Business Insight Feb

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Secrets to Surviving

Issue 2 - February 2013

Beyond Start Up

Why Saas Saves You Money Boyd is Happening in an Office Near You Health and Safety Law at Work Achieving Fast Sustainable Growth Secrets to Success Series

Cashflow for Survival Islamic Finance

Explained

Why Talent Walks and How to Keep Your Key Staff

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Editor’s Foreword A warm welcome to this issue of Business Insight. www.businessinsight.ae

So tell me, did you make New Year’s resolutions? Have you broken them yet?! It’s almost a standing joke that resolutions made at the start of the year are made to be broken, but it’s no laughing matter when your business needs to make changes in order to maintain stability and achieve growth.

There is too much at stake to let your business resolutions slide this year. Overleaf on page 6, you can read about the global economic outlook for 2013 and the implications for UAE businesses this year. I think we both know that a ‘thriving’ mindset, as opposed to ‘surviving’ mentality, is what will help you achieve your goals and set you apart from your competitors.

So how do we thrive in business? I’ll come back to that in a moment, but before we get there, my view is that your business success starts with your mindset. You need to be able to visualise your success, and know what your success looks like – is it villas, cars, bigger premises, or more offices? After all, if you can’t see a target, how can you hit it? I recommend that you turn straight to page 47 to read about why and how the act of visualising success can lead to ‘actualising’ success.

In the same vein, if you’re stressed and panicked about any aspect of business, it manifests in your performance.

Negatively. Replace the stress with a logical and methodical approach of dealing with it. Try page 41 to check if you’re reacting negatively to stress, then turn to page 52 for the tweaks in methodology to make your business resolutions stick this year.

Okay, back to our question ‘how do we thrive in business?’

Take a look at the article on page 12, ‘Achieve Fast & Sustainable Growth’. Here, you’ll find the right kind of insights for company owners who are too busy micromanaging the small details to paint the big picture. You’ll find a parallel article on ‘Cashflow Management’ on page 21, that is a useful reinforcement at the start of the year to the money management skills that will see you through the IMF-predicted economic dip coming up in the 2nd and 3rd quarters this year.

Lastly, if you have made the transition from being a Senior Manager to an Enterprise Leader, read up on the 7 ‘seismic mindset shifts’ that need to take place to make you an effective leader; you’ll find them on page 30.

This issue is all about understanding your economic conditions this year, adjusting and improving your business mind by dealing with stress and having a clear picture of where you want to go, and using this month’s business insights to drive you forward. Happy reading. Happy New Year!

The Best,

Secrets to Surviving

Issue 2 - Feburary 2013

Beyond Start Up

Why Saas Saves You Money Boyd is happening in an office near you Health and Safety law at work Achieving Fast Sustainable Growth Secrets to Success Series

Cashflow for Survival Islamic Finance

Explained

Why Talent Walks and How to Keep Your Key Staff

Business Insight Magazine Published by: Redcorp* Associate Publisher: Nuria Gonzalez Martin Editor: Kay Marham Assistant Editor Tanya Selley Business Development Manager: Brendan Bosley Administration: Janice Porte Art Director: Mohsin Rawal Printing: UPP Printers Distribution: Blue Truck For information on advertising rates & positioning: Please contact Brendan Bosley – Tel. +971 4 375 4619 Email: sales@redcorp.ae For editorial schedule & article submission: Please contact Kay Marham – Tel. +971 4 375 4121 Email: editor@redcorp.ae

K

All the best, Talk to me at editor@redcorp.ae and let me know what information you need to take your business forward – and I’ll try to help in the next issue!

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February 2013

©Copyright 2013 Redcorp. *A joint venture between DMCC, Entourage Marketing and Events and RealHR. While the publishers have made every effort to ensure the accuracy of all information within this magazine, they will not be held responsible for any errors or omissions contained herein. Views of editorial contributors do not necessarily reflect those of the publisher. All rights reserved.

CONTENTS

OPERATIONS Page 9 - 11

Secrets to Surviving Beyond Start Up

TECH Page 35

SUCCESS

Why SAAS Saves you money

Page 15 - 16

Interview - Kiran and Anil Pethani Managing Partners of Cara

WELLBEING Page 43 - 44

MONEY

Managing Stress At Work

Page 26 - 27

Introduction to Islamic Finance

THE HUB Page 45

WELLBEING PEOPLE

From Visualising to Actualising Success

Page 32 - 33

The Transition from Manager to Leader

People

Operations 6 11

2013 Economic Outlook Achieve Fast and Sustainable Growth

Success Interview Khaled Al Dhubaib, CEO of Tabco Emirates 17

LLC; the Franchisee of Elevation Burger

18

Interview Shabbir Adamji, Founder and CEO of GoMad

Money 21 23

Financing Third Port Trade in Dubai Cashflow for Survival

Why Talent Walks and How to Keep Your Key Staff

28

Performance Management

31

Tech BYOD is Happening in an Office Near You

36

Using Tablets for Business

39

Wellbeing Health and Safety Law at Work

40

The Hub The Changing Role Of Accountancy New Year’s Business Resolutions

46 49

Business Directory

51

News Desk

54

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Economic Outlook for 2013 N

ew year, new start… but what’s the economic outlook for 2013 and what will it mean to business in the UAE? With the threat of the Euro disbanding, America defaulting on their debt, Japan in recession and China changing their policies, we have reviewed the potential impact of these events, to give business a ‘heads up’.

spending to a minimum; do not hire staff unnecessarily and save as much as possible. Review your supply chain and identify any areas of potential weakness, ensuring that alternative suppliers are identified.

“[Growth] is timid because of

The financial crisis of 2008-09, and the more recent European debt crisis have illustrated how integrated financial markets and world trades are. We should take note of these; they show us gaps in our understanding, which can be integrated into our policy making and business planning today.

uncertainty in the

Europe The problems that have arisen in the European Union (EU) due to sovereign debt, have produced fundamental questions over the Euro and the EU as a whole.

U.S., what will be the

In the EU, countries are integrated by government bonds, financial transfers and business enterprise.

Though Greece has won a respite over their debt, the concern of them sinking further into recession and the ‘Greece Effect’ spreading to other countries in the EU, means the threat of them being disbanded are constantly being discussed. Growth in the region is likely to remain repressed for the foreseeable future, with GDP remaining relatively flat at 1% growth in 2013.

Knowing this, European companies are scaling back growth plans globally; including those with offices in the UAE. For business not directly affected by this, but who deal with companies in this position, impact on service can be expected at the least. At worst, their link in the supply chain is questionable. Service sector and retail may see a decrease in sales as there will be less people to supply to.

Bear this in mind when compiling your business plan and cash flow forecast; it should be realistic. Keep

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euro zone, the outcome of the discussions in the

consequences of the new Japanese policies that have been announced, and what will pan out in China when the new leaders take over in March”

Christine Lagarde, Managing Director, IMF

America America may have avoided their ‘fiscal cliff’ (a mixture of tax increases and changes in fiscal policy with austerity measures which were to have taken effect in January) but they have further battles ahead just to pay the debts they have incurred.

The USA must raise their debt ceiling before the end of March so they do not default on their loans. Should they default, the cost of their debt will increase, as will the cost of their purchases. This will have to be passed on somewhere… expect that increase to be passed onto you!

America appears to be remodeling their business plan, as per President Obama’s indirect message to the world in mid-November. He became the first incumbent President to visit Burma and travel throughout Asia. This visit was taken by the press as a signal that America is to build further ties with the East and strengthen business relations between the two regions, which could signal a loss to other areas.

Asia (Excluding China and Japan) The outlook for Asia is positive. Should Europe remain stable and countries avoid political instability, growth is anticipated in the region. America is looking to do business here – Perhaps we should too?!

Japan Japan is the world’s 3rd largest economy and in November they went into recession. As our No. 1 exporter, and No. 5 importer of goods, the impact on the UAE is transparent. Less business means higher unemployment, a reduction in consumer spending and consumption of UAE goods. This potential shortfall has to be found elsewhere so this should be reviewed now.

OPERATIONS Inflation is also an issue. With recession and austerity measures comes inflation. Imports are likely to rise in cost, subsequently our costs will increase, and profits decrease.

Negotiate now with your suppliers, secure guaranteed rates wherever possible. Get close to your supplier so you can get a feel for the increases to come and keep modifying your business plan to reflect this.

China China is starting to shift its growth model away from a reliance on exports towards domestic consumption.

This, coupled with the increasing cost of land, means caution is appropriate for predicting an increase in the cost of Chinese exports. This ‘China Cost’ is likely to impact on profits.

To avoid the “China Cost”, research and locate alternative global and local sources.

Iran Politics affect all companies within the UAE. The sanctions imposed on Iran have led them to ban the imports of many items deemed as luxury, and which they feel can be made locally. Iran currently imports 6.10% of the UAE’s export trade; the majority of which, whilst commodities, may also be deemed by the Iranian government as being luxury items... It doesn’t take a lot to determine what this means for UAE companies!

The light at the end of the tunnel Intra regional trade (trade within the Middle East, specifically other UAE States) has enabled the UAE market to stabilize, but political instability in the Middle East, is a cause for concern globally. With the Arab Spring still in people’s mind, countries wanting to work in the Middle East region, favour the stability of the political system in UAE. The World Economic Forum, ‘Enabling Trade Report 2012’, put the UAE in 19th place out of 132 countries, ahead of France, Ireland and even the United States. It reviews and grades trade infrastructure, governmental policy and performance in trade environments, highlighting the UAE could benefit more from trade and it’s geographic position on the EuropeAsia trade route.

Also, the way we promote the small and medium enterprise (SME) sector in the region has been praised and the World Trade Organisation has named us as the world’s 20th top exporter! Experience indicates expansion of internal markets and the reduction of physical, fiscal and trade barriers, have had a dynamite effect on the SME sector. Young, growth orientated firms, operating in clusters of subcontracting and cooperation arrangements can, and will continue to, benefit from integration.

Trading Partners and Business Insight 2013 Tips UAE’s top 5 import partners are: • India - 17.5% • China - 14% • United States - 7.7% • Germany - 5.6% • Japan - 4.82% Our export partners are: • Japan - 17.10% • India - 13.60% • Iran 6.10% • South Korea - 6.10% • Thailand – 5.10% Top Tips • Fluid Business Planning. Your business plan should be regularly reviewed and altered if necessary.

By keeping up to date on global economic conditions, you could mitigate the effect of this on your company; Allocate time to find alternative suppliers. Cost implications are likely and therefore budgets may change also.

• Secure alternative trading sources and obtain guarantees on rates and their terms with suppliers.

• Knowledge is power. Build closer working relations with suppliers. Listen and understand their business and act in your best interests.

• Cash is king - Save!!! Aim for a minimum of 6 months savings so if your supplier does fail, you have a cushion to fall back on.

• Planning. Ramp up sales and marketing in alternative areas. Carefully plan/record pipeline, and source alternative options will help negate the loss of clients or vendor.

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OPERATIONS

Secrets to Surviving Beyond Start Up Y

ou know only too well that getting a business off the ground is challenging and all-consuming.

Slaving away however is not why you started your company, nor is it how a company should run after ‘start-up’ stage. It should run without you; so you can grow the business instead of being ensnared in the small details. So, how do you create a business that survives and thrives after the initial launch period?

Stick to your business plan So many people use their business plan as the means to attract investment initially but then let instinct and daily tasks take over. This is a mistake. Your business plan outlines what you’d like your business to achieve.

It is the roadmap to bring you beyond this stage, specifically answering such key questions as: • How big would you like your company to become in terms of revenues and profits?

• What is your end-goal: sell it, take it public, or keep it as a lifestyle business?

• What is your time frame to achieve your goal?

• How will you achieve this?

Answering these questions forces you to think about your long-term goal and create an actionable plan to get there. With these goals in place (which maybe years in the future), formulate a clear plan for the year. For example, what new products or services to develop, what recruitment choices to make, and how many new customers must you acquire.

Expert comment: James Bernard, Director of Business Development and Client Management at DMCC comments: “One of the most important issues, not just for starting, but for operating your business, is to develop a business plan; how to generate income, what your expenses will be, who your competitors are, and most importantly what your business does. Document it and work out what sets your business apart. List your USPs (unique selling points) and what is going to put you ahead of any competition. Completing the process will convince

the most important individual that a viable business vision exists. That individual is you.”

“One of the most important issues, not just for starting, but for operating your business, is to develop a business plan”

James Bernard, Director of Business Development & Client Management, DMCC

Cashflow management The importance of managing cashflow cannot be understated, as it is a crucial ‘make or break’ issue.

We have dedicated an entire article to ‘Cashflow Management’ on page 23. For example, consider the implications of hiring two new sales people to achieve your revenue targets. Visa costs, salaries, medical insurance, expenses, car allowance etc. could easily result in AED 100,000 p.c.m. Will they perform as budgeted in their first 3 months? Ensure that the cashflow forecasting and realities work with your business planning.

Once you have your goals, you should be clear about your needs and outgoings, budget v actual. Update your cashflow forecasts with the known details, in line with your business plan. A cashflow forecast is a ‘living’ document, in need of constant updating, with forecasts and actual costs being controlled in line with your financial realities.

Expert comment: Vikram Venkataraman, Director of Salvus Advisors, advises: “Cashflow management is essential. Critical.

Without proper cashflow management and regular reviews to ensure you always understand your cashflow, your company can easily fail. That is how serious cashflow management is.”

Create effective processes An important part of success is to create processes.

Processes are actually systems for completing a task, documented so that it can be done methodically, and streamlining the efficiency with which you operate to enable time savings, easily integrate new staff, provide better customer service, and facilitate profit and growth.

For example, how does your company generate

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By choosing the right international health insurance for your employees and their families you will be reassured that they will receive prompt access to the best medical treatment available, and that getting them back to work sooner means that your business will be healthy too!

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OPERATIONS systems, beliefs and way of operating. This affects the way new employees interact with your internal team, clients and stakeholders. Without considering these, you are setting yourself up for failure. Read up on the ‘Why Talent Walks Out’ article on page 28.

sales? You know whom to target, but a process will address: • A system of generating new sales leads; allocating a certain time of the day/week to focus on cold calling, email marketing etc.

• Setting up a CRM (Customer Relationship Management) system, so you have current and organised database of clients and prospects, with a mandate to update this for every new contact • Putting together a portfolio of sales aids for each sales person, including information on your company, range of offerings, price lists, features and benefits etc.

With a sales generation process, a new salesperson can easily fit in and get to work immediately, resulting in time savings, increased productivity and an efficient sales structure.

Other systems could include: • Sales order processing • Invoicing / cash collection systems • Internal discipline procedures • Handling customer complaints • Accounting systems Once you have established processes in your business, tasks can be completed without you. Employees will know exactly what to do, and training will be straightforward.

Identify the systems to build first; where your company has the most problems, where mistakes are made, or where you’re spending a lot of time. Systems will solve these recurring problems, freeing up your time. Moving forward, build processes for frequently-performed tasks, which, if completed in a predictable, consistent manner, would increase the value and efficiency of your business.

Expert comment: Phil Davis, Project Director for the Government Partnership with the Emirates ID Authority (EIDA) tells us: “It’s important that your staff understand why the processes are in place, rather than just instructing them to be followed. Experience tells us that processes work better for the company if your employees understand the reasons behind them.

Hiring the right staff and placing them into the right job is critical to progressing to build a successful business.

Think about the cost versus the potential value and output of the prospective employee. Talk to specialist recruitment agencies and work with ones that understand your needs and can deliver according to your requirements.

