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Issue 3 - March 2013

Manage your Finances Today to be Rich Tomorrow

Handling Employee Misconduct Cases Lawfully and Effectively Don’t Retreat Compete Supply Chain Management Mitigating Currency Exchange Rates Secrets to Success Series

Going Green

Rising Cost of Medical Care

Gain Competitive Advantage Through Staff Happiness

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Editor’s Foreword I can’t believe it is March already… Can you? Time has flown by! It doesn’t seem so long ago that we were heralding in the New Year, feeling positive about what it will entail. Do you still feel that way now? If you are like me you will be looking back at what you have achieved so far, and what is left to do for Q1. You may be happy with the ways things are going. If so, great, long may it continue! Not all of us are there yet though. Some of us may even feel as though we are stagnating a little, and wondering what we can do as we are often being unstuck by the corporate giants out there. If so, turn to page 11 for our article on how to take on these giants and beat them at their own game. Continuing on the theme of beating the big boys, turn to page 48 for a step by step guide on how to create your company’s own renowned persona. I know this seems like a mammoth task right?! Wrong. Our guide breaks down the whole process for you into manageable chunks, showing you just how easily you can make your company standout, just like the golden arches… So why aren’t you doing this?! Finances can also be a key issue in March as many businesses that are branches of larger organisations scramble around in order to log their year-end results in time for April. Even if you are a small company you may be looking at your finances, finalising 2012 accounts or looking at your cashflow for Q1; what you have yet to achieve to reach your goals, and comparing them to the same period last year. Either ways page 6 is for you as we discuss how some business owners can take their eyes off the ball and/or believe this to be far more difficult than it needs be. If business is going well for you, or if you have just, or are about to move offices, I would recommend reading pages 51 and 52. This will give you some great tips to take into account when planning your planning your ‘new’ offices as a whole. In answer to my question above as to whether or not you still feel the New Year positivity I hope that after reading our magazine the resounding answer is yes, and that you are able to see, plan and have the right tools to make 2013 a success.

Published by: DMCC Authority Contact: James Bernard Associate Publisher: Nuria Gonzalez Martin Editor: Tanya Selly Associate Editor Ritwika Chaudhuri Business Development Manager: Brendan Bosley Administration: Janice Porte Art Director: Mohsin Rawal Printing: UPP Printers Distribution: Blue Truck

All the best For information on advertising rates & positioning: Please contact Brendan Bosley – Tel. +971 4 375 4619 Email:


Talk to me at and let me know what information you need to take your business forward – and I will try to help you in the next issue!


March 2013

For editorial schedule & article submission: Please contact Tanya Selly – Tel. +971 4 375 4121 Email:

©Copyright 2013 Redcorp.


OPERATIONS Page 9 – 10

Going Green

TECH Page 34 – 35


Keeping your Data Safe

Page 16 – 17

Interview Linda Mahoney Chairman, Better Homes

WELLBEING Page 43 – 44


Can Meditation Improve your Business

Page 21 – 22

Islamic Finance: Compliments not Competes

THE HUB Page 48


Tips to Building a Strong Brand

Page 31 – 32

Gain Competitive Advantage Through Staff Happiness

People Handling Employee Misconduct Cases Lawfully and Effectively


Operations 6

Manage Your Finances Today and be Rich Tomorrow


Don’t Retreat, Compete

Tech Hello To The New BlackBerry Z10 Line


Techworking - “Linking” Into Business Success


Success 14

Interview Nathalie Haddad, M.D. Right Bite Interview Lesley Fair and Nicola Holmes Directors,


Custard Communications

Money 19 23

How To Chose The Right Bank For Your Small Business

24 27

Mitigating Currency Exchange Rates

Alternative Project Finance Gaining Popularity Introduction To Commodities

Wellbeing Rising Cost of medical Insurance


The Hub Supply Chain Management The Truth Behind Fitting Out an Office Space

46 51

Business Directory


Entrepreneurship: The New Culture


News Desk


March 2013


Manage Your Finances Today,

Be Rich Tomorrow M

forecasting, and financial control.

eyer and De Wits wrote in 1998 “plans require forecasts.” Danish physicist Niels Bohr also once joked “Prediction is very difficult, especially about the future. Even enthusiastic planners acknowledge that forecasts will be inaccurate.” Does this mean that we do not have to plan, or that forecasting is useless? Of course not! The best way to prepare for an unpredictable tomorrow is to plan meticulously today, to try and shape the future and meet changes in the marketplace. The success of a business is hidden in its effective planning and management; and one of the most important driving forces behind healthy business growth is to manage effectively the finances. Poor financial management of owner-managers, or lack of financial management altogether, is the main cause underlying the problems faced within SME financial management. Hall and Young 1991 study looked at 3 samples of 100 small enterprises in the UK that were subject to involuntary liquidation in 1973, 1978 and 1983. It showed that 49.8% of the respondents claimed that their business failure was directly linked to poor financial management. The positive correlation between poor or nil financial management (including basic accounting) and business failure has well been documented in western countries according to Peacock (1985a). This clearly shows that to be successful in business we must devote more time and resources to effective financial planning. So what does financial planning actually mean? The Role of Financial Planning Financial management can be defined as the organisation of finances within a company in order to achieve the financial objectives of the organisation. This has two aspects; financial planning and


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Financial planning will ensure that enough funding is available at the right time to meet the needs of the organisation for short, medium or long-term capital investment. Financial forecasting is the estimate of a financial trend for an organisation. The goal is to minimise the error between planned and actual requirement. Financial control comes later as it seeks to assess whether the plan put forward meets the objective of the organisation in question.

“Watch the costs and the profits will take care of themselves”

Andrew Carnegie

Obviously financial plans can be a critical tool for any company. They will help to link a company’s daily operations and available funds to its mission, and both its short and long term goals. These plans help management to identify steps needed to be undertaken to reach key milestones, and can also help to motivate staff to achieve targets. Vice versa it also addresses the problem of gap between goals set and not achieved. Big or small, private or public, financial planning is crucial for any organisation as without that no business would be able to measure accurately whether they have failed or succeeded, whether a new “venture” was productive or destructive. Financial planning helps highlighting whether to reduce debt or raise equity, or whether current cash is enough to run the day-to-day operations and/or fund external ventures. Keeping in mind the universal accounting norm for any business organisation, the need for an SME from that of the bigger organisations differ substantially. In a large corporate, the objective of the firm is to maximise shareholder’s wealth either by maintaining income and reducing risk, or by increasing net income by keeping risks constant. However for a SME over and above the P&L (profit and loss account), the most important challenge is to remain

OPERATIONS afloat by maintaining a healthy cashflow. Cashflow management entails measuring cash coming in (receivables) and cash going out (payables). Despite an initial infusion of healthy capital whether from banks or other sources, the business might stumble if it lacks operating capital to run the show on a regular basis. Expert comment Pritam Mirchandani, Head of Business, Finance RakBank, comments “Financial planning and financial management, including cash flow management, is of the utmost importance to the success of SMEs. Cash must be readily available to operate the business and fulfill short term obligations. Absence of proper cash flow management tends to lead to issues like cheque returns, delays in payments, and, consequently, the risk of losing credibility in the market. To ensure that they are treading the path of successful financial planning, SMEs must take advantage of their banking relationship and consult with their banks on how to avoid financial pitfalls. They can also consult with their accountants and other financial professionals.” Douglas Stoneham, General Manager, SME Banking, Middle East, “There is a saying… cash is king. For SMEs, this is a very important message. Also understanding the tricks of trade with supplies, credit to buyers stock holding period etc helps planning effectively for the business.” Thus maintaining a continuous flow of working capital in turn helps in addressing two other dual objectives: 1. To ensure income to the owner-manager 2. To grow the business in terms of earning through sales Establishing a plan Financial plans are built from the ground up. Management begins the planning process by setting goals, followed by gathering insights and information from all areas of the business to understand its competitive position in its market. Management then can focus on internal and external factors, enabling it to create a base from which to forecast revenue and profits. Step 1: Set goals Set specific numeric goals for each business or division based in part on past performance. Scan the external landscape for specific factors that could impact performance targets for a particular business unit or division. Step 2: Create Metrics Devise relevant internal performance metrics to track and measure performance. Some examples are: • Changes in volume • Changes in operating profit margin • Uptick in selling, general and administrative expense (SG&A) • Headcount analyses cost per function Step 3: Scan environment Scan the external landscape for specific factors that could impact performance targets for a particular business unit or division.

“While financial management is critical, within this function the management of its assets is perhaps the most important. In the long term, the purchase of assets directs the course that the business will take during the life of these assets, but the business will never see the long term if it cannot plan an appropriate policy to effectively manage its working capital”

Osteryoung et al

Financial planning and budgeting “An effective financial plan is based on a 3 step process for determining and detailing an organisation’s financial goals: budgeting, forecasting, and flexibility. When budgeting, an SME should be well aware of their numbers and must adopt emergency strategies to ensure their ability to weather unfavorable conditions. It must also ensure that expenses are minimised, company income is maximised, and credit is managed. Financial forecasting on the other hand is necessary to minimise the error between planned requirements and actual requirements. Flexibility is a running theme throughout the plan to ensure that the SME is agile enough to adjust to market changes and make the best of it.” suggests Mirchandani. The external and internal factors provide managers with the foundation to create a budget, which works in tandem with financial planning. Small business owners can use financial planning and budgeting to obtain external financing from investors or banks. Many small businesses need external financing for growing operations. Because small businesses may not have a strong financial history, financial planning and budgeting helps investors or banks thoroughly review the business. Not only preparing budget, but monitoring its progress regularly is equally important. Budgets should not be set in stone and need to be flexible to react to special items, ranging from a spike in borrowing costs, to nonrecurring expenses that might cut off a revenue stream. Hence, don’t forget to update budgets and financial plans regularly to account for unanticipated events. “A financial plan that includes detailed financial statements and projections forms the core of the overall business plan. It enables the company to make sound business decisions about what financial resources it needs to acquire and to plan for and obtain necessary financing to establish, sustain and to grow business,” says Mirchandani. Stoneham points out two more important points which SMEs need to keep in mind while making financial plans, “They need to know clearly what kind of margins they are working as that is a determinant of cash they generate. Also it is better to spend on a finance manager from the very inception considering this as an investment or probably to get help from an independent financial consultant who can help in effective financial planning.” The above sounds complicated, confusing? Do not worry, see our simple recipe to a solvent and successful organisation. Eleven tips to drafting an effective financial plan 1. Plan ahead, prepare a budget How can you get going if you do not know where to go or how to get there? So, a. Draw a clear business plan, set a financial target, create systems for budgeting, receivables, and payables to establish how healthy the business are in a financial sense. b. Create a cash flow statement taking note of

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current receivables what and when it is due. c. Keep a close eye on both payments the business will be required to make and payments that could be delayed or deferred. Do not let unpaid debts lay idle. d. Manage stock effectively to improve your cash flow. By only purchasing the stock you need, it ensures that your working capital is not tied up unnecessarily in products.

you take advice to ensure that you take advantage of them.

2. Forecasting Forecasts can never be 100% accurate, hence the need for planning. Within your plan try to include as many external variables as possible, not only from the business internally but also take into consideration the wider market.

7. Be aware of competition It is not only important to focus on individual line of business but also be aware of the competitors. The long term economies of business involves emphasizing on competitive advantages like achieving lower cost than that of your competitors, offering superior value to the customer with a combination of product and price attributes and also offering added services.

3. Plan your tomorrow based on yesterday The best budgets are based on the historical budget system. This system shows where money has historically been earned and spent, identifies whether milestones have been reached or not, and then plans business operations in line with this reality and the new milestones set. 4. Effective use of capital It is essential that long term and short-term capital be fully utilised. While long-term capital should be used for acquiring fixed asset and partly to finance current asset, the latter should be used for acquiring current assets like raw materials, stock in process, finished goods, trade debts and investment. 5. Meet tax deadlines Failing to meet tax deadlines for filing returns and payments can be a costly business as you’ll incur fines and interest on those fines. What’s more, these are unnecessary costs that can be avoided with a bit of forward-planning. There are many ways you can help reduce your tax liabilities and it is important that

5. Keep your books up to date weekly Don’t be tempted to put off doing your paperwork, otherwise you not only risk falling behind and ending up in a mess at tax return time, but you could risk failing to invoice a customer and losing out on money.

“Beware of the danger signals that flag problems: silence, secretiveness, or sudden outburst”

Sylvia Porter (1913–1991)

8. Be flexible Be ready to adapt to changing situations that might affect the financial forecast. Setting a benchmark or monitoring events as it happens could do this. 9. Know your customer, spread your risk Do not perform work for customers that cannot be relied on to pay promptly. Share with all customers the terms of payment, including any incentives and penalties. Don’t rely on a small number of customers too heavily. If they become insolvent or suddenly switch to doing business with your competitor, the impact on your business could be catastrophic. 10. Line of credit When the business is cash negative, do not panic. As long as the business has predictable, reliable income from customers in the near future, a manager can access lines of credit. Keep a pre-arranged source for a line of credit in case you are short of capital but use it judiciously only in case you really need it. 11. Plough back profit Do not forget to plough back a good part of your earned income to ensure growth and stability. Such a policy will not only pay rich dividends in future, but also help getting loans from external sources in times of distress or when to go for expansion. Adaptive organizations believe that discontinuous change is now the norm. They see financial planning as a continuous, inclusive process, driven by events (such as the launch of a new product or a competitive threat) and emerging knowledge, and not constrained by the financial year-end. Nor does it need sophisticated tools. Instead it relies on fast, relevant (actionable) information and responsible people who know what is expected of them, and what to do in any given situation. In short, if you follow the above basic guidelines of cash management and planning, you are more likely to succeed. As you grow in size you need to adopt a management model that supports the company’s success factors, and based on that establish an effective financial plan.


March 2013


Going Green I

n January Abu Dhabi held the Sustainability Week Conference 2013. Over 150 countries represented by government figures from all over the world gathered to discuss a common goal; to ensure the prosperity and welfare of mankind for a common and sustainable future. So this got us thinking, how can this relate to companies? Clearly, business and governments globally have a duty to educate the consumer on sustainability, but first, shouldn’t we put into practice what we preach?

used. The same goes for monitors. A laptop’s power consumption is used to power the laptop and its screen. Desktop computers tend to have an LCD or CRT monitor that uses an additional power supply.

It was enlightening. We found, not only can you become greener but you can also save money.

The potential savings are huge, and as such, we plan to break this down for you in issue 4.

Switch off all electrical appliances This may seem obvious but how many of us leave lights on in unmanned rooms? All over the world, countries are turning off street lights in whole cities in order to meet their goals in reducing emissions, and save money. Why don’t we?

Recycling paper The average office worker uses 10,000 sheets of paper per year and 1.5 pounds of paper waste per employee per day. For every ton of paper you save, you can save up to 17 trees and 682.5 gallons of oil. Guess where we are going with this…

Also, consider future purchases. A PC typically uses around 150w during moderate activity, whereas a laptop computer consumes 30 to 40w of power. Laptops are also capable of performing in a “lowenergy” mode, reducing the amount of power

Collaborative Distribution This is a huge trend across Europe which is basically shared supply chains. Shared systems make you greener and increase your customer service by allowing flexibility in your delivery schedules.

Printing double sided saved us 50% of paper costs

A no cost option is to reuse paper wherever appropriate and make savings. Also recycling produces no additional costs. Companies now specialize in recycling paper, who will collect your paper and turn it into products, which are then sold on. All confidential information will be dealt with appropriately and shredded in a secure manner Another is to give thought to marketing. Is that flyer really junk mail? On average, each household currently receives 41 pounds of junk mail a year. Is this necessary? Double sided printing Many printers and copiers today come with the option of double sided printing. The advantages of this are obvious, double sided printing means less paper and therefore less money. The maths is simple. By setting your printers and copies to double sided you will save approximately half of your paper

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your environmental footprint. By switching back to mugs and glasses not only will you save money in terms of purchasing, but also the environment. The same applies to paper towels in your kitchen and bathroom.

costs. Use brothers double sided printing calculator to find out how much money you can save http:// display/s_page/106450. Not only will you be saving significant monies but you will also be saving the environment too.

Air Conditioning In the UAE, air-conditioning is a must have which is often one of the most costly utility bills a company has to make. On average 1°C in indoor temperature represents 5% of your energy bill, which means that you actually save 10% by increasing the indoor temperature from 20°C to just 22°C.

Technology With a little outlay, companies are now willing to invest in paperless office technologies, including electronic backup and storage solutions; making paper a thing of the past and significantly reduce clutter. Did you know that one 100 Megabyte zip drive can store the contents of a four-drawer filing cabinet and one CD-ROM can hold nearly a roomful of paper! Research shows that you can save 40% of overall document-related costs by implementing a digital document management solution. Remanufactured ink and toner cartridges cost an average of 15% less than national brands and come with a 100% money back quality guarantee. One returned cartridge keeps approximately 2.5 pounds of metal and plastic out of landfills. Remanufacturing one toner cartridge also conserves about a half gallon of oil. Ensure that your office is set up for network enabled printing. A network printer is connected to the internet and allows multiple computers to print from it. Having a network printer in the office will reduce the need for desktop printers, thus saving energy, maintenance cost, and space. If your business sends and receives a lot of faxes, enabling your computers to send and receive faxes directly you will be able to save 89% of these costs. Change your font size to Arial narrow or similar and save 15% of your black ink use. Now that really is a good tip! Packaging The first way to decrease your carbon footprint and save money is to ask yourself “Do we really need all that packaging?” Millions of tons of polyethylene films go into billions of flexible packages each year. Eliminating even a fraction of a gram adds up to sizable benefits for the environment, lower packaging costs and higher profit margins. Also, Polyethylene has a half-life of arguably several hundred years; your packaging will out live you, several generations of your family and probably your company. Do you really want this? Invest in modular furniture Modular components form the core of an environmentally efficient office design. Buying modular furniture helps you mix, match and grow without the need to reinvest in an entirely new look, simplifying future purchasing decisions and potential waste. Office Sundries Using paper cups and vending machines are a very quick way of providing drinks but very costly, not only in terms of products but also when considering


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If the US could cut paper use by just 10%, it would prevent the emissions of 1.6 million tons of greenhouse gasses which is the equivalent of taking 280,000 cars off of the road

New Clients Becoming a green company can also boost your sales – and it’s a lot easier to accomplish than you think. As the world becomes more aware of the environment and sustainability our choices are naturally affected. So why pass up an opportunity to appeal to this market? If you have made a commitment to green practices let your client audience know, and you’ll be surprised about the positive impact this will have. Remember, it all starts with you, spread the word If more people “Go for the Green Option” in their daily work-life, the positive benefits will multiply. Start by making more personal decisions with the environment in mind. Then help increase awareness by spreading the word to your colleagues, teams, bosses, suppliers and customers. It all adds up! Ultimately, small changes will have a big impact. Changing one aspect of the each of the areas above, helps safeguard the environment for our children and grandchildren.


