We plan to grow our businesses 10-fold and quadruple our employee strength to 20,000 by the year 2022. –Thumbay Moideen, Founder President, Thumbay Group
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ello and welcome to our latest issue. It seems 2017 is showing absolutely no signs of slowing down as we suddenly find ourselves nearing the end of Q1. The SME business landscape is taking a very exciting turn as more structures and regulations are being put in place to provide smaller businesses with a bit more clout. Following 2016’s approval and implementation of the The New UAE Bankruptcy Law (the New Law), Dubai SME has launched a business rating system aimed at improving governmental support to participating SMEs by facilitating partnerships between the public and private sectors. Our Legal Focus (Pg 14) takes a closer look at RATE SME and what it offers the SME sector. We also take a closer look at how SMEs can improve their corporate governance by hiring a board of directors (Pg. 26) which will give them access to expert business advice and also work in their favour by increasing the confidence of potential investors. The UAE is not the only member of the GCC focusing on SMEs. As part of Vision 2030’s plan to diversify its economy away from its dependence on hydrocarbons, the Saudi Arabian Government is making a concerted effort to boost its private sector. It was announced that at the end of February the Saudi Stock Exchange Tadawul would open the Nomu-Parallel Market to provide a number of investment opportunities for businesses, including SMEs. More information can found in Saudi Country Focus (Pg. 22). Our Behind the Scenes section (Pg. 48) takes us to Kitchen Nation, a culinary incubator for SMEs in the restaurant industry. Kitchen Nation is a small business itself, and its business model demonstrates that SMEs do not have to rely on larger companies or government bodies to grow their brands and attract new clients. Once a business, particularly a smaller business, has a new client, attention must be paid to retaining that client to ensure repeat revenue. Our feature on brand loyalty (Pg. 30) looks at how SMEs can retain their clients in spite of potential competition from larger companies. It seems we have much to look forward to as 2017 progresses!
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PUBLISHED BY
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NEWS ANALYSIS Show me the money!
6
FAST FACTS Dubai South inaugurates new business centre
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TOP TIPS Five tips to survive and thrive
26
FEATURE Above board
30
FEATURE The customer is always right
C7 • M30 • Y80 • K40 PANTONE 871 C
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CASE STUDY The full package
38
FACE TIME Pay people properly
C45 • M35 • Y30 • K100
Chairman SALEH F. AL AKRABI Chief Executive Officer ROBIN AMLÔT robin@cpifinancial.net Tel: +971 4 391 4681 Managing Editor GEORGINA ENZER georgina@cpifinancial.net Tel: +971 4 391 3728
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OPINION Out with the old
40
FRANCHISE Beauty by botany
12
OPINION Let it go!
42
START-UP Revealing Rüya
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EDUCATION Engaging employees
Editors JESSICA COMBES jessica@cpifinancial.net Tel: +971 4 364 2024
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TECH FOCUS Cybersecurity: prevention is no longer enough
WILLIAM MULLALLY william@cpifinancial.net Tel: +971 4 391 3718
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LEGAL FOCUS Dubai SME launches RATE SME
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18 22
CHALK TALK Jameel Ahmad
CEO CHAT Thumbay thriving
48 50
COUNTRY FOCUS Spotlight on Saudi
BEHIND THE SCENES Rami Salous and Paul Parik LAST WORD The Hulk in HR
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ISSUE 57
Senior Designer FLORANTE MAGSAKAY florante@cpifinancial.net
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THUMBAY THRIVING
Creative Designer ANA MAKSIĆ ana@cpifinancial.net We plan to grow our businesses ten-fold and quadruple our employee strength to 20,000 by the year 2022. –Thumbay Moideen, Founder President, Thumbay Group
THUMBAY THRIVING +
INSIDE
Ending up in the right place Live your dream
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NEWS ANALYSIS
Show me the money! The ripple effect of the low oil price continues to be felt as businesses report having to wait beyond the agreed terms to receive payment
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AE companies, particularly SMEs, faced financial hurdles in 2016 after having to wait twice as long for payments. 2016 saw low recovery and low growth in the GCC due to the recent drop in the oil price, which impacted the liquidity in the market, according to Coface’s Chief Executive of Middle Eastern Countries, Massimo Falcioni. The metals, construction, and building materials sector was the hardest hit, registering payments after 243 days; payment terms are usually 120 days. The chemical sector saw an average delay of 21 days over and above its usual 45-day terms, meaning it took 66 days to receive payments. The IT sector had an average 75-day delay on payments, with payments received after 105 days. Food distributors and retailers received payments after 79 days, instead of the usual 45. “This liquidity issue had the knockon effect of leading certain businesses to bankruptcy. The UAE did not have its bankruptcy law in place at that time, which is why we witnessed a high number of runaway cases–around 880 runaway cases were registered, mostly in construction and general trading. At Coface we monitor 23,000 businesses in the UAE and Saudi, which means we also register the delay of payments
to companies. We saw that they really suffered in 2016 due to these liquidity issues,” said Falcioni. At an SME level, the obvious negative impact of late payments is on cash flow, but it can also lead to loss of productivity or even business closure. On a macro level, these consequences could have a major economic impact on the UAE’s national development plan which aims to create more job opportunities for its citizens, according to Saad Maniar, Senior Partner at accounting, consulting, and technology firm, Crowe Horwath. “With poor cash flow due to late payments, SMEs are less likely to absorb new staff. Additionally entrepreneurs cannot afford to reinvest in their business if they do not have sufficient cash flow to fund that growth,” said Maniar. SMEs will also struggle to meet their obligations to suppliers as well. Karl Jeffs, Founder of Gecko Media said he has had a few problems receiving payments from smaller business, PR agencies, and magazines. He added he has received payments within the agreed credit terms from larger clients, for the most part. “As a photography agency, we are generally the last to be paid. This is frustrating; we are a small business
and we always pay our suppliers and contractors on time, often before we have been paid. Having said that, we have not had any non-payers yet, we always get paid eventually,” said Jeffs. Flacioni said, after the drop in oil price, some companies took quick action to better manage their cash flow and any working capital issues. They started by reducing their costs in labour by downsizing their organisations and they kept salary increases in the range of three or four per cent which is lower than preceding years. They have also started to review their payment terms they have with their customers. At the end of 2016 the UAE Government took steps to help SMEs avoid failure and bankruptcy, as well as to deter further runaway cases, by approving and implanting its Insolvency Law, which will protect small business owners from criminal prosecution if they become insolvent. Falcioni said by putting this law into practice will improve the ease of doing business in the UAE and will attract foreign direct investment. When an entrepreneur has an issue meeting their payment obligations but has an opportunity to restructure their debt, it can only improve the SME sector as a whole.
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FAST FACTS
NEW RANGE OF FLEXIBLE INTERNATIONAL HEALTH PLANS FOR DUBAI SMES
Oman Insurance Company (OIC) and Bupa Global launched a range of tiered international private medical insurance (IPMI) plans, catering to the needs of SMEs in Dubai, as a result of research, which found SMEs in the UAE want more flexible products with more cost-containment options adapted to business needs. They also want plans that can be enhanced by allowing decision makers to add modules such as dental, and have the option of upgrading to a higher tier plan, or even extending cover to include families of their employees. SMEs increasingly want a regional or international plan that offers all the benefits of a reputable insurer with the flexibility to reduce costs, and simplicity to administer all employee health plans. “SMEs are starting to adopt longterm recruitment and talent retention strategies to support business objectives, and they need to invest in their employees’ welfare, which means added health benefits to a greater portion of professionals. We are proud to be providing a new range of plans that truly meet business needs for SMEs in Dubai,” said Malcolm Wright, Head of Partner Commercial Distribution for Oman Insurance Company.
DFSA CONTINUES TO SUPPORT SME FINANCING
The Dubai Financial Services Authority (DFSA) launched the next phase of consultations on its proposed framework for regulating crowdfunding platforms in the Dubai International Financial Centre (DIFC), with a paper detailing its approach to investment-based crowdfunding, outlining the DFSA’s measures to support the sustainable development of crowdfunding, and financial technology more broadly, within the DIFC. “This is our second consultation on our proposed framework for regulating crowdfunding platforms and reflects the increasing importance of this funding source to the UAE’s SME sector. Our approach remains consistent for loan-based and investmentbased crowdfunding platforms in its aim to define a clear structure for the sustainable development of this industry,” said Ian Johnston, Chief Executive at the DFSA. In the UAE crowdfunding is expected to become a more established form of financing for the SME sector in the region, with a regulatory framework targeting the specific requirements of crowdfunding platforms should ensure the sustainable development of this valuable funding source for SMEs and the UAE economy.
DUBAI CHAMBER HOSTS WORKSHOP ON DRAFTING BUSINESS CONTRACTS Dubai Chamber of Commerce and Industry recently organised a workshop to raise awareness on the legal and technical aspects related to drafting successful business contracts, which was attended by members of Dubai Chamber, lawyers and legal advisors, investors, managers, and business leaders and SME owners who frequently use contracts in their commercial dealings. “Successful contracts are those that enhance business relationships. Creating successful contracts is more an art than a science, and more like painting a fine portrait than mechanically taking a simple photo. The creator must be sensitive to all aspects of the relationship, understand the parties' goals, then clearly and logically present each in a writing that can be consistently interpreted without the creator,” said Paul Jorgensen, Founder and Principal, The Jorgensen Law Firm. Dubai Chamber offers contract drafting services to its members, in line with its objectives of creating a favourable business environment and supporting business growth in the emirate. The Chamber also regularly organises workshops and seminars for its members and the wider business community to raise awareness on important issues impacting companies in the emirate.
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DUBAI SOUTH INAUGURATES NEW BUSINESS CENTRE Dubai South has launched its New Business Centre to meet market demand and anticipate the accelerated growth of start-ups and SMEs in the country. It is located in the Business Park, allowing companies to leverage its location in close proximity to the Al Maktoum International Airport and Expo 2020 Dubai. The Centre offers varying sizes of fullyfurnished offices built to suit all business requirements, from SMEs to start-ups. It also offers a complete suite of services, including secretarial and office services, such as reception and telephone assistance, and fullyequipped meeting rooms with the latest audio and visual technologies, ideal for conferencing and meetings. The New Business Centre makes setting up their businesses easy via the newly launched online portal, where companies can complete registration in less than 15 minutes, for a minimum fee of AED 30,000. “Opening the New Business Center is essential in fulfilling Dubai South’s commitment toward building a knowledge economy by encouraging start-ups and propelling the growth of SMEs. The Business Center offers excellent business solutions for companies aspiring to expand, develop, and grow in a competitive business environment and plug into the global value chain,” said Dubai South’s Acting CEO, Ahmed Al Ansari.
FAST FACTS
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E WORKERS IBL CTIVE SOCI HAVE X AL A E A LIF FL ORE E M
80% MEET PEOPLE MORE OFTEN
MOF HOLDS SESSION FOR THE INNOVATORS NETWORK The Ministry of Finance (MoF) hosted CEOs of Innovation from federal government authorities as part of the interactive platform Innovators Network. The session took place in MoF’s Innovation Lab in Dubai and covered development opportunities for government entities, innovation plans, as well as MoF’s innovative projects and services. “The Ministry of Finance supports the innovation environment in government entities and seeks to identify the latest innovation developments across the globe. This stems from the Ministry’s commitment to play an active role in making the UAE among the most innovative countries by 2021,” said HE Younis Haji Al Khoori, Undersecretary at MoF. The Innovators Network was developed as an interactive platform to include CEOs of Innovation in order to combine efforts in developing an innovative environment in government work. This network aims to support the national innovation strategy by involving CEOs of Innovation in workshops and discussions, reviewing the best local and international practices, as well as holding seminars for international experts, which will enable CEOs of Innovation to perform their roles with regards to empowering the culture of innovation within their work entities.
63%
CONTRIBUTE MORE TO LOCAL ECONOMY
66%
WILL ONLY WORK FLEXIBLY
62% EAT MORE HEALTHILY
58% AVOID BORING COLLEAGUES
380 people surveyed by flexible workspace provider, Regus
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TOP TIPS
Five Tips to survive and thrive
Shamim Kassibawi, Managing Director of Spread Communications, and MENA CEO of The SMC Group, offers tips on how entrepreneurs can make the most of the ups and downs of business ownership
MANAGE YOUR TIME
Organise, organise, organise. Make sure you plan and make the most out of your day. Get an early start and list your tasks in order of priority. Do not try and juggle too much and delegate where you can; it gives your team a chance to learn and grow. Do you recall that big problem you had last month? Not really. When you manage a business, problems are bound to arise. From anxiety to insomnia, entrepreneurs go through it all. Stay focused and tackle your problems as they come. Nothing is too big or small for you to handle, remain positive, and everything will work out in the end.
LISTEN UP
INVEST IN YOUR TEAM
Your team is your biggest tool to ensure success. Encourage them, train them, and develop their skills. Open doors to communication, whether it’s through a team lunch, business trip or an informal chat. Create and nurture leaders, allowing yourself to stand out from the competition.
