SME Advisor Middle East - February 2014 by SME Advisor Middle East

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good advice for better business

Issue 99 FEBRUARY 2014 strategic SME partner

Whatever next? Our guide to Succession Planning

Dynamic duo Venture forward with Paul Kenny and Arya Bolurfrushan

Your money or your life What your business needs to know about Health Insurance

At your

service Ron Kaufman’s customer strategies and how they boost your business

PUBLICATION LICENSED BY IMPZ

It’s a woman’s world A power briefing from HE Raja Al Gurg

EDITORIAL COMMITTEE

Welcome to our Editorial Committee SME Advisor is delighted to

announce that during 2014 we will be working with some of the leading names in the SME space - key figures who have kindly agreed to take part in our new Editorial Committee. This panel will play a vital role in channeling the feature content of our magazine and ensuring that we are more topical than ever analyzing and discussing the ‘real world’ issues of tangible value to our readership and bringing industry-leading expertise across the publication and its raft of prestigious related events. We are delighted to introduce the following SME personalities:

Alexandar Mathew Williams Alexandar Mathew Williams is presently the Director of Strategy and Policy at Dubai SME, a government agency of the Department of Economic Development (DED) tasked with the development of Entrepreneurship and Small & Medium Enterprises (SMEs) in Dubai. He has logged more than 20 years’ experience in public policy and strategic programme development focusing on micro-economic, business and SME development. Anas Halabi Anas is Managing Partner at Prediam Partners, an independent investment advisory firm, focused on real estate, hospitality and related ventures that he cofounded. Prediam has successfully assisted in setting up, structuring and financing numerous regional and international projects and startups, including an innovative application for Muslim travelers, an aggregator website for tourists in the UAE, an income producing hospitality portfolio in Dubai and a boutique hotel development in Beirut.

Mona Tavassoli With over a decade of work experience, Mona Tavassoli is the Founder of Mom Souq (www.momsouq.com), an online community and bazaar for mothers residing in the UAE, through which mothers can network with each other, share advice and their experiences. As an extension, with the aim of continually providing support to working mothers in this region, Mona launched a new platform - Mompreneurs Middle East (www.mompreneurs.me). Laudy Lahdo Laudy Lahdo is currently the General Manager of Servcorp, an Australianbased global provider of office solutions, in the Middle East region. She joined the company in 2003, after her move from Australia to the United Arab Emirates and as General Manager, has helped grow the company from just one office in Dubai’s Emirates Towers to 11 branches spread across the UAE, Bahrain, Qatar, Kuwait, Lebanon and Turkey. Servcorp provides both small and medium sized enterprises (SMEs), as well as multinationals, with the best locations, facilities, and technology and business support services in over 140 locations worldwide. Simon Hodges Simon has more than 30 years of experience working for international companies at Board level. He has spent over 10 years in the UAE and was previously Corporate Director of Administration of The Jumeirah Group, Senior Executive Officer of Dubai Holding Insurance Services LLC and Head of Governance for ADNEC. He also completed a two-year assignment as head of the health funding project for the Government of Dubai. Since 2011 he has been mentoring business owners from Dubai to enable them to create and then manage effective organisations that support business growth.

Hazel Jackson Hazel has built an impressive reputation and successful multimillion dollar business – biz-group FZ LLC- during the past 19 years based in Dubai. Nearly two decades ago, and with just US$700 in her pocket, Hazel founded biz-group, which she has developed from a small training company into an organisation of 42 professionals servicing the Middle East’s corporate training, team building and business strategy needs. Passionate about impacting performance, biz-group’s success is a testament to Hazel’s entrepreneurial spirit. Kay Braganza A seasoned public relations professional and successful entrepreneur, with five years of experience in the industry and an extremely commendable portfolio, Kay Braganza decided to pursue her love PR and start up her own agency four years ago. Here, she aims to cater to the demand of a flexible and a truly bespoke PR service, which strives to make a lasting difference to companies of all sizes. A recognized and respected expert in the PR world, her proficiency in the field speaks for itself, after working in it for nine years and having dealt with reputed clients such as Sony Gulf, Nokia, Mom Souq, and Clarion Events amongst many others. Nadine Halabi Nadine Halabi has been the Coordinator of the Dubai Business Women Council since August 2011. Since then, she has been managing the overall operations of the exclusive Council, coordinating the high profile board members, its stakeholders and members in line with the values, visions and missions as set out by its President, Mrs. Raja Al Gurg. Prior to her joining the DBWC, she worked at an events management and PR agency in Bahrain, where she flourished in a senior role as Deputy General Manager.

February 2014

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Taking off the rosy glasses… Chairman

Dominic De Sousa CEO

Nadeem Hood COO

Gina O’Hara Partners

Vijaya Cherian, Director of Editorial Raz Islam, Publishing Director Chris Stevenson, Assistant Director of Sales Darine Williams, Publishing Director Group Director of Sales Carol Owen Group Director of Editorial Paul Godfrey Chief Strategy Officer Dave Reeder Group Managing Editor Melanie Mingas Editorial Senior Editor

Paul Godfrey paul.godfrey@cpimediagroup.com +971 4 440 9105 Sub Editor

Rushika Bhatia rushika.bhatia@cpimediagroup.com +971 4 440 9115 Advertising Media Sales Executive

Emma Hughes emma.hughes@cpimediagroup.com +971 4 440 9120 Ibrahim Parwaz ibrahim.parwaz@cpimediagroup.com +971 4 440 9161 Event Sponsorship Manager

Gill Fairclough gill.fairclough@cpimediagroup.com +971 4 440 9148 Production & Design James P Tharian Database & Circulation Manager Rajeesh M Head of Design Fahed Sabbagh Designer Froilan A. Cosgafa IV Photographers Jay Colina Abdul Kader Pattambi Digital Services Manager

t’s part and parcel of being an owner or director of an SME that your attention will inevitably be tugged into making plans for the future. What are the likely obstacles and challenges of the next 12 months? What are the fresh market opportunities that are opening up? Where will I find the resources I need to start building a branch network? All perfectly normal and predictable thoughts. Yet sometimes, an event of an altogether different calibre comes along - one that is inescapable and will undoubtedly lead to unforeseen sums needing to be spent. A classic example of this is the new law regarding compulsory Health Insurance, a topic to which we’ve devoted two articles here in the February issue of SME Advisor. Under the new regime, all employers will be required to enrol their employees into, and bear the cost of, the mandatory health insurance scheme. What’s more, the Law - absolutely correctly - prohibits employers from deducting the cost of the insurance from the employee’s salary. Employers must also enrol their personnel into the scheme directly - they cannot credit sums to the employee and stipulate that they be spent on health cover. The law will start to impact SMEs by the end of July 2015 (if you have 100-999 employees) or by the end of June 2016 (if you have less than 100 employees). All of which begs the question: how are you going to pay for this? The level of cover being discussed is defined as ‘Basic Cover’, and there is an approximation that this equates to a typical premium, per person, of around AED500AED700. Paying that sum monthly for 30 or 40 employees is going to add up, but the reality is that for many smaller companies the cost per employee could be much higher. As anyone who has tried getting Health Insurance knows, for the individual or the few employees of the smaller company, a decent level of cover will cost more than twice that amount, and is often unavailable under at least US$400 per month. Plus, as a former insurer, I can vouch for the fact that if (even for the larger companies) insurers are asked to provide cover for a much lower sum, then they will simply opt out and choose not to do so. Which will considerably reduce the pool of possible options. Notwithstanding, the aim here is a very noble one and recognizes the fact that every expat resident (locals will be sponsored separately by the UAE government) deserves to have peace of mind when it comes to the thorny subject of healthcare. Observing the law, though, will make its own financial demands on SMEs and it’s best to start making good provision right now. Given that the government is extremely committed to doing things fairly and clearly has the best interests of employees at heart, it won’t pay to be an employer who take shortcuts or attempts to reduce the staff payroll in order to finance the health insurance bill with a lower headcount. (The kind of strategies woefully used in western Europe when a minimum working wage was being introduced).

Tristan Troy Maagma Web Developer Abey Mascreen Published by

The question is, what are the strategies you are going to use in order to supercharge your margins and income in such a way as to absorb the costs? Again: start planning now. Tomorrow and the day after will be too late. Enjoy this issue of SME Advisor.

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Paul Godfrey Senior Editor

Printed by Al Ghurair Printing & Publishing LLC © Copyright 2014 CPI. All rights reserved. While the publishers have made every effort to ensure the accuracy of all information in this magazine, they will not be held responsible for any errors therein.

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February 2014

Issue 99

February 2014

CONTENTS

24 At your service Ron Kaufman’s customer strategies and how they boost your business

EditorIAL COMMITTEE 03 SME personalities bringing industry-leading expertise across the publication and its raft of prestigious events. Editor’s note 05 Paul Godfrey on the new Health insurance law and why it’s time to start planning now. SHOPTALK 08 News and developments impacting SMEs in the region. Finance Focus 12 The latest financing opportunities for SMEs and allied financial services. SME ABOUT TOWN 16

Key events attended by SME owners and managers.

Movers & Shakers 20

An exclusive profile of Raja Al Gurg. We highlight the increasingly important role of the woman entrepreneur.

Now that’s what I call service. We feature Ron Kaufman, the world’s premier leader, educator and motivator on the service agenda.

Business Innovation 30 Empowering SME success. A thought leadership debate highlighting the strategies pioneered for SMEs by the region’s leading telecoms provider. 34

Through the right channels. Etisalat on how partnership profiles are a catalyst for SME growth.

Insurance for your business 38

Health is wealth – but can your business afford it? Has your company made the necessary Health insurance provisions?

To the credit of your business. An expert from AIG explains the benefits of using the ‘Excess of Loss’ model.

Getting Finance 46 Venturing forward. We speak to the founders of the new VC firm, Emerge Ventures. 50

What an Impact! A look into the new vibrant co-working space – Impact Hub.

Managing Risk 54 Risking it all. Having a strong risk management protocol can be a powerful catalyst for success – and peace of mind! Legal 58 Dubai’s compulsory Health Insurance – what does it mean for SMEs? Experts from Clyde & Co. give a thought-provoking analysis.

Industry watch 62 Impact Hub’s unique offering 64

Just Falafel’s fast expansion

Samsung’s innovative initiative

Deloitte’s Survey on M&A activity

TURN8 attracts investor attention

TECHNOLOGY FOR BUSINESS 70 IT trends and tools that are reshaping business in the region. The next level… 72 Succession Planning – safeguarding your business for the future. Why it’s fundamental for business continuity…

72 February 2014

SHOPTALK

Abdullah Salem Al Dhaheri, Chief Executive Officer of ADNOC Distribution, and Eng. Saleh Al Abdooli, Chief Executive Officer of Etisalat

Etisalat partners with ADNOC Distribution

DNOC Distribution signed a memorandum of understanding (MoU) with the UAE’s leading telecommunications provider Etisalat. The MoU establishes the framework for Etisalat to provide ADNOC Distribution with capacities and infrastructure to ensure the complete automation of its service station sites. The agreement was signed between Abdullah Salem Al Dhaheri, Chief

Executive Officer of ADNOC Distribution, and Eng. Saleh Al Abdooli, Chief Executive Officer of Etisalat. The MoU seeks to transform and optimize the existing Wide Area Network (WAN) infrastructure for ADNOC to a managed scalable and reliable converged IP-based network that can support voice, video and data communications. The upgraded WAN infrastructure is expected to provide resiliency, security

and redundancy on all critical links as required by ADNOC Distribution. Abdulla Salem Al Dhaheri, Chief Executive Officer, ADNOC Distribution, said: “ADNOC Distribution is pleased to ink this MoU with Etisalat to provide an end-to-end data and communication service at our service stations to make them even more customer-friendly. This agreement marks the first step towards the complete automation of our service stations network. “The agreement underlines ADNOC Distribution’s commitment to our customers and further establishes the

TRA urges Government entities to verify Twitter accounts The Telecommunications Regulatory Authority (TRA) launched a new campaign designed to verify the official Twitter accounts of all UAE Government entities. The initiative is in line with the TRA’s ongoing effort to provide authenticated and reliable sources of news and information to the public and in turn, guarantee the legitimacy of online government entity accounts.

“We recognise the importance of social media and its increasing role in the instantaneous provision of news and information to the public. The strengths of social media include flexibility and convenience of access thus, allowing everybody to participate in topical discussion and publish opinion. It is critical that government authorities and

company as an early adopter of the latest stateof-the-art technological solutions and best-in-class practices for improving the add value provided to our customers.” Eng Saleh Al Abdooli, Chief Executive Officer Etisalat, said: “Based on our deep understanding of the variable needs of the key economic sectors that we have gained by working closely with flagship national organisations, we aim to provide a robust information technology infrastructure that is the foundation of any modern enterprise. In achieving the desired results for the companies we work with, we aspire to meet our leadership’s vision in shaping the UAE into a technologically advanced nation. “Our partnership with ADNOC Distribution will prioritize the delivery of premium services to create a high-tech working environment. Additionally, Etisalat will provide customers to ADNOC Distribution’s service stations with round-the-clock, valueadded technical and telecommunications support.”

institutions have verified Twitter accounts to provide a publically trusted source of information,” commented His Excellency Hamad Obaid Al Mansoori, TRA Deputy Director General and mGovernment Director. “Social media experts working closely with us have been in constant communication with Twitter’s website management team to ensure that all verified government entity Twitter accounts bear the blue verified badge on its profile,” he added.

February 2014

SHOPTALK

During the ceremony

Dubai Entrepreneurship Academy

he Dubai Entrepreneurship Academy, a firstof-its-kind initiative from Dubai SME, was officially inaugurated by His Highness Sheikh Majid Bin Mohammed Bin Rashid Al Maktoum, Chairman of Dubai Culture & Arts Authority. The opening ceremony also witnessed Sheikh Majid honouring the first batch of 104 graduates from the Academy. The Academy aims to provide existing and

potential entrepreneurs with the skills and knowledge they need to become future business leaders. Dubai’s efforts to take its SME leadership to the next level will be ably complemented by the Academy as it will offer innovative training to entrepreneurial talent across the region, eventually enhancing the role of SMEs in economic development. “The Dubai Entrepreneurship Academy is a novel initiative, which will lead to a

stronger support system for SME owners and future entrepreneurs and ensure that they have the necessary skills and experience to succeed. The programmes offered by this Academy will go a long way in turning entrepreneurial ideas into business plans and lead to more enterprises being launched in the UAE,” said Abdul Al Janahi, Chief Executive Officer, Dubai SME. “We have a busier calendar for the year ahead and

Dubai SME unveils allinclusive report Dubai SME produced a comprehensive report on the state of the Dubai SME sector covering the size, composition, profile and characteristics of SMEs. The first-of-its-kind report comprises a detailed analysis of the economic relevance and business performance of SMEs, based on Dubai’s official SME definition. Aimed to provide a multidimensional overview of the SME sector in Dubai, the report will help people working in the realms of policy, human resource development, technology solutions, and corporate governance strategies, banking and financial services to evaluate the

Abdul Baset Al Janahi, Chief Executive Officer of Dubai SME

prevailing trends and needs in the sector, and respond accordingly. Abdul Baset Al Janahi, Chief Executive Officer of Dubai SME, said the report will serve as a reference for all stakeholders in economic

we will continue to add sector-specific and industryrelevant programmes, including training, online resources and e-learning programmes,” added Al Janahi. A significant feature of the 2014 calendar will be a Certificate programme in Professional Retail Business Management. The calendar also includes programmes such as ‘How to attract funds and grow your business,’ ‘Think Creatively,’ ‘Creative problem solving,’ ‘Secrets of effective leadership for entrepreneurs,’ ‘Project at your home,’ ‘Be a successful negotiator in entrepreneurship,’ ‘Art of perfumes,’ My business step-by-step,’ ‘How to build a global brand,’ ‘Leadership excellence for women entrepreneurs,’ ‘Customer service excellence,’ and ‘Entrepreneurs and selfconfidence.’ More information on the Academy and its programmes will be available on www.sme.ae.

development at the federal and local levels besides providing strategic inputs for the fiveyear strategic plan of Dubai SME, which is in the pipeline. “The report brings valuable insights – it shows that the SME sector in Dubai is critical to the Emirate’s economic dynamism and has immense opportunities for future; it also shows there is room for improvement at the individual SME level, especially in terms of competitiveness and investment in human resources, innovations and transparency, to name a few,” Al Janahi said.

Dubai seeks to elevate competitiveness levels

he Dubai Competitiveness Office (DCO), within the Department of Economic Development (DED), announced the launch of three major initiatives in 2014 as part of its mandate to elevate competitiveness levels across the UAE, particularly Dubai. According to an official periodical launched by DCO, the first among the three initiatives is aimed

to enhance and sustain government efficiency with regard to account payable procedures. The SME sector will be a major beneficiary of the initiative as it will ensure sustainable cash flow for such firms. The second project looks at reinforcing e-commerce infrastructure and the online shopping environment. It will also help local businesses expand their services across the region and internationally in a fast,

safe, authentic and costeffective way. Meanwhile, the third project is geared to enhance the efficiency of ‘Starting and Doing Business’ in such a way that will sustain and advance the UAE’s ranking in this domains. Khalid Al Kassim, Director the Dubai Competitiveness Office, said: “Ever since the Dubai Competitiveness Office was set up by His Highness Sheikh Hamdan Bin Mohammed Bin Rashid Al Maktoum, Crown Prince and Chairman of the Executive Council of Dubai, with a vision to place competitiveness as the

chief driver of prosperity for all citizens, we have been gathering valuable inputs from all over the world on the best means to achieve this vision.” “The highlights of our efforts towards evolving a competitiveness strategy and the proof points supporting our objectives are presented in the periodical we have launched now. The UAE being ranked among the top across various competitiveness indices played a major role in Dubai winning Expo 2020 and going forward competitiveness and the Expo will be bound by shared interests,” Al Kassim stated.

