The Intelligent SME Issue 22 by SPI Publishing

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ENABLING GLOBAL AMBITIONS

‘Betting on people’

The serial entrepreneur Avishesha Bhojani, Group CEO, Bates PanGulf

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Contents October-November, 2014

Betting on people, not business ideas Having the most amazing idea, but hesitating to invest your own money and expecting a third-party to do it is not going to work; every time you fail, you'll learn something new and no matter what happens, never forget your personal values. Avishesha Bhojani, group chief executive officer at Bates PanGulf shares more of such pearls of wisdom as he reminisces the highs and lows of his personal and professional life in a candid conversation at the Emirates NBD Global Business Series.

13 Rare & Fabulous

High-end luxury products for CEOs and decision makers.

18 Business Announcements

What's happening in the business marketplace? Here are some updates that you might have missed.

22 Uncertain about the route to success, test drive customer-first approach!

Dan Smith, head of integrated marketing for the Middle East and Africa region at Xerox, sheds light on the long, painstaking process adopted to be known as the services-led company that still produces world-class technology, their engagement with the SME community and their growth forecast in the coming years across Dubai.

It’s a win-wheel deal!

SellAnyCar.com introduces you a new concept of knowing-all about your car in just a click, not more than 15 seconds precisely. In a candid chat with ISME, Saygin Yalcin, CEO of the online venture discussed the growing gap in the market for accurate information on the real value of used cars, the iPhone app empowering information for users on the go and much more.

34 Decoding Tasweek’s stateof-the art ‘smart’ Dubai

In the subject of next big trends, smart city is the trendiest. But how's the extraordinary integration of technology feasible in Dubai? Masood Al Awar,CEO, TASWEEK Real Estate Marketing and Development details the prospects of the platform.

40 Unveiling Dubai's 'future cities'

Harnessing the power of advanced systems and connectivity to create living environments that are more attuned to the needs of residents which benefits in terms of efficiency, safety, better living conditions and much more. Samita Khawar gives a run-down.

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46 The new work place

From the cubical of the 80's, to the prevalence of communal tables and today’s telecommuting, the work place has been going through several transformations, that have shifted the focus away from the ‘real estate’ aspect of the company office, to the nature of the work itself., writes Neil Petch.

50 Corporate governance pitfalls to avoid

Special focus

52 Strive for satisfaction, not happiness in your job

Real estate: Crisis or opportunity? Noor Trade says pick your spots carefully!

UAE’s construction sector unexpectedly picked up more speed this year, indicating a leap in bank lending, since its sharp cut down in the wake of Dubai’s 2008 crash. At the same time, property prices have been skyrocketing on the back of Dubai’s economic boom, increasing the chances of a positive turnaround in the commercial property segment. So, are banks cautious, reflecting the scars of the last crash, or encouraging investments? Intelligent SME, thus, caught up with Kazim Ali, Head of Corporate Banking at Noor Bankto discuss whether the boom is for real, or a bubble is about to burst. Edited excerpts from the interview.

44 Cityscape: A reinforced real estate extravaganza!

Wise companies do not wait for disaster to strike before ensuring that they are well protected against the possibility of failures. They examine all aspects of the ways in which their companies function, in every department, to determine whether they are operating effectively and efficiently, according to clear procedures and with appropriate checks and balances, writes Mark Fisher.

The upbeat sentiment among investors, clearly, reflected in the footfall this year, beating a record 35,000 participants and featuring more than 280 exhibitors from 28 countries.

David Allen, creator of the ‘Getting Things Done’ system, will share tips on making clear decisions and mastering workflow, in an exclusive workshop to be held in Dubai later this month. ISME caught up with him for a brief tête-à-tête.

56 In a business strategy, mobile comes first

Business owners in today’s world are offered access to communication channels of various hues and contours to engage with their consumers, but not one can match the personalisation and effective engagement of the mobile channel, writes Vikram Chadha.

60 Local marketing: A sneak peak at the 5 must-do list!

Building a successful business is all about marketing, and when your business is service- oriented, the operative words are ‘local marketing’. TishTash highlights five effective strategies to market your business locally and bring in more sales opportunities.

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Publisher & CEO Shantanu A.P. Account Director Vijay G. Editor Samar Manzar Asst. Editor Amey Borkar Consulting Editor Utpal Bhattacharya Expert Contributors

Karen Osman Mark Fisher Mostafa Mohamed ElManzalawy Michael J. Tolan Neil Petch Samita Khawar TishTash Vikram Chadha V Ramkumar Art Director Aneesh Varghese Designer Retheesh Viswanath Web Developer Raj Shekar Reddy Business.Dev. Manager Nasim Akhtar Response and communications

Response Executive Evelyn V.B. MIS Executive Yolanda Pedemonte

Rizza Leah L. Gabalfin Distribution Department

Jerry P. Sam

Editor’s Note Dubai’s real estate has witnessed a surge in investments, recording a growth of 57 per cent in the first quarter of 2014 over the same period in the previous year, with 14,000 investors pumping in AED 35 billion, according to industry experts. As the flurry of investments in Dubai realty continues, the big question still remains: “Will history repeat itself, bringing both Dubai and these investors on their knees or has the wheel of fortune turned, finally, in the favour of investors?” While the economy has seen robust recovery, fuelled by surge in areas like trade, tourism and transport with Dubai pushing its candidacy to host the World Expo in 2020 (the first time a city in the Middle East would host this event), the jump in property prices is too fast in too short a time. Some experts are already voicing their concerns that surging supply and unsustainable demand is not really a good mix, for starters. On the other hand, the regulatory authorities are meticulously chronicling new initiatives like, to name a few, making it mandatory for developers to pay for land in full before construction, and to complete projects before sales. Similarly, hiking the fee it charges on real estate sales from two per cent to four per cent. But are these steps enough to assure the boom will last, and whether new opportunities will be created for the SME sector? Since the subject is gathering momentum, we bring you a special focus on the real estate sector in this edition. We have featured articles on increasing bank lending in construction activity, smart cities, to business opportunities for entrepreneurs. Hope it makes for an interesting read. Coming back to our home turf on Emirates NBD Global Business Series, which gives exclusive insights into the lives and work of successful businessmen, we bring you an up-close and personal interview with the man who’s been instrumental in setting up major retail initiatives, leading one of the biggest advertising and public relations company in Dubai, the group chief executive officer at Bates PanGulf Avishesha Bhojani. This issue brings you the exclusive pearls of wisdom he shared on the platform. A phenomenal mentor, we must say!

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Disclaimer

SPI Publishing has endeavoured to bring out a publication that is reliable and informative. This is true to the best of our knowledge. The opinions presented are those of individual writers and not necessarily endorsed by SPI Publishing. The content in this magazine is protected by copyright law and is copyright to SPI Publishing unless credited otherwise, and may not be copied, reproduced or republished for any commercial purpose or financial gain.

S U C C E S S I S A D E S T I N AT I O N

H AV E YO U A R R I V E D ?

WATCHES YACHTS DESIGNER JEWELLERY BOUTIQUE REAL ESTATE GADGETS EXOTIC DESTINATIONS FINE DINING

October - November '14

Intelligent SME

Rare & Fabulous

The course of time at a glance W

ith an integrated power reserve indication and the high-precision CFB A1011 Manufacture caliber, the Manero PowerReserve from the Lucernebased watch brand Carl F. Bucherer combines high functionality and sophisticated technology – indicating at all times power is remaining. The power reserve indication is a classic design element with a tradition of its own. Originally used in marine chronometers, it soon became an established feature of wristwatches too. It displays the current state of tension in the mainspring and the residual power in terms of hours. In the Manero PowerReserve, the functionality and design of the power reserve indication are perfectly combined, creating a striking and unique watch face. On a semicircular indication at 3 o’clock, a hand

shows the power remaining. As the power is used up, the hand slips into a red shaded area. The day of the week (at 9 o’clock) and the special big date (at 11 o’clock) can also be read at a glance, as can the integrated small seconds at 6 o’clock. The black dial is divided into an outer ring and an inner ring, which are differentiated by color. While all functions are to be found on the lighter-colored inner circle, the outer darker circle is segmented by rose gold markers. This optical variation provides a pleasing transition to the 18 Kt rose gold case, which is 42.5 mm in diameter and 12.54 mm in depth. The timepiece is beautifully complemented by the black alligator-skin strap. At the center of the Manero PowerReserve is the Manufacturer’s own CFB A1011 automatic caliber,

which in this model is integrated in a Manero for the first time. As a further development of the CFB A1002 Manufacture caliber, the CFB A1011 shows the power reserve by means of a hand, recalling classic elements of watch design. A particular feature of the movement is the peripherally mounted and bidirectional oscillating weight, which supplies power to the automatic gear train. The patented dynamic shock absorption system known as “Dynamic Shock Absorption” (DSA) offers the ultimate in efficiency and reliability. In its design and its technology, the Manero PowerReserve skillfully combines classical and modern components – making it always up to the minute.

October - November '14

Intelligent SME

Rare & Fabulous

Damas’ dazzling diamond delight! D

amas, the Middle East's leading jewellery and watch retailer, has announced the launch of an exclusive range of jewellery from its much-loved diamond brand OneSixEight. OneSixEight refers to the number of hours in one week and the unique brand aptly captures the brilliance of diamonds in an extraordinary collection that is designed to be worn every day of the week, for all occasions. Each piece highlights the bold beauty of a single solitaire diamond, accentuated by individually matched stones. The result is a stunning illusion of a far larger carat. The full collection, which includes earrings, pendants, necklaces, bracelets, bangles and different ring designs, is essentially available in white gold. The designs can, however, be customised upon request. The collection is now available at all Damas stores throughout the GCC. Anan Fakhreddin, CEO at Damas, commented: “OneSixEight enables a woman to be a star and sparkle with diamonds of her choice, making her feel special every day of the week. We are confident the new range will prove a great value addition to the OneSixEight collection that continues to be one of Damas’ most popular brands.”

October - November '14

Intelligent SME

Rare & Fabulous

Redefined 2015 Cadillac Escalade debuts in UAE L

iberty Automobiles Co. celebrated the launch of the all-new 2015 Cadillac Escalade on the September 16, 2014, at the Armani hotel. Senior officials of General Motors, Liberty Automobiles, many prominent business guests and media were present at the event, offering an opportunity to learn what the new model had to offer for car enthusiasts in the region. Speaking at the event, Gilbert Nassar, General Manager of Sales and Marketing, Liberty Automobiles said, “We are proud to announce the launch of the allnew 2015 Cadillac Escalade in the UAE. This magnificent vehicle has always been the embodiment of strength, prestige and capability. Owners will see that the fourth Generation Cadillac Escalade is true to its style, and represents a significant improvement to the series.’ Car owners in the UAE will find that the vehicle is perfect for roads in the UAE, providing a great mix of power and luxury that the brand is renowned for. The new 2015 Escalade features a 6.2 L V8 engine with 420 horsepower

and 624nm of torque – making certain that it contains the best specs for any base engine in the segment. In terms of performance, the new Escalade offers a worldclass quietness, which is superior to other high-end luxury vehicles. It delivers great safety - with seven airbags installed, lane departure alerts and front and rear park assists available with the help of its long range sensors. It is a vehicle that exhibits the flair and personality of the owner and its size, efficiency and comfort make it the perfect family vehicle. Felix Weller, Director of Cadillac Middle East, said, “The all-new 2015 Cadillac Escalade has been redesigned through an extraordinary level of

hand-tailored craftsmanship and technology. Offering further luxury, a sophisticated look and greater efficiency, this model is by far the best in the range and will set new benchmarks.’ The Escalade has always been not only perfect for utility but also for luxury, and this blend is displayed by a heavily redesigned interior. The new posh interiors feature augmented wood, premium cut-and-sewn materials and sueded accents. The driver and front passenger seats have been specially engineered to be more comfortable and are trimmed in perforated leather, ensuring that customers have as luxurious an experience as possible. The Cadillac Escalade instantly

stands out in the crowd because of its elegantly re-designed appearance, consisting of newly sculpted chiseled lines, tight seams and LED lights. With exceptional illumination and dynamic front styling cues, the new Escalade is enhanced by a highly detailed chrome grille, which gives it a unique and distinguishable look. This mix of power, performance and luxury ensures the all-new 2015 Cadillac Escalade is unparalleled in the region and is sure to satisfy the demands of many discerning car owners.

October - November '14

Intelligent SME

Rare & Fabulous

Introducing Samsung Galaxy Note 4, Gear S S

amsung Electronics recently announced the expansion of its flagship Galaxy Note series with the new Galaxy Note 4, which is now available to customers across the region for pre-booking. Blending an evolved S Pen with a superior viewing experience, the Galaxy Note 4 provides users with the most unique and powerful mobile experience on the market. Alongside the Galaxy Note 4, Samsung announced the Samsung Gear S, the next generation of smart wearable device that expands the smartphone experience to the wrist. Delivering an up-to-date smart wearable experience with 3G connectivity

and wearable optimized features to meet the evolving needs of consumers, the Gear S has been designed with an elegant, curved Super AMOLED display and flexible band, which offers a new, powerful wearable experience, giving consumers the freedom to live their life on the go. The Galaxy Note 4 LTE (32GB) comes in Charcoal Black, Frost White, Bronze Gold, and Blossom Pink colors and is now available for pre-order for AED 2,799, while the Gear S will be available across leading retail outlets in UAE for AED 1,299 from mid-October.

Powerful performance

The Galaxy Note 4’s extraordinary 5.7-inch Quad HD (2560x1440) Super AMOLED display reproduces clearer and more vivid images with deep contrast, better viewing angles, and response times as fast as a millionth of a second, providing a terrific viewing experience. Due to its large screen,

the refined Multi Window feature is able to maximize the user’s experience providing them with the key to easier multi-tasking. Users can choose how they access their applications with full, split or pop-up screens, and easily change the size and positioning of apps on the screen with one intuitive swipe. The Galaxy Note 4 also sports an advanced camera system that is able to reproduce brighter and clearer images. The device is equipped with a 16 megapixel rear-facing camera featuring a Smart Optical Image Stabilizer that counter-balances camera shake and automatically extends exposure time in dark settings. In addition, a 3.7 megapixel front-facing camera with f 1.9 offers a default 90 degree shooting angle and up to 120 degree wide angle so users can take the best group shots with friends. The Galaxy Note 4 also offers an improved Fingerprint Scanner, to secure personal data and the world’s first UV sensor in a mobile device.