BUILD YOUR PROFILE
Develop and build your company profile. Put time into how your business is portrayed through various portals such as your website and social media, and take part in speaking opportunities. This will help position you amongst your peers and give you credibility as a leader. Meet as many people as possible, develop and nurture relationships and make sure you remember everyone’s name! You never know who’s going to change your business and who your next big client will be. Whether you’re in the airport or on the go, give people your time and it might just pay off.
Being an entrepreneur is an exciting journey full of learning opportunities. Do not miss out on the greatest opportunity of all–listening to the experiences and insights of your industry peers. Make sure you are up-to-date on news and websites focused on entrepreneurship; it will prove to become your greatest source of information. Criticism is an inevitable part of your experience as an entrepreneur. Pay attention to any positive or constructive criticism that comes from friends and family, as they might know you better than you know yourself. Be open to advice as you never know what can help add value to your business. But do not let negativity or doubts stop you from achieving your dreams. Execute all your ideas with conviction, no matter how crazy it may seem. Have a vision for yourself and work your way up.
EXERCISE
Do not forget your body. When starting out as an entrepreneur, your health is everything. During the first few years of your business you are on your own, so when you get sick your business is bound to get affected. Have a regular workout schedule in place. Practising simple exercises can relieve stress, increase focus, and keep the mind sharp.
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OPINION
Out with the old Steve Currie, Taskgate, advises companies holding fast to outdated employment models not to ignore the rising trend of flexible working conditions
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echnological advances have helped create the trend towards flexibility in the workplace. The traditional nine to five job and the long commute it sometimes entails is slowly becoming a thing of the past. More and more companies are engaging flexible resources to meet business demands, offering work perks like flexible schedules and the ability to work from home. This flexible structure is an active practice worldwide that is quickly being adopted in the UAE as businesses and employees seek a mutually beneficial balance between flexibility and productivity. This means more options in terms of place, time or patterns of work. It can also mean new approaches to work, including job sharing, new workspaces and business structure. Today an increasing number of businesses are enabling their staff to work more flexible schedules. Cloud-based technology has enabled an increased collaboration with communication tools, software, apps providing businesses with access to documents and databases from anywhere. Instant messaging is another tool that is now becoming more common as organisations widen their
applicant pool to candidates across the world. These advances enable flexibility to work from almost anywhere at any time, making flexible working easier than ever before. A recent report by the Royal Institution of Chartered Surveyors (RICS) surveying more than 500 Middle East employees stated that 75 per cent needed more flexibility in their working environment to be more productive. The findings provide distinctive insight about the impact the physical environment has on staff productivity. In the United States contingency workers represent 34 per cent or the total workforce which contributes $715 billion to the US economy. In the UK the contingency workforce contributes $32 billion to the economy. Freelance numbers have increased by 45 per cent from just fewer than 6.2 million to 8.9 million in Europe, making them the fastest growing group in the EU labour market. Whilst there are currently no solid figures available for the UAE the outlook is a positive one with plenty of opportunity. Local companies across the region are increasingly turning to freelancers to keep costs in check. Businesses already engaging with freelancers are doing so
for short-term support, which is where they will see the biggest benefits; no lengthy interview processes, no visa costs, no medical insurance costs and access to scalable resources. Freelancers who were surveyed quoted flexibility as being the number one advantage for them working as freelance. Being able to choose the projects and the companies they work with is key, and being able to fit work around their own schedule is essential. This is particularly relevant when it comes to those looking to return to work. There are a lot of talented individuals that gave up a great career to either move countries with a partner or to have time off raising children. These professionals can add significant value to employers, but need the work flexibility to fit their current priorities and lifestyle. The biggest disadvantage of working as a freelancer is the uncertainly of winning the next project and being able to maintain a constant flow of work. Flexibility has to work both ways in the office. Companies need to be able to engage talent when required and to scale back when things are quiet. However, companies must have a responsible approach to this.
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Companies that want to be able to ride the wave of uncertainty in the future must adopt a more flexible approach to staffing their business.” – Steve Currie, General Manager, Taskgate
Prior to 2008, when businesses across the region continued to boom, employers began hiring at an alarming rate. But when the crash came in 2008 and 2009, thousands of people were made redundant, and some companies were forced to close operations. The financial cost was clear, but the emotional stress on those being made redundant, their families and business owners, was immeasurable. The global financial crisis was an extreme event, however, key learnings in the recruitment process make it possible to manage workload realistically and productively. Companies that want to be able to ride the wave of uncertainty in the future must adopt a more flexible approach to staffing their business. The upcoming introduction of VAT is an excellent example of where taking a flexible approach can benefit companies. Whilst some firms have already started engaging one of the Big 4 (PWC, Deloitte, EY, and KPMG) or directly hiring their own VAT specialists, others are yet to decide how they are going to ensure they’ll be ready and able to comply with the new regulations. An SME, for example, may be in a much better position to look at engaging a freelancer to provide them with the
necessary support to be ‘VAT ready’ than they would be by taking on an additional headcount. There will be a great need for expert advice to understand how the introduction of VAT will affect certain areas of a company’s operation, but it’s unlikely in many cases to be a permanent requirement.
THE TALENT MISMATCH For years HR professionals have cited the global skills shortage as one of their biggest challenges when looking for the right people for their business. Yet many highly skilled and qualified individuals complain about the lack of opportunity available. Companies and potential employees have to look at overcoming this issue by harnessing the power of technology and opening their mind to working in a more modern and flexible way. Why cannot an Abu Dhabibased consultancy be working with a strategy expert based in Egypt? Why cannot a London-based luxury brand business be working with a Dubaibased marketing and branding expert? In the future it’s going to be more about what someone does and less about from where they do it. Working this way will help turn a local talent pool into a potentially global talent pool.
Are we ready for this type of change? According to a report published by PWC, The Future of Work–A journey to 2022, two out of five people around the world believe that traditional employment will not be around in the future and instead people will have their own brands and sell their skills to those that need them. This is already happening. Experts have decided to leave the somewhat safe haven of full-time permanent employment and instead do what they do best and put themselves out there as an expert, ready to provide their expertise to companies as and when needed. The MGI report, A Labour Market that Works, addresses how companies of the future will consist of a core team of staff, a minimum spine of capabilities, with the remainder of the workforce being made up of flexible resources. They will call on experts to provide their skills and services as and when required. This will enable them to better manage their headcount and their budgets whilst remaining lean and able to scale up or down to meet work demands. With more and more companies in the UAE having to make redundancies each week perhaps the sooner this model is adopted locally the better.
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OPINION
Let it go! Warsha Joshi at Platinum VA explores the reasons why owners struggle to delegate and how to overcome that fear
D
elegation is a critical yet underutilised and underdeveloped management skill. Small and medium size business owners are constantly juggling different elements within the business, yet struggle to hand over responsibility. Some business owners are proud of the fact that they do everything for their businesses themselves, but it doesn't always make business sense to be a one-person operation. As a company grows in size, SMEs needs to focus on the core areas of their business, including profits and losses, brand development, geographical expansion, and new product development. The reality is that effective delegation can benefit not only the business owner but as well as employees and the organisation as a whole. Delegation enables an organisation, as a team, to
get more work done and play to each member’s strengths. This means business owners need to work smarter, not harder, which entails helping people find more intelligent ways to work. Streamlining work processes and introducing new solutions to help get the job done in a timely and efficient manner is a smart way of staying ahead of the competition and in increasing productivity levels. Despite the advent of technology, many start-ups and SMEs continue to use a combination of lists and diaries to try and keep organised. These are great, but can be timeconsuming and are not necessarily best suited to this digital age. Instead, they could swap the physical list for a virtual one that cut the extra hours allocated to managing one’s diary and calendar.
Business owners also need others who are empowered to complete critical tasks. Securing the right talent with the necessary skills can make a business inherently more powerful than an unengaged counterpart. It is important that SMEs invest in the right people and hire leaders that encourage growth and display an active engagement. Additionally, managers shouldn’t forget to empower their employees. By saving their consultants’ or executives’ time and helping them concentrate on key tasks, business owners can also speed up their company’s growth. One way of achieving this is by hiring a virtual executive assistant to outsource their busy middle-level management, where many tasks such as email management, agenda planning, invoice recording and overall operational support can be done by them while
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Delegation enables an organisation, as a team, to get more work done and play to each member’s strengths.” – Warsha Joshi, Managing Director, Platinum VA
the business’s managers can focus on essentials that require their expertise. One of the best leadership strategies to engage a team is to empower them with more responsibility. It is quite common to have employees wait for their managers to review documents or approve their work. This is an example of an area that business owners need to let go. Empower employees with autonomy and provide the necessary training, coaching, encouragement, and rewards Many owners are comfortable delegating only to people they trust, and many times the employee to whom they entrust an important part of the business lacks the skills to fill the role adequately. Trust is certainly a big part of the delegation equation, but business qualification is critical to handling a task. To prevent putting square pegs into round holes, establish a clear set of qualifications
for the position before considering any candidate. Ultimately, business owners need to recognise that delegation can help a business grow and prosper and that good employees, when used intelligently, can be a significant advantage to a business. Diligent delegation of authority leads to a careful distribution of responsibility, thereby creating true leaders in an organisation.
MAKING MISTAKES Business owners often refer to their business as their ‘baby', but rather need to treat it as a commercial operation. Building a business as if it is going to be sold tomorrow will help business owners focus on setting up the best structure, maintain profits, and remain innovative. Generally, negative emotions have stronger influences than positive emotions. When faced with the possibility of missing out on an opportunity, it is
common for individuals to make quick and often irrational decisions. Attention to detail is a good quality in any business, but when it turns into perfectionism or fear of any error whatsoever, this can become an enormous handicap, and owners are sometimes reluctant to delegate because they fear others are more likely to make mistakes or are not able to deliver the task in the amount of detail that they are used to. It is important to remember that very few mistakes are fatal to a business. In fact, many mistakes can be turned into opportunities, and every one of them can be a doorway to evolve and grow. This is the mindset an owner must have in order to delegate comfortably. Fear of delegation and mistakes can be reduced with proper processes in place. Instilling company process and initiating a clear metric for success provides employees with right support and guidance.
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LEGAL FOCUS
Dubai SME launches RATE SME The new classification system is the next step in the Dubai Government’s efforts to boost the SME sector
A
classification system to provide a comprehensive performancebased review of SMEs based on financial and non-financial criteria was launched in January this year. Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai initiated the programme which is undertaken by Dubai SME, part of the Department of Economic Department (DED). RATE SME is aimed at improving governmental support to participating SMEs by facilitating partnerships between the public and private sectors, boosting the contribution of SMEs to Dubai’s GDP from its current 40 per cent to 45 per cent by 2021, in line with the goals laid out in the Dubai 2021 plan. Under the plan, approximately 40,000 new startups are expected to be created over the next five years, employing up to 370,000 more staff and contributing
AED 65 billion to Dubai’s economy, bringing the total amount generated by SMEs to AED 220 billion. Approximately 190,000 companies in Dubai fall under the SME category, and make up around 95 per cent of total businesses, and they employ about 42 per cent of the workforce and contribute to 40 per cent of the emirate’s GDP. Furthermore, most SMEs have limited availability of externally sourced start-up financing–80 per cent indicated personal savings as the primary source of finance for commencing their business operations, according to Dubai SME data. “Dubai SME seeks to use the Dubai SME Rate Framework to stimulate the growth of this vital sector and empower it to contribute effectively to Dubai’s economic and societal development. Moreover the programme encourages SMEs to look beyond financials, contributing positively to society and
realising sustainable development,” said HE Abdul Baset Al Jahani, CEO, Dubai SME. RATE SME is open to all SMEs in Dubai that have a turnover of between AED 1 million and AED 200 million and employ between five and 200 staff. Manufacturers must employ between nine and 250 staff. Participating companies will be rated on the basis of five factors: business performance, innovation, corporate governance, international expansion and corporate social responsibility (CSR). Companies will be rated under one of five categories: A+, A, A-, B+ and B. Emirati-owned businesses will be classified separately from other Dubai firms. “RATE SME’s main objectives are creating new career opportunities and growing the talent pool, boosting productivity, elevating competitiveness, and reinforcing strategic collaboration
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Dubai SME seeks to use the Dubai SME Rate Framework to stimulate the growth of this vital sector and empower it to contribute effectively to Dubai’s economic and societal development.” – HE Abdul Baset Al Jahani, CEO, Dubai SME
between the public and private sectors in Dubai. It will contribute to building a knowledge-based economy with world-class efficiency and productivity,” said HE Sami Al Qamzi, Director General of the Department of Economic Development. He added that launching the framework reflect’s Dubai’s comprehensive strategy to stimulate economic growth through boosting the SME sector, as well as attracting investment through transparency and trust.