Don’t Retreat, Compete B

Focus on your customers Who likes poor customer service? Think of what you have learnt from your previous treatment as a consumer and incorporate these, establishing your unique sales points when going against the corporates.

usiness is a constant battle of David vs. Goliath, with small businesses desperately fighting it out with the large corporates that dominate the market. Standing out in an industry full of giants takes courage, individuality, and a bit of savvy. So what else can you do to remain competitive and outmanoeuvre the big boys?

Small businesses tend to offer superior customer service when compared to large corporates, so focus on this point. Cara the Jewellers have managed to take on global brands by using this focus.

Don’t be intimidated All companies and brands that we can think of today started off small. They had a business idea and grew it; just as you are today. If you believe in your product or services, don’t be intimidated by the big players; play them at their own game. You initially had confidence in your idea to get you this far. Keep that confidence. Tell people what makes you great and different to your competitors, and then tell your story over and over. Persistence will see you through. It is a tough battle, but we all know why we fight it… Be an individual and find your niche Do you really want to follow the herd and not get noticed? You know you will be hidden if you do this. Yes, companies do this and some make money, but this takes a lot of money at the outset, and normally amounts to ruin for entrepreneurs. You need to determine excatly what it is that makes you stand out from big brands and businesses. Question each aspect of your business. Do you offer around the clock customer service? A free extended guarantee? The fastest delivery? Free setup? How are you viewed by your clients? Knowing these answers and more will set you apart from your bigger competitors and identify you’re your key selling points. You almost certainly will struggle to compete on price, but you can compete on value.

“First they ignore you, then they ridicule you, then they fight you, and then you win”

Mohandas Karamchand Gandhi

Expert comment: Kiran Pethani, Cara the Jewellers comments: “We closed a shop as we weren’t getting the same level of service throughout the business. Service is what is important to us.” Ultimately, get customer service right and you will get repeat clients and brand loyalty. You will also have free marketing, as positive feedback from clients to their friends and family is invaluable and the easiest way of increasing sales as it involves the trust element. When you’re building a business you need every bit of free publicity you can get. Speed and flexibility One thing that large corporates cannot match SMEs on is speed and flexibility. Being close to all the action, you can spot changes in the market a lot quicker than larger companies, and are able to action these changes in the shortest timeframes as you do not have the wheels of corporate infrastructure to go through to get the go ahead. Being in this position should not be taken lightly. Having and capitalising on your flexibility means that you can profit from these changes and be the industry leader in the new area, far quicker than your large competitors can, whilst setting standards that they may not be able to compete with.

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Look at your competitors and understand your price relationship to them to see if that’s causing the low and high conversion rate products/services. Conversely, if doing well, ask yourself what is leading to that high rate. Can you replicate this?

Play to your strengths By this we mean think about your USPs against a corporate and sell these. The prime example of this is when you compete for talent; often small companies think a corporate will just pay more therefore winning the prospective employee, however rarely is compensation an issue. If this is not your experience, then the candidate was not right for you as there will always be someone who can pay more.

Find the right staff Business recessions inevitably create a large and available pool of human capital that, as small business, you can take advantage of. Just as you shouldn’t use price as your benchmark for competitiveness, you also shouldn’t select the cheapest staff. Select genuine talent, the sort of people who share your vision, who are willing to help you make the most of every opportunity, and want to make your dream a reality. Don’t hesitate to offer your team performance-related bonuses or even a small option on shares in the company if appropriateit will be more than reflected in motivation, and help to retain your key staff as they will become invested in the Company.

At the start acknowledge that you are an SME. You have a different culture, resources, etc. making you different to a corporate. This should be taken into account as employee candidates often do have a preference as to whom they wish to work for. Furthermore, money isn’t everything. Today a work life balance is equally important. People want stability, a feeling of belonging, and also working where they feel they can make an impact. As an SME you will have probably have much less bureaucracy and therefore be able to provide these far easier than a corporate. I’m not saying you do not expect your employees to work as hard, if not harder, but you are able to make the work place more fun, where everyone feels equally important as you are all part of the same team, working on an exciting vision for the future and so much more. Expert comment: Phil Starr, Recruitment Director at RealHR Consultancy and Recruitment comments: “SMEs can offer a lot more to a candidate. When competing with a large corporate, remind the candidate that due to your size, they may be able to contribute more to the company as a whole. Generally, SMEs will not put people in a box as they work in more than one area of the business. Also, SMEs are known to offer more autonomy in a role as well as flexible working, job satisfaction and an increased sense of personal worth. These are factors that should not be taken lightly as they are increasingly sought by talent.” Finally, do not discriminate against age. A seasoned workforce can bring a level of expertise that can be difficult to find in a younger and more inexperienced workforce, and do not necessarily cost more as practised professionals are underutilised. Don’t rule out competing on price Or at least until you have conducted your research. The first thing that you have to do is understand what products you have that are over or under priced, it’s important to know how you compare to the competition. By running a competitive analysis on your products (adjusting prices so you’re closer to the competitive price), you’ll increase your competitive stance. Also look at conversion rates. What is selling and what is not? Is there a reason for this? Is it that your staff do not understand the product? A mystery shopper will provide feedback to help you move forward with this. There are many reasons why you may not be competing and price may or may not, be one of them. You have to understand this first.


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“As we advance in life it becomes more and more difficult, but in fighting the difficulties, the inmost strength is developed”

Vincent Van Gogh

Don’t be afraid of technology Finally, understand the value of technology. Cutting costs can be difference between surviving and ensuring a future. Technology is a constant source of cost-cutting innovation across every possible business process; and is as easily available to small businesses as it is to larger competitors. Our previous article in Issue 1 on cloud services shows Microsoft Office 365, for example, can put email, security, collaboration, communications and websites into the palm of your hand for as little as 25aed per month. SharePoint, for example, is the platform which many large companies use to create complex websites and collaboration portals. Only five years ago, implementing SharePoint was a four-to-six-figure commitment; today enterprise collaboration costs as little as a couple of lattes for the office each morning. Business survival truths Who says SMEs can’t succeed? The long-held belief that 50% of businesses fail in the first year and 95% fail within the first five years has changed according to more recent statistics published by the Small Business Administration (SBA). According to their report, 7 out of 10 new employer establishments survive at least 2 years and half at least 5 years. The Small Business survival rate has improved from 50% of businesses failing in their first year to 7 out of 10 (58%) of new businesses surviving at least two years, and 50% at least 5 years. Looking at this, especially since 2008, makes it all the more positive and hopeful for people starting businesses and succeeding, regardless of external conditions. Finally, it’s not just about responding to customer inquiries. Doing more for your customers than they expect is the best way to generate word of mouth. Send your best customers gifts. Also, take an interest in their lives and businesses. Knowing your clients forms an emotional bond, and at the end of the day, this is why they return; we all know that loyalty is a difficult trait to break and this is what we should be striving for in all areas of our business.


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Success Series Continuing with our Success Series, we speak to some of the leading brands that have come from the UAE. Read on to find out on how they have become so successful and what advice they have for you.


Nathalie Haddad,

Managing Director/ Dietician of Right Bite


eople know the importance of eating healthily to boost productivity and performance, but who has the time to cook healthy balanced meals day in day out? Also with the restaurants that we are blessed with in Dubai it is easy to see why we would not necessarily lose that “Dubai stone”.

Seeing my clients happily benefiting from the service, and how it changes or impacts someone’s life is my motivation. I am very lucky as I have a great team. We want to be innovative and strive to stay up-todate with trends, whilst evolving the business and the services we offer.

Nathalie Haddad, founder of Right Bite, is a clinical dietician and therefore understands this problem better than most. As the Managing Director of Right Bite, a nutrition and catering service, Nathalie is creating a healthy alternative to the standard ‘ready made meals’ concept; offering a tailor made menu with your taste buds and lifestyle taken into account. Her aim for the company is to enhance your nutritional intake, by offering delicious food, created for you and delivered right to your door.

What were the first steps you took to launch your business? I have a passion for nutrition, which was lacking in the market so I started off just doing it, creating meal plans for my customers. Client relationships are important as they give me their feedback on the foods we created and the service we offer. Slowly we grew as a business and the offerings we provided.

What were the defining factors in you starting your own business? When I was counseling individuals prior to Right Bite, my customers would comment that they know they should be eating healthy food but there is the lack of available healthy options in the market. Convenience and variety were also obstacles. It was at this time that I saw a need for this type of service, a healthy food plan delivered directly to the customer, it was this idea that I developed into a business, and Rite Bite was born.

“[Problems in business] allow you to work harder to solve these problems and in turn offer a better service to your customers and a better work environment for your staff and colleagues”


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Being in business you must have made mistakes. How you recovered from them? Starting and running a business is a learning curve for business owners. The learning never stops however, you must be open and admit when you are wrong or make mistakes. Learn from them, and correct them. Do not get disheartened by them. For us the mistakes were not major, just occasional little issues here and there, which is part of learning and growing any business. Remember, they allow you to offer a better service to your customers, and a better work environment for your staff and colleagues. What are your plans for the future? We have recently ventured into the café business and opened our first healthy café called “Nathalie’s Café” in Abu Dhabi. I hope to continue growing in the healthy catering business across all areas of catering. If you could impart any advice on other Entrepreneurs, what would it be? If it’s something that you love then take the risk and work hard to achieve your goals and dreams.



Lesley Fair and Nicola Holmes Director, Custard Communications


a business that is client focused and transparent. Research into our market prior to start up wasn’t research as such, but innate and intimate knowledge of the industry. We wrote a basic business plan and knew what we wanted to see in an agency that was to be a part of us and us a part of it.

veryone knows just how critical marketing and public relations is to a business, they are the people that turn a negative experience into a positive one leaving the public happy. They are also the people who assist you with understanding your business so that you are able to determine where best to spend your money so that you get the maximum exposure, but with so many specialist companies in this this area, but they too have had to start from somewhere, often competing with the ‘big boys’. The question is; why would you go into a business whereby you know you are going against the huge multinationals and how can you even begin to start to realise your dreams?! We speak with Lesley Fair and Nicola Holmes, Directors of Custard Communications who have done just that… and made a success of it. So why did you decide to start your own business, and what continues to keep you motivated? Nicola and I were freelancing. Nicola had come from the UK to freelance with event management companies in Dubai and I had been in the UAE for several years in hospitality, PR, marketing and then freelance event management. We had both reached a point where we were asking ourselves “What’s next?” There is a glass ceiling as a freelancer. I’d been client side and was frustrated by there being little transparency in the process of recruiting an agency, and Nicola was frustrated that clients were often not treated with the respect they deserved. It seemed like a logical next step to join forces because our values are so aligned, and neither of us felt we had given the UAE our fullest. Because we were both in the industry we had an in depth knowledge of the market and the potential for the sort of business we wanted to set up, for example

So, have you made mistakes along the way? Oh yes! We›d be liars if we claimed we haven›t made mistakes, but mistakes are lessons to learn.

“[Problems in business] allow you to work harder to solve these problems and in turn offer a better service to your customers and a better work environment for your staff and colleagues”

We always take the time to reflect on lessons and vocalise with each other and our team where things can be improved. On a personal level we›ve both learned that rest and relaxation time is important, and looking after ourselves is crucial. How do you retain talent? That’s a good question that we’ve never asked before, so we have had to ask our team. This is straight from the horses mouth: The team like the way we conduct business, the way we deal with clients and that the honesty and comfort levels we achieve with clients makes their work more enjoyable because they can be themselves. Whilst professional, we’re also quite laid back. We take our work seriously, but we don’t take ourselves too seriously, there’s a lot of laughter in the office and amongst the team. They also like prestige of the clients we have and the events we manage. The creativity of the team and how we draw it out is very important because our repeat clients, even year on year, get a different product each time and the team like that they never get bored. Our advice, with staff, suppliers and clients is to treat them as you would expect to be treated. What advice do you have for other start-ups? For start ups?! Easy, share your concerns with someone you trust, be thankful and keep smiling.

March 2013



Linda Mahoney Chairman, Better Homes


As Dubai developed so did we. It was an amazing transformation. I am proud of Dubai’s achievements and transformation, and likewise of Better Homes for being part of that growth. It’s incredible to think of all the people we have assisted, and the services we have provided throughout the ups and downs of this city’s evolution. 30 years has gone by so quickly.

ubai has been through incredible change since its inception, and few companies have been around to see it evolve since its earliest days. Better Homes, Dubai’s largest property realtor, began in 1986 as a one-woman operation from a villa in Jumeirah. Today it is one of Dubai’s leading property agencies, with over 250 agents in UAE and offices in India, Qatar, Oman, Jordan and Saudi Arabia. We speak to Linda Mahoney, Chairman of Better Homes, about seeing the company through the good, bad and ugly economic cycles, and how her company grew through it all. How did you start out in the property market? I started working for an American lady in 1985. She obtained head leases from landlords; paying the landlords their rental, and leasing them onto tenants with a margin. Shortly afterward, the repercussions from the earlier Kuwaiti stock market crash were being felt, in addition to the drop in oil prices. This then led to a depressed market. When this occurred, rents went down and she decided to leave the business. So I thought, “What do I do now?” I still thought that real estate was a good opportunity, so I decided to start on my own. It was hard work, but it turned into a great opportunity. You started in 1986, so you have must have seen Dubai evolve. The Emirates has seen some of the most dynamic growth and change that a country can go through, and likewise the real estate industry here. Back then, the real estate industry was in a fledgling stage, so we were all learning as we went. The infrastructure was poor, and there was a lot of driving out to dusty parts of town, taking documents here and there. This was before emails and before mobiles, so you can imagine! We put ads in the paper via phone conversations. The property went before it was printed, as demand was increasing without the property availability.


March 2013

What about mistakes and what did you learn? Everything is a learning curve. It’s important to always learn and improve yourself as a leader and as a business. The only way to deal with mistakes is for you to acknowledge them and put them right. I would say that the only mistake you can make in business is to not learn every day.

“Everything is a learning curve. It’s important to always learn and improve yourself as a leader and as a business”

How did you survive the downturn? Property is a cyclical industry so as a business we were already aware of this. We reviewed our business model and invested in property management to broaden our business interests for the downturn. We had to future-proof our company before the crisis and streamline during the crisis. This is inevitable. I suggest looking at your business model; how this works in worst and best case scenarios. Then look at which areas you could change to ensure you survive. Keep your options open and consider all possibilities. How has your company grown in recent years? Ryan Mahoney (M.D.) brought us into the digital age. Better Homes is now a leader in online property services. We can connect to buyers and renters globally through the extensive online database of property listings. Our listings database is powered by industry-leading software, Masterkey. In a world-first, or so we believe, we have created an online customer ratings tool for our agents. Reviews are user-generated by previous clients and

SUCCESS are accessible on the Better Homes website. It’s all about being transparent for the customer, this is the direction companies are going if they want to gain customer trust in the digital age. We all want to know that we are dealing with a good agent. Not only is customer user feedback vital to obtain trust, but it is also a useful HR tool, allowing us to review practices and see where training is required. Another key area of focus is ensuring that we have a large presence ‘on the ground’ with 250 agents, and growing. It is critical for us to know the market well, from the ground up. We have also broadened our services to become more of a one-stop shop. That is, yes we offer residential and commercial sales and leasing, and we did expand to include property management and short term rentals. More so, we feel the customer should be able to come to us for all aspects of moving into a new home. That is why we have partnerships, lots of them, with great companies like Zen Interiors and Zurich insurance and so on; this gives the client benefits for buying or renting through Better Homes. We have to always think of the client and what serves him or her, in terms of products and in terms of customer service from our agents. So your employees are important to you… Very! We have a variety of people we have from many nations. It is rewarding and opens the company to different possibilities that you ordinarily would not recognize. Our employees are often multilingual and that is an asset for any company. What tips do you have for other small business managers?

“I suggest looking at your business model; how this works in worse and best case scenarios. Then look at which areas you would change to ensure you survive. Keep your options open and consider all possibilities”

Surround yourselves with others of a different mindset. I would never think of things Ryan does. It gives us a larger view; considering all angles, which is vital for business. We are very lucky as we don’t argue and I have no insecurity about any decisions that he makes. We possess talent in different areas which are complimentary to each other. There are no egos to worry about. Having the right team around you to support each other is vital. In your career, you have had ups and downs, how have you not fallen at the first hurdle? I am an intense person with high energy. Would I have done this had I not needed to, I don’t know. For me it was need, they say necessity is the mother of invention, and I would add determination. It is amazing what people are able to do when they need to. You can take on so many different personas and find the ability to deal with the various areas of your new life. You adapt. You just adapt. Ultimately any budding entrepreneur out there needs to remember that even though we may be inundated, we can still be capable of doing anything that we set our minds to. Entrepreneurs have a can-do mentality. Some are risk takers, and others aren’t, but they are all driven. Likewise, some people by nature prefer to work for others. This is a good thing as this is the mix that makes a business. If you could impart any other advice to companies, what would it be? There is room for everyone. Just find your niche and strengths and start there. Keep your eyes open to possibilities, keep learning and turn every challenge into a new experience. Above all, don’t fear competition, use it as a motivator.

