SME Advisor Middle East - March 2015 by SME Advisor Middle East

Presenting partner strategic SME partner

ISSUE 109

KEEP ‘EM HAPPY!

CUSTOMER SERVICE TIPS FROM DUBAI EXPORTS

How you’ll benefit The Abu Dhabi Economic Vision 2030

Commander -in-Chief The changing role of the CEO

The right co-ordinates We meet Maryam Al Mheiri, COO, twofour54

Over to you! The art of budgeting

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sme advisor ISSUE 109

EDITORIAL COMMITTEE SME Advisor is delighted to announce that during 2015 we will be working with some of the leading names in the SME space - key figures who have kindly agreed to take part in our new Editorial Committee. This panel will play a vital role in channeling the feature content of our magazine and ensuring that we are more topical than ever - analyzing and discussing the ‘real world’ issues of tangible value to our readership and bringing industry-leading expertise across the publication and its raft of prestigious related events. We are delighted to introduce the following SME personalities:

Avishesha (Avi) Bhojani Avishesha (Avi) Bhojani is the CEO of Bates PanGulf (BPG) Group. At the helm of the BPG Group since 1991, he is responsible for consolidating the Group’s interests across advertising, public advocacy, public relations, design, activation, media asset management and digital verticals, in the Middle East and North Africa region. He is also instrumental in the conceptualisation and execution of a number of strategic retail initiatives in Dubai such as Dubai Shopping Festival and Dubai Summer Surprises. Professor Val Lindsay, MSc (Otago), MBA (Victoria), PhD (Warwick) Dr. Val Lindsay is a Professor in Strategy and International Business, and Dean of the Faculty of Business at the University of Wollongong in Dubai (UOWD). She has a keen interest in teaching and research in the areas of international strategy, exporting, services internationalization, entrepreneurship, small and medium-sized enterprises, networks and clusters, and economic development. Essa Al Zaabi Essa Ali bin Salem Al-Zaabi is the Senior Vice President - Support Services at Dubai Chamber of Commerce & Industry, and the Director of the Dubai Chamber initiative, Tejar Dubai. He is a proven UAE leader and business entrepreneur, with the ability to rapidly mobilize teams to achieve organisational change and integration. A self-motivated team-builder and corporateperformance driver, he has held a number of key positions throughout his career that has reflected his passion and commitment to the development of UAE nationals as business professionals, young entrepreneurs and future leaders. Previously he has worked with the National Human Resource Development and Employment Authority, as the Director of Tanmia – Dubai Office, then became

the Vice President of Human Capital at the Dubai World Trade Centre, and later on the Deputy General Manager of the Emirates Institute for Banking and Financial Studies. His Excellency Abdullah Saeed Al Darmaki His Excellency Abdullah Saeed Al Darmaki is the Chief Executive Officer of the Khalifa Fund for Enterprise Development, a government entity that spearheads the support and development of SMEs in the UAE. His role is integral to the strategic planning and management of the organisation in alignment with the Executive Council’s objectives. With over 17 years of experience in Oil & Gas, Petrochemicals and Manufacturing industries, and a background in Sales & Marketing, he has held a number of leadership positions with governmental and private organisations in the UAE. Mohan Valrani Mohan Valrani came to Dubai in the year 1966 and has been staying in Dubai for last 48 years. Mohan Valrani is the Senior Vice Chairman & Managing Director of Al Shirawi Group of Companies, which is a large conglomerate in the UAE and one of the largest in the Arabian Gulf, with headquarters in Dubai (UAE). Apart, from his business activities, he is also deeply involved in social activities. He is the founder - Chairman of the India Club and on the Board of Trustees of The Indian High School and has been as instrumental in contributing to the success of these institutions. Roberto Mancone Roberto Mancone is the Global Head of Business Products for SMEs and MidCorporate for PFB Germany, PBC Int’l and Postbank. He is Chairman of the Global Credit Product, Deposit and Payments Executive

Committee of the Private and Business Clients Division of Deutsche Bank. He is Board Member of the Advisory Board of Deutsche Auskunftei Service GmbH, Chairman of Business Advisory Council of EFMA, member of ECGI (European Corporate Governance Institute) and Member of the Advisory Board of BAA, the Alumni Association of Bocconi University and SDABocconi. Yogesh Mehta Yogesh Mehta is the Managing Director of Petrochem Middle East. He graduated with a Bachelor of Science in Chemistry from National College Bandra in Mumbai, India. Over time he opened his own chemical trading business, which enjoyed fair success. He then relocated to Dubai in 1990 and within five years, he managed to establish a business by opening a state-of-the-art storage terminal for bulk and drum chemicals. Driven by passion and a need to succeed, he established Petrochem Middle East in 1995 with friend and business partner David Lubbock. Petrochem Middle East has since grown from strength-to-strength to become one of the largest independent petrochemical distributors in the Middle East. A self-made billionaire, his greatest attributes are mentoring and leading by example. Sultan Sobhi Batterjee Sultan Sobhi Batterjee is the owner and CEO of IHCC, the leading Hospital Construction Company in the Middle East and Africa, and Founder and President of Lifestyle Developers Ltd. He is a member of several social and economic associations including the Young Arab Leaders Society in Dubai, the young entrepreneurs committee Jeddah Chamber of Commerce and he is also a Board Member of the (EO) Entrepreneurs’ Organisation in the USA. He holds a number of academic honours including a Bachelor’s Degree in International Finance and Accounting from the Regent’s Business School in London and a Masters in Entrepreneurship from the Entrepreneurs’ Organisation/MIT and Strategic Diploma from Oxford among others.

MANAGEMENT Dominic De Sousa Chairman Nadeem Hood Group CEO Georgina O’Hara Group COO EDITORIAL Group Director of Editorial Paul Godfrey paul.godfrey@cpimediagroup.com +971 4 440 9105 Editor Rushika Bhatia rushika.bhatia@cpimediagroup.com +971 4 440 9115 Editorial Assistant Adelle Louise Geronimo adelle.geronimo@cpimediagroup.com +971 4 440 9160 ADVERTISING Publishing Director Rajashree Rammohan raj.ram@cpimediagroup.com +971 4 440 9131 Commercial Director - Business Division Chris Stevenson chris.stevenson@cpimediagroup.com +971 4 440 9138 Director of Sales Ankit Shukla ankit.shukla@cpimediagroup.com +971 4 440 9111 Media Sales Executive Emma Hughes emma.hughes@ cpimediagroup.com +971 4 440 9120 Event Sponsorship Manager Gill Fairclough gill.fairclough@ cpimediagroup.com +971 4 440 9120

FROM THE EDITOR At the heart of the Abu Dhabi Economic Vision 2030 Having recently hosted an event dedicated to communicating the values and objectives of the Abu Dhabi Economic Vision 2030, it’s more apparent than ever that the SME sector is seen as the key fulcrum of economic change and diversification. Currently, while the UAE scores fairly highly in the world league of diversified economies - and among the great GCC oil producers, is by far the most successful in terms of diversifying away from a fossil fuel-based economy - there is still some solid work to be done. The 2030 Vision represents the final stage in leveraging that critical change. What is significant is the enormous and key role that SMEs will play in terms of changing the infrastructure and delivering the transformational shift that will lead to an era of smarter working practices, an integrated transport system, a world-class manufacturing base and a fully-committed technology sector. All of these will be enabled by SMEs, whether as contractors, partners in public/private initiatives, as IT powerhouses or as facilitators of the ‘Internet of Things’. This isn’t to say that the world of the SME is set to change beyond recognition: but it’s as well to remember that the Economic Vision 2030 will be delivered in a very different world from the one we know now. This may be a world where a lower oil price might already have become a norm and the reduced potential for trade with other MENA oil producers may well have been replaced by the presence of a moderate, embargo-free Iran and stabilized northern African states also set on diversifying their economies. The predominant factor here - especially in terms of working in Public/Private partnership arrangements - is whether SMEs can (in large numbers) fulfil the raft of criteria that this new broader remit entails. If we look at the experiences of Germany, the UK and Qatar, for example, we see that there is often a shortfall between the expectations of a global business and the ability of a local SME to deliver what the larger partner wants. Take the acid test with your own SME: would your business - right here, right now - be able to partner Al Futtaim, Aldar or Baker & McKenzie to deliver a major infrastructure project? Would you have the internal Governance and Risk Management protocols, the cashflow ratios and credit worthiness that they would look for in a partnering business? That’s going to be the world of the future and those who prepare now have some very good things to look forward to. Enjoy this issue of SME Advisor!

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STRATEGIC SME PARTNER

KNOWLEDGE PARTNER

Contents

“What attracts investment is a combination of a sound business plan, a credible management team, a vision to create something different and the commitment to deliver against that vision.”

p48

“For any SME looking to expand the business, the first investment should be made internally by bringing on a knowledgeable management accountant.”

ON THE FRONT COVER

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07 Editorial Committee SME personalities bringing industry-leading expertise across the publication and its raft of prestigious events. 09 Editor’s Note Paul Godfrey assesses how the Abu Dhabi Economic Vision 2030 is at the core of SME development. 12 Data and decision making Our infographic section showcasing key trends shaping the SME marketplace. Ground level 14 Getting ahead – how you can benefit today from the Abu Dhabi Economic Vision 2030. We explore the economic and commercial impacts of this powerful agenda. 18 Don’t do, delegate! A practical action plan that will help you boost productivity and empower your team. 22 Will you face the competition? Or, bite the dust? We offer top advice on how your business can survive in competitive markets and stay ahead of the curve. 26 The power of CRM. Key strategies that will help you build customer connections and multiply sales.

sme advisor ISSUE 109

Business Banking 30 Growth in a cooler climate. SME Advisor presents a strategic guide for businesses looking to find buoyancy and success in a challenging market with lower oil prices.

44 Accelerating into the future – Flat6Labs and its unique proposition. The Abu Dhabi-based accelerator is a one-stop-shop solution giving entrepreneurs training, funding, mentorship and more!

Digitally Disruptive 34 Definitely Digital? Digitization is a crucial catalyst in helping an SME operate efficiently, enhance visibility and achieve business profitability. We speak to experts at Etisalat…

48 In the hot seat: Ray Eglington, Managing Director – International, Four Communications. The successful entrepreneur shares valuable insights on doing business in the capital and life as an SME…

Movers & Shakers 38 Creative force: Maryam Al Mheiri. SME Advisor met with the dynamic personality driving the region’s vibrant, collaborative and supportive media community – twofour54.

Entrepreneurship 52 Leading from the front. The role of CEO is incredibly important for a developing SME, but do you fully understand what it entails?

The Next Level 56 Keeping it simple – your business strategy for 2015. Geetu Ahuja, Head of GCC, CIMA, on how to supercharge business growth in the months to come. Trade and Export ME 60 We present our comprehensive section, Trade and Export ME A practical, informative and incisive guide for the trading community in the region. Event Preview 80 Unveiling SME Beyond Borders – Oman Chapter. Our exclusive preview of this world-class SME forum. Tech Trends 84 Business apps to boost productivity and profitability.

Data and Decision making

ABU DHABI ECONOMIC VISION 2030 An SME’s handbook

DIVERSIFICATION

PRODUCTIVITY AN

54.6% Oil and gas share in GDP (2010-2013)

43.3%

OIL SECTOR

90%

14.0%

Hydrocarbon sector contribution to government revenue

MANUFACTURING SECTOR

76.5%

NON-OIL EXPORTS

AED 15,996.1 m Abu Dhabi’s 2030 Plan is a blueprint for growth that aims to create a sustainable and diversified, high value-added economy – providing sparkling opportunities to SMEs and growth-stage businesses.

OIL, GAS AND OIL PRODUCTS EXPORTS

AED 90,460.1 m

Contribution to the GDP by large enterprises

50%

2030 VISION: Abu Dhabi will focus on developing sectors which are planned to grow at more than 7.5% a year. Non-oil sectors contribution to GDP: 64% Aim to reach equilibrium in non-oil trade by 2028. Achieve a “WB Doing Business Ranking” of 20 out of 175 countries.

are employed within the construction and government services sector

2030 VISION: Reduce unemployment by 5% among national population Through increased productivity, full employment and increased participation of Nationals in the economy, the

PILLARS OF THE ABU DHABI POLICY AGENDA VISION

A large empowered private sector

The creation of a sustainable knowledge-based economy

An optional transparent regulatory environment

A continuation of strong and diverse international relationships

Data and Decision making

KEY FACTORS FOR AN SME

ND EMPLOYMENT

Diversification The Abu Dhabi Economic Vision 2030’s core strategy is economic diversification and this will be achieved by stimulating growth within the non-oil sectors. But, this diversification is also aimed at reducing the reliance of non-oil sectors on domestic markets, which are affected by oil prices too. Therefore, there will be an increased focus on export-led businesses and international trade – SMEs that run export-oriented businesses will particularly benefit here.

SMART TECHNOLOGY

-18.6% NON-OIL SECTOR

THE NUMBER OF SUBSCRIBERS TO THE MOBILE PHONE SERVICE INCREASED BY 18.9% BETWEEN 2009 AND 2012

23.5%

26%

108.2%

PC penetration (in % of total population ’06)

Mobile penetration (in % of population ’06)

Contribution to the GDP by MSMEs

13%

Labour productivity Large enterprises are more productive mainly due to the majority of oil and gas companies they encompass. SMEs need to invest in training, technology and lean production methods to boost productivity. The Abu Dhabi Economic Vision 2030 envisions increased access to capital and new legislation reforms, which will foster the growth of the SME sector.

11%

are employed in trade, restaurants, hotels

No. of people connected to the internet

Smart technology The onus will be on SMEs to work with the large contractors and developers to supply technology-centred, ‘smart’ working practices - ways of working that enable project delivery without the ‘cast of thousands’ workforce that has previously been a given. This will mean re-interpreting the kind of universal, in-bound technologies from the world’s great IT and manufacturing brands and re-applying it in a relevant, productive and local context. All of which is likely to result in the emergence of the ‘mini-consultancy’ in a way never previously seen.

2030 VISION: Achieve internet penetration rates of 60%. The Masdar Initiative aspires to host up to 800 graduate students by 2018.

Government seeks to increase GDP per capita by more than 50% by 2030. Double the active population ratio in Abu Dhabi by 2030. Achieve a “WEF Competitiveness Ranking” of 17 out of 125 countries.

