ huge number of people. The Ministry of Finance is a major sponsor of those laws that include, amongst others, the Pledge of Movables law and also the Financial Leasing law. It is to be noted that the Pledge of Movables law is steered by the International Finance Corporation (IFC). These laws would encourage lenders to provide lines of credit to SMEs without overburdening their

owners by asking for mortgage of lands that most of those SMEs would not have, or personal guarantees or cheques that most of the owners of SMEs would be reluctant to give. If the SME has a good accounting record, with the protections availed by those laws, lenders would disburse funds more easily and without fear, as they would be secured by the movables or the equipment. These laws also institute a registry for the secured movables and involve amendments to current laws to allow lenders to directly enforce on their security without the need of a court order. The exception would be in the case of a dispute by the borrower where such dispute would be heard on an expedient basis. The laws have already been drafted and have been sent to various governmental agencies for their comments in the hope that

they will be issued soon, since they will bring a very welcome respite to SMEs. These laws would also have to be taken into consideration by the UAE’s insolvency law whereby the latter would not impose unduly high penalties on entrepreneurs by encouraging innovation because it would allow for the possibility to fail and to be able to immediately rebound again, except in the case of fraud. The current insolvency law imposes some penalties on traders such as loss of civil rights and a period of rehabilitation that extends to three years after the repayment of the debts as these conditions are remnants of a bygone era. In conclusion, one might say that the UAE is moving in the right direction in terms of legislation and development to bring the economical activity at par with most advanced economies.

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CHALK TALK

ROY NOUHRA

The Finance Chair of the Entrepreneurs' Organization UAE made the necessary changes to his career when stress started to make his health suffer

was born in Lebanon and moved to Paris when I was one month old due to the war that started in 1974. I lived in Paris until I was 12. I moved to Montreal until I was 16, and then to Washington DC until I finished university. I started studying Business with a minor in International Relations. Two years into it, my father asked me what I was studying and when I told him he asked me if I was learning anything.

I said I wasn’t. He suggested I move to Engineering because we have a family business that is engineering related. Usually people move from Engineering to Business because it’s easier. He told me if I made the switch and I graduated, he would buy me a Ferrari. I love cars and racing cars so I moved to Engineering the next week. I studied Civil Engineering and graduated with honours. When my dad came to buy me the car, I declined it.

I wanted to earn it. Because I was top of my class, I was able to study my Master’s degree for free. I completed my two-year Masters in Engineering Management in one year, again at the top of my class. It all came easy to me; I do not know why because my grades weren’t good in high school. After graduating from my Master’s degree, I got a job offer in Washington DC from the biggest contracting company there.

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They handpicked the top of the classes and I was offered the job without an interview; they sent me a letter saying the job was mine if I wanted it. I had been away from the Middle East too long, and I had never come back to Lebanon. I decided I wanted to be closer to my extended family. I moved to Lebanon where the family had a wood trading business. I started managing this business which was simply horrible. The business environment there was very different to the business environment that I learned about in the US. Also, within a year, the traffic got to me. The war had finished and all the roads were being reconstructed. Traffic is my kryptonite; I cannot deal with traffic jams. A year later we decided to close the business. I had previously come to Dubai to visit my brother, who had come here the same year that I went to Lebanon. I decided I liked the place–it was quiet and calm and there was no traffic, and the potential was huge. It wasn't Dubai of today. The lack of traffic was part of the reason for coming here in 1998 to manage the family business, and we had an electromechanical contract. For a couple of years we were working, having fun, and enjoying life here. Everyone knew everyone. When the boom happened we grew exponentially and the traffic increased, which started getting to me. As the business grew, we started having issues with our main contractors. My health started to deteriorate from the amount of stress. I was still young back then; I was in my mid-20s and I was responsible for around 1,500 employees. A couple of projects got delayed for reasons out of my control. If the owner decides to stop paying the contractor and you are the sub-contractor, then you are not going to get paid either. At a certain point, I was very tight on my cash flow and there was

nothing that I could do. This was the hardest lesson that I learned–if your cash flow is not managed properly, even though the situation might be out of your control, your business will suffer for it and you might lose your company. I could not pay salaries for two months and I could not sleep at night. We were able to bounce back and we were never in that situation again because we became much more conservative in our approach. I decided to take a step back and diversify the industry that we were in. I wanted to stay in the UAE because I love this place. The business environment is amazing, but I wanted to get out of contracting. I wanted to get into something I was passionate about, even if it meant starting from zero. I wanted to have fun while working. Aside from car racing, my passion has always been water skiing and snow skiing. I have been doing skiing since I was around four years old and car racing since I was 16. When I was around 10 years old there was a new invention that came out called Skurfer which was like a surfboard that was towed behind a boat. My brother and I each had one. We did not know where they came from. But this was basically the first wakeboard that was ever invented. Only 100 were ever produced and we had two. I suggested manufacturing water skis to my brother. We looked around and came across a company called Liquid Force. The CEO of the company was Tony Finn, the inventor of the Skurfer. When he saw the picture of me and my brother as a kid with his products, he wanted to work with us. We started manufacturing for him. Fifteen years later we manufacture 90 per cent of the world's wakeboards, in Jebel Ali. This is a great way to work in what we were passionate about. Four years ago we took the same approach

with the snowboard industry, and now we manufacture 25 per cent of the world’s snowboards. So this is growing market for us. I also wanted to build race cars in the UAE but there was no market for it. Since we knew about fibreglass from the wakeboards and snowboards, we decided to look at boats. After researching the boat industry, we found a niche market in rigid inflatable boats, and we got into that. That is where I spent most of my time now. We manufacture customised, high performance boats which we sell to the military and professional customers. These boats can go out in the harshest environment to reach its destination in the shortest time, because two minutes or 30 seconds can make a difference between someone living and someone dying. Around seven years ago I decided that I needed to do more schooling. I joined an organisation called Entrepreneurs’ Organization (EO) which offers peer-to-peer learning, and it motivated me to do an owner management programme in Harvard Business School for three weeks every year for three years. It gave me a nice refresher regarding new business practices that I could bring into my business to make it more efficient. Balance is very important. Before I was married, I had no balance at all. I had no time for anything except work. After my health suffered, I made the distinction between ‘me’ time and ‘work’ time. When I got married, it was me, the business and my wife. That is the balance that I try to keep now. As people grow older, they manage stress and time differently. Not everyone is able to do that, but when your body tells you that you are going too fast and your health gets affected, then you are forced to find that balance.

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CEO CHAT

Among our offerings to SMEs is an omnichannel solution at a flat cost so they can calculate their spends on a fixed basis. â&#x20AC;&#x201C; Bhairav Trivedi, Group CEO, Network International

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DIGITAL DEVELOPMENTS

Bhairav Trivedi, Group CEO, Network International, discusses the evolution of the payment space and how technology is driving change

etwork International was established in 1994 as a small, in-house issuer processing centre for Emirates NBD when the bank launched its credit cards, to handle the number of processes that happen behind the scenes once a consumer applies for a credit card. Over time it became apparent that a credit card is only as good as the number of places a consumer can use it in, and Network International moved over to acquiring processing as well which includes getting the card machine to the merchant and running the payment from the back end by ensuring the card belongs to the consumer and that the merchant will be paid. Fast forward to 2016 and the company has grown into the largest

payment processor in the MENA region with a market cap of over $2 billion, according to Bhairav Trivedi, Group CEO, Network International. He added that the organisation operates in over 70 countries across the Middle East, Africa, and selected areas of South Asia, which translates to 1,400 staff members. “When we’re not in the news, it’s a good thing. We are the biggest little company not many have heard about, but we are there to make sure your payments work. When a consumer walks into a store you see Visa, MasterCard, American Express, and Diners Club, but they never ask the merchant if they process with Network,” he said. In order to become a leading infrastructure provider, Network

International had to stay above the learning curve on any new technological developments in the financial services industry, but while creating the next ‘big thing’ is important; the business focus is first and foremost on technology that has been adopted elsewhere that can be quickly brought to the local market.

SMES According to Trivedi, developments in the payment space are starting to offer very attractive options for SMEs with the release of a number of nextgeneration point of sale devices, such as Clover and Poynt. These products no longer limit payment solutions to swipe-and-go, but offer an entire inventory tracking system which is cont. overleaf

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CEO CHAT Network International International has has aa presence presence in in over over 70 70 Network countries, servicing servicing more more than than 200 200 banks banks and and countries, 70,000 merchants. merchants. 70,000 cont. from pg. 19

able to predict when a product will be sold out and prompt a business owner to reorder their stock. “Among our offerings to SMEs is an omnichannel solution at a flat cost so they can calculate their spends on a fixed basis. If they have a variable element, they have no idea if they are upselling, down selling, or selling their goods or services at the right level,” said Trivedi. On a larger scale, Network International is working on projects with the Dubai Smart Government, the technology arm of Smart Dubai, to provide solutions that allow consumers to make payments with their Roads and Transport Authority (RTA) Nol cards. During GITEX (Gulf Information Technology Exhibition) in October this year the RTA, in partnership with Network International, rolled out a new payment model that allows consumers to use their Nol cards at Zoom and other stores located at metro and petrol stations. By January 2017, the goal is for consumers to be able to use their Nol card at all Zoom and Carrefour stores in the metro stations. Trivedi was initially sceptical because he could not fathom why anyone would use their

Nol card to make a purchase, and it took a trip to a Zoom store to see the impact. “The person behind the counter was aggressively promoting the use of the Nol card because she said she struggled to provide change for consumers when a bottle of water is AED 3.75 and they hand over AED 10 or AED 100, and customers are also usually in a rush to catch the metro. Simply tapping the Nol card is convenient for consumers as well, especially when an ATM has given them an AED 500 note, but all they want is a bottle of water. Partial transactions can also be done in the event that a customer doesn’t have the full amount required in cash,” he added. For the banks, the financial provider, the RTA, or whoever owns that card, these payment solutions provide a lot more traction on that card. The card that may have been used only for transit suddenly makes its way to the front of the consumer's wallet because they can use it for a lot more, Trivedi said. As of the end of September this year, 8,000 RTA taxis are equipped to allow commuters to pay using their credit card and Nol cards.