Added convenience with the new ViP service Emirates National Oil Company (ENOC) and Emirates Petroleum Product Company (EPPCO) recently activated the Vehicle Identification Pass (ViP) – a Radio Frequency Identification based fuel retailing system at their service stations. This ViP service is currently available only for commercial users and fleet owners, who are provided with an electronic chip installed on the top of the fuel tank gasket of their vehicles when they register for the service. After the chip has been installed and activated, customers only have to visit ViP-enabled service stations to refuel their vehicles. Within a week of its launch, the new ViP system had over 30 companies registering a total of over 1100 vehicles for the service. An average of 2080 transactions were recorded daily since the introduction of the service with over 208,000 litres of fuel purchased daily. How it works

The introduction of ViP, which complements the self-serve facility

Burhan Al Hashemi, Managing Director ENOC Retail tests the ViP system

provided at over 45 service stations from midnight to 6am, has significantly added to the convenience of motorists, particularly fleet owners. They also benefit from ease in account-keeping through fully automated operations. The system uses radio-frequency to transfer data from each registered vehicle. It allows users to refuel according to the permitted amount and fuel type allocated for the vehicle, which will further enhance the efficiency of fleet owners in managing their fuelrelated book-keeping operations. The payments will be credited to the customer’s account, with account updates delivered in real time.

ViP will eventually replace ‘Select Cards’ – the current refuelling cards across the network this year. The automation solution is planned to be extended to all purchasing activities at ENOC/EPPCO service stations, including Carwash, AutoPro Services, and C-Store. “ENOC’s ViP service is focused on promoting the convenience of motorists and adding value to the service offering by drawing on the newest advances in technology. The strong response from our customers underlines their acceptance of our new initiatives. We are committed to introduce an integrated, tech-driven fuelling system, which further enhances our operational efficiency.”

February 2014

FINANCE FOCUS

MasterCard and DBWC launch ‘Ro’Ya’

ubai Business Women Council (DBWC) and MasterCard announced the launch of Ro’Ya – a new initiative aimed at driving entrepreneurship amongst women in the UAE. The programme aims to provide coaching and mentorship to aspiring female entrepreneurs. As part of this initiative, aspiring and existing female entrepreneurs, who are either citizens or residents of the UAE, can submit their business proposals through a dedicated microsite on www.dbwc.ae. Entries should represent concepts that are in the idea development phase but which have not

From left to right: Raja Al Gurg, President - Dubai Business Women Council; Michael Miebach, President, Middle East and Africa, MasterCard

been implemented yet. The submission deadline is March 30, 2014. The submissions will then undergo exhaustive screening by a joint panel of experts from MasterCard and DBWC, as well as independent judges, and shortlisted candidates will be invited to a live presentation of their ideas at a closing gala event, during which the winners will be determined.

The top three women entrepreneurs will receive a cash prize of USD 50,000, USD 30,000 and USD 20,000 respectively to be used towards start-up costs. In addition, five candidates will also receive USD 5,000 each. MasterCard will also continue to work very closely with the top winners, after the competition is over, to provide professional

guidance and relevant networking opportunities that will kick-start their businesses and prepare them for long term-success. “The DBWC is invested in strengthening the bond between business and professional women in the UAE, and Ro’Ya is our opportunity to continue in this light. We aim to encourage leadership and advocate responsible action, while identifying key issues, offering information, and pooling our resources to ensure the well-being of women as entrepreneurs and members of the workforce. Our vision is for Ro’Ya to become a superior networking platform, that will improve opportunities through the exchange of knowledge and expertise, serving as a catalyst for positive action through Collective Community Advocacy,” said Raja Easa Al Gurg, President, DBWC.

Remarkable growth for DSG’s ePay portal

His Excellency Ahmed Bin Humaidan, Director General of Dubai Smart Government

Dubai Smart Government (DSG) revealed that its ePay portal – a medium for instant payment of Dubai government fee through the internet or mobile phones – continued to grow in 2013 with a 27 per cent increase in collections in comparison to 2012. His Excellency Ahmed Bin Humaidan, Director General of Dubai Smart

Government, said: “These results are a clear indication of the growing pace of eTransformation in Dubai; further reflected by the growing demand on the adoption of ePay to complete government transactions. It also expresses the strong confidence of our customers in this highly efficient and secure solution. ePay contributes to the national economy and helps create a sustainable green environment, since it reduces traffic movement and congestion, by avoiding unnecessary visits to government counters, thereby reducing wastage of assets and enhancing the green economy of the nation. We have come a long way in providing our clients with cutting-edge smart government applications in various fields, specifically in financial dealing which is the most sensitive for both individual and corporate users.”

ePay and mPay are part of the Dubai Smart Government’s initiative which aims at providing government services through innovative channels in order to ease the lives of people and businesses interacting with the Government in Dubai. The Dubai Smart Government offers online government services through electronic channels for the public and the business community to have an efficient and comfortable mechanism for instant payment of government fees, thereby saving time and effort on personal visits to banks or the departments concerned. The ePay portal has a smart feature that allows it to be linked with all the eServices of government departments, irrespective of the technologies and software used by these entities. It is also distinguished for its compatibility with all means of electronic payment including the internet, kiosks, IVR, major credit cards and direct debit.

Financial data – top target on spam hit list

ecent research by Kaspersky revealed that financial data leads the malicious spam hit list for the third year in a row. Furthermore, the Kaspersky Lab experts offered a summary of the spam activity in 2013: • The proportion of spam in e-mail flows was 69.6 per cent in 2013, which is 2.5 percentage points lower than the previous year. • The percentage of e-mails with malicious attachments was 3.2 per cent; 0.2 percentage points lower than in 2012. • 32.1 per cent of phishing attacks targeted social networks. • The biggest sources of spam were China (23 per cent) and the USA (18 per cent). • By monitoring spam messages in global e-mail traffic and tracking their source,

Kaspersky Lab experts were able to identify that 0.10 per cent of spam in 2013 was sent via computers and servers based in the UAE, placing the Emirates in the 51st position worldwide. • As for the region, Middle East came sixth in 2013. The proportion of spam in e-mail traffic continues to fall; in the last three years the share of unsolicited messages has fallen by 10.7 percentage points. It appears that advertisers increasingly prefer the various types of legitimate online advertising that are now available and which generate higher response rates at lower costs than spam can offer. It is common for IT security experts to recommend that users regularly update their antivirus solutions, and that is something that cybercriminals tried to take advantage of in 2013. In e-mails that appear to be sent by well-known antivirus vendors such as Kaspersky Lab, McAfee, ESET, Symantec etc., they urged users to update their systems immediately using an attached file. The attachment turned out to contain a Trojan from the infamous

ZeuS/Zbot family that is designed to steal sensitive user data, particularly financial information. Where’s the spam coming from?

Asia accounted for 55.5 per cent of the world’s spam in 2013, followed by North America with 19 per cent. Eastern Europe’s share almost doubled compared to the previous year, placing the region in the third position with 13.3 per cent. Western Europe remains in fourth place despite a decrease of 2.4 percentage points, while the share of Latin America in fifth place amounted to a threefold drop compared to 2012.

New mandatory Health Insurance Law Nexus Group, an independent insurance broker, expressed its support for Dubai Government’s new scheme wherein employers will need to provide compulsory health insurance for every worker in Dubai. This new Health Insurance Law will come into effect in 2014 and is set to be rolled out in phases until 2016. The Group stated that this Law will urge businesses to opt for insurance cover and revamp their existing employee benefits packages. “This is a hugely encouraging and progressive move by Dubai’s Government, and will provide workers across the Emirate with a vital safety-

Duncan Crerar, Head of Employee Benefits, Nexus Group

net,” said Duncan Crerar, Head of Employee Benefits, Nexus Group. “People are an organisations’ most valuable asset, so the new Law is all about protecting employee well-being and ensuring they can

contribute to sustainable, long-term business success.” Crerar added that companies already planning to implement or renew health insurance offerings should not delay to see how the new legislation plays out. “If you have the capacity to offer health insurance to your workforce now, you should continue as before. Seek professional advice and get the plans in place. Protecting your workers has countless benefits – not least making them more secure, productive and loyal,” he said. Over time, Crerar predicted that the new legislation could influence businesses in Dubai to

ramp up and diversify their other key benefit offerings. “Dubai is a hugely competitive job market, and health insurance has always been top of a job seeker’s wish-list. Once this legislation is rolled out, the onus will be on employees to take their benefit packages to the next level,” he explained. “With an extensive health insurance record in the region, Nexus is ideally placed to guide employers in what is set to be an evolving and gamechanging process,” added Crerar. “Invariably, it will be the businesses that treat the new legislation as an opportunity rather than an obstacle that will see the biggest rewards.”

February 2014

FINANCE FOCUS

Dunia Finance’s Sustainability Report

unia Finance unveiled its first ever corporate sustainability report, in line with its focus on building a robust best practice and corporate governance environment. Themed Saving the Future, the sustainability report followed a ‘triple bottom line’ concept that measures ‘Profits’ but also the organisational impact on ‘People’ and the ‘Planet’. The basis of this approach is that all companies are responsible to all their stakeholders – not just the shareholders but everyone the company deals with and has an impact on. Rajeev Kakar, Managing Director and CEO of Dunia Finance, said: “At Dunia Finance, we are truly committed to sustainability. We have built a strong and resilient business, which is focused on protecting the environment, empowering people,

enabling success and enriching lives. We want this company to continue making a difference to the people and communities we serve. “We are passionate about being responsible corporate citizens in the UAE. This approach and aspiration obviously comes with greater responsibility towards ensuring that we weave good practices into all aspects of our business, and in everything that we do. This has led us to recognise the importance of social responsibility initiatives for the betterment of the communities we operate in.” The report, which was prepared based on the comprehensive G4 Sustainability Reporting Guidelines and Implementation Manual, outlined the various programmes and initiatives that Dunia Finance runs, including its approach to empowering, educating and nurturing talent within the organisation, and supporting the development of individuals in its communities. The report described the company’s customer-centric approach and its focus on diversity and culture,

Rajeev Kakar, Managing Director and CEO of Dunia Finance

as well as how it invests heavily in its people, enhancing leadership and particularly developing UAE-national talent. That’s not all. The report also listed the many green initiatives Dunia Finance has implemented to help protect the environment, including reducing their ecological footprint with compact branches, recycling, automation, reducing waste and promoting energy efficient lighting.

Dubai Chamber promotes e-commerce

Dubai Chamber of Commerce and Industry held a meeting with the representatives of other chambers in the UAE in an effort to promote e-commerce in the region. The Chamber also urged them to join its initiative of the new online portal, www.dubaichamber.com/

alibaba,which was launched by the Chamber recently in collaboration with the leading global e-portal alibaba.com. The meeting was presided over by Atiq Juma Nasib, Senior Director, Commercial Services Sector, Dubai Chamber. Nasib stressed the importance of an e-commerce

platform in today’s business scenario and urged UAE chambers to join this fruitful partnership, as he said that the concept of trading online has led to a new era in global trade and those adopting this portal will benefit immensely in the long run. Nasib added that Dubai Chamber’s online portal is one of the fastest in the UAE and the region which gives an edge to Dubai in the area of e-commerce alongside the Emirate’s world-class trade, transport and logistical facilities, which help in shipping goods at a low cost to international markets. Representatives of the UAE Chambers praised Dubai Chamber’s efforts in launching the e-commerce

portal to support regional businesses while promoting their products on a global level by providing them the facility of developing a free of charge e-catalogue for their products which offers businesses a unique opportunity to exhibit their goods round the clock. They also expressed their willingness to join this strategic partnership initiated by Dubai Chamber to promote e-commerce in the country and said that they were ready to sign a MoU with the Chamber which will lead to a new way of entering promising business destinations while creating distinguished exporting base for their members and traders.

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February 2014

SME ABOUT TOWN

biz-group’s new concept – Orchestrate

iz-group, the business strategy, teambuilding and corporate training company, celebrated its 20th anniversary on a high note with the launch of Orchestrate – an innovative teambuilding product that challenges teams to perform as a symphony orchestra. The concept, which is the first of its kind in the Middle East and exclusive to biz-group, reinforces the company’s pioneering approach to impacting performance. As the name suggests, Orchestrate requires participants to learn to play a musical instrument, be it a drum, trumpet or cello, and perform as part of a symphony orchestra led by Parisbased conductor Stefano Catalano.

The concept, which has been rolled out in the UK and South Africa, has been praised for its unique approach to engendering teamwork and communication among employees. Orchestrate is now the 121st teambuilding product biz-group has launched. Many of these, including Orchestrate, have been introduced through international teambuilding company Catalyst Global, for whom biz-group is the exclusive local partner. Other internationallyacclaimed programmes for which biz-group is the exclusive Middle East representative include: Multipliers by Liz Wiseman; ExperienceChange and Design Thinker from ExperiencePoint and the Gazelles One Page Plan from Verne Harnish. “At biz-group we believe anything is possible and constantly challenge ourselves and our clients to achieve the inconceivable. We chose to launch Orchestrate as part of our 20th anniversary celebrations as it

really encapsulates our work ethos, ‘passionate about performance’, while providing our guests with an inspiring, engaging and hopefully memorable activity,” said Hazel Jackson, Founder & CEO of biz-group.

Corporate Governance workshop Ipreo, the investor relations advisor and capital markets data provider, and law firm Herbert Smith are all set to host a workshop on ‘Corporate Governance and Legal Trends in

Investor Relations (IR)’ on February 13, 2014 at the Emirates Towers. The event is supported by the Middle East Investor Relations Society (ME-IR Society) and aims to attract regional IR professionals.

“As Middle Eastern markets have witnessed a rapid development over the past few years, investors and the regulatory framework have also become more sophisticated and complex,” said Andreas Posavac, Director-Issuer Services at Ipreo. “It is likely that shareholder activism will become more common and regional issuers will be required to identify and understand institutional investor engagement and voting trends. The aim of this workshop is to encourage corporates to think about and prepare themselves for such potential activity in the future, and to provide them with an overview of the key governance topics for 2014.”

Oliver Schutzmann, Vice Chairman of the ME-IR Society and Head of IR and Corporate Communications at SHUAA, added: “Regional corporates must be prepared and have a strategy in place. Companies with sophisticated IR teams are at a great advantage here as they have already put in place the processes and procedures required to protect themselves against unwanted and disruptive shareholder activity. The Society supports initiatives aimed at educating issuers and intermediaries on all aspects related to IR and this workshop will provide participants with a bestpractice toolkit to manage these challenging issues.”

Prepaid Summit Middle East

ubai is all set to host Prepaid Summit Middle East – the region’s fifth annual conference dedicated to the prepaid sector. The event, to be held on March 19, 2014 in Conrad Hotel, will discuss the emerging trends of the global and regional prepaid market. The global prepaid market is on track to achieve strong growth over the next

three years, according to Douglas Blakey, Group Editor for Consumer Finance at Timetric Financial Services and spokesperson for the upcoming event. “The region-dedicated Prepaid Summit has been on the heels of the growth trend for five years now. This year’s conference agenda is wellequipped to showcase global growth

phenomena in a local context. In fact, our speakers will consider how this role is reversed by taking a look through the regional lens to explore how prepaid in the MENA region reflects the global growth,” Blakey said. He indicated that more than 150 industry leaders will benefit from the Summit’s expert speaker line-up. These speakers will highlight the most regionrelevant regulation, map the evolution of prepaid and consider how prepaid is changing the corporate and consumer financial service markets. “The increasing awareness of prepaid products among consumers is creating new expectations and marketers must gear up and fast develop new, engaging and relevant card products,” Blakey stressed. He cited the key drivers influencing the regional prepaid market as increased mobile-enabled internet use and strong retail growth. “The 2014 Summit will bring the experts together to create a map for future. Prepaid continues to evolve across the Middle East, and the conference agenda clearly reflects this,” he added.

Security conference highlights key trends The RSA Security Summit, held at the Jumeirah Beach Hotel, proved to be a fantastic opportunity for businesses to gain detailed insights on IT security. The one-day conference highlighted key cyber security trends and urged organisations to ramp up their team’s ability to face unknown threats and ensure data protection. The adoption of third platform technologies such as cloud computing, Big Data, social networking and mobile devices to help enterprises achieve their IT and business transformation goals depends entirely on the organisation’s ability to secure their cloud

environment ensuring that data is protected no matter where, how and what device it may be accessed from. The rapid evolution of the IT industry in turn introduces organisations to a whole new host of advanced risks and persistent threats that are far more complex, destructive and frequent in volume than ever known. The RSA Summit opened with a keynote by Art Coviello, Executive Vice President, EMC and Executive Chairman, RSA – The Security Division of EMC, who highlighted the benefits of an intelligence-driven security approach to help enterprises secure their most

sensitive information and networks and mitigate risks in the age of third platform technologies. The Summit featured presentations from senior RSA executives and security experts; they expressed the need to harness Big Data Analytics to leverage the benefits of a

transformational security monitoring and investigative solution. Furthermore, the event brought together an audience of senior security professionals from the IT industry including Chief Security Officers, Compliance and Risk Managers, CIOs, and IT Directors.

February 2014

SME ABOUT TOWN

Strathclyde’s Abu Dhabi event

Nader Atout, a Strathclyde MBA alumnus, entrepreneur, and Executive Director of Business Development at twofour54

he University of Strathclyde launched its first Abu Dhabi event along with its Abu Dhabi Alumni Association. The event was held to support Strathclyde affiliated entrepreneurs in the UAE as part of the ‘Strathclyde 100’ series. Strathclyde 100

Research and Innovation Summit Gulf Petrochemicals & Chemicals Association (GPCA) is all set to host the inaugural Research & Innovation Summit in Dubai from March 12 to 13 at the Ritz Carlton Hotel, DIFC. The Summit will highlight the crucial need for the GCC’s petrochemical industry to focus on innovative strategies and technological

events feature a platform for University of Strathclyde student and alumni entrepreneurs to pitch the concepts and needs of their innovative young enterprises or well-developed business ideas to a supportive and business-savvy audience with a shared interest in seeing

developments that are critical for sector growth. With the petrochemicals industry currently the second largest manufacturing sector in the Gulf, representing 2.9 per cent of the manufacturing sector’s contribution to the GDP, the opportunities for growth are vast. “Today, the GCC petrochemicals sector is developing in a stable and successful manner. However, as this is a highly technical industry, GCC petrochemical producers must focus on research and innovation in order to stay relevant in an

entrepreneurial Strathclyders succeed. The audience serves as a support network at Strathclyde 100 events, and the type of help received can range from constructive advice or new business relationships to investments or formal partnerships. The event featured key speakers such as the Executive Dean of Strathclyde Business School, Professor Susan Hart; Nader Atout, a Strathclyde MBA alumnus, entrepreneur, and Executive Director of Business Development at twofour54; Jonathan Macneal of Glasgow-based University of Strathclyde spinout Insignia Technologies Ltd.; Strathclyde MBA alumnus Mohammed Johmani, a well-known serial entrepreneur; and Strathclyde MBA student Manal Hamid, Partner & COO of Moms Guide Abu Dhabi – a nonprofit social enterprise whose mission is to connect mothers and their families in the city of Abu Dhabi. Strathclyde MBA alumnus and UAE Alumni Committee member Aamir Khan (Projects Manager at Tectronics WLL) served as Chair of the Strathclyde 100 Abu Dhabi event, providing smooth segues throughout the evening and facilitating Q&A sessions after each pitch.

increasingly competitive global market,” said Dr. Abdulwahab Al Sadoun, Secretary General, GPCA. “In the global context, China is the ideal example of a petrochemicals market that invests in R&D technologies that result in tangible gains,” notes Dr. Sadoun. “While the EU and US spend more on petrochemical research, China has managed to invest in research in a way that helps industry growth and significantly boost output,” said Dr. Sadoun. “We in the Gulf should use this as an example of how not only to finance

research, but to invest in research that yields considerable business growth.” The need for research will be a key focus of discussion at the Research & Innovation Summit, with experts from Borealis, McKinsey and Sipchem providing insights on the subject. “The Research & Innovation Summit will provide a platform for stakeholders from the industry, academia and government to discuss ways in which to transform ideas from the laboratory into the field,” said Dr. Sadoun.

