The Executive #26 by Jason Attard

26 - 2010

• The Executive Event - July 2010 • Small States: From Caterpillars to Butterflies (Part 1) Joe Vella Bonnici • SME Entrepreneurship in Europe and what about Malta? Lorenzo Mule’ Stagno • The Importance of Liquidity Joe Gauci

• Don’t be Passé Richard Clarke

• Tourism Policy: Developments in the EU and Malta Michael Debono

• Q&A: Interview with an Entrepreneur Makis Seriakos Jason Attard

• Help Your Brand Stand Out. Bertrand Magro • Preparing your Succession Strategy Mario Duca

• Q&A: Interview with an Executive David Galea Lisa Baker • Q&A: Interview with an Entrepreneur Andrei Imbroll Jason Attard • Q&A: Interview with an Entrepreneur Melo Hili Jason Attard • IT Review: LP+ Keith Vassallo

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Issue No. 26 - 2010

The Executive

Editor’s Letter

hanks are obviously due to the sponsors, suppliers and Speakers, and attendees of our recent event. Once again, Strategy, International Business and Finance were discussed, with the topics focusing on a local perspective. This issue’s pages 06 and 07 highlight some moments. And the discussions have been placed within its contents for your pleasure. In “Small States: From Caterpillars to Butterflies”, Joe Vella Bonnici highlights the fact that small states are typically highly dependant upon larger societies for their welfare, and that they must better integrate themselves into the outside world. Joe furthermore points out that some small states achieve competitive advantage over others, and that it is fundamental for us Maltese to discern how these advantages are obtained. Lorenzo Mule’ Stagno then uses his experiences as Malta’s representative at this year’s SME week celebrations so as to assess the assistive advantages gained by other countries, thus comparing them to our own. In “SME Entrepreneurship - and what about Malta?” he brings into light performance factors; an example of this is that our approximate exports of €6,600 per capita is bested by all bar Portugal and Bulgaria, and the taking into account

that approximately half the Maltese export figure is due to a single and foreign-owned company, makes this performance somewhat more dismal. Lorenzo provided the argument that the Maltese Government provides far higher support than the EU average to our larger companies, to the detriment of Malta’s SMEs. Effective Cash Management is tantamount to success. This is the prime pillar of Joe Gauci’s discussion on ‘The Importance of Liquidity”. The issue provides a further focus upon learning from the experiences of strong performers in local and also foreign environments. Makis Seriakos (from Ashley Worldgroup), David Galea (from Megabyte), Andrei Imbroll (from Land Overseas Fund SICAV plc) and Melo Hili (from the Hili Group and Premier Capital Ltd.) have thus been interviewed. The journal then reviews Exigy’s LP+; a hosted e-learning platform built on Microsoft technologies, for our schools and authorities. Jason Attard

Enjoy your read.

editor@the-executive.biz

Contents

This Issue’s Contributors

07. The Executive Event - July 2010 09. Small States: From Caterpillars to Butterflies (Part 1) Joe Vella Bonnici

15. SME Entrepreneurship in Europe - and what about Malta? Lorenzo Mule’ Stagno

21. The Importance of Liquidity Joe Gauci

Joe Vella Bonnici Lorenzo Mule’ Stagno

Joe Gauci

Michael Debono

A Q&

23. Tourism Policy: Developments in the EU and Malta Michael Debono

33. Don’t be Passe’. Richard Clarke

35. Help Your Brand Stand Out. Bertrand Magro

39. Preparing your Succession Strategy Mario Duca

Richard Clarke

A Q&

Bertrand Magro

A Q&

Mario Duca

A Q&

Makis Seriakos

w vie Re IT

41. Q&A - Interview with an Entrepreneur - Makis Seriakos Jason Attard

47. Q&A - Interview with an Executive - David Galea Lisa Baker

51. Q&A - Interview with an Entrepreneur - Andrei Imbroll Jason Attard

55. Q&A - Interview with an Entrepreneur - Melo Hili Jason Attard

61. IT Review - LP+ David Galea

Andrei Imbroll

Melo Hili

Keith Vassallo

Villa Arrigo

Our Collaborators:

Print Progress Press Editor Jason Attard

Photography Foto-ish the Studio Technical Editor Alexander Aquilina

Design & Layout Jason Attard Technical Editor Lorenzo Mulè Stagno

Technical Editor Joe Vella Bonnici

© All rights reserved. The Publisher’s written consent must be obtained before any part of this publication may be reproduced in any form or by any means whatsoever. Opinions expressed in The Executive are not necessarily those of the editor or publishers (except where otherwise stated). Whilst every care has been taken in compiling the contents of this publication, the editor and publishers cannot be held responsible for errors or omissions in articles, advertising, photographs or illustrations. You are reminded of your right to refuse receipt of this publication by sending such requests in writing to Effective Marketing Ltd., signed by the person refusing receipt.

Effective Marketing Ltd.

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Mdina Road, Attard ATD9039 MALTA.

Tel: +356 2142 4724

Fax: +356 2143 6360

Email: info@effectivemarketingltd.com The Executive

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Issue No. 26 - 2010

The Executive Event - July 2010

The Executive

Executive Events held their summer event on this 15th of July, at Villa Arrigo in Naxxar. Josef N. Grech presented the event, introducing the speakers and their topics to the audience. And Joe Vella Bonnici started off the discussions with “Small States: From caterpillars to butterflies”. Following a networking break, Lorenzo Mule’ Stagno delivered “SME Entrepreneurship in Europe-and what about Malta?” This was again followed by a networking session. The academic part of the event was finalised through Joe Gauci’s presentation of “Liquidity is paramount to success.” The lucky winner of this Executive Event was given a wooden wine box, engraved to commemorate the Executive event, holding a Chateau Tour Prignac Medoc, and executive gifts including a digital photo frame and a leather business-card holder amongst other items. The wine box and gift items were provided by Playcraft while the wine was provided by Cleland & Souchet. Over 100 distinguished guests attended. Following the discussions and networking breaks, the event moved over to QBar, where guests were entertained, and provided with hors d’œuvres from Zest and wine from M. Demajo Wines and Spirits. Henley Business School of the University of Reading, Villa Arrigo, Cleland & Souchet, and QBar, have collaborated to, as well as sponsored, the event, as have sponsored also Philip Toledo Ltd., C. Fino + Sons Ltd., Dmax, Regus, Computer Solutions Ltd. and Playcraft. The Executive Events are organised by Effective Marketing, who are the publishers of The Executive business journal. Invitations are issued to Malta’s decision takers and instigators. The events are currently Free of Charge and attendance is solely by invitation. Discussions are provided by some of Malta’s best business brains, as well as by international recognised academics and business connoisseurs. The Executive Events would like to thank its sponsors, collaborators and attendees for the continued presence and support.

would like to thank the sponsors; selected, in our approach, due to the consistency, validity, and value of their quality provision.

The Executive

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Issue No. 26 - 2010

The Executive

www.the-executive.biz

The Executive Event - July 2010

The Executive

Issue No. 26 - 2010

The Executive

Small States: From Caterpillars to Butterflies (Part 1)

Small States: From Caterpillars to

hese are defining times for small states. Globalisation, the knowledge economy and the internet are creating new scenarios which present changed threats and opportunities for small states. Key concepts such as time and space are being redefined and new paradigms are fast emerging. If small states are to succeed in meeting their economic and social objectives a change in mind-set is required. Many of these small states achieved political independence in the post-World War II era and since then continue to consider themselves as “powerless” and economically dependent on larger and more developed societies. If they are to prosper, small states must believe that they are capable to make a qualitative jump to evolve from caterpillars to butterflies. This, of course, is easier said than done. Paradoxically, globalisation is accentuating the importance of “local” conditions in determining patterns of wealth creation and distribution. Small states are inherently “open” systems which are asymmetrically dependent on the “outside” world. They have little option but to integrate with the global economy. The primary challenge is then how to manage their interface with the global economy in times of fast change and turbulence. Globalisation is resulting in higher risks for small states rendering them as sensitive to minimising risk as to maximising economic prosperity. And though a degree of “academic dependency” in understanding the forces at play is inevitable, it is important that small states remain conscious of this fact and be wary of easy, imported solutions. As Baldacchino and Greenwood www.the-executive.biz

Butterflies (Part 1) Joe Vella Bonnici

point out “The difficulty here is to struggle consciously against paradigms of being, of having and of becoming, which are of alien, typically Western provenance”(10). The track record of some small states confirms that despite the innate limitations and vulnerabilities arising out of “smallness”, it is still possible for them to prosper. A lot depends on the pro-activeness and flexibility of their policymakers and entrepreneurs. As Godet (2001) remarks “The world may be changing, but the direction of that change is not certain” (8) Small states need to make a qualitative leap in the strategic management of their economies. They cannot just rely on market forces. Internally they lack the capability for bottom-up planning and externally they lack the necessary power to ensure “equitable” exchanges. By itself small is a relative, polymorphous construct . In the context of small states, “smallness” is related to “statehood” and must therefore be interpreted in terms of

the key characteristics of a state. The study of small states (and one of its variants: “micro” states,) has been plagued by definition problems. Issues arising out of “smallness” have many times been intertwined and confused with those arising out of the process of development, geophysical considerations (especially location and islandness) and statehood (including sovereignty and jurisdiction). There is therefore no one accepted definition of a small state. The size of population has often been used to define “smallness”, even some analysts have used other indicators such as territory size, some geophysical characteristic such as “islands” or “land-locked “ states or the size of GDP. Indeed, over the years “small” has become even “smaller” and probably today we are talking about “micro”. In the 1950s and 1960s small referred to states having a population of about 10-15 million. By the 1970s and 1980s, the term stated to be used to refer to populations with less than 5 million citizens. Over the last three decades, small states have generally come to refer to societies with less than 1.5m population. In practice there is a continuum, with states larger than whatever threshold is chosen sharing some or all of the characteristics assumed to pertain to small states. Neo-classical economic philosophy refutes the very concept of sustainable superior performance. Such performance is viewed with suspicion and is seen as a “temporary” distortion of market conditions. Size itself is considered a paradox . Economists generally regard small economies as being “sub-optimal” . The Executive

Issue No. 26 - 2010

Small States: From Caterpillars to Butterflies (Part 1)

The Executive

In an era dominated by industrialisation with its emphasis on mass production, mass markets, intensive resource utilisation and economies of scale, small economies were seen as being handicapped by their small markets and limited resource base, including their labour force. Insufficient domestic demand prevents critical mass and reaching the minimum scale necessary for efficient output. A small domestic market also reduces the potential for competition because of the small number of feasible players. The cost of living is relatively higher because of scale and competition effects as well as transport costs. These limitations, coupled with a high degree of openness, render small economies vulnerable to exogenous shocks. Small size limits the capacity to diversify risk. Armstrong and Read (2003) point out that the high level of structural openness in small states (a high share of trade in GDP) has important macroeconomic policy implications in terms of the balance of payments, international monetization, the exchange rate and domestic monetary autonomy. Also, the provision of public goods and services carries a higher cost due to www.the-executive.biz

indivisibilities. Briguglio (1995) states that small states face severe disadvantages in promoting local R&D, technical progress and technology acquisition as the production of knowledge is governed by fixed costs. International Trade theory makes a strong case for countries to participate in trade. It presents trade as a win-win proposition. This theory, which puts “countries” at the core of its approach, seeks to provide answers to such questions as: Why do countries trade? What goods will be traded? How will the gains from trade be shared among the participating countries? How are adjustments brought about when trade patterns are distorted? Mainstream trade theory makes no reference to the particular conditions faced by “small” countries. International trade demands specialisation and an international division of labour. Small states feel uneasy with specialisation as they fear putting their few eggs in one or two baskets. Moreover, specialisation in many small states is identified with commodities (“primary” exports) and adverse terms of trade. Michael Porter in his seminal work “The Competitive Advantage of Nations” (1990)

modified the trend by emphasising that both the state and the enterprise had a critical role to play in constructing national competitiveness. Porter proposes the “Diamond of National Advantage” model to explain the dynamics of superior performance. He concludes that despite globalisation, competitive advantage is created and sustained through a highly localised process. The emphasis shifts from “inheriting” wealth (comparative advantage) to “creating” wealth (competitive advantage). This “business school” mind-set presents international competitiveness as a “zerosum” game rather than a “win-win” proposition. Porter’s work, while providing some invaluable insights, does not account for the realities of small states. We have to look for an explanation as to why some small states achieve competitive advantage or “ a superior performance” elsewhere. In the second part of this article we will try to propose an alternative framework that builds primarily on the Resource Based perspective. Joe Vella Bonnici is a freelance management consultant and is a lecturer at the University of Malta. The Executive

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Issue No. 26 - 2010

The Executive

SME Entrepreneurship in Europe - and what about Malta?