Trivedi said that when rolling out something new, there is a consumer adoption issue, where people may not be fully aware of the technology, and a merchant acceptance issue whereby a taxi driver may not actively promote the payment options, either because they might see it as an inconvenience or they may worry about not being left a tip. In order to encourage something new like this to take off, he said sometimes a governing body has to follow what has been done in other developed economies. One example is for the taxi commission to place a sign in the vehicle saying that the taxi must accept credit cards or Nol cards.

ADAPTING TO DEVELOPMENTS Trivedi said one of the most exciting developments is big data, because it can help a number of institutions profile consumers and come up with predictive payment models. If a consumer changes their spending behaviour from eating out often to buying groceries, and they start cycling their credit card bill instead of paying it off immediately, those data elements will make the financial institution question whether they

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NETWORK INTERNATIONAL MILESTONES need to closely monitor that client’s credit limits. Information gained from big data is equally valuable in the retail sector and Trivedi cited the example of a duty-free store, because they need to know their customer mix, what they are buying and why and how they can ensure they keep stock of relevant products. Duty-free stores can advertise specific items on the aircraft arriving from certain locations. The stores positioned near the arrivals gate for that flight can be stocked accordingly. “The most important characteristic of data is even if a consumer walks into a store and the merchant doesn’t know anything about them, if they have been profiled to into a certain category, then their typical behaviour can be predicted. It’s not necessary to go down to the individual level,” he said. Other interesting developments in the payment space are bitcoin and blockchain technology, although Trivedi said consumers could be using bitcoin out of speculation, more than anything else. “Today, bitcoin has many regulatory hurdles. The same concerns consumers first had about making payments online apply to bitcoin, but at a much higher level. Doing a remittance from bitcoin to bitcoin doesn’t shave a percentage off a consumer’s money during the exchange, which meets the needs of many people. But the minute a government feels something is done to bypass their regulations, they will not accept it,” he said. “Blockchain, on the other hand, is a technology that holds a lot of promise.” The Dubai Government announced in October this year its plan to become paperless by shifting all transactions to blockchain technology by 2020. According to a statement, the Dubai

Government’s blockchain strategy is estimated to have the potential to generate 25.1 million hours of economic productivity each year. The Dubai Future Foundation and Smart Dubai Office are said to take prominent roles in the new plan's execution. Blockchain is a nice ID method and it will take off in some sense, said Trivedi, adding that blockchain technology is no different from somebody writing something on a billboard, and have it there permanently because it cannot be erased. Somebody else can write that the original post was amended to become something else, but that original record will always be there in the public domain. In terms of securing IDs, Trivedi said ideally a person’s national ID and their fingerprint would be used for authentication, because those two things can tie everything to an individual. A fingerprint would also work better in the payment environment because the margin for error is one in 30 billion. Technological developments are making it more difficult for criminals to defraud consumers. “When fingerprint ID technology was introduced, fraudsters created fingerprint moulds. So finger vein imaging was developed. Apple products have more red lights to try and pick up the veins and determine whether or not there is blood flow, which would indicate it’s a live finger as opposed to a mould. As technology gets more developed, where does it go?” he said. Trivedi said there is a level of physical interface required with payment transactions which will require more and more multi-factor authentications, which is its own validation process. He added that technology is driving adoption because ultimately, convenience offers users value.

2004 – Recruited its first international clients from Lebanon, Egypt, Kuwait, Oman, and Africa. 2007 – Launched integrated POS solutions to ease payment methods for the retail and hospitality sectors. 2010 – Acquired the Diners Club franchise for the UAE, Egypt, Lebanon, and Jordan. 2011 - First to launch a Dynamic Currency Conversion product. 2012 – Acquired TimesofMoney Limited, an online remittance and digital payments company. 2013 - First to launch a mobile point-of-sale (mPOS) device in the UAE. 2014 – First acquirer to launch a dedicated e-commerce solution - Network Online (NeO). 2015 – Becomes exclusive provider of PayPal settlement in the UAE. 2015 - Global investment firms Warburg Pincus and General Atlantic acquire a 49 per cent stake in Network International from Abraaj Capital and Emirates Investment Authority. 2016 - Acquires Emerging Markets Payments Holdings (EMPH), making the combined entity the clear market leader across the MEA with presence in more than 70 countries. Source: Network International

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COUNTRY FOCUS

KEEPING UP WITH QATAR In spite of low oil prices, Qatar’s non-hydrocarbon sector continues to strengthen while the Government places more focus on developing and supporting SMEs

espite lower oil prices, the Ministry of Development and Planning Statistics (MDPS) Qatar Economic Outlook 2016–2018 report suggests real economic growth in 2016 is expected to rise to 3.9 per cent, strengthened by continued vitality of the non-hydrocarbon sector and the boost to upstream hydrocarbon production from the Barzan gas project. However, nominal gross domestic product (GDP) is expected to contract by 2.9 per cent, reflecting the drop in global hydrocarbon prices. The MENA Economic Monitor Report–Spring 2016, estimates that Qatar may sustain real GDP growth averaging 3.6 per cent between 2016 and 2018, due to efforts to drive growth in the non-hydrocarbon sectors. Growth moderated to an estimated 3.7 per cent in 2015, down from four per cent in 2014, and has been primarily driven by the non-hydrocarbon sector, and the construction, transport, communications, and financial sectors continue to perform well.

In 2016, the Government tightened its fiscal policy with the budget announcement showing a decline in both current and capital spending, resulting in a total budget of $56 billion compared to $60 billion in 2015. However, the investment commitments for the 2022 FIFA World Cup Qatar, and its plan to diversify the economy, restricted the Government’s ability to reduce capital spending, instead it started to remove subsidies, raised fuel prices in January, and looked to develop new revenue sources such as planning for the implementation of a value added tax (VAT) with other GCC countries on 1 January 2018. Qatar is expected to spend $70 billion to $80 billion a year between 2015 and 2017, according to Qatar National Bank (QNB) group CEO, Ali Ahmed Al Kuwari who said the bulk of the expenditure is aimed towards real estate developments and rail, road, airport and port projects in the transport sector. The Lusail Mixed Use Development is the largest in the list of major projects at $45 billion, and

is expected to be completed in 2022 while the Qatar Integrated Rail project has an investment of $40 billion, and should be completed in 2026. Further investments include the Ashghal Expressway Programme, which will cost around $20 billion and is expected to be completed in 2018; the Hamad International Airport, at a cost of $15.5 billion, to be completed by 2020, and the Ashghal Local Roads and Drainage project, costing $14.6 billion and completed in 2019. According to QNB forecasts, the state’s real GDP will grow from 3.3 per cent in 2016 to 3.9 per cent next year and 4.2 per cent in 2018 thanks to continued investment spending and initial production from Qatar’s new $10 billion Barzan gas project. Sheikh Ahmed bin Jassim Al Thani, Minister of Economy and Commerce, has stated that non-oil economic growth has been expedited, negative costs have been contained and new legislative reforms introduced to increase private sector participation including the New Companies Law to

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create an investment environment enabling investors to participate in all aspects of Qatar’s economy. The developmental pace that Qatar's economy has witnessed over the last 10 years and the associated demographic developments have strongly fuelled the rising number of SMEs, said Al Thani. “Currently they comprise almost 97 per cent of all companies, and the new commercial companies law, which came into effect in August 2015, has more efficient legal rules and procedures meant for licencing new businesses. While the new law targets all types of businesses, SMEs are expected to benefit the most, as the cost and time savings associated with this new law matter the most to small-scale businesses,” he said.

QDB AND THE PRIVATE SECTOR In June this year, Qatar Development Bank (QDB), the Government entity committed to promoting economic diversification by supporting local industries, including SMEs and start-ups, launched a rating and

accreditation programme, designed to assist SMEs gain access to government, semi-government and private business opportunities, as well as to localise the supply chain. The rating process was introduced as per Tender Law No. 24 of 2015, a law regulating tenders and auctions in Qatar, and will give SMEs insight into understanding internal gaps and challenges related to their business as well as any required improvements to enhance their business performance. “This programme is an important pillar in the system of support that we offer to small and medium companies, which enhances our efforts to support the efficiency of the Qatari economy and its diversity and underscores our commitment to contribute to the achievement of Qatar National Vision 2030,” said Hamad Al Kubaisi, the Executive Director of Advisory of Qatar Development Bank. SMEs that pass through the ratings programmes are eligible for the Tender Bond Exemption Service. As per new tender law SMEs can

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Qatar is expected to spend $70 billion to $80 billion a year between 2015 and 2017 to improve infrastructure in the real estate and transport sectors.

be waived off from producing the following documents: Tender Bid Bond exemption, a Performance Bond exemption and an Advance Payment Guarantee exemption. QDB continued its support of the SME sector by announcing in September that it has so far extended direct financial support of over $1.4 billion to local enterprises. Abdulaziz bin Nasser Al Khalifa, CEO of QDB said SMEs and entrepreneurship are flourishing in Qatar, and now they can get easy access to a number of Government-funded services. “No one is providing all of these support services to entrepreneurs as much as it is provided in Qatar,” Al Khalifasaid. Access to finance remains a challenge for SMEs throughout the GCC region and at the end of November it was announced that QDB plans to launch a debt-to-equity seed funding initiative for entrepreneurs, and it is expected to launch by the end of 2016. Al Khalifa said that despite banks’ caution in lending to SMEs, QDB saw the need for the capital initiative cont. overleaf

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COUNTRY FOCUS

Our continuing partnership with Qatar Shell provides SMEs with the chance to make a significant impact on their business by joining the Qatar Shell supply chain, and gives those companies the opportunity to expand regionally and globally.” – Abdulaziz bin Nasser Al Khalifa, CEO of QDB

cont. from pg. 23

after witnessing a rising demand for loans over the past year, and the bank continues to work towards encouraging entrepreneurship. The loan provision for 2016 in October stood at $350 million, meaning QDB is likely to record 20 per cent yearon-year growth in loan provision by the end of the year. In 2015 QDB introduced its dedicated SME Equity Fund worth $100 million, and Al Khalifa estimated that five per cent of the five-year fund had been released.