OTHER INITIATIVES IN THE PIPELINE

Emirate resource optimization

Premium education, healthcare and infrastructure assets

Government investment will fuel sectors such as healthcare, aviation, media and financial services.

Urban development will see the emergence of national parks, a Capital City and a Central Business District.

A plan for a $7bn tram and metro system is in place.

Complete international and domestic security

Maintaining Abu Dhabi’s values, culture and heritage

A significant and ongoing contribution to the federation of the UAE

GROUND LEVEL

Getting ahead how you can benefit today from the Abu Dhabi Economic Vision 2030

The economic and commercial changes that this powerful document describes can translate into substantial business intelligence for your company, right here, right now. What are the trigger-points for new markets and how can you latch onto the fresh ways of working that the Vision implies? Senior Editor Paul Godfrey investigates…

The Abu Dhabi Economic Vision 2030 is the most comprehensive economic proposal so far produced by a government entity in the GCC. It outlines the final stage of diversification away from a fossil-fuel based economy and introduces dramatic, fresh working priorities that will in essence be of direct benefit to tens of thousands of SMEs. It focuses on elements such as • Smart technology, the workforce and the ‘new’ project management • The role of public/private sector liaison. • Special opportunities in infrastructure, financial services support, IT and professional services. • Critical skills development for SMEs • Opportunities for the entrepreneur: the SME is seen as the primary catalyst for a self-funding development model.

The guiding theme here is that it’s no longer simply a case of what will be done, but rather, a question of introducing completely new working structures and practices. This is highlighted first and foremost by the appearance of a ‘smart’ agenda, which – • Emphasises aspects such as ‘the internet of things’, smart roads and inter-device communication. • Proposes smart and hi-tech ways of working, getting away from traditional labour-intensive templates. While the first point here is especially significant for encouraging the growth of the ‘techno-SME’ (so prevalent in Singapore and SE Asia, but still relatively rare here), it’s the second aspect that can lead to major new opportunities for the largest slice of SMEs. This point recognizes the

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GROUND LEVEL

fact that the world is changing: the growing creation of a middle class in the Indian subcontinent will reduce the previously taken-forgranted availability of an unlimited, affordable workforce migrating to the GCC. A massive sea-change that’s happening because the growing South Asian economies will be able to offer more opportunities of their own. The fact is that the onus will be on SMEs to work with the large contractors and developers to supply technology-centred, ‘smart’ working practices - ways of working that enable project delivery without the ‘cast of thousands’ workforce that has previously been a given. This will mean re-interpreting the kind of universal, in-bound technologies from the world’s great IT and manufacturing brands and re-applying it in a relevant, productive and local context. All of which is likely

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to result in the emergence of the ‘miniconsultancy’ in a way never previously seen. For IT consultants and workproject specialists, the time has truly come. This shift is all about – • Economies of skill, not economies of scale • The ability to source ten or 20 IT-fluent workers, rather than 200 manual workers • The skills to take an ‘end-to-end’ view of a project rather than simply sourcing and housing manpower • Having access to high-tech equipment on the most affordable basis • Being able to pass heavy equipment credibility and safety checks of a kind that SMEs have rarely been exposed to Getting up to speed The Economic Vision 2030 document proposes a major role for Public/

Private Sector Partnership (PPP) of a magnitude not previously seen in the region. This is because PPP is one of the leading models for assuring the capability of deep infrastructure change while empowering local business - rather than giving multinationals all the credit and letting them be a ‘one stop shop’. In those nations where PPP has proven most popular, eg, Germany and UK in particular, some classic challenges have emerged for SMEs. Indeed, closer to home - in Qatar - we see a very pure example of the hurdles that SMEs can face when taking on projects with sophisticated, large-scale entities, and these reflect some of the classic concerns arising from the PPP model. For example • The tendering opportunities will require a very high level of proven performance from likely

GROUND LEVEL

the ‘way in’ for SMEs in PPP relationships has been via a competitive tendering process, and this means that businesses have to feel fully confident about their ability to enter, complete and excel in tendering scenarios.

SME candidates. Clearly, a key requirement of any business dealing with the public sector is that it will not harm the public either physically or by virtue of bad reputation. This means a good level of Corporate Governance and pristine Risk Management protocols. It will also require a history of documented and minutes Board meetings and thoroughly audited accounts. • The working practices of even the best SMEs may not be aligned with the requirements of a world-class organisation, and one of the factors that we tend to see in PPP relationships is that the public sector entity may require an induction and ‘apprenticeship’ period of up to 18 months. This time will be dedicated to an intensive schooling in the required working practices. The good side of this from the point of view of the SME is that the private sector business emerges supercharged as an absolute ‘best in class’. • The SME may need to provide guarantees as to solvency, cashflow and the solvency of suppliers and customers. This process can be facilitated by the presence of aspects such as Trade Credit Insurance and, of course, with up to date bank references. Typically, the ‘way in’ for SMEs in PPP relationships has been via a competitive tendering process, and this means that businesses have to feel fully confident about their ability to enter, complete and excel in tendering scenarios. Evolving the right skills It’s important to emphasize that while the Economic Vision 2030 proposes a mix of infrastructure changes and initiatives, these impact some sectors more than others, and many established areas of SME activity, including

sectors such as, eg, Education, Professional Services, Law, Healthcare and Media, won’t necessarily see massive shifts in core working practices. Yet conversely, as the focus shifts away from a fossil fuel economy and we enter the third and final stage of diversification, these are also the very sectors where there will be more and more emphasis in terms of their ability to provide the right core services and support. So again, these represent fantastic areas of possible new opportunity for SME entrepreneurs to engage with. The other factor to consider is that as we approach 2030, the role played by oil and gas extraction and export in other regional economies will decline dramatically. This means that SME expansion overseas will perhaps be a more limited option than it is now, as many of the classic regional markets may not have such buoyant economies or an affluent consumer market. As well as impacting traditional entrepreneurial aspirations, this is likely to hit the Trade sector hardest - lowering oil reserves may be a trigger for deflationary climates and many of the MENA nations will potentially be less desirable trading partners as a result. Again, classic SME trade entities need to see the Economic Vision 2030 document as a catalyst for change and as a mechanism for starting fresh dialogues and possibilities. An integrated hub Some aspects of the new future economy are already becoming evident. For example, it’s clear that the raft of connectivity issues - with aspects such as replicable data across devices, good internet presence, strong social media flow, etc. - are all more and more crucial to an SME’s development and will become omnipresent as the future unravels.

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GROUND LEVEL

• Shopping centre delivery • Urban Planning & Design.

By 2030, the UAE will feature four worldclass airports, including the busiest in the world in terms of total destination and transfer footfall.

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Other elements, though, will be more key to the overall shape of the economy as a whole, and the main example here is the emphasis on a fully integrated transport system that seamlessly combines rail, air, sea and road links. By 2030, the UAE will feature four world-class airports, including the busiest in the world in terms of total destination and transfer footfall. Developing this exceptional integrated model will be the largest single factor in the emirate’s transformation to the 2030 template. Indeed, the UAE will be positioned as the economic and demographic hub of a region defined by a radius of up to three hours flight time (an area larger than that described in 2008 as the catchment area of The Dubai Mall, for example). The planning, construction and delivery of that transport system is an incredibly rich opportunity for SMEs in sectors such as – • Contracting • Procurement • Logistics • Facilities Development • Aviation • Engineering • Architecture • Residential and Communities development

These will also be the main arenas of PPP activity, and businesses committed to realising these opportunities will have to ensure not only the right operational credentials and tendering expertise (as discussed above) but the capacity to deliver on projects of a previously unforeseen scale. They will also need the resources to enable them to have a clear priority amidst numerous other business activities. In this respect, the SMEs engaged successfully in delivering the infrastructure of Expo 2020, in Dubai, will be especially well-placed to make a strong case for eligibility. Some of the other requirements here will be – • Use of international quality standards and benchmarking • Staff training and qualification quotas and ratios • Senior personnel, Board members and directors having professional accreditation from world-class professional bodies (ACCA, IRM, ICAEW, etc.) As the Abu Dhabi Economic Vision 2030 unfolds, the growing infrastructure opportunities will bring a considerable influx of expatriate residents and tourists alike. So another sector to reap the benefits will be the hotels and hospitality market, where the emirate’s commitment to excellence (already strikingly apparent in Yas Island, for example) will spur further extensive development, opening the door to SMEs with the credentials to work with leading international groups and further raise the bar in terms of execution, delivery and staff competency.

For an online version, please visit: www.smeadvisor.com/2015/02/gettingahead-benefit-from-abu-dhabi-vision-2030/

GROUND LEVEL

Don’t do, delegate! Delegating is a critical skill that most SME owners overlook – often at their own peril. By taking a proactive approach and dividing tasks strategically across your organisational chart, you can boost productivity, take on bigger projects and empower your team! We provide a practical action plan…

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GROUND LEVEL

“Surround yourself with the best people you can find, delegate authority, and don’t interfere as long as the policy you’ve decided upon is being carried out.” - Ronald Reagan

As an SME owner, you have to don several hats and constantly juggle all the different bits of your business to ensure you are moving in the right direction. But, do you find yourself caught up managing day-to-day activities with no time to take a step back and look at the larger picture? You are not alone! Research suggests that 66 per cent of business owners express that they wish they delegated more. The reality is that effective delegation is advantageous not just to the business owner, but to the employees and the organisation as a whole. It enables you, as a team, to get more work done and ‘play to your strengths’.

Consider the following fundamental factors

Provide detailed instructions.

Make sure that your employee fully understands what needs to be done, what is expected from the job and the timeline it needs to be completed within. More importantly, the employee needs to be fully comfortable doing the job. It is also a good idea to explain how performance will be measured and what the final reward (if any!) will be. This enables your employee to have a clear vision of the project and ensures that you both are on the same page.

Who to delegate to?

Choose the right person for the job. It is critical that you delegate to an employee who has the skillsets required to manage the job. What’s more significant is that the employee should be www.smeadvisor.com

fully motivated to do the job. This doesn’t mean that you repeatedly delegate to a select number of trusted people; try to spread the tasks across the organisational chart so that all your staff members are actively involved in the process. In fact, many businesses even go as far as letting their employees come forward when there is a project they would really like to take on. This encourages open communication, boosts employee self-esteem and takes some load off the manager’s shoulders.

Don’t be afraid of getting different results!

This is, perhaps, the biggest trouble spot when it comes to delegation. Business owners and managers often want to do everything themselves in order to get the final job done perfectly. But, ask yourself – does this job need to be done flawlessly, or does this job need to be done? An employee might do things differently, but that doesn’t 19

GROUND LEVEL

necessarily mean the job won’t be done right. If there is ever a situation when you need to intervene, try to use a ‘teaching’ approach, where you guide your employees in the right direction rather than taking things in your own hands. An article on www.hbr.org explains further: “As you give more responsibility and autonomy to your most capable direct reports, focus your conversation less on how they should approach a task and more on the what and why. For example, why is the initiative important? What’s the scope of the task and what is their level of authority: to make the decision or bring options and a recommendation to you for approval? What are the key issues they need to address and resolve? Who are the people in other groups they need to collaborate along the way? What are the key milestones and check-in points and what are your expectations for communication during the course of the initiative?” Remember to avoid micromanagement as this defeats the whole purpose of delegating.

Reward good performance.

This is a classic case of positive reinforcement – applauding an employee’s successful completion of a task will encourage them to work to the same level of efficiency next time round. In addition to giving your employee a sense of accomplishment, it is a great way to show your team that you are not afraid to give credit where it is truly deserved.

Offer regular training.

Establishing a continuous development model with intensive training modules will help employees 20

Take this quick quiz to see where you stand!

You spend a huge part of your day focusing on the ‘macro’ picture of your business over planning the minute details.

If you were to step away from your business, your team can efficiently get things done in your absence.

You are able to end your working days at a decent time and can take sufficient time off. Your team aren’t afraid to make mistakes and you encourage them taking initiative to do things on their own.

build new skills and enhance existing capabilities. These sessions will help employees think in a way that is aligned with the overall vision of the business. Implementing a mentorship programme is another area that will give employees a ‘third-person’ perspective of the work and boost their confidence.

Know when to delegate.

Follow the ‘70 per cent rule of delegation’ – if you think an employee can get the job done 70 per cent as well as you can, then it’s safe to delegate. “This 70 per cent performance standard allows the CEO to aggressively move tasks to team members and have them perform the tasks at an acceptable level. Clearly there are some tasks that require a 100 per cent performance level. The CEO will choose not to delegate these tasks. They could be transferred

If your answer to most of these questions was ‘no’, it is time to start delegating tasks to your employees and subordinates.

but with extensive support and training. In addition, one-on-one oversight may be required,” Jim Schleckser explains in an article on Inc.com.

Give yourself adequate time.

Effective delegation requires mutual understanding and trust between the organisational team. Building confidence takes a lot of time, so don’t fret if you don’t become an expert at delegating straightaway. Start by delegating tasks on a trial basis and see how it works within your company. Another recommended practice is setting milestones or checkpoints along the way, which keeps you in control of the project while not micromanaging every minute detail.

For an online version, please visit: www.smeadvisor.com/2015/02/theart-of-delegation/

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GROUND LEVEL

30%

feel they are the most capable to get the job done

Top reasons why SME owners don’t delegate

20%

are in a hurry to get the job done

20%

believe their employees don’t have the right skillsets

don’t trust anyone else to the job

However,

65%

believe they are “good” or “very good” at delegating responsibilities.

