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Finding that all important lifeline for your business Other stories: GOING GLOBAL

MARKETING ANALYTICS

FOSTERING FEEDBACK

Issue 75 FEBRUARY 2012 WWW.SMEADVISOR.COM

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EDITORIAL

Managing Director Richard Judd richard@cpidubai.com +971 4 440 9126

Voulez-vous

EDITORIAL Group Editor, CPI Business Ketaki Banga ketaki@cpidubai.com +971 4 440 9115

It’s interesting to note that amidst all this talk of tightening of belts and a wait and watch approach as the Euro crisis sends ripples across the world, as well as daily updates on the unrest across the Middle East region, we still see positive activity in our neck in the woods.

Editor Mike Byrne mikeb@cpidubai.com +971 440 9105 Assistant Editor, CPI Business Aparna Shivpuri Arya aparna@cpidubai.com +971 440 9133 Contributing Editors Ali Koaik ali@cpidubai.com +971 440 9140 Meghna Pant meghna@cpidubai.com +971 440 9130

The good news is that in the UAE, the Department of Economic Development (DED) issued 14,360 business licenses during the year. Limited liability companies topped the list of companies at 8,787 and a growth rate of 17%. There was also a 33% increase in simple partnership firms. The professional services sector, at 7%, accounted for the most number of licenses in 2011 followed by the tourism sector at 5%.

ADVERTISING Commercial Director Chris Stevenson chris@cpidubai.com +971 4 440 9138 Sales Director Francis Morgan francis@cpidubai.com +971 4 440 9163 CIRCULATION Database and Circulation Manager Rajeesh M rajeesh@cpidubai.com +971 4 440 9147 PRODUCTION AND DESIGN Production Manager James P Tharian james@cpidubai.com +971 4 440 9146 Art Director Kamil Roxas kamil@cpidubai.com +971 4 440 9112 Designer Froilan A. Cosgafa IV froilan@cpidubai.com +971 4 440 9107 Photographer Cris Mejorada cris@cpidubai.com +971 4 440 9108 DIGITAL SERVICES www.smeadvisor.com Digital Services Manager Tristan Troy Maagma Web Developers Jerus King Bation Erik Briones Jefferson de Joya online@cpidubai.com +971 4 440 9100 Published by

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Branch Office PO Box 13700 Dubai, UAE Tel: +971 4 440 9100 Fax: +971 4 447 2409 Printed by ATLAS Printing Press LLC © Copyright 2012 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.

The total number of amended licenses in 2011 was 58,129 – an 18% increase over 2010 – while the total number of renewed licences grew 4% to reach 97,355. And the total number of commercial permits issued in 2011 was 39,898, while the total number of trade names reserved reached 52,136 – a 15% increase. We’ll cover these developments and more in detail next month. In the meanwhile, I just wanted to reiterate that hope still lives. It’s easy to forget that when every morning you get a daily dose of what else is wrong with the world. And don’t even get me started on the fact that it’s 2012! Anyway, coming back to the fact that the world’s still spinning and the sun still shines and it may not always be business as usual but you still have to get on with it to the best of your abilities – heck there’s a whole bunch of businesses out there that have even renewed their licenses – which means they need to figure out how to keep moving in the right direction. As do you. The bad news is you’ll never have quite enough money to do that quite the way you want to. But you could still have some. As the ABBA song goes (and check out our retro inspired cover this month, too!): And here we go again, we know the start, we know the end Masters of the scene We’ve done it all before, and now we’re back to get some more You know what I mean Voulez-vous... So, would you? That is the question you tend to ask the people who finance your business, whatever stage it’s at. In this issue, one of our favourite columnists, John Lincoln from du, discusses some of the financing routes available to startups as well as established businesses. Find all this and more inside. Until next month... when the new editor of SME Advisor, our very own Mike Byrne, takes over this column. But it’s not goodbye. I’m just moving to another page and we’ll keep talking, as always.

Ketaki Banga, Group Editor, CPI Business Talk to us: E-mail: ketaki@cpidubai.com Twitter: @SMEadvisorME Facebook: www.facebook.com/SMEAdvisor LinkedIn group: SME Advisor

CONTENTS Issue 75 February 2012

Finance 30 INVESTMENT Richard Taylor and Rupert Connor, Chartered Financial Advisors, Acuma Wealth Management, take us through some investment options.

32 NEW ARRIVAL ADVICE There are pitfalls that many new arrivals to the region can experience. Independent financial advisor, Greg Pogonowski, outlines some practical solutions.

Management 34 FEEDBACK Providing feedback is an opportunity to foster and enhance goal achievement and employee performance, says Stephan Melchior, Managing Partner, Wilson Learning Middle East.

36 SERVICE PARTNERS

Money, money, money: Finding that all important lifeline for your business

Shoptalk

Marketing

08 TRENDS AND UPDATES

24 ANALYTICS

A quick look at news and events that will impact SMEs in this region.

14 SHELF LIFE New toys for you and your business. Like you need an excuse!

Trade 18 GOING GLOBAL Dr. Ashraf Mahate, Head of Export Market Intelligence, Dubai Exports, and Vice Chair of the Economic Policy Committee, Dubai Economic Department, discusses trade liberalisation.

Business growth

The golden rule to analytics is measuring income from effort, says Alan Devereux, Communication Officer, British Business Group.

26 ARAB TRENDS Namita Ramani, Social Media Expert, Salony Creations, tells us how social media usage in the region has created a fundamental shift in the way we communicate.

Legal 28 COMMERCIAL ACTIVITIES Melissa Forbes, an Associate at the law firm Taylor Wessing, shares of some of the general laws that govern trade activities in the UAE and how they may affect your business.

20 MONEY MONEY MONEY In this second instalment of a threepart series, John Lincoln, Vice President, Enterprise Marketing, du, discusses the multiple financing routes available to startups and established SMEs. 4

SME ADVISOR MIDDLE EAST FEBRUARY 2012

How do service partners mirror your business’ priorities and are they adding value or causing destruction to your reputation, asks Debbie Nicol, Principal Consultant and Owner, business en motion.

38 ACHIEVING GOALS Sahar Moussly, Executive Director, Trans Gulf Management Consultancy, shows how to pin down and successfully implement tasks.

Business guru 40 MENA OUTLOOK Hedi Larbi, Director, Middle East Department, World Bank, discusses the Arab Spring’s impact on politics and economics in the region and gives his predictions for 2012.

Human resources 42 TALENT SHORTAGE You’d think unemployment was the problem, but there is acute talent shortage in the market as well, says Philip Lefebvre, Managing Partner, Whitewater Executive Search.

Opportunities 44 OFFICE REMODELLING We spoke to Shahriar Khodjasteha, Group Marketing Director, Al Aqili Furnishings, about office space interior trends and the opportunities available for SMEs to remodel.

58 BUSINESS INTELLIGENCE According to research, less than a third of Business Intelligence (BI) initiatives will align analytic metrics completely with enterprise business drivers by 2014.

60 REVENUES Companies operating in international markets are reporting better results than those concentrating on their domestic market, according to findings.

62 CRITICAL ADOPTION According to a survey, a staggering 100% of UAE business leaders have identified technology as critical to their company growth strategy.

SME about town 64 SME CONNECTS The recently formed networking group hosted its second event, which attracted more than 100 attendees from SMEs in the UAE.

Technology for business 66 CLOUD PRINTING Dan Smith, Head of Integrated Marketing, Middle East and Africa region, Xeroxâ&#x20AC;&#x2122;s Developing Markets Operations, discusses the reluctance of business-to-business cloud computing implementation.

46 eBAY FOR IDEAS Gary Dushnitsky, Academic Director, Deloitte Institute of Innovation and Entrepreneurship, London Business School, and Thomas Kleuter, provide insights from online knowledge marketplaces.

Women in business 48 CAREER SURVEY The landscape for women in business has changed a lot over the past ten years, but there is still work to do, says Fiona Elsa Dent, Ashridge Business School.

Entrepreneurship

Innovation

68 IP ADDRESSES

52 LESSONS FROM CHINA

IPv6 must be universally adopted, or connectivity problems will ensue, says Axel Pawlik, Managing Director, RIPE NCC.

Winter Nie, Professor of Operations and Service Management, IMD, draws valuable insights from the innovative advancement of Chinese enterprise.

SME speak

Business set up

70 STRATEGY IN SMEs

54 IDEAS TO REALITY In the first of a multi-part series, The Bedaya Center, a regional entrepreneurship hub, tells us how to develop an idea, which forms the foundation for a successful business.

50 SKILLS

Industry watch

Are entrepreneurs born or bred, asks Ian White, Director, Qatar Skills Academy.

56 HIRING PRACTICES An employer poll has revealed that employers rate ambition above all else, with career track record coming last across the finish line.

SME Advisor Middle East, with Tickbox Surveys Middle East, conducted a survey of its readers to understand strategic planning within SMEs.

A day in the life 72 LIGHT HOUSE STUDIO Mohamed Kashif Joosub, CEO and Chief Photographer, Light House Studio, takes us through a typical day in his life.

FEBRUARY 2012 SME ADVISOR MIDDLE EAST

shoptalk

trends & updates

Bahrain Economic Development Board attracts record investment Despite the global economic crisis and the challenging period for Bahrain in 2011, the Kingdom of Bahrain continued to secure significant foreign investment throughout the year, with a significant number of businesses setting up in the Kingdom through the direct outreach activities carried out by the Bahrain Economic Development Board (EDB). Last year saw the EDB attract nearly twenty international businesses from around the globe and bring approximately USD 300 million dollars of investments into the country, whilst the number of financial services businesses with Central Bank of Bahrain (CBB) licenses rose from 401 to 414. Furthermore, the Kingdom’s economy grew approximately 2% last year, despite the global economic and regional challenges, and is forecast to expand at around 4% in 2012. Shaikh Mohammed bin Essa Al-Khalifa, Chief Executive of the EDB said: “The large number of international investments, from India through Europe to the US, into Bahrain over the last year demonstrates that the Kingdom’s wide-ranging attractions to foreign investors remain as compelling as ever; from a skilled workforce and liberal business environment to the low costs, competitive taxation and ready- access to

large global markets, including the trillion dollar Gulf market. “The EDB in Bahrain, and at our offices around the world, in close co-operation with our key partners across Government and the private sector, will be working as hard as ever to deliver further such opportunities for Bahrain in 2012; sustaining economic growth and job creation in the Kingdom for the long term.” According to the companies that have set up in the Kingdom, the reasons provided for the decision to invest in Bahrain during 2011 have included: • The unique and compelling proposition for international investors seeking a base in the GCC for international export. • The value of basing operations in the Kingdom, including the duty free access to the GCC region and the United States. • The offer of a highly skilled workforce and a low-cost base proved highly persuasive. • The active support provided by the EDB throughout the process The Kingdom’s favourable business conditions were further endorsed by the recently released 2012 Index of Economic Freedom by the Heritage Foundation, in which the Kingdom was ranked first in the Middle East and North Africa region, and 12th worldwide, in recognition of Bahrain’s strong economic fundamentals. Foreign investments in 2011 include:

SME ADVISOR MIDDLE EAST FEBRUARY 2012

BASF

German chemicals giant, BASF, announced its largest investment in the Middle East will be based at the Bahrain International Investment Park (BIIP), one of the largest of its kind in the world with an annual capacity of 16,000 metric tons and is expected to be fully operational by the end of 2012. The plant will manufacture a range of customer specific antioxidant blends (CSB). An agreement was also signed between BASF with Tamkeen and the EDB to support the employment and training of Bahrainis for the new operation, which is expected to be a significant addition to Bahrain’s economic make-up as a research and development intensive, hitech industry. DLA Piper

A global law firm, with 4,200 lawyers in 30 countries and 76 offices decided to further expand its operations in Bahrain by opening a full-service office in early 2011, making it the only international law firm with offices in every GCC country. DLA Piper’s practitioners in Bahrain provide full service business law advice for organisations, both public and private, across the full industry spectrum including oil, banking, intellectual property and technology, employment, global government relations, private

equity, real estate, construction, tourism, leisure, and healthcare. JBF Industries Ltd

The USD 200 million investment will create a new plastics factory to produce polyester film used in the manufacturing of electronics, food and packaging materials, and create 300 new jobs for the Kingdom. JBF is a publicly listed company employing more than 2,500 people, with sales revenue in 2011 reaching US 1.5 billion. Construction of the new JBF facility in Bahrain is expected to be complete by end of 2012, with an estimated production capacity of 9,000 tonnes in the first phase. RMA

Once complete, the new 6,000 square metre RMA plant will manufacture Pipeline Inspection Gauge (PIG) traps and tee pipe fittings for the oil and gas sector. The EUR 13 million (BD6.8m) investment, based in the Bahrain International Investment Park (BIIP), is expected to bring over 100 jobs to the Kingdom and with 95% of output expected to be for export. There has been further success in 2012, with AeroThrust Gulf Aviation Services W.L.L. announcing the establishment of a USD 20 million aircraft engine Maintenance, Repair and Overhaul (MRO) facility in Bahrain.

shoptalk

trends & updates

DED and the Isle of Man partners for strategic development

(L-R) Mr Colin Kniveton, Chief Executive of the Department of Economic Development in the Government of the Isle of Man, signs the agreement with His Excellency Sami Al Qamzi, Director General of DED

The Department of Economic Development (DED) in Dubai and the Government of the Isle of Man have signed a Memorandum of Understanding (MoU) on economic, trade and technical co-operation. The agreement envisages joint projects and partnerships across key sectors including investment, finance, industries, services, education, scientific research and technology. The MoU was signed by His Excellency Sami Al Qamzi, Director General of DED; and Colin Kniveton, Chief Executive of the Department of Economic

Development in the Government of the Isle of Man. “Innovative partnerships are essential to attract strategic expertise and investment required to sustain growth. Dubai and Isle of Man have created a path-breaking partnership that will be a game-changer given the economic knowledge and resources we share between us,” commented Al Qamzi. “As Dubai moves through the next level of its growth a dynamic exchange of up-to-date knowledge on the major enablers of economic development is of critical relevance. It will also help the Government of Dubai

SME ADVISOR MIDDLE EAST FEBRUARY 2012

to stimulate growth through the appropriate policy response, which the Department of Economic Development is here to support,” added Al Qamzi. It has also been agreed to establish a joint economic committee comprising representatives of both parties to monitor and guide the implementation of the MoU through regular meetings, proposals and reciprocal visits. The two sides will encourage relevant specialised entities, companies and individuals to explore project opportunities in Dubai and the Isle of Man as well as the means of financing such

projects, and also implement joint projects across a range of sectors. The sectors identified for exchange of knowledge and expertise include trade, industry, construction, agriculture, transport, telecommunications, oil & gas exploration, tourism, financial services, investment, education, research and technology. Together, Dubai and the Isle of Man will facilitate mutual visits by commercial delegations, scientists, technicians, students and trainees to promote exchange of expertise in key growth areas. The visits will also cover international fairs and exhibitions held in Dubai or the Isle of Man.

shoptalk

trends & updates

The University leaders at the launch press conference

University Leadership Council to support research, innovation The University Leadership Council (ULC) was launched in the UAE under the patronage of His Excellency Sheikh Nahyan bin Mubarak Al Nahyan, UAE Minister for Higher Education and Scientific Research. The new organisation will provide a platform for thought leadership and offer actionable recommendations to deepen collaboration and advance regionally relevant research and innovation. The Executive Committee of the University Leadership Council consists of representatives from five leading UAE universities. They include Dr. Tod Laursen, President of Khalifa University; Dr. Larry Wilson, Provost of Zayed University (ZU); Dr. Peter Heath, Chancellor of American University of Sharjah (AUS); Dr. Rory Hume, Provost of the United Arab Emirates University (UAEU); and Dr. Fred Moavenzadeh, President of Masdar Institute of Science and Technology, an independent, researchdriven graduate-level university focused on advanced energy and sustainable technologies. The five leading universities who are members of the University

Leadership Council, in collaboration with the nation’s top academic institutions, will generate creative ideas and foster common interests for spearheading innovation and technology transfer in the region under the new organisation. More UAE-based universities are expected to become members of the University Leadership Council (ULC). A logo of the new Council was later unveiled. To fulfill the prime responsibility towards the community, the academic leaders will drive the onset of new concepts especially through research and build a foundation for the advent of scientific advancements under the new initiative. By coming together and initiate collaborative efforts, the academic leaders will help advance the nation’s socio-economic development and expand the knowledge base within the UAE and indeed the region more broadly. The Council has a clear mandate to interface with industry and government to bring about a clearer understanding of the goals and mission of researchbased universities and to work collaboratively towards common goals, such as promoting a culture

SME ADVISOR MIDDLE EAST FEBRUARY 2012

of research and innovation (R&I), advancing the educational goals of the UAE-based universities and alignment of policy with the government with regard to meeting the requirements of the industry and the economy. The University Leadership Council will focus on higher education issues and needs, foster synergy through complementary and cooperative research and academic activities, as well as act as a link for faculty and students to interface with both the public and private sectors. It will also seek financial support from industry, government, and private individuals for relevant academic and research activities within member institutions. Ultimately, the ULC serves to promote the overall economic development of the country by broadening the base of knowledge and sharing technology across multiple stakeholders. As a part of this strategy, the Executive Committee has scheduled an upcoming workshop titled Government, Industry and Academic Partnership to Promote Science and Technology in Abu Dhabi. It will aim to gather influential members from the government, industry and academia. Dr. Tod Laursen said: “Khalifa University is an academic institution with a very clear mission to establish an internationally recognised centre of higher education and provide regionally relevant research

and innovation. We are pleased to support this initiative and collaborate with other researchdriven institutions in the UAE. The Council’s mandate aligns very well with our mission to expand the knowledge economy and with our collective desire to highlight the critical role that UAE-based institutions have in making this economic transformation a reality.” Dr. Larry Wilson said: “Zayed University aims to prepare today’s students to be capable leaders of tomorrow to provide the knowledge and skillsets required to secure the country’s long-term social and economic progress. We will support any collaboration effort that supports human development and we believe the establishment University Leadership Council is a step in the right direction that will ensure the country’s continued development.” Dr. Peter Heath said: “Rooted in Arab culture, the American University of Sharjah is part of a larger concept of revitalising intellectual life in the Middle East. We believe the University Leadership Council will play a crucial role once again in bringing the Arab world back to its pioneering status in education and knowledge and we are ready to contribute to this key initiative in the UAE.” Dr. Rory Hume said: “As a world-class centre for applied research, national and international outreach, innovation and outcomebased learning, the United Arab Emirates University strongly believes in collaborative efforts on knowledge sharing. The University Leadership Council aims to focus on research and innovation through collective measures that will help develop human capital and we are keen to extend our cooperation to the new organisation to achieve its objectives.”

shoptalk

trends & updates

TECOM Investments and Dubai SME encourage UAE nationals TECOM Investments, a member of Dubai Holding, and Dubai SME, an agency of the Department of Economic Development in Dubai, mandated to develop the small and medium enterprises (SME) sector, have signed a Memorandum of Understanding (MOU) with a view to encouraging entrepreneurship among UAE nationals and furthering the sector’s contribution to the country’s economy. Formerly known as Mohammed Bin Rashid Establishment for SME Development (MBRE), Dubai SME was launched in 2002 to cultivate the spirit of entrepreneurialism among UAE nationals and provide key resources to facilitate the development of their businesses. The collaboration between TECOM Investments and Dubai SME will encourage UAE nationals who are members of Dubai SME to register and set up offices within TECOM free zones. The companies will receive opportunities to gain insight and increase industry knowledge as part of the TECOM ecosystem that offers a combination of high-end infrastructure, peer-networking

(L-R) Dr. Amina Al Rustamani, CEO, TECOM Business Parks, with Abdul Baset Al Janahi, CEO, Dubai SME, during the signing of the Memorandum of Understanding (MoU)

with major global players and an enabling business environment to ensure future growth. Dr Amina Al Rustamani, CEO, TECOM Business Parks, said: “The MoU will further our strategic efforts to position Dubai as a centre for entrepreneurship and enterprise development.This will encourage the sharing of knowledge and expertise, and eventually impact the long-term growth of the industry and the country. Such platforms will also help grow the abundant talent

SME ADVISOR MIDDLE EAST FEBRUARY 2012

for innovation and enterprise in UAE. The collaboration between Dubai SME and TECOM Investments will prove particularly crucial in providing aspiring business persons with conducive benefits required for achieving success in diverse sectors.” Abdul Baset Al Janahi, CEO, Dubai SME, said: “His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, established Dubai SME in 2002 to support

various projects for youth development, and now more than 11,000 young business leaders have received assistance from Dubai SME in establishing their own businesses. Dubai SME has also created opportunities for competition and successful marketing through providing governmental contracts worth more than one billion dirhams to its members under the Government Procurement Plan.” TECOM Business Parks (Dubai Internet City, Dubai Outsource Zone, Dubai Media City, Dubai Studio City, International Media Production Zone, Dubai International Academic City, Dubai Knowledge Village, DuBiotech, Dubai Industrial City and ENPARK) offer a favourable ecosystem for SMEs through shaping and enabling a business environment that guarantees the sector’s long term growth. This gains relevance against research findings that nearly 58% of the SME businesses in the UAE aim to operate internationally by 2013. Dubai SME offers a suite of services for SMEs providing them with the necessary guidance to launch a project and directs them to the relevant departments. These services include financing new and existing projects up to a limit of AED three million, exemption from the business license fees for the first three years of the project, obtaining a fully equipped office at the Dubai SME incubator, conducting training courses and development, and enabling business owners to become suppliers to government bodies.