PUBLIC PRIVATE PARTNERSHIPS In May this year it was announced that up to $19 billion worth of investment opportunities have been identified in sports and sports-related industries that the private sector can tap in the next seven years. Al Thani said the Ministry of Economy and Commerce has spent the past year collaborating with a range of local ministries and government institutions, including delivery, regulatory, and financial authorities to develop the ‘Qatar Gathering for Sports Business’, based on various economic cluster models used by countries like Singapore, the US, and Spain, adding it aims to support SMEs and other companies invest in the sport sector, particularly in mega projects related to the 2022 FIFA World Cup Qatar. Based on a detailed analysis of current and planned expenditure in

the sports market, 83 opportunities that have the potential to serve as catalysts for the long-term growth and development of Qatar’s sporting industry have been identified and are split across multiple sectors of the economy: event management and promotion, sport development, venue construction, sporting goods and equipment, sport commercialisation, sport tourism, and venue operations and maintenance. “The private sector plays a pivotal role, which is why we are providing them the means to access the country’s growing sports market. For the past year we have been testing the waters; now that we have concluded the first stage and we are ready to cut ahead and develop this sector,” said Al Thani. In early December, Qatar Shell, in partnership with QDB, signed four new contracts with Qatar-based SMEs, as part of a nationwide support strategy to improve the small and medium enterprise sector. 2016 marks the fourth year of the SME Business Opportunity being held and has resulted in 18 contracts awarded to local SMEs, with a total aggregate value of approximately $27 million. “Our continuing partnership with Qatar Shell provides SMEs with the chance to make a significant impact on their business by joining the Qatar Shell supply chain, and gives those

companies the opportunity to expand regionally and globally,” said Al Khalifa. QDB and Qatar Shell are working together to provide local SMEs access to new specific business opportunities within the Pearl GTL plant, the world’s largest gas to liquids plant developed by Qatar Petroleum and Qatar Shell, in the belief that local SMEs are vital for achieving a sustainable and diversified economy in Qatar and facilitating a thriving private sector.

ESTIMATED GOVERNMENT EXPENDITURE $20 billion–Ashghal Expressway Programme to completed in 2018.

$14.6 billion– Ashghal Local Roads and Drainage project to be completed in 2019. $15.5 billion– Hamad International Airport to be completed by 2020. $45 billion–Lusail Mixed Use Development to be completed by 2022. $40 billion–Qatar Integrated Rail project to be completed by 2026.

Source: Qatar National Bank group CEO, Ali Ahmed Al Kuwari

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HIRING PEOPLE SHUTTERSTOCK.COM/DITTY_ABOUT_SUMMER

NOW HIRING! As countries within the MENA region are expected to hire new staff, contributing experts give insight into finding the right candidate, first time

recent survey conducted by Bayt.com and YouGov, indicated outlook for job opportunities in the coming months is optimistic, as more than half of employers are planning to hire new staff.

Results for the Middle East Job Index 2016 were collected online between June and August this year from 2,001 respondents from 14 countries, including the UAE, Kuwait and Qatar. The survey added that

the majority of hires will take place in the UAE, Saudi Arabia, Egypt, and Jordan, and that hiring will begin from three months to one year from now. In light of these employment projections, the people responsible

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Companies need to be mindful of the fact that candidates are in a powerful decision making position themselves and the courting process happens on both sides. – Martina Eriksson, HR Manager–Middle East and Africa, Axis communications

Taking the time to hire the candidate with the right skills can save a business time and money in the long run.

for the recruitment processes within these companies will have to take certain steps to ensure they find the right people. Employers are increasingly taking a holistic view of candidates, where being ‘good on paper’ with the right qualifications and references is no longer sufficient. Now more than ever, companies need the right people with the right personalities, according to the Middle East Job Index, which found that only 49 per cent of new hires stay with the company, and that 90 per cent of those who leave

do so due to personality conflicts, emotional issues, and a poor person-company fit. “Cultural fit should not be underestimated; a very capable person who doesn’t get along at work can be more disruptive to achieving effective working teams if their impact on others is negative,” said Minelle Gholami, People Director at integrated facilities management firm, Emrill Services LLC.

SOFT SKILLS The most sought after soft skill is communication, according to almost two thirds of respondents, according to the Middle East Job Index 2016, followed by leadership skills tied with cooperation and team-related skills at 39 per cent, and the ability to work under pressure by 38 per cent of the respondents. “Certain fields might have a different focus when it comes to the most important soft-skills. For instance, 50 per cent of the respondents in the oil and gas industry seek candidates who are

able to work under pressure. Forty one per cent of the respondents in the human resources field seek honesty and trustworthiness, and more than a third of the respondents in the real estate field look for a positive personality and demeanour,” according to Nauman Mian, CFO of the employment website Bayt.com. A good communicator is someone who is able to engage effectively with the cross-section of people with whom they will interact in their job role, according to Gholami. She added that problem-solving skills and the ability to focus on creative solutions will provide a ‘value-add’ for new team members. Behavioural competencies are becoming more important than ever. Claire Donnelly, Senior Consultant at executive consulting firm Mike Hoff Consulting, said it is important that companies hire for attitude and train for skill. “The company needs a very clear set of core company values that mean something to the current cont. overleaf

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HIRING PEOPLE Candidates Candidatesneed needto tohave havewellwelldeveloped developedpersonal personalskills, skills,because because good goodqualifications qualificationsare areno nolonger longer enough enoughto tosecure secureaaposition. position. cont. from pg. 27

employees of the company. Once you have these, a recruiter can easily identify if a candidate will fit into the company,” she said. The Harvard Business Review points out that as much as 80 per cent of employee turnover is due to bad hiring decisions, which can be pre-empted at the interview stage. Many long-held ideas about how to conduct interviews are no longer accurate; there is no such thing as a surprise interview question anymore. Candidates tend to learn by heart the answers to predictable interview questions, regarding their career expectations and their strengths and weaknesses–answers that reveal little about their employability, said Mian. Asking a candidate about their CV is a good starting point, but asking

indirect questions about a person’s back story, about their primary drive in life, and what they like to do in their spare time gives a fuller picture, according to Sarah Jones, CEO of ecommerce site Mini Exchange. “Interviews should be used to get to know the person and their motivators. Competency based questions are a good way of exploring their ability to adapt and deliver in different situations. It is also always interesting to note the questions asked by the candidate as it can be very telling about their motivations and interests,” said Gholami. Candidates can be better assessed away from the interview process, in a more relaxed environment. Taking them for a coffee or taking them along on an errand to see how they interact with clients and the other

team members are good ways of being able to see the real person, suggested Donnelly.

PSYCHOMETRIC TESTING Certain skills and competencies cannot be confirmed without conducting assessments and they can save the employer a lot of time since the competency-based questions, scoring and reports are all automatically generated. Having a quantified value or score associated with each candidate is also a much easier method for contrasting qualifications and making the hiring decision, said Mian. Of the professionals polled by Bayt.com, 63 per cent believe that companies should start offering psychometric testing to employees and 68 per cent indicated that

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though they have never undertaken a psychometric test before, they would like to. On the other hand Gholami warned against psychometric testing being used as the deciding factor in the hiring process; it should be used to complement all the other information garnered through the interview process, and not to determine whether a candidate passes or fails the screening process without an interview. Often the size of an organisation will be a factor in the success of the recruitment and interview process, according to Martina Eriksson, HR Manager, Middle East and Africa at network camera manufacturer, Axis communications. If a company has stakeholders in different global locations, it may be more complicated to accommodate their diaries. Companies can avoid this by setting out a timeline at the start of their recruitment drives, as well as looking at each position and deciding which steps of the recruitment process need to be incorporated for each one. “The key is to manage your engaged candidates’ expectations by keeping them informed every step of the way. Companies need to be mindful of the fact that candidates are in a powerful decision making position themselves and the courting process happens on both sides. As much as we are assessing candidates, they too are evaluating how well we fit in with their future goals and aspirations,” she said. She added that key questions to include during the interview are: asking their understanding of the role you are recruiting for, what research they have done on your company, their reasons for leaving each position, including their current

role, key accomplishments that resulted in the company’s benefit, moments the candidate is not so proud of and what they would have done differently, questions aligned to the values of your company to see if the candidate’s views are congruent, and areas of strength versus areas of development.

