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Editor’s Foreword
T
his month, Business Insight has quite a family feel to it. With so many family businesses within the UAE, we wanted to look at this in more detail.
Most of us will know the old adage, “You can choose your friends, but not your family”, but for those who don’t, it means that your family may be able to irritate you immensely, but because they are family, they cannot be ignored. What happens if we work with them? How do you survive the constant business talk without it affecting your home life? Or, what happens if your nephew is out of work and is asking for a job? Do you give him one because you are a family business? On page 16, we look at this in more detail in our article, ‘Running a Family Business’. It cannot be denied however, family run businesses are very often hugely successful. Some cite the fact that it is because the board have a common heritage. They were brought up the same way so they all have the same values, making the decisions to drive a business forward much simpler. This got us thinking… if they are so successful, ‘What Lessons can Businesses Learn from Family Businesses?’ On page 68 we answer this. And, whilst we have the epitome of success of a family owned business in our Success Series article with Jean Cassegrain, CEO of Longchamp on page 30, we have an equally interesting read with Inga Beale, CEO of Lloyd’s of London on page 24. Inga is presently one of a handful of female CEO’s in the insurance industry globally, and currently presides over the world’s oldest insurance market. But would you believe that she doubted herself and very nearly gave everything up? She tells us her story. Enjoy!
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APrIL 2015 Cover
RUNNING A FAMILY BUSINESS
Running A Family Business *Success Series Interview Jean Cassegrain, CEO, Longchamp
Success Series Interview Jean Cassegrain, CEO, Longchamp Raising Capital For Growth
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16 APRIL 2015
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Contents Foresight Page 16 – Running a Family Business Page 20 – Facebook
Success Series
34
Page 24 – Interview: Inga Beale, CEO, Lloyds of London Page 30 – Interview: Jean Cassegrain, CEO, Longchamp
Money Page 34 – SME Financing – Is There a Better Way? Page 37 – Raising Capital for Growth
People Page 40 – An Employer of Choice Page 42 – What Makes an Employer of Choice?
Technology Page 54 – Avoid the Problem of Storing Big Data Page 58 – Emerging Technologies and New Business Models Page 61 – IPad’s 5th Anniversary – Reflecting on the Tablet Revolution
Travel & Hospital Page 62 – Lebanon Banking on Regional Demand for Tourism Sector Revival
Business Incubator Page 63 – Business Process Improvement Page 66 – Ways to Win an Argument Page 68 – Lessons to Learn from a Family Business Page 72 – Business Etiquette in the UAE Page 74 – How to Wake up Earlier
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Page 50 – DMCC Expands its Single Family Offices Page 52 – Almas Conference Centre Shines for Dubai Diamond Conference 2015
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foresight
Running A Family Business
As you may have noticed from our success series many of the blue chip businesses within the UAE are family owned, in fact driving around Dubai you notice names of prominent families everywhere
hilst this may seem as an effective way to start your own business, you only need to watch an episode of Dallas to appreciate that this may not be the case. Running a family business has a unique set of challenges. These challenges can cause a breakdown of your family if things go wrong. In the United States, a familiar aphorism “Shirtsleeves to shirtsleeves in three generations” describes how family-owned businesses fail by the time the founder’s grandchildren have taken charge. Data supports the saying; 70% of family-owned businesses fail or are sold before the second generation gets a chance to take over, whilst 10% remain active as privately held companies for the third generation to lead. In contrast to publicly owned firms, where the average CEO tenure is six years, many family businesses have the same leaders for 20 or 25 years, and these extended tenures can increase the difficulties of coping with shifts in technology, business models, and consumer behaviour. Today family firms in developing markets face new threats from globalisation. In many ways, leading a family-owned business (FOB) has never been harder… Recognising and learning to avoid those traps as early as possible can boost the odds of long-term survival.
W
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April 2015
Too Much Trust At the start, you are full of optimism and you do not consider the challenges. With any business relationship, determine things like who is really in charge of the company, how the profit/debt will shared, and succession of the company. These should be agreed and put into writing. All of these things lead to internal conflicts and have been known to tear families apart as there will come a time when each of you have to look out for your own best interests. Establishing a formal policy that outlines the roles for each of the members; including compensation, conflict resolution and anything else that is business related will save you all from a lot of petty arguments in the future. If you already have an FOB with several family members it is not too late to take a stance. By employing an external qualified source, that you all agree (in writing of course) will be able to make the decisions on things like succession and splits of profit and/or debt, and any other business related items that you cannot settle without coming to loggerheads, your company will get an unbiased approach to the setup and how you can progress moving forward. One American company (a leading producer of long steel in the Americas) progressed in this fashion. The external agency identified five candidates for CEO.
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foresight
Among those recommended were two fifthgeneration cousins with extensive experience in the business. The company sent the two for advanced executive training at leading U.S. business schools and subsequently put them in charge of key business units for several years. In late 2006 the topperforming family member was appointed CEO, and his cousin became COO. Today, four of the five CEO candidates remain, and the company’s revenues grew from US$13 billion in 2006 to US$20 billion in 2010. There Is Always A Place For You Here A common mistake that FOBs make is that once the business is operational and fairly profitable other family members bring their children into the business regardless
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April 2015 | 17
foresight
as to whether or not they are qualified or even able to work there. The result is that the business becomes the fall back option for the whole family, which can prove costly. The best solution for this is to implement strict training and screening, especially for key positions. If family members are to hold key positions within the company they should hold a related degree, have undertaken training, and have the necessary experience for the job. If not, it is better to employ them in positions where they will not affect the company significantly, but will be able to learn and move through the ranks. A good method of screening is employed by one European FOB whose family members applying for a job must be at least 26 years old, have earned a master’s degree in business or engineering, speak three languages, and have won two promotions within five years at a non-family firm. They also are not automatically entitled to a position; they have to apply like anyone else who wants the job and they run the risk of being turned down. Go It Alone It is not uncommon for an FOB to have too many family employees even if they do not have the business levels to accommodate them. This can result in two things: zz The lack of outsiders means that the business is likely to stagnate as the beliefs and principles of family members are all so similar zz Should you have to make redundancies/fire someone in the future, you are likely to cause a huge divide in the family regardless of the reasons behind the choice, as someone close to you will be hurt Whilst the second point speaks for itself, the first is very serious indeed for a FOB as it means that the business is not likely to look outside of the box. Outsiders, with different backgrounds, can provide a wealth of experience in different areas, for example implementing new technologies or policies to improve the workplace. These are the ideas that will take your business onto the next level. The thing to remember is that the term FOB can cover a wide range of models; from Choithrams to the husband and wife corner shop. However success is the same providing you treat the partnership as you would any other external non-related business partners. This takes an approach that encompasses various principles: 1.
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Communication: Communication is key. With family, it can take a little more effort, as there is a tendency to assume a family member knows you well enough
April 2015
2.
3.
4.
5.
6.
to draw the right conclusion. If feelings or expectations are not voiced, or alternatively decisions are made without conferring with each other, grievances are caused. If you want your partnership to work, let go of these assumptions and communicate clearly and openly, just as you would with a non-family business partner. Training is vital: Managerial skills do not come as naturally to family relationships so they need to be learnt. Investment in this area will strengthen your position. Manage expectations: By this we mean agree and document each partners expectations and conclusion regarding their role. Be formal: Sadly, expect to have some disagreements, so ensure that everything is documented legally. Here in the UAE you have to agree the share split when obtaining your license, however, what about all other aspects of your roles? Formally stating in writing roles and expectations you will avoid confusion, petty disagreements and set expectations. Same vision: The leader’s vision for the business must be in tune with the aspirations of the other family partners, or at least, have faith that the others can adequately fulfill their positions. Prioritise family: Obviously you went into business to be successful, but this does not mean losing your integrity and eventually your
family. Families are often torn apart because of business, but remember; you can have many businesses during your lifetime, but you will only ever have one family. 7. Work/life balance: Just because you see family all day at the office, it does not mean that you should stop seeing them outside of the office too. Often having an FOB means one or more family members fail to show at family gatherings. Also, when at family gatherings ensure that you talk about things other than your FOB. 8. Consider all employees: Other employees should not feel threatened or left out when the top managerial positions are occupied by family. When employees see their managers as part of a clique, instead of someone likely to understand their problems, it can cause resentment and demoralisation which will affect your bottom line. 9. Consider all views: If you hire an outsider to the top levels, their views should be considered as important as those managers who are members of your family. 10. Merit based rewards: Promotions and incentives should be based on skill and contribution to the company, not because someone is part of the family. 11. Don’t stagnate: Hire outsiders as soon as viable; they will give you a pletherer of knowledge/inspiration to move your business forward. n
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foresight Š 2014 EYGM Limited. All Rights Reserved.
The opportunity for the GCC is now — understand the challenges and drivers that impact you. Nationalization, diversification, global positioning and stability are key areas for governments and businesses in the region to consider for the future of GCC growth. The EY growth drivers report highlights how government and business can work together to address challenges and embrace opportunities in the region. For more information visit ey.com/growthdrivers
The views set out in this publication are not necessarily the views of the Ernst & Young global organization or its member firms. www.businessinsight.ae
April 2015 | 19
foresight
Facebook Facts
We are constantly talking about the power of Facebook from advertising prospective – But Why? By May 2014 the country average for Facebook penetration in the Arab region was over 21.5% up from 15% in May 2013 (Arab Social Media Report) Facebook achieved over 1.36 billion active users (Grant King, IHC) At 1.35 billion, Facebook has more monthly active users than WhatsApp (500 million), Twitter (284 million) and Instagram (200 million) - Despite owning Instagram and WhatsApp (CNN) Smart phone users check Facebook 14 times a day (The Daily Mail)
2.3 million Facebook users UAE Facebook penetration is at nearly
44.92%
of which 66% are male and 34% are female.
1pm – 3pm (Stat.ae)
Users spend an average of
25 minutes each visit (Grant King, IHC)
UAE generate
month (Grant King, IHC)
46%
of 25 to 34 year old are Facebook members in the UAE (MVF Global)
Best time to post in the day
facebook tracks what sites you have visited even after you log off (The Daily Mail)
2.7 billion page views each
in the UAE (MVF Global)
Best time to post at night
10pm – 1am (Stats.ae)
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April 2015
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foresight
The largest number of users in Saudi Arabia is aged
26 to 34
(Arab Social Media Report 2014)
8m
of the Saudi arabia’s 31m people use Facebook (Arab Social Media Report 2014)
Autoposting to Facebook decreases likes and comments by
70%
(Digital Buzz Blog, 2012) In Europe, over
223 million people are on Facebook (Search Engine Journal)
there are
2.4 million active users in Saudi
Every minute there are
1.8 million
Arabia (Arab Social Media Report 2014)
new ‘likes’ (The Daily Mail)
There are more than
one trillion
87%
of Saudi users of social media are men (Statista, Q2 - 2014)
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posts on Facebook (CNN)
88%
of saudi nationals own a Facebook account (Statista, Q2 - 2014)
April 2015 | 21
foresight
33%
of purchasers for Fashion & beauty category purchases are aged 35-54 dropping to
13%
52%
have stopped following brands due to inundation of boring information (SMI)
for purchasers age 18-34 (SMI)
Facebook 90%
accurate in targeting your clientele by demographics (Grant King IHC) FACEBOOK EARNS an average of
US$5.85
from every US user (Quarz)
More than
1.1 billion
people use Facebook on a mobile device on a monthly basis. That’s 1/7 of the people on planet Earth (CNN)
Facebook reported a
USD$1 billion
increase in revenue from the fourth quarter of 2013 to the fourth quarter of 2014 as a result of previously limiting brand post impressions (Grant King, IHC)
B2C Facebook interaction is
Worldwide, there are over
1.35 billion
monthly active Facebook users (MAUs), which is a 14 percent increase year over year. (Facebook, October 2014)
30%
higher than average on Sundays (Mindjumpers)
42%
Over half of all Facebook users now access their newsfeed from a mobile device, such as a smart phone (Grant King, IHC)
Photo’s drive engagement
87% - Photo 4% - Link 4% - Album 3% - Video 2% - Status (SMI)
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April 2015
of marketers report that Facebook is critical or important to their business (State of Inbound Marketing 2012)
18%
higher (Bit.ly blog)
864 million
there were
2 million
advertisers in March (Grant King – IHC)
On Thursdays and Fridays, engagement is
people log onto Facebook daily (DAU), which represents a 19% increase year over year (Facebook, October 2014)
www.businessinsight.ae
success
success story Interview:
Inga Beale
CEO, Lloyd’s of London Last month Lloyd’s officially opened its office in Dubai in the DIFC, and its CEO Inga Beale, was on hand to celebrate the opening. When Business Insight heard this, naturally we wanted to speak with her. She made history in 2013 when she was the first female to be appointed to the role in the 327-year history of Lloyd’s
eale appreciates this feat and has a respect of the position that is rarely seen from someone who has risen through the ranks as she has, “It was hard work and perseverance that got me where I am. I didn’t set out with a clear life-plan - I just reacted to opportunities. I have always worked in insurance, and started as a trainee underwriter. What was particularly fascinating was that it was in reinsurance and therefore, by it’s very nature, it was a global position. In my first job, I was at one moment looking at Australian risks, and then I would be focused on Taiwan and Japan, and so on. You become exposed to risks of all kinds, all around the world. Insurance supports all of society. It supports countries and businesses; its network is so extensive. I was fortunate enough to end up there at the beginning.”