BENEFITS RATE SME has listed number of benefits afforded to SME owners who choose to have their businesses rated which fall under four categories. The Capability Development Programme provides a number of valuable business services to SME owners such as access to a rational corporate governance programme; workshops for SME management
teams; a training programme in reputable universities/institutes; and a programme for connecting SMEs with university graduates. Since access to funding is an ongoing challenge for SMEs, RATE SME will grant small business owners access to a number funding solutions with competitive prices. RATE SME’s International Expansion Programme will provide valuable information on export markets; offer consultancy services to support export; and provide SME owners with participation support in local and international exhibitions. Finally, SME owners will be eligible to receive a number of benefits from Government entities and programme partners, such as members’ exemption from registration and vendor renewal fees; their applications for services will be fast tracked; and SMEs will be assigned priority on contacting.
Participation in the rating programme is voluntary, and those business owners wishing to do so can apply online. They are required to pay a registration fee of AED 5,000, which will go towards an external verification of claims. They also have to submit at least one year of audited financial records.
SINCE DUBAI SME BEGAN LAUNCHING ITS INITIATIVES IN 2002 23,109 Emirati entrepreneurs have received assistance. 4,152 Emirati start-ups have benefitted from its programmes. AED 3.3 billion of Government contracts allocated to national Dubai SME members companies. AED 282 million of financial exemptions and incentives submitted for national member companies. Source: HE Abdul Baset Al Jahani, CEO, Dubai SME
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CHALK TALK
JAMEEL AHMAD
The Vice President of Corporate Development and Market Research at FXTM has learned that despite winding path of his career, he has ended up where he needs to be
I
grew up in the countryside of Oxfordshire. I have a Pakistani father and an English mother and I grew up in a huge family as one of seven children. I have three older sisters, so it was like growing up with four mothers. I was a complete geek in school. I was very serious and as soon as I
entered my teenage years I became a really hard-working student–I was always doing my homework or studying or whatever else I could to know that I could have a future in whatever my path would be. I didn’t know back then it would be finance. I used to think about all the careers I could do. I wanted to be a
pilot or a mechanic. But I have bad eyesight and no practical skills, so those two options went out the window. I can’t draw; I have the artistic ability of a pigeon. I’m bad at technology. I can’t even put up a TV stand; I pay the IKEA guys to do it for me. As much as I love sports, I knew that it would never be more than a hobby.
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As I matured, I was interested in international relations and the news. I was really intrigued by different cultures. Between high school and sixth form, I was working in a very busy retail outlet village that was full of tourists and I loved interacting with people of different backgrounds and I could see that it was a skill that I was developing. I took that mentality with me into university. I chose accounting and finance because it would challenge me. I didn’t want to go to university and not work hard, and it was a difficult degree. Just over two thirds of the students were international students and non-English speakers, and I became intrigued by what I was learning from the people around me and this personality trait served me well. In 2012 one of my lecturers could see I was interacting with the international students in a completely different way. He suggested I apply for a leadership enhancement training programme in the US. I thought he was crazy. I was completely focused on my final year of university. Why would I spend time on a pipedream of going to US on a scholarship? Every time I saw this teacher, he would ask me if I applied. I was so fed up with being asked, that just before my finals in May, I applied and I was accepted. It was probably one of the best life experiences ever. There were 118 different people representing 54 countries and I realised I had to soak in the opportunity to work with and learn from all these people. I was fortunate because there was a lady who was a mentor in the group and she knew somebody who had just started up a brokerage, based in Cyprus. I had originally hoped if I could graduate with a good degree, along with this experience, I would be above some of the competition in the UK, and I could work in finance back home.
I went back to the UK in August 2012, confident I’d be able to find a job. Months passed and I realised I’d have to approach the opportunity in Cyprus. I wasn’t going to let circumstances in the UK stop me from achieving what I wanted to achieve. So I went to Cyprus to work for a Singaporean brokerage. Towards the end of my training contract, as the post was meant to be a full-time position, the company restructured. If I wanted to stay I would have to relocate to New Zealand. The company overlooked how difficult it would be to get a visa; the regulations are very strict. It was going to take a long time, even though the company would support the application. It was mutually agreed that it wasn’t possible for me to go, so I ended up leaving the company. I packed up and returned home to the UK. I was a bit miserable and bitter and felt that things were a bit unfair, but that’s part of life–it can be tough. While I was searching for a job, I found an analyst position at FXTM, in Cyprus of all places. I spoke to my parents about moving away again and improving my career options. I told them I had to move away from the norm, because it was allowing me to pick up important skills. The best advice I could give anybody wanting to get ahead is to get away from their comfort zone and be different. I managed to find out who I would report to in that position and I sent him a LinkedIn request. I sent him a message expressing my interest in the position and asked if he could guide me on how to submit my application. He gave me his email address and he said would make sure my application was passed on, which I did. He replied to my email asking if I was willing to relocate to Cyprus, and then I heard nothing for about three days. I decided to phone him because he left his phone number on his email signature.
I achieved what I wanted to achieve– we had a Skype call and we arranged a date for a face-to-face interview in Cyprus. I flew to Cyprus, had the interview, and flew back to the UK in one day. I think they realised I could meet the travel commitments of the job. I have been with FXTM for almost three years. I’ve developed personally and professionally and now I travel the world, being the face and voice of the company. There’s been a lot of growth and a lot of responsibility in leading the international market research team. It’s busy but fun. Maintaining a work-life balance is really difficult. When you go on trips, it is purely business. You fly in and out, and then get to the next location. I don’t have time to explore the world. I learned that I had to become really organised or I would fail by letting people down and risk damaging the company’s reputation. I’ve also had to learn to delegate, and I’m much better at it now. One way I stay organised is ensuring my suitcase is always 30 per cent packed, with a suit, some shirts, and my passport, in case I get told I have to fly out the next day. I actually have a second, business passport now in case I need to apply for a visa, which helps me maintain the job. The CEO asked me what I needed for the company to keep moving at this pace. Management came back with what they could offer in terms of support. They gave me a lot of time to build my team of five analysts who are located around the world. Managing different time zones can be difficult, but once you get it right it can be very productive, because someone is always available, except for about a three-hour window. I’ve learned to be positive and accept there will be setbacks but use them as opportunities to learn. You can never do enough learning.
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CEO CHAT
The road to set-up an enterprise will never be free of hurdles, but staying focused can make all the difference. – Thumbay Moideen, Founder President, Thumbay Group
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THUMBAY THRIVING Thumbay Moideen broke away from his family business and expanded the Thumbay Group to cover 18 sectors across two continents
Please explain what your business does and how it operates? Thumbay Group’s businesses are spread across 18 different sectors, and we operate 20 brands. Our core businesses are education, healthcare and research. In addition, we also have a presence in diagnostics, retail pharmacy, health communications, retail optical, wellness, nutrition stores, hospitality, real estate, publishing, technology, media, events, medical tourism, trading, and marketing and distribution. Some of our brands include Gulf Medical University (GMU), Thumbay Network of Academic Hospitals, Thumbay Clinics, Thumbay Labs, Thumbay Pharmacy, Health Communications Division, Zo & Mo Opticals, Body & Soul Health Club & Spa, Nutri Plus Vita, Blends & Brews Coffee Shoppe, The Terrace Restaurant, The Flower Shoppe, Thumbay Builders, HEALTH Magazine , Thumbay Technologies, Thumbay Media, Thumbay Medical Tourism, and Thumbay Marketing and Distribution Company (TMDC). Our differentiating factor is the focus on sustainable growth through innovation in efficiency, services, product quality, and technology, besides a strong core of ethics that forms the bedrock of Thumbay Group’s functioning.
What was the inspiration for Thumbay Group, and how did it start? Although we had a flourishing family business back in India, the entrepreneur in me was keen to start a business of my own. While on a business trip to Africa, I had to transit through Dubai where I happened to meet a member of the ruling family of Ajman. In the course of our conversation, I suggested the idea of a private medical college to boost the Emirate’s economy full-throttle. I was subsequently invited by the Government of Ajman for a detailed discussion on the idea. As a result of that meeting, I was invited to start a medical school. In 1998, I set up Thumbay Group in the UAE, under which the Gulf Medical University started as the first establishment. To further expand the activities of the University and to provide world-class facilities to its students for clinical training and medical research, Thumbay Group soon forayed into healthcare by setting up a network of teaching hospitals and clinics, as well as the Centre for Advanced Biomedical Research and Innovation (CABRI), a state-of-the-art medical research and diagnostics centre . To this day, education, healthcare and research remain our core activities. The first academic hospital to be set up was Thumbay Hospital–Ajman. In addition to Ajman, Thumbay hospitals are now present at Dubai, Fujairah, Sharjah and Hyderabad, India.
Thumbay clinics are present at Ajman, Dubai, Sharjah, Umm Al Quwain and Ras Al Khaimah. In addition, we also have Thumbay Labs and Thumbay Pharmacy outlets across the UAE and in Hyderabad, India. cont. overleaf
OBSTACLES FACING A YOUNG COMPANY Product risk
It is vital to do a market research, understand the community and its people, and then clearly articulate how your business fits within the context of this landscape. Inability to define how your product/service solves a problem in the market could be big hurdle.
Financial risk
Most entrepreneurs are tangled in heavy debt cycles when they fail to identify key business milestones, and choose to overborrow for supporting an unsustainable lifestyle. A key approach to avoid that trouble is to articulate your business plan, growth path and build the confidence in potential investors with savings.
People
From hiring the right team to develop the business, to defining your brand’s image, start-ups must overcome these challenges to ensure success and longevity. Source: Thumbay Moideen, Founder President, Thumbay Group
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CEO CHAT Thumbay hospital Ajman
Thumbay hospital Sharjah
Thumbay hospital Qatar
cont. from pg. 21
What challenges did you face when setting up the business, if any, and how were these overcome? Moving out from the familiar environment of my home country to a completely new place like the Middle East was a challenge. Initially, when the Government of Ajman invited me to start a medical school, I wasn’t sure whether I wanted to take up the opportunity, as I had no prior experience in running a medical school. However, I decided to go ahead with it and flew in a few consultants from the top universities of India who concluded that there was tremendous scope for a medical university in Ajman.
Then came three major challenges: first, the Ministry of Higher Education doesn’t allow expats to own a licence for higher education institutions. The Government of Ajman awarded me a royal decree for the formation of the college, which helped me overcome this issue. Second, I needed land to build the institution, and the same was purchased by me from the Government of Ajman. Third, I needed a teaching hospital to train the graduates. I had no other option but to build a hospital in Ajman, which became the first teaching hospital under the Thumbay Hospital network. The road to set-up an enterprise will never be free of
hurdles, but staying focused can make all the difference. The journey of Thumbay Group has not been without financial challenges. I needed a large sum of money initially to set up the University, for which I sought to mortgage the land with the bank. However, the bank refused to do it, citing the reason that it was gifted land. They suggested that the land be bought from the Government, which I did. During the initial period, banks were reluctant to support me. However, we were successful in convincing the banks, and when loans were passed, I made it a point to pay the employees their salaries in advance.
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international patients, has a welcome centre inside Sharjah International Airport–a first of its kind in the region. TMT also has representative offices in twenty different countries.
Masterplan Masterplan of of GMU GMU campus campus
Thumbay physical therapy and rehabilitation centre (left) , and Thumbay Dental hospital (right)
What challenges did you face in terms of branding and advertising? At first, GMU targeted Asian students only, but we received interest from students from 30 different countries. Today, the nationalities that make up the student cohort of GMU stand at 75. This number includes students from Middle Eastern countries, the Indian subcontinent, as well as countries in Africa, Europe and North America. Thumbay hospitals and clinics also serve patients from approximately 175 nationalities. We market ourselves through innovative methods. For example, Thumbay Medical Tourism (TMT), which promotes Thumbay Hospitals among
What are your plans for the company in 2017? We plan to grow our businesses 10-fold and quadruple our employee strength to 20,000 by the year 2022. The Thumbay academic hospital network will have a total of 1000 beds in the UAE, 1500 beds in India, and 750 beds elsewhere in the Gulf and Africa by 2022, taking the total number of hospitals to 15 worldwide. The Gulf Medical University–Ajman is soon to become a full-fledged university with engineering and management courses in addition to medicine. The Group also plans to open three new university campuses across three different countries. By 2022, Thumbay Group plans to add 25 Thumbay labs, 100 Thumbay pharmacies, 40 Zo & Mo Opticals outlets, 100 Blends & Brews coffee shops, 25 Body & Soul health clubs, and 50 Nutri Plus Vita stores. We started 2017 by opening the sixth teaching hospital under the Thumbay Hospital network in Rolla, Sharjah. It is a multispecialty hospital offering treatments and day-case procedures. Work on the the 350-bed teaching hospital, 60-chair dental hospital and rehabilitation centre in the GMU campus are progressing well. The state-of-the-art innovation centre of GMU will be opened shortly, and it will be a one-of-its-kind in the region with dedicated innovation and incubation laboratories. Our projects in Africa and Qatar are also heading towards completion. New outlets of Thumbay Clinic, Thumbay Pharmacy, Thumbay Labs, Nutri Plus Vita Stores, Zo & Mo Opticals, Blends & Brews Coffee Shoppe, and Body & Soul Health Club & Spa will be opened this year.