“Make sure process decisions work in alignment with the objectives of the company; the process has to fit in with the company, not the other way around”

Phil Davis, Project Director EIDA

Expert comment: Phil Star, Recruitment Director at RealHR, comments: “Hiring the right people from the start is the single best way to reduce employee turnover. Interview and vet candidates carefully. Ensure they have the right skills, but also that they fit well with the company culture and the existing team dynamic. The right compensation and benefits package are important too, so make sure you understand what they want.

Many entrepreneurs overlook how important a positive work environment is, and how far recognition and praise can go. The right package, recognition and praise might be the single most cost-effective way to maintain a happy, productive work force.”

The challenge is that it takes time to plan and build systems, time which most business owners are currently spending maintaining daily operations. Force yourself to document your systems daily. After one month, you’ll see your business running more smoothly.

Constantly review your business plan. Understand your budgeted spend and sales income. Ultimately be fluid and always take into account the variables involved in running a business.

See Cashflow Management article on page 23 for further reading.

Processes are not rigid. To survive, regard process as a fluid and changing concept. Make sure process decisions work in alignment with the objectives of the company; the process has to fit in with the company, not the other way around, and need constant review.”

Hire the right staff It is impossible to place a value on employees who care about your company and where it is heading.

Spending the extra on salaries for the key skill sets or talents suited to your business can be the difference between a 5% growth and a 20% growth in a start-up’s early years.

Many business owners plan for success, but hire without strategically aligning their employees with the mission and goals of the company. This means evaluating if recruits fit into your company’s organisational culture, the company’s values, visions, working language,

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Achieving Fast and Sustainable Growth The ideal for any business is clear: fast growth and long-term sustainability or, ‘running’ instead of walking.

Young companies that are traditionally small and nimble, are also known for a ‘catch all’ mentality towards building and running the business, where getting every little detail and activity right is important from the start. If, however, you are spending all your time focusing on the small details, you risk missing the bigger picture of achieving growth in a businessefficient and sustainable way.

The methodology of paying close attention to every detail of the business is often responsible for initial success, but becomes a hindrance to progress as the company grows. As a result, some businesses find they are unable to prioritise like they use to, leading to a more micro-management-heavy environment, out of fear of losing control over every aspect of the business.

To avoid this approach, you should seek to find more transparent, collaborative ways of working, to help work towards your business priorities and achieve your overall organisational goals. This leads to maximised profits from the revenue generating elements of your business, be they staff, assets or products.

Changing the management model According to a study by CIMA (Chartered Institute of Management Accountants), 75% of office workers waste 1.5 hours a week due to unclear communication from their management, a lack of support and ‘micro-management.’ Traditional micro-management models have long been in place and tend to create a lack of dialogue between various employee levels within the company, leaving employees feeling both unacknowledged and disengaged. It is important to remove these hierarchies and to give employees the autonomy to manage their own workloads. This way, individuals are better positioned to assess priorities, setting and adjusting their own deadlines, without the need and added pressure of constant micro management.

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“It is not the strongest of the species that survives, nor the most intelligent, but the ones most responsive to change”

- Charles Darwin

Tips on working more collaboratively • Arrange a meeting for all team members to understand what the group should do for the project. Let each person ask questions to make sure everyone understands the assignment, and then make sure it is clear who will perform which roles • Let people show their strengths. Delegate work accordingly • Define jobs clearly and have a timeline that everyone sticks to • Select a manager in the group who keeps the organisational structure strong. Good organisation would free team members to be more creative • Try to establish some communication guidelines with the team at the beginning of the project.

Establishing understanding at the outset gives all members of the team a more solid context in which to work The employees closest to the work are those who understand it best and should have a voice in establishing the benchmarks and timelines, which in turn creates an atmosphere where team members benefit from ownership and accountability. Most employees respond well to some working freedom and if they know how to prioritise, they are more likely to track and communicate what they are doing and when; giving you a more transparent, direct view of how their progress aligns with your overall business goals, thereby removing the need for hierarchy or micro-management. This is also an important point for encouraging key staff to become ‘emotionally involved’ with the company. See our article ‘Why Talent Walks Out & How to Retain Staff’ on page 28.

Centralise internal requests to reach your goals While helping your teams to understand your overall business goals and prioritise their workloads accordingly is one challenge, keeping them working to the right priorities and overall business goal(s) takes a concerted effort. Once goals and priorities have

OPERATIONS maximising revenue. One piece of UK research indicated that if a company operates a 50-man business, and is able to capture just one extra hour per month from each employee, it can boost the bottom line by AED 338,000 a year.

been established, you can also help your teams to prioritise and manage multiple client requirements, by centralising their internal requests through a ‘request’ queue.

In many organisations, inbound requests are often made directly to the person or team who typically does the work. For example, if someone needs a brochure for an upcoming event, they might directly approach the graphic designer, or if the development team needs a new server for a special project, that request might go directly to a friend in the IT department. Although that particular employee may get what they need at that time, they are hampering the ability of that internal team to consistently deliver to the organisation, obscuring any real visibility needed by department leaders into what their teams are doing.

By centralising inbound requests, the employee can track the status of their requests, teams can better define what they need before work begins and workflows such as approvals and work breakdown can be defined and automated if able, making it possible for individual workers to keep focused on the right work without the need for consistent micromanagement. Your employees should also be able to discuss workloads with you when priority requests are placed in the request queue. This dialogue will help staff to understand which piece of work to complete first, if multiple priority requests are queued.

The importance of real time visibility Using the right technology and tools to help your teams prioritise their workloads will also give you realtime visibility into ‘activity’ versus ‘servicing’ levels and insight into whether your projects will be completed on budget and on time. This information is vital to inform your business critical decisions, such as whether the company needs more resources to grow, or how your company can scale using the same resources, thereby

A new breed of companies who value the dynamic nature of a more collaborative management model will benefit from a more autonomous and engaged workforce

The benefits of visibility do not stop when you focus on better resource management. With clear, real-time insight into how a project is run on a daily basis, you can identify any inefficient processes and unnecessary admin work and fix these problems immediately, which is a valuable and necessary skill to master for your growing business. This frees up staff time in the long run, enabling your business to do more with the same team, and give staff the time needed to identify and seize new business opportunities as and when they appear.

Agility is the key to growth Businesses who lead by micro management values risk being left behind. Being left behind is not where you want to be, as a new breed of companies who value the dynamic nature of a more collaborative management model, will benefit from a more autonomous and engaged workforce, and a transparent overview of their work flow against their business goals.

Implementing a more collaborative workmanagement environment will enable your growing business to efficiently prioritise and maximise on revenue streams, leaving you management room to seize upon opportunities to grow your business.

Without this approach, your company is in danger of lacking the transparency and information you need to make these critical business growth decisions, whilst balancing the risk of working with an unmotivated and inefficient work force. You may be able to soldier along without the most efficient systems in place…but why walk, when you can run?!

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SUCCESS Success Series Continuing with our “Success Series” we take a look at some of the leading brands in the UAE today, including ‘The One to Watch’ best new business 2012 in the MENA region. Read on to find out more about how they’ve become a success and what advice they have for you.

A Business Worth its Weight in Gold C

ara the jewellers, situated in the Gold and Diamond Park, is a long held secret to its loyal global clientele, where the excellent customer service and customer referrals have meant steady growth year on year.

Following the opening of their first shop 8 years ago, to their recent shop in Ireland, Cara are recognised in Dubai and internationally as professional jewellery designers and manufacturers. We were lucky enough to interview Kiran and his brother Anil Pethani, Managing Partners in the family business. Being so successful, they are shockingly humble, talking-down their triumphs and asking us not to print details about their charity work (of which there is a great deal). Their business plan is also surprisingly simple and one that goes against the grain of modern business practice, “We don’t have a business plan” said Kiran. Intrigued, we asked more…

“We learn every day. There are always new things that we can learn.

In business, learning is important”

Anil Pethani, Managing Partner, Cara

You story is inspirational. It shows how you can overcome the odds to achieve your dreams. Tell us how it happened.

Kiran – Anil and I moved over here from India many years ago. We came with nothing. We couldn’t speak or write any English. We came to clean. Slowly slowly, I started to learn the jewellery business and began to sell.

It has been an amazing journey for you, coming from a village in India, to owning, some of the busiest jewellery shops in Dubai. How did this come about?

Kiran - One bad day when we parted with our former employer, some of our clients suggested starting a new business. They offered to help us. They literally gave us the money. No questions. No contracts.

They wouldn’t even become partners in the business.

Another of our clients renovated the shop. We reimbursed them within three years. We are very lucky.

These people are still our very good friends. They still look out for us, as we do for them. We called the business Cara for them as it means ‘Friends’ in Irish.

Your interpersonal skills have made you what you are – from friends backing you to customer referrals, what else has helped?

Kiran - We try to be honest. If there is a problem, we sort it. Also, our staff are very important. We act as a team, with real friendships going back years.

Anil - Villagers from our community in India come to work for us. Being family friends, we already have relationships and loyalty to them. They have it for us too. We support them back there (India), and they support us here. When you hire someone, he has his own destiny and his own luck. When his luck grows, yours grows.

What practical steps have you taken to grow your business?

Anil - We are now selling on-line to accommodate our international clients. Also some clients like the shop,

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but they prefer the anonymity of my office and private meetings. Other clients like to see the process from design to manufacture. They like to see the factory, how and who will make their piece. So we do this. The experience is personal to what the client wants.

We don’t want big things. Our success is our loyal clients. If you want to grow fast and compete, marketing is important. We don’t. We want a peaceful life, with happy loyal customers, so my advice is look after your existing customers.

Kiran - Our customers range from every-day people to royalty with everyone having a personal Cara experience. Our customers are key to our business and we believe in great customer service and happy customers. We often ship across the world to ensure our customers are pleased.

Kiran – We are not interested in making the most money. For us, it is a slow growth but happy growth.

The work life balance is very important to us. Don’t get me wrong we sometimes have stress. Previously our popularity grew very quickly, but we did not account for this and had too much work and not enough time.

We have learnt from this.

What made you want to take the next step from shop manager to owning your own store?

Kiran – We were thinking about the future when this opportunity arose and thought ‘We can do this’. There was no doubt. In business, you need to be in control.

You must have honour. With the financial backing in place we knew we needed to work hard, and this dream would be realised.

Our growth has been evolutionary. We do not have a business plan we just work hard. We make decisions based on our gut feeling. No one is perfect in this world, but we just try to be honest and helpful.

“Our customers are key to our business.

We believe in great customer service and happy customers”

Kiran Pethani, Managing Partner, Cara

What lessons have you learnt?

Anil - We learn every day. There are always new things that we can learn. In business, learning is important.

When we started, we had only product knowledge.

No business knowledge. This was, and still is, new to us. Knowing price is essential, we developed our own manufacturing plant so we have no extra margins (which we keep low). We are more famous for the value of the products post sale, compared to their original costs.

Kiran - Also, being honest, means that we can sleep very well at night. For us, it is not about tomorrow. It is about today, and are we doing the right things, the right way.

Your business philosophy is unique. Tell us more about it.

Anil - It is all about the customer. The main strength for business is the service. Being personal is important. We do not really “do” marketing. We got where we are today by steady growth, repeat business and word of mouth.

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“”

Kiran Pethani, Managing Partner, Cara

We try to keep a strong relationship with our customers.

They like to pop in to see us and we try to build a friendly relationship with them, as opposed to just a formal business relationship. These relationships are important on all levels.

We carry a high range of choice and product line, but still we do 60% customised jewellery. We sell a customer what they want by giving the right advice… not only considering what is in stock.

When something doesn’t happen that you expect, how do you cope with that?

Kiran - Being honest means we do not tend to experience issues. We have learnt from experience to be careful opening shops, as we had to close one as we felt the customers were not getting the same level of service throughout the business. Service is that important to us. We took it as a sign from God; if something doesn’t happen as we want it, we just move on from it. We believe in Karma; what is meant to be is meant to be.

What advice would you give other entrepreneurs?

Kiran– Acknowledge that every day is about learning.

Keep learning and never become stagnant.

Anil - Also, do not be afraid to take calculated risks.

We do not take big risks, but ‘If you never jump in the river, you won’t learn to swim!’ We take the risk when we feel safe. We consider all of our options before taking the risk.

Communication and trust are essential to building successful working relationships. Work honestly, don’t be greedy; starting small and working to big.

SUCCESS

Success Story Interview

Khaled Al Dhubaib,

CEO of Tabco Emirates LLC; the Franchisee of Elevation Burger

E

levation Burger, the organic delicious burger chain has finally come to Dubai. We talk to Khaled Al Dhubaib, CEO of Tabco Emirates LLC the Franchisee of Elevation Burger, to gain a unique insight into his success story, and what has made him a Food and Beverage powerhouse in the GCC. Were you exposed to entrepreneurship from a young age?

Yes, I was brought up in an entrepreneurial environment. In 1995 my family opened a number of outlets related to Kuwaiti food and brought to the country prominent international food franchise chains, so it is very natural for me to start new business projects.

My first major project in the food sector began with Sweet’n Cup which is now one of the leading cupcake and chocolatiers in Kuwait. It has grown exponentially and we are now franchising across the GCC. THE BUSINESS Who are Elevation Burger UAE? Elevation Burger UAE is a franchise of Elevation Burger.

The founder, Hans Hess, couldn’t find a burger he’d been dreaming of since he left California in 1999, spending the next three years developing the burger recipe. The first store opened in April 2005; selling good, organic, sustainable and fresh food. Now it is franchised.

OPERATIONS & STRATEGY What are the most crucial things you have done to grow your business?

Strong supply chain management is essential. We depend on quality products and freshness. Ensuring that we have a solid supply chain means that should any supplier let us down, we can easily rectify this with minimal impact to service delivery and therefore profit.

We also watch our expenses closely. Cash is king.

From our detailed market study and business plan,

we developed a comprehensive cash flow forecast, enabling us to operate effectively and efficiently not overspending.

“Ensuring we have a solid supply chain means that should a supplier let us down, we can easily rectify this”

Khaled Al Dhubaib, CEO, Tabco Emirate LLC

It is a very brave move to enter a crowded Dubai market. What made you decide to do this?

Dubai forms an important part of the GCC community.

It is natural for us as we provide something unique.

The market here is fast paced, however with the rise in obesity and diabetes, we needed to come to the market with a solution that meets the needs of the customer and tackles this issue.

Our burgers have on average 15% less fat than others in the burger market. Organic animals are happy – they are free range, have plenty of space and access to fields. You can taste this in our burgers. We pride ourselves on taste, (which organic food can lack), but not in our burgers. If you try our burgers you will be able to taste the difference immediately.

What’s the worst business advice you’ve ever received?

Do things quickly! Planning is key to identifying risks and opportunities. Effective planning helps to minimise risks and eliminates potential issues. You can’t do this quickly.

What do you think are the secrets of your success?

We stick to our core vision. Sweet’n cup operates in a niche market; “unique and mini”, with only the best materials, whilst serving our product in a different way to our patrons. Understanding this has been key to our success. These are the lessons we are bringing to Elevation Burger UAE. This is my advice to other entrepreneurs out there.

Be focused in what you believe in, stick to your core product, understand your product, be passionate about your product, and then deliver it to the market in a unique way. If you can do this then you will gain market share through that product.

February 2013

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Success Story Interview

Shabbir Adamji

Founder and CEO of GoMad

W

How do you measure your success?

Our success was to get through the first year and achieve various things. This is still a work in progress.