B
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You are passionate about the industry. This flies in the face of the perception that insurance is boring. What the industry is not good at is attracting the talent in the first place. We are not very good at telling the story about how important insurance is and how interesting a career in insurance can actually be. Insurance globally is a male dominated industry. What are your experiences of being Lloyd’s CEO? I can’t think of many other women to reach your level. Certainly at the moment, there aren’t many other women who have made it to this level in the UK. Globally there is a small handful. At one time, I gave it all up because I thought I couldn’t hack it anymore. That was the time when I thought I
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success
At one time, I gave it all up because I thought I couldn’t hack it anymore. That was the time when I thought I wouldn’t be able to do it… I actually gave up after I had been working about eight years in the city and I went travelling around the world and vowed never to work in insurance again. As it happens, I saw the light and came back and was offered my old job back”
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April 2015 | 25
success
wouldn’t be able to do it…. I actually gave up after I had been working about eight years in the city and I went travelling around the world and vowed never to work in insurance again. As it happens, I saw the light and came back and was offered my old job back. So how did this transformation in your thinking occur? If you think back to the late 80’s, women weren’t even allowed to wear trousers at Lloyd’s. It was that sort of environment and I was disillusioned. I brought an around the world ticket and I went travelling on my own. I went to India, Thailand and onto Taiwan, Hong Kong and ended up in Australia. Once I landed there, I needed some money so I got a job at the BBC and at the time, the manager of the office was a woman. It was the first time I had been exposed to the most senior person being a female. She wore trousers! No one talked about the fact that she was a female. She sort of inspired me. Even though I was only sitting on reception for six weeks, I thought, “I am going to go back. I am going to be myself and get on with my career.”
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April 2015
I talk a lot about embracing differences and not rejecting them because I think it is much more enriching, and in particular for running a business it is healthy to have input from different people. It is much more difficult to manage though!” It was a very important time. She was very influential, but by that time I had been exposed to many different cultures, countries, different ways of working. I had my eyes opened and saw a whole new world.
from different people. It is much more difficult to manage though! However, I really think that by embracing differences and embracing diversity, you have a much stronger, sustainable business model.
So how has that reflected on you now? It helped me see that you should respect people from all walks of life. I was very fortunate to be offered a position in the US, which I took. Then I was offered to go to Paris, a couple of year’s later Munich, and then on to Switzerland. I was given the opportunity to see all sorts of different cultures. Travelling and seeing the world taught me to appreciate different cultures. I talk a lot about embracing differences and not rejecting them because I think it is much more enriching, and in particular for running a business it is healthy to have input
What is the best advice that you have been given? One of the key things I was told was when I had to make a difficult career choice as to whether or not to take a job, and I phoned one of my mentors. It seemed like a sideways move but they told me to take it, “Life moves on so quickly and before you know it, everything will be different and you will be having a very different experience.” These were really wise words to me because I was determined to move up the career ladder, and this was a move sideways. It was moving back to Europe though and despite being a sideways step, it was the best thing I ever did.
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success
How important are mentors and sponsors to business people? Mentors and sponsors – people who can open up doors and opportunities for you - are important. It is important to have that mentor and that safe environment for you to share your thoughts and your dilemmas with, and for them to give you completely independent advice. Also, it is important to try to get a sponsor, or perhaps more than one sponsor, who can open doors and give you introductions to people, to help you on your way… that is becoming more and more important. You have spoken about different cultures. What challenges do you face when dealing with a team of different cultures? You have to be very, very, pro active as a leader. I was fortunate enough to work for GE for 14 years. They were incredibly proactive in management training, which included cultural training. When I moved from the UK to the US I assumed that there would be no cultural differences, or certainly very little. I mean, we all speak the same language. But I found there was a huge difference in culture. Then, when I moved to Germany I thought, “Gosh it feels like being back in the US.” When I learned more about these cultures, I learned that the American/German culture is very similar, and the UK culture is actually more aligned to French culture. It is a very complex area. I was lucky enough to work in an environment where I got taught a lot about different cultures. In your own words, why is insurance important? I think insurance really helps countries, governments and businesses build resilience. At a government level, it can help to build resilience in economies. If you go to a city level, insurance can help build resilience against natural disasters for example, and if you go down to an individual business or an individual person, insurance can protect against theft and/or damage. This is owed, in part, to the fact that when we offer insurance, there
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it is important to try to get a sponsor, or perhaps more than one sponsor, who can open doors and give you introductions to people, to help you on your way… that is becoming more and more important” are certain terms that must be adhered to. You have to have certain parameters in place and therefore naturally, it not only provides a buffer for when something goes wrong, it helps the whole environment build resilience. With regards to insurance, we know Dubai is making huge strides in takaful. How is Lloyd’s fitting that into their business plan? Lloyd’s is certainly ready to offer this type of insurance. We are part of discussion groups and we are talking with scholars to ensure that we are able to offer sharia compliant products. We have a coverholder in London called Cobalt. It is focused on Lloyd’s being able to offer a Sharia Compliant product. However it is very tiny at the moment and there is still much research to do in this area. We are working on it.
What is the future for Lloyd’s of London? Most of our client’s have professional risk managers whose job it is to purchase insurance. For Lloyd’s in particular, it is a case of selling to the businesses the protection that they need, which they may or may not be aware of. There is a piece of research that was commissioned last autumn called the ‘London Matters Report’ conducted by the Boston Consulting Group. In its interviews with risk managers, it uncovered that only about 10% of corporate risks are insured. There is definitely scope for us to uncover other products that we should be looking at. What is the next big insurance focus? Cyber insurance is growing and will continue to do so. It is an area where everything is becoming much more intangible and much more difficult to understand. Lloyd’s has always been a pioneer of new products.
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success
We have always been at the forefront of innovation and cyber is no exception. We have been doing a lot of work, particularly with the UK government in this area. Business need to learn to use insurance to not only provide security, but also to help them understand their exposure and what they can do to protect themselves. We have seen very little take up in this region, but the risk is here. It is here right now, and it is impacting all sorts of businesses. Specifically focusing on cyber, why is it so important that businesses cover themselves? There have been a couple of high profile events in the region. You only have to look at what happened to Saudi Aramco when they were hacked into. All of the workstations were taken down for all of their employees and it took two weeks before they were operational again. It cost them US$15milion. We have also had a breach in the banking world. The hack managed to extricate US$45milion from various ATMs around the world. The most recent one that I can remember is the Marriott Hotel Group where customer credit card information was taken. Not to mention Sony… It is happening here and now in the region. Whatever your business is, you are a potential target for a cyber attack. There can be all sorts of reasons why people want to do it. You shouldn’t get complacent and think that it is only banks or big businesses that are vulnerable. All businesses will have information that others want. Ultimately, everyone is prone to it. Hackers want to make a point. They want to show that they can. There are so many reasons that people want to do it and it is a very real threat to businesses. Some governments have made it mandatory that businesses report any breach, hacks or attack. This has happened in the US and it is going to happen in the UK. This is something that governments can do as it raises awareness to the threats and makes businesses think about them, where perhaps they hadn’t before. The world moves so rapidly these days. The pace of change is so dramatic that businesses cannot afford to sit and do nothing.
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April 2015
Business need to learn to use insurance to not only provide security, but also to help them understand their exposure and what they can do to protect themselves”
In this region, many businesses don’t have business plans. Why is a business plan so important? Unless you plan now for the future and what is around the corner, your business will not be prepared, which will affect it chances of success. Businesses need to start at the macro level and look at changes that are predicted to come along in the next five or even ten years. Lloyd’s launched its Vision 2025 in 2012, which outlines Lloyd’s commitment to be the global centre for specialist insurance. We looked at what was happening around the world, which formed the basis own strategic plan. The
reason is that change takes time and must be planned. Particularly in a services industry such as insurance, it is vital that you have the right talent – the right people and the right environment. This requires planning. To me it is really important to ensure sustained success. What is the one piece of advice that you would like to impart on others? I think some businesses fall in to the trap of being internally focused at times. For me, one of my great learning’s was to make sure you have an eye on your competitors constantly and make sure you are always focused on your customer. n
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success
Success Series Interview
Jean Cassegrain CEO, Longchamp
Alexa Chung & Jean Cassegrain
The Longchamp heritage is legendary. The fashion house started its beginnings as a luxury leather goods company. Jean Cassegrain (Senior – Not to be confused with his grandson of the same name who we are interviewing) established the company in Paris in 1948. Originally the owner of a tobacco house, the company expanded into leather-covered items for smokers. Whilst they continued their focus on the male market, it wasn’t until 1978 when they introduced their first female line, for which they are now famous The brand has grown considerably under the direction of its 2nd and 3rd family generation. 5 family members sit on the board. They have expanded the business into 100 countries with around 1,800 retail outlets. They also have a further 238 Longchamp Boutiques with 18 distribution subsidiaries. We speak to Jean Cassegrain, CEO of Longchamp to find out more. Can you please explain the evolution of the company? First of all, I would mention the development of our international network because presently, despite having a long tradition of exports, we are now physically established in many countries with our own teams. At present we have 2,700 people working for the company around the world. And of course, the products that we sell have also changed. Longchamp is still luxury in
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April 2015
motion, but now relies on a highly structured international distribution network along with a more extensive range of products including bags and accessories, luggage, Readyto-Wear clothing and shoes. Longchamp is essentially a family business, and the UAE has a great deal of family businesses. How have you managed to stop bringing the boardroom to the dining room? I am not sure we have…! Being a family business you have a certain amount of independence. Why is this beneficial to businesses? My dad worked with his two parents and his three brothers and sisters. I also work with my sister, my brother and our two parents. Therefore this family
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success
nature is very deeply rooted in the house, it allows us to really work on developing the brand with a sense of continuity. Our close relationship also means that we each can share the vision of the company and enjoy a personal contribution to the business. We come from a common heritage. This means we have a shared set of values that our parents brought to Longchamp. Our independence also gives us much more stability. It allows us to think and plan for the next generation rather than for the next quarter. We can also build on the input from family members. Each person brings a specialised knowledge and expertise. This creates a more complete basis for decision-making to support the business and its growth. How has your Grandfather influenced the work you do currently? My grandfather had from the beginning international ambitions for his brand. In the early 50’s he was already selling on all continents the Longchamp pipes and leather accessories. I guess my everyday work is the result of his very visionary vision. Prior to the 1970’s, the Longchamp brand was aimed at the male market. Please explain the thought process as to why your family chose to move into women’s products At the beginning, Longchamp’s focus was on pipes and items for smokers and therefore our world has gradually expanded where we have acknowledged possibilities. After smokers, it was gentlemen in general with small leather goods for men, bags for men, all kinds of leather accessories for men. Then women also became part of the brand from the early eighties. This was a major period of development for the company due to the success of these bags. This new direction also helped the business as smoking pipes became less and less fashionable. Now over and above bags, the house has become part of the world of fashion in general with the development of the shoe and Readyto-Wear collections. What are your plans for growth in emerging markets? How do you determine what markets you should focus on and why? In the coming years we will continue to develop the brand internationally. We know we still have a lot of growth potential and are planning this strategically. Already, we are the favorite leathergoods brand of French women and we hope that we can also become soon the favorite brand of
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Quality is our weapon of choice. Consumers these days take quality seriously, so we will not deviate from this”
The fact that Longchamp is a French brand is very important to us. Many French brands no longer design with the French audience in mind. Being French runs through Longchamp’s DNA” many women! We are opening this year in Peru, Chile, Paraguay, Canada, Austria… and are confident that many other men and women in the world can enjoy and appreciate our collections. Longchamp is a globally recognised brand. How have you achieved this? Do you have different marketing strategies for different regions etc.? Quality is our weapon of choice. Consumers these days take quality seriously, so we will not deviate from this. Our strategy is to stay true to the Brand values in every region and keep in mind our first customer - the Parisian woman. The French women are known for their effortless elegance, their dynamism, their optimistic take on life. Like theirs, our approach to luxury is casual, effortless, optimistic. As a brand and as a company, we are warmer than most other European luxury brands, closer from our customer. Movement is also an important buzz word for us. Like our customers, we are in constant movement;
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and always had good ideas. So when she asked us if we would be ready to have her own collections we were thrilled! We enjoy a successful relationship with Kate and greatly appreciate her enthusiasm and flair in developing a line of products that are very successful. You have a long history of collaborations… Yes, which is why we were very confident that the collaboration with Kate would be a success! Our relationship to art began as early as the 1970s when we introduced a limited edition series of bags featuring a design by the famous Franco-Russian artist of the era, Serge Mendjisky. With this, Longchamp was one of the first leather goods brands to enter the world of collaborations with known artists. Following on from this, we have continued to work with some of the world’s most exciting talents in designing special products and the installations within stores…
urban, cosmopolitan, active and well-travelled. We move with our times - worldwide! What is your vision for the Longchamp brand? The fact that Longchamp is a French brand is very important to us. Many French brands no longer design with the French audience in mind. Being French runs through Longchamp's DNA. It is who we are. It is what sets us apart and allows us to bring the very best of French savoir faire and creativity to other cultures and populations. Our brand’s key words are Leather, Family, Fun, Quality and Creativity. We have managed through the years to keep a good combination of those. We always look for the best tanners, the best suppliers of cotton, nylon, silk and the many materials that we are using. We work continuously to ensure perfect quality and we therefore make sure to source the best raw material thorough the world from a wide variety of suppliers. Collaborations are being used by various brands as way of generating an increase of sales. You have one of the longest and most successful collaborations in fashion. How did the Kate Moss Collaboration come about? We met through our first advertising campaigns with her back in 2006. She started to talk a lot with my sister Sophie
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How have you managed to continue the collaboration with Kate Moss to today; especially in light of the fact that so many others fail after just one line? We work on a ‘coup de coeur’, instinct; it is a choice that is not driven by marketing, but something on an emotional level. For instance, for our latest collaboration we appreciated Sarah Morris’ strong sense of color, the graphic nature of her work. We put our craftsmanship at the service of each artist with whom we work. This means that they have no constraints and can think freely. We can then use our skill to produce that work in large numbers and ensure consistent quality standards. Respect for creativity makes these collaborations work on the long time! All artists and signers we have worked with (including Kate), bring a fresh eye to our brand and our products. They bring a new and exciting view, without any barriers of what has been done in the past and with no time limit. What are the biggest challenges that Longchamp faces today? Maintaining the same level of quality and sourcing the best possible leather will remain of our main concern. Personally speaking, my biggest concern will be to make sure the Brand will be able to face the future on solid grounds. We also must continue to grow in new markets, those where we still have a
strong potential for growth, while improving our distribution on the most mature markets even further. Longchamp is evolving and its new aspects must be reflected in our global distribution to continue to affirm our unique place within the fashion and luxury world. What is next for Longchamp on a global basis? For the past few years, we have been developing our own distribution network. It allows us to control the conditions in which our products are presented and sold, as well as the experience that our customers have when they visit us. In these stores we celebrate every aspect of our brand, and all of our collections. In last December, we opened a store on Les Champs Elysées, Paris. It takes the Longchamp brand back to where it began and is an important part of our history. In many ways the personality of Paris is also a reflection of Longchamp – vibrant, stylish, elegant, surprising and constantly on the move. The Champs Elysees is Paris’s most visited shopping destination. It provides a showcase for every aspect of our craftsmanship and style where we can now welcome visitors from all over the world to discover every aspect of the Longchamp house and heritage. In 2015 we will keep with this strategy with openings in Vienna, Peru, Paraguay, Macao, Cambodia - and a lot of projects are being considered worldwide. What is next for Longchamp on a regional basis? The Middle-East is a very wide region, where we sell our products in our own stores and within key luxury department stores as well as duty free outlets. In all cases we carefully control where our products are sold, how they are presented and the service that customers receive. We have just reopened our boutique in Dubai mall after few months of renovation. The boutique is now under the latest Longchamp concept and we are very happy with the first results that are coming from the boutique, and of the customer perception of this new boutique atmosphere. A few months ago it was our boutique in Mall of The Emirates that had been relocated and revamped also under our latest concept. For 2015 we are looking to expand our network across the region with a focus on Saudi Arabia and Qatar. We have very many opportunities are under discussion. What is the one piece of advice that you would like to impart on someone going into business today? Don’t be afraid to create and take risks!