S Pen for everyday tasks

The S Pen introduces a more user-friendly Air Command functionality along with other intuitive features such as Action Memo, Smart Select, Image Clip and Screen Write, that allows users to create and collect content with ease. A new Smart Select feature enables users to easily piece together content from different origins, and share it with ease.

October - November '14

Intelligent SME

Get Informed

Equity Investment: An initiative to facilitate funding In the wake of establishing more viable and sustainable sources of funding through linking entrepreneurs and successful investors, Dubai SME has recently launched the equity investment initiative across the emirate.

ubai SME, the agency of the Department of Economic Development (DED) in Dubai mandated to develop the small and medium enterprise (SME) sector, has launched an Equity Investment Initiative, aimed to unlock investment and funding in SMEs. The initiative aims to provide entrepreneurial projects with access to capital through equity participation of venture capitalists, angel investors, private equity companies etc. Dubai SME has been providing debt financing and loan facilities over the last 12 years as part of

supporting start-up projects, but the new initiative aims to establish more viable and sustainable sources of funding through linking entrepreneurs and successful investors. “The initiative is a path-breaking effort towards changing mindsets. It targets to channel the abundant capital available in the local market into sectors where entrepreneurs and their start-ups have significant developmental potential. The initiative fits well into the Dubai SME Strategic Plan for 2015-2021,” said Abdul Baset Al Janahi, Chief Executive Officer of Dubai SME. “Bank financing mainly targets established companies and cannot be expected to flow into start-ups or their early stage development. The market fails to address the initial funding requirements of entrepreneurs but banks take much of the blame for not offering such assistance. Dubai SME as a government agency is trying to address this market failure through the Equity Investment Initiative,” added Al Janahi. The initiative will be rolled out in two phases, the first of which has already been launched. In the first phase, Dubai SME will study the SME equity financing landscape

in Dubai and the wider region. The study will include brainstorming with different stakeholder communities and exploring the market size, scope and appetite for equity participation in SMEs as well as identifying potential venture capitalists, angel investors and private equity players. “We will specifically look at sectors offering significant potential for SME participation, for example, sectors such as information technology, biotechnology, education etc. With their agility and capacity to drive innovation, SMEs have had remarkable success in these sectors, which investors can leverage for mutual advantage,” Al Janahi elaborated. The second phase of the project will be launched in 2015 and will focus on creating the appropriate channels and platforms for entrepreneurs and equity investors to come together to form partnerships. Dubai SME by then will have an extensive database of entrepreneurs, enterprises and investors interested in being part of start-up projects in specific sectors. “Dubai’s efforts to establish a knowledge economy will be ably supported by the Equity Investment Initiative for SMEs. It presents a significant opportunity in the medium to long term, not only for SMEs in Dubai but across the region. Total investment into small companies in the region is estimated at around three billion dirhams and clear strategies and initiatives will help channel this money into sectors with a high growth potential,” Al Janahi concluded.

October - November '14

Intelligent SME

Get Informed

Today, seventy per cent of DMCC 's member companies are SMEs

DMCC takes world's best SME free zone title The jury members selected the winner based on the overall performance during the last one year, tracking percentage increase in tenants, growth and implementation of new incentives.

MCC , the Government of Dubai Authority with a mandate to enhance Dubai's position as the global gateway for commodity trade and enterprise, has been named by fDi magazine as 'Global Free Zone of the Year for SMEs' in their Global Free Zones of the Year rankings and awards for 2014. Ahmed Bin Sulayem, Executive Chairman, DMCC, commented:" DMCC receiving the 'fDi Global Free Zone of the Year for SMEs Award' is a strong indication of Dubai's leading role as the global destination for SMEs.â&#x20AC;? "We attribute this landmark achievement to the vision and leadership of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President, Prime Minister of the UAE and Ruler of Dubai to develop a

vibrant SME sector and to take a leading position in empowering entrepreneurs. His Highness' influential leadership constantly inspires DMCC to innovate and grow with one objective - to offer an inclusive marketplace where businesses can trade with confidence while ensuring Dubai continuously excels as the global hub for commodities trade and enterprise." The judging panel selected the overall winner of the 'fDi Global Free Zone of the Year for SMEs' based on performance over the past year including elements such as percentage increase in tenants, strong growth and implementation of new incentives giving the Free Zone a competitive edge. Courtney Fingar, editor-inchief, fDi Magazine said: "After triumphing in fDi's first-ever Free Zone of the Year Awards for the Middle East and North Africa this summer, DMCC has now captured the global prize. We have recognised DMCC as not only the best economic zone in the MENA region for SMEs but also in the world. While, of course, DMCC caters to companies of all sizes and its appeal is not restricted solely to smaller companies, our judging panel felt itâ&#x20AC;&#x2122;s offering for SMEs is particularly strong and the impressive rate at which new companies are registering in the zone reaffirms that. "The global market for free zones is extremely competitive - nowhere more so than in the Middle East and Dubai in particular - so standing out as best in class in this region and in the world is an achievement worth applauding."

45 free zones across the world participated in the rankings including the 17 free zones who also entered the fDi Middle East and North Africa Free Zones of the Year 2014 awards earlier this year. Gautam Sashittal, Chief Executive Officer, DMCC added: "At DMCC we are passionate about nurturing and growing the thriving international marketplace we offer our Free Zone member companies including start-ups, SMEs and large corporations. This means continuous innovation and enhancement of our products, services and infrastructure in line with international benchmarks. The 'fDi Global free zone of the year for SMEs award' is testament to these efforts and we are honoured to receive this recognition as the Best Free Zone in the world for SMEs." Today seventy per cent of DMCC 's member companies are SMEs, representing every sector ranging from trading, shipping to recruitment, IT to advertising and fashion. The broad spectrum of companies based in the DMCC Free Zone is both diverse and dynamic ranging from MEPCO Gulf - a leading paper and board trader in the Middle East; to NSI Gulf - a fast growing technology consultancy and regional leader in Salesforce implementation; to Bluefish ME, a boutique events production house; and CommsIT, a leading IT and telecom solutions company that was recently ranked in the Top 100 SMEs in Dubai. The DMCC Free Zone is also home large corporations including Alcatel Lucent Middle East and North Africa, LVMH, 7-Eleven, Nutricia Danone and Carrera Y Carrera.

October - November '14

Intelligent SME

Business Announcements

Emirates NBD celebrates listing of USD 500mn bond on NASDAQ Dubai

is Highness Sheikh Ahmed bin Saeed Al Maktoum, chairman of Emirates NBD, recently rang the market-opening bell to celebrate the listing of a 500 million dollar conventional bond on NASDAQ Dubai. Emirates NBD, one of the region's leading banking groups, is now the largest issuer of conventional bonds on the region's international exchange, with three listings totaling 2.25 billion dollars.

NASDAQ Dubai's total conventional bond listings, from all issuers, have reached 6.74 billion dollars. The bell ceremony took place in the presence of His Excellency Essa Kazim, Governor of Dubai International Financial Centre (DIFC) and Chairman of Dubai Financial Market (DFM); Hesham Abdulla Al Qassim, Vice Chairman of Emirates NBD; Shayne Nelson, Chief Executive of Emirates NBD; and Hamed Ali, Chief Executive of NASDAQ Dubai. His Highness Sheikh Ahmed bin Saeed Al Maktoum, Chairman of Emirates NBD, said: "NASDAQ Dubai is the ideal venue to support our capital raising needs, as the exchange combines international standards with its location in our

home region. We are delighted to make full use of Dubai's first class listing structure as we pursue our strategy of expansion in the UAE and internationally." Abdul Wahed Al Fahim, Chairman of NASDAQ Dubai, said: "As activity in the UAE's financial services sector gathers pace, NASDAQ Dubai is delighted to provide its listing platform to support Emirates NBD's growth and expansion. The exchange will continue to support efficient capital-raising activities for a range of issuers that are active in a variety of sectors and industries." Emirates NBD's latest bond listing on the exchange took place on September 18th 2014, following a 750 million dollar listing by the banking group in March 2013 and a one billion dollar listing in June 2013.

RAKBANK Titanium recognized as best SME credit card by MasterCard

ecognized for its level of innovation in the payments space, RAKBANK’s Titanium Business Credit Card recently won the Best Payment Program award for Small to Medium Enterprises (SMEs) in the Middle East, Africa, and South East Asia during MasterCard’s 2014 Innovation

Forum held in Singapore. Designed to offer added convenience, the Titanium Business Credit Card can be used by business customers to make payments instantly and to take advantage of the cash advance facility to meet unexpected business requirements. Cardholders enjoy the flexibility of paying the minimum amount due on their card within 25 days from the statement date and the balance at their convenience. This free-for-life card is ideal for tracking business expenses and making online payments to the government, utility companies, and others. “Small business customers

make up a significant part of the Bank’s customer base, and with their needs getting increasingly sophisticated, we are committed to providing them with faster, simpler and more convenient payment solutions,” said Ian Hodges, Head of Retail Banking at RAKBANK. “In addition to the Titanium Business Credit Card, RAKBANK also extends Online and Mobile Banking to SMEs to ensure convenience with their everyday banking activities as well.” The MasterCard forum brought together more than 350 participants from the Southeast Asia, Middle East and Africa to discuss the evolving needs of businesses and consumers and to showcase the latest innovations on the payments front.

October - November '14

Intelligent SME

Business Announcements

DAFZA expands to increase economic, business opportunities

ubai Airport Freezone Authority (DAFZA) has recently announced its expansion plans and vision to invest in a number of lands that belong to Al Wasl Real Estate Corporation, and launch its economic project that aims at supporting the economy of Dubai. In order to meet the growing demand for global companies to start their business in the freezone, DAFZA will initiate construction on the new complex in the coming few months, and will be completed within 21 months. The project is allocated to build light industrial units (LIUs) for companies operating outside the freezone. The land that DAFZA will be building its new complex on, is spacious and enjoys a strategic location near the current headquarters of the freezone, in addition to proximity to all major roads and exits. On this occasion, Dr. Mohammed Al Zarooni, director

general of DAFZA said "We receive tenancy applications every day from local, regional and multinational companies. In order for us to accommodate this large number of applications looking to establish offices at our premises, we decided to expand and build this complex.” The freezone rented the location from Al Wasl Real Estate

Corporation, Asset Management Group, one of the leading real estate and asset management organisations in Dubai. In addition, DAFZA is liaising with Dubai Customs to facilitate the movement of goods from and to local and foreign markets. “With the local market currently witnessing continuous growth, Wasl Asset Management remains fully committed towards playing a significant role in the move to position Dubai at the forefront of today’s global markets,” said Hesham Abdulla Al Qassim, CEO, Wasl Asset Management Group.

All-season rooftop lounge opens at Sofitel

bove at Sofitel Dubai Downtown recently opened its doors to public, introducing signature French elegance and modern luxury to Dubai’s rooftop scene. Above is the first all-season luxury venue with breathtaking, unobstructed views of the iconic Burj Khalifa in the heart of the city’s vibrant downtown area. A vast space of 11,800 square feet with a retractable roof, Above offers the city’s international community a selection of world class cuisine, a menu of gastronomic specialties, and private cabanas. “There is a synergy between the modern culture of the Sofitel brand and lifestyle preferences of the world citizens that both reside and travel to the area. Above offers guests a contemporary rooftop haven among the city center to experience the Dubai lifestyle – modern luxury,” said Chady Jreige, partner of Above at Sofitel Dubai Downtown. Above features an elegant yet chic décor, striking bar and lounge area, private terrace adorned with palm trees, reflection pool and private cabanas. The design aesthetics complement the world-class beverages and decadent cuisine inspired from Arabic, European, Asian and American flavors that will be available from a team of international chefs.

October - November '14

Intelligent SME

Success Story

Uncertain about the route to success, test drive customer-first approach! 22

October - November '14

Intelligent SME

Success Story Q: The ethos of Xerox and its history is very interesting dating back to 1906-Could you describe us in a few words how the company has evolved over the years?

A: This year is the 75th

Once known as the copier king, Xerox has successfully managed a complete shift from its earlier fame of machines to services now. It has emerged as the world’s second largest pensions and benefits administrator, globally. So, has Xerox finally found a formula for a long-term success? Dan Smith, head of integrated marketing for the Middle East and Africa region at Xerox, sheds light on the long, painstaking process adopted to be known as the servicesled company that still produces world-class technology, their engagement with the SME community and their growth forecast in the coming years across Dubai.

anniversary of Chester Carlson inventing Xerography. Today seen as a simple idea, this revolutionary invention spawned an industry. The history and culture of innovation led from copiers to the Xerox Alto, the first integrated GUI, mouse and keyboard system and the forerunner of modern PCs. Xerox also invented Ethernet at PARC and was the seventh domain name to be registered with the US Department of Defense (DoD), long before the internet was brought to our homes. Recently, a subsidiary of Xerox has provided solar panels to the Mariner space craft. Today Xerox does business in 180 countries, which has recorded history as the first company to have a female CEO succeed another female CEO, donates millions of dollars to over 2600 nonprofit organizations a year, awarded over 20 patents per week and lauded by Fortune for being admired and recognized by FTSE4 Good and Ethisphere for its commitment to the environment. This journey from industry conceiver to being a $21B USD diversified services and technology firm, employing 140,000 people, has been a rich one and the future is looking just as bright.

Q: Let’s fast forward into Dubai,

what potential does this market offer to you? What are the key areas Xerox would be eyeing for deeper penetration?