SHELF LIFE

Space-saving simplicity Pocket power Slim, stylish and in tune with the latest trends, the Acer Allegro is inspired by how people communicate and live in the most modern settings. With its user interface powered by Windows Phone, complete with Live Tiles, the Allegro puts people front and centre, making it easier to connect and share with friends, family and colleagues so important moments are never missed. With the most recent version of Windows Phone, code-named Mango, Live Tiles are more interactive, enabling users to get real-time information without having to open them, by pinning them to the Start screen. Available now in the UAE, the Allegro comes in Midnight Blue and Pearl White. The generously-sized 3.6” WVGA display is nice and bright, so it’s crystal clear on the go. You can also handle documents while mobile with the Allegro because integrated Office Mobile enables smart viewing, editing, sharing and syncing. A calendar feature also syncs information from the phone, email and Facebook, and notes important business and social events across all your business and personal calendars. The Allegro delivers a fast web experience with Internet Explorer 9, and quickly searches the web, allowing you to view HTML 5 enabled websites. The Allegro packs a powerful 1 GHz processor and speedy 14.4 Mbps HSDPA downloading for smooth use and has 8 GB of storage A 5 MP camera captures it all in high-definition stills and 720p video.

When workspace is at a premium and budgets are tight, small and mid-sized businesses now have the option of Xerox Corporation’s new ultra compact printers and multifunction device for high quality, affordable, documents. Standing at just over 208mm tall, nearly the size of a standard sheet of paper, the Xerox Phaser 3010/3040 offers print speeds of 20 to 24 pages per minute (ppm). The WorkCentre 3045 multifunction printer (MFP) copies, scans, faxes, e-mails, and prints documents all in one and produces output at 24 ppm. The products are among the smallest devices in the market and are powered by Hi-Q LED print engines – the same breakthrough technology found in some of Xerox’s higher-end graphic arts devices. Little green machines

The Phaser 3010/3040 printer and WorkCentre 3045 MFP run on Xerox’s EA

SME ADVISOR MIDDLE EAST FEBRUARY 2012

App-etising Cisco has announced Cisco Connect Express, a mobile app that brings Cisco Connect software features to mobile devices. Cisco Connect Express is compatible with Linksys E-Series routers and X-Series modem routers and helps consumers control the basic functionalities of their wireless network. With the app, consumers can use their phone or tablet now to add devices to the wireless network, manage guest access, and change their Wi-Fi settings. The Cisco Connect Express mobile app has been designed for iOS or Android devices and can be downloaded at no cost from the iTunes App Store and Android Market. Cisco will continue to include the Cisco Connect desktop software

toner, which uses up to 20% less power for fusing than conventional toner. And, with only one consumable item -- the toner cartridge; users replace just what they need. The Hi-Q LED print engine makes the products quieter and more energy efficient than comparable products using laser technology. Other key features include: • Print resolution of up to 1200 x 2400 dpi, so text and graphics add impressive visual impact to every page • Standard Wi-Fi networking for the WorkCentre 3045NI for convenient placement in any location in the office • Simple remote management on the WorkCentre 3045 monitors print-job progress, toner-level, and provides quick access to online support

for Windows and Mac computers with Linksys products. The desktop version of Cisco Connect helps consumers set up their home wireless network in a few easy steps and can also be used to customise wireless settings to match their preferences. Additionally, consumers can now use Cisco Connect Express for quick access to these settings and controlling their wireless settings anywhere in the home from mobile devices. The Cisco Connect Express app is now available for no charge at the iTunes App Store or Android Market. The mobile app works with Linksys E-Series and X-Series wireless routers and requires an active Wi-Fi connection to the home router.

Future projection Epson has announced the UAE launch of the MG-850HD, the first HD-Ready 3LCD home cinema projector featuring an iPod docking station. Users don’t need to download apps or clip on attachments; they simply connect their iPod, iPhone or iPad to the docking station. The MG-850HD, which comes with inbuilt 10W stereo speakers, is able to play music, videos and photos, as well as TV programmes and feature-length films previously downloaded from iTunes, on a large, cinematic scale that can reach up to 300 inches. Its versatile connectivity also means that content can be viewed from traditional Blu-ray, DVD, PC, TV and gaming sources. Harnessing Epson’s latest technologies, the projector delivers equally high white and colour light

On-the-go scanning

Canon has launched the image FORMULA P-215, a USB powered scanner for small or home office environments and for professionals who work remotely. The new ultra-compact portable scanner is compatible with both Mac and PC operating systems and supports mobile working with the ability to scan directly to cloud-hosted applications such as GoogleDocs, Evernote and SharePoint. Powered by a single USB cable, the image FORMULA P-215 can scan up to 15 pages per minute and capture both sides of a document in a single pass.

output of 2,800 lumens and a high contrast ratio of 3,000:1, ensuring high quality images are projected, even in daylight. Epson’s 3LCD technology ensures that images are clear, bright and easy on the eyes. Moreover, the plug and play functionality allows users to set up and use the projector quickly and easily. Whatever the angle of the actual projector, users can easily align the projection to ensure a straight and correct image with its user-friendly horizontal keystone slider.

The scanner incorporates an automatic document feeder that is capable of handling up to 20 sheets, saving valuable time when scanning documents containing multiple pages. Workers can use the P-215 instantly without the need to install additional drivers or software thanks to its unique, built-in CaptureOnTouch Lite software. The P-215 also includes ISIS/TWAIN drivers for Windows users and a TWAIN driver for Mac users for industry-standard connectivity and use with a variety of imaging applications. The versatile P-215 incorporates a special card feeder slot for scanning thick plastic ID and embossed cards, which is particularly useful for industries such as insurance and financial services where proof of ID is required when registering new client accounts or closing deals.

Portable performance The new Samsung Series 9 and Series 7 premium notebooks are products that exemplify the demand for super-thin and sleek laptops. These super-thin and sleek laptops create a new baseline for mobile computing for both consumers and businesses alike. They represent Samsung’s most advanced and innovative craftsmanship in the premium notebook sector, that deliver on these needs. Samsung’s ultraportable Series 9 actually predates the creation of the ultrabook category, coined by Intel. With an upgraded Intel Core i7 processor, a 1,600-by-900 resolution screen and a handful of easily accessible ports, the Series 9 is the notebook to impress in the boardroom. The matte black finish and thin factor straddle the line between professional and cool. On the other hand, the Samsung Series 7 CHRONOS notebook delivers high PC performance while maintaining an ultraportable form factor. The high-spec Series 7 CHRONOS features the latest Intel Core i7 Quad Core processor, the ExpressCache technology, 6GB of DDR memory and Samsung’s proprietary FastStart feature. With the Series 7 CHRONOS, which incorporates MAX screen technology, consumers no longer need to make a compromise. Besides, a Windows 7 operating system means enterprises can easily incorporate these premium notebooks into their existing IT infrastructure.

FEBRUARY 2012 SME ADVISOR MIDDLE EAST

Trade

Liberalisation

Getting global One area that has received considerable attention in recent years is the liberalisation of key logistical trade practices, in order to aid companies with expansion beyong their home borders. Dr. Ashraf Mahate, Head of Export Market Intelligence, Dubai Exports, and Vice Chair of the Economic Policy Committee, Dubai Economic Department, discusses the various elements involved.

here is no single specific economic policy that can describe trade liberalisation, but in reality it includes a wide variety of actions by the government.

Some of the trade liberation actions that have been carried out by various countries include: macroeconomic stabilisation policies, import duty and tax reforms, liberalising global capital flows, implementing legal changes, such

SME ADVISOR MIDDLE EAST FEBRUARY 2012

as allowing non-nationals to own agency licences, as well as administrative and political reforms. The broad nature of trade liberalisation is largely due to the different manner in which protectionist policies are carried

Trade

Liberalisation

out by countries. In some cases these protectionist policies are the result of the historical development of a country, while in other cases they reflect the current economic situation of a nation. The road to trade liberalisation has tended to take two different paths or strategic directions, namely focusing on the price of the good or service through various policy changes, and second, implementing a system of administrative controls. In the case of the former, where the focus is on the final price, governments have tended to implement policies which have sought to, in the first instance, remove exchange rate distortions, usually through floating the currency. This policy allows the market to largely determine the exchange rate and hence the price of the product is a more realistic reflection of the cost of production and the economic situation of the country. Second, countries have sought to remove non-tariff barriers which are a whole system of import protection policies and replacing them with import tariffs. The key benefit of removing nontariff barriers is that in most cases they are not transparent. In contrast a tariff is transparent and allows the firm to be able to calculate the cost and decide whether to pass it to the consumer. More importantly, if non-tariff barriers take the

Lack of resources need not be a disadvantage and SMEs can use this to their advantage through forming global partnerships or alliances. SMEs need to understand that trade liberalisation allows them to benefit from lower input costs which can enhance their price competitiveness, thereby allowing them to compete more effectively in export markets.

Dr. Ashraf Mahate

Another common government action, especially in many developing countries, has been to open the import process so that it is simpler and without the need for an import license. This naturally increases the level of competition between firms and tends to reduce the price of the product. form of a quota, set a maximum quantity that can be imported into the country. For high demand products this naturally leads to an increase in the market price. In recent years a number of countries have sought to homogenise tariff rates between partner-nations and to limit the categories of high tariff products. In some cases this has come about through regional

pacts or treaties while in others through a free trade agreement. Another common government action, especially in many developing countries, has been to open the import process so that it is simpler and without the need for an import license. This naturally increases the level of competition between firms and tends to reduce the price of the product.

This policy also seeks to remove or at least greatly reduce, the product categories where the state has a monopoly of import. On the other side of the trade cycle governments have also sought to eliminate export taxes so that it is free of governmental price distortions. An export tax effectively increases the price of the product and makes it uncompetitive in the global marketplace and thereby diverting it to the domestic market. The second strategy of implementing an administrative system of trade policies has focused on maintaining the current tariffs rates, but seeking to reduce their negative impact on exports with an import duty drawback system or export subsidies. This strategy allows the country to maintain the protective tariff system while ensuring that the export sector is competitive in global markets. This strategy is a realisation that all export sectors rely on a certain level of imports and hence any restrictive tariff system will negatively impact their performance in global markets. Some countries, and this is typical of the UAE, have established free trade or export processing zones which go beyond simply seeking to liberalise trade, but create an area which is not subject to the normal rules and regulations of the nation.

FEBRUARY 2012 SME ADVISOR MIDDLE EAST

Trade

Liberalisation

Trade liberalisation offers SMEs an opportunity to not only survive, but grow their business beyond the borders of their country. More importantly, the global marketplace allows SMEs to capitalise on economies of scale, which may not be possible if they simply focus on their domestic market. Therefore, there is little doubt that internationalisation is too good an opportunity for SMEs to ignore. However, one also needs to be aware that trade liberalisation is a two-way street, in that as the SMEs in one country seek to globalise their business, so do those in the partner country. As such trade liberalisation has both a positive or negative impact on the SME sector. Some of these impacts include an increase of foreign competition due to the reduction or removal of import tariffs non-tariff barriers. The increased foreign competition will impact greatly on domestic firms who are uncompetitive. Of course these firms can be pro-active and seek to change their business processes through eliminating unnecessary cost components and employing more innovative technologies, as well as modern management practices. SMEs that do not change their business practices to reflect the more competitive environment will tend to experience a negative impact due to trade liberalisation. Although trade liberalisation provides SMEs an opportunity to grow their business, some commentators argue that they lack the necessary resources to effectively capitalise on the opportunities. In essence SMEs, due to their size, tend to be uncompetitive in the global marketplace. However, the lack of resources implies that they may not be able to invest in modern technology or upgrading the skills of their employees. As a result trade liberalisation tends to benefit larger firms who have the resources to exploit economies of scale and invest in research and development activities as well as have considerable marketing budgets. Lack of resources need not be a disadvantage and SMEs can use this to their advantage through forming global

Trade liberalisation can eliminate export restrictions and if the overseas price is higher than the domestic one then the producers will simply sell their output abroad. This can lead to a shortage of inputs in the domestic market and thereby push domestic firms out of business.

partnerships or alliances. SMEs need to understand that trade liberalisation allows them to benefit from lower input costs, which can enhance their price competitiveness, thereby allowing them to compete more effectively in export markets. However, for them to effectively do this they need to understand their business process and identify aspects which can be carried out more cheaply overseas and where they can add value. More serious for the SMEs is the fact that trade liberalisation can actually reduce the availability of inputs. Trade liberalisation can eliminate export restrictions and if the overseas price is higher than the domestic one then the producers will simply sell their output abroad. This can lead to a shortage of inputs in the domestic market and thereby push domestic firms out of business. Of course the domestic firms can agree to pay a price equal to the foreign one for their inputs but they may not have the same level of cost structure to compete as far as the final price is concerned. For example, anecdotal evidence suggests that Chinese firms have paid over the market price in order to obtain key raw materials with the full knowledge that their labour costs are greatly below global levels. Therefore, if they over-pay for raw materials, they can make up the difference against their competitors through lower wages. The strategy of over paying for raw materials is simply to ensure that they have a consistent supply. As countries move away from a trade restrictive environment to a more liberal one there will certainly be an impact on the SME sector. The impact of trade

SME ADVISOR MIDDLE EAST FEBRUARY 2012

liberalisation is far too important for the SME sector to ignore as there will be both positive as well as negative effects. SMEs need to move beyond their borders and take their goods or services into overseas markets. If they do not then not only will their market potential be limited, but they will face increased competition from foreign firms in their own backyard. What is certain is that the SME sector needs to be pro-active in order to examine their business and identify strategies that will allow them to capitalise on the huge global potential.

About Dr. Ashraf Mahate is the Head of Export Market Intelligence at Dubai Exports (formerly known as the Dubai Export Development Corporation), which is an agency of the Dubai Economic Department. Dr. Mahate is also the Vice Chair of the Economic Policy Committee with the Dubai Economic Department. He has written a number of journal articles, chapters in books and edited books in the areas of economics, finance and banking. He has also presented papers at major international conferences. Dr. Mahate has provided extensive consultancy services to various organisations in the areas of banking, economics and finance. He has been a director of a number of companies including a venture capital company and a private equity fund. Dr. Mahate received his doctorate from Cass City University Business School in London (UK) which was ranked by the Financial Times newspaper as the 12th best university in the world for finance. He read Economics at University College London, followed by a Masters in International Economics and Banking at the University of Wales in Cardiff. Dr. Mahate is a professional educator and received his training at the Institute of Education (University of London). He is a member of the Chartered Institute of Managers (UK) and a Member of the Institute of Commercial Management (UK). He is also a member of the Association of Certified AntiMoney Laundering Specialists (ACAMS).

ANALYTICS Find the delicate balance.

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Business growth

Acquiring finance

MONEY, MONEY, MONEY In this second instalment of a three-part series, John Lincoln, Vice President, Enterprise Marketing, du, discusses the multiple financing routes available to startups and established SMEs.

10 Preparedness - Rehearse your business plan presentation 11 Presentation - Have a professional and polished presentation summary of your business plan, as well as a detailed version 12 Personal - You should personally articulate your vision, mission and commercial model. It’s alright to have the consultants beside you, but you should make the critical part of the pitch yourself.

What are all the funding sources available? There are many funding sources available to a startup or a small business. Some are the obvious ones, whilst there are others that you may not be completely familiar with:

ost people have heard of bank loans, credit cards, friends and family, and venture funds, as possible sources of funding. However, there are many other alternate sources for funding that a small business owner can and should consider. In these trying economic times, the traditional lending sources such as banks, venture funds and others have raised their criteria for qualification of funds. Therefore, it is essential for the small business owner to be aware of alternate sources of funding for their startups, or for an expansion of their existing business. Before I discuss the various regular and alternate funding sources, there are a few essentials that a small business owner should follow, or put in place before continuing with funding endeavours.

The 12 essentials Here are 12 essentials that I would urge you to follow, before you pursue capital options: 1 Business plan - Have a business plan 2 Credibility - Establish personal credibility and reputation in your community or social circle 3 Credit - Maintain a good credit rating 4 Confidence - Be confident 5 Perseverance - Be prepared for rejections; don’t give up 6 Passion – Show a sense of passion; after all, you are the chief believer 7 Pitch - Have an elevator pitch; a summarised pitch of your business to be articulated to potential funders in no more than three minutes 8 Professional - Dress appropriately for the business that you are in 9 Punctual - Always be punctual for any meetings with potential funders

SME ADVISOR MIDDLE EAST FEBRUARY 2012

Personal savings Funding your entire business with your personal savings is not the most prudent thing to do. As quite a number of startups are susceptible to failure, it is neither smart, nor fair, that you put all your “eggs in one basket”. However, if you can afford it, then using a portion of your personal savings is definitely a boost in your overall funding endeavour, as it will demonstrate commitment to other potential lenders and investors. Keep in mind that the journey is going to be very tough, and therefore any personal investment from you should be sourced from the sale of an asset that you are not currently using, for example an extra property or vehicle. A word of caution; before you invest with your hard earned personal savings, please take a step back and consider seriously the impact it will have on your family and yourself. If you still feel that you must, then you are probably onto something that is worth the effort and the risk. Family and friends This type of funding is commonly known as FFF for friends and family (and fools). There are instances where businesses fund their startup with money from their immediate family or friends. If your company is in dire need of cash, and if you have a family member or friend willing to invest, it is a path that you should consider. Unless you are in a bubble economy or have some unique technology patent, most friends and

Business growth

Acquiring finance

Credit cards should only be used to fund emergencies in your business. Do not use credit cards to fully fund and manage your business. In an ideal situation, they should only be used as stop-gap measure for interim working capital or inventory management.