19%

like doing the job themselves Source: The Alternative Board

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GROUND LEVEL

Will you face the competition? Or, bite the dust? Business owners often believe that having a unique product offering sets them apart from competition and is enough to sustain in todayâ&#x20AC;&#x2122;s fast-paced markets. But, is that really enough? SME Advisor offers top adviceâ&#x20AC;Ś

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GROUND LEVEL

“Number one, cash is king. Number two, communicate. Number three, buy or bury the competition.” - Jack Welch

No matter how unique, extraordinary and tantalizing your product is, without the correct marketing tactic, it falls short of the greatness it could achieve. There are umpteen companies in the playing field, offering something similar or satisfying the customer’s need in a better way. A clear understanding of your competition is instrumental in the success of any business. The economic flux of the markets may appear to be dominated by major players with huge promotional budgets. For SMEs, it may seem impossible to penetrate through the surface and make their mark. However, as has been witnessed in the recent times – quality, flexibility, and personalised service are proving to be effective tools for carving out a niche, even in the most competitive of markets. Who are you up against? The intensity of competition is what will affect the overall success of the business. So it is important to consider all types of competition to ensure that you have the cutting edge. Here’s an overview of the different kinds of competition: Direct competitors: Multiple businesses offering similar products and services create direct competition. Customers are

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spoilt for choice with a variety of price points, locations, service levels and product features. Competition exists because a majority of customers will not choose the same combination of these choices repeatedly. By positioning your business to offer a unique mix of options, you will be able to reach a different type of consumer. Understanding where your competitors are positioned is important to identify the gaps that your business can fill. Indirect competitors: These are businesses that offer slightly different products and services, but target the same group of customers with the goal of satisfying the same need. You can attempt to make sure that your business provides advantages over your competitors, beginning with those who are in the most directly similar to you. Customer expectations can change dramatically when economic conditions are unstable. It is imperative that companies revise sales and marketing strategy accordingly. Your product should be worthy in itself that the customer has good reasons to come to you rather than a rival. “In order to stay ahead of competition, the first thing our brand enforces is product consistency. We are known and have loyal patrons for certain hidden gems in our menu and we strive to make sure this is consistent across our rapidly expanding number of stores. Secondly, we try to keep our employees motivated. Service delivery and customer experience is almost as important as product quality,” says Rohith Muralya, Director of Concept Cuisines, SFC Group. “The restaurant industry is highly competitive with new brands entering the market on a daily basis. We evaluate every new entrant into our segment as this plays a very important role in

understanding changing consumer trends and evolving standards,” he adds. “Some of the novice entrants provide us opportunities for fresh out-of-the-box thinking. If we find them more effective and evolved than our practices, we try to adopt it into our operations. We are currently in the process at enhancing our brand elements; and evaluation of competition (both successful and unsuccessful) has been our focal learning point.” The need for market intelligence Market intelligence more or less dictates every decision a company will have to take. Pragmatic market intelligence can have a huge return on investment and can generate extra customer revenue or the avoidance of a bad investment. The fundamental way to gather market intelligence is to survey the competition – study their ads, brochures and promotional materials. Keep track of what they are doing well and what they are doing poorly. Another source of vital information about the competition is secondary data. This consists of your sales force or other contacts among your supplier and customer network; key people who can provide information about competitors’ strengths and weaknesses. Basic competitor information that every business should have includes: • The competitor’s market share • How target buyers perceive or judge your competitors’ products and services; • Your competitors’ financial strength • Competitor’s ability and speed of innovation for new products and services Every competitor has definitive weaknesses and strengths that may be points of potential advantage

GROUND LEVEL

Understanding each competitor’s behaviour in terms of short-term and long-term objectives, strategies and tactics will be extremely important for survival and success in business.

Is your SME ready for its competition?

Get in control with these four action points: • Adopt a global mind-set. Equip yourself with solid data and research on local and international markets covering areas such as: technology, culture and strategy. • Focus on transformation. Make sure your business is aligned with the latest trends in the industry even if it that requires significant restructuring. • Nurture your human resources. Continue investing time and efforts towards skill-building, hiring and corporate culture. • Plan for innovation and differentiation. Remember, to stand out, you need to not just think big, but think different! The bottom line is that there is always competition, no matter what your business is. But there is more than one way to cross a river and you have to figure out how to build the bridge.

for your company and products. In most cases, larger companies cannot make decisions or allocate resources, personnel and materials as fast as a smaller company, under changing market conditions. Smaller companies may have to be content with a limited, but profitable objective of weaning their share from the market before larger competitors catch up. Gathering competitive intelligence can spell the difference between realising your company’s dream and losing out on business altogether. To be successful in identifying competitor’s strategies and tactics, you must gather every bit of available data from sales forces, outside consultants, market surveys, and trade associations. The data should include pricing, promotions, spending, new product introductions, sales results, market share trends, packaging innovations, key account management, service levels, and other indicators of competitive activity in the marketplace. Keeping ahead of the race In the 2014 Global SME survey, one in three SMEs in the UAE said that stiff competition in the market was the biggest risk they faced. The poll was conducted for 3,800 senior executives of SMEs around the world, (including 200 in the UAE) to rank the top three risks faced by their businesses. Obviously, the most important objective as a small business is to survive and make money. Sometimes the competition may seem just too formidable for you to continue as a business. Some business owners see competition as inherently bad; as they tend to steal your products, ideas, customers and ultimately your revenue. However, if you choose to view your competition as a challenge, they will push you to innovate and grow. Once you know the identity of your most direct competitors and have a good idea as to your second- and

third-tier competitors as well, you should give some thought to which actions they are likely to take in the next year or so. Estimates of competitors’ future activity depend on your knowing and understanding of their objectives, strength in the marketplace and resources. This intelligence will reflect in: • Annual forecast of sales, spending, and profits • Promotion and advertising programmes Introduction, support, and success of new products and services • Market, product, or service category, and sub-category trends’ • Direction for future growth Understanding each competitor’s behaviour in terms of short-term and long-term objectives, strategies and tactics will be extremely important for survival and success in business. Too many businesses spend their time thinking about what they have been doing when they should instead be thinking about what they need to do tomorrow. Instead of spending hours analysing prior results, put that energy into developing future market scenarios, looking for potential shifts and identifying how you can upend competitors. In this day and age of innovative thinking, ignoring upstart rivals will prove to be expensive. Upcoming competitors show you how to use new technologies, new solutions and new business models to change the marketplace, and how to reposition yourself for growth. Good luck!

For an online version, please visit: www.smeadvisor.com/2015/02/face-thecompetition-sme-competitive-research/

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COMPLEXITY

TURNS LOYAL CUSTOMERS INTO FORMER CUSTOMERS.

SIMPLE

KEEPS THEM COMING.

It’s not about how much consumer data you have. It’s about how simple it is to put it to work for your customers. SAP helps bring together insights into every customer, and lets you engage them in the exact time, place and channel that’s right for them. So your customers feel cared for, respected and, most of all, delighted. That’s running simple. Find out more at sap.com/runsimple

GROUND LEVEL

The power of CRM

building customer connections and multiplying sales A Customer Relationship Management (CRM) solution allows your business to manage and analyse critical customer information such as purchase history, buying preferences and transaction frequency. For early and growth-stage businesses, handling such data effectively can be an important stepping stone in building a solid customer base and boosting revenue. We examine the benefits and offer top tipsâ&#x20AC;Ś

CRM is all about managing business relationships to convert them into growing sales. Sales prospects come from many different sources like prospect lists, your website, social media and other online marketing activities. Face-to-face venues such as

trade shows, conferences and business networking events can be rich hunting grounds for generating sales leads. The information profile that represents a sales lead includes who to talk to, how to reach them, what to say to them and when to ultimately close the sale.

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GROUND LEVEL

Fast facts Implementing a CRM solution can help you: • Maintain customer data in an organised manner • Follow-up regularly with customers • Create powerful e-mail marketing and social media campaigns catering to a specific target audience • Set and measure sales goals – providing a solid structure for your salesforce • Understand the evolving needs of your customer

Identifying a quality sales lead Once you have all the information on prospective customers, what are you going to do with it? An effective CRM system will enable you to manage this data efficiently and convert sales leads into valuable

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customers, who give you regular business and are ambassadors of your brand. Once a prospect is contacted, data becomes about tracking. When did you contact them, what did they say, did you send them something to support your pitch and when will you contact them again? These are some of the key activities that you need to keep track off. After the deal is sealed, depending upon what you sell, data becomes about managing customer satisfaction. Small businesses should recognise the importance of customer retention as it is less expensive and even less tedious to manage existing customers rather than getting new ones. One of the most common ways that small businesses manage customer relationships is by using e-mail software and spreadsheets. A sound CRM solution will help you to manage a large database quickly and efficiently. It is important to do proper research on which software fits your company and product needs, and invest in it accordingly. Converting CRM into paying customers Business owners and managers are being very cautious about expenditure. In this volatile environment, it can be

really difficult to decide whether to cut costs in order to survive in the storm, to invest in more marketing, or to identify new opportunities that might be emerging that could offer greater potential. Closing deals and sales can be tough even at the best of times. Here are some top tips that will help you seal the deal: • Ensure that you are talking to all the right people. Middle men unduly create misinformation and confusion. You have to be sure you have targeted the decision-maker, the sponsor who stands to benefit from the proposed deal, whoever is in charge of implementation, and if there are any other people influencing the decision within or outside of the business. • The next step is to ascertain clarity. The customer should be exactly sure about your product/service and how it can benefit his business. • A very tactful CRM approach is to have a network of associated services handy for your customers. Address the risks or uncertainties their business may encounter and suggest ways to mitigate these risks. Either you could provide precautionary measures yourself or you can provide contacts of companies who do. So, essentially you are doing their proactive research for them and making them entitled to come back to you. • Check if they understand what they need to do to realise the benefits, and how you will help them implement the solution and realise the value. The proposed solution should support the goals of the individual, the department and the company. The need for proactive research Customer service organisations spend much time and money on reactive customer service but far less on personalised proactive support. Reaching out to customers quickly on matters of interest creates a feeling among customers that enterprises really do care. There is a wealth of information available on customer activities and purchases, both from internal and external sources.

GROUND LEVEL

The way to overcome the difficulties surrounding collecting proactive data is through careful planning – developing a data collection plan with clear operational definitions that has been vetted by stakeholders, process owners and customers. Intelligent search and indexing of this content provides information on the customer’s tastes and preferences. However, it is important that the suggestions are relevant and helpful and not intrusive or disturbing. Many companies can improve customer experience by supporting customer

interests and notifying them of special savings with a personalised proactive outreach. Some customers exhibit certain purchase patterns and behaviours. It would be beneficial to keep track of such customers and approach them with offers they can’t refuse. SMEs need to define their market through an appropriate sales and marketing mix. It could be telesales, advertising, sponsorships, conferences and exhibitions. They have to undertake deliberate actions to generate enquiries and achieve the desired result which is mainly to attract, sell to and retain customers. The exact same sales and marketing techniques used to sell any product or service successfully, must also be applied to selling a company as a brand. Once the company is etched in the mind of a customer as a sure fire winner, it is relatively easy to retain customers. Examples of proactive data include data collected in a market research effort, regarding potential new products or services, shopper perspectives and getting comparative information across your competition’s stores. Sources of proactive data are interviews with potential customers, focus groups, surveys, market research

SME spotlight We spoke to an upcoming SME for their opinion on the subject… “In a small business like ours, customer leads mostly come from word of mouth marketing and interpersonal relationships. One happy customer tells a few others and this leads to a few more,” said Fairuz Basheer, Business Development Director of Farah World – a freight forwarding and logistic company based in Dubai. “Because our target customers are small firms and not major business, it is relatively easy to deal with them on a one to one basis and get things going. We try to provide exceptional services based on the clients’ needs and take special care of urgent or fragile shipments.” “As far as marketing research is concerned, (for us) it is just a matter of asking the customer what he wants and getting it done. We handle shipments mainly to Africa. Sometimes a service failure will make you lose a valuable customer even though it may occur due to inevitable factors like change of policies at the destination port. Proactive research (in our sector) would involve anticipating all these issues in advance and taking necessary steps to combat them. We have been trying our best in this endeavour and luckily we have managed to retain most of our customers and even added more to our list.”

and benchmarking. This type of data can be difficult to obtain, in terms of both validity and the collection process. Customer surveys and focus groups can miss customer segments or ask the wrong questions. Existing market research can be expensive to purchase and at the same time be inapplicable to the company’s particular customer base. The way to overcome the difficulties surrounding collecting proactive data is through careful planning – developing a data collection plan with clear operational definitions that has been vetted by stakeholders, process owners and customers (current and potential) will result in reliable information. Many businesses outsource this type of data collection planning to a company that specialises in market research. Once a data collection plan is in hand, a business can either collect the data themselves or have the third-party company do it for them. Effective CRM solutions Some CRM implementations fail as they are not customised to suit the organisation. The crux of the matter lies in collecting data which is important and relevant and converting into sales leads which are long lasting. SMEs in this part of the world mostly thrive on conventional methods and tried and tested formulas. Even though a lot of effort may go into generating quality sales leads, it may fall short if you don’t get meaningful insights from you data. This is because most companies expect their CRM approach to give results from Day One. Ultimately, for best results, CRM should be perceived as a solution and not a tool. Taking a strategic view of your CRM means extracting true value from data and processes and reusing it throughout the business. Once you know what you want your CRM to do for the company, you should strategize and work out how to use it and what you need to achieve from it. For an online version, please visit: www.smeadvisor.com/2015/02/thepower-of-crm/

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BUSINESS BANKING

Growth in a cooler climate While nations such as the UAE, Kuwait and Saudi Arabia can remain relatively competitive in a time of lower oil prices, the deflationary impact on other GCC nations - and across the MENA region - will inevitably impact trading profiles for SME exporters. Senior Editor Paul Godfrey presents a strategic guide for businesses looking to find buoyancy and success in this rather new and challenging environmentâ&#x20AC;Ś

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BUSINESS BANKING

“There is no better time to make your money than when everyone else is losing theirs.” - Henry Ford, Industrialist

How do you effectively plan expansion strategies in a time of low oil prices, especially if you are dealing overseas with markets facing deflationary pressures from lowered revenues? The reality is that thousands of SMEs need to start that planning process right now, and be ready to deliver on the outcome of their deliberations asap. That’s because many of the key market makers are now waking up to the realisation that a climate of lower oil prices is not simply a passing phase, but may become a structural given of the regional economy for years ahead. For example, a number of the world’s leading financial consultancies – AT Kearney is an example – have already created forecast models looking at a world where a low oil price has been sustained for a decade. How would your business fare in a climate of that kind? The view to overseas export markets One of the factors often overlooked about the impact of a low oil price is that it discourages overseas expansion into those nations feeling the impact of falling revenues. Their markets are not well-placed to benefit or entertain the aspirations of new entrants. Nor would they be well-placed even to support their own entrepreneurs’ efforts. The

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BUSINESS BANKING

If you already have overseas interests, now’s the time to prune costs, making them work hard and really crank up profitability.