SME Entrepreneurship in Europe

was chosen to represent Malta in this year’s SME week celebrations in May (last year, Malta’s ambassador in the first such initiative was Ms Angele Giuliano), and I may add that it was an interesting experience. I had the opportunity to meet around 30 SME entrepreneurs representing their respective countries, with such a range of diverse cultures, languages, industries and of course, characters. The common factor, which was palpably felt, was the strong entrepreneurial spirit – the come on let’s do business type of attitude. People have found it interesting to hear about how a couple from Albania have created an export-oriented manufacturing firm that makes customised sportswear in flexible quantities, or a Bulgarian lady who set up a contract firm aggregating small furniture makers to go for large contracts in Germany and France. How a Finnish lady spent two years in Biotech research and design before launching a long-lasting scent-containing pendant on an international level via fashion houses, and having about 20 shareholders in her company. Or the trials and tribulations of a young Portuguese man as he moves from his home market to Spain, Mexico and Brazil with his fascinating scientific toys and games. These are just some of the stories gathered during the two days I was in Brussels and should I have had more time I would have garnered much more, and gone deeper into their travails. But the encounters I had set me thinking about Malta’s own success stories (and failures) on an international level. Do we have many, or any? And what are we doing right or wrong? I decided to start looking into it a bit, and try to come up with some points, mostly through the good old system of research. www.the-executive.biz

-and what about Malta? Lorenzo Mule’ Stagno

to attain. However, let’s not forget that Finland is a relatively small country, at the periphery of Europe. Which brings me to Iceland: smaller population than Malta, also an island, and very peripheral. Finally I included Portugal as a fellow ‘Mediterranean’ or southern country (apologies for the inaccuracy). I purposely avoided the EU powerhouses and large countries for the reasons mentioned earlier.

So how we?

The Research

My study is ongoing, so the reader may get more doses in future issues of The Executive, but the current research has unearthed some interesting facts, especially when comparing these with data from other countries. This data was lifted off some documents called SBA Fact Sheets found on the EU website. I chose the countries for comparison relatively arbitrarily, but not without some justification. I wanted some countries for which I had good entrepreneurs’ stories, but I also wanted to compare Malta with countries that are “within reach” in some way or other. Bulgaria, Estonia and the Czech Republic are ex-Soviet block countries, with high development potential since their ‘liberation’, all starting from a relatively low GDP base and moving up at varying speeds and with varying success. Finland, admittedly one of the richest countries in the world, is a high benchmark

rich are

Malta’s GDP per capita – a rule of thumb measure of a country’s standard of living – stands at just under €19000; this is just above Portugal’s €17250 and just below the Czech Republic’s round €20000. Lower down the ladder we get Estonia’s €15000 and Bulgaria’s €10000. The EU-average stands at €26000, which is exceeded by the two Nordic countries of Finland at €28000 and Iceland €32000. These figures may have changed since the financial crisis, especially in the case of Iceland where their financial system imploded.

Size Matters

In all EU countries the percentage of Small and Micro companies is pretty high. From the countries studied, Estonia has the lowest frequency at 87%, with Portugal the highest at 99.3%, just above Malta’s 99.2%. There seems to be no direct relation between this factor and the GDP per capita, but some other interesting factors beg attention. Malta has around 40 large companies (headcount of 250 or more), according to the SBA fact sheet provided by the DG Enterprise and Industry of the European Commission. This equates to under 1 company for The Executive

Issue No. 26 - 2010

The Executive

SME Entrepreneurship in Europe - and what about Malta?

Business shouldn’t feel this difficult. Shireburn Business Suite - An integrated software solution FinAnciAl, inventory, PoS And PerSonnel www.shireburn.com every 10000 people in Malta, and about Shireburn Effort A5.indd half the average of 2such companies in EU member states. The rest of the 34000 odd companies are SMEs (99.9%), of which only approximately 200 (0.6%) are medium-sized (between 50 and 250 people), again practically half the EU average. The rest are small (about 1200 companies or 3.5%) or micro (95.7%).

produces ratios of the number of businesses with respect to population, with Malta and Portugal having 8 businesses per hundred people, while Finland and Bulgaria have 4 businesses per hundred people. Adding the number of self-employed will change these figures, but will not change the comparative ranking significantly.

These numbers seem to exclude the incidence of a considerable number of selfemployed, which according to the EU agency Eurofound, add up to over 21000. Practically all of these are also micro organisations, with about two thirds involving no employees except the one self-employed. Malta’s amount of self-employed seems to be just over one percentage point under the EU average of self-employed incidence. An interesting aside is the remarkable under-representation from this figure of self-employed women at under one-fifth of the total. For the intents of this article, although the self-employed will not feature in the statistics provided, due to the fact that Malta’s count remains within (just below, in fact) the EU average, most statements should still hold, and in some cases should become even more emphatic. For example, analysing the SBA figures

How Entrepreneurial?

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The percentage of those who have started a business which is still active or currently taking steps to start one puts Malta at a paltry 5%, especially when compared to the EU average of 24%. All the countries in the study have an above average quota (except Bulgaria where data was not available), with Iceland’s 35% and Estonia’s 31% topping the charts. When asked about their desire to be selfemployed however, Malta fared much better at 33% - 2 percentage points higher than the EU average. Only the Czech Republic (37%) and Iceland (41%) had higher percentages, with Portugal having the lowest at 30%. I find the very low percentage of entrepreneurs mentioned worthy of further investigation, especially considering the

relatively high number of businesses per 100 7/16/10 when 4:58 PM the people mentioned earlier. However, figures are taken at face value, the large gap between those who are and those who want to be makes one wonder: Is it an issue of hurdles or are we a nation of wishful thinkers?

How International?

Malta exports approximately €2.5 billion per year, which would be the equivalent of €6600 per capita. I did not come across an EU average in this case, however from the countries chosen, Iceland takes the gold medal with €14500 per person, followed by Finland and the Czech republic with €10000 per capita. Estonia is also just ahead of us with €7000. Only Portugal (€3300) and Bulgaria (€2000) trail behind. What may be important to note is that about half the Maltese export figure is due to a single foreign-owned company.

How Innovative?

The SBA fact sheet is also not very flattering for the Maltese with respect to Innovation. In general, we seem to be lagging by about 10 percentage points below the EU average, with only Bulgaria scoring lower from the countries studied. The Executive

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Issue No. 26 - 2010

The Executive Some More Indicators

Some more points of interest that seem to be worth comparing include the issue of problems with administrative regulations and the difficulties encountered in accessing finance. While the EU average for the former is 33%, Malta has 43% expressing this concern. Only the Czech companies, at a whopping 54% seem to find their administrative regulations worse. In the case of access to finance, 35% of Maltese SMEs experienced difficulties in accessing finance, compared to the EU-average of 21%. In this issue Malta ranks the absolute highest from the countries studied. One final indicator worth noting is the support from the State, through a mechanism called State Aid. In this case, Malta ranks lowest with just 1% of this aid being allocated to SMEs, compared to the EU average of 11%. Estonia and Finland provide 8% and 7% shares respectively to their SMEs and the Czech Republic seems to be the absolute outlier with an astounding 22%. Even Portugal, a country that does not seem to have a stellar reputation in these matters, provides twice the share that Malta provides.

www.the-executive.biz

SME Entrepreneurship in Europe - and what about Malta? It seems that 99% of State aid goes to the large companies in Malta. I still need to confirm this from official sources, but if this were true, that means that Malta gives its support almost exclusively to the few large companies, with practically no focus on Malta’s SMEs. When comparing this to other countries, this means that although we have half the percentage of large companies than the EU average, the Maltese Government provides them with an uber-dose of support, much higher than the EU average, to the detriment of Malta’s SMEs.

Concluding for now

What this has unearthed until now has possibly raised more questions than answers. However, it has also, hopefully provided food for thought, especially about what we are doing, and what we could be doing. May I also remind the reader that I was usually comparing with the EU average. However, it is a well known fact that the EU (with few member states as exceptions) is not an epitome of positivity towards entrepreneurship, SMEs or internationalisation. Just read any economic journal. I intend to keep on

digging, and hopefully there will be some insights that may be useful. It was a pity I did not have more time to pick my entrepreneur colleagues’ brains, since we were put on a pretty hectic schedule of activities. I think most of us could not shake off the feeling that, with all the good intentions, the Commission could have done, and could be doing, much, much more if it is really serious about encouraging SME entrepreneurship. However, the Commission, and the European Parliament, are not the only targets for improvement. Mentality and active improvements need to be encouraged and seen at National and Government level, in our civil servants and ultimately, in ourselves. Lorenzo Mulè Stagno MBA (Grenoble) B.Ed (Hons) is the Owner of Business Marketing Services Ltd, a Communications firm, and Allied Consultants Ltd, a Market Research, Management Training and Consultancy firm. One of his roles is that of director of operations of the Henley Business School in Malta, currently offering, among others, the prestigious Henley MBA, which has been recently ranked by the Economist Intelligence Unit among the top ten MBAs worldwide. For more information about the Henley MBA please contact Allied Consultants on 21311326 or email info@henleymalta.com.mt.

The Executive

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Issue No. 26 - 2010

The Executive

The Importance of Liquidity

aving a successful business today depends on how successful your Cash Management is. In many cases liquidity problems can render a business to be unsuccessful and is very often the reason why businesses are not profitable. Managing your cash well and ensuring a positive cash flow is the key to success.

The Importance of Liquidity Joe Gauci

Problems

Numerous problems result from a lack of liquidity including inflamed supplier prices; a high turnover of staff, tension between staff and customers; loss of trust from creditors, suppliers and your bankers; higher financial costs; lack of stock; loss of competitiveness; rise in legal costs and a reduction in turnover to name a few. Many more headaches are created by a poor cash flow within a business.

Management

Often, Cash Management is not overseen correctly as few businesses understand the difference between profits and a good cash flow, and new start-ups can even find themselves short of cash right off mark. Problems also occur when businesses use company funds to purchase fixed assets and to finance the personal spending of the directors and owners, when credit is abused, and when there is a lack of discipline when collecting funds from Debtors. Recession = Lack of Liquidity = Problems The recent recession has proved that bad cash management results in lack of liquidity which in turn results in bankruptcy. There are steps that can be taken during a recession which will increase the chances of success of your business. Those businesses which remain financially sound take the opportunity during a recession to reduce their expenses, maximise margins, increase www.the-executive.biz

their customer base, negotiate better credit terms with creditors and banks, acquire new businesses, reduce stock levels and change their credit policies regarding sales. You should always look into ways that your business can benefit from the situation you are in which in turn minimises risk.