A: Dubai, the UAE and indeed the whole Middle East region are key markets for Xerox. And we have joint venture or strong partner relationships in the region showing our long history of activity and our commitment to the future. Our business in UAE spans the breadth of offerings from Service to Technology, and Xerox is looking at opportunities to serve organisations with more of our world class offerings. Transportation, government, tourism and hospitality, oil and

gas, manufacturing and many other sectors require the best of breed offerings from Xerox, and this means significant opportunity for us. Additionally, International Data Corporation (IDC) predicts that across the market, growth of 6-8% will occur in hardcopy print and as the vendor with the broadest offerings in that space, the region is assured of a continuing commitment from Xerox.

Q: Xerox has made concerted efforts

to move out of the ‘copier king’ image by adding more high-margin services to their main hardware businessesHas the changeover worked well for the company? If yes, could you cite examples to support the same?

A: Xerox has been successful in making the change to a service-led organisation that still produces world class technology. This heritage of innovation in technology has also been brought to our services divisions, creating new offerings and approaching problems in different ways. Today Xerox processes $2.7B of road toll transactions worldwide, handles 2.5M interactions in call centers per day, and is the world’s second largest benefits and pension administrator globally. Additionally Xerox has embarked on a comprehensive repositioning of its brand since 2010 to ensure that all businesses and organisations are aware of our capabilities, and we believe that this has been well received. 23

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Intelligent SME

Success Story Q: Going ahead, what is your

strategy for Xerox? Are you looking for inorganic growth propositions in this region? If yes, please elaborate on the type and scale.

A: Xerox has to be, and is,

ready to seize on inorganic and organic growth opportunities. As previously mentioned certain vertical sectors offer opportunities for organisations to work with us. In terms of offerings, the firm is currently rolling out ‘Next Generation Managed Print Services’ offerings to organisations across the region, offering further opportunities for efficiencies and superior process deployment. The managed printing services (MPS) market growth worldwide is far in excess of standard hardware growth and Xerox is acknowledged as being a market leader. Thus, we continue to train our channel partners to take advantage of this trend. In the graphic communications space of the Middle East, Xerox has a strong portfolio of products ranging from high speed inkjet offerings to Xerox laser technology with new metallic capabilities announced recently at Graph Expo in the US. This will enable us to not only to take advantage of existing page and print volumes, but also bring new applications and workflows to organisations alike.

Q: How do SMEs engage with a

grand brand like Xerox as they tend to feel intimidated by the enormity of its size?

A: Xerox has a wealth of experience in serving SMEs across the world. Every customer has the right to feel valued, listened to and given value for money. Xerox would encourage any SME to reach out to a local Xerox office or representative where they will find a welltrained operative who will seek to understand their challenges and then work with them to overcome the same. Along the way, they will try to build value for the SME by showing superior knowledge of technology and offerings – such as managed print. The full range of contact options is open to them via email, telephone or chat. 24

Q: Could you shed some light on the

values that bind the company together for the benefit of SMEs in the region?

A: Any company must be built

on a foundation of customer first and this is especially true for Xerox. With this in mind, all our partners are given the opportunity to develop their businesses, train their staff and build their offerings for the benefit of the business community in their locality. Many of these resellers and providers will be SMEs themselves and the ethos that exists in Xerox is communicated through our core values: we succeed through satisfied customers, we deliver quality and excellence in all we do, we require premium return on assets, we use technology to develop market leadership, we value our employees, we behave responsibly as a corporate citizen. This intent is what binds the Xerox

Any company must be built on a foundation of customer first and this is especially true for Xerox. With this in mind, all our partners are given the opportunity to develop their businesses, train their staff and build their offerings for the benefit of the business community in their locality.

community to our customers. In the end, SMEs are organizations that need to be able to focus on their business and leave non-core activity to vendors like Xerox.

Q: Getting into the guts of your business, what are your top performing products/services?

A: Xerox is a recognized leader in

MPS and our performance in this area reflects that position. We’ve always been at the forefront of driving colour into businesses and improving quality whilst focusing on cost down to allow more users to access the functionality. Again our performance in this area is recognized by the continuing annuity streams driven by colour printing technology. Lastly Xerox has recently brought to market a new standard in multifunction printer (MFP) controller technology, ConnectKey, which offers further opportunities for seamless integration of documents, paper and the wider business infrastructure. Xerox continues to drive innovation and value in businesses far and wide in some of these areas and many more.

Q: How do you go about the

innovation of a new product? Are they brought to you (sold) or you invest in R&D?

A: The firm has a rich history

of investing in R&D, but also in partnering for growth by acquisitions. Approximately $600M USD or 3.2% of revenue in 2013 was dedicated to R&D, and along with five Xerox Research Centres across the world and our technology partner – Fuji Xerox, we continue to drive innovation in services and products.

Q: As we sign off, let’s get to know

the legacy Xerox has planned. It’s the year 2040, how do you see Xerox, and what do you see yourself doing?

A: It has become the powerhouse

of services-led technology driven company helping customers to focus on their core businesses. Leadership in those markets that are embryonic in 2014 will deliver significant opportunities for further business evolution.

October - November '14

Intelligent SME

Meet the CEO

Betting on people, not business ideas 26

October - November '14

Intelligent SME

Meet the CEO

Having the most amazing idea, but hesitating to invest your own money and expecting a third-party to do it is not going to work; every time you fail, you'll learn something new and no matter what happens, never forget your personal values. Avishesha Bhojani, group chief executive officer at Bates PanGulf shares more of such pearls of wisdom as he reminisces the highs and lows of his personal and professional life in a candid conversation at the Emirates NBD Global Business Series. Edited excerpts of the interview: MC: You started your

entrepreneurial journey in April, 1985. From an employee to employer, how did the company “Interface” come about?

AB: While working for an

advertising company Ulka (now Draftfcb Ulka), in New Delhi, I had prepared a whitepaper that emphasised on how the firm would become the target of mushroomedout start-up agencies. One of the reasons for conducting this study was the company had become the number one agency within two years, bagging clients in the least amount of time. When I presented the white paper to my chairman (Bal Mundkar), he said, “Son, sounds like a good idea. So, how about setting up a new company?” I was taken by surprise and replied, “It’s just a situation analysis.” He, then, insisted that I should set up a new company. And, that’s how Interface came into being. Bal further added that I could take with me an account that is developing and not yet signed, earning an investor’s title with stocks in my kitty. Starting off in late 20s, which is pretty young in the Indian context to own a company, I bagged a client called Indian Sugar Mills Association. It wasn’t a rosy ride right since

inception because Pradeep Narang (from the association) posed a condition that the company should be set up within twelve days. He wanted to start the campaign before the monsoon session of Indian parliament, which was less than a month away. I told him, “Listen, I don’t really have the cash to incorporate the company on this stage, and it will take some time to arrange the same.” Unrelenting, he insisted, “I am going to spend a million rupees for your payment in any case, then why not now?” So, he gave me an advance cheque of INR 1, 00,000 to start the company, and that’s how we got started.

I confronted Bal that it was an unaffordable proposition since all I was left with was INR 2000 to start the office. He exclaimed that a chief executive officer needs to sort out these issues, and that I was no exception. This was my first lesson: as an entrepreneur when you start out, you’re left with only one option- to invest your own money, and nobody would come to your rescue. You've got to think a little out of the box to keep the ball rolling.

MC: There is an interesting

A.B: Entrepreneurs are those people who submit to their own ideas, beliefs and abilities. Entrepreneurs are also those who have enough confidence in their capabilities and don’t fear investing money on themselves. A serial entrepreneur does it a few times, and does it differently too. Simply put, these are individuals who invest in people they feel are smarter than themselves and execute ideas in a creative, innovative manner. I feel I am a serial entrepreneur who likes betting on bright brains.

story on how you learnt your first entrepreneurship lesson. Share that story with us.

A.B: After we got started, the hunt for an office began. Since we were starting a second agency to Ulka, Bal believed that the office should be at par with the former company. He selected a place that cost me a whopping INR 98,000. Moreover, he handed me an offer letter with the designation of chief executive officer of the firm, and the title came with a clause: possess an air-conditioned and chauffeur driven car. It was quite a big deal for India in 1985 during the pre-consumerism era.

MC: How do you define

entrepreneurship? And what, according to you, is serial entrepreneurship?

MC: What could be the possible

drivers for someone to become an entrepreneur? 27

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Intelligent SME

Meet the CEO A.B: A variety of drivers motivate

people to start their own ventures. Sometimes, it's just being at the right place, at the right time and getting the right opportunity while other times, it is a clash over conflicting work ethics in their existing job that makes people quit and explore entrepreneurship. When someone believes that they have hit a glass ceiling in the race to climb the corporate ladder, it also causes them to become entrepreneurs. But, most of the time, it’s a case when individuals are extremely convinced about an idea and know for sure that it will work. They, then, end up taking the plunge. Having said that, a strong funding support, especially from strong entities such as government bodies also serves as a great driver for entrepreneurship.

groups in the MENA region, how did Bates PanGulf (BPG) happen?

A.B: BPG happened because I

wanted to experiment and have a bit of fun. I had helped several Omani businessmen to set up their advertising agencies in 1991. Circumstantially, I met a person in the Omar Zawawi Establishment who was tasked with the mandates of building a business plan. He approached me for help in doing the task. I willingly offered him my services with a clause that they

MC: Indeed, you have come

a long way and much of your entrepreneurial journey got shaped in Dubai. How did Dubai happen to you? What made you come to this part of the world?

A.B: My wife, Poonam, was a technology consultant in California and I was in New Delhi. She didn’t want to return to India, and so we decided Dubai would be an interesting place to settle down. In addition, I had a client who had joined Gulf News as the general manager, and he had offered me to help him in planning strategies. Thus, I came over to Dubai and joined Gulf News as the Head of Strategy. In fact, I'd like to share an interesting incident that happened on the first day of my joining. It was my last working day (August 22, 1988) at Interface, and I had to fly overnight for starting work at Gulf News the next morning, not getting a wink of a sleep. Surprisingly, by 4pm, word spread around the entire office that the new head of strategy is an alcoholic because my eyes were bloodshot red. I got whisked into the managing director’s office with H E Obaid Humaid Al Tayer asking me whether I was suffering from an 'alcohol problem'. MC: From Gulf News to setting up

one of the largest marketing solutions

My vision for the Dubai Internet City was to try and create and ecosystem where capital and ideas converged. After the Dubai Internet City, we developed Dubai Media City and Dubai Ideas Oasis. The last venture failed completely.

wouldn’t expect me to execute the business. So, we hired a general manager from India, who used to work for a reputed firm (Lintas Unfortunately, Iraq’s invasion of Kuwait 1991 (about 10 days prior to his flight) made him apprehensive about the job, and he refused to travel. Now, we had a company with five employees and no general manager to run the operations. I was, then, called upon to fill this post and help establish the ADINC (Advertising International Company in Oman). I survived in Oman for nine months, and returned to join a friend, Abdulla Majid Al Ghurair, in PanGulf. Post starting work here (Dubai) once again I realised that the company’s costs were just not tallying up. The costs were higher than the revenues. During the same period, we bagged Emirates Bank as our client. For the next ten years, they were one of our major clients and also instrumental in helping us meet Mohamed Alabbar. In one of the meetings, where the general manager of Emirates Bank (Anis Al Jallaf) was making a presentation using Macintosh PCs, Alabbar liked the slides made by us and we bagged the assignment of creating slides for his projects. He, then, sent us a transcript of his project in queen’s language, which was quite different from his spoken language (slight American accent). I told him that it wouldn’t be possible to work with this language, he quickly understood my thoughts and asked me to re-write the whole draft. And, that’s how we got to know each other. He introduced me to one of his colleagues, Mohammad Abdullah Al Gergawi (UAE Minister of Cabinet Affairs), to execute the concept of Dubai Shopping Festival, Dubai Summer Surprises, Govt Excellence Programme, etc. It is a myth that the Dubai Shopping Festival is my creation. It is the product of three Ms: His Highness Sheikh Mohammed bin Rashid Al Maktoum (Vice President and Prime Minister and Ruler of Dubai), Mohammed Alabbar and Mohammed Abdullah Al Gergawi. I just happened to be at the right place and at a right time.

MC: We have learnt an interesting

October - November '14

Intelligent SME

Meet the CEO story of you dropping out of college to find your luck in advertising business. Tell us more about it.

A.B: I dropped out of the National

Institute of Design (India) after high school for a variety of reasons and none of them had anything to do with design. It was a great campus, with great looking girls and sounded like a cool thing to do as well. NID believed that they had a completely fail-proof criterion, making an individual go through a battery of tests. I figured that was something wrong because I got through with zero motor skills to be a designer. The course made me realise that you can fake it for a while, but you can’t fake it forever. I understood design, but I couldn’t do design. Thus, I got into advertising, which is perhaps one industry where the left brain and the right brain converge together into a no-brain (Smiles).

MC: You started with a humble

beginning, investing about Rs1, 00,000 as early capital just to start things going. What advice do you have for entrepreneurs to take it from there to what you are? We can’t seem to connect the dots. You probably have a secret for us.

A.B: To begin with, it’s a very lonely process although people consider it easy. When I had left the government and before BPG came as a full-time job, I moved

to level 41 of Emirates Towers (a serviced office centre for entrepreneurs and companies to start their ventures). Around the same time, a friend of mine, who was quite senior to me experiencewise, had also left his job at Jumbo Electronics and started a new venture. I invited him to share my place and he set up shop for first Tech mart. The objective was very simple: when you’re starting up, you’re extremely lonely and you need someone to talk to. As an executive, you have people around who listen to you for transactions and other chores. You’re basically in a position to give. Initially, when you start-up, there’s nothing to give. Furthermore, one needs to realise that not all your business ideas and models are going to work for you. Destiny has strange ways of going about it. Failure at some or the other point of your career is inevitable. You will fail at times, and you need to be prepared for it. I’ve yet to come across someone who says I’ve always succeeded. Either the person has not taken risks, or the person is lying.

MC: You have hit tough times too, what have been your failures so far? A.B: My vision for the Dubai

Internet City was to try and create an ecosystem where capital and ideas converged. After the Dubai Internet City, we developed Dubai Media City and Dubai Ideas Oasis.