March 2013



March 2013


How To Choose

The Right Bank for Your Small Business


hen you’re just starting out in business the same question is asked by every SME owner. Who should I bank with that can support me now and in the future? From the start you should be looking for a supportive and reliable bank. Whether your needs are simple (a separate business checking account) or complex (a line of credit, mobile access etc.), finding the bank that fits your business needs is crucial. Choosing the wrong bank account could not only limit your potential growth and services, but could cost you more than necessary in terms of fees, time and effort. Before you make any decisions, remember that all banks are different. We talked to RAKBANK, ranked in the top three for SME Finance providers in Dubai, to gain their expert advice on banking and what you should be doing to make your business a success. SMEs: Follow RAKBANK’s vision to grow SMEs, which are defined as businesses with less than 250 employees and a turnover of less than AED 250 million, are a thriving source of growth for Dubai’s economy, and the UAE as a whole, accounting for 95% of enterprises, 40% of the workforce, and contributing 42% of the annual value-add created by Dubai. More precisely, around 230,000 SMEs in the UAE contribute above 75% of the country’s total business sector, one-third of the UAE’s gross domestic product (GDP), and are one of the fastest growing sectors in the country. According to the Ministry of Economy the contribution of SMEs to the UAE GDP doubled in 2011 to reach 60%. Graham Honeybill, General Manager of RAKBANK once mentioned in an interview that SMEs form the backbone of the UAE economy and are the largest employing sector in the country. Their health is crucial to the local economy’s ability to overcome market challenges effectively and quickly. Hence within RAKBANK, they represent the fastest-growing area of business, and a key priority.

“Our business finance unit extends financial solutions to businesses across a wide range of sectors and industries as long as the business is in line with the Bank’s lending criteria which is based on a viable business model, strong business plan, and robust operating environment”

Pritam Mirchandani

RAKBANK attributes the upsurge in the SME sector to both market opportunity and the entrepreneurial spirit of the community. Over the years RAKBANK has established its reputation as financial partner of choice throughout the growth cycle of SMEs. And, despite being considered high risk area by many banks, RAKBANK has always been proactive in the SME field, extending finance services to businesses that demonstrate viable business models and healthy cash-flows. RAKBANK’s prominent role in providing financial solutions to the local SME sector is acknowledged by Dubai SME, an initiative of Dubai’s Department for Economic Development to promote SMEs. In fact in a recent study undertaken by Dubai SME, RAKBANK is classed as one of the top three banks in terms of market share in the UAE SME banking market, where the top five market players account for nearly 60% of primary banking relationships. Pritam Mirchandani, Head of Business Finance, RAKBANK says, “The UAE’s strategic location as a trading hub for a wide geographic region provides excellent business opportunities for SMEs. Given that SMEs have become one of the key contributors to the local GDP, RAKBANK has aligned itself with the growing SME sector since the launch of its dedicated Business Finance Unit as early in 2005.” One of the early starters in SME financing, RAKBANK has a plethora of products to offer to its business customers including loans and deposit products along with excellent services targeting to different needs of the budding entrepreneurs. The bank lends to eligible businesses operating for at least six months, and assesses their credit-worthiness through an analysis of their business models, growth plans and available financial information. SME finance services are available at the bank’s 33 branches in the country, including its dedicated SME centers. “Our business finance unit extends financial solutions

March 2013


companies by offering them customized finance solutions with minimum documentation and ensures that dedicated staff or relationship managers are available to customers every step of the way throughout the bank’s business banking centers. As a market leader in customer service, RAKBANK brings customers additional convenience with its internet banking channels, including Online and Mobile Banking solutions.”

to businesses across a wide range of sectors and industries as long as the business is in line with the Bank’s lending criteria which is based on a viable business model, strong business plan, and robust operating environment,” says Mirchandani. Products from RAKBANK All businesses in UAE can take advantage of RAKBANK’s interest-bearing transaction account, which gives access to more funds while paying interest. In addition, RAKBANK offers collateral free business loans known as Finance Loan to small SMEs with minimal documentation to support their expansion, or to meet their short or long term financial goals. These loans range from AED 100,000 to 2 million. The requirement of collateral is a significant obstacle for SMEs in accessing finance, as these assets can otherwise be used as an additional source of capital or offers other benefits to the business when not locked down as a financial security. By eliminating the need for collateral, RAKBANK aims to facilitate finance to SMEs in an effective way and without setting unrealistic demands for security, whilst undertaking a thorough business and creditworthiness review of individual borrowers. As company requirements become more complex, RAKBANK helps SMEs meet financial obligations such as finance for shipping and stocking period, advance payment to suppliers, local debtors, export, and nonfunded products. Not only does the bank supply the relevant paperwork, but bank agents are available to offer customers additional tailor-made solutions to meet specific needs. Recently, RAKBANK has launched a Renminbi payment option to allow clients in Dubai to pay in the local Chinese currency (RMB) to avoid exchange costs and become more competitive. The bank also offers its business banking customers competitive auto finance solutions with minimum documentation and many insurance benefits. According to Mirchandani, there is little reason for busy clients to visit the bank. “We support

So what does RAKBANK advise to their clients to facilitate business growth?

Any investor thinking of starting a small business must choose a bank that not only extends innovative financial products, but also provides high level of customer service and convenience

RAKBANK’s guidelines for SME success More than half of SMEs fail within five years of startup due to lack of adequate working capital, poor market selection, and rapidly changing external market conditions. Many firms do not develop an initial plan and even those that do establish a plan, do not monitor and continually adjust it to changing market conditions. Financial planning and management, including cashflow management, is of the utmost importance to the success of SMEs. Generally, SMEs must bear in mind that an effective financial plan is based on a 3-step process for determining and detailing an organization’s financial goals: budgeting, forecasting, and flexibility. When budgeting an SME should be well aware of their numbers, and must adopt emergency strategies to ensure their ability to weather unfavourable conditions. SMEs must also ensure that expenses are minimised, company income is maximised, and credit is managed. Financial forecasting on the other hand is necessary to minimise the error between planned requirements and actual requirements. Flexibility is a running theme throughout the plan to ensure that the SME is agile enough to adjust to market changes and make the best of it. As far as banking is concerned to ensure that you are treading the path of successful financial planning, SMEs must take advantage of their banking relationship and consult with their banks, accountant and other financial professionals on how to avoid financial pitfalls. RAKBANK suggests that any investor thinking of starting a small business must choose a bank that not only extends innovative financial products, but also provides high level of customer service and convenience. They must also form a business banking relationship as early as they can by simply opening a business account. Choosing the Right Bank: Final Thoughts A good bank can prove to be an invaluable partner to a small business, not only helping you to borrow capital, but also working with you to plan for the future and assure potential customers of the business’s stability and credibility. Put as much effort into finding the right bank, and nurturing your relationship with your banker, as you would put into landing a big customer or hiring a new member of your management team.


March 2013


Islamic Finance:

Compliments, not Competes I

slamic Finance today is the fastest growing financial sector, growing at an annual rate of 20% and is estimated to become a US $1.8 trillion industry by 2015. Sharia Compliant financial assets around the world have already hit US$1.3 trillion in 2011, a 150% increase over the last five years, and from a mere US$5 billion back in 1980s, according to a report by a lobby group, UK Islamic Finance Secretariat (UKIFS). Globally, banks hold over 90% of Islamic assets, and together with funds are big investors in sukuk bond, the most popular instrument in this sector and is growing at a phenomenal rate. 2012 reports from Zawya showed that global sukuk issuance nearly doubled in 2012 when compared to 2011. More than 500 institutions globally offer Islamic banking and investment products and services to both retail and corporate customers. On an average 12% of Muslims around the world use Islamic financial products, but with other countries expressing interest in increasing services, the market is likely to grow bigger over the next few years Interestingly, apart from growing faster, Islamic banks have emerged from the crisis with their balance sheet unscathed mainly because of their business model and exclusion of certain things; which has given them natural shield from the general meltdown and edge over conventional banking for offering safety and stability. Advantages to Islamic Finance The above has been possible because of the basic tenants of Islamic finance, see our previous article on Islamic Finance Issue 2 for more information. Within Islamic finance key precepts is a commitment to back all financial contracts by assets and activities in the real economy, as well as an emphasis on the principles of morality and ethics in conducting business. The moral and ethical consideration of Islamic banks cannot be detached from the banking

practices and has to be consistent with the standards laid down by the Sharia board. Tirad M. Mahmoud, CEO, Abu Dhabi Islamic Bank summarises the benefits of Islamic finance and the resilience of this sector, “Islamic banks comply with a number of laws as well as regulations and values based in religion. Generally speaking, sharia-compliant banks have targeted businesses that are connected to the real economy. These include trade, development, housing programmes, infrastructure and other assets that are part of the long-term economic development cycle. Since Islamic banks do not indulge in speculation and are attached to normal economic activities, risks taken by them are less.” Furthermore Islamic banks bring ‘saver’ and ‘investor’ closer to real market by eliminating the barriers between them. The nature of the financial intermediation of Islamic banks significantly defers from conventional banks and it is in harmony with real market and developmental changes in it. In Islamic Finance the use of interest is prohibited for borrowing as in that case the borrower only bears the risk of loosing or making money, instead Islamic finance propagates sharing of profits and losses equally between borrowers and lenders. So, instead of lending money in return for interest payments, Islamic banks would lend money in return for an eventual share of the profits or loss generated from the business. Another important characteristic, which forms the basis for the development of Islamic banks, is the relationship with depositors. They deal with their customers on investment grounds rather than a pre-determined fixed interest rate. They invest the money of their depositors on highly profitable projects after going through a strategic analysis in order to give a substantial return to their depositors. Thus in Islamic banking industry, each bank will attempt to out-perform other banks if it wants to attract funds from investors. Are the advantages strong enough to outpace conventional banking? Mahmoud says, “In light of what has happened with the global financial crisis, businesses are taking stock and listening to clients’ demand for morally-sound practices. Islamic banks are well suited to cater to this gap in the market. If this business model is more successfully publicised, then demand for sharia-compliant banks and their services will increase dramatically and outpace conventional banks.”

March 2013


Expansion The nature of Islamic finance and the face of Islamic banking have changed drastically over the years. It is no longer considered archaic and only religion bound with primitive rules and regulations, but more as an alternate mode of finance curving its own niche, inching space in the world of conventional finance and spreading beyond the ready made customer base of 1.2 billion Muslims to non-Muslims as well. The introduction of new instruments and financial products upgrades earlier practices; and with the evolution of regulatory and legal framework has made it more user and market friendly. The potential for growth of course depends on Islamic banks offering products with broader appeal. While Sukuk (Islamic Bonds) appears to be the most popular Islamic financial products, there is significant demand for other Islamic financial services such as insurance, wealth management, project finance, private equity, mortgage and capital market insurance and of course last but not the least is Takaful or Islamic insurance.

“It is time we have a move from individuals to institutions. It could be a global sharia board... The reason is people deal with you on international standards. You have to have the right standards”

Nasser Al-Shaikh

“In Malaysia we have best practices. We have existing rules and regulation but what we have additionally for Islamic banking is clear regulations that allow us to have a better turnaround time for products and services. This is what we hope to have in other countries as well,” says Muzaffar Hisham, Head of Maybank Islamic, the Islamic finance arm of Malaysian bank Maybank, whose Islamic wing focuses on South East Asia, operating in Malaysia, Singapore and Indonesia. Mahmoud goes on to explain the problem behind uniformity of laws slightly differently, “Many people would like to have sharia regulations simplified but this is not easy. Interpretation of Islamic religious laws can be more flexible in one school of thought than another, but there is no one law that can overwrite another. Sharia rules around the world have similar fundamentals, which are interpreted differently as a result of these different schools of thought. There is sufficient diversity, which in turn brings more flexibility into Islamic financial products and services.”

Seeing immense potential of Islamic Finance, France and Korea have introduced new laws for issuing sukuk; furthermore new Islamic banks have recently opened in China. Citigroup, Standard Chartered, HSBC and BNP Paribas have all taken steps to seize growth opportunities in Islamic finance. Germany will soon have its first Islamic bank. Ireland, a country of arguably staunch Catholics, is also making a bid to be a global hub for Islamic finance.

A lack of standardisation is not the only hurdle the sector is facing. As a financial practice which is supposed to be based on ethics only, there are questions of integrity in certain products. According to Mohamed Akram Laldin, Executive Director of International Shariah Research Academy for Islamic finance, “80% of Islamic financial products are merely Islamised versions of conventional ones.” Also there is shortage of expertise in this field resulting in many Sharia scholars sitting on multiple boards.

There are more joining the fray. Bloomberg have built deep product suites and a raft of indices to offer their customers Islamic finance instruments. London’s Islamic property funds encompass buildings from the Shard to regular family homes. The UK capital has more sharia-compliant financial institutions than any other western city. Following that, Paris, Frankfurt and Luxembourg are determined to become competitive hubs in the Islamic finance sector

To prevent these types of conflicts Mr. Laldin is leading the negotiations with his counterpart in Saudi Arabia to create common regulations for Sharia scholars, and to set up a global certification board. “This is important because we want to boost the confidence of the investors and we want to be transparent,” he says. “At the end of the day, this is what Islam is propagating.”

And in the center for all these popularity is once again the core principles of Islamic finance like prohibition of usury, disdain for investing in industries like alcohol or gambling thus extending its reach beyond Muslim community into those individuals and institutions traditionally termed as ‘responsible investors.’ However, despite its ethical nature and safer approach to financial dealings, it has its own challenges. Challenges to Islamic finance One of the major issues with Islamic finance expanding around the globe is varying interpretation of Islamic laws in different countries. For example a contract drawn in Dubai may not be recognized in Malaysia. Even the local markets suffer from lack of clarity in rules and regulations when entering international arena.


March 2013

Because of inherent challenges and lack of proper and effective marketing Islamic assets represent approximately 1% of the global financial market.

“The primary goal of Islamic financial institutions is socioeconomic development and the alleviation of poverty”


To what extent will Islamic finance, for institutional and individual investors, continue to grow outside of the Muslim world? This depends on few key parameters. It certainly depends on the issue as to what extent it can offer more tangible solutions beyond the Muslim community over and above being just an ethical spin on conventional finance!. While the prognosis will be clearer few years down, it is true that suddenly it’s become more about the numbers and interests, and less about a leap of faith. In next month’s issue we will be looking in more detail at Islamic finance products, in particular Sukuk, and current products available today for UAE businesses.


Alternative Project

Finance Gaining Popularity


s economies across Europe and the U.S. continue to struggle to regain momentum, the Middle East is becoming a key driver for world economic growth, planning significant developments and upgrades of its infrastructure, and hence the need for significant investment from various sources. This need has opened a flood gate of opportunity for alternative project finance which is gaining accepted over and above traditional source of infrastructural financing from banks and government sources. Globally, KPMG estimates US$40 trillion investment is needed in the coming decades to provide basic levels of infrastructure. Out of which by 2020 GCC countries plan to invest up to US$3 trillion on infrastructure projects alone including power, water, alternate energy and transportation. As per reports, Saudi Arabia, UAE and Qatar account for almost 80% of the on-going US$452 billion worth of infrastructure projects that are expected to give a much needed support to the GCC construction industry. Bahrain is planning a US$291.7 million spend, and Qatar is allocating 37% of its budget towards major capital projects; the bulk of which is for infrastructure projects. “Providing finance for infrastructure and energy projects in the GCC is essential for the regions’ continued growth. Project finance has, and will continue to provide, an essential means of ensuring the continued development of such projects. Bank finance has traditionally been the main source of project finance, but with banks’ balance sheets now being constrained, alternate sources of finance need to be tapped,” said Jeffery Barratt, partner at Norton Rose, international legal practice, Board Member of International Project Finance Association

“It is getting harder for small businesses to obtain funding. We know that various alternative forms of funding have sprung up in response to this problem, and businesses would be wise to do some research into bypassing banks and source additional finance elsewhere.”

Rob Donaldson, head of M&A Baker Tilly

(IPFA) & Middle East London Committee Chairman in an event titled alternative sources of financing for projects in the Middle East. Jeffrey Singer, CEO of DIFC Authority commented, “Despite challenging economic conditions, investment in major projects both locally and globally remains positive and in fact continues to grow. Undoubtedly, we have seen a shift from traditional project finance sources to alternative funding sources, leading to greater reliance on local banks, development banks and Islamic finance to name a few.” The event looked into the need, opportunities and recent trends in alternative project finance mainly in the Middle East region, the initiation of Islamic finance and Sukuk side by side to finance major infrastructural projects, and also shared a case study on the recent groundbreaking US$1.2 billion Madinah Airport expansion in Saudi Arabia where a unique financing structure was made based on a modified Islamic financing model. It also discussed how local banks flushed with capital are coming out more prominently to fund mega projects but still how the local export credit agencies (ECA) are the major support for EPC (Engineering, Procurement and Construction) contractors or equipment companies. However, due to newly developed nature of the regional financial market, alternative sourcse of finance is still being practiced on a more experimental basis rather than becoming a regular funding practice. The limitations are noticeable, for example, projects bonds are yet to become popular and funds from insurance are less visible for infrastructural financing. Governments are also very particular on the credentials of private funding institutions but the potential in this field remains huge, and very soon it is likely to become the order of the day in the field of project finance.

March 2013



Currency Exchange Rates


ust a few days after global finance ministers’ and central bank chiefs’ meeting in Moscow dismissed talk of a currency war, it appears that a battle is brewing in Asia to keep the value of currencies competitive. For many of us, we are not sure exactly what this term means, how this may affect our business or what steps to take to ease any potential risk. Read on if you want to de-mystify this subject. Currency war Currency war, also known as competitive devaluation, is a condition in international affairs where countries compete against each other to achieve a relatively low exchange rate for their own currency. The effects are quite simple. Imports become more expensive. So, domestic industry, and consequently employment, receives a boost in demand from both domestic and foreign markets. However, the price increase for imports can harm citizens’ purchasing power. The policy can also trigger retaliatory action by other countries which in turn can lead to a general decline in international trade, harming all countries. Hence the term “currency war” So what does this actually mean to you as a business? A currency war naturally leads to a foreign exchange risk (also known as exchange rate risk or currency risk). Foreign exchange risk is a financial risk created by an exposure to unanticipated changes in the exchange rate between two currencies. This means that investors and multinational businesses exporting or importing goods and services, or making foreign investments throughout the global economy, are faced with an exchange rate risk which can have severe financial consequences if not managed appropriately for example, increased costs whether as part of the actual transactions, and/or the actual price of goods and services. Sadly, no one can predict whether the rates will


March 2013

Venezuela purposefully devalued it’s currency and wiped millions from Procter & Gamble share price in February 2013

increase or decrease, and this causes significant issues for business planning as it makes it difficult to predict how much of your cashflow will be affected by exchange rate fluctuations. This can have a fundamental impact on your business for example, corporations that look to spend domestic currency to purchase imported goods lose purchasing power as domestic exchange rates fall. Conversely, multinational corporations that make international sales lose business and profits when domestic exchange rates appreciate. In light of this, and the fact that there is a currency war being fought by countries at present, we have looked in more detail at the various ways in which you can mitigate these risks, but first you need to understand the whole risk. Politics There are other forces to keep an eye on, not just the rates themselves. You have to recognize that political implications associated with foreign exchange rates can affect your bottom line. For example, strong exchange rates may result in national trade deficits, because exported goods are now more expensive. In response, government leaders could legislate high tariffs and strict quotas on foreign business. These measures are designed to protect the domestic economy, at the expense of foreign business. Transaction Risk Transaction risk comes from having to conduct commercial transactions in foreign currencies. Generally, businesses convert the foreign currencies into your own currency for the purposes of reporting and consolidation eventually, with them profiting if your currency becomes stronger and suffer losses if your currency becomes weaker. For example, if you have AED50,000 profit from an operation in England, and the pound strengthens, your currency would dip in value so you would end up with less than AED50,000.

