SME Advisor Middle East - Good advice for better business by SME Advisor Middle East

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Issue 68 July 2011 www.smeadvisor.com

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Awards & SUMMIT 2011

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WONDER WOMAN: TALA BADRI

DIGITAL MARKETING MADE EASY

PREPARING FOR an IPO

SWOT AND SOCRATES

ISSUE: 68 JULY 2011

Contents 52

women, according to researchers at Duke University, Princeton University and the University of Waterloo.

Shoptalk 8 TRENDS AND UPDATES: A quick look at news and events that will impact SMEs in this region. 14 SHELF LIFE: New toys for you and your business. Like you need an excuse!

Banking on business NETWORKING: This is pivotal to creating new business opportunities and increasing the visibility of your brand, says ADCB.

Trade 24 EXPORT PARTNERSHIPS: Dr. Ashraf Mahate, Head of Export Market Intelligence at Dubai Exports, and Vice Chair of the Economic Policy Committee, Dubai Economic Department, outlines the benefits of forging export partnerships as a low-cost solution for entry into foreign markets.

Management 28 TEAM INNOVATION: Businesses are dancing as fast as they can and innovation is the tune playing on the loud speaker, says Karen Oliver, Managing Director, DBM Arabian Gulf.

PRODUCTIVITY: David Lavenda, Vice President, Product Strategy, harmon.ie, offers tips for coping with distractions at work.

Human resources 32 JOB ADS: Employment ads can signal whether a job is typically held by men or

Marketing DIGITAL PROMOTION: Businesses must adapt digital advertising so they can continue to provide value and remain relevant, says Abbas Alidina, Founder and Director of Logicks.com. SOCIAL MEDIA: Alan Devereux, explains how to track competitors, find new hires, sell your products, and find new customers – and all for free!

PR REBUTTAL: Said Hamideh, PR Strategist, Active PR, explains why PR agencies are still necessary for business promotion.

SAY CHEESE: We look at Photobooth-ME, a mobile photobooth concept based in Dubai.

A day in the life of… KIM THOMPSON: The owner and Manager of Raw Coffee takes us through a typical day in her life.

SME about town

DED AWARENESS PROGRAMME: The Department of Economic Development has concluded an awareness programme for retailers in Dubai.

PARTNER UP: We bring you coverage from Reseller Middle East’s 2011 Conference and Awards. DMC BREAKFAST CLUB AND THE BIG START: A snapshot of recent finance and entrepreneurial initiatives by Dubai Media City.

Finance CREDIT RISK ASSESSMENT: Serov Vasiliy, and Dr. Dayanand Pandey, British University in Dubai, talk to Mike Byrne about how this process can evolve to better serve SMEs.

Business pin up WONDER WOMAN: The winner of two SME Advisor Stars of Business Awards 2010, Emirati businesswoman Tala Badri talks to Mike Byrne about life and her Centre for Musical Arts.

Sales TARGETS: Are you really understanding why targets are being missed, asks Peter Heredia, Managing Director, Max Sales Solutions.

MULTI FUNCTION DEVICES: The most common threat all organisations face on a day-to-day basis is data leakage, says Naoshi Yamada, Deputy Managing Director, Canon Middle East.

Pricing

18 THE ART OF WAR: John Lincoln, VicePresident- Enterprise Marketing, du, says all war is based on deception.

IPOs: What do you keep in mind when it’s time to think about going public, says Geethalakshmi R of Associated Business Attorneys.

Business growth

OPERATING MODELS: The construction industry in the GCC must start adapting their strategies and operating models, says Fadi Majdalani and Ahmed Youssef, Booz & co.

RECRUITMENT: A study of companies over 20 years shows that businesses that exclusively promote CEOs from within the organisation outperform companies that recruit from outside.

REFERRALS: Finding the best qualified leads does not come from a cold contact situation but from building a strong referral business, says independent financial advisor, Greg Pogonowski. SWOT ANALYSIS: You may have taken the time to know thy self but are you taking the time to truly know thy business, asks Vikram Venkataraman, Director, Salvus Strategic Advisors.

Technology for business 48 ONLINE BACKUP SOLUTIONS: Before acquiring online backup solutions for your business, examine how and what you are being offered, says Rik Ferguson, Director Security Research & Communication EMEA, Trend Micro.

Industry watch

SME Speak Survey SME ANNUAL LEAVE SURVEY: SME Advisor Middle East and Tickbox Surveys conducted a survey of its readers to find out their views on annual leave within their company.

Corporate wellness STRESS: In the mad rush to tie up loose ends before you go, have you noticed the increased stress this might have on you, asks Dr. Sarah Peeters.

Editorial

Publisher Dominic De Sousa COO Nadeem Hood Managing Director Richard Judd richard@cpidubai.com +971 4 440 9126

Sales Director Raz Islam raz@cpidubai.com +971 4 440 9129 EDITORIAL

Peace and love, man! Last month we talked about pricing strategies and understanding your market and competition. This month we take it to the next level and show you how to fight fire with fire – if it comes to that. So, how do you fight a price war and come out relatively unscathed? To be honest, I’d rather be ending wars instead of starting them. No, it’s not about “Peace and love, man!” Sometimes you do need one final, decisive action that puts an end to what is often a needless drain on your time, attention and resources. Sometimes you need what has now been

popularised by Bollywood as Gandhigiri. This phrase was coined by a film character called Munna Bhai, a goon with a heart of gold, somewhat like Robin Hood, who decides to right wrongs in cheeky, non violent and very effective ways. For instance, to deal with someone who had warped opinions, Munna called into a radio station and urged everyone to send this person get well soon wishes because he was a sick man. Like our columnist John Lincoln says, instead of jumping into a price war sometimes the better strategy is to reassure your competitor so neither of you gets trigger happy. Like Gandhi advised, outright aggression isn’t always the solution; but nobody is stopping you from being passively (and cheekily) aggressive. Then there are times when you have no choice but to come to blows; you need to do this the right way too. Remember, you are an SME and you probably will not be able to survive a prolonged price war which might bleed you to death. So you have to hit hard, hit smart...and get out of the way!

Let’s not make it personal. Don’t hang around to gloat. As John suggests, sometimes all it takes is to let your customers know that if you are bullied out of the market, they lose choice and run the risk of dancing to the tunes of a big market manipulator. Everybody loves to support the small guy who takes on big bullies. You’re an SME – you’re the cute guy! Use that to your advantage. But don’t let it go to your head, even if it’s not really the case and is more of a market perception. Don’t end up being seen as the cool new kid on the block who changed into a highly irritating, pompous jerk. It may not be strict textbook advice but, really – despite the things that have to be done because it’s business and we all have to survive – be nice. It helps your brand during, and long after, the price war. On that note, until next month...

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

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Dave Reeder dave@cpidubai.com +971 4 440 9106 Group Editor, CPI Business Ketaki Banga ketaki@cpidubai.com +971 4 440 9115 Assistant Editor Mike Byrne mikeb@cpidubai.com +971 440 9105 ADVERTISING Managing Director Richard Judd richard@cpidubai.com +971 4 440 9126 Sales Director Raz Islam raz@cpidubai.com +971 4 440 9129 Key Accounts Manager Faaju Abdul Fatah faaju@cpidubai.com +971 56 674 5757 CIRCULATION Database and Circulation Manager Rajeesh M rajeesh@cpidubai.com +971 4 440 9147 PRODUCTION AND DESIGN Production Manager James P Tharian james@cpidubai.com +971 4 440 9146 Art Director Kamil Roxas kamil@cpidubai.com +971 4 440 9112 Designer Froilan A. Cosgafa IV froilan@cpidubai.com +971 4 440 9107 DIGITAL SERVICES www.smeadvisor.com Digital Services Manager Tristan Troy Maagma Web Developers Jerus King Bation Erik Briones Jefferson de Joya Louie Alma online@cpidubai.com +971 4 440 9100 Published by

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Head Office PO Box 13700 Dubai, UAE Tel: +971 4 440 9100 Fax: +971 4 447 2409 Printed by Printwell Printing Press LLC © Copyright 2011 CPI All rights reserved While the publishers have made every effort to ensure the accuracy of all information in this magazine, they will not be held responsible for any errors therein.

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SHOPTALK trends & updates <<<

Competition: Pitch for free PR Active Public Relations & Marketing Communications Consultancy (Active PR) have announced the details of a social media competition titled Entrepreneur’s Loudspeaker. The competition details will be posted on Active PR’s Facebook page calling for start ups to submit a two minute “elevator” pitch, in either English or Arabic, explaining why they think their start up business deserves to be recognised across the region

as a viable proposition and attractive to their target audiences and prospective customers. The competition, whilst calling for owners of start ups to submit a short two minute video pitching the merits of their business concept, is also intended to double as a forum where audiences from around the Middle East region will eventually be able to comment, discuss, reach out to, and eventually vote on the semi-finalists’ winning video pitches.

DED launches Dubai Logistics Cluster Platform

The Dubai Department of Economic Development (DED) has launched the Dubai Logistics Cluster Platform, a body representing logistics and related sectors to come together, discuss challenges and propose

SME ADVISOR MIDDLE EAST

recommendations to strengthen the industry. Announcing the launch of the Dubai Logistics Cluster Platform, His Excellency Mr Sami Al Qamzi, Director General, DED, said: “The Dubai Logistics Cluster Platform launch will mark a new chapter in public private partnerships

JULY 2011

The winning entry, will earn three months of PR support worth over USD 20,000. “What is great about this competition is that the winner will not only reap the rewards of receiving best practice PR exposure, but also have the spotlight cast on their business and offering to potential customers across key target markets in the region,” said Sawsan Ghanem, Managing Partner, Active PR. “This is as exciting for us as it is for the participants as we are keen to evaluate and experience

how it evolves and develops. It all goes back to the creativity and the vision of the owners of the start-ups taking part.” The competition, which was launched 19th June 2011, will be also operating on Active PR’s Facebook, Twitter page and YouTube channel and is open to all start ups from across the region. For more information about the Entrepreneur’s Loudspeaker competition, entry requirements and rules and guidelines, please visit the competition Facebook page http://on.fb.me/activepr

in Dubai, more so in driving logistics – a backbone of the Emirate’s economy. Our approach has been to facilitate the logistics cluster stakeholders to benefit from the geographic, economic and infrastructural opportunities offered by Dubai.” He added: “However, it is important that we sharpen our skills continuously. The all-round growth of organisations operating within the Logistics Cluster is a high priority for us. The Dubai Logistics Cluster Platform, will enable us to further boost the competitiveness of Dubai in logistics.” The launch of the Dubai Logistics Cluster Platform was preceded by a focus group, where all key stakeholders in logistics, including government and private companies, service providers, educational institutions, related

and supporting industries, government institutions and industry associations took part. They discussed the issues related to the business environment and the growth of the companies, as well as potential for stronger collaboration with public sector, which served as the basis for the Cluster Platform. The Logistics Cluster Platform is envisaged to facilitate better communications and synergies, and promote and facilitate interaction among firms, educational institutions, knowledge providers and the public sector to come up with joint specialised education and training activities. It will also facilitate market development through joint marketing as well as policy and action recommendations to strengthen and further develop Dubai’s logistics.