CANDIDATES’ PERSPECTIVE Candidates often prepare for interviews by researching the company. This includes looking up reviews on sites like Glassdoor.com, which features commentary from both current and former employees, in an attempt to get a feel for the company culture. Founded in 2008, Glassdoor is one of the fastest-growing jobs sites, according to cross-platform measurement company Comscore. The site has received more than 11 million employee reviews for a half million companies, up from 340,000 companies last year. It has 30 million unique visitors a month, pointing to the number of job seekers that are checking potential employers before they apply for work. Review site Software Advice surveyed a sample of 4,633 respondents in the US to learn what impact Glassdoor reviews have on a job seeker’s decision to apply for, and accept, jobs. When an employee posts a review, they are asked to rate the company on a rating scale of one to five. A low rating will deter top talent from applying for a position with a company–one third of job seekers said they required a company to have at least a three-star rating before applying. A negative review will stem from a negative experience, said Eriksson, and the onus is on the company to admit where they were wrong, decide what they could have done

differently and then do it. It is always advisable for management to relook at internal processes to ensure they are keeping abreast of industry changes and keeping their current workforce engaged. Mian added that avoiding negative reviews on a public space comes down to fostering employee satisfaction; designing solutions for employee engagement and satisfaction starts with listening to their goals and needs. According to Bayt.com’s Career Development in the Middle East and North Africa survey, 47 per cent of professionals have not formally set any development plans with their manager, and 95 per cent of those would like to have one. This means many professionals will move to another job opportunity, industry, or another country if they feel their professional goals are not being met or listened to. He added that by valuing employees’ feedback, and addressing concerns as they arise, companies will prevent staff from feeling they have to resort to negative online reviews.

TIPS TO IMPROVE CANDIDATE SCREENING

• Draft a thorough job description–know what you are looking for. • Read between the lines; do not take a CV at face value. • Conduct a quick phone interview before hand. • Ensure hiring managers are trained to conduct effective interviews. • Put informal conversations into the process to see the real person, not rehearsed answers. Source: Martina Eriksson, Axis; Nauman Mian, Bayt.com, Sarah Jones, Mini Exchange; Claire Donnelly, MHC

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OUTSOURCING IT

FIND THE RIGHT PARTNER

SMEs with limited resources can save costs and tap into up-to-date solutions by outsourcing their IT requirements

utsourcing is estimated to be a global market place worth over $600 billion per annum with cost-savings being the primary reason for doing so. According to research conducted by

Duke University with International Association of Outsourcing Professionals (IAOP), 80 per cent of customers outsource to improve business performance and their overall operating model.

The value of outsourcing is now measured less by costs saved and more by how it can help enable strategic growth, through rapid access to talent, increased agility and improved quality of service delivery.

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Outsourcing IT can free up SME owners to focus on building their businesses.

Considering the rapid growth of SMEs, competition has increased within the sector. Forward-thinking SME owners and managers are continuously embracing technology to streamline processes and restructure their business models for greater profitability, according to Sachin Bhardwaj, Director of Marketing and Business Development for cloud infrastructure management firm, eHosting DataFort. “Outsourcing to IT service companies offers small businesses multiple benefits. At a strategic level it allows companies to focus and leverage their resources towards their core business activities, rather than spending too much time on operational activities. On the operational level, outsourcing offers the skills and expertise of a service provider to manage complex

SME owners need to ensure that they find the right outsourcing partners that understand the industry in which the SME operates, and has a track record of helping their SME clients grow their business.” – Ruth Scott, Human Resources Director of classifieds website dubizzle

IT infrastructure requirements competently,” said Bhardwaj. “With an outsourcing partner, an SME can dedicate its human resources to focussing on winning new businesses and servicing existing customers,” said Hany Fahmy Aly, Executive Vice President of Enterprise Business at telecommunications company, du. He added that keeping up with developing IT trends falls on the partner company, which removes the risk of the small business owner falling behind and using outdated systems because management will no longer have to decide where to invest in IT and how to manage it, nor do they take a risk when investing in new technologies that may not be suitable. “SME owners need to ensure that they find the right outsourcing partners that understand the industry in which the SME operates, and have a track record of helping their SME clients grow their business,” said Aly. In terms of tapping into the best talent, John Kilmartin, Executive Director if ICT, Bahrain EDB thinks that outsourcing IT services prevents businesses from being limited to what is available locally and companies that may not be able to train employees in the early days can find the staff they need without having to invest in developing their skills.

“Bahrain has numerous educational and training centres that run programmes specifically tailored to the needs of companies establishing themselves in the Kingdom. Bahrain University and Polytechnic are among the institutions that offer advanced information and communications technology (ICT) training programmes and 12,000 of Bahrain’s 1.3 million population are currently employed in the ICT industry, and the number is expected to grow,” said Kilmartin. According to Vic Bageria, CEO of business intelligence and solutions provider, Sàvant Data System business owners have to ask whether the task in question is worth outsourcing or not, and they have to carefully consider whether the cost of outsourcing is worth the increased efficiency of the business. Just because a business owner can outsource a task does not mean that they should. He added that tasks which contribute to a high operational impact tend to be outsourced to assist in the smooth running of the operation. If your company is not software-oriented, but requires other services to be polished, it is usually better to outsource than to hire, manage and pay employees. “It is vital for companies to have full control over the business to avoid giving up its competitive edge. Never cont. overleaf

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OUTSOURCING IT By outsourcing to IT experts, SMEs can lower their risk of experiencing cybercrime. cont. from pg. 31

outsource areas that would directly impact your business and customers– always have full control of your online domain and social media channels,” Bageria said.

SECURITY Almost 50 per cent of GCC executives lack confidence that their organisations have the right tools to predict, prevent and manage cyber-attacks, according to a poll by Gulf Business Machines (GBM) in March this year. The 700 executives and IT professionals polled are based in the UAE, Qatar, Oman, Bahrain and Kuwait, and 48 per cent of respondents said that their organisations conduct regular third-party security assessments. Furthermore, only 40 per

cent of organisations have a dedicated IT governance, risk and compliance function. Even though IT security budgets are getting more attention from 29 per cent of organisations, about 70 per cent of enterprises and SMEs do not outsource their security operations, and 71 per cent of executives confirmed that their IT security budgets will either stay the same or decrease in 2016. “IT can be placed in the longand short-term goals of companies. Strategic infrastructure can be worked on in manageable portions over a certain period by an internal IT team, while tactical IT projects can be outsourced to achieve certain short-term goals by a managed service provider,” said Bhardwaj.

He added that with the constantly changing threat landscape, security is becoming critical which has resulted in a higher demand for managed security services. “Almost every business can be seriously affected by cybercrime and it is an extremely complex challenge. By outsourcing, SMEs can rely on teams of security experts to keep their businesses free from cyberattacks, protecting the business’s reputation and revenue,” said Aly. Making the transition from operating in-house to handing over a task to an outsource partner can be fraught with difficulties if communication is not clear and the roles are not clearly defined on each side. All parties concerned will

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FINDING THE RIGHT OUTSOURCE PARTNER • Choose a partner that is evolving, changing, and ready to adapt to new trends in IT. SMEs need partners that are continuously refreshing their approach and are ready to offer the newest solutions available. • Know the reputation of the provider to ensure the highest possible standards in maintaining efficiency. Talk to the call centre and earn about the potential supplier’s quality and scope of experience and turnaround time. • Take into account the provider’s financial stability which will help to determine if the partnership will survive the long-run or not.

benefit if they understand what is expected of them. “SMEs should ensure that there are clear points of contact on both sides and everyone understands the outcomes and goals of the organisation. They need to communicate where they are today, as a business, and where they want to be in 12 to 18 months. Communication will remove risk and speed things along,” said Aly.

OFFSHORE VS ONSHORE Outsourcing offshore or locally both come with their own set of pros and cons. While offshore partners may offer more cost-effective solutions, they also tend not to be tailored to the needs of the SME.

The SME may save on costs initially, but cultural and time zone differences may work against them, impacting communication and delaying deliverables, said Bageria. “Outsourcing locally can provide higher efficiency and productivity rates as communication can take place by telephone or email, minimising language gaps as well as relieving the owner’s frustration in resolving issues,” Bageria said. Aly added an argument for using local partners because SMEs can build strong relationships while being assured that local regulations and business practices are accounted for, while receiving tailor-made solutions that can be scaled and adjusted as the business grows.

• Ensure the provider is compatible with the business. It is critical that they understand the company culture, which will facilitate good communication when handling conflict. • Look into the provider’s experience because this will play a vital role in ensuring delivery of information. When entering a longterm contract be sure to ask for the experience and qualifications of all the relevant team members. • Ensure the provider will adhere to industry best standards and practices. • Ensure the provider offers yearround 24/7 support.

Source: Sachin Bhardwaj, eHosting DataFort; Vic Bageria, Sàvant Data System; Hany Fahmy Aly, du

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CASE STUDY

RIDE ON!

In spite of investors’ general disinterest in social business, the Charicycles co-founders have continued to focus their business on giving back to the community

haricycles, a Dubai-based, bespoke bicycle company, was started in October 2014 by sisters and Co-Founders Zaina and Rania Kanaan, when Zaina wanted a bicycle but could not find what she was looking for on the market. “I had just bought a very expensive bike and Zaina wanted something more affordable,” said Rania Kanaan, Co-Founder and Director of Operations, Charicycles. “We found an old bike, fixed it up, and customised the colours.

Every time Zaina went out riding, people would ask where she bought it. That is when we realised there was an opportunity in the market for bespoke, affordable, eco-friendly bikes, that were neither new nor contributing to the waste in the environment. We reduce waste by sourcing vintage frames and upcycling them.” According to a report in science journal Nature, global solid waste generation rates are estimated to exceed 11 million tonnes per day

by 2100, which means the global population will produce three times as much waste as it does now, per day. Upcycling differs from recycling in that instead of using something repeatedly, an old item is refurbished and made beautiful again. The Charicycles team are able to customise their bikes to suit their clients’ needs, from the colour of the frame, the name plate, right down to the colour of the stitching used on the seat upholstery, said Zaina Kanaan, CoFounder and Marketing Director, Charicyles.