We did not hit all revenue targets set, but in terms of plans and moving forward, we have over achieved.

e met with Shabbir Adamji, founder and CEO of GoMad, who can be best described as a serial entrepreneur. Having just won the SME award for ‘The One to Watch’ 2012, his ‘entrepreneurialship’ has shown that his business can help others to realise their dreams.

To describe Shabbir as an ideas man is an understatement. During his varied career, he has achieved a lot of what it is that he wants to do.

Describing himself as “someone who easily gets bored”, he is now looking towards his ‘forever job’; helping others to achieve the success that he has made in his life.

Can you sum up your company philosophy for us?

In two words, coaching and nurturing. A lot of people have ideas on business and don’t know where to start.

We help people make it happen. GoMad came from the philosophy about making a difference; ‘Go Make A Difference’. I wanted a playful name to indicate a fun, forward thinking company.

As a startup, you have come far, winning your award and already gaining a strong reputation. How did all of this start?

One fine morning, I woke with words on my lips ‘Make a difference’. I wanted to do something new. I like to think outside of the box and find solutions to problems.

This comes naturally to me so I thought “why don’t I start a business on this basis?” I like to feel that I am going to the office and making a difference, doing something for the community. As this is a hobby to me, it allows me to be out of work for the rest of my life!

The main idea was the belief that I was able to fill a particular gap in the market. For a startup, things change. We set our goals by looking at what we think is achievable, given the resources, finances etc, and then look to take it forward; through innovative and creative process. Our approach and solutions are not based on existing models.

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February 2013

“There are many ideas that may not have been extraordinary, but people have achieved great success by believing in them and working hard at them”

Shabbir Adamji, Founder and CEO, GoMad

We are not discouraged or unmotivated. We are a startup and often they do not make their goals. We have our staffing and we are getting business in.

We have won awards in our first year and achieved a high level of media interest both nationally and internationally. In terms of this, we have achieved our goals.

You have a history of business. How do you deal with business setbacks?

I have an inert system in me to be very optimistic and full of ideas. My day starts at 4.30am and I wake with many plans to fight off those problems. I cannot be stopped. Business setbacks will always happen. I learn from them. Take it in your stride, do not get discouraged and do not give up. Adapt the situation to suit you; be flexible enough so you can change in that area or market.

Did you do much research for your startup?

I have done research in terms of who and what is in the market, and then identified what gap can I fill.

Sadly, it was rather discouraging. People in this part of the world are not open to thinking outside of the box.

I need to make people understand that what I can offer means there is something for them.

For example, if there doesn’t appear to be a market for your product or service make one. Looking just at the UAE, you have a whole new country of potential clients and no one to stop you!

How did you get into doing what you do?

My previous background is diverse. I started in automobile development at a top brand in India; then I moved to shipping, where I spent 6 years having

SUCCESS What is next for GoMad? We are looking at business models to help the masses and have developed GoMad Inc., a first ever universal social media platform that allows the user one platform for online networking on social and professional level.

Largely, you connect with people you know, so why not sell to these people?!

So, we have created MyStore, which explains exactly what it is you do and shows people your offering, explaining your wares. Like cold calling but without the angst. As part of this project we have also designed and implemented a charity donation platform. The United Nations “World Food Program” loved the idea and we are already supporting their causes.

What processes have you started that have led in part to your success?

We have built an open and innovation culture. Every mind has an idea and I want to listen to them all. I thought about how to do this and I have set up processes to capture these ideas.

adventures on oil tankers. I then relocated to the UAE and started a family business, which did not go well, and from there went into construction. I have done major projects on the palm, like Trump International Hotel, Atlantis, and the underwater tunnel going to the Atlantis, where we had to lower and control seawater level to a depth of 26 meters to enable the construction of the tunnel. This is one of the most challenging and craziest things that I have ever done!

I started my own company after working in construction. It was funded by one of the big families in the UAE. I started Transmak Dewatering during the recession in 2008. We were instrumental in a number of projects including Abu Dhabi Airport and Trump International Hotel. We took it from a startup to third in the market. We had this success purely through hard work, passion and desire. This was a major achievement in my business life.

“Business setbacks will always happen.

I learn from them.

Take it in your stride and do not get discouraged and do not give up”

Shabbir Adamji

Communication, verbal and non verbal is key. As is having an open mind, so you can work at your best and unleash your inner genius.

If you could give one piece of advice, what would it be and why?

If you have a passion for something, do not compromise it for anything. There are many ideas that may not be extraordinary, but people have achieved great success by believing in them and working hard at them.

If something seems impossible or foolish, make sure you keep going with it. Think of Richard Branson and when he started Virgin Airlines; this may have been seen as a foolish decision by many. Now look at him!

All of these things have made me believe in myself. I remember these, when times get hard. At the end of the day, if I can lower sea level in a controlled manner, then educating people on their options is easy! It is these experiences make you stronger and confident.

What is your message and how do you get this out successfully?

What we do is ideas. We make people understand what to do to go from one level to the next. If they copy their competitors, they will be like their competitors and not have their own stand out points.

This is important. They have to learn their own unique points. Without these, they won’t have their Unique Selling Points (USPs) or their own differentiators in the market place.

Being in a robotic mode is never going to help you get to the next level. You need to think outside of the box and take some calculated risk. Be a little innovative and take that jump to lead the market.

February 2013

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MONEY

Financing

Third Port Trade in Dubai A

banks, talking to the wrong people and not presenting their business case properly. In addition, banks are traditionally wary about financing start-ups.

significant proportion of trade in Dubai involves third port trading, whereby goods move from one country to another without touching the shores of the UAE. With the increasing attraction of Dubai including superior infrastructure, safety and the availability of financing, the influx of companies into Dubai, specifically DMCC and its JLT Free Zone, has become significant.

Bank evaluation criteria Banks look at entirely predictable criteria whilst evaluating requests for third port trade financing lines: • The trading track record of the company wishing to borrow the funds • The quality of the financials and strength of the borrower • Goods traded in, export or import markets (the quality of ports is significant, for example) • The political and convertibility risks • The quality of the actual client base of the borrower • The risk mitigants available, such as tight trade structures, credit insurance, water-tight contracts etc.

Dubai’s competitive financing advantage Trading houses are setting up global and/or regional hubs in the JLT Free Zone, to explore new markets such as Africa, Iraq, Libya and the CIS states, and also to route imports and exports through Dubai, rather than from their home countries, chiefly India and Pakistan.

A key consideration for these companies is the availability of cheaper financing in Dubai than in their home countries. Interest rates in India, for example, can range between 11 and 14%, whereas rates in Dubai can span between 4 and 10%, depending on: • The quality and vintage of the borrower • The structure • Goods traded, and • The quality of the borrowers’ clients and export markets The discounting of export letters of credit (LCs) has also become cheaper in Dubai, with some banks even being able to compete with the pricing of banks from Singapore. Two key issues therefore arise: • How do banks in the UAE view third port financing?

• How easy or difficult is it to secure trade financing for this purpose?

The good news is that UAE banks are more than familiar with third port trade and financing structures and are very much open for such business. However, the bad news is that they are few in number and it is therefore important to know with which banks do offer this kind of finance.

Considerable time is wasted by chasing the wrong

The good news is that UAE banks are more than familiar with third port trade and financing structures and are very much open for such business

A serious issue facing companies setting up in Dubai is the issue of being ‘start-ups’, and the resultant difficulties in raising trade financing here. From a local bank’s perspective, anything less than two years established is considered ‘start-up’. There are dozens of high quality and large companies (in their home countries) in the JLT Free Zone for instance, which have not been able to secure credit facilities due to their ‘newness’ in the UAE, but whom have then met with financial consultancy firm Salvus Advisors to find a way through the bank financing maze. So what can be done?

The reality is that it is extremely difficult for such companies to obtain financing, even though they may have decades of experience in the same business in their home countries. Vikram Venkataraman, MD of Salvus Advisors says: “We recently had a case of a 20 year old listed Indian company, a market leader in their business, who were refused financing because their company in Dubai was new. All they wanted to do was re-route their exports and imports through Dubai, instead of India.”

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So what can be done to get on the right path to third port financing?

Unless companies are prepared to fully secure their credit facilities with tangible security, or a stand-by letter of credit from their home country bank(s), an unsecured (or ‘clean’) line for new companies is practically impossible. One recommendation applicable to some Indian companies is to obtain standby LCs issued by their bank(s) in India, to obtain financing here in Dubai.

Regulations in India do permit this, a fact not widely known by Indian companies going overseas.

It is also recommended to commence banking on a fully secured basis to establish a track record with banks – a dilution of this security over time, with a good record once established (say 1 – 2 years) is possible. Other tips for new companies: • Choose the right bank. Of the 50 odd banks in the UAE, less than 10 dominate the lending landscape and are hungry for business. Of these, some are more comfortable than others with third port trade. Do your homework and find out which • Talk to the right people in the bank before you open an account. In fact always open accounts with two banks to avoid dependence on one. The choice of person and department is critical. The unit that opens an account is NOT the one that will process a credit application! Secondly, ensure you talk to a Relationship Manager who understands that you will be applying for unsecured credit lines over time • Consider obtaining credit insurance, both Atradius and Euler Hermes (the more active insurance firms) are present in Dubai. This will go a long way in your seeking factoring/ invoice discounting lines with banks • Appoint a good auditor (empanelled with banks) and get your statements audited from year one The trick is to prepare the ground immediately for obtaining future financing and not assume that: • It is not possible at all • You don’t need to do anything special to prepare yourself • Any good bank will consider financing you even after two years, merely because you have had a good track record – you may have just banked with the wrong bank!

A little bit of research and understanding of ground realities will save a lot of time, effort and avoid considerable heartache!

- Thanks to Vikram Venkataraman, Director, Salvus Advisors JLT

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MONEY

Cashflow for Survival C

ashflow is critical to the success of all companies, irrespective of size, and your survival in business depends on it. This article explains what cashflow is, how it impacts on profits, and includes tips on how to improve your cashflow management.

than your incoming cash, spelling trouble for your business. There are steps you can take to remedy the situation and generate or collect more cash, while maintaining or cutting expenses. Achieving a positive cashflow does not happen by chance, you need to be proactive to make it happen.

Many businesses have been bankrupted simply because the amount of cash coming in does not match the amount of cash going out. Equifax reported that 66% of new businesses only survive for two years, 44% survive four years, and just 31% survive for at least 7 years. Insufficient capital is one of the main reasons for the failure of small businesses, coupled with lack of experience, poor location, poor inventory management and over-investment in fixed assets.

Constantly analyse and manage your cashflow to control the inflow and outflow of cash effectively.

Achieve this by viewing your cashflow forecast as a ‘living document’ and undertake regular cashflow analyses to ensure you have enough cash each month to cover your obligations. You need to know at all times exactly what your cashflow position is. Salvus Advisors have a free cashflow worksheet you can download and use for this purpose – www.salvusadvisors.com. In addition, most accounting software packages geared to SMEs such as QuickBooks, will help you to produce a cashflow statement.

Hazards of poor cashflow management Knowing your company’s exact cashflow position at all times is essential. If your cashflow is not under control, you risk: • Not being able to execute your business plan, purchase supplies, pay your staff or invest in necessary marketing etc • Not being able to pay your suppliers on time, threatening your entire supply chain • Missing payments to suppliers, meaning you reduce your options in terms of supply, staffing etc., thereby stunting the growth of your company Cashflow basics Cashflow is the movement of funds in and out of your business. It should be reviewed weekly, monthly or quarterly and there are two kinds of cashflow to consider: 1. Positive cashflow: Receivable cash is higher than the amount of the cash leaving your business through accounts payable, monthly expenses, salaries, etc.

2. Negative cashflow: This occurs when your outflow of cash is greater

Profit does not equal cashflow.

You cannot look at your profit and loss statement (P&L) expecting it to let you know your cashflow position

Profit v cashflow Profit does not equal cashflow. You cannot look at your profit and loss statement (P&L) expecting it to let you know your cashflow position. Many factors feed into establishing Cashflow, including accounts receivable, inventory, accounts payable, capital expenditures and debtors. Smart cashflow management requires focus on each of these drivers of cash in addition to your profit or loss.

Profit equals revenue minus expenses. Invoicing a customer for products or services sold to them creates revenue, but actually collecting the money on the invoice creates cash. A positive cashflow is needed to generate profits. You need cash to pay your employees and suppliers to provide your service. It is the sale of those services that generates a profit.

Cashflow and growth You need to actively structure your business to have a positive cashflow if your business is to grow and

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profit. Growing your business places a huge demand on cash; think about the outlay for premises, licenses, employees etc., before thinking about achieving higher revenues and profits from growth.

How to improve cashflow Take proactive steps like investing in accounting software, hiring a management consultant and/or getting specialist training to understand where the money is made or lost at any given point between your current and future positions.

“Despite the fact that cash is the lifeblood of a business - the fuel that keeps the engine running -

Many business owners see growth as the solution to a cashflow problem. They therefore often achieve their goal of growing the business, only to find they have magnified their cashflow problems in the process. Plan for growth and related cash outlays in advance, so not to threaten the business with a lack of cashflow for existing operations. If planning to expand into bigger premises, ask yourself if you have sufficiently budgeted for the following: • Quarterly rent in advance, deposit and PDCs for the year • Utility deposits and monthly bills • Telecommunications infrastructure • Office and staff insurances • New furniture and equipment • Fees for amendments to trading licenses • New staff salaries and visa costs • Marketing materials for new office

most small business

Tips to better manage cashflow 1. Collect receivables To speed up the receipt and processing of receivable cash, you need to have a strongly proactive process in place, rather than just sending out invoices and hoping that clients pay on time. Consider implementing these measures: • Avoid extending credit unless you have 3-6 months worth of outgoings in your account. If you cannot afford to extend credit, then don’t!

• Offer discounts to customers if they pay bills quickly • Know your client. To whom can you reliably offer 30 days credit, or a 50% ‘upon-order’ payment, with the 50% balance payable with credit terms that suit your business and cashflow needs • Ask new clients to prepay, or request cash on delivery (COD) to establish their account with you.

This is not offensive and they should understand your reasons without explanation • Where credit terms are offered, implement structured payment plans. Ask customers to pay with post-dated cheques so you know when the cash will be received

Philip Campbell,

2. Tightening credit requirements Do your research beforehand to determine the risk of extending credit to each customer. Can they pay their bills on time? Is their business growing or faltering? Ask new customers to fill out a credit application, check references and make a decision accordingly. Accept credit cards – these will cost you a percentage, generally 2 to 5% of the sale, but it helps timely payment.

3. Increasing sales Winning new business is essential for growth, but it can take time and money to convert prospects into sales.

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owners don’t truly have a handle on their cashflow.

Poor cash-flow management is causing more business failures today than ever before”

CPA

Selling more to existing customers is cheaper. Analyse what they’re buying and why, as this information may lead you to increase your profit margin and generate more cash. Be careful when incurring unbudgeted costs to increase the sales that contribute to accounts receivables. Make sure you control the credit given for these extra sales.

4. Pricing discounts You can also offer your customers discounts for paying early. This practice may impact your profit margin, but it may help your management of cashflow by incentivising customers to make payments earlier than typically required.

5. Getting Control of Your Cashflow Financial experts suggest asking yourself the following two questions to determine if you have your business cashflow under control: • What is my current cash balance right now?

• Where do I expect my cash balance to be six months from now?

If you cannot answer these two questions you do not have your cashflow sufficiently under control. A remedy to this is tracking your actual cashflow figures every month to determine if your management methodology is creating the cashflow your business needs.

Finally, spend regular time working with your cashflow ‘budget/actual’ documents and variance analysis to move forward with your business. Take your cashflow into account at all times to ensure a positive cashflow status is achieved and protected. This approach is the difference between ‘starting’ your business and ‘running’ your business.