The last venture failed completely. I realised that some ideas fail because they’re ahead of their time. Recently, I met Mohammed Abdullah Al Gergawi and he said, “Avi, we need to try out the incubators idea once again.” So that’s one failure. Before the Lehman Brothers happened, I met an interesting person in New York. He was backing a media company that was doing magazines like Trader monthly and the Dealmaker. They were lifestyle-focussed Wall Street journals, and the revenue streams was not the magazine itself, but the parties and the events it conducted. It seemed like a good idea, and, thus, I thought that region has capital, money managers too, and we just need to bridge the two. Putting into action my plan, I brought the Dealmaker in this part of the region. We decided to launch and the first issue magazine cover got revamped three times. Every time, we would put two people on the cover, they would mysteriously disappear. Lehman Brothers crashed, and Wall Street didn’t need a lifestyle magazine or parties anymore. The parent company was going south. We were okay on revenues. But an informal meeting with a friend of mine, who runs a publishing firm in region and his take on the revenue generation from the same, made me realise that I needed to close shop. I learnt a lesson that when you fail, sometimes you need to know when to quit. Trying and putting good money to recoup bad money is not a good idea.

MC: As an entrepreneur, how do you decide upon the right time to exit the business?

A.B: It’s difficult to say what would be the right time for one to stage an exit. But, generally speaking, when an entrepreneur has to find reasons to come to office, I think that is a sign that one should quit the game.

MC: Tell us about the dynamics

you share with your family. What role does a family play in an entrepreneur’s life?

A.B: Poonam (wife) and I have 29

October - November '14

Intelligent SME

Meet the CEO known each other for really long. She takes care of the education business, which includes four international schools and nine nurseries; I help her with that occasionally. As an entrepreneur when you venture into a start-up, it is absolutely critical to have a strong family support. There may be times when you may not succeed in bringing the same amount of money home as you would in your corporate job, and therefore it is crucial to have a family that loves and understands you despite all the adversities.

MC: How is a day in the life of Avi Bhojani? A.B: I have three jobs in a day.

The first one is a day job, then a night job followed by a late night job. In the day job, it’s BPG Group while in the night, I usually help Poonam run the schools and nurseries by managing the shareholders, and managing our private investments is the latenight job. I have also started a night club (My boys like to call it as dad’s mid-life crisis. Smiles) called Mahiki, which is located in the Jumeirah Beach Hotel. It’s a fun place to hang out and it’s doing pretty well too; we go there once in two or three months. I also have a real estate development company, an advertising company based in India, which is a partnership with an elite family of my home country. So my late-night job involves taking care of such private investments.

MC: What kind of attributes do

you look for while investing in any business?

A.B: Firstly, it’s the person rather

than the idea and business model. Secondly, his/her motivation to do the business. I would like to illustrate an example to explain the same: While starting the Dubai Internet City, we decided to do an e-biz challenge where almost 1900 business plans were offered to us. Approximately 1800 were from well-placed executives who had a non-compromising attitude on salary and the equity share. One needs to realise that attempting to make a kill in the first go itself will lead to nowhere except failure. Broadly, one needs to focus on sustainability and earning clients trust to establish a relationship.

MC: Any advice you would give to the young entrepreneurs based on personal experiences?

A.B: When you get into a business,

think medium-long-term exit. You got to realise the fundamental difference between building a business and having a child. The latter you can prefer nurturing for the rest of his/her life. On the other hand, consider your business a material thing and think about buying and selling as a part of the game. There’s no point holding onto something that has stagnated. Moreover, I strongly believe in the power of partnerships. Get a good set of partners who not only complement you, but are also trustworthy in their area of competencies. Getting along with a person is not a good enough idea to start a business partnership. Similarly, entrepreneurs should realise that there’s no free money. Having the most amazing idea, but hesitating to invest your own money and preference for third-party funding to get the ball rolling is unlikely to help you

build a robust company. Keeping your money locked as savings for a rainy day is a wrong notion. One needs to realise that when you set-up a company, the tides have already turned against you, and it’s rainy already. So invest your money first. If you take up too much of third party money in the early stages, you will be left with very little action for yourself. The perception is clear in this part of the region: capital is treated as a premium over enterprise. Tightening of the belt is inevitable. There has to be some change in lifestyle to contain the financial pressures of starting on your own. Lastly, if you’re afraid of failing, just don’t start. You will fail at times, but that doesn’t mean you will fail always. You learn something and you get started again. Most start-ups have also shied away from buying professional services of high calibre. When you’re venturing into something, make sure you invest in good branding, financial services, legal matters, etc. It’s critical to get it right the first time around. They invest in wrong things: doing up good looking offices, etc. As an entrepreneur, also be willing to work the longest hours. You’ve got to come in first and leave the last. No matter what, you don’t forget your personal values. If you try and take short-cuts, you will not be able to see yourself in the mirror. If you believe that you want to deliver superior education, then the rest will sort itself out. To hit a particular year’s bottom-line target, don’t short-change. And, the last bit is, make sure you enjoy the ride. It’s time to change if you’re not enjoying.

October - November '14

Intelligent SME

We have literally skipped the desktop emphasis and become a “mobile-first” internet population.

From the Entrepreneur

It’s a win-wheel deal! Selling a car can be a lengthy and tedious affair. Consumers mostly are unsure about their car’s real value, which leads to endless appointments with time-wasters wearing the garb of buyers. To overcome these challenges, SellAnyCar.com introduces you a new concept of knowing-all about your car in just a click, not more than 15 seconds precisely. In a candid chat with ISME, Saygin Yalcin, CEO of the online venture discussed the growing gap in the market for accurate information on the real value of used cars, the iPhone app empowering information for users on the go and much more. Edited excerpts of the interview: Q: Give us a breakdown of your business model?

A: SellAnyCar.com has an interesting business model wherein we buy any car--whatever the make, model, age or condition. With branches all over the country, we offer one of the easiest and

quickest ways to sell your car. We collect your car's details online then all you need to do is come into any one of our locations around the country and after a quick inspection, we will pay you instantly. No haggling, no hassle. Selling a car used to be a lengthy and risky process. Consumers were not sure about their car’s real value and were needed to arrange too many appointments with buyers, most of them time-wasters. With SellAnyCar.com, you can literally find out your car’s value within 15 seconds, sell your car and get paid during your lunch break. We are located in all major cities all over the country and already are one of the largest used car dealers in the region.

mobile internet. We have literally skipped the desktop emphasis and become a “mobile-first” internet population.

Q: How did you go about funding

overwhelming. The consumers appreciate the services offered by SellAnyCar.com. We have grown to all major cities in the UAE, including several locations in Dubai, Abu Dhabi, Sharjah, Ajman, Umm Al Quwain and more. We have launched our operations in Istanbul, Turkey, and will be opening more locations all over the Arab world.

SellAnyCar.com?

A: While I am the Founder & CEO, I have great strategic and financial partners supporting me to reach our common vision. SellAnyCar. com is able to purchase any car in the region and pay you instantly. Q: Tell us in detail what are your

mobile plans, whether or not you plan to release a mobile application for your business.

A: SellAnyCar.com has already released an iPhone app and we are currently working on an Android application. The Middle East is the fastest region to adapt to 32

Q: What do you do with the cars

you buy and which is your target market/s?

A: SellAnyCar.com does not sell cars back to the public consumer. We have established one of the world’s largest distribution channels, whereby we sell cars to our business partners for various commercial purposes around the globe. Q: How has the response been from the residents?

A: The response has been

Q: Given you pay-off the seller on the spot, is the investment a major one from your end?

A: Fortunately, SellAnyCar.com is

the best-funded internet startup in the region and able to purchase any car and pay you instantly.

October - November '14

Intelligent SME

Special Focus-Real Estate

Decoding Tasweek’s stateof-the art ‘smart’ Dubai In the shrine of ‘next big thing’ trends, the concept of smart cities is one of the trendiest. The idea is plain and simple: accumulating the extraordinary amount of data exhaust, which everyone generates while travelling around a city, for planners to optimize services in the city to make them more efficient, cleaner and cheaper. Dubai recently hosted the Smart Living City (2014), a platform where international thought leaders converged, to discuss the prospects of transforming the emirate into a next generation hub. Speaking about the two-day event with the ISME, the chief executive officer of the organising firm (TASWEEK Real Estate Marketing and Development), Masood Al Awar, said: “Residents of Dubai face heavy traffic congestion on a regular basis. With the integration of the next-generation technology into the city’s platform, the traffic information can be accessed real time through apps on smart devices.” So, what else can the smart city concept offer to the growing population of the lively emirate? Here’s a run-down. 34

October - November '14

Intelligent SME

Special Focus-Real Estate Q: Why do you think Dubai needs to

adopt the Smart City trend? What are the various benefits of creating the same?

A: Dubai is a growing city with

an estimated population of 2.2 million, which will constantly increase given the economic opportunities and social security provided by the emirate to its citizens, residents and visitors. I feel that Dubai should be developed as a ‘smart’ city to create a balance between its increasing population and available resources for a sustainable, low-carbon society. In addition, adoption of the ‘smart’ city technologies will allow Dubai’s future population to thrive in a sustainable environment. Intelligent digital technologies currently available to us can be mobilised into the emirate’s vital services to make it ‘smart’ and sustainable. With its increasing population and expanding city boundaries, Dubai as a future city will be able to manage the complexities, increase efficiency, and reduce the costs of essential services for a better quality of life for its people.

smart cities? In addition, what are the measures one could adopt to overcome them?

A: Smart Building Technologies

Smart Living City Dubai 2014 was a highly successful event, posting a record attendance of visitors, renowned international speakers, business leaders, and government officials.

faced by the residents of Dubai is the congestion and traffic. How can a smart city counter this challenge?

In addition, the traffic apps can also provide necessary information about the city’s public transport system, including the metro, trams, and buses, helping travelers to chart out their journey from point A to point B, virtually. This will eventually increase people’s reliance on public transport over private vehicles, thus contributing in easing road congestions.

A: Yes, residents of Dubai have

Q: What are the key aspects or

Q: One of the major challenges

to overcome heavy traffic and congestion everyday to reach their destinations. The latest smart city technologies will enable people to avoid such routes and reach their offices and home without unnecessary delays. With the integration of next-generation technology into the city’s platform, the traffic information can be accessed real-time through traffic apps on smart devices. This will enable travelers to plan their travel routes accordingly, avoiding roads with heavy traffic, accident sites, blocked or closed roads, and areas under diversion. Such a simple yet highly useful technology improves the drivers’ road experience, enabling them to take alternate routes, avoid congestion, and contribute in decreasing emergency-response times.

components, according to you, that defines a smart city? Could you list a few of them?

A: A ‘smart’ city is a concept where

substantial investment is made in the development of human and social capital along with upgrading transport and communication infrastructure. A ‘smart’ city ensures responsible management of natural and human resources for sustainable economic growth with the active participation of the public and private sectors. Important components of a ‘smart’ city include: Smart Economy, Smart Environment, Smart Governance, Smart Living, Smart Mobility and Smart People.

Q: What are the major challenges for real estate firms in developing

(SBT), such as Building Automation System, Building Management Systems, and Building Information Modeling are available for the construction sector. However, their use is not so prolific because of challenges such as cost effectiveness vis-à-vis sustainability, high initial cost of acquiring technology, the need for more stringent ‘green’ building regulations, and lack of public-private partnerships, to name a few. We have reached a stage where the advantages of building a smart city have been firmly established with far-reaching benefits to society, economy and people, which is gaining popularity in the real estate sector too. Governments all over the world are taking initiative to develop these cities with the cooperation of the private sectors. Its effects will also be felt in the real estate market where the properties with smart technologies will command higher value. Strict ‘green’ building norms will also encourage property developers to install smart building technologies in their developments.

Q: You have recently concluded the

inaugural edition of the Smart Living City Dubai 2014. What are the key takeaways from hosting this event?

Q: Smart Living City Dubai 2014

was a highly successful event, posting a record attendance of visitors, renowned international speakers, business leaders, and government officials. It provided an in-depth analysis about the smart city concept and the Dubai Government’s plans to transform the emirate into a next generation hub. The event also enlightened the need for more cooperative efforts between the public and private sectors to build future cities. All the key sectors need to work in sync with each other towards the common goal of building cities that are technologically advanced, economically beneficial and environmentally friendly.

October - November '14

Intelligent SME

Special Focus-Real Estate

Real estate: Crisis or opportunity? Noor Trade says pick your spots carefully! 36

October - November '14

Intelligent SME

Special Focus-Real Estate ISME: With the small to medium

UAE’s construction sector unexpectedly picked up more speed this year, indicating a leap in bank lending, since its sharp cut down in the wake of Dubai’s 2008 crash. At the same time, property prices have been skyrocketing on the back of Dubai’s economic boom, increasing the chances of a positive turnaround in the commercial property segment. So, are banks cautious, reflecting the scars of the last crash, or encouraging investments? Intelligent SME, thus, caught up with Kazim Ali, Head of Corporate Banking at Noor Bank to discuss whether the boom is for real, or a bubble is about to burst. Edited excerpts from the interview.

enterprises (SME) sector contributing 42% to the overall Dubai economy, what services do you offer to address the financing gap encountered by these companies?

Kazim Ali (KA): Noor Trade, which is a subsidiary of Noor Bank, provides comprehensive working capital financing solutions to SMEs. We also offer a range of trade services, cash management and treasury solutions. ISME: For individuals purchasing

commercial property, do banks provide loans only if they are assured that the space will be leased by reputed local companies or MNCs?

KA: Banks provide commercial real estate financing on a selective basis. The factors that come into play are leverage levels, pre-leasing commitments and the ability to support through other cash flows if the rental levels are not achieved ISME: How are the repayments

secured? Is it by rentals or asset mortgage? What are the fixed and floating interest rates for the same?