Construction Machinery Show in KSA

onstruction Machinery Show, the largest dedicated event for heavy machinery and construction equipment in the GCC region, returns to Saudi Arabia this year with a spectacular live demonstration area â&#x20AC;&#x201C; a regional first â&#x20AC;&#x201C; at the Dhahran International Exhibition Centre in Dammam from 16-20 February, 2014. Alongside the indoor and outdoor exhibits, attendees will be able to witness an array of excavators, wheel loaders, concrete pumps, skid steers as well as earth moving equipment in action for the first time in the region, from leading manufacturers such as Case, Doosan Everdigm, Liugong, Bobcat and Ammann at a huge 15,000 sq. m dedicated area. Each of these companies will bring in experts from

their respective headquarters to operate their top equipment, giving construction companies, engineers, developers and construction experts the opportunity to witness firsthand the ability of these machines to operate in this region. Unlike previous editions, Construction Machinery Show will be held for five days instead of four. It will showcase the latest heavy machinery and construction equipment during the event, which attracts the top-tier local

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and regional businesses that are related to construction and infrastructure development in the KSA market. The construction industry in the Kingdom has witnessed unprecedented growth creating huge opportunities for consultants and contractors. The 2014 show offers the perfect opportunity to not just showcase all the latest construction and machinery products, it also provides the perfect networking platform for the industry.

February 2014

MOVERS AND SHAKERS

An exclusive profile of

Raja Al Gurg The year 2013 had several defining moments such as November 6 – the day Dubai SME unveiled its prestigious Dubai SME 100 rankings for 2013; or November 28 – the day Dubai won its bid to host EXPO 2020. One critical landmark of the past year that we often forget to highlight, however, is March 11 – the day Sheryl Sandberg, COO, Facebook, released her book Lean In and sparked a worldwide debate on the role of ‘women in businesses’. She argued that women – in more ways than one – are capable of driving a business forward, leading it to a path of continual growth, and creating within it a culture of innovative leadership. A key personality that has been at the forefront of a similar movement in this part of the world, specifically in the emirate of Dubai, is the President of Dubai Business Women Council, Raja Easa Saleh Al Gurg. In a candid chat with SME Advisor, she highlights the allimportant role of the woman entrepreneur…

Raja Al Gurg, President, Dubai Business Women Council

prominent woman entrepreneur in the region, a key figure leading women empowerment across the emirate, and an inspirational icon for many young women, Raja Al Gurg has several feathers in her cap. And, it doesn’t stop there. Al Gurg’s raft of accolades include being named the fourth most powerful Arab businesswoman in 2006; receiving the ‘World of Difference Award’ from The International Alliance for Women (TIAW) in 2009; receiving the ‘Stevie Award for Women in Business’ in 2011; and being ranked fifth in CEO Middle East’s 100 Most Powerful Arab Women List in 2012. Apart from being the Managing Director of the prestigious Easa Saleh Al Gurg Group (ESAG), Raja Al Gurg is also the President of Dubai Business Women Council (DBWC) – an organisation dedicated to empowering women in their business endeavours. Here, we sit down with the stellar role-model and explore several fundamental issues… Firstly, congratulations on the Dubai Expo 2020 win. How do you see this changing the economic landscape of Dubai?

Dubai has always been a country full of opportunities and has proven its ability to be an international business leader on many occasions. The Dubai Expo 2020 will provide a lucrative opportunity for many businesses in Dubai to grow and further strengthen their offerings while new businesses will also enter the market to reap the rewards of such a prestigious international event. Experts have forecasted that more than 277,000 new jobs will be available over the next six to seven years which will aid in the overall growth of the UAE. Furthermore, new job opportunities also welcome new talent and expertise which will again complement Dubai’s existing plethora of offerings and definitely strengthen its economic landscape, not just for 2020 but the years leading towards and after it. Have you implemented any changes in DBWC’s long-term strategy following the Expo win?

Our strategy is to build awareness, educate,

promote opportunities and enhance positive change in the community towards the acceptance of women in business and this is also at the heart of the DBWC’s belief in empowering women and motivating them to be productive members of the society and economy. We will continue to support women in their business goals and will endeavour to increase our membership numbers in order to provide and support a diverse network of members from all backgrounds and specializations. Tell us a little bit about Dubai Business Women Council. How did it come about?

The DBWC was created to fill a very large gap in the Dubai economy and to motivate National Women to heed the guidance of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, when he said, “It is not strange for a UAE woman to be an ambassador; she who proves herself merits praise and encouragement.” (www.sheikhmohammed.co.ae). The DBWC is a platform for likeminded business women to interact and engage in educational and innovative activities to provide guidance to their businesses and to meet industry experts, discuss new business opportunities and

The DBWC is a platform for likeminded business women to interact and engage in educational and innovative activities. create mutually beneficial relations. Our support structure also connects members providing opportunities for collaborations and partnerships. What is your advice to women entrepreneurs in the region?

As women, especially business women, we think we can do everything on our own but my advice is to always have a support structure that will give you the correct guidance and keep you on the right track. It is also very important to analyse the market before starting your new business venture to ensure that there truly is a need for your business and also to get an understanding of how you will foster continuity. We lead such fast-paced lives with new technology being introduced every day; innovation is keeping every business on its toes.

February 2014

MOVERS AND SHAKERS

crucial to know that one can learn from everyone around him/ her, regardless of his/ her position at the workplace. What kind of new initiatives can we expect from DBWC in the next year?

We have signed a partnership with MasterCard for an initiative that is meant to support young entrepreneurs. The initiative, ‘Ro’ya’, will encourage Emirati and expatriate women in Dubai to submit their fresh business ideas to the DBWC via a microsite that will be uploaded on the DBWC website. Three finalists will be chosen and the winner will be granted cash money as reward in addition to one full year of mentorship with MasterCard for all three winners. There are a few other initiatives that are in the process of being finalized and only then will we be able to disclose them to the public. 2014 looks very promising for the DBWC, its members and partners. What are specific goals of the DBWC – for example, are you looking to achieve minimum employment quotients for women in the public and private sector?

Raja Al Gurg

Furthermore, nourish relationships! Your network of contacts are the key to your success and it’s important to use them productively for referrals and advice on how to evolve your business. Be selective about where you meet business affiliates and make the most of new contacts. What kind of support does DBWC offer to women entrepreneurs?

The DBWC hosts monthly Network Majlises. These Majlises are workshops, trainings or presentations around business related topics that will add value to what they already know or teach them new business skills. By attending the Network Majlises frequently, members will meet likeminded business women and this will pave the way to creating new partnerships, or bring in new clients for their businesses and eventually this will broaden their networking circles. You are undisputedly one of the leading businesswomen in the region. Many women look up to as a role model.

Who has been an inspiration in your professional life?

My father, His Excellency Easa Saleh Al Gurg, has been a great source of inspiration and a great mentor to me. I have learnt so much from him and continue to learn more with every day that passes. Do you think investors are hesitant to fund startups and business ventures led primarily by women? If yes, what are ways to change this perception?

Not really; investors have no problems investing in businesses led by women. This perception is no longer found in Dubai and the rest of the world. Women have managed to prove that they are as capable as men when it comes to setting up and managing a business. Having worked with several SMEs and entrepreneurs throughout your professional life, have you identified any key common factors that lead to success?

Hard work, perseverance, and patience are of paramount significance. It’s also

We are looking to bring in more women on board as members and empower them through the free training sessions and workshops that we conduct for them on a monthly basis. We also want our members to build very strong networking opportunities through the DBWC channels that will enable their businesses to grow and prosper. Do you have online portals to help and inspire women in other Middle Eastern countries?

Not yet, but we are aiming to have that this year. So far the DBWC website, www.dbwc.ae, is a B2B platform for our members to connect with each other and find easier ways to do business with one another. Members that join the Council will be given a username and password that will enable them to go through our member directory, connect with them and even post articles and exchange ideas and references through our online forum. For an online version, please visit:

www.smeadvisor.com/2014/02/anexclusive-profile-raja-al-gurg/

February 2014

MOVERS AND SHAKERS

Ron Kaufman

Now that’s what I call service Service is simply the most important differentiator your SME has. It’s the DNA that permeates everything you do - and it can either make your business the unmissable provider of choice, or a company that’s perpetually struggling to retain customers. Is your business a service champion, rich with sparkle, flair and the resonance of repeat orders? Or one of thousands that simply does the basics and hopes to get by? If it’s the latter, we can help - SME Advisor had an exclusive meeting with Ron Kaufman, the world’s premier thought-leader, educator and motivator for uplifting customer service and building service cultures. Here are some of his thoughts and recommendations for building an unforgettable service culture.

ne of the difficulties that almost every between these elements involves certain expectations. business faces when it tries to improve For instance, the customer in MacDonald’s will have customer service is the fact that the whole a certain set of expectations that it will be mission of concept of ‘service’ seems to be so arbitrary the brand to meet and exceed; but these will indeed and relative. It’s all a bit ‘fuzzy’ and inconsistent - linked by very different from those of a guest entering, eg, the to all kinds of qualitative experiences that don’t seem Mark Hopkins Hotel and expecting a very personalised, to add up to replicable entries on the balance sheet. Yet ‘boutique’ style of service. Understanding that the service go for an expensive meal and find that it’s served cold, expectation and delivery will vary from environment to or wait for an eternity (with no explanations) for a flight environment is very important. that’s been re-routed and the whole issue of customer “So how can we actually define what service is? Again, service is far from fuzzy or intangible. the clue here is that it always involves a third party. So So how can a business implement effective customer I define service as – Taking action to create value for service in a way that supercharges loyalty and repeat someone else. purchases? Especially given the fact that what constitutes good service in one environment might well be construed “Understanding this is the first building block in developing as second-rate and shoddy in another: for example, what your own outstanding service and seeing it as a strategy you passes muster in a fast food outlet is very unlikely to stand can use to grow the business. As our ability to understand up in a five-star hotel. It’s no accident that it is this very what good service actually consists of has grown, we’ve contrast (the need to compare ‘apples and oranges’) seen our service aspirations become more and more which is the starting point for Ron Kaufman’s view that important. So, for example, we’ve seen the following service is actually underpinned by very specific actions transition – Customer satisfaction – Customer delight – Customer and decisions, which can be viewed quite objectively and loyalty – Customer service partnership follow a clear structure and working template. For example, Ron says that: “Service depends on a “Note that again here we see the ‘partnership’ angle partnership: we must understand that it not only takes as fundamental to unlocking the benefits of what lies place in relation to someone else, but the interaction at the core of good customer service. The really great

February 2014

MOVERS AND SHAKERS

service-driven organisations direct all their efforts towards seeing the business itself as a partnership - and that fact underlies all their advertising and branding. This is the case with Singapore Airlines: everyone knows that you will have terrific service if you travel with them - it’s known globally that service is their ‘thing’. This in itself has great knock-on value for the organization in terms of how it works internally, too: while the same airline doesn’t pay more than its competitors, it’s seen regionally as the place to work - because if you spend time there, you’ll learn exactly how to provide great service, and you’ll take that skill with you for a lifetime. So the service values of the business actually mean that you can boost staff loyalty without spending more on the bottom line.” Identifying what you need to do

Ron Kaufman’s approach is fundamentally about perceiving service as a science - a science that can be learnt and applied by every organisation that aspires to create value for someone else. When it comes to an organization wanting to improve its service culture, the role of the business’ leaders is paramount. True leaders in any areas of life don’t just tell people what to do - they live the example. This is never truer than in the domain of customer service where CEOs, MDs and CFOs (to name just a few examples) have to exemplify the change paradigm and empower their workforce to want to do the same - embedding the quality remit until it’s an organic and fundamental part of how the organisation functions. The question is, how can leaders - of organisations of any size or shape - go about making that change in practical terms? What is the actual sequence of steps that they need to follow? Ron Kaufman again provides a working, generic paradigm for this process: it’s something he calls ‘The Seven Rules of Service Leadership’. They work as follows: Rule One: Declare service a top priority Declaring service a top priority means senior leaders understand that focusing on service improvement leads to commercial results. Profit is the applause you receive for serving your customers well. When middle managers declare service a top priority, the message to everyone is clear: procedures and budgets surely count, but

creating value for others counts the most. When frontline employees declare service their top priority and delighting others becomes their goal, they uplift customer satisfaction - and job satisfaction too. Rule Two: Be a great role model Leaders are the people who others choose to follow, not those who simply tell other people what to do. By their own example, leaders inspire others to want to do what they do, too. If you and the C-level team are fully committed to creating and implementing a service culture - and then truly walk the talk - this is the best way to ensure that the rest of the organisation will also

Understanding that the service expectation and delivery will vary from environment to environment is very important. make service the absolute top priority. They will do so because they see service as being part of the DNA of what committed employees manifest across every aspect of their career with the business. Rule Three: Promote a common service language It’s no good trying to spread your message if everyone has a different out-take on what that message is, or a different set of terms for defining what service is. Everyone talks about better service from a perspective that makes perfect sense to him or her. What’s missing is a common language to enable listening and understanding, clear distinctions to understand what other people want and value. To build a culture of uplifting service throughout an organisation, leaders must promote a Common Service Language everyone can apply. Rule Four: Measure what really matters Many people get confused when it comes to measuring service - understandable, because there are so many different

aspects that it’s possible to measure. Elements like complaints, compliments, expectations, levels of engagement, relative importance, recent improvements, performance to standards and customer satisfaction are just a few of the factors that come to mind. It’s one of the roles of the service leader to cut through this confusion to measure what really matters. Remember the definition: Service is taking action to create value for someone else. Then, it follows that the two most important questions to ask are – • Are your actions creating value? • Are you taking enough new actions? The second point is so important because compliments happen when someone has an idea to serve someone else better and then takes action to make it real. But this will only happen when there is a continual emphasis on new thinking and new learning about customers, service and value. This new learning about service leads to new ideas for giving better service to others, which in turn leads to new actions. If you measure according to the true benchmarks of creating value and applying new actions, you will have the security of knowing that you are measuring using the criteria most relevant to the essence of service values. Rule Five: Empower your team Empowerment is a buzzword in business, and many leaders and employees seem to fear it. What they really fear is someone who is empowered masking a bad decision. If a leader is not confident in her people, she doesn’t want to empower them with greater authority or a larger budget. And if an employee is not confident in his abilities and decisions, he often does not want the responsibility of being empowered. In both cases what’s missing is not empowerment, but the coaching, mentoring and encouraging that must go with it. If you knew your people would make good decisions you would be glad to give them the authority to do so. And when your people feel confident they can make good decisions, they will be eager to have this freedom. Empowering others cannot and should not be decoupled from the responsibility to properly enable those you empower.

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MOVERS AND SHAKERS

Rule Six: Remove the roadblocks to better service Most frontline staff members are taught to follow policies and procedures. Often they are hesitant to ‘break the rules’. Yet some rules should be broken, changed, or at least seriously bent from time to time. What roadblocks to better service lurk inside your organisation? What gets in your people’s way? What slows them down? What prevents them from taking better care of your customers? What stops them from helping their colleagues? Service leaders ask these questions and remove the roadblocks they uncover. Rule Seven: Sustain focus and enthusiasm It’s not difficult to declare service a top priority. What’s challenging is keeping service top of mind when other issues clamour for attention. It’s not hard to use a new language for better service; what’s hard is using that language day after day until it becomes a habit. It may not be hard to track new service ideas and actions, but it can be difficult to keep them top of mind in the thinking of your team. Sustaining focus and enthusiasm is critical - in business, in life and in

True leaders in any areas of life don’t just tell people what to do - they live the example. service. This is not something leaders should view as a soft and therefore less important rule. Nor should it be entirely delegated to others. In fact, overlooking Rule Seven could be the mistake that derails all your plans and programmes. How many companies suffer after starting down a great path, but ultimately view the endeavor as a failure, simply because they couldn’t sustain it? The local dimension: a need for speed?