John Lincoln

family are not investing in the business, but rather are investing in you personally. Do be aware of typical case scenarios where the USD 10,000 that a family member has given, may come at a high price; requests for favours or employment for family or friends, or unnecessary interference on your time and business, is more common that you may think. Since most family and friends are investing in a person rather than a business, it is recommended that funding from friends and relatives be taken as a loan rather than an equity participation in your business. This loan should of course be structured with a formal agreement and repayment plan. This way, you can mitigate future unwarranted interference in your business. Credit cards Funding a startup or an ongoing business with personal credit cards is more common than you think it is. About 30 years ago, it was considered “non-passé” or “not credit worthy” or impractical to use your credit card to fund your business. Today, it is not so commonly frowned upon, nor is it considered as much of a risk. Before you start on a credit card splurge for your business, be aware of the high interest rates that credit cards charge. Also, do keep in mind that cash advances on a credit card carries with it much higher interest rates. Credit cards should only be used to fund emergencies in your business. Do not use credit cards to fully fund and manage your business. In an ideal situation, they should only be used as stop-gap measure for interim working capital or inventory management. If you do use credit cards to fund your business, ensure that the pricing of your goods and services

reflect the relatively higher interest rates that you are paying to fund your business, through the usage of credit cards. Also, ensure that you choose the credit cards from providers offering interest free financing, for longer periods of time. Do not max out your credit card limits by paying the minimum monthly payments. If you are prone to paying the minimum payment, then this important source of funding will just not be there, when you need it most. Angel investors The term “angel investors” originated from Broadway where wealthy people who funded theatrical productions were called “angels”. Angel investors generally understand the risks they are taking and therefore expect a much higher return for such increased risks. Before you approach a group of angel investors, it is important for you to know their objective. Most of them are taking part in this high stakes game for the expected high returns. Also, do keep in mind that since most of them are successful entrepreneurs or former business executives, there are other reasons why they fund startups. These can range from their need to keep informed of the latest trends in technology, to networking or opening an avenue to share their business experience and networks. Therefore it is important that you position your company and tailor your objectives to match that of the angel investor. Most angel investors know that you will need additional funds to scale your business. One thing to keep in mind when you negotiate the term sheet is that you should alert the angel investor on your anticipated future funding needs. You should offer them the option to invest in subsequent rounds, as well as alert them of the high potential for dilution of their equity. If you have found an angel investor interested in your startup but who cannot, due to other

commitments, invest, then one option is to leverage the angel investor’s asset base and reputation to guarantee a bank loan. Bank term loans There are many forms for bank loans available for the small business. They include bank overdrafts to term loans. A bank overdraft is seldom given to a startup when there is no substantial history of established cash flow. Term loans are the most common types of loans for small businesses. They are very simple in that the lender provides a specific amount of money, usually at a fixed rate of interest, and there is a schedule for repaying the loan (usually in monthly or quarterly payments) over a certain period of time. The big question that a bank wants answered is whether you have the necessary collateral. In these trying times, an unsecured loan is a rarity and is only offered to people or businesses with an exceptional credit history. There is big caveat on bank loans that you should be aware of; most banks will seek full recourse to the individual owner or shareholders for full recovery of the loan, it is imperative, therefore, that you ensure that the business risks are mitigated before you commit to a bank loan, as the consequences of failure will affect you personally. The requirements for a term loan are arduous and time consuming. Banks normally require a significant amount of information before they approve the loan. These can range from: Your detailed business plan A personal guarantee for short-term loans, a new business, or if the collateral is insufficient Your credit report The type of collateral you can provide Company incorporation or trading licenses Your personal and financial commitment to the business Your business’ financial statements for at least the previous three years

FEBRUARY 2012 SME ADVISOR MIDDLE EAST

Business growth

Acquiring finance

Tax returns (where applicable) for the past three years. Term loans have benefits and drawbacks. The benefits include the ability to leverage the term loan to preserve your working capital. However, you need to watch out for those higher fees and charges. Venture Capital (VC) Seeking funding from venture capital companies (VCs) provides medium term committed share capital to help companies grow and succeed. The funding objectives from VCs are very different from funding sourced through bank loans. Banks charge interest for their loans and seek repayment of the capital, irrespective of whether the business succeeds or fails. VCs invest in exchange for an equity stake in your business. VCs expect significant returns when they exit the business. Exiting can occur in many ways, ranging from taking a startup to an IPO stage, or selling it to other equity owners. VCs invest in businesses that have a unique intellectual property and a sustainable commercial model. VCs also generally invest in companies which are managed by experienced and capable teams, who have the requisite experience to take the business to the next level. If you are confident of your technology or your commercial model, then seeking funding through VCs might be a good option, as they have the breadth of contacts that will prove invaluable in terms of new funding, customers, or people that you may need for generating business. Leasing I have come across many small businesses that do not use leasing as a way to fund a portion of their capital requirement. Most equipment leases rarely require downpayments. Therefore, if you have vehicles, machinery and equipment that needs to be purchased, leasing is an option that you should seriously consider. For many startups, the reality is that leasing may be your only real option for acquiring essential business tools. An advantage that is often overlooked is that leasing may improve certain financial indicators, such as your debt-to-equity and earnings-to-fixed-assets ratios. In essence, you are able to exclude your leased assets and their corresponding monthly rental obligations

Traditional lenders normally look at the business creditworthiness when evaluating a loan application, whilst factors evaluate mainly the financial standing of the small business’ customers. This is a tremendous boost for a small business’ potential, even if they have little, or no, credit history.

from your balance sheet and include the revenue derived from the assets in your income statement. Factoring Factoring is useful for companies suffering cash flow squeeze and facing slow payments from their customers by selling their invoices or accounts receivable to funding companies. The factors advance most of the invoiced amount ranging from 75% to 95%, after verifying the credit worthiness of the small business’ customer. The factor charges a fee and remits the balance back to the small business. The factoring firm handles the collections and therefore the small business can focus on running operations, instead of chasing collections. Once the credit worthiness of a small business customer is established, a small business is usually able to receive the funds for invoices within 24 to 48 hours, rather than waiting 30 to 90 days for the small business customer to pay. Traditional lenders normally look at the business creditworthiness when evaluating a loan application, whilst factors evaluate mainly the financial standing of the small business’ customers. This is a tremendous boost for a small business’ potential, even if they have little, or no, credit history. One important point to note abut factoring is that it can be costly by several basis points above a traditional lender. One other important consideration for small business before using a factor is that it will not be economical to send out thousands of small value invoices, as the service fees of a factor depend on each invoice. Conclusion Small businesses have many options to finance their working capital or long-term funding requirements. It is important to take note that

SME ADVISOR MIDDLE EAST FEBRUARY 2012

the funding expense varies and resultant costs should be worked into the pricing of your goods or services. Do not feel dejected if your funding applications are turned down; as a small business owner and risk taker, you are already special. For inspiration, remember what Dale Carnegie said; “Most of the important things in the world have been accomplished by people who have kept on trying when there seemed to be no help at all.”

About John Lincoln has over 20 years telecommunications experience in the USA, Japan, Europe, India, Dubai, Malaysia, Latin America and various other countries. He has extensive senior expertise in international telecommunications sales, marketing, business development and customer service delivery. John also has executive experience with general management, marketing, P&L, product development and revenue management responsibilities in both consumer and enterprise segments for both the fixed and mobile sectors. In addition, John has an impressive operational and management portfolio of established proven expertise in incremental business value creation and management of large multi-cultural teams in Vodafone Global in the UK, Japan Telecom in Tokyo, AirTouch and Pacific Bell (now AT&T) in San Francisco and Tokyo, Airtel in Delhi and other telecom and technology companies. Additionally he has extensive large scale business development, M&A and operational project experience across the USA, Europe, Asia and Latin America. John has an MBA and MS in Telecommunications from the Golden Gate University in San Francisco, California, USA. You can find John’s personal blog at www.johnlincoln.blog.com. He can be contacted via: john.lincoln@gmail.com, Twitter: @lincolnjc. At present John is in the final stages of finishing a book which explores how businesses can grow and achieve sustainability and which is scheduled for publication in the near future. Watch this space for updates

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Marketing Analytics

your Facebook page, and message your LinkedIn contacts. At the end of the campaign you go into the analytics page (Google Analytics is free) and see how many people visited your site via Twitter et al. If on Sunday one person visited your website, came via LinkedIn, and one sale was made of Product A, you have return on investment.

The low-down on ROI The golden rule to analytics is measuring income from effort. There is nothing complicated about social networking – all you need to do is apply the rules you do in everyday business to the online world, says Alan Devereux, Communication Officer, British Business Group.

ne question that continually gets asked is “How do we measure return on investment?” I am not a fan of this question and think it has been created by communications companies rather than people like you and I. Communications companies are very good at differentiating themselves from their competition (as they should be) and the wheels of the ROI bandwagon are creaking and cracking under the strain. You might be thinking that I am stating the obvious, well I am; and that is why I do not like the constant repetition of the ROI question. How do you measure your marketing campaign? How do you measure your PR campaign? Apply the same measurements to your social networking activity.

Alan Devereux

Product A is advertised on your Website. You have a www.google.com/analytics account and the code has been added to your Website, with this you can measure the incoming traffic and see how popular the page for Product A is. You then send 20 tweets with the link attached, add the link to

SME ADVISOR MIDDLE EAST FEBRUARY 2012

Online tools Perhaps you don’t have a Website or don’t understand Google Analytics (perhaps you don’t have an interest). What then? The Internet is full of free tools. www.bit.ly is one of a multitude of URL shortening services and tells you how many times a link has been clicked, the country the click originated from, and the days the link was clicked. Using tools like Bit.ly you can find the time you should be sending messages. You can analyse the success of your campaign and make adjustments as you see fit. Specifically for Twitter, www.timely.is claims to analyse interaction from your last 199 tweets and suggests the time you should tweet your messages. You simply add your messages to the box and click Queue. You can then spend four hours in a boring, but necessary meeting, knowing that your Twitter feed is active and when you return you can analyse the affect of your campaign. Is your ROI reputation based on sales? Perhaps you could set a target of media relations for your PR team, or perhaps your goal could be community outreach – how many brand ambassadors can you create using social networking sites? My Internet search for analyse my social media campaign yielded 36 million results. EU bailout showed 27 million results and stop slavery showed 24 million. If you have been unfortunate enough to have been dragged under its wheels, the ROI bandwagon might have you asking the ROI question; meaning you probably haven’t invested in social networking sites on a company level.

About Alan Devereux is a husband, father, and Communications Officer for the British Business Group, Dubai and Northern Emirates, and can be found here: http://ae.linkedin.com/in/alandevereux. He can be contacted at info@britbiz-uae.com

Marketing

Arab region

How social are you? The Middle East has seen a rise in social media usage in the last few years. With a variety of new and improved Web applications being launched, itâ&#x20AC;&#x2122;s appealing to more than just a niche market. Namita Ramani, Social Media Expert, Salony Creations, tells us how this has created a fundamental shift in the way we communicate.

ocial media has become popular not only with individuals but also with organisations, both in the public and private sectors. Companies, firms and even governments are joining this online network. Large organisations, as well as groups, are adopting social media techniques to bring their people together. Some of these activities include rallying people around social and political causes, boosting citizen journalism and civic participation, and creating forums for debate and interaction between communities. With a third of the Arab demographic being made up of youth between 15 to 29 year olds, the infiltration of social media in these groups is soaring. While this young population will soon be entrepreneurs and also part of the governments and private sector workforces, it is argued that with these social media tools it is possible to influence citizen engagement and social inclusion, while creating opportunities for employment and enhancing development. Online penetration On a global level, the UAE is currently the top Arab country for Facebook penetration, as percentage of population, according to a Arab Social Media Report. It is also among the top ten in the world with a 45% Facebook penetration. This huge online network has sparked a revolution in our society. With a majority of the population on social networks, there is a sweeping scope of opportunities that should not be missed. Advertisers are flooding

Namita Ramani

Websites and earning a sizable percentage of revenue on these sites. However, social presence should be created for the right reasons; engagement with your right target market and not in the fear of being left behind! Consumer-generated content is having wide-ranging effects on both the perception of a company and whether a purchase is eventually made. Can your company afford not to participate in the conversation? Although Facebook has more penetration in the Arab region compared to Twitter, Twitter users are growing at a rapid speed. Firms and establishments are using Twitter accounts to personally interact with their customers and are also posting deals to keep them updated on the latest offers. However, having an online presence is not enough; maintaining and constant updating is necessary to not lose out on viewership. Content is king A focused content strategy that is suited to your company will help you gain all the right customers. With a content strategy you can encourage your customers to interact with your company and this is where the sales will happen. Customer engagement will happen via comments on your posts and replies to your comments and customer loyalty will be earned. Wall posts, status updates, and questions are some of the great features Facebook offers and outlets like spas, restaurants, clubs and retail stores can generate considerable revenue with effective use of these features. With the right online marketing strategy you can reach the target audience

SME ADVISOR MIDDLE EAST FEBRUARY 2012

economically and get the most ROI. Social marketing is also measurable. You can find out how many followers you have on Twitter and follow a month by month growth strategy. TweetReach is a great tool for measuring Twitter activity. Facebook reach and response is in valuable. To know if your message is being heard, take a look at your Facebook fan page and see how many new fans you have compared to last month and also see how many friends have become fans after an event. Have they posted comments? Online marketing has added a new dimension to advertising and PR. It is ever-growing and has developed into the new face of marketing, holding numerous opportunities. It is not limited only to social media; there are many more elements, such as search engines and blogs. A combination of online as well as print presences is the solution to successful marketing. A successful marketing plan is one that integrates the right elements of online and offline channels best suited to your product or brand to get the most of every cent spent.

About Namita Ramani is a Web strategist and digital marketing expert, and established Salony Creations, in 2004 to fill the gap of creative Web solutions and integrated marketing solutions in the region. She started her second company, SpaGenie in 2009, which specialises in providing integrated marketing solutions to spas in the region.

Legal

Commercial ACTIVITIES

Take stock of the law Traders who are registered to do business in the UAE, or does business with companies or persons that are based in the UAE, should be aware of the laws that affect their business and how to protect themselves against any potential liability that they may encounter in the course of conducting business activities. Melissa Forbes, an Associate at the law firm Taylor Wessing, shares some of the general laws that govern trade activities in the UAE and how they may affect your business.

Commercial Transactions Law Who does the Commercial Transactions Law apply to? The Commercial Transactions Law (or UAE Federal Law No. 18 of 1993, as it is more formally known) applies to traders as well as to any person or entity who conducts commercial activities (even though such a person may not be a trader).

What kind of regulations are set out in the Commercial Transactions Law? The scope of the regulations covered under the Commercial Transactions Law relate to matters such as unfair competition, commercial obligations, commercial sales, commercial agency, commercial representation, brokerage, transportation, banking, commercial papers, bills of exchange, recordkeeping, payment by cheque, and bankruptcy. Who is a trader? A ‘trader’ is defined under Article 11 of the Commercial Transactions Law as: a any person who works in his own name and for his own account in commercial activities and is properly qualified to do so; or b any company which undertakes a commercial activity or has adopted one of the legal forms stipulated by the Commercial Companies Law.

he Commercial Transactions Law and the Civil Code are two of the key pieces of legislation that govern commercial activities in the UAE. In addition to the Commercial Transactions Law and the Civil Code which apply generally to commercial activities, there is a wide range of laws that regulate certain specific commercial activities such as construction, real estate sales, banking, e-commerce, shipping and international trade. There is also a wide range of specific laws that govern particular issues that are relevant to traders, such as employment, consumer rights and customs duties.

SME ADVISOR MIDDLE EAST FEBRUARY 2012

What are commercial activities? ‘Commercial activities’ are defined under Article 4 of the Commercial Transactions Law as being: a activities which are carried out by a trader in relation to his trade affairs, provided that each activity carried out by a trader is considered to be related to his trade unless proved otherwise; b speculative activities carried out by a person, though not a trader, with the intent of realising profit;

Both the trader and the customer have rights under the Commercial Transactions Law. The remedies available under the law vary, depending on the matter to which the claim relates and the damage suffered as a result of the relevant incident. Generally speaking, a claimant may be able to seek compensation, a precautionary order (or injunction), although such orders are granted very rarely and only in exceptional cases, and enforcement orders, among others.

Legal

Commercial ACTIVITIES

c activities which are stated by law as being commercial activities; and d activities which are related to or facilitating a commercial activity. Article 5 of the Commercial Transactions Law clarifies that the following activities are deemed to be ‘commercial activities’ for the purposes of this law: a purchasing commodities and other tangible and intangible movables with the intention of selling the same at a profit, whether sold in their present condition or after their transformation or manufacturing; b purchasing or hiring commodities and other tangible and intangible movables with the intent of hiring them out; c selling or hiring out commodities and movables; d banking, exchange and stock markets operations as well as those of investment companies, trust funds, financial establishments and all kinds of other financial brokerage operations; e all kinds of transactions relative to commercial papers, irrespective of the capacity of the persons concerned therein or of the nature of the transactions for which such operations are carried out; f all kinds of sea and air navigation activities, including: (i) the construction, sale, purchase, chartering or freighting, repair or maintenance of vessels and aircrafts, as well as sea and air cargos including sea and air carriage; (ii) the sale and purchase of vessel and aircraft requirements, tools or materials or catering such vessels and aircrafts; (iii) loading and unloading operations; (iv) marine and aviation loans; and (v) employment contracts concerning captains and pilots of commercial vessels and aircrafts; g incorporation of companies; h operating current accounts; i all kinds of insurance other than cooperative insurance; j selling by public auction; k operating hotels, restaurants, movie halls, theatres, play grounds and amusement centre activities; l water, electricity and gas distribution activities; m editing newspapers and magazines whenever the publication thereof is made with the intent of making profit through the

Civil Code Who does the Civil Code apply to? The Civil Code governs the relationship between private parties (including corporate entities and individuals).

What kind of regulations are contained in the Civil Code? The scope of the laws covered by the Civil Code relate to matters such as contractual rights, undertakings, guarantees and other forms of security, and rights of ownership. Melissa Forbes

publishing of advertisements, news and articles; n post, telegraph and telephone operations; o broadcasting and television activities as well as those of recording and photography studios; and p the activities of public warehouses and mortgages on property deposited therein. Article 6 of the Commercial Transactions Law further clarifies that the following activities shall be deemed to be “commercial activities” if practiced as a profession: a brokerage; b commercial agency; c commission agency; d commercial representation; e supply contracts; and f purchase and sale of lands or real estate for the purpose of making profit from selling same in their original status or after transforming or allotting it. What remedies are available under the Commercial Transactions Law? Both the trader and the customer have rights under the Commercial Transactions Law. The remedies available under the law vary, depending on the matter to which the claim relates and the damage suffered as a result of the relevant incident. Generally speaking, a claimant may be able to seek compensation, a precautionary order (or injunction), although such orders are granted very rarely and only in exceptional cases, and enforcement orders, among others.

What remedies are available under the Civil Code? The remedies available under the Civil Code are similar to the remedies available under the Commercial Transactions Law. Again, the remedy available for a particular claim will vary, depending on the nature of the claim and the damage suffered. DISCLAIMER The information set out above is intended to be used as general guidance only. Please seek legal advice from Taylor Wessing in relation to any particular matter before acting (or refraining to act) in accordance with the information set out above.

About Melissa Forbes is an Associate in the corporate department of Taylor Wessing’s Dubai office. She has worked as a legal consultant in Dubai since 2008 and, before that, worked for a number of years in London and Australia. Melissa has advised on a number of cross-border and domestic corporate transactions, including mergers and acquisitions, corporate reorganisations, private equity investments, joint ventures and divestitures. She has also advised on a variety of commercial matters relating to issues such as corporate governance, regulatory compliance, management incentive schemes, shareholder disputes, agency and brokerage agreements, licensing, company formations and de-registrations, as well as various commercial and property related disputes. Melissa is qualified as a solicitor of both the Supreme Court of England and Wales and the Supreme Court of New South Wales in Australia. Taylor Wessing is an International law firm, based primarily in the UK, Germany, France, the UAE and Belgium, with representative offices in Beijing and Shanghai. It also has well-established alliances with BSJP in Poland and RHT Law in Singapore. Clients include leading financial institutions, major corporations, public sector bodies and wealthy individuals and families.

FEBRUARY 2012 SME ADVISOR MIDDLE EAST

Finance

InvestMENT

Richard Taylor

THE CASH STASH When businesses record a higher than projected income at the end of a financial year, it can often be difficult to assess where to inject this surplus. For those seeking alternatives to traditional savings, there is the option of investment bonds. Richard Taylor and Rupert Connor, Chartered Financial Advisors, Acuma Wealth Management, take us through the steps.

ome businesses in the UAE hold a significant amount in cash. This can be for good reason; it allows management to react quickly to take advantage of opportunities as they arise and it can provide a buffer in the event of a downturn which, in a still developing economy such as the UAE, can be invaluable. After all, it is a well known fact that many businesses fail, not due to unprofitability, but due to having

insufficient free cash with which to pay their immediate creditors. Another factor with companies in the UAE holding cash is the unknown expense of gratuity payments. Depending on the size of the workforce and their average length of service, a businessâ&#x20AC;&#x2122; potential liability can be significant. There are companies that make absolutely no provision for their gratuity liability, which really is a huge risk, while others hoard cash, which carries a massive opportunity cost and leaves the business, open to other risks.

SME ADVISOR MIDDLE EAST FEBRUARY 2012

Sitting on cash can be an expensive luxury because it has an opportunity cost. Without going into too much detail, cash sat in a bank account earning interest, could, and maybe should, be being put to use elsewhere. Even worse, a cash-rich company runs the risk of being careless. The company may fall prey to sloppy habits, including inadequate control of spending and an unwillingness to prune growing expenses. But regardless of whether a business is holding the â&#x20AC;&#x153;rightâ&#x20AC;? amount of cash, which in itself is clearly a matter of opinion, they all have to hold some cash and this article concerns itself with what is an alternative home for it. Risks with holding cash There is a risk associated with holding cash: 1 The risk of not earning a much better rate of return by being put to a more productive use (the opportunity cost) To combat the opportunity cost, if a business is going to hold cash, and not just for the short term (as a longer term hedge against unknown liabilities in the form of market downturns and gratuity payments) they need to be certain that they are getting the best rate of return on it. Offshore investment bonds One answer to both of these concerns is to invest corporate cash in an insurance bond

Finance

InvestMENT

with a major offshore life company. You may already be familiar with these sorts of wrappers from a personal investment perspective (they are very popular with expats and for good reason) but very few people are aware that they can be used to house corporate cash at very low cost. Here are a few of the advantages of using an offshore investment bond wrapper to hold your business’ excess cash (cash over and above what you need to keep liquid for dayto-day cash flow management): You can access high rates of return on cash that you might not be able to get through other conventional channels. Offshore investment bonds provide access to multiple bank accounts from many different banks internationally. They offer deposits on 1

Offshore investment bonds provide access to multiple bank accounts from many different banks internationally. They offer deposits on an instant access basis or term deposits with terms from three months up to five years, with competitive rates offered for those who are willing to tie their capital up for longer periods.