KA: The repayments of Noor Trade are generally secured via mortgage and assignment of rentals. The rates vary according to the variables mentioned above. Banks generally provide floating rate financing but as these projects generally have a defined or fixed cash flow, clients are advised to hedge their rate exposure, especially given the present rate environment. ISME: In an age when companies

have a plethora of financing options for scaling up, which includes crowd funding and venture capitals, what factors differentiate you from the rest and how do you manage to sustain successfully despite the challenges?

KA: Our SME offering under Noor Trade is focused on working capital financing and banking solutions (payments, treasury services, trade etc.) that are still best provided by the commercial banking segment. We try and differentiate ourselves by having one of the most comprehensive solutions in the sharia-compliant space. A focus

on customer service and being responsive to client needs are also important factors in this segment.

ISME: Moreover, the trend of

providing SME equipment financing options to purchase assets like machinery, vehicles, etc., is growing in the region. How is Noor Trade catering to this segment?

KA: At Noor Trade, we have a

commercial vehicle financing program that caters to SMEs who wish to purchase vehicles. We are looking to develop programmes for other fixed assets such as machinery, equipment and they’ll be rolled out to customers once finalised.

ISME: Soaring property prices

in the run-up to Expo 2020 have resulted in a positive turnaround in the property development sector. Do you offer specialised services for the construction and real estate sector, such as loans and financing? If yes, what are they?

KA: At Noor Trade, we look at

supporting our clients for the development of offices, and warehouses for their own use. We have also been involved in large ticket syndicated and sukuk financing for the leading developers in the region. A recent example is that of Noor Bank being one of the book runners on Emaar Malls’ recent sukuk issue and syndicated financing transaction

ISME: Are banks in the UAE still

averse to lending, and watching from the sidelines should the real estate burst of 2008 strike again?

KA: Banks are financing actively

and overall loan growth in the UAE has been quite healthy for a while now. According to the UAE Central Bank data, the loan book of the UAE banking sector grew by 4.8 per cent year-on-year in the second quarter. However, a more measured approach to direct real estate financing now prevails in the country, following the lessons learned from the global financial crisis of 2008-2010. Real estate financing requests are also being carefully monitored by the Central Bank and the rating agencies. The Central Bank has also introduced

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Special Focus-Real Estate ISME: Lastly, what characteristics differentiate Noor Trade from others? Simply put, why should an SME or an individual choose banking with you as compared to other banks in the region?

measures to limit overall exposures to real estate as well as prescribed loan-to-value (LTV) criteria for individual mortgage financing as a means to control excessive lending.

ISME: How does the bank counter

challenges around credit growth and provisioning for legacy issues linked to overexposure to corporate and government entities?

KA: The legacy issues have been

addressed over the past few years. The current focus is on managing growth, which is done by having a disciplined origination model and investment in good risk management.

ISME: Do you offer any unique

sharia-compliant services for businesses? If so, what are they?

KA: Noor Tradeâ&#x20AC;&#x2122;s product suite is

generally far more comprehensive than that of several other shariacompliant providers. For example, we have the ability to finance the receivable cycle for our customers and also use low risk instruments like credit insurance effectively. On the treasury side, we have the ability to structure relatively complex transactions for our clients and are one of the very few local banks to provide spot gold trading.

Noor Tradeâ&#x20AC;&#x2122;s product suite is generally far more comprehensive than that of several other shariacompliant providers. For example, we have the ability to finance the receivable cycle for our customers and also use low risk instruments like credit insurance effectively. On the treasury side, we have the ability to structure relatively complex transactions for our clients and are one of the very few local banks to provide spot gold trading.

KA: The SME business is our key focus area. Significant resource investments have been made in this segment over the past two years and this will continue. The business has its own organizational structure and brand identity under Noor Trade, which gives it the ability to stand out in the market as a specialized, focused business line for Noor. Our core strengths in this segment are the shariacompliant product capabilities that we have combined with our ability to provide a superior level of customer service and rapid turnaround time that are very competitive. At Noor, we believe innovation is key and ensure we continuously improve our products and processes to enhance our customer experience.

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Unveiling Dubai's 'future cities' Harnessing the power of advanced systems and connectivity to create living environments that are more attuned to the needs of residents which benefits in terms of efficiency, safety, better living conditions and much more. Samita Khawar gives a run-down.

he need for a better and rapid economic growth, quality of life, and resource constraints such as water and power, are driving the need for establishing a Smart City culture throughout the urban centres of the Middle East. Major cities like Dubai, Abu Dhabi, Jeddah and Dohaâ&#x20AC;&#x201D;are creating Smart City projects and programmes, setting a rapid pace of development and implementation.

Smart Cities:

Trends in the Middle East

The need for a better and rapid economic growth, quality of life, and resource constraints such as water and power, are driving the need for establishing a Smart City culture throughout the urban centers of the Middle East. Major cities like Dubai, Abu Dhabi, Jeddah and Dohaâ&#x20AC;&#x201D;are creating Smart City projects and programmes, setting a rapid pace of development and implementation.

With strong government policies and programmes encouraging the movement of cities away from hydrocarbon energy dependency and into clean technology energies like solar and wind, the Middle East is emerging as the global benchmark for alternative energy generation, transmission and consumption. Most cities in the Middle East are now using their move toward clean technology as the foundation to a larger Smart City strategy.

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Special Focus-Real Estate With strong government policies and programmes encouraging the movement of cities away from hydrocarbon energy dependency and into clean technology energies like solar and wind, the Middle East is emerging as the global benchmark for alternative energy generation, transmission and consumption. Most cities in the Middle East are now using their move toward clean technology as the foundation to a larger Smart City strategy.

Smart Cities: An Overview

A 'Smart City' is an urban region that is highly advanced in terms of its overall infrastructure, real estate, communications and other social facilities such as healthcare and mobility. A smart

city balances its social, commercial, and environmental needs, optimising the resources it has. The economic development activities of a smart city benefit everyone, including citizens, businesses, the government and the environment. Information and Communication Technology (ICT) is the principal infrastructure and the basis for providing essential services to the residents of a Smart City. These cities are built on ‘Smart’ and ‘Intelligent’ solutions and technologies, such as Smart Energy, Smart Buildings, Smart Infrastructure, etc. ICT is leveraged as a core element of these solutions for fostering economic growth, improve the lifestyle of citizens, and create opportunities for urban development and renewal,

support eco-sustainability initiatives, improve the political and representative process, and provide access to advanced financial services. Key solutions and technologies that can be categorised under Smart City Solutions are listed in the Exhibit 1 below, also known as the Smart Diamond.

Smart City Solutions

The convenience and safety of a smart city, as well as the consideration for the environment a smart city empowers, are all made possible thanks to various fully functioning and mutually coordinated public infrastructures. The Exhibit 2 introduces these systems and how they work in each public infrastructure and technological platform.

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Special Focus-Real Estate Smart City Solutions Smart City Solutions Smart Energy

Smart Energy uses digital technology through Advanced Meter Infrastructure (AMI), Distribution grid management, and high-voltage transmission systems, as well as for demand response for the intelligent and integrated transmission and distribution of power.

Smart Buildings

Smart Buildings are green, energy efficient, and intelligent, with advanced automated infrastructure that controls and manages aspects such as lighting and temperature, security, and energy consumption independently or with minimal human intervention.

Smart Mobility

Smart Mobility enables intelligent mobility through the use of innovative and integrated technologies and solutions, such as low emission cars and multimodal transport systems.

Smart Technology

Smart Technology connects homes, offices, mobile phones, and cars on a single wireless IT platform. Smart technology includes adoption of a smart grid system, smart home solutions, a high-speed broadband connection, and roll-out of 4G technology.

Smart Healthcare

Smart Healthcare is the use of eHealth and mHealth systems and intelligent and connected medical devices. It also involves the implementation of policies that encourage health, wellness, and well-being for its citizens, in addition to health monitoring and diagnostics as opposed to treatment.

Smart Infrastructure

Smart Infrastructure includes intelligent and automated systems that manage, communicate with, and integrate into different types of intelligent infrastructure, such as energy grids, transportation networks, water and waste management systems, and telecommunications.

Smart Governanc and smart education

Smart Governance and smart education includes policies and digital services from the government that help and support the adoption of green and intelligent solutions through incentives, subsidies, or other promotions.

Smart Security

Smart Security includes technology and solutions such as video surveillance, public safety LTE, and managed security services that are designed to protect people, property, and information.

Smart Citizens

Smart Citizens possess interest in embracing smart and green solutions in daily activities. More citizen proactivity is expected in adopting smart concepts and smart products, including lifestyle choices.

Smart City Ecosystem and Stake holders

There are a variety of ecosystem players involved in the realisation of smart city solutions. These players not only span many government levels and multiple disciplines, but also the business world ranging from small private firms to large multinationals Roles vary based on the nature of each player’s business and the smart city’s goals or motivations. There are typically three major motivating thoughts behind a smart city project - the need to construct or invent a new economic model (the economic motivator), the need or wish to

Brief Description

reduce energy consumption (the eco- sustainability motivator) and the need to improve the quality of life in a city environment (the social motivator). Further, these three motivators are not exclusive from each other and they can all be found playing a role in the initiation of a smart city project. ICT plays a major role in the development of smart city solutions. However, the value propositions of most smart city initiatives do not position ICT as the key to the project’s value. On the contrary, value propositions are typically more aligned with the respective motivations for the initiation of each project, while

ICT is considered an enabler of the ultimate objective. Therefore, the technology and solution providers, who essentially facilitate the smart city objective, play a crucial role in the value chain, as it’s their technology which eventually determines the success of a specific smart city solution.

Smart Cities: Global Trends Increasing congestion in

cities, rising pollution levels, migration of people from rural to urban areas, and scarcity of resources, is causing social, political, environmental and energy instability and increasing the incidence of accidents in the

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Special Focus-Real Estate metropolitan areas. This in turn has increased the need for smart city concepts such as modern infrastructure, smart mobility and other intelligent solutions and technologies. Countries like South Korea, China and the UAE have been investing heavily into technology solutions as well as the formation of smart cities. Today, a number of excellent precedents exist that the world can emulate such as those in Vienna, Aarhus, Amsterdam, Cairo, Lyon, MaĚ laga, Malta, the Songdo International Business District near Seoul, Verona, etc. A list of smart cities and smart city projects

Samita Khawar, Director, Growth Implementation Solutions, MENA, Frost & Sullivan.

currently in different stages of implementation is provided in Exhibit 2 below. The global smart cities market has observed significant growth in the past few years and is expected

to continue growing at a significant rate. By 2025, more than 26 of the global cities will transform into smart cities and more than 50 per cent of these cities will be in Europe and North America alone.

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Special Focus-Real Estate

Cityscape: A reinforced real estate extravaganza! The upbeat sentiment among investors, clearly, reflected in the footfall this year, beating a record 35,000 participants and featuring more than 280 exhibitors from 28 countries.

welling real estate prices across UAE post the country bagged the bid to host the World Expo 2020 have become a reason to rejoice for real estate developers in the region. Fuelled by the upward momentum gathered in this sector, the thirteenth edition of the Cityscape Global (largest real estate gathering) saw a steep rise in the unveiling list of real estate projects planned for the nation. And yes, they were packed with luring payment schemes too. With AED113 billion worth of transactions pumped into the Dubai property industry in the last six months, Dubai Land Department believes that the emirate has now established itself as a prime global destination for real estate, following the implementation of new laws and regulations which safeguard investor. The upbeat sentiment among investors, clearly, reflected in the footfall this year, beating a record 35,000 participants and featuring more than 280 exhibitors from 28 countries. All major UAE developers made an impressive presence at the three-day exhibition, including Foundation Sponsors Emaar Properties, Damac Properties, Nakheel and Dubai Properties. Grabbing the centre stage for demonstrating their latest developments to potential regional and international investors, Emaar presented the much-anticipated showcase of The Opera District in Downtown Dubai. Meydan flaunted two new projects â&#x20AC;&#x201D; Mohammed Bin Rashid Al Maktoum City District 11 and Meydan Avenue. Nakheel unveiled the Palm

Shaikh Ahmed bin Saeed Al Maktoum, President of Dubai Civil Aviation Authority, inaugurated the high-profile event. Gateway, a three-tower waterfront living and leisure complex with more than 1,300 homes, a beach club retail, dining and health and fitness facilities. The event was inaugurated by Shaikh Ahmed bin Saeed Al Maktoum, President of Dubai Civil Aviation Authority, Chairman and Chief Executive of Emirates airline and Group, who was accompanied with senior government officials and industry veterans. Over mega participation, developers offered special payment plan, ready-for-possession units

and exclusive prices for Cityscape visitors. Sobha Developers released limited collection of luxury villas within Mohammed Bin Rashid City in Sobha Hartland. Similarly, Damac Properties announced its latest luxury hotel in Dubai, fourth project across Dubai in collaboration with the luxury hotel operator, Paramount Hotels and Resorts. Speaking about the strong response, Niall McLoughlin, senior vice president, DAMAC Properties, said, â&#x20AC;&#x153;if people still question whether the recovery in the Dubai property market is real,

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Special Focus-Real Estate

they should come to the show and see for themselves.” McLoughlin added, “we have been overwhelmed with the response to our serviced apartment offering through DAMAC Suites & Spa and look forward to an equally successful couple of days to come.” DAMAC Properties has confirmed that footfall on the stand has jumped significantly compared to the opening day of last year, as investors look to capitalise on the gains to be made in the serviced apartment sector especially. Celebrating thirteen years of its successful run-up, Cityscape Global continued to serve as an annual meeting point for real estate investors, developers, regional and city investment promotion authorities, architects, designers and other real estate professionals currently driving real estate growth and development across global emerging markets. Wouter Molman, director of Cityscape Group said: “The general outlook for Dubai’s real estate remains positive across all real estate sectors, supported by a strong economic outlook with a projected GDP growth of over 5 per cent annually until 2020, and Dubai visitor numbers growing steadily to an expected 20 million tourists by 2020." Having grown by 25 per cent from last year, we will welcome over the next three days as exhibitors, visitors, and delegates look to foster tighter business relationships and stay

tuned to the latest trends of the global real estate market,” Molman elaborated. Figures of real estate investments in Dubai have shown a massive hike, surpassing the most optimistic expectations, as the value of real estate investment showed growth in Dubai by 57% during the first quarter of this year, where fourteen thousand investors pumped AED 35billion in Dubai real estate market.” Citing a similar tone, Ismail Al Hammadi, real estate consultant pointed out that everyone is eager

to know the latest investment of Dubai Holding such as Dubai’s Mall of the World, which will be an integrated global tourist Icon. Hammadi went on to add, “…there is no accurate description for this growth other than the word ‘boom’.” The three day-long property extravaganza ran alongside a series of conferences; the Global Real Estate Summit, Future Cities and the Real Estate Brokers Summit, which were hosted at the exhibition centre.