One of the key factors in Ron Kaufman’s approach to service culture is that literally any business can set about building its own model of service excellence, using the generic, modular building blocks and understanding the key essentials of what

needs to be done in a way that’s relevant to the business and the customer alike (ie, keeping an awareness of the ‘partnership’ angle). Typically in the GCC, it’s the larger businesses - hotels belonging to international chains are a classic example - who have wholeheartedly pursued the belief in customer service. For instance, the greater availability of staffing in the hospitality sector in the GCC means that most hotels can work to a staff/guest ratio about 30 per cent higher than in Europe or the USA. But what about SMEs? The reality is that when SME Advisor organised the ADCB Stars of Business Awards in November 2013, the entry form - which was completed for 4,974 nominations - specifically requested details about any ‘recent customer service initiatives undertaken’. While only five per cent of all applicants bothered to complete this section, of these, all except a handful of entries listed discounts in price as their customer service USPs. Indeed, it was a hallmark of most of the winners (across all 26 business categories) that they actually has sophisticated service strategies, quite unlike the vast majority of applicants. It is very much the case that this emphasis on price remains the one and only factor by which SMEs in many sectors - especially, for example, financial services - define their approach to customer service. But this in itself, as has been proven time and time again, is no guarantee of loyalty, since there can only ever be one ‘cheapest’ in market. Moreover, that price saving is so often given as a result of a reduction in the level of customer service (which, it is argued, makes the reduced price possible!). Surely, then, it’s time for the region’s SMEs to take a long, hard look at Ron Kaufman’s definition of what service is actually about. Namely, it is - Taking action to create value for someone else. Ron Kaufman is the world’s leading educator for upgrading customer service and uplifting service culture. Ron is author of the New York Times bestselling book Uplifting Service. For more information and a sample newsletter, visit www.UpYourService.com For an online version, please visit:

www.smeadvisor.com/2014/02/now-thatswhat-i-call-service/

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Business innovation

Etisalat Chief Sales Officer, Ayman El Dessouky

Empowering SME success

January 28 was a landmark day for the reach and effectiveness of the region’s SMEs. A keynote press conference and power dialogue round table event heralded the launch of a dynamic new media partnership between Etisalat and SME Advisor magazine - one that will see the region’s leading telecoms provider pioneer fresh offers to the SME community and provide critical guidance on expert digital strategies. ‘Getting connected’ is perhaps the most important single element in the life of an SME. Its ability to contact customers, prospects, creditors and suppliers is fundamental to its business success – and it needs the most cost-effective, innovative and reliable packages, across a broad range of devices, to do so with maximum impact. This is the value chain that Etisalat can offer so effectively, and in order to project this message to the SME marketplace, the iconic brand hosted a major event at the Ritz Carlton, Dubai International Financial Centre, on January 28th - with the theme ‘Empowering growth, extending reach’. The occasion celebrated a new strategic partnership with CPI Media Group and

specifically, SME Advisor magazine. It comprised two key elements - a press conference followed by a ‘power dialogue’ round table event - with both elements led by Etisalat Chief Sales Officer, Ayman El Dessouky. Meeting the needs of the SME community

The press conference featured keynote messages from Ayman El Dessouky and Dominic De Sousa, Founder and CEO, CPI Media Group, announcing the media partnership, which began with immediate effect. Also present on the main podium were Fayzah Al Nuaimi, Vice President, SMB Sales, Etisalat, and Steve Gardiner,

Vice President, SMB Development, Etisalat, Signifying the ground-breaking agreement, the official contract was signed in front of the press and members of the public alike by Ayman El Dessouky and Dominic De Sousa - and Event Moderator Paul Godfrey then invited questions from the floor, bringing in key names from the SME community such as Alexandar Williams, Director, Strategy and Policy Division, Dubai SME; Mona Tavassoli, Founder, MomSouq; and Anas Halabi, Managing Partner, Prediam Partners. A number of questions focused around the ways in which - in practical terms Etisalat can work with SMEs to facilitate issues such as data mobility, the enrichment

of customer data at the point of sale, and the availability of customized call plans across the whole spectrum of SME scalings. Indeed, these issues were to play a major role in the subsequent round table debate, which assessed factors such as – • How can an SME communicate effectively with its customers, maximising the use of cost-effective technology? • How can a business successfully upgrade its digital understanding and implementation? • How can a youthful but growing enterprise develop fresh and inspiring solutions that are practical, realistic and easily applicable to the challenges facing an SME? The result was an event that proposed fresh, imaginative and inspirational approaches as to how best to drive your business forward. Indeed, the aim of the round table was not only to hear the views of the Etisalat SME ‘champions’, but also those of the key professionals gathered around the table: captains of industry, SME leaders and personalities with a proven record of business success. No wonder the Samaya Ballroom of the Ritz Carlton attracted a full capacity house!

The launch of a dynamic new media partnership between Etisalat and SME Advisor magazine

platforms? Especially given that this is now a requirement of the 2013 Companies Act. These keynote issues would then fuel an animated debate lasting more than two hours and featuring the presence of national press and an audience containing some of the most prestigious decision-makers in the SME community.

Empowering growth

The expert panel

As an important catalyst for getting the round table event underway, Ayman El Dessouky gave a presentation directly targeting five of the key challenges facing SMES - explaining the role and effectiveness of highly contemporary digital solutions. The five issues he identified were, namely -

The members of the round table panel were – Prrasad Katta, Regional Director - MEA, Western Union Business Solutions Alexandar Williams, Director of Strategy and Policy Divison - Dubai SME John Merrigan, Partner, Tamayyaz Mona Tavassoli, Founder, Momsouq Genny Ghanimeh, CEO & Founder, Pi Slice Neil Petch, Chairman, Virtuzone Sam Malik, Managing Director, The PR Professionals Sudarshan Seshadri, VP, Head, Sales & Business Development, ADCB Anas Halabi, Managing Partner, Prediam Partners Paul Godfrey, Senior Editor, SME Advisor

• The quest for mobility - how can a business be part of the digitization revolution and have multi-device technology and replicability at the point of sale? • How can SMEs understand the huge collections of data they have at their disposal and convert it into valuable prospecting and loyalty-building tools? • How can a growing branch network have point-to-point connectivity at affordable prices? • The challenge of understanding the value of switching to a Cloud-based system and how this can leverage cost savings and international mobility. • How to enable effective risk management across the raft of IT and telecoms

One of the most important ‘power threads’ of the session resulted from Neil Petch’s comments about the importance of getting a business digitally connected from Day One of its operations; indeed, his view was that in terms of priorities this ranked top of the list - right alongside finalizing the trade licence and getting the right office accommodation! Genny

Signifying the groundbreaking agreement, the official contract was signed in front of the press and members of the public alike by Ayman El Dessouky and Dominic De Sousa. Ghanimeh - whose business depends fundamentally on a chain of web-based contacts and funding presentations reiterated this point, saying that her business simply couldn’t exist without sophisticated online capability. It was important also to hear the views of Prrasad Khatta, who explained how Western Union empowers staff to interact with customers using a raft of account data, all easily accessed on tablets, and offering quick decision-making for staff at point of sale. But Sudarshan Seshadri commented that whether a business was part of the digital revolution or not (and whether its directors knew how to have connectivity) was not an influencing factor in securing funding: however, this could lead to an inability to secure the right growth trajectory. On this point, Ayman El Dessouky commented on the actual account setup and management process, explaining

February 2014

Business innovation

how Etisalat have a dedicated SME team in place and genuinely understand the pressing needs of the SME sector - especially the requirement for urgent action and the ability to upgrade services to avail of fresh business opportunities. Contributing to Best Practice

Another dialogue developed at the round table involved the role of connectivity in ensuring Best Practice - especially in relation to the requirements of the new 2013 Companies Act. This contains strict guidelines on the importance of communication between the Board of Directors and all the business’ stakeholders. John Merrigan, for example, took the view that regular and consistent communication was not only a digital concern, but brought in other important aspects, like the availability of audited accounts and the transparency of all board-level dealings and investments. Mona Tavassoli believed that the role of communication was also paramount in ensuring Best Practice during key moments in the business’ evolution and the digital platform had been a crucial factor in the strategic launch of the nowacclaimed Mompreneur website and online business. Anas Halabi - viewing the telecoms imperative from the perspective of a professional investment specialist explained how the requirement of good Corporate Governance, was delivered via a strong communications platform,

effective, high quality packages specifically designed for the SME. Steve The keynote issues Gardiner explained that these packages fuelled an animated were not only available in abundance, but had been designed to simplify product debate lasting more selection from a previously complex than two hours series of offers - and what’s more, they and featuring the gave SMEs access to exactly the same presence of national level of technology available for their larger counterparts. press and an The day closed with Ayman El Dessouky audience containing explaining the detailed research process some of the most that Etisalat invest in sourcing exactly the right mix of product offer for the SME prestigious decisionsector and how the company is responding makers in the SME to and predicting the waves of change community. across an ever-more-broad international marketplace. ‘Empowering growth, extending reach’ was a deal-breaking component in astute proved to be a morning of extremely investment decision-making. Just how relevant and well-informed debate - at important it is to align communications the end of which many businesses could into a Best Practice agenda was explained literally take away freshly-brainstormed by Alexandar Williams, as he demonstrated solutions across a variety of everyday the role of corporate Governance among telecoms and digital needs. SME Advisor those businesses who qualify (via magazine was delighted to facilitate a painstaking selection criteria) for the thought leadership event of this calibre honour of being among the Dubai SME 100. - and we look forward to introducing the next event in what promises to be one of For the SME three things matter - cost, the major ongoing business dialogues cost and cost! of 2014. As the Moderator Paul Godfrey opened questions from the floor, it was inevitable For an online version, please visit: that there would be questions about www.smeadvisor.com/2014/02/ pricing and the availability of cost- empowering-sme-success/

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February 2014

Business innovation

Through the

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Etisalatâ&#x20AC;&#x2122;s dynamic team (from left to right): Hazem Ghoneim, Senior Manager, SME Channel Management; Steve Gardiner, Vice President, SME Channel Sales; and Moneer Al Ramahi, SME Business Development Manager

For SMEs, connectivity is everything - in fact, it’s the first and most important requirement in building a business and putting the all-too-vital commercial steps in place. In order to ensure that businesses are supercharged by the right digital and telephony mix, top-name providers like Etisalat reach out to customers proactively, using expert ‘channel partners’ to activate the key relationships that can spell the difference between market leadership and a world of lost opportunity. SME Advisor spoke to Steve Gardiner, Vice President, SME Channel Sales, Etisalat, and Hazem Ghoneim, Senior Manager, SME Channel Management, Etisalat, about the partnership profiles that are all-important and how they’re a catalyst for the right kind of SME growth…

s Steve Gardiner comments: “We see the role of the channel partner as a key service channel when it comes to meeting the needs and expectations of what I would call the ‘middle sector’ of our SME market. By this I typically mean good-performing and aspirational businesses who are looking for great value telecoms solutions that reflect the way the business is developing and expanding. “Here at Etisalat, we have focused more and more on the role of the channel partner; if you go back a few years, there was a contrast between the larger businesses who would be serviced by our own relationship managers, and the mid-sized and smaller entities who would be handled by a call centre or tasked to visit a Business Centre. We believed that the middle sector was being a little bit overlooked by the industry - and really needed bespoke attention from an expert, one-stop provider. And that’s the role of the channel partners. We currently have a considerable number of channel partners, but our plan is to continually develop the Channel in terms of quantity of Partners, but with a trained eye to provide the quality of service that our SME customers deserve. Consider the following scenarios perhaps they strike a chord with your SME: • You need to upgrade your server and face prohibitive maintenance and development costs; and at the same time, your salesforce are venturing further afield into the GCC markets and need continual data access. All in all, a classic case for conversion to a Cloud platform. • You are developing a branch network for the first time and want replicable data

access across a range of mobile devices, empowering your sales teams at every point of delivery. • You need to empower your mobile workforce with complete mobility solutions in terms of voice, data, unified comms, collaboration tools, with access to the hosted CRM and ordering portal. • You are a start up. You quickly need a complete business starter kit, comprising web site builder and associated tools, group email functionality, cloud services, supported by mobility solutions.

they’re generally very substantial entities, with approximately 50 staff on average. We also have a ‘roadmap’ that can very effectively allocate different types of channel provider for each style and size of customer.” Setting standards – and giving support

It is of course vital that if the channel partners are to be entrusted with a batch of key customers to manage, they have to work to the highest standards in the industry. Hazem Ghoneim explains that: “We work very closely with the channel partners to ensure that the right quality controls are in place and that there is the right style of delivery. For example, there are quarterly assessments, and we invest heavily in Channel Development programmes to train and develop Channel Partner staff to listen to and understand the customer needs and requirements – then to provide practical and cost effective solutions tailored to their needs.’ The interaction with the customer is designed to work in the most constructive and effective way. Steve describes this as follows: “Here at Etisalat, we have developed a branded process that identifies the steps that the channel partner has to follow, taking the customer relationship through the vital stages, namely • Listen, Comprehend. • Advise, Propose. • Discuss, Agree. • Negotiate, Conclude.

All these scenarios need a detailed dialogue to happen between the business and the telecoms provider. On the one hand, there needs to be first-hand understanding of the SME’s culture and its challenges; and on the other, an availability of the right hardware, software and connectivity packages. What this means is that your requests need to be managed so that the right tailored solutions can be found - and delivered cost-effectively. This is precisely why topline providers like Etisalat use channel partners - to accelerate serviced delivery via a bespoke communication with your team, really getting to know exactly what the extent and profile of your requirements are. “Of course, there is still a walk in service at the Business Centres and a dedicated call centre for SMEs - all you have to do is dial the toll free number 800 5800 - but the channel partners physically reach out to you in a proactive way and can give you the kind of detailed guidance, often following a site visit, “We also provide an incredibly comprehensive that can be so valuable, especially if you’ve raft of support literature, from flyers, to got a special strategic or growth plan in mind. manuals, brochures, posters and a full The channel partners can vary in size, but media package, as well as a complete

February 2014

Business innovation

We have focused more and more on the role of the channel partner; if you go back a few years, there was a contrast between the larger businesses who would be serviced by our own relationship managers, and the mid-sized and smaller entities who would be handled by a call centre or tasked to visit a Business Centre.

knowledge-based system. All of which the personal customer is something we For example, we have strategic relationships gives the channel partner a 360-degree will see more and more, and it’s already with all the top Freezones, such as JAFZA, interface with the customer. What’s more, causing a good deal of fuzziness between DAFZA, DSO and SAIF, and each of these each channel partner represents the full the old-fashioned, traditional categories has an Etisalat kiosk to facilitate service Etisalat portfolio of SME products.” like ‘business to business’ and ‘business take-up. These relationships with stateAs Hazem adds: “We require the operating to consumer’. What we are going to see is of-the-art SME environments are key to levels of the channel partners to be so high the arrival of the ‘human to human’ model, the way we can evolve and develop our that there will be absolutely no difference where all that matters is that the unique, product offer.” “In addition to these,” Steve continues, between this service level and if the bespoke needs are met, not whether it’s as customer was handled by Etisalat directly. part of a specific segment, business mix or “we will also be offering monthly workshops and networking events for Entrepreneurs, Our long-term objective is of course to make a strictly private customer.” bringing a raft of 3rd parties together into sure that each and every SME customer is a SME community, which will be heavily proactively managed, and the role of the Quality strategies, quality partnerships channel partner is tremendously important Meanwhile, the performance standards of supported by the Etisalat SME division. “Again, the best engagement solution in meeting this goal - so they are very much the dedicated SME call centre are required true partners, and partners of a very high to be higher and higher, and these are being for this is through the channel partners, quality. They’re not seen by us as being delivered against very specific sets of KPIs. who can bring speed, knowledge, high simply resellers – very much the opposite, “What’s more”, Steve comments, “we now technological awareness - and of course they are an invaluable arm of Etisalat and have our best-ever staff/enquiry ratio in a great range of devices - to the equation. an extension of our own workforce.” place at the call centre and unlike others They’re very much in tune with the we have taken the management decision entrepreneurial mindset, because they’re not to base overseas, but here in the UAE. precisely that kind of innovative, growing ‘Human to human’ Hazem adds, “Our valued relationships business themselves; and they know “The role of the channel partner”, says Steve, “enables us to focus not simply on with SMEs are also supported by a range exactly what it takes for an SME to leverage the business as a business, but to see it of carefully-selected strategic partnerships. competitive advantage through the power from the perspective of the employees. These aren’t chosen on the basis of what of better connectivity and some strong, A core part of our strategy is to meet the they can ‘sell’ to SMEs but to bring us closer forward-thinking solutions.” needs of the corporate employees, as well to the trends in the SME marketplace, with as understanding the strategies of the an objective of supporting the thousands of For an online version, please visit: business they are employed by. This ‘blurred businesses from one point and enriching the www.smeadvisor.com/2014/02/throughline’ between the business customer and services provided by our Freezone partners. the-right-channels/

February 2014

INSURANCE FOR YOUR BUSINESS

Health is wealth – but can your business afford it? Following the roll out of the new Health Insurance Law, all residents of, and visitors to, Dubai – including all the free zones – are required to have mandatory health insurance. As an SME owner, this means in addition to yourself and your family, you will now need to make health insurance provisions for your employees as well. It’s important, then, to get a policy that matches your needs and budget.

t pays to think seriously about the kind of cover you – and your employees – need. But, more importantly, does this type of cover fit within your realistic budget limitations? Ask yourself the following questions before you approach an insurer: • How often do you anticipate yourself, or your employees, needing to visit a doctor? This may well depend on the kind of industry sector your business operates in. • How much of a monthly premium can you or your SME afford? Can you get a better deal based on the number of employees in your organisation? • Is there a limit to the amount you’ll have to pay and the amount paid to you by insurance carrier? • What kind of pre-existing conditions does your insurer need to know about? • Do you want to include dental and vision plans? • What could happen should you, or one of your employee, require surgery? • What if you, or your employee, were injured in an accident? Medical insurance – getting to the bottom of it

There are basically two different types of insurance. Insurance that’s offered as part of a group scheme, usually from the employer – ie, you as an SME owner.

Or insurance taken out by you, as an individual. Basically, they work in a very similar way, ie, in return for a monthly (or sometimes yearly) payment, you receive certain types of medical care free of charge. In the case of the group scheme, the employer will usually pay the premium – or a large percentage of it – on the employee’s behalf. The insurer will give each of your employees a membership card, which they can take with them whenever they visit a doctor, a clinic, a hospital or a walk-in outpatient centre. Don’t, however, make the mistake of assuming that you and your personnel are now covered for every kind of illness or treatment, because that may not be the case at all. You may tend to think of medical cover as paying all of the day-to-day bills, as well as the costs of prolonged treatment, operations, and so on. The reality is that there’s really no such policy – you have to select the one that’s closest to your needs without the premium exceeding your budget. What are the different types?

Whether, you are looking to get medical cover for your employees or yourself, it’s a good idea to be up to speed the different types of cover available. Generally, there are two main types of medical cover: comprehensive and mini-med.

February 2014

INSURANCE FOR YOUR BUSINESS

‘Comprehensive’ policy The key point to highlight here is that a comprehensive policy very often won’t cover minor issues; it is focused on major bills such as long-term treatments. This type of cover will not take care of anything and everything. It requires the person insured to co-finance a small portion of the costs. It includes provisions for ‘deductibles’ and ‘co-payments’.