3 You can ensure your surplus cash is invested with only the most secure institutions. Not all banks are born equal and there are some that are much more deserving of our faith. Is your surplus cash held with your day-to-day bank? If you choose to stick your surplus in an offshore bond, firstly be aware

It is also possible to split your cash between what you really need to keep available at a moment’s notice and what you can afford to take a slightly longer term view. For example, companies holding a significant amount of cash as a precaution against unknown gratuity liabilities can afford to take such a view and may find that they can get their cash working a lot harder for them.

an instant access basis, or term deposits, with terms from three months up to five years, with competitive rates offered for those who are willing to tie their capital up for longer periods. 2 You can easily switch your company’s cash between banks to get the best rates available. If you are with one particular bank and you see another offering a better rate for corporate cash do you transfer your cash from one bank to the other? Probably not! The paperwork and hassle involved with opening a new bank account is rarely justified. By using an offshore investment bond to house your company cash, you can withdraw from one account with one bank and put it with another bank offering a better rate with minimum hassle; no money laundering checks, no forms and none of the usual procedures that make it so difficult.

that the majority of the banks available within the bonds scheme have had to go through a stringent due diligence process (although this is my no means infallible) and if you have any doubts, you can easily move from one bank to another. You can invest your cash in assets other than bank accounts to access even higher returns. And finally, you always have the option of investing in something other than cash to try and earn a better rate of return. You need to be careful with this as anything other than cash will fluctuate in value and can (and probably will) fall in value at times, and in some cases, the rules stating what your company can invest in may prohibit such investments. But by widening your horizons it may be possible to significantly reduce that opportunity cost by earning a better rate of

return on relatively low risk investment such as fixed interest investments. It is also possible to split your cash between what you really need to keep available at a moment’s notice and what you can afford to take a slightly longer term view. For example, companies holding a significant amount of cash as a precaution against unknown gratuity liabilities can afford to take such a view and may find that they can get their cash working a lot harder for them. The bottom line Regardless of how much surplus cash you may have at your disposal there are more options than just leaving it with the bank with whom you do your day-to-day banking – and there are some very good reasons as to why you should consider not leaving it there. An offshore investment bond can provide options and security as well as the opportunity to make your idle cash work a bit harder.

About

Rupert Connor and Richard Taylor are independent financial advisors with Acuma Wealth Management. As qualified advisors in the region they help expats to get their finances in order, and maximise the financial opportunities available offshore and plan for future events. Acuma Wealth Management offers three core services; wealth creation, wealth management and wealth preservation, which include retirement planning, pension transfers (SIPPS & QROPS), death tax and inheritance planning, life assurance and critical illness cover, group pensions and corporate benefit solutions, key man insurance and shareholder protection, and medical insurance.

FEBRUARY 2012 SME ADVISOR MIDDLE EAST

Finance

New arrival advice

Dodging those traps Whether you’re moving to the region to take up employment or to set up a new business, there are pitfalls that can easily be overlooked. Independent financial advisor, Greg Pogonowski, outlines the most common areas where new arrivals run into difficulty and advises on the most practical solutions.

nderestimating the cost of living One of the biggest mistakes made in that first move abroad is to underestimate just how much it may cost to live in a new and unfamiliar country. The danger is that, in their preparations, people tend to budget for food, utilities and other essentials on a like-for-like basis with their home domicile. Countries such as the UAE, for example, can be more expensive than the UK when it comes to rent and it is not until the bills start coming in that the differences become apparent. The solution is to assume you will need far more than planned for in your original budget. Underestimating moving costs Putting together a budget for the move overseas is essential; factor this between budgeting and moving as there may be external changes, such as in foreign exchange rates and local cost of living increases. With the weakening US dollar in recent times and because the Dirham is pegged to it, at this time things are in favour for a new SME owner arriving. However, one area where people can be caught out is in the numerous one-off and fixed costs, such as for legal services, expenses around property purchase or rental, local administration costs and peculiar taxes that can rapidly eat into the most carefully calculated budget.

Living beyond your means One of the things I have noticed is that when people first arrive in a new country such as the UAE, particularly if it is their first contract

One area where people can be caught out is in the numerous one-off and fixed costs, such as for legal services, expenses around property purchase or rental, local administration costs and peculiar taxes that can rapidly eat into the most carefully calculated budget. or posting abroad, the new and exciting surroundings often put them into holiday mode. For the first three to six months they want to absorb the culture and the bright lights of their new country of residence and they spend like they are on holiday. Hand-in-hand with this is ensuring sufficient emergency funds are put by that will not be touched, unless there is an emergency. This is apart from “mirroring” what you used to do back home. If you were putting 5% of your income into a pension plan (maybe because you were in an employer’s scheme and the money deducted automatically from your gross pay), because most employers in the UAE do not offer a pension scheme to employees (because of the compulsory

SME ADVISOR MIDDLE EAST FEBRUARY 2012

gratuity that has to be paid, by law), why not continue to do this and not spend the money on a Friday brunch – it just makes sense for everyone to do this, not just SME business owners. Not factoring in exchange rates Exchange rate fluctuations are an obvious factor but where people often come unstuck is where they have regular withdrawals for fixed payments in their home domicile, such as mortgage payments and other bills on any property retained in their home country. A strategy here is to look to see if a fixed rate of exchange can be obtained over a six to twelve month period, so budgets are not wildly affected.

Finance

New arrival advice

Being caught out by local taxes and regulations Tax systems vary quite considerably from country to country (as do the legal systems). Whilst there is no income tax in the UAE, there are “hidden” taxes, such as the SALIK road toll in Dubai. Then there are visa fees, which carry administration charges on top. Most new expat business owners are perplexed by the amount of bureaucracy in the UAE. However, help is at hand if you find the right company to act for you in terms of PRO services, relocation, and company set ups. Inadequate will writing While many expats will have written a Will in their country of origin, once they move abroad this may not be recognised in their new country of residence. For example, if a married man dies in a country ruled by Shariah Law, all his assets will be initially frozen, and then after evaluation, be transferred to his nearest living male relative. Even if there is a UK Will in place there is no guarantee that the wife will receive anything. Setting up a Shariah compliant Will is essential. Having an overseas bank account Make sure you set up bank accounts in the country in which you want to make domestic payments, such as for utilities. Not to do so could see you paying excessive and unnecessary bank charges. All expats should also keep the minimum amount of money in the UAE as possible (say at least three months’ living expenses) and the rest should be in a true offshore account, so that it falls outside Shariah Law. If the expat SME owner is from Europe, it is recommended they do not have an offshore account with any European bank, as they have all signed up to the EU Disclosure Treaty. Worse still, is to think you have an offshore account only to find it is really not because the bank you used in the UAE is just a “franchise” of the “real” bank you think you are with, and therefore still falls within Shariah Law. If you are from the UK, forgetting to inform HMRC A common mistake people make is forgetting to inform HMRC of their non-UK status. This can easily lead to an individual being sought after for tax in both the

Exchange rate fluctuations are an obvious factor but where people often come unstuck is when they have regular withdrawals for fixed payments in their home domicile, such as mortgage payments and other bills on any property retained in their home country. A strategy here is to look to see if a fixed rate of exchange can be obtained over a six to twelve month period, so budgets are not wildly affected.

You will also need critical illness benefit, private medical insurance amongst others; an SME owner should consult a qualified independent financial advisor in the country they move to, as the one back home is usually not authorised to give advice to expats, and vice versa.

Greg Pogonowski

UK and their new country of residence. A special and simple form needs to be completed. On another note, anyone taking gains within the first full tax year that an individual moves abroad will be taxed by HMRC. To benefit from any tax advantage from moving abroad, gains will have to be taken after the end of that tax year in April. Life insurance cover Whilst most UK written life insurance policies provide cover outside of the UK, this is not true of many plans from other countries. It is important that anyone working or living in a new country reviews any insurance policies they may have in place to ensure they properly cover them, both for their new residence, as well as for their individual needs. If your policies do not provide cover if you are not resident in the country in which you took your plan out, but you intend to return home in the future, best not to cancel these, but consider term insurance (life cover) to cover the period you are abroad.

Pensions and NI contributions for UK expats If you have a pension in the UK, either ensure that you maintain contributions to it or set up an alternative scheme. You can continue to contribute to it for five consecutive tax years after you have moved abroad, and still get tax relief on your contributions, even though you are no longer paying income tax in the UK. This will depend on your individual circumstances. Likewise, if you are intending to return to the UK later in life and wish to draw a state pension, then maintaining National Insurance contributions is essential. For non-UK expats, especially those who do not get tax relief on contributions, you should seriously look to set up an offshore pension as this can give you considerably more than an onshore plan back home, over time, because your investment grows tax free and this makes a significant difference the longer you have your plan.

About Greg Pogonowski is an independent financial adviser with over 27 years experience in the financial services profession, he works with Pinnacle Asset and Wealth Management. He can be contacted atgreg@yourmoney-matters.com, or by calling +971 (0) 50 8769035.

FEBRUARY 2012 SME ADVISOR MIDDLE EAST

Management Feedback

employee behaviours and goals. For many leaders, this is the most difficult aspect of their job. Learning and using a consistent feedback process guides dialogue to increase comfort and ensure results are achieved. Test yourself by answering the following question: “Do you feel you are receiving enough and regular feedback from your employees?” Feedback can be translated into a simple process with a high impact:

STEP 1

Are you listening? The leader’s role is to ensure that employees know if they are achieving their goals or not. Providing feedback is an opportunity to foster and enhance goal achievement and employee performance with fulfilment, says Stephan Melchior, Managing Partner, Wilson Learning Middle East.

typical statement from employees about their leaders can often go a little something like this: “If they don’t say anything, I must be doing alright.” As much as we have heard this statement, the reality is that a lot of employees know very little about what their manager is really thinking. What management must understand is that in its basic form, workers want to know if they are doing well so they can keep doing it; they want to know when they are not doing so well, so they can change it. On the other hand, leaders sometimes complain about their employees, “I tell them what to do, but they don’t do it.” While many causes may underlie this statement, one critical component is that employees frequently do not receive enough feedback to deliver on their goals. Hence, they don’t know whether they are doing the right thing or not. A contemporary definition of feedback is: “A two-way communication that provides

information about performance and instils feelings of fulfilment or satisfaction.” An effective leader must utilise feedback and dialogue to: Reinforce factors that are helping the employee achieve his or her goal Redirect employees when they do not meet objectives, for example support or coach them Renegotiate the goal itself or the methods used to achieve it, if the goal seems to be set too high Leaders should prepare for feedback dialogue and have a general sense of tactics to recommend, but then have the flexibility to change tactics if the dialogue indicates other, more appropriate solutions. The greatest productivity comes from using a consistent approach or process to providing feedback. In addition, not giving feedback is simply not fair to employees. Consistency is key Feedback is the main mechanism for leaders to redirect, reinforce or renegotiate

SME ADVISOR MIDDLE EAST FEBRUARY 2012

Reinforce positive intent Open the conversation by demonstrating positive intent through adopting and conveying a win-win approach: Begin with an opening statement that explains the overall goal of the meeting Show interest in what the employee wants Ask the employee pertinent questions to draw out his or her point of view Volunteer information about your own point of view Work with the employee to find mutually satisfying solutions Demonstrate honesty and integrity

STEP 2 Explore performance with fulfilment Ask questions to elicit the employee’s own perception of his or her performance in the situation Ask questions to elicit the employee’s perception of his or her level of fulfilment or satisfaction in the situation Share your own perception of the employee’s performance and fulfilment and agree on both your viewpoints For example, if an employee constantly fails to give powerful presentations, but you find out he/she feels awful giving presentations, you first need to work on the motivation, and then tackle performance.

STEP 3 Assess the environment Determine factors that are helping the employee achieve the goal Determine factors that are getting in the way of goal achievement

Management Feedback

STEP 4 Decide on actions Given the degree of performance with fulfilment and the current environment, decide what to reinforce, redirect, or renegotiate Identify what processes, resources, tasks, and behaviours may need to be continued or changed.

A brand is expressed visually through a number of different elements, all working together. Most common brands include a logotype, typography, colour, pattern and imagery.

STEP 5

by other leaders in your organisation, or you may apply standards differently to different employees. This lack of uniformity will result in employee resistance to feedback and feedback to be unsupportable.

Seek an expression of confidence Ensure that the employee is confident about his or her ability to commit to the action plan. Add your own statements of confidence as appropriate If he or she is not confident, discuss concerns and identify what is getting in the way; explore ways to remove the barriers End the feedback dialogue on a positive note. Effective feedback is compassionate, timely and accurate A frequent excuse for avoiding initiating feedback dialogue is fear of hurting a person’s feelings. Yet, without feedback, people are hurt more. An all-too-common situation is when the whole work unit has difficulty with one person and no one will tell him or her that there is a problem. How would you feel if you were that person? In which way are the employee’s feelings best protected – by ignoring the situation or by providing effective feedback? It is important to consider feedback from the recipient’s viewpoint prior to providing it. The leader should imagine how it would feel to receive the feedback and the consequences if the feedback is not given. This will help guide a more compassionate approach. Timely feedback is important because things happen so fast in business today. Providing feedback on something that was done even two weeks earlier loses its power to influence change. The most effective leaders develop a habit of giving feedback frequently, which creates comfort with feedback among employees. Feedback is not an annual event; it is continuously provided and sought by the leader as goals are being implemented. Waiting until the goal is completed is too late to develop the employee’s skills and approach to goal execution. The need for accurate feedback cannot be understated. There are eight errors that leaders frequently make when observing employee

6 Fixed impression An earlier observation or impression of your employee may remain fixed in your mind and colour all of your later observations. In effect, you will continue to see the employee as he or she was rather than as he or she is now.

Stephan Melchior

behaviour, which result in providing inaccurate feedback to employees: 1 Accuracy of recall If you rely on memory alone, and keep no records, you may distort the actual event or behaviour.

8 Inference You draw conclusions about an employee’s behaviours, which are based on limited behavioural observations or hearsay.

2 Halo effect One very outstanding characteristic may determine your perception of an employee’s performance. Your feedback on less prominent aspects of the employee’s performance may be distorted in a positive or negative way. 3 Contrast You compare the employee with someone else, instead of seeing an employee’s own merits. You may provide feedback that is better or worse than reality. 4 Stereotyping In stereotyping, the individuality of a person is ignored, and he or she is seen as behaving in a way that is supposed to be characteristic of a particular group. 5 Differences in standards The standards you use may be unique to you and different from those commonly accepted

7 Projection You see your own characteristics in others and perceive them accordingly to your feelings about those characteristics. The employee may actually be very different from you.

Building a balance between following the five-step process and avoiding the eight points above helps creating and maintaining a common and consistent approach to giving feedback.

About Stephan Melchior has been working in the learning and development field for more than 15 years; designing and delivering training programmes in more than 20 countries. He is well known for the graphic facilitation approach he uses in his courses. Today, Stephan is Managing Partner at the Middle East office of Wilson Learning Worldwide, based in Dubai Knowledge Village. As a global organisation, Wilson Learning is the founder of the Performance and Fulfillment concept, and was rated among the Top 20 Leadership and Sales Training companies in 2010 and 2011 (www.trainingindustry.com). Wilson Learning Middle East was also recently ranked among the TOP100 SMEs in Dubai. Wilson Learning Middle East can be contacted at info@wilsonlearning-me.com, or at +971 50 7553800.

FEBRUARY 2012 SME ADVISOR MIDDLE EAST

Management

Service partners

Is everyone in sync?

Service providers or partners are essential ingredients of business today, as no one person or business can provide all services to all customers. But how do they mirror your businessâ&#x20AC;&#x2122; priorities and are they adding value, or causing mass destruction to your reputation, asks Debbie Nicol, Principal Consultant and Owner, business en motion.

he more complex a business is, the more providers or partners may be needed. Collaboration is sought for many reasons. A business takes time to grow a positive reputation, credibility and goodwill. The reputation can be a ticket to a positive future for your company or, on the flip side, can be the beginning of a slow and painful death of the business. Clearly, no business owner wants the latter, yet some actions indicate unintentional disinterest in the reputation with whimsical appointment of service providers and partners. The action specifically referred to may include the linking up with service providers or partners,

who through their actions, may inadvertently, send messages which may not paint your company in the best light, or may not compliment your company in the best manner possible. Take the foreign recruitment agency which may never have been to your country of business, let alone your business premise. 1 What do they know about your corporate culture and how do they mirror the same priorities in their operation whilst working for you? 2 What do they know about the laws of the recruiting country, and how do they represent truth to the new employees, and set them up with real expectations? 3 What degree of care do they have to ensure that personal needs are aligned to the needs of the client and its customers?

SME ADVISOR MIDDLE EAST FEBRUARY 2012

4 How correct is the information that they share about your company and the job itself?

You are paying for these services, yet more often than not, you may receive an outcome not to your expectations. Should you simply want people to be recruited to fulfill a mechanical, routine, non customer contact job, which will have no impact on your company, then perhaps a provider is all you need. Is that really possible though? How often will that be enough? Take the outsourced financial representative who works with your customers on collectables. The service may have been outsourced due to that skill not being available in-house. The financial representative themselves have a way of operating, a way of working within their technical area of expertise.

Management

Service partners

What alignment exists between the achievement of technical expertise and the values of your company? 2 What service gaps do they close and which do they possibly create that you may, or may not, be aware of? 3 How are they continuing and bettering the reputation of your company? 4 What is your measurement of their service – collections only? 5 From whom do you seek feedback on their service – from the service provider only, or also from customers? If so, how do you determine which customers would be of most value to incorporate into this measure? 1

What are your actions reaping? There’s a common saying; you reap what you sow. Simply signing an agreement is not sowing; it constitutes signing a document no matter how detailed or clear it may be. It will never substitute for an alternative approach. To reap an extension of your business, that being a provider or partner, who reinforces the same values and priorities and who acts and behaves

A business takes time to grow a positive reputation, credibility and goodwill. The reputation can be a ticket to a positive future for your company or, on the flip side, can be the beginning of a slow and painful death of the business.

Converting a provider into a partner A common consensus in the business world is that a service partner will serve you better than a service provider. Some people would define a partner financially, as one that is on a retainer, such as one who is doing your ghost writing on a monthly basis plus other on-call services. Others would define a partner by the level of confidence, trust and genuine care that party demonstrates in their care for your customers. Others may define a partner legally, with a legal document, guaranteeing specific amounts of business based on previous successes. A provider would be defined as one that you may use on an occasional basis to do a job. They generally complete the task for which they are employed from a technical point of view, with little concern for their impact on your reputation or customers. In each of the areas you outsource, what would best serve your business?

Debbie Nicol

A common consensus in the business world is that a service partner will serve you better than a service provider. Some people would define a partner financially, as one that is on a retainer, such as one who is doing your ghost writing on a monthly basis plus other on-call services.

as you do, takes time and effort. We need to invest in any business relationship for it to reap results as intended. Take the foreign employment agency. Firstly, what criteria could you communicate of the desired behaviours you need from any business relationship during the selection process? How much have you invested in their outcomes and how much more could be done? Can they describe the vision and values, and equally can they feel them? Have they been able to adopt those whilst recruiting for you? Can they provide examples in any interview and show genuine excitement about them. Your employees receive an orientation; what part of that could also be applicable to your outsourced recruitment agency? How

often is there contact with the agent; only when you have a need or for ongoing and regular relationship building? They won’t care what you know or need until they know you care. Are you wishing this agent to be purely transactional taking people in and out of your system or transformational, bringing those who would be best to endorse and take both the productivity and the culture of your company forward? Alternative actions could be relevant to the finance representative. How often do you perform measurement of their actions? Are you looking for, or hearing trends in your customer’s feedback? How involved are you in the process that they apply to your customer’s situations.

Inception Where do you have opportunity to turn service providers into service partners? How clear are you of the impact your providers and partners are having on your business reputation? How much personal investment of time and effort are you willing to give to increase the potential of any partnerships?