Cash and Profit

Cash flow and profit are not the same thing. Financial accounting is not focused on cash flow but it is focused on net income or profit. Over the long term, profit and cash flow are approximately the same but the crucial difference is timing which is absolutely crucial. The time between the selling of a product or service and the collection of cash is of prime importance. Many more problems are faced by businesses that allow a long time delay to collect any dues owed than those who allow a shorter period. Therefore, the gap between profit and cash flow could be very wide. You may have rapid growth in credit sales which increase profits, but this also reduces the cash available. The result of this is that businesses fail without cash.

Practical Steps Take

To increase your businessâ&#x20AC;&#x2122; liquidity arrange a longer period with your bankers in which to repay your bank loans. You can also reduce the credit period to Debtors and increase the credit period from Creditors. If you are going to pay suppliers immediately you should negotiate prices and obtain better margins than you would expect if you were paying over a period of time. You should also ensure that your overdraft is adequate for your needs and consider other types of finance such as factoring in order to ensure you have a positive cash flow. If your bankers do not meet your demands you must not be afraid to change them, or to take difficult decisions in order to safeguard your business. Looking into your business activity and taking direct action to reduce costs where possible whilst making your staff aware of what you are trying to achieve will help you manage your cash, and if you are in a strong financial position you should endeavour to take advantage of the situation and improve your profits, whilst employing a good accountant who will prepare your accounts on timely bases. Budgets are very important and preparing a good cash budget or cash flow will assist you in managing your liquidity more effectively. Business owners should learn the basics of how to manage cash flow and to do simple ratios for indications. Comparing stocks and debtors with the bank overdraft, as well as comparing the current assets less current liabilities on a monthly basis will show any fluctuations in financial figures which will give you an adequate view of the business. Joe Gauci is Managing Partner of KSI, a local leading firm of Accountants and Auditors. He may be contacted on 21226176 or at jgauci@ alliotgauci.com. The Executive

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Issue No. 26 - 2010

The Executive

Tourism Policy: Developments in the EU and Malta

of the EU tourism industry and this plays an important part for the attainment of the EU’s development and job strategy goals. It is crucial for the tourism sector to successfully address a number of challenges, including an ageing society, the ever increasing global competition, sustainability concerns and demand for specific niche markets.

The Agenda

for

sustainable

and

competitive tourism

In 2007 the European Commission officially adopted its Agenda for a Sustainable and Competitive Tourism. The latter was moulded by the Tourism Sustainability Group, which comprises many experts in the field. The European Commission has thus built a framework for the implementation of supportive European policies and actions in the tourism sector and other related areas, effectively providing tourism stakeholders with added value at European level. This agenda also further contributes to the implementation of the renewed Lisbon Strategy for Growth and Jobs and of the renewed Sustainable Development Strategy. The EU therefore has policies in place to help tourism flourish and reach its full potential.

Tourism Policy:

Developments in the EU and Malta Michael Debono

ourism is of critical importance to the European Union, not least because Europe is the number one destination in the world and has an impressive density and diversity of attractions. The Commission has so far carried out a variety of actions related to tourism within the framework of various policies. There are numerous policies, agendas, directives and communications from the EU regarding tourism. Despite all this, no legislation exists that controls the vast arena that is the tourism industry. There may be several factors that have led to this lacuna in European law. First and foremost is the fact that tourism is a large industry that involves numerous stakeholders and one piece of legislation cannot cater for all involved. Another may be that “tourism is a global phenomenon shaped locally” and therefore it would mean that the EU can guide countries on how to implement sustainable www.the-executive.biz

tourism in order to help the industry flourish but since all the member countries are at a different stage of developing their tourism industry, it is not possible to regulate all aspects in all the countries. In fact, in Günter Verheugen’s words, “the European Union has no direct competence in tourism. While in most cases tourism is a local issue, there is no doubt that a better partnership at European level between public authorities, private sector and employees will offer clear advantages to the European tourism”. And the EU has taken a number of measures to help guide member countries to regulate their tourism industry and help it grow in a sustainable manner.

EU Tourism Policy

Tourism is a force to be reckoned with, in boosting employment and development. Sustainable development and enhancement of heritage are two examples where tourism can prove beneficial if adequate policies are in place. It is therefore imperative to enhance the competitiveness

Financial Instruments

In the above quoted speech, Mr. Verheugen went on to say that the EU does “put its money where its mouth is” on what concerns the sustainable development of European tourism. In fact, the EU is doing this through the numerous financial instruments that it offers.

European Destinations of Excellence

The European Commission has been running the EDEN “European Destinations of Excellence” preparatory action since 2006. According to the European Commission’s website, “the broad aim of this initiative is twofold: to draw attention to the value, diversity and shared characteristics of European tourist destinations, and to promote destinations where the economic growth objective is pursued in such a way as to ensure the social, cultural and environmental sustainability of tourism”.

Regulating perspective

tourism:

- Malta

island

The tourism industry in Malta has been confirmed as one of the main pillars of Malta’s economy in terms of jobs, as it provides employment to around 13,000 people. According to a new statistical The Executive

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Issue No. 26 - 2010

The Executive

Tourism Policy: Developments in the EU and Malta

publication issued by Eurostat, the EU’s statistical arm, Malta has the largest share of tourism-related employment among the 27 EU member states.

Travel Package Holidays and Package Tours Regulations. However, Malta has a national tourism plan and a tourism policy in place for the period between 2007 and 2011.

Tourism Policy in Malta

The overall objective of the tourism policy is to move towards sustainable tourism, taking into account not only economic considerations but also environmental and social implications. Moreover, the tourism policy must be implemented and closely monitored if it is to achieve its desired objectives. The end result of all these

As on an EU level, Malta doesn’t have a legislation pertaining to its tourism industry. Rather, the tourism industry is regulated through various legislations, such as the Malta Travel and Tourism Services Act, the Tourist Guide Service Act, the Holiday Premises Regulations, and the Packages

decisions and actions is the performance of tourism, often measured through indicators such as tourist volumes, tourist expenditure, tourism earnings, employment in tourism and tourism value added. If the destination is to reach its national objectives, its tourism plan must be based on a broader tourism policy and integrated with policies of other sectors, especially supporting sectors. This implies that the The EDEN

award is awarded every year to a locality that is not on part of tourism zones in a country. The award is given according to the theme chosen by the European Commission that year. So far, the four editions that have been launched each had a specific theme, as follows:

• Best Emerging European Rural Destinations of Excellence (2007); • Tourism and local intangible heritage’ (2008); • Tourism and protected areas’ (2009); • Aquatic Tourism (2010).

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Issue No. 26 - 2010

The Executive

Tourism Policy: Developments in the EU and Malta

tactical actions stated in the plan must mirror the vision set out in the policy document and other national documents.

Financial Instruments Maltese authorities are entrusted to administer the financial resources, partly cofinanced by the European Union. Focusing on one particular scheme which falls under the European Regional Development Fund (ERDF) as an example of such resources, the case study used in this section will be the Grant Scheme for Tourism Enterprises run by the Malta Tourism Authority. The scheme was launched in August 2004 under the Structural Funds Programme for Malta 2004-2006. Back then, the total project value for the scheme stood at €2,488,647, of which 60% were pooled in by the public sector (35% from the European Regional Development Fund and 25% Malta Government Funds), with the remaining funds being invested by the private sector. It is of interest to note that over 90% of the funds were utilised.

European Destinations of Excellence Malta is one of the 27 member states who, every year, participates in the EDEN framework. It is in fact administered by the Tourism and Sustainable Development Unit, which is the Unit that acts as the EU directorate for the Malta Tourism Authority. The main function of this unit is “dealing with policy and EU matters relating to the environment, tourism and sustainable development”.

Two further calls were issued, in February

2009 and October 2009 respectively with a third, and possibly final, call to be issued in October 2010. A grant scheme of € 10 million was allocated for these projects, which aimed at enterprises investing in sustainable tourism projects meant to “strengthen Malta’s competitive advantage in tourism, increase the use of ICT for tourism; increase good environmental practices by tourism enterprises as well as increase innovation in tourism,” (TSDU website).

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ÂŠ The Executive

Issue No. 26 - 2010

CREDITINFO_03.FH11 9/4/08 2:31 PM Page 1

The Executive

Tourism Policy: Developments in the EU and Malta

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Throughout the last four years, MTA has Composite been participating in the EDEN project. The theme for 2009/ 2010 was Aquatic Tourism and the winning destination for Aquatic Tourism was Isla (Senglea). Awards such as this are instrumental in creating awareness of Europe’s tourist diversity and quality. In fact, Malta has up to a few years ago, attracted mainly visitors for the sea, sun and sand qualities of the island. However now-a-days, new markets are emerging.

Pointers for the Future Over the years the European Commission has managed to extend its areas of competence in various fields of political, economic and social endeavour, but tourism has by and large remained aloof from this process. However, the Commission, keenly aware of the importance of tourism in an EU economy that is increasingly service and knowledge based, has started laudable initiatives to increase networking that leads to higher cooperation, coordination and also the promotion of good practices around the Union. The economic importance of tourism can be measured by looking at the ratio of www.the-executive.biz

international tourism receipts relative to gross domestic product (GDP) which in 2007, this was highest in Cyprus (12.5 %) and Malta (12.2 %). The relatively recent accession to the EU of these two island states in the Mediterranean has increased the profile of tourism within the EU. It is pertinent here to put forward some discerning questions as to whether Malta, should take a more leading role in promoting EU policies and new European Funding Initiatives related to tourism, or else try to discourage such initiatives. A purview of the Facts and Figures boxes will lead to a high level comparison between the role of tourism locally and at EU levels. Given the potential uptake of EU grants at different levels by Maltese tourism industry stakeholders, including policy makers, local government, tourism operators and also indirect beneficiaries, one tends to argue that stakeholders should try to promote the interests of the industry at EU level. The significant interest shown by operators in the first two ERDF calls for Sustainable Tourism projects clearly show that there are widespread interest to upgrade the tourism product in terms through physical, ICT, environmentally friendly and tourism interventions for the benefit of the whole economy.

However, one must express scepticism as to the level of penetration by local government, policy makers and other stakeholders in EU Funding Programmes managed centrally by the Commission. The tourism industry’s importance to the local economy is undoubted but if stakeholders rest on their laurels, and no concerted efforts are made to ensure increased influence at EU level policies and initiatives and significant uptake of all available funds, then the industry’s economic importance will be dwarfed by other burgeoning economic sectors. As Viktor E Franklin (1905-1997) once said, “when we are no longer able to change a situation we are challenged to change ourselves.” References are available on request. Michael Debono is the founder and CEO of DConsulta Limited a boutique consultancy firm offering a range of services revolving around EU grants, business development and finance. Michael is involved in People Solutions, a recruitment and temping agency that also offers training services. Michael can be contacted on 2747-4414 or at michael@dconsulta.eu. The Executive

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Issue No. 26 - 2010

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The Executive

Rural Women in Economies

he rural areas of the European Union are strikingly varied in terms of social and economic structure, geography and culture. Rural women too are not a homogeneous group. They have different roles and occupations, on farms and in family businesses, in employment and in community activities. Their needs and interests differ too, particularly from one age group to another, and depending on the size and composition of their family and age of their children. The economic and social changes that rural areas are undergoing do not affect all women in the same way: offering opportunities to some, to others they bring difficult challenges.