MONEY Translation/Accounting Risk Translation/accounting risk effects your company’s financial statements as opposed to a financial risk. It is the risk of transactions in another currency when you have already entered into that given contract. For example, any subsidiaries and assets (including your products) in another country, would have their values expressed in that currency. In your financial statements, you need to express the values of your foreign assets in your currency so you can combine it with your local assets.

reduced profits. All participants within the global economy may use currency swaps, derivatives and diversification strategies as tools to manage foreign exchange risks. Once you have determined your overall risk exposure, you can start to plan as to how you will mitigate that risk. Globally, there are insurance products available to mitigate these risks; however these do not exist to cover transactions made in, or from, the UAE. Do not be disheartened though as there are still various methods that you can use to limit your exposure to foreign exchange risks.

Economic/Operating Risk and Tax Also known as operating risk, economic risk is associated with the revenue, demand and costs for your products in a foreign country. When the exchange rates fluctuate, so if the foreign currency drops in value, your products would become more expensive and less attractive in that country. This could result in lower sales revenue and lower profits. Depending on the particular country where you do business, tax may be payable. Once you fully understand all the possibilities surrounding your risk, you then have to measure the risk itself, taking into account these factors, and more, to determine exactly what your actual exposure to currency risk is; 1. Identify the cashflows of your business that are to be converted into another currency, coming up with estimated figures if you are unable to confirm a guaranteed amount. Include three types of scenarios – Anticipated exchange rates, higher and lower rates. 2. Link incoming and outgoing cashflows that are in the same denomination to determine your net cashflow. For example, if you export to Europe, link all business that is undertaken within that region. Repeat as necessary for Japan and any other currency in which you conduct your business. For the purposes of measuring foreign exchange risk, you should net them out and only be interested in profits, to Identify your transaction area that is exposed to currency risk, and the potential impact on profits as result of the decline in that given currency. 3. Analyze your exposure to the rates. Businesses should understand the economic drivers behind exchange rates. Strong national economies generally translate into higher currency valuations. When a country’s economy is strong, people want to store that currency as a means of taking advantage of lucrative stock market, real estate and business investments. Conversely, investors will liquidate these asset holdings amidst recession. As capital flows outside of a nation’s borders, its exchange rates fall. 4. Determine how much money you can potentially lose if exchange rates are expected to fluctuate as anticipated. Again, ensure you account for at least three scenarios – Best, worst and expected cases. Remember that foreign exchange risks relate to adverse currency rate fluctuations where the end result is a loss purchasing power and therefore

Strategy 1. Corporations can hedge foreign exchange risks with diversification and derivatives. Diversification limits the ability of one failed profit source or currency to manifest itself into severe losses for the overall firm that may even lead to bankruptcy. Corporations can diversify themselves effectively by maintaining presences within different countries and acquiring foreign exchange reserves in multiple currencies. Businesses that lack the capital for international expansion may purchase shares in global mutual funds for diversification.

First you have to fully understand your risk, then you have to measure the risk itself before you are able to implement a strategy

Beyond diversification, currency derivatives manage foreign exchange risks. Currency derivatives, such as futures, options and forwards, lock in predetermined exchange rates over set periods of time. 2. The easiest way to mitigate risk is to open a foreign bank account in the currency required. This would require you to offset bank fees, charges and any tax that may incur in doing so. Whilst it will not cut the risk completely, it will also gain a modest interest whilst you wait for the exchange rate to move in your favour, before moving the money back to your account. 3. Normally reserved for companies who deal in large sums of money internationally, and we recommend seeking full financial advice from a financial advisor on this as it means you would hedge your funds in the derivatives market by futures or forwards contracts. This is worthy of an article in it’s own right, but to summarise, the result is that you negate the affect of exchange rate fluctuations as they are canceled out by an opposite position in derivatives. 4. Again, worthy of full financial advice, but trade options are a lower cost alternative to derivatives. The strategy for hedging a foreign currency position with options is similar to using futures or forwards, but is usually less expensive. 5. A currency swap can be complex, but it is an effective method at mitigating foreign exchange rate risks, when used sparingly on portions of their foreign risk. Basically, it is an exchange of future income streams through in different currencies. On maturity, the company receives the currency that has appreciated relative to the other.

March 2013


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March 2013 adding real value

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Introduction to Commodities F

product of the same type, or that investors can buy or sell, usually through futures contracts. The price of the commodity is subject to supply and demand.

rom the orange juice we drink to the gas we use to power our cars, commodities play important roles in our daily lives. They can be found literally all over the world, and can be traded on the global marketplace. In fact, billions of dollars are invested in commodities every day.

Common Commodities Markets Metals: Gold, silver, copper, platinum and palladium Energies: Crude oil, heating oil, gas, natural gas, crude oil brent, ethanol futures Grains: Wheat, corn, soybeans, soybean meal, soybean oil, oats, rice, red wheat, spring wheat, canola Meats: live cattle, feeder cattle, lean hogs, milk Softs: Cotton, orange juice, sugar, coffee, cocoa, lumber

Whether they are traded on the ‘spot’ or on ‘futures market’ the goal in commodities trading is to buy low and sell high. But what does this mean to the Dubai and our business? Over the last three decades Dubai has become one of the most important centers for imports, exports, and re-exports in the region, and has worked to strengthen its industrial base with the aim of expanding sources of income. The result of which is that Dubai is now recognised as one of the trade centers in the Arabian Gulf region, and growth is expected to continue especially in manufactured goods. This development means that commodities are central to UAE’s commerce and growth, and as such our business. If commodities is one of the biggest income sectors in Dubai and is set to grow even more, then surely we should be looking at this market to either invest in as a business and/or privately, and most definitely as a revenue stream for our services/ products. To help you understand the potential of this market and impact on your business, we have chosen to run a series of articles on commodities; what they are, how they work, why this market has continued to grow during the recession, what to be aware of, and how to trade if you are interested. So let’s start from the beginning and spell out the basics! Definition of a commodity A physical substance, for example food, grains, and metals, that can either be traded with another

“I buy when other people are selling”

J. Paul Getty (1892–1976)

History of commodities Modern commodity markets have their roots in the trading of agricultural products and since ancient Sumerian times the world has tried to standardised this exchange. This started with small baked clay tokens in the shape of product being traded, e.g. sheep or goats, being sealed in clay pots with their number written on the outside of the pot representing a promise to deliver that number by a certain date; a futures contract. Regardless of the details stated on the outside of the pot, it was only possible to verify the number of tokens inside by shaking or by breaking the pot, at which point the number or terms written on the outside became subject to doubt. Eventually the tokens disappeared, but the contracts remained on flat tablets. This represented the first system of commodity accounting. The economic impact of the development of commodity markets is hard to overestimate. Throughout the 19th century the exchange of commodities have led to innovations and improvements in transportation, warehousing, and financing; and has paved the way to expanded national and international trade. Reputation and clearing became central concerns to trade, and the countries which could handle them most effectively became powerful empires, trusted by many to manage and mediate trade and commerce. Being a hub of trade means money to a country.

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Types of Commodities trading 1. Spot trading Spot trading is any transaction where delivery either takes place immediately, or with a minimum time frame. Spot trading normally involves visual inspection of the commodity or sample, and is carried out in wholesale markets. 2. Forward contracts A forward contract is an agreement between two parties to exchange at some fixed future date a given quantity at a price agreed today. Typically used for food and agricultural products. 3. Futures contracts A futures contract has the same general features as a forward contract but is standardised and executed through a futures exchange where the buyer and the seller accept set terms with regards to product, grade, quantity and location, and are only free to negotiate the price. 4. Hedging Hedging, a common practice for farming cooperatives insuring against a poor harvest by purchasing futures contracts in the same commodity. If the cooperative has significantly less of its product to sell due to poor weather or insects, it makes up for that loss with a profit on the markets as the overall supply of the crop is short everywhere that suffered the same conditions. Fund Types Commodity fund can mean several different types of investments. These include: • Commodity Funds. These funds hold direct assets in the commodity. For example, a gold fund would hold gold bullion and therefore be a true commodity fund • Commodity Funds That Hold Futures. Most investors have no desire to take delivery of physical assets, they simply want to make profit from price changes. Purchasing in funds that hold futures contracts is one way to achieve this objective • Natural Resource Funds. Funds that invest in companies who are engaged in businesses that operate in commodity-related fields, for example

“A market that slowly grinds higher is a good buy. A market that soars is usually a good sell”

Neal Weintraub

energy, mining, etc, are often referred to as natural resource funds. They do not hold actual commodities or futures but provide access to the commodities markets by proxy Combination Funds. Some funds invest in a combination of actual commodities and commodity futures

Pros and Cons of Investing in Commodity Funds Commodities offer portfolio diversification. Investing in futures or actual commodities provides a portfolio element that is not a traditional stock, bond, or a mutual fund. Historically, commodities have had a low link to traditional equity markets, meaning that they do not always fluctuate in tandem with market movements. For many investors achieving this low link is the primary objective when looking to add diversification to a portfolio. Commodities also offer an upside potential. The raw materials used in construction, agriculture and many other industries are subject to the laws of supply and demand. When demand increases so will price, and therefore profit. Finally, commodities also offer protection against inflation. On the other hand commodities markets can be volatile and subject to wild, short-term price swings and long lulls. Over the course of just a few days, prices can go from record highs to record lows. In addition we need to be aware of the composition of various mutual funds and the benchmark indexes that they track. In many commodities indexes energy is often the heavyweight, taking up more than half of the index and thus not spreading potential risk for price fluctuations across various commodities. Making money in futures Speculators in commodities are traders who try to buy futures low and sell them high to make money. They are not required to hold the futures contracts for the duration of the contract; they can buy or sell anytime they want. So, a speculator could buy livestock contract from a farmer at a certain price, then wait for the price of livestock to go up before selling the contract on, even if the contract is not due for another couple of months, turning a profit in the process. Players Involved in Commodities Trading There are three different types of players in the commodity markets: 1. Commercials Entities involved in the production, processing or merchandising of a commodity and account for most of the trading in commodity markets. 2. Large Speculators A group of investors that pool their money together to reduce risk and increase gain. Large speculators have money managers that make investment decisions for the investors as a whole. 3. Small Speculators Individual commodity traders who trade on their own accounts or through a commodity broker. In next month’s issue we will look in greater detail at why commodities rule in times of recession, and the top 14 commodities over the next 2 years, specifically in Dubai.


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Handling Employee Misconduct Cases

Lawfully and Effectively L

abour court cases are increasing, so how can this be avoided? Managing discipline and misconduct is a complex issue which we will look at in greater depth in the following issues, but in the meantime we have put together this short guide to help manage discipline and avoid potential labour disputes. Train Managers Managers are responsible for enforcing Human Resource (HR) policies as they interact directly with the employees; their behaviour determines whether a potential dispute and labour claim arises. Most managers consult with HR in the first instance, but may then feel that this then absolves them from any responsibility, continuing to act on their own initiative, which may be inappropriate and unlawful. Managers must be trained on the risks of this. Issuing policies and documents is not enough. Their education needs to be ongoing and current; annual HR review meetings to discuss previous problems is one way of doing this, and interactive training helps considerably. Draft, propagate and use policies An established employer will have policies for absence, termination, internet usage etc., and policies must be clear and consistent. Disputes arise from the difference between culture and expectations. For example, the calculation of sick days and salary often carry two opposing views and calculations dependent on how and what days are calculated. Clarifying this stops misinterpretation. In the UAE, holiday and sick days are calculated on calendar days and a 30 day reference period, and not on a 365 calendar day reference period; at odds with Europe, USA and other countries. The key to guaranteeing compliance with company policy is to ensure everyone reads and understands

your HR policies, so communication of these documents is essential. For Ministry of Labour (MOL) you have to prove, in writing, that employees were aware of the policies and all updates, otherwise you may loose at court, irrespective of any verbal discussions you may have had with the employee. Furthermore, your list of gross misconduct offences needs to be thorough for you to be able to argue at Court that an employee was aware that their conduct would be unacceptable, and subsequently liable for warnings, even dismissal in the case of gross misconduct. Keep staff informed of all changes that may affect them Here we refer to minor changes that are not policy or part of the contractual terms; for example a change in line management, office seating arrangements etc. These are often made without consultation and can be blown out of proportion. Remember, an employee’s perceived discrimination or breach of contract claim will strengthen by a litany of minor changes “forced” on the employee, and viewed as evidence of differential or unfavourable treatment. You should strive to communicate direct with employees. With a minor consultation process you minimise the potential for misunderstandings, and employees feel they have had the opportunity to voice their opinions at the outset, therefore stopping issues arising.

Remember, an employee’s perceived discrimination or breach of contract claim will strengthen by a litany of minor changes ‘”forced” onto the employee

Give staff a clear and comprehensive contract of employment A clear, well-defined contract will reduce disputes and help to defend against any legal proceedings as it states in writing, what was agreed by both parties. Companies here rely on either the Free Zone contract or DED Labour contract which is a good start, but they lack fine detail, which can lead to

March 2013


misunderstandings, issues between employer and employee, and finally legal disputes. The solution? Develop and implement a company specific contract to run alongside the Free zone or DED Labour contract, and a comprehensive work place manual. Ensure that this contract and manual is drafted in line with Federal Labour Law, that the Terms and Conditions (T&C’s) are clear, consistent, unambiguous and up-to-date so you, and your employee, know what is expected. Once signed, both are binding, with MOL accepting the intent and agreement of these terms on the employment relationship.

The essence of fair dismissal is deliberation

Have a clear and transparent policy on pay Pay is often central to claims, as differences can stoke resentments. Article 1 of Federal labour Law states the definition of “wage” to include implicit/ habitual payments made outside the scope of the employment contract. Never dismiss staff on the spot Even where an employee is caught ‘red handed’ acting against the T&C’s of their contract and therefore subject for immediate dismissal (“Summary Dismissal” in HR terms) or have breached Article 120, instant dismissal should never happen. If an employee is caught ‘red handed’, suspend the employee and follow up with the full disciplinary process as stated in the company’s HR policy; or a court could decide that the dismissal was unfair and unlawful. Secondly, the essence of a fair dismissal is deliberation. A carefully drafted ‘Disciplinary Policy’, compliant with the MOL’s disciplinary code of conduct and Federal Labour Law, is designed so both parties understand the charges faces and can deliberate responses. By proving you

have considered all the evidence and potential penalties before taking action, the employee can be dismissed with or without notice, depending on cause, circumstance and federal labour law. Hasty decisions regardless of how justified almost inevitably lead to court. Always follow the three warnings (exc. Gross Misconduct and breach of Article 120) The law dictates all employees, after successfully passing their probation period, be given an opportunity to improve their inadequacies. MOL requires evidence of at least three warnings; oral, first and final written warning being issued before termination takes place, except in cases of article 120 breach. In cases of dispute MOL frequently requests employers to provide evidence that warnings were issued to the employee. Employers must document the verbal warning in writing, and keep it on file to be used as evidence if required. Labour courts globally see this three step process as fair and correct. Do not rush to dismiss before a third warning has been issued, it will be deemed procedurally unfair by the courts. Act on medical advice regarding dismissal for Long Term Sickness (LTS) or incapacity LTS is a very challenging. It places stress on resources and employees, yet it formulates staff’s perception of the company. Employers can act hastily, failing to give employees adequate time to return to work, or to look for alternative positions within the company, so the employee can undertake some duties. This means staff may attend work when they shouldn’t, increasing the risk of occupational injury and compensation in line with Article 144. Before dismissing an Employee for LTS, take the advice of a doctor from a governmental hospital or a specialist in the illness. Consider medical reports (always obtain two) and act on the advice given, without rushing to dismiss someone. Guard your Words Managers and HR personnel must choose their words carefully. The correct use of language is fundamental. Many labour claims arise as a consequence of the clumsy and inappropriate use of language. Consult a specialist lawyer early The law is complex and an employment lawyer understands it and how the courts will interpret the evidence given. Your lawyer should understand your business, providing you with sound and unbiased advice. Share all facts and evidence, irrelevant if the facts and evidence do not support the company. Failure to do so can become very costly at court. Ultimately, the essence of labour law is fairness and consistency. Following these tips and applying your policies consistently will give you maximum protection in court.


March 2013


Gain Competitive Advantage

Through Staff Happiness. W

e know business is a serious matter but science shows us that happiness is central to productivity and consequently success. Many studies illustrate that happy employees have better relationships at work, are more resilient and creative, think clearer and smarter being able to think of solutions and ideas faster then compared to when they are feeling stressed, worried and fearful. As such, creating a happy work culture is the new corporate initiative for many organisations. Companies like Google, Apple and Herman Miller have shown that employees who can have fun at work are better employees. They provide proven loyalty and better service. Reality of workplace happiness Happiness is often taken for granted, but do you really know how your management and staff feel? Do they think they get the right level of support and development from you? Do you praise them? Can they cope with their workload or are they drowning in it? If you do not know the answer to these questions, you risk that they are unhappy; this unhappiness may turn to resentment, and their resentment will affect all areas of your business including your bottom line. A survey, by the Institute of Leadership and Management found managers who were happy, felt they performed better. The top 10% of performers rated themselves an average of 86 out of 100 when it comes to happiness, saying their teams were more successful and everyone coped with their workload stress. Conversely the lowest 10% of performers, rated themselves as least happy, with an average of 30/100. The defining factor of these results is surprisingly simple. Employee’s who are happy, feel they are adequately supported and engaged in their roles. They have good communication lines to

management, and defined training plans with goals to achieve. In 2010, the UK Government commissioned The Macleod Report on employee engagement. With the recession hitting hard, people were disillusioned. Advances in technology and a lack of cashflow meant people were losing their jobs. Low morale was affecting all businesses. The report found “only organisations that truly engage and inspire their employees produced world-class levels of innovation and productivity.”