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SME Financing – Is There A Better Way? As Founder and CEO of Beehive, The UAE’s first peer-to-peer lender, Craig Moore, CEO is responsible for overseeing the overall strategic direction and managing the dayto-day operations of Beehive. Before founding Beehive, Craig was a Founder & COO of Butterfly Software, a data analytics and migration software company acquired by IBM in September 2012. Prior to Butterfly his experience includes various sales, consulting and finance roles at numerous multinational companies such as Dell, EMC, Hitachi and HSBC with an emphasis on shaping effective go to market and value propositions. It is this experience that led him to starting Beehive
There are around 300,000 small and medium-sized enterprises (SMEs) that account for about 60 per cent of the UAE’s non-oil economy and 90 per cent of total businesses. SMEs are critical to employment creation and economic growth, yet they account for only 3-4% of bank lending and bank loan rejection rates for SMEs are between 50-70 per cent. SMEs can have a particularly difficult time getting financing from banks. The eligibility criteria for application in addition to the financial/company information required can prove a significant barrier. The assessment of loan applications may take many months, which is often too long for many SMEs requiring fast access to cash for working capital or expansion. These reasons and more can contribute to a significant funding gap between the supply and demand of SME finance. The International Finance Corporation (IFC) estimates that the current SME funding gap in MENA has reached approximately $260 billion. Beehive’s unique offering helps support the growth and development of the 300,000-plus SME businesses operating in the UAE, serving as a partner in the current drive to achieve SME policy targets.
Could you give us an overview of the SME landscape in the region? Small and medium sized enterprises (SMEs) are the most common businesses found across most of the world’s economies. Usually defined as being an independently owned and managed business with fewer than 250 employees, and annual turnover of less than $45 million. Such firms comprise around 90% to 95% of all businesses in most economies. They also make a significant contribution to employment and are of interest to governments primarily for their potential to create more jobs.
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Supporting SME growth is certainly a positive focus for the region, considering their contribution to the community. Could you tell us more about Beehive and how exactly it supports SMEs? Beehive is an online marketplace for peer-to-peer finance and we’ve rapidly grown to be the UAE’s leading online peerto-peer platform. We launched in November 2014 and are based in Dubai, initially focusing on the UAE. Beehive directly connects established, creditworthy businesses seeking finance with smart investors to who want to invest to support their growth
Business need to learn to use insurance to not only provide security, but also to help them understand their exposure and what they can do to protect themselves”
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Our platform uses crowdfunding technology to reduce both the cost and complexity of obtaining finance. The result is that SMEs funded on our platform get faster access to lower cost finance, and investors get better returns and diversified risk. The relationship between investor and business is mutually beneficial. Investors also know they are investing locally into the growth of UAE businesses and the economy. Beehive facilitates faster and more flexible funding for SMEs, who are seeking in excess of AED 100,000 for up to 3 years, which typically results in a lower cost of finance compared to conventional sources. Investors can bid to fund business loan requests from as little as AED 100 and can get very healthy returns on their investments as well as monthly repayments on their investments. We have investors currently getting returns of between 10-14% APR on their portfolio. We conduct very thorough due diligence on each business listed on Beehive and we facilitate the finance agreement between the business and investors, charging a small percentage fee of the finance amount. Investors are also able to buy or sell their finance parts to other investors on the platform through Beehive’s secondary market. This gives them access to a liquid market place where they can trade finance parts in a similar manner to a bond market.
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Our platform uses crowdfunding technology to reduce both the cost and complexity of obtaining finance. The result is that SMEs funded on our platform get faster access to lower cost finance, and investors get better returns and diversified risk� It definitely sounds very interesting. Does Beehive offer any other products other than SME Finance? Yes we do. We have recently launched several new products to broaden our range and offer a variety of financial products and features for both businesses and investors. Some of our recent products include: Invoice Finance: The new Invoice Finance product helps SME businesses boost their working capital and improve cash flow, by unlocking the value of their accountsreceivable to ease the dual challenges of late payments and rising inflation. Invoice financing, is a rapidly growing tool for SMEs to manage cash flow. It closes the gap between the moment a business issues an invoice and when it receives the actual payment. Businesses will be able to list invoices that are due within 60 to 120 days, and receive financing within 24 to
48 hours at rates starting from 0.75% per month, dramatically below alternative means of finance. Secondary Market: Listing on the secondary market allows investors to release their invested funds before they reach their full term by transferring the outstanding capital to another investor on Beehive. The investors, who hold parts of financing facilities related to a business with a specific rate, can transfer their finance parts on the secondary market to other willing investors. Diversification+: Is a tool that enables investors to maximise their potential returns by setting their own bidding criteria so that bids are automatically placed on their behalf when new businesses go live on our marketplace. It’s basically the easiest way to invest in Beehive with minimal effort. Marketplace: Investors bid to lend specific
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ensure repayments are made as agreed. Through a simple application the Beehive platform helps business access faster and flexible finance achieving a lower rate than conventional banking finance and without penalties for early repayment. The beauty of peer-to-peer finance for investors is that they can invest small to large amounts directly into multiple businesses, which gives better returns, diversifies their portfolio, spreads risk and in addition they get monthly repayments.
For companies to be listed on the Beehive platform they need to fit to a certain criteria. For example companies need to be UAE registered with an annual turnover above AED 2.5 million and have been in business for a minimum of 2 years. Companies also need to provide 12 months bank statements for all company accounts”
amounts at preferred rates. On the Beehive Marketplace the offers to fund the businesses with the highest rates get “bumped” by lower rates as soon as the financing request is at 100% within the 2-week auction period. As investors place more bids, competition drives down the average rate. We certainly see a lot of strong competition between investors bidding to fund businesses in the last few days before they close! It is very noticeable that Islamic investors have been investing significantly in the region. Is investing in Beehive sharia compliant? Yes, we have recently introduced a sharia compliant solution in order to meet the needs of Islamic investors. Peer to Peer or ‘Marketplace lending’ as it is also known, aims to build a community of investors and businesses where risks are shared and capital is channeled into real economic activity; Islamic finance is based on similar principles.
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All “Beehive Sharia Compliant” finance requests are processed under a “Commodity Murabaha” structure. This uses the UAE based award winning “DMCC Tradeflow” Commodity Murabaha platform operated by the Dubai Multi Commodities Centre. Any finance requests that do not comply with the principles of Sharia are processed as a conventional loan structure. Investors can specifically identify and select Sharia compliant finance requests on our platform. What makes Beehive services different from the banks that lend to SMEs? By using crowdfunding technology to drive down costs, Beehive is able to pass on the benefits and savings to both SMEs and investors. Our role is to ensure a direct connection between investor and SME, ensure the whole process is faster and that both parties optimise their rates. We also rigorously examine the risk profile of the businesses and
If a business is seeking funding, what are the criteria for getting listed on Beehive’s platform? Beehive undertakes thorough due diligence on each business listed on the platform. For companies to be listed on the Beehive platform they need to fit to a certain criteria. For example companies need to be UAE registered with an annual turnover above AED 2.5 million and have been in business for a minimum of 2 years. Companies also need to provide 12 months bank statements for all company accounts. How many businesses received funding by using Beehive so far? Can you give us examples of firms that have tasted success through Beehive funding? Beehive has funded 15 businesses since launch with a total around AED 5 million. We’ve seen some excellent SME clients get funded on the platform including pixelbug, Coffee Planet, Snoopy Pets and Italian Food Masters to name a few. From your experience, can you provide any tips for businesses looking for more funding? Consider how much finance you’re looking to raise, for what purpose and over what term. Always make sure you can service the repayments rather than over-stretch your business. At Beehive we specifically support SMEs that’s why there are no early repayment charges so businesses can be conservative knowing there is flexibility. Finally, be sure to make your business strengths known. This doesn’t just refer to financial information, a strong leadership team or a unique process or skill in your business can really set you apart and appeal very strongly to potential investors. n
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Raising Capital For Growth
By: Jonathan Hall, Founder and Managing Director, Mulverhill Associates
In November’s issue of Business Insight we discussed what an investor would like to see in a business plan. But what happens when you secure that investment? In our article, we look at the key points that you need to know for raising capital
Jonathan Hall Founder and Managing Director Mulverhill Associates
Jonathan Hall is Founder and Managing Director of Mulverhill Associates, an investment and advisory firm based in Dubai and previously an Executive Director of Abraaj Capital. Jonathan is also an active angel investor and is currently a board member of compareit4me.com, InfoPod and jamalon.com
ow that you have an investor interested, how do you convert this interest into having a new partner in your business and fresh cash in your company’s bank account? In this article we have the working assumption that you are looking to raise new capital to fund on-going growth and to achieve the targets you set out in your business plan. Most investors (like ourselves) won’t rule out that you may wish, for whatever reason, to also sell a small portion of your own shareholding in the process to take some cash out for yourself, but we do assume this is a relatively small part of the overall amount being raised. We also assume that you are, and will most likely remain as the head of the management team. Whilst several of the points below also apply, a full sale of your company is quite a different scenario and structures and motivations here are usually much simpler (show me the money).
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Every situation where a company is looking to raise equity finance is unique. It has its own cast of participants and individual nature and scale of the business involved. However there is a broadly standard process to be completed, and there are a number of principles that should be borne in mind to maximise the likelihood of achieving a successful outcome. Define And Agree Key Terms Key terms and parameters should be defined and agreed early on. Raising funds, and especially raising equity funding for the first time, can be very time consuming and without doubt is a demanding process for a business owner. To try and make sure that this time and effort is well spent and that both parties have a broadly similar view and approach to the investment being discussed, it is worth formally setting out a few key items as early as possible in discussions. This could
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be done in a legal ‘Letter of Intent’ or it could be more informally covered in an exchange of emails. The important point at this stage is to see an expression of the investor’s seriousness in writing. At the centre of these terms should be a statement of what amount of funding is being sought and what percentage of the company’s shareholding is being offered in return. The shareholding or valuation may be expressed as a range, and will usually be subject to later confirmation or discussion based on the investor’s more detailed due diligence and evaluation of the business. However, a clear indication of some common ground on this issue is critical and without it everyone risks wasting time and storing up trouble for later. Be clear, for yourself and with your potential partner, about what your respective roles and authorities would be if you proceed
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It is extremely important to properly understand and reflect on what it all means today for you and your business, and equally what it could mean in the future” to work together. Will you remain as CEO or MD? Will you maintain the same levels of authority as now, or will you be required to seek your investor’s approval for any actions (for example; spending over a certain amount, annual budgets, senior hiring’s...)? Will the investor take a seat on the board of the company, and if so how will relative voting rights be allocated and reflected (and if you
keep a majority then perhaps you need to have 2 board seats or a casting vote to maintain agreed levels of control)? Be Patient And Persistent Raising funds is rarely a process that happens in the time frame you would like and will most likely take a number of months to complete. Every case is different, it depends on many variables and there are extreme examples both
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All key terms and parameters should be defined and agreed early on” ways, but with an interested and committed buyer and seller it is a good result to achieve completion within 3 months, and quite usual for it to be closer to 6. In the majority of cases there is an inevitable ebb and flow of activity, with bursts of intensity balanced out by periods of quiet (which for the business owner you can usually take means a degree of boredom and frustration). There may be no direct contact or communication from the investor for some time here and there but that does not necessarily mean that nothing is happening or that the investor is getting cold feet. It takes time for investors to compete the due diligence, research and analysis and to make decisions, and this is true of personal investors and institutional investors, all have their own criteria to be satisfied. You are of course fully entitled to follow up and ask for feedback, but if the investor is serious and interested they will also come back to you and keep the dialogue and process moving along. This is often the most difficult time of the whole process for a business owner and staying confident, calm and focused during this period is critical. Prepare Yourself For Criticism And Try To Remain Objective With the time, effort and commitment required to build a successful business, it is inevitable that founders and owners feel a very strong emotional connection to their company. It is also the case that incoming investors will usually undertake a fairly objective and dispassionate analysis of the business. They may well make comments and observations that a founder finds hard to hear and to accept. Some comments may fall into the game playing of negotiations as each party positions itself for the nitty gritty of final agreements. However, some comments may be uninformed or mistaken. If this is the case they should be corrected (ideally quickly, factually and with the minimum of fuss). Other comments may be correct and should not be ignored or dismissed because they are difficult to hear. No company is perfect and you could learn something valuable. If you are an SME looking for growth funding there will undoubtedly be areas for improvement and change. This is a natural feature of development and the stages that companies pass through as they grow, and a good external investor and new partner should be able to help identify these items and to contribute ideas and solutions.