reality is that with the exception of Kuwait, the UAE and KSA, all of the region’s oil producers will be hit by drastically lower revenues and indeed, and will not be able to cover even the costs of production. If we are looking to explain this in business terms, the classic case would be that of a regional airline - whereby the actual running costs would be reduced by about 40 per cent (because of the much lower cost of fuel), but there would be fewer customers (because in a deflationary economy, there is less money for consumers to spend). The spiral of lowering demand impacts price and remuneration strategies across the board: because businesses have to hold their prices, they work to lower margins and staff cannot receive incremental salary increases. This in turn means that consumer services have to keep their prices low. So a café, for example, would have to hold its prices indefinitely, while in the B2B sphere, an IT consultant has to pitch its fees commensurate with businesses that won’t have increased their revenue for several years. It’s also the case that in an extreme deflationary environment, prices and salaries actually go backwards, potentially reverting to the price and rewards structures of a decade (or more) ago. A report published by PWC in 2006 - ‘The implications of oil price trading fluctuations on national economic performance: a review of nine producer nations’ - demonstrates that the effects of severe oil price reduction will on average take about one year to exert strong deflationary pressures. Looking forward, this would mean that by October 2015 we could start to see a noticeable level of inertia and falling returns in affected export markets. While logically this means that SMEs should place emphasis on a more local style of growth - focusing on the UAE - there are certain sectors whereby export initiatives

can feasibly still remain strong, for example • Supplying contractual services for infrastructure initiatives in overseas markets. In deflationary climates, governments typically tend to ‘restart’ the economy by investing in infrastructure projects (Roosevelt’s ‘New Deal’ being the classic 20th century example). It’s no accident that exports in products such as piping and cabling have remained strong to modern Iraq, for example. • Professional services that specialize in project management consultancy. • ‘Entry level’ products designed for a broad or lower-quartile consumer market, which are priced so as to let local distributors profit from the value-chain. This can be a great way in to an otherwise depressed market and - through building industry share and reputation - pave the way for considerable rewards when the climate turns around. (A ‘Trojan horse’ strategy). • If you already have overseas interests, now’s the time to prune costs, making them work hard and really crank up profitability. So, for example, closely assess the FX chain and, if your level of transaction is big enough, look for some effective solutions to hedge your risk. However, it’s worth adding two further caveats. Re-exports will of course be more expensive in foreign currencies; and the stronger dirham would imply higher import costs two factors constraining the likely trade landscape. The impact on SME funding Naturally, export businesses specializing in transactions with the oil-producing MENA nations may find that the business plan they were preparing to show to banks and finance houses is in need of revision. Yet while the banks’ attitude to lending may be impacted in these

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BUSINESS BANKING

If low oil prices are sustained, the emphasis will be on growing the business in existing home markets.

very specific circumstances, in reality there will be relatively little impact on the regional banking sector, and banks’ ability to lend as such should not be significantly affected. This is because banks across the GCC have two distinctive features, namely • High adequacy ratios • A low rate of non-performing loans, due to traditional avoidance of high-risk exposures and early-phase SMEs What will change is likely to be the strategy and direction of SME business that lenders will be prepared to invest in. There is little doubt that development strategies in the stronger home markets - such as the UAE, KSA and Kuwait - are likely to be more logical and positive options, and as such, domestic growth is in all probability the soundest route for attracting development funding. Capitalising on domestic growth If low oil prices are sustained, the emphasis will be on growing the business in existing home markets, rather than risking expansion into deflationary overseas territories - whatever the previous international forecasts and projections may have been. With an emphasis on strategies closer to home, where market grip is strongest, this is a key opportunity to – • Research industry trending and demographics and look to build presence and market share: this may be through many different types of customer engagement, whether online or by building the branch network. • Invest in effective marketing. Research the best advertising and promotional fit for your sector - in addition to pushing social media capability (which is a great way to understand customer impressions,, and

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interact with and influence your customer base). • To fuel development, a more mature business can be wellplaced to source secondary or tertiary finance - supercharging growth capability and investing in infrastructure development (eg, building a new and more efficient depot or automated warehouse, or buying a larger facility with scope for future expansion). • Also, while the home market is performing well, it’s a good time to diversify the business, spreading exposure and future risk and capitalising on fresh local opportunities. While looking inwards at the business’ present strengths and capabilities, this is a perfect moment to focus on building a solid structure for the company. You can, eg • Introduce a realistic Succession plan, removing uncertainties about the business’ future purpose and direction • Bring in sensible financial incentives for the sales team • Implement ‘key man’ protection packages These are all activities that will create a strong, solid platform, enabling and supporting more dynamic takeoff when the time is right for broader expansion. If indeed the era of lower oil prices is with us for a significant period, it will necessitate that SMEs become adept in building business in a slightly cooler climate - but nonetheless one where growth and significant rewards are completely achievable and full of entrepreneurial possibility.

For an online version, please visit: www.smeadvisor.com/2015/02/growthin-a-cooler-climate/

//DIGITALLY DISRUPTIVE

Definitely

digital? When it comes to the new technology, are you online, on-board and onthe-money - or simply hoping for the best? 34

Can you count all the reasons why an SME in todayâ&#x20AC;&#x2122;s world needs to be fully to speed with its digitization strategies? As well as all the factors like replicable data across every screen - and thatâ&#x20AC;&#x2122;s a must if you want to empower decision-making in the field and ensure employee mobility - there are key essentials like digital marketing, social media engagement, e-commerce, digital supply chain management and online recruitment. The fact is, digitization is a key catalyst in helping your company operate efficiently, enhance visibility and achieve business profitability. The world is going digital - but have you? If you want to assess your businessâ&#x20AC;&#x2122; real priorities in this new digital world, think about your answers to the following key questions -

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//DIGITALLY DISRUPTIVE Do you have a crystal-clear understanding of what your business needs to do to smooth its digital journey? If digital technology can help your business operate more efficiently, are you putting in place the systems to release that revenue growth? Do you know what the best-in-class solutions would actually involve? Is your understanding of today’s digital world accurate and up to date especially in terms of your customers’ expectations?

SME Advisor has researched some of the different ways of tackling these questions, and we spoke to Etisalat about how best businesses can upskill to meet the challenges of the digital climate. Of course, as the region’s leading technology enabler for SMEs, it’s part of Etisalat’s mission

Digitization is a key catalyst in helping your company operate efficiently, enhance visibility and achieve business profitability.

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to empower businesses with a better understanding and capability across the digital agenda. The company is currently pioneering a new online initiative, called the ‘Digital Index Survey’. It’s designed to provide SMEs in the UAE with an opportunity to have their digital maturity professionally evaluated and ranked - and then understand and help businesses improve this ranking to increase competitive advantage and drive growth. Invest 15 minutes to change business performance Etisalat Digital Index Survey will be quick to complete and will actually identify the key areas where you need to improve (if you need to!) - giving you the ability to focus business resources and activate a better rate of return. It focuses on four key areas organisation and collaboration, IT and

infrastructure, the customer experience, and channels & partners. When you answer some simple (but structured) questions across these key fields, you’ll be ranked against international benchmarks and peer-group companies in the region. This is a ‘smart’ way of boosting digital performance, and you’ll also find that Etisalat Digital Index Survey will be rolled out in a very simple format online and will be completely free for all participants You’ll be able to access the survey online via http://digitalindex.etisalat.ae/. Register yourself and have your survey completed Alternatively, we’ll be sending you an activation e-blast to ensure you know when and how to get online and start your diagnostic journey with Etisalat Digital Index Survey!

The proof is in the results…

And here are some good ones!

What does it mean in practical terms when a business gets its digitization properly sorted? Here are two case studies of businesses which have unleashed a considerable transformation in profile and performance through digitization…

National Grocery Store Managing a chain of 10 grocery shops, the company set about a digital roadmapping exercise, designed to transform its internal processes and reach more customers through fresh digital channels. There were no shortage of challenges, though. The business faced erosion of customers through increased competition and new ways of shopping. There was an inefficient procurement process - not to mention an inefficient allocation of space when it came to the IT infrastructure, with different servers located in the different stores. This also meant considerable difficulties in maintaining and updating the IT environment. Quantum improvements were delivered across four key areas.

Digital commerce

Digital signage

The company set up an online store, through which customers could view and buy their products directly, dramatically increasing revenue. This change didn’t require specific skills to be insourced because it was made with Web-portal managed as a service. Also, no additional overhead resulted from this, since it leveraged the same logistical and procurement processes from the physical stores.

The chain introduced - across the different stores - small and medium-sized video screens promoting key products. Customers were able to

//DIGITALLY DISRUPTIVE view more promotions and available products, thereby increasing impulse shopping and average sales in-store. Importantly, the digital signage generated a new revenue stream from third parties wiling to promote their own brand.

Cloud infrastructure

All IT infrastructure was moved onto Cloud services. This meant that the company was able to concentrate on its core business, working with external suppliers for the management of the IT infrastructure.

This reduced the total cost for the infrastructure operations and maintenance and eliminated the need to have a dedicate specialist resource. Moreover, there was no longer any need for the continual maintenance and renewal of the IT infrastructure.

Connected retail

The company rolled out a centralised backend system to unify the procurement process across all the stores. Each store also had access to the central system, improving and simplifying the review of stocks available and

Resort Facility Construction Company Digital devices enabled a classic streamlining initiative at this leading construction company, as it introduced digital platforms to manage workforce equipment and logistics. This helped overcome challenges such as the ineffective management of workforce Better digitization then delivered -

Tablet app for workforce

The company rolled out a tablet app for the management workforce to track and update work progress from any place - and at any time. This enabled the real-time update of raw materials needing procurement, and was directly connected to partnersâ&#x20AC;&#x2122; online solutions. The app was also provided with very high security standards through authentication and encryption.

Equipment tracking

A centralized control of equipment was deployed, leveraging sensors placed on vehicles and expensive assets. A customised and easily-comprehensible dashboard was available to monitor and

Paperless processes

The company decided to eliminate paper by scanning documents and using forms and applications such as digital signature to insert and share data. This reduced administrative costs and effort drastically, and allowed the company to search, track, manage and share information more easily.

The benefits National Grocery Store increased overall sales by 12 per cent in a single year, due to the e-Commerce site. It also reduced IT spending by 40 per cent yearly through infrastructure virtualization. Direct costs improved by achieving better volume discounts and a more efficient logistics process.

tasks and workloads due to a very scattered working environment and a multitude of diffuse operations. Allied to this were difficulties in monitoring and controlling expensive equipment at construction sites, and the cost of an IT team working on non-valueadded tasks.

locate the assets at any given time. The solution also facilitated the maintenance scheduling and faults management functions.

the forecasting process - resulting in a much more efficient logistics process and smoother delivery of goods to all stores.

Office software as a service

The company introduced a full suite of on-demand services for e-mail, calendar, file sharing, online

conferencing, instant messaging and Office Online. By removing local instances of productivity software, the company ensured it had the most up to date software throughout and reduced the cost of upgrades and fault resolutions. Whatâ&#x20AC;&#x2122;s more the software was made accessible to any device, anywhere. The benefits The Resort Facility Construction Company signifcantly improved workforce productivity. It reduced equipment loss and the incidence of stolen items and increased the equipment lifecycle all with an impact of 7 per cent on the bottom line. It reduced operating costs and boosted productivity by eliminating all paper-based processes. For an online version, please visit: IT spending came down by nearly www.smeadvisor.com/2014/11/partners30 per cent yearly! in-connectivity/

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MOVERS & shakers

Creative force: Maryam Al MheirI SME ADVISOR MET WITH THE DYNAMIC PERSONALITY DRIVING THE REGION’S VIBRANT, COLLABORATIVE AND SUPPORTIVE MEDIA COMMUNITY – TWOFOUR54. IN THE FOLLOWING EXCLUSIVE INTERVIEW, SHE SHARES HER SUCCESS STRATEGY, CORE VALUES AND VISION FOR THE FUTURE…

MOVERS & shakers

Maryam Al Mheiri, Chief Operating Officer of Media Zone Authority - Abu Dhabi (twofour54)

MOVERS & shakers

twofour54 provides an environment that encourages creativity and collaboration and offers comprehensive services and solutions for every phase of the business life cycle.

Did you know? twofour54 is named after the geographical coordinates of Abu Dhabi

Tell us about your role within twofour54 and your vision for 2015? As the Chief Operating Officer of Media Zone Authority - Abu Dhabi (twofour54), I am responsible for leading strategic operations behind our vision of building Abu Dhabi as the regional hub for content creation. This involves managing relationships with our stakeholders, including other local government entities, as well as the 330+ media companies that call twofour54’s campus their home. I am also responsible for our customer and employee-related services, overseeing implementation of initiatives to encourage a collaborative campus community that stimulates creativity and professional partnerships, and of course a productive and happy workforce.

What attracted you to this industry and twofour54? The media industry appealed to me because it is creative, diverse and has to be on its toes to meet the evolving needs of its audiences. twofour54 was established with the goal of building a sustainable media industry in Abu Dhabi as part of the government’s Economic Vision 2030 diversification strategy. Its vision, mission, and values resonated with me and it is an honour to help build our city and contribute to the long term future of our nation.

What would you say are the strategic advantages that the twofour54 community offers to businesses? twofour54 provides an environment that encourages creativity and collaboration and offers

twofour54’s campus

comprehensive services and solutions for every phase of the business life cycle. Setting up business at twofour54 guarantees free zone status, with 100 per cent ownership, full exemption from corporate taxation, and support from the Abu Dhabi Government. Additionally, our set-up process is clear with a transparent pricing structure to ensure there are no hidden costs. Abu Dhabi’s strategic location as the Capital of the UAE, in the heart of the Middle East and a gateway to the Arab world is a huge benefit of setting up business at twofour54. Also the end-to-end services offered,

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MOVERS & shakers

our growing talent pool and the ability to connect with our existing 300 campus partners are just some of the many advantages of being a part of the twofour54 community.