“The employer

Stress and workload Levels of seniority within a company have a fundamental impact on happiness and productivity. Those at a higher level (CEO, MD etc) are more able to cope with stress and workload than those in middle or first line management.

generally gets the

Happiness flows up and down a company from managers to their teams; so remember, ‘You are only as strong as your weakest link’! It is vital that, when it comes to performance, lower level managers and staff have confidence, and their job satisfaction is monitored. They are less likely to cope with the stresses of their role which can be passed onto the teams through thoughtless talk and body language, affecting morale.

J. Paul Getty

employees he deserves”

If your managers are not understanding the workloads of their colleagues or failing to cope with their own, try not to take work away from them. This can be demoralising, breeding complacency and boredom which reduces output. A little stress is productive but only when they know how to cope with this; support and training deals with this effectively. Teaching new and prospective managers time management, delegation and mental resilience, will help them cope with their workload.

March 2013


Development Training and development has a direct correlation to how people work. The better trained your manager and their team is, the easier it is for them all to cope with these challenges. Feedback (for example, through one-to-ones), career coaching and a well-developed training programme are all areas that can be developed to enhance opportunity, increasing contentment and performance whilst keeping costs low.

“Employees, especially young people, want more than a pay check”

Marissa Mayer, CEO Yahoo

Goals and progression Clarity in career progression is another way to increase morale and, in turn, efficiency. It is vital to provide investment early on in a manager’s role as they need the guidance the most. A company seen to value staff by investing in them right from the start, will be rewarded by taking advantage of a manager’s early enthusiasm and energy to achieve a lasting impact. A study by Medlin and Green (2009) highlighted, ‘Many management systems or processes, such as management objectives, feature goal setting as a critical element for success. Goal settings have a positive impact on levels of optimism as staff believe they will achieve their goals.’ Equipping junior managers with the skills to cope with stress early on in their managerial career, will help to increase their efficiency now, and in the future. Crucially, this helps avert the ‘2 year itch’ too - which is the time frame when people in a lower management roles become disillusioned, having learnt their own strengths and weaknesses and, when coupled with a greater understanding of the challenges of their role, causes their confidence and output to plummet. Communication Inspiration can be a problem as managers often feel they lack the ability to inspire their teams. Training on how to communicate effectively, and learning how to understand the individuals in their teams, will assist building confidence in all your staff.


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Confidence gained through communication is key to company survival as it builds an emotional bond between staff and management. Expert Comment: Sally Boyle, Regional Senior HR Officer MEA for GL Noble Denton says “Through staff engagement, the manager gains confidence believing they can build a successfully engaged team. Employees with a strong emotional link to their manager (feel their managers are interested in their development and opinion) respond in a positive manner.” If happiness in the workplace brings increased returns to productivity, companies need to look at ways of increasing employee happiness. Yo Sushi! has taken on this challenge and launched a staff engagement programme called ‘Wow!’ Aimed at junior managers and staff, they are supporting growth plans by training on customer service, using a magical theme and focus on fun. What are you going to do...? The 8 rules to building happy organisations; 1. Happiness of staff is an indicator of productivity - Watch out for, and act on any indication of unhappiness in teams or individuals; Get to know your colleagues and make working together more fun and sociable. 2. Low stress, not no stress – Invest in training and development. Don’t restrict a manager’s workload as this could bore and disengage them. Make sure they are supported to enable them to work more effectively. Think ‘Fun’ wherever possible. 3. Goals – Converting goals into a coherent vision enables leaders and managers to see the end game and how this can be reached. 4. Training – Companies with a clear and defined talent pathway for development and progression will develop skilled, engaged and high performing staff. 5. Remember front line managers – They are critical and influential over those who deal directly with your clients. Engage them, and your service levels will increase. Fail, and your service will suffer... As will your bottom line! 6. Fear the ‘2 year itch’ – Take proactive steps early on in the manager’s career and develop training, coaching and mentoring, with clear targets to assist them and take them past this stage. 7. Communication – Listen to your staff, gain their trust and form the emotional bond. Portray your caring side for example, with flexibility over things like contractual hours if possible. Provide time management training, encourage delegation and transparency; with yourself and their team. 8. Support – Staff and help them feel good. Implement a culture of trust providing freedom within set guidelines for colleagues to undertake their tasks, help colleagues to see why what they do matters, and regularly encourage and praise. Play to their strengths, and encourage a healthy balance between work and life.



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Dotcasting the Talent Agency and Casting arm of MEDIACUBED for the Entertainment industry - are looking for someone special. We are looking to find an individual sharing the PASSIONALITY and entrepreneurship of the team with knowledge of the industry. An existing network is essential. Current credits include: Mission Impossible 4 / Paramount Pictures, Sinbad / SKY TV, TVCs Porsche, Short Films, TimeOut, Grazia, Viva, Intel/Microsoft, Merrill Lynch, plus expos and events throughout the region. Tell me more, tell me more! Let us ask you a question before you read on, “are you ready to run your own business?“ If so then with our support this is your chance. Your role will require: Business development, networking, maintaining super relationships within the industry, managing online advertising sales, nurturing talent and offering solutions to all our clients. What’s in it for me? Let us tell you over a hot cup of tea (if you make the shortlist). Send in your credentials and prove to us you are ready to run your own business and we’ll take it from there. Break a leg!







Our client is a well-known and respected law firm with offices in most major business centres. They are seeking a bilingual (English/Arabic) paralegal to join their busy team and assist the Professional Support Lawyers. You must be a high academic achiever with previous law firm experience. Main responsibilities will include legal and ad hoc research and liaising with federal and local government departments, so previous legal research experience and some knowledge of finance in studies and/or work experience would be advantageous. Interested individuals are encouraged to apply by sending their CV to March 2013


Keeping Your Data Safe H

accidentally delete something you can “undelete” relatively easily using services such as Recuva. This means that people with time and inclination would be able to do the same.

ave you ever asked yourself the questions of what happens to the confidential data on hard drives and other technological storage solutions when you upgrade them? This is a question that many do not ask, yet if you were to think about it, you would realise it were a vital question... As, if the data is not completely deleted, it could easily fall in the hands of criminals and competitors, exposing things confidential to your business; details of bank account, passwords etc… Researchers at Harvard University looked into this problem. They purchases 158 used hard drives from on-line auction sites, swap meets and used computer equipment shops. They found confidential information of 20 organisation; access to company bank accounts, credit card details etc. Researchers found that the problem arose with companies trusting others to adequately dispose of the computers and the drives. Instead, the data remained intact, with the computers being passed on to various places. One car dealership, for example, hired a consultant to update its computers and assumed the old machines were destroyed. Instead, the contractor sold the pieces on eBay. You also have to remember that the UAE has several laws and regulations surrounding Data Protection that you must adhere to (which includes information held on any electrical device), as well as the disposal of computers and other office equipment. So, without asking the right questions you could inadvertently find yourself on the wrong side of the law. What a lot of people don’t know is that when you delete files in Windows, you only move them to the recycle bin for them to be easily retrieved in the future. Emptying the recycle bin means the data is still available on the hard drive. Yes, the data space on the disk is marked as available to reuse, but the data will remain there until this has been overwritten with new information. Whilst this is good if you


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I am sure you are beginning to see this as very problematic for businesses globally as ignoring this process can cause substantial damage to your reputation and harm your business, leading to severe financial implications. So what exactly can you do?!

“Without getting too technical, it’s important to point out that overwriting your data ‘with all zeroes’ is meaningless. There’s no such thing in the world of hard drives”

Sydney Ellis

Assess data First, assess what data you retain and determine if it would fit into low, moderate or high sensitivity areas. When assessing these areas, consider things like intellectual property disclosures, personal information and identity theft. You need to know what sort of information each computer contains; for example, the Managing Director will have a lot more confidential information on his computer or laptop then the receptionist. Clearing Data from Your Drive Overwriting the entire contents of a drive with 0s, 1s, or random data is a technique used to make the original contents unreadable. However, the standard for overwriting data is an open source program called Darik’s Boot and Nuke that you download, burn to a cd and go through various prompts, whilst connected to the drives you wish to delete. However this can take hours or longer to run depending on what you are clearing. Also, if your hard drive is damaged in any way, the software would not be able to work on these. Therefore, clearing is only suitable for disks with no sensitive information. Anything else should be purged or destroyed. Purging Data from Your Drive This is by far the easiest way to remove the data from your hard drive. This uses the conventional hard drive or SSD drive, and the Secure Erase command. If your computer is under 10 years old any ATA drive should also have this function. To run this command you

TECH need to use a program like the open source Parted Magic. As with any download, you will have to burn the Parted Magic ISO file to either a CD or USB stick. You can easily follow instructions on how to do this at Pendrivelinux. Once you have booted the CD, • Select Option 1 to run the default settings. • At the bottom of the screen, select System Tools – Erase disk • Select the final option to use Secure Erase • Alternatively, Secure Erase can be invoked by using a DOS-based utility called HDDErase, which you can download from the Center for Magnetic Recording Research. To do this: • Burn to a disk or USB and boot the system with the drive you want to purge • Type “hdderase” at the DOS prompt to run HDDerase.exe. • At the prompt, select the drive you want to purge • Type “y” to proceed to the options menu • Select secure erase (or enhanced secure erase if it is available) • Type “y” to proceed with the secure erase. Hardware options Are you planning to purge many hard drives? If so, a hardware device may be a better option for you. This is a machine that you plug into one or more disks. There are various advantages of this such as time savings, being able to use the PC/laptop, and some also produce a certificate for you for audit purposes.

Degausser This creates a strong magnetic field that will automatically delete data on any hard drive, floppy disk, magnetic tape or Zip drive, when they are inserted into the machine. Once the machine is activated, all the information will be permanently deleted within a matter of seconds. Prices of these machines often make then inhibitive to purchase per business, but there are companies, who are able to do all of this for you. Buying your own degausser may prove problematic in the longer term as the data on magnetic disks become more densely packed to produce higher capacity disks, so older degaussers may not be powerful enough to delete newer disks. Also, new technology in the future, such as thermally assisted magnetic recording (TAMR), may mean degaussing will not work. Another perhaps more fundamental problem with degaussing is that it only works on magnetic media, and not on solid state drives. Hybrid drives using both technologies are increasing in commonality and therefore only part of the data would be erased. Destroying Destroying drives and machinery will guarantee the data is unreadable. This tends to be carried out at specialized facilities that have the capability of carrying this out effectively and safely. Regardless of the method, always ensure that you chose the right one. If however, this all seems a little beyond you, there are companies that will do this for you. We would recommend Sophos, who will go through the process with you bit by bit. Either way, inaction is dangerous. The only way to ensure that you do not become a victim of cyber crime that fundamentally you could have stopped, is by dealing with the problem head on.

Locally you will be able to purchase the McAfee Shredder to permanently delete files from your hard drive from a number of distributers, and the process is so easy you can do this yourself without the help of an IT expert! Instructions to how purge using McAfee’s Shredder • Open the McAfee Security Center. You can do this by double-clicking its icon in the System Tray or by selecting its shortcut from the Programs list of the Start Menu. • Find the tab labeled “Tools” on the left side of the Security Center interface and click on it. • Select the Shredder from the list of available tools in the top left of the Security Center window. • Tell the Shredder how much data to erase by choosing to either “Erase files and folders” or “Erase an entire disk.” • Tell the Shredder how many times to process the file it’s erasing. “Quick” shreds the file once, “Comprehensive” shreds it seven times and “Custom” can shred it up to 10 times. • Select the files you want to shred. You can erase the Temporary Internet Files or the contents of the Recycle Bin, or you can erase specific files by clicking on “Browse” and finding them on your hard drive. • Double-check the files and make sure it’s alright for them to be permanently deleted. When you’re ready to begin shredding, click “Finish.”

As recommended by The National Institute of Standards and Technology’s Guidelines for Media Sanitization, there are four ways you can ‘sanitize’ your hard drive. Disposal Discarding the data without sanitizing. This is not recommended, as it would only be appropriate if a loss of the confidential information retained on the hard drive would have no impact on the organization. Clearing Whereby you overwrite the entire drive with new data so that the old data is no longer readable by a computer. Forensic agencies would be able to retrieve some information in a laboratory using special equipment. Purging Purging uses the computers’ electronics to carry delete data in a more in-depth level. It’s the most efficient way to remove information from your hard drive, making it impossible to recover; including by computer forensics. Destroying This is when you would physically destroy the hard drive itself. This can be achieved by various methods; Incineration, melting, shredding, pulverizing. Next month, we will look the law on Data Protection.

March 2013


Hello To The New

BlackBerry Z10 Line By Dan Nixon


In terms of processing power the handset features a 1.5GHz dual-core unit. Although that’s nothing special, the phone is really quick, with no lag at all. The Z10 has 16GB of internal storage and an option to add an extra 32GB via microSD card.

lackBerry has joined the 21st century! BlackBerry (BB), formerly Research in Motion, have brought out a 4G, fully touch screen mobile phone (and one with the original BB buttons for die hard fans). With talk of this being their last ditch attempt to claw back their market share and avoid oblivion we have reviewed it for you to determine whether the new BB is still a workforce stalwart?!

An advantage of BlackBerry has always been their excellent battery life. Unfortunately, this is not true of the Z10. A daily charge will usually be okay, but push it hard and you could be caught short.

Design & Hardware At first glance it is clear that the Z10 is completely different to any other Blackberry model. Forget the curvy lines and QWERTY keyboards the Z10 is a master class in understated minimalism. Although it may look a bit like an iPhone 5 the large emblazoned BlackBerry name at the base leaves no doubt as to who has created this great looking beast. The phone feels sturdy in your hand, and the quality of build on offer is great, on a par with the Samsung Galaxy S iii or the HTC One X. The plastic battery cover is a bit flimsy, but this really is just nit picking. The Z10 high definition display immediately shows that it is light years ahead of anything seen on a BlackBerry device before. Even the menu screens have a sharpness that makes icons pop right out and images are crystal clear. Videos look great and are really comfortable to watch, giving you the full movie experience. The screen size of 4.2 inches might seem a bit small, but the fact that the display is both compact and brilliant to look is a strong point. Once you spend some time with the Z10 it becomes obvious that the display is better than Samsung or HTC’s finest.


March 2013

Software & Multimedia The Z10 is the first model to showcase BB’s stunning new operating system. Although not too dissimilar to an iOS BlackBerry 10 does offer a unique user experience with tons of cool functionality that makes the OS feel genuinely fresh.

Simple business mastery

The inclusion of screen edge gestures are an absolute revelation and mean that users can simply swipe from the edges of the display in order to navigate around the handset. For example, a simple swipe up from the base of the screen will automatically bring up all the apps you currently have open making multitasking completely intuitive. Similarly, BlackBerry Hub offers a one-stop messaging shop for all your email and social networks, and can be accessed from the menu screen by swiping to the right from the left edge of the screen. Busy browsing through an app but want to check that message that just came through? Just swipe up from the base of the screen and to the right in order to be taken into the hub. Don’t you agree it is a smart messaging system?

TECH All this swiping and gesturing gets even better when it comes to using the touchscreen keyboard on the Z10. Obviously, BlackBerry devices have something of a legacy when it comes to the old ‘bashing out messages’ game, but the software QWERTY on the Z10 really takes things to the next level. The keyboard itself is a really clean design, but the best bit is its intelligent predictive text. This works by letting you flick suggested words up onto the screen from the keyboard. You can even delete whole words in one go by swiping right to left across the keyboard. It really needs to be seen to be believed, but trust us when we say it makes typing easier than ever before. BBM is another part of the BlackBerry holy trinity and it has been given a spruce up thanks to BBM Video and Screen Share. The added video functionality is really easy to use and gives users a viable alternative to Skype, meaning that you can get video calling to friends over your mobile network or Wi-Fi. Screen Share is even better; essentially letting you show whatever is on your screen to that of your chat friend. To be completely honest, both BBM Video and Screen Share was a bit temperamental on our devices, with Screen Share also looking a bit grainy at times. However, we are hopeful that this hiccup will be sorted out on a future update for full production models. To keep the business-types happy, RIM has also provided an overhauled version of BlackBerry Balance, which lets users seamlessly switch between a work profile and personal profile on their handset. That might sound fairly ordinary, but the fact that your IT administrator can delete the work side of your device and leave the personal side untouched should you ever leave your job is pretty impressive. Finally the Z10 has a decent 8 megapixel autofocus snapper built-in camera that can even capture 1080p HD video. The real headline feature of the Z10’s camera though is something called Time Shift. This bit of software lets you rewind or fast forward after you have taken a shot in order to get the perfect image. But it gets even better. By using face recognition you can scroll to find the best facial pose of the person in your photo, meaning silly gurns and badly-timed blinks will become a thing of the past. Our Verdict The Z10 really does have what it takes to really propel BlackBerry back into the smartphone premier league? It looks absolutely stunning, the display is a pleasure to use, and the operating system is revolutionary, providing the user with a new way of interacting with their device. BlackBerry Z10 Specifications • • • • • • • • • •

16GB Internal storage 4.2” Touch display 8MP Rear camera 3G Ready 1280 x 768 resolution, 356ppi Up to 11 hours* talk time (3G) Up to 17 days* standby time 1080p HD video recording MicroSD memory card BlackBerry® 10 operating system

March 2013


Techworking –

“Linking” Into Business Success S

prominent and impressive to the people you contact once they start looking at you. Create a profile for your company and encourage all of your employees to create profiles that link to it. Strong profiles will pay off as you will look more attractive to prospective employees.

ocial media can be a huge contributor to a company’s profile and lead generation, but how efficient are the various different social channels in directly driving leads? In a recent study of over 5,000 businesses, internet marketing website HubSpot found that traffic from LinkedIn generated the highest visitor-to-lead conversion rate at 2.74%, almost 3 times higher (2.77%) than both Twitter (0.69%) and Facebook (0.77%). How can LinkedIn provide business advantage? A LinkedIn company page is in a centralised location where millions of LinkedIn members can visit company news, products and services, business opportunities and job openings. You can: • Tell your company’s story • Highlight your products and services • Engage with followers • Share career opportunities • Drive word of mouth at scale For the site visitors, the company pages on LinkedIn are a place to: • Explore companies of interest • Get the latest company updates and industry news • Research products and services • Learn about job opportunities The ‘Products & Services’ tab on your company page showcases what your business has to offer. You can upload images, videos and your company website address, and place your offerings in front of a huge business audience which LinkedIn members can view, recommend, or share your products with their network. The recruitment advantage Make your company and your job offerings visible on LinkedIn. If the perfect candidate finds you, wonderful: you want your company to appear


March 2013

Chances are, influential people in your industry are members of useful groups, so why not hang out where they hang out?