We have been overwhelmed with the response to our serviced apartment offering through DAMAC Suites & Spa and look forward to an equally successful couple of days to come.

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Real Estate

The new work place From the cubical of the 80's, to the prevalence of communal tables and today’s telecommuting, the work place has been going through several transformations, that have shifted the focus away from the ‘real estate’ aspect of the company office, to the nature of the work itself, writes Neil Petch.

wenty years ago, the work place looked like a web of cubicles: rows after rows of tiny, partitioned desk spaces for the hundreds of industrious and diligent people working there. Companies everywhere were immensely proud of this sight: after all, at that time, it was deemed to be the quintessence of the modern work environment, and to improve the way people work, giving the white collar staff a dedicated space in which they could work productively and independently. Today, it seems we’re experiencing the reverse: it’s all about wide open spaces, where people can see and reach each other unobstructed; also efficiency has become more synonymous with teamwork and collaboration. This shift was brought about by the many changes in the work environment: from the developments in each industry, where new processes and practices had to be implemented to increase performance and revenue; to the all-encompassing and continuing developments in technology and information management, that have an impact on all aspects of modern life. At the same time, the meaning of ‘going to work’ has changed. It’s not about working from the office – i.e. being physically present it’s about accountability - getting things done, regardless of where you are. This new perspective has given way to new work arrangements that offer employees more flexibility and freedom, allowing them to make their own work schedules, alternating between working in the office and working remotely.

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There are open spaces well fitted, so that people could work from anywhere. Naturally, this gives way to a set of new challenges! But, so far, for most companies, the consequences of these new arrangements have been positive. In fact, companies that have embraced these changes - and were quick to develop new workplace and HR policies that weaved in their business objectives, whilst reflecting the new work place trends, alongside their employees’ needs and expectations - have seen productivity and job satisfaction levels go up, whilst infrastructure costs came down. With a work force that is increasingly mobile, there’s a lesser need for large corporate offices with multiple floors of individual spaces. The office space has to be re-scoped and re-engineered in order to facilitate better collaboration, in and out of the office. Clearly, one of the key factors that have shaped the new work place paradigm is technology. By providing a grid of communication tools and supporting the development of new processes, technology can facilitate an optimum level of connectivity and collaboration between all people involved. Firstly, there’s the obvious need of storing, accessing and managing information with a workforce that is not any longer located in the office, and may be rather dispersed geographically. As a result, companies have identified, tested and adapted a range of apps, tools and devices that are deployed to all employees and can be utilized everywhere. There’s also the more complex need of creating a collaborative environment that can keep employees engaged at various levels, from the kind of chance interactions the proverbial water cooler used to generate, to facilitating purposeful face-to-face interactions with specific agendas (e.g. updates, meetings, briefings, brainstorms). Therefore, the office space of today is designed to reflect the new way of working. There are open spaces well fitted, so that people could work from anywhere; meeting rooms equipped with

Real Estate

Neil Petch is chairman of Virtuzone, one of the most dynamic and fastest growing company set-up operators in the region.

It’s important to note that these transformations are taking place not only in the offices of large multinational companies, but across small and medium companies as well.

teleconferencing facilities and tools, so that people could connect and have multi-person conversations regardless of their physical location. It’s important to note that these transformations are taking place not only in the offices of large multinational companies, but across small and medium companies as well. That’s because regardless of the size of the companies, people have the same needs, and conduct their work in similar patterns. As expected, it can be expensive for a small company to make significant investments in renting, designing and fitting such an office. Luckily, they don’t need to. Today, small companies have options within reach. Serviced office - with coworking spaces and ready to use facilities – provide a complete, flexible and cost-effective solution to the demands of day to day office work, and have become the go-to alternative to the traditional view and structure of the physical office.

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Corporate Governance

Corporate governance pitfalls to avoid Wise companies do not wait for disaster to strike before ensuring that they are well protected against the possibility of failures. They examine all aspects of the ways in which their companies function, in every department, to determine whether they are operating effectively and efficiently, according to clear procedures and with appropriate checks and balances, writes Mark Fisher. 48

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Corporate Governance

orporate governance has played a starring role in international news stories in recent weeks. Serious questions about the way companies are run lie at the core of scandals involving British companies: Tesco (the supermarket chain) and GlaxoSmithKlinethe pharmaceuticals giant. In another case, a record 30 million dollar pay-out to a corporate whistleblower by the SEC, the US securities regulator, also puts the spotlight on corporate governance. Though these affairs are a long way from the UAE and concern large companies, rather than SMEs, they offer valuable lessons to anyone running a business, large or small, anywhere in the world. The details of these particular cases, and what if any wrongdoing may have occurred, are unclear and are anyway beside the point. It is the bigger picture that is interesting. Tesco has suspended four senior executives amid allegations that they overstated profit guidance to the tune of 250 million pounds; a huge sum even for a major company. On hearing such allegations, any corporate governance expert would immediately prescribe a thorough examination of the processes

Mark Fisher is vice president, corporate communications, at NASDAQ Dubai. He has worked as a solicitor in Hong Kong and the UK.

that enabled such a catastrophic outcome to occur. Did the company have clear procedures in place for preparing such a forecast? Were the procedures adequate and were they followed? Were the people involved sufficiently qualified, in terms of personal calibre and experience as well as technical expertise, and were there enough of them, to keep an eye on what everyone else was doing? These considerations are among the elementary building blocks of good corporate governance. But it appears that many major companies, despite having all the necessary resources at their disposal, are unable to create the right structures. It can be even more difficult for SMEs to do so, with less money and capacity. The consequences can be devastating. In Tesco's case, the company's shares quickly fell more

In the UAE, awareness is growing of just how important good corporate governance is. This positive trend will no doubt protect many companies from unwelcome phone calls from the authorities and the media.

than 10%. Corporate reputations in such cases can take quite a while to recover. GlaxoSmithKline was fined $490 million by a court in China after its subsidiary there was found guilty of bribery. Several of the company's managers, including its former top China executive, were convicted of bribery-related charges and received suspended prison sentences. As with the Tesco affair, a corporate governance audit of what went wrong would examine procedures, processes and the human resources angle, including who was doing which job and whether the right candidates had been selected for them. Wise companies do not wait for disaster to strike before ensuring that they are well protected against the possibility of such failures. They examine all aspects of the ways in which their companies function, in every department, to determine whether they are operating effectively and efficiently, according to clear procedures and with appropriate checks and balances. If they achieve this, they will avoid the fate of the unnamed company involved in the whistleblowing case, in which the SEC rewarded the informant for tipping it off about fraud. It may be a good idea for business owners to apply a whistleblowing test to their own company, along the lines of asking themselves if anything might be going on inside it which they would not like the authorities to know about. If that thought produces an uneasy feeling, it is time to take action. In the UAE, awareness is growing of just how important good corporate governance is. This positive trend will no doubt protect many companies from unwelcome phone calls from the authorities and the media.

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SME Booster

Expo 2020: A potential game changer for SMEs

Besides generating FDI boost to the host nation and upgrading multiple sectors of hospitality and tourism, the Expo offers significant opportunities for construction, infrastructure and real estate sectors much prior to the Expo itself, advises V Ramkumar.

ith over 180 countries expected to participate and more than 25 million anticipated visitors, the Dubai world Expo 2020 would drive a social and economic impact that an Olympics event or FIFA World cup would. The expected boost by Dubaiâ&#x20AC;&#x2122;s World Expo 2020 to the economy

is expected to be more than $23 billion, over the next 6 years. Leveraged well, this could mean a very significant opportunity for SMEs. World Expos are generally considered as an event of international cooperation, dedicated to the communication of innovation. In addition to

generating economic and financial benefits to the host nation, it also helps to showcase the achievements of the host and also promotes it as a business hub and tourist destination. Interestingly, one of the first World Expos was hosted in the United States in 1876, where the telephone, commercial typewriter and Tomato

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Intelligent SME

Connecting the minds and Creating the Future! Ketchup were introduced to public. Similarly, when Paris hosted its first World Expo in 1900, it took great pride in demonstrating innovations of escalators and talking films. While Universal Expos are typically scheduled once every five years, there are international and specialised Expos that are conducted once in every 2-3 years, and also typically shorter. Universal Expos are analogous to the summer Olympics with more than 150 participating countries, and the ‘Specialised Expos’ are comparable to Winter Olympics with participation of about 100 countries. Dubai’s World Expo 2020, similar to Shanghai’s Expo 2010, comes under the Universal Expo category. In order to understand a potential impact that an Expo brings to a nation, it may be worthwhile looking at the benefits that Shanghai accrued after its Expo 2010. China had invested close to $4 billion for the event, hosting 192 participating countries with over 73 million visitors. A relatively unknown fact is that close to 80,000 volunteers were trained for the China 2010 Shanghai Expo, featuring over 20,000 live performances over the 6 months that it ran. The theme was ‘Better City – Better Lives’, signifying Shanghai as the status of next great World City. The beneficial impact of the World Expo to China was very visible: • Economic growth jumped to 12.7% in 2010 from 8.2% in 2009 • Estimated contribution of over 5% to China’s GDP • More than $12 bn income from tourism generated. • Multiple aligned benefits such as 10 new subway lines, 4000 new taxis, 60% increase to Hongqiao International Airport. The projected benefits of Dubai’s Expo 2020 are quite farreaching and extensive too. With a projected investment of over $8.7 Bn, the theme of ‘Connecting minds, Creating the Future’ is expected to create over 277,000 new jobs, with significant boost to infrastructure, hospitality, tourism, and real estate. An anticipated addition of 100 new hotels with 45k additional rooms and 450 new

SME Booster

V Ramkumar is a Partner at Cedar Management Consulting International LLC, a US based management consulting firm whose heritage includes being part of the firm founded by creators of the Balanced Scorecard. Ram has over 20 years of management consulting and strategic transformation experience. He can be reached at v.ramkumar@cedar-consulting.com

restaurants will itself potentially generate over 111k new jobs in the hospitality and tourism sector. Infrastructure improvements including the 438-acre site at Jebel Ali, extension of Dubai metro lines and a series of Real Estate projects are all seen to be as drivers of active economic development. While the Expo itself generates FDI boost to the host country and upgrades multiple sectors of hospitality and tourism, it also creates significant opportunities for construction, infrastructure and real estate sectors much prior to the Expo itself. This offers huge opportunities to companies in those sectors, and also has a domino effect on downstream sectors.

There are a few key implications that this context brings to SMEs in the region, which are critical: • Focused opportunities: If you

are an organization related to the construction or infrastructure sector, there couldn’t be a better opportune time to drive focused growth. Players in tourism, hospitality, food & beverage business – which typically have a significant SME presence, have a window of immense opportunity to focus as well. • Increased competition levels: Dubai Expo 2020 will make it an attractive destination for many of the global companies, and that will drive increased competitive forces at play. While this is good for the economy in the long run, it has immediate and far-reaching implications to SME players, both in the board room where the strategy blue-print is drawn, and in the market-place where the lines of competition are getting re-drawn! • Consolidation & partnerships: Participating in the making of such a large event will also mean that

size of the players will begin to matter more. Increase in mergers & acquisitions and building joint venture partnerships will be inevitable. This is an area that SMEs will need to pay additional attention to. • Demand for talent: Creating potentially over 277,000 new jobs is not an overnight initiative, and by no stretch of imagination could it be that straightforward, too. It’s a potential opportunity for players engaged in sourcing and in the business of providing skilled resources. Quality resources are likely to become much more expensive and this demand will also mean increased internal initiatives to retain good talent. An area of perennial importance to SMEs! While some of the above are being witnessed already – including increased real estate activity and growth in infrastructure, it’s quite likely to become even more apparent in the coming years. The higher proliferation of SMEs in the region is already evidenced by the increased off-take by banks to SME financing, and specifically additional focus for contract financing, which could mostly be attributed to Expo 2020 related activities. Events such as World Expo also bring in another important consequence to the industry: only the fittest survive. It would be impossible to positively benefit from participation in world-class events unless you are seriously committed to customer experience, passionate about quality, and focus on service excellence that is driven by the best of talent. And for those who have indeed got all of the above right, it’s a perfect time to ‘Connecting the minds and Creating the Future’!

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SME Booster

Strive for satisfaction, not happiness in your job David Allen, creator of the ‘Getting Things Done’ system, will share tips on making clear decisions and mastering workflow, in an exclusive workshop to be held in Dubai later this month. ISME caught up with him for a brief tête-à-tête. Q: What is the ‘Getting Things Done’ system all about?

A: It’s about the best practices

for optimizing your ability to be present and 100% focused on what is most meaningful to you in the moment and creating mental and emotional space to access your creativity and intuitive judgments.

Q: Most SMEs usually have very

few people doing too many things. In such a scenario where there is constant multi-tasking to be done, one has to struggle to prioritise tasks. Would you be kind enough to give some tips on how this struggle can be reduced?

A: The main key is to objectify the

inventory of exactly what work is to be done—i.e. what are all the projects and what are the next actions that need to be taken to move them forward. The next step would be to consistently review and keep recalibrating priorities in an on-going, agile fashion.

Q: How would you differentiate

importance and urgency, as most employees often get confused between the two?

A: Well, many important things

Q: Do you think, sometimes,

procrastination is justified and it’s fine to postpone certain things for a later stage? Or is it completely the wrong thing to do? What tips would you give to employees to overcome procrastination?