Our partnerships with external suppliers extend across all our business activities. However, procurement for the healthcare vertical is particularly challenging due to the ever-changing technological advancements. The factors we consider while zeroing in on a supplier include the availability of latest and innovative products, competitive cost, speed of delivery and quality of supplies. In addition to the UAE, we now have a presence in India with Thumbay Hospital as well as outlets of Blends & Brews Coffee Shoppe, Thumbay Labs and Thumbay Pharmacy in Hyderabad. Our projects in the other GCC countries and Africa are at various stages of completion. We will also be opening universities and teaching hospitals in major metros of India. We already have representative offices in 20 countries in the Middle East, Africa and the Indian subcontinent.
FIVE TIPS FOR AN ENTREPRENEUR CONSIDERING THEIR OWN VENTURE 1. Any successful enterprise requires businessmen/entrepreneurs to remain focused, grounded and optimistic. 2. Transparency and abiding to a work ethic guarantees honour in any industry; following them in all business practices is crucial. 3. Entrepreneurs must cultivate the skill of looking one move ahead. It is a critical skill to learn because if you anticipate your marketplace, even just a little, the rewards can be spectacular. 4. One should also watch-out for the debt spiral; one needs to carefully avoid getting tangled in a perpetual cycle of debt-which is often the case in many entrepreneurs who spend and borrow excessively to support an unsustainable lifestyle. 5. Businessmen should dream big, it hardly costs anything but provides a vision for better business outcomes. Source: Thumbay Moideen, Founder President, Thumbay Group
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COUNTRY FOCUS
SPOTLIGHT ON SAUDI As Saudi Arabia’s Vision 2030 looks to wean the Kingdom off its dependence on hydrocarbons, the focus is now on developing the private sector
T
he International Monetary Fund (IMF) expects the Saudi economy to grow 0.4 per cent this year, down from a forecast of two per cent at the end of 2016 because of OPEC oil production cuts, according to its World Economic Outlook report, released in January this year. However, while speaking at the World Economic Forum in Davos, Switzerland this past January, Finance Minister Mohammed Al-Jadaan said Saudi Arabia’s growth in 2017 will be a little over one per cent, higher than the IMF’s new forecast. There are challenges as a result of reduced oil prices, especially when an essential part of government revenues in the GCC countries is generated from oil, which is most noticeable for Saudi which ran a $100 billion deficit last year said Raid Madiyeh, Global Sales Trader, Saxo Bank. “The Government has already trimmed spending to cope with the downturn in prices. In light of expectation that oil prices are expected to stay below $60 in 2017, and that demand is not expected to pick up soon as the global economy is not expected to improve remarkably, the GCC government deficit will only worsen in the years ahead. Declining oil revenue, subdued global growth, liquidity crunch and geo–political
issues are some of the challenges facing Saudi Arabia and GCC region,” he said. The Government needs to further pursue more reforms such as the introduction of VAT to restore fiscal balance. Consumer spending, which slightly shrank in 2016, primarily due to subsidies cuts and uncertainty about the Government’s policies and direction, could stabilise in 2017 as the population adapts to new standards, according to Joseph Mazloum, Senior Associate in the Financial Services practice, at Booz Allen Hamilton, MENA. “The revitalisation of the economy hinges on increased private sector participation and economic diversification, which are among the main economic objectives stated by the National Transformation Programme [NTP] 2020. Policies aimed at extracting higher value from the oil and gas industry by deepening vertical integration and driving the growth of specific high value sectors such as financial services, tourism, transport, engineering and communications and ICT are well underway and 2017 could be the year when the Kingdom starts reaping the benefits of some of these policies. Finally, as the NTP
recognises the importance of SMEs in economic growth and diversification, policies aimed at enhancing their ability to thrive and compete are expected to be implemented in the short-term,” said Mazloum.
SAUDI SMES Saudi SMEs performed better in 2016, compared to 2014 and 2015, contributing 33 per cent to the Saudi GDP, according to data from the Saudi Industrial Development Fund (SIDF), with the risk perception of SMEs increasing over the last two years. Only three per cent of Saudi SMEs receive funding from banks, well below the Arab world average of eight per cent compared with middle-income countries at around 18 per cent and high-income countries at approximately 22 per cent, according to data by the Union of Arab Bank, World Bank. “SMEs contributed towards recruitment and were able to better maintain headcount as opposed to enterprise firms; SMEs comprise nearly 25 per cent of the Saudi labour force,” said Zaid Al Mashari, CEO and Founder of Saudi-based consultancy, Proven. He added that marketing related challenges faced by SMEs included a lack of research data, marketing
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SHUTTERSTOCK.COM/FEDOR SELIVANOV
In spite of a lack of access to funding, developing the SME sector has become a priority under the National Transformation Programme 2020.
inefficiency, poor pricing policies, and consumer preference of foreign products over local products. Mazloum added that despite some recent improvements in the regulatory environment, policies and procedures are perceived to be too costly and cumbersome for SMEs. They also have a history of struggling to attract talented individuals who favour secure and wellpaid employment opportunities within government or semi-government entities. “Innovative and wellperforming SMEs should seek to seize the opportunity to attract bright, young professionals, as the opportunity cost of foregoing a government job is declining. Finally, Saudi SMEs are disfavoured in terms of access to market as they have little support and recourse to participate in public procurement–adequate policies need to be implemented so that Saudi SMEs can achieve their full potential.” Reducing receivables and outstanding collectibles, as well as cash cycle management and fiscal discipline will be focal points for SMEs in 2017, while access to capital will still be their biggest challenge. SME owners should
prioritise working more closely with financing partners, more transparent reporting, cash cycle management and fiscal discipline. “Despite a reduction in the number of procedures required for setting up a new firm, lengthy bureaucratic procedures and licencing is a key obstacle, followed by nonavailability of adequate financing,” said Al Mashari. One financing option available to Saudi Arabian SMEs is applying for assistance from the Kafala Programme, a joint effort between the Ministry of Finance, the SIDF and a number of banks. Launched in 2006, the programme has supported over 8,000 SMEs. The programme is a viable option for SMEs that meet certain criteria, said Mazloum. These include having three years’ worth of audited financials; operating under a legal entity such as the sole proprietor, partnership company, or limited liability company; proving, through a feasibility study that the business is economically and commercially viable; having a clear history with banks; and finally having an annual turnover of less than SAR 30 million. Eligible business activities include manufacturing, agriculture,
trade, education, petrol, gas and mineral resources, building and contractors, transportation, services and medical. “With the prospect of continued lower oil prices, the importance of growing the private sector’s contribution to GDP has become evident. This can be done by boosting the SME segment which account for 60 per cent of total employment in Saudi Arabia. The Kafalah programme has clearly played a crucial role in the provision of credit to the SME sector, but in the longer term a more proactive approach by banks remains the more desirable solution to funding the gap,” said Madiyeh. The Saudi Stock Exchange Tadawul launched the Nomu–Parallel Market to open at the end of February 2017, to open new investment possibilities for a range of companies, including SMEs, which they would benefit from as a catalyst for rapid growth. “Going public allows SMEs to gain access to equity financing needed to push research and development, expand operations or acquire small rivals or suppliers. Additionally, listing expands and diversifies the investor base and cont. overleaf
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COUNTRY FOCUS
SMEs contributed towards recruitment and were able to better maintain headcount as opposed to enterprise firms; SMEs comprise nearly 25 per cent of the Saudi labour force.” – Zaid Al Mashari, CEO and Founder, Proven
cont. from pg. 23
eases access to other sources of funding such as bank loans, at more favourable rates, and private placements. Being listed will also increase visibility, and a more enhanced public profile across the business landscape, which can reinforce the increased access to finance as shares are traded and the firm becomes exposed to larger investors,” said Mazloum. Listing can also offer interesting prospects for bright candidates as SMEs introduce employee incentive schemes, such as stock options. Offering to qualified investors takes place first. Qualified foreign investors are defined by the CMA regulations as financial institutions such as banks, brokerages, fund managers and insurance companies with at least $5 billion in assets under management. The CMA reserves the right to lower that limit to $3 billion. The issuer must be a Saudi joint stock company or a joint stock company, in which the majority of its capital is owned by a GCC national, said Al Mashari. Further criteria include: a minimum market cap of SAR 10 million; at least 20 per cent of shares owned by the qualified public, with no single investor owning more than five per cent; a minimum of one year of operational and financial performance; a mandatory financial and a legal advisor is optional; annual audited financial statements; quarterly reviewed financial statements; and disclosure of material information. There is a lock up period–100 per cent of pre-offering investor shares for one year. If the expected aggregate market value for all shares to be listed exceeds SAR 40
million, at least 50 public shareholders are required. If the expected aggregate market value for all shares to be listed is less than SAR 40 million, at least 35 public shareholders are required. Finally, no profitability track record is required. Al Mashari added that the guidelines for foreign investors include no longer requiring a local partner in a number of sectors, and foreigners may own real estate for company activities as well as transfer funds from their enterprises out of the country. Foreigners can also sponsor foreign employees provided that Saudisation quotas are met.
CAUTION AHEAD Mazloum added that barring a further drop in oil price, one factor that could impact the economy as the Kingdom enters a new era of major socioeconomic reforms, is the speed and effectiveness of their implementation. In the scenario where the price of oil surges, maintaining the momentum of economic and fiscal reforms will be crucial as they are necessary to guarantee the sustainability of the Kingdom’s economy in an increasingly volatile environment. “Furthermore, high interbank rates due to the government’s heavy borrowing in local financial markets, reduced spending and the delay of some investment projects are hurting economic growth. On the upside, the rise in oil prices, coupled with high oil supply, is cushioning the economy against a sharp downturn,” said Madiyeh. The expected reduction in oil production following the OPEC’s
meeting in November is clouding the outlook for the all-important hydrocarbon sector. In an attempt to avoid a repeat of 2016’s austerity, the government included higher spending in the 2017 budget.
OVERALL ECONOMIC PERFORMANCE
• The sectors that have been identified as part of the NTP, such as infrastructure, tourism, ICT, wholesale and retail, education and R&D are expected to perform well in 2017. • The drive to extract more value from the hydrocarbon industry will command higher margins in those industrial sectors that are more resilient, despite a challenging global economy and a competitive environment. • The non-oil producing private sector will continue its recovery. • The Saudi Arabian construction industry is forecast to rise at a CAGR of 7.05 per cent reaching $148 billion by 2020, resulting in an increasing number of major infrastructure and mega-construction projects throughout the Kingdom. • Growth in the construction sector will be underpinned by increasing religious tourist numbers in Saudi Arabia, expected to rise from 17.5 million visitors recorded last year to between 25 and 30 million in 2025. • The contribution of religious tourism to the non-oil sector of the country’s GDP is likely to rise from 5.4 per cent to 5.7 per cent by the year 2020. Source: Joseph Mazloum, Senior Associate in the Financial Services practice, at Booz Allen Hamilton, MENA; Raid Madiyeh, Global Sales Trader, Saxo Bank; Edward Gallagher of De Boer Middle East.
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SETTING UP THE BOARD
ABOVE BOARD SHUTTERSTOCK.COM/ANDREY_POPOV
Setting up a board of directors allows SMEs to put formal structures of corporate governance in place while having access to expert advice
A
start-up that has successfully raised funds will require some form of governance structure to be put in place, such as a board of directors. There is no onesize-fits-all definition of what a board of directors actually does. In Directors: Myth and Reality by Myles L. Mace, it was concluded that the board of directors ‘serve as a source of advice and counsel, serve as some sort of discipline, and act in crisis situations’ if a change in CEO becomes necessary, although the nature of their advice and counsel was never clarified. Mace’s work suggested that a board serves largely as a sounding board for the CEO and top management, while sporadically providing advice
when the company is confronted by a problem, about which one or more board members are proficient. However, a survey conducted by Demb and Neubauer, The Corporate Board: Confronting the Paradoxes, found that approximately two-thirds of directors agreed that setting the strategic direction of the company was one of the roles they filled. Furthermore, 80 per cent of the directors also agreed that they were involved in setting strategy for the company. It was found that more respondents agreed with that description of their job than agreed with the statements that their job entailed; 45 per cent said they oversaw top management and the CEO, 26 per cent
said they involved in the succession, hiring, and firing of the CEO and top management, while 23 per cent said they served as a watchdog for shareholders and dividends. “Before setting up the board a business owner needs to establish what his expectations of the board will be. At the same time the business owner should identify those areas of the business where external expertise will be most beneficial,” said Stephen Armitage, Managing Partner at UAE Business Solutions. Once identified the business owner should enter into dialogue with the prospective board members to confirm the expectations of all parties involved in the board structure and how it will work in practice.
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Potential investors will be more comfortable if a business has a board.
The board is there is act independently of the management team and to provide additional expertise to ensure the safe running of the business. The board of directors serves the specific purpose of overseeing strategy and corporate governance, bringing in much-desired external perspective and experience. The number of board members depends on whether the staffing approach is based on inclusion of certain skills, stake holder contacts and relationships, the value they can bring to the business, or a combination thereof, according to Mahesh Shahdadpuri, Founder and CEO of contract staffing firm, TASC Outsourcing.