How to Leverage Your Business’ Top-Performing Social Network 1. Post more of the targeted content that’s working Monitor all of the comments, likes, shares, and clicks that you receive and be guided by the positive indicators. If you notice people are specifically really enjoying blog posts, webinars, or something else, keep offering it! 2. Find more opportunities to post relevant calls to action Sprinkle more lead generation opportunities throughout your social media updates and create more ‘teasers’ to encourage organic traffic, interest and response. 3. Don’t take success for granted It’s easy to get comfortable when something is going well as there are always opportunities to improve. Keep testing, analysing your data, and increasing results. If you’re using LinkedIn to make connections, you’re missing out. Business owners land clients as a direct result of participation in LinkedIn Groups. Others see their groups as a natural extension of their social media marketing efforts. LinkedIn groups are informal communities formed around industries, professions, themes, niche topics, etc. If you find and join the right groups, it will be very easy for you to keep up with news and trends, make connections, ask and answer questions, attract new clients and more. Here’s how you find the right Groups for your business advantage:

TECH Conduct your search Go to the Groups Directory page and enter search terms related to your goal. Remember, narrow your search; searching ‘marketing,’ generates 41,000 results; by searching ‘social-media marketing’ you will yield around 4,000 results. Use search terms that are as specific as possible.

should be somewhat regular in order to establish your presence and trust in you. This is especially true if you hope to establish yourself as an authority in your field; it’s hard to spark great discussions and answer questions when you’re never there. Take 10-15 minutes every couple of days to respond to questions and comments; before long you will be in a position to generate your own discussion topics and promote your own company/website.

Be discerning You can refine your search by using the check boxes on the left-hand side of the page. One approach is to sift search results by your current connections. For example, you can choose to see only groups that your first or second connections have joined. Borrow ideas Searching is useful, but so is following the lead of people you respect. Go to any profile page and check out the groups that person belongs to; chances are one or two match your goals. Plus, joining the same groups increases your chances of connecting with the people you hope to connect with. Chances are, influential people in your industry are members of useful groups, so why not hang out where they hang out? Sift through the results A search result lists groups in descending order according to the number of members. Under each group is a brief description, which is sometimes helpful. Join a few groups Pick a few groups that appear to meet your goals - and seem interesting - then join. You can be a member of up to 50 groups in total, and you can leave a group at any time.

Quality not quantity! Sometimes people will invite you to join a group. Sometimes you’ll stumble across one and think, ‘why not?’ Eventually, you’ll belong to dozens of groups, but remember it is impossible and impractical to participate in a meaningful way in more than a few. Eventually, consider starting a group Anyone can start a group. If your group becomes popular, you can drive traffic to your website and send free weekly messages to group members, all of whom opted in to receive those messages, which also gives you valuable data for mailing lists.

Wait until you really understand how groups operate before starting one of your own

You should wait until you really understand how groups operate before you establish one of your own, differentiating it from the thousands of similar ones that exist. This is an opportunity for you to use your own unique insights into your industry, demonstrate your understanding of the market and show why you are a credible business with whom to deal. In the next issue of Business Insight, we’ll be looking at how to ‘tweet’ your way to competitive advantage, ‘friend’ your way to a higher profile and harness Facebook to encourage a more loyal relationship with your customers.

Read recent discussions and click the ‘Members’ link to find out who else is in the group. If you find heavy hitters or people you respect, that’s a good sign. Keep in mind, some groups are members only; the Manager of the group must accept you before you can participate or view discussions. Members only groups tend to be more focused, but there are plenty of open groups that stay on topic and are spam free. Monitor and reflect on the quality Monitor, test and evaluate the quality of the discussions or updates. Are the articles or resource references relevant and valuable? Are the discussions interesting? Keep in mind you can always leave if your initial impression turns out to be wrong. Hold back on self-promotion for a while In the online world, no one likes the person who arrives and takes over a discussion with selfpromotion. Watch, listen, and get a feel for how the group operates. Then gradually start to participate. Start by responding to questions or topics raised by other people. Get a real feel for the group, and let the group get a feel for your views and discussion style, before you start driving discussions. Stay reasonably active You don’t need to participate every day, but you

March 2013


Rising Cost of Medical Care A

about litigation as they are in the States, sanctioning expensive tests for everything.

lthough Private healthcare insurance is not compulsory for all employers, as Dubai’s public healthcare, run by the Department of Health and Medical Services (DOHMS), provides free (or very low cost) medical services for UAE residents. That said, expatriates used to constitute about 75% of the public hospitals patient numbers. Consequently since 2001, medical services are no longer free to expatriates, but since 2004 though, only foreign patients required for admission are accepted by public hospitals. These changes have led to the expansion of private medical industry in Dubai, with companies offering private medical insurance (PMI) to their expatriate staff, as an employee friendly benefit that helps to maintain a healthy workforce, and retain and attract new staff. Current trends I am sure you have noticed that the cost of private medical insurance has increased exponentially recently, and like us, you’ve been asking why? In Dubai, we are all used to private healthcare being a necessity. Yes, UAE public hospital facilities are very good, but we all want to go to a private hospital, stay in a room that resembles a hotel, with a food menu to order from. We know we have to pay for this but the cost of medical insurance in the region has risen on average 10-20% year on year. In light of this we have looked at PMI, analysed why prices have increased, and identified what you can do to bring these prices down. Increase in costs Did you know that Dubai is the third most expensive place to receive treatment in the world, beaten to number one only by America and China? There is a demand for American led medical care in Dubai, with doctors here being just as concerned


March 2013

Hospital overhead costs and non surgical supplies have also increased. Hospitals run as a business, and to ensure they turn a profit these costs are passed onto the medical insurer, who adds 10-15% on average to cover their own costs, before being passed to you.

5,000 medicines in the UAE had incased 44% due to exchange rates

Furthermore the costs of medicine and their subsequent import costs have also increased. The UAE conducted a study on prices in six countries; Jordan, Bahrain, Oman, Lebanon, Saudi Arabia and the UAE, and found that 5,000 medications in the UAE had increased by up to 44% due to exchange rates. This has led to the UAE Cabinet approving a unified pricing system that lowered the cost of more than 6,000 medications; 83% of the registered 7,053 medications in the country will be priced below AED 250, of which 2,101 are for chronic diseases like diabetes, heart disease, stroke and chronic respiratory diseases. The system has also fixed the profit margins for distributors and private pharmacies in the UAE, pricing medicine in US dollars to prevent currency fluctuation. Problem The problem is that the average cost of medical consultations is about AED 150 and a night visit is AED 300, hip replacement surgery may average AED 50,000, knee replacement surgery AED 40,000, and the average monthly cost of breast cancer treatment is AED 30,000. That is not to mention pregnancy or child birth. Any complications in pregnancy can be very costly and just the cost of the incubator averages AED 4,000 a day without the drugs required‌ So can you really afford not to have private medical insurance?


Do you think small & medium business deserve tailor made health insurance products?

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March 2013


The removal of any of these categories can lead to a 20% reduction in costs. Remember there will be an impact to your decisions. For example, should you not include or limit Maternity Benefit, your employee may return home for the birth and take more time off, or return at all. Or, where the birth takes place here, in the UAE, but with complications that the Company’s PMI does not cover the employee would be liable for these costs. This would undoubtedly affect, negatively, their and colleagues perception of the company; their production, motivation and loyalty would also be influenced, and there is also a risk that the company’s reputation in the marketplace as a good business will also be affected.

Insurers Insurers are actively putting measurers in place to assist with cost containment. Hospital invoices are now checked by trained personnel as insurers found globally that hospitals overcharged. For example, a hospital would invoice for a whole pack of painkillers when just two had been administered. Insurers are also seeking to do deals with hospitals globally to reduce costs; with you choosing which hospitals you would like covered and therefore, the levels of premiums. Whilst we should start to see the changes in prices from government policy affecting treatment costs towards the end of the year, costs are spiraling. Yes, you can go out the market and negotiate, but sometimes pre existing medical conditions can hamper the possibility of your moving insurer. So what can you do to reduce costs? 1. Consider an excess Implementing an excess will immediately reduce costs; the bigger the excess, the higher the reduction in premium. The discount varies between insurers. An excess can range from US$80 to US$8,500 and is generally payable per policy period. Meaning the first US$80 to US$8,500 (dependent on which you chose), is payable by the insured. The remaining claim is the insurer’s liability. Depending on your insurer and scheme type, you could look at implementing an excess for dependents only, but consider existing staff, and if this will affect potential employee decisions. Caution should be given as to whether or not the excess is per claim or per claimant. In 2011 in the US, one insured person paid $16,000 dollars in excess payments as they repeatedly sought medical advice for various ailments, within the one year. 2. Select the correct area of cover Ensure your area of cover is appropriate. Must the receptionist have cover outside of the UAE? If all of your staff are from India and Europe do you really need cover in the USA? These are all questions to consider when setting areas of cover. 3. Alter your levels of cover Insurers are now offering modular policies, allowing you to pick options as opposed to standard levels of benefits. Seek full advice from PMI Advisors, and also consult with members of staff to determine the cover levels you require. Ask yourself, do you really need full refund for out patient services? Do you want to include cancer cover? Is dental cover required or can you do without this? Do you really need maternity cover from the start of the policy or can this come in later, or even not at all? Always read the fine print; some cover may only be extended in emergency circumstances, after the treatment has been received. In these cases the “bureaucracy” of the claim can delay significantly the payment and/or lead to the claim being rejected.


March 2013

The average monthly cost of treatment for breast cancer is AED30,000

4. Arrange eligibility criteria This is unlikely to affect premiums in the short term, but on a long-term basis this will impact, as you will be decreasing the people that will be eligible to be insured, and therefore claim against your policy. Is it really necessary that you have full cover for all staff and dependents? Ultimately, you have your private insurance policy so your workforce can return to work quickly should they become sick, but cover for dependents is an additional employee friendly benefit, requested by your staff will be undoubtedly impact on your claims experience. Careful consideration should be given before making this move as staff are likely to have travelled with dependents to the UAE for employment with you, therefore it affects current and future employees. Don’t make rash decisions in this area. Consider all options first and seek consultation with your staff, explaining your reasoning prior to going ahead with any proposal. 5. Review your claims experience If you are large enough, your claims will have a direct impact on your costs. If you are part of a global policy for example, the claims throughout the rest of the world are likely to have a direct effect on your own premiums, as your policy premiums will be directly related to the claims of the company as a whole. Ask for a breakdown on the claims relating to your area for the last three years. Does the increase in premium reflect the increase in claims? Roughly, the claims fund amounts to 70-80% of the total premium. If your claims amount to the claims fund, you can expect an increase of 10-20% in line with medical inflationary increases. Some companies may re-evaluate premiums to match direct experience, so ask if this can be done. Your intermediary will be able to assist you with all the information required, as well as providing the work to obtain alternate rates. Regardless of the cost, Private Medical Insurance is a benefit which will continue to be expected in Dubai by all of your current and prospective employees. How you implement it and what benefits you include are ways that you are able to keep costs to a minimum.


Can Meditation

Improve Your Business?


bet you are thinking “What? No!” When we think of meditation we often think of aged hippies chanting or people with dreadlocks going on vacation to monasteries in Tibet to ‘find themselves’, and whilst we may scoff, new reports are proving that we should not as meditation brings many benefits; it can refresh, help us settle into what is happening now and ultimately, making us more productive. These studies are showing that it is worth trying meditation for you to determine exactly how it can help. The hardest part of determining if meditation can help is not the meditating; but finding the time to do it. Studies from The National Institute of Health, University of Massachusetts and the Mind/Body Medical Institute at Harvard University have found that meditation enhances the qualities companies need most from their workers; increased mental activity, enhanced intuition, and the alleviation of aches and pains etc. In addition to the extensive and inherently valuable direct health and wellbeing benefits for individuals, meditation can also help your workforce. Large corporates as well as SMEs are all looking towards tailoring meditation schemes as a new employee benefit. HR Departments and the Board are quickly realising its benefits to the business. Meditation can improve business by: • Reducing costs of staff absenteeism caused by illness, injury, stress, long term illness • Improving cognitive function, concentration, memory, learning ability and creativity • Improving productivity and overall staff and business wellbeing • Reducing staff turnover and associated costs • Enhancing employer/employee and client relationships • Reducing the health insurance premiums for business

• Providing a visible and tangible Corporate Responsibility Stance • Enhancing employee job satisfaction Ultimately meditating can help to improve your way of responding to life’s challenges. Meditation increases your focus and keeps you in the present, identifying the route of problems quickly, and exactly how you can deal with this as opposed to the peripheral issues that may unnecessarily take up your time. Rick Goings, CEO of Tupperware, meditates for at least twenty minutes every afternoon to refocus; “For me, it’s a practice that not only burns off stress, but gives me fresh eyes to clarify what’s really going on and what really matters.”

“You cannot solve a problem with the same mind that created it”

It has been found that meditation helps to increase your capacity to resist distracting urges. Subsequently helping to improve relationships, reliability and, performance. By resisting these urges, (for example, not reading new emails when you know you need to concentrate on your accounts in order to meet a deadline) you can make better and more thoughtful decisions.

Albert Einstein

We all know it is easier and more reliable to create an environment that supports your goals then it is to depend on willpower, but we often need to rely on willpower to make this happen. Like when to bite your tongue rather than saying exactly what you think to one of your sales staff. Meditating daily is like hitting the gym but for your will power and emotional wellbeing. Your urges will not disappear and we are not saying that you will never lose your temper again, but it provides you with the underlying sense of calm leading to fewer incidents. We do not want to stop these feelings anyway. These feelings are what help us learn and they hold useful information but the difference is that you will learn clarity; what to ignore and what to follow.

March 2013


“I want to fix people from the inside”

Andrew Cherng, Panda Express Founder The only way to see if this works for you is to try it yourself. Try it today; for twenty minutes, and repeat it over the next three days, and see how you feel afterwards.

“The mind is its own place, and in itself can make a heaven of hell, a hell of heaven”

John Milton


8 simple ways to practice meditation; 1. Chose a quiet place and make yourself comfortable in any position, somewhere where you will not be disturbed. 2. Breath naturally, with your eyes closed. Inhale through your nose and breathe out through your mouth. Your breathing will naturally deepen and become slower the more relaxed you become. 3. Relax completely with self-talk. As you breathe in silently say “I am…” and as you breathe out “relaxed”, drawing out this word with your breath so it becomes ‘relaxxxxxxxxxxed”. Repeat this for every breath. 4. Managing distraction. You will find your mind drifts to other thoughts, but keep focusing on the breathing and repeating the phrase. It will happen often when you first start, this is common, but practice makes perfect. 5. Practice for ten minutes, using a timer with a nonjarring alarm if this helps with the timing. 6. Now bring a business issue to mind, at the end of the ten minutes. Think of it as a question, for example, “How can I increase my sales of ….?” Gently turn the question around in your mind, avoiding grasping it too tightly. You will know when you are holding too tightly as your muscles will tense and your breathing will speed up. 7. Explore deeply and clearly. Approach this as though it is the first time someone has asked you that question. How do you feel about it? How would you react? How would your response change if you were one of the stakeholders and not the business owner? Think clearly and deeply for ten minutes or more if you are comfortable. 8. Ending the session. Slowly open your eyes, resting, allowing your mind to gather for a minute or two before getting up. Make any notes that you have as soon as possible after the meditation.

March 2013

Still not convinced?! Just ask… Dalio – Founder and CEO of Bridgwater Associates, the world’s largest hedge fund has built in many principles of meditation into his firm’s culture. He upheld his belief that a person’s main obstacle to improve was his own fragile ego. It became that no one held back a good idea for the fear of being wrong. Marc Benioff, CEO at started to meditate to help relieve the stress he was going through when working at Oracle and continued from there. Bob Shapiro, former Monsanto CEO who cofounded Sandbox Industries, a venture capital firm, has turned offices into meditation spaces, “As a business person, I noticed a number of people I know pretty well who picked up on it, people who perhaps had come into it with some degree of scepticism and found the experience useful.” Bill George, Former CEO at Medtroni and lecturer at Harvard Business School, dedicated a conference room to being a quiet space, where employees could go for a break. Russell Simmons, Def Jam Founder, has written a column in The Huffington Post 2010, about Transcendental Meditation [TM]. “Even thought I had been meditating in different ways for over 10 years, I have now been doing TM for two years and it has changed my experiences in life for the better.” Ramani Ayer, former Chairman and CEO of The Hartford Financial Services Group, has been practicing TM for more than 25 years as it was ideally suited to his hectic lifestyle. “It has demonstrably reduced my stress and helped to maintain my good health, and has immeasurably benefited my family and business relationship. Importantly, it has helped me to make clearer, more effective decisions on the job.”


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March 2013


Supply Chain Management W

ithin our success series, one of the key processes that our business leaders have identified as vital to their success is Supply Chain Management (SCM). So, we thought we’d help you understand this in greater depth by analysing SCM looking at all angles, so you too can excel. SCM is the active management of supply chain activities to synchronise demand with supply, measure performance, create net value and sustainable competitive advantage. It spans the movement and storage of all materials, workin-process inventory, through to finished goods from point of origin to point of consumption, and information systems. SCM is a vital part of any business as it forms the backbone for enabling business to trade, and is the difference between positive or negative cashflow. With the global economy as it is, SCM is even more important. What would you do if your trusted supplier found themselves in financial difficulties and were unable to supply their regular order? How would this impact you? Or if one of your customers became bankrupt, leaving you with unpaid invoices? These are just three of the pertinent questions that SCM answers. There is a basic pattern of SCM which is summarised below for you. Production Identify your products/services. How much of which products/services should be produced/used, and by when? Create master production schedules taking into account plant capacities, workload balancing, quality control, and equipment maintenance, then incorporate it into pricing, supplier selection and management, maintenance plan, financial accruals and cashflow projections.