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Some comments may be uninformed or mistaken. If this is the case they should be corrected (ideally quickly, factually and with the minimum of fuss)” Do Sweat The Details - Consider The Implications Assuming discussions proceed and due diligence has been successfully navigated, the time will come when legal documents become the focus of final negotiations. The substance and complexity of the set of legal agreements required to complete the investment can vary significantly depending on many factors including; the industry, sector, size of business, type of investor, nature of investment and competition (yours and the investors). For example, an individual making an investment in a retail clothing store will likely have a very different structure and set of terms compared to a venture capital firm making an investment in a new online business. One is concerned primarily with lease and supplier contracts, dividend payments and value of inventory, while the other is centred on intellectual property, future potential and investment rights and protections. Whatever the structure and content of the legal agreements and the proposed terms may be, it is extremely important to properly understand and reflect on what it all means today for you and your business, and equally what it could mean in the future. This is of course what your lawyer or advisor is for, but their perspective is different. There is no excuse for you to not make this effort. Consider a variety of potential scenarios
and what the implications are for you if these came to pass. What rights and approvals are you giving to the investor, and what would happen if they exercised those rights? Do you have specific plans and intentions that should be agreed upfront? Are you committing to make adjustments in shareholdings or to make or receive payments based on future performance, and how confident are you really? Is there an agreement or scope for the investor to increase his holding in the company over time, and could this mean control changing hands at some point? It is also worth imaging the scenario in which you and your new partner are no longer so friendly, after the honeymoon is over – do your agreements stand up to more critical scrutiny? Don’t Forget To Run The Business As a final point to take away, make sure that you do not neglect your business during this period of seeking investment. If you have built your company to the stage that you need or want to bring in external funding then you do not want to let the process of securing this investment have a negative impact on the business itself. Not only will this affect morale, but it also does nothing to help your case if results stagnate or decline during the time you are in discussions with investors. Best wishes! Nobody said it would be easy n.
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an employer of choice The term, ‘an employer of choice’, is what HR teams across the world strive for. It means that you have your pick of the talent, as people want to work for your company. It means, you are perceived as being one of the best
he term employer of choice can be summed up succinctly in one word. Google. The Californian based search engine is always amongst the top places to work for in corporate America. Their employee’s claim that they have more fun at work then they do at home. When you look at the offices you can understand why. Slides replace stairwells; there are swimming pools, sleeping pods, and games rooms - all of which are to encourage their 4,000 strong workforce to be creative. What this means is that Google receive on average 3,000 job applications a day. That is one million a year. You only have to have a fleeting glance at the math to understand that they have their pick of talent. Ultimately however, the company culture of a fun and happy workplace is something which Eric Schmidt, Google’s executive chairman, has carefully cultivated. He believes that their competitive advantage isn’t just down to their product and services; it is that workplace culture that gives them the advantage. How many of you in your past lives have worked in an organisation that has a bad workplace culture? The toxic environment means you pray for the arrival of 5pm when you can leave the office. You pray for the arrival of the weekend because it means no work for 48 hours, yet after 36 hours, you become anxious and irritable, as you know you have to face another 5 days of corporate hell. Those of us that have worked in such environments can testify that we would avoid working the long hours to get something done, as we were just desperate to get out of the office. Not to mention the negative impact that the stress has on output causing us to slow down and make basic errors… Alternatively, how wonderful is it to feel happy to be going into the office, full of enthusiasm and hope? You are with others who feel the same as you and therefore there is a light atmosphere to the office. It is this that makes people want to work for you. It is the feeling that your employees are valued, beyond the job that they do,
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that enables the staff to want to work somewhere. It is ultimately the staff, which spread how happy they are through word of mouth. So what are the signs that you are an employer of choice? Pick Of Talent You have too many job applications to process for each position and have a very careful selection process to ensure that you hire only the best for each role. More often then not, employers of choice don’t receive the job applications because they pay the most. In fact, they often can offer lower wages, as they know that they will have someone right for the role regardless of salary. Staff Retention The turnover of staff is low throughout the organisation. This is because they appreciate and value their jobs and positions within the company. If you have people staying long-term in positions within accounting or even facilities (areas with a notoriously high turnover), then you know you have the right culture. Strong Leadership and Mentoring Programes Companies that empower their employees and assist them in succeeding are often among the employers of choice. An Open Door Policy By this we mean that it is not just the management who welcome suggestions, constructive criticism or even just a quick chat. I mean colleagues feeling that they are free to be able to make suggestions to other colleagues without the fear of reprisals. A great culture sees peers encourage or maybe correct each other if they feel there is something that could have been done differently.
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The Office Is Full Of Friends Office colleagues hang out with each other outside of the office. At weekends they come back to the office with tall tales of joint adventures when they went out to dinner, movies or shopping. They are a team in and out of the office, providing back up and support to themselves and the company. This also means that the open door policy is encouraged so if they do spot mistakes, the team work together to rectify them long before they become an issue. They Matter Employees of an Employer of Choice know that they matter. They know that their opinion counts and will work hard to ensure that culture remains. Going back a few years, British Airways asked their engineers to effectively take a one-day pay cut a week, (thereby working five days for four days pay). Their engineers agreed, as they knew it secured their jobs and their salaries would increase again as soon as it was possible. Yes, the engineers were smarting about it, but the culture remained that they were part of something bigger. British Airways took pains to explain that they didn’t want to have to make redundancies and they were shown just how valued they are. The engineers understood that this was by far the best course of action. There Are Smiles All Around It is as it reads. All the staff is smiling. The air is buzzing with productivity as they are enjoying themselves and getting their tasks completed quickly and effectively. Communication From The Top Down Is Strong The staff is the first to hear about any changes, new direction, big wins or even just a thank you. Everything is communicated to them early. Often, in employers of choice, the staff is even consulted on the changes. Change Isn’t Feared The staff embraces the changes around them. More often than not, it is because they were consulted in the changes, so these come as no surprise to them. Don’t get me wrong, I am not saying that all staff will like the changes, but because of the clear communication, they understand the reasoning behind the changes and therefore will not assume the worst. n
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What Makes An Employer Of Choice?
27% 47% A recent YouGov survey of 2,133 UK adults for Croner put Google, closely followed by Apple, as the Company of Choice. So what makes them so desirable?
state A culture of innovation
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Good leadership
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82% 76% people
A good working environment
of the survey’s participants said it is important that an employer should offer a good work-life balance.
69% 65% 41% Training and development opportunities
Career development
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Good culture and strong company values
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LEGAL
Wrongful Arrest Claims In Practice By: Walid Batisha, Head of Litigation Department and Adam Gray Associate, Fichte & Co legal consultancy
Typically, the protection for the shipowner against spurious or unmerited arrest claims lies in the court’s initial examination of the case at the arrest application stage and the court’s ability to reject a claim on that basis. However, there is scope under Articles 106, 282 & 292 of UAE Federal Law No. 5 of 1985 (the “CTL”), read conjunctively, for a defendant to bring a compensation claim against the arresting party where the arrest was ‘wrongful’
t is common knowledge in the UAE legal industry that a court deciding on an arrest application will require the arresting party to provide an undertaking, agreeing to indemnify a shipowner against wrongful arrest. It is also common knowledge that claims for wrongful arrest rarely ever succeed and so such actions are rarely ever brought. The reasoning behind this is that the grounds for substantiating a wrongful arrest claim are far from transparent and the legal test to be applied is nebulous at best. Practice dictates that the wronged party needs to prove that the arresting party arrested the ship in an act
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which went beyond mere negligence. Further, it is accepted that the shipowner needs to prove that the arresting party arrested in malice or with intent to injure - an extremely high standard of proof. The heavy burden of proof resting on the shipowner, coupled with extremely low chances of success and lack clear grounds to premise such claims, mean that wrongful arrest claims are significantly dis-incentivised. In the rare instance that a court orders against a wrongful arrest undertaking, it will be completely at the discretion of the court as to what amount will be payable as compensation. Until recently, no court in the gulf region has actually awarded compensation for wrongful arrest.
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LEGAL
Background To The Case In February 2013 a ship financing company (the “Claimant”) made an arrest application against our client’s (the “Shipowner”) vessel pertaining to a contractual dispute between the Claimant and the ship managers (the “Defendant”). Subsequent to the arrest, the Claimant filed main claim proceedings against the Defendant in the Dubai Court. As is standard practice, the Dubai Court required the Claimant to provide an undertaking to indemnify the Shipowner for any loss or damage, within the claim amount, and to pay compensation to the Shipowner if a final court judgment determined that there was a wrongful arrest. Fichte & Co were instructed to interfere in the claim at the first stage of the proceedings after the Shipowner’s vessel had been arrested and once the main claim had been filed. We pleaded that the ship had been unlawfully arrested and therefore ‘wrongfully’ arrested on two main grounds: 1. The Claimant arrested the Shipowner’s vessel in a claim wholly unconnected to the dispute with the Defendant. The Shipowner was not privy to, nor party to, the contractual relationship between the Claimant and the Defendant upon which the arrest claim was founded. The arrest injured Shipowner in an attempt to secure a claim against a third party. In essence, the Claimant was wrong to arrest the Shipowner’s vessel to secure a claim against a party other than the vessel owner. 2. The Claimant had made a series of procedural errors in bringing their arrest application, namely, they did not produce the arrest minutes which the arresting bailiff is required to record in accordance with Article 119 of the Commercial Maritime Code, UAE Federal Law no 26 of 1981 (the “CML”). These minutes were to be sent to the Master of the vessel containing a summons to appear before court (Article 120 CML), but they were never sent. Furthermore, the Claimant produced documentation to support their claim which failed to demonstrate that the Defendant had ownership of the arrested vessel. As a result of the wrongful arrest, the Shipowner suffered significant losses, mainly due to loss of use of the vessel. It was felt that a strong message had to be sent, namely, that ships cannot be arrested with impunity and without due consideration by arresting parties of the implications for shipowners before filing an application. It was envisioned that only a
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It was felt that a strong message had to be sent namely, that ships cannot be arrested with impunity and without due consideration by arresting parties of the implications for shipowners before filing an application
court judgment in favour of a shipowner would make a claimant think twice before filing. To achieve this, the provisions of the CTL for compensation where a court finds that there was a wrongful arrest had to be tested. Success Late last year, the Dubai Court of First Instance made an order in favour of the Shipowner for AED 10 million in compensation for wrongful arrest. The judge ruled that the Claimant had been unlawful in arresting the Shipowner’s vessel to secure his claim against the Defendant. A civil arrest order was issued under Article 252 of UAE Federal Law no. 11 of 1992 (the “Civil Procedure Code”) against the Claimant’s bank accounts, cars and other assets to secure the claim. On 18 March this year, the Dubai Court awarded the arrest order to grant the teeth required to enforce the judgment order. Jasamin Fichte, Managing Partner of Fichte & Co comments that, “I am particularly proud of this victory because we had the courage, ingenuity and quality to achieve what was thought to be previously unachievable, to scale what previously was considered un-scalable
and ultimately to facilitate justice being done for our client in what was obviously an unjust situation. Having said that, we won’t stop there, we are appealing for the full compensation sum of approximately AED 38 million.” Walid Batisha, Head of Litigation at Fichte & Co said, “What is most satisfying about this result is that not only did we convince the Court to rule in our favour in what has been historically a near- impossible action, but, we also won a monumental sum in compensation for our clients and succeeded in winning absolutely every argument raised in our submissions both procedurally and substantively.” n Conclusion This judgment endorses the view that despite some entrenched practices and customs in the UAE Courts, even the most challenging of claims can be won with employment of intelligent strategy and quality of argument. Do not hesitate to obtain legal advice if you believe your ship may have been subject to a wrongful arrest.
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marketing & Advertising
Instagram – The Basics
Here at Business Insight, we tend to spend a lot of time talking about social media, in particular Facebook and Twitter, but what about the other platforms? In this article we look at the basics of Instagram and how you can use it to your business advantage
nstagram is a platform that has recently become part of the Facebook group of companies. It is a social photo app that allows you to filter your photos, meaning the average selfie can look 100 times better. Instagram has over 200 million users and have recently exceeded having over 200 billion images shared on their site. It was launched originally on iOS, with the Android devices having to wait until 2013, where it earned 5 million downloads in six days.