There are several other clauses such ‘coverage limits’ and ‘out-of-pocket maximums’ that an insurer might choose to include as part of your policy. For instance, in the case of ‘coverage limits’, health insurance policies only pay for health care up to a certain ‘capped’ amount. The insured person (or in this case your employee) may be expected to pay any charges over and above the health plan’s maximum payment. While, in the case of Mini-med plan ‘out-of-pocket maximums’ there are set This plan is the reverse of the above limits that you are expected to pay. The policy – it covers smaller, day-to-day bills, policyholder’s obligation ends once the such as vaccinations, getting a cast for a ‘out-of-pocket maximum’ has been reached, fracture, and so on. The upside with this and from then on, the health insurance pays plan is that it costs much lesser than a comprehensive policy. Of course, bear in mind, it might not be very useful in the case of major situations such as brain Good health insurance can cover surgery, for example.

exploring medical cover options and the hospital you receive treatment in. With direct billing (which generally costs more), your employees can simply walk in, present the insurance card and receive treatment. The insurer is billed direct by the hospital and all your employees will have to pay a fixed excess (often no more than AED100). With ‘pay and claim’, however, your employees will have to pay the entire treatment bill themselves and then claim it back from the insurer. In some types of group or company schemes your insurance cover may only give you a ‘pay and claim’ facility. This is a crucial aspect of medical cover, and it’s vital that you select an option that is best suited to the financial model of your SME and to the needs of your employees.

But, why is it so costly?

There’s often a lot of confusion about the kinds of conditions your insurance policy actually covers. For instance, if you have a basic policy, most insurers exclude eyecare or dental treatment. Although, at the time of setting up the policy, you always have the option of adding in these ‘extras’ for a higher premium amount. Again, it’s probably best to assess the kind of working environments your employees are exposed to and make provisions in your insurance policy accordingly.

Most insurance companies work with a simple logic – the more they can spread the risk, the lesser costs they have to bear. So, in the case of a life insurance, there are thousands of people – and more – who aren’t likely to make a claim in the near future. But with medical cover, the people who buy it are the very people most likely to make a claim. This means that the money insurers collect from the premiums would be required to paid out again. Hence, insurers pitch their premiums higher than in other branches of insurance. In order to keep premiums feasible and affordable, the insured party is asked to pay a small part of the cost. And, there are several ways insurers go about this: When your staff present their medical insurance card, the insurer will ask them to pay a certain amount (often referred to as a ‘deductible’) whenever they receive treatment, up to a certain limit. Beyond that limit, the insurer will pay. In another situation, you can set up a ‘co-payment’ arrangement with your insurer. So, every time your employees visit the doctor, you agree with them that they will pay a certain amount like AED150. You can of course discuss the percentage of the total bill amount that you are willing to pay and ensure that this is clearly outlined in the policy beforehand.

you – and your employees – for most contingencies.

all further costs. Out-of-pocket maximums can be limited to a specific benefit category (such as prescription drugs) or can apply to all coverage provided during a specific benefit year. As an employer, you might find that, setting a schema of this kind can be helpful, because it keeps the policy cost down and means that in return for paying ‘out-of-pocket’ expenses, you’ll have better-priced cover when you need it the most. Where can my staff get treatment?

The vast majority of policies only cover you for a limited number of hospitals and medical centres (basically, the ones who offer the insurer the most preferential terms). Even the most expensive types of health cover cannot offer ‘universal’ cover at each and every hospital. It’s always best to check the range of hospitals and clinics you’ll have access to before you sign the policy, because cheaper providers may only provide cover in outlying areas where their costs are less.

What’s covered? And, what’s not?

Shaping up for health insurance

It’s important to note, in all the above scenarios, the ‘you’ could be you as an individual, or you as an SME owner. But, no matter what the case may be, health insurance is crucial and here to stay. Good health insurance can cover you – and your employees – for most contingencies. The hitch is that you can only get the best from insurance if you understand how it works. It’s not a miracle cure, but it’s a sound investment you need to make; and the more you know about the ‘pros and cons’ the more secure you can be in knowing you’ve chosen the options that are best for you, your family, and your employees. Good luck!

Selecting the right payment method

For an online version, please visit:

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www.smeadvisor.com/2014/02/healthis-wealth-2/

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February 2014

INSURANCE FOR YOUR BUSINESS

To the credit of your business… Trade Credit Insurance (TCI) has been slow to catch on in the GCC nations, but it’s now finally making the headway it deserves. The reality is that TCI is an important risk management tool for hedging against late-payment or non-payment of receivables, and it therefore plays a key role in buffering an SME from potentially disastrous payment shortfalls - which might otherwise prove fatal for a cash-starved business at a crucial stage of development. Yet there are many different variants on the TCI model, and here, Will Clark, Head of UK Trade Credit for AIG Property Casualty, explains the benefits of using the ‘Excess of Loss’ model,which AIG has rolled out as a powerful international template.

hances are your SME has started to think in • Facilitate building of a branch network or a move towards terms of protecting its receivables - a logical overseas expansion, because new trade agreements can decision, given that at any one time, they can be entered into with fresh confidence, without the need account for up to 40 per cent of the value of the for up-front payments or prohibitively short credit terms. company’s asset base. TCI is a great place to start, because it’s one of the most practical risk management tools for Will Clark, Head of UK Trade Credit at AIG Property Casualty, safeguarding turnover and profitability alike. It gives a comments that: “these are all very popular attractions of powerful range of practical benefits, such as Trade Credit Insurance, and it’s not surprising that the market • Protection against late payment or non-payment, is increasingly looking at this mechanism for regulating its removing any fears on the part of the seller that the risk. However, one of the factors here is that, since TCI is a business is living on a knife-edge through the risk of relatively new arrival, what we tend to see is one particular defaulted payments. type of cover - known in the industry as Whole Turnover • Stronger buyer-seller relationships, since the buyer Cover. This is in effect a business that is seeking to subcan expect better terms moving forward; the seller contract out its credit management to an Insurer seeking - assured of payment - doesn’t need to impose overly- cover across the complete range of receivables from the very strict criteria and can work with a broad portfolio of small exposures to the very large; “Yet one of the factors preferred businesses. here is that - especially for the more ‘evolved’ business • Better opportunities for getting finance, given that risk the company can lose a certain element of freedom and partners and investors alike can see that a potential risk discretion in the way it handles its receivables. This is where has been taken good care of and that the business has an alternative style of TCI cover, known as ‘Excess of Loss’ the stability to entertain and maximize fresh investment can play a valuable role. It offers a completely different way sums. of insuring risk, while still giving all the required comfort • Ongoing credit data on buyers, informing the SME about factor that a business needs.” the raft of potential risks tied up in its receivables and allowing the business to be proactive in its choice of Excess of Loss - what are the benefits? business partners. TCI insurers have accrued data that “Locally as well as globally”, Will continues, “the market can provide detailed and accurate profiling across a vast has been growing for the Excess of Loss product, and AIG array of businesses, and can do so on an international has become a true brand leader in this area. The Excess basis. This is very important in the GCC, where the of Loss policy differs from the more widespread Whole concept of the credit bureau is still in its infancy. Turnover Cover in a number of important ways. To begin

The Excess of Loss policy differs from the more widespread Whole Turnover Cover in a number of important ways.

February 2014

INSURANCE FOR YOUR BUSINESS

Will Clark, Head of UK Trade Credit at AIG Property Casualty

with, the Excess of Loss product seeks to work with the policyholder’s own credit management. The business which takes out the cover retains the strategic and operational management of its credit risks and exposures with the insurer acting as good counsel in terms of optimal credit management practice and astute exposure management. Importantly the insurer takes over the “larger” risks which could ‘blindside’ the business and jeopardize its cash flow and performance, and - in the worst scenario - its actual survival.

“One of the great advantages here is will be free to take on board whatever risks that your business doesn’t have to deal you feel are necessary - there’s no ‘big with imposed credit limits or modify the brother’ watching over you and altering way it deals with valued customers. The your behaviour. customer can choose how much or little “There’s also another dimension. cover is necessary (and therefore how You will of course have built up key much the cover will cost), depending on relationships with credit management the elements of the risk that are transferred partners - like debt collectors, for example to the insurer, and which risks are retained. - and these probably work well in terms The business keeps full responsibility for of covering your day-to-day exposures. all its credit decisions under a pre-agreed Excess of Loss clicks in when you’re faced discretionary limit as well as documented with an exceptional or unforeseeable risk credit management procedure, and you that can’t be fielded in the usual way, complementing traditional measures and giving you a 360-degree range of safeguards.”

Excess of Loss clicks in when you’re faced with an exceptional or unforeseeable risk that can’t be fielded in the usual way, complementing traditional measures and giving you a 360-degree range of safeguards.

Ways of working

“The fact is”, says Will, “that AIG have been evolving this model for more than 40 years, and we have a good view of which businesses it’s most applicable to. For example, you need a relatively good capital base to work with an Excess of Loss procedure - but note that it can still be very attractive to the younger SME, because the potential impact of a wholescale catastrophe is well taken care of. This style of cover also has high discretionary limits which helps to provide a business with the independence it needs to set credit limits but the cover it requires to grow safely. It’s also a great way of helping your business breed confidence, because it will have the chance to really get to know its customers without interference, but with the security of knowing that the extreme risks are taken care of. “It’s a powerful variation on a product which has a great potential market here in the UAE with the region being one that has become such a major export hub. Companies based in the region will so often be looking to export, and TCI is a vital factor in building confidence in those overseas markets. Excess of Loss is also preferable for many businesses, because there’s no sense of surrendering control; it simply lets a business get on with what it does best, walking familiar territory but with an all-important safety net in place as and when required.” For an online version, please visit:

www.smeadvisor.com/2014/02/to-thecredit-of-your-business/

February 2014

Getting Finance

Venturing forward They are young, dynamic, full of ideas, and mean business. They’ve left no stone unturned in taking their respective businesses to new heights – but rest assured they won’t stop at that! We spoke to these two iconic role models – Paul Kenny and Arya Bolurfrushan – and asked them about their new exciting ‘ventures’…

Paul Kenny and Arya Bolurfrushan of Emerge Ventures

hen Paul Kenny, founder Across what regions are you looking to be technology but it will diversify across and CEO of the famous make investments? the different verticals within technology. e-commerce website Kenny says, “We hope to make investments “In the initial stages of Emerge Ventures, Cobone.com, and Arya across the globe – with no specific focus to we knew our focus was technology but Bolurfrushan, CEO of Bolurfrushan any particular region. We have currently when we got into the space of investing, we International Group and an angel investor, invested with two businesses based out realised there are significant opportunities recently launched a new venture capital of the UAE and one that’s San-Francisco across multiple verticals. It’s also worth firm – Emerge Ventures, they attracted a based. So, we are actively looking at adding here that Impact Hub is a great lot of attention. Emerge Ventures is focused different regions.” example of an investment that we’ve made on high-impact early stage investments in that isn’t a technology startup. So we are Middle Eastern technology companies – with Your company has a specific focus on looking at a very diverse portfolio but a preference to infrastructural e-commerce. infrastructural e-commerce startups. every investment that we make will have In a candid chat with SME Advisor, the What attracted you to this sector? an element of technology.” dynamic duo explain further… “In 2010, when I was working on Cobone.com, there were no Internet companies, there Is there also a specific business model How did Emerge Ventures come about? weren’t many people you could approach that you have developed a bias towards for guidance and support. The challenges in your several years as an experienced Tell us a little bit about your vision for that we faced were immense; for instance, entrepreneur, angel investor and the company. Kenny replies, “After the launch and success we struggled with hiring. At that time, people industry-expert? of my company Cobone.com, I found Kenny replies, “It depends on the stage at which the city or country in question myself interacting with a lot of aspiring entrepreneurs that were looking for advice; One of the main currently is. So what I say today may change constantly engaging with them and helping tomorrow. I personally feel that having a them overcome challenges within their advantages of having B2B model gives you a better chance than running with a B2C model. I have businesses. For instance, many people an experienced would approach me for advice on setting investor on board personally experienced this with Cobone. up their payment gateway, or marketing com. The reason is because the market is is the structure their product, and so on. At the same time, extremely fragmented, there aren’t sufficient Arya would get a lot enquiries about his it creates for the support technologies that allow you to scale interest in financing and investing various entrepreneur. This up quickly. For instance, payments is a big projects. So, we asked ourselves, why not structure helps issue in this region, marketing is another combine forces and create a platform to major issue. If you take the example of Dubai, the entrepreneur provide capital – financial and intellectual – there are millions of people using different to startups in the region? As a result, Emerge be accountable technologies, there is no one way to reach all Ventures was born. the people of Dubai other than a billboard to themselves in “It was a natural transition as we found measuring progress. on Sheikh Zayed Road costing millions. But, ourselves building connections within the as an SME, I simply can’t afford that. So, it’s startup community; also entrepreneurs a complex B2C market but there are a lot of opportunities in the B2B space.” and investors from outside the region would approach us as they looked to gain would say, “why should we work for an access to the Middle East. Simultaneously, Internet company?” So, the reason we set What are some key factors that you we were also making a lot of investments up Emerge Ventures is to help technology look for in a startup before investing? Is in the region; we had about 25 investments startups. We see the significant opportunity there a selection procedure in place or between the two of us.” not just that B2B or B2C plays but in terms of do you prefer referrals? Bolurfrushan adds, “We saw massive technology that helps builds companies of “The three investment deals we’ve had growth potential in the MENA technology the future. For example, the Impact Hub is a so far were all deals that we sought after. infrastructure space, with the UAE in launch pad for hundreds of new companies We’ve found that informal conversations particular investing heavily to develop over the coming years and we want to be are often a good way to come across innovation and technological readiness. part of this,” says Kenny. startups that we are interested in. Many He adds, “And, what we have learnt is times, they might not even approach us As economies in our part of the world mature and move higher up the value that the technology market across some for funding; we might just happen to see chain towards the highest calling of man countries is either more developed or less that they have a great business idea that – innovation – we wanted to be a vehicle developed. Technology is very diverse, we want to support. Building a long-term bringing the smartest global capital to it could be biotechnology, logistics, relationship with the businesses we want serve as a catalyst in this transformation.” robotics, and so on. So our interest will to work with is also very important to

February 2014

Getting Finance

us. For this to happen, the interaction needs a good amount of time like a few months – it’s not something that typically happens over one or two meetings,” explains Kenny. “Currently, we have about 10-15 pitches coming to us per week which are not just local but regional and international. In terms of their sectors, they are quite diverse.” What kind of influence do venture capitalists have in a startup’s overall decision making process?

Kenny says, “Arya and I have made about 25 investments so far, and many of these are passive – we don’t even speak to them. When you are an angel investor, you are not really taking a seat on the Board or anything along those lines. “I like to have an open relationship with the entrepreneur and say, “if you want be to me around, I’m more than willing to help”.

There’s a lot of buzz about ‘innovation’. What does this mean to you, and to Emerge Ventures? Is something that you look for when making an investment?

fact that this region takes a bit more time. I don’t want to force an exit strategy on any company.”

Bolurfrushan says, “As Emerging markets What is next for Emerge Ventures? develop, they tend to move up the value Kenny explains, “Our long-term focus is chain towards creation and innovation. to partner with people who are looking We would like to help fuel this evolution to build great things. We want to be a part by believing in aspiring entrepreneurs of some of the leading companies of the and providing the resources to help them future. The Impact Hub is a great example realize their vision. We invest in people, – it’s a platform where hundreds of new not companies.” businesses will be built and we want to a part of this exciting story. We are definitely Emerge Ventures has made its first three not looking for entrepreneurs or businesses investments as part of MENA Fund I. Tell with a short-term strategy or those that are us a little bit about them. What made in the industry for quick-wins. them attractive investments? “We want Emerge Ventures to be seen Bolurfrushan says, “We’ve invested in ‘The as a premier destination for smart capital Impact Hub’, a collaborative incubator and – because we aren’t just giving you financial co-working space in Souk al Bahar Dubai; support, but a lot of sound advice as well. “Something that we are looking to do in Lumba, a silicon valley based mobile gaming company focused on the Arabic-speaking the near future is to host a ‘Dragon’s Den’ type of an event where entrepreneurs have a couple of minutes to make their pitches, and the winner gets rewarded.” Do you think being an entrepreneur is perceived as being ‘glamorous’ in this region?

Kenny responds, “I think being an entrepreneur here is surely not glamorous, it’s actually quite hard. You need to put in a lot of effort in building your business and effectively managing all the risks associated with it. You can’t pursue a full time job while running a small business on the side – you have to dedicate all your resources in terms of both time and money to be a true entrepreneur. I’ve come across a lot of such entrepreneurs – particularly in this region – and highly respect them.”

The dynamic duo of Emerge Ventures

And, it’s just understanding what your role is in the business – are you an advisor, or on the board? Where do you actually have power? I would personally try and invest in companies that are looking to get some added value and, that I can help with. But, I wouldn’t necessarily interfere, if they have their strategy, they should stand by it. Our investment is always the people, not the business.” Bolurfrushan adds, “One of the main advantages of having an experienced investor on board is the structure it creates for the entrepreneur. This structure helps the entrepreneur be accountable to themselves in measuring progress.”

world; and Elevision, a new digital media network that broadcasts news, information and advertisements from screens inside the lifts of premier towers in the UAE.” Kenny explains, “What I like about the Impact Hub, for instance, is the location – it’s set in the heart of Downtown Dubai which is a strategic and popular location. It’s quite different from other similar hubs in Dubai because it offers a unique educational and learning experience.”

Do you have any advice for aspiring entrepreneurs in the region?

“I think it’s the perfect time to start a company here, just remember to have a long-term focus. Also, as an entrepreneur, you will have to face a million roadblocks but it’s imperative to have the ‘never say no’ attitude and find a way to achieve your goals. In terms of raising capital for your business, it’s critical to be persistent – don’t give up easily. Getting finance is definitely going to be a hustle, but, if you continue to interact with the right people, you will surely get there,” concludes Kenny.

Do you usually have an exit strategy planned out when making investments?

For an online version, please visit:

Kenny explains, “You can think about a potential exit strategy but I’m aware of the

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Getting Finance

What an Impact! ‘Impact cannot happen in isolation. It requires collective action.’ Walking into the vibrant Impact Hub Dubai – situated in the heart of Downtown Dubai with a stunning view of Souk Al Bahar – visitors can instantly sense that the above phrase has been nicely woven into every element of this elegant space. Built on the foundations of education, innovation and entrepreneurship, Impact Hub Dubai is no ordinary entrepreneurial hub. We caught up with Executive Chairman & Co-Founder Aman Merchant and asked him to describe their rollercoaster journey to creating this unique community…

irstly, tell us a little bit about Impact Hub.

well as the public events are sources of fresh faces throughout the week. “In addition, we have a small refreshment corner – The Pantry – which has a range of free snacks and beverages on offer exclusively for our Hubsters. But we also encourage our Hubsters to bring their own food or order in from the many restaurants nearby. The event offerings are a highlight; they include workshops, seminars, competitions, mentor meet-ups, project showcases and more to follow – being part of a global network, means we have amazing case studies to look at, for possible introduction to our programmes calendar.”