A: Many things should not be

done immediately, and held until a more appropriate time. That’s not procrastination—that’s good workflow management. As a matter of fact, deciding the one thing to do at the moment means that you are not doing everything else. The best way to overcome procrastination is to determine the very next physical action required to move something forward, and focus on that relatively easy accomplishment, without worrying about perfection or trying to do everything about the project in your head all at once.

have an urgency to them; but not all things that seem urgent are that important. If it truly is something that needs to be done immediately, then it must. Ideally, though, if enough of the non-urgent but important things are appropriately handled, the “urgencies” diminish significantly.

Q: From an employer’s perspective,

your workflow?

Q: We see several cases of employees

Q: How can you manage and master A: By appropriately taking the

five steps necessary to control it:

capturing what has your attention, clarifying exactly what it means and what you are going to do about it, organizing it into its proper category, reflecting on the total inventory, and then making trusted choices about how you engage your resources, moment to moment.

how does one create a stress-free, but highly functional and productive work environment for his/her team?

A: Train people in these best

practices and then hold them accountable to them. And, of course, model those behaviors yourself!

struggling to find happiness in their job. If an employee is not happy with

the job, what would be your advice— quit the job or wait, hang on and search for happiness in the job?

A: Usually people are unhappy in a job because, either they feel out of control in their situation or it’s not really a job they want to be doing, in the first place. Whatever the case, getting the job under control and getting focused on where one is going, will solve the problem. I recommend “satisfaction” instead of “happiness” as the optimal state anyway. Happiness is always fleeting—satisfaction is steady and healthy (satis = enough; factere = to do).

Q: You have also ventured into the

app world with the GTD-Q app. What made you enter this space?

Q: GTDQ is not a workflow app

it’s simply a digital survey tool about your degree of control and focus that can provide immediate feedback.

Q: Is this your first visit to Dubai?

What are your looking forward from the Dubai experience?

A: No, but it has been many years since I was there. I’m looking forward to seeing the changes, and getting a sense of the culture and its interest in the GTD methodology.

Q: Share some of your favourite

productivity principles from your book ‘52 productivity principles for work and life’. Which are the ones you swear by?

A: I think they are all important

and relevant. I think my favorite, though, is the first one: Cleaning Up Creates New Directions.

October - November '14

Intelligent SME

SME Booster

Usually people are unhappy in a job because, either they feel out of control in their situation or it’s not really a job they want to be doing, in the first place. Whatever the case, getting the job under control and getting focused on where one is going, will solve the problem. I recommend “satisfaction” instead of “happiness” as the optimal state anyway.

The personal productivity guru

October - November '14

Intelligent SME

Tourism

The growth of medical tourism in the UAE Medical tourism, more precisely health and wellness tourism, refers to the industry where people from across the globe travel to other countries for medical and surgical care, and at the same time, visit the local attractions of that country. Karen Osman shares some key highlights of medical tourism in Dubai hat could shape the future of the emiratesâ&#x20AC;&#x2122; economy and healthcare. 54

October - November '14

Intelligent SME

Tourism

lthough globally, medical tourism is still in its early stages, it’s cited as one of the fastest growing industries, especially in the UAE. According to the Dubai Health Authority (DHA), medical tourists contributed about 8.7 per cent of the total health sector revenue in 2012. Euromonitor International has calculated that the UAE medical tourism market is worth $1.58 billion (Dh5.8 billion) and is expected to grow a further 6.5 per cent this year to $1.69 billion. Impressive figures – so what are the key factors driving this growth? The UAE is amongst the world’s top 20 destinations for medical tourism partly due to the country establishing itself as an international tourism destination for leisure and business travellers, boasting luxury resorts, countless attractions and impressive shopping malls. In addition to the UAE being the ideal holiday destination, it has also invested billions of dollars in the healthcare system, establishing accredited and internationally recognised hospitals and clinics with Western standards of healthcare and facilities such as Dubai Healthcare City, The Cleveland Clinic and Moorfields Hospital. Adding to the lure of the UAE, is its ideal location, being situated between East and West with national carriers flying over a third of the world’s population within four hours of Dubai and two-thirds within an eight-hour flight, the UAE is accessible to most people. Although the UAE is fast becoming a prominent player within the medical tourism sector, it does face heavy competition from more traditional medical tourism destinations such as Switzerland, Germany, Thailand and the UK. In order to further strengthen the UAE’s position as the leading health-care destination, the UAE government has recently approved a comprehensive strategy which was presented by the DHA. The strategy focuses on establishing a health system that provides excellent services, focusing on highly qualified medical practitioners and building 22 state-of-the-art hospitals. The initiative also includes the

Karen Osman is the managing director of Travel Ink, a creative copywriting and translation company that caters exclusively to the travel, tourism and hospitality industry. Focusing on helping hotels, airlines, tourism boards and other tourism related companies with their content requirements, Karen Osman has over fifteen years of experience in publishing, communication and marketing across Asia, Europe and the Middle East. She can be contacted on Karen@group-ink.com

The strategy focuses on establishing a health system that provides excellent services, focusing on highly qualified medical practitioners and building 22 state-of-the-art hospitals.

launch of Dubai’s medical tourism e-portal promoting Dubai as well as presenting medical packages that include visa, hotel stay, and activities to do. With the Ministry of Health projecting over a million medical tourists visiting Dubai every year by 2020, the DHA and the General Directorate of Residency and Foreigners Affairs have recently decided to extend medical tourist visas in order to further facilitate and support the medical tourism initiative. Targeting patients from Russia, CIS countries, South Asia and neighbouring GCC countries, the UAE medical tourism marketing strategy will be implemented in various languages, enabling patients to have access to the information in their own language. It’s the UAE’s commitment to providing excellent healthcare services, packaged with the promise of sun, sand and shopping along with an aggressive growth and marketing strategy that will undoubtedly position the UAE as one of the world’s most popular medical tourism destination.

October - November '14

Intelligent SME

Telecom Talk

In a business strategy, mobile comes first

ne cannot possibly argue that UAE has the highest smartphone penetration rate in the world, with 75 per cent of the population using mobile devices to do everything they do, and there’s something they can’t do on their mobile phone they’re frustrated and ready to leap to the first offering that comes along. The growth in smartphone uptake in the region has become

as prevalent in business as it is amongst consumers. So, embracing this phenomenon to market your goods and services in a strategic way is the name of the game in today’s scenario. Especially, small to medium enterprises (SMEs) must take advantage of this phenomenon to improve the productivity of their employees, customer service and engagement. Businesses need to use the mobile phenomenon to build brand

relevance, cross channel touch points, and engage with customers who are constantly on the move, whose expectations are high and who demand to be wowed. SMEs in particular, today, must learn quickly and understand how best to interact in an increasing ‘mobile first’ environment. Many communication channels are available to business and consumers, but not one can match the personalisation and effective

October - November '14

Intelligent SME

Telecom Talk engagement of the mobile channel.

Empowered mobile customer

The empowered customer expects a seamless experience across all channels and touch points. One of the flaws committed by many businesses is that they fail to define how mobile devices access fits into their sales, service and customer experience journey. This is absolutely critical from a marketing perspective, as 91 per cent of consumers keep their device within reach 100% of the time. Another key statistic is that 47 per cent of emails are opened on mobile devices, rather than through apps or the web. This clearly highlights the importance of mobile usage and access as a medium of communication with customers, which means the way and the number of times you communicate with your customers is of growing importance. In 2013, 17.4 per cent of global web traffic came from the mobile, and about 20 per cent of all online sales that are happening now are made through mobile devices, particularly smartphones. The growth in web traffic in year 2013 from mobile devices had 6 per cent points again over year 2012. Earlier, a business relationship with the customer stopped when the customer stepped out of your store. However, the mobile first prevalence that exists today gives businesses more opportunities to directly interact with their mobileempowered customers. Business success today is secured through a mobile first strategy, in which mobile devices are the key screen through which businesses engage with their customers, irrespective of their location.

Seven quick wins to get you there

This is where businesses must work more closely with their service providers in shaping their own mobile needs, and yet at the same time fulfilling their customer expectations. The seven quick wins that telecom service providers use to help businesses in developing their mobile first strategy are:

1. Smartphone for employees: Providing smartphones to

Vikram Chadha is the vice president of SME Marketing, du. He has executive-level international experience in general management, marketing P&L, product management, sales strategy and management responsibility with over 14 years experience in Asia, Africa, America and Middle East in the telecommunication sector. He has extensive senior expertise in international telecommunications marketing, sales, business development and customer experience. He brings with him a lot of marketing experience in the consumer, enterprise and SME segments. employees is now a given with most businesses. Yet there are many who have not adopted this practice. There are numerous case studies and data sets that clearly show that connecting employees anytime, anywhere has led to improved performance, improvement in their efficiency, and above increased productivity.

2. Bring your own device (BYOD) along with MDM (mobile device management): Many businesses

have adopted the BYOD (Bring your own device) policy and approach. It promises many benefits to the employee, as well as to the business. The employee benefits by choosing the device he wants, and also getting the better business packages to go along with it, enabling him to save money on a monthly basis. The business enjoys greater innovation, better work-life balance, and improved productivity. However, this also increases pressure on IT to manage and secure the devices, and also increases complexity on access of work emails, personal emails, social network usage and access of applications. By providing mobile device management solutions along with smartphones bundled with data packages, the service providers are enabling the businesses by resolving their complexity and enabling a productive mobile workforce as well as a happier workforce. For me, a happier workforce is the key to winning in business.

3. Tablet adoption: Enabling tablets to be used as a business productivity tool for employeeâ&#x20AC;&#x2122;s own training purposes, for accessing important documents from their intranet or cloud, for preparation of proposals and also for showcasing videos, product details and presentation to the customers. For instance, two examples can highlight this scenario: (a) I have seen some restaurants use this to great effect, where they take the orders on the tablet, showing the pictures of the requested food and (b) Sporadic usage of video messages from CEOs to their employees, applauding their achievements or announcing new initiatives. This kind of service and usage of technology has a positive effect on the morale of employees. It also has an amazing connect with mobile first generation customers. Businesses now also have an opportunity to showcase to their opt-in customers new product introductions, sales catalogues, technology improvements, and customer service improvements, as well as sales transaction through this medium. This enables and builds instant connect with the business and the brand. Targeting and analytics on top of this can help business understand how their mobile first users interact with the brand and measure the impact of mobile customer engagement efforts. The time is right for businesses to make these transformation, or at least to implement some of these transformations. It is important that the businesses adopt the mobile first strategy across their business units, and integrate it into their macro strategy to connect and engage with the customer of today who is always on the go. 57

October - November '14

Intelligent SME

Business Law

Your weapon against intellectual property theft! Reportedly, IP thieves are most often current or former employees, Kashwani Lawfirm elaborates on why businesses should take a proactive approach to prevent these incidents. lead to dire consequences. All these rights are globally protected under the signed treaties and the UN umbrella, where each signed country has to follows the obligations and rights stated in the signed treaties, and has to issue new legislations domestically in order to comply with the previous signed treaties.

In-depth IP Copyright

n most developing countries, people repeatedly find themselves in the dilemma of having to choose between the expensive original and the unlawful copy. It comes as no astonishment that the less privileged possess stronger tendencies toward the illegal. Every morning we wake up to either a new invention, idea, design or patent spreading rapidly in the world, eventually turning into a necessity given a few years successful run-up in the market. Therefore, it becomes increasingly essential to balance the needs of knowledge creators and users.

Compliance to intellectual property laws, and drafting patents are the biggest source of rescue to keep the ball rolling in these scenarios.

Whatâ&#x20AC;&#x2122;s intellectual property (IP)?

Intellectual property is the ownership of inventing a machine, writing a book or music, and industrial design; the consequences of such ownership is intellectual property. Itâ&#x20AC;&#x2122;s a law that prevents copying, using and buying without the creatorâ&#x20AC;&#x2122;s consent or compensation for the time, efforts and thoughts, and failure in abiding to the same could

Copyright is protecting literary and artistic works, for example writing, music, painting, sculptures, computer programs, and electronic data base. The owner of a certain copyright has two rights: economic rights, where he/she can receive money from his copyright as recompense for his/her efforts; moral rights, where he/she can prohibit others from using his/her copyright without prior consent.

Industrial designs

To be protected under most national and international laws, industrial designs must appeal to the eye (solid products, not ideas). For example, watches, jewelry,

October - November '14

Intelligent SME

Business Law fashion, furniture, electrical appliances, vehicles, toys, and pet accessories- the owner of industrial designs has the right to prohibit any other party from using or selling or importing his industrial designs without the owner’s prior consent to use.

Trademarks

Trademark is the sign or logo used to differentiate goods and services. It needs to have two basic characteristics: (a) it must be (Distinctive) to differentiate between different goods and service; (b) it should not be (Deceptive).

Patent

Patent is protecting inventions, for example electronic iron, telephone, shaving machine, hover, and fan. The owner of patent has the right to use his/ her invention for a certain period of time, and he/she has the right to prevent others from using his/ her invention during the exclusive time of protection. It can be further classified as follows:

Conditional access technology

Always related to technical measures, for example smart cards that facilitate users the right to view or listen to coded broadcasts.

Database right

To some extent, it might be protected by copyrights as a literal work.

Publication right

The beneficiary of a publication rights is the publisher, which includes literary, drama, musical, and artistic work (firstly), in cases where the copyrights has expired. That publisher has publication rights for 25 years, starting from the year of the first publication.