How do twofour54’s initiatives provide a 360 degree solution to businesses? twofour54’s core business units are integrated to offer a comprehensive, world-class experience from setting up business, staffing and training

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to enabling content creation, production and release. Our one-stop-shop, business services team, helps with the logistical side of setting up and doing business in the UAE, including travel and accommodation, visas, customs clearance and government services. Our training academy is the region’s foremost provider of media industry training and offers international-standard courses to government, businesses and individuals looking to enhance their skills and employability. To date, we’ve trained nearly 7000 delegates, including 3100 UAE nationals. We help to develop the resource pool that businesses will need as they grow, by identifying and supporting talented young Arabs with media industry ambitions. We support a creative community of more than 10,000 creative individuals and provide facilities and funding to enable budding media professionals to develop great ideas into quality media products across all platforms – books, short films, music videos, animation, electronic games and digital apps. Finally, we enable media content creation through our end-to-end production services including pre-production, filming and postproduction facilities. We enable filmmakers to create content for television series, commercials, corporate videos, music promos and even the biggest Hollywood blockbuster movies, such as Fast & Furious 7 and Star Wars.

What are some of the special programmes you have in place for aspiring entrepreneurs and SMEs? How can they benefit from twofour54?

MOVERS & shakers

The demand for locally produced Arabic content will be A key driver of growth in the media industry.

t Find ou e g a more on p 44! At a glance –

why set up at twofour54?

100% company ownership in a stable, tax-free environment Unique campus SETTING with facilitated business networking Easy licensing and business set-up services On-site Media Training Academy for media professionals Full On-site HD production and post-production facilities 42

Enjoy a unique campus setting

We recently introduced a new flexible entrepreneurship scheme, initially aimed at Emirati entrepreneurs, allowing them to obtain a licence in the media zone without the need to rent office space. The company will be provided with two visas for staff and given assistance in developing and growing their business. We also established a Business Centre facility that allows multiple users to share a single physical work station, using it at different times, similar to hot-desking. This reduces the set up costs for SMEs and start-ups, while helping to widen the entrepreneurial resource pool for other partners in the media community. We have also helped to establish the first start-up accelerator in Abu Dhabi, Flat6Labs, which provides seed funding, strategic mentorship, workspace and direct support for start-ups through an expansive network of partners and activities. Flat6Labs has a strong track record in taking start-ups to scalable,

investment-ready businesses so twofour54 is very pleased to be involved. Entrepreneurs and SMEs can also tap into our database of freelancers, ranging from makeup artists to copy writers to sound assistants.

What would you say are key trends shaping the growth of the media and entertainment sector? The demand for locally produced Arabic content will be key driver of growth in the media industry. The proliferation of mobile phones is another ‘fact’ rather than ‘trend’ that will have a tremendous impact on how content is created, packaged, and in some cases, sold, as we move more and more towards paid media. E-commerce is an area we expect companies to put some focus, alongside growth in gaming and app development.

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MOVERS & shakers

The cultural context to the evolution of our industry is fascinating. Take a look at the study released at last year’s Abu Dhabi Media Summit, available at admediasummit.com, to learn more about the cultural changes that will transform our industry – and our lives – over the next decade.

How do you see twofour54’s vision being aligned with the Abu Dhabi 2030 Economic Vision? Absolutely – Abu Dhabi’s Media Zone Authority and its commercial arm, twofour54, were set up under the mandate of the Abu Dhabi government to help deliver on the Economic Vision 2030. The intention of the 2030 vision is achieve economic diversification to reduce reliance on traditional industries, and twofour54’s role is to build a sustainable media industry as both an alternative industry and career path.

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Do you see Public-Private Partnerships playing a major role in the development of the 2030 Vision? The private sector is hugely important as we develop the media industry here in Abu Dhabi. Ultimately, we are working to build a sustainable, private-led industry, so it is vital for the public and private sectors to work together. In my experience, some of the best ideas have come from collaboration and partnerships and where we see a benefit the industry, twofour54 will try to support.

economy. Good business is about good relationships, and creativity often comes from collaboration so my advice is to build your network as broadly as possible. Connect with people both in and outside your field, thinking about the supply chain you might fit into and who might fit into yours. The twofour54 campus was designed to encourage a sense of community and collaboration, and is now home to more than 330 media companies across all media platforms – come and get to know them!

What advice would you give to our readership (SME owners and entrepreneurs)? SMEs and entrepreneurs are hugely important to our people and our

For an online version, please visit: www.smeadvisor.com/2015/02/creativeforce-maryam-al-mheiri-twofour54/

MOVERS & shakers

Accelerating into the

future

Flat6Labs and its unique proposition Time and again, research has shown that eight out of 10 start-ups fail within the first 18 months of existence. But, what if there was an entrepreneurial ecosystem that could help start-ups at every step of the way – giving them training, funding, mentorship and guidance as a one-stopshop solution? The Abu Dhabi-based accelerator Flat6Labs offers all this and more. We spoke to Nina Curley, Managing Director, Flat6Labs Abu Dhabi, to get a detailed overview…

Tell us about Flat6Labs. How did it come about and what was the inspiration behind this initiative? The idea for Flat6Labs initially arose at Sawari Ventures in 2010 out of a desire to provide a full stack solution for technology entrepreneurs in the Arab region. We wanted to support them with acceleration programmes at the seed level, to help them develop viable, scalable ideas, and to provide continued backing at the follow-on and Series A rounds with angel and VC investment.

Do you tend to lean towards start-ups of a particular industry? We focus on start-ups that have a software or digital product. The hardware concepts we’ve looked at are also focusing on software as a primary differentiating factor in their businesses. Within digital, we’re relatively agnostic.

You’ve recently announced your launch within the UAE. What attracted you to this market? How do you perceive it being different from your previous operations across the Middle East?

We decided to launch in Abu Dhabi for two primary reasons. Firstly, we knew that our partnership with twofour54 would enable us to offer our start-ups a unique value proposition. For instance, we can provide added support through twofour54’s intaj and Creative Lab programmes, with film and media production, hiring creatives 44

and freelancers, and mentorship from media experts. Additionally, the infrastructure in Abu Dhabi, the smartphone penetration rates in the UAE and the proximity of industries that have a vested interest in supporting entrepreneurship, all make Abu Dhabi an excellent market for launching digital products. We also have a deep commitment in Abu Dhabi to supporting local entrepreneurship. To that end, we’re partnering with universities to deliver training in lean methodology, and to offer coaching to help students develop business concepts, while also working in partnership with others, including NYU Abu Dhabi and VentureSouq, to provide angel training to potential angel investors in the UAE.

What is the criteria based on which a start-up can join Flat6Labs? Start-ups can apply to Flat6Labs if they have a digital product, which could range from software as a service (SaaS) to a mobile application, e-commerce platform, analytics product, education technology, gaming product, digital content site, or media and film product, and more. Generally, we take early stage start-ups, but we’re open to later stages if the start-ups fit our seed funding model.

Can you share the different modules that a start-up goes through as part of the Flat6Labs programme? What are the major benefits? Once a start-up joins Flat6Labs, its team participates in an initial bootcamp, which offers training in

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MOVERS & shakers

During their launch event in Abu Dhabi

the crucial skill sets and practical approaches that start-ups need to build a scalable business. This includes key modules such as customer discovery, marketing, team building, and leadership and culture. We begin by assessing metrics that we can track throughout the cycle, taking a deep look into each company’s value proposition, revenue model, proposed sales channels, and their go-to market strategy. We’re hands on and work with world-class experts; this cycle we’ll be partnering with T2VC – a Silicon Valley innovation design firm, and Exoventure – a Virginia-based venture capital management firm with extensive expertise working with

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emerging technology entrepreneurs in emerging markets. After the bootcamp, we take the startups through three modules:

The three step process! First month: Product development Second month: Acquiring customers and gaining traction in the market Third month: Growth and early traction

At the beginning of the cycle, startups are also matched with mentors, after a Mentor Pitch day, so that

they can work with coaches and mentors throughout the cycle. By the time start-ups debut their ideas to investors at a final Demo Day, they will have benefitted from the training, the mentorship, the seed funding, the free, sunny office space, and a multitude of perks and services that we offer through our network. What sets us apart from other standard accelerators, however, is the quality of our community. I know many of our community members personally, and can attest to their incredibly valuable expertise as well as their deep commitment to the start-up process. 45

MOVERS & shakers

the infrastructure in Abu Dhabi, the smartphone penetration rates in the UAE and the proximity of industries that have a vested interest in supporting entrepreneurship, all make Abu Dhabi an excellent market for launching digital products.

How do you think you differentiate from other similar accelerator programmes in the region?

Flat6Labs is the only regional programme with established regular programmes in the three leading digital markets in the Arab world, and we’re also the only regional member of the Global Accelerator Network, which was established by TechStars – one of the leading accelerator programmes in the world, originally based in Boulder, Colorado. Aside from those factors, I’d say that locally we differentiate ourselves by the kind of culture we espouse: we value founder-friendly terms, a culture based on transparency, a hands-on, experiential approach to training, and a culture that truly supports mentors, with unique content streams and exclusive gatherings. We’re delighted to have as many amazing mentors as we have, and we work to guarantee

that they are well-matched with start-ups based upon experienced synergies to product the maximum value on both sides. While we do our best to allow relationships to build organically, we also encourage companies to offer mentors equity as the relationship progresses.

Tell us about your partnership with twofour54. Thanks to our partnership with twofour54, we are able to offer our start-ups support with company registration and visa acquisition – this is in addition to the seed funding that we offer. Essentially, this makes Flat6Labs Abu Dhabi one of the simplest routes to getting set up in the UAE. We also offer an incredible, well-lit, spacious office space, which twofour54 has built – enhanced with breakout meeting rooms, private phone rooms and training spaces. A cornerstone of our partnership, as I mentioned earlier, is our agreement with Creative Lab and intaj to support start-ups during the media production process. Finally, twofour54 also offers start-ups discounted office space after graduation.

What kind of funding support do you offer? We provide $30,000 to $50,000 in seed funding in exchange for a seven to 15 per cent equity stake, and we match angels in the follow-on round, with up to $100,000 per company.

When is your first cycle in UAE going to kick-start? What is in store for 2015?

Our first cycle will kick-off in early March. We’ll host our Demo Day during the first week of June, giving the community a chance to connect with our start-ups. We have a lot in store! Following the launch of the cycle, we’ll also be hosting the GCC finals for Venture Scout in March, coorganising an angel training event in April, and we have a few more events up our sleeve that I can share with you once they’re finalised.

How many start-ups do you work with in each cycle? We work with eight to 10 per cycle.

Do you offer any kind of postgraduation support to the participants? Do they become part of your start-up network?

The start-ups we support are always a part of the regional Flat6Labs community. What this means is that not only do we support them with free office space for two months after graduation and office options for the duration of their time in Abu Dhabi, but we also work to continually facilitate connections and mentor support for start-ups. Start-ups that join our network also get unique access to Flat6Labs graduates in Saudi Arabia and Egypt – one of the underestimated benefits of joining is being able to trade ideas and develop partnerships with a unique set of companies in the three biggest digital markets in the Middle East and North Africa.

For an online version, please visit: www.smeadvisor.com/2015/02/ accelerating-into-the-future-flat6labs/

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MOVERS & shakers

In the hot seat Ray Eglington,

Managing Director – International, Four Communications

What started out as a small startup in 2001 is now one of the leading names in the regional PR and communications industry. We met the man at the forefront of this success – Ray Eglington, Managing Director – International, Four Communications. In a candid chat with SME Advisor, he shares valuable insights on life as an SME, doing business in the capital and trends shaping the sector…

Tell us about Four Communications. How did it all come about?

In the late 1990s, there was a lot of consolidation in the UK public relations industry, meaning that clients had to choose between either boutique specialist PR agencies focused on specific sectors or the big global machines. The idea behind Four Communications, when we first started the company in 2001,

was to fill that gap: to offer the big agency skills but with a small agency service ethos.

What attracted you to this industry? After I finished university, I interviewed for an eclectic mix of job opportunities in a range of different industries. PR immediately stood out because of the people I met and the variety of things they got to do. Interestingly enough, one of the first PR executives who ever interviewed

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MOVERS & shakers

me for a job is now one of my business partners at Four Communications!

What were some of the initial challenges you faced? When we moved our Gulf head office to Abu Dhabi in 2007, one of the major challenges was the experience of learning how to operate in a completely new market environment. We were lucky, then, in that Abu Dhabi was really opening up more to international businesses looking to support the capital’s booming business and industrial success.

How do you differentiate yourselves from other successful agencies in this industry? What are major factors that give you a sustainable competitive advantage?

Ray Eglington, Managing Director – International, Four Communications

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A great agency is all about finding, attracting, developing and retaining great talent. What truly sets us apart – not just in this market, but also internationally – is the people we attract. That comes down to culture. We try to provide a challenging learning environment in which teamwork and collaboration is encouraged and appreciated – and in which our people can develop. In turn, great people attract and retain great clients. We are blessed to work with some of the most prominent projects and companies in Abu Dhabi and the UAE, including the likes of Etihad Airways, the national carrier, and Etihad Rail, the company developing the country’s national rail network. We also support communications strategy for the UAE Space Agency and the InterContinental Hotels Group (IHG) in the Middle East.

What are certain values that you’ve embedded as part of your company culture?

Four Communications is run on four core values: • Experience – we are experts in disciplines and in industry sectors; client teams are led by senior practitioners in their fields • Passion – we love what we do, have fun doing it and it shows • Intelligence – we are bright, thoughtful and strive to find the right answer to clients’ challenges; we are intelligent and ambitious in the way we run our company • Commitment – we give the best service, our staff the best place to work and we are committed to helping and supporting each other These are what make us – and our work – EPIC.

Being one of the top communications agencies in the region means it’s important for you and your team to always stay ahead of the technological curve. How do you see yourself adopting the latest tech trends? How do you use technology to better your customer’s experience? In our sector, a key and persistent change is the convergence of traditional, digital and social channels into integrated experiences for consumers. The one thing that remains consistent across all those is content. That’s what we at Four Communications are all about – we are storytellers and content creators. 49

MOVERS & shakers

what attracts investment is a combination of a sound business plan, a credible management team, a vision to create something different and the commitment and work ethic to deliver against that vision.

Is there any particular industry sector that you have specialised expertise in? Are there sectors that you havenâ&#x20AC;&#x2122;t yet tapped and would like to in the future?

We work across a variety of different sectors and are particularly strong in travel and tourism, aviation and aerospace, real estate, energy, education and sports. Currently, we are also expanding our sector offering in automotive, healthcare and luxury industries.