About Debbie Nicol, aka the enablist, Principal Consultant and Owner of business en motion assists organizations and leaders to move ahead through change. She works with organisational development, change management, corporate cultures and learning strategies. www.businessenmotion.com and is the creator and author of a development concept, www.embersoftheworld.com

FEBRUARY 2012 SME ADVISOR MIDDLE EAST

Management

Achieving goals

Back to basics After a few months into the new year, countless resolutions fade away and are forgotten. How can you demonstrate resolve and tick off those goals on your checklist? Sahar Moussly, Executive Director, Trans Gulf Management Consultancy, gives an insight into pinning down and successfully implementing tasks. Sahar Haffar

o what is this resolution we all talk about at the end or beginning of the year? Simply put, it is our desire to change one or more things in our lives. This pledge is a goal that will draw the road map for our lives and without it we will get lost in a maze of events and daily tasks.

But what helps constitute a goal? There are three questions that are closely related to setting your goals – the what, the why and the how. And once you answer these three questions and identify the what why and how, then you are in business of getting results. When you say for instance my goal is to lose weight or my company goal is to make more money I would say this is not a goal; this is a desire that will never give you the results you wish to see. Therefore a goal has to be more specific, measurable and time bound which requires specific effort to be achieved. It is not enough to just say that you wish to make your business more money – how much revenue, realistically, do you want to generate? Don’t forget that clarity is always power. What is the deadline for achieving your goal; by defining a deadline you can track your progress and measure your success. When the actual statement you put down on paper is very generalised and ambiguous it‘s no surprise that you don’t achieve your goals. Having your goal clear, measurable, realistic and bound to a deadline will aid in completing the task. The next step is to ask why? Why do you need this goal? What will keep you on track and to work towards this and what are the motivational factors for this goal?

Here you need to identify three motivating reasons that will assist you on the road to overcome obstacles and challenges. You need three such reasons to absolutely and positively ascertain why these goals have to be achieved. And more importantly you must prioritise those whys. Most people fail to achieve their goals because they too much time creating their goals and they neglect to firstly concentrate on the why. But in actuality, you need to identify the sustainable factor that’s going to allow you to overcome adversity, challenges, and setbacks. What’s going to inspire you for excellence and push you to do what is necessary? This, in essence, really comes down to the initial motivator that planted the idea or ignited the spark. After stating your goal, and answering the question why, you need to identify the action steps that are going to bring you closer towards your goals and elicit your desired outcomes. Next, you have to list five how’s to achieving your goal. Figure out five specific actions and target dates to achieve the required results. There is a very apt quote, from Gary Ryan Blair, which states: “A goal is created three times. First, as a mental picture of something you want to be, have, or do. Second, when written down, to add clarity and dimension. And thirdly, when you take action towards its achievement.” Everything counts Every activity you engage in is doing one of two things: it’s either taking you towards, or away, from your goals. Every action, every thought, or behaviour, no matter how big

SME ADVISOR MIDDLE EAST FEBRUARY 2012

or small it is, or how inconsequential it may seem, produces a bottom line outcome or result. That result is going to be goal focused, leading you in the direction you want to go, or it’s going to be taking you away from your goals. There are two words you want to embrace – everything counts! It’s the golden rule of goal setting, execution and excellence and it’s the golden rule of getting things done quickly and easily.

About Sahar Haffar Moussly is a Dubai based UKcertified Life Coach and NLP (Neuro-linguistic programming) practitioner. Today she runs two businesses. Alongside her life coaching practice, Life in Harmony, Sahar is also Executive Director of Trans Gulf Management Consultancy (TGMC), a firm specialising in conference interpretation and translations service, which was established in 1997. TGMC was listed as a finalist in the SME Advisor Stars of Business Awards, 2010, in the category of Professional Services. With over 25 years experience in the corporate world, Sahar holds a BA in English Language and Translation gained from Damascus University, and an MA in International Diplomacy gained at the University of Washington. She went on to become a qualified interpreter and translator, gaining a diploma in simultaneous translation and interpretation from the UK and became a member of the Chartered Institute of Linguists. In 2010 Sahar published a research and guidebook in Arabic entitled Welcome to Tomorrow, which introduces the topic of life coaching and self development to Arab audiences. The book was launched in Damascus in January 2010. For more information about Life in Harmony visit www.lifeinharmony.me

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BUSINESS GURU HEDI LARBI

Spring of hope

What does the New Year hold for the Arab World? More democracy, political instability, economic slowdown but also a lot of hope, says Hedi Larbi, Director, Middle East Department, World Bank, when he spoke to Aparna Shivpuri Arya.

n 2011 the Arab world witnessed a tsunami change. Arab People overcame their fear, overthrew a few of the prevalent regimes, and took upon themselves to drive the political change they have been longing for since the Ottoman Empire. Let us look back at the last 12 months and try to preview what could 2012 hold for our region.

Politics It is too early to draw some lessons as the political transformation is still unfolding both within and across countries. Political transition has just started in few countries (Tunisia, Egypt

and to a less extent Libya). At the same time, revolution is still ongoing in other countries (Yemen, Syria) while other countries are trying to preempt the storm of political change, through various tactics, including financial hands out or marginal political reforms. Objective analysis of the prevalent economic and social situation in these countries, and extensive discussions with constituencies and popular base of the political parties can help shed some light. For the majority of the people, the future of any political ideology will depend on how much those who are elected will deliver on both the political and economic demands of the people.

SME ADVISOR MIDDLE EAST FEBRUARY 2012

Economic 2011 was a tough economic year for revolutionary and evolutionary countries. Growth was flat or negative in Tunisia, Egypt, Yemen, Libya and Syria. It was sluggish in Morocco and Jordan. Unemployment, the central reason of the Arab Spring, soared especially in Tunisia and Egypt. Tourism income took a plunge with little sign of recovery (-35% in Egypt, -45% in Tunisia and even worse in Syria). Foreign Direct investment (FDI) has more than halved. Domestic investors were willing to engage but were restrained by political uncertainty, social unrest and volatile security. Trade, though resilient in the first half of the year, declined thereafter. External accounts deteriorated. Foreign reserves declined, though for policy purpose, they still seem to be at reasonable levels, but not for a long time. And most of all, available fiscal space at the beginning of the revolution was depleted, and fiscal deficits start soaring again (around 5% in Tunisia and Morocco, 8 to 10% in Egypt, Jordan, Yemen, etc.). The prospects in 2012 remain very challenging, if not worse than 2011. In addition to the huge pile of inherited political and economic problems, and those developed in 2011, the region will not be able to avoid the severe impact of the persistent global crisis, especially in Europe. Indeed, even under the best of assumptions, Europe is likely to see a shallow recession, which will take many years to resolve and growth to recover. This will definitely affect the economies of the region for few years to come, especially North Africa countries, through the usual channels of trade, investments, tourism and remittances. In the absence of external financial support (which doesnâ&#x20AC;&#x2122;t seem to be forthcoming in spite of the repeated promises of the G8), the combination of the euro crisis and the persistent social unrest and risk factors perceived by the private sector, will further compound an already challenging economic situation of countries in the middle of difficult political transition. Therefore, economic recovery in most countries, especially Tunisia, Egypt, Morocco and Jordan will be delayed. Once again, exports, tourism income, remittances, and investment could be hard hit. The fiscal space will further shrink in a context

BUSINESS GURU HEDI LARBI

Objective analysis of the prevalent economic and social situation in these countries, and extensive discussions with constituencies and popular base of the political parties can help shed some light. For the majority of the people, the future of any political ideology will depend on how much those who are elected will deliver on both the political and economic demands of the people.

Hedi Larbi

of rising borrowing costs. This will seriously limit the capacity of the countries to deploy appropriate fiscal measures to stimulate growth and preempt economic recession at this very sensitive juncture. “I am afraid, the unbearable high levels of unemployment is posed to further aggravate. On another front, it seems to be clear that there is an issue of credible leadership with enough policy experience to assure private sector and who is able to stand up to popular demands and mobilise public and private sector capabilities to immediately start the

the beginning. If so, we should expect future elections to bring political Islam back to its real weight. After all, there should be a learning period during which, each country will develop its own culture, model and practice of democracy. It is too early to judge the ongoing political transformation process, or to predict its final outcome. However, the observations made above and what has been achieved so far lead to think that the journey will be very difficult but it seems to have well begun. Indeed, some positive signs are worth noting. Post-revolution countries are well engaged in their democratic transition. New and solid political awareness is developing and has been

We can debate the impact of the 2011 Arab Spring forever and under or overestimate the depth of its political transformation, but what happened in 2011 will have profound consequences for the future of the region, and beyond. implementation a well designed development program. This is the real threat I see, not only to the political Islam but, above all, to the Arab Spring and its noble objectives,” says Hedi. What lies ahead Two brief conclusions can be inferred from the above. Democracy will likely be an important moderating factor over time. But Arab people will also discover that political Islam is not necessarily a viable alternative that can address their economic and political woes. Therefore, these first free elections in the region are not the end of the transformation process, but only

reflected in a first time free and fair elections in Tunisia, Egypt and Morocco. There is the foundation of numerous political parties. Tunisia, where all this started, is offering a home-made blue print for managing a democratic transition process, which could inspire other Arab countries. Ultimately, Egypt will complete this first stage of transition and could offer another model. Libya, due to the lack of political and state institutions, will go through ups and downs, but will find its way with or without the help of its neighbour. Morocco offers a reasonable example of evolutionary reform

which could inspire other monarchies of the region. If these countries eventually emerge as stable democracies, they will exert a tremendous influence on the internal politics of the region, by demonstrating successful alternative models to the autocracies and theocracies that have previously been the only choices on offer. We can debate the impact of the 2011 Arab Spring forever and under or overestimate the depth of its political transformation, but what happened in 2011 will have profound consequences for the future of the region, and beyond. The Middle East and North Africa will never be the same. The forces that have been unleashed are likely to continue driving regional politics for decades to come. The ongoing changes will also fundamentally alter the geopolitical map of the Middle East.

About Mr. Larbi became Country Director of the Middle East Department, World Bank Group, on December 1st, 2007, covering Iran, Iraq, Jordan, Lebanon and Syria. Mr. Larbi, a Tunisian national, joined the Bank in 1993 as a Transport and Urban Economist in the infrastructure division of the West Central Africa Department. He has since held various positions in Africa region as a lead specialist, then as Sector Manager in the Sustainable Development department of the Middle East and North Africa Region. Mr. Larbi received his Baccalaureat in Mathematics from Bizerte College in Tunisia; a Master’s Degree in Civil Engineering and Management from Ecole des Mines de Paris, France; and an Executive MBA from Harvard Business School, USA. This article is courtesy of our group publication, Private Sector Qatar. For more information please visit www.privatesectorqatar.com

FEBRUARY 2012 SME ADVISOR MIDDLE EAST

Human resources Talent shortage

Needle in a haystack With economic indicators pointing to the possibility of another downturn in certain regions and global unemployment rates at a high, the last thing we would expect to read about is a shortage in skilled talent. Yet, there have been several recent murmurs of dissent in corporate corridors, says Philip Lefebvre, Managing Partner, Whitewater Executive Search.

t begs the question, if unemployment rates are high yet companies are faced with acute talent shortages, what are companies seeking and what human resource strategy should be implemented to attract and retain talented human capital?

During the economic slowdown, it is certainly not uncommon to have organisations slash their workforce as a way of streamlining operations and containing costs. However, unless these downsizing decisions are in direct relation to a divestiture or a change in the organisation’s direction, it usually indicates that the remaining employee base

SME ADVISOR MIDDLE EAST FEBRUARY 2012

will have to shoulder the work load left behind. Unfortunately for companies, it is not everyone who is willing or capable of taking on added responsibilities; and, unfortunately for the workforce, it is those that are able to do so that are sought after. In today’s competitive landscape, the most attractive behavioural traits an employee can demonstrate to his employer are a willingness to work hard and the motivation to take on more responsibility. In addition, companies now expect their employees to be much better-rounded, with inherent competencies such as cultural sensitivity, results-oriented, and critical thinking. Then, consider the aging baby boomer population and the subsequent diminishing workforce across global economies and compound this with the complexity around hiring “the right cultural fit”, and it’s really no wonder that companies perceive that the talent pool is scarce. The recruitment process has changed dramatically over the past 15 years and one element that has had a tremendous impact on the process has been the advent of competency modelling. In essence, competency modelling is a tool created to identify and formalise the 8-12 core competencies required to be successful in a role. These competencies are in turn attributed to behaviours that a candidate must demonstrate in order to fulfill the competency model. Although this powerful recruiting instrument does have the potential to mitigate the risk of wrongful hires, one could argue that it may also be screening out potential talent. Therefore, companies should consider in conjunction with competency modelling, a more universal approach for identifying, attracting and retaining talent. Employers need to acknowledge that while implementing strict recruitment guidelines, they may be creating the talent shortage themselves. Companies should be adopting a more sustainable approach to recruiting talent by looking beyond the traditional methods and starting to consider candidates that may not meet all requirements, but that demonstrate a propensity to do so in the future. There are several creative ways that today’s employers can expand their pool of potential talent, while at the same time, remain

Human resources Talent shortage

Employers need to acknowledge that while implementing strict recruitment guidelines, they may be creating the talent shortage themselves. Companies should be adopting a more sustainable approach to recruiting talent by looking beyond the traditional methods and starting to consider candidates who may not meet all requirements, but who demonstrate a propensity to do so in the future.

Philip Lefebvre

committed to their hiring guidelines. The most obvious is to expand the geographic nature of the search. Studies show that over 70% of professionals would consider relocating for an interesting career opportunity. Sure, there are functional nuances that would require specific regional experience such as sales, however, through global standardisation practices, there are many other roles such as finance and human resources that remain relatively constant regardless as to where they are based. Another method that companies can use to expand their potential talent pool is by

culture and business – the company’s employee. Unfortunately, companies have fallen victim to the concepts of streamlining and efficiency; and, couple this with the redundancies that take place during an economic downturn and as a result, companies no longer have the “feeder roles” that are typically in place to groom employees for more senior positions. So, companies must then resort back to external recruitment where in the past, they were able to tap into a handful of high-potential internal candidates. Retaining talent within a company is just as important as recruiting that same talent. There are a wide variety of retention tactics that companies use today ranging from compensation to formal learning and

Beyond simply broadening their target pool of potential candidates, employers should also develop their current employee base. Investing greater resources in the search and development of potential talent will lead to employees maintaining high levels of engagement over the long term.

searching in comparable industry sectors. The majority of companies will argue that specific industry sector experience is a requirement for a role, however unless a company is seeking someone with a highly technical background, individuals with similar functional experience can readily shift from one industry to another without facing a daunting learning curve. In fact, it can often be an advantage for companies to move away from a traditional industry-specific approach, and this will often lead to new ideas and competitive advantages. Ironically, the best source of talent comes from the pool of individuals that are already intimately knowledgeable of the organisation’s

and efficiently while respecting the fact that the candidate still has a commitment towards his current employer. Although simple in nature, these guidelines will ensure that the successful candidate starts work with the impression that his new employer has integrity. Today’s workforce is no longer what it was 30 years ago, largely due to the aging population, and as a result, companies are proclaiming that there is a lack of talent in the market. Beyond simply broadening their target pool of potential candidates, employers should also develop their current employee base. Investing greater resources in the search and development of potential talent will lead to employees maintaining high levels of engagement over the long term. Perhaps, companies may actually realise that there is in fact more talent available out there.

About

development programmes. Furthermore, if their recruitment practices and on-boarding processes are not adequate, companies may be losing potential talent before they even sign an employment contract. If the objective of an organisation is to attract and retain an employee, much of the effort practiced prior to them agreeing to join can be just as valuable as other retention techniques. First impressions are critical and therefore the company’s representative (an internal recruiter or an external firm), must demonstrate professionalism, an understanding of the opportunity offered, and credibility. Interviews with all stakeholders should be managed quickly

Philip combines more than 15 years of executive search experience between Korn/ Ferry International, and Heidrick & Struggles. He subsequently moved to Dubai in 2008 to participate in the growth of a regionally-based executive search firm. Whitewater Executive Search is a Dubai-based executive and midmanagement search firm with the primary objective of providing reliable recruitment services to clients across the Middle East and Africa. Since his arrival to the region, Philip has had the opportunity to work with a wide variety of clients. He has closed searches in sectors, such as industrial manufacturing, oil and gas, real estate, hospitality and pharmaceuticals. He has also worked across several key geographies including UAE, Saudi Arabia, Qatar, Egypt, Iraq, Morocco, Algeria and Tunisia. Philip is a native Canadian but spent the first eight years of his life in Saudi Arabia. He holds a Bachelor of Finance degree from Concordia University in Montreal, Canada, and is fluent in English and French.

FEBRUARY 2012 SME ADVISOR MIDDLE EAST

Opportunities

Office remodelling

by a simple remote control.

What kind of systems are in the market for SMEs who want to create an open office space but who want to maintain high-quality security?

Time for a makeover? Itâ&#x20AC;&#x2122;s a new year and with it brings fresh starts, including office makeovers. We spoke to Shahriar Khodjasteha, Group Marketing Director, Al Aqili Furnishings, about office space interior trends and the opportunities available for SMEs to remodel.

f an SME has a small office space what is the advice Officeland would offer in order to best utilise this space?

For a small office space, it is always recommended that the client go with an open workspace concept, meaning minimal usage of panels and solid partitions. We suggest that the staff workspace be used as a bench system without any partitions or minimal partitions, if required. This concept will help staff to always have eye contact with one another, communicate well, and give each other a feeling of being in a team and thus generating an environment of teamwork. Furthermore this concept will make the office space look bigger and brighter. Also, it is very important to choose light and natural colours,

both for walls and for the furniture. If enclosed offices are required, we suggest glass partitions be used to maintain privacy. We have a unique and smart solution for meetingroom glass partitions called Switch/Smart glass; this system enables you to have both a transparent and translucent glass effect, which can be operated

SME ADVISOR MIDDLE EAST FEBRUARY 2012

The furniture manufacturers around the world have evolved and have developed their production techniques for smart and secured offices. Steel storage systems with a central locking system can be installed for additional security. Also, lockable steel cabinets and mobile pedestals can be utilised for a similar purpose, with the option of installing keypad locked mobile shelving systems to prevent unauthorised usage. This steel furniture range is also fire rated and can safeguard monetary and sensitive documents for security.

How do you find workplace trends in the MENA region compared with other regions â&#x20AC;&#x201C; are businesses moving away from traditional office and cubicle formats to more open and engaging spaces? Workplace trends and conditions in this part of the world have certainly evolved during the past few years. Due to space constraint, high rentals and market trends, the majority of todayâ&#x20AC;&#x2122;s business workplaces are adopting the open workspace concept, which enables smart usage of worktops and yet

We suggest that the staff workspace be used as a bench system without any partitions or minimal partitions if required. This concept will help staff to always have eye contact with one another, communicate well, and give each other a feeling of being in a team and thus generating an environment of teamwork.

Opportunities

Office remodelling

There are chairs which are produced by recycled polyester content made from recycled polyester bottles and shoes. The use of bio based foam and recycled polyester materials has eco benefits such as reducing dependence on petroleum, reduction of waste, and of air, water and soil contamination.

provides a modern and breathable working environment. Having said that, some businesses still opt for panel workstations or cubicles, taking into consideration their nature of business and nature of work environment. A service centre or a call centre cannot opt for an open plan workstation as the majority of their staff will be on the phone and it may cause inconvenience and a lot of disturbance.

What new innovative products has Officeland launched into the market to cater for office interior design? We at Officeland have introduced and launched smart furniture solutions, which can cater to any type and size of business. We have re-introduced both the panel system and open workstation plans to meet the ever-growing demands of the current market. The open plan workstations we provide are suitable for any business looking for a modern and smart furniture solution. Each workplace is allocated with all the basic requirements such as worktop, storage underneath the desk which can be fixed or mobile and a monitor arm, which can be mounted on each worktop to give extra desktop space and 360-degree adjustment. In addition, there is the option of adjustable CPU holders mounted underneath the desk to give more leg space and a cable management system mounted on each desktop for easy access, fully equipped with power and data cables. Furthermore each worktop can be partitioned by a minimal clip on colourful acrylic or wooden panel which can act as a divider between worktops. This concept of open workspace makes the working environments more lively, modern, and most importantly, very economical. The new panel system which we have re-introduced comes with thinner panels compared with older models ones. A

combination of fabric and glass panels can be used to maintain privacy and yet provide a modern working environment. Also, the height of the panels is reduced by 25% compared to the old ones. This system can be integrated with a cable management system, which will provide power and data facility for each worktop where all wires are concealed within the partitions. Furthermore, we also specialise in providing executive office furniture solutions from executive office to boardroom tables and lounge sofas. The material used in producing this type of furniture varies from saddle leather, extra leather, and soft leather, to veneer and glass and so can cater for a range of budgets.