‘Meaty treaties’ Berne convention for the protection of literary and artistic works (1886). The parties to this convention are 167 countries; which concluded in 1886. It has seen several revisions over time across various countries: Paris (1896), Berlin (1908), Berne (1914), Rome (1928), Brussels (1948),

Mostafa Mohamed ElManzalawy is a senior lawyer at Kashwani Lawfirm, specialising in corporate, banking, construction, education, hospitality, equine, intellectual property rights, arbitration, employment matters, governance, and family law. Write to him at m ostafa@kashwanilaw.net

Stockholm (1967) and Paris (1971 and 1979). Berne required signatories to provide strong standards for copyright and treat authors from all member nations in the same way they treated their own nationals. The authorial rights have been expanded to adaptations, musical arrangements, films, architecture, choreography, photographs, and translations. Meanwhile, the duration of protection expires after 50 years, counting from the legal registration date of work (in the country of origin). But for the acquired rights, it varies; for example, the right to translate, right to make adaptation, right to perform, and the right to make reproduction. United Arab Emirates joined them in July 2004.

Paris convention for the protection of industrial property (1883)

Established in 1883, the parties to this convention are 175 countries. This, too, has seen several revisions at Brussels (1900), Washington (1911), Hague (1925), London (1934), Lisbon (1958) and Stockholm (1967) and was amended in 1979. This treaty offers three basic principles, the National treatment (all contracting countries offered the same level of protection for the work and/ or invention). Right of priority (applicant submits the work in his country of origin, then, he/she has the right to submit the work in all other contracting countries. And he/she will have the priority before any other applicant, submitting the same work and/or invention). Common rules, this convention offers a few rules where all contracting countries had to follow, United Arab Emirates joined the convention in September 1996.

Nice agreement concerning the international classification of goods and services for the purpose of registrations of marks (1957)

The parties to this agreement are

84 countries, established in 1957. This agreement is open to members of the Paris convention 1883. This agreement states classifications for goods and services; which includes 34 classes for goods and services. All contracting countries have to identify the class of the work falling under the said category. It’s followed by a notification to the trademark office in the country of origin for registration.

Hague agreement concerning the international registration of industrial designs (1925) The parties to this agreement are 61 countries. The core philosophy of this agreement is to offer the applicant an opportunity to register his/her invention globally between the contracting countries.

Madrid agreement concerning the international registration of marks (1891) and the protocol related to that agreement (1989) The parties to

this agreement are 92 countries (assembly members). This agreement works effectively with the trademark office in the country of origin for the international registrations of work.

Trademark law treaty 1994 (TLT)

The aim of the TLT is to show the procedures of trademark registration nationally and regionally. The parties to this agreement are 53 countries

Lastly, intellectual property rights (IPR) are significant from the perspective of preserving present as well as ensuring future competitiveness. They also have an impact on the FDI inflows in a developing country, which helps not just in terms of capital inflows, but also in terms of technology and expertise. Strengthening IPR thus becomes imperative from the viewpoint of economic development. 59

October - November '14

Intelligent SME

Marketing

Local marketing: A sneak peak at the 5 must-do list!

Building a successful business is all about marketing, and when your business is service- oriented, the operative words are â&#x20AC;&#x2DC;local marketingâ&#x20AC;&#x2122;. TishTash highlights five effective strategies to market your business locally and bring in more sales opportunities. 60

October - November '14

Intelligent SME

Marketing

orking predominantly with small businesses over the past three years, we have become familiar with the many ongoing challenges they face, from operations and human resources, to planning and financing, and especially marketing - which can have a tremendous impact on the profitability of a business. Surprisingly, we’ve found out that many small businesses spend vital resources and considerable time on marketing tactics and strategies that don’t have the desired outcome: they don’t increase or generate new sales. Sometimes it’s local sponsorships of industry or community events that don’t turn out to be quite what was expected; on the other hand, it’s online ads that may be helpful with creating awareness, but don’t move the needle when it comes to sales; or those thought-after interviews in the local newspaper, that may boost the egos of small business owners, and even make them local celebrities for 15 minutes, but, don’t translate into sales either. So, are these tactics and strategies entirely wrong? It cannot be! Many companies of various sizes all over the world seem to employ them effectively and reap the benefits. So, no, these tactics and strategies are just fine. The key difference is the approach and the execution, the timing and the context to be exact, this is what matters the most for a small business. Small businesses, especially service-oriented and reliant on local customers and leads, should do first the basic ground work in their local communities before employing any of the marketing strategies mentioned previously.

Here are some marketing strategies to consider before spending out any money: Customer Service

If you’re a small company and want to stay in business, you need to have a good product and excellent customer service. If people are

happy with the service they receive, they will be back and they will refer you to their partners too. You need to find a way to turn the customer service you offer into a salient selling point. You can start by inviting and encouraging your customers to write reviews of your product or service, and incentivize them: it could be a voucher, a discount or a freebie, anything that will make it worthwhile. The Cure, a Dubai-based day spa, just opened a new branch in the Green Community. Attracting new customers in a new venue is a double challenge for a spa, given the very competitive and personal nature of the market. So, to kick off, The Cure offered a range of vouchers with free treatments on their customers’ next visit, to all those who ‘liked’ them on Facebook and wrote a short review of the treatment they had. A simple tactic which helped them build a regular customer base!

Newsletter offers

The only way you can grow your business is either to increase the volume of sales with your existing customers, or to constantly widen your customer base. Prepare a newsletter relevant to a group of customers that may not be at all familiar with your offering. The

If you’re a small company and want to stay in business, you need to have a good product and excellent customer service. If people are happy with the service they receive, they will be back and they will refer you to their partners too.

key is to make it appealing to them – providing a limited-time offer or a discount – so you could get some bounce-back action.

Local Business Network

One of the most cost efficient ways to market your business is to develop relationships in your local business community. There are many ways you can do this, you can attend events, workshops, coffee morning gatherings, etc. that will help you get a wider picture of what the local business landscape is like. Or, in the interest of time, you can be a little more tactical and look for businesses that have either similar business models with yours, target the same demographic, or offer services that could be complementary. Once you identified them, think of ways of cross-promoting each other businesses. For e.g. Izil a local natural argan beauty range worked with local spas across the UAE to display and sell their products. For any Izil product sold, spa customers could receive a spa treatment of their choice, using a product from the Izil range.

Use Google Places

Google has created web pages for millions of local businesses. Take advantage of this free tool and sign up for a free Google Places account. It’s a matter of seconds till you create your business profile complete with address, telephone number, link to website, description of your services and products, and images.

Of course, use Social Media

If you have not yet set up a Facebook, Twitter, FourSquare, Yelp and CitySearch account, make this a priority. These marketing strategies cost very little, are flexible and scalable, don’t take up that much time either, and generate new business. But, the best part is that they use your very own products and services as the incentive to boost the business, as opposed to hard-cash. So, give it a go!

October - November '14

Intelligent SME

Leadership

It’s ‘R’ factor, not ‘X’ that can make you successful! Michael Tolan narrates an interesting story about a company owner who failed to realise the importance of respecting his staff and stakeholders and eventually, had to see a sad demise of his business.

hen Harold illuminated the ‘open’ signage outside his restaurant on that fateful morning, little did he know that what he thought was a fresh start to his day, would eventually

culminate into day of tragedy for him and his business. It all started 15 years ago, when Harold, a bright enthusiastic dreamer-turned- entrepreneur who had raised just enough courage and cash to strike out on his own,

gathered 3 of his former workmates to become his first employees and set out to start a restaurant. They developed the logo, menus and the restaurant design. It was all very exciting; everyone was looking forward to being at work every new day. It was all about making things happen, training new staff, greeting the customers personally with an enthusiastic appreciation for their visit wrapped in a comforting smile. The greeting and serving staff were treated as precious assets and you could feel the pride beaming from them when they approached any table to take a new order. The kitchen was immaculate and the head chef and his team were looked upon by Harold as gods. They were after all, the product, the keepers of the sacred recipes that clients began to flock to as the good word spread of this new hot spot for best food and best value. In fact, within 6 months, Harold and his executive team were planning a second and a third restaurant. Success was flooding in with

October - November '14

Intelligent SME

Leadership no end in sight. Harold instituted a superb employee rewards program, recognizing the special people every single day that had preformed some task or met a challenge with amazing creativity or technique that other members of the team could learn and share. His turnover rate in staff was zero, unheard of in the industry. After the first year, his advertising costs dropped from 11% to 2% due to the incredible amount of referrals and repeat customers, all with a waiting time of 45 minutes to be seated. No one seemed to take any notice of the waiting time, as he deployed special greeters and offered coloring books and games to keep kids occupied with a chance to win prizes during their meal through a contest he created. Harold opened up the two other venues as planned and decided to promote his original executive team to partners within these new stores, giving them an incentive to watch over them, as if they were truly their very own business. Naturally, Harold knew he could not be everywhere at once, so he thought to himself that he had made a brilliant decision in vesting them with equity and bonuses based on their store performance. Within 5 years, Harold had gone from one restaurant to 31 locations and profits were soaring in from every location. His accountant had advised him that he was perhaps paying too much in bonuses and employee benefits, suggesting he could save over one million Euros if he made certain cut backs in these areas which could secure Harold the funds he had dreamed of having to buy his own yacht. Harold refused to listen and kept the business just the same, maintaining all of the standards he had personally developed and nurtured over the years. He had always believed that giving and demonstrating ‘respect to others, will nurture a ‘culture of respect’ holistically which impacts loyalty from employees, customers, stakeholders. For him, it was the “R” factor. On the 10th anniversary of

Michael J. Tolan is a speaker, writer and corporate mentor and board advisor to several organisations. He is the creator of Mission I’m Possible series of motivational workshops through FirePowerLeadership.com and is the Chief Inspirational Officer of the World Class Academy of Excellence (Follow him on Twitter mtolan@worldclassgroup).

He had always believed that giving and demonstrating ‘respect to others, will nurture a ‘culture of respect’ holistically which impacts loyalty from employees, customers, stakeholders. For him, it was the 'R' factor.

his first opening, he launched a franchise system that promised to have his brand in 20 countries its first year and an additional 80 restaurants nationwide in 36 months. Once again, the advice from his accountants was to make sure prior to rolling out this vast expansion plan, to start cutting back on what he called ‘lavish employee and partner’ bonuses. He explained that too many expenses went into training, quality control, awards, reciting that most companies use the industry practice as a benchmark, and their budgets are 80% less than Harold’s. The pencil pushers advice was, if he did not do it now, he would always have these expenses as overheads on the P&L statement. This time the accountant used the example that he could have bought his own Jet by now instead of this excessive waste of money. Harold felt like he was being

hit over the head by the sweetest bell he had ever heard… “My own Jet, with our company name, it’s a good idea; it could advertise our brand, anyway I would be going to all the other stores and cannot drive to them all, all in all I might save in air tickets,” he reasoned. Harold did not react immediately nor did he unveil his new idea to anyone. He feared talking this through with his key people as he had always done, but he feared resistance. Instead of giving them the respect they deserved and elicit buy-in, he had a special clause inserted into everyone’s work agreement. It stated that they would always, without contest, support and accept all company policies from the past and any new ones issued by him in the future. This was also stealthily inserted into each new franchise agreement and the roll out began. After five months and the opening of 27 new locations that had been wait listed, he dropped the bomb. First, he issued an internal memo to his key partners to inform them of the new budget cuts and how their bonuses would be trimmed back by 70% effective today.

October - November '14

Intelligent SME

Emirates NBD Global Business Series

Suvo Sarkar, general manager - retail banking & wealth management, Emirates NBD felicitated the guest of honour.

In the second season of the Emirates NBD Global Business Series, Avishesha Bhojani, group chief executive officer at the Bates PanGulf, defined entrepreneurship as the decision to put his/her fate on your own ideas, beliefs an abilities.

Drawing attention to remarkable insights, he said that failure at some point or the other of your career is inevitable. One has to be prepared to face their destiny.

Engaging in a Q&A round, the crowd picked some of the most practical insights from one of the most successful serial entrepreneurs in the region.

Up-close and personal with Avishesha Bhojani [Chief executive officer, Bates PanGulf Group] 64

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Intelligent SME

Column

A fair price is a good price Investors are always eyeing value for their money in early stage buyout deals. However, Utpal Bhattacharya cautions that picking up assets by beating down the price, may not always be the best approach in the long-term.

here is always this question of how one can put a value to oneâ&#x20AC;&#x2122;s company when one is thinking of diluting equity to raise growth capital for further expansion or to meet increasing costs of business and so on. Consultants come up with different ideas and methods, but these do not always work, especially for early stage funding, when revenue streams are still not stable. Yet, raising growth capital is extremely important for entrepreneurs to keep a small company going and growing. Sometimes entrepreneurs go all out, and even dilute significant stakes to new investors in the company, just so that the enterprise survives. If such an approach were a good or a bad thing, can be judged only in the long-run. I have seen a number of enterprises fail when the entrepreneur is left with a much smaller equity and the controlling stake is passed on to the financiers: the incentive to work hard goes away. In one of the instances, I have seen an entrepreneur continuing to work hard despite losing a large chunk of the company to investors out of fear that they could invoke some of the harsh, punitive clauses of the investment agreement. The fun of working in the company had gone. It is a lose-lose situation for both parties, the entrepreneur and the investor. Recently, in a fund raising trip for a company, I saw how a founding partner jump down nearly 50 per cent in the pricing

of his seven year old company that was earning from multiple revenue streams, but desperately needed growth capital to take it to the next stage. The transaction never happened, as the investor wanted some more discount. The company did raise some capital eventually, but again at discounts that left the owners distraught, as most of the proceeds of the funding had to be used for paying away earlier bank debts. So, while interest payment burden of the company reduced, for the promoters and the founding partner, they had lost much more equity in the company, then they thought was fair, and nobody took any money home.

Summing up

What I am trying to drive at is that for investors, it feels great to beat down the price of an asset at acquisition, but at times it is not always about the money one pays in acquisition, but what one acquires in terms of the management and resources. The same management that was doing extremely well before the acquisition can turn out to be a loser post-acquisition, especially in a market that is not the exact replica of the US market. In the market that we operate, stock markets are rather illiquid, and people prefer cash in the bank or a real estate asset that earns a rental income to owning share certificates in a company that struggles to raise growth capital. Thatâ&#x20AC;&#x2122;s why I insist that a fair price is always the best route to success in the long-term when investing in early stages of a company, as in that case promoters continue to remain loyal to the enterprise and investors make good money while exiting.

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