How do you measure the effectiveness of your PR strategies? We use a whole range of sophisticated measurement and evaluation tools, depending on the specifics of each individual communications campaign. We also look to build in a set of key performance indicators (KPIs) into the PR programmes we develop and agree on these with clients from the on-set.

Today, when you look at expansion strategies, how do you convince investors of your future potential?

I really believe that convincing others of a companyâ&#x20AC;&#x2122;s potential involves not only demonstrating a track record of successes and impressive wins, but also being able to show and prove that you have accepted, understood and learnt from your failures.

What, according to you, are prime factors that aspiring entrepreneurs should keep in mind when approaching investors?

What is your definition of effective PR in terms of what it brings to the companyâ&#x20AC;&#x2122;s position in the market?

The key factor for aspiring entrepreneurs looking to attract external investors is convincing them that you will treat every Dirham of their investment as carefully as you would your own. You have to deliver value against each Dirham.

Effective PR is work that shapes and changes behaviour.

What is your personal leadership mantra?

At the initial stages of start-up, how easy or difficult was the getting finance process?

I believe effective leadership is about pushing people to get the best out of themselves and to constantly improve. You need to create an environment in which they can do that. Success in a client services business such as ours is all about

Regardless of which market in the world you operate in, what attracts 50

investment is a combination of a sound business plan, a credible management team, a vision to create something different and the commitment and work ethic to deliver against that vision.

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MOVERS & shakers

the difference between what is expectation and delivery. You need to find ways to go the extra mile.

If you were to describe the working experience at Four Communications in three words, what would they be? Challenging, stimulating and fun.

What is your vision for the next five years? I am incredibly proud of the small part we, as Four Communications, have played so far in telling the story of Abu Dhabi, the UAE, and their companies and institutions. For the last seven years, we have been involved in some of the most influential and vital initiatives this country has seen. Over the next five years and beyond, I hope we can play an even bigger part in telling that story. This is one of the most exciting places on the planet at the moment – it is great to be a part of it all.

watching that plan unfold and succeed over the years – and we have been fortunate to have worked with many organisations and sectors that have seen opportunities because of that very vision of diversification. As Abu Dhabi continues to diversify across a variety of sectors, we hope to get even more involved in the projects and initiatives that are driving the emirate’s continuous and sustainable growth.

Having a dream is fantastic but it needs to be accompanied by the commitment and work ethic to turn that dream into reality.

Finally, what is your message for aspiring entrepreneurs in the region? To aspiring entrepreneurs, I would say there are two sides of the coin. One, you must believe in yourself, your business idea, and your ability to achieve your vision. But on the other side, don’t expect it to be easy. The people who succeed in everything are, almost without fail, the ones who work the hardest. Having a dream is fantastic but it needs to be accompanied by the commitment and work ethic to turn that dream into reality.

How do you see the Abu Dhabi 2030 Economic Vision generating opportunities for your sector? Is your strategy aligned with the Vision?

One of the very first things I read when I landed in Abu Dhabi back in 2007 was the 2030 plan. I remember being very fascinated and impressed with how the government had outlined such a clear vision for the future growth and development. It has been an incredible journey

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For an online version, please visit: www.smeadvisor.com/2015/02/in-the-hotseat-ray-eglington-four-communications/

ENTREPRENEURSHIP

Leading from the front

champion, mentor, strategist, marketmaker, the CEO is fundamental to SME success Every member of the C-suite has seen his or her role change considerably in the last decade, and the CEO is no exception, taking up a more strategic, vision-building role and increasingly armed with a top-level business qualification. Yet the CEO is more than ever the lynchpin role in the organisation, taking up the challenges that others dare not (and should not) handle. Senior Editor Paul Godfrey reports from the CEO front line…

Times they are a-changing. In 1969, Harvard Business School conducted a survey of 4,300 senior executives and asked them about the fundamental role of the CEO as they understood it. Overwhelmingly, the key criterion was seen to be the effective management of the business’ internal workings, with the second most important point being the accurate and efficient reporting to the Board of Directors. This very functional view of the CEO was common at a time when the titles of Managing Director and CEO were often interchangeable (see - the first criterion now makes more sense) and when the most

common qualification would have been a scientific, engineering or technical degree. Typically, the CEO was once seen in a much more ‘nuts and bolts’ role than would ever be the case now and the trend towards the CEO as strategist, champion and leader is in fact gathering pace all the time. There’s no doubt, though, that whatever the interpretation, the role of CEO is incredibly important for the developing SME, and will often be either the corner-stone of success or the prime reason for the business being a flop. What’s more, the statistics show that the CEO is now more

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ENTREPRENEURSHIP

Directors, which is in turn headed by a Chairman. This separation of the roles between CEO and Chairman prevents power being concentrated in one place - but often, it’s only relevant to the large organisation. For all but the very biggest SMEs, the CEO will simply be the most senior person on the management team (and often the owner), reporting to the panel of investors. In this capacity, it’s unlikely that there will be a Managing Director as well, so the role of CEO will have to combine being very hands-on (managing relocation to new premises, explaining the dress code, etc.) while also being the voice of the business out in the market and spearheading its commercial ‘wins’ and cultural and strategic values. Notwithstanding, it’s very likely to be the case that even with the smaller or mid-sized SME, the CEO is far from being an independent entity. In all likelihood, he or she will be beholden to delivering the wishes of investors or key financial entities whose involvement is fuelling the business’ commercial path and providing the context for development and good performance.

The technical definition of a CEO is often that of an individual who represents the views and interests of the C-suite to the Board of Directors, which is IN turn headed by a Chairman.

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often strongly qualified with business-specific higher degree. For example, a study by Carola Frydman of MIT, looking at the years from 1936 to the early 2000s, shows that there has been a rapid increase in the share of CEOs holding an MBA. This has risen from approximately 10 per cent of CEOs in 1960 to more than 50 per cent by 2002. Current levels are estimated to be around 55 per cent. Preconceptions The technical definition of a CEO is often that of an individual who represents the views and interests of the C-suite to the Board of

What should today’s CEO be doing? The answer is, four things. These four things cannot - and should not - be done by anyone else within the organisation. The following list is in descending order of importance, with the most important function at the top. 1) Setting strategy and vision. Lots of people can help the senior management team develop strategy. Lots more - including the investors and shareholders - can approve a business plan. Yet the actual direction, destination and market positioning can only be set by one person: the CEO. Which competitive scenarios will the company enter? What products will it sell and which

ENTREPRENEURSHIP

The CEO must lead the way in axing projects which lose money or don’t support the strategy.

ones will it allocate R&D budgets to? How will the company establish a USP? The CEO makes these decisions and builds the team to steer the company accordingly. 2) Building culture. Work is first and foremost about people; the type of people you have reflects the style of culture you build. The right culture can give you a supreme portfolio of top perforrmers.. Culture has hundreds of dimensions and throughout, the CEO sets the tone. The CEO’s clothes send signals about how formal the workplace is. The CEO’s diary sends signals about who is and isn’t important. How the CEO allows or rebukes errors (feedback or failure?) sends signals about risk-taking. Always remember: congratulations from the CEO on a job well done can motivate a team like nothing else. Silence can send a damning signal just as quickly. 3) Team-building. The CEO recruits, terminates and leads the senior management team. They, in turn, recruit, terminate and lead the rest of the organisation. The CEO must be able to recruit and terminate as necessary not shrinking back from either. He or she must keep all teams working together in a common direction. He or she sets direction by communicating the overall strategy and vision of where the company is going. 4) Capital allocation. The CEO (not the CFO) sets budgets within the business and determines the means to fund key projects and initiatives. The CEO must lead the way in axing projects which lose money or don’t support the strategy. He or she considers carefully the company’s major priorities, and manages the capital allocation accordingly. It doesn’t matter if the CEO has a financial background or not: he or she must have the

financial competence to determine where the money needs to go - and go out and get more if there isn’t enough to round. Within a larger organisation where there is an established Board of Directors, each of the above activities will be modulated and approved by the Board members whose job is to secure company returns to its stakeholders and markets. This will mean that the CEO must set aside priority time for Board presentations and make ‘winning over’ the views and commitment of the board a fundamental part of his or her working mission. In a smaller company, aside from the ‘four pillars’ outlined above, there will be a consistent need to be the recognized champion of other more everyday tasks. These include: • Heading-up all liaison with funding and lending partners: the CEO must be an articulate and well-informed presence at the helm of all interaction with banks, VCs, investors, etc. • Leading pitches for major new ‘Platinum’ customer accounts • Supervising the creation of all new design identities for the business and its market positioning and customer niche • Being fully accessible through the range of social media and not afraid to engage in direct customer exchanges and messaging However the role of CEO has changed, one thing is certain: it remains the single most challenging, engaging and rewarding job in the organisation. Is it on your radar?

For an online version, please visit: www.smeadvisor.com/2015/02/leadingfrom-the-front-role-of-the-ceo/

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THE NEXT LEVEL

Keeping it simple

your business strategy for 2015

With a lot of talk about global expansion, IPOs, M&As and the digital revolution, are SMEs losing sight of the absolute basic strategies that can set a solid foundation for business success? What are areas that SMEs can refresh straightaway to supercharge their business? We spoke to expert practitioner Geetu Ahuja, Head of GCC, CIMA, who shared simple, relevant and practical advice to supercharge business growth in 2015â&#x20AC;Ś

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the next level

We live in times where setting your own SME is no longer considered an unachievable dream. From a three member cakes and confectionary set-up based in Beirut to a team of 25 running a successful consulting business in downtown Dubai, SMEs have changed the rules of modern day business. They play an important role in todayâ&#x20AC;&#x2122;s society and are considered to be an engine of growth and employment in the Middle East. In the UAE, close to 300,000 companies can be classified as part of the SME sector; this currently accounts for more than 90 per cent of the countryâ&#x20AC;&#x2122;s total registered companies. This means now, more than ever, SMEs need to ensure they are moving in the right direction, competing in the right markets, with the right products and services. However, despite the ample opportunities, the current economic climate might prove to be challenging for mid-sized businesses, where they can be hit the hardest by issues such as cash flow problems and finding the time to minimise costs and maximise value. So, how does a business owner with limited resources run an effective and profitable business? Here are top tips that can help SME owners stand out in a crowded market place. Setting business goals There are some basic principles SMEs should consider when setting business objectives. They have to be clear and concise, relevant, timely meaningful and more importantly feasible. Business goals should be capable of being broken down to levels below the corporate whole so that groups and individuals across all levels know what they are expected to achieve and how the business goals relate to overall performance.

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SMEs also need to make the most of their market situation â&#x20AC;&#x201C; performing better than the competition using the right mix of assets, skills, finance, infrastructure and relationships to deliver good value propositions to customers. It is crucial that they minimise costs that add little or no value to customers. While setting goals, owners need to be aware of external environmental changes and ensure that they are capable of responding quickly to new opportunities or threats. SME owners should be well equipped to be able to understand and evaluate the health of their business. Setting clear business goals is thus a basic necessity that could mean the difference between survival and failure. Establishing a performance review system Once you have a robust business plan, it is crucial to benchmark it with a range of key performance indicators (KPIs). KPIs are financial and non-financial measures used by organisations to evaluate how successful they are in achieving their goals. Selecting the right KPIs and using them effectively will help improve business performance. Reviewing your progress and understanding how to get the best out of your business and where to take it next can be hugely beneficial. Additionally, to be effective, information on performance against goals must be regularly disseminated to all team members in the organisation. This is particularly true if there have been recent changes to the business, the market or the economic environment that an SME operates in. Managers should also seek to encourage the flow of performance information throughout the organisation.

THE NEXT LEVEL

For any SME looking to expand THE BUSINESS, the first investment should be made internally by bringing on a knowledgeable management accountant.

Geetu Ahuja, Head of GCC, CIMA

In choosing KPIs, SMEs should also consider which area of their business sets them apart from their competitors? Which areas tend to go wrong most often? Which areas, if they go wrong, will cut off cash quickly, cut off sales and cut off profit? Delegating to specialists For any SME looking to expand its company, the first investment should be made internally by bringing on a knowledgeable management accountant, who brings in the added value of not just being an accountant who looks at numbers, but with competencies that integrate business and finance, looking at the business on the whole and be able to successfully steer the company towards short-term profits while keeping an eye on the long-term goal. Having someone on board who can advise on all aspects of managing a business will allow for more positive interactions with all members in an organisation. Acquiring key members to join your team can ensure bigger and better business returns in the future. For many SMEs, finding the time to stand back from the dayto-day running of their business to take stock of performance and longer-term strategic issues can be challenging. This is where investing in the right talent can lead to sustainable, long-term payoffs. Hiring a qualified and well-experienced management accountant or a CFO will not only bring fresh blood and new perspective to the business but will also enable the owner to stay more focused and spend his time, energy and passion where it is most needed, i.e. chasing the big picture and ensuring that all team members understand and work toward this vision.

The road to innovation The current business economy means that now, more than ever, SMEs need to take a good look at the fundamentals of their businesses. As markets mature, SMEs need to find new sources of growth. The ability to innovate underpins their existence and sustenance in a competitive market place. Innovation will allow SMEs to find new ways to satisfy customer needs, keep staff motivated and excited about the future, assure suppliers of the companyâ&#x20AC;&#x2122;s prospects, and lead to cost-saving advances in production process and service delivery. There has never been a better time to be a SME owner. If one can understand and master these nuances and concentrate on improving performance, stripping out unnecessary costs and focus on the right strategy to take the businesses forward, then there will be no turning back!