Rural Women in Economies

Ensuring gender equality is a key concern of the United Nations, and over the past decades, a number of United Nations conferences and summits have addressed the situation of rural women. These include the Fourth World Conference on Women, in 1995, and the Millennium Summit, in 2000. Moreover, the Convention on the Elimination of All Forms of Discrimination against Women is the only human rights instrument that specifically addresses the situation of rural women. Despite this attention given to the situation of rural women, discrimination remains rampant, from access to education and health care, to access to and control over land and other productive resources, to opportunities for employment, incomegenerating activities, and participation in public life. The rights and priorities of rural women continue to be insufficiently addressed – a situation that the International Day of Rural Women (15th October) will, it is hoped, contribute to remedying. The changes under way in rural areas have a direct impact on women’s lives, in both positive and negative ways. Economic changes can intensify gender biases. For example, land privatisation programmes can undermine women’s traditional land-use rights. On the other hand, women’s increased access to paid employment and independent cash income in some areas can positively affect intrahousehold dynamics and the perception www.the-executive.biz

Mark Causon

of women’s roles in society. Many women, particularly younger women, have found that independent sources of income give them the confidence to question traditional views of rural women’s roles both in the household and in society, and to challenge gender biases in access to resources.

Despite the trend towards living in towns rather than in rural areas, the latter still offer opportunities and real potential. Surveys show that in general, rural women have a strong desire to stay in their community and contribute to its development, provided certain requirements are met:

• employment opportunities in the local area, including part-time jobs; • the possibility of gaining work experience and vocational qualifications; • local facilities for education and training; • business services supportive to women’s projects and enterprises; • public transport services compatible with working hours; • local childcare facilities and social services for the elderly and the sick; • Supportive public and professional organisations.

From studies conducted in Tunis, it was established that the identification of problems/techniques was lacking and that intervention should ideally be conducted through group action and also through individual contact with the rural women themselves through such means as the organisation of fairs and events. The identification of regional realities and needs assisted in-turn in the identification of strategic sectors facilitating common interests and the improvement of women’s conditions, through the unification and deployment of systems from the conception stage to the full programs and evaluation stage.

Through this action, the formation of personal improvements, financing of infrastructures with new systems and the formation of associations was established. Counselling services were part and parcel of these schemes and this also included the production and distribution of documents and videos on good practice. Thus was established commercialisation of products with the active participation of rural women in Tunisia. Another study was held in Spain where training and education for rural women were organised to improve their living conditions and their participation in agriculture. To make this possible, participation of women in family, professional and social life was studied, and the results identified that actively-participating women increased their finances. The study also identified the importance of the introduction of eLearning programmes for rural women through online lessons, the creation of user lists and the organisation of a calendar of events. Such methodologies have led to the creation of forums for discussion between rural women, as well as to training them in leadership skills and to assisting them in better education and in the organisation of professional economic activity in agro tourism management. Marc Causon may be contacted on tel. 79232635 or on mark@europedirect-mostamalta.eu. For further information on rural women in economies, please refer to http://www.un.org/womenwatch/ daw/public/W2000andBeyond.html, http:// ec.europa.eu/agriculture/publi/women/broch_ en.pdf, http://www.policy.hu/nemes/publikaciok/ integrated%20rural%20women.html. The Executive

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Issue No. 26 - 2010

The Executive

Don’t be Passé.

Don’t be Passé. Richard Clarke

was recently asked what I thought of trick. Jack Walsh, former CEO of General a couple of websites that a business Electric had advised to “use the brains of associate had just completed for his every worker. Make sure that it is the person new businesses. He waxed lyrical about with the best idea who wins. Reward and the accordion menu and the oh so different celebrate new ideas and those who show message the website oozed. Except it really guts and in didn’t. It looked exactly like every other website in that industry. Then he showed me the other. What struck me was how different each was to each other but how similar they were to their industry T he ‘Idea Lenov competitors. Do it now, go and Pad U o’s ne 1’, w look at 3 random bank/ lawyers / Hybr id Ta blet/ accountants/ spas / hotels websites. Lapto p You’ll be amazed at how similar they are. Here’s the rub, everyone is fighting to look exactly the same as each other, in the questionable guise of “looking professional”. Of course this leaves the customer with one option, choose the cheapest now. Enter into business “with the same enthusiasm and openness children have” remarks Richard Branson, head of the totally different and appropriately named virgin company. “Think different” was the catchphrase of the world’s greatest and now largest computer company Apple. I’m currently redesigning my website, it’s hard work. Even the designers whose job it is to be creative struggle to break away from the norms. It took so many redesigns before the message was clear - I do not want it to look like anything to with accountancy or tuition. It currently has a pipe smoking rabbit and a space hopper for sunshine... Wait till the final version! Of course this is nothing necessarily new. Time after time CEO research shows how highly they say they rate creativity. However 99% of the time they fall back on what is expected and safe. Efficiency is placed way above creativity. That is yesterday’s business model. All businesses can now leverage technology for efficiency. It’s time for a new differentiation. Creativity is about exploring the unknown so it inherently feels risky. But we are missing a www.the-executive.biz

doing so make the numbers”. Creativity requires playfulness. That doesn’t sit well amongst many of the older school of the business world. Yet it is a skill. Ideas alone are not enough; they need to be novel and useful. The lightbulb moment. Think about that. Who had the lightbulb moment before the lightbulb was invented?! Actually it was Humphry Davy in 1809 and not Edison. The good news is that adult creativity peaks in your 30s and 40s with a secondary peak in your 60s. So dust off your black turtleneck and spend time playing with ideas. Be creative. Be childish. Either that or try to compete on quality, price and timing. You will perhaps succeed for a very short time. There are two types of thinking, convergent and divergent. The former looks for a single answer eg. 99. The latter has many possible answers. My industry has an inherent problem. Tutor and building costs are high, resulting in high fixed costs. The convergent solution is to increase the

selling price or lower the costs to make the business work. The divergent thought might include shortening courses, doing a study roadshow from a mobile unit, getting students to teach other students, using the Internet to reduce costs, analysing individual students and taking them on their own shortest pathway to success, creating a course using texts or facebook, and so on. The point is that divergent thinking can be used at every step of the way, and even if only 1 idea out of 2000 makes it through, it could create significant edge. I write this from a cruiseship and there’s a rock-climbing wall and an ice rink. Yet I’m sure other ships do the same. They’re good ideas but they’re not industry-defining ones. That’s the test. But without giving true time, effort and thought to be creative you can be guaranteed that it won’t be your business that next defines your industry. The music industry no longer can rely on record sales. I personally pay spotify £10 a month and I have access to the world’s biggest record collection that is constantly added to, and friends send me their playlists which I can download immediately if needed. So record collections, DVD collections are now a thing of the past. Music labels are quickly being transformed into event and marketing merchandise companies. This article is being written on my iPad which will then not be stored on it. No need. Like everything else digital in the world, the future is not a hard drive packed full of content, but everything synched to the cloud. That is companies with bigger, better and safer hard drives than you and I could ever imagine. Freeing up my device to what it does best. So cd was the new record, then download was the new cd. Now downloads are passé. Don’t be passé. Keep up and innovate and be creative. There’s never been a better time. Richard Clarke was the International Director for Europe’s largest financial training company before going on to open his own successful accountancy training company with branches in Malta, Ireland and online, the Richard Clarke Academy. Having 10 years full time lecturing experience, specialising in Financial Reporting and Management Accounting, he also researched neurology and social economics and their affect on the learning process giving his lectures an extra dimension. He co-devised and ran train the trainer courses for ACCA in Europe, Africa and the Far East. Richard is writing innovative Financial training books which he hopes will break the death grip of tired, dull textbooks. The Executive

Issue No. 26 - 2010

The Executive

Help your Brand Stand Out.

• Promotional items are not seasonal. Nor do they have a limited time frame; they will promote until their demise. • Everyone likes a free gift, even if it is something as small as a key chain. • The buyer must guide the supplier not simply according to budget and desired specifications, but more so according to the objectives of the campaign in question, and according to the target’s traits. • Corporate gifts play a significant role in reflecting your respect and gratitude for a business co-worker.

Help your Brand Stand Out. Bertrand Magro

eople like information when they’re ready for it. They like information that they can use. That is why advertising with promotional products is one of the most effective ways to market your business. The true value of promotional products lies in their ability to carry a message to a well-defined audience and provide repeat exposure at no extra cost.

Businesses that have a corporate gift programme are twice as likely to be contacted by customers, compared to those who did not give gifts, according to Promotional Products Association International. So, the real question should not be not whether you’ll use promotional items, but rather which promotional merchandise you’ll choose.

The average person visits the refrigerator over 10 times per day. Can you imagine having your marketing message get that kind of exposure for one low cost? Refrigerator magnets are only one solution in an endless list of promotional items that companies are adopting to increase their exposure while reducing their advertising budgets in tough economic times.

The Benefits of Promotional Items

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Printed merchandise and promotional product advertising do increase name recognition and attract new customers; they generate goodwill and create interest in new products. The value of these benefits multiplies when considering that they are gained in a highly cost-effective advertising manner.

One could argue that unlike television campaigns, which are expensive and which are limited to running for a limited period of time, and unlike radio-based efforts; a hit or miss game unless you are prepared to invest heavily in occupying airtime, promotional items are not seasonal. Nor do they have a limited time frame; they will promote until their demise. When someone takes one of your pens, featuring your logo and website or phone number, it is usually kept for a long time. Imagine also how your advertising power will multiply as your pens get forgotten at the bank, exchanged at offices, and lent to relatives. The success of promotional products is that they are a long-lasting form of marketing and are excellent tools to increase brand awareness. There are literally hundreds of promotional products to consider, so you can choose what best fits your company, its target market and the specific promotional message you have in mind. They also allow you to connect to your customers in a unique and memorable way because offering useful and functional promotional products is a value to your customers. Everyone likes a free gift, even if it is something as small as a key chain. You can also use your promotional products to draw in customers at a trade fair or use them as a give-away at a launch. In this way, your impact on the target audience lasts well beyond the point of contact, with your item acting as a reminder of your brand every time it is being used. For this reason, promotional gifts are The Executive

Issue No. 26 - 2010

The Executive

Help your Brand Stand Out. no recognition, or the impact ending once the items are consumed. Or you could give a functional item carrying your company logo and contact details, that gets used throughout the year and serves as a constant reminder and appreciation of your service.

Promotional product research shows just how effective branded gifts can be:

Promotional gifts keep talking to your crowd throughout their entire life cycle. great at increasing brand awareness. They continue promoting the organisation as long as the gift item is in use. They act as the walking advertisement of the brand.

Choosing the Right Supplier

The supplier’s role is to match the client’s characteristics with those of the recipient audience in question, using the selected promotional item as the tool which does so. The buyer must also know how to guide the supplier not simply according to budget and desired specifications, but more so according to the objectives of the campaign in question, and according to the target’s traits. It is vital to choose not just the right promotional item, but a provider that offers choice, quality, value and reliability.