MONEY

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February 2013

25

Introduction To

Islamic Finance

The global market for Islamic Finance at the end of last year was worth around $1.4 trillion and this financial model has enjoyed year-on-year growth of between 15-20% for over a decade. In 2011 the IMF alluded to the role that Islamic Finance could play in connecting finance with the real economy, and the World Bank has already formally recognised Islamic Finance and designated it as a priority area for its financial sector programme. So, what is Islamic Finance and how do its basic principles differ from conventional finance models?

Islam tends to be poorly understood amongst people from non-Islamic countries, with non-Muslims unfamiliar with the finer details of Islamic culture and values.

Therefore the notion of applying Shariah principles to banking and finance is treated with bewilderment, especially as there is no concept of Christian or Hindu banking.

Yet Islamic Finance is thriving, not only within the Middle East, but also in Europe, with many major European banks perceiving it as a profitable opportunity to generate new business, rather than as a threat to existing business. Islamic finance is about widening choice, and in particular about providing alternatives to interest-based finance. The aim is to develop financial products that are seen as ethical, sustainable and within the realm of socially responsible investment.

Islamic Finance (IF) is the broad term used to describe a wide range of financial transactions that have been approved by a recognised authority as compliant with Islamic Law, also known as Shariah Law, or ‘The Shariah’. This ‘alternative’ finance system has drawn the attention of Muslims as well as non-Muslims due to its unique characteristics.

How do Shariah principles relate to finance?

The Shariah explains in detail ethical concepts in the use of money and capital, the relationship between

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“Islamic Finance is increasingly becoming mainstream and integrated into the global financial system. The World Bank has formally recognised Islamic Finance and have designated it a priority area in our financial sector programme”

Sri Muliani Indrawati, Managing Director, World Bank Group

risk and profit, as well as the social responsibilities of financial institutions. For example, if you were to ask an Islamic bank for a loan of $100, they would consider it unethical and ‘unfair’ to ask you to repay more than the $100, by charging interest. Instead, Sharia principles would apply by lending you the $100, if it were deemed to be for an ethical and commercially valid business reason, and then take an agreed share of the profits of the business venture. Crucially, the Islamic Finance institution will also be prepared to share the losses, should the business venture not succeed.

Islamic Finance therefore upholds the principles of fairness, transparency and integrity, and embraces the following key features: 1. Materiality and validity of transaction Islamic Finance encourages trade activities that generate fair and legitimate profit, in which the transaction must be accompanied by an underlying genuine trade and business-related activity. This requires a close link between the financial and productivity flows, which underpin Islamic Finance.

This is to ensure that funds are channeled into real business activities and will therefore be subject to an appropriate (sometimes rigorous) due diligence process. This has the effect of insulating the Islamic Financial system from risks associated with excessive leveraging and speculative activities.

2. No payment or receipt of interest (riba) The central feature of the Islamic Finance system is the prohibition of the payment or receipt of interest, called ‘riba’, in Islamic Finance terminology. Linguistically, the word ‘riba’ means ‘increase’. In a commercial context, the Shariah concept of riba is similar to the payment of interest in conventional financings. Riba occurs when money is lent and paid back with interest, whether fixed or floating. It also occurs when money or currency is exchanged in unequal amounts (riba alfadl) or in equal amounts with one or both payments

MONEY deferred (riba al-nasia). In principle, the Shariah requires that returns on capital must be linked to the success of a business venture, rather than emanating from the mere act of lending money.

of adequate regulation and low savings. The Islamic financial system has it’s emphasis on transactions backed by real assets, and therefore it’s connectivity to the productive economy, and what is real now.

3. No profit sharing without risk (al-ghinm bi-I-ghurm) The Islamic Finance system also upholds the principle of no profit sharing without risk sharing, meaning that the earning of profit is legitimised only by engaging in an economic venture, thereby contributing to the economy.

The key difference between Islamic and conventional finance is the prohibition of interest under the Shariah.

Given that the payment and receipt of interest is essential to conventional lending, procuring finance in a way that is Shariah compliant may appear difficult in the first instance. However, Islamic Finance industry experts have developed a number of structures that are intended to create viable investment opportunities for Islamic investors, which although structured in an alternative way, are intended to yield the same economic characteristics as various types of conventional financing.

4. Principles of fairness The principle of fairness is also reflected in the risk and profit sharing characteristics of Islamic financial transactions. This requirement must be clearly defined at the outset, and serves as an additional built-in mechanism that promotes sound risk management practices by Islamic financial institutions. In particular these features demand the exercise of appropriate due diligence and high standards of disclosure and transparency to be observed by the Islamic financial institution, which in turn enforces market discipline and minimises informational asymmetries.

5. Lack of ambiguity and uncertainty Terms and conditions need to be clearly laid out; ambiguity based on future events cannot be part of Islamic transactions, avoiding any potential future conflict. In Islamic Finance, all forms of contracts and transactions must be free from excessive uncertainty.

Ambiguity and uncertainty in contracts will lead to an unfair advantage of one party over another. This means that contracting under conditions of excessive uncertainty is not permissible.

6. Prohibited investments (haram) In addition to giving guidance on how a transaction should be structured, the Shariah stipulates that the nature of the underlying investment must also be acceptable from a Shariah perspective. Capital therefore, cannot be used to promote unlawful investments. Investments in the alcohol trade, armaments and gambling are some examples of prohibited investments.

7. Risk taking (mukhatarah) As the Shariah prohibits the guarantee of a fixed return on an investment, the parties must assume some risk in a transaction. Taking security over assets is not prohibited however, as this is viewed as a prudent means to guard against a contractual breach, willful wrongdoing or negligence by any of the contracting parties.

8. Speculation (maisir) Transactions that rely on mere chance are not permitted under the Shariah. Returns from a business venture should result from the efforts of the parties in a transaction. On account of this prohibition, certain types of derivatives such as futures and options that are employed for speculative returns are prohibited.

“Shariah standards could take a lead in developing international standards for the new financial regulatory architecture”

Faris Sharaf, Governor of the Central Bank of Jordan

The economic growth in many Muslim countries, both within and outside of the UAE has meant that an everincreasing number of Muslims and non-Muslims are seeking to invest their wealth in a Shariah compliant manner.

As the global financial crisis has brought about a rare moment of reflection and critical thinking, the logic of Islamic Finance has increasingly found itself under the spotlight. At the same time, Islamic Finance is still a relatively new industry (established for approximately 37 years) and is still going through a standardisation process. However the adoption of Islamic Finance products, systems and offerings can open doors to new markets for businesses in an unparalleled way.

Read our continuation article in the next issue for information on Islamic corporate finance structures and Islamic banking.

“I believe in efficiency of markets, also Islamic markets, and I am pretty sure that the market will come to a certain consensus”

Geert Bossuyt, Deutsche Bank

The differences between Islamic Banking and conventional banking It is generally accepted that the causes of the global financial crisis have been centered around speculation based the allure of huge profits, indebtedness, a lack

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Why Talent Walks and

How to Keep Your Key Staff A

ccording to a recent article by Human Capital International, employees (from entry level to senior staff) ranked ‘remuneration’ as last among their motivating factors for moving to another company.

The more senior the position of the employee, the less of a priority remuneration is to them

Countless surveys support the notion that the more senior the position of the employee, the less of a priority remuneration is to them, and the less likely that a counter offer will be considered. In reality, most people don’t start looking for a new job because they want more money; it is often triggered by dissatisfaction in their job, a lack of recognition or progression.

Phil Star, Recruitment Director at RealHR says: “Counter offers may appear to enable you to hang onto your staff in the immediate term, but in my experience, employees very quickly realise that the underlying dissatisfaction with the company is still there and they tend to leave anyway after a few more months. So ultimately, counter-offerings can often be a ‘lose-lose’ strategy.”

So why do talented employees want to leave?

When an employee wants to leave a company, regardless of the specific reason given, it usually boils down to either their own expectations, or something about the intrinsic environment that has changed.

For example, if they have stayed in a role for 2 years and then decide that they would like to progress their career by now moving to a more senior role, it means that their original expectations of the job are no longer being met.

Alternatively, if they are no longer getting along well with colleagues, or new systems have been introduced that make them unhappy, this means that the reason for wanting to leave is an internal ‘environmental’ factor.

Take a look at the following common reasons given for talent wanting to leave their company: • Limited career opportunities • Lack of respect/support from supervisor • Lack of recognition for contributions

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• • • • • •

Lack of interesting/challenging job duties Lack of leadership from supervisor Bad work hours Bad employee relations by supervisor Favoritism by supervisor Money

According to Human Capital’s survey, the myth is that 89% of employers believe that staff leave because of money, whereas the reality is that 88% of employees leave because of factors other than money.

Companies need to recognise that these employees are now very mobile and they want a personal and clearly articulated career path. With their social media skills and easy access to job postings on the Internet, employees don’t have to work as hard to find new opportunities as you have to in order to keep them.

What happens when an employee decides to leave?

When one of your employees starts to look for employment elsewhere, they generally take the following 4 steps: 1. They search for the job title of the role they want They will go to a recruitment website and enter ‘accounts manager’, for example, into the search facility. They will only seek a position that matches their work desires.

2. They check the salary and benefits Naturally they want to see if the packages offered match their ‘wants’.

3. They go to interview stage Here, the employee learns more about the actual job role, intrinsic culture, process and ‘environment’ of the new company.

4. They accept or reject the position Finally, they will either reject or accept the new position if the preceding steps match their expectations and desires.

What can you do to retain your valuable employees?

RealHR’s Phil Star comments: “I believe that SMEs

PEOPLE are much better positioned than larger companies to retain staff. SMEs offer great work exposure and employees like the buzz of being able to contribute on a deeper level, influence decisions and be involved in projects from the start. I find that this gives them a real chemistry with the company that is very rare to find in big organisations. Once that chemistry is there, the employee is emotionally involved with the company and therefore much more likely to go through the up and downs with you and remain loyal.”

Create and maintain a working environment that attracts, retains and nourishes good people Develop a corporate mission, culture and value system, insisting on a safe working environment and creating clear, logical and consistent operating policies and procedures. Your aim is to make your company a place where people want to come to work. Develop a corporate mission, culture and value system. Make sure you insist on a safe working environment and create clear, logical and consistent operating policies and procedures. Your aim is to make your company a place where people want to come to work; not just your current employees, but other people too. You want to be known as an employer of choice (think of the likes of Google). To do this you should include; • Clarifying your mission • Being fair and honest • Cultivating a feeling of family • Promoting integrity • Not tolerating sub-par performance • Insisting on workplace safety • Making work fun Develop effective employee relationship strategies Employees tend to work for their immediate manager, not you, so give your managers plenty of manmanagement training.

It is a very useful exercise to ask your employees why they work for you. This will not only reinforce the benefits in their minds, but will also give you a better understanding of what attracts talented people to your company. You can then use that information to recruit new employees, and you can also ask ‘What can we do to make things even better here?’

Ultimately, employee relationship strategies help to build a sense of family. In families, people learn to work out conflicts and disagreements, stick together through good times and bad, and support each other’s growth. It’s much harder to leave a family than to leave a place where you just go to work.

There are three important points to remember when considering employee retention: • Give your people the tools and equipment to get the job done • Help your people to develop new knowledge and skills • Recognise the fact that money alone will not retain most employees Support your employees All employee support strategies are based on the fact that people want to excel and progress, but need two things: adequate resources to get the job

done, and moral and mental support from you and your managers. When they have these, their job satisfaction increases dramatically.

Other employee support strategies include: • Giving people productive work to do • Providing challenges • Removing obstacles and barriers to getting the job done • Adjusting jobs to fit strengths, abilities and talents • Keeping your promises • Establishing effective communication systems • Clearly defining job responsibilities and accountabilities • Encouraging, recognising and rewarding creativity and innovation • Avoiding micro-management • When possible, offering job flexibility Employee growth strategies Good employees want to develop new knowledge and skills in order to improve their value in the marketplace, and enhance their own self-esteem.

Helping them with personal growth will not only make a difference in their lives, but bond them more closely to the company. For example, you can provide: • In-house skills training and development • Outside seminars and workshops • Funding for continuing education and development • Individual learning plans, as part of your learning culture • Investment in your employees’ career planning

“We’re in the people business serving coffee, not the coffee business serving people.

It’s Not About the Coffee, is about people, and the importance of putting people first.

It’s about the role that we all play in creating the culture of a company, which brings it to life and sustains its development and

Employee compensation Today, more and more companies are paying their people for performance, not just for their time. Your compensation plan needs to incorporate this trend if you wish to retain key employees. A performance linked strategy involves defining the job and checking performance against expectations. When an employee exceeds expectations, give them a bonus.

direction”

Howard Schultz, Starbucks Founder and Chairman

Lay the plan out in advance, so that people understand your expectations and what they have to do to get the bonus. Having said this, money alone is not enough to keep employees engaged and loyal, so use a range of ‘hard’ (money) and ‘soft’ (benefits) compensation strategies. For example: • Provide total employee compensation (salary, benefits, bonuses, training, etc.)

• Design reward systems that stimulate employee involvement • Offer profit-share options • Offer time off and other forms of non-financial employee compensation • Provide benefits such as healthcare, school/family, car and pension • Arrange for discounts on purchases • Fund fitness club memberships Remember, compensation is only one piece of the employee retention puzzle. If all the other pieces, such as the intrinsic physical environmental, (company culture, working relationships, support, process and growth strategies) don’t fit together into one interlocking whole, you won’t be able to pay talented employees enough to keep working for you.

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people + culture + structure = added value

Professional Human Resource service provider for all SMEs, at unimaginably reasonable rates Outsourced Services: Payroll & EOSB Calculations Attendance Management Grievance and Discipline Management Onboarding & Visa Administration Operational HR

For all inquiries call +971 (0) 4 3754273 or email info@realhrconsult.com 30

adding real value February 2013

PEOPLE

Performance Management P

erformance management is rather like an effective ‘working partnership’ between you as an employer, and your employees. By setting performance standards, reviewing, providing feedback and conducting appraisals, you have a strong system to achieve the best results through managing the performance of your employees.

Performance management is a tool to ensure that you manage your staff effectively and ensure that your employees: • Know and understand what is expected of them • Have the skills and ability to deliver on these expectations • Are supported by the organisation in developing the capacity to meet these expectations • Are given feedback on their performance • Have the opportunity to discuss and contribute to both their individual and team objectives It is about establishing a culture in which both employees and management take responsibility for the continuous improvement of business processes, skills usage, behaviour and contributions. Share expectations. You can clarify what you expect individual and teams to do; likewise they can communicate their expectations of how tasks should be managed and what they need to do their jobs.

Performance management strengthens of interrelationships and the quality of relationships between managers and individuals, managers and teams, members of teams and etc. It is also about planning and defining the expectations and objectives you have already expressed in your business plan.

Tools of performance management Here are some guiding principles to which you should adhere when developing effective performance management programme: 1. Set meaningful, attainable expectations These should align with the mission and broad objectives of your business. Be clear about the expectations you have of your employees, and explain any performance measurement tools or techniques being used.

2. Approach this process as a collaborative effort Engage staff in the process of setting out the goals and expectations. Ask for your employees’ ideas to develop appropriate critical elements or outcomes that support your business objectives and lead to the achievement of organisational goals.

3. Provide employee access to the necessary tools It is important to provide your employees with the tools, resources and environment that best support performance enhancement. Ensure that you have the relevant IT systems in place and other materials/practices that facilitate successful performance.