For an online version, please visit: www.smeadvisor.com/2015/02/yourbusiness-strategy-for-2015/

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BUSINESS INTELLIGENCE FOR INTERNATIONAL TRADE www.tradeandexportme.com

Contents

62 ADVISORY BOARD Key personalities sharing their expertise to ensure that we bring you the latest trends and issues in the field of trade. Strategy 64 HAPPY CUSTOMERS ARE LOYAL CUSTOMERS Dr. Ashraf Mahate, Head of Exports Market Intelligence, Dubai Exports, on how you can make your customers the best marketing tool. Trade & Growth 68 Capital Gains: Doing business in Abu Dhabi How does your business fit within The Abu Dhabi Economic Vision 2030, and what are the support initiatives that will help you reap the benefits? Trade and Export ME presents a detailed reportâ&#x20AC;Ś

Governments, associations and large private companies have set up various centres, programmes and funds aiming to facilitate SME development. p68

TRADE AND EXPORT MIDDLE EAST

The Real Estate Regulations and Strata Regulations as drafted represent a significant long-term statement of intent for the ADGM and are likely to have a positive impact on the Abu Dhabi property market as a whole. p76

VIP Interview 72 SME success spotlight: Milly Pack FZE We met up with the dynamic team behind Milly Pack FZE – a growthstage business that has not only successfully created a niche for itself in the market but is slowly making its way to the top…. Legal 76 Abu Dhabi Global Market: A new direction for Abu Dhabi Land Law Legal experts from Clyde & Co. give us a detailed overview of the Abu Dhabi Global Market’s (ADGM) Consultation Paper No. 6 of 2015 and provide an analysis of what this means for business owners in the region…

TRADE and export middle east

ADVISORY BOARD Trade and Export Middle East presents a dynamic group of industry experts and leaders as part of its Advisory Board. The following key personalities will help add value to our analysis and ensure that we bring you the latest trends and issues in the field of trade.

H.E Saed Al Awadi CEO, Dubai Exports, Department of Economic Development, Dubai

Dr. Adeeb AlAfeefi Director, Foreign Trade & Export Support International Economic Relations Sector, Department of Economic Development, Abu Dhabi

Khalil Saqer Bin Gharib Corporate Communications Director, Dubai Customs

Lakshmanan Sankaran Chairman, Regional Banking Commission (MENA)- ICC Paris

Moin Anwar Trade & Investment Commissioner (Middle East), New South Wales Government, Australia

Peter Fort CEO, Ras Al Khaimah Free Trade Zone

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Strategy

Happy customers are loyal customers Making customers the companyâ&#x20AC;&#x2122;s marketing tool

Good business is often attributed to efficient marketing strategies. While there are so many tools and tactics available in the market that promise optimum results, word-of-mouth marketing is still recognized as the most-effective strategy for any product or service. But what if this is simply unachievable due to low customer satisfaction rates? Dr. Ashraf Mahate, Head of Exports Market Intelligence, Dubai Exports, clues us in to this important subject.

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Strategy

SMEs should be wise and focus on exceeding customer satisfaction through developing ‘wow’ factors that can lead to greater client loyalty.

Most SMEs focus on acquiring new customers when actually the key to a successful business is customer retention. Numerous studies have found that acquiring new customers can cost seven times more than retaining the existing ones. So why do customers stop using a particular company or service provider? Studies show that twothirds of customers who turn away are unhappy with the service they receive. A further one-seventh are unhappy with the product or service. And then a further one-eleventh decide to switch to the competitor. This leaves only 11 per cent of customers, which means that for every 100 customers attracted 89 do not return. Such a low performance level does not only increase the costs of the firm, as they are constantly trying to attract new customers, but the dissatisfied ones become a ‘bad advert’ for the firm. While many companies focus on price competitive tactics, they forget that the real winning strategy in keeping customers is always satisfaction. A satisfied customer will not only come back to buy more but they are also likely to become a perfect advert for the

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firm, thereby helping the company to further increase its customer base. It is no news that there is a strong correlation between satisfied customers and sales. However, what is not known by many is the reality that SMEs tend to put most of the focus on prices alone, which results to them paying less attention to all other factors relating to customer experience. What they should keep in mind when it comes to customer satisfaction is that offering low or even the lowest prices in the market does not entirely compensate for good customer service. Any fall in a customer’s experience will in time lead to a damage in the reputation of a firm or brand. Once these aspects are diminished then it is only a matter of time before the company loses its loyal customers and ultimate failure is just one step away. A vital factor to keep in mind when doing business is that while the prices you offer is important, customer satisfaction has no substitute. This is more so the case in global markets where an international firm also competes with domestic producers. SMEs should be wise and focus on exceeding customer satisfaction through developing ‘wow’ factors that can lead to greater client loyalty. Ideally an SME needs to develop strong customer relationships so that clients do not ever think of using the services of another firm. At the same time, a strong relationship like this will result tin the customers becoming ambassadors for the firm in recruiting new clients. The internet age has made all this much easier through the vast host of discussion sites, blog pages and of course social media. In fact, the internet has shown that customers are effective not only in discussing their pleasant experiences but also their bad ones. The scores of parallel sites of major international firms is one example of how disgruntled customers can use the power of the

internet to persuade others away from using the services of the firm. If the goal of an SME is to retain its customers and utilise them to attract new ones then it needs to showcase a ‘wow’ factor to every client. One of the simplest ways of doing this is through under promising and over delivering in all aspects of the product and service. It is better for the SME to exceed the customer expectations than to disappoint or lower their experience. Everyone has experienced the situation wherein a tradesman makes an appointment and either fails to arrive at the agreed time or not at all without a telephone call or an explanation. On contrary, there are also scenarios wherein the firm actually does more than what is expected ahead of time. Both are unexpected situations, and while the first leads a customer to become annoyed or angry, the second results to a pleasant and memorable experience. In terms of customer loyalty we are more likely to reuse the services of the latter firm as well as recommend it to others. The difference between the two situations is that the first made a promise yet did not keep to it while the second made a commitment and not only kept it but exceeded it. The basic idea of under promising and over delivering is to capitalize on the fact that customers are positively influenced by excellent service that they did not initially expect. If the customer expects a certain level of service and receives exactly just that, then there is no unexpected component. In other words there is a huge difference between meeting customer expectations and exceeding it, and more often than not the latter is more valued. Expectations of a particular service are formed or created by the firm through the promises that they make. When I order a pizza and the restaurant informs me that they will deliver it

Strategy

The concept of under promising and over delivering is not about making false promises at the start and then improving them. The concept is about realising and understanding the business, and what it takes to make a customer happier.

within 30 minutes then that is what I expect. If the pizza arrives exactly 30 minutes later I am satisfied or even mildly happy. However, if the pizza were to arrive in say half the time I’m expecting it, then my satisfaction will be much higher. The concept of under promising and over delivering is not about making false promises at the start and then improving them. The concept is about realising and understanding the business, and what it takes to make a customer happier. Also, this concept is not about doing things fast without taking notice of any possible errors, instead it requires a business to set systems and processes in place so that their customers receive an excellent product or service. As such the firm needs to rigorously plan various aspects of its operations to ensure that it has all the necessary resources to cater to the needs of the customers. Furthermore, the firm should have an extensive understanding of the needs of the customer and address it accordingly.

Under promising and over delivering is all about doing a host of little things that the customer does not expect which together make for a great experience. The best part about under promising and over delivering is that it costs the SME nothing to implement yet it is extremely effective. For resource stretched SMEs, the question is – how to develop an under promise and over deliver strategy? Most of the time, SMEs are trying to firefight and deal with yesterday’s problems in the light of today’s circumstances. Nevertheless, SMEs can take simple and cost free steps to ensure that they have satisfied customers.

FIRST, the SME needs to find out what are the issues that customers feel most strong about and which annoys them the most. Such an understanding of customer sentiments does not require a large and expensive customer survey, but it can be done simply by talking to customers at any www.tradeandexportme.com

Strategy

processes so they can do things better. Sometimes, if for whatever reason the promise cannot be met each time then the SME may need to simply just revise their offering.

THIRD, there is little point in

delivering a product that is faulty or does not work properly. Therefore, the SME needs to ensure that it has appropriate quality control procedures to remove product or service defects.

available opportunity and building up a databank. Once these key frustrations have been identified, the SME can now develop or plan a strategy to ensure that they are minimised if not totally removed. Of course the SME must also find out what pleases its customers and enhance that particular component in its product or service. In some cases it also helps to even just subtly mention the fact that aspects which annoy the customer have already been improved or dealt with professionally. For instance, a tradesman can simply mention to a customer that the problem that he has voiced out has already been taken care of and add a positive aspect such as carrying out an additional task that needed doing at no extra cost.

SECOND, the SME should re-evaluate its own promise and know when to compromise to ensure that they deliver each and every time. In some cases in order to meet its promise the SME may need to change its www.tradeandexportme.com

So the lesson is quite simple â&#x20AC;&#x201C; under promising and over delivering leads to a strong customer loyalty, referrals and greater sales. On the other hand just under delivering simply makes customers angry and disgruntled customers. Of course in reality things to go wrong and even the best laid plans can fail. In such circumstances the SME needs to just be transparent with the customer and own up to the errors. At the same time the SME needs to make good of the damage through compensating the customer for any inconvenience experienced. But keep in mind that, when the under promise and over deliver concept is correctly implemented, the SME will surely have satisfied customers who will become its most devoted fans.

Dr. Mahate received his doctorate from Cass City University Business School in London (UK). 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 Anti-Money Laundering Specialists (ACAMS). He can be reached at ashraf.mahate@ dedc.gov.ae.

For an online version, please visit: www.tradeandexportme.com/2015/02/ happy-customers-are-loyal-customers/

TRADE & GROWTH

Capital gains

Doing business in Abu Dhabi Abu Dhabi has been hailed as one of the world’s most vibrant economies and is set to embark on a new era in which diversification is at the top of the government’s agenda. In fact, this lies at the core of the capital’s blueprint for growth: The Abu Dhabi Economic Vision 2030. How does your business fit within this agenda and what are the support initiatives that will help you reap the benefits? Trade and Export ME presents a detailed report…

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TRADE & GROWTH

SMEs are crucial to the diversification of the capital’s economy, as they face lower risks because of their agility. Recognising this as a huge business prospect, Abu Dhabi is providing an invaluable platform for entrepreneurs to build relationships and do business, while being the premier learning and networking arena for individuals and organisations. The range of licence options and locations, coupled with support infrastructure, simplicity of process and a tax free environment, make Abu Dhabi arguably the most attractive business haven for SMEs in the world today. It is a highly transparent and user-friendly market for budding and experienced entrepreneurs. The expansion of free zone categories and reduction in restrictions on foreign ownership has also helped to stimulate SME growth. Better business banking support, easing of lending restrictions and customer payment options are areas which the government and the industry sector is working on, for promoting significant growth of SME. Providing a support system: Government initiatives The rapid growth of the SME sector can be attributed to government efforts to diversify the economy and create more jobs in non-oil industries. These initiatives are primarily aimed at enabling business owners to reach their full potential, not just by providing capital, but also by forming networks and exchanging information and advice. New legislation was introduced in April last year for raising the contribution of SMEs to the country’s economic output up to 70 per cent by 2020, from the current level of 60 per cent. Governments, associations and large private companies have set up various centers, programmes and funds aiming to facilitate SME development. Education programmes focusing on inculcating entrepreneurship goals in young minds are being perceived as the

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Governments, associations and large private companies have set up various centers, programmes and funds aiming to facilitate SME development.

first step to create awareness and knowledge about SME enhancement. Another major milestone was the new SME draft law approved last year to promote the sector, which allows small and medium-sized firms to use machinery and other assets for securing back loans, in order to improve financing options for the firms. Once there is a formal record of the assets (which includes the machinery and inventory), SMEs will be able to use them as collateral. Other governmental entities transforming the SME sector with their ongoing initiatives include: • Khalifa Fund – A catalyst for growth 2015 has been set as the year for development, improvement of the services and acceleration of the processes at the Khalifa Fund for Enterprise Development which will launch initiatives to promote the culture of entrepreneurship

TRADE & GROWTH

Abu Dhabi has focused on providing economic freezones and establishing business clusters to help foster industry linkages between companies operating in the region.

and to support the SME sector in the country. It has funding initiatives which include Khutwa, a microfinance programme that provides loans of up to AED 250,000 to support small businesses; Bedaya, which offers loans of up to AED three million for start-ups; and Zeyada, which seeks to support the expansion and development plans for SMEs through loans of up to AED five million. • Abu Dhabi Businesswomen Council – Empowering female entrepreneurs The goal of Abu Dhabi Businesswomen Council’s Mubdiah programme is to enhance the contribution of female nationals to the private sector by ensuring their right to practice business at home, and assisting them in their transition from a home-based business to a full-grown SME. This has proven to be a boon for many female entrepreneurs, particularly those seeking support in areas such as legal permissions, documentation processes and technical advice. • Freezones: a melting pot of entrepreneurialism Abu Dhabi has focused on providing economic freezones and establishing business clusters to help foster industry linkages between companies operating in the region. Twofour54 and KIZAD are great examples of freezones that work to attract the best and brightest companies across a diverse range of sectors. The zone tenants range from internationally established companies to start-ups, where the smaller firms have access to mentoring and support services. Redefining entrepreneurship Creating a ‘culture of entrepreneurship’ is an important concept for competitive economies,

as it shows the region’s ability to remain dynamic by meeting consumer demands with new business offerings. The government of Abu Dhabi has made entrepreneurship a priority for the Emirate, with a goal of becoming a sustainable, diversified, high-value added economy that encourages enterprises to grow and thrive. Industry linkages and clusters should not be exclusive to economic freezones. To facilitate ease of development, the Department of Economic development (ADDED) has addressed the gap between SMEs and their informational barriers by providing industry linkage and market intelligence services to companies. Connecting small businesses with associated companies in their sector or value chain can help improve firm growth and improve their prospects in the industry. Federal business guidelines, regulations and establishments such as a credit bureau, rating agency and a collateral registry are fundamental building blocks for a nation’s overall economy, market and the development of a SME sector. Access to information and the availability of financial and funding resources to entrepreneurs is critical for the establishment and growth of SMEs. While efforts from government, along with financial institutions, are ongoing to develop these fundamental building blocks, increased focus on public-private sector initiatives will fuel economic growth and promote diversity.

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VIP INTERVIEW

SME success spotlight Milly Pack FZE

We met up with the dynamic team behind Milly Pack FZE – a growth-stage business that has successfully created a niche for itself in the market and is slowly making its way to the top….

The packaging industry is a thriving sector in the UAE. Which industries do you cater to and how is the growth in this sector? We target various industries such as food, pharmaceutical, confectionary and automobile. Going by current market trends and expert analysis, the UAE will see massive growth in its packaging industry over the next five years – so it is the ideal time for us to be operating in this sector.

How is the competition in the packaging industry? What gives you an edge over your competitors? Competition is quite healthy in the packaging industry, which is always good for growth. Our core strengths are: quality products and reliable service. Focusing on these, without getting sidelined by competition, is what will keep us on top of the market.