Choosing the right gift

Promotional products can be used in all situations, from a corporate uniform to business gifts, or even merchandise. The question about marketing a business begins with defining exactly what is needed to get the word out. The aim is to use promotional products that will get your name out in the world and keep it in homes and businesses around the country. The more you let others know about your business, the more likely you are to get a positive response by gaining loyal customers. But not all gifts are considered good for endorsing a brand. You have to select the gifts that relate to your product or service and leave a longlasting influence on your client’s mind because of its functionality. A company providing information technology products and services would benefit by handing out gifts that complement the purchase www.the-executive.biz

made, such as a mouse pad or a pen drive. A beverage company distributing picnic coolers in summer with the company logo and colours provides added value to customers who continue to advertise the brand wherever they use the promotional item. A bank may choose to distribute branded organisers that include useful tips to improve the clients’ finances. You can also use the popularity of another brand to boost your own popularity, in the same way that a testimonial or referral would, and consumers would thus be more willing to trust you with their business. Corporate gifts play a significant role in reflecting your respect and gratitude for a business co-worker. They can strengthen the relationship between the organisation and the customer, between a business and its clients and even between two business associates.

Conclusion

The choice of items is literally endless and, especially when the gifts are original and can’t be purchased in stores, they are an amazing way to create logo products that can be worn and appreciated for years. Business gifts are used to help promote your messages at exhibitions, trade shows, conferences, product launches, mail-outs, corporate entertaining, anniversaries, special events, Christmas gifts, and as sales incentives. Now that Christmas is coming up, some forward planning will allow your company to offer gifts that are original and appreciated. You may consider sending what most companies do - risking geting laid among the rest, offering your company

• Promotional products can boost response rates by as much as 75% (Baylor University Study). • The use of a promotional product in conjunction with a sales letter in direct mailings can increase response rates by as much as 50% (PPAI Study). • Customers who receive promotional products are 14% more willing to provide sales leads than customers who receive nothing (Baylor University Study). • 39% of people who received a promotional product could recall the name of the advertiser as long as six months after they received it (Schreber & Associates). • Sales people who gave promotional gifts to customers received 22% more referrals than those who didn’t (Baylor University Study). • Customers who received promotional products re-ordered up to 18% sooner than those who received coupons (SMU study). • Using promotional products can give you an advantage over tradeshow exhibitors for buyer attention (Georgia Southern University Study). • Customers who received a promotional product expressed more goodwill toward the company than those who did not receive a promo product (Exhibit Survey Inc. study).

Bertrand Magro is the Managing Director of Playcraft Promotional Items, which has over 12 years of experience in being the leading provider of branded gifts in Malta. Playcraft offers a diverse selection of in-house options, tailor-made to suit specific requirements, and tastefully branded to suit your corporate identity. Playcraft is equipped to produce a diverse range of products that stand out either individually or as part of a scheme. Playcraft may be contacted on (+356) 2125 7042 or at info@playcraftmalta.com. The Executive

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facilities to your conference table, too, should you need it. Thereâ&#x20AC;&#x2122;s room for 1,000 seated delegates in 4,026 square metres of space with 14 different venue formats for you to choose from. For the comfort of your delegates, the Excelsior has 430 deluxe and Executive bedrooms with picturesque views across the waters of Marsamxett Harbour. Call the Excelsior sales team now on (+356) 2125 0520 or email sascha.sammut@excelsior.com.mt to see what kind of 5-star bespoke deal we can do for you.

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Issue No. 26 - 2010

Preparing your Succession Strategy

The Executive Establishing the Way Forward a) What are the family goals and objectives for the future? b) What: i. are the plans of next generation family members • interested in staying with the business? • with the best capabilities? ii. is the position of next generation family members if there are several younger capable family members who are aspiring to lead the business?

iii. role will the younger members play? if no member is interested in the business? c) How should mentoring be structured? d) When would the best time to step down be? e) What are the financial implications of the leadership transition? The discussions leading to these decisions take time and need to be conducted carefully. The following tips should be helpful: a) Start business succession planning early. b) Involve the family; their lives are likely to be affected by the outcome. c) Realistically analyse family. Plan accordingly.

Preparing your Succession Strategy Mario Duca

usiness succession planning should be a priority for every business. It makes sense to put as much effort into the succession plan as it does into building up the business in the first place. In a family business this involves tough decisions affecting the future of a business and the family. Retirement is not just a matter of deciding not to go to the office any more; the whole question of what happens to the business becomes a paramount issue. Questions such as ‘Who’s going to manage the business on my retirement?’ “How will ownership be transferred?” “Will my business even carry on or should I sell it?” It is a known fact that a fully executed solid succession process could last for anything between 5 to 10 years before the hand over should take effect.

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d) Forget the notion that everyone has to have an equal share of inheritance and replace it with a more practical idea of “rough equality”. e) Mentor your successor/s and work with them.

Family Business succession planning must address all these issues, establishing a smooth transition between yourself and the future owners of your business. In family businesses, succession planning can be especially complicated because of the family relationships and emotions involved. This is perhaps one of the main reasons why more than 70 percent of family owned businesses fail to survive the transition from founder to second generation. In many cases, this is due to family discord, such as differing expectations between the generations about who should get what, which is tough when you are trying to do what’s best for the business and, at the same time, retain family harmony. Another important aspect to keep in mind is that management and ownership are not necessarily one and the same thing, since you may decide to transfer the management

f) Source outside help with your succession plan from advisers with expertise in helping business families create succession plans. of your business to just one of your children but then transfer ownership shares to all of your children.

Conclusion

There are no simple or quick-fix solutions to the particular challenges faced by family businesses in the process of succession planning and execution. The first thing is to recognise the difficulties that family owned businesses have to face and get the right kind of help. Don’t procrastinate and leave matters to chance; your family and your business deserve better than that . Mario Duca is the Managing Director of FBS2M, an international consulting and teaching organisation that works with enterprising families, family businesses and family offices. The Executive

Issue No. 26 - 2010

Interview with an Entrepreneur - Makis Seriakos

The Executive

A Group whose turnover of 2009 is of Eur 290,000 million has joined forces with a local marketing agency; on the 18th of June of this year, Lighthouse Group and Ashley World Group announced their partnership. Ashley World Group’s decision to do so has been facilitated by the fact that Lighthouse is a member of IN Network, which is the world’s largest network of advertising agencies. This partnership has in plan to consolidate the workforce by an additional thirty members so as to facilitate the provision of “unique services to the very highest international levels”, in order to attain this union’s shared objective of having “a dedicated orientation towards our clients’ national needs”. The Executive interviews Makis Seriakos in order to attempt to understand the thinking behind this move.

Q&A: Interview with an Entrepreneur - Makis Seriakos This interview was conducted by Jason Attard. Please give us a brief history of Makis Seriakos, and of the Ashley World Group. I was for several years at the helm of McCann Erikson Southeast Europe, one of the world’s largest international advertising agencies. This experience, my success at running and expanding McCann Erikson, gave me the courage, drive, determination, to do my own thing – to bring a Greek organisation into being at the highest rungs of market share and respectability. And today Ashley Worldgroup, based in Athens, owns six subsidiary companies specialising in various communications services. It has offices in Belgrade, Bucharest, Ljubljana, Pristina, Sarajevo, Skopje, Sofia, Tirana, Zagreb, Vienna, Lodz and Limassol. Now Malta has joined the club. The group is placing the due importance onto the Internet and Events markets. This is a major factor in our growth. Digital is the new economy. It has no frontiers, a common language, and this is where countries will develop their future from. In 1999, 2000, we transformed ourselves from a traditional organisation to a future-oriented communications group. This was a turning point for the Ashley World Group. We started our digital workings from scratch, to the market-leading position the Group enjoys today. And we’re consolidating our holds onto the current markets, and partnering with market leaders of similar mindsets, so as to effectively widen our reach. Hence the union with Lighthouse Group. www.the-executive.biz

How has the Greek financial crisis affected your business? We have hardly been affected; in such times, those who suffer the most are mainly the smaller companies. These are the ones who risk going bust the greatest. When you are established, when your clients are established, you know that a certain amount of business will go on. Perhaps profitability is at stake in such ties, but survivability is not. What else convinced Ashley World Group of this partnership? The opportunity arose, and taking it signified not only expanding into interesting shores with a trustworthy partner. It moreover signified our acquiring a significant stepping stone towards the much coveted North African markets. Establishing our brand in Malta thus is an effective contribution to our strategy of internationalising our activities. How did this opportunity arise? Entirely by accident! We met 2 years ago. I asked, “How is Malta?” Roderick* replied that to really know, I should experience the country for myself. So I did, and the ‘smell’ was good. When you travel you smell. When you smell you have a feeling. If you don’t travel then you cannot gauge. So, when the opportunity for this partnership arose, the reaction was “Why not?”. The Executive

ÂŠ The Executive

Issue No. 26 - 2010

The Executive

Why this thrust for internationalisation? I would boil it down towards three primary factors; the vision of the company for growth, without which stagnation is inevitable. The core belief that segmented volume will facilitate both the economical and qualitative advantages of economies of scale. And the need to disperse risk as efficiently as possible; similar to the purchasing of stocks and shares from varied sources, by expanding internationally one’s dependance on individual economies is lessened. How do you intend to compete? I had brought into my new organisation my core belief “Nothing Impossible” and this was instilled into the workforce from the very beginning. It has been made evident to me that Roderick* too shares this mentality. It is therefore a simple matter of joining forces to serve the market. This belief, coupled with my international experiences, has enabled Ashley World Group to lay and exploit its primary competitive advantages – those of flexibility and efficiency. For this partnership we will do so by effectively utilising our long international experience. Our workforce of accomplished Greek professionals, now combined with the really impressive creative capacities of Lighthouse, will continue to steer us towards the frontiers of creativity and effectiveness of our campaigns; our characteristic ‘flexibility and speed’, and we are completely focused on maximising the output of all our work. Here again, Lighthouse’s organisational infrastructure will play no small part. The synergy with Lighthouse will maximise all these factors. But first and foremost, a dedicated orientation towards our clients’ www.the-executive.biz

Q&A: Interview with an Entrepreneur - Makis Seriakos

national needs is the primary edge we intend to keep on honing. This stance is what enables us to regularly clinch international awards of excellence such as EFFIE Awards in marketing campaigns. The “Live your Myth” Greek worldwide campaign for tourism is an award-winning example of our work. Could you tell us a bit more about your “Nothing Impossible” mindset? A baker might go up to an agency and say “I want to sell to the whole world! Can you help?” If you start thinking that nothing is impossible then you will find a solution. If one were to think emotionally that this is impossible, then you are out of business. You have to believe that nothing is impossible. History shows that behind the giants of this world , there is a huge quantity of “Nothing Impossible” mindsets. Think of garage work start-ups. Think Apple, Microsoft, Dell. What do you mean by “flexibility” and “efficiency”? Each market within which Ashley World Group operates has its own distinct needs and characteristics. These must always be scrutinized, intimately understood, and shown the utmost of respect – flexibility in structuring objectives according to the needs of the market. And then there is the need to be flexible for the client. We please the customer as an individual , tailoring our services in as intimate a manner as a tailor would, for example, while fitting a suit. There is no difference. In so doing; being flexible, that is, we also cater for those customers who are not in traditional businesses – of which there are a lot. The Executive

ÂŠ The Executive

Issue No. 26 - 2010

The Executive

Q&A: Interview with an Entrepreneur - Makis Seriakos

Learning from Makis’ Experiences: •

When

partnering, do so with market leaders of similar mind-sets.

•

Seek

to acquire established clientele; even in

harder times, when your clients are established, you know that a certain amount of business will go on.

•

flexible

both

adapting

different

markets as well as in adapting the client’s wants and needs.

•

Efficiency in design keeps creativity levels high and pricing down.