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The Business Gains The great thing about Instagram is that you are spreading an image of your business. Followers can view them quickly, liking them and share them easily, spreading the word about yourself and/or company. It is a great way to give followers a glimpse into your work culture and the brand of your business. Start Up As with all apps, you have to download it onto your device, and then register your details in order to be able to use it. From there, you will be able to choose a photo and provide up to 150 character bio, as well as showing your website.
Posting your logo and a handful of photos everyday, people will soon get bored and un-follow you. You need a careful mix to let the outside world know who you are and what your brand does
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marketing & Advertising
Videos will play automatically in the persons feed who is following you, which is great if you have a mini commercial to promote
Instagram has over 200 million users Connect To Other Platforms The great thing about Instagram is that you can use it to control all your other social media platforms. What we mean by this is that, rather than posting your photo on Facebook and then Twitter, you can just make one post in Instagram and hey presto! It does the rest for you over your chosen outlets. Find Friends You can find this option under your profile tab. If you have linked other platforms to your Instagram account, it will connect you with friends that you have on these platforms. It will also connect you with people who are in your contacts on your phone. Once you have followed some users, you will be able to see their photos appear in your feed, giving you the option to like to comment on their photos; in the same way that they will have the option to do the same with yours. Instagram isn’t like other social media sites. Here, you can follow anyone and
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they can also follow you. You do have the option to set your photos to private, but from a marketing perspective, you may want to give thought as to whether or not it would be in your interests to do this. Filters Uploading a photo is easy. You can either chose one from your existing library or upload one that you are taking through the app. In total there are 20 filters to choose from. These range from changing a photo to a sepia colour, or completley enhancing the colours that are available. You also have the option to change the contrast, make the picture lighter or darker, as well as change boarder of the photo. Remember though, people want to see something that they are unlikely to see otherwise. Fashion brands are notorious for posting a press shot. Your followers could get bored of this. The pictures that have their followers hanging onto Instagram all day for are the behind the scenes pictures, for example ones that illustrate what it is like to be a fashion week in Paris, London, New York or Milan. With these pictures, you get to the see the sets before the press photos are released, the clothes that will be taking the world by storm in six months time, not to mention how creative the invitations often are, or the parties that the fash pack attend… These are the sorts of pictures that the public want to see, so be creative! Video Since it was taken over by Facebook, Instagram has added the option of uploading videos. These videos will play automatically in the persons feed who is following you, which is great if you have a mini commercial to promote. Be Careful With Your Brand As is the general rule in sales, you don’t want to be too forceful. By posting your logo and a handful of photos everyday, people will soon get bored and un-follow you. You need a careful mix to let the outside world know who you are and what your brand does. All of the Vogue magazines around the world achieve this. They regularly post their covers, occasionally old covers, but lots of photos of models and clothes. Another person who has learnt from the fashion industry is Miranda Kerr. The ex Victoria Secrets model is often on the other end of Instagram, using it to promote her products and businesses, as well as the products that she endorses. Again, she won’t labour on one subject continuously, and you understand the brand of Miranda Kerr from her photos of the beach, yoga poses she may be doing, or any of
the photos of the countryside. This all ties in with her healthy lifestyle, and her own business, the Kora Organics Skin Care and Beauty range. Hashtags The hashtags are the most important part about Instagram. Similar to Twitter, it is the hashtags that create the community. People use them to find the subjects that interest them as well as connecting with those that have taken the photos. In twitter, these hashtags create conversation. On Instagram, you have the visual topic via a photo or video. If you want to appeal to a large market base, then you could perhaps tag your city. This would then mean that when people chose to look up that city, they would be able to view your photos. Ultimately, tagging photos and videos will widen your appeal as the poster, and can lead to many likes and followers. Popular Tags There are apps that will tell you what the trending tags are on a variety of different subjects. This will allow you to copy and paste, using them as you see fit. Alternatively some of the generic tags that often top the charts are: #Love #Cute #Me #Tweegram #Photooftheday #Instagood Timing As with all social media, the timing of a post is key to its success. Give this careful consideration. Evenings are a great time to post. That said if you want give a visual, up-todate live commentary of an event, then it is best to do it during the event. Also, don’t post more than one photo at once. If you want to post several, try and spread them out so you get maximum exposure. It Is Good To Talk Instagram, like all creative outlets, tends to be personal. If someone compliments a photo, then don’t be afraid to say thanks. Creating good relationships will promote your pictures and in turn, increase your following. Remember, with any new enterprise or marketing tool, you have ensured that you have a plan and stick with this plan is you want to see results. Get the whole team involved and always be mindful of opportunities. You never know when you may have the perfect chance to promote yourself or your business. n
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The Importance of Grammar In Advertising We all know how vital advertising is for business, but it is very easy to get it wrong. In a place as multicultural as Dubai, with 27 regular immigrant languages spoken here daily and 7 official languages (not to mention the populations that don’t stand out as much), take heart from the mistakes of big brands who didn’t consider their market to learn just how important it is to put your market and their language at the forefront of your mind‌
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marketing & Advertising
Clairol – The hair products company Clairol introduced a curling iron called the “Mist Stick” into Germany - only to find out that mist is a slang term for manure. Sales were seemingly non-existent. Source: i18nguy.com and ooocities.org
Another food company, KFC converted their slogan into Chinese for their new market. Only to find out after the launch that their global catch phrase “Finger Lickin’ Good” translates to “Eat your fingers off ”. Source: Michael Czinkota and Ilkka Ronkainen, International Marketing, 2012
The American Dairy Association expanded their advertising campaign “Got Milk?” into Mexico. The literal Spanish translation read, “Are you lactating?” Source: Socialnomics
Coors – The American beverage company used their international tag line “Turn it Loose” in Spain, not appreciating that the Spanish translation is “Get Diarrhoea”. Source: Altalang.com
Electrolux – The wizards behind the marketing campaign for the Electrolux Vacuum Manufacturers, came up with a brilliant slogan saying “Nothing Sucks Like an Electrolux” and used this in the US. However, in the US, if something ‘sucks’ it is really bad… Source: Linux Gazette, 2004
Pepsi also joined the corporate world of failed advertising with their marketing campaign “Come Alive with the Pepsi Generation” which they took to Taiwan. Literally translated, this reads “Pepsi Will Bring your Ancestors back from the Dead.” Source: Michael White, A Short Course on International Marketing Blunders, 2009
The car company Ford had to research why sales of their Pinto had flopped in South America. They found that Pinto was slang for the criticism of men’s parts. They changed the name of all models to Corcel – Which means, “Horse” Source: Islam Ezz, Top 63 International Marketing Mistakes and Pitfalls
In Italy, Schwepps Tonic Water translates literally into Schwepps Toilet Water – Subsequent campaigns have had better results! Source: Brand Failures: The Truth about the 100 Biggest Branding Mistakes of All time
They weren’t the only car company to make a mistake with a vehicle name. General Motors launched the Chevy Nova in South America without research, and were completely unaware that “no va” means, “it won’t go” in the Spanish markets. They renamed it the Caribe. Source: Snopes.com Gerber – Gerber opened their market to South Africa and kept their brand exactly as you would expect to see in any other market place. This included their keeping the face of the baby on the label. When sales didn’t take off as expected they looked into the reason why and found that in Africa, it is common practice for the labels to contain pictures of what is contained IN the products so that all those who can’t read can understand what they are buying. Source: Gulf Business, 2013
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On the other hand, Sharwoods, the Indian ready-made sauce manufacturer in the UK, spent US$14.2 million on their television advertising campaigns for their new range of sauces that they had called “bundh”. Yet they failed to see that bundh in Punjabi means a rude way of describing someone’s rear. Source: The Guardian 2003 One word makes all the difference, especially to Sunmaid who missed out “them” on their packs of raisins when they asked, “Why not try tossing over your breakfast cereal?” Source: The Fishtank A global pharmaceutical brought a remedy to the region, illustrating it’s use with pictures as opposed to words so it could be marketed to both locals and expats. The first picture was of someone looking unwell; the next was of them taking the medicine, with a final picture to illustrate him or her looking healthy again. Big Pharma however failed to take into account the fact that the Arab world reads right to left…
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DMCC expands its single family offices
hile there are challenges that come with the day-to-day operation of a family business, setting up a Single Family Office also offers immense benefits to those looking to preserve wealth across generations. A Single Family Office centralises the management of a family’s wealth, overseeing asset management, financial planning, philanthropy while taking care of governance and other family business affairs. DMCC, the largest and fastest growing Free Zone in the UAE, has launched a new licence structure for Single Family Offices to enable businesses in this growing segment to provide all those services under a DMCC licence for the first time. This is the latest in a string of new products and services offered exclusively to DMCC Free Zone members, including the Emirates NBD DMCC Corporate Credit Card and DMCC Business Package. Krysta Fox, Director Free Zone, DMCC, said: “This is one of many product enhancements and new services to come from the DMCC Free Zone this year to ensure our members have access to the most efficient licencing structure and business service they require to succeed.” “Families with diversified and multi-jurisdictional investments look for solutions that relate to managing wealth as well as family support. There is a growing appetite for structuring assets through the Family Business Model hence we are providing our members with the opportunity to open Single Family Businesses in the DMCC Free Zone,” she added.
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So what are some of the features of a DMCC Single Family Office and who is able to set one up? zz A family constitutes a ‘Single Family’ when it has one or more individuals all of whom are bloodline descendants of a common ancestor. This also includes their spouses, widows (whether or not remarried), individuals adopted as minors, step-children as well as the children of adopted children. zz A DMCC Single Family Office can be owned by family members or by a registered trust owned by the same members. zz The assets of one family group will only be managed, and will not be allowed to expand its activities to manage trusts or businesses of other families. zz A DMCC Single Family Office can hold shares in the family business, assets, trusts and foundations. zz Shares of the company cannot be sold to any party, with the exception of transfer within the family to other members. zz At least one family member must be appointed as a board member or legal representative. zz Only a family member can be on the DMCC Single Family Office board, with the exception of a Single Family Office consultant who can be appointed as a director. zz A DMCC Single Family Office can be staffed by individuals outside of the family for administrational or functional roles, however, all professional advice (such as legal or financial advice) must be provided by accredited, qualified and regulated professionals. To learn more about DMCC’s licence structure for Single Family Offices, go to www.dmcc.ae
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Almas Conference Centre shines for Dubai Diamond Conference 2015 he Dubai Diamond Conference guest list this year was studded with government ministers, diamantaires, gem traders, jewellers, policy advisors and dignitaries from every facet of the industry. So it stands to reason that the signature event of the diamond industry calendar was held at the DMCC’s Almas Conference Centre. Its very name is derived from the Arabic word for diamonds, and its well-appointed facilities made it the perfect location for more than 500 of the industry’s leading lights to gather to debate the issues driving their trade. The Almas Conference Centre every year hosts more than 100 events and attracts some 15 thousand visitors and exhibitors from all over the world. They come to take part in an eclectic and diverse range of conferences, exhibitions, trade fairs, gala dinners, corporate functions and exciting product launches. Based in Almas Tower, the Middle East’s tallest commercial building and
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headquarters of the DMCC, Almas Conference Centre offers outstanding service and is equipped with state-of-theart technology. Located at the heart of Dubai’s busiest business district, within walking distance of the Metro and minutes from Dubai International Airport, the prestigious venue is easy to reach whether you are in Sharjah or Shanghai. Almas Conference Centre features in a snapshot: zz 450 square metre conference facility, 550-person capacity zz Full ballroom set up for large exhibitions and conferences and half ballroom option for more intimate affairs, each complete with breakout rooms designed to host coffee breaks, brainstorm sessions, or just to provide quiet areas to take personal calls zz State-of-the-art audio and video equipment including two drop down screens, projectors, wifi and single presentation control
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Complimentary conference materials with ballroom rental including water bottles, refreshments, notepads and pens
The private catering arm of Amwaj Rotana specialises in corporate events, making them the perfect option for event organisers looking to host their next gathering at Almas Conference Centre. Renowned for world-class service and award-winning cuisine, the expert team can cater for any culinary need – whether intimate dinners or lavish buffet spreads. Boasting more than 20 years’ experience in events and conferences, the team at Amwaj Rotana prides itself on pioneering trends and providing personalised service for every event. n Almas Conference Centre will make businesses shine for all the world to see. To find out more about how you can host your next event with us, contact almasconference@dmcc.ae
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technology
Avoid the Big Problem of Storing Big Data By: Gerald Sternagl, EMEA Business Unit Manager Storage, Red Hat
“Big Data” is no longer just another I.T. buzzword but rather a valuable business tool for organisations looking to gain a competitive advantage. Whether enterprises want to attract new customers or deliver innovative products, the power and benefits of big data are well documented. However big data comes with a unique set of challenges in terms of storage
he research report from Gartner, “Making the hybrid cloud storage work” 2014, estimates that 40% of all organisations will double the size of their on-premise storage infrastructure by 2016. However big data storage requirements go well beyond the capabilities of traditional SAN (Storage Area Networks) and NAS (Network Attached Storage) storage systems. How will businesses cope with this?
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Data And Storage Between advances in technology and changes to legal and regulatory requirements (particularly in consumer-facing industries), the sheer volume of data within enterprises is spiralling out of control. If that wasn’t bad enough, the data is no longer uniform and structured; whether it be an email, an image, a video, an application log or even a GPS signal from a mobile device, organisations are realising that every single bit of data has the potential to offer valuable insight.