SHOPTALK >>>trends & updates

Arab Facebook users reach 27.7 million The number of Facebook users in the Arab world reached 27.7 million by the end of the first quarter in 2011, an increase of 30% since the beginning of the year, according to the second Arab Social Media Report (ASMR). The report is the second edition of a series produced by the Governance and Innovation Program at the Dubai School of Government. This edition monitored the growth of Facebook and Twitter in the region, propelled by the uprisings sweeping the Arab world. It revealed a substantial shift in the use of social media from social purposes towards civic and political action. The number of active Twitter users in the Arab world during the same period, according to the report, was over 1.1 million users who tweeted at least once every two weeks. These active users generated over 22.7 million

tweets during the first quarter in 2011. Regional Twitter trends during this period focused primarily on events unfolding during the Arab uprisings. The words ‘Egypt’, ‘Jan25’, ‘Libya’, ‘Bahrain’ and ‘protest’ were the top hashtags used by Twitter users in the Arab region. The report noted that though the UAE, Qatar, Kuwait, Bahrain and Lebanon are the leading five countries in the region according to the percentage of Facebook and Twitter users, social media growth was the fastest in those countries experiencing social unrest. While Turkey continues to lead the region in terms of number of users, Egypt saw the highest increase in the number of users during the first quarter of 2011 among the Arab countries, adding close to two million Facebook users. Fadi Salem, Director of DSG’s Governance and Innovation Program and co-author of the

report, said: “Social media and its ability to influence grassroots civic engagements, participatory governance models and new social dynamics have been under intense debate in the Arab world in 2011. The growth of social media and the shifts in usage trends have played a critical role in mobilising, empowering, shaping opinions and influencing change among the youth in the Arab world. A critical mass of young and influential social media users exists today, who lead the shift of usage trends from social into political nature across the region.” The findings of the report provide empirical evidence regarding the changing nature of social media usage in the region. According to the report, youth between 15 and 29 continue to account for around 70% of Arab Facebook users at the end of the first quarter in 2011, while women constitute just a third of users across the region. Racha Mourtada, Research Associate with the Governance and Innovation Program at DSG and lead author of the report, said: “Governments in the region have responded to the rise of social media in a variety of ways. While some have

tried to block it, others have used social media to engage directly with their citizens. The Governance and Innovation Program at the Dubai School of Government has worked closely with governments in the region to develop official guidelines to promote social media usage by the government.” The survey also indicated that around 85% of respondents in both countries considered that social media usage during the movements in their countries was mainly for organising people, disseminating information and raising awareness about the social movements. The Arab Social Media Report series aims to highlight and analyse usage trends of Facebook and Twitter across the Arab world. It is part of a larger research initiative focusing on social engagement through information and social networking technologies for better policy, good governance and social inclusion in Arab states. The initiative specifically aims at studying the potential of such applications for increasing collaboration, knowledge sharing, and innovation by fostering participation, whether within and between governments, citizens and the private sector. The full report can be accessed at www.arabsocialmediareport.com.

“SME Speak” Survey Have your say!

www.smeadvisorme.com JULY 2011

SME ADVISOR MIDDLE EAST

SHOPTALK trends & updates <<<

Further privileges for Dubai SME 100 companies Dubai SME, the agency of the Department of Economic Development (DED), Government of Dubai, has signed a partnership agreement with Dun & Bradstreet (South Asia Middle East Ltd) to offer exclusive benefits to the top 100 SMEs in Dubai. The partnership will entitle companies ranked under the “Dubai SME 100” initiative of Dubai SME to various privileges such as discounts on D&B credit rating reports, free D&B DUNS Registered Seal (a tool recognised globally for enhancing online credibility and visibility) as well as participation in development workshops that help SMEs improve their credit rating and

subsequently, their bankability. His Excellency Abdul Baset Al Janahi, Chief Executive Officer of Dubai SME, expressed his gratitude to Dun & Bradstreet for supporting the SME 100 initiative, which seeks to recognise the top performing SMEs based in Dubai. “With the SME 100 programme, Dubai SME has embarked on a momentous journey of SME development together with valued partners like D&B. I am confident that as we move forward Dun & Bradstreet will provide even more benefits to those promising SMEs poised to add substantial value and diversity to the regional and global business communities,” said Al Janahi. Mr. Rajesh Mirchandani, CEO of Dun & Bradstreet, added: “D&B

(L-R) His Excellency Abdul Baset Al Janahi, CEO, Dubai SME and Mr. Rajesh Mirchandani, CEO, Dun & Bradstreet is proud to be a part of the Dubai SME100 programme and will extend all possible support to Dubai SME in this initiative”.

Dubai SME100 The Dubai SME 100 ranking will act as a platform and catalyst to identify promising SMEs and groom them to become bigger, better and sustainable enterprises, eventually graduating them to large globally-oriented companies. Unlike other rankings, which are based mainly or purely on financial indicators, the Dubai SME 100 ranking places a balanced emphasis on financial and nonfinancial dimensions of enterprise performance and development. The non-financial dimensions cover innovation, international orientation, human capital development and corporate excellence. The ranking will also serve as a tool for helping SMEs identify capability gaps for improvement.

The ultimate outcome is for Dubai to have more growth-oriented and innovative enterprises. The ranking methodology was developed by Dun & Bradstreet (D&B) for Dubai SME, with SME development as its core guiding block. The basic criterion is that the applicant must be an SME based on the official definition of Dubai’s SMEs, with up to 250 employees and a turnover of up to AED 250 million. In addition, it must have audited financial statements for at least three years, and be an independent entity registered in Dubai (under DED or any Free Zone). Over 830 eligible SMEs have been nominated by banks, business councils and Free Zones to participate in the initiative, with more nominations expected in the next few weeks. The first ever Dubai SME100 ranking list will be out in late October 2011.

Time for GCC creative industry to stand on its own feet The Brain Power International Forum was held, 31st May, 2011, at Dubai Knowledge Village Conference Centre and was attended by more than 200 business professionals. The forum sent a clear message that it is time for the GCC creative industry to stand on its own feet and move away from the shadow of the multinational agencies. The forum organised by London Business Forum hailed Dubai’s position as an ideal

SME ADVISOR MIDDLE EAST

environment for the creative business in the region. Dubai has nurtured local capabilities and accommodated creativity, according to Guy Browning, renowned Guardian Columnist and presenter of the forum. Browning said that Middle East businesses should give up the “sense of inferiority” and start depending on themselves to drive the creative side. He estimated that this could save half the creative costs with double the impact for campaigns. Browning added: “The creative industry in the UAE,

JULY 2011

including the advertising sector, is on par with the international industry. In the past they needed international direction but not any longer so today.” He added: “Dubai has succeeded in positioning itself as a brand and organisations operating from this evolving Emirate have imbibed a culture of creativity. Arab businesses are becoming creative because creativity output depends on creativity inputs and the inputs are valuable enough to have a good output. Being from this market is an added advantage.

Arab businesses have to start believing in their own capabilities instead of paying a high price for employing experts from other parts of the world. Mwafy announced that the third international forum would be on the 14 th of June, 2011, at Dubai Knowledge Village Conference Centre, presented by Larry Hochman. He added: “This forum should be on the diary of everyone, from the customer focused professionals to CEOs to front office officers.

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SHOPTALK trends & updates <<<

Retailers instructed to stop charging surcharge on credit card usage

His Excellency Sultan Bin Saeed Al Mansoori, Minister of Economy and Chairman of the Supreme Committee for Consumer Protection, has instructed retailers to stop charging additional fees on credit card usage, effective July 1st, 2011. He was heading the second meeting of the Committee for 2011, which passed a resolution

prohibiting retailers from imposing surcharges on credit card usage as commission. The meeting reiterated the importance of decisions made by the Ministry and the Supreme Committee for Consumer Protection to support consumer rights and boost economic competitiveness and growth in the UAE.

The route to improved profitability for ME retailers Growing competitive pressure and the lingering effects of the 2008 – 09 recession are forcing the region’s general merchandisers, grocery store chains, and specialty retailers to look for new ways to improve their performance. The biggest areas of opportunity are very basic: Middle East retailers are trying to figure out which new markets they can enter; what are the best locations for new store openings; how they might shift their product categories in more profitable directions; how they can generate more value out of their best customers; and how they can negotiate better terms with their suppliers. One solution is for Middle East retailers to turn to retail analytics, a discipline that has been in

SME ADVISOR MIDDLE EAST

use in the most mature retail markets since the 1990s. A way of integrating data into both strategic and day-to-day decisions, retail analytics has been instrumental in the success of some of the world’s best-known retailers. Like their peers in these other countries, Middle East retailers are increasingly using data analytics to get a better understanding of their customers, differentiate themselves from competitors, and fuel their growth. “Some early retail analytics initiatives in the region, in particular in the area of category management, suggest doubledigit growth opportunities in sales and high potential benefits on margins; between 1% and 5% of sales,” said Gabriel Chahine, Partner, Booz & Company.

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The Committee also agreed on liberalising trade of 15 new products including detergents and washing powders, dairy products and juices, drinking water, livestock, feed, fats and oils, and the list will be send to the Cabinet for approval. ”This is strategic to reduce monopoly and exploitation, and will enhance market competitiveness,” said Mr Al Mansoori. The Committee reviewed a report on the advertisements for fast food outlets, and recommended that awareness measures must be initiated to ensure that customers are not

Competitive advantage The sophisticated use of retail analytics can strengthen retailers’ capabilities in a variety of areas, including category management, sourcing, supply chain, and network development (the science of figuring out where to open new stores). “There are four dimensions in which this superior planning and adaptability can then be applied: product, pricing and promotions, customer insights, and locations,” said Andrea Di Gregorio, Principal, Booz & Company.

Facing learning curves Because most Middle East retailers haven’t used data analytics in a concerted fashion, they might understandably be concerned that they face steep learning curves. However, there is also an advantage in entering an area where others have led the way: retailers can avoid their pitfalls and learn from their successes. There are four especially important principles that regional retailers should

misled by catchy advertising and resort to unhealthy eating, especially of junk food. The Committee also reviewed a report on the status of the Call Centre in the Consumer Protection Department, and another on the difference between the prices of key food items sold at cooperative societies and major retail outlets. The Committee discussed the Electronic System for Goods Monitoring which is expected to be operational during the second half of 2011. Currently, the Ministry is undertaking a pilot phase with some commodities and the results will be generalised for other goods. The new system works through electronic links between the major trading centres and UAE customs ports, and can monitor the prices of 200 commodities on a daily basis.

bear in mind if they are to develop a differentiating capability in the area of retail analytics; 1. Structure the capability around available customer data 2. Implement gradually and don’t over commit to technology 3. Institutionalise and formalise the use of data in business processes and across the organisation 4. Get executive sponsorship and hard-wire analytics into the organisation

Conclusion “It’s important to realise that for retailers just beginning this journey, even relatively basic solutions can offer significant results,” said Karl Nader, Senior Associate, Booz & Company. However, as retailer’s system evolve toward more advanced forecasting and inventory policies, they will need to evaluate each subsequent wave of analytical development on its own merits and determine whether the investment continues to offer sufficient value.

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portable projection

New toys for youss. ine and youredbuansex cuse!

Fujitsu has unveiled a projector built in to a modular notebook bay. Available from July as an option for the Fujitsu LIFEBOOK P771 and LIFEBOOK S761 notebooks, the patented Fujitsu Bay Projector adds convenience and mobility. Set-up is simple: the built-in beamer is immediately ready to use once the lens and bulb are folded out of the DVD-size modular bay and clicked into place. The Bay Projector works on almost any surface. Brightness and keystone correction are adjusted directly via built-in buttons, and laser beam technology provides high

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Innovation collaboration Avaya have unveiled new product releases and innovations in the SME market. These announcements include the new version of Avaya’s communications solution for this market, Avaya IP Office 7.0, which drives improved savings, user experiences, and collaboration for a new generation of entrepreneurs, early-stage companies, and mid-size firms. Avaya IP Office 7.0 completes the integration of Nortel Enterprise Solutions (NES) IP and digital phones into the IP Office platform. Avaya IP Office 7.0 also delivers an expanded portfolio of devices for multimedia collaboration, including new colour touch screen desktop phones that let users scroll through contacts or manage visual voicemail at the touch of a finger. Avaya also previewed forthcoming innovations in collaboration for this market, including the Avaya Flare Experience on mobile devices and tablets for Avaya IP Office. This functionality will integrate the touch and swipe interface of Flare on third-party devices, providing simplified mobile, unified voicemail, instant messaging and more.