•

is crucial for every campaign to be able to

provide to the client tangible achievements of the required objectives, to the highest possible levels.

•

You have to believe that nothing is impossible. If you start thinking that nothing is impossible then you will find a solution.

And by efficiency I do not refer to the operational speed at which we conclude our jobs (though this too is important, as efficiency keeps creativity levels high and pricing down), but more so, to a strict duty of every job done, to provide to the client tangible achievements of the required objectives, to the highest possible levels. What outcome are you expecting from this union? Lighthouse will assist us in our vision of being Number 1 in digital markets in as many countries as we ought to be in. We also intend to exploit LCL’s capabilities on Web, T. V., Internet, Media content, and campaigns settings for our international jobs. Certainly, our experiences and resources will also rub off onto Lighthouse’s customer base. Would you give our readers some words of advice? Certainly! To the local agents - Always marry creativity with efficiency. And to Malta’s stakeholders to business - Export big services. The most important thing is for small countries to export big services. * Roderick Muscat Monsigneur is the Chief Executive Officer of Lighthouse Group. ** The Effie Awards were founded in 1968 by the American Marketing Association, New York Chapter, as an awards program to recognise the most effective advertising efforts in the United States each year. Jason Attard is the Managing Editor and Publisher of the journal.

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The Executive

Outstanding ICT expertise with a proven track record Megabyte Ltd. is Maltaâ&#x20AC;&#x2122;s largest and longest established privately owned computer systems company offering a full range of IT Services and Support. It was established in 1979 and since then Megabyte can boast a long track record of achievements and consistent growth. This has been possible due to an optimal spread of its operations into various business sectors. The key to the Companyâ&#x20AC;&#x2122;s success lies in the expertise accumulated over the years in the development and implementation of total, cost-effective computerised solutions. Megabyte pioneered the introduction and development of business computer systems in Malta by engaging dedicated and highly qualified staff whose professional capabilities and experience were used in project management, systems analysis, software design, customisation, modification and full support. Megabyte has built a reputation for quality and has pioneered some of the major developments in the evolution of Information Technology in Malta. These developments have had a real impact on the advancement and application of IT, particularly the number of early clients with whom we continue to work successfully today. Megabyte is proud to have won the loyalty and support of the many major organisations which are currently its clients.

MEGABYTE LIMITED F4, The Technopark Mosta MST 3000, Malta

T: F: E: W:

(+356) 2142 1600 (+356) 2142 1590 info@megabyte.net www.megabyte.net

Issue No. 26 - 2010

Interview with an Executive - David Galea

The Executive

David Galea lived, studied and worked in the UK for 12 years, where he was involved in both Sales and IT recruitment until 2003 before moving back to Malta. He is now the Head of Business Development and Marketing at Megabyte Ltd., which is a leading IT organisation - well known for making its mark on the computer software and systems industry in Malta. The Executive interviews David to get an insight into how the organisation has managed to stay at the head of its game for so long.

Q&A: Interview with an Executive - David Galea This interview was conducted by Lisa Baker. How had Megabyte started off ? Formed over 30 years ago, we pioneered the introduction and development of business computer systems in Malta and formed an integral part of the rise of the local IT industry. In 1988, Farrugia Investments Ltd, spotting a good investment opportunity, became a fifty-percent shareholder of Megabyte which strengthened our position and allowed for accelerated growth. Being a systems integration and IT solutions company, the services we provide to our clients include consultancy, software, engineering, networking, e-business and internet, support, training and facilities management. Over the years we have gained expertise in both developing and implementing complete, cost-effective computerised solutions which has been one of the main reasons for our success. Megabyte’s founders started out with the ‘one stop shop’ principle which still holds true today. From here we have built a reputation for quality and have been at the forefront of some of the major developments in Information Technology in Malta, which had a particular impact for our early clients - most of whom we still work with today. We have always brought on board the highest qualified and dedicated staff whose experience and know-how we always use across the board in project management, systems analysis, software design and development. Our solid reputation built up over the years has www.the-executive.biz

managed to win us many major clients who prefer the ‘safe bet’. We are now the largest and longest established privately owned computer systems company on the island, offering a full range of IT Services and Support to enable our customers to be more efficient and competitive. And how do you recruit the best? We always manage to attract the right kind of applicants when we are in the recruiting process, and one of the main reasons for this is because of our brand as an employer. We are well known for providing a good working culture for our employees in terms of good leadership and internal communication and so forth, which means our staff are highly motivated and people really do want to work for us. This in turn means that we attract top-notch candidates with both the hard, and soft skills, required for the roles. Once at Megabyte, staff are encouraged to continue to develop their skills, commercially and personally. In fact, around 8% of our expenditure goes on training. Basically, because we attract and hire people who fit with our culture and values, then take good care of them, we have a very high level of staff retention. Obviously, people need to move after a while to further enhance their career, and 30 years have seen a fair number of people through our doors, though we are proud to say that a quick look around the local The Executive

Issue No. 26 - 2010

The Executive

Q&A: Interview with an Executive - David Galea

IT industry will show you that most of the top players in the key us to offer the best possible solution. As with all our solutions, any package offers on-going business consulting and support. positions at some point or other worked with us. Our dedication to employing quality persons is a fundamental pillar behind the acquisition of clientele such as the Public Sector; we are What furthermore differentiates Megabyte from other IT proud to have been trusted by the government to build a number of companies is that we are creating value. We are searching for a solutions for the country’s administration over the years. And our long term relationship with the customer, rather than going for short-term profit optimisation. Our typical customer is successful huge client portfolio in the private sector stems from this too. In recent years, the Aviation industry has opened up new in his business because he looks ahead and optimises his IT opportunities for us. Starting around 10 years ago with Airmalta, expenses over the years. we then added Cyprus Airways and the world’s current leading airline, Etihad Airways to our client list. This section of our Who are some of these major industry players? And how business has some exciting developments ahead which you will do you retain your most valuable asset? soon no doubt hear about. Again, our global experience which Microsoft and Oracle are two apt examples; we have been in partnership with them for 8 and encompasses all the leading 19 years respectively. We are also technologies upon which our Learning from David’s Experiences: partners with HP Gold, Cisco, customers depend, secures our Excel, Symantec Silver, Vmware leads time after time. VIP and Micros Fidelio. Having • To mantain solid foundation, Diversification must such well known partners Does Megabyte enjoy other be conducted slowly but surely. demonstrates our expertise competitive edges? which in turn helps in keeping As we are one of the leading IT • Build a solid reputation for your company by our customers believing in us. firms on the island, we can offer We also retain our customers as the backing of an organisation bringing in nothing but the best professionals. we understand the importance that few of our competitors can of not only gaining new clients, match, which of course is a big • Investing in on-going training and development will but also investing time in our selling point to our clients. Our existing customer base. We build keep staff at the top of their game. sheer experience and size give relationships with our clients with benefits to our customers that on-going support, and although are very hard to match. • If you need to strengthen your position in the this takes time, it means we get market, consider taking-on new investment through their repeat business. At the The team of Implementation end of the day, if our clients are Consultants is very flexible and a partnership or acquisition. 100% satisfied they will continue its members have expertise in a to work with us. huge array of services and skills. Each solution is thus designed and implemented to truly reflect the How has Megabyte developed its products and services client’s requirement and expectations. and why? And Certification is another edge. Our staff receive ongoing We have spread our operations into various business sectors training & certifications to help them keep up with product updates including the automotive industry, aviation, government & public and current business practices, and this, along with our on-going sector, hospitality, manufacturing, retail and distribution, and in-house training and research into new technologies enables us to travel, and this has been one another of the main reasons for our long track record of achievements and growth. provide state-of-the-art solutions in a one-stop shop. Our skilled team is in possession of top industrial certifications such as OCP (Oracle Certified Professionals), various Microsoft And why has this strategy been of use to Megabyte? Certified Professionals, Java and CompTIA - which again offers Being present in all these sectors has minimised the risk to peace of mind to our clients. Due to our extensive direct experience, Megabyte, as the different industries are affected in different we can confidently handle any size of project, no matter how large, ways by outside factors such as the recession. If one market area and we are also in partnership with major industry players and is suffering, we are involved with working in other sectors which have long term experience in utilising different technologies. At may well be thriving at the same time. Therefore, the impact on the end of the day we see the client as our partner - our customers Megabyte is kept to a minimum. Having said this, like everyone else, we suffered through the last recession, as in all industries, IT really are our most valuable asset. projects tend to be the first ones to be shelved, but the mountain But isn’t this what everyone else is offering? What makes has been conquered and the road to recovery is now well travelled. In our case this speedy recovery is definitely due to our new CEO, your saying so more real than others’? Our main forte is that we are client-centric and offer solutions from Rainer van Beckum who brought us the new modus operandi that we several global leaders who we partner with. Unlike some of our had been lacking for our internationalisation efforts. competitors, this way the client knows that we don’t just have one offering which we recommend, but rather have the choice to be Lisa Baker has worked for several years in the property and real estate business able to find the best ‘fit’ for them and their requirements and this gives them complete peace of mind. We offer pre-sales consulting in the United Kingdom. Lisa has been the journal’s administrative back-bone for to identify the exact requirements of the customer, which enables years and has extensive experience in collaborating with the journal’s contributors. www.the-executive.biz

The Executive

Issue No. 26 - 2010

Interview with an Entrepreneur - Andrei Imbroll

The Executive

Survival of the Fittest – Evolution. For thousands of years, life has followed this basic rule. Subtle differences within the same species have helped the individual survive cataclysmic events that have hit the environment within which that species thrived. For the past two decades, Malta has seen the emergence of dozens of resourceful individuals, who, backed by the growing worldwide economy and Malta’s desire to join the rest of the world in this race, have launched themselves head-first into the most successful business of the last twenty years; the construction industry. This saw the emergence of a new species – “Il – Kuntrattur”. The construction industry was hot, growing and an opportunity not to be missed. Other successful businesses couldn’t leave this goldmine slip by and also joined in this race to become the number one developer in Malta. The party couldn’t go on forever though. The signs were there, the warnings were sounded and now we are once again faced with a life or death situation. Will the “Kuntrattur” survive? Was he just a lucky fellow who once took a gamble and kept on riding the wave for twenty odd years? This, Andrei Imbroll argues, is the defining moment in the emergence of every new species - the moment which will show us which traits are strongest over the others and how the Neanderthal was replaced by Homosapiens. We are now all witnessing the extinction of the Maltese “kuntrattur” and the birth of the Maltese Entrepreneur. Land Overseas Fund SICAV plc is the first Maltese self managed and self administered property fund. Its team consists of Dr. Andrei Imbroll, Mr. Ian Casolani, and Mr. Stefan Borg as Investment manager and Mr Adam de Domenico as Finance manager. These 4 individuals felt that joining the flow was not the direction to take and that a new concept for Maltese investors needed to be offered. The Executive has interviewed the Management team of LandOverseas Fund SICAV plc, herein represented by Andrei, to get their views on this evolving market.

Q&A: Interview with an Entrepreneur - Andrei Imbroll This interview was conducted by Jason Attard. What led you to seek this innovative path from the Property and Construction industries? Having sound experience in the real estate business for the good part of the last forty years, we realised that the Maltese property market was becoming oversaturated. The average contractor was taking longer to offload the end product and the scales of demand and supply were tilting in the opposite direction. Lifestyle www.the-executive.biz

developments were picking up, but rapidly filling the existing gap in the market. About two to three years ago through a quick analysis one could easily see that amidst the dwindling demand, at least 5000 new units were in the pipeline. The bubble was about to burst. This was definitely not an easy path to take as all of us had to forego large parts of our more stable income to focus on the The Executive

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Issue No. 26 - 2010

The Executive fund. In December ’08 we obtained a fund licence from MFSA which was a huge target for us to reach as we are now the first self managed, self administered property fund in Malta. This fact, coupled with the fact that one of the largest and reputable business organisations in Malta joined LandOverseas in June ’08, clearly indicates that we took the right path.