“Impact Hub is a global community of people from ever y profession, background and culture working at ‘new frontiers’ to tackle the world’s most pressing challenges. We have a network of about 45 Impact Hubs worldwide, with several more that can be classified as ‘work-in-progress’. Every local Impact Hub has its own theme, or focus, and ours is education. We have an educational focus and aren’t ‘F&B’ driven. “What makes us different from coworking spaces and lounges in the city is our nearly 8,000-person private Impact Hub Global network, and our concept of ‘Hubstership’; you become a What is your target audience? ‘Hubster’ through a monthly experiential “The Impact Hub is designed to create an programme suited to your needs. In terms ‘impact’ on audiences such as aspiring of the space itself, we have different entrepreneurs; this includes housewives, zones with varied themes, from small corporate executives, and students; meeting rooms and networking spaces startups in their first two years of existence, to outdoor areas and relaxation zones. and experienced entrepreneurs as well The experience is up to you, whether it’s as SMEs. through a designated table or the virtual “Our mission is to provide an environment ‘HUBConnect’, which provides access to where people learn to become selfour closed events as well as other perks. sufficient; you don’t necessary have to There are ways to be involved from the be an entrepreneur to be part of Impact outside as well: the reasonable rates for Hub. You could be a corporate executive hosting seminars and conferences, as looking for an innovative surrounding. We

want people with similar ‘entrepreneurial mindsets’ to ’learn, meet and do’. “I should also add here that we are very selective about the kind of people signing up for the various programmes. We want to incorporate individuals that are passionate, innovative and add value to the Impact Hub ecosystem.” What was your inspiration behind this idea and how did it come about?

“We liked the concept of Impact Hub because it has a primary focus of bringing people together to co-learn under a common space and explore new possibilities. It all began in September 2009 when I attended an entrepreneurship conference in Barcelona and was thereafter asked to contact Impact Hub’s main office in London, who then connected me to one of my partners and fellow co-founders, Habib Al-Assaad. By May 2010, we finally held a meeting with all the people involved in the ‘idea phase’, and our team was filtered down to three cofounders and myself. It was quite clear at that stage that we would have several challenges ahead of us, and we wanted to have a solid team that not only fully understood the concept – but shared our value system and long-term vision.”

February 2014

Getting Finance

So, what were some of the challenges you faced?

“By December 2010, we had finally put together a ‘task force’ of three people: apart from Habib and myself, we had Marwan Chaar, Co-Founder as well (Wissam Otaky joined later in 2012). The four of us officially decided that we were going to move forward with this idea and take it to the ‘implementation phase’. We aimed to launch it within a year – of course with the mindset to overcome all the legal challenges we may be faced with. Over the course of that year, however, things started becoming more real – we were faced with a lot of hurdles – raising the money wasn’t easy, the paperwork was extremely complicated, but most importantly we were initially dealing with a ‘not-for-profit’ model which was surrounded with a lot of complexity. We were often told that our model just isn’t feasible because a not-for-profit enterprise – that charged a fee to its customers to sustain itself – simply didn’t exist! There were a lot of people who simply couldn’t wrap their heads around the idea of a ‘not-for-profit’ operating like a business. Because, you see the idea was to create a self-sustainable ‘not-for-profit’ organisation. “After interacting with a lot of family friends, financiers, and investors, we finally decided, in June 2012, that the ‘not-forprofit’ approach wasn’t working for us. But, becoming a ‘for-profit’ organisation wasn’t part of our value system. Hence, we decided to use a hybrid approach which was setting up as a social enterprise. A social enterprise is essentially a business aimed at creating a social impact, rather than maximizing profit. We then approached all our Advisory Board Members and explained the change – following which one of them decided to make an investment into the idea. After these initial challenges, we finally managed to bootstrap the money from family and friends. We could see light at the end of the tunnel. “However, the legal aspects of the business were still to be addressed. The legal structure wasn’t ready for our business model. After a lot of visits to several government departments, we finally were able to get a licensing structure that allowed us to operate the way we do today – and remain extremely grateful to the various authorities for allowing our globally-proven innovative model to come to Dubai, and thus become the first Impact Hub in the Arab World. “The result of overcoming these hurdles is something that you can see here, at the

Impact Hub, today. I’m proud to say that we are the first such space in the region that allows such entrepreneurial exchange in such an open environment. We are, in a way, custom-built for entrepreneurship itself.”

and guidance. The value this can add – especially for an entrepreneur who is short both on time and money – is immense. “Lastly, the learning experience we offer to our Hubsters is something unique. It’s an element that is very important to creating What would you say are key elements the sort of environment we have here at that make Impact Hub different from cothe Impact Hub. I believe that you can’t working spaces in the region? simply rely on physical elements such as “At Impact Hub Dubai, we’ve strived to location, fancy interiors, and so on. It’s the create an entrepreneurial interaction by ’softer’ elements, in fact, that are crucial to structuring the space a little differently. success. These are elements such as learning, We place a heavy emphasis on learning; education, interaction, and so on.” so, it’s not about just coming here, having a chat and a coffee. How did your partnership with Emerge “Why are we different from working Ventures come about? spaces? There are three elements that I “The founders of Emerge Ventures, Paul and believe make us different. Arya, have been doing business for quite “Firstly, a fundamental difference is that we some time and their support is of paramount have an amazing community host, Hebah importance to us. What I like most about Fisher, who facilitates communication and them is that they actively look to support not just the startup community, but the entire startup ecosystem in the region. They are also great listeners – always open to new We have a powerful challenges, ideas and concepts. “Yes, they do provide us with financial global network of support, but that’s just one element about 45 Impact of our relationship with them. We’ve Hubs worldwide, received continual backing from them in from Sao Paulo to terms of business development, visibility, connections and much more. San Francisco to “More importantly, Emerge Ventures, just London to Singapore like Impact Hub, is relatively new and in its to Melbourne, which early stages. So, we see ourselves evolving will go up to 100 as Emerge Ventures grows.”

locations in the next year or two.

connections between Hubsters who have similar interests or a common purpose, locally and globally. For instance, if your startup is looking for a website designer, you can tell our host who will then try and connect you with a designer who can partner with you. It’s a great personalised, yet anonymous, way of networking and learning at the same time. “Secondly, we have a powerful global network of about 45 Impact Hubs worldwide, from Sao Paulo to San Francisco to London to Singapore to Melbourne, which will go up to 100 locations in the next year or two. This means wherever in the world you may be, you can go to any Impact Hub; there’s always a network that you are a part of and can easily access for instant support

What’s your vision for the future? How do you see Impact Hub Dubai shaping up in the years to come?

“My vision is to eventually transform Impact Hub Dubai into the region’s first point of contact for disruptive thinking – a home for possibilities. Let me explain; globally, several Impact Hubs are engaged by corporates and governments to help solve difficult problems. For instance, a company could approach Impact Hub and outline its current challenge; this could be a product launch, a technological barrier, or anything along those lines. We would then put our Hubsters into a room and allow them to brainstorm ideas. This way you are sure to get a lot of interesting ideas and feedback. So, essentially Impact Hub would be like an instant think-tank.” For an online version, please visit:

www.smeadvisor.com/2014/02/what-animpact/

February 2014

Managing Risk

Risking it all... As an SME you might think that risk management is not applicable to your business. However, it’s quite the reverse. Larger corporations often have a huge risk appetite – meaning they not only have a stronger ability to withstand risks, but positively invite risk as opportunity for growth and change. SMEs, on the other hand, can be wiped out as a result of the impact of even moderate risks. A powerful tool that can help prepare your business for any of these risks is a comprehensive risk management process…

s an SME owner or director, you’ve surely been involved in one, or more, of the following key strategic decision making

indicate it is more difficult to forecast risk currently than it was three years ago while 46 per cent anticipate that forecasting risk will be more difficult three years from now than it is today.

processes: • Hiring a senior level executive for a leadership position within your The art of risk management organisation First things first. How does a business • Launching a new product line to diversify define risk? Fadi Sidani, Partner in Charge your company’s current portfolio – Middle East, Enterprise Risk Services at • Looking at expansion opportunities within Deloitte explains, “Risk, from a business new global markets perspective, is any event, action, or lack of • Considering fresh investment from a action that may result in an organisation potential high-profile investor not achieving its strategic objectives. Risk • Evaluating the credit-worthiness of a long- is closely associated with strategy. There is term client often a negative connotation when speaking of risk; it’s obviously bad if it impacts your And, one powerful tool that can help you business adversely but if tackled in the right make a calculated and tactical decision, in manner, it could result in a reward too.” all the above situations, is a detailed risk What is risk management? It’s the function management process. Failure to carefully that helps you reduce the likelihood of these assess the financial, operational, strategic, business risks affecting your business. Simply and compliance risks in all the cases put, it’s based on the simple foundations mentioned here can lead to huge losses, of “Prevention is better than cure.” It’s a or in a worst case scenario, a complete discipline applicable to any scale of business. shutdown of your business! “Risk management, in its ideal situation, A 2012 Deloitte Global Risk Management anticipates risks that would result in Survey stated that 62 per cent of institutions preventing the organisation from achieving reported having an Enterprise Risk its strategic objectives,” explains Sidani. Management (ERM) programme, up from “Risk management doesn’t have to be this 52 per cent in 2010 – a clear indication complex procedure. Sometimes it’s as simple of the fact that risk management has as having a discussion within the senior become an indispensable weapon in the management team about the strategy in armoury of any business. And, statistics place, the risks associated with it, accepting further reveal that such action on the part these risks and deciding ways to tackle them. of business owners is warranted as 45 per It’s often just implementing pragmatic, cent of financial professionals report that simple and practical measures. Of course, their organisations are exposed to more if you are a larger company, you need to uncertainty about earnings today than three have a more detailed, systematic approach.” years ago, according to a 2014 Association for As for the benefits of risk management, Financial Professionals (AFP) Risk Survey. these are numerous – That’s not all. The same survey also reports • Better preparedness and business that 35 per cent of financial professionals continuity

• • • • •

Higher operational efficiency Effective use of company resources Improved and informed decision making Boost in cashflow Increased investor confidence

Risk management for your SME

The first step really is understanding what kind of risk management plan is practical, affordable and suitable for your SME. Sidani explains, “Risk management doesn’t have any ‘one size fits all’ approach. There are definitely common best practices that have emerged over time relating to risk management. Our approach, here at Deloitte, is ‘fit for purpose’; what will work in the organisation, and help it identify, measure and mitigate business risks to a level that they can tolerate. We may approach two businesses in the same industry but we may have one solution for the first and a different solution for the other. Additionally, it’s important to keep in mind that the inputs of the CEOs, the culture of the company and the characteristics of each business may vary. As a result, posing a solution that is completely mechanical will not work. It requires a lot of human interaction, input and vision. “At Deloitte, we do have a standard methodology in place but all our solutions are customised to each business – sometimes driven by strategy, industry, corporate governance and structure, technology risk appetite and so on.” Risk management in five steps

We asked world-renowned risk expert, Audrey Weir, Chief Risk Officer with AIG MEA Limited, about the key practical steps to tackling risk. She explains, “One of the advantages of risk management is that while the risks

themselves may be diverse and complex, the process of tackling them can be crystallized into a relatively simple five step process. This can best be described as -

Assessing the key things that might cause an issue to, disrupt, and/ or make your business fail. Focus on identifying the top five to ten items (these are your key identified downside risks). You do not need a huge list of risks, simply a representative one for your business. Consider both internal and external causes of risk. For example: • Economic downturn • Outsourced invoicing with receivables being collected (and held by a third party • Reliance on one key person for your business to be successful • Large values of stock held in one location (theft/fire/ obsolescence risk).

Risk, from a business perspective, is any event, action, or lack of action that may result in an organisation not achieving its strategic objectives.

Your internal staff and management team are better placed than any third party to identify the risks which specifically apply to your business. Third parties can however help by bringing cross-sector experience, deep industry knowledge, or by challenging the team to think more broadly.

For your top five to ten, record whether the issue identified in step One could possibly happen or might be likely to happen (likelihood). In addition, consider what the impacts would be (financial, business collapse, reputational damage, loss of licence, other). These are the possible impacts. Overall this is your risk assessment. For some of your top five to ten you might decide to accept these risks (they are unlikely or have a minimal impact). For others in your top five to ten you might determine that they are likely, or would have an unacceptable impact. For these risks, continue to Step Three.

Determine what you can influence or change. Can you reduce the likelihood, or the impact, or both? Before embarking on action, factor in the cost against the benefit. Spending USD 50,000 to manage a risk that might have a maximum consequence of USD 5,000 and no reputational damage can never be considered to be good business sense.

February 2014

Managing Risk This will provide you with a risk management action plan. Make sure that you take action in a timely manner. Address actions proactively, before that risk has become a reality.

issues, and this extends to the implementation of sound corporate governance strategies, better financial reporting, and mandatory policies for internal audit. This is important not only from a risk perspective, but also helps in areas such as quality control, strong safety measures and so on – ultimately boosting your company’s bottom line.

After review of what can be managed and makes good business sense to action, consider whether there are still risks that the business could not recover from, or might have difficulty in recovering from. Can you transfer some of the risk, even if only the financial consequences to another party? Insurance is one such arrangement, and involves pooling funds from many to pay for the losses that some may incur. These are your risk transfer options. Remember however that the risk transfer will not be without cost.

If you opt to devote time to understanding your business risks, discuss these in your management team. Evolve your top five to ten as you define or change your strategy; as you consider expanding into different markets or countries; if you are considering an IPO; as you become aware of external factors that impact your business changing. The investment that you may make in risk management does not need to be extensive to be effective. It does however need to be a living, evolving approach.” Looking at the glass as half full…

SME Advisor has been a strong advocate for the implementation of a comprehensive risk management plan within an SME – often encouraging business owners to follow basic risk management procedures to ensure that their organisation is safeguarded against any sudden, unexpected catastrophes. So when Deloitte’s recent Exploring strategic risks survey revealed that a staggering 49 per cent believe that their risk management programme is inadequate, we decided to investigate further. We asked Fadi Sidani at Deloitte to comment on this alarming statistic, “Deloitte is a pioneer in risk management services and, as part of these services, we regularly carry out surveys in various sectors across the globe. This survey – in particular – is focused mainly on enterprise risk management, how businesses manage their business risks overall and what they perceive to be major risks. “The survey reported that 49 per cent of EMEA companies describe their risk management programmes as inadequate. The way I would look at it is as “the glass half full”, so 51 per cent look at their programmes as being adequate! And, I think this is a

Fadi Sidani, Partner in Charge – Middle East, Enterprise Risk Services, Deloitte

Premises risk – Still statistically the greatest risk of all, especially in the GCC region. When was the last time you conducted a risk audit of warehousing, heavy plant and machinery, or storage areas for LPG and other flammable materials? Arrange a walk-through audit immediately: lives are at stake – and it may be yours!

Cyber risk – Although this is one topic significant improvement from the previous that has perhaps been beaten to death, years – which can be contributed to the the reality remains that 31 per cent of all very fact that the concept of corporate cyber-attacks are still targeted at SMEs! governance has been continually evolving, With rapid advancement in technology, growing and maturing all across the globe, SMEs need to consider the potential specifically within the Middle East region. threat of cybercrime and continue to take Taking the example of all the companies serious measures to tackle it. Sidani adds, we work with across the world, we have “Technology has been a great driver for risk seen a greater push towards best practices management by enabling access to data and corporate governance. Corporate and networks – allowing businesses to use governance demands the implementation this information to analyse risks better and of superior risk management policies, better make informed decisions. But, it has its financial reporting, as well as improved shortcomings; there’s an increased risk compliance, and as a result of this, risk of losing confidential information which management has received a huge boost. can harm your business – especially in the Today corporate governance is the driver case of an SME.” of good risk management. “When we look at the 49 per cent statistic, Reputation risk – This is another area of it’s important to note that these companies risk that has emerged over time with the are saying they have a risk management increased use of social media. Unfortunately, programme – at least it’s there, which businesses still haven’t recognised the level is a fantastic sign. However, the reason, of damage this can cause. For instance, according to me, for citing their risk bandit messaging on your company’s Twitter management programme as inadequate is or Facebook page can pose a major threat because there is a learning process involved to the reputation of your brand. that the leadership of any firm has to go through. There is a requirement to have a Human Capital and Innovation – Deloitte’s more structured approach while dealing Exploring strategic risks survey identified with risk management.” human capital and innovation as two of the main strategic assets businesses will need to Lessons for 2014 invest in over the next three years. With new As your SME prepares itself for Q2 and sets trends such as big data, BYOD and mobility in place a sound risk management plan, changing the way businesses operate, it’s vital it’s crucial to understand the latest trends for SMEs to continue reinventing themselves in the world of risk. Here, we highlight and adopting innovative ideas. key risk hotspots that your SME needs to So, will 2014 be the year your SME consider in 2014: implements a strong risk management plan, Compliance and discipline – Compliance has or would you rather risk it all? always been at the heart of risk management and 2014 is no different. SMEs need to For an online version, please visit: continue focusing on compliance related www.smeadvisor.com/2014/02/risking-it-all/

Ready to move your business forward

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LEGAL

Dubai’s compulsory Health Insurance -

what it means for SMEs

After considerable anticipation, Dubai has now announced that it will be compulsory for businesses to provide their employees with good-quality Health Insurance, and that this will be provided in addition to existing salary levels. The first stages of the new legislation’s roll-out begin in only eight months’ time - so there really is no hiding place for the SME owner or director. With the new law - the “Health Insurance Law for the Emirate of Dubai (No. 11 of 2013)” - being signed on 24 November 2013, four of the region’s leading insurance experts, all based with Clyde & Co.’s Dubai office, spoke to SME Advisor about its details and implications for the SME sector. We’re delighted to welcome the insights of: Wayne Jones, Partner; Rebecca Ford, Partner; Alison Beirne, Senior Associate; and Elizabeth Williamson, Associate.

nder the new Health Insurance Law, health insurance will be compulsory for all residents of, and visitors to, the Emirate of Dubai including all the free zones within the Emirate. The obligation to provide health insurance cover for UAE expatriate residents will fall to employers and sponsors. In addition to its general impact on employers, residents and visitors to the Emirate, the Health Insurance Law will have wide ranging implications for the health insurance market (principally insurers, third party administrators (TPAs) and brokers) and healthcare providers. In this update, we consider the implications of the new regime (which is

intended to be rolled out in phases between 2014 and 2016) on employers and on the insurance market in Dubai. Dubai’s admirable vision for the new regime is, on the one hand, to achieve universal access to quality health care services and, on the other, to develop through its open market approach, a vibrant dynamic health insurance system, by attracting quality market players and investment in the sector. The introduction of compulsory health insurance is also very much in keeping with a trend across the GCC region to reform healthcare financing. Summary of the Law

The new Law is not yet publically available, although the DHA has promised that it

will soon be available through their website. Although the Law was signed on 24 November, it has yet to be published in the Official Gazette; it will not come into effect until after it has been published. Based on information provided by the DHA, the following is a summary of key aspects of the new regime: • Employers will be responsible for the provision of health insurance for their employees, sponsors for their dependants. • The government of Dubai will be responsible for UAE nationals resident in Dubai. • Complying with the health insurance requirements will be a pre-requisite to an individual obtaining a residency or visit

visa. There will be mandated minimum coverage, in the form of a basic health plan, which will differ for UAE nationals, expats and visitors; it will be permissible to provide enhanced cover over and above the mandated essential package. • Insurers, TPAs, brokers and healthcare providers will require an annual DHA permit in order to carry on their medical business in Dubai. Only DHA “Participating Insurers” will be permitted to provide the mandated minimum health insurance coverage. The DHA will publish an approved price list for medical services and healthcare providers will be required to adhere to the approved pricing. • DHA approval will be required to offer insurance plans and for associated premium charges. Implementation timeline

The implementation of the Law will be carried out in phases; the roll-out will commence in 2014 and is expected to be complete by the end of 2016 in three phases as set out below: 2014 Phase 1

2015

2016

End Oct

1,000+ employees Phase 2

End July

100-999 employees Phase 3a

End June

Below 100 employees Phase 3b

End June

Spouses & dependants Phase 3c

End June

Domestic workers

The basic health plan

The DHA has indicated that the scheme will comprise a mandated minimum coverage, in the form of a basic health plan, which will differ for UAE nationals, expats and visitors (the Basic Health Plan). It will also be permissible for insurers to provide enhanced cover over and above the Basic Health Plan. Only “Participating Insurers”, discussed in more detail below, will be permitted to provide the Basic Health Plan.