SME ADVISOR MIDDLE EAST

contrast and colour depth. The Bay Projector module is available to order beginning July 1, 2011 across the CEMEA&I, United Kingdom, Ireland and Nordics regions – initially in LIFEBOOK P771 and LIFEBOOK S761 models. Pricing is around EUR 499 but varies according to region.

deletion, Facebook search enhancements and more

In-app payments support

– Enables developers to create apps for the BlackBerry PlayBook using the BlackBerry Payment Service

Additional language support – Updates language support to include: French, Italian, German, Spanish, Dutch and UK English.

BlackBerry PlayBook charging enhancements –

More playtime RIM has released BlackBerry Tablet OS v1.0.5 which is now available via a free over-the-air update. The easy-to-install software update brings several new features and performance enhancements to the BlackBerry PlayBook.

Facebook for BlackBerry PlayBook –

Including video uploading, message

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Home screen users can easily adjust the screen brightness or choose to restart, turn off, or put the tablet into standby mode Video chat connectivity – Adds support for the TURN (Traversal Using Relay NAT) protocol, which enhances Video Chat connections between users on home, public and enterprise Wi-Fi networks Wi-Fi hotspot detection – Automatic Wi-Fi hotspot detection in the BlackBerry Tablet OS v1.0.5 makes it easier to connect to a Wi-Fi hotspot

Ultraportable laptop

On your lap convenience

Lenovo announced its thinnest business laptop ever, the ThinkPad X1 laptop. The ThinkPad X1 laptop incorporates several features new to the ThinkPad X series family including a 13.3-inch super bright infinity screen made of Corning Gorilla glass, RapidCharge battery technology and a Dolby Home Theatre multimedia feature. As the thinnest ThinkPad, the ThinkPad X1 laptop measures less than 17 mm. Packed into the ultra-thin form factor are second generation Intel Core processors which are typically offered on Lenovo’s larger 14 and 15-inch laptops. Starting at only 3.7 pounds/1.72kg, the ThinkPad X1 laptop feels incredibly light and sturdy thanks to its interior roll cage and magnesium chassis. The hardened ThinkPad X1 passes eight military specifications so that mobile professionals can work anywhere with confidence.

Satellite range Toshiba Computer Systems has announced a refresh of its Satellite L series laptop range. The portfolio features models with three different screen sizes and a broad selection of central processing units from AMD and Intel. The Satellite L series will be available during the second quarter of 2011 in Europe, Middle East and Africa. Visuals are backed up by a full sound courtesy of Dolby Advanced Audio. The Satellite L750, L755, L770 and L775 also come with embedded Onkyo stereo speakers. A wide selection of connectivity features including support of high data rate connections via USB 3.0 and Bluetooth 3.0 as well as wireless LAN.

New world plans du have announced the launch of a new calling plan for companies with non-du business landline services across the UAE that offers up to 70% savings of their current spent. Business Phone Plus is designed specifically to meet the needs of the growing SME sector. Customers have an option to choose between two innovative ‘Business Phone Plus’ plans: Business World 100 and ‘Business World 400’. The ‘Business World 100’ plan offers monthly bundled benefits of 125 international minutes, and 125 national and mobile minutes, for just AED 100 per month. With Business World 400 for just AED 400 per month, customers get 500 international minutes, and 500 national and mobile minutes included monthly. In addition, they can also enjoy an all day flat rate of as low as AED 1.35 per minute to 190 international destinations. To start enjoying the benefits of ‘Business Phone Plus’ plans, customers can visit www.du.ae/businesscallselect to find out more about the plans.

Logitech has unveiled the Logitech Touch Lapdesk N600, featuring a large touchpad that makes it easier than ever to point, scroll and swipe your way through the Web. The Logitech Touch Lapdesk N600 features a five-inch, retractable touchpad with multi-touch navigation. You can move the pointer with one finger, scroll using two, and swipe through pages or pictures with three. The multi-layer, heat-shielding design of the lapdesk protects you from laptop heat so you can browse in cool comfort, and the anti-slip surface helps keep your laptop in place. To get started, you just plug the tiny Logitech unifying receiver into the USB port and start navigating. For your convenience, Logitech’s newest lapdesk offers up to six months of battery life. The Logitech Touch Lapdesk N600 is expected to be available in UAE in September, for a suggested retail price of AED 400. For more information please visit Logitech.com.

Life as it happens Western Digital (WD) have introduced the newest version of its WD Photo photo viewer app, which now works with the WD TV Live Hub media centre from an Apple iPhone, iPad, iPod touch or Android compatible SmartPhone or tablet. Consumers can create content with their iOS or Android device and send it directly to anyone with a WD TV Live Hub media centre for big screen viewing and enjoyment. This feature is ideal for business travellers who want to keep in touch with the family and share their adventures in a fun and creative way. It is also a great way for students and distant family members to share life’s moments as they happen. In addition, WD Photos photo viewer app allows consumers to remotely access content stored on their WD TV Live Hub media centre or My Book Live network drive from their portable device, anywhere in the world. This provides access to hundreds of photos without reducing memory on a users’ iPhone or Android device while allowing others on the home network to continue to enjoy the same content. And, if a user’s portable device is lost or misplaced, the content still resides safely within the home.

JULY 2011

SME ADVISOR MIDDLE EAST

BANKING ON BUSINESS Networking <<<

Get connected WE OFTEN wonder why some people are more successful in businesses than others. How do these individuals create new business opportunities and increase the visibility of their brand? The answer is simple â&#x20AC;&#x201C; networking, says Abu Dhabi Commercial Bank. What is networking? Some people might think that networking is being seen in the right places at the right times, working the room, shaking hands with as many people as possible and collecting a pile of business cards. Some of these assumptions are correct but networking is much more: itâ&#x20AC;&#x2122;s a social economic activity that enables minds to be engaged in a powerful and meaningful conversation. Networking is a skill that enables you to reach out to a diverse group of people, connecting many different cultures and sectors; once you have infiltrated your target market the opportunities can be endless. Fundamentally networking is all about sharing opinions and ideas. Being able to listen to other peopleâ&#x20AC;&#x2122;s views and opinions and then establishing connections. Proving the value you add to your community helps build trust and enables you to leverage professional relationships.

SME ADVISOR MIDDLE EAST

The art of networking The art of networking is not only meeting likeminded business contacts but also the ability to turn such a meeting into a business opportunity and a lead. This may seem complicated, but in fact the principles are common sense and are based around day-to-day activities. Always steer the conversation to the topics you feel comfortable sharing with people, not only because they can be of interest to you, but also because these topics would position you as an expert in and a credible resource. The intention is not to monopolise the conversation, but to use it as a tool to explore and learn more about your target audience and be able to use the best tactics in achieving your business goals. Means of networking A successful network can be achieved through several means of communication; through conventional ways such as face-to-face meetings, business groups, alumni organisations, cultural events, community activities, word of mouth, or, JULY 2011

alternatively, it can be formed through modern tools such as virtual organisations, social media and online networking through various forums.

The value of networking To ensure success through networking, it is important that a strategy is drawn up, outlining your goals and objectives, so you can benchmark your progress and success. This will enable you to rapidly build a professional identity and position yourself in the community where you want to be known. The importance of communication with relevant individuals and groups, who share common interests and goals, should not be underestimated; together you can create broader objectives and increase the impact of networking successes for everyone involved. Tactics and approach Just like any other relationship, networking requires time and care. In order to maintain an effective network, you have

to keep regular contact with the key influencers you have taken the time to get to know. It is important to take this a step further and explore what interests these individuals have and how they prefer to conduct business. Your involvement with your network is a key factor in achieving rewarding relationships within the network. Through a positive attitude and open frame of mind to prospective new ideas, we can ensure longevity in our professional relationships, helping to establish more referrals and potentially more business prospects.

Innovative virtual methods It is always said that it is not what you know but who you know that counts. This statement rings true today with millions of people around the world embracing the virtual networking portals. These people are constantly racing to stay connected through innovative tools to enhance their network connections. One cannot deny the role of various social media in connecting people and spreading news promptly. These tools also help to highlight the significant characteristics of individuals and businesses. There is no doubt that the online community is considered as the revolutionary tool to tap some business leads. Marketing through networking As we all know, networking is an indirect marketing tool, limited to a closed group of people you decide you want to interact with. It is the understanding you build around you and your business that demonstrate your value in tackling certain situations. And all of this comes at a price considerably less than what you would need for a research or advertising campaign.

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Pricing SURVIVAL GUIDE <<<

All war is based on deception. So how do you fight a price war? In last month’s pricing survival guide, John Lincoln, Vice-President - Enterprise Marketing, du, talked about knowing your enemy and pricing strategies. This month he tells us how to jump into battle.

What is a price war? Unsurprisingly, this is my favourite part in this two-part series. A price war is a term used in marketing to indicate a state of intense competition followed by a series of price reductions. One player will lower its price, and then the others will lower their prices to match. If one of them reduces their price again, a new round of reductions will start. This is what is commonly referred to as a price war. In general, it’s not good for the companies involved. The lower prices reduce profitability and can threaten an SME’s survival. Typically, small businesses are the losers in a price war as they can often not compete and must close. In the long term your customers are the losers too. As you would have noticed, if there is less competition then prices tend to increase, sometimes to a level higher than before the price war started – for example in the US cable industry.

SME ADVISOR MIDDLE EAST

JULY 2011

What triggers a price war? Price wars are often triggered due to the following reasons: • Excess capacity: Excess inventory in the market arising from low demand (due to adverse economic conditions), excessive production and new entrants adding further capacity in the market. All these events are sure triggers for the start of a price war among all the players. This is an established reality in Dubai where real estate and rental costs have plummeted recently. • Comparable products: Another sign of the advent of a price war is when there are a large number of comparable products in the market, for example, consumer electronics like mobile phones and laptops. • Price elasticity: If certain players in the market believe that elasticity can be extracted from certain segments – that

is if a competitor believes that pricing is generally high in the market, and that more demand could be generated by lowering prices, then this is another trigger for an impending price war. This is the reason why a swarm of mobile phone and personal computer manufacturers are racing to serve the unmet needs of the bottom of the pyramid. Another good example is the introduction of the “Tata Nano” car in India. Now we have Bajaj, another well-known manufacturer of scooters and motor cycles, entering the fray in India. • Incompetent management: An unnecessary price war could be triggered by ill-conceived measures by managers to meet their shortterm targets. These incompetent managers give no consideration to the long-term value destruction in the market. Managers are often measured on the yearly achievement of targets. Lowering prices is a sure fire way to meet short-term targets.

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Pricing • Desperation: You could also expect a price war when a large, established player who is losing market share to a new entrant is condemned all around for being non competitive. Conversely, a price war could be triggered by a small business desperately trying to generate incremental cash flow to survive. • High fixed cost structure: Price wars could start when competitors keep a close eye on volume to reduce the average unit of ﬁxed cost contribution, based on the belief that discounts will generate volumes to cover their fixed costs. This type of competition is common when businesses have invested a lot in fixed assets like plant, machinery and equipment. • Low degree of industry change: A price war can happen when some players perceive that the industry structure is “stale” and not evolving fast enough. A player would start a price war as it rightly or wrongly see an opportunity to disrupt the market place. • Low switching costs for customers: If you are in an industry where the switching costs for a customer is low, then there would be an attempt by your competitors to try and poach your customers with a price based proposition. This is very common for the fast moving consumable goods (FMCG) sector.

How does a small business deal with price wars?