March 2013

The APICS Dictionary defines SCM as the “design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand and measuring performance globally”

Inventory What inventory should be stocked at each stage in a supply chain? What should be held as raw materials, semi-finished, or finished goods? Inventory is a buffer against uncertainty in the supply chain however holding inventory is expensive, so what are the optimal inventory levels and reorder points? Inventory is integral to your business plan, cashflow forecast, pricing and credit terms to name but a few. Be proactive and include as early as possible to minimise potential risk and costs. Location Where is everything to be located/stored and is it cost efficient? These answers determine the possible transport paths available for SCM. Transportation How should inventory be moved from one location to another? Any uncertainty in transportation must be compensated for by stocking higher levels of product, impacting on costs and cashflow. To counterbalance ask for discounts on bulk orders. Information What data should be collected and how much information should be shared? Timely and accurate information guarantee better coordination and decision making. With good information you can make effective decisions about what to produce, how much, where to store and transport to. Each company requires different SCM practices, so we have amalgamated some of the key practices that have been identified by specialist SCM professionals for you. 1. Establish a Company governing supply chain council A governing council’s purpose is to give direction and help align supply chain (SC) strategy with the

THE HUB products in stock and virtually nothing else. Excess stock means excess capital outlay, impact on bottom line profitability and available cashflow, so create a balance avoiding the potential damage of having insufficient stock leading to lost sales and customers. Poor planning and forecasting are direct causes of inventories that are out of balance with the needs of the business.

company’s overall strategy. You should hold regular meetings; ensure targets and strategies align with the business, and remove any barriers to implementation. 2. Ensure SCM is adequately staffed Having one person responsible for the SC and their team will encourage accountability and ensure that the structure of the SC is where it should be. This role, vision and objectives should be reviewed regularly by the council, and determined at board level. When looking for talent in this area the incumbent must have the ability to think strategically. 3. Make technology work for you Processes should be evolving and fit company culture and objectives. Subsequently, technology should be brought and tailored wherever possible for you to meet these objectives. So, establish the processes that need improvement, and then select the technology that best fits. 4. Work closely with key suppliers Monitor these relationships and act accordingly; are you aware some suppliers may be in financial difficulty? Has a key supplier just won a huge contract and are not increasing staff? These are all things you will be able to identify and ward off with a solid relationship. Have a backup plan by sourcing quotations from two alternative suppliers, thus providing a buffer should they not be able to supply you. Also, try to obtain long-term contracts with fixed pricing, including a breakout clause on service. 5. Look towards collaborative strategic sourcing Strategic sourcing is a cornerstone of successful SCM, but by taking a collaborative approach you can save money and lessen your carbon footprint on the environment. This is such a important issue that we will report on this in it’s own right in the next issue. 6. Don’t just focus on price You need to shift your focus from looking only at purchase price to understanding the total cost of owning/consuming a product/service. Yes, cost is vital but consider intangible costs. Generally, acquisition costs account for only 25 to 40% of total cost. For example, a new software package may incur training costs, time away from the business for training, and implementation time costs, all of which need consideration prior to decision.

Alexander the Great based his strategies and campaigns on his army’s unique capabilities and these were made possible by effective supply chain management

9. Establish appropriate levels of control and minimize risk Maintaining any level of stock involves risk; risk of products not selling, theft or damage. No process that can eradicate this completely, but by having clear SCM policies you are able to manage this risk more effectively. SCM policies follow an appropriate sequence and structure. Keep them realistic and easy to understand to ensure compliance. 10. Go green Reducing a supply chain’s carbon footprint is no longer a “nice to have” practice. The world is more aware of sustainability, and the environmental impact of our choices regarding products, suppliers and our employers. Some countries even have tax benefits, and award contracts to companies who implement ‘green’ practices. If you compete internationally you should make yourself aware of these. By implementing a strong supply chain and ensuring that you are always familiar with what is happening with it and your inventory, you will increase profits. In leaner times, it will be the difference between a company that thrives, and a company who survives. In our next issue, we will be looking at collaborative distribution, what this means, how it can save you money and what steps you can take if you wish to implement it and ‘go green’.

7. Centralise contracts related to purchasing/ supplying If you are large enough employing specialists will provide visibility, accountability, and many advantages. Yes, individual teams/offices should keep copies for their own records, but by having purchasing/supplying under a centralised SC function you can ensure that contracts are collected and maintained in one location, duplication of efforts business-wide are eliminated, and inventory carrying, transport and delivery costs are reduced. 8. Optimize inventory You should always be aware of your assets. To compete effectively you should have the right

March 2013


Tips to Building A Strong Brand H

ow to build a brand can be a daunting concept. When you think brands, you think of the multi nationals like Coca-cola, McDonalds, British Airways etc. When we see their logo, we know who they are. When we walk into a restaurant or onto a plane, say in Los Angeles, we could just as easily be in Dubai or London. They have their own identity. It stands out and we remember it. We know exactly what we will get from them, and exactly what we won’t. A common misconception is that you do not have to be a multinational to have a strong brand. You can be easily identifiable and stand out from the rest without the big bucks. A brand is a notion that a company has a big idea/story behind its existence. Consumers don’t just want products and services, they want to connect with something on an emotional and ethical level. We all look for ways to belong and this is where brands come into their own. The important thing however is to get it right internally before you are able to get it right externally. Yes, building a brand is a marketing technique, but it is also an invaluable HR technique. It is important that everyone in the company helps you build your brand as your employees are all ambassadors for you and your company, as through them, the public’s view on the company is formed, which is why hiring the right staff can be so important. The brand must go through each and every department, from the board to the person on the shop floor. You must all consider the effects your actions have on a company. Everyone wants to feel as though they belong on one level or another, so use this to your advantage. By getting each of your employees in your company to help you, you are getting their emotional support also. With this in mind, we have put together a handy 7 step guide that will help you build your brand.


March 2013

1. Be noticed and make an impact You want people to remember your brand. Think of the logo that you want to use, the colouring you would like associated with your brand, the design of your business cards and marketing material. All of this should be uniform. When people see this, they should instantly know it belongs to one company; the more they see it, the more they will subconsciously register that company is yours. The wording and artwork on all company material is important, so give this considerable thought. Think of memorable phrases and artwork to convey your message. These can be used with regularity if the occasion fits. You must ensure that your first impression counts. Your literature must make people believe that you are fit for business; a weathered business card is not a good reflection on anyone. You would not place an advert in a publication without a thoughtful design process, so do not give out business cards that have not had careful consideration also. 2. Be connected By this we mean consider how your customers relate to the brand. For example, in company literature, is it immediately apparent what you are about? Think of the style and content that you should be using. It should be broadly in line with your industry sector; Marketing companies use wacky graphics, colourful material and ‘new’ words, where as finance companies tend to be more staid and therefore use formal language, with not much ‘fun’ in design. Consider your industry sector brands and the language they use. We are not saying to copy them as you need to stand out from them, but their use of language will give you an idea on the formation of wordings that you can use and how you want your company to be portrayed.

“A brand is a living entity - and it is enriched or undermined cumulatively over time, the product of a thousand small gestures”

Michael Eisner, CEO Disney


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The colours you use are also important. What do they signify? Did you know the reason we see financial service companies favour blue is that this signifies trust, loyalty and wisdom, as well as increase in health and status?! Ask yourself what you would like your clients to say/feel about you; Is it your service and product standards are the best, or that you are known for the innovative way you assist your customers? If so, the colours are a great way of conveying this message. 3. Be clear You need to ensure you do not confuse your customer – If you are a legal company, why use too much legal jargon? Instantly you are alienating your client from your message as they are still trying to work out what you meant by T&Cs. You need to speak in a language which your client will understand in all your communications, verbal written and marketing collateral. Also, testing your brand can be helpful. Try to target the kind of audience you would be selling to. Go out onto the street and ask 20 people what they think your company is about from the logo and literature you have. Record their comments and ask them for advice on how you could possibly improve your image. Remember, in the future, you may well be selling your products or services to one of them so their advice could be invaluable. Believe it or not, white space can add impact. A clear design will give room for the message to breath, so be careful not to drown the message with unrelated imagery or excessive text.

“One of the biggest responsibilities of management is to look after the corporate DNA”

Andrew Rolfe, CEO, Pret A Manger

4. Be obvious Using your services should be clear – Do not leave any room for misinterpretation. Try not to worry about pleasing every one as you won’t; causing consternation with 20% of your target population means you still have 80% who like what they see… 5. Be consistent A consistent message brings on feelings of solidarity and security – the two feelings we associate with trust. Therefore, does your letterhead reflect your business card? Do both the letterhead and business card reflect the website? Does the website reflect your promotional material and presentations? All of these questions should be considered. 6. Be different Being different allows you to formulate your ‘Unique Selling Points’ or USPs – How do your competitors pitch themselves? What language do they use? How do you differ? What do you do that is better? These are all questions you should ask yourself. You need to let the customer know what makes you different to the rest of the market and therefore why they should chose you over your competition. Again, it is the design and layout that will help you convey this message appropriately.


March 2013

7. Be hard hitting and direct Interaction and/or invitations are always a good way to start to solidify a relationship with people. Design a way of enabling your customers/potential clients, to interact with you in any way. A website is a good place to start. Again make this uniform with all other promotional material. Display your logo and think of unique ways to gain interaction. Ultimately, a brand is about getting noticed. By considering each of these points, your brand will grow, as will your identity and your profile in the market place.

Need help choosing the right brand agency There are a number of brand agencies set up in Dubai, all of whom can help you. But how do you choose the right one? Liza Medd, co-founder and Director of Fred Creative explains the most important tips when selecting an agency. 1. Results. What results do they have, how do they measure results? What did they do? You’ll learn a lot about what an agency thinks is important by what they measure. 2. “Funny” Does Not Always Mean “Money”. Don’t fall in love with an ad agency just because they show you a bunch of funny spots. Just because a campaign is funny doesn’t mean it got any results. 3. Portfolio Isn’t Everything. There are many agencies who expect to be hired on the strength of their portfolio alone. But remember that creative output is only one component in creating a healthy, productive partnership. Test this. 4. Local vs. Long Distance Relationships. The right combination of things you’re looking for in an agency partner might not always be available in your back yard. Look for an agency who understands your industry and your vision. 5. The Creative Brief. If you really want to know how an agency approaches their work, ask to see their “Creative Brief”. Look carefully at the questions they ask. It will give you a good sense of their strategic acumen. 6. Proof of Process. Ask the agency to show and explain to you a completed creative brief; from start to finish. You want to get a sense of their process and how adept they are at translating strategies into ideas with results. 7. Make sure you have the right account exec. If you don’t like the way this person works or don’t like your account exec (and vice versa), the relationship is doomed from the start.


The Truth Behind Fitting Out Office Space S

o you’ve decided to open your company and begun the legal process of incorporation and now need office space. Sourcing office space for many SMEs is usually undertaken as an after thought, with many SME owners not aware of all the technicalities and requirements needed. Identifying and designing the right offices could be the most important decision you make for several years and certainly one of the most expensive. If planned, budgeted and managed correctly it could propel your business to the next level, boost profits and save a fortune. It is also likely to be one of the biggest financial outlays your company will have to make. So if you’re responsible for getting it right first time, you might be feeling somewhat overwhelmed. We talk to Woody Lennard from Oceana Gulf, a leading contractor and office fit out company to get the low down on what you should be looking at when deciding on office space, design and fit out. A well planned office is also crucial for staff; no one wants to sits in a box room, with no natural light and not talk to any colleagues all day. A recent survey undertaken by the Maris Group found that 80% of professionals link the quality of their workspace to job satisfaction, 33% of professionals say that they workspace is a factor in their stay or go decision. The one surprising thing about this survey however was that they found staff output can be increased by up to 20% with the right design. First of all, and undoubtedly the most important, is understanding what it is you want, and then choosing the right contractor to assist you. They need to understand your business. Why? Because not all industry sectors have the same needs and requirements. For example, engineering firms may require large working spaces for working on designs or building and electrical measurements, whilst accounts may require filing cabinets full of records to be stored, and a marketing company may want a

whole office to be able to brainstorm at all times, so partitioning would not be effective here. The fit out stage of your business can be extremely enjoyable and smooth as long as you take responsibility and select the right fit out contractor for you. There are many aspects to designing and building an office for SMEs but as long as the basic 3 stages are followed, then you will have a fantastic experience and an efficient, well designed, functional workspace for you, your employees and for your company to go from strength to strength.

Staff output can be increased by up to 20% with the right design

Stage 1 Will require you to co-ordinate with your fit out contractor and come up with a Space Plan Design that works not only for the office space, but also for your business requirements. This in turn helps define your project requirements and scope from the beginning. Make sure you have a site visit with your contractor so you can conduct a technical site survey based on the office. If you do or do not have an idea of the design you would like, work with your fit out contractor to develop a Concept Design Plan that helps you organize, analyze and approve, this design and will provide a preliminary project budget and a project schedule can be prepared on the back of this. Now you have chosen your office, you need the correct paper work at hand so you can start the fit out application process. The major items required are: • Fit out contractor appointment letter from you as the tenant/owner • No Objection Certificate (NOC) from the owner of the office space and yourself/tenant, explaining there are no objections to you fitting out the office space • Owner/tenancy contract • Owners Sales Purchase Agreement

March 2013


most critical choices you can make. Get it right and you’ll have a smooth transition, with no disruption or budget over-runs. Get it wrong, and it can be a nightmare of escalating budgets and business disruption. Woody Lennard, Managing Director of Oceana Gulf Contracting LLC, recommends the following selection process:

• • • • •

Your DMCC Trade license Owners Title Deeds Trade License (tenant & contractor) Passport and Visa copy (Owner & tenant) No Objection Certificate (NOC) & approved drawings from the Tower Engineering Consultant (the consultant appointed by the developer) • Owners Affection Plan With the help of your selected fit out contractor, you can begin your submission process. Working with a professional fit out contractor should ensure this process is smooth and well co ordinated. Incorrect information and poor co ordination will lead to delays in the approval process and re submissions to the relevant authorities. Stage 2 Will require you to co ordinate with your fit out contractor to finalize the detailed design drawings ready for submission to the Engineering consultants and DMCC. During this stage all architectural, engineering, mechanical, electrical and finishing’s should be prepared to comply technically with the relevant authorities, and approved by you for submission and construction. Once this stage is complete, your fit out contractor can prepare an accurate final estimate based on your final approved design and specification. Stage 3 Will require you to co ordinate with your fit out contractor to ensure the progress on site is monitored against your agreed payment structure and relevant authorities are coordinated, building management are integrated, DEWA is applied for, service providers are booked, defects lists are prepared, certificate of practical completion are prepared and handover of the occupancy certificate is successfully issued. Perils to be aware of during fit outs Now you need to minimize your risks. Fitting out your new office can be a fantastic experience if you are aware of the pitfalls. Here are some of the perils to stay clear of. • Not enough electrical load to run your office • Not enough floor area for your staff and visa situation • Not future proofing your office • Using poor quality products and materials • Not incorporating ergonomics for your staff can cause health and safety issues • Poor design • Not firming a comprehensive bill of quantities and specifications • Not having a contract and payment structure plan • Contractors running away • Not having defined timescales for the project • Not being able to communicate with your contractor • Contractors without the correct trade license activities Whether you’re relocating, refurbishing or fitting out new office space, the company you hire is one of the


March 2013

80% of professionals link the quality of their workspace to job satisfaction, 33% of professionals say that workspace is a factor in their stay or go decision

1. Check the Company’s reputation. A design and fit out company will live or die on it. Take time out to talk to their past clients and look at projects they’ve delivered. Ask about the process and if the project was completed in time. It will be time well spent. 2. Assess their financial stability and your risk. The health of the company you hire has a direct relation to your financial risk. For example, if your project budget is £1 million, and the company has an annual turnover of £5 million, then you could put them out of business by hiring them. How will they afford to purchase resources for your project? Choose carefully. 3. What services are included in their proposal? Make a list of everything your contractor will provide as part of their service and those things that it won’t. Comparing companies on this basis will determine true value for money. Many companies will quote a lower price in full knowledge that you will need additional services later on. Beware of this as these additional services are likely to be expensive. Which of these services do they offer in-house? Which ones will you have to hire additional contractors and manage yourself? 4. Evaluate their credentials. Is your contractor serious about the environment, quality, and health and safety? If they are, then they would have picked up certain credentials along the way. Take a good look at their past projects and speak to their past clients about how their experience was in relation to time, budget and quality. Thanks to Woody Leonard, Managing Director Oceana Gulf Contracting LLC, Tel: 04 431 8908.



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March 2013



The New Culture


hy is intrapreneurial spirit suddenly more important today? A simple answer is that the world is changing rapidly under the influence of new technologies, increasing competition, and in times of recession organisations need to stand out from competitors; bringing something new to the market or simply producing a better product at lower costs. So how can a company develop an innovative culture to support this need? Everyone knows what an entrepreneur is, they are the successful people who start up a business on their own and have been known to be described as the new rock stars of the business culture. The sad truth however remains, that for every successful entrepreneur, there are thousands who struggle daily, often never realizing their dream of success. Entrepreneurialism is not for everyone. There are many people, who do not want to ‘go-it-alone’. Sadly though, everyone tends to be put into one of two categories; big shiny entrepreneur, or just another employee. This however is not the truth. Think to your own work experiences. There are always people who work and think like an entrepreneur, but never make that move - “intrapreneurs”. So what is an Intrapreneur? An intrapreneur is someone that will run with their own ideas and turn it into something profitable in one form or another. They have the entrepreneurial streak, but are comfortable finding their own way within a company either by internal promotion, or climbing the career ladder. Marissa Mayer, President and CEO of Yahoo is a prime example of this. Marissa fought her way up from a Business Executive within Google before going on to take Yahoo by storm. Marissa has key entrepreneurial talent, but choses to remain safe within company as opposed to starting out on her own. Kathryn McGeary, HR Regional Projects Officer for GL Noble Denton, says “Intrapreneurs have the advantage of keeping up with fresh ideas, allowing the business to adapt and survive; essential in this current market. On the downside it can mean that individuals are taken away from their core work to pursue something that doesn’t result in increased revenue. This will be felt more in a smaller business where there aren’t the additional employees and financial resources, and they may decide to


March 2013

leave and set up independently after they have determined the financial viability of their idea. Although intrapreneurs can be a risk, there is no gain without risk!”