The DHA has indicated, the health services that will be covered under the Basic Health Plan will include the following: • In-patient: tests, diagnosis, treatment and surgery; and emergency treatment • Maternity: out-patient ante-natal; inpatient maternity; and new born cover • Out-patient: examination, diagnostics and treatment by general practitioners, specialists and consultants; laboratory testing; radiology diagnostic services; physiotherapy; medicines; vaccines and immunizations; diabetes screening (every three years from 30 years or from 18 years for high risk patients); diagnostics and treatment for dental and gum treatment; hearing and visions aids; corrective laser and surgical treatment for vision. Under the new regime, insurers will not be permitted to deny individuals coverage under the Basic Health Plan due to pre existing conditions, although treatment for chronic and pre-existing conditions may initially be excluded for the first six months of cover. The annual upper aggregate claims limit (excluding any coinsurance and / or deductibles) will be AED 150,000. There will be a coinsurance payable by the insured of between ten per cent - 20 per cent with specific caps and conditions imposed by the DHA for different classes of benefits. A referral procedure will be implemented requiring the insured to first consult with a GP before consulting with specialists/consultants. The DHA will expect insurers to set an index rate in respect of premiums charged for the Basic Health Plan. The DHA will expect the index rate to be between AED 500 to AED 700 per month / per year. Premiums will only be allowed to vary by +/ - AED 25 from the index rate. The index rate will need to be approved by the DHA prior to a health plan being launched and sold in the market. It will only be possible for an insurer to apply for adjustments to its approved index rate each November. The DHA has also indicated that there will be additional safeguards in place to protect low income workers (earning less than AED 4,000 / USD 1,100 per month). Employers’ responsibilities

Under the new regime, all employers will be required to enroll their employees

into, and bear the cost of, the mandatory health insurance scheme. In contrast to the position in Abu Dhabi, employers will not, however, be responsible for an employee’s dependants. Where an employee sponsors dependants, the employee will be required to enrol such dependants in the health insurance scheme. Notably, employers will not be able to simply provide an allowance and require employees to obtain private cover. The employer must put in place direct cover for all employees. The Law also prohibits employers from deducting the cost of the insurance from the employee’s salary. As mentioned above, employees may be required to pay a “co-insurance” or “deductible” (ie an amount payable by the employee directly to the medical services provider at the time of the visit), as is permitted under the regime in Abu Dhabi. Employers will be required to submit evidence of health insurance coverage when applying for, or renewing, an employee’s residence visa and will also be responsible for ensuring the validity of the health insurance coverage for their employees throughout the period of their employment. In the event that valid health insurance cover is not in place, the employer will be liable to meet full cost of any healthcare services provided to their employees, including the cost of the emergency services. Financial penalties may also be imposed on employers who do not comply with their obligations under the Law. Once the new Law is published in the Official Gazette and the precise obligations regarding level of cover become clear, employers should review any existing health insurance policies to determine whether the benefits currently provided are sufficient. Employers should also begin to undertake an analysis of the cost to the business of complying with the new regime and the products available in the market, which will ensure they meet their new obligations. Health insurance market

As noted above, we expect that in the coming months the Law and implementing regulations will shed more light on the new regime and its requirements. However, we are already seeing some insurance market participants reevaluate their business models in order to ensure that they can

February 2014

LEGAL

continue to participate in the Dubai a DHA permit by 1 January 2014, in order health insurance market. Reform of health to continue to deal with DHA registered financing systems and the introduction of healthcare providers. In order to apply for compulsory health insurance has long been the permit, it will be necessary to ensure a priority for GCC governments. Regional that insurers, TPAs and brokers to comply implementation has assumed different with DHA and UAE Insurance Authority formats. In some cases, for example, in KSA, requirements. In the case of TPAs, this an open market approach has been adopted, requires a UAE presence (not in a free zone) allowing private insurers to participate and and authorization by the UAE Insurance compete in the health insurance market. At Authority. What the new permit system means in the other end of the spectrum, as we are seeing in Qatar, the basic health package practice is that it will become increasingly will be provided by a national health difficult, if not impossible, to pay claims insurance company, thereby closing off to medical providers in Dubai if the the ‘basic cover’ portion of the market from payer (insurer, TPA or broker) does not the private sector. Abu Dhabi introduced have the required DHA permit. In other its compulsory health insurance scheme words, failure to hold a DHA permit (or in 2006, with the launch of a state-owned insurance company which provided the bulk of a subsidised basic benefits package Under the new regime, for low-income workers. Dubai appears to have chosen to follow an open market all employers will be route and allow private insurers (subject required to enroll their to complying with local requirements) to employees into, and provide both the essential and enhanced bear the cost of, the plans. This is good news for the private health insurance sector in Dubai and should mandatory health allow for plenty of opportunities in the insurance scheme. market in the coming years. Compliance with the compulsory health insurance requirements is intended to be linked to the Emirate’s immigration and to have satisfied the DHA that it is under trade licensing processes, which will require process) from 1 January 2014 is likely to employers and employees to provide have an adverse impact on the ability suitable evidence that they have local of insurers, TPAs and brokers to service health insurance in place in order to obtain their business in Dubai. Under the new trade licenses and residency visas. This will DHA regime, insurers will need to apply have knock on effects for companies with to become what the DHA refer to as a global health insurance plans in place, and “Participating Insurer”. This will involve how these are arranged and delivered to insurers completing an application process employees in Dubai. The new regime will in order to demonstrate that they comply also increase the regulatory burden for with specific DHA requirements. insurers issuing health plans for residents Applicants will need to demonstrate of Dubai. This will impact on all who are their ability to meet certain general managing health plans in Dubai. Going and technical requirements including forward, health plans will need to comply in relation to their capacity; complaints with mandatory requirements for essential handling procedures; data security; cover. In addition, health insurance plans financial reporting; policy wordings / will also need to be approved, not only by benefits schedules; staffing; training and the UAE Insurance Authority, but also by competence; reinsurance and minimum the DHA. retention (30 per cent) requirements; complaints ratios ; under writing DHA permits: payers & participating performance etc. Although all insurers will insurers be permitted to provide health insurance Ahead of launching the Health Insurance in Dubai, only “Participating Insurers” will law, the DHA has imposed requirements be permitted to provide the Basic Health that all payers (ie insurers, TPAs or brokers) Plans. Insurers are required to submit, should have registered with or obtained an “Expression of Interest” in becoming

a Participating Insurer online via the eClaimlink by 31 January 2014. The key for market participants now is to assess how Dubai’s new health insurance regime will affect them, and the implications for their business, in order to enable them to take action to ensure that they are ready to take hold of the opportunities that Dubai’s new regime will present. Clyde & Co is currently advising all sectors of the insurance market and employers in Dubai on requirements to comply with the new compulsory health insurance regime. Further information

If you would like further information on any issue raised in this update please contact: Insurance contacts:

Wayne Jones, Partner E: wayne.jones@clydeco.com Allison Beirne, Senior Associate E: allison.beirne@clydeco.com Employment contacts:

Rebecca Ford, Partner E: rebecca.ford@clydeco.com Elizabeth Williamson, Associate E: elizabeth.williamson@clydeco.com Clyde & Co LLP PO Box 7001 Level 15, Rolex Tower Sheikh Zayed Road Dubai, United Arab Emirates T: +971 4 384 4000 F: +971 4 384 4004 Clyde & Co accepts no responsibility for loss occasioned to any person acting or refraining from acting as a result of material contained in this summary. Clyde & Co LLP is a limited liability partnership registered in England and Wales. Regulated by the Solicitors Regulation Authority. QFC Branch licensed by the QFCA. DIFC office registered with the DFSA. Abdulaziz A. Al-Bosaily Law Office in association with Clyde & Co LLP is licensed in Riyadh – see www.albosailylawoffice.com for licence detail. © Clyde & Co LLP 2013 MELU - 119- 1213 For an online version, please visit:

www.smeadvisor.com/2014/02/dubaisnew-health-insurance-scheme/

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February 2014

INDUSTRY WATCH

Impact Hub's unique offering Entrepreneurs looking for an innovative co-working space can now head to the newly opened Impact Hub Dubai.

mpact Hub’s unique appeal lies in its ‘Hubstership’ package which allows you to become a ‘Hubster’ through a customised monthly learning programme. The new space strives to create a community feel and connects people who have similar interests or a common purpose. In addition, you have access to exclusive events and discounts. The event offerings are a highlight and include workshops, seminars, competitions, mentor meet-ups, project showcases and more. Furthermore, there are a variety of spaces available, from small meeting rooms to outdoor areas. You can eat and drink at no cost from 'The Pantry', or bring in your own food from the surrounding restaurants. The Founders

Founders Habib H.h. Al-Assaad, Marwan Chaar, Aman Merchant, and Wissam Otaky committed years to researching and developing an ecosystem that would truly serve the needs of innovators. Merchant, the Executive Chair, says, “We have seen a real desire in the entrepreneurial community for what we offer – part campus, part incubator, part global network. It’s truly missing from the local and regional scene. Impact Hub Dubai is attracting innovators who are just as passionate and focused as their counterparts in the forty-five Impact Hubs around the globe. Whatever you can dream of, whether that’s local or global, this is your home for possibilities, and it’s the only one of its kind in the Arab world.” The Emerge Ventures lounge

You will also find the Emerge Ventures lounge which is sponsored by the new venture capital firm launched by Paul Kenny and Arya Bolurfrushan. The lounge will host entrepreneurial seminars held by the fund. When asked why Emerge Ventures chose to invest, they said, “The aim of Emerge Ventures is to find and empower entrepreneurs and companies that will have

The new space strives to create a community feel and connects people who have similar interests or a common purpose.

a significant positive impact on the region and aid in developing the region’s innovation ecosystem. When we saw what the Impact Hub stood for and what it aimed to accomplish, we felt it embodied our vision and were pleased to invest both monetarily and with our time. It not only empowers the entrepreneur through providing numerous resources; it is itself a growing startup which has seen tremendous success in various locations around the world.” For more information, please visit impacthub.ae; Facebook: www.facebook.com/thehubuae; Twitter @ impacthubdubai. Impact Hub Dubai is located in Downtown Dubai, SAAHA Offices Block B Core F (impacthub.ae/location) from 9am to 9pm, Saturday-Thursday.

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INDUSTRY WATCH

just falafel's fast expansion Just Falafel – the UAE-based fast food chain – recently announced plans to expand into the United States and Canada.

ver since its inception, Just Falafel has enjoyed dynamic growth. And to fuel this growth, the company has decided to test international waters; it has signed area franchise agreements with different partners in key locations such as New York City, New Jersey, Kentucky, and San Francisco in the US and the Greater Toronto Area in Canada. These new franchise agreements will mean the opening of up to 160 new Just Falafel restaurants in North America over the next five years. To oversee these new operations, Just Falafel has appointed Jim Joy as CEO of the newly-formed Just Green Restaurants, Just Falafel’s exclusive developer for New York. Joy joins Just Green Restaurants from Burger King Corporation, where he spent more than 30 years in a number of key roles, and most recently, he spent the last 11 years successfully managing sales operations. Further appointments will be announced in North America as Just Falafel activates its growth strategy there. Fadi Malas, Just Falafel’s CEO, commented on the company’s landmark overseas expansion, stating, “Just Falafel has built a tremendous following and awareness based purely on our love for and innovation of a traditional Middle Eastern food that appeals to palates around the world. Just Falafel’s expansion in North America follows our other international success story

in the United Kingdom, where we opened our first restaurant earlier this year. Expanding in North America gives us the opportunity to capitalize on the growth of the world’s largest consumer market. I am very pleased to be implementing our growth strategy in North America with Jim Joy at the helm of our development arm for New York. He brings valuable expertise and significant industry experience that gives us the confidence to expand in this highly-competitive market.” Jim Joy said, “Falafel has been a traditional fast food in New York and other key North American cities for decades, and Just Falafel has the recipes, expertise and business model

CMY

Just Falafel has appointed Jim Joy as CEO of the newly-formed Just Green Restaurants, Just Falafel’s exclusive developer for New York. to evolve this food category to the next stage of its development. I am very excited to be joining Fadi and the team at such an important moment in the company’s growth story. The brand is really starting to get traction across the world and consumers love the product offerings." The founder of Just Green, Just Falafel’s developer for the New York area, also emphasized the significance of Just Falafel’s expansion into one of the world’s most soughtafter consumer markets. “With its diverse population and palates, New York is the most strategic entry point for Just Falafel into North America, and we are extremely proud to be part of the team which launches this new brand in the Big Apple,” said Faisal Al-Saud.

February 2014

INDUSTRY WATCH

Samsung’s INNOVATIVE initiative Samsung Gulf Electronics announced a new campaign – Launching People. This initiative aims to provide practical, financial and technological support to young talented individuals with great business ideas. campaign, as well as the mandatory application form to be completed for each submission. The judging panel

Judging the competition in the first instance will be the campaign jury, consisting of Samsung and a team of four mentors. The mentors have been carefully selected by Samsung for the expertise they have From Left to Right: Young Soo Kim, President of Samsung Gulf Electronics; Mohammad Saeed Harib, creator of the demonstrated, and animated series Freej; Fadi Malas, CEO of Just Falafel; Reema Al-Banna, Designer and founder of fashion label Reemami; Marco Vocale, Head of Corporate Solutions at Samsung Gulf Electronics; Dino Varkey, Group COO of GEMS Education prominence they have achieved, in each of their respective fields. Aside from short listing applicants in Over the years we have been inspired by the many the first round, the mentors will provide the necessary stories we have heard of people around the region practical support to the winners to help them realise who have done remarkable things with the help their dreams. The mentors selected to represent each of our products. These stories made us realise that category are: Samsung doesn’t just launch products, we launch people – and we want to see more.” said Young Soo Kim, President Fashion: Reema Al-Banna, designer and founder of the of Samsung Gulf Electronics. “Launching People will award winning fashion label Reemami. provide a platform to up and coming talent in need of that Education: Dino Varkey, Group COO of GEMS Education – extra helping hand to bring their ideas to life. The success the world’s biggest private school operator. of this campaign is tied to the success of its participants Invention: Mohammad Saeed Harib, creator of the and as such we want to invite all who have an idea no animated series Freej. matter how large or small.” Entrepreneurship: Fadi Malas, CEO of Just Falafel – the successful UAE born, international fast-food chain. How does it work? The campaign invites passionate individuals from across the UAE, Bahrain, Kuwait, Oman, Qatar and Yemen to Shortlisted candidates submit their ideas for projects in one of four categories – A list of eight shortlisted applicants – decided upon by the Fashion, Invention, Entrepreneurship and Education – in a campaign jury – will be announced on March 19, 2014. bid to turn their dream into reality. The competition will then be open for public voting to Applicants will be required to submit their ideas during determine the final four winners. The public voting period the submission phase, from January 20 to March 3, 2014 will close on April 9, 2014. on the competition platform, which will be hosted on The Launching People campaign will be open to the official Samsung Gulf Facebook page and will be individuals residing in the UAE, Bahrain, Kuwait, Oman, accessible from www.launchingpeople.ae. Here, applicants Yemen and Qatar. Interested participants should log onto will be able to find all information relevant to the www.launchingpeople.ae for information on how to enter.

“

Deloitte’s survey on M&A activity Deloitte’s fifth edition of its Greater China outbound Mergers & Acquisitions (M&A) spotlight – Graduating up the value chain survey – reported that Chinese outbound M&A investments increased over the first half of 2013. ago,” explains James Babb, Clients & Industries Leader, and responsible for the China Services Group at Deloitte Middle East. “A cumulative 74 per cent of respondents believe that activity will increase over the coming 12 months, whereas when interviewed the same time last year, just two-thirds of respondents answered similarly.” Key findings of the report include:

he primary reason behind this was that local investors have become increasingly confident about overseas prospects in the new economic normal. The survey suggests that close to threequarters of respondents (all based in China) say that levels of outbound M&A would rise in the coming 12 months. “Respondents are more optimistic about the China outbound M&A landscape than they were 12 months

63 per cent of respondents surveyed expect the Middle East to see a sizable number of Consumer business and Transportation Chinese outbound M&A investments taking place.