Non price options Compete on quality and differentiation If your proposition is already differentiated, ensure that you communicate the incremental features, benefits and value of your differentiated offer. Most SMEs do not have the luxury of tweaking their tangible features in their proposition. However, there are ample opportunities to address the intangible aspects like superior service, good relationships, offering special and bespoke packaging and bundling with other products and services. This is important because if

SME ADVISOR MIDDLE EAST

you do not have the requisite differentiation, it would behove you to offer incremental service packages at low or no cost to compete on your main proposition. For example, in times of economic recession, hotels often drop their prices. The Ritz Carlton, in service, never competes on price. They are able to do this as they positioned and delivered their proposition as the “Gold Standard”.

Communicate weaknesses and threats to your customers Another option that SMEs have is to communicate to your buyers the inherent risk in buying a low priced – meaning low quality – proposition. Small businesses should also communicate to their customers the long-term risks to their business if you, the small player, are forced to exit the market. This is an important strategic move as customers will need to be told that prices will eventually rise as all the smaller players are forced out of the market. Form strategic partnerships or alliances You can offer exclusive deals with your main proposition offered through partnerships and alliances. For example, if you are a small business car dealer you could enter into a special deal with a major electronics distributor or airlines to offer exclusive deals and miles for any new car purchased through your dealership. As the UAE is a rich and diverse market, there are ample opportunities for SMEs to seek and source alliances with major foreign principals to offer exclusive offers to their customers. The SMEs that have these strategic alliances can then bundle their main propositions with the exclusive offers attained through their strategic relationships with foreign principals. Reveal your strategic intentions and capabilities You should reveal your strategic intention to your competitors. This could include your intent not to start a direct price war by JULY 2011

Another option that SMEs have is to communicate to your buyers the inherent risk in buying a low priced, meaning low quality, proposition. Small businesses should also communicate to their customers the long-term risks to their business if you, the small player, are forced to exit the market

maintaining your prices. This is important as there are many stupid and incompetent competitors who are trigger happy when it comes to reducing prices. Conversely, this could include your intention to match with everyday low prices, just in case a desperate competitor is short-sighted enough to start a price war. (Frankly, this might not be tenable and sustainable for most small businesses but this is a viable option for distributors that have the support of their principals). As a small business distributor of some large established brands, you can also make sure that your competitors know that your costs are low (if they are indeed low). This will effectively warn your competition about the potential consequences of starting a price war with you. Small businesses should keep in mind that that lower costs often tempt your principal brands to suggest to you to cut your prices. One thing to keep in mind when reducing costs is that it will adversely diminish your customers’ perceptions of quality and may, by itself, trigger an unprofitable price war.

Price options Deploy indirect pricing tactics addressing perceived value SMEs have the option of initiating perceived pricing tactics such as segmented pricing, multiple-part pricing, volume discounts, pay per use pricing, bundling, bucketing, loyalty pricing, and so on. These pricing moves allow small business marketers to selectively cut prices for only those segments of the market that are under competitive threat from a price war. Limit the theatre of operations in a price war Rather than responding with an all out price cut (which an SME invariably could potentially lose), one option is to change your customers’ choices. This, in essence, means that a small business can limit the adverse

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Pricing impacts to a narrow segment, channel, sector or region. For example, if a small business is in the retail, hospitality or transportation industry, you could avoid across-the-board price cuts, and localise a price war to a limited theatre of operation – that is to limit the John Lincoln war to some sectors and or regions. Alternatively, if you are running a B2B business supplying across all vertical markets, you could limit the war to a specific channel focused on a particular vertical. If you are a distributor of consumer electronics representing major Original Equipment Manufacturers (OEMs) in the region, you almost always have a high-end, medium-end and a lowend proposition to cater to the price sensitivity across different segments. Cutting prices across all the segments is a stupid move as most buyers of high-end consumer electronics are price inelastic. Rather than diluting the premium quality of your proposition for the high- and medium-end targets, you can have a low-priced option or an alternate package or even an alternate brand to target the low end.

When should you start or engage in a price war? Small businesses are strongly advised against starting a price war. However, sometimes you are compelled to do so. I would recommend that you ask the following questions before starting or engaging in a direct price war? Do your principal investors and suppliers have deep pockets to survive and sustain a price war? Do you have excess capacity or inventory that must be sold?

SME ADVISOR MIDDLE EAST

Is your core business or proposition, therefore the very essence of your survival, being threatened by a price war from a large competitor? Can a retaliatory price cut sway a large portion of customers back to you? Is there untapped elasticity in certain segments in the market that your serve? Is there a large segment of price sensitive customers who have not adopted your proposition due to affordability factors?

Long term implications

Change in behaviour of customers: Price wars change the behaviour of customers. They teach customers to anticipate lower prices and often force them to defer their purchase in anticipation of low prices. Perceived quality of your brand will suffer: The image and positioning of your brand will suffer. Your price-cutting efforts will, in the long term, affect the perceived quality of your propositions. Often, it is not only the perceived value of a single affected proposition that will suffer; this has the potential to affect the perceived value of all your propositions in the market. Trigger retaliation from affected players: A price cut will eventually wake up a giant who has been hurt. Once you harm the interest of other players, you should expect them to retaliate. Never wake a sleeping giant.

You should reveal your strategic intention to your competitors. This could include your intent not to start a direct price war. This is important as there are many stupid and incompetent The bottom line competitors In my long career across different who are countries and companies, I have trigger happy been involved in or have led the start a price war. I can certainly assure when it comes of you that in the long term it was to reducing counterproductive and the industry prices lost as a whole. In this context, I would like to leave you with three thoughts from my all-time-favourite military strategist. Most of you would have heard of Sun Tzu, the ancient Chinese military strategist who wrote the Art of JULY 2011

War. As the famous military strategist said: “It is said that if you know your enemies and know yourself, you will not be imperilled in a hundred battles; if you do not know your enemies but do know yourself, you will win one and lose one; if you do not know your enemies nor yourself, you will be imperilled in every single battle.” “All warfare is based on deception.” “If your enemy is secure at all points, be prepared for him. If he is in superior strength, evade him. If your opponent is temperamental, seek to irritate him. Pretend to be weak, that he may grow arrogant. If he is taking his ease, give him no rest. If his forces are united, separate them. If sovereign and subject are in accord, put division between them. Attack him where he is unprepared, appear where you are not expected.” Keep these principles in mind the next time before you start or engage in a price war. Good luck.

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

Trade Export partnerships <<<

Forging foreign alliances AT SOME POINT IN TIME EACH SME IS constrainED BY LIMITED financial and human resources. ONE solution is to look for a low cost and resource light entry into foreign markets, says Dr. Ashraf Mahate, Head of Export Market Intelligence at Dubai Exports, and Vice Chair of the Economic Policy Committee, Dubai Economic Department.

SME ADVISOR MIDDLE EAST

JULY 2011

SMEs are at times expected to service their clients to a level that is comparable to large companies and face the competition from new players in their own market. Some of these new companies competing within your market tend to be foreign owned entities that are expanding their geographical base. SMEs faced with this situation theoretically have two choices; namely to carry on as they have been focusing on the domestic market, or, to diversify their own market base. The former option is time dependent in that slowly the firmâ&#x20AC;&#x2122;s own market share will decline and perhaps come to an end. The latter option is obviously the preferred one but it is not always followed due to availability of financial and human resources. The real question is how long can SMEs ignore entry into foreign markets, especially if sales growth in their own market is limited and their own share is being eroded? Essentially, strategic partnerships, or sometimes referred to as an alliances, is a long-term arrangement between two or more companies to position either an existing or new product or service in a defined geographical area. In doing so it is intended that at least one party in the relationship is able to reduce its costs. Although, cost minimisation is important it is not the only defining factor in a partnership and equally important is the objective of long-term value growth. In other words, the aim of the partnership is for the firms to come together in order to capitalise on their relative strengths.

Trade Types of strategic alliances or partnerships The term strategic partnership or alliance incorporates a number of different structures some of which are listed below: Joint ventures: A joint venture is a partnership between the exporting firm and the importing firm, negotiated to involve one or more of the following, equity, transfer of technology, investment, production and marketing. The partnership contract will define responsibilities for performance, accountability, profit sharing, and marketing arrangements. Joint ventures can spread costs, mitigate risks, offer knowledge and details of local market, and ease market entry. Individual countries may have laws which regulate joint ventures. Licensing or franchising: A firm can contractually assign the rights to certain technological know-how, design, and intellectual property to a foreign company in return for royalties, or some kind of payment. Licensing offers rapid entry into a foreign market. Capital investment is allowed, and the return is usually realised at the earliest, but licensing involves loss of control over production and marketing, and the inevitable sharing of technological know-how by the licensee, unless carefully prescribed in a legal contract. Software rights, branded name rights in hospitality sector and so on are examples of the same. Joint equity strategic alliance: is where two or more companies come together through equity participation in order to form a totally new firm. Although cash based equity can be one type of input it need not always be the case. In other words, some of the partners can actually contribute tried and tested research, other

resources such as facilities or human capital or it can even be sweat equity. The aim of such a partnership is to create long term sustainable competitive advantage through each party being able to contribute what it is best at as well as being able to incorporate partners who are cash rich but lack opportunities. For SMEs this type of partnership offers considerable benefits because they do not necessary have to participate in the day-to-day management of the operation and their contribution can be limited based on their resources and level of commitment. Non-equity based strategic alliance: this is whereby two or more companies come together in order to share some resource or capabilities so as to create a competitive advantage. This type of relationship need not be long term it can be for a fixed time period. A typical example is where Company A may want to use Company Bâ&#x20AC;&#x2122;s warehouse and distribution network in a foreign country for a certain time period. This gives Company A the ability to penetrate the foreign market without incurring additional investment in warehousing, distribution network, sales staff and so on. In return Company A will offer either the same or different service. The key advantage of such a relationship is that it allows the SME to test a relationship before making it long term.

One of the most important decisions that an exporter needs to make is to select an appropriate partner. Selecting the correct foreign partner can ensure that the exporterâ&#x20AC;&#x2122;s products are successful in the target market

or listings are unqualified (in other words the firm has not been verified) it nevertheless gives the exporter an idea of the number and type of firms operating in the market. The second stage is for the exporter to carry out its own due diligence. Participate in catalogue and video exhibitions: Catalogue and video exhibitions are another low-cost means of advertising export products abroad. In this way, the export products are introduced to potential partners at major international trade exhibitions. Usually, the embassies show export products catalogues and videos to interested agents, distributors and potential buyers.

Exhibit at trade shows: International trade shows are an excellent way of marketing an export product abroad and to locate foreign representatives. Participate in trade missions: Participating in foreign trade missions is another way to meet foreign representatives. Public and private trade missions are often organised by governments and trade associations. Arrangements are handled by the organising party so that the process of meeting prospective foreign representatives is simplified. Business to business (B2B): This is an electronic market place where exporters and foreign representatives can meet and transact business. The B2B exchange is effective in reducing search cost as well as the provision of information to a large number of potential partners.

How to find strategic partners Forming strategic alliances is not an easy task, however, SMEs can identify an appropriate foreign partner in the following ways:

Selecting partners One of the most important decisions that an exporter needs to make is to select an appropriate partner. Selecting the correct foreign partner can ensure that the exporterâ&#x20AC;&#x2122;s products are successful in the target market.