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Traditional storage systems with their expensive and proprietary components were not designed to handle such volumes of data, and any attempt to use these systems to store big data could prove to be extremely costly, and very possibly inefficient and inflexible, due to the existing constraints of the systems. It is estimated within the industry, that businesses generate between 40-60% more data each year; making it almost impossible for IT managers to predict the necessary amount of storage capacity - something that they normally do upfront in the case of traditional storage systems. There is also the issue of portability. Big data cannot be dealt with using traditional solutions such as aggregation and data integration, due to the sheer volume of data involved, as well as the bandwidth limitations of wide-area networks (WANs). Furthermore, the emergence of cloud computing and virtualisation requires IT managers to deploy data storage solutions that can be easily transported from one environment to another.
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Managing Data If enterprises are to take advantage of big data and harness its potential, they need to address these storage challenges. Rather than simply investing in larger traditional storage systems, enterprises need to completely reinvent their approach to data storage. Fundamental to this approach is the need for enterprises to start thinking about their storage systems as data platforms rather than static data destinations. In doing so, they will be able to meet both their current and future storage needs by satisfying five key success factors for managing big data. Delivering Cost-Effective Scale And Storage Capacity Probably the most critical requirement for big data storage platforms is the need to be agile and flexible enough to be scaled up (both in terms of capacity and performance), to match the company’s storage demands, with the caveat of keeping CapEx and OpEx to a minimum. Unlike traditional NAS and SAN storage systems with fixed capacity, requiring either a data purge or a very expensive ‘scale-up’ effort to accommodate extra data, big data storage platforms take a ‘scale-out’ approach. This is achieved by combining industry standard commodity servers with virtual
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or cloud storage resources to create an easily managed storage system. Eliminating Need For Data Migration Because traditional storage systems have fixed capacity, growing businesses need to balance their future data storage requirements with current budget constraints. For this reason, a company needs to migrate their data to newer systems periodically. Depending on the volume of data, these migrations can be very expensive. They have been known to cause a drain on personnel and could lead to additional hidden costs; such as unplanned downtime or overrun leases. With some enterprises’ data now approaching petabyte size, they need to avoid having to physically migrate data from one environment to another. Bridging Legacy Storage Silos In order to keep pace with the exponential growth in data, businesses with traditional fixed capacity storage systems often end up accumulating extra storage systems. This is because these systems are disconnected from each other. This so-called ‘storage sprawl’ inhibits the ability of the firm to see the big picture and extract any valuable insight from the gathered data. Rather than adding another system into the mix, big data storage must be capable of bridging these legacy silos. Ensuring Global Accessibility Of Data Given the sheer volume of big data, limitations on WAN bandwidth and the
consequences of a single point of failure, a centralised approach to data management is no longer practical. Big data storage platforms must be able to manage data distributed across global enterprises as a single, unified pool. Protecting and Maintaining The Availability Of Data Traditional storage systems rely on external backups and hardware redundancies to mitigate loss of data and application downtime. Such a strategy is impractical for big data, from an efficiency and a cost standpoint, due to the volume and decentralised nature of the data. Big data storage platforms need to perform automatic replication of the data to ensure that the data is instantly available and extremely robust. If businesses want to gain a competitive advantage by harnessing the power of big data, it is imperative that they take decisive action and address their data storage system capabilities sooner as opposed to later. Migrating from traditional fixed capacity storage systems to an open, software-defined storage platform, will allow enterprises to circumvent all the pitfalls inherent in traditional systems at a fraction of the cost and reap their rewards for years to come. n
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technology
Emerging Technologies and New Business Models By: Abdul Rehman Tariq, Regional Channel Manager, MENA Brocade
The Middle East channel (the physical transmission medium of an information signal) is evolving e are seeing some of the Pan-European distributors coming to the Middle East region. We are also seeing some acquisitions taking place; with large distributors from within and outside the region acquiring smaller distributors and this trend is likely to continue. With the focus now on Software Defined Networking (SDN), Network Functions Virtualidation (NFV), 3rd platform, Big Data, Mobility etc., businesses need to understand the value-added services of the distributers, as these are where they will able to differentiate itself from thier competition. Gone are the days of pure ‘box-moving’. The channel needs to ‘Be ready to Change’. It can be difficult to change from a model that you have been working on for years and years. However technologies are changing, vendor approaches to customers are changing. The channel needs to be ready to adapt and change accordingly.
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Business Models Businesses should consider the professional services and consultancy of the channel. Based on a survey conducted by Brocade last year of over 500 channel organisations worldwide, a report revealed that almost half of channel respondents expect professional services to become their
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main revenue generator by 2020. Yet for the majority of respondents, professional services accounts for 25 percent or less of revenues today. The History Political uncertainty has been an integral part of this region. The major countries in the Middle East, especially the GCC, are the most politically stable and historically most of the growth in channel comes from the GCC member states. Due to the EXPO 2020 in Dubai and Qatar 2022, the hospitality vertical has picked up pace, and channel partners that evolve to cater to the needs of this vertical will garner rich rewards. Saudi Arabia is moving towards adoption of emerging technologies. This is a good thing for vendors, as well as channel partners who provide niche solutions that cater to specific customer needs. The UAE has always been a front-runner when it comes to the adoption of the latest technologies and trends, so it is anticipated that both Saudi Arabia and the UAE will lead the growth. Most vendors are now providing local support in terms of financing and services. With professional services and capital financing a major play for vendors,
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there is definitely scope for channel to take advantage of such offerings and grow their customers. IT-as-a-Service (ITaaS) will become popular. In essence, ITaaS is the delivery of technology on a subscription basis, thereby turning Information Technology from a capital to an operational expense. With ITaaS, technology solutions can be deployed as and when needed and organisations only need to pay for what they use. This allows IT to be a strategic enabler of the business while helping to ensure that the purchase and consumption of IT services is always fully aligned to business requirements. Moving towards a subscription model can significantly reduce upfront costs, making IT expenditure more regular and predictable and giving organisations greater financial transparency. The fact that organisations are buying a service, rather than the IT equipment itself, should also give businesses greater access to expert technical support and the latest, up-to-date hardware. We have captured some of the trends that you should be aware of: The Rise of the New IP Historically, compute transitions have always driven network evolution. It is no secret that the future lies in new compute models; such as mobile, cloud computing and the Internet of Things, and this will in turn lead to a major shift in networking. Legacy networks built on closed proprietary protocols and designed for non-mission critical applications will have to adapt if they are to support these new technology trends. In 2015 we will see this begin in earnest, with the rise of the New IP; a new networking paradigm that is better aligned with the evolution of the rest of IT and increasingly open, softwaredriven, and user-centric. SDN and NFV Take Big Leaps Forward According to a recent EMEA Channel survey conducted by Brocade in October this year of over 230 Brocade distributors and resellers, over half of EMEA channel partners and systems integrators believe that Software-Defined Networking (SDN) and Network Functions Virtualisation (NFV) will be significant trends within the next two years. We have already seen some early adopters taking
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Historically, compute transitions have always driven network evolution advantage of these technologies but in 2015, we’re expecting to see SDN and NFV really take hold as open standards become popular. The Internet of Things Will Impact Business In 2014, we saw the Internet of Things begin to truly take shape, and in 2015 this trend is set to rapidly gain momentum. With Gartner predicting that 26 billion connected units: from watches to refrigerators, and treadmills to cars, will reach the market installed by 2020, businesses will need to cope with an ever-growing network of connected devices generating and accessing data. Many of these connected technologies will be brought onto existing corporate or public networks, making investment in the underlying infrastructure that supports these advancements absolutely essential. The Virtual Workspace Will Become a Necessity Employees are demanding increased flexibility, and with budgets set to remain tight for the foreseeable future, companies are looking for ways to meet user demands and
boost productivity. 2015 is therefore likely to see virtual working increasing, with companies looking to meet this conflicting pressure by introducing virtualised workspaces. However this added flexibility means that there will be a greater strain on core IT infrastructure. Therefore companies will need to make sure they have the right network in place in order to deliver this level of user flexibility and freedom. A New Approach To Privacy 2014 has exposed many concerns around data privacy and with “privacy-first” services such as Snapchat, Whisper, and Ello growing in popularity, it is clear that this trend is here to stay. With public awareness of data security and privacy increasingly, every organisation will need to sharpen its privacy and data security initiatives. Data breaches or leaks are no longer simply security issues; they could damage a company’s brand and reputation. As a result organisations will need to pay much closer attention to how and where they store sensitive commercial or customer data. Investment in education for employees and customers will be particularly critical, as well as careful consideration of who can access what data. n
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technology
iPad’s 5th Anniversary: Reflecting on the Tablet Revolution By: Taj ElKhayat, Regional Vice President, Middle East, Turkey, North, West, and Central Africa at Riverbed Technology
Friday 3rd April hearleded the 5th anniversary of the launch of the iPad. This launch marked the dawn of BYOD and the true consumerisation of IT, and the IT department has never been the same since!
re-iPad company-issued devices were the norm. They were selected not for usability or design, but purely based on what was deemed to be most secure and most able to integrate best with corporate IT. The availability of a ‘larger-than-smartphone’ portable device, giving the C-suite access to a wealth of apps to improve business productivity, meant the iPad in business became almost a status symbol in the boardroom overnight. The tablet’s success spurred on other device manufacturers to create consumer IT fit for business, and the resulting booming smartphone and tablet market transformed the IT culture of organisations forever. We now have a culture of technologically empowered employees self-selecting the applications they believe are best to get the job done, and driving the adoption of SaaS (software as a service) apps. But while the iPad and its successors from other device manufacturers brought many positives to end-users, they also opened up a new wave of issues for the IT department. With employees finding and downloading their own apps to use in business, rather than being given company-approved apps, CIOs had to contend with a raft of new visibility, control and network application issues. Terms like ‘the hybrid enterprise’, ‘BYOD’ and ‘shadow IT’ were relatively unknown phrases – now they are at the centre of IT strategy. The issues caused by the consumerisation of IT and the resulting BYOD (bring your own device) and BYOA (bring your own application) culture are unlikely going to go away. It can therefore be difficult to keep track of what we call data
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and application sprawl, which is where a new raft of data and information is located, not to mention standardise processes for information sharing. As we move forward into the next five years, the IT department needs to continue to innovate in how it avoids bandwidth issues and security/compliance threats. CIOs will need to identify where employees are increasingly adopting apps on their personal devices and build more collaborative relationships with the application providers (approved and unapproved). Companies should even consider building their own apps so that these can be used, and together with a company policy, they will stand the best chance of retaining all data. By standardising new technology based on what employees are using, the IT department can gain more control over the information that is being shared by optimising the network to deliver it. This also improves overall visibility in terms of where data is sitting on a network. Since the adoption of the iPad as a business tool, other traditionally consumer focused vendors have been trying to replicate its success and break into the business productivity market. Facebook and Google are creating platforms that augment email, or replace it all together and it seems that within the next five years it is entirely plausible that new advances in these areas will mean there will be even more devices and vendors making a play in the business IT market. CIOs need to keep track of what their employees are adopting and work with these vendors now to implement the services and gain a competitive advantage. n
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Travel & Hospitality
Lebanon Banking On Regional Demand For Tourism Sector Revival Middle Eastern travellers are returning to Lebanon. Tourism receipts are expected to rise by 7.9% and reach US$6.4 billion in 2015
Lebanon stand at ATM 2014
ebanon’s tourism industry is showing early signs of improvement in 2015. Colliers International have forecast a hotel occupancy figure of up to 49% for Beirut hotels, so the country is promoting its tourism sector at this year’s Arabian Travel Market (ATM) 2015. Tourist arrivals increased for the ninth month in a row in February 2015, up year-on-year by 20.5%, or 175, 859 visitors, in the first two months of the year. Visitors from the Gulf countries registered a strong increase with double-digit growth from Qatar, Saudi Arabia and the UAE, as well as Egypt and Iran. “Colliers reports an uptick across the board in January and February, from airport arrivals and average rate to hotel room occupancy. Lebanon has long been a favoured long weekend destination for GCC residents, and the added resurgence in Egyptian, and particularly Iraqi tourists in recent months, has created new demand,” said Nadege Noblet, Exhibition Manager for Arabian Travel Market, which takes place at the Dubai International Convention & Exhibition Centre on 4-7 May 2015.