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When money is just thrown at fintech or ecommerce companies, it is taking away from businesses like ours that are doing well, doing good, have healthy margins and steady cash flow.” – Rania Kanaan, Co-Founder and Director of Operations, Charicycles

to deal with the right suppliers. We had to go into areas you would not imagine two women would want to go, but the people involved were very nice and we were able to strike the deals we needed to do our business. Now we’re looking at working with Japanese suppliers and we have a few connections, so we will see what comes of that,” said Rania.

SOCIAL BUSINESS

When Zeina Kanaan returned from volunteering in refugee camps, she wanted to incorporate the social aspect into the business.

The bicycle frames come from Japan and arrive in Dubai before being warehoused or redistributed to countries such as Afghanistan, Iraq and Iran. In 2012 it was estimated that Japan discards around seven million bicycles annually, according to municipal studies in the Shizuoka Prefecture. “Sourcing the frames was not too difficult. Because Dubai is an import/ export hub, the paperwork is very well-regulated; it’s straightforward

Charicycles is a social business, a term originally coined by Nobel Peace Prize winner, Professor Muhammad Yunus, an economist and banker from Bangladesh. In his book Creating a World without Poverty–Social Business and the Future of Capitalism, he put forward the idea that social businesses differ from other businesses in the way profits are handled, and the purpose of creating the businesses is to help society overcome poverty and social problems. The sisters started the business around the same time that Zaina had been volunteering in refugee camps in the MENA region, specifically on the West Bank. Every time she asked the children in the camps what they wanted as a gift, they would ask for a bicycle. “These children are missing out on a part of their childhoods by being

put in these fake, residential areas. They are missing out on freedom and mobility, and a bicycle gives them that for the few minutes that they ride it,” said Rania. On her return to Dubai, Zaina wanted to integrate her work with the refugee camps into the business model and the sisters decided that for every five bicycles that they sell, one will be donated to a child in a refugee camp. The donated bicycles are sourced locally from a merchant in the vicinity of the camp in an effort to help the community economically, and the bicycles are distributed on a reward basis, with the help of on-theground, registered charities and the children’s teachers. “The children that excel in school are rewarded with a bicycle. Many of the children do not see a future outside of the camps; they think they will not be employed anyway, so they do not see why they should bother going to school. This incentivises them to show up to school and work hard, even with all the obstacles that they are facing, because they will get something they want at the end of it,” said Rania. The Kanaan sisters grew up in Canada which offers a much easier business set-up environment, said Zaina, because the right resources are cont. overleaf

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CASE STUDY

cont. from pg. 35

available for free and people facilitate mentorship and collaboration. “Operating a business in Dubai is expensive–getting a licence, employing people, and paying yourself a salary to self-sustain are all expensive, and Dubai is not an affordable city. Everything here is business-oriented, so if you want to work with an advisor or mentor, you need to compensate him or her in some way. For a start-up, it’s even more difficult because those are funds you’d rather not be paying,” said Zaina. The Kanaans are currently fundraising for Charicycles, but they have found that being a social business has put them at a disadvantage. One of the biggest challenges facing social businesses, according to Rania, is that investors tend to overlook them in favour of funding tech or F&B startups, and a lot of great businesses are being side-lined in the process. “These are valid businesses with a lot of potential, even if they have not shown the growth that would attract investors. When money is just thrown at fintech or ecommerce companies, it is taking away from businesses like ours that are doing well, doing good, have healthy margins and steady cash flow,” said Rania. Social entrepreneurship is slowly emerging as its own sector in the MENA region as seen by the gradual emergence of regional incubators and efforts supporting entrepreneurs, such as the Emirates Foundation, which assists Arabian Gulf nationals, as well as Impact Hub which connects social entrepreneurs with investors. In spite of funding challenges, Charicycles has a business model that is cash-flow friendly and allows for healthy margins that meets the day-today costs of running the business. All the profits are being reinvested back into the business, but sometimes it takes its toll because every day that they are not funded, is a day they have to be

Rania Kanaan says bicycles are donated to children on a reward basis to encourage them to attend school.

especially prudent about managing and allocating their funds, said Zaina. “We honestly believe the future is in social business. A business is only sustainable if it sustains other communities. We’d like to see more attention on these social businesses and on people that are making an impact, even if they do not have the hockey stick growth that investors or VCs generally seek. Social businesses are the future and giving them a chance in the early stages is a stepping stone for other businesses to enter and grow as an industry and to impact the world in a positive way in the longer term,” Zaina said. One of the tenets of the business is to work as locally as possible when selecting their suppliers. Even though the core team is quite small, the co-founders try to provide relevant jobs and work experience by opening the door to interns.

“Once we had an intern come over from France for a month. She was an engineer with no work experience and we wanted her to leverage her skills into the business, so she spent that month trying to find a way to use the bicycle to generate motion energy to use in some way. She wanted to see if it was possible to use the kinetic energy to charge a cell phone, but the bicycle doesn’t generate enough energy for that. But she felt her work experience was rewarding because she was actually using her skills,” said Zaina. Last December the team added canvas bags, made of 100 per cent natural cotton, to their inventory. The bags were originally an added gift with each order placed during Christmas but upon seeing their popularity, they decided to make them a regular sale item. The bags are eco-friendly and reusable, in line with the company’s desire not to

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Charicycles can be customised down the colour stitching used in the seat.

IN SUMMARY

create waste, and all their printing is done by a local company, InkMASH, said Zaina.

INTO THE NEW YEAR The co-founders have starting doing fundraising pitches and have had very encouraging meetings in Kuwait which should enable them to break into the market; Egypt is also an emerging market they would like to enter. “We are also looking to expand our product line. We would like to have mountain bikes and cruiser bikes with different accessories such as cup holders or phone chargers. E-bikes are becoming popular and they are eco-friendly, and the components can be adapted to your current bike–it’s not necessary to go out and buy a ready-made e-bike,” said Rania. Regarding their work with refugee camps, the co-founders would like to work with as many organisations as possible that have CSR initiatives

that focus on displaced refugees; the camps that were meant to be temporary living spaces have now become permanent and they are relying on minimal aide. According to a statement by Amnesty International in February this year, Syrian refugees in Lebanon receive $0.70 per person, per day for food assistance, well below the United Nations (UN) poverty line of $1.90. “There are people born in these camps and they know nothing else. Because it’s a living space that doesn’t look like it’s going anywhere anytime soon, why not try to make it a positive space for the people that are living there?” said Zaina. The co-founders realise that having bicycles will not solve the refugees’ problems, but the health benefits; added mobility, and fun provided by the bikes may make their living situations slightly more positive.

THE PROBLEM Charicycles is an SME that falls under the growing sector of social businesses. Social businesses are generally overlooked for funding by investors who favour fintechs and F&B start-ups. SOLUTION The co-founders have ensured their business model allows for good cash flow and healthy margins to grow the business organically, despite the softer economy. THE RESULT Business growth has been slow and steady due to all the profits being reinvested back into the business, but this has proven the business is sustainable, putting the co-founders in a position to start pitching for funding. At the FinanceME Business Vision Awards held in April this year, Charicyles won the ‘Best Giving Back Initiative’ category.

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FACETIME

NAVIGATING THE THREAT LANDSCAPE As cybercriminals develop more sophisticated malware, it is imperative for SMEs to ensure they put proper safety measures in place

n October this year, cybersecurity firm FireEye announced an overview of the threat landscape in the EMEA (Europe, Middle East and Africa) region for the first half of 2016, in its latest Advanced Threat Report. According to the report 96 per cent of global organisations were unknowingly breached as threats increasingly evade traditional security products. The report explores how nation-state based threat actors and cybercriminals conduct espionage and target organisations in the EMEA region, and highlighted that organisations in Saudi Arabia, Qatar and the UAE were among the most exposed to advanced targeted threats in the Middle East. “SMEs are the predominant target for cybercrime as a service, because cybercrime can be profitable,” said Peter Tran, GM and Senior Director Worldwide Advance Cyber Defence Practise at cybersecurity strategy firm, RSA. Cybercriminals are commoditising viruses and malicious codes that an unsophisticated criminal can use against smaller businesses because they are an easier target. Creating these tools can earn cybercriminals up to $1 million per year.

Smaller businesses are at a particular disadvantage for a number of reasons, which include staffing, according to Rich Bolstridge, Chief Strategist of Financial Services, Akamai Technologies. Finding the right people for security and tech positions, even in large enterprises anywhere in the world, is definitely a challenge. This is felt more so in the MENA region where first of all there is a distinct lack of talent, and second, SMEs do not have the ability to develop relationships with universities and some of the talent pipelines to source the candidates with the right skillset as they becomes available. “Once security personnel have been hired they have to be retained and they need to be kept busy in a small enterprise where they are unlikely to see the action they would in a large company. The level of cybersecurity activities, and perhaps the attacks being dealt with as an SME, will not be as challenging overall for them to deal with,” Bolstridge said. He added that a key challenge facing SMEs is to understand threat intelligence because there is so much information surrounding

comprehending what the risks are. The first thing that an SME needs to do is a risk assessment; some SMEs are handling very sensitive data and by taking an inventory of their assets and assigning a risk score, they will have a better understanding of the impact a breach would have on their business. “If the SME has a strong online presence, such as retail or ecommerce business, the owner needs to look at what the cost of downtime will be if their business presence is unavailable for a day or even an hour,” he said. Bolstridge added that for a business owner to assume their data is secure because they are smaller and therefore under the radar, is a misguided approach. Attackers understand that smaller businesses are often not welldefended, but they still have valuable assets, whether they are personal records, financial data, credit card information, addresses, or usernames and passwords.