• 63 per cent of respondents surveyed expect the Middle East to see a sizable number of Consumer business and Transportation Chinese outbound M&A investments taking place, ahead of North and South America (45 and 44 per cent) and Africa (35 per cent). The Middle East ranked third after Asia and Europe. •60 per cent of respondents surveyed expect the Middle East to see a sizable number of Energy and Resources Chinese outbound M&A investments taking place, ahead of Europe (49 per cent). • 45 per cent of respondents surveyed expect the Middle East to see a sizable number of Real estate and Construction outbound M&A investments taking place, after Asia (76 per cent), Africa (55 per cent) and South America (51 per cent). On the other hand, real estate investments in North America and Europe are expected to make up a minor proportion of the total. • 52 per cent of respondents surveyed expect the Middle East to see a sizable number of Financial Services Chinese outbound M&A activity taking place, ahead of Europe and Africa (47 per cent each), South America (44 per cent) and North America (18 per cent). The Middle East ranked second only to Asia among respondents. • Less than 10 per cent of respondents expect the Middle East to have Chinese outbound M&A activity in the following industries: technology, media and telecommunications (TMT), Life Sciences and healthcare, and manufacturing.

February 2014

INDUSTRY WATCH

TURN8 attracts investor attention Entrepreneurs from the first round of TURN8 – the seed accelerator initiative launched by DP World and powered by Innovation 360 – got the opportunity to pitch their ideas to potential investors from all across the globe. brands, events and news. This enables companies to improve customer insights or understand why a particular campaign may have failed.

Dream (www.facebook.com/ dreamapplication) is a mobile application that enables people to share their dreams online. Using Dream, a person can type in their dream or create an audio recording. The dream will then be available via the website or the mobile app.

ine entrepreneurial ventures – currently part of the TURN8 programme – interacted with over 50 global investors from investment companies such as Tecom Investments, STC Ventures, UK-based Venturebright and US-based Fenox Venture Capital. DP World launched the TURN8 seed accelerator to encourage and promote innovation globally starting from Dubai. It is powered by i360accelerator, a 120-day incubation programme for early stage startups designed by leading innovation management consultancy, Innovation 360. The teams who presented to the investors include:

Ta3rifah (ta3rifah.com) is a mobile app that provides an automated loyalty programme through a Software-as-a-Service (SaaS) model. Its advanced business analytics and targeted promotions are designed to gain and retain customers.

Asly (asly.info/home) enables consumers to determine if the products they purchase, such as medicines, electronics or automotive parts, are genuine.

Crowd Analyzer (crowdanalyzer.com) helps companies and agencies monitor the crowd on the social web by collecting, analysing and presenting people’s opinions about products, campaigns,

KinTrans (facebook.com/pages/ Kintrans) is a unique device designed to improve communication between deaf individuals and others by translating sign language into audible words.

LocaMath (locamath.com) is a unique interactive educational application that makes it fun for children to learn math. Using math-based games and animation, LocaMath makes studying less “boring” and motivates children.

Piqou (piqou.net) is a mobile app that lets users survey their friends or family members related to a specific decision, like buying a gift for someone, where to go for lunch, or even making a business decision. Piqou mobile app helps you to quickly gather trusted opinions from your friends and family with just by a few simple clicks on your phone, collate them and arrive at a decision.

Stationary.ae (stationery.ae) is an e-commerce supplier of school and office supplies. It offers more than 60,000 items from different brands, less expensively and more conveniently than local brick-and-mortar retail stores.

Tech Backpack (techbackpack.org) offers a very innovative yet comprehensive solution to the news industry by simplifying the process and exchange of news stories between news organisations and independent journalists. It is a new approach to news production by incorporating Web 3.0 within every step of the traditional media workflow.

TECHNOLOGY FOR BUSINESS

Technology predictions for 2014 Deloitte recently released the 13th edition of its Global TMT Predictions which highlighted the top global technology, media and telecom trends for 2014. leagues and European football (soccer). In addition, the report predicted that phablets – oversized smartphones that are part cell phone, part tablet – will outsell tablets by US$25 billion. Details of this year’s technology predictions include:

few trends the report revealed included 50 million homes doubling up on pay-television (TV) and the global value of premium sports video rights increasing 14 per cent led by North American sports

Mobility in the workplace Aruba Networks launched a report that explored the changing style of the ‘workplace’ and the new #GenMobile concept. The report revealed characteristics of the newly dubbed #GenMobile – a group of employees defined by their preference for mobility both in terms of the devices they use and their approach to work. Rather than acting as an aide to the workday, #GenMobile are shaping their working lives around their mobile devices. How to spot #GenMobile?

The typical #GenMobile abides by the ‘anywhere,

The US$750 billion converged living room: a plateau approaches. Global sales of smartphones, tablets, PCs, TV sets and videogame consoles will exceed US$750 billion in 2014, up US$50 billion from 2013 and almost double the 2007 total. However, a plateau appears likely: sales are expected to continue growing, but at a slower rate than over the past ten years, with an estimated ceiling of about US$800 billion per year.

anytime’ principles of flexible working, where office hours are no longer constrained to the traditional workday, demand flexible work locations over higher salaries and request reliable internet, asking for Wi-Fi versus 4G, 3G or wired connections. Trends in the UAE which are driving #GenMobile into the workforce:

• Mobile device ownership: Ownership of mobile products in the UAE is the highest globally with 84 per cent of respondents in the UAE owning three or more connected devices and they also display the highest ownership of tablets in the survey (42 per cent). • Wi-Fi matters: A very high three quarter (75 per cent) of respondents in the UAE prefer Wi-Fi at the expense of other connections (4G, 3G or

Massive Open Online Courses (MOOCs): not a disruption zone yet, but the future is bright. Student registrations in MOOCs will be up 100 per cent compared to 2012 to over ten million courses, but the low completion rates mean that less than 0.2 per cent of all courses completed in 2014 will be MOOCs. The growing awareness of online education will force educational institutions to increase investment in this area, drive more acceptance of online education as it becomes accredited, and increase adoption by corporate training groups. One became many: the tablet market stratifies. The installed base of compact tablets (with screens smaller than nine inches) will surpass the base of classic tablets (nine inches and larger) for the first time. By end the first quarter, we expect the base of compact tablets to be 165 million units, slightly ahead of the classic tablet base, with 160 million.

wired), while 77 per cent declare that their mobile devices help them to manage their lives. • Money isn’t everything: Nearly half (48 per cent) of UAE respondents would prefer to work from home two to three days a week than receive a ten per cent higher salary and over one third (35 per cent) would rather have their employer pay for the smartphone of their choice than a five per cent higher salary. • A new workday is emerging: Over four in ten (42 per cent) believe they work most efficiently before 9am or after 6pm rather than traditional working hours. • Work from home: 42 per cent respondents in UAE say they work most efficiently from home as compared to an office, café or other public spaces.

• All things connected: It’s no surprise that a little under two thirds (63 per cent) want their cars connected but it is interesting to see over one half (53 per cent) want their clothes or shoes or kitchen appliances like cookers and fridges to be connected in the next five years. • Tech at work is essential: A quarter (25 per cent) would rather be able to bring their own device to work than have an office with a window, and over two thirds (67 per cent) would rather their company paid for their choice of device than provided them with lunch. • Remote working on the rise: Over half (51 per cent) expect their number of remote work hours to increase in the next twelve months.

Security risks can damage corporate reputation A latest survey, Global Corporate IT Security Risks 2013, revealed that a large number of companies facing IT security incidents were unable to keep information about those cases confidential due to pressure from third parties.

ublic disclosure of information about IT security incidents is often inevitable, something that most organisations can’t avoid – ultimately resulting in bad reputation for the business. The study revealed that an average of 44 per cent of companies that suffer a data leakage are forced to disclose the incident to clients who might potentially be affected by the incident, while 34 per cent informed their business partners, 33 per cent informed their suppliers, 27 per cent reported to regulators, and 15 per cent were obliged to disclose details to the media. Large companies are more frequently faced with having to disclose details about IT security incidents to third parties. These organisations must primarily report to regulators, clients, and the media. The need to disclose

this type of information naturally risks causing substantial damage to corporate reputations. Not infrequently, disclosure is also associated with financial losses in the form of fines imposed by regulators, and compensation for related losses incurred by clients and partners. Since regulators, contractual obligations to clients and partners, and other factors often do not permit a company to keep information about data leakages confidential, the only real way to avoid damages from the disclosure of this type of information is to prevent an IT security incident from happening in the first place – by building a secure, protected IT infrastructure. Using an advanced security platform like Kaspersky Endpoint Security for Business is a great solution. This platform provides anti-malware

Users feel unsafe while making e-payments The Kaspersky Consumer Security Risks survey – conducted in association with B2B International – revealed that more than one third of users do not feel safe making e-payments on their smartphones or tablets. E-stores, e-payments and e-banking systems have made many financial tasks easier. You can pay your bills, purchase hardto-find items, and make transactions with a few clicks of the mouse - without wasting time in queues. The widespread use of smartphones and tablets makes online banking

even more convenient: the portability and functionality of these gadgets means you can manage it all not only at home or in the office, but anywhere you can find Internet access or a phone signal. Not all smartphone and tablet owners understand the benefits of accessing your money while on the go, and it seems many

protection against complex targeted attacks and real-time threats across the entire company IT infrastructure physical, mobile and virtual - together with security systems management, control and encryption tools. This level of security, in combination with employee education about IT threats can form the foundation of an action plan guaranteeing the highest level of protection for any company’s IT infrastructure against cyber-attacks and their consequences, including financial loss and reputation damage.

are hesitant to embrace mobile banking technology. The primary reason being that they do not trust the reliability of mobile device protection when shopping or banking online. The survey reported that 37 per cent of respondents in the UAE would never use a mobile device for making online transactions, such as paying for goods in online stores. A slightly smaller, but still considerable proportion of smartphone and tablet owners (27 per cent in the UAE) do not feel comfortable using their devices for online banking. And only 22 per cent of tablet and 27 per cent of smartphone users

globally are unconcerned about entering financial information from their gadgets. Android is the world’s most popular mobile operating system and therefore is most frequently attacked by cybercriminals, which makes sense, since the more users to target, the easier it is for fraudsters to get illegal income. These numbers have persuaded some users to ditch these devices altogether, never mind using them for online financial transactions – 24 per cent of those surveyed in the UAE reported they would not use Android for this particular reason.

February 2014

THE NEXT LEVEL

Succession Planning -

safeguarding your business for the future

It’s natural for you, as a business owner, to expect continual growth and success for your organisation. But, while you hope for the best, you might forget to prepare for the worst! Succession planning is a great tool that can help you protect your business in the case of any sudden, unexpected changes, and here we highlight why it’s fundamental for business continuity…

uccess through ‘Succession’ planning

Succession planning is a key step for any SME owner or director. Why? Because SMEs, more often than not, depend substantially on one or two ‘central’ figures for all their major dayto-day operations and decision making processes. In fact, you may even come across a scenario where one senior level executive is responsible for bringing in all the revenues within an SME. So, what happens when this person is removed from the equation? The answer is simple – the business suffers huge losses, bad reputation, loses key clientele, and in a worst case scenario – shuts down! The ‘Opportunity Pyramid’

One of the biggest business myths of life in an SME is that succession planning should begin only when the business owner plans to leave the business. The reality is that such planning should kick-in years before the actual need arises. Or how else will you have sufficient time to identify, train and nurture your successor? How will you ensure that your company continues to follow the same core values you had set in place at the start of the business? In fact, the longer you wait to start succession planning, the lesser routes you will have to choose from. What’s more, there are chances that your family – especially the non-active members – may not receive their rightful share of the business. Start today…

A good succession plan takes into account three primary elements – the business owner, the owner’s family, and other stakeholders such as employees, investors, senior level management and so on. And, the right approach is to think of your succession plan as an ‘action plan’ you are leaving behind for these three parties to follow, in case you have to withdraw from the business due to unforeseen circumstances. At the same time, it’s important not to confuse succession planning for a ‘disasterrecovery’ plan. It’s not something that can

be implemented overnight; it’s a plan that develops change over the long-term. Here, we highlight the basic fundamentals of writing your succession plan: The ultimate goal: Most business owners get involved in their day-to-day operations and often forget to set a goal or endpoint they want to see their business achieve. Your succession plan should address your vision for the company, growth strategies, expansion plans, sustainable practices or CSR activities (if any) – for instance, do you want to contribute a sizeable portion

The reality is that such planning should kickin years before the actual need arises. Or how else will you have sufficient time to identify, train and nurture your successor?

of your business earnings to a charitable cause? Of course, it’s crucial to discuss this ‘ultimate goal’ with other stakeholders and employees to ensure they are on the same page. Value of your company: Succession planning is the right time for you to ascertain the true market value of your business. This monetary value could be a figure that you’ve unanimously decided within the organisation, or you could have a certified accountant or branding specialist do the needful. Determining how much your business is worth is key to understanding how you want to divide it across the several stakeholders within the organisation. As simple as that. Moreover, if you decide to go down the route of selling your business – you will be prepared with a sale price!

Managing control: As a business owner, it’s often hard to come to terms with the fact that you have to eventually let go and hand over all control to a suitable successor. This is another critical aspect that your succession plan needs to cover. It should address issues such as: Would you still have control of the business? Who would be the suitable successor of the business? How would the distribution of assets take place? Would you pass on ownership to a successor but still maintain control? If you do indeed pass on control, how would you distribute responsibilities amongst your successors? It’s also worth noting here that you would have to provide your successor/s with proper, intensive training and mentorship over a reasonable period of time in order to prepare them to take reigns of the business when the time comes. Lastly, there needs to be a timeline clearly mentioned for such transition. Identify your successor: Many believe that family will inherit and take over the business – which can of course be disastrous. However, this is not true in most cases and it’s critical to identify your successor. Is this someone from within your firm like your existing CFO or CMO? Or perhaps you’d like to hire someone completely new, in the case of which you would have to lay down a detailed recruitment and hiring strategy. Business values: Every business owner has his or her own beliefs and business values which are incorporated into the organisation. These values are reflected across all business transactions and form the basis of all employee activities. Therefore, including these business values in your succession plan will allow your successor and stakeholders to understand the foundations of your business, and encourage them to keep these alive in the future as well. Adaptability: An effective succession plan has the ability to make any transition as smooth as possible, without disrupting

February 2014

THE NEXT LEVEL

business operations. However, changes are a fact of SME life. So, taking into consideration sudden changes and allowing for a certain degree of flexibility is something to keep in mind when writing a succession plan. Having said that, it’s important that your succession plan is realistic to begin with and sets in place goals that are truly achievable and within the scope of the business. The role of insurance: One of the most significant areas of all is insurance. There’s no doubt that this is a powerful tool in the succession planning process. Two very popular types of insurance which business owners opt for when planning for succession are life insurance and key man insurance. Key man cover provides the business with the buffer funds to manage a difficult transition – such as the loss of a business owner or key person – and allows you to source a suitable long-term replacement. Understand the legal implications: Since there isn’t tax involved in this part of the world, you don’t have to worry about any legal tax issues. However, your plan will have to be legally sanctioned in case of challenge from family members. It will also have to be pre-approved by the Board of Directors within your business. Finally, ask yourself the following two questions about your succession plan: • Does it fulfil all the interests of the business owner? • Is it in line with the needs of other stakeholders in the business? If the answer to both is yes, you are on the right track! Key factors:

In an online article on Harvard Business Review, Marshall Goldsmith – a leading business educator and coach – explains four factors for efficient succession planning: 1. Change the name of the process from Succession Planning to Succession Development. Plans do not develop anyone – only development experiences develop people. We see many companies put more effort and attention into the planning process than they do into the development process. Succession planning processes have lots of to-dos – forms, charts, meetings, due dates and checklists. They sometimes create a

false sense that the planning process is an end in itself rather than a precursor to real development. Many humans fall into the same trap regarding physical fitness. We have may have fantastic plans in place to lose weight. We may be very proud of our plans, which include detailed daily goals for diet, alcohol consumption, and exercise. And if our execution were half as impressive as our planning, we would be very svelte. Our focus should be on weight loss, not planning for weight loss. 2. Measure outcomes, not process This change of emphasis is important for several reasons. First, executives pay attention to what gets measured and what

Implementing these simple, yet effective, steps will strengthen the longevity of your business, keep your stakeholders happy, give your business a better future and help you make a longlasting impression on your potential investors. gets rewarded. If leadership development is not enough of a priority for the company to establish goals and track progress against those goals, it will be difficult to make any succession planning process work. Second, the act of engaging with senior executives to establish these goals will build support for succession planning and ownership for leadership development. Third, these results will help guide future efforts and mid-course corrections. The metrics a company could establish for Succession Development might include goals like the percent of executive level vacancies that are actually filled with an internal promotion vs. an external hire, or the percent of promotions that actually come from the high-potential pool. Too often, we find companies measure only the percent of managers that had completed succession plans in place.

3. Keep it simple. We sometimes find companies adding excessively complex assessment criteria to the succession planning process in an effort to improve the quality of the assessment. Some of these criteria are challenging even for behavioural scientists to assess, much less the average line manager. Since the planning process is only a precursor to focus the development, it doesn’t need to be perfect. More sophisticated assessments can be built into the development process and administered by a competent coach. 4. Stay realistic. While development plans and succession charts aren’t promises, they are often communicated as such and can lead to frustration if they aren’t realistic. Bottom line, don’t jerk around high performing leaders with unrealistic development expectations. Only give the promise of succession if there is a realistic chance of its happening! What not to do

Although the basis of succession planning is preparing your business for change, remember that too much change isn’t ideal either. For instance, if you decide to step down from your business, and have a successor ready to take charge – someone you’ve hired from outside the business, a good idea would be to ensure that the rest of the senior level management team remains unchanged. The key is to maintain a balance between reinventing your business and not rocking the boat too much! Being prepared

Implementing these simple, yet effective, steps will strengthen the longevity of your business, keep your stakeholders happy, give your business a better future and help you make a long-lasting impression on your potential investors. More importantly, it gives you sense of satisfaction that your family is financially secure in case of any sudden changes. Finally, always remember the words of the iconic Benjamin Franklin, “By failing to prepare, you are preparing to fail.” For an online version, please visit:

www.smeadvisor.com/2014/02/successionplanning/

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