Q&A: Interview with an Entrepreneur - Andrei Imbroll A contractor usually burdens all the risk of his investment alone or between a few individuals, while our setup allows us to spread these risks further. Our financial background also allows us to link all the financial tools out there with property development, something the average contractor does not have the access to, the time and resources to set up or the know how.

Like any other market worldwide, property is seeing What are the advantages of the fund structure you have a slowdown. How are you dealing with this issue and put in place? The list is endless. But to be concise there are some basic countering the recession? Property is a basic commodity which we Maltese believe strongly rules of investment which one should always follow so as to in. It’s an asset you can touch and see which, if you are strong optimise returns. These include diversification, the exploitation enough to hold onto for long enough, will always give you good of economies of scale, thorough research and risk reduction. Our structure allows this and returns. more, such as, a tax efficient For the last few years I had been setup, professional hands on hearing everybody around me Learning from Andrei’s Experiences: management team and most say “oh what a great opportunity importantly a hassle-free secure I had to buy this property or the • If strong enough to hold onto property for long investment. other” but for various reasons enough, it should always give you good returns. and excuses they missed on it Being a fund and thus and grumble that now the time • The golden rule of “location, location, location” is regulated is exposing us to is over. I always replied that still valid, world-wide. several international investors the time to invest in property is who have our same goals and still the right time; it’s the place • In choosing where to invest in property, the three concepts. Networking is critical which is not! Thus, we set out to boxes needing to be ticked are, buying within markets: in this business, both from a find locations where the market (1) with excellent and accessible geographical locations, financial but more importantly was still predominantly a sellers’ (2) with a low supply of quality homes, and from a branding point of market and where demand (3) with a feeling that for the next 100 years to come, view. For example one of our outstripped supply, but most developments in Istria consists importantly where the golden people will still be attracted to settle in these of an entire hilltop village, rule of property – “location, locations. Tuscan style. This investment location, location” strongly is attracting interest from applied. • Whereby 10 years ago nine out of ten gambles several large international anyone took went in the right direction, today resort developers to partner up Maltese Contractors had things are different. with us. This will give a young ventured to places like company like ours a huge boost, Bulgaria, led by the hype image wise. these places created over a • Innovation and creativity are to define the property couple of years prior to EU scene too in the years to come. What is the way forward in accession. We researched this global financial crisis? these markets but felt that they too were a bubble ready to burst. We decided to focus on That must be joining forces, minimising running costs markets with excellent and accessible geographical locations, and being well-placed in a market with solid foundations. a low supply of quality homes and a feeling that for the next These factors are key to not only survival but to moreover 100 years to come, people will still be attracted to settle in be successful for the decades to come. LandOverseas these locations. This led us to initially invest in the Croatian is an ideal and streamlined structure which we believe Adriatic coast and more recently, into our neighbouring will lead the way towards shaping how the Maltese island of Sicily. Both these locations ticked the above 3 boxes. Entrepreneur will do business in Malta and overseas. Even during this recession there is no over-saturation of properties in the markets we are invested in. And once this financial turmoil starts to stabilise, these locations will be at the forefront of emerging markets.

We strongly believe that the Maltese are an extremely resilient people and we are seeing new ideas sprouting out daily around us. Our advantage is that we saw this coming a few years ago and we are thus placed ahead of others.

What is the difference in essence between your business concept and the contractor? That is undoubtedly primarily Risk Management. Nowadays, risks have increased tenfold. Whereby 10 years ago 9 out of 10 gambles anyone took went in the right direction, today things are different. Assessing thoroughly the risks of each and every investment is the stronghold of our philosophy. Minimising those risks is our mission.

Could you provide our readers with some words of advice? I would say that innovation and creativity are crucial for every business today and these are the factors which will define our business scene for the years to come.

www.the-executive.biz

Jason Attard is the Managing Editor and Publisher of the journal. The Executive

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Issue No. 26 - 2010

Interview with an Entrepreneur - Melo Hili

The Executive

Melo Hili has evidently earned the full faith of McDonald’s Corporation; Denis Hennequin, President of McDonald’s Europe showered him with praise in their Press Release announcing the transfer of its 19 restaurants in Estonia, Latvia and Lithuania to him, on behalf of Premier Capital Ltd., through their Development Licencee structure. This should come as no surprise. Though one could argue that the Baltics have been hit harder by the economic downturn than Malta has, Premier Capital’s turnover as well as its actual net earnings increased by several millions between 2007 to 2009. “The changes in business structure are designed to provide long-lasting profitable and sustainable benefits for the Developmental Licensee, customers, employees, suppliers and the McDonald’s brand – this is a model we use when we find business people who bring the right skill set and financial resources to accelerate the growth of the brand.” One could interpret this statement as an acknowledgment by McDonald’s Corporation that Premier Capital have the resources, skill-sets, operational expertise, and mentality required to beat them at their own game, in partnership with them. Premier Capital Ltd., owned by Beppe, Marin and Melo Hili, has performed as successfully in the Bond market as it does in representation of “the most recognizable restaurant brand in the world”. Its €25,000,000 bond issue, inclusive of the over-allotment option, was oversubscribed immediately, with a number of applicants having had to be scaled down. The journal attempts to highlight elements behind their success.

Q&A: Interview with an Entrepreneur - Melo Hili This interview was conducted by Jason Attard. Could we have a brief background on Melo Hili, and the Hili Group? I had joined the family business when I was 21, and had worked for a couple of years in general trading areas under the Hili Group. This was then primarily a trading company focusing upon the Libyan markets. Shortly thereafter, we had www.the-executive.biz

teamed up with a Scottish company – Motherwell Bridge – on engineering projects. We had teamed up ‘50/50’ – this is going back to the early 90’s. And what I did for fifteen years was manage the direction of Motherwell Bridge and its subsidiary companies. This is where I had concentrated my work and gained my roots in business. The Executive

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Issue No. 26 - 2010

The Executive In 2005, Premier Capital was set up, by two of my brothers Beppe and Marin, and myself: - a family business. We were thus assigned the McDonald’s license. I was appointed its Managing Director, and we discerned a vision that required an international reach. We thus strategised to further develop the eight restaurants that we inherited, so as to solidify the foundations of our business. The franchise had been in the family since inception, in ’95. What is your personal forte? I am an organiser. An entrepreneur, able to manage a varied and distinguished workforce in an informal manner, though at this level formality too must have its place. Verily, one has to manage people, but must also give the environment in which to operate comfortably. And the management style belies the size of the Hili Group. The levels between myself and the Restaurant Manager are few; inflated egos and ‘hands-on’ can’t quite get along. That we have a fairly flat hierarchical structure is not just ‘modern’. Apart from keeping management costs down, it facilitates communications and all personnel are better aware of all happenings. I run a team of ten trusted senior management people who report to me – my Executive team. There is a healthy mix of mentalities, cultures, backgrounds, and we do not all operate from the same base. And why not? Some of the Executive team members operate also as Country Managers, who thus are established at their responsibilities’ locations. This is a supporting function; every country has its own management team, run by the Country Manager, who we tend to recruit from within our workforce. Why employ from within? We have found that in order to attract and retain the best, both horizontal and vertical opportunities must be made available. A fringe benefit is the savings on HR and training costs which are used up until the externally-acquired team member learns the ropes of the products, of the Group. And in so doing, one is assured of a high level of training and expertise in each relative field. In short, we ensure that the top people are experts in their respective fields of responsibility. Is, then, the main requirement towards being employable by the Hili Group, a strong experiential backing? Well..not quite. That is certainly an indispensable requirement towards one’s engagement at our senior management level. But what we seek is (1) honesty, (2) being bright, intelligent, (3) energy – we work odd hours if and when the need arises, and (4) a distinct lack of an inflated ego. A person with a big ego wouldn’t last a month. And finally, (5) education. A good education gives a solid background. Studying gives you discipline too. Nothing suffices on its own. You need a mixture of these factors. This is what we seek. Has Malta been your guinea pig? Well, we started off in Malta, working solidly for two years in laying the foundations. When other opportunities came through, www.the-executive.biz

Q&A: Interview with an Entrepreneur - Melo Hili we took them, using the same modus operandi as that adopted here. The markets we have penetrated and are penetrating, are more or less of the same size as Malta’s; employing 2,400 people, we have 500 to 600 staff members per market. Yet the cultures differ. The Baltics could have a bit of history similar to ours but when you go back, they’re not the same at all. So you adapt the product to suit the native’s inherent character traits. And to ensure success in every operative region, we ensure that all management teams have a local spine.This is how we worked when we took over the Baltic operation in 2007. And the system truly works! Does the Hili Group facilitate education? Let me put it this way. We employ two people in every operative country in the Human Resources and Training sector. And we invest considerably in developing our people. As an example, our management training programmes essentially recruit young people, preferably graduates, and we run them through the McDonald’s Training Programmes, wherein they can develop their management skills. They can thus jump to Restaurant Manager. In fact our Latvian Country Manager had started off in Malta in 1995, first as an assistant then moving up the rungs to Operations Manager, Supervisor, and so forth. Thanks to our Management Development programmes as well as his drive, level of engagement and capabilities, he is where he is today. And doing a great job of it, at that.

Management DManagement evelopment Development programmes programmes Specific Post-‐Secondary Specific Post-‐Secondary schemes schemes Internal Training Internal Training Sending staff to Sending the MacDonald's staff to the bM ase acDonald's base of opera?on of opera?on

Figure 1. Premier Capital’s Training Infrastructure

What social segments do you target for custom? McDonald’s is a place for all ages, for everyone. From people in suits, to jeans and t-shirt customers. We have our core values – our quality, service, cleanliness, and the value we give in what we offer. Do you know of anyone who does not go for these values? These are the McDonald’s principles, to which we have adapted extremely well. We recognise them and thrive on them. Is it correct to say that for the McDonald’s brand, Premier Capital has selected a joint product, and also market, development strategy? Quite, yes. As examples of both growth directions we have successfully implemented the McCafe’ intra-brand, and we’ve established the brand within new markets. The business is primarily a burger business but we are always looking at new ways to enhance customer experience. Yes, we do innovate. But we do so in a technical, studied manner. We also have mystery shopping programmes which we run in all the four countries, undertaken by a Swiss company that we regularly engage for such matters. Every The Executive

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Issue No. 26 - 2010

The Executive Learning from Melo’s Experiences: • Aiming for a worldwide reach is not unrealistic. • One has to manage people whilst giving the environment in which to operate comfortably. • Inflated egos and ‘hands-on’ can’t quite get along. • Apart from keeping management costs down, a flat hierarchical structure facilitates communications and all personnel are better aware of all happenings. • In order to attract and retain the best, both horizontal and vertical opportunities must be made available. • Ensure that the top people are experts in their respective fields of responsibility. • In staff, seek (1) honesty, (2) being bright, intelligent, (3) energy, (4) a distinct lack of an inflated ego. And finally, (5) education. Nothing suffices on its own. You need a mixture of these factors. • Adapt the product to suite the native’s inherent character traits. • Core values of quality, service, cleanliness, and product value, are appreciated by all social levels. • Innovate. And do so in a technical, studied manner. • Always be on the lookout for new valid opportunities. • The brand must reflect the lifestyle that is synonymous with it. • Premier Capital Ltd. has been so successful thanks to its strategy of improving customer experience, consolidating current markets, complementing the core provision with ancillary products and enhanced environments, and expanding globally. • There’s lots of good stuff needing to be done. giving back something to the community is something that people deserve, and when they see an organisation of stature that is contributing, it simply rubs off. • Lead by example. The running properly of a business depends on the stamina of the top dog.. • Regarding the goals and objectives - you hit them, and you move on.