There is more and more discussion around building green and sustainability. Is this something that is becoming more of a request from businesses designing and fitting buildings and office spaces and does it have the potential to be financially more viable? Going green is the biggest worldwide trend and there are indeed a growing number of enquiries from SMEs, where we are requested to quote for green or sustainable furniture. For example, we can provide chairs which are produced by recycled polyester content made from recycled polyester bottles and shoes. The use of bio based foam and recycled polyester materials has eco benefits such as reducing dependence on petroleum, reduction of waste, and of air, water and soil contamination. In many instances going green with office equipment doesnâ&#x20AC;&#x2122;t have to mean paying more and in the end the sustainability of using such materials means that long-term costs are reduced â&#x20AC;&#x201C; the life span of such furniture is potentially endless.

Shahriar Khodjasteha

From an SME perspective, are the Officeland products for office interior design affordable? What gives SMEs better value over other alternative companies offering similar services and products? We at Officeland carry a wide range of products from around the world to suit any type of budget. Our range of products are competitive, affordable and good value for money. We work with manufacturers from around the world who buy and stock furniture raw material from suppliers in bulk quantities, which in turn helps to maintain competitive prices. In turn we pass these discounts to customers to ensure that businesses of all sizes can avail of our products.

With the economic slowdown in recent years, has the demand for office fitting consultations, product installations and so on dwindled, or, have these offerings seen a rise in demand over the past number of years? As with most industries, the furniture industry around the world certainly got hit during global downturn and over the past few years average yearly order levels have lessened. As some construction projects were halted so too were orders for fitting out office buildings. However, the past quarter has seen many projects re-started and so orders will begin to rise again. We are optimistic that the year 2012 will bring the furniture industry back to normal, with both new offices requiring fittings and older offices wanting a remodel.

FEBRUARY 2012 SME ADVISOR MIDDLE EAST

Opportunities eBay for ideas

Knowledge economy Selling and buying knowledge online – is it feasible or fantasy? Gary Dushnitsky, Academic Director, Deloitte Institute of Innovation and Entrepreneurship, London Business School and Thomas Kleuter, provide insights from the online knowledge marketplaces.

he primary online market for those looking to buy or sell physical assets is eBay; but when it comes to the sale of ideas and inventions, the keys to the knowledge economy, no similar huge online marketplace has emerged.

However, with the market for knowledge and technology now surpassing USD 100 billion in annual transactions, the time seems ripe for such an online exchange. The hitch is that before an eBay for ideas can develop, some of the unique challenges facing the market for ideas will have to be overcome. Those challenges include: 1 Search cost The costs involved in trying to find an idea that’s truly valuable to your business needs 2 Adverse selection The existence of information asymmetries; for example, someone whose credibility is questionable could, in essence, hoodwink a buyer by claiming to possess an idea but misrepresent what’s true, and; 3 Expropriation Once a new idea or invention is revealed, someone could expropriate the nugget of value and imitate it, leaving the originator at a loss for more than words. In the past, one generally culled a new idea from sources that were known and trustworthy: investment opportunities and fundraising would often occur around one’s alumni or other tightly knit social network. Casting one’s net for ideas into the limitless pool that is the Internet, however, will never be as easy as the old way of doing business unless such challenges and risks are mitigated. A greater understanding of the operations and risks involved in online intellectual marketplaces are needed to ensure that happens. To that end, Gary Dushnitsky, Associate Professor of Strategy and Entrepreneurship at London

Gary Dushnitsky Business School, and Thomas Klueter, PhD candidate at the Wharton School of the University of Pennsylvania, studied 30 of the most prominent online marketplaces in which owners of knowledge (inventors of a patent or an entrepreneur with an innovative business idea) interact with knowledge seekers (potential licensees or prospective investors). The authors explored the mechanisms currently governing the exchanges that take place between anonymous actors in these online knowledge marketplaces. They indicate that the challenges facing online idea markets differ qualitatively from those that eBay has learnt to navigate. For instance, greater level of detail regarding the properties of a physical product is likely to facilitate exchanges on eBay and similar marketplaces. A similar level of transparency for an invention or a business idea, however, could lead to its imitation. The conundrum is how much to disclose: a detailed listing might be expropriated, yet a

SME ADVISOR MIDDLE EAST FEBRUARY 2012

brief listing could be overlooked or passed due to concerns regarding its underlying value. To address these unique challenges, e-marketplaces for ideas can set rules for the amount of information that must be disclosed. Alternatively, they can make upfront fees a prerequisite for inventors so as to make it less profitable for those trying to sell something of little or no value. The authors determined that the adoption of disclosure and upfront fee is meant to boost trust among participants by mitigating the level of risk associated with participation in an online knowledge marketplace. To the extent that these mechanisms effectively substitute for trusted social ties, they have the possibility of leading to a rapid expansion of the online market for ideas. Dushnitsky and Klueter conclude, however, that the Internet is not a magic potion and they warn that participants need to be aware of substantial risks when partaking in online knowledge markets. Knowledge owners, for example, whether they are individual entrepreneurs or innovative firms, should take extra care when deciding which inventions to list in online markets and which not to make public to a large crowd of often anonymous knowledge seekers. In the end, they note that the use of online knowledge markets is still in its infancy, with adoption rates higher in some industries compared to others. It will take a long time to determine whether an eBay for ideas is feasible or a mere fantasy, and which industries are most likely to benefit from its emergence.

About Gary Dushnitsky (PhD, 2004, NYU) is an Associate Professor of Strategy & Entrepreneurship, and an Academic Director of the Deloitte Institute of Innovation and Entrepreneurship at the London Business School. Prior to joining LBS, Gary served as a faculty member at The Wharton School (University of Pennsylvania), where he was a Goergen Fellow with Wharton Entrepreneurial Programs. Gary’s research focuses on the economics of entrepreneurship and innovation. He developed a stream of research on the topic of corporate venture capital where he explores the conditions under which established corporations succeed in partnering with innovative startups, and the implication to corporate innovativeness.

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Women in business Careers

The changing tide The landscape for women in business has changed a lot over the past ten years with many more women achieving senior management status. Women have also been successful in other walks of life including politics, sport and government. However, there is still work to do, says Fiona Elsa Dent, Ashridge Business School.

n our work at Ashridge we hear much about women’s experience in organisational life which is mostly positive, but often there are stories of inequality in their career and challenge in their day-to-day work. This together with the current media interest in women’s role in business motivated us to undertake a piece of research to explore the current landscape for women in business. Our findings are based on the responses to a survey completed by over 1400 women as well as interviews with 20 women in senior positions in business. Findings We found that women still have a way to go in the business world. While we have made significant strides over the past few decades there is still much work to be done. We found that women still lack self belief and confidence and together with family commitments, are the three most frequently mentioned barriers to career success. The diagram below indicates the full range of barriers women identified: (the size of print indicates frequency of mention).

While many organisations have put HR policies, procedures and practises in place to support women’s career development, this alone is not enough. Organisational attitude and culture have a far greater role

to play in advancing women’s careers than any HR policy. On the positive side, however, it appears that women who are determined, self confident, passionate and resilient, with a well honed awareness of their own strengths, weaknesses, values and career ambitions, are as likely as anyone to achieve success in business. The diagram below summarises our respondents’ answers to the question “What has helped you to achieve your career goals?” It also appears that other people can play both a supportive and obstructive role to women’s

SME ADVISOR MIDDLE EAST FEBRUARY 2012

career success. For instance, many women talked about finding a good coach, having a supportive boss and having an organisational sponsor as particularly helpful. On the negative side, women talked about poor bosses, colleagues who see them as a threat and, of course the old boy’s network. Worryingly there are also many tales of bullying and macho behaviour. Success in the early phase of a women’s business life appears to provide a springboard for longer term career success. Three areas of importance were identified: Being given early opportunities to take part in key projects or to develop new skills through stretch assignments. Getting help from others who offer guidance, help and support. Aiming high, having clear ambitions and career plans to follow. We asked our respondents various questions in relation to organisational leadership. We found that women were more inclined towards the more relational emotional styles of leadership, where deriving meaning from what they do, working collaboratively, showing appreciation, involving others in discussion and decision making are key features of their approach to leading and working with others. Many suggested to us that this does not imply that they are a “soft touch” but rather it suggests they recognise the importance of followership,

Women in business Careers

It also appears that other people can play both a supportive and obstructive role to women’s career success. For instance, many women talked about finding a good coach, having a supportive boss and having an organisational sponsor as particularly helpful.

Fiona Elsa Dent

engagement, empathy and adaptability, as key skills for their success and effectiveness as a leader. One of our interviewees said that her style was all about “building friendships and alliances, it’s a deeper relationship with people who I respect and where usually we have shared values and interests”. Many of our respondents also explained

be done to create organisational cultures and environments where women and men are treated in an equitable manner with regard to the day-today working environment, career opportunities and promotion. We heard, and continue to hear, many similar stories from women throughout the globe about the importance of having a good boss, who will support you and push you forward during the early years of a career. As one of our UAE respondents highlighted “one of my early managers offered me support, saying, “Just go in and give it a try, you will always

While women in this part of the world face many of the same challenges as those in other countries, they also have a real opportunity to learn from others’ experiences and create successful futures for women in business.

that, while they prefer to work in a participative and appreciative way, it is always in relation to ensuring good quality performance and outputs. There are, however, still many hurdles to be crossed in the area of organisational attitude to women leaders. Close to 49% of our respondents still felt that men and women were judged differently with regard to their leadership style and behaviour. 48% indicated that they felt it was harder for women to succeed in their organisation than male colleagues, though 56% felt they were judged equally to men when it came to promotion. The international perspective It seems that the situation globally for women in business has many similar challenges, no matter which continent you are focussing on. While women have made significant strides forward in the workforce there is still a lot more work to

have a fall back route if you just feel that this is not working for you.” She went on to tell us that this was good advice as it has helped her to forge her career and reach the senior position she now holds. Other similarities include having a good supportive network of family and friends as well as being confident enough to take stretching and challenging opportunities when they arise. My experience of working with many different groups of managers in the Middle East tells me that, while women in this part of the world face many of the same challenges as those in other countries, they also have a real opportunity to learn from others experiences and create successful futures for women in business. In recent years I have encountered impressive, capable women who are often the first generation who have been enabled to take advantage of developmental and career opportunities.

Practical tips for success Organisations and individuals alike should work together to: Ensure women have the opportunity to identify their career goals, ambitions and aspirations. Create an environment that supports and develops women (and of course the same is true for men). Be aware of the issues and organisational blockages to women’s progression and find ways to resolve these problems. No matter what the gender ensuring that all your people are at the top of their game will contribute to a higher performing organisation. References:“Understanding Women’s Careers” – A Research Summary by Fiona Elsa Dent, Viki Holton & Jan Rabbetts (www.ashridge.org.uk) – December 2011 “Women in Business: Navigating Career Success” – by Viki Holton & Fiona Elsa Dent. Palgrave. April 2012.

About Fiona is a Director of Executive Education at Ashridge. As a member of the Ashridge Management Committee she is responsible for one of the two education faculty groups which manage programmes, client relationships and deliver management development solutions across Ashridge. Fiona has written seven books including: The Leader’s Guide to Influence: How to use soft skills to get hard results (Pearson 2010); Working Relationships Pocketbook (2009)Influencing: Skills and Techniques for Business Success (2006). She continues to write and research predominantly in the areas of influencing as a key leadership skill and relationship management. Established in 1959, Ashridge, near London, is a well known business school and is consistently highly ranked in the Financial Times rankings for customised executive education. Activities include open and customised executive education, MBA, MSc and Doctoral qualifications, organisation consulting, executive coaching and mentoring, applied research and virtual learning.

FEBRUARY 2012 SME ADVISOR MIDDLE EAST

Entrepreneurship Skills

I think, therefore I am “Entrepreneurs are born and not bred” goes the saying. There is some truth in this statement, but after many years of working alongside business creators and sharing their individual journeys, Ian White, Director, Qatar Skills Academy, tells us that this is not the whole story and shares with us his expertise on defining entrepreneurs.

ne thing that I have noticed is that enterprising people come in all shapes and sizes and from no one particular place. They can burst suddenly onto the scene from relative obscurity, dominating the media and the stock traders’ tittle-tattle. Or, they amass vast empires by working away diligently, carefully avoiding the limelight, more concerned with substance than style; value rather than their vanity. This raises the question of whether someone becomes an entrepreneur through choice and deliberate action, or are they simply fulfilling a destiny for which they have been fully equipped? Whatever the answer to that question might be the fact remains that our current global society likes entrepreneurs, wants more of them and is prepared to reward them. From post-communist Russia to reforming China; from Silicon Valley in California USA to Silicon Fen in Cambridge UK; and now in Qatar, entrepreneurs are encouraged and celebrated. The issue is therefore, what should be done to create favourable conditions and by whom, to achieve the right outcome.

There is some logic in the argument that the people who are destined to become successful entrepreneurs need no assistance. The fact that these people have conquered, where others have failed proves their capability. However, this quasi- Darwinian attitude of survival of the fittest might be too harsh for economies which are struggling for growth. Ignoring the talents of all but a few may be a waste of potential. One aspect of entrepreneurship which has become accepted over the last decade is that entrepreneurs are not restricted to the commercial private sector. In what can be seen as a reaction against global business trends,

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“localisation” is creating thousands of social enterprises developed and run by individuals with social capital rather than a shareholder profit, as the driving motive. Entrepreneurs are exceptionally valuable in NGOs and employed “intrepreneurs” are recognised as key players working for a knowledge-based organisation. Is it therefore more pertinent to consider who an entrepreneur is, rather than what they do? In fact, until their occupation (or, more typically, multiple occupations) has been determined, referring to these individuals as enterprising people, gives one the freedom to focus on generic competences which define the person.

One aspect of entrepreneurship which has become accepted over the last decade is that entrepreneurs are not restricted to the commercial private sector. In what can be seen as a reaction against global business trends, “localisation” is creating thousands of social enterprises developed and run by individuals with social capital, rather than shareholder profit, as the driving motive.

Entrepreneurship Skills

It also helps us to avoid stereotypical portrayals or believe that all entrepreneurs are clones or aspirants of famous biographers. It is this examination of the “who” rather than the “what” which is the subject of Qatar Skills Academy’s “Understanding Enterprise”, a development programme running from the Bedaya Centre with the support of Qatar Development Bank and Silatech. An enterprising person demonstrates many different qualities, some even conflicting, which go on to determine a career path. One of the most important and guiding capabilities, is to possess a sufficient level of self-awareness to be able to control the use of one’s abilities and develop them according to the situation. This self-awareness is the protection between confidence and determination or arrogance and delusion. I refer to risk. Attitude to risk is often identified as one of the defining characteristics of an enterprising person. Entrepreneurs are frequently depicted as high-risk individuals. In reality, as Richard Branson said, they often never risk more than they can afford. Therefore, risk-aware is a more accurate definition. Developing a strong sense of personal identity is critical to an enterprising person’s make-up. Identity can be formed through any combination of factors, such as family influence, national culture, religion, childhood upbringing and experience of education. If any of these inputs are overtly negative to the concept of enterprising behaviour, they are likely to leave a lasting impression. On the other hand, charismatic role models and a value-driven lifestyle is likely to prove central to the inner compass of an individual and define their outlook to life situations. The ability to use and control one’s talents (and disguise or hide one’s limitations) is a skill acquired through observation and practice. Exposure to real situations where control of one’s self is at issue, either as an observer or an active participant is essential in the learning process of an enterprising person. Enjoyment and satisfaction in the conscious ability of this control of one’s self-knowledge is the renewable power that fuels the engine driving the enterprising person. It is partly this love of

Developing a strong sense of personal identity is critical to an enterprising person’s make-up. Identity can be formed through any combination of factors, such as family influence, national culture, religion, childhood upbringing and experience of education.

Ian White

fluid situations and constantly developing scenarios which characterises the enterprising person as a lifelong learner, although they would not usually think of applying this term to themselves as it is such a natural habit. An enterprising person’s perspective on a situation, either existing or potential, is hard-wired to their self image. Decision making is framed by this central locus of control, which is why progress is swift, nonfollowers are dropped and clarity of the end result is maintained. Articulation and description of the end result is a particular quality of most enterprising people. The dream which they possess becomes less of a figment of imagination, less of a conceptual idea and more of a reality each time it is verbalised, modelled, prototyped and presented. This ability to form a highly detailed vision of the intended outcome is another of the central qualities of the enterprising person. They will have delved deep into their subconscious to root the vision in a matrix of principles and values, as well as opportunities and rewards. The

strength of the vision is what will ultimately determine the quality of the outcome. In addition to the cerebral activity, enterprising people adore action. Achieving the first stage of action is often through the use of a closely knit group of trusted followers or supporters. The ability to discuss and present ideas is another essential skill of the enterprising person. Communication in all forms, in all situations and in all contexts is usually something which an enterprising person relishes and handles personally. In cases where this task is delegated (because the self-awareness check recognises this is a deficiency) the attention to detail and micro management of the messenger is often so over-powering that the flavour is lost. So even when convention may dictate that a person should not be a public face, the credibility they possess as the custodian of the idea should overrule everything. We must therefore approach the successful breeding of entrepreneurs as a combination of nature and nurture. After all, if everything was a certainty, life would be very boring.

About Ian White is a British entrepreneur and specialist in vocational education. His first business after university in the UK was in television production, a venture which earned him the ACE UK Entrepreneur of the Year award. During the mid ‘90s Ian developed businesses in the vocational education and SME development sector whilst also working for the UK Government and the European Commission. He was created a Fellow of the Royal Society of Arts in 2002 for his work on enterprise education. Ian arrived in Doha in 2010 and created Qatar Skills Academy to meet the need for organisations to improve quality and productivity through investment in people.

FEBRUARY 2012 SME ADVISOR MIDDLE EAST

Innovation

Lessons from China

Look to the East As China positions itself at the forefront of the economic world stage, MENA public and private entities should draw inspiration from the innovative and efficient manner in which this climb was achieved, says Winter Nie, Professor of Operations and Service Management, IMD.

he rapid increase in China’s competitiveness in the high-speed rail, ship-building and even aviation and automotive industries caught some Western observers by surprise. Less than a decade ago, for example, China’s rail system was woefully inadequate. Today it boasts more kilometres of high-speed rail lines than Europe, as well as the world’s fastest trains (350 km/hour) in regular commercial service. However, despite the considerable increase in its R&D output in some sectors, Chinese industry still lacks basic research and radical innovation. Nonetheless, there is still a strong desire among Chinese people to experience the benefits of innovative technologies created in the West; the “me-too” phenomenon is a strong driver in the pursuit of new product development. The Chinese are innovating in a uniquely Chinese manner and consequently rising as formidable challengers to traditional multinational companies, as seen in the transport industry. Up against the tough competition and volatile conditions in emerging economies, any company doing business in China might do well to take a leaf or two from the local champions’ book. In my research, I have found four interesting features regarding the manner in which the

Chinese innovate: innovation on-site, innovation to reduce costs, tailored innovation and rapid product innovation. Innovation on-site, not in the lab Due to the customised nature of its equipment used among many other applications to personalise buttons, cut patterns in leather, mark computer keyboards or engrave glass, Han’s Laser could not test its products in-house extensively. In the early days, the company would send a technician on-site for several months and file a machine performance report every day. When problems arose, the field technician worked closely with the R&D team at headquarters to find solutions to rectify them immediately. These improvements were systematically incorporated in the next new version. Between 1996 and 1999, the company made over 3,000 improvements to its machines. Testing on-site made the client’s factory a research lab, reduced the time to market, and helped with the company’s cash flows. When the new model was finally released, it incorporated the client’s precise needs. No more, no less. Innovation with a focus on costs When China International Marine Containers (CIMC) imported a production line from Germany

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in the early 1990s, it had a capacity of about 10,000 containers a year. Over the next five years, CIMC technicians fundamentally reengineered the manufacturing process four times, applying technology borrowed from the auto industry. By 1996, production had risen twenty-fold and CIMC was the global leader by volume, manufacturing almost one in every five new containers worldwide. The following year, it was able to set up its own R&D centre, where it managed to find a way to replace the expensive aluminium used in refrigerated containers with much cheaper treated steel. It licensed steel-treatment technology from German manufacturers and improved performance to the point where treated steel could match the performance of aluminium. As a result, it increased its equipment capacity and capability to become more cost efficient. Similarly, the fixed costs for the production of solar panels are considerable. However, one Chinese company I interviewed focused on process innovation to lower the capital expenditure. While solar panel equipment suppliers normally provide “turn-key” solutions, which can be extremely costly, this company identified the key components and subassemblies that it could not make in-house and bought them from Western suppliers.