Trade journals: Often, firms place advertisements in trade journals or a listing in a trade directory. Although these advertisements JULY 2011

SME ADVISOR MIDDLE EAST

Trade

On the other hand the wrong foreign partner can lead to not only a disastrous entry into the target market but wasted management time and resource.s. Exporters can minimise the risks of finding a foreign representative through ensuring the following aspects: A proven track record or experience in the product in question for the target market; An extensive geographical coverage with a supporting infrastructure; An established player in the market with key advantages over its competitors; Experienced sales team that is well managed with appropriate financial and non-financial incentives; Ability to provide the exporter with appropriate market information; Have adequate warehousing, servicing and after sales. Although the above aspects cover the essential qualities that a foreign partner needs to have, it is important to bear in mind that there are also other human factors that need to be considered. For example, the exporter and the foreign representative need to have a strong and positive relationship that is built on trust and transparency. The normal procedure in selecting a foreign partner is to first to identify at least five or six potential partners. The second stage usually involves the exporter meeting the key personnel of the foreign partner. This stage allows the SME to discuss its own strategic direction and corporate practices with that of the foreign partner. This will allow the SME to assess if the two entities share the same corporate goals. In doing so the SME will also be able to evaluate the business and non-business aspects of the key

SME ADVISOR MIDDLE EAST

Then there are also legal aspects that have to be considered before forming a partnership. Most countries have specialised legislation covering the rights and obligations of all parties in a partnership agreement. Therefore, before any formal agreement is entered into, the SME needs to seek legal advice

JULY 2011

Dr. Ashraf Mahate

personnel in the foreign entity and evaluate whether its own team will be able to work together. The third stage can be a formal due diligence of the foreign which can cover the various aspects including the following: Sound financial position with a good reputation for prompt payment; Ownership structure; HR issues; Trade membership; Ability to deliver a quality service and after sales support; Ability to adequately market the product or service; Legal issues. Once the due diligence has been carried out the SME needs to decide which type of partnership to form. There is no golden rule to this and it really depends on the current market situation, the benefits that each partner is able to make available and the long term goals of each party. Then there are also legal aspects that have to be considered before forming a partnership. Most countries have specialised legislation covering the rights and obligations of all parties in a partnership agreement. Therefore, before any formal agreement is entered into, the SME needs to

seek legal advice. Although, alliances or partnerships are a slow entry mechanism because of the steps involved in their formation, they do, however, offer a viable alternative for SMEs not wishing to go alone in a foreign market. The world of commerce is full of success stories where alliances have made a real difference to SMEs. However, this success does come with a word of caution in that they have to be very careful as to whom they select and what is agreed.

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

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Management TEAM innovation

<<<

PUTTING YOUR BEST FOOT FORWARD Have you heard the saying, “there are two types of people who dance with elephants – the quick and the dead”? In today’s globally competitive work environment, businesses are literally dancing as fast as they can and innovation is the tune playing on the loud speaker, says Karen Oliver, Managing Director, DBM Arabian Gulf. A Boston Consulting Group (BCG) Business Week annual innovation survey showed a new world order emerging. A key finding in the 2010 study was that rapidly developing economies like China, India and Brazil, were gaining ground in the area of innovation and they continue to pump huge resources into it. Eighty-four percent of the companies surveyed put innovation at the top of the priority list but many said that they are not satisfied with the strategies currently in place. Getting the best out of your employees in a new era takes a new way of thinking. In his book, Drive: the Surprising Truth about What Motivates Us, Daniel Pink says, “We are not as endlessly manipulatable and predictable as you would think.” The promise of a regular paycheque only ensures that your employees do the bare minimum expected of them and monetary rewards never lead to increased productivity. So, how do you spark that flame of ingenuity that leads to creative solutions and productive employees? I have found that there are five main drivers – or “guiding principles,” as driving implies being pushed, the automatic response being digging in one’s heels. No, we want to create a

SME ADVISOR MIDDLE EAST

work environment that encourages people not just to do their best but to stretch and test limits by trying new things. The first guiding principle that must be in place is trust, followed closely by transparent communication, autonomy, a coaching approach and involvement.

Building trust In any relationship if you trust the other person, you will be open and honest. Trust is the foundation to successfully creating a work environment where employees share ideas and try new things. Building trust is the most critical step because without it, the rest simply will not happen. You need to ask yourself: Would my employees trust me enough to know that I’ll be there to catch them if they fall? It’s important to discover what motivates your employees. Once they trust you, they will be more willing to share what makes them come to work every day.

Transparent communication Once you’ve built trust the challenge is to continually prove that you mean what you say. The best tool in reinforcing trust is transparent JULY 2011

If you micromanage, there’s no trust and the employee feels dependent on your approval every step of the way, becoming paralysed if you’re not around at decision time. Productivity comes to a grinding halt until you return. It’s the difference between management and engagement

communication. In many organisations, I see departments working in silos, keeping separate from other departments, often stifling innovation. Managers protect information, compete with fellow managers for the CEO’s attention and believe that information is power, yet don’t realise that sharing information is where greater strength comes from. Opening-up communication is imperative. Look at how the company currently communicates to employees. Are there mechanisms in place for feedback? Are your employees comfortable giving you feedback? I always advise my clients to meet with each employee individually and ask what is important to them, not only on the job, but outside of work in life in general. Ask what is working and what is not. Tell them their feedback will be confidential. Often your quietest employee is the deepest thinker. If you have an employee who seems shy or intimidated by a face-to-face meeting, invite them to put their thoughts on paper first. Once open communication is established, you want to communicate the company’s purpose and how their role fits in the bigger picture. Explain the purpose of the

Management

task at hand, why it’s necessary and how the task fits into the larger purpose (both the employee’s and the company’s). Invite suggestions and delegate.

Encouraging autonomy It is human nature to want independence. Just as young adults leave home and look forward to making their own way in the world and eager to spread their wings, it’s the same in the workplace. You hire employees based on their level of education, skills and experience. Once hired, they assume that you believe they can do the job. If you micro-manage, there’s no trust and the employee feels dependent on your approval every step of the way, becoming paralysed if you’re not around at decision time. Productivity comes to a grinding halt until you return. It’s the difference between management and engagement. Management leads to compliance while engagement encourages autonomy and leads to creative thinking and productivity as the employee has “permission” to proceed without you. Daniel Pink talks about a software company in Australia called Atlassian that is successfully implementing this strategy. Once every quarter, designers have 24 hours to work on anything they want, how they want and with whom they wish. The 24hour period culminates in a festive party where results are shared and celebrated. That one day of unbridled autonomy has resulted in some of the best fixes and new product ideas in the company’s entire history. A programme like this only works if management has an open mind focussed on the right purpose. I worked with a manager once who came to me very frustrated. He said, “I’ve asked all the right questions and followed all of your suggestions and they’re still not doing what I want them to do.” He was waiting for them to come up with the solution he already had in mind. If you give employees the tools they need and get out of the way,

ABOUT: Karen is the Managing Director and Founder of DBM Arabian Gulf. She leads and guides her team in introducing international standards of change management, executive coaching and outplacement programmes in the Gulf region. An executive coach with 25 years experience in human resources and development, Karen has worked with decision makers in international organisations in the UK, Asia Pacific and Middle East region. As an experienced facilitator she has assisted senior teams manage the change process following mergers, acquisitions and organisational realignment. A former HR Manager for international retailer Marks & Spencer, she was responsible for management development across the Asia Pacific region. She relocated to Dubai in 1999 and opened the DBM office two years later. Since then she has worked with senior managers in local and international organisations across the Gulf Region. Karen has a Masters Degree in Organisational Behaviour from the University of London, is a Fellow of the UK Chartered Institute of Personal Development and holds Level A & B Occupational Testing Qualifications from the British Psychological Society. An accredited coach, Karen is also a facilitator of Corporate Coach U’s international Coaching Skills Training Programme.

they’ll surpass your expectations if you’ve established trust. Tell employees that it’s all right if they try something new and it fails. Post-it notes actually came from a glue formula gone wrong. Of course, there is a balance between unrestrained autonomy and still meeting corporate goals and objectives on time.

A coaching approach Throughout my 25-year career in human resources, I have discovered that employees who are coached to performance rather than managed are more committed to and invested in the outcomes of their work and achievement of organisational goals. Collaborating on a project verses telling employees what to do always leads to more innovative solutions. A manager in a coaching role presents an opportunity, expresses the desired outcome, sets the deadlines and allows the employee to fill in the rest. A manager or coach also identifies areas of potential growth and presents the employee the opportunity to develop new skill sets to help them reach their personal career goals. People want to be good at what they do and mastering a skill gives employees a sense of pride. Allowing your team to develop new skills can shake things up a bit and introduce a different way of thinking. However, do employees view additional training and skill development as a reward or a burden? You will know the answer if you’ve built their trust and established open and honest communication.

workings of an organisation, every employee has a role. When developing plans and brainstorming ideas, it’s important to involve employees at all levels and empower middle managers to take the lead. Leaders who are innovative thinkers develop employees who think out of the box. Middle managers who have developed a coaching approach and involve all team members end up with skilled teams who become self-managed. When we think about innovative companies what comes to mind? Google? Apple? Facebook? What do they all have in common? They come across as young, vibrant and fun places to work.

Innovation means survival You can’t force creativity but it can be nurtured. If we create an environment that embraces trust, transparent communication, autonomy, a coaching culture and involvement it will lead to creativity, innovation, and corporate survival.

Involvement When you look at the inner

Karen Oliver

JULY 2011

SME ADVISOR MIDDLE EAST

Management Productivity

<<<

coping with distractions How many of us have gone to work and pledged to be more productive today than yesterday? Yet, somehow, it always ends up the same – the end of the day rolls around and the T0-DO LIST IS STILL UNENDING. David Lavenda, Vice President, Product Strategy, harmon.ie, offers tips for MINIMISing wasted work time.

Why are so many of us unproductive? Information overload and the glut of digital interfaces play a major part. The plethora of software, gadgets and other tools, which were supposed to make us more productive by allowing us to be constantly accessible, has produced unexpected consequences. Most significantly, the constant deluge of email alerts, text messages and tweets put workers into a constant state of digital overload. Recent industry surveys have shown that many employees are interrupted at least every fifteen minutes, and the majority waste at least an hour a day dealing with all types of distractions. And when each of those distractions happens, it can take twenty minutes to regain focus and get back to the work at hand. In an organisation with 1,000 employees, wasted time comes with a bill of over £3.2 million every year in lost productivity. Almost 60% of interruptions at work involve using communication and social tools, like email, social networks, text messaging, instant

SME ADVISOR MIDDLE EAST

messaging, or switching between different applications. These tools do make people more productive — email alone has revolutionised how businesses operate. But while receiving the right email or IM can save you time, it can also cause problems.

Case in point According to the survey, a third of employees have trouble getting their work done, and a quarter can’t think deeply or creatively about their work, guaranteeing that their employers aren’t getting the best work possible. It’s not uncommon for people to tune out of meetings to deal with digital distractions, either. Despite the rudeness of doing so, 64% of employees studied report that they will ignore a meeting in which they are participating to answer email, answer a cell phone, update their social status, or send an instant message. Reducing distractions, and finding times when you can avoid electronic distractions entirely to focus on the task at hand, has become a necessity. These six tips can help you to minimise distractions and work more productively. JULY 2011

The number of people that can sit comfortably at a desk and work straight through an eight-hour workday are few and far between. For our own health and well-being, it’s crucial to get up and leave our desks at least a few times over the course of the day

Start with prioritisation Whether you’re responsible for your own work or you get a task list handed down from management, it’s impossible to know if you’re off track when you don’t have priorities. The simple truth is that there is always enough work to fill the day, so you need to choose what you’re going to accomplish. Choosing your priorities can be as simple as writing the next three things that you need to accomplish on a sticky note. Most of us do have to leave room in our plans to deal with new tasks as they come up, but it’s usually viable to choose three or so actions that you’re going to take today, before you get side tracked by anything else.

Schedule your work Most people have certain times of the day when it’s easier to complete certain tasks. You may have noticed that you can write easily first thing in the morning or brainstorm new ideas better in the afternoon. Pay attention to when you’re most effective at the work you need to do.

Management

Protect that time. You can spend the hours when you don’t work quite as effectively on those tasks that constantly come up but aren’t actually a part of the project you’re working on – sending out emails, updating social networks, taking meetings and so on.