4. Continually assess and communicate progress Make sure this is an ongoing performance review process, rather than saving all of your feedback until the year end appraisal. Credible, constructive feedback includes timely, specific references to predefined targets and goals.

5. Provide for training and mentoring This means the active pursuit of new knowledge and training, using traditional and innovative means to enhance learning, optimise employee strength, and address areas targeted for improvement. Inquire about what assistance is needed; then allow time for employees to learn improved methods and procedures.

6. Provide employees with mid-year progress review Do this with final evaluation feedback, and assign ratings of record. Face-toface progress reviews and final evaluations should be scheduled in advance.

Supervisors can solicit employee accomplishments prior to each of these meetings. Engage employees in discussions about the best ways to meet future milestones and goals.

Benefits of effective performance standards: • Serve as an objective basis for communication about employee performance • Enable the employee to differentiate between acceptable and unacceptable results • Increase job satisfaction because employees know when tasks are performed well • Ensure all new members of staff are aware of your expectations about job performance • Encourage an open and trusting relationship with employees The performance management system is objective, fair, open and transparent.

Employees must be engaged in the process and deem the process to be fair and transparent. As the truism says, ‘if you can’t measure it, you can’t manage it’, and this is an apt concept for a staff management model that will result in increased employee motivation, engagement and productivity.

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The Transition

from Manager to Leader

W

hen you make the leap from an executive role to running your own business, or are appointed the CEO of your existing company, you shift from executing a functional role within the company (such as sales and marketing) to leading an enterprise, with full responsibility for the organisation. It truly is different at the top.

To make the transition from manager to leader successfully, you must navigate a tricky set of changes.

Many people have trouble negotiating most of these shifts, so lets look in more detail at what is involved in making the transition from manager to leader.

Specialist to generalist An immediate challenge is shifting from leading a single function to overseeing the full set of business functions. This shift can leave you feeling disoriented and less confident in your ability to make good judgments. A classic trap is therefore over-managing the function you know well and undermanaging the others.

Effective leaders understand the different ways that professionals in finance, marketing, operations, HR, and Research and Development approach business problems, and the various tools (cash flow management, customer segmentation, process flow, succession planning, stage gates etc.) that each discipline applies. You must be able to speak the language of all the functions and translate for them when necessary. Critically, you as a leader must know the right questions to ask and the right metrics for evaluating and recruiting people to manage areas in which they themselves are not experts.

Analyst to integrator The primary responsibility of a ‘function manager’ is to recruit, develop and manage people who focus in depth on specific business activities. An ‘enterprise leader’ has the job of managing and integrating the collective knowledge of those functional teams to solve important organisational problems.

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“The task of leadership is not to put greatness into people, but to elicit it, for the greatness is there already”

John Buchan

As the new leader you are expected to balance the needs of the supply side of the business (operations) with those of its demand side (sales and marketing), to know when to focus on the quarterly business results (finance) and when to invest in the future (Research & Development), to decide how much attention to devote to execution and how much to innovation, and to make many other such decisions.

Tactician to strategist There are a myriad of details regarding every aspect of the business that a leader needs to absorb.

Being tactical can be seductive, the activities are so concrete and the results so immediate. The problem with this, of course, is that a core part of your leadership role is to now be the strategist-in-chief for the function that you have previously managed. To do that, you have to let go of many of the details and free your mind and time to focus on higher-level matters. You need to adopt a strategic mind-set.

For example, if a competitor introduces a lowercost substitute for a key product that your company makes, you as a leader need to not only consider the immediate threat, but you also have to think expansively about what the competitor’s future intentions might be. Is the competitor going to use this low-end product to forge strong customer relationships and progressively offer a broader range of products?

If so, what options should your company pursue? How would the competitor respond to what you chose to do? These are not questions you would have been responsible for in your previous managerial role.

Bricklayer to architect Too often, senior executives dabble in the profession of organisational design without adequate thought, and end up committing malpractice. They come into their first enterprise-level role itching to make their mark and then target elements of the organisation that seem relatively easy to change, like strategy or structure, without completely understanding the effect their moves will have on the organisation as a whole.

PEOPLE As you move up to the enterprise level, you become responsible for designing and altering the architecture of the organisation; its strategy, structure, processes and skill bases. To be an effective organisational architect, you need to think in terms of systems.

You must understand how the key elements of the organisation fit together and not naively believe that you can alter one element without thinking through the implications for all the others.

Problem solver to agenda setter Many managers are promoted to senior levels on the strength of their ability to fix problems. When they become enterprise leaders however, they must focus less on solving problems and more on defining which problems the organisation as a whole should be tackling.

To do this you have to perceive the full range of opportunities and threats facing the business, and focus your team’s attention on only the most important ones. You also have to identify the ‘white spaces’; issues that don’t fall neatly into any one function but are still important to the business, such as diversity. To work out which problems your team should focus on, ie. to set the agenda, you have to learn to navigate a far more uncertain and ambiguous environment than you might be used to. You also need to learn to communicate priorities in ways that your organisation can respond to.

Warrior to diplomat With an enterprise leadership role, you will find yourself devoting a surprising amount of time to influencing a host of external factions, including regulators, the media and investors. Your support staff will also bombard you with requests for your time. Some of these groups you will be familiar with, others not at all, but what will be new to you is your responsibility, not just to interact with various stakeholders, but also to proactively address their concerns in ways that mesh with the company’s interests. In essence, you will have to take on the challenges of being a ‘corporate diplomat’.

by employees or indirectly transmitted to the level immediately below and further down through the organisation. This effect can’t really be avoided, but as an enterprise leader, you can make it less inadvertent by cultivating more self-awareness and taking the time to develop empathy with subordinates’ viewpoints.

“Technology is always evolving, and companies… can’t be afraid to take advantage of change.”

Eric Schmidt, Google

Even if you are already a strong communicator who is used to selling ideas or products, you still need to adjust your thinking in regard to defining a compelling vision and sharing it in an inspiring way.

In your previous role you’ve probably maintained a reasonable degree of personal contact with most of the company’s employees. Now you may be overseeing 400+ people scattered around the globe, which means that your previous communication style is simply unworkable. When the time comes to communicating it to the organisation, you have to work more through direct routes such as intranet and find other channels, such as video, for spreading the word.

For the most part, the shifts involve switching from left-brain, analytical thinking to right-brain conceptual mindsets. That doesn’t mean enterprise leaders never spend time on tactics or on functional concerns, it’s just that they spend far less time on those responsibilities than they used to in their previous roles. In fact, it is often helpful for enterprise leaders to engage someone else as a Chief of Staff, a Chief Operating Officer, or a Project Manager to focus on execution, as a way to free up time for your new role.

What do effective corporate diplomats do? They use the tools of diplomacy; negotiation, persuasion, conflict management and alliance building to shape the external business environment to support their strategic objectives. In the process they often find themselves collaborating with people with whom they compete aggressively in the market every day.

You must also understand how to recruit and manage employees of a kind that you have probably never supervised before, such as Government relations and corporate communications. You must recognise that these employees’ initiatives have longer horizons than the core ongoing business, with its focus on quarterly or even annual results.

Supporting cast member to lead role In part, this shift is about having a much greater impact as a role model; your influence is magnified, as everyone looks to you for vision, inspiration and cues about the ‘right’ behaviors and attitudes. Rightly or wrongly, the personal styles and quirks of leaders are infectious, whether they are observed directly

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TECH

Why SaaS Saves You Money S

aaS has grown into a very popular and cost efficient way of delivering a variety of indispensable business applications ‘on demand’ – from accounting and HR software, to customer relationship management systems. End users usually access SaaS applications in the cloud via the web using your standard web browser, such as Internet Explorer.

With SaaS (Software as a Service), rather than your company developing, maintaining, owning and supporting in-house software to manage systems such as HR or accounting, you simply rent the software from another company, which manages and hosts it ‘on the cloud’, a centralised infrastructure.

The first SaaS products for businesses The cloud model evolved from trends that started back in the 1960s, when mainframe providers like IBM offered centralised services such as database storage to other big organisations. The explosion of the Internet in the 1990s saw a new class of centralised computing emerge, Application Service Providers (ASPs). These offered businesses centrally hosted services and managed business applications, often belonging to a third party.

‘Software as a Service’ (SaaS) extended this offering, replacing what were essentially hosted, older-style business applications, with brand new solutions based on ‘multi-tenanted’ products. With these products, instead of each customer using a dedicated application (with all of the associated overheads of maintenance, updates and upgrades), all customers share a single base.

This makes these systems cheaper for vendors to maintain and easier to update. The result is lower costs for customers, with automatic product updates, usually included as part of the subscription fee. The first SaaS applications included a Customer Relationship Management (CRM) product from Salesforce.com, which quickly gained popularity.

How you can use SaaS products The major attractions of SaaS for companies include

the fact that there is no initial capital outlay for the product, and that it has the potential to cut your ongoing IT support costs. All hardware and software maintenance and support is dealt with by your SaaS provider; and thanks to economies of scale, they can generally achieve this more cheaply than would be possible in-house. SaaS also enables you to get your applications up and running quickly, which means your staff will be able to work quickly and efficiently thus meaning a further saving in time costs.

All hardware and software maintenance and support is dealt with by your SaaS provider; and thanks to economies of scale, they can generally achieve this more cheaply than would be possible in-house

While customer relationship management (CRM) is still the largest market for SaaS, today it has grown into a common delivery model for a whole array of other business applications including: • Accounting • Content Management (CM) • Enterprise Resource Planning (ERP) • HR Management • Invoicing • Management Information Systems (MIA) • Service Desk Management A SaaS HR software app, for example, can help you to manage and streamline a whole range of HRrelated activities, from employee holiday and absence management to legislative compliance and HR analytics.

SaaS products offer you huge flexibility and low costs, as charges include hardware and software implementation, upgrades, security and support, releasing you from the burdens associated with installing and maintaining the equivalent in-house solutions.

Many products allow you to respond more quickly to changing business demands because they are easier to scale up or down, and often rapidly develop new functionality. SaaS can also enable smaller companies to benefit from cheaper subscriptions, since many vendors offer short contracts, so that customers are not tied in for a long period. Vendors also tend to charge for the service based on actual usage, so you do not have to commit upfront to licences you will likely never actually use.

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BYOD is Happening in an Office Near You According to US-based Juniper Research, the number of employee-owned personal devices used in the workplace will more than double by 2014, reaching 350 million, compared with almost 150 million in 2012.

This consumerisation of IT means that employees are bringing their personal smartphones and tablets to work and asking you to give them access to the company network, their email, contacts and calendar, and are increasingly asking for access to business applications too. Welcome to the ‘The Bring Your Own Device’ (BYOD) phenomenon! A BYOD programme lets staff consolidate their work laptop and their favorite personal device, meaning they can now carry just one device and streamline their communications.

BYOD security challenges Despite BYOD’s benefits it also introduces risk, as business applications, and potentially your most sensitive enterprise data, can be accessed by employees whenever they want. Given this, what if the device is not password enabled and is left in a taxi? Or if confidential client data is synced using Dropbox? Or access your company data over an insecure wireless network? These examples show that embracing BYOD also means the need to embrace a secure mobile device management solution.

BYOD management strategies Before a BYOD programme is implemented: • Ask your IT department to assess whether any of the BYOD devices being reviewed for integration will interfere with those currently accessing company system • Check whether your network supports BYOD • Establish the security of your data and how these devices will interact with existing systems, such as anti virus and print management software • Think about what access and which applications you’ll make available to groups of users, how you’ll provision those applications and how you’ll ensure

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• • •

Despite BYOD’s benefits it also introduces risk, as business applications, and potentially your most sensitive enterprise data, can be accessed by employees whenever they want

•

users have the correct versions and applicable patches Map your mobile users to your user directory so you don’t have to manually update your mobile system every time an employee joins or leaves Set policies, map them to users and devices, and easily adapt to changes Monitor and support the devices, both proactively (e.g., monitor device statistics and application performance) and reactively (e.g., locking or wiping a device upon its loss or theft) Invest in Mobile Device Management (MDM) software, which secures, monitors, manages and supports mobile devices deployed within business By controlling and protecting the data and configuration settings for all mobile devices in the network, MDM can reduce your support costs and business risks

If your company is like most, you may not have instituted a formal policy that safeguards against BYOD risks. Using the above checks and measures, you can decide which devices to support, for whom and how you’ll enforce that policy.

Implementing a strong security policy A BYOD policy should be like any of the any documents that employees must sign outlining their rights, responsibilities and rules with which they must comply. A signed policy also gives your company the right to protect itself in the event of device theft, loss or misuse. Here are our 9 essential points to include in your BYOD policy: 1. Employer ‘right to wipe’ Perhaps the biggest risk of BYOD is the exposure of sensitive data if the device is lost or stolen. That’s why most policies must require password control, device locking and encryption, as well as the right to remotely delete data from the device under certain conditions, including employee termination. It makes sense to choose a technology that compartmentalises business

TECH not be overlooked. If the age or condition of a device means an increased likelihood of causing an electrical outage, or even a fire, establish how this should be reflected in your insurance cover. What would you do if one of the employees’ BYOD devices caused an electrical short, resulting in data loss, or even an outage that disrupts your entire office for a period of time? All BYOD devices must also be tested and pass your company’s legal obligations of Health and Safety checks in order for them to be lawfully used, especially if the device is over 3 years old.

data and apps on the device, enabling you to selectively wipe only what is necessary for business.

2. Employee responsibilities Employees need to understand the scope of their responsibilities, such as maintaining minimum hardware or software requirements. You might want to make it the employee’s responsibility to buy the iPhone 4, 4S or 5 for example, and if they don’t upgrade, they can’t have the app. Another reason for mandating minimum specifications is to keep security patches updated on all devices. Some company policies warn that mobile access will be automatically disabled for people whose device versions are out of compliance.

3. Allowable activities / e-safety Common restrictions include limiting access to parts of the network, company documents, networks, and applications; using device features like cameras and USB ports and the white/blacklisting of apps and websites. Common websites that are restricted include Dropbox and iCloud. While you can also ban social networking sites, be aware that taking away too much personal functionality can deter employees from using the device, and therefore and working out of normal hours.

4. Allowable devices In the interest of reducing support costs and applying security controls, perhaps you should limit allowable devices. At the very least you should consider ‘tiering’ the policy by device type; e.g. Blackberries can access enterprise applications; iPhones and iPads just email and the network; and Androids email only. You should tell users why, so they can make an informed decision about the device they choose.

Common restrictions include limiting access to parts of the network, company documents, networks, and applications

9. Employee misconduct, discrimination or harassment Once you approve a BYOD device you must make employees aware of the definition and ramifications of misuse and misconduct. Inform staff that if they wish to use their own devices, they must abide by company rules and procedures, including policies on bullying, discrimination, abuse of social media, IT, communications, security, confidentiality etc.

Where an employee is found in breach, make it clear that they will be subject to the company disciplinary process, regardless of the fact that they own the device. This is in line with Federal Law in most countries.

The sheer number of issues that BYOD raises can be paralysing, but the important thing is to take action.

BYOD is an experiential issue and not something you can learn by analysing every possible consideration.

You need to take control of this and put some kind of policy in place, even if it is an imperfect one, and then let it be a work in progress that is updated regularly, as your requirements change.

5. Who provides support?

Some companies decide that if employees own the device, they take responsibility when it malfunctions.

Time spent on support also equals lost productivity.

You could save yourself the time and expense of an IT call, but alternatively, you may lose a lot more as a result of lost productivity.