Innovation

Lessons from China

Without anything like the research budgets of their more established competitors, they must operate with lean and ultra-dynamic strategies; likewise, without a brand identity to protect, they have nothing to fear by allowing the customer to test the product. They win some, they lose some. And in the ever-changing market environment in China, this nimble method is very effective and, most importantly, cost efficient.

It then streamlined the non-critical parts by either developing its own equipment and technology, or, working with local suppliers. As a result, its capital expenditure was reduced by two-thirds. This is perhaps one of the most common innovations Chinese companies use to reduce costs. Product features and functions tailored to local requirements Chinese consumers use their mobile phones for many purposes, including playing music in public places and watching television. With this in mind, mobile phone producers in China cater to these needs by offering features such as handsets that contain six to eight speakers for playing audio or talking in noisy spaces. Not only are phones available at half the price of those offered by traditional market players, but they also provide features to address the unique needs of local consumers. Another example of local customisation comes from the Chinese home appliance manufacturer Haier. When a rural customer in China’s Sichuan province complained that their Haier washing machine kept breaking down, service technicians found the plumbing clogged with mud. It turned out that many rural Chinese customers were using the Haier machines (meant to wash clothing) to clean sweet potatoes and peanuts. Instead of warning customers about what should not be washed in the company’s machines, Haier engineers modified the washer design to accommodate their needs. From then on, Haier washing machines sold in Sichuan were labelled, “Mainly for washing clothes, sweet potatoes and peanuts.”

Haier’s strategy of meeting localised market demand at home and abroad with innovative models resulted in about 96 product categories and 15,100 specifications. Haier executives maintained that these kinds of feature innovations were inexpensive to produce, but highly valued by customers. The most important quality characterising Chinese innovation is the sheer speed with which companies introduce new products to the market. For example, before the 2008 Olympics in Beijing, Chinese mobile phone companies rushed to produce new models reminiscent of the country’s iconic “Bird’s Nest” stadium and “Water Cube” National Aquatics Center. In 2007 alone, Chinese mobile phone company, Tianyu, produced over 100 new models. Innovating for the future So why do Chinese companies take these unconventional approaches to innovation? Quite simply, it was out of necessity. Without anything like the research budgets of their more established competitors, they must operate with lean and ultra-dynamic strategies; likewise, without a brand identity to protect, they have nothing to fear by allowing the customer to test the product. They win some, they lose some. And in the ever-changing market environment in China, this nimble method is very effective and, most importantly, cost efficient. However, there is a downside to this purely entrepreneurial approach. As Chinese companies mature, they will want to begin thinking about developing globally recognised and successful brands. In order to innovate like Apple, Google and other highly creative

Winter Nie Western companies, China must proactively invest more in R&D, which consequently requires the strict protection of intellectual property rights. In the meantime, MENA and multinational competitors would be wise to take note of domestic Chinese companies’ innovation techniques for mass markets because, as many have already discovered, Chinese companies are learning fast. As recently as 2001, China lagged behind in the world of supercomputing. Of the sites that qualified for the prestigious Top 500 list, a ranking of the world’s fastest supercomputers, not a single one was Chinese. However, fast forward a mere decade and 61 of those top 500 are located within China, two of which are in the top five!

About Winter Nie is Professor of Operations and Service Management at IMD. Her areas of research interest are service management and supply chain management. She has provided training programmes for and consulted with companies in pharmaceutical, telecommunications, automotive, food and beverage, machinery, and electronics industries as well as financial and professional services. Winter has taught programmes in the US, Britain, France, Brazil, Malaysia, Singapore, Taiwan, Japan, Korea, and China and has also won several teaching and research awards. Professor Nie holds a PhD in Operations Management from the University of Utah (USA).

FEBRUARY 2012 SME ADVISOR MIDDLE EAST

Business SET UP

FROM IDEA TO REALITY

the building blocks

Setting up and managing a business successfully is not as easy as it might seem. A few key steps need to be considered before take-off. In the first of a multi-part series, The Bedaya Center, a regional entrepreneurship hub, tells us how to develop an idea, which forms the foundation for a successful business.

Basic elements of a business idea A good business idea is market driven and it comes from the needs and demands of the end-users who could be individual consumers (B2C) or businesses (B2B). Secondly, the market should be of

sufficient size to satisfy the vision of the new startup. There may be a niche in the market but is there a business in the niche? Entrepreneurs also need to know if they can develop the business idea alone or if they need to bring a team together.

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Importance of personality traits The perennial question is whether entrepreneurs are born or nurtured. Increasingly there is a viewpoint that many people want to be entrepreneurs and that the talent can be nurtured. Some recent

Business SET UP

FROM IDEA TO REALITY

examples include the entrepreneurship postgraduate certificate at Carnegie Mellon University at Education City in Qatar and the Technology Innovation and Entrepreneurship Programme run by Qatar Science & Technology Park. These are very practical programmes that take the participant through the complete business planning stage to securing the equity funding and launching the business. Lots of buzzwords are mentioned on the personality traits of successful entrepreneurs. A sample includes hard working, risk-taker, able to multi-task, customer-focused, attention to detail, team builder, able to plan, takes the long term view and so on. Most entrepreneurs only have some of the characteristics often mentioned but fill in the gaps with the team they put together. Passion vs. profitability Passion is a great motivator provided it is founded on logic. If the idea is feasible the entrepreneurs should follow their passion; it will carry them through the many tough times. However, if the market is telling

The perennial question is whether entrepreneurs are born or nurtured. Increasingly there is a viewpoint that many people want to be entrepreneurs and that the talent can be nurtured.

in-house by the manufacturer and lacks objectivity. The product is untested by consumers; only the company can assert its benefits. The Website is the primary place to order, but the product description is unclear and the site isn’t fully functional. However, entrepreneurs should not be afraid of failure. If you study the biographies of many of the today’s most successful business heroes, you will find a personal story of failure and recovery. It is not important that you failed but what matters is how you pick yourself up and learn from the experience The product is interesting but lacks a precise market. The product’s key differentiators and advantages are not easily articulated. The product defines a new category,

Do’s and don’ts Do’s • Put the customer first at all times • Listen to your customers • Conduct quality market research • Test the market before you fully launch • Involve potential customers at the early design phase • Provide the maximum value consistent with the sales price.

Passion is a great motivator provided it is founded on logic. If the idea is feasible the entrepreneurs should follow their passion; it will carry them through the many tough times. However, if the market is telling you that the idea is bad and no profit can be made it may be time to listen and change tack.

you that the idea is bad and no profit can be made it may be time to listen and change direction. Risk assessment The market is the great unforgiving arbitrator. The business idea must satisfy the needs of a customer. Many products failed to satisfy the market. Some reasons for failures include: No market research on the product or the market has been done. Most of the budget was used to create the product; little is left for launching, marketing, and selling it.

so consumers or customers will need considerable education before it can be sold. The sales force doesn’t believe in the product and isn’t committed to selling it. Because the target audience is unclear, the marketing campaign is unfocused. Distribution takes longer than expected and lags behind the launch. Sales channels are not educated about the product and thus slow to put it on shelves. The product lacks formal independent testing to support claims. The marketing campaign is developed

Don’t • Believe your own marketing PR • Underestimate your customers • Assume “because I can make a better mouse trap, the market will agree” • Build your dream team with friends; you need people with specific talents to complement the team.

About The Bedaya Center is a partnership between Silatech and Qatar Development Bank. With the tag line “for entrepreneurship and career development” it has a prime focus to encourage young Arabs set up their own businesses and look to the many opportunities presented by the World Cup 2022.

FEBRUARY 2012 SME ADVISOR MIDDLE EAST

Industry watch

Hiring practices

Ambition rated trait #1 An employer poll conducted by Bayt.com, a regional job site, has revealed that employers rate ambition above all else, with career track record coming last across the finish line.

he latest figures suggest that 28.8% of employers in the Middle East look for hunger, drive and ambition as the most important factors when making a hiring decision. Salary considerations come in second (22.7%). Meanwhile, career track record is the least important. In fact, most employers (67.2%) will consider hiring a candidate who has relevant skills but no direct experience in the company’s field; similarly, the majority will hire a subordinate who is older than them (59.6%) or who is more skilled, capable, and qualified than themselves (74.6%). The employers surveyed say that the majority of jobseekers are letting themselves down by presenting unpolished resumes and not doing research prior to job interviews. The results of the survey demonstrate that spelling and grammar does count, as 21.3% of employer respondents claim that poor language on a CV is the biggest

mistake that jobseekers can make. The second biggest mistake, according to 19.7% employers, is submitting a CV that is not customised for the role. Clear exaggerations (16.4%) and poor format (14.8%) also figure highly on the list, along with lack of focus and key omissions. When it comes to interviews, 20% of employers consider poor preparation to be the biggest turn-off in potential employees; 17.5% feel that dishonesty is the worst trait an interviewee can have, followed by the candidate arriving late or asking inappropriate questions or making inappropriate comments, with 13.8% of employers citing each as the biggest turn-off. Insufficient enthusiasm for the role and poor interpersonal skills come joint fourth on the list of biggest turn-offs (12.5%), followed by inappropriate attire (7.5%) and being overly aggressive (2.5%). “The results of our survey suggest that candidates will be more successful if they take

SME ADVISOR MIDDLE EAST FEBRUARY 2012

the time to carefully review their resumes before submitting them to any potential employer. It is also worthwhile taking the time to research a company and the position applied for before an interview, as being fully prepared is clearly a key requirement across the region,” said Amer Zureikat, VP Sales at Bayt.com. “Bayt.com provides jobseekers and employers with the tools needed to get ahead in the world of employment, by publishing frequent surveys with information relevant to the region. Moreover the Bayt.com online CV builder has fully resolved the issue of poor CV format and sloppy CV style by ensuring that a style and format of CV that is attractive, state-of-the-art and uniform can be accessed very easily by the entire region’s jobseekers.” Most prospective employees are likely to be interviewed by one or two people (27.3% and 28.8%, respectively), though it is not uncommon for them to meet with more existing employees in their potential new company; 22.7% of respondents say that their interviewees will meet three people, while 18.2% claim that candidates will be interviewed by more than four. However, no matter how many people the candidate meets, the vast majority of employers (70%) say that post-interview follow-ups are essential. Almost 61% of employers consider the hiring practices in their company to be sophisticated, with 58.1% claiming that their organisation provides training on interview skills for those involved in the hiring process. “Bayt.com provides a wealth of information including tests, articles and guides for both employers and jobseekers online and we highly advise our community of professionals to read-up on the latest interviewing trends for their target industry and truly understand the requirements of the role and the nature of the industry so they can have a meaningful dialogue with employers during the interview process” added Zureikat. Data for the Bayt.com Hiring Practices in the MENA Employer Poll was collected online from August 9th to December 22nd 2011, with 637 respondents covering more than 12 countries in the MENA region.

Industry watch

Business intelligence

Finding the balance According to information technology research and advisory company Gartner, less than a third of Business Intelligence (BI) initiatives will align analytic metrics completely with enterprise business drivers by 2014.

espite alignment being the foremost BI challenge, research has discovered that cloud offerings will account for just 3% of BI revenue by 2013, despite every major BI platform vendor presenting one. In addition, Gartner analysts said that by 2013, BI initiatives will be based on an organisational model that strikes a balance between centralised and decentralised delivery. “The immediate future of the BI landscape is one of a disconnect between marketing hype about pressing challenges on the one hand and reality on the other,” said Andreas Bitterer, Research Vice President at Gartner. “The need for analytics does not match most organisations’’ skill requirements; vendor hype for cloud-based BI is not reflected in revenue and customer adoption, and there is a struggle between centralised and decentralised organisational models of BI delivery.” Gartner’s three central predictions for the BI market are: 1 That by 2013, every major BI platform vendor will present a cloud offering, but these will account for just 3% of total BI revenue. The BI market is not exempt from cloud-related hype. Current adoption of “cloud BI” by user organisations lags far behind the expectations of vendors, which are busy creating and marketing new off-premises solutions. Organisations that have already invested in on-premises BI infrastructure are hesitating to identify a segment of their BI initiative for which data can be moved into the cloud and reports and dashboards received from a cloud provider. However, companies that have subscribed to a specific cloud application, such as customer relationship management, payroll or

help desk service, are more inclined to use BI functionality delivered by their cloud provider, as they see it essentially as an extension of the cloud application. 2 By 2013, BI initiatives will be based on an organisational model that strikes a balance between centralised and decentralised delivery. Many BI programs have departmental roots with analytical resources embedded in the business.This model has worked well in serving departmental needs, but it lacks consistency in terms of data definitions and measures across an entire organisation. Often, the IT organisation has solved this inconsistency problem by establishing a central team to deliver BI. However, such an overly centralized model lacks the agility and familiarity of the decentralised model. A hybrid delivery model enables greater consistency and economies of scale, more autonomy and faster turnaround times. 3 By 2014, fewer than 30% of BI initiatives will align analytic metrics completely with enterprise business drivers. The foremost BI challenge is to align initiatives with corporate strategy and objectives, but fewer than one third of organisations have a documented analytics, BI or performance management strategy. Organisations often develop and deploy hindsight-oriented reports or query applications focusing on metrics that users may find interesting, but they don’t represent the operational or strategic controls used to facilitate business performance. With the increasing consumerisation of BI (for example, mobile BI), the growing volume and variety of available data, and the soaring

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speed of business, it can be challenging to establish appropriate “guard rails” for analytic implementations to ensure that the right data is presented to the right people and processes at the right time. These user data growth factors also challenge the cohesion of metrics frameworks among lines of business, resulting in business functions that operate in conflict with one another; for example, one group may focus on profitability, while another concentrates on market share. “Throughout 2012 and beyond, BI will remain subject to nontechnical challenges,” said Bitterer. “IT leaders should concentrate not only on the technological aspects of BI, but also on the severe lack of analytical skills. Second, they should use a think global, act local approach in their BI programs to provide the right level of autonomy and agility to avoid the bottlenecks that overly centralised BI teams create, while simultaneously establishing enough consistency and standards for enterprise wide BI adoption.” he said. More information is available in the report Predicts 2012: Business Intelligence Still Subject to Nontechnical Challenges available on Gartner’s website at www.gartner.com/resId=1873915. The Gartner Predicts Special Report overview includes links to more than 70 Predicts reports, categorised by topic, industry and market.

About Gartner is an information technology research and advisory company, delivering technology-related insight for its clients. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, Gartner is a partner to 60,000 clients in 11,000 distinct organisations.

Eduserve FZ LLC PO Box 211027 | Dubai | UAE t: +971 55 4646 685 e: info@eduserve.com w: www.eduserve.com

Eduserve is pleased to announce the return of Roger Harrop, the award winning motivational business growth expert and opening speaker at the SME Summit & Awards 2011 in Dubai.

CEO MasterClass: The Key to Profitable Growth in Good Times or Bad

Regain your Focus - Hone your Strategy - Propel your Organization Forward Who Is It For? CEOs, Business Audiences, Boards, Trustees, Directors, Senior Managers.

What Are The Benefits? This program, which is centred on two main themes of “Staying in the Helicopter” and “Keeping it Simple”, will show you how you can: ● Explore every aspect of your business and yet maintain a laser beam focus on the ‘big picture’ ● Identify and concentrate on the really important business issues; ● Achieve significant growth in sales and profits; ● Take away practical action learning that will successfully impact your business and your own personal life when implemented;

About Roger Roger Harrop BSc(Hons), CEng, FIMechE, FCIM, FInstIB, FPSA, PSAE ● Former Vice-President and Fellow of The Institution of Mechanical Engineers ● Accredited SME business advisor and Fellow of The Institute for Independent Business ● Speaker of the Year with The Academy for Chief Executives ● Winner of the Professional Speaking Award of Excellence Over 10,000 CEOs, business leaders and others have achieved transformational change through his thought provoking and entertaining talks laced with real-life stories, anecdotes and humour.

Doha – Qatar 26 Feb 2012 Dubai – UAE 28 Feb 2012 SME Special Special Offer Offer SME Mention promotional promotional Mention code SME2011 for code SME2011 for 10% discount off your 10% discount off your next MasterClass MasterClass with with next Roger Harrop Roger Harrop “Roger’s huge experience, combined with a direct, engaging style makes him a great business speaker and coach. He made a huge impact on our management team and helped us address several serious business issues." Andrew Shaw, CEO, Dubai Cable Company

Also available for in-company training throughout the region For booking information, contact Lyn on +971 55 4646 685 or email lyn@eduserve.com

Industry watch Revenues

Take it global

Companies operating in international markets are reporting better results than those concentrating on their domestic market, according to findings from the Regus Global Survey.

olled from over 12,000 companies around the world, these findings indicate that foreign expansion is good for business and should be considered urgently by domesticallyfocused companies who do not want to be left behind in fiercely competitive markets. Evidence from the survey emphasises the need for a shake-up in attitudes at domestically-focused firms. There is a gulf between the outlook of companies already operating internationally, where 80% intend to expand still further and those solely operating in home markets, where only 42% intend to expand abroad over the next few years. Property and People are key perceived obstacles to international expansion:34% of firms say the biggest obstacle to overseas expansion is the challenges of settingup a physical presence in a foreign country. 63% of companies also say that property commitments have to be very short-term when setting up a foreign operation, as they do not know how quickly or slowly they will grow. Opinion is split over where senior management for overseas operations should

Mark Dixon hail from, with 53% favouring a mother country manager, and 47% opting for a local manager A similar division occurs over management language skills, with 48% of respondents demanding local language fluency. Regus CEO, Mark Dixon notes, “This report provides hard evidence that, in the current economic climate, firms who have diversified overseas are faring better than those who have stayed with their home markets. This applies to companies both large and small and should act as a wake-up call for those still solely focused on domestic markets to find effective and costefficient ways of moving cross-border in order to enhance their earnings and spread their risk. While property and people are perceived as potentially major challenges, the wide availability of flexible workspace options around the globe make the property element more perception than reality, the people issues do require very considerable judgement.” he said. “Decisions about whether to install a local manager or install one from the mother country are critical and, we believe, rest heavily

SME ADVISOR MIDDLE EAST FEBRUARY 2012

on whether sales are mainly being handled through a few major distributors, or whether direct contact with a wide range of customers is required.” “Interestingly, the only exception amongst the major economies of the world is China. Here, state-sponsored infrastructure investment and development is providing disproportionate domestic market opportunity for Chinese firms. Nevertheless, such infrastructure development will ultimately turn out to be finite, and we suspect that into the next decade, Chinese firms will once again be looking for export-led growth,” said Dixon.

About Regus is a provider of flexible workplaces, with products and services ranging from fully equipped offices to professional meeting rooms, business lounges and video communication studios. Customers such as Google, GlaxoSmithKline, and Nokia join hundreds of thousands of small and medium businesses that outsource their office and workplace needs to Regus.

Industry watch

Technology adoption

Critical embrace A staggering 100% of UAE business leaders have identified technology as critical to their company growth strategy, according to a survey conducted at a recent SAP Value Academy in Dubai.

he results form part of a dramatic trend in the UAE to embrace IT as key component in the country’s ambitious transformation agenda, with a recent Business Monitor International study indicating that the country’s IT spend is projected to grow at a 2011 2015 compound annual growth rate of 8%. Further technological optimism stems from the UAE’s eye-catching mobile penetration rate of 200% (one of the highest in the world) as well as its ambition to achieve 100% broadband penetration in 2012 and a determination to adopt cutting-edge services, such as virtualisation and the cloud.

Sameer Areff

Further technological optimism stems from the UAE’s eye-catching mobile penetration rate of 200% (one of the highest in the world) as well as its ambition to achieve 100% broadband penetration in 2012 and a determination to adopt cutting-edge services such as virtualisation and the cloud. “As business leaders, we must adopt the latest technologies such as mobility and business analytics and successfully implement solutions that enable end-toend visibility, sustainable business practice and swift decision-making,” said S. Krishnasarma, Director – ITS, ETA ASCON STAR Group. The SAP Value Academy provides a forum for business leaders to learn

the strategic approaches that enable companies to become best-run businesses. Companies consistently delivering on their commitments have used a value lifecycle to plan, build, attain, sustain, and improve their performance. The lifecycle requires discovering value potential, translating strategy to execution, realising the value and finally optimising performance and investments.