Remove distractions from your environment It’s not a big deal if you get interrupted in the middle of sending out an email. But if you’re trying to design a new product, research a problem or do something else that requires deep, uninterrupted thought, then distractions become a much bigger problem. Sometimes, the only thing you can do is physically take your distractions out of the room you’re working in. Leave your cell phone in the car, shut the door, even disconnect your computer from the internet, if that’s what it takes. Working offsite is one of the best ways to remove distractions. You may be able to get more creative work done in a morning at the coffee shop than you do in a whole day at the office. It’s not possible to spend all of your time disconnected like that, but even spending an hour away from the physical presence of distractions can let you get an incredible amount of work done. You can even set rules for when people are allowed to interrupt you if you’re concerned about missing out on something. It’s a rare emergency that can’t wait an hour, especially one which is work-related.

Plan for time away from your desk The number of people that can sit comfortably at a desk and work straight through an eighthour workday are few and far between. For our own health and

well-being, it’s crucial to get up and leave our desks at least a few times over the course of the day. The trick is planning those times, rather than leaving them up to how often you get distracted by something in another part of the office. One of the best options is to plan a work out or other exercise into your day. Even talking a walk once a day can burn away some of that stress. But you need to make a point of getting up and carrying through on your plans every day.

Delegate and collaborate When you work in a larger organisation, there are always people around with different skill sets; people who may be able to handle certain tasks on your to-do list more effectively than you can. It can be tempting to try to do everything yourself. After all, who knows better than you how exactly you want something done? Either bringing in the right person for some aspect of the task or delegating it entirely can keep some minor issue from distracting you entirely.

Disconnect after work At the end of the day, most of us head home. But even outside of the office, we tend to be distracted: with the right phone, you may still be working on something you should have left at your desk. According to the survey, 82% of employees report that they stay connected when they leave the office in the evenings and 50% are still connected when they go to bed. That means that you’re just as distracted when you’re trying to spend time David Lavenda with friends or family as when you’re at work.

ABOUT: For the past 20 years, David has served as an executive for a number of high-tech companies. After completing an undergraduate degree in Physics, advanced studies in Electrical Engineering, and an MBA in Marketing, David co-founded Business Layers, an identity management company, serving as VP Marketing and Product Strategy from its inception until the company’s successful sale five years later. Additional stints as VP of Marketing and Product Strategy for several successful high-tech companies followed. David is a technology blogger for Fast Company. He is also pursuing advanced studies in STS (Science, Technology, and Society), focusing on the research of online behaviours. Harmon.ie (pronounced ‘harmony’) is a provider of social email software that brings document collaboration to every business user by transforming the email client into a collaboration and social workspace. Formerly known as Mainsoft, the company has been building cross-platform enterprise software since 1993. For more information, visit www.harmon.ie

JULY 2011

The only way to avoid such distractions is to leave your work in the office. Not all organisations are particularly accommodating to someone who wants to turn off his cell phone in the evening or take over steps to disconnect from work, but it comes down to where you should really be focusing when you’re at home.

Avoiding unnecessary distractions It is impossible to eliminate every possible distraction from your day and, to be frank, you likely don’t want to – business runs on email and the other communications that pop up during your day. But by investing time now to reduce those distractions during the times you need to focus will save you time in the long run. It takes between ten and twenty minutes to recover and refocus every time someone stops to ask you a question or your email alert buzzes. Even an interruption lasting less than a minute can throw you off for a quarter of an hour. The only way to avoid wasting all that time is to reduce the number of distractions that actually get through to you during those times when you need to focus. You won’t get all of them, but every one that you do eliminate could mean twenty minutes of work time that you’ll get back. The bottom line is there is a need to create boundaries for using timesaving digital technologies. Being connected during business trips or while out at customer visits is a godsend for busy people. But cutting back on the deluge of information by setting boundaries and shutting down while at home, on vacation, or at your child’s school play will allow you to focus better for the really important tasks. SME ADVISOR MIDDLE EAST

HR Employment ads

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Are you sending out the wrong message? Job seekers may not be aware of it, but employment ads can signal whether a job is typically held by men or women, according to researchers at Duke University’s Fuqua School of Business, Princeton University and the University of Waterloo.

The clues come in the form of gendered words like competitive and dominant (male) versus compassionate and nurturing (female), the researchers report. Both men and women show a preference for job descriptions matching their gender, women more strongly so. But no one in the study was aware of the effect, the researchers discovered. “Our research suggests these signals may perpetuate gender inequality in the workplace,” said senior author Aaron Kay, Associate Professor of Management, Psychology and Neuroscience at Fuqua.” When we ask people why they don’t like a job, they come up with all kinds of explanations. Not one participant picked up on gendered language.” Kay and co-authors Danielle Gaucher, a postdoctoral scholar at Princeton University and former graduate student at the University of Waterloo, and Justin Friesen, a graduate student at the University of Waterloo, examined more than 4,000 recent job ads. After finding genderbased wording differences in employment postings, the team used those differences to create masculine and feminine job

SME ADVISOR MIDDLE EAST

advertisements for identical positions, then asked people to rate the jobs. For example, the masculine advertisement for a registered nurse read, “We are determined to deliver superior medical treatment tailored to each individual patient,” while the feminine advertisement said, “We are committed to providing top quality health care that is sympathetic to the needs of our patients.” “We found these wording differences affected the job’s appeal independent of the type of job it was,” Friesen said. “When we used more masculine wording, the traditionally female-dominated jobs became more appealing to men. Using more feminine wording made the traditionally male-dominated jobs more appealing to women.” This unconscious response could be one reason why women are less likely to apply to jobs traditionally held by men, including those in science and technology, said Kay. “People don’t realise the cues being sent to them,” said senior author Kay. “Consistently finding certain jobs less appealing, without being aware of the external reasons why, may lead some women JULY 2011

Consistently finding certain jobs less appealing, without being aware of the external reasons why, may lead some women away from occupations they may otherwise have found interesting

away from occupations they may otherwise have found interesting.” Because every study participant missed the presence of gendered language, the researchers believe it’s likely that companies unintentionally place gendered job advertisements. “Many companies want to diversify,” Gaucher said. “Companies that use highly masculine wording may, in reality, be just as welcoming to their female employees as they are to their male employees.”

ABOUT: Duke University’s Fuqua School of Business is one of the world’s leading business schools, with No. 1 (Bloomberg BusinessWeek) and No. 2 (Financial Times) ranked faculty in the US. The school has study and research locations in China, India, Russia, the UK, the UAE, and North Carolina. For more information about Fuqua’s degree and open enrolment executive education programmes, please visit http:// www.fuqua.duke.edu/. The research report can be found online at http://tinyurl.com/5uay29d.

JULY 2011

SME ADVISOR MIDDLE EAST

Marketing Digital promotion

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Playing two moves ahead

customers’ attention has shifted from traditional billboards and yellow pages to new digital media, such as search engines, social networks and mobile applications. With this change in behaviour, businesses must adapt so that they can continue to provide value and remain relevant, says Abbas Alidina, Founder and Director of Logicks. com. How much time do you spend on Facebook, Google or YouTube every day? How often do you drift into e-mail trance while using your SmartPhone? It’s quite remarkable when we think about how much things have changed over the past decade because of these technologies, which are now an integral part of our daily lives.

Getting started with digital marketing Many businesses make the mistake of diving head first into developing a Website, opening social media accounts, or, creating mobile applications for their business without any coherent digital strategies. This juncture actually represents an opportunity to take a step back and look at the bigger picture. What are your intentions? How do you aim to improve the customer experience? What will differentiate you from competitors?

Planning for success Failing to plan is planning to fail. Identify which business goals you aim to achieve with your online presence. For instance; Increase the number of inquiries received

SME ADVISOR MIDDLE EAST

Boost sales Build a community of enthusiasts around your brand Decrease the volume of inbound customer support calls. These objectives should be captured as early as possible. By gaining clarity on your business goals from the onset, it will help you to remain focused on driving customers towards your desired outcomes as they interact with your brand.

Internet penetration by country in the Middle East

Researching your industry Before launching a digital marketing campaign, it is critical to determine whether or not a market actually exists for your products or services online. Ask yourself: Where do your customers “hangout” online? What languages do they speak? What other interests do they have? Investing significant time and money on digital marketing only to realise that your targeted audience is elsewhere can be demoralising to your business. At a macro level, the level of Internet penetration across the Middle East varies drastically by country. The overall Internet penetration across the Middle East JULY 2011

By gaining clarity on your business goals from the onset, it will help you to remain focused on driving customers towards your desired outcomes as they interact with your brand

region is an average of 28.5%, so each country is at a different level of online maturity. This should be taken into consideration when developing your digital marketing strategy.

Understanding consumer behaviour If you can understand your audience, you are better positioned to reach them effectively. The Internet is a rich data repository. Digging deeper into this information minefield in a structured way will help you to learn about your customers. Here are two free tools to help you get started: 1) Google trends: This valuable tool illustrates how often people have searched Google for specific search-

Marketing

terms over time. You can also filter the results by region, city and language. By entering search-terms related to your products and services, you can gauge the level of online activity that is relevant to your business. 2) Twitter search: Whereas performing a Google search will return the ten most authoritative Websites on specific keywords, performing a Twitter search will return the ten most recent Tweets containing your keywords. You can start monitoring conversations and find out what your customers and prospects are talking about. There are a number of additional free and paid tools available online that will help you to study your market from varying perspectives. Every business should at least begin to experiment with these tools and see how they can learn from the data. The beauty of the Internet is that it represents the ability to study and organise behaviour, sentiment, perception, activity, impressions and experiences, and thatâ&#x20AC;&#x2122;s remarkable when we actually stop to think about it.

The customer engagement cycle The customer engagement cycle illustrates the stages that customers and prospects pass through as they experience your brand. For a moment, take off your marketing

hat and start thinking like a customer. Develop your digital marketing strategy based on the entire customer experience. Ask yourself what customers require at each stage of the customer engagement cycle with respect to your specific industry.

Abbas Alidina

Stage

Description

Awareness

Customers have not previously heard of your brand, products or services. You need to make a good first, second and third impression so that they consider you when they are further along the engagement cycle.

Consideration

Customers are looking for information so that they can research and compare between competitors and offerings. Communicate your value proposition to them and build up confidence in your brand so that they will purchase from you.

Purchase

Customers are busy people and want to make the purchase in a way that is convenient for them. Be as flexible as possible and make it simple and straightforward for them to make the purchase.

Support

Customers want to purchase from brands that will provide good service and support. Make sure to support them with any issues, questions or complaints they may have.

Loyalty

Customers like to be appreciated and rewarded for the business they are providing you. Offer recognition and incentives for loyal customers.

Advocacy

Customers who are happy with the experience they encounter with your brand are likely to recommend you to their peers. Empower them with the ability to easily spread the word on behalf of your business.

Each of these stages represents the opportunity to form a deeper relationship with your customers. The customer engagement cycle is a chain and you are only as strong as your weakest link. Any breakage along the chain means that you are losing customers as they pass through it.

Budget and allocate resources wisely Spending the majority of your digital marketing budget to develop a flashy website with all the bells and whistles is not the most effective way to connect with customers online. Even

ABOUT: Abbas Alidina is the Founder & Director of Logicks.com, a digital marketing agency that helps businesses across the Middle East to improve their online performance. With more than ten years of digital marketing experience, he has developed strategies and executed projects for numerous global and regional brands. For more information please visit http://www. logicks.com or follow Abbas on Twitter @AbbasAlidina

JULY 2011

if you have the most beautiful Website around, if customers are not visiting it then you might as well be offline. Whether you are performing the digital marketing activities in-house or outsourcing to an agency, it is critical to ensure that you have an experienced team who has demonstrated the ability to get the job done. While it is quite inexpensive or even free to establish a presence on the majority of online platforms such as Google or Facebook, time and resources do carry fixed costs. The results that you can achieve through digital marketing are directly related to the level of commitment that you are willing to invest in it.