MINIMISING HUMAN ERROR The FireEye report found that ransomware is an increasingly

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If the SME has a strong online presence, such as retail or ecommerce business, the owner needs to look at what the cost of downtime will be if their business presence is unavailable for a day or even an hour.” – Rich Bolstridge, Chief Strategist of Financial Services, Akamai Technologies

laptops that have customer data to and from the office, it is prudent to ensure that protections are in place. Using full-disc encryptions on these laptops will prevent a breach of records in the event that the laptop is lost or stolen. Tran added that SMEs are not harnessing their power as a collective by coming together and sharing information about the threat landscape the way larger organisations do. “The more unified SMEs are within their respective industries, the more information will be available to them regarding the threat landscape, best practices, and what other businesses have done in certain situations. They’d be surprised at the help that is actually available to them; they have just never reached out,” said Tran. In terms of investing in security, a concern for many SMEs with limited resources, Bolstridge recommended implementing a good Denial of Service (DoS) protection system, which is a secure way to prevent the attack. Denial of Service (DoS) attacks occur when an attacker makes the web servers unavailable to serve up the web sites they host

to legitimate visitors. For some time, it was thought that these types of attacks were generally used against large corporations, government sites, and activist sites as a form of protest to disrupt their web presence. However, more small and medium businesses are beginning to see their online presence disrupted by this type of attack. Finally, the executives of the company should be briefed once a month on the threat landscape and what steps are being taken to protect company assets, and that should be a non-negotiable, Bolstridge said.

TARGETED ATTACKS IN THE REGION

19 % –organisations in Saudi Arabia were exposed to at least one targeted attack. 14 % –organisations in Qatar were exposed to at least one targeted attack. 11 % –organisations in the UAE were exposed to at least one targeted attack. 28 % –government organisations were exposed to at least one targeted attack.

Source: Advanced Threat Report by FireEye

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common threat to organisations in the region and a favoured tool in extortion campaigns. The first half of 2016 saw a major spike in ransomware activity, compared to the same period in 2015. As prevention technology improves, ransomware creators and cybercriminal groups quickly move on to new variants. Bolstridge said the first, and obvious, way SMEs can mitigate the threat of attack is by limiting access to assets. Business owners need to decide which members of their team require read access, update access and full access control, and limit admission to these assets accordingly. “Using two-factor authentication for any kind of sensitive data is recommended. Many vendors offer two-factor access for the cloud services that they offer, or they will offer a text message authentication when a client logs in from the website. SMEs should take advantage of these extra security measures where they can,” he said. His second suggestion to SME owners is to follow the data–know where company data is going at all times. If staff members are taking

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FACETIME

STRATEGY EXECUTION: THE HOLY GRAIL OF BUSINESS Cedar Chairman, Sanjiv Anand discusses his latest business title Execution Excellence: Making Strategy Work Using the Balanced Scorecard

Tell us about your latest book, Execution Excellence: Making Strategy Work Using the Balanced Scorecard. Strategy execution is the holy grail of business. A general once said, “Don’t fight a battle you can’t win”. Similarly, don’t formulate a strategy you cannot execute, which unfortunately, even today, 50 per cent of firms cannot execute. So I’ve focused my book on strategy execution, which I have done for the last 30 years. Successful strategy execution is about the ability to map your strategy and focus on it. It’s about your ability to develop ownership within the firm, identify a great set of lead and lag measures, and lastly set targets right–pushing only the right buttons harder. The Balanced Scorecard, or BSC, was developed by Prof. Kaplan of Harvard Business School, whom I worked with at the same firm. I believe the BSC is the most appropriate framework to successfully execute strategy. This book is less about the theory of the BSC, but more about how to effectively use the BSC to execute strategy based on the over 300 scorecards designed by me, and the Cedar team. Most importantly, the book has real world examples of strategy maps and scorecards across 10 different industries, along with case studies of successful implementation of the BSC.

Many of these examples relate to the UAE and Middle East, including banks. What makes this book relevant today? While the world continues to provide opportunities to grow, it is not without challenges. Firstly, customer expectations around products, relationships and brands have risen over years, driven by extremely high levels of competitiveness. This has resulted in the need for firms to develop multiple strategies that address different customer segments. Additionally, competition is now local, regional, national and global. This requires a more nuanced and complex competitive strategy. All of this additionally drives complexity in process, and people. Global organisations or markets require processes to work well in a centralised and decentralised manner, and lastly organisations have become complex as even medium sized enterprises could have employees across geographies. All of this has made strategy, and more importantly the execution of strategy, more relevant than ever before. When you were writing this book, who did you have in mind as typical readers who would be interested in the content? Briefly tell us what

you have included in the book that will be of specific interest to them. The book is focused on three main audiences: • Board Members and Shareholders. The primary responsibility of management teams is to ensure shareholder financial expectations are met. The book can help boards better understand the challenges in executing strategy, and how they may be able to hold management accountable in meeting financial and non-financial expectations. • CEOs and heads of divisions and business units, and the Head of Strategy. They are responsible for formulating and executing strategy. This book is designed to make them successful. It talks about using the BSC to create focus and design a strategy map and BSC that allows them and the management team to identify the top 20-25 financial and non-financial objectives, and create a strategy map. It then allows them to build a balanced scorecard identifying ownership of strategic objectives, the right set of performance measures, and the art of target setting. Most importantly the book has sample strategy maps and scorecards from over 12 of the most common industries as a reference that will allow the readers

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Organisations often make the following mistakes in setting targets: either they only focus on financial targets, or they tend to set too many aggressive targets.” – Sanjiv Anand, Chairman, Cedar Management Consulting International

to quickly learn with examples from their own industry and build their BSC. • HR Heads. The Balanced Scorecard is often used by HR Heads to drive enterprise and individual performance and create ‘performance oriented organisations’. The BSC is an enterprise performance management framework. In addition, the book covers Individual Performance Management, helping readers create an individual performance management framework aligned to enterprise strategy. Having worked on strategies for companies around the world, is there a common roadblock or struggle that you’ve seen at both large and small companies? As Tom Friedman said, “The world is flat”. That means that everybody can access any market, anytime, and the competition is local, regional and global. A company doesn’t even need to be on the ground to be a competitor–the internet has instantly added a hundred competitors to every business. In light of this, the roadblocks are almost the same for large and small companies: the ability to rapidly read market trends, position oneself in those markets for very short market cycles, and have a people and process framework that allow for focus and execution speed. Long term planning is nearly dead. If you cannot survive the short term, what’s the point? What are the elements of a strategy that works? Never build a strategy that cannot be executed. The problem starts there.

Most organisations build strategies that are complex, difficult to understand, and hard to execute. Here are a few elements that can help avoid this typical pitfall: A strategy that works needs to be balanced. It needs to focus on the drivers to financial performance rather than just the financial outcome. People and technology helps drive process excellence. Process excellence helps meet or exceed customer expectations. And meeting customer expectations delivers financial performance. Therefore, all of these elements are critical for strategy that works. Combined with a clear sense of ownership across the leadership team, a set of performance measure that are lead indicators to performance, and a set of targets that focus performance and not overwhelm. Focus, balance, ownership, measurement, and the right targets are the elements that make strategy work. When setting targets, how do corporate leaders balance between the actionable and the aspirational? Organisations often make the following mistakes in setting targets: either they only focus on financial targets, or they tend to set too many aggressive targets. If one looks at an organisation’s strategy, one will find in an average year that out of the 20-25 key targets to set, only 4-5 need to be aspirational, the rest can be actionable/realistic and easy. Too many stretch targets break an organisation’s back, which results in an accelerated depletion of its

people, financial and other resources, with no real guarantees of benefits. For example, if the strategic theme for the year is customer excellence, then the four to five areas that drive customer excellence should carry the aspirational targets. An opposite example is that if the organisation is going through a re-organisation, and headcount is being released, it is not the time to set an aspirational target for employee satisfaction. When do you reopen the strategy and make a change? How do you balance between staying on course and reopening a decision? Since Brexit happened, it is an excellent example of a scenario to relook at strategy. The UK has decided to walk away from the EU. Currency markets have moved, equities are down, trade agreements will be torn up and redone, new tariffs will become applicable, the logic of where one manufactures and where one sells–all of this will now need to be relooked at. Something like this, an M&A event (in your own firm, or your competitor), and in the worst case, an act of nature, are the only reasons I would recommend a drastic relook at the strategy. Otherwise it’s better to keep the strategy focused and consistent, and use the target to fine-tune some of the intensity and directional change that may be needed for other events. Too much movement of strategy and target all the time is like a compass with no direction.

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FRANCHISE The The restaurant restaurant has has recently recently included included aa vegan vegan option option on on their their menu menu to to cater cater to to consumer consumer demand. demand.

GET TO GOVINDA’S The home-grown restaurant has been catering to vegetarians since 2001, and recently opened its second branch and expanded its menu to cater to vegans as well

hen Mahesh Advani became a vegetarian in 2000 he decided to open a vegetarian Indian restaurant, called Govinda’s. “There weren’t many good restaurants where you could find clean Indian food that doesn’t have too much oil or spice. We serve Sattvic food; this

dietary style nourishes the mind, body and soul, and has no onion or garlic. It is cooked and prepared in the old, traditional Vedic way,” said Mahesh’s son and Govinda’s Business Development Manager, Sanjit Advani. The business was opened in Karama in 2001 as a buffet restaurant that

offered a variety of vegetarian options. The restaurant ran at a loss until 2005, but was sustained by the family’s textile business, Blossom Trading LLC, that has been in Dubai since 1988. It was only in 2006 that the restaurant broke even when it became popular with local residents and a portion of the Indian

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We are not just another Indian restaurant. We pride ourselves on being one of the few Indian restaurants provide vegan, gluten-free, and oil-free dining options.”