“Talk that does not end in any kind of action is better suppressed altogether”

Thomas Carlyle

Intrapreneurs are vital to today’s business as they will lead the way in innovations and have the spirit to make to make it happen. Smart organisations should look for individuals who can work independently, are innovators, and want to be a “champion of change”. More importantly, intrapreneurs can work seamlessly as part of an integrated team structure, to effectively embrace, shape and embody a culture of innovation. Intrapreneurs are most successful when management empowers and supports them. In return they will support the company, represent the company’s best interests, champion and defend the company, all whilst earning the respect of colleagues. Kathryn goes on to say, “Encouraging intrapreneurs within a business means a constant stream of creative ideas developed by employees into a profitable venture. The organisation gains new avenues with minimal risk, and the business gains as the employee feels valued. Everyone wins!” So here’s to intrapreneurs everywhere; the business world needs us now more than ever!

Regional News Qatar

Swiss promotion across the Gulf

DOHA: Swiss authorities have recently released plans to promote their art and culture across the Gulf region, by outlining their plans on extending the Swiss Day Event to Qatar following its recent success in the UAE. The event, held in the Dubai Theatre

and Arts Centre, was to show people that there is more to Switzerland than banking, chocolate and watches. To reiterate their commitment to the region, Switzerland have also announced that they will be opening a new embassy in Doha in April 2013.


$2.5bn development grant

ABU DHABI: A $2.5bn (AED 9.18bn) grant has been approved by the directive of President His Highness Shaikh Khalifa Bin Zayed Al Nahyan under the Abu Dhabi Fund for Development (ADFD), within the framework of the Development Programme of the Gulf Cooperation

Council of Arab Gulf States. This amounts to 25% of the full grant offered under the programme and will be managed by the ADFD. It has been earmarked to support finance projects across a number of sectors, including health, energy and education.


Joint navy drills with Sudan

RIYADH: The Navy of both Saudi Arabia and Sudan have joined forces to conduct their first navy drills in the Red Sea. The focus is on anti smuggling training and operations to boost security and stability. Source: Suna

Saudi and Kuwaiti forces foil terror plot

RIYADH: Saudi authorities announced yesterday they had foiled a “terror” plot by elements suspected of links to Al-Qaeda, mostly Yemenis, and smashed two extremist cells in Riyadh and Jeddah. The Interior Ministry said in a statement the suspects were “in contact with the deviant organisation abroad”, a term usually used to refer to the AlQaeda jihadist network. The suspects were working on “recruiting elements to execute criminal attacks targeting security forces, citizens and foreign residents, as well as public installations”, it said in a statement carried by the official SPA news agency. The Ministry said two Saudis and six Yemenis were arrested, and also named

two further nationals were wanted for questioning. If any of those plots had succeeded, it would have been the first since the suicide bombing against assistant Defence Minister Prince Mohammed bin Nayef in August 2009. Saudi Arabia witnessed a wave of deadly attacks by Al-Qaeda between 2003 and 2006, which prompted the authorities to launch a crackdown on the local branch of the group founded by slain Saudi-born Osama bin Laden. In Jan 2011, crossborder police agency Interpol issued an alert to police worldwide for 47 Saudis with suspected links to Al-Qaeda, following a Saudi Red Notice. Saudi Arabia is a key US ally in the war against Al-Qaeda.


Kuwait to increase jobs

KUWAIT CITY: The latest Middle East and North Africa Job Index survey conducted by, and YouGov, a research and consulting organisation, has shown that in the next three months, 30% of Middle East and North Africa (MENA) employers are ‘definitely hiring’, with an additional 27% stating that they are ‘probably hiring’ – an increase of 2% in

both instances in comparison to results gathered in Q3 2012. In Kuwait, 31% of the companies are ‘definitely hiring’ in the next three months, with 30% stating that they are ‘probably’ hiring. In a year’s time, 73% of companies are expecting to hire new employees. Source: Kuwait Times


Oil output set to increase in line with demand

RIYADH: Saudi Arabia expects to raise its oil output in the second quarter to satisfy higher demand from China and feed economic recovery elsewhere, oil industry sources said. The world’s largest oil exporter kept

production steady at about 9 million barrels per day (bpd) last month and sources say production has since hovered around that level because buyers have not asked for more. Source: Reuters


Iranian Development

TEHRAN: Close to 70 cluster development plans have started across the country, said a senior official of the Organization of Small Industries and Industrial Townships of Iran. Gholamreza Shafe’ei added that close to 200 industrial complexes, including 60,000 enterprises have been identified across the country since six years ago, Shata News reported. He said a 270-page document about cluster development has been compiled by the Organization of Small Industries and Industrial Townships of Iran. The Ministry of Industries, Mines and

Commerce is notifying it to all entities, he added. Countries hope to achieve industries which grow fast and many are using the strategy of industrial clusters development. The industrial cluster is one of new combined methods of various theories such as theory of economic geography, regional economics, national innovation system, transmitting knowledge theories, social capital theories and social networks. Source: Zawya


The UAE is free from horsemeat

ABU DHABI: The Abu Dhabi Food Control Authority (ADFCA) confirmed that beef products sold in the UAE are beef ruling out the presence of horsemeat in beef products. Municipality sources have advised that there is no need to be concerned as the Nestle products that have been tainted by the horsemeat are not

available in the UAE. The concern surrounding horsemeat in beef products stems from the European findings of horsemeat found in beef products in “beef” dishes in Britain, Ireland, France, Austria, Norway, the Netherlands, Germany, Italy, Spain and Belgium.

March 2013


Regional News UAE

Emiratisation is key

ABU DHABI: The Ministry of Labour has reaffirmed its commitment to the Emiratisation project, which is the national project aimed to steer Emiratis towards private sector jobs. Currently, only 22,000 Emiratis work in the private sector, which boasts more than 4 million jobs. The concern of the Ministry of Labour is that the private sector currently would not be able to support the 350,000 jobs that would be required over the next 20 years for all the Emiratis graduating.

DIFC and the city of London forge ties

DUBAI: The Dubai International Financial Centre (DIFC) on Tuesday received the Lord Mayor of the City of London, Alderman Roger Gifford, and his delegation in testament to both parties’ commitment to furthering a continued historic bilateral relationship with the aim of strengthening trade and investment links. The Lord Mayor met with Jeff Singer, Chief Executive Officer of DIFC Authority, as well as Chirag Shah, Head of Strategy and Corporate Planning in the Centre. During his two day visit, the Lord Mayor will also meet with policymakers from a number of banks and other institutions, including the Chairman of the Banking Association, Abdul Aziz Abdullah Al Ghurair, senior representatives from Dubai Financial Services Authority (DFSA) and the DIFC Courts to discuss synergies and explore opportunities. Source: Zawya

Abu Dhabi Group to invest $45 billion in Pakistan

ABU DHABI: The Abu Dhabi Group has joined forces with Pakistani real estate billionaire Malik Riaz in a deal worth $45 billion (AED 165.15 billion). This deal includes building the world’s tallest building in Karachi. Pakistan’s news channel Geo reported today that $35 billion (AED 165.15 billion) will be pumped in Sindh province while the rest will be invested in Lahore and Islamabad. Under the deal, Sports City, International City, Media City, Educational and Medical City will be built in Pakistan’s financial capital. The news channel said that world’s Seven Wonders will also be built as part of the project

HSBC bans Syrian, Sudanese and Iranian nationals DUBAI: HSBC advised that they are closing accounts belonging to people of several nationalities. Those affected from the Middle East include Syrians and Iranians. Other nationalities include Sudanese. The accounts are to close with immediate effect. HSBC would not disclose what other nationalities are on the list. The decision behind this move was taken because of the ongoing sanctions by either the European Union, America or both, in the respective countries. These countries are considered an ‘internal risk’, hence the decision. The ban itself, will not include clients who have Advance or Premier accounts, whereby you are required to maintain AED 100,000 or AED 350,000 respectively.

AED 132m vital development projects get approval

ABU DHABI: Following directives of the President, His Highness Shaikh Khalifa bin Zayed Al Nahyan, and follow up from General Shaikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, the implementation of the project to integrate the development of Ajman Bridge, at the entrance of the emirate of


March 2013

Ajman on the Al Itihad Road. The total cost of this project is AED 110 million and is expected to be completed in one and half year. The committee also approved a project to build 27 villas for citizens at Falaj Al Mualla and Shawka areas with a total cost of AED 22 million. Source: Khaleej Times

Making the private sector more attractive

ABU DHABI: In order to create 350,000 jobs for citizens by 2030, the Ministry of Labour will be presenting proposals to the cabinet to bring the private sectors benefits in line with those offered by the public sector. Proposals are expected to include; salary subsidy, 5 day working week, and 9 hours a day (inclusive of hours break), with insurance against loss of job.

AED 35.2m profit in 2012

DUBAI: The Dubai Financial Market (DFM) recorded a net profit of AED 35.2 million last year following the ongoing improvements in the performance of the banking sector globally. The company’s total revenues were AED 191million at the end of 2012. The two key sectors of the company, retail and banking, are both thriving at present and this is reflected in the figures. The Dubai exchange has increased its contracts by 35% in 2012 when compared to 2011. This is an improvement on the results of 2011, when they recorded a net loss of AED 6.9million.

Values to Drive Business

ABU DHABI: The UAE has much to shout about. According the research conducted by Watani’s Social Values, the UAE is the first value-driven nation in the world. They also had the second lowest cultural entropy, which is the level of dissatisfaction and negativity. The study found that the top 3 values of the country, were also in the top ten personal values across all the demographics; respect, family and ethics.

Emaar announce increase in maintenance fee

DUBAI: Emaar announced that property owners in the Springs development will have to pay a community service charge of AED 2.29 per square foot of plot area, which is an increase in costs of 1.3% from the previous year. Emaar have also advised that they have lowered the maintenance charge for the meadows, decreasing it 0.5% to AED1.89 per square foot of plot area. “After a thorough review of our current and projected costs for the year and following approvals from Real Estate Regulatory Agency (RERA), we wish to inform you that 2013 community service fee for ‘The Meadows’ has been determined at AED 1.89 per square feet of plot areas.” It added: “Emaar Community Management has been working to ensure quality lifestyle and superior service to all its residents at the same time drive economies of scale for getting competitive costs and value for money in your community.”

UAE 5th Cheapest petrol prices

ABU DHABI: The UAE has the fifth cheapest petrol prices in the world, with Venezuela the cheapest at $0.06 per gallon. According to a study of 60 countries, which takes into account the retail price of petrol, the Bloomberg Gas Price Ranking found Turkey had the most expensive petrol in the middle east at $9.89 per gallon. Saudi Arabia came second at $0.45 per gallon, followed by Kuwait ($0.81 per gallon), Egypt ($1.14 per gallon) and then the UAE. However, it does appear that this list does not take into account neighbouring Oman and Libya, where petrol prices are known to be cheaper than in the UAE.

World News Europe


Investors turn their backs on sterling G20 pledge a LONDON: Following very disappointing results from the UK, putting into question their economic growth, hedge fund and investment managers have been ‘dumping’ sterling from funds. The media talk of the threat of a downgrade of the UK’s debt and the much publicized upcoming change of the Governor of the Bank of England (BOE) has fuelled concerns about a drop in the country’s asset values. For the first time in five months, investors have been shorting the pound as opposed to buying it, according to figures released from the US Commodity Futures Trading Commission; whose figures are used as a proxy for activity

in the global hedge fund community. Currently, betting against the pound is second in popularity. The Japanese yen is still retaining the number one spot. The pound slid to a seven-month low against the dollar this week after the BOE warned that inflation would continue to be above target and growth would remain sluggish. The return of investment to the Eurozone is also hampering the British economy, as is the prospect of Mark Carney becoming the next BoE Governor. The BoE has indicated that it would be happy to see a weaker pound as it would boost their struggling economy.

Eurozone economy shrinks 0.6% in Q4 of 2012

BRUSSELS: EU statistics released on 14th February, show the Eurozone economy shrunk by 0.6% in quarter 4 of 2012 from the previous three months, deepening their recession and posting the worst performance in almost 4 years. Of the losses, both Germany and France’s gross domestic product shrank more than expected highlighting the fragility of forecasts for a recovery this year. German GDP shrank by 0.6% in the

period whilst France contracted by 0.3%. Both of their forecasts were marginally worse than the figures forecasted of 0.5 and 0.2% respectively. Italy’s economy shrank by 0.9%, more than expected, and a sixth straight fall in a row. The figure for the wider EU, all 27 member states, was a fall of 0.5%.

Obama blueprint on reigniting the economy

Venezuela currency devaluation hits big business


WASHINGTON: President Obama has proposed how he plans to reignite America’s economy and the American middle class. During his State of the Union address, Obama announced that he plans to increase the minimum wage from $7.25 an hour to $9, and also plans to launch negotiations for a bilateral transatlantic trade deal between the US and EU.

Source: The Financial Times

NEW YORK: The Venezuela government devalued their currency which overnight has wiped $275 million from Procter and Gambles profits. The Wall Street Journal has said that Procter and Gamble (P&G) has cut its current quarter and full-year earnings view in light of the decision made by the government of Venezuela to devalue its currency. The company indicated that it expects to take $200 million to $275 million in one-time charges. P&G further indicated that if the bolivar remains at current levels, annual profit will be reduced by 6 to 7 cents per share. This is the 5th time in 10 years that Venezuela has devalued its currency. The current devaluation is in response to inflation levels that are peaking at 22% and a growing demand for dollars to pay for imported goods, according to the New York Times.

crack down on tax avoidance

MOSCOW: During the G20 summit in Moscow, finance ministers agreed to crack down on tax avoidance by multinational companies with members determined to develop measures stopping firms shifting profits from a home country to pay less tax elsewhere. Following the UK Starbucks scandal (whereby Starbucks submitted tax returns twice, decreasing in the value of tax owed from one return to the next, despite them being based on the same figures), the UK, France and Germany have been instrumental in bringing this to the table. A survey by the Organisation of Economic Co-operation and Development (OECD) found that multinational firms could exploit gaps in tax rules in different countries in which they operate. A number of companies, including Amazon, Starbuck and Google have come under the fire in global press for their tax strategies.

G20 attempts to end currency war talk MOSCOW: Following the concerns about a global currency war, the G20, which brings together the 19 richest nations and the EU, pledged on Saturday that they would not devalue their money to lift their own fortunes at the expense of a global recovery. In a joint statement, the countries committed to focus monetary policy on boosting economic growth and refrain from any actions that could trigger a round of currency devaluations. “We will not target our exchange rates for competitive purpose, will resist all forms of protectionism and keep markets open,” the G20’s statement said. A currency war is where nations use policy levers to drive down the value of their money, therefore boosting their own exports but hurting their trading partners.


Japan still in recession

TOKYO: Japan’s economy shrinks in Q4, leaving it firmly in recession. Having lost a further 0.4% in annualized terms for the third straight quarter, the reasons being stated behind this continued drop are due to feeble demand both at home and overseas. Growth for all of 2012 was 1.9%. These figures were worse then expected as analysts had predicted that due to the weak yen boosting exports, Japan would be out of recession by the end of 2012. However, with weak global and local demand, this proved not to be the case.

Japan is also coming under fire for their monetary policy. Prime Minister Shinzo Abe, who took office in late December 2012, is championing aggressive spending and monetary stimulus to help get growth back on track. The Bank of Japan’s incumbent Governor, Masaaki Shirakawa, is due to leave office on March 19 but no decision on his successor has been made. It is expected that appointment of the next Governor will be a political appointment. Source: The Inquirer

March 2013


In the Next Issue

Take a look below for a sneak peek into what is coming up in Issue 4 of Business Insight…

Created by entrepreneurs for entrepreneurs We understand the challenges, frustrations and external forces that impact and shape SME’s. The aim of The Business Factory is to provide the critical links between buyers and sellers to help achieve business goals and improve ROI for all. The Business factory inaugural event is being organised by Heels & Deals Dubai, the local network of the global community for female entrepreneurs. The UAe’s premier BUsiness evenT for AmBiTioUs enTrepreneUrs

April 30th 2013 i m A X T h e AT r e , meydAn, dUBAi

The event will take place on Tuesday 30th April 2013 at the incredible 5-star Meydan IMAX Theatre venue. The Business factory will connect business owners both male and female, and start-up’s, with companies providing solutions they are in the market for, as well as in-depth expertise through a wide range of targeted activities during the day-long event. When: April 30 2013 Where: IMAX Theatre Meydan, Dubai Become a sponsor: th



Anticipate What Customers Want This is exactly as it sounds, we share tips so that you never have to be on the back foot again!


Business Processes Ever found yourself spending time repeating yourself constantly, and yet you find that you don’t have the time to tackle the hundreds of other issues that are piling up? Well this report is for you. In our article, we look at processes so you can grow your business.

Team building your way to the top We all know that team spirit is important but this in itself can take time to build. We look at the various ways we can nudge this along, to get all of your company working together, and more importantly, thinking along the same lines.

Make your website work for you Newcomers in Dubai often comment on they can’t find the most basic of things, a company’s contact details for Money example. Globally, the internet Islamic Finance – Investment is the first point of call for anyone Vehicles Ever wanted an alternative to the with any queries and you could conventional stock market where be losing out on a lot of business with the expat community if you can invest your money? you are not marketed via the Sukuks may be for you. We internet. So, we look at this for explain the Islamic bond market you and how you can make in detail to demystify them. your website work for you.


The Top 14 Commodities in, 20132014 Really, it is as it says in the heading… We look at the Top 14 commodities that are tipped to be hot over the next couple of years, and why investing in commodities in commodities rule during recessions.

The Hub

Data Protection Did you know the UAE has a data protection policy? If this is news to you then we suggest ensuring you read our article on data protection. It lays out exactly what laws you have to abide by and the effect of global laws on doing business here.

SUBSCRIBE NOW AND RECEIVE YOUR COPIES FREE IN 2013! To join our mailing list, just email for instructions on how to get your free copies delivered to your office in 2013. Business Insight gives you: •

Success secrets from the UAE’s most successful business people

Expert advice on finance topics that affect your business

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Staff development tips from the best HR brains in the UAE

Subscribe today and give yourself ‘the unfair advantage’ over your competitors! Email for the subscription form to arrange your free copies in 2013.


March 2013

March 2013


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Business Insight is the official DMCC business publication, produced for the benefit of both the client companies based in JLT and the wider...