Establishing an independent board demonstrates that that a business owner is committed to good governance and compliance, according to Spencer Lodge, Founder of consultancy, Make It Happen, adding that investors will have a greater degree of comfort if they can see real independence demonstrated in a board and an audit committee, chaired by at least one experienced director with financial expertise. He added that each business will have different needs when it comes to selecting a board, which are dependent on the product or service on offer. There is usually are a minimum of three primary board members: CEO, Finance Director and Head of Sales. There is no limit to how many board
members a company can have, but the bare bones should consist of the CEO, someone to take care of the company’s finances, and someone to drive revenue.
THE RIGHT PEOPLE Once the decision to set up a board has been made, a business owner has to consider carefully the individuals they will appoint. Ensuring the right people are appointed should, ideally, be achieved from the start. “The process of setting up of the board should begin with the SME owner identifying a long-term vision for the organisation and the objectives they plan to achieve. They should be able to identify gaps of knowledge, competencies, or skill cont. overleaf
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SETTING UP THE BOARD
The process of setting up of the Board should begin with the SME owner identifying a long-term vision for the organisation and the objectives they plan to achieve.” – Mahesh Shahdadpuri, Founder and CEO, TASC Outsourcing
cont. from pg. 27
sets required to attain that objective. For an SME organisation, the gaps could revolve around innovation goals, settingup processes, building leadership, building scalable business models or geographical expansion, identifying strategic exit options for the business, raising finance, and going for an IPO. The Board should consist of people who can fill these identified knowledge and skill gaps,” said Shahdadpuri. Shahdadpuri added that even though it might be easy to bring family or friends onto the board, it is not recommended because board members should be appointed on merit, should understand the SME owner’s business and marketing operations, and they should put the company’s best interests ahead of their own. The chairperson should be able to listen to all opinions, speak honestly, as well as command respect from fellow board members, shareholders and employees. “Your first non-executive directors should be people familiar with your industry and the challenges of emerging companies, ideally someone who has practical understanding of growing a SME. You also need someone you respect, trust and believe you can work with,” said Lodge. It may be tempting for SME owners to ask their existing lawyer or accountant to be a director, but they are already advisors and the owner needs to remember the purpose of creating or expanding the
board is to introduce new leadership, governance expertise and skills to the business. However, Lodge added that not every director needs to be familiar with the company’s industry. Professional directors often acquire this knowledge and bring other complementary skills gained from their experience serving on boards, but it is usually considered appropriate that the overall board composition includes some people with industry experience. The final consideration when looking to hire is access to capital. The owner will need management accountability to enable them to grow the business. To achieve this, it is imperative that the SME owner clearly defines their long-term vision and the expectations they have of their board members, and conveys them effectively. The SME owner must narrow down their top three-to-five high-priority areas and define the desired impact on each of those high-priority areas, said Shahdadpuri, adding that TASC Outsourcing’s objectives for its nonexecutive board of directors cover the following areas: growth strategy across geographies, innovation, and new lines of service. “Further, the SME owner must draft bylaws or policies that clearly define the role, expectation, power, and responsibility of each board member.
In doing so, the SME owner must bear in mind the unique knowledge and skill gap that he expects the respective board member to fulfil. The bylaws should clearly state who the ultimate authority for decision making is, whether the advice of the board is final and binding, which areas or functions fall, or do not fall, under board’s prerogative, how often should the board meet, and what the time commitment required from the board member is,” he said. At a more formal level, the law will help a business owner to define expectations to a certain degree because contracts impose a number of important duties and responsibilities on members. A group of directors working within a board structure must bring together expertise and advice, in areas such as: strategic direction by ensuring the company develops and implements business plans, strategies and policies to operate with profits and sustainability in mind; helping the business owner set and monitor performance targets; ensuring the company complies with its legal and accounting requirements; and ensuring the company identifies and mitigates risks and looks for new opportunities, added Lodge. Once the potential board members have been selected, it is necessary to carry out the necessary due diligence before formally appointing them.
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Shahdadpuri noted specific criteria include ensuring that the prospective director has no undisclosed conflict of interest, is honest, and possesses their claimed skills and qualifications. “If possible, the SME owner must network within his contacts to assess the potential board member’s behaviour style, attendance track record, cultural fit, and knowledge, experience, and stakeholder relationships. It is also important to perform a check on criminal records and history to avoid tarnishing the organisation’s image at a later stage. Needless to say, these checks must be carried out confidentially, and tactfully.” These checks are important because if directors have a criminal background or have experienced bankruptcy, in some countries it will not be considered a legal hire, added Lodge. While companies’ credit checking are not prevalent in the UAE, due diligence should still be done by requesting a CV from potential candidates as well as reviewing their professional network on sites such as LinkedIn, added Armitage. “It might be useful to contact the reference providers outlined on the candidates CV to get a third party perspective. An informal interview with the prospective candidate will also allow for relevant questions to be posed and answers sought.”
LIABILITY INSURANCE Businesses inherently take on risk as a normal part of their operations, but with the advancement of global standards of corporate governance, companies in the MENA region should closely consider the particular risks associated with the personal liabilities directors and officers face, according to D&O: Valued protection in challenging economic times by Middle East Insurance Review. Furthermore the current economic slowdown has contributed to a change in corporate governance norms across
territories, with litigation remedies are becoming readily available for stakeholders and tougher regulations are being passed all the time. “Since the board doesn’t own the business, the SME owner and the board members can sign a contract which excludes the board members against different forms of liability. It is important that the board member’s responsibility and liability is clearly defined. At times, a board member may request liability insurance, in which case, the SME owner will need to seek Directors & Officers (D&O) insurance or a professional indemnity insurance to protect personal assets of the board members. The SME owner must take into account the possible exposure that may arise through regulatory claims, fraud claims, employee claims, unauthorised transactions, and litigation costs,” said Shahdadpuri. Succession planning is another crucial consideration because if the board loses a director due to unforeseen circumstances, there needs to be a plan in place for how the member can be replaced and the continuation of the business with minimum disruption, added Lodge. “Protect the key men at risk and insure against disruption and loss should they become indisposed. For instance, what happens if they die? To what extent is the income insured for the benefit of you, your employees and the business? A key man is determined by reliance from the business on running this could be the head of sales–the business being reliant upon revenue or it could be the CEO with legal dependency as the owner.” Finally, board members have to be compensated in some way, which will depend largely on factors such as their degree of involvement in the business in terms of the number of meetings they attend, any specific
expertise they bring to business, or if they have invested any capital. “Remuneration can take the form of cash, equity or a combination of both. Many smaller companies offer shares or options to increase the attractiveness of such roles or because of funding constraints. Most board members receive some shares of company stock. In order to determine how much stock to award based on a variety of factors. Highly sought-after board members can receive a substantial percentage of shares just for signing on, along with additional shares for time spent working with the company or based on the company’s progress,” said Lodge.
TRAITS OF A GOOD BOARD MEMBER • High level of integrity. • Accountability for execution of ideas and strategy. • Ability to provide insightful and meaningful ideas. • Respect within and outside the industry. • Strong leadership skills demonstrated from previous and on-going experience. • Good communication skills. • Analytically minded. • Emotional intelligence. • Patience. • Great work ethic. Source: Mahesh Shahdadpuri, Founder and CEO of TASC Outsourcing, Stephen Armitage, Managing Partner, UAE Business Solutions, Spencer Lodge, Founder, Make It Happen
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BRAND LOYALTY
THE CUSTOMER IS ALWAYS RIGHT In an increasingly competitive business environment, SME owners have to focus on customer retention if they want to see their businesses survive
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nce a small business owner lands customers it doesn’t mean they will keep them because they may want to concentrate on making new sales or pursuing bigger accounts. A loyal customer is not just one who keeps a business going, but is also the most effective marketing vehicle for an organisation, which is why it is crucial for a business to retain its most loyal brand advocates. This scenario is both a challenge and an opportunity for small- and mediumsized enterprises. They can grow and tap into their existing customer base and through it build a new customer base, according to Ali Safri, Head of Presales at software solutions provider, Avanza Solutions. Acquiring new businesses can be challenging for SMEs purely because of the amount of competition. According to a report entitled Growing sustainable SMEs in the MENA by advisory firm EMG, there are 1.9-2.3 million SMEs in the MENA region. They account for 20-40 per cent of private sector employment, with around 20-39 per cent of SMEs considered in need of a
loan or an overdraft. This indicates the proportion of SMEs in the region that are undersupplied with financial products and services that are necessary for their sustained growth. Once an SME manages to gain a new client, it is crucial for them to retain that client in order to receive repeat business. “We live in a competitive world where consumers have so many choices that retention is critical. The first step any SME owner should do to ensure customer loyalty is being built is to establish a line of communication to the customer. To do this, they need to acquire a valid contact email, number or even social media handle so a link to follow up is there. Building a customer database might seem easy as there are services offering to sell huge databases out there especially in this region but building a qualified customer database of advocates that have purchased your goods or services is critical,” said Aly Rahimtoola, Managing Director, Harmony Cosmetics, parent company of UAEbased beauty brand Herbal Essentials. One advantage a smaller business has over a larger corporation is that
the owner is able to be much more hands on when dealing with clients, which in turn can makes a customer’s experience more pleasant. “Find a way to add true value to a customer’s life, then do it with excellence. Make their day-to-day operations simpler, easier, faster and less stressful. Enhance their lives consistently, listen to their feedback and deliver what you promise, when you promise it, and customer loyalty will naturally materialise as they choose your brand above others who may fall short on their promises,” said Mona Ataya, CEO of online retailer, Mumzworld. Being customer-centric is imperative for success, by putting customers at the heart of everything from the getgo and providing a positive customer experience before and after the sale in order to drive repeat business. Part of what drives repeat business is maintaining effective communication with customers, which in today’s age of technology and social media is something an SME owner can leverage from the beginning stages of their business.
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The key to effective communication with clients is to understand that consumers tend to use multiple points of contact with a business. They may, for instance, browse items in physical stores, then search online for the best price and purchase them that way. Or, they may initiate a chat, then transition to a screen-sharing session and maybe even two-way video. They will also likely escalate issues via multiple channels, and quickly. For instance, if they do not get an issue resolved via email or chat, they are highly likely to amplify this negative experience via social media, according to Shaheen Haque, Territory Manager at contact centre solutions provider Genesys. “Businesses of all sizes must therefore focus on creating a consistent communications strategy across all channels and responding quickly. This requires customer engagement technology that supports omnichannel interactions. This not only
enables a business to see the historical context of customer interactions across channels, but also enables them to report on these interactions in a holistic way so they can accurately measure service levels and adjust resources accordingly. With crosschannel visibility and appropriate resource allocation, businesses can react rapidly and effectively,” said Haque. Taking omnichannel to the next level, businesses should also look for customer engagement technology that includes multimodal functionality. This gives businesses the ability to transition customers between channels within the same interaction. Communication tends to be fine when things are going well, according to Mita Srinivasan, Director, Market Buzz, but when things go wrong or awry, communication can be a problem. “Not communicating a problem or flagging a potential problem is not
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Loyal customers will guarantee a business owner repeat business, ensuring regular revenue.
an option. This leads to speculation and misunderstanding. Whatever the reason, it is in the interests of both parties to discuss and arrange a solution. Most people find it better to work together to find a solution and prefer to work with companies that are proactive in finding solutions and looking after their best interests. The business owner (or whoever they assign to do the client/project) should effectively be the face of the business and represent not just their own company but the customer’s best interests.” Ataya added that a strong brand does not stop communicating with their client as soon as a transaction is finalised; it has an extensive customer service team ready to answer any questions or concerns, and an efficient process by which valid concerns can be reported, actioned and redressed in a timely and appropriate manner. cont. overleaf
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BRAND LOYALTY
The first step any SME owner should do to ensure customer loyalty is being built is to establish a line of communication to the customer.” – Aly Rahimtoola, Managing Director, Harmony Cosmetics
cont. from pg. 31
Retaining customer loyalty encompasses more than offering clear communication with clients and consumers, business owners have to consider their customer service as a whole. Providing quality service is one part, since it only takes one bad customer experience to destroy loyalty to a brand, according to Anastasiya Golovatenko, PR Director, JPd Agency. The other important consideration is offering a degree of flexibility when dealing with clients. “When you work with clients learn how to say yes rather than no. If you still not sure about such a strategy, the cost of new client acquisition is as much as five to 10 times higher than the expense of retaining a current one. Be transparent; a single lie discovered can create doubt in everything you've done or said.”
EMPLOYEES AND CUSTOMERS It is also important for a business owner to ensure their employees also help foster brand loyalty. Employees that share the vision and philosophy of the business tend to be the best brand ambassadors for their companies. An employee that genuinely has the same passion and care for the business, that the founder has, will ensure that the customer has a superior customer experience so hiring and training employees that believe in the business is even more critical for a SME owner than a larger conglomerate, said Rahimtoola.