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Q&A: Interview with an Entrepreneur - Melo Hili restaurant is mystery shopped at least twice every month. Not done haphazardly, this is an ongoing process at all our restaurants. What is your way forward? Opportunities in this business abound. We are always on the lookout for new valid opportunities. And as McDonald’s thrives on quality, we constantly research for methods to improve the customer experience in all our restaurants, of which there are more than thirty. Introducing free, highquality WiFi throughout all restaurants is one such drive. And McCafe’; a brand within a brand, has been engaged in selected restaurants. What we are also doing is maintaining late-night openings and 24-hour servicing. We’ve remodelled our restaurants to better reflect the modern lifestyle that is synonymous with our brand. And Consolidation with a capital ‘C’. By end of 2011 we’ll have 8 new stores. So, in a nutshell, improving customer experience, consolidating current markets, complementing the core burger experience with ancillary products and enhanced environments, and expanding globally. What can you say about your CSR? Does Premier Capital Ltd. have a conscience? Since January we have appointed a person at senior level to co-ordinate our efforts in this area, and our environmental commitment. We most definitely do! For example, we annually support the local charities – we do a big drive internally and externally in this regard. We get as much help from celebrities as we can, and we donate a significant percentage of our takings to the concern during the drive. Internally too, we conduct regular initiatives, such as treeplanting whereby our people buy tree portions. We are currently looking into the setting-up of a charity here in Malta similar to the one we have established in Latvia. We don’t run the Latvia charity operation ourselves but we do sit on the board. We acquired a medical mobile similar to our blood banks. This offers a clinic service in remote areas of Latvia, where medical support is very scarce. Why? Because simply put, there’s lots of good stuff needing to be done. We believe that giving back something to the community is something that people deserve, and when they see an organisation of the stature of McDonald’s, well it simply rubs off. There’s also the stuff one should do quietly, then. Mileage is not necessary in all one does. Could you provide some final advice to our Readers? Running an organisation requires stamina and you have to lead by example. That’s how we work. Jason Attard is the Managing Editor and Publisher of the journal. The Executive

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Issue No. 26 - 2010

IT Review: LP +

The Executive

LP+ by Learning Possibilities is a hosted e-learning platform built on Microsoft technologies. The platform is available for schools at all levels, as well as local school authorities (such as education departments or ministries). Learning Possibilities is a British company based in Hertfordshire, with the local representative being Exigy; a member of the M. Demajo Group. The Executive attempts to explore the advantages gained by schools when employing the system.

IT Review: LP+ This review was conducted by Keith Vassallo.

P+ runs in a web browser and is based on Microsoft SharePoint Server 2007, Microsoftâ&#x20AC;&#x2122;s Content Management System aimed at large deployments. Using SharePoint as its base, LP+ automatically gains the security, collaboration and cross-platform compatibility of SharePoint. We are told that upgrades to SharePoint 2010 are currently being carried out by Learning Possibilities, which will allow LP+ to gain the benefits of the new iteration. LP+ will run on any web browser and Internet connection and is offered as a hosted service. As a hosted service, neither the local authorities nor the school itself requires any server infrastructure to host LP+. Once registered, schools are given a virtual server(s) and an administration system which allows them to add staff, students and parents to the system and customise it to their exact needs. Of course, the advantages of a hosted service mean that the school does not require servers, a powerful Internet connection or staff to take care of the backing infrastructure. The company (locally via Exigy) offers consultancy, customisation and training services. www.the-executive.biz

Versions

LP+ is available as several platforms. LP+ Steps is a platform aimed at Key Stage 1 education (Translatable to grades 1 and 2 locally, children aged 5 to 7). Steps focuses on student achievements which encourage the student to continue learning through a number of fun activities presented by Herbie the caterpillar, who guides students through activities such as drawing, pattern matching, homework, basic writing and class work. Once students start Key Stage 2 education (primary education locally, grades 3 till 6) they can be migrated to LP+ Safari. Safari introduces collaboration and social networking tools, resource and document libraries, e-mail accounts for students and parents and much more. The system is presented using a fun environment simulating a primary school - complete with class room, grounds, desks and labs. For secondary education (Key Stages 3 and 4) LP+ Symphony is a The Executive

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Issue No. 26 - 2010

The Executive

IT Review: LP+ LP+ Symphony

The Safari Homepage full blown system consisting of several e-learning tools and media rich environments which allow the students to learn in a safe, fun environment whilst allowing them to network with each other. Finally, LP+ Synergy is aimed at local authorities for the management of schools. This could include a group of private schools, church schools or government schools, as well as education ministries or departments. The Synergy platform serves as a collaboration space for teachers, where resources can be shared and the authority can effectively communicate information, policies and much more through the system. The Synergy platform is directly connected to the other platforms used by the individual school. When a teacher logs in, a list of schools they teach in is shown, linking to the individual school pages.

Adrian Porter at Exigy gave us a demonstration of the features of LP+ Symphony. We were first shown a sample school site. The Symphony platform allows the definition of separate sites within a particular school. Depending on the type of login (student, teacher, subject coordinator, parent, administrator), different site content is displayed with information relevant to the particular stakeholder. Each stakeholder is given a school e-mail address, and all notices and other communication is sent to the school address (though forwarding is a possibility). The school-specific site can be accessed by all stakeholders, but only modified by the administrator (by default). A notice board is displayed, displaying school-wide notices which one can click for additional information. This could potential replace, or be used in addition to, a traditional school notice board. The system also allows for inter-school collaboration, with the sample site we were shown showing resources and available collaboration links between different linked schools using the system. As administrator, Adrian could also modify permissions for the users of the system, which is where the power of SharePoint shines through - permissions can be assigned to groups as described above or even to individual students. The school site lists a number of departments/faculties within the school, and clicking on this brings up the separate area for that department. The department area is meant to be managed by a department coordinator, or simply by the teachers of the subject in that department if a coordinator does not exist. For example, we

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The Executive

Issue No. 26 - 2010

The Executive

IT Review: LP+ were shown a science department site which is an umbrella for chemistry, biology and physics. The department site offers quizzes, polls, a department calendar, picture gallery and much more. Of particular note, a common file store allows teachers to share resources with one another, as well as allowing students to download shared resources for the subjects they belong to. LP+ has an included SCORM player. The SCORM standard consists of a set of technologies for web-based eLearning, and there is a large amount of SCORM content available for many different subjects. Teachers can upload this SCORM content (or indeed content they create themselves) to the site, which will play the content for students. SCORM content includes assignments, homework, interactive games and any other content the teacher chooses to come up with.

A Secure Environment

By default, LP+ provides a closed environment. This means that only verified students can log in to the system using their schoolprovided e-mail address. This creates a secure environment where students can feel free to explore content without the dangers of the wider Internet. Teachers/administrators also have the ability to moderate site content, such as approving changes to a wiki or newly uploaded content (including comments, etc.) before it is published. Even when the moderation feature is turned off, the site will automatically inform the administrator of new content which is questionable in nature.

Integration with the School System

LP+ is not a school management system - it is an eLearning system. The clerical management work of schools (time tables, registers, results, attendance, etc.) is handled by other systems. However, LP+ can integrate with popular school management systems (such as SIMS) and can be customised to integrate with non-standard school systems. This allows LP+ to display student information including attendance, behavior, achievements and emergency contact numbers. All the information is available for the student him/herself, teachers and perhaps crucially parents. Using such a system, parents can have a “Parent’s Day Every Day”, allowing them to keep track of their child’s attendance and behavior as well as achievements. LP+ does not just read from the school’s system, but can also write back to it. One example is to take attendance using LP+, which then updates the school system. This allows teachers to fill in attendance from manual sheets at home, saving lesson time. The school system integration allows a student to see their timetable online, as well as check targets set per student or per class. For example, a student can see that his/her average mark is currently 60, and the teacher has set an 80 target. Graphs are shown to show the student’s progress towards his/her target.

The following are LP+’s highlights as presented within the product web-site: Why LP+? 1. NO CAPITAL COST - LP+ is a hosted platform that can be accessed from your school, home or library. You do not need to put a server into your school and you continue to utilise your current investment in PCs, laptops and networks. 2. PAY FOR WHAT YOU USE - LP+ is a subscription based solution. You only pay for the number of people in your school that access LP+, so smaller schools are not disadvantaged. You get to select from a range of age and role based platforms from Early Years to FE and beyond. 3. BUILD YOUR PLATFORM OVER TIME - As your school progresses with its use of LP+, you can add further functionality, so you don’t have to buy everything at the outset. You will find over 25 pages of products and services in this brochure. We also provide you with an adoption methodology to drive systemic usage. 4. SAFE EMAIL - LP+ SafeMail is the most secure email service available today. We have layers of security to ensure that learners are protected from harmful messages. LP+ SafeMail can also be securely accessed from mobile phones and PDAs. 5. YOU STAY IN CONTROL - Although LP+ is a hosted solution, it is still your learning platform. You choose the layout, the look and feel, add your school colours, design your own sites and control the security policies. 6. JOIN 50,000 TEACHERS - When you purchase LP+, you automatically get access to LP+ Network, our teacher community site. Here you will find lots of resources, support tools, ADOPT and articles on best practice. You can contribute and find other schools to collaborate with. 7. INDUSTRY STANDARDS - The LP+ platform is based on Microsoft SharePoint and the .net framework. This allows us to integrate 3rd party products into our solution, including MIS systems so you can offer online reporting to parents. We encourage you to upload your resources and content and support all major standards such as SCORM. 8. IT’S COST EFFECTIVE - It’s official! A recent independent study found that LP+ can save you up to 10x your annual subscription in efficiencies and effectiveness. Download a summary of the study on LP+ Network. 9. IT’S SECURE - We build LP+ on best-of-breed, enterprise class products because we take our responsibility in handling your data seriously. From our Tier 4 hosting centre and enhanced CRB checked staff to our SafeMail solution, security is at the heart of our product design so you can rest assured. 10. FREE HELP DESK - We want you to get the best from LP+ and so we have a manned helpdesk that is free. We also provide your with a support site that has videos, articles, FAQs and forums. 11. GREEN - We provide a hosted shared solution that uses less energy, which means schools will not require to leave machines on overnight or at weekends.

Conclusion

Within the UK, LP+ is deployed to 400 schools with a total of more than 400,000 users. The system is suitable for any size of school as it is priced per student. The success of a system such as LP+ depends on the willingness of the teachers to use such a system and the commitment given by the school. However, where the system is deployed (including two local private schools), results have been most encouraging. Using LP+, parents can be better involved in their children’s education, teachers can better manage their content and administrators can unify the large amount of content generated by a school into a coherent, easy to manage system.

LP+ allows teacher, administrator, parent and student to observe performance, attendance, and so forth.

The Executive

Keith Vassallo has worked as a Test and Support Engineer as well as a Software Developer. He develops for the web and consults local businesses on low-cost IT infrastructure implementations. Keith is passionate about the latest in technology and has a keen interest in open-source matters and operating systems. www.the-executive.biz

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