– Sanjit Advani, Business Development Manager, Govinda’s

“We are not just another Indian restaurant. We pride ourselves on being one of the few Indian restaurants to provide vegan, gluten-free, and oil-free dining options. We created the oil-free menu for people who are watching their diet, but still want to enjoy the delicacies of Indian food,” said Advani. He added that the recipes were designed by his parents to give diners the feeling of having a homecooked meal, with hearty flavours. Feedback from customers prompted the Advanis to expand the menu by creating Govinda’s vegan and glutenfree options.

FRANCHISING

expat community that follows a Sattvic diet, and the Indian community could provide valuable feedback on the food. One of the problems faced during the set-up of the business was Advani’s lack of knowledge of the restaurant business as well as his lack of experience in terms of putting the correct systems and procedures in place. This was mitigated by working closely with the Dubai municipality to create the proper infrastructure for the restaurant. The second branch was opened in Jumeirah in January 2015 to cater to the western expat and Arab communities. The biggest challenge, which is still being overcome through media and PR activities, is educating the public on what sets the restaurant apart.

The family operates the business on a franchise model and is currently looking to franchise more outlets. Each franchise will be franchisee operated with full support in site selection, recruitment and training, and performance consulting. Franchisees will also have access to the restaurants contact list of suppliers, as well as assistance in getting the best rates for equipment and supplies. “Regarding the store layouts, there are a few things we want to keep uniform, such as the corporate colours of pink, blue, and white, as well as the design of the lotus and the peacock feather. Other than those factors, the stores will adapt the look and the feel of each restaurant according to where we open our outlets,” said Advani. Advani added their franchise system was developed with the view to being able to expand into many

cities and countries. The franchise fee is an upfront payment of $25,000 in the UAE and 15 lakh rupees in India, the business’s other target market, owing to the country’s high vegetarian population. The annual royalty fee, charged from the second year, is six per cent of the gross revenue. Finally, there is a marketing fee of two to five per cent of gross revenue, with half being paid to the franchisor for national and international marketing. The other half has to be spent by the franchisee for local marketing, and they will have to be able to prove that this is where those funds were allocated. There have already been inquiries and requests for the family to open more restaurants in Dubai and to enter the Abu Dhabi Market. “We see the UAE as a great market for this concept as the food industry is still growing at a rapid pace. With veganism on the rise, we always have new customers coming to our restaurants to try our food,” he said. Although there is great potential for growth across the UAE, the Advanis plan to open 12 new franchises in India in the near future, predominantly in pilgrimage areas, where devotees go on a spiritual journey for a number of days. These sites have a demand for Sattvic food, and that is the gap the family plans to fill by catering to that niche demand. Advani added that the larger metro cities in India also have great potential for the restaurant, so they will be included in the company’s future franchising agenda.

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START-UP

FLOWERS BY THE BOXFUL When Priya Jelly opened her floral boutique, she wanted to set it apart by lending a touch of Parisienne elegance

Priya Jelly

aison des Fleurs, a homegrown, boutique florist, was opened three years ago in Jumeirah Beach Road by Founder Priya Jelly. She came up with the idea while she was working with the family business, Platinum Events, and she realised how much was being spent outsourcing flowers for events and weddings. Maison des Fleurs offers a variety of flowers: fresh flowers, which last about three days and orchids which last about a month, long-life roses which last just over a year and silk roses that work best when flowers are required for an outdoor event or a photoshoot over a number of days. They last indefinitely with the proper care and are also wellsuited to the climate of the Middle East. “Long-life roses are treated with olive oil and harmless chemicals on

our farm in Ecuador. Provided they do not come into contact with water, direct sunlight, or humidity they will last over a year. The nice thing about long-life roses is that they come in natural colours, or exotic colours such as green, blue, or black,” said Jelly. When she decided to operate in retail, she wanted to offer something different, and was not interested in opening an already established brand in Dubai. Because Paris is one of her favourite cities and a source of inspiration, she looked into the availability of bouquets in boxes, which she discovered was not offered here. The first two boxes in her range were square and round and part of the classic black collection. “Apart from the black collection, which is always available, we offer two other limited edition boxes: the white collection for Christmas and the ‘From Paris with love’ collection for Valentine’s Day, which feature images from Paris. I wanted to keep the boxes specifically for those occasions because residents in Dubai are spoiled for choice. Once they are given a choice, they want to know what will be available next. Transparent acrylic boxes are available to customers looking for a different way to display their flowers,” she said. This summer, just before Ramadan, Jelly opened her flagship store in Dubai Design District (d3) because she didn’t want it to be in a mall, and she wanted to make sure the location suited the brand, which she described as “funky and trendy”. There are also many SMEs and home-grown brands in d3, so Jelly felt it was the right space for Masion des Fleurs.

Jelly attributed the steady growth of the business to two factors. The first is providing great customer service to ensure repeat business; she said she would rather have five happy customers than 50 customers and 20 complaints.

SOCIAL MEDIA

The second factor is the brand’s viral popularity on social media, which she says is the perfect tool for SMEs without an advertising budget. When she posted images to Instagram, she would get a call from a potential client with an inquiry or an order. Soon certain Hollywood celebrities and international magazines started posting images that she had not sent them. “We started to see Maison des Fleurs Instagram accounts opening in different parts of the world using all our images and logos. I had registered the trademark throughout the GCC before we opened, so it was upsetting to see people copying our products. Then I decided not to care and just focus on what we are doing. People can copy our images or even our boxes, but they cannot copy our creativity,” she said. The business has been growing consistently, and Jelly said to date, 2016 has been their best year. She is starting to franchise the business and opened her first franchise boutique in Bahrain on 1 October this year, in partnership with Noor Enterprises. She has signed an agreement to open a boutique in Qatar in early 2017 and is currently in talks to franchise in Saudi Arabia as well. She added that she wants to make sure that she gives the franchise to the right partners, saying that they do not have to be florists, but they must have a passion for the brand.

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Business

ision awards 2017 APRIL 2017, JUMEIRAH EMIRATES TOWERS

8TH JANUARY 2017 NOMINATIONS OPEN

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APRIL 2017 BUSINESS VISIONS AWARDS 2017 AWARDS GALA DINNER For more information on the Business Vision Awards 2017, please contact Nikhil Nidhan nikhil@cpifinancial.net Tel: +971 4 391 3717 p44_Startup.indd 45

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FREEZONE FOCUS

Mark Geilenkirchen is optimistic about Oman’s logistic sector as we move towards 2017.

SMES SUPPORTED BY SOHAR SOHAR Port and Freezone focuses on building Oman’s SME sector, while strengthening ties with Iran and Saudi Arabia, according to CEO, Mark Geilenkirchen Do you work with SMEs in any way? Are they in your supply chain? At SOHAR, both large and small companies are given all the tools they need to succeed, and we help to organise regular SME forums to inform new enterprises about the opportunities for setting up a business. SMEs are often much better at identifying and embracing new industrial trends and helping to bring innovation into their respective sectors. This allows them to be pioneers in emerging technologies, paving the way for bigger and bolder investments later on. A thriving SME ecosystem not only generates many new jobs, but also ensures that products and services do not fall behind the competition. SMEs can be much more adaptable to change than larger and more complex organisations. However, the greater variance in their profitability and their chances for long-term survival compared to larger firms, accounts for

special problems when it comes to financing. SMEs tend to be confronted with higher interest rates, as well as credit rationing because of a shortage of collateral. Newcomers at SOHAR are guided through the process of securing the permits they require to begin operations through our ‘onestop-shop’ that was designed in consultation with Port of Rotterdam and the Oman Government to simplify clearance processes. One hundred per cent foreign ownership is among a host of other benefits available to Freezone business owners, as are very low levels of core capital, an important consideration for any aspiring startup or SME. As an integral part of plans to diversify Oman’s economy and create sustainable employment, SOHAR has brought more than 1,000 per cent growth to the region in recent years as well as many skilled job opportunities.