6. Division of responsibilities If your own company-developed app doesn’t work properly, you resolve this. For hardware-related issues or anything non-business-related, you could ask the employee to shoulder the responsibility. Either way, your company policy needs to spell out these distinctions.

7. Who pays for what?

If you formalise BYOD, who foots the bill for the device and ongoing usage charges? If most of the downloads are business-oriented, employees might expect the business to pay, but you might want to set a cap. Either way, the details of payment need to be clarified in the policy. The 3 most common options are: no reimbursement; expensing of a portion of the monthly usage costs; and either a one-off or ongoing expenses. You may even offer different plans for different employee roles, with some getting full reimbursement, and others partial.

8. Health and safety laws BYOD includes office insurance implications that must

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Aerohive

™

TECH

Using Tablets for Business T

ablets make a lot of sense in the home, where we can lie on the couch and browse the web or watch movies, but when it comes to corporate usage, business owners ask the question: ‘Why should we use tablets when we have laptops?’

Responses to this question came with the results of a survey by independent survey research firm Changewave, who polled 1,641 businesses, and addressed the explosion of corporate tablet demand and usage. IT buyers were asked if they were planning to get tablets and, if they already had them, how they were used in the workplace. Unsurprisingly, sales staff and directors are the most open to using tablets in the work place.

Common business usage of tablets Perhaps surprisingly, the primary uses mirror the home environment. 73% of respondents use tablets to access the Internet and 69% to check e-mail. However, rather more interesting are the 46% of people who use iPads to provide sales support, and the 45% who use them for customer presentations.

One sales use for tablets, is for companies to put them in the hands of their customers, which has the effect of physically drawing them into your business proposition.

You would never dream of letting you client freely look around your laptop, but you can do this with a presentation on tablet, which actually involves them with your business, promoting participation and synergy within your offering.

Unleashing a video monster Video is an under-exploited element of tablets today that is likely to grow in 2013. iPads can be used in warehouses, where staff can take a quick video of an incoming product that looks of suspect quality, and email the images to the purchasing agent to check if they should accept it. This kind of informal video

use, whether recordings or impromptu video chats, will grow as more people experiment with tablets. So will the use of video in sales, since tablets make it much easier for someone to call up a 30-second video from the device and hand the tablet to the prospective customer to watch it.

Companies have found that when they gave salespeople tablets, they needed to make it easier for them to create tablet-friendly sales presentations.

Templates of tablet-ready presentations, that a salesperson can customise with the prospective client’s information, are a good option. Some companies still require a laptop to build those kinds of presentations, while others have built-in applications so the salespeople themselves can do that from a tablet.

Business benefits of tablets Mobility • Tablets can be used anywhere you go. Because of their lightweight and portable nature, they can even be used while standing or on the move Flat working surface • The form factor and convertible design characteristic of a tablet means it can be laid flat on any working surface. This facilitates personalised interactions with people, such as sales meetings, or any meeting in which you don’t want technology to interfere with the personal dynamic. You can sit across the table from someone and take notes without having your PC act as a dividing wall Electronic input power • Notes can be taken during any business meeting or conference and can be stored, accessed, reviewed, reorganised and synchronised, with inputs in other formats to modernise work and create a superior output Take notes easily • The technology comes with MS Office Outlook and MSN Messenger so you can send handwritten notes and drawings and you can also add your handwritten signature to the end of your emails. As they are electronic, you can reorganise your notes and search them later.

It’s not really a matter of whether tablets are better than laptops or vice versa.

It’s about what type of device is most efficient or productive for the job at hand, which is why it might pay you to look for ways in which tablets can cure your business headaches going forward.

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Health and Safety Law at Work U

nder what is known as ‘common law’ all employers in the UAE have a legal duty of care to protect their employees. There is a term implied into all employment contracts requiring you, as an employer, to take care of your employees’ health and safety. You must provide a safe place of work, a safe system of work, adequate plant and equipment, and recruit competent and safety conscious staff.

If you fail to take reasonable care in any of these areas, your employees may have a number of recourse options, such as resignation and even a personal injury claim, depending on the case.

Employees, too, have responsibilities and should work with you to develop a safe place of work.

Main legislation Legislation covering the workplace stems from the UAE’s Civil Code, Dubai Municipality H&S Code, Labour Law Chapters 5 and 10, and the Ministry of Justice. All workplaces are covered by legislation that says that an employer must do everything reasonably practicable to provide a safe and healthy workplace with adequate welfare facilities. Additionally, Chapter 4 of UAE Labour Law clearly states the maximum working hours for employees in line with H&S implications and responsibilities.

Employers’ health and safety obligations Your employers’ duties to provide a safe and healthy working environment arise from the core principles of negligence, contract and numerous specific statutory duties. As an employer, you should at least: • Publish a health and safety policy • Develop a prevention policy • Require persons at work who are exposed to serious and imminent danger to be informed of the nature of the hazards and steps taken to protect them • Appoint one or more competent persons to assist in undertaking preventive and protective measures • Arrange for the appointment, even if contract based, of health and safety representatives to

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• •

The employers’

• • • • • •

duties to provide

•

a safe and

•

healthy working environment derives from the core principles of negligence, contract and numerous specific statutory duties

• • •

periodically review the workplace and evaluate any risks and hazards Establish procedures to be followed in the event of serious and imminent danger to persons working in the organisation Consult with employee health and safety representatives Prevent risks as much as possible Inform staff of any risks Combat risks at source Arrange protection from unavoidable risks Monitor and improve safety arrangements Adapt work stations to the individual, eg; chairheight, foot rest etc.

Alleviate monotonous work where possible, to help keep employees alert Provide comprehensible and relevant health and safety information Provide adequate health and safety training during working hours Provide reasonable safety training Comply with the updated provisions concerning health and safety procedures

Producing a H&S policy All employers with more than 5 staff must have a statement of their health and safety policy. Employers with fewer than 5 employees may still find it useful to put health and safety procedure into writing. A written health and safety policy can be concise and still effective. This statement must: • Be in writing • Be carefully thought through and demonstrate a commitment to managing health and safety at work • Contain a general statement of intent to provide a safe and healthy working environment • Be easily accessible and brought to the attention of all employees • Be workable • Give details of health and safety responsibilities within the organisation

WELLBEING • • • • •

Name key individuals Cover the systems and procedures in place Refer to other documents where appropriate Cover managing risk assessments Include arrangements for employee consultation, maintaining equipment and safe handling of substances • Explain arrangements for training, supervision, accidents, first aid and emergencies • Address stress, alcohol and drug misuse

normal work for more than three days • Certain work-related diseases (poisoning, lung diseases, infections and other conditions must be reported when linked to specified types of work) • Certain gas incidents According to UAE Labour Law, if one of your employees suffers a work related accident, then you must report the accident immediately to the police and the Ministry of Labour under whose jurisdiction your place of work falls. The information you need to supply should include the employee’s name, profession, address, nationality, a brief description of the incident and its circumstances, and the medical measures or treatment that were provided.

Policies should be produced after consultation with employees and certainly in liaison with specialists, to ensure that risks are managed and procedures are correct. You can do this after conducting surveys on your staff’s attitudes to health and safety. They should be applied uniformly and there should be a system for regularly monitoring and reviewing the policy to ensure that it complies with current legislation.

For businesses with limited experience in developing H&S related policies, free safety policy templates with blanks to fill in are available online, which are good for a first step, although the adoption of a tailor-made policy is best practice and entirely ‘off the shelf’ policies are discouraged, as they are generic, and can not to take into account the specific health and safety issues that are relevant to your business and may leave the business open to risk.

Risk assessment A risk assessment is a vigilant examination of what areas/issues in the workplace place could potentially cause harm to people, so that you, the employer, can assess whether you have taken sufficient precautions to prevent damage and/or injury. Every employer must make a regular assessment of their premises to assess which risks may be present. Self-employed workers have a duty to assess risks to themselves and others. Consider the many detailed regulations requiring that risks in different industries should be assessed. www.trakhees.ae provide a variety of useful guidance for employers and employees alike.

Following a risk assessment, you must record any significant findings, make arrangements to implement appropriate remedial measures and arrange for the provision of appropriate information and training for staff.

Accidents and disease at work Under UAE’s Civil Code and Labour Law requirements, employers must have the facility to record accident and disease at work, and where appropriate report to the municipality the following: • Fatal accidents • Major injury or conditions which require medical treatment • Dangerous occurrences

Employers are legally obliged to have on their premises an H&S / First Aid Kit. You are also obliged, as an employer, to have at least one trained first-aider onsite during working hours, and inform all employees of the arrangements for obtaining first aid. Treatment of injured workers must be addressed without delay by your appointed first-aider.

“There’s a need for accepting responsibility - for

Ensuring that employees are safe and healthy at work is one of the fundamental requirements of any employer. Although the Law is extensive in this area, it is important that you view health and safety as a basic part of employment provision and not something that has to be addressed just because of the law.

a person’s life and making choices that are not just ones for immediate short-term comfort.

You need to make an investment, and the investment is in health and education”

Buzz Aldrin

As the employer, you must record all workplace injuries, diseases, dangerous occurrences or certain near accidents in a formal Accident Book. Employees must also report any accidents or illnesses caused by work and record the details in the Accident Book. Other matters should be reported immediately, preferably by telephone, followed by a written report within 7 calendar days. These are: • Accidents that prevent a worker from doing their

February 2013

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February 2013

WELLBEING

Managing Stress at Work

W

hile some workplace stress is normal, excessive stress can interfere with your productivity and impact your physical and emotional health.

Your ability to deal with stress can mean the difference between your success and failure in business.

You can’t control everything in your work environment, but that doesn’t mean you’re powerless, even when you’re stuck in a difficult situation. Finding ways to manage workplace stress isn’t about making huge changes or rethinking your career situation, but rather about focusing on the one thing that is always within your control - you.

You can learn how to manage job stress For workers everywhere, the changes in the economy may feel like an emotional roller coaster. Common causes of stress can be the pressure to perform and meet rising expectations, but with no increase in job satisfaction; pressure to work at optimum levels all the time and more overtime due to staff cutbacks and a fear of being laid off. Since job and workplace stress increase in times of economic crisis, it’s important to learn new and better ways of coping with the pressure.

Signs and symptoms of excessive stress at work • Feeling anxious, irritable, or depressed • Apathy, loss of interest in work • Problems sleeping • Fatigue • Trouble concentrating • Muscle tension or headaches • Stomach problems • Social withdrawal • Using alcohol or drugs to cope You control the stress, it doesn’t control you Stress is not just something that manifests itself, or something you have to put up with. Stress is something you can control. Part of this includes taking time for yourself and doing the things you enjoy, both in and out of the work environment. There are a variety of steps you can take to reduce both your overall stress levels and the stress you find in your job. These include:

1. Reduce job stress by taking care of yourself When stress at work interferes with your ability to perform in your job, cope in your personal life, or adversely impacts your health, it’s time to take action. Start by paying attention to your physical and emotional health. When your own needs are taken care of, you’re stronger and more resilient to stress.

The better you feel, the better equipped you’ll be to manage work stress without becoming overwhelmed.

For example:

Finding ways to manage

Exercise to beat stress Regular exercise is a powerful stress reliever, even though it may be the last thing you feel like doing.

Aerobic exercise (an activity that raises your heart rate and makes you sweat) is a hugely effective way to lift your mood, increase energy, sharpen focus, and relax both the mind and body. For maximum stress relief, try to get at least 30 minutes of heart-pounding activity on most days. If it is easier for your schedule, break up the activity into two or three shorter segments, even if that means using the stairs a few times a day!

workplace stress isn’t about making huge changes or rethinking your career situation

Make food choices that keep you going Low blood sugar can make you feel anxious and irritable, while eating too much can make you lethargic. Healthy eating can help you get through stressful work days. Eat plenty of fresh fruit and vegetables and drink water regularly throughout the day. By eating small but frequent meals, you can help your body maintain an even level of blood sugar, keep your energy up, stay focused, and avoid mood swings.

Get enough sleep Not only can stress and worry cause insomnia, but also a lack of sleep can leave you vulnerable to even more stress. When you’re well-rested, it’s much easier to keep your emotional balance, and cope with job and workplace stress. Keep a sleep schedule and aim for 8 hours a night.

As you make more positive lifestyle choices, you’ll soon notice a reduction in your stress levels both at work and at home.

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“Stress is the trash of modern life - we all generate it but if you don’t dispose of it properly, it will pile up and overtake your life”

Danzae Pace

“Adopting the right attitude can convert a negative stress into a positive one”

Hans Selye

2. Reduce job stress by prioritising and organising Your newfound ability to maintain a sense of selfcontrol in stressful situations will often be well received by colleagues and managers alike, which can lead to better relationships at work. Here are some suggestions for reducing job stress by prioritising and organising your responsibilities.

Create a balanced schedule Analyse your schedule, responsibilities, and daily tasks.

All work and no play is a recipe for burnout. Try to find a balance between work and family life, social activities and solitary pursuits, daily responsibilities and downtime.

Don’t over-commit yourself Avoid scheduling things back-to-back or trying to fit too much into one day. All too often, we underestimate how long things will take. If you’ve got too much on your plate, distinguish between the ‘should do’ and the ‘must do’. Drop tasks that aren’t truly necessary to the bottom of the list or eliminate them entirely.

Try to leave earlier in the morning Even 10-15 minutes can make the difference between frantically rushing to your desk. Don’t add to your stress levels by running late.

Plan regular breaks Make sure to take short breaks throughout the day to take a walk or sit back and clear your mind. Also try to get away from your desk or workstation for lunch.

Stepping away from work to briefly relax and recharge will help you be more, not less, productive.

Prioritise tasks Make a list of tasks you have to do, and tackle them in order of importance. Do the high-priority items first and if you have something particularly unpleasant to do; do it first. The rest of your day will be more pleasant and less stressful as a result.

Break projects into small steps If a large project seems overwhelming, make a step-

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by-step plan. Focus on one manageable step at a time, rather than taking on everything at once.

Delegate responsibility You don’t have to do it all yourself. If other people can take care of the task, why not let them? If you can let go of the desire to control or oversee every little step, you’ll be letting go of unnecessary stress in the process.

Instruct your staff clearly on what is expected of them.

Be willing to compromise When you ask someone to contribute differently to a task, revise a deadline, or change their behaviour at work, be willing to do the same. Sometimes, if you can both bend a little, you’ll be able to find a happy middle ground that reduces the stress levels for everyone concerned.

3. Avoid stress triggers If you know you clash with a colleague, manage the situation better, as opposed to being resigned to accepting it. Avoid the colleague, increase your professionalism when dealing with them and always be polite, controlled and courteous with them. You are likely to find that they reciprocate in the same vein.

Think about the triggers for your work stress, and be smart about how you can avoid them; there is almost always a way!

4. Break bad habits If you know that you usually leave your workload to the last minute and this stresses you, organise your time and pace your tasks better, in order to avoid this stress.

Similarly, if you are habitually late for meetings or work and arrive stressed, remember that nothing is stopping you from leaving earlier and allowing more time; you’ll be less stressed when you have time to spare.

As you learn to manage your job stress and improve your work relationships, you’ll have more control over your ability to think clearly and act appropriately. You will be able to break habits that add to your stress at work and you’ll even be able to change negative ways of thinking about things that only add to your stress.

THE HUB

From Visualising to

Actualising Success

F

expenses and employ extra staff specifically to target bigger clients. Either way, you need to write down clearly defined, achievable steps to reaching your success.

or most business people, success means some kind of mix between financial gain and achieving goals. In business, success is certain to be on your list of things you want to achieve, but when conditions become difficult, it can be easy to lose sight of that success and hard to keep on track.