Industry insights We are witnessing a rapid rate of growth in digital marketing spending across the globe. A recent digital marketing research report that was conducted by Econsultancy (http://econsultancy.com/reports/ the-state-of-digital-in-mena). In the report, it was discovered that 58% of companies in the Middle East & North Africa are increasing their digital marketing budgets this year compared to a 43% increase in overall marketing budgets. Furthermore, companies who are increasing their digital marketing budgets are doing so by an average of 28%. Businesses have realised that customer attention is not only scarce, but also scattered. There is an oversupply of platforms, especially in the digital world. Customers are focused on search engines, social networks, email and mobile phones amongst others. Businesses must adapt to these changes in consumer behaviour and participate in the places where customer attention is focused. SME ADVISOR MIDDLE EAST

Marketing Social media <<<

The best things in life are free! What would you say if someone could show you a way to track competitors, find new hires, sell your products, and find new customers – all for free? You’d be interested, right? You can do all this with LinkedIn, explains Alan Devereux, Communications Officer for the British Business Group, Dubai and Northern Emirates. LinkedIn differs from Facebook and Twitter in that it is your CV is posted online. It is a business network over everything else. There is the option to showcase your work, networking with peers, and gaining professional advice. You probably have a LinkedIn account but you may never really use it – big mistake! LinkedIn allows the following: Upload your CV Upload your projects, portfolio, presentations, and PDFs Join groups that suit your profession Follow companies (including incoming and outgoing staff) Follow individuals

SME ADVISOR MIDDLE EAST

See who has viewed your profile These are the basic things LinkedIn allows us to do. But it also allows so much more. LinkedIn has company pages; many people do not know how amazing company pages are. Let’s imagine you are promoting an event. You know that your profile is viewed on average 30 times a week (because LinkedIn tells you), but, as LinkedIn does not allow us to create profiles as companies you wonder what use it is to your business. I am going to tell you how to place an advert on your LinkedIn profile for free. First you must register your company on LinkedIn. To do this you need to click the companies tab in the menu bar, JUly 2011

on the right of the new page you’ll see a link saying Add a Company. Once you have added the company LinkedIn will then give a lot of customisable pages. You can easily see how to fill in each one. To take full advantage of this new page, even if your company is not followed by anyone but yourself, you will need to create a product or service, the product you are hoping to sell. Once the product is created simply click the Share button below it. The event will then appear in your profile where the status updates normally appear. If you add a new update the event will go, if you do not it will stay. You can of course re-share it when you log-off for the night. Make sure to add a nice picture.

There is more. LinkedIn company pages now allow three 640 x 220 pixel images.

You can see that I opted for simple messaging; you may want to advertise a product. Your options are unlimited – I created this one with PhotoShop to correct size specifications to ensure no

Alan Devereux

distortion of the lettering. The page has nearly 1,000 views and at the time of writing this page 7% of that number are actual followers. Now you know how to advertise on your profile you may want to spread the word further. If your employees have LinkedIn accounts they might like to do the same thing; you could hit thousands of potential customers by clicking a button marked share. The next time you think about banning social media sites from your office I hope you might think twice!

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

Marketing >>> PR rebuttal

Said Hamideh

PR strikes back ReSPONDING TO one of our previous columns on not needing a PR agency, Said Hamideh from Active PR comments on the “do it yourself” approach that often appeals to smaller businesses and feels there comes a time when the services of pr are DEFINITELY needed.

Committing one’s life to making an idea come true is often just the beginning of an entrepreneur’s journey. The truth is that unless the startup is some original, quirky or automatically powerful concept (and nothing is automatic – just ask Facebook or Twitter!), the poor entrepreneur, already exhausted of mental and financial resources, will begin to experience the frustration of getting key influencers and media to ignore their story. I’m saying this, not as a PR professional, which is what I am now, but rather

as someone who founded a struggling online company (not just on one occasion) as well as having worked for a software company that received regular attention from Silicon Valley’s highest tier media. In the case of my start up, we simply didn’t have the detachment needed to be rational about our marketing needs. After all, we built a product intended to generate interest on its own accord, but, it simply wasn’t doing that. With the case of the large software company, they needed outsiders to come in and operate in a way that was not beholden to internal politics and “groupthink”.

The conventional advice, has been rather straight forward (and easier to prescribe than it is to achieve): stop focusing on message distribution when you are failing to strike a chord with humans. Keep improving or modifying your business model until the customers and journalists start voting with their feet. Thankfully, there are lots of things we can do to facilitate attention and awareness during this awkward period of time where something gets launched, but it obviously still needs lots of refinement based on market reception. That said, no matter how well connected, a Public Relations agency doesn’t necessarily have an easier time getting a story picked up than the company itself would, especially if the concept needing promotion is inhuman or dull. Luckily, regardless of a concept’s disadvantages, a proactive and hardworking PR agency will have plenty of room to always add the following “outsider” benefits: JULY 2011

Communicate messages the client has already crafted in creative and forceful ways to their network of media contacts and influencers (often doesn’t work so simply though) Add new narratives and angles of interest to a preexisting business concept and uncovering additional key messages better suited for media reception (“spinning” the story) Design and executing new applications, implementations, experiences, and yes, stunts, that add extra layers of meaning and understanding to a business concept that doesn’t have the flexibility to adapt significantly (what good PR agencies aspire to do from time to time). One could say that at the heart of creativity is the art of blending concepts together or “connecting the dots” that the company itself couldn’t because they had tunnel vision. Notice how each of these strategies progressively adds more of a burden to change the product itself, but never quite gets to that point where we as a PR agency just tell the clients outright that their product is unfit for selling to the media. It is a testament to the power of a weaving a good story or experience.

ABOUT: Said Hamideh is a social media and PR strategist at Active PR in Dubai Media City. He designs and executes branded campaigns and experiences for Active PR’s traditional client services. Said is also a part-time serial entrepreneur, having founded a real-time web application to help mentor undergraduate scholars called Mindbounce.com.

SME ADVISOR MIDDLE EAST

Sales Targets <<<

Is your aim off? Sales is A notoriously competitive and challenging industry and when targets are not met management arenâ&#x20AC;&#x2122;t slow to ask why. Normal excuses might be rehashed: competition, price, market conditions, and lack of selling skills. But do you really know what the issue is and are you really understanding why targets are being missed, asks Peter Heredia, Managing Director, Max Sales Solutions. What isnâ&#x20AC;&#x2122;t measured cannot be managed

Here are some simple ideas that will make sure that you and your sales teams are focusing on activities that will increase sales, and that should you chose to automate your sales process it is contributing to your overall success:

This is especially true in sales but are you clear on which key selling activities are driving your business today? If not then you need to know immediately. Obviously, by increasing activities in these key areas you will almost always deliver significantly improved results. Sales automation can ensure that you get visibility of sales activity and provide the information needed to make good decisions. It is critical that good salespeople and good sales managers understand what activity delivers the best results. Manage these activities well and you will never have to explain a missed target again.

Why are you missing targets in the first place? The following are some common non-sales skill related problems to watch out for: Insufficient active opportunities being worked on Too many non revenue generating calls are being made Excessive time is spent on low value opportunities Sales people are staying in their customer comfort zone

SME ADVISOR MIDDLE EAST

Despite X closing twice as many deals as Y, we can see that in this example Y is bringing on 60% more revenue by focusing on all key activities.

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Sales

You need to have a system in place to provide effective visibility on all sales activities and then managing these activities will drive your sales success. But make sure that implementing automation doesn’t become the project

In our experience we regularly come across organisations that buy super sales systems complete with all the “bells and whistles” and who then use less than 10% of its functionality. Many others abandon the systems shortly after implementation, or, use only core functionality that

normally isn’t about increasing sales efficiency and effectiveness. You need to have a system in place to provide effective visibility on all sales activities then managing these activities will drive your sales success. But make sure that implementing automation doesn’t become the project – it’s all about increasing sales.

Automating your sales team Understand what the issues are that you are trying to fix before you automate User acceptance can be an issue – discuss with, and involves sales team throughout Data entry must be minimal; salespeople don’t like admin and you want them on the road – you want maximum output from minimum input Web based versus hosting on own server — our experience shows that keeping it simple is best. Server based is quicker, easier and can still be accessed over the Internet Align the automation with your own sales process (make sure that your process is effective) All key activities need to be readily visible, preferably in a dashboard format for all to see all of the time

Peter Heredia

ABOUT: Peter Heredia is the Managing Director of Max Sales Solutions. He has worked with sales teams around the globe for more than two decades and has worked in the Middle East for the last ten years. If you would like to talk to Peter about your sales team then please contact him on peter@maxsalesolutions.com

Must provide effective management of the sales pipeline

JULY 2011

SME ADVISOR MIDDLE EAST

Finance Credit risk assessment

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Getting over the first hurdle One of the first steps any business must take in order to gain funding from a bank is to obtain a credit risk assessment. No real assessment model exists for SMEs and alternative models are expensive and often discriminatory. Serov Vasiliy, Credit Controller, KN Ibrakom and Dr. Dayanand Pandey, Head of Finance and Banking Program, British University of Dubai (BUiD), talk to Mike Byrne about how this process can evolve to better serve SMEs.

In the UAE in 2009 there was a decree passed whereby the minimum capital requirement for setting up a business was abandoned in order to try and encourage more business growth – it had been originally set at AED 150,000 but there has since been more flexibility with the removal of this price cap. This has undoubtedly had a positive effect and statistics will show that generally the SME sector has accelerated its drive out of the recession faster than other larger businesses. However, at the core of financing concerns for SMEs seems to rest the same repetitive vicious circle.

Recurring problems SMEs are reluctant to approach credit risk assessment agencies and banks because of the cost. So, if they can’t afford to go through this rating process then this will have a knock-on effect as banks will often not consider an application without the credit

SME ADVISOR MIDDLE EAST

rating first. “What you then have is this gap between the one who wants to borrow and the one who wants to lend – there is nothing in between to assist with the smooth transition from one to the next,” says Serov Vasiliy. As it stands, the procedural formula for credit risk assessment can also vary according to agency or bank you approach. With the existing Altaman model, which is used in many developing countries and emerging markets, there is an equation used, whereby certain data is extracted and a ratio is calculated and a score set. The problems with using this model for assessing an SME are wide–ranging. “This score defines whether a loan will be given or not. It can be quite discriminatory in nature, especially where SMEs are involved because their data is neither complete, audited nor integrated and so they are, from the outset, at a disadvantage. The SME may indeed have some of these financials in place and maintained but the quality then JULY 2011

A new model must be introduced that is not only cost effective, but also easily understood by the banks, assessment agencies and the SMEs. It is often the case that managers will simply not adopt models for assessing SMEs because they find it them hard to understand and to enforce

comes into play. Information asymmetry is one of the main deterrents when it comes to the bank extending money to SMEs,” says Dr. Dayanand Pandey. There have been suggestions in recent years that new models for assessment are needed where SMEs are concerned. Instead of strict objective formulas based on rather complex algorithms, something much simpler and more subjective, for a case-bycase analysis, would better serve justice for the smaller business. “Assessing SMEs based on the potential of default is just not realistic because there is often no market data by which to base an SME’s ability to remake payments. The large majority are not listed, are not trading and so the information is not freely available,” says Serov. Serov and Dr. Pandey stress that practices are often determined by regional factors, whereby loans and credit extensions are granted by banks to SMEs that are “known”. “What we see in this region is

Finance

fill this void and assess what is needed to bridge the gap – they have the necessary local resources and knowledge to help with the situation. It’s all about creating a confidence for the banks and for this to realistically happen the system needs to step in and help. In conjunction with setting up this rating agency, if projects in

Serov Vasiliy, Credit Controller, KN Ibrakom

the banks’ lending to some SMEs based on whether they are well known; if they are, then a loan or credit extension may be afforded to them and with a lower interest rate. If you are unknown then the interest rate will be much higher. Not only will interest payments be higher, but the conditions attached will be much stricter and this will impugn the versatility of the SME even further,” says Dr. Pandey. And what are the short and long term affects of a much higher rate of interest and more restrictive covenants attached to the loan? “The business model and the day-to-day operations can then get disturbed. Therefore, what the lending institutions are essentially doing is driving the SMEs into a situation where defaulting on payments becomes almost inevitable,” says Serov.