“Your employees are your greatest asset. Once they feel demotivated, clients will feel it too. Make sure that your team is your biggest investment– educate them, support them, motivate them and you’ll be surprised with the results achieved. A motivated team increases productivity, creates a positive environment, improves overall performance and help retain A-players. Happy employees mean happy clients,” added Golovatenko. A survey by ADP Research Institute conducted in the MENA region looked at how engaged employees are an asset to their organisation, and showed that happy and engaged employees are not only 57 per cent more effective; they’re also 87 per cent less likely to leave their employers. “There is a vast range of quality products on the market today, so more often than not it is the employees which differentiate a company from its competitor. From the boss, right down to the delivery man, employees are at the heart of any business and have the ability to make or break a company. How a customer is treated, the information they are offered and how a situation is handled is often as important as a product itself,” said Ataya. Regardless of how good a product or service is, customers will not know to approach the business if they do not know about it. Ataya said that product awareness is key, which comes back
to the notion of making life easier for customers. From the perspective of Mumzworld, mothers are busy, and if they know they can source something from the website, they are more likely to return instead of wasting time trying to shop around on other websites. The company constantly updates its offerings and adding new collections to the website to help mums identify what they need as fast as possible, making the customer shopping experience more streamlined. “Awareness is the starting point in the journey that the SME will take the consumer on that will involve purchasing, ultimately ending up with a loyal retained customer who, in time, will become an advocate for the brand. The best way to build a business is to develop consumer advocates who love what you provide. They will tell their friends and this ‘word of mouth’ strategy, which might seem outdated, is still as valid and important today as it was decades ago but it all starts with product awareness,” said Rahimtoola. While word of mouth allows a company to generate awareness organically, promoting products via marketing necessary for any size business because it allows a company to establish the brand’s reputation quickly and allows the business to attract new clients. “Today an increasingly large majority of the buying population– the millennials–do not want to be
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generically marketed to. They want personalised offers tailored to their needs. They also want self-service options, and they want organisations to communicate with them using the channel of their choice,” said Haque. He added that using cloud solutions, SMEs can now offer this sort of sophisticated service previously only affordable for large companies. Making use of technologies such as advanced analytics, artificial intelligence and the internet of things (IoT), the cloud offers SMEs ways to anticipate what types of products customers want, as well as when and how they want to be marketed to.
LOYALTY PROGRAMMES While the prevalence of customer loyalty programmes was the lowest globally, in the MENA region at 42 per cent, 87 per cent of respondents were strongly in favour of these programmes, according to the Nielsen Global Survey of Loyal Sentiment, which polled more than 29,000 respondents. This suggests that there is scope for more customer loyalty programmes across the MENA region, something SMEs could leverage. According to research by ICLP, that surveyed 600 consumers in the UAE and Saudi Arabia, loyalty programmes were found to be a powerful way to improve a business; 63 per cent and 61 per cent of respondents in the UAE and Saudi Arabia respectively preferred to buy from brands that offered customer loyalty programmes. Considering SMEs’ limited cash flow, they do not necessarily have to offer financial incentives. SMEs can take advantage of digital marketing by encouraging interaction on social media accounts, such as offering customers an opportunity to win products through an online contest. Using relevant analytics tools allows a business owner to see their
customers’ buying behaviour in detail, and enables them to customise their offers accordingly. Although social media was perceived to be highly important in customer engagement in the ICLP survey, 20 per cent of respondents said they engage with brands they are loyal to on social media, which suggests that tailored incentives is one of the most effective ways to increase customer loyalty in the Middle East. Engaging and keeping customers aware about brands using social media and non-invasive tools like proximity beacons, efficiently coupled with cognitive CRMs, provide a metric and measurement of loyalty and are the new ingredients for success, said Safri. “Technology can now enable SMEs to compete with much larger players who can undercut on the price but cannot provide the similar user experience and thus provide an edge for keeping the customer loyal, engaged, and satisfied and a likely ambassador of the brand furthering its reach.” In most cases, the unique selling point for SMEs against a corporate giant is their ability to provide a level of personalised service that their larger, less flexible competitors are unable to match. Between technological advances, new channels for engagement, and the general economic conditions that have prevailed in the Middle East for over a year, delivering service that can attract and retain today’s millennial customer is now more important than ever. “In fact, according to Marketing Management Primer for 2016 by research firm, Gartner, 89 per cent of marketers compete primarily on the basis of customer experience– discrete moments that, together, strengthen or weaken a customer's preference, loyalty and advocacy for
a brand. By investing in customer service rather than competing on price alone, SMEs can protect their margins while remaining competitive,” said Haque. Another advantage SMEs have that makes them more competitive than their larger counterparts is flexibility– when time equals money by responding quickly, a smaller business can actually help their client solve their problems, as well as save money. “A smaller business with fewer layers is better-geared to respond quickly to challenges and to jump on to new opportunities when they arise,” said Golovatenko. Being undercut, particularly in today’s challenging climate, is a real threat for many SMEs, but they can use these differences to their advantage. They should focus on competing by creating value, said Ataya. She added that smaller copycats who imitate strategies and price cut impact the ecosystem as they drive higher prices of marketing and confuse consumers with unrealistic pricing. These are typically short lived as they do not have a sustainable model that adds true consumer value.
CUSTOMER BEHAVIOUR IN SAUDI ARABIA AND UAE
63% from the UAE buy from brands that offered customer loyalty programmes. 61% from Saudi Arabia buy from brands that offered customer loyalty programmes. 55% from the UAE purchased more from brands that they are loyal to. 60% from Saudi Arabia purchased more from brands that they are loyal to. 74% from the UAE value instant rewards, but felt 54 per cent of brands delivered. 72% from Saudi Arabia value instant rewards, but felt 57 per cent brands were able to deliver.
Source: Research by ICLP that surveyed 600 consumers in the UAE and Saudi Arabia
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CASE STUDY
THE FULL PACKAGE With the rapidly growing travel sector in the Middle East, HolidayME was developed to allow customers to create tailor-made holiday packages at competitive rates
H
Geet Bhalla, Co-founder and CEO, HolidayME
olidayME–Holiday to the power of ‘ME’–was created to address the issue of expensive holiday packages by allowing consumers to tailor-make their own at a reasonable price. The Dubai-based online travel company was founded by Geet Bhalla and Digvijay Pratap in 2014. According to the Phocuswright Middle East Online Travel Overview, the Middle East is the fastest growing market when it comes to travel, averaging about nine to 10 per cent against the global average of 4.4 per cent growth. When a consumer wants to book a flight or a hotel online, there are a number of players available. “The global market size is worth about $90 billion, including air travel, hotels, car rental, and cruises and approximately 35 per cent of that is leisure. that is about a $30 billion market share. The online penetration of flight and hotel bookings averages 20 per cent, depending on the country. The UAE is slightly higher at about 25-27 per cent, while Saudi Arabia is slightly lower at 18-19 per cent,” said Bhalla. With 35 per cent of global travel happening for leisure, there was a clear market for online holiday packages. The mechanism of the travel industry allows the HolidayME team to buy flights and hotel reservations in
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Buying a holiday can take a few days. This technology allows us to showcase our products to our customer, make their customisations and changes and create the package within 10 minutes.” – Geet Bhalla, Co-founder and CEO, HolidayME
advance and create a holiday package at much more reasonable rate than if the consumer tried to put it together themselves. This benefit can equate to savings of 25 to 45, or 50 per cent that is passed on to the customer, without compromising their holiday experience. Furthermore, the company is able to provide full support in English and Arabic. “Many customers end up booking holidays at the last moment, when prices are generally higher. We’re able to give value to the customer from a buying standpoint. Also when going to a destination for the first time, people spend a whole lot time trying to understand what the destination is about, which hotels they should stay in, what they should avoid, where they should go, and what they should they experience. Our team of travel experts do the groundwork for them; when they buy a package from us, those guidelines are already established,” Bhalla said. Based on customers’ preferences a hotel is selected based on its proximity to the city, or the beach or a great view. Similar elements, such as what should not be missed, or what should be avoided, is taken care of by the team as well. That saved time is also passed on to the customer; they do
not have to experience the hassles of building a package which would cost more money and, at the end, they still cannot be sure what the experience is going to be. Bhalla said it made sense to set up the business in Dubai owing to its position in the Middle East as a regional hub to conduct business and to travel. Secondly, two of the world’s major fullservice carriers, Etihad and Emirates, fly from Dubai as do major low-cost carriers FlyDubai and AirArabia. “The online travel presence in the UAE is higher than anywhere else in the region, and the spend rate is higher too. In terms of a general business environment, Dubai offers a free zone structure which was critical to us from the set-up standpoint. All these considerations together make Dubai the ideal location,” Bhalla said.
CHALLENGES The company invested a substantial amount of money in developing the product and online product management included continuously testing the model to ensure consumer needs were being met, which for the start-up turned into an expensive proposition. “We built a product that we thought was intuitive, but when it was tested it was found a few elements
were missing and that consumers wanted something a bit different. It meant a fairly big, expensive change–we had to turn it around without spending too much money, but we also had to be able to show traction for when we started fundraising,” said Bhalla, adding that having a dedicated team that bought into the vision of the company was essential. Following the platform’s launch in November 2014, HolidayME secured $4 million from Saudi Arabian trading company, Al Sanie Group. In October 2016, the company raised a further $7 million in Series-A funding from a number of investors including Saudi Arabia-based F&C Overseas Investments and Accel Partners. Accel’s early stage investments include Dropbox, Spotify, Flipkart, and a 2005 funding round in Facebook. Al Sanie Group also participated, recommitting to HolidayME. “We started getting the right traction and saw there is a demand for the product, so we did fundraising to scale in three areas. The first was to invest in technology to make the product easier to use. The model needs a lot of technology investment so that it can be constantly adapted to buying and delivered effectively. Second, we needed to get our supplier cont. overleaf
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CASE STUDY
The HolidayME platform allows customers to create an their holiday package to their specific requirements. cont. from pg. 35
arrangement right; it takes a lot of work to ensure we are working with the right service providers. Finally, from a customer acquisition standpoint, we need to invest in marketing,” Bhalla said. Having Accel Partners on board as an investor has not only provided financial support. The Silicon Valley investor has also provided valuable input regarding structuring the organisation as it has grown as well
as insight into building the company’s next level of technology, given its portfolio of tech companies. “This business is about constantly testing various metrics. Accel Partners has a big team with really intelligent people who know how markets behave, offer sound business advice and are up to date on technology. We’re not likely to make the same mistakes other companies have made. If we need to reach out to an expert in a certain
field, it becomes so much easier when an investor such as Accel Partners is involved in the process,” said Bhalla. The other challenge facing the founders was hiring the right team of people. The company started with three people and now has a team of 150 across three offices: Dubai, a technology development centre in Pune, India, and their recently opened office in Saudi Arabia. “When you’re a start-up, you’re not
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really in a position to offer people high salaries to join your team. It is essential to get them to buy into the company vision, particularly if you’re targeting top talent. They will take that leap of faith when they are convinced that the leadership in the organisation has a clear vision as well as a plan to achieve that vision,” said Bhalla. He added that when selecting staff members, it’s important to look at what motivates people, since money is not the only driver. The right people joined the tech division, for example, because they wanted to use the platform wherein HolidayME has invested some of the latest framework technology. Motivating the right people to stay also doesn’t necessarily have to include financial remuneration. “We’re a holiday company and being able to send staff members on holiday is a nice incentive. It may not have a high monetary value, but it can provide a high level of satisfaction, which keeps them engaged in the organisation,” he said. Having just expanded into the Saudi Arabian market, the HolidayME team has had to adapt their offerings. Compared to the UAE market, which is dominated by expats, the Saudi population is predominantly Saudi nationals and they have different preferences and prefer to travel to different destinations. When Turkey recently experienced instability, the UAE-based customers wanted to visit different destinations, while it remained a popular destination with the Saudi market. Saudi customers also like to travel to Morocco and Egypt, which are not as popular with clients from the UAE. UAE-based customers tend to prefer direct flights, while Saudi customers do not mind flying on a one-stop route. “To accommodate the UAE market, we take into account buying behaviour of different nationalities as well as the fact that certain nationalities can move around more
freely, without requiring visas. Food and accommodation preferences also differ. Larger families might prefer serviced apartments while smaller families might be happy to stay at a hotel. Some families might want a beach destination; others might want a beach destination that is more private. Once we know what a customer wants, we can easily tailor the products accordingly,” he said. The team will continue to focus on these two core markets and try to acquire more customers while expanding the products and destinations offered. Investing in technology will remain an ongoing activity, following the launch of a new product–Discover–a technology platform that allows customers to create a holiday package and have it delivered simultaneously. “Buying a holiday can take a few days. This technology allows us to showcase our products to our customer, make their customisations and changes and create the package within 10 minutes. We’ve invested a lot in this platform and we will continue to develop it in 2017,” said Bhalla.
TRAVEL AND TRUMP In light of recent media attention around President Trump’s proposed travel restrictions, Bhalla doesn’t think this will make people stop travelling in spite of any political or social upheaval; they may simply change destinations. Trends over the last couple of years have seen newer destinations emerge, such as Georgia and Armenia, which were not previously visited and are now gaining popularity. He added that he is optimistic that the travel sector will continue to grow because people tend to spend less money on material goods, and more money on having valuable experiences, which travel facilitates.