One way of keeping success in your sights is to be able to visualise it, according to Heidi Grant Halvorson, Motivational Psychologist and author of the new ebook ‘Nine Things Successful People Do Differently’.

Visualisation, put simply, is a technique routinely used by successful sports and business people throughout the world. Concrete evidence of the effectiveness of visualisation is hard to pin down, but there is no doubt that the act is one which can help people to achieve their goals. We have chosen to focus on 5 actions to help you visualise your way to business success: 1. Clearly define what success means to you The definition of success varies from person to person and no one can define what success means to you and your business except you. Success for you may mean the clearance of debts, the achievement of a better work/life balance, a healthy investment portfolio, or simply a huge leap in business revenues so that you can expand. In order to visualise that success, it is essential that you define it clearly.

Once you’ve defined it, note down all of the elements of your success and get an image in your head of how it will look; ie. a full order book, sales people coming into the office with new orders, the end of year P&L etc.

2. Decide how you’re going to achieve your success Only once you’ve clearly defined your success, decide how you’re going to achieve it. It may be that you decide you will implement more efficient processes to facilitate more sales, or streamline your business

“The only place where success comes before work is in the dictionary”

Vidal Sassoon

“Success is walking from failure to failure with no loss of enthusiasm”

Winston Churchill

3. Define how your success is going to look When you define success, you’ll start to get a mental picture of how your success will look. At one end of the scale, it may be as simple a vision of you agreeing a large deal with a new client or at the other; it may involve financial trappings like a new car or a bigger house. No matter how you define success, it’s going to look different to what you see when you look at your life today. You are more likely to achieve that success if you can develop a mental picture of what it will look like and let it help you keep you on track.

4. Decide how you’re going to measure your success Once you’ve defined your success, put in place measurable and identifiable milestones for reaching it. These milestones will be of huge help to you and give you the chance to take any corrective action you need to get you back on track if you’ve veered off, and will of course give that necessary motivation when you need it most.

5. Decide how you’ll feel when you’re successful Success is often simply feeling better about your opportunities for business and your own strength, proactivity and performance of your business. Bearing in mind that most decisions, business or otherwise, are made using an emotional process, the process of visualising success is a great way to get back in touch with your feelings about your business. Write down how you’re feeling about your business today and about what you’ve achieved in your business over the last year. Then write down how you want to feel when you’ve successfully reached your business goals.

Remember that successful people are created and not born.

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The Changing

Role Of Accountancy E

outline the importance of information transparency, proactive collaboration and system integration, as well as the role social media will play in the accountancy firm of the future.

very UAE business is now facing a more complex operating environment. With economies having been shaken in recent years, organisations now look for professional development and business growth in different ways, and part of this includes changing the nature of business needs traditional job definitions.

The Internet has facilitated business owners with more intelligence about financial legislation, accounting practices and business development practices. The traditional role of the accountant is now much better understood by the average business owner than ever before; meaning that the accountant now needs to adapt and develop in order to stay relevant for businesses.

Businesses look not only for lower cost audit and accountancy services, but real-time advice to improve the performance of their business. In this article we

The traditional role of the accountant is now much better understood by the average business owner than ever before; meaning that the accountant now needs to adapt and develop in order to stay relevant

Changing model It is not news that the role of the accountant has to change. Margins are dropping and SMEs are increasingly exploring a raft of alternatives, including online accounting services, in order to not only reduce costs but also gain faster insight into financial performance.

This latter point is key. While businesses are increasingly unimpressed by the costly services still offered by the vast majority of accountancy firms, it is the lack of real-time financial information and time-critical advice that is undermining the role and status of accountancy within business.

Organisations need to understand the impact on the business from cashflow to debt recovery and currency management. Traditional accounting practices have not always facilitated easy assessment, risks, and business change in real-time. Companies have to wait until the monthly, quarterly or annual audit and returns are produced to gain a complete and current insight into their performance. As a result, any opportunities to make changes that may improve the company’s financial position or performance, have been delayed longer than necessary.

At the same time, margin erosion is constraining accountancy firms’ ability to provide advice. Any cost sensitive business is shopping around for accountancy services and opting for the cheapest option each year. Whilst this drives down business overheads, it provides no opportunity for the accountant to build the customer relationship that should underpin the added value advice services. The model is no-win on both sides.

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February 2013

THE HUB Exploring online services To address the pressure of change, a growing number of accountancy firms are exploring the benefits of online accounting solutions to improve efficiency and reduce costs. Admittedly the trend is becoming more common in mainland Europe than in the UAE, but is expected to change going forward. RAK Company Administration (www.rakca.com/services/accounting_ auditing) is already offering online services that are ahead of the accountancy pack. By integrating bank statements directly into the accounting system and exploring self-learning technology that recognises trends in expenditure, the entire accounting process can be streamlined, reducing costs by an estimated 50%, which is of growing interest to organisations in the UAE. Added value services However, while this is great news for the accountancy firm looking to become more competitive, price reduction alone is not enough: businesses will simply adjust price perceptions and continue to move each year for the best deal. The only way to build a profitable accountancy business is to create a strong platform of added value services that exploit the expertise and experience of accountants, from tax planning to export.

Switched on accountancy firms are tracking tweets, responding to requests for financial advice or complaints – and winning business as a result

Building relationships via social media At the heart of the need for a new accountancy model is transparency. Accountancy firms need to be able to demonstrate the value and implications of activity that has been undertaken, from uploading a sales invoice to producing the monthly returns. One way to provide this critical transparency of process is to exploit social media.

Just as timestamps are applied to each accounting transaction, the same process could be applied to Facebook Timelines to reach a business generation that increasingly fails to respond to phone calls and emails, a personal message via Twitter or Facebook with an embedded link can prompt a business owner to sign off the monthly returns.

Whilst this model may seem a leap to traditional accounting firms, social media is transforming the way companies do business and the way they attain business. From LinkedIn recommendations to customer reviews on Facebook, organisations need to be social media savvy, and this includes accountancy firms.

Switched on accountancy firms are tracking tweets, responding to requests for financial advice or complaints – and winning business as a result. The next step is to take this model forward and exploit the ‘always on’ nature of social media to become a constant business companion in the accounting field.

Accountancy firms need to be able to build on this efficiency improvement by delivering not only access to real-time financial performance information, such as the implications of cashflow positions on growth, but also relevant advice and collaboration in a way that suits the new generation of business leaders.

For any accountancy firm looking to provide real-time insight into financial performance and offer proactive, relevant advice on financial issues (even international topics that are relevant to UAE businesses, cashflow and payment strategies), the real-time collaboration offered by social networking is compelling. Critically, it provides a chance for accountancy firms to exploit the lower cost model while also building the relationships required to offer added value services and retain longer-term customer loyalty.

Now a number of factors are combining to create real momentum for a shift in a company’s accountancy demands and therefore the accountants’ approach

Conclusion In Europe this model has gained significant traction.

Banks have started to facilitate the direct integration of bank statements into online accounting solutions to deliver greater transparency; while the auditing authorities proactively certify online solutions. As a result, business organisations can now confidently embrace online accounting in the knowledge that the processes have been verified and the authorities will not pursue any organisation taking this approach for further audit.

Now a number of factors are combining to create real momentum for a shift in a company’s accountancy demands and therefore the accountants’ approach.

The drive towards e-Invoicing and the transformation in information sharing and collaboration, are rapidly creating a business environment dependent upon real-time financial insight.

The challenge for accountancy firms today is not about driving down costs to become more competitive; it is to demonstrate transparency, deliver that real-time information and exploit the new models of communication and collaboration to provide relevant and timely added value services and advice.

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THE NETWORK

Great business cards start with great design and influential copy. After that, the success of your business card as a marketing tool depends on distribution.

By featuring your business card in our Business Card Directory we are able to link the needs of your company, with the right people, and enable you to reach over 46,000 decision-makers in DMCC, TECOM, DIFC, and surrounding business areas.

You can feature your business card in our next issue for a small investment.

Even if only 1% off our DMCC audience enquire and take up your services you would make your money back on this investment and a lot more!

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February 2013

THE HUB

New Year’s Business Resolutions N

follow a specific plan, with benchmarks, deadlines and measurable results, are more likely to see their changes take hold.

ew Year’s resolutions are notoriously easy to make and hard to keep. The same holds true for business resolutions. As a small business owner you may start the year with high expectations for what you hope to accomplish, but the day-to-day reality of running a company soon takes precedence over ‘big picture thinking’. This year, don’t let that happen!

IBM’s Global Business Services report, called Making Change Work, provides some tips on how to get new plans to stick. Some suggestions include understanding all possible outcomes for your decisions, making specific steps that relate to achieving your business goals, getting company-wide support for all aspects of your business plan and being prepared to make a significant progress, even if that means changes.

Even if you do resolve to change an aspect of your business, how do you make that change stick? How do you make sure your business really does stay in shape? A number of studies have yielded specific advice based on real-world examples.

IBM studied the experiences of more than 1,500 managers and business leaders from around the world, focusing on what actions led to successful business transformations. The study found that the most effective change-implementation plans shared four qualities: 1. Realistic preparation You must consider all potential outcomes of a change beforehand. Assess every challenge (cost, employee morale, time, etc.), and then lay out the road map for how you’ll address each one. When you plan your business idea, you must also be able to demonstrate its value and how you’ll implement.

2. Step-by-step Just as formalised systems have been developed for project management, similar processes can be put in place to keep your New Year’s business resolutions and the change process on track. Companies that

“Harness the power of planning your time well, taking care to allocate your schedule according to priorities. Wait when it’s appropriate, hurry when it’s appropriate, and apply patience, vision and common sense”

Tim Berry

3. Change starts at the top Business professionals surveyed by IBM considered top management backing the most critical factor in making change successful. For small businesses, that means you as the MD should make a strong case for the change, and then motivate all of your employees to follow through.

4. Invest to make an impact Cost will always be a factor in any of your business decisions, but you can’t expect to make a largescale change and spend nothing upfront. Make sure you have the resources necessary to cover expenses such as employee training, IT upgrades, visa costs for additional staff etc. Money being spent on transforming your business in the New Year should be seen as an investment, not an expenditure.

In their book ‘Switch: How to Change Things When Change is Hard’ Chip and Dan Heath looked at the process of change from professional and personal perspectives. The reason change is such a struggle, they say, is rooted in the human brain: “We are pulled constantly between messages sent by our rational self (‘I want to eat healthily in the New Year’) and our emotional self (‘I’ve had no breakfast, I’m hungry, so I’ll eat that cheeseburger and fries for lunch’). We may know that change is good for our business, but emotionally, we’re just not ready to tackle the work that comes with it”.

To get the rational and emotional sides of our brains in alignment, the Heaths suggest three basic guidelines all three of which correlate with the findings of the IBM study: Change behavior by changing the situation Your workplace and existing methodologies must be rearranged to support the new way of doing things, not the old routines. An example of this is to resolve

February 2013

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to avoid arranging any meetings or being disturbed for one hour at the end of each day, so that you can focus on your business planning and reviewing priorities. To facilitate this, ensure that your staff are all busy and productive in their roles; for example, allocate that same time to your sales staff as leadsourcing time.

2. Promote your business regularly and consistently If you want to attract new customers, you have to make promotion a priority. Make a New Year’s resolution to hire a marketing expert, or take the time to create a marketing plan of your own and follow through.

3. Put business planning into your weekly schedule Planning is vital if you want a healthy, growing business. Business planning lets you take stock of what worked and what didn’t work, and helps you set new directions or adjust existing goals. Set aside time each week to review, adjust, and look forward - this help you avoid costly mistakes and stay on track.

Respect the effort it takes to change After their initial New Year intentions, employees may backslide into their old ways simply because it’s easier on them mentally. Don’t ask people to do too much too soon, and understand that some resistance to change may be simply habit or inertia. This is where the support of a motivated and motivating manager can make a big difference.

Eliminate confusion What exactly does it mean to resolve to ‘generate more sales’? Clear, specific directions (‘I will get all salespeople to ‘pitch to an additional 10 cold clients per week, knowing that we can convert 20% to sales’) are far more effective than impressive but vague goals. Give exact deadlines, foolproof instructions and build in accountability with regular follow-ups.

Change is possible, but it takes work. When it comes to resolutions for your business in 2013, the ultimate question is: how badly do you want it?

Now that we are well underway with the New Year, it is a good time to reinforce the changes you want to make in your business. Reflect on the progress of your business over the past year and compare to what you want to achieve this year. Learn from the comparisons and plan how you want your business to develop and achieve its goals this year. In the meantime, here are 6 tips you can implement immediately to sharpen your business: 1. Learn how to delegate and do more of it There are so many things to do when you’re running a business, it’s easy to delude yourselves that you need to do all of them. Delegation is the key to freeing up your time and also achieving a healthy work-life balance.

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“People set goals all the time, but 70% of [them] never end up getting carried out in any significant way” Mark Murphy

4. Put time for you on your calendar It is important it is to take the time to recharge yourself; a healthy work-life balance demands time out, exercise and a refreshed outlook every week. If you won’t invest in yourself, who will?

5. Set realistic goals Goal setting is a valuable habit - goals lead to success rather than distress. Make a New Year’s resolution that the goals you set are achievable, rather than unrealistic pipe dreams that are so far out of reach they only lead to frustration.

6. Drop what’s not working for you and move on Not all products are going to be super sellers, not all sales methods are going to work for everyone, and not all suppliers or contractors are going to be ideally suited to your business. If a technique or a product or a business relationship isn’t working for you, stop using it. Don’t invest time, energy and money into trying to make the unworkable workable. Drop it and move on.

It is said that ‘if you keep on doing what you’ve always done, you’ll always get what you’ve always got.’ If you want your business to achieve higher sales, more growth, or if you just want to free up more time to work on the business, you have make changes. If you apply these New Year’s resolutions throughout the year, your business success is much more realistic an outcome than if you just repeating your old ways for another year. A happy and prosperous New to You!

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Regional News Saudi Arabia

New Saudi Minimum Wage

The Ministry of Labour said it would implement a new salary system on February 2nd in order to encourage private firms to increase salaries for Saudi workers to SR3,000.

Saudi’s receiving less than SR1,500 are viewed as “half workers” and those earning less are excluded when calculating their firms Saudization percentage.

The system has been introduced by the Ministry to cut down the unemployment

Iran

rate in the country.

The Ministry’s wage protection programme will be implemented gradually, with companies having to file their employee’s wages data. Failure by a firm to do so could mean Company licenses being revoked, and further to sanctions. This move will benefit part time workers, students, the disabled and those released from prison.

Source: Zawya

Iran, Iraq and Syria sign transit agreement

An agreement has been reached with Iran, Iraq and Syria to expand cooperation through boosting the transit of goods across joint borders, facilitating border trade and expanding border terminals.

Another agreement is due to be signed shortly by Iran, Uzbekistan, Turkmenistan, Oman and Qatar to boost the transport of goods by port.

Oman

32% of employees in Oman are highly motivated

A survey conducted by job site Bayt. com and YouGov have revealed that employees in Oman consider a good work life balance to the most important factor for motivation.

The survey entitled ‘Employee Motivation in the MENA’ also states

that on a day to day basis, six out of ten employees feel that they are either highly motivated (32%) or motivated (27%) at their workplaces, with nearly three quarters of Oman respondents believing that they enjoy a good work life balance with the support of their company.

Source: Zawya

UAE

United Arab Bank branches out

The United Arab Bank (UAB) has announced that it will open 10 more branches, to take advantage of the increase in demand, spurred on by the recovery of the real estate market.