What benefit does SOHAR Port and Freezone offer investors and entrepreneurs looking to establish their businesses there? It’s always about a number of factors and SOHAR seems to have found the perfect mix. Location is obviously key, and having a modern Freezone located next door to one of the world’s fastest growing ports, with over 2,500 ships a year, is clearly a big plus in SOHAR. Add to that landside connectivity with new and uncongested highways to the UAE, Saudi Arabia and the other Gulf States. Available energy at reasonable rates and a good supply of local labour at various skill levels are also important. Finally, the right legal and regulatory framework is vital: SOHAR allows free repatriation of capital and profits; corporate tax holidays of up to twenty-five years; no personal income tax, currency restrictions or duty on imports and exports; and no restrictions on sales to the GCC market

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SMEs are often much better at identifying and embracing new industrial trends and helping to bring innovation into their respective sectors.” – Mark Geilenkirchen, CEO, SOHAR Port and Freezone on payment of a small, local duty. The costs of doing business at SOHAR compare favourably with some of our more established regional competitors. The first direct passenger line between Chabahar, Iran and Muscat was recently announced. Can you tell us a little bit about that agreement? According to the Iranian embassy in Muscat, the flow of tourists from Iran to Oman increased by around 10 per cent in 2015, and the number of Iranian visas issued to Omanis increased by nearly 40 per cent. This month we saw the inauguration of the first passenger shipping line between Iran and Oman. A modern catamaran now makes a weekly crossing between Chabahar and Muscat, which takes around three hours and fares range from around $100 up to $200. The Iranian Government has announced that Iranian passenger ships will also be deployed on this route in the near future. Back in February this year, we launched a cargo connection between the Iranian Port of Shahid Rajaee and SOHAR Port. This route was opened primarily to facilitate the transport of agricultural products and perishable goods between our two countries. Earlier this year, we attended a number of events, including the Focus Iran Summit, Sea Expo, and OPEX in Tehran, as well as the Second Iranian Iron and Steel Conference in Isfahan. Our goal was to build awareness for everything that SOHAR has to offer, and start to connect our Port and Freezone with Iranian businesses across many sectors, especially our

four main clusters: food, logistics, metals and petrochemicals. We believe that we offer an ideal, modern gateway for the entire region thanks to our prime position outside the Strait of Hormuz and our close proximity to Iran. With over 80 million people, Iran is the biggest consumer market in the Gulf region and, as the country reopens its doors for international business, the predominantly young and well-educated population will be eager to connect and access more goods and services from overseas. Our Freezone offers many advantages for Iranian businesses looking to invest and develop themselves outside Iran– whether it is within the Middle East region or the rest of the world. SOHAR offers seamless sea-road-air access. Recent agreements to create a trade corridor stretching from Turkmenistan, Uzbekistan and Kazakhstan in the north, through Iran to Oman and India, will further enhance ties between Oman and Iran; and the establishment of an undersea gas pipeline will also enable us to deepen energy relations via Iran with gas-rich Central Asia. What is Oman’s logistic sector outlook as we move towards 2017? Oman is focusing on developing itself as a global logistics hub and thanks to the Sultanate’s strategic location the logistics sector is set to prosper. Oman serves as a regional transhipment centre by sea, and is also an ideal gateway for moving goods by land into the interior of Saudi Arabia, the United Arab Emirates and Yemen. In 2015, the logistics sector contributed 4.9 per cent to Oman’s

GDP. The logistics market in Oman is expected to rise annually at a CAGR of 6.9 per cent, to reach over $12 billion by 2020. The Government is concentrating on the sector through the Oman Logistics Plan 2020 and the Oman Logistics Strategy 2040. These plans aim to improve soft infrastructure, including the necessary regulatory environment, support mechanisms and national institutions to catapult the Sultanate into the top ten of the world’s most logisticsfriendly economies by 2040. Oman’s modern ports are not only essential for the Sultanate, but also for the GCC as a whole, as rising connectivity within the region will continue to drive more traffic through them. The upcoming opening of a new 680-kilometre highway connecting SOHAR Port with Riyadh will provide a more direct route between Oman and Saudi Arabia. The new highway, traversing some of the world’s most difficult desert terrain, will cut more than 500 kilometres off the journey. It will avoid the congested UAE-Saudi border crossings, so it can reduce the actual journey time for a truck by three or four days–and time is money in logistics. Work on the highway is completed on both the Oman and Saudi Arabian side, and the only missing link is the completion of the Saudi border post. We expect the road to be opened early in 2017, once the Saudi authorities have signed things off. We see the highway as a win-win for both countries and we expect inbound and outbound traffic to and from the Kingdom to increase quite significantly.

WWW.FINANCEMIDDLEEAST.NET

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47 12/8/16 5:08 PM

BEHIND THE SCENES

Abeer Altamimi Founder, Kids HQ, wanted to create a safe environment for the children of working parents

Abeer Altamimi

a Dutch company and The play area was installed by complied with all our they really made sure that it st have modified the play safety requirements. We mu e we also made changes area about six times becaus ck. based on the parents’ feedba

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ve pottery wnstairs, we ha ts come in do Q H s nt le In Ta dparen e’ve had gran n in classes and w hildren. We’ve had childre 14 dc to an d gr ol r s ei ar with th four ye at range from yearage groups th t to attract the nine to 14 arn wan years old. We and for these children to le ch s, whi se as cl g old age group in w k out introducing se skills. We are t ages can do, they will wal it os m n d they ca do children of they made an ng hi et m so with nts. with their pare

We have classes with Top Tots, which is a South African franchise. It is a sensory class for young children between the ages of six months to three years.

12/15/16 11:47 AM

Upstairs we have natal and pre-natal classes that are run by Urban Energy and we also have yoga and kickboxing classes. The mums in many of these classes are either pregnant or have recently given birth and they have young children. So while they come here to work out, we take care of their children. Then afterwards they can go to the coffee shop for a healthy snack or a coffee.

We’re introducing a dad’s and lads class which is like a workshop class with a soft wood that they can cut and use to build things.

ren h young child a mother wit -up and dropas ss ne si bu Starting a school pick e, especially ar, who was was a challeng hire an au pair for one ye ally helped to d ch ense, whi re off. I decide d a driver’s lic who are starting their ha d an ed at en educ ery evening ly advise wom a lot. I definite k for help. I saw my kids ev d dropped as an businesses to a week I picked them up le and I was e du for dinner. Onc ol–we had a proper sche ho them off at sc able to work guilt-free.

I wanted to create a place for kids between the ages for three months and eight years old to come and enjoy themselves. We also want to cater to mums who want to take classes with their children, or they can do parenting classes and they can have a coffee or even meetings in the coffee shop. I wanted a centre that caters to everyone in the family. WWW.FINANCEMIDDLEEAST.NET

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LAST WORD

The admiral among the ensigns ALTHOUGH NICOLAI SOLLING, CHIEF TECHNOLOGY OFFICER AT HELP AG, WOULD LIKE TO BE LUKE SKYWALKER, HE MAKES DO WITH PROVIDING SECURITY SOLUTIONS TO CLIENTS addressed during the project delivery. But I am there when needed.

How do you prepare for the day ahead?

I try to stay ahead on my tasks, but it is sometimes challenging. However, I always know my next day’s agenda before I leave work. This way I can mentally prepare myself for any challenging task in the coming day. Sometimes a presentation needs to be tweaked or modified to fit the requirement of the customer, or internal meetings need to be prepared.

What does your current role involve on a day-to-day basis?

First and foremost, I have a lot of face-to-face time to position our solutions to existing clients, and to meet new customers and explain to them what sets a security specialist like Help AG Middle East apart from the competition. These meetings are also great as they help me understand what the customer’s problems and priorities are which translates into how our solutions and services portfolio looks. I am always on the lookout for new interesting solutions that addresses real problems in the market. I also have several internal functions, such as coordinating our teams, and making sure that we are good at delivering the technologies we take to market. Finally I am the escalation point in case of technical issues. Luckily this does not take too much time as we do not have many of those. Overall we empower our engineers, project managers and line managers to own problems and issues, which means they gets automatically

What is the most challenging aspect of what you do?

That is an easy one to answer–balancing my internal versus customer-facing activities. I love meeting our clients to understand what drives them. Furthermore, I am really passionate about what we do. I also have internal functions that are important. The tendency from my side is always to prioritise the customer meeting. Luckily my colleagues understand this and try to help me out with the internal tasks.

How do you strike a work-life balance?

That comes pretty naturally. I have two kids, aged one and four. They ensure that whenever I am home from work I focus on them, at least until they sleep. I also go for a run every morning, which I find is a good way to start the day. It clears my mind listening to some 80’s rock on my iPhone and simply focusing on the step ahead. My weekends are all about family and there is simply nothing better than waking up early and going to the park, or the beach.

If you were to thank one person for helping you become the person you are today, who would it be and why? On a personal level, of course I must thank my family. They give me the support required to do my job. On a professional level it is really not a specific person, but all of those who believed in me when I had nothing to show for myself. I still think that the best career advice you can give anyone is to focus on which organisations allow you to learn, develop and empowers you, especially at early stages of your career.

What is your favourite travel destination?

Scuba-diving in the Philippines. What book are you currently reading?

The beast in the red forest by Sam Eastland. What is the one quality a potential employee should have?

Ownership of problems and self-motivation.

What movie or novel character do you most identify with?

Who would not want to be Luke Skywalker in Return of the Jedi? What super power would you like to have?

When I meet a really good developer I always think, I ‘ want to do what he can do.’ Add C# and Python on the list of things I would like to be able to do.

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* Amount returned is unaudited Canadian dollars and consists of a. Aggregate value of active undivided interest projects b. Book value of land, capitalized construction costs for development structures and cash reserves held by limited partnership and limited liability company entities, and c. Book value of land held directly or indirectly by Walton International Group Inc. & Walton International Group (USA), Inc. ^ These are weighted average returns on fully exited pre-development projects, audited, as of December 31, 2015. The complete report for all of Walton’s exited and unedited projects prepared by Walton Management, including notes and qualities with respect thereto, may be requested through your Financial Planner or Walton representatives. Past performance is not necessarily indicative of future results. Information as of June 30, 2016 Risk disclosures: Investing in land has risk. Land investment is illiquid and it may be impossible for you to sell your land within a short period, or at any time at all. Land could potentially lose value over time. Past performance is not necessarily indicative of future results. No representation is made that profits, income or other returns will arise, or will likely arise, from the acquisition, holding, disposal or any other dealing with the land, or that any profits, income or other returns will arise or will likely arise within any specific time. These risk disclosures do not purport to disclose all risks associated with land investments. Walton does not provide any investment, financial, accounting, legal and tax advice. You should carefully consider whether land investment is suitable for you in light of your financial circumstances, and consult professional investment and tax advisers if necessary. Walton and its representatives are not licensed to deal with real property located in Hong Kong, Japan, The People’s Republic of China, UAE, Taiwan, Thailand, Malaysia or Singapore. © 2016 Walton International Group Limited

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