IN SUMMARY THE PROBLEM The Middle East lacked an online model that allowed consumers to created holiday packages that were tailored to their needs, despite being the region with the fastest growing travel market. THE SOLUTION HolidayME developed a suitable online platform that allows customer to purchase tailor-made holidays at a reasonable rate. By monitoring consumer behaviour to make immediate changes as needed, the company created enough traction for investor interest. In 2016 the company raised $7 million is Series-A funding to invest in improving the technology used as well as further develop relationships with suppliers such as hotels and airlines. THE RESULT Currently customers can select 400 holiday packages from over 200 destinations, and can choose over 8,000 activities. Customers are able to make bookings at over 300,000 hotels and can use the company’s flight booking platform which offers competitive options. To date the company has served over 50,000 customers.
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FACETIME
PAY PEOPLE PROPERLY
As companies try to manage their budgets in the current economic climate, underpaying their staff could cost them in the long run
I
n a survey conducted among 20,000 jobseekers and employers across the GCC by recruitment platform BLOOVO.COM, 43 per cent said they are dissatisfied by the jobs they are currently in. The two main factors topping the list of employee demotivation are low salary and job mismatch. Low salaries often extend to new hires as well and can be attributed to the recent slump in oil price. Business leaders and HR professionals are more careful and costconscious these day and the insecurity factor that they face, living in the Middle East region, doesn’t help because companies are looking more closely at their budgets, more carefully managing their costs and trying to get people at a lower level or with less experience or who are ‘less expensive’ is part of that mind-set, according to Nuno Gomes, Principal, Information Solutions Leader Middle East, Mercer. “We would all like to have the best people available for our businesses but a lot of that needs to be balanced with budgets and expectations in terms of company profitability. When business leaders recruit people there is always a bit of uncertainty in terms of what the return on investment will be. There is a lot of reluctance to pay a lot of money for
somebody that we honestly do not know, despite all the efforts and details in the recruitment processes. Unless someone is really a perfect fit or recognised in their field, companies are more often than not willing to go over and above to make that monetary investment,” said Gomes. This trend to employ individuals at a lower rate of pay can only sustained in the short-term, according to Simone Beretta, Head of HR, Robert Bosch Middle East. “The drop in oil price can affect the short-term decisions of the company; however we have to look at the long-term investment and the long-term success of our companies. I would rather not recruit for a position at all if I have to save across the corporation costs, rather than employ the wrong person. So, underpaying or hiring the wrong talent is not going to be a successful start.” Baretta added that in the long-term this kind of approach is not beneficial to candidates as well the companies. Candidates will end up not hitting their targets, will lose confidence and will not be productive anymore. That means companies will not hit their own business targets, and therefore not reach the full potential in the market as they would with the right people. According to research by staffing agency, Robert Half, the cost of cutting
corners and hiring the wrong person can be extremely high. The company does not only lose money and time by bringing in the wrong person, management could also potentially have to recover lost revenue as a result of the wrong person interacting with clients, or by having to repeat procedures that were handled ineptly. There will also be added pressures on other employees who will have to pick up the slack. But the cost of a bad hire does not end there; 39 per cent of CFOs surveyed said that bad hires impacted company productivity, while 11 per cent said the wrong person brought in fewer sales. It was also found that the amount of time supervisors spent managing poorly performing employees equalled about one day per week. Further research by the Harvard
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Business Review suggests around 80 per cent of employee turnover is due to a bad hiring decision. Another long-term implication of not remunerating the right people can impact the company by losing their top people. “If business leaders are looking into recruiting people at lower pay levels in an effort to manage that cost, it becomes a lot easier for another company to poach those important assets out of the business. Paying fairly and accurately for each individual becomes crucial, especially in these times of uncertainty and instability,” said Gomes.
CANDIDATE PROACTIVITY Job seekers should not be passive when entering the recruitment
process; they can be more proactive in ensuring they are securing the right roles for the right remuneration. The first step is by leveraging their networks to find out the market value of the role, and online tools such as Glassdoor.com will provide a good indication of the spectrum of a salary base for a specific position in an industry, said Baretta. Gomes added that a benefit to using tools such as online recruitment is that it becomes a lot easier to capture candidates’ information, but there is a lot more information that HR teams and managers need to go through to find the right people. They need to remove the haze between the good candidates and a great number of others.
“Candidates need to be more targeted in the roles they apply for. We’re seeing people applying and looking for jobs anywhere. More and more we talk to people who put job ads out there and they receive CVs in the hundreds or even the thousands, and the majority of those are not really a fit for the role. While there is a tremendous rush for jobs, applicants are putting their names and CVs forward for jobs that really either do not fit their profile or they do not have the right level of experience,” said Gomes. Candidates need to ensure the job profile fits their career needs and expectations, and it’s not just another job providing an escape from their current employer or to try something new.
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SHUTTERSTOCK.COM/ MELPOMENE
Underpaying staff can cost a business its best people as they are more likely to be poached by other companies.
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BRAND
BEAUTY BY BOTONY Rahul Agarwal left his career as an accountant to enter the personal care industry with a reasonably priced product, despite warnings of stiff competition from his detractors
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aunched in Dubai in 2015, organic skincare line hailing from India, Organic Harvest, is part of a three-tier FMCG distribution model where the products are sold to a local distributor and distributed across retail channels throughout the UAE, according to Rahul Agarwal, CEO, Organic Harvest. “Dubai is a prestigious place to be present; it has a mix of modern and traditional consumers, with good purchasing power. At the same time, it is the gateway to the whole Middle East,” he said. The product line was originally released on the Indian market in June 2013, following two years of research and development. “Although the personal care industry in the country is saturated with a number of domestic and international players vying for the market share, there are very few home-grown brands in the organic personal care segment,” said Agarwal.
He added that being one of the very few domestic players among a host of international brands, and also one of the first to offer a complete range of products, as well as its competitive pricing, has helped the brand to capture the attention of the target audience. The skin-friendly product range of skin, body and hair care products was derived from plants that have been grown without chemical fertilisers, herbicides and pesticides. Global organisations such as EcoCert, OneCert and Natrue have certified the product ingredients and raw materials as free from any harsh chemicals, parabens, phthalates, mineral oil, PABA, petrolatum, paraffin, or animal ingredients. As such, bringing the brand into the UAE and acquiring the necessary approvals from the relevant authorities was a smooth process because all the brand’s products are FDA compliant and
meet international quality standards, such as good manufacturing practice (GMP). When searching for the right distributor, Agarwal said the most important requirement was that they had existing coverage in all modern trade outlets, both hyper and supermarkets, as well as pharmacies. “Our distributor also needed the right infrastructure and adequate finance to support the business. We have an excellent partner in our distributor, Lifeline Drug Store based in Abu Dhabi, which has fulfilled all the above conditions.”
PRODUCT PROMOTION The brand was promoted through 360-degree coverage of PR activities, print media, and below the line (BTL) marketing, which targets a specific demographic. The company also relied on digital media marketing, as well as placement of well-trained
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Dubai is a prestigious place to be present; it has a mix of modern and traditional consumers, with good purchasing power. – Rahul Agarwal, CEO, Organic Harvest
The products have been created from plants grown without chemical fertilisers, herbicides, or pesticides.
and qualified beauty advisors at strategic locations, who also provided customer feedback to the management team. “We have touched the tier-one distribution network. We are going to start off an above the line (ATL) campaign, which has a broader reach and is largely untargeted, on the ARN Radio Network in three different channels. The channels will reach UAE nationals, expats in the Arab community, western expats, and the South Asian population,” said Agarwal. The brand has been well-received both in India and in the UAE, with repeat and referred customers within the business’s first seven months.
The formulation of the products has been tweaked a little bit to counter the heat of the local weather conditions. Similar products within the range are marketed and available across the world wherever the brand has a presence. The brand is now poised to expand into the GCC. Organic Harvest became available in Saudi Arabia at the beginning of 2017 and the rollout will continue with Kuwait, Qatar, Oman, and Bahrain. Agarwal said the company will continue to expand its distribution network in its existing market, as well as entering new markets.
RETAIL INDUSTRY OUTLOOK The UAE’s retail sector is expected to reach AED 200 billion in 2017, growing by five per cent on average each year, according to an analysis by the Dubai Chamber of Commerce and Industry. The Chamber used data from a number of sources which included Euromonitor and ATKearney, which also suggested consumer spending data shows that the retail sector is growing faster than the UAE economy as a whole. “The retail industry, in terms of organic personal care brands, is having a 25 per cent plus growth year on year. The opportunity is huge; AC Nielsen predicts a $16 billion market for organic personal care products by 2020,” said Agarwal.
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START-UP
REVEALING RÜYA After 20 years of sketching and planning his dream restaurant, Umut Özkanca has finally opened it
Umut Özkanca
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üya, a Turkish restaurant, designed to cater to the international market, opened in Grosvenor House in October 2016. Founder Umut Özkanca wanted to open a restaurant from his native Turkey and create a brand from the Middle Eastern region that could have the same impact as Japanese restaurant, Nobu. The food created is tailored to the international palette, though Özkanca refused to make it a fusion concept. “Fusion cooking alters the DNA of the food. We have kept the soul of the food but polished it for consumers of all nationalities. My chef, Colin [Clague] did the same thing with Café Zuma,” said Özkanca.
Özkanca took Clague to Turkey to sample a range of the available cuisine and he started developing dishes for the menu. If the dish deviated too much from the essence of the cuisine, the pair would brainstorm until they found the middle ground. Some dishes had to be made less spicy; some dishes were too heavy, so the fat or butter had to be reduced. Rüya, Turkish for ‘dream’, was launched in Dubai but Özkanca nearly opened the first restaurant in London. An issue with a clause in the lease caused a delay, so he immediately flew to Dubai to sign on with Grosvenor House. “I think the way things work out is luck or fate. Rüya is a new brand; it might be better to build it here until it is strong enough to compete in the London market. At the moment, if you want to succeed with a brand like Rüya, you have to make it in London. For the past five years the brands that are going global have come out of London,” he said. Özkanca added that the advantage of opening the restaurant in Dubai is that the residents know food; consumers dine out frequently, they know the products on offer, and competition is fierce because the city is small and top brands are competing for business. “If a restaurant can succeed in Dubai, the chances are fairly good it will succeed in many other markets.”
The process of setting up the business was extremely smooth. Özkanca comes from a family with around 50 years’ experience in the restaurant business. He opened his first restaurant at the age of 23; Rüya is his 15th. He followed all the necessary processes and there were no unforeseen challenges. Rüya’s interior was designed by Londonbased firm Conran and Partners. The firm has over 30 years’ of international industry experience and has worked with Özkanca previously on two projects in Instanbul.
PROMOTION
Within the restaurant’s first six weeks, Rüya had repeat customers which Özkanca took as a good sign. “No matter what marketing campaign you do, the best marketing is wordof-mouth. My father always taught me that this business is a marathon, not the 100 metres,” he said. To run that marathon Özkanca said the key is to focus on making restaurant patrons happy by providing good food and service. Özkanca is taking the same steady approach with his expansion plan; he intends to open four or five restaurants over the next five years. The next restaurant will open in London, followed by Miami or New York, then Berlin, Hamburg, or Las Vegas. In the east, he is considering bringing Rüya to Singapore or Hong Kong.