The branches will mainly be opening

in Abu Dhabi and Dubai. The UAB will also be putting in a further 20 off-site ATM’s.

A network of 20 branches in the UAE, the UAB reported net profit of Dh298 million.

UAE

Firms with 100+ employees, must have Emirati PRO

Companies of over 100 employees will not be able to have any dealings with the Ministry of Labour unless they have an Emirati Public Relations Officer (PRO).

This has been put into place following

the Emiratisation programme.

The Ministry of Labour has advised that it has already refused to work with a company after it was found that the company in question had over 5,000 employees and no Emirati PRO.

Gender Diversity in the Boardroom The UAE has introduced a law making it compulsory that all private and public sector companies have one female representative on their board of directors.

This is a huge win for the Arab Women Leadership Forum (AWLF) who recently spoke in Dubai making the point that it pays to have gender diversity in the boardroom for better corporate governance, and a

quota fixed by legislation will have wider implications across the region as a means of empowering women, specifically Emirati women.

Globally, 45 countries involved in the GMI ratings survey found one in ten board seats are held by women as increasingly companies want to optimise their unique talents.

From 15th to 17th January, Abu Dhabi hosted the 6th World Future Energy Summit, where leaders from around the world met to address the challenges faced regarding sustainable energy. The major global event had over 70 world leaders in attendance and 40 renewable energy project developers.

During his speech, His Highness Sheikh Mohammed Bin Zayed Al Nahyan, Crown Prince of Abu Dhabi

and Deputy Supreme Commander of the UAE Armed Forces, reinterated his commitment to renewable energy sources saying, “The vision of Sheikh Khalifa and the late Sheikh Zayed has prompted us to seek sustainable energy. The UAE has been providing the world with energy for half a century, and we are working with the international community to secure the resources for alternative energy and achieve sustainability.”

Action is Required New Competition Law in the UAE

Previously, this has been no cause of concern for UAE companies, but on 23 October 2012 the UAE passed UAE Federal Law No. 4 of 2012, concerning the regulation of competition. In the law, it states that “all business with operations in the UAE, or supplying goods and

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February 2013

services to the UAE market, will have to ensure that they focus on, and comply with this new law.” The Law will come into force on 23 February 2013, regulating competition in the form of restrictive agreements, the abuse of dominant position and economic concentration.

Regional News UAE

Changes to visit visas in the UAE

Businessmen, property investors and cruise passengers will now be eligible for multiple entry visas following three years of discussions. This means that non-resident businessmen will be able to attend several meetings during the course of a couple of days, fly to another country and return to the UAE. This move has been taken to support the long term strategy of stimulating growth and development in the traditionally strong tourist sector.

EIDA confirm companies in the UAE cannot hold Emirates I.D. cards for employees [Al Khaleej] EIDA have confirmed that companies may not retain the Emirates I.D. cards for their employees unless a court has instructed them to do so. However, they are able to record information of the individuals from their cards.

EIDA also stressed that the act of handing over an I.D. card to another is illegal. They urged all UAE citizens to carry their cards on them at all times, as they must be able to present them when requested.

Year on year in December, the average Consumer Price Index (CPI) rose by 0.7% and inflation rose by 1.1% in the same time frame.

In 2011, the emirates inflation stood at 1.9%. According to the Ministry of Economy estimates inflation in the UAE is not expected to exceed 2% in 2013.

The single largest contributor rise to year-on-year increases is the food and non-alcoholic beverage sector, which rose 44.8% when compared to the same period in the previous year.

Conversely, Housing, water, electricity and gas dropped 45.7%.

The authorities provided further guidance over the new year, confirming that the decriminalization of bounced cheques is being provided to Emirati nationals and is not being extended to UAE expats.

Confusion over this arose following

an article on 1st January, when an Arabic paper advised that UAE expats are now spared jail, however Gulf News contradicted this that same day, spurring the government to provide clarification.

Great Figures from the UAE

Mortgage Cap

The Federal Central Bank recently announced it is considering a ruling, set to take effect from mid 2013, that limits the Loan to Value rate (LTV) for mortgage finance at 50% for UAE Expats and 70% for Nationals.

Banks however see this as a deterrent to the revival of the housing market, and are requesting reconsideration of the expat

rule as they are afraid their clients will not be able to put down the high deposits required. They claim demand will slow and rental prices will increase forcing another slow down. Real estate agents are already advising of 20% drop in sales in the week following the announcement of the regulations.

Decriminalization of bounced cheques for Emirati’s only

Oil Output to 2.6m bpd

The Minister of Energy Mohammed Bin Dha’en Hameli advised on the Abu Dhabi today show that the UAE’s current oil production is 2.6 million barrels per day with their targets increasing to 3 million barrels per day.

February 2013

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December 2012

World News Pakistan

PM arrested

ISLAMABAD: The Supreme Court of Pakistan has issued an arrest warrant for the Prime Minister Raja Pervez Ashaf and sixteen others on corruption charges, sending shock waves throughout the country.

The warrant has come as populist cleric called for the resignation of the Government. The cleric, Muhammad Tahirul Qadri, returned home from Canada calling for reforms, quickly gaining a huge following amongst Pakistanis and backing from the military.

The timings of the warrant appear to be politically motivated, signifying that the judicial system is working with the military. The Government remains adamant that they will not back down.

Europe

US Warns UK against leaving the EU

WASHINGTON: [Financial Times].

In light of the news that David Cameron is to set out details of a referendum on the UK remaining in the EU, Obama’s administration publically warned the UK that their “special relationship’ is best served with the UK remaining part of the union.

Phillip Gordon, assistant secretary for European affairs, made it clear in a press conference on the 9th January that there would be consequences for Britain if they left the EU or played a lesser role in Brussels. “We welcome an outward looking European Union with Britain in it. We benefit when the EU is unified, speaking in a single voice. We want to see a strong British voice in that EU. That is in America’s interests.” This has been taken by the press to mean essentially ‘You are on your own!’

David Cameron wants the UK to remain in the EU but is expected to set out a renegotiate and referendum strategy which he seeks to deploy if he wins the 2015 election. These terms would take place as part of talks on a proposed EU treaty, making a UK vote on the outcome unlikely prior to 2017.

It is not just America that is warning of the threat to the UK should they leave the EU. Ireland’s Prime Minister Enda Kenny, has also warned of the dire consequences for Ireland should this occur, “We would see it as disastrous for our country to allow Britain to leave the EU”.

Asia

India

BEIJING – The People Bank of China has said that it will launch a trial program for Chinese citizens to invest in international markets.

It advised in a bulletin on their website that a trial domestic individual investor programme is a main goal of 2013.

The central bank also said by simplifying cross-border settlement and auditing procedures, as well as promoting bilateral currency swaps, whilst implementing currency settlement agreements with other countries, they will strengthen the role of the Yuan in overseas markets.

NEW DELHI: [Reuters]. The government has deferred implementation of controversial rules on tax avoidance to April 2016, finance minister P. Chidambaram advised on 14th January.

The General Anti Avoidance Rules (GAAR), that were to be implemented from April 2014, will give powers to income tax authorities to deny tax benefits, and prosecute a company or individual if they deem the transaction was carried out with the sole purpose of avoiding tax. It also means that any monies entering India via Mauritius will now be eligible for tax.

China allowing GAAR Tax individuals to Laws deferred invest abroad until 2016

BOJ 2% Inflation Target

TOKYO: The Bank of Japan (BOJ) and the new Government are finalizing a joint statement on monetary measures in time for the next rate review meeting scheduled for 21/22 January. In it, they will set the new 2% inflation target, albeit without deadlines.

The 2% will be deemed to be a ‘midterm’ goal and the statement will recommit both the BOJ and the Government to beating deflation in the shorter term and inflation over the longer term.

Last February, the BOJ set their target at 1% and used quantitative easing measures five times in 2012. Now in their forth recession since 2000 Tokyo, which heavily relies on its export market, is suffering from a strong yen and therefore it is expected that at the next rate review quantitative easing will once again be considered as a follow on to last week’s agreed $117 billion stimulus package.

Pakistan and Indian tensions amplify over Kashmir KASHMIR: Whilst tension and ongoing violence between India and Pakistan is known throughout the world, the recent killings of two Pakistani and Indian soldiers, has been predicted this to worsen.

The deaths in early January have been the worst violence seen in the region since the ceasefire started over a decade

South America

ago. It is not business as usual between the countries, as the new visa system was ignored by troops who turned away Pakistani senior citizens who tried to cross the border at the Wagah post, on the first day the scheme came into effect. Each side blames the other for the violence and both commenting on their right to retaliation.

Greece approves tax hikes ATHENS: As per the conditions of the

bailout, the Greek government last week approved a series of unwelcomed tax increases in order to continue to receive aid.

The legislation scraps many tax exemptions, raises tax rates on property and corporate profits, and slaps capital gains tax on share sales. A new top rate of tax of 42% has been introduced and corporate rates will also increase. This is anticipated to raise 2.5 billion Euros of additional revenue in 2013 and 2014.

Peru growth

LIMA: Peruvian GDP rose 6.7% year on year in October 2012 bolstered by rising Asian demand for copper and gold.

Wages have risen year on year and retail sales have amplified by 20% year on year.

This increase marks thirty-eight consecutive months of growth for the country.

December 2012

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December 2012

Here at Business Insight Magazine, we want to hear from you, to get your take on various topics. Last month’s topic in our Air & Share was ‘Management/Leaders’.

We asked you the following questions got some surprising answers; Q: What is the difference between ‘management’ and ‘leadership’?

“Managers lead a team and leaders lead the business. It is important to make that distinction when hiring people so you can the right person in the right position.”

- Rainer Ebert, Managing Director, SieMatic Kitchens ME JLT “Although the two go hand in hand, ‘management’ deal with the allocation of resources and the delivery of results, whereas ‘leadership’ is providing guidance, inspiration and motivation.

I like to think that a manager asks ‘how’ and ‘when’ and the leader asks ‘what’ and ‘why’.”

- Jason Armes, General Manager, Transguard Themis LLC

Q: Leaders don’t follow, do they?

“Leaders should be followers first.”

- Romeao Salvador, Business Development Manager, ICTSI (M.E) “Every PC company had tried with the tablet computer, but Steve Jobs and Apple were the first to get it right. You do not need to be first to be a great leader, but you cannot achieve great results without great people around you.

People follow leaders, and leaders follow their beliefs.”

- Jason Armes, General Manager, Transguard Themis LLC “Yes of course they are the people who shows path to others and they are the creators for the new things that has to be followed by others.”

- Giridhar Nandagiri, Life HealthCare Group “Leaders have their own minds and very beliefs. However, all leaders at one point would have followed someone; be it a boss in a previous job, their religion or their families (parents, wife etc..). This experince is very important to them as they ultimately would have learnt from them and it is all of these factors go into making the man.”

- Mohsin Rawal, Creative Director, Mohsin Rawal

Q: Can someone be a good leader and a poor manager or vice versa?

“Yes both are true and it is more common that you would think! Poor business practice often results in leaders being put into top man-management roles without managerial support. When we think of great leaders, we think of political figures, military campaigners or even religious figures and we often know little of their individual management capabilities. Companies can suffer when great leaders are not supported by, or they are not prepared to admit, that they are not great manmanagers.”

- Jason Armes, General Manager, Transguard Themis LLC

Q: How does a leader maintain his/her motivation?

“By setting goals and targets for the company. They have to believe in what they are doing, and why they are doing it. The goals have to be achievable so they do not become unduly discouraged.”

- Phil Starr, Recruitment Director, Real HR “Leaders need to find what challenges them to keep motivated. Understanding what stretches them, keeps them interested, makes sure they themselves remain engaged.

If a leader knows what truly motivates, challenges and engages them, then they will be able to lead others to their challenges.”

- Cerri McVittie, HR Manager – UAE, Atkins “A leader has to believe in the goal or objective and draw their motivation from the overall achievement of that goal.

Whether the target is personal or professional, objective or subjective, the leader must ensure that he or she can drive those around them and gain satisfaction from doing so. The speed of the leader will dictate the pace of the pack and people will not follow a unmotivated leader.”

- Jason Armes, General Manager, Transguard Themis LLC

Q: What leadership style is most effective or preferred?

“Initiation.”

- Giridhar Nandagiri, Life HealthCare Group “Leaders are judged by the ability to communicate their vision to their teams, their ability to gain traction with their people and their ability to make their teams perform to their best. Style is inconsequential to substance.”

- Jason Armes, General Manager, Transguard Themis LLC

Q: Are people born leaders or can we learn to become leaders?

“There are personality traits that assist with becoming, or being recognized as a leader, however there are many leaders whose skill has been learnt from a deep knowledge of their business and specialty, or from directing and channeling the talents of those around them. Leaders may have to learn inspire others, but they may first have to listen and learn to ensure that their direction is the right path to pursue.”

- Jason Armes, General Manager, Transguard Themis LLC “People are born to be natural leaders, but people often learn this trait too, from seeing others and learning from them. Good business sense in your field and great experience, often allows people to lead effectively, being able to apply tactics that they have learnt and developed during their careers.”

- Phil Starr, Recruitment Director, Real HR

December 2012

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In the Next Issue

Take a look below for a sneak peek into what is coming up in Issue 3 of Business Insight...

Operations

Gain competitive advantage through staff happiness.

A happy workforce is central to productivity and consequently success, so we help you create this without breaking the bank.

Don’t Retreat, Compete!

Flexibility is the lifeblood of the small business… Use this to compete with larger competitors.

Tech

Supply chain management.

What should you be doing to manage supply chain risk?

We give practical advice on management your supply chain.

Welcome back to Business Insight Air and Share. In the press recently there has been a lot of discussion on the value of entrepreneurs and more significantly intrapreneurs, and we would like your views on the subject.

Coined in the 1980s by management consultant Gifford Pinchot, intrapreneurs have been described as an ‘inside entrepreneur’, or an ‘entrepreneur’ within a large firm who uses entrepreneurial skills without incurring the risks associated with those activities.

Q: What lessons do you think organisations can learn from today’s successful entrepreneurs?

Q: Is it a good idea to encourage and develop intrapreneurs?

Q: What do you think are the potential business benefits and risks of developing intrapreneurs?

Whether you are a start-up company or established Company let us know what you think about entrepreneurs and intrapreneurs by emailing editor@redcorp.ae, stating in the subject line “entrepreneurs and intrapreneurs”. Please remember to state your name, job title and Company so we can quote you direct.

In the next issue we will print your answers, helping us to understand the benefits or potential issues surrounding the intrapreneurs debate.

Money

How Banks Assess Trade Financing Risk in the UAE Thinking about asking for finance and wondering how your company will be assessed? This explains all.

Financial Planning Solid financial management is key to the success of SMEs. Continuing our ‘Financial Mastery’ series this article explains why SMEs should not overlook the importance of effective financial planning.

People

Handling employee misconduct lawfully and effectively.

Every business owner or manager will have to deal with difficult employees during their careers, but how do you deal with these workplace issues? This is a must read if you do not want a Ministry of Labour hearings!

Harness social media like the experts We identify the essential elements of this ‘hot topic’ that you should be looking to include if you want to compete with the big boys.

‘Techworking’ – using Linked in Networking has always been about making new contacts.

Social media is a game changer. We look at 20 creative ways to use linkedin.

Wellbeing

Can Meditation Enhance Your Business Success?

Meditation can help you focus, enabling you to make better business decisions. You don’t believe?! Read this article to find out how, and who already does meditate.

The Hub

Tips to Building a Strong Brand A strong brand is important.

Building a brand isn’t easy. Here are some handy tips on how to do this successfully.

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