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Rise In Traffic According to a report from Bank Audi Research Center, this is supported by a rise in passenger traffic at Beirut Rafic Hariri International Airport, which grew by 10.24% year-on-year in the first two months of 2015. They recorded 419,369 passenger movements, a record high for the period. The Colliers forecast predicts a RevPAR for Beirut’s three, four and five-star hotel market of US$78 this year, up 1% from 2014, and ADR of US$158. A March 2015 SGBL Eco News Report also quotes figures from the Institute of International Finance (IIF), which is similarly forecasting a healthy, and much-needed increase, in tourism
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receipts. They anticipate that these are set to rise by 7.9% to reach US$6.4 billion this year, with a further possible increase of up to 12% in 2016, touching on US$7.2 billion. “Lebanon’s diverse tourism product encompasses the stylish capital of Beirut with its chic cosmopolitan ambience and reputation for luxury retail, through to trendy beach locations, stunning natural beauty and mountain ranges, ancient cities and architectural heritage. This is a solid foundation on which to rebuilt interest and drive inbound arrivals,” said Noblet. “In April 2014, Lebanon’s Ministry of Tourism launched its ‘Live, Love, Lebanon’ campaign. This was a clear indicator of the government’s commitment to reviving the country’s tourism prospects as a major economic driver,” she added. According to the World Travel and Tourism Council’s Lebanon 2014 report, the direct contribution of travel and tourism to GDP was US$3.2 billion (6.9% of total GDP) in 2013. Travel and tourism has also been estimated to indirectly contribute US$9 billion (19.2%) of GDP in 2013. In 2015, these figures are forecast to rise by 2.1% and 2.2%. This also means employment rate growth. In 2013, the sector generated 92,500 jobs and there is a growth forecast of 2.7% in 2014. Sustainable Tourism In July 2014, the non-profit organisation Beyond Beirut, which is funded by USAID, submitted a document detailing a five-year plan for development of a sustainable Lebanese tourism industry, which has been endorsed by various stakeholders including the Ministry of Tourism, ecotourism business and small guesthouse owners. Lebanese companies exhibiting at this year’s ATM include SAAD Transport SAL, World Net Hotels, Rida International and Warwick MENA Hotel Management Company. The 2015 event will also build on the success of their show last year, with the announcement of an additional hall adding an additional 2,000 square metres of floor space as Reed Travel Exhibitions looks to add to its record-breaking achievements in 2014. Last year ATM saw total attendance increase by 12% with 33,000 participants from over 131 countries, and business deals signed worth more than US$ 2.1 billion over the four days. n
“Tourist arrivals increased for the ninth month in a row in February 2015, up year-on-year by 20.5%, or 175, 859 visitors” Nadege Noblet, Exhibition Manager, Arabian Travel Market
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Business Process improvement By: Ranganathan Ramachandran Director – Strategy & Business Development Ethics Plus Public Accountants
What is the difference between business processes, policies and procedures? A business process is a set of tasks such as planning, production, sales etc. performed together to produce a definite set of results. A policy is a course of action or guideline, whereas a procedure is the basis of the policy, outlining what is required to fulfill the plan. Policies define an organisation and commitment to quality, whereas procedures document the internal working processes. That is why businesses will have few policies and a greater number of procedures. Policies and procedures come either from outside, such as policies imposed by a legislative mandate, or originate from within the organisation. Primary influences on policies are mainly the values and beliefs of the company on various issues, often based on past experiences where systems have been developed. How do written Standard Operating Procedures (SOPs) help? A Standard Operating Procedure (SOP) is a set of written instructions that document in detail, the regular and recurring processes that are to be conducted or followed in an organisation. All organisations will have policies and
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procedures that guide how decisions are made and how the work is done. Well-written policies and procedures increase the ability of the organisation to ensure accountability and transparency. They are a pre-requisite for quality assurance and quality improvement programs. The development and use of SOPs are an integral part of an efficient quality system within an organisation. It provides the stakeholders with the information to perform a job appropriately and facilitates consistency in these roles. Where an organisation does not have written policies and procedures, it is possible that they still exist in some form. The challenge with non-documented policies and procedures is that they are not subject to the usual organisational reviews and accountability processes. The documentation of what we do and why we do it our policies and procedures - is an important strategy for ensuring directorial accountability and a consistent delivery of quality service. If not written correctly, SOPs are of limited value. It is also critical to note that the best-written SOPs will fail if the organisation is not serious about their implementation.
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Since core operations are key to any business, and ultimately generate the most value, any changes in these operations will bring in intense shifts In today’s competitive business environment, organisations that can adjust to changing market conditions will do well. For this to happen, companies need to look inward and focus on their core operations and strengthen their foundation. What constitutes a core operation? The ultimate objective of any company is the goal of creating value for its customers, clients, vendors, and suppliers and ultimately for itself: i.e. for its owners and shareholders. An organisation’s core operations will be those that can potentially create the most value for themselves and external stakeholders. One company’s core activity may differ from another, and this will change depending on situations. For example: During an economic downturn, companies rely on a variety of different approaches and try shifting their focus on operations. This may include an attempt to cut costs, create a new marketing campaign or spend extra budget on research and development. Some organisations find value in process improvements and innovative solutions to deal with internal inefficiencies. What is process improvement? A business process is a set of logically related tasks. Process improvement is also interchangeably termed as Business Process Reengineering (BPR), Business Transformations, Process Innovation and Process Redesign. Business Process Reengineering is the process of revamping
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business processes to change old ways of working and achieve a dramatic transformation in critical areas such as cost, quality, service and speed of processing. Since core operations are key to any business, and ultimately generate the most value, any changes in these operations will bring in intense shifts. Process improvement involves: zz Identifying each component of a critical business process (through flowcharting or similar techniques) zz Determining the requirements of each participant in the arrangement and zz Establishing Key Performance Indicators (KPIs) - predefined measurable standards or specifications Ultimately, BPR aims to get each of these internal stakeholders to communicate with one another, to let them know what problems they have and provide solutions Implementation of BPR involves the following: zz Spell out the mission, vision and goals of the organisation zz Identify and select the business process to be redesigned zz Critically analyse the current process zz Find out alternative ideal process redesign zz Implement the redesigned process zz Strive for continuous improvement
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What are the challenges in performing BPR? Business process re-engineering (BPR) started in the 1990s for companies to determine how to improve their processes for better customer service and increase the competitive stance. A key driver for reengineering processes is the need upgrading IT infrastructure. The main issue is where to begin and how to start – It can appear intimidating. Lack of available resource is also a constraint. Right BPR requires vision, commitment and a comprehensive approach to change including: zz Leadership and direction from the top management zz External focus through customer research zz Comprehensive analysis of economic benefits and competitive benchmarking zz Availability of adequate infrastructure particularly advanced IT skills and its creative use zz Effective change management and devotion to simplification How organised are SME’s in the UAE when it comes to having structured systems and procedures in place? While Dubai’s SME sector has proven to be dynamic and fast evolving, there are areas that are lacking when compared to counterparts in say Singapore. Especially in overall productivity, corporate governance, well-defined policies and procedures and business transparency. These are essential if these SME’s have to grow to the next levels or attract investors, joint ventures, international collaborations, etc. It is also seen that micro SME’s are the most lacking in terms of innovation within their business operations. In many cases, it is seen that a small business has undergone a tremendous growth within a short span of time, however its infrastructure, business process, administrative support, etc. remains the same: unable to support the growth in the business. It is also seen that adoption of technology in order to improve upon efficiencies, processes and services is quite slow in the region. Business process improvements may be required at various departments
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ranging from sales and marketing, customer service and even human resources. For e.g. only a significantly small portion of SME’s in UAE have defined Key Result Areas (KRAs) for specific job roles and evaluate the performance of their staff against certain set key performance indicators (KPIs). Dubai SME conducted a survey in 2014 and found that only 11% of SME’s in Dubai have documented policies and procedures in place. How can Ethics Plus assist? Ethics Plus can identify and create an efficient structure and systems that will facilitate control and growth of a Client’s operations in a focused manner. We will clearly define the roles and responsibilities at critical levels of an Organisation. We can create a framework to facilitate implementations of systems, policies and procedures in a time bound manner without affecting the existing operations. We handhold the client at every stage and ensure that the organisation is run by robust systems without depending on a few individuals. We can carry out process improvements and innovative solutions to deal with internal deficiencies. The Management is responsible for establishing the systems designed to ensure compliance with policies, plans, procedures, and applicable laws and regulations. Ethics Plus can carry out internal audits for determining whether the systems are adequate and effective and whether the activities are in compliance with the appropriate and pre-defined requirements. Using our professional skill sets and judgment, we will provide an independent appraisal of a company’s financial, operational, and control activities. We report on the adequacy of internal controls, the accuracy and propriety of financial transactions, the extent to which assets are accounted for and protected, and the level of compliance with recommended policies and procedures. Case study on a BPR assignment The assignment was for a Logistics company based in Dubai with operations in UAE, Saudi Arabia, and Africa. The company had grown from ten people to 500 in five years. Ethics Plus carried out a business process improvement review and re-designed their existing processes wherever deficiencies were found. The approach entailed data gathering, driver identification, and analysis of other KPIs so we could deliver recommendations and suggestions. These included implementation and stakeholder management considerations. The outcome was not a radically re-structured organisation; instead, overall gain in departmental efficiency due to the re-design of
several processes. The feature of the assignment was our disciplined approach, strong executive support from the client and quantified results. During the fieldwork we found many areas to work on, such as duplication of effort, discrepancies between two processing centers, cycle time delays, unnecessary steps, lack of direction, discontent among employees etc., as well as some internal control deficiencies. Some of the action ideas put forth included the following: zz Simple techniques such as combining several tasks into one zz Decentralise decisions zz Reduce checkpoints and controls zz Establish a hybrid system of centraliseddecentralised operations zz Automation of manual activities zz Transfer of responsibilities and personnel from one department to another zz Measurement plan for tracking process performance zz Documentation of work processes and zz Training zz Re-arrangement of the workforce etc. What are your top tips for BPR? zz Implement timelines, and reinforce accountability to maintain a smooth flow of the project zz Start with a small process that can be done quickly zz Focus on only two projects at once – one in design and one in the implementation zz Include key stakeholders in the project team zz Schedule process reviews without waiting for all the changes to be implemented zz Include the senior management in the same training programs as the team zz Align process changes with departmental strategy and job level design zz Use a suitable BPR/documentation tool
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Ways To Win An Argument
There have been many times, both in our personal lives and in our business lives, which we have come up against someone doesn’t have the same beliefs as ourselves. In sales especially, this barrier is very tough. It can be the difference in someone signing on the bottom line, or someone walking away from the deal ust how should people approach a potentially confrontational situation, when all you want to do is to get people to see your prospective and therefore (as an example) buy your product? With all of business, having a brilliant idea is one thing, but not being able to convince others of its value means that the idea will fail. During debates, people are persuaded to think along the same lines as others because of their reasoning. The debater can also use certain techniques to help influence the outcome.
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How Not Why A study by the University of Colorado found that by taking a particular approach to a discussion often means someone’s cast iron thought process would soften dramatically. It found that the best way to convince others that they could be wrong was not by asking them to explain “Why?” but to instead ask them, “How?’
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The University of Colorado found that people who provided reasons remained as convinced of their positions as they had been before the experiment. Conversely, those who were asked to provide explanations softened their views, and reported a correspondingly larger drop in how they rated their understanding of the issues. For example, in terms of politics, they were asked to explain, “How will that policy create the changes?” This got people to think more deeply on a subject. If you were to ask “Why should the policy be enacted?” it is likely that you would get the answer that was on the front page of this mornings newspapers. However, if you ask “How?” they are unlikely to have thought about the implementation and consequence to others areas that also may be dear to them, and their considering this will bring on a change of heart. Remain Calm When you are in a debate about something you care so much about, it is highly possible that your passion
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example, if someone is saying they want to remain with their current provider, ask them, “How do they provide that service at xxx cost, when I know [insert fact]?” A good follow up to this type of question will be, “How do you think they will be able to continue to provide that level of service at that cost?” Also ask questions to provoke an emotional response. If they have been saying that they had problems with a service, but have recently changed their processes and things have gone well, you could ask, “So you went through [input scenarios], but how angry did you have to become in order for things to finally change?” Logic Using logic, and explaining the natural order to something is another way of winning an argument.
By showing your anger, you will instantly lose all credibility could render you to lose control of your emotions. By showing your anger, you will instantly lose all credibility, render yourself as someone who they can’t work with and ultimately lose the argument – and any potential for business.
Listen There is nothing more irritating than having a discussion with someone who just won’t listen. You walk away from your talk with very negative thoughts about them running through your mind. Therefore, be very careful not to be that person. Listen to the other person. Give credit where credit is due. This will illustrate that you are listening as well illustrating that you are amenable. Also, by listening carefully to what he is saying, you can observe the weaknesses and flaws in his position, which you can exploit to your advantage at a later stage. Consider A Win-Win Going for a knock out may be satisfying initially, but in the longer term, it could substantially damage your business, you may
By asking the right questions, you will remain in control
find you will be able to retain that contract – Especially if they find out, as they may feel conned. If you can provide a win-win, whereby you get what you want, but your potential client feels as though they are winning too, you are much more likely to get the outcome you want overall as well as a lasting relationship. Stick To The Point If the person you are speaking with starts to head off in a direction that you aren’t prepared for, be firm and say, “This is an entirely different issue that I am happy to discuss later. Let’s deal with the major one at present and we can come back to this.” Positive Reaffirmation Ask for agreement of your points. If you have a strong case on something, put your points across and ask the person you are meeting with if they agree. Use this only with a strong argument though as otherwise, if used on a weaker one they will be able to refute this and you lose all momentum that you had previously gained. Remember though, that ultimately personal attacks should be avoided at all cost. These will instantly disintegrate the high ground you have worked so hard to achieve and jeopardise all future working relationships. n
Prepare And Find Facts To Support Your Argument People find it very difficult to be able to argue against facts. Before you head to your meeting, look at their business and try to think of arguments from their prospective. Not only will this prepare you for the discussion, it will also provide you with time to be able to find the facts to support your argument. Survey’s, statistics, quotes etc. are all good tools to use. Question Them By asking the right questions, you will remain in control. Remember “How” as opposed to “Why”. For
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Lessons To Learn from Family Businesses While writing the article on family businesses on page 14, it became apparent in our research that there is some great business lessons that entrepreneur’s today can all learn from
he main factor of a family owned business (FOB) is that, whilst the CEO may have the same job description, targets and remuneration package as that of a Corporate CEO, they have a slightly different outlook to the role. They are often raised from childhood with boardroom talk taking place in the dining room during family dinners. They may even have worked in the business as children during school holidays as a way of their parents keeping an eye on them. What this means is that they feel slightly different responsibilities. Every CEO feels the burden of the company on their shoulders, but only family run
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CEO’s feel the burden of the business and their family on their shoulders. They don’t want to be remembered as the family member who drove their business into the ground. They Are Frugal FOB CEOs tend to be much more frugal both in good and bad times. Regardless of the size of the company, unless their brand is focused on high end, their offices tend to be more modest, so they don’t have the super luxurious offices on the best street in town. These businesses view the business money as their own family
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“Easiest money we can make is money that we don’t spend” michael attard, MD, Eurograv
money and therefore they tend to keep a much tighter control of funds. Michael Attard, a 2nd generation MD of Eurograv said to me once that the, “Easiest money we can make is money that we don’t spend.” This means that their survival during the bad times is greater as they haven’t spent so much to begin with. They Have Contingency Funds They tend to ensure that they have money put aside for a rainy day and will never spend more than they earn. This
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is very unusual when you compare this to a CEO who is not part of an FOB. As we said before, the boards/CEO of an FOB will evaluate opportunities slightly differently. Initially they look at the returns based on it’s own experience and then they will judge the potential. Whilst all CEO’s take this approach to a degree, they will only place investment in very strong projects. This means that they will underperform as they will miss opportunities in periods of expansion, but at the same time, they will be far better placed during their darker days promoting survival. They Avoid Debt In these days you expect companies to come with debt. There comes a time with all businesses, when they need some kind of cash injection in order to be able to take their business to the next level. FOB’s tend to approach this time differently. More often than not, they won’t make the leap if the reward isn’t guaranteed. That said, if they do, they normally plan a restructuring of their own assets before they look to take on official debt as they view debt in the same fashion a new business owner would – It makes you fragile.