SME ADVISOR MIDDLE EAST FEBRUARY 2012

Other key observations at the event included the fact that while 70% of attendees do not use any formal value management practices, an overwhelming 100% viewed them as essential to supporting business and IT strategy alignment. There was also a consensus that the key innovation technologies on the agenda were related to mobility, customer relationship management and business intelligence. “The Value Management methodology is intended to keep companies focused on choosing the right projects, clearly defining ownership and accountability for business results, and delivering on these agreed upon commitments,” said Sameer Areff Managing Principal, Value Engineering, SAP MENA. “By hosting the SAP Value Academy in the UAE we are demonstrating the importance we place on assisting companies in the country to embark on technology projects with a strong focus on their business objectives, emphasising the importance on the overall business outcome and realising the expected results” “The awareness and willingness of top business leaders in this country to embrace cutting-edge IT is tremendously exciting. Game-changing innovations like in-memory computing, mobility and cloud provide real-time data that will transform government, businesses and improve people’s lives. This will help make citizens safer and grow the local knowledge-based economy,” he said.

About As a provider of enterprise application software, SAP helps companies of all sizes and industries – from back office to boardroom, warehouse to storefront, desktop to mobile device, SAP helps people and organisations.

SME about town SME Connects

Building alliances SME Connects hosted its second business networking event in January at the Mercedes-Benz showroom, Sheikh Zayed Road. The event attracted more than 100 attendees from the top management of leading SMEs in the UAE.

James Bernard

Mohammed Tayem, Managing Director of Entourage marketing and events, and Founder and CEO of SME Connects, introduced the business networking club. “SME Connects is a business networking club bringing small and medium enterprises under one roof with the aim of exchanging ideas and exploring mutually beneficial opportunities,” he said. SME Connects members are already exploring opportunities for strategic partnerships and building alliances, taking informed decisions based on industry trends and trade analyses. Members can look forward to increasing their competitive edge by taking advantage of the latest product update and service offers.

SME Connects is an ideal platform for resolving regulatory matters through face-to-face meetings with government officials. DMCC-JLT Director James Bernard spoke on the occasion, “JLT Free Zone is one of the fastest

platform for SME owners, companies offering support services to SMEs, and those looking to set up an SME in Dubai. It is a support group that is dedicated to bolstering SME opportunities across all sectors of the economy and an exchange forum bringing government authorities, manufacturing, trade, and s ervice industry professionals under one roof.

SME Connects is a networking platform for SME owners, companies offering support services to SMEs, and those looking to set up in Dubai. growing free zone in the region. SME Connects is an ideal networking platform for our member companies to interact with each other and for others to find out what we have to offer.” SME Connects is an exclusive club for decision makers and a focused networking

SME ADVISOR MIDDLE EAST FEBRUARY 2012

The official Website of the club www.smeconnects.com is active and membership is free and open to all businesses. Membership can also be accessed on SME CONNECTS Linkedin and Facebook page.

TRADE TALK

SURVEY

WE NEED JUST FIVE MINUTES OF YOUR TIME!

TRADE and EXPORT MIDDLE EAST aims to keep the regional trading community up to speed with the latest information. Over the following months we will delve into industry trends, pinpoint key data and analyse the most pertinent issues to ensure that our readers are armed with real insights from within the industry. And we need your help for this! We will conduct regular reader surveys and then share key trends and analysis back with you. This is your chance to be heard and to share your experiences to help the industry. Of course, your responses will be held in the strictest conďŹ dence.

Have your say! Visit www.tradeandexportme.com to take the survey.

OCTOBER 2011

Technology for Business Cloud printing

Wiring your business to the cloud As cloud computing makes its way onto the agenda in boardrooms around the globe, practical examples of its implementation in a business-to-business environment have, until relatively recently, been a bit thin, says Dan Smith, Head of Integrated Marketing for the Middle East and Africa region of Xeroxâ&#x20AC;&#x2122;s Developing Markets Operations.

onsumers seem happy enough for the likes of Facebook and Google to hold virtually all of their personal data, but historically there has been resistance from businesses to share data in this way. While the recent emergence of webbased file hosting and collaboration services such as Drop box, SharePoint and Huddle indicate signs of change, much resistance remains, particularly in more traditional industries such as printing. Printers that are used to working with large, often commercially-sensitive, information are hesitant to transfer files over the web. They also believe that the sheer volume of information with which they work is not suited to cloud computing and they are not alone. Many business people remain cautious about allowing one of their most valuable assets, data, to be shared and stored in the cloud. Yet the benefits of cloud computing to the printing industry are compelling, especially at a time when margins are small and overhead is swelling. The cloud offers access to new market places. It also enables the ability to test new applications and offer new products, services and ideas to niche customers without worrying about capital outlay. Cloud users can focus on

SME ADVISOR MIDDLE EAST FEBRUARY 2012

Technology for Business Cloud printing

what brings value to their business, rather than on what IT to purchase. The cloud also provides the ability to pay only for what is used, known as On-Demand, providing scalability and flexibility. So what’s the catch? And if the cloud is really such a panacea then why hasn’t every business embraced it fully? The answer to both questions centres on trust. With regards to printing, businesses want to see practical examples of how the cloud works, and how their peers are using it before committing to change. What’s surprising is that they don’t have to look very far because the cloud is already a feature of the print industry in all but name. Web-to-print, essentially a cloud-based service, is already widely used by many print and print management firms for certain types of work. What these webto-print users have recognised is the web’s potential for opening up new markets and revenue streams by making it easier for the customer to buy – a key benefit offered by the cloud in general. One company that spotted the potential of the cloud for the print industry early on was Cape Town-based Personera. The firm, which offers a personalised products platform for Facebook users, was originally looking for a way to reduce the high bandwidth cost of sending large PDF files

What these Web-to-print users have recognised is the Web’s potential for opening up new markets and revenue streams by making it easier for the customer to buy – a key benefit offered by the cloud in general.

Dan Smith

in the form of text, photos and coordinates, and the final products are assembled ready for printing. With this efficient network printing model in place, Personera began exploring its online options. It quickly recognised that there were many new cloud-based marketplaces, such as social networks, that are ripe with user

Cloud is clearly not the right delivery mechanism for all print projects, but innovators within the industry will continue to find ways in which it can be used effectively, without ever needing to compromise security.

(regularly exceeding several gigabytes) to printers around the world. After extensive research into the available technologies, Personera developed an internationally scalable solution for crunching down file sizes to just a few megabytes. The solution works by sending artwork and templates to a print house once. The items are then kept as reusable objects which only need to be processed once. Variable data is then sent to the print house

information. Developers could easily extract this data to offer value-added services, assuming those users chose to opt in. As a result they launched a Facebook wall calendar in 2009. Users click on a Facebook Connect button from the Personera landing page, select a theme, and drag and drop their photos. The system can also insert all friends’ birthdhays automatically, and users can even add their own events and dated

notes. Print runs occur on-demand at the site closest to the user, as in Personera’s original business model. This model is just one way in which printers can tackle bandwidth issues in the cloud by using the available technology to remotely deliver certain elements of data, saving time and resources. Cloud is clearly not the right delivery mechanism for all print projects, but innovators within the industry will continue to find ways in which it can be used effectively, without ever needing to compromise security. This is going to be much more of an organic adoption process than an overnight change, but the rewards will be greatest for those with both the courage and the ingenuity to try new ways of working in the first wave.

About Dan Smith is Head of Integrated Marketing for the Middle East and Africa region of Xerox’s Developing Markets Operations. He was appointed to this position in August 2008 and is based in the UK. He manages all facets of marketing – including channel communications, product marketing support, demand generation programs, electronic and e-marketing initiatives – for the Xerox lines of business in more than 70 countries comprising the Middle East and Africa region. Dan joined Xerox’s UK. operations straight from university in July 1997. His first role with the company was as a systems analyst for color solutions and pre-sales technical support. In August 2000 he joined a team tasked with establishing a channels business model for Xerox U.K. At the start of 2003, he began working with partner development in the UK. and a Xerox sales team for enterprise-size organisations. In October 2004 Dan joined DMO to drive the Xerox Office strategy in the Middle East and Africa and in 2007 he became Head of Marketing for the Xerox DMO Office business, overseeing a drive to maximise channel communication and demand generation in emerging markets. Dan is a law graduate from Hertfordshire University in the UK.

FEBRUARY 2012 SME ADVISOR MIDDLE EAST

Technology for business IP addresses

Making new connections

Every Internet connected device has a unique identifier known as an Internet Protocol (IP) address but the current standard, IPv4, is running out and its replacement, IPv6, is not backwards compatible. This means that IPv6 must be universally adopted or connectivity problems will ensue, says Axel Pawlik, Managing Director, RIPE NCC.

rom desktop computers to SmartPhones and tablets (and even some fridges and microwaves), modern workplaces are full of connected devices that require IP addresses to communicate. The Internet was built on IPv4, but due to its rapid expansion, the four billion addresses that the protocol allows are no longer enough.

The RIPE NCC, the Regional Internet Registry for Europe, the Middle East and parts of central Asia, which is responsible for allocating IP addresses, expects to completely run out of IPv4 addresses in the spring of 2012. IPv6 allows for a lot more addresses (roughly 340 trillion trillion trillion in total) and guarantees the continued expansion of the Internet. Organisations now need to make sure they’re IPV6 ready or risk damaging their business. For example, a company with a Website running on IPv4 may be safe for now, but when users start to come online with IPv6 only devices, the site will be inaccessible to them. This potential loss of custom can of course have a hugely detrimental impact on any business and the economy. SME’s make up over 90% of the total number of businesses in the most region. It is fair to assume that a large proportion of those businesses rely on the Internet and therefore economic stability is fundamentally dependent on successful IPV6 adoption. Gartner recently predicted that by 2015 a quarter of newcomers to the Internet will be using

Axel Pawlik IPv6. It’s not a question of whether or not users will start to appear online with IPv6 only connections, it’s a matter of “when?” and businesses need to be prepared. What SMEs need to do Most SMEs rely on their Internet Service Providers (ISPs) for their Internet connections and should check that they are able to provide IPv6 as a matter of urgency. In Europe’s service region, 47% of ISPs have an allocation of IPv6 and globally 70% plan to adopt IPv6 by the end of 2012. However, if an ISP doesn’t supply IPv6, we advise working with them to lay out an action plan to become IPv6 ready. Whereas anything that is bought off the shelves in stores and malls will have the ability to run IPv6, old office equipment may not be compatible. It is important to carry out an IT audit of the technology used in the workplace. Routers and equipment

SME ADVISOR MIDDLE EAST FEBRUARY 2012

may need upgrading or even replacing and it is important to devise a plan of action before IPv4 is completely depleted. Many hardware vendors will be able to provide advice and are worth working closely with. The main adoption strategy is called dual stacking and involves running IPv4 and IPv6 simultaneously. This method allows everything to be run and checked so that if there are any kinks that need to be worked out with IPv6, the adopter can still be accessed using IPv4 and not suffer any loss of connectivity. Act now It is paramount that SMEs make it a priority to adopt IPv6. Only by ensuring that all devices connected to the Internet are compatible with IPv6 can businesses stay connected and safeguard the sustainable growth of their business and the Internet. A carefully planned and strategically executed implementation of IPv6 will be far less disruptive for an organisation than a lastminute, rushed roll-out. For more information on IPv6, please visit www.ipv6actnow.org/.

About Axel Pawlik is the Managing Director of the RIPE Network Co-ordination Centre (RIPE NCC). He graduated from the University of Dortmund, Germany, with a Masters Degree in Computer Science. He was later employed at the University of Dortmund from 1985 to 1992, where he contributed to the establishment of UNIX networking as a publicly available service in Germany. This institution introduced Internet access services to the business community and general public. Founded in 1992, the RIPE NCC is an independent, not-for-profit membership organisation that supports the infrastructure of the Internet. The most prominent activity of the RIPE NCC is to act as a Regional Internet Registry (RIR) providing global Internet resources and related services to a current membership base of over 7,000 members in around 75 countries.

SME Speak

Strategy in SME Survey

Line of attack In order to assess how strategy is developed in the SME sector, SME Advisor Middle East, in conjunction with Tickbox Surveys Middle East, conducted a survey of its readers.

he general belief is that all firms regardless of size need to actively plan for their future if they are to effectively compete and survive. This is more so the case for SMEs who continuously compete with larger and more established firms as well as lower priced enterprises, as well as new entrants. The anecdotal evidence from the SME sector suggests that the average owner who in almost all cases is also the key manager tends to be â&#x20AC;&#x153;strategically myopicâ&#x20AC;? and lacks the long term vision of where to take the company or knowledge of where it is currently heading. The absence of appropriate strategic planning implies that the typical SME may not be achieving its full potential and more likely placing the company at risk of failure. Despite the importance of strategic planning in SMEs little is known about how it is developed. Therefore, this survey seeks to understand how strategy is developed in SMEs. Once a better understanding of the strategy development process is obtained we can recognise the hindrances and be to mitigate them. The survey found that in two-thirds of the cases the strategy development in the organisation was carried out solely by the owner or general manager. In 19% of the SMEs in the

survey, strategy was developed by the relevant heads of department or senior staff. In a further 10% of the cases, strategy development was a task given to a few selected staff. In none of the cases did SMEs use external consultants or experts to help them develop their strategy or at least moderate internal meetings. It appears that strategy development in SMEs is a concentrated affair in the hands of a few, if not, the owner. The lack of external insight may also be a reason as to why many SMEs cannot see the wood from the trees with everyday issues to develop a top level roadmap for the company. Although the strategy development process may be concentrated with the owner and a few other staff, the general view is that it is important. In fact, 95% of the respondents felt that the strategy development process was important for the organisation. The remaining 5% felt that the strategy development process was totally irrelevant to the organisation. The relevance of the strategy development is further confirmed by the fact that 23% of the respondents feel that it leads to decisions that allow the organisation to meet its objectives and vision. A further 26% of the companies felt that the strategy process builds a shared vision of the organisation. 19% felt that the planning process focused on strategy, as opposed to tactics. Interestingly, the remaining one third of the wider companies were of the view that the

SME ADVISOR MIDDLE EAST FEBRUARY 2012

strategy process was limited in being unable to identify risk correctly, foster creativity, or incorporate feedback from all staff. The success development of strategy within an organisation relies on the ability to include appropriate staff. The survey found that 42% of the respondents felt that the strategy development meetings included the most relevant individuals in the organisations. A further 39% of the respondents felt that the most knowledgeable individuals in the organisation tended to be included in the strategy development meetings. So, it appears from the surveys that, at least in 81% of the cases, the most relevant, who can also be the most knowledgeable individuals in an organisation, are part of strategy meetings. Interestingly, in 19% of the cases the survey found that the most vocal individuals in an organisation were likely to participate in the strategy meetings, as opposed to the most relevant or knowledgeable staff. This implies that about a fifth of SME strategy may be impacted by individuals who tend to be vocal in their organisation. Although the manager, or owner, may dominate the day-to-day running of an SME, in many cases they tend to have either a formal or informal Board of Directors. The survey found that for 65% of the SMEs in the sample the Board of Directors plays an important role in its development and approval. This implies that the Board of Directors tends to question the team, or person, that has developed the strategy so that it is in line with their vision. A further 13% of Board of Directors of SMEs only approves the strategy once it has been developed and do not question or challenge it. Of the remaining 23%, the Board of Directors of SMEs play no part whatsoever in either its development or approval. This shocking result shows that almost a quarter of SMEs receive no support or

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SME Speak

Strategy in SME Survey

without the use of any neutral external party to assist with the process or moderate the meetings. The negative aspect of this is that very often those close to the day-to-day operations of the firm tend not to be able to see the strategic vision of the firm. The operational staff tends to be interested in short term goals and outcomes as opposed to a longer term view of the firm. The survey found that the strategy development process tends to include the most relevant or knowledgeable individuals within the firm. In most cases, the Board of Directors plays an important role in developing and challenging the strategy. On the negative side, there are a large proportion of SMEs who tend

direction from their Board of Directors, as far as strategy is concerned. In most cases, the strategic outcomes for a firm tend to be linked to financial remuneration for the employees concerned. The survey found that 68% of the SMEs in the sample linked the achievement of the strategic goals to financial remuneration. However, the system was not universally applied, in that some SMEs linked strategic outcomes and financial remuneration only for senior or staff while for other firms it was for all staff. Of the SMEs that had a system of linking strategic outcomes to remuneration, 44% of the SMEs applied it to all staff. A further 35% and 21% applied the system of strategic outcomes and remuneration to only senior and key staff respectively. The survey sought to determine which particular aspect of the strategy development

process that they would most like to change in their organisation. The results demonstrated that 45% of the respondents would like to better align the strategy of the organisation with the long term vision. A further 19% feel that the strategy needs to be monitored, and, a performance measurement system needs to be implemented in their organisation. Interestingly, 13% of the SMEs in the sample feel that the strategy in their organisation needs to be based on market realities. The remaining 15% of the respondents would like to see a more efficient and effective strategy discussion process that includes individuals, rather than excluding them. The SME Strategy Development survey highlights the fact that the process in SMEs is led by the owner, or manager,

SME ADVISOR MIDDLE EAST FEBRUARY 2012

to develop their strategy by including largely vocal individuals rather than the most relevant staff. Also, these firms may also have no direction or support from the Board of Directors. This difference in strategy development may greatly reflect their respective performance and of course long term growth or survival.

About Tickbox Surveys Middle East specialises in market research surveys for the consumer, B2B, investor, community and employee segments. It also specialises in helping companies to identify appropriate interventions for improving customer and employee satisfaction as well as loyalty through using surveys and statistical analysis. For more information visit www.tickboxsurveys.com.

A day in the life of...

Mohamed Kashif Joosub

Light House Studio is a modern studio that offers studio and equipment rental, as well as photography and production services. They cater to photography needs for events, fashion shoots, portraits, weddings and products. CEO and Chief Photographer, Mohamed Kashif Joosub, takes us through a typical day in his life.

SNAP SHOT At a time when many are looking to switch industries or try something different, we bring you first person accounts of the lives of entrepreneurs or senior executives, outlining a typical day in their business. Who knows, maybe the perfect idea is waiting for you. Read on and get inspired. My day starts early as I arrive at the studio, greet the team and kick-off the day with a quick staff meeting. Today’s photo shoot is an outdoor commercial shoot for Jaguar at Dubai Festival City Marina.

8:00 am

I get on with the bit of admin work and check my e-mails while enjoying a cup of green tea. I make a couple of phone calls to ensure the agency, make-up artist and model are all on the way to the location.

8:30 am

I help the team load the photography and lighting equipments into the company van.

9:00 am

I arrive at the Marina entrance 9:45 am of Dubai Festival City and I’m greeted by the Ad agency team and the manager of the yacht club who is there to assist us with the day’s work. While my team is unloading our equipment, I sit down with the ad team to finalise the script and the story board for the photo shoot. The model, stylist and make-up artist arrive on the set of the shoot. I brief them on the final agreed concept and story board.

10:00 am

My team and I scout around the area, looking at possible areas for the shoot, taking into consideration the position of the sun, which plays a big role in outdoor shoots. It is also a bit windy and cloudy today, so we have to make sure the equipment is well protected.

10:15 am

We find our first location, the Helipad, which is located next to the yachts and have the Jaguar placed on to it – then we set up our lighting and do some test shots with our cameras.

10:40 am

The model is ready, dressed in typical yacht gear. The lightings are all setup up and so we start shooting the first scene, the model is excellent, which always helps make our job a bit easier.

11:10 am

Completed the first location, the photos look amazing and our clients are very impressed far. The model heads back for a quick wardrobe change and get a touch-up on the make-up and hair and then we make our way to the second location.

12:30 pm

1:15 pm

SME ADVISOR MIDDLE EAST FEBRUARY 2012

Lighting is setup in the next location, the car is placed

between two super yachts. The model joins us on the second location, and we get started on the shooting of the second scene. We are done with the second shoot and take lunch. I use this time to check through e-mails. The clients are very happy with the outcome of the photo shoot so far and we get great feedback from them.

2:00 pm

The model gets her new look for the next session – a very Arabic style make-up – and this time we start to shoot some interior shots of the car.

3:15 pm

We have found a beautiful spot with a full view of the Burj Khalifa, the Marina yachts and beautiful sunset for our final shoot – it’s a perfect back drop for the photos.

4:40 pm

6:00 pm

It’s a wrap! The shoots are complete.

We reach the studio after a long day, upload images from the camera to the server and work on the day’s pending admin work.

7:30 pm

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