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Business
ision awards 2017 APRIL 2017, JUMEIRAH EMIRATES TOWERS
8TH JANUARY 2017 NOMINATIONS OPEN
9TH MARCH 2017 NOMINATION SUBMISSIONS CLOSE
1ST APRIL SUCCESSFUL SHORTLISTED INSTITUTIONS ANNOUNCED
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
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EDUCATION
ENGAGING EMPLOYEES
Education in the workplace can boost employee engagement and business results, according to Hanny Alshazly, Regional Director, MEA, D2L
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he quest for knowledge in the Middle East and North Africa (MENA) region has remained strong despite the economic and political challenges facing the region. Data collected online for recruitment firm Bayt.com’s Learning in the Workplace in the Middle East and North Africa poll in 2015, which featured responses from 6,639 professionals from countries in the MENA region including UAE, KSA, Kuwait, Qatar, Oman and Bahrain, showed that 98 per cent of professionals based in MENA say working in an organisation that provides learning and training opportunities is a top priority. Employee engagement, defined as commitment to the organisation and willingness to put in extra effort, strengthens the bottom line. Companies in the Middle East are now realising how much more costeffective it is to retain a talented employee by keeping them engaged; research shows replacement can cost
upwards of one-and-a-half-times the salary of existing talent, and nothing drives employee engagement as effectively as learning opportunities. In a region coping with tumultuous change stemming from low oil prices and political instability, knowledge is often the best form of security. This might explain why the research report from MicroMarketMonitor on the MEA region’s market for learning management systems (LMS) projects that the market is set to grow to $425.2 million by 2019, at a compound annual growth rate (CAGR) of 28.6 per cent, outpacing the forecasted global CAGR of 23.76 per cent. Employee engagement through learning gives companies operating throughout the region at least one point of leverage in countries where many factors are beyond their control. The spread is wide between companies taking employee engagement seriously and those that aren’t. Aon Hewitt’s Best Employer
Middle East study in 2016 which benchmarks organisations against the firm’s regional database of more than 375 organisations and 130,000 employees found that while employee engagement for best employers in the region is pegged at 85 per cent, the market average for employee engagement in the region stands at a significantly lower 61 per cent. How do companies in the Middle East go about bridging the gap between the reality of employee engagement in the region and the standards they are looking to achieve? Provide a learning environment that is easy to use and accessible on all devices. Employees in the region are keenly aware of the need to upgrade knowledge and skills to remain viable in a rapidly changing job market. This drives their desire to be associated with an organisation that provides them with the means to develop and sharpen their skills. By helping employees grow and develop leadership skills,
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SMEs struggle to attract and maintain talent in the highly competitive employment market and stand to benefit heavily from facilitating a learning environment.” – Hanny Alshazly, Regional Director, MEA, D2L
a company can ensure it has in-house leadership resources available for the future. An LMS can prove beneficial when making provisions for continuing education in the workplace. An LMS provides a destination for materials and resources, and therefore makes it easier for employees to delve into learning and have easy access to their learning portfolio. From the management perspective, an LMS allows the company to more easily track and record an employee’s progress. It allows the company to know how much time their employees are spending on learning and what kind of content is most engaging. Employee engagement is also a key theme for small and medium-sized enterprises (SMEs), which by virtue of employing a large percentage of the workforce in the MENA region form the backbone of its economy. SMEs struggle to attract and maintain talent in the highly competitive employment market and stand to benefit heavily from facilitating
a learning environment. So far, the up-front investments for an LMS were perceived as relatively high for SMEs. But affordable, intuitive cloud-based LMS geared towards SMEs who need a quick-to-setup, affordable platform to deliver online learning to their staff are now emerging.
COMPETENCY-BASED LEARNING LMS choices vary, and the ones that allow interaction through video, social, and gamification engage modern learners more effectively because they expect this kind of functionality. Most importantly for a region like MENA, enterprises need an LMS that supports competency-based education (CBE). CBE lets learners move on once they’ve mastered a concept as opposed to holding them to a period of time spent on the material, and provides personalised guidance until required learning milestones are reached. The promise of competencybased education is that it allows people already in the workforce to train for in-demand skills faster than
traditional models of education. It also allows policy-makers to shift priorities quickly as needs for new skills arise. As long as there are workers willing to respond to the market for skills, CBE can support that market better than time-based teaching models. Work-linked learning, where curricula closely track the demands of the job market, can help raise skill levels–a key ingredient in the recipe for economic prosperity. The Middle East’s economy is growing and simultaneously diversifying. According to a 2016 economic outlook from World Bank, regional growth is expected to improve slightly to 3.2 and 3.6 per cent over the next two years, as governments across the region are consolidating their fiscal stance, undertaking reforms and trying to diversify their economies away from oil. Companies operating in the midst of these changes need to deepen their corporate learning effort to nurture employees in line with these significant changes.
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SHUTTERSTOCK.COM/ANNA-MARI WEST
TECH FOCUS
CYBERSECURITY:
SMEs should look at including monitoring and responding to threats in their budget, and not merely focus on threat prevention.
PREVENTION IS NO LONGER ENOUGH Jonathan Gill, VP EMEA, RSA and Greg Day, VP & CSO EMEA, Palo Alto Networks discuss the growing landscape of cybersecurity in the SME space with FinanceME’s Matthew Amlôt
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he cyber landscape is rapidly changing, with threats becoming faster and more sophisticated than ever before. Jonathan Gill, VP EMEA, RSA added to this, “Between 50 and 79 per cent of our customers report that they have been breached in the last 12 months, and those are the ones that we know about. That 79 per cent was a figure in a recent Forrester report from last year, and I think they had an average of 10 incidents for each company breached. Our own
Cybersecurity Poverty Index report said two-thirds of organisations have been breached in the last 12 months, and again, that’s the ones that we know about.” “Eighty per cent of attacks now take place in minutes or less, and the response is getting slower, whilst 80 per cent of attacks are identified in weeks or more, and only 10 per cent of attacks are actually found internally; the rest are found by customers or authorities.”
In addition, the nature of these attacks has changed as well. In particular, specialists have been seeing a spike in the use of ransomware of both very common and bespoke origin. This suggests alarming trends for businesses in the future. “I think there’s a simple reality behind this. A lot of cyberattacks are for financial gain and if I hit one user and try to steal his credit cards, those credit cards are now worth very little because there’s so much of that
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Between 50 and 79 per cent of our customers report that they have been breached in the last 12 months, and those are the ones that we know about.” – Jonathan Gill, VP EMEA, RSA
information out there. If I hit the same user and encrypt his data then they’ll generally pay a few hundred dollars at least to get their data back. The alarming trend we’ve seen is some new attacks in the last year that set out to do some reconnaissance, find out what your valuable information is, where it might be and how much it is worth to you, and then target you with those same ransomware concepts. So I will no longer take two or three hundred dollars from you, I might ask for $20,000 up to $200,000 because I know this is the life blood of the business,” said Greg Day, VP & CSO EMEA, Palo Alto Networks. One of the biggest challenges is trying to recognise the risks involved in the cyberspace as the technology is evolving at such a pace, to the point where best practices three years ago have become almost wholly out of date and irrelevant—even global companies are struggling to keep pace with these changes, added Day.
WHAT CAN SMES DO? “My tips for a small to medium business would be first to look at doing the basics well; there are a lot of just simple steps that they can follow that will really help them. Secondly, a small business needs to look at the skills available to it. Do you actually have the staff that
can implement this? I think it’s very important to make a conscious decision which says, ‘Am I going to try and do this myself, or am I going to work with a local partner or systems integrator that will provide this to me as a service?’ Finally, I would advise that you plan for the best and prepare for the worst. Again this actually applies to all businesses; do you have a response strategy, if something does happen to you, what are you going to do? And that’s not just a technical strategy, that’s a business strategy,” said Day. Gill went on to recommend that organisations should look at spreading their cybersecurity budget over three main pillars: prevention, monitoring, and detect and respond. Currently, he said a lot of organisations will allocate some 90 per cent of their security investment in prevention, in both large and small companies. “I think there’s a realisation that that’s not working, attacks are getting faster, response time is getting slower, we’re finding fewer and fewer incidents are solved internally, and there’s this paradigm shift taking place to get a more balanced investment in prevention, monitoring and the ability to respond.” “One piece of advice would be to look at the balance and spend between those three areas and
not just focus on prevention, the evidence is that prevention on its own is not working.” He went on to add that due to the fact that there has been an uptick in successful phishing attacks, Verizon’s 2016 Data Breach Investigations Report suggests that 30 per cent of phishing messages were opened in 2015, an uptick over 23 per cent from the year before, a great way for an SME to improve its security policy would be to start there. “If you’re looking for a quick win as an SME, 60 per cent of the breaches in the last 12 months were associated with phishing and malware… That’s why you need monitoring, and then you need to be able to detect and respond—and if you’re an SME with a small number of employees, and if 60 per cent of the problem can be solved around identity and assurance, let’s take care of that,” he said. Ultimately the most important thing an SME can do is attempt to understand and recognise the changing nature of the threat and respond accordingly. Gill concluded by saying that businesses need to recognise that it’s not so much who’s attacking them, or trying to prevent everything coming through, it’s an acceptance that something will happen. They can no longer control all the variables in this perimeter-less world, but must look at the way of solving that problem holistically.
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BEHIND THE SCENES
Kitchen Nation
Rami RamiSalous, Salous,Founder Founderand andCEO CEOand andPaul PaulParik, Parik,Operations OperationsManager Manager Rami Salous and Paul Parik look at challenges facing restaurant start-ups, from due diligence, to funding, and fit out and how Kitchen Nation can help.
Being a start-up in Dubai is costly. Kitchen Nation helps people by providing a platform where they can do feasibility studies and develop a customer base. When these businesses do move on from the incubation process, they are more able to pay rent and meet expenses, and not go through a huge loss in their first year. They are also more likely to be successful when approaching a crowd-funding platform for financing.
done o haven’tent can h w s r u e n m develop e n t re p re hen Aspiring costing or menuce from the Kitct on n n d a e o t li o is c f s as the a ch dividual rk with e g fully receive ineam who will woing them to beinchen t r it n b k o io d t e Nat ual basis e clients just ne e workers at h m t an individ o r S o l. s a f n e s plan, operatio ers need the ch n their busines help. o h t a s r o d space; n. So it depen can ask for ext e y the kitch ey need. So the what th
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“Our staff ranges by skill level. We have people who can handle basic kitchen preparation, and we have more experienced staff. Some customers will start wanting to work as the head chef, but they don’t have experience because they’ve never been a head chef before. They can work with our head chef for two or three months and take over from there. Some clients just need people to help chop vegetables, some need people to do more creative things in the kitchen, so it just depends on the project, and the clients are charged accordingly.”– Paul Parik, Operations Manager, Kitchen Nation 3/19/17 4:02 PM
Rami Salou
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Paul Parik
“I wanted to bring a food truck from the States and I thought it would be an easy concept to set up but I had to go through a really long process with a number of permits, and I had to have a central kitchen. I figured many people faced the same problem, because establishing a kitchen is very expensive. So I thought of having a big central kitchen for my products and my food trucks, as well as providing an incubator for others.”– Rami Salous, Founder and CEO, Kitchen Nation
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“We’ve found that Dubai has a lot of food entrepreneurs that need a space like this to bring their dreams to life. Each contract we offer is on a month-to-month basis so start-ups are not tied down to a long-term contract.”– Paul Parik, Operations Manager, Kitchen Nation “JLT is a free zone, so it is easier to get a licence to operate. We thought of Al Quoz, but that area can only have the central kitchen, customers cannot dine in. JLT allows people can come in and see the menus and try the food here.”– Rami Salous, Founder and CEO, Kitchen Nation
Ingredients such as flour, eggs and the produce that comes daily is divided among vendors by weight which keeps waste to a minimum and costs low. They only have to store their prepped food.
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LAST WORD
The Hulk in HR
HANI HIRZALLAH, CHIEF HUMAN RESOURCES AND ADMINISTRATION OFFICER, ADNIC, LEARNED THE VALUE OF EFFECTIVE PEOPLE MANAGEMENT FROM HIS OWN BUSINESS FAILURE to have enough time for my family and friends, and I actively make time for meditation and my hobbies. I consider myself to have developed a solid practice of effective time management and this is what I want to pass on to all ADNIC employees.
What is the most challenging aspect of what you do?
What does your current role involve on a day-to-day basis?
I am the Chief Human Resources and Administration Officer at Abu Dhabi National Insurance Company (ADNIC) and I oversee the company’s internal and external HR strategy. I monitor trends in human capital development, and I work closely with the senior management team to ensure that ADNIC’s HR strategy is in line with the company’s organisational transformation. Day-today tasks include advising team leaders and top management on performance management as well as coaching and counselling of ADNIC employees at all levels.
How do you effectively manage your time?
The learning process is ongoing. I make sure that I stay proactive in my work to leave room for unexpected interruptions or emergencies. Similarly, it is important to prioritise some tasks over others and to be able to delegate responsibilities to the team. Also, many people forget that it is essential to have a healthy work-life balance to perform in the job. I always make sure
The insurance industry has seen some challenging times affecting insurance companies and brokers alike. We have experienced this volatility at ADNIC responded with a realignment of our organisational structure, which has led us back to stability and sustained profitability. It’s important at such times to stay agile with your resource management and focus on empowering employees to deliver optimal performance. Managing employee output and group performance in times of economic slowdown is probably the toughest aspect of my role at ADNIC.
What is your leadership style?
The most important thing for me is to pass on my knowledge to my team. As a senior HR executive I am highly committed to apply best practice and to give our staff the best training and development opportunities possible. Everyone faces challenges during their careers and it is important to learn how to overcome them. I try and communicate with our employees as much as possible, and to trigger discussion in order to come to an agreement before decisions are made.
Describe your biggest failure in business and what it taught you.
I am an entrepreneur at heart and a couple of years back I started my own company.
It was very promising at first; I seemed to be on top of everything and new recruits handled the job well. After some time, I started to be less involved and failed to establish constant commitment. I dedicated most of my time to my own tasks and I could not always focus on monitoring overall performance, which resulted in failure of the business. While it was disappointing at that time, I strongly believe that everything happens for a reason and I learned a really important lesson here. To be successful you have to dedicate your time and your commitment and always work as hard as possible.
What would you most regret not having done by the end of your life?
I probably will regret not having continued with karate–I was always very passionate about it. If you ruled the world, what would you change?
I would like more justice and tolerance.
What superpower would you like to have?
I would like to have the same powers as the incredible Hulk–superhuman strength, regenerative healing factor and ability to know when and how to activate my superpower.
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