The financial crisis of 2008 illustrates why debt should be feared. You have less room for maneuver if you are faced with a setback. You also have to consider that you would in effect, have a non-family investor that has to be considered when you want to make what would ordinarily be classed as a standard business decision. A study by the Boston Consulting group found that from 2001 to 2009, debt accounted for 37% of the capital of an FOB on average, but for 47% of the nonfamily firms’ capital. They determined that this means that FOB’s don’t need to make make big sacrifices to meet financing demands during a recession. They Are Not Buyers You only need to look in the business news to hear of corporations that are buying businesses left, right and centre. They also tend to be more organic in their approach to expansion, and as such they have the flexibility of an SME regardless as to their own personal size. If they do want to buy a business, they more often than not go for smaller deals which perfectly compliment their current business structure. Again, this is primarily down to their frugal spending and their greater aversion
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to risk. Obviously, there are exceptions to this, but a FOB will ultimately be looking for a long-term absorption as opposed to a shorter-term profit. There is a different risk to an FOB that you get from the purchasing of another business. The integration of culture, disciplines, view of risks are exaggerated. Basically, all the things that make the FOB what it is can be put at risk. They Are Diverse The same study by Boston Consulting Group, found that 46% of FOB’s were diverse, whereas the general data illustrates that only around 20% of corporations can boast diversity. Think of Al Futtaim who are in the banking, retail and motor vehicle sectors, versus Barclay’s whose focus is financial. FOB’s see this as a way of protecting their family wealth. They know that if one sector has a downturn, the other businesses will be able to prop up the company portfolio. Global In Outlook Why this is the case, it is not sure although the study found that on average 49% of their revenues come from outside their home region, versus 45% of revenues at nonfamily businesses. When I spoke with Attard about this finding he said that as a FOB, “You are competing with the big boys. You know your strengths and your weakness. Because we are smaller, we can easily enter new markets. Our flexibility means that can quickly make the decision to move into a new territory to maximise the potential early on. Conversely, it also means that we are able to quickly move out of the region should the need arise. We don’t have the shareholder restraints that other businesses do.” They Have A Long And Loyal Staff All family businesses understand the importance of having those you trust work for you. Often, because of the SME feel of FOB’s, the hard line with staff isn’t taken and compassion can be shown to non-family members. This in itself generates loyalty. In Eurograv all of the staff has worked with family for years. In fact, one member of staff, Peter, was the original entrepreneurs best friend. He worked at the business for nearly 50 years, despite the fact that in the last
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“You are competing with the big boys. You know your strengths and your weakness. Because we are smaller, we can easily enter new markets” michael attard, md, eurograv 10 years, he was beginning to lose his way to Alzheimer’s, “Peter stuck through everything with us. He has always given great advice and knew the industry like the back of his hand. Not just that, he was in effect a distant family to all of us. He celebrated my birth and birthday’s. I grew up with him in the office,” Attard said when I asked about how they have kept their staff for such a long time. “After he retired, his mental health very quickly deteriorated and his wife asked if perhaps, he could return to the office a couple of days a week to prolong the inevitable. He was there for us the bad times, so of course we would be there for him.” Peter came into the office at least once a week right up until his passing. By having staff work so long at a company, not only do you trust them, but you also have a stronger culture. They are able to act quickly to allay any problems that may crop up. They also
know the customers much better and therefore have many longstanding relationships with them. Staff appreciate that their positions within a business are much safer than they would be if they were to go to a corporate. Due to the frugal nature of a family business, they will pay for training for staff to empower them. They understand that it is cheaper to invest in staff than it is for them to hire new staff. For the SME version of an FOB, the CEO is likely to know all of his staff by their names. It is possible that their families have all met. This makes is much harder for the CEO of an FOB to layoff any of his employees. This in turn adds to the burden placed on their shoulders, and therefore completes the chain above; they will continue to ensure that they are frugal, with reserves to manage everything that the dark days may throw at them. n
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Business Etiquette in the UAE When people move to a different country, with a completely different culture to their own, they often make fatal mistakes when addressing people. This could have disastrous consequences and may end in lost business. In light of this, we have provided you with a brief overview to the etiquette of doing business in the United Arab Emirates
Status Status is important here, so it is vital for the correct title to be used at all times when addressing someone. If you are talking to a chief, you should use Sheikh (chief) (or Sheikha for a woman), Sayed (Mr.), Sayeda (Mrs.), etc. Also, don’t be surprised to hear yourself referred to by your first name, but with Mr. in front of it. For Example, Mr. Ian. It is customary among the region to do this and as such, all receptions and telephone operators tend to follow this as well. You should also not forget to greet and acknowledge the most senior person in the room first. There are many factors that determine a person’s status. Age, money, and family connections are all key. Who you are is more important than what you have achieved in this region and therefore many family members work for the family business. Working in the Middle East The working week generally is Sunday through Thursday, although some employment positions are expected to work a six-day week. Throughout the region and with many nationalities, punctuality can be hit and miss however Westerners are expected to be on time. This means it is not unusual to be kept waiting for meetings.
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Patience is a virtue for meetings in the region and when coming from the west, it may take a bit of getting used to. Phone calls, messages and interruptions are not uncommon. This means that meetings can often take a long time for completion and you may feel that nothing has been achieved. Understand though, that this goes a long way to building that trust and friendship which is required for conducting business in the region. Hospitality is very important and therefore coffee, tea and even pastries often accompany meetings. Many nationalities take great pride in their hospitality and to refuse it may cause offense. Therefore etiquette dictates that you accept beverages offered. A great sign of disrespect with people from all over the Middle East and East, is showing the bottom of your shoes (or the soles of your feet). Often, other nationalities make this common mistake during meetings. The rule for this is that displaying the sole of your foot or shoe, or touching someone with your shoe, is considered very rude, so it is advisable to refrain from doing this. Handshakes Handshakes are a business formality here and within the Arab community. It is etiquette for one to wait for the other
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The adage, “it’s not what you know, but who you know” has much more relevance in the Middle East to withdraw their hand first before doing the same, so they often last a while. Often, your hand is held whilst you are guided somewhere. Throughout the Middle East, there is a very strong regard for women who themselves are far more modest than their western counterparts. Particularly in public Muslim women are unlikely to shake a man’s hand, so for a woman to be introduced to man, it is advisable to wait and see if a hand is extended. The right hand should be used for eating, shaking hands, or handing over an item, as the left is considered unclean as it is used for bodily functions. Always ensure you use the right hand for a handshake. Negotiation Traditionally traders, many of the nationalities in the region, negotiate and haggle throughout all stages of business, so it is best to be prepared for this. The process for decisions to be reached can appear to be very slow when compared to the West, as there are formalities that you are unlikely to be aware of that add to the delay. Personal Space Westerners tend to command a more personal space than those in the Middle East, and much more than those in the East. Try to remember this, as it can appear rude if you step away from an individual if they are inching towards you. Senior Citizens Older people should always be met with a special respect in many circumstances; for example, when they enter a room or if you are introduced, you should greet the elder first. If they enter a room, you should stand to greet them and if you are serving any refreshments, you should always seek out the eldest in the first instance.
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Gifts All gifts are sourced to provide something meaningful. If you know their likes, then think of something along those lines. However, it is not expected that you should arrive laden with gifts. Gift giving for giving’s sake is not advisable.
For example, enquire about the health of the family, how many children do they have? Do they like sports? Are the children studying and if so where? Family is very important throughout the Middle East and the East so being interested in family is one way of establishing a connection.
Gender We all hear stories about the Middle East and often have pre conceived, and often highly incorrect notions about gender. That said, due to the special regard that men have for women in the region, they do avoid touching and prolonged eye contact with Muslim women, and often women of other nationalities. It is considered improper to inquire about a man’s wife or daughter. It is polite to ask generally about family or health, but never specifically about any female members. Family life that involves female members is kept extremely private.
Religion The Middle East is a Muslim region and therefore insulting Islam or the prophets is a serious offense. As they follow the doctrines of the Koran, locals are forbidden to consume pork, alcohol and shellfish. Therefore, it is only correct that you respect this cultural difference by not consuming these products whilst around either a local or any other Muslim. It is also suggested that if you are to take a meeting over lunch at a restaurant, you consider this and stay clear of those serving alcohol as a sign of respect. Muslims pray five times a day between dawn and sunrise, then at about half an hour after mid-day, mid-afternoon, and again right after sunset. The final prayer time is an hour and a half after sunset. It is polite to bear this in mind if asking for meetings around these times. Finally, many languages but specifically the Arabic language (of which there are many variations) may often sound harsh or angry. You may hear raised voices and see many gesticulations. The more you spend in the company of locals, the more you will realise that your interpretation is incorrect. Looking out for gestures such as smiles and laughs are a good indicator that this is not the case. n
Clothing Clothing in the Middle East is very important with modesty at the forefront of all considerations. Men and women should wear non-revealing clothes (covering shoulders, chest, arms and legs). When visiting religious sites, women must also cover their hair. In some circumstances shoes should be removed, such as at the entrance to religious sites. Business is Personal The adage, “it’s not what you know, but who you know” has much more relevance in the Middle East. Doing business in this region focuses on personal relationships, family ties, trust and honor. Therefore, it is vital that a business relationship be built on mutual friendship and trust. Because it is a ‘Who you know’ society, if you have contacts in the right places, you will find that procedure is navigated swiftly and hurdles are dealt with efficiently. The system of favours is very much at play here, and all favours are reciprocated and never forgotten. Because of the way relationships are at the heart of all business, you should expect your initial meetings to be very much about relationship building. You want to prove that you are trust worthy and compatible to work with, so seek to strike a personable relationship. To strike up conversation, stay clear of discussing women in particular and ensure that you keep questions general.
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How To Wake Up Earlier
The American Psychological Association has found that early risers achieve more, are more pro active, can handle problems with greater efficiency and less stress and plan better than those that sleep in late. We also hear about how CEO’s and people of note like to wake up at silly o’clock to ensure they get everything done. But how do you turn yourself from a night owl into a morning cockerel? re plan your wake up the night before - Select your clothes make sure your bag is packed and lunch is made. This will surprisingly save a considerable amount of time the following morning, giving you a more leisurely wake up/get up. Plan your sleeping - If you normally don’t get to bed before midnight, start to retain your body clock by physically going to be earlier each day by 15 minutes. Think of the benefits – Write a list of how that extra hour or so will benefit you. You will have time for exercise or to spend with your family, reading the papers. Alternatively it may be quite time to plan in the office, or even just an easier commute. Read this to motivate you each night. Turn off all lights – Any lights; from your phone, windows, TV, clock etc. suppress the hormone melatonin causing you to reset your internal body clock. By slowly turning the lights out each evening, you are resetting your clock and ensuring a deeper sleep. Get a routine – This needs to be planned. New mothers are told how vital a sleep routine is for their babies, and the same can be said for adults. If a bath and reading in bed for half an hour help you sleep, then get into this habit. Set your alarm so you physically have to get out of bed to turn it off - Especially if you plan to go cold turkey. You may
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74 | April 2015
want to set a couple of them throughout the room, so you have to find them. Have them go off at 10 minutes intervals. If you are going cold turkey, this could be your equivalent to a snooze button. If you are waking a few hours earlier than normal, you are likely to still be in a deep sleep when you hit the off button and therefore may not hit snooze, causing you to over sleep. Alternatively pick the time when you want to wake up and gradually work toward this - So you want to wake up at 5am, but struggle to get out of bed before 8.30am? Start by setting your alarm earlier each day. If you are a snoozer, factor this in. For example, you know you can grudgingly get out of bed at 8.30am, so set your alarm for 8am. By the second snooze you are likely to be awake. The following day set it 15 minutes earlier until you hit your desired time. Remember though, for this to work you have practice this method of waking up every day, even at weekends. Try and think of something exciting that you need to get out of bed for - We always manage to get out of bed early to catch that flight on holiday don’t we? This is because it has that excitement factor. This may not last for long, but it will help your whole persona psychologically, slowly turning you into a cup half full person and therefore more mentally equipped to take on the challenges of the day. n
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