Recommendations What is clear from this discussion is that the existing models cannot possibly continue to partially serve the SME sector. A new model must be introduced that is not only cost effective, but also easily understood by the banks, assessment agencies and the SMEs. It is often the case that managers will simply not adopt models for assessing SMEs because they find it them hard to understand and to enforce. “What is advisable is that a government entity step in to

Dr. Dayanand Pandey, Head of Finance & Banking Program, British University of Dubai (BUiD)

certain sectors could be allocated to the SME sector, for example food and beverage and certain types of construction,” says Serov. However, both men are quick to point out that the area of credit risk assessment cannot be judged as simply placing it in the hands of the public sector over the private sector – one has to naturally compliment the other and where the public sector agency differentiates itself is by providing the assessment at a reduced rate. It is then up to the SME to choose where they receive their rating. “A central warehouse or database needs to be established by the governments in this region. This could be fed through multiple channels and help establish an effective rating agency where everything is funneled into. Here in the UAE the central bank is pushing for this credit bureau, so that things can be monitored. It been introduced for consumer loans, where tracking is in place for

ABOUT: Serov Vasiliy is a finance specialist, holding an MSc in Finance and Banking Degree and is currently employed as Credit Controller by KN Ibrakom FZCO, part of Kuehne+Nagel Group. In 2003 he received a Diploma in Economics and completed BSc in Economics Degree in 2005 with London School of Economics and Political Science. This year Serov graduated with distinction from British University in Dubai and obtained MSc in Finance and Banking Degree, offered in collaboration with Cass Business School. Dr. Dayanand Pandey is currently Head of Finance & Banking program at the British University in Dubai (BUiD), Honorary fellow of the University of Birmingham, UK and Consultant-Risk & Training at Bank Melli Iran, UAE. Prior to the BUiD, he was Head of Risk Management &Training at Bank Melli Iran (BMI), Regional Office in Dubai. Previously, he has worked as the Coordinator Master of Applied Finance and Banking Program with the University of Wollongong in Dubai and as a senior lecturer at the Emirates Institute for Banking and Financial Studies in Sharjah, UAE. Dr. Pandey has published a number of books and scholarly articles in journals .He has authored a book on Managerial Economics published from Pearson Education, Economic Environment of Business and Risk management from Excel Publications.

JULY 2011

personal loans, but as yet has not been followed through for SMEs,” says Dr. Pandey. Considering the SME sector constitutes over 85% of the businesses in the UAE, contributes over 80% of the GDP and is responsible for close to 70% of those employed, the establishment of such a governmental agency would seem justified. Having such an influential impact on economy growth, it has also been suggested in recent years that banks should allocate 20% - 30% of their loan funds to SMEs. Indeed this idea had been discussed prior to the economic recession but the subsequent downturn means that it was sidelined and not seen as a pending priority. But as the SME sector continues to accelerate faster than larger businesses out of the downturn, perhaps it is time to revisit the idea in order to not only continue recovery, but also to ensure future growth. So how does one persuade banks to cooperate with any government initiative of this nature? “The Basel Committee has proposed improvements to the Basel II Framework concerning internal value-at-risk models. It has further aligned the language with respect to prudent valuation for positions subject to market risk with existing accounting guidance. As present, the standardised regulations under Basel are not due to be enforced for quite some time in this region,” says Serov. What will persuade the banks to change their methods of assessment is forward thinking says Dr. Pandey. “It would be a great benefit if the banks here started to formulate better credit risk assessment formulas, which fall under the regulations of the Basel II agreements, ahead of schedule – it would make any future transition easier for the banks and for SMEs,” he says. SME ADVISOR MIDDLE EAST

Finance IPOs

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Appealing to the public Do you have a mind-blowing idea that can cash in sky high profits and ROI for your business? Do the existing infrastructure, manpower and resources require an overhaul to gear up? If these symptoms exist in your organisation, then it’s time to think about going public, says Geethalakshmi R, CEO and Managing Partner, Associated Business Attorneys. Is your bank dodging appointments to discuss investment for the proposed new business silhouette? Does expansion sound so imminent, yet the CFO is adamant on a latent cash drain? Then now is the time to consider an Initial Public Offering (IPO) as a reliable alternate to generate capital funds from the public domain.

What is an IPO? In simple terms, an IPO is forsaking and pledging all what you can determine as company assets, including income, towards repayments, security for repayment as a barter for a term loan, facility assistance proposed to be received from your venture capital and investment banking sources.

SME ADVISOR MIDDLE EAST

IPO as an alternate capital resource

Mapping growth potential For every SME, regularly graphing the company’s growth against the company’s expense is a good exercise which comes handy while assessing IPO as an alternate capital resourcing option. A vital feature for IPO determination as the right option is the company’s strong and cemented upscale growth graph. A ROI indicator at 20 – 25% annual returns would be the minimum welcome benefit to begin with. The proposal must be designed with 60 – 70% upscale growth confirmation within one to three years of initial public offering, which will make the company’s profile reasonably competent for a probable candidate. JULY 2011

For every SME, regularly graphing the company’s growth against the company’s expense is a good exercise which comes handy while assessing IPO as an alternate capital resourcing option. A vital feature for IPO determination as the right option is the company’s strong and cemented upscale growth graph

Charting the inflow capital prerequisite If your company’s business objective has reached a stage where expansion is vital and promising, IPO is the right option, as expansion calls for additional capital. Capital is the value needed on a budgeted basis that would be the overall estimate, keeping in mind your proposal for expansion. Your causes for expansion must be glossy in approach to woo the investor so be smart to include all cost heads, including cost estimates for R&D, sourcing resource for market presence expansions, innovative and re-engineered strategy implementations, sales force expansion and territorial presence and expansion. In some cases we have seen even investments in the Government sectors proposed by SME’s during their next five year plan in the IPO offer proposal. The mantra is simply an international reach out that promises strong yet effective growth potential for the business upscale. Never underestimate your cost Although IPO’s are an alternative for generating capital, it is an expensive exercise. Normally companies opting for IPO include IPO cost as one major factor that contribute to overall budgeting of the company’s finances. However, successful IPO’s have been established, wherein the company estimated about 25 – 30% of the company’s existing equity as base value cost for setting up the IPO, keeping in mind fees and consulting allocation to be around 25 – 30%. Luminaries for management Getting qualified for an IPO predominantly revolves around

Finance

registered for the company on a turn-key project basis.

a key factor – the strength of the company’s management team. A lot goes into sculpting and grooming the management team to be demonstrated as the right and the most effective team for driving the company. Proven years of job experience in their designated fields has always been a strong medium of selling the company’s IPO prospectus. Public investor confidence is gained two folds when famous names in the corporate management circles feature in the company’s list of directors or advisors. This factor also adds value to the company’s actual ability in achieving set goals as trend setters now are part of the executing team for the company.

Bank involvement IPO’s are no cake walk without your investment banker on toe. SME’s could choose banks who have international experience and who have managed at least three to four transitions to IPO. Quite a bit also goes into which bank the SME has tied up with and therefore chose your banking partner with diligence. Get an expert to do the job Due to the complexities of the processes and procedures, long hours determining the right positioning, effort and money, busy business owners may not be the right people to actually get the ball rolling. IPO budgeting must include appointing a reputed IPO consultant to man the whole process as a team. It is advisable to choose from an array of service providers; we have seen SME’s opting for an open tender in some jurisdictions to appoint the most economical yet promising IPO consultants for the whole project. In some cases the appointed IPO consultant determines the pre-qualification of the SME’s proposal. There are several IPO consulting agencies worldwide who get the IPO

Geethalakshmi R.

Getting qualified for an IPO predominantly revolves around a key factor – the strength of the company’s management team. A lot goes into sculpting and grooming the management team to be demonstrated as the right and the most effective team for driving the company

Auditors and attorneys Auditors and Attorneys play a key role in designing the company’s IPO prospectus. Corporate entities are rated internationally, sometimes by the auditing firms and attorneys that they associate with. Auditors and Attorneys accepting an emeritus position in a company’s board is quite common nowadays. The response received for some project proposals are lukewarm because they did not have reputed names for auditors or attorneys on board. It is a mandate to have internationally reputed and experienced auditing firms on board. When hiring attorneys, one must chose those who are familiar with IPO documentations and procedures. Initiate the process yourself Some in-house exercise is crucial; let your in-house team work up on two vital areas – a complete analysis of your business, past, present and future. Secondly, get a project designer to design your company sales brochure which must be simple, yet informative, effective in impressing the investor, with a clear spreadsheet of the ROI’s and overall commitment of your company. Broadcast your vision. Once done, let your IPO consultant map the presentations and time them for you. Let your auditor approve financials arrayed and allow the attorneys to confirm legal compliance. juLY 2011

Market your proposal According to reports in the US, a positive trend has been observed when the management of the SME sets up an in house team and conduct “road shows”. It is a very effective medium of self marketing where an in-house team, headed by the management, travel around presenting the company to stock brokers. This is also a good exercise for the company’s sales and marketing team to have the management in the lead and sharpen their selling skills. Remember stock brokers and agents will be your gateway to reach the public – if they are convinced then you are making great progress. In a nutshell, for a successful SME, regular in-house self review appraisals are a must. This helps SME’s to comfortably adopt and implement every exercise necessary to make them qualify for choosing IPO and go public. Although complex, the medium is quite adventurous, and is the only one that takes into consideration all three vital elements that define a company – the past, the present and the future. The past – You must have a proven track record of performance that you can boast of. The present – You must confidently show your strength in result oriented performance to the public. The future – You must assure with conviction your company’s promising ROI factor for the layman’s hard earned money to be invested into your ideas.

ABOUT: Advocate Geethalakshmi is held in great esteem and high regard amongst her profession. She is the CEO and Managing Partner for Associated Business Attorneys FZC, UAE, ABA Management Consultants, Dubai UAE, ABA Investments LLC, Dubai UAE and Associated Business Attorneys, Bangalore India – a position which is not common for an expatriate woman in the profession. Geetha can be reached at geetha@abattorneys.com

SME ADVISOR MIDDLE EAST

Business growth Referrals <<<

Expanding your reach

Making business contacts is one of the most Growing a small business is tough work. The important sales function is a time consuming task with a constant need to regularly fill your sales things a funnel with fresh, qualified prospects. Finding business the best qualified leads does not come from owner can a cold contact situation but from building a do to further strong referrals NETWORK, says independent their company. financial advisor, Greg Pogonowski. Make an effort to contact The business referral your SME to the next level. Making owners who economy is alive business contacts is one of the most have a business and well, but small important things a business owner businesses are missing can do to further their company. complimentary out. A report published in 2009 Make an effort to contact owners to your own found that 81% of SMEs regularly refer business to others. If you want to get noticed in the world you need to network and make contacts that can help propel

SME ADVISOR MIDDLE EAST

who have a business complimentary to your own. Talking to them can give you insight on what they did right to advance their business. Ask important questions. Ask

JULY 2011

other business owners who they do business with and who they trust in the industry. Those people may be able to help you as well. Show interest in other people’s businesses. If you meet a new business owner ask questions about how they got started and maybe even try to act as a mentor. Maintain solid relationships. Keep up with