How do you ensure that you are adhering to the right protocols in packaging products from different sectors? Packaging is the backbone of all product industries; every industry has its own protocols and quality benchmarks. For example, the food industry is very specific about the standard of raw materials that we use to make their packaging material. We strictly follow such instructions to ensure highest quality products.

The company’s state-of-the-art equipment

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VIP INTERVIEW

10-second company profile Milly Pack FZE is the sister concern of Jebel Pack LLC Dubai. Over the last three decades, Jebel Pack has established itself as one of the key players in the corrugation industry of the UAE. Jebel Pack LLC makes outer packaging (Corrugated cartons) for a raft of products in the market. Milly Pack FZE provides duplex or inner packaging for existing and potential clients within the UAE and Africa region.

Kumail Rashid, Director, Milly Pack FZE

Milly Pack FZE is set up in RAK FTZ

Milly Pack FZE plans to multiply its capacity

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VIP INTERVIEW

In the age of the digital revolution, technology has become an integral part of our lifestyle and plays a critical role in industrial production.

What are key trends that will shape the packaging industry in 2015?

What is your vision for the future? Do you have plans of setting up operations outside RAK?

In 2015, there is an increased demand for superior quality products with high-end, sophisticated finishing. As the competition is very tight, manufacturers are investing heavily in state-of-the-art equipment and machinery in order to produce quality products that will meet the needs of the market.

We have massive growth and development plans for the next few years. Following the collaborative support we’ve received from RAK FTZ’s management, we are planning to open few other exciting projects in the near future. Moreover, we are also in the planning stages of multiplying our plant’s capacity to be three times of what it is now.

What attracted you to open your business at RAK FTZ? What’s great about operating our company at RAK FTZ is the continued assistance provided by RAK FTZ in each and every aspect of the business. We are extremely grateful to the RAK FTZ management for their excellent support and very much look forward to sustaining this solid partnership with them.

What advice would you give to fellow SMEs in this region? Definitely consider expanding operations across different Emirates – particularly RAK! With the backing of RAK FTZ’s management and other prominent partners, SMEs can surely flourish and take their businesses to new levels.

How important is technology for you? In the age of the digital revolution, technology has become an integral part of our lifestyle and plays a critical role in industrial production. With rapid advancement of technology, the problems we face in production procedures have significantly reduced. Currently, we’ve implemented several ‘quality control’ mechanisms which enable us to reduce error, enhance product quality and stay on par with international benchmarks.

For an online version, please visit: www.tradeandexportme.com/2015/02/ sme-success-spotlight-milly-pack-fze/

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LEGAL

Abu Dhabi Global Market

A new direction for Abu Dhabi Land Law

Land, who owns it and how that ownership is exercised, plays a central role in dayto-day business discussions across the UAE. It is in this context that real estate professionals across the region have looked with great interest to the publishing of Abu Dhabi Global Market’s (ADGM) Consultation Paper No. 6 of 2015 (the Consultation Paper). Legal experts from Clyde & Co. give us a comprehensive outlook and analyse what this means for business owners in the region…

The Consultation Paper (which forms part of a wider consultation process with respect to ADGM’s system of regulation as a whole) contains two draft regulations – one dealing with the general principles of real estate law in ADGM (the Real Estate Regulations), and another dealing with real estate development and strata titling (the Strata Regulations). The most striking aspect of the wider consultation process is the proposed direct application of English common law into ADGM to deal with areas of law such as contract and tort. As will be appreciated by those familiar with the real estate sector

in the UAE (and in particular Abu Dhabi), land law and land ownership was always a potential area for a “stand-alone” or more tailored approach when it comes to reform or introduction of new law. The result is a codified approach with stand-alone regulations applying to all property matters within the free zone. Globally, the basis of all but a few systems of land tenure begin with the establishment of a central land register in which to record the real estate interests of stakeholders. Under the current proposals, ADGM will be given its own register of real estate interests (the Register) and an authority empowered to regulate the

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LEGAL

system (the Registrar). Where the system proposed differs from other similar regimes is that it retains Abu Dhabiâ&#x20AC;&#x2122;s nationality-based restrictions on holding of title to freehold property assets. The practical impact of this is that the same restrictions that apply to non-GCC nationals holding freehold title â&#x20AC;&#x153;onshoreâ&#x20AC;? in Abu Dhabi, will apply to real estate assets within the freezone itself. This effectively restricts freehold ownership rights within Investments Zones to entities and individuals with UAE or GCC nationality. On reviewing the Real Estate Regulations (as published) it is still unclear as to the exact

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requirements for the registration of freehold interests. The proposals still contemplate that the land register maintained by Abu Dhabi Municipality will be the principal land register with respect to freehold (as opposed to leasehold) registration. It is, as yet, unclear from the current draft how this will interact with interests registered by the Registrar in the new system. That said, the actual process for registration (in ADGM) under the proposed law is relatively clear and comprehensive. As a rule, the act of registration (of any instrument) under the Real Estate Regulations is the highest form of protection possible for an investor and a deed produced by the Registrar will be a recognised confirmation of ownership of a real estate right. Taking account of the restrictions on foreign freehold ownership of land, the treatment of the leasing of real estate assets will be of most interest to the target clientele of ADGM i.e. the global financial services community. Leases in ADGM can be registered against title and may have a term of up to 99 years. Further, they are not subject to the nationality restrictions inherent with freehold interests. Mortgages are permitted over leasehold interests (when registered) and combined with their potential long term nature may make leases an attractive investment for market participants. The contractual provisions of leases under the Real Estate Regulations are free to be negotiated between landlords and tenants however there are certain mandatory implied terms dealing with termination for non-payment of rent and breach of contract. Taken together, there is much greater flexibility of treatment for leasehold interests (as opposed to freehold) under the proposed system and this would be consistent with the existing cultural and political position of the Abu Dhabi authorities relating to land tenure.

The most striking aspect of the wider consultation process is the proposed direct application of English common law into ADGM to deal with areas of law such as contract and tort.

LEGAL

the Real Estate Regulations and the Strata Regulations as drafted represent a significant long-term statement of intent for the ADGM and are likely to have a positive impact on the Abu Dhabi property market as a whole.

Going beyond the headline issues of leasehold and freehold interests, the Real Estate Regulations set out to establish a comprehensive system of land tenure within the ADGM. A system of registerable mortgages is proposed with rights of sale and foreclosure. The treatment of mortgages may permit creditors (in certain circumstances) to take possession of real estate assets in the event of borrower default. The treatment of easements is also considering including provision for certain implied entitlements, for example in relation to rights of way and rights with respect to utilities. Investors or other interested parties looking to carry out due diligence on the holder of a registered real estate right will be interested in the Real Estate Regulationsâ&#x20AC;&#x2122; treatment of searches. To date, undertaking a public open search against title has not been possible in Abu Dhabi. Under the proposals â&#x20AC;&#x153;a personâ&#x20AC;? may apply for a search against the Register. The key reform here is not necessarily that a search will now be possible (although this is welcome) but rather that as the Real Estate Regulations stand, the consent of the title owner is not required. If this is reflected in the enacted regulation, this would be a major step forward for transparency within the market. Together with the Real Estate Regulations, the Consultation Paper proposes introducing a system of strata title to deal with multiple owners of property interests within a project and related ownership of common property. The regime set out in the Strata Regulations will be familiar to anyone practising in the field with its utilisation of strata plans and a compulsory system of ownership associations to administer common property. Commendably, the Strata Regulations also include a requirement for developers to establish escrow accounts when

looking to construct and market a project for multiple ownership. This protection, familiar in neighbouring Dubai, will be a welcome introduction to the legal regime in Abu Dhabi. When considering the Consultation Paper, it is important to remember that the regulations described in this article are in draft format and have not been enacted. The final form of regulation is expected to be released following the consultation period. Further, the physical area of land subject to the new regime is limited when looking at the full extent of the Emirate itself. However, the Real Estate Regulations and the Strata Regulations as drafted represent a significant long-term statement of intent for the ADGM and are likely to have a positive impact on the Abu Dhabi property market as a whole. Further information If you would like further information on any issue raised in this update please contact: Andrew Thomson Senior Associate Real Estate Clyde & Co LLP PO Box 7001 Level 15, Rolex Tower Sheikh Zayed Road Dubai, United Arab Emirates T: +971 4 384 4000 F: +971 4 384 4004 Clyde & Co accepts no responsibility for loss occasioned to any person acting or refraining from acting as a result of material contained in this summary. www.clydeco.com

For an online version, please visit: www.tradeandexportme.com/2015/02/ abu-dhabi-global-market-land-law/

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EVENT PREVIEW

Unveiling SME Beyond Borders Oman Chapter

SME Beyond Borders is all set to make history again – this time in the fortuitous setting of Oman. This will be the first occasion addressing the full spectrum of challenges and opportunities within the SME sector. In the following feature, we give you a preview of this world-class SME forum…

Mark your calendar! Date: April 30th Venue: Intercontinental Hotel, Muscat

Oman is increasingly a key fulcrum of innovation, debate and commercial development in the SME sector - in many cases becoming the regional champion of SME evolution. For nearly a decade, the SME sector in Oman has been the main focus of government attention as a catalyst for economic change, international outreach and the principle beacon of the nation’s transformation to a highly contemporary diversified economy. The Central Bank of Oman has identified four key sectors as the paradigms of SME opportunity, namely • Transport and Infrastructure • Manufacturing

• Healthcare • Tourism The essential debates and dialogues of SME Beyond Borders focus on delivering opportunities in these sectors and spelling out how best entrepreneurs can manifest the required changes and turn them into commercial success. The agenda of SME Beyond Borders follows a framework that has not only been identified by government agencies as the crucial way forward, but also results from the detailed findings of round tables and discussion groups. These were specifically organised to capture the key concerns of SME owners and directors, identifying the workable

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EVENT PREVIEW

opportunities and solutions, as well as the timeframes and practicalities to which they are bound. Mark your calendar: Two days of intense, practical discussions SME Beyond Borders - Oman Chapter is a dramatic arena for ground-breaking content, advice and discussion. The event is structured across two key elements • A day dedicated to seminal Round Table discussion, engaging both the public and private sectors and identifying the key topics for research and resolution. • A half-day conference where these topics form the core of the agenda, ensuring debate that is relevant, provocative - and always totally on-brief. Between these two landmark occasions, a comprehensive report will have been generated, documenting the conclusions of the Round Tables and providing a detailed ‘White Paper’, rich in primary data and unique analysis of the SME sector.

SME Beyond Borders - Oman Chapter is a dramatic arena for ground-breaking content, advice and discussion.

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to benefit SMEs? How can an SME reap the benefits in practice? These factors will be discussed by government representatives and the leading change-makers in the public sector arena. Dialogue Two: voices from a Private Sector in quest of Empowerment How does a business effectively liaise with a larger partner involved in keynote infrastructure projects? Are there enough projects of this kind and how are their tenders actually won? How can a company build an effective brand when there is a sad lack of market intelligence and consumer feedback? How can a business obtain finance when only 2.8 per cent of total bank funding went to SMEs in 2013? These are the issues that captains of private sector business and key SME owners and directors will bring to the table - all in quest of resolution.

Points of view: straight talking across the table The Round Table events are as follows -

Understanding the Dynamics of Entrepreneurship The findings of the Round Tables then form the agenda for a unique conference, featuring two distinctive discussion modules. Each module explores four themes, each comprising brilliant on-stage presentations and debate.

Dialogue One: SMEs in the Public Eye and what Government can do for your business Government has suggested a number of critical changes for SMEs and their support networks, supplier relationships and commercial frameworks - from reforms in the banking sector through to recommendations of shorter payment cycles when dealing with MNCs and public sector entities. How helpful are these measures in practice and what stage have the changes actually reached? Are there other moves that the public sector could make

Module One: Government, Economy, Infrastructure - the dynamics of change and how they impact your SME Tackling the raft of SME issues and imperatives from the ‘top down’, this element of the conference features presentations on four key themes • Public/private sector partnerships - understanding their opportunities, working templates and models of competition • The infrastructure agenda transport logistics, routes to market and the strategies for

EVENT PREVIEW

Stars of Business will recognise the very best SMEs across 11 key business categories.

facilitating both local and panGCC business • The commercial platform Government-led initiatives for helping SMEs get finance, shorten payment cycles and ensure that public sector dealings are a twoway street • Incubation, encouragement, acceleration - what the Government’s SME champions can do for your business, and how Module Two: Training for success: how to deliver results and transform change into profitability This module again embraces four keynote themes, each reflecting the spectrum of real-world dilemmas and challenges, so imperative for SMEs to confront and overcome. • Becoming a brand leader building competitive advantage, the dynamics of local branding and the challenge of the regional marketing agenda • The growth imperative - how

Oman’s SMEs can collate market intelligence and boost expansion across borders • Understanding infrastructure - leveraging the public sector initiatives and using transport and distribution innovations to your advantage • Closing the skills gap - sourcing the senior personnel who understand the ‘new agenda’ across finance, risk management and commercial strategy This is a day of comprehensive and informed guidance, bringing primary data to the help of SMEs and accelerating the progress of business in line with stated Government objectives.

For an online version, please visit: www.smeadvisor.com/2015/02/smebeyond-borders-oman-chapter/

The NBAD Oman Stars of Business Awards - 2015 It’s your turn to shine! Join us on April 30 at the Intercontinental Hotel, Muscat.

Stars of Business has become an iconic awards brand like no other in the GCC. Originally created for the burgeoning SME sector in the UAE, Stars of Business now comes to Oman to honour the foremost success stories in a nation now emerging as a focal point of SME achievement. Stars of Business will recognise the very best SMEs across 11 key business categories. These awards - specifically tailored to reflect the needs, markets and success stories of businesses in Oman - will use the same methodologies that have already led to them being universally respected as scientifically assessed and unimpeachably judged. The NBAD Oman Stars of Business Awards will be presented at a glittering gala dinner on the evening of April 30, 2015, at the Intercontinental Hotel, Muscat. Extensively promoted across the press and online media, it will be a ‘who’s who’ of the Oman SME universe, a glamorous evening of networking, followed by gourmet dinner and awards ceremony. Truly a night to remember, guests will include senior government

officials, captains of industry - and the owners, directors and managers of the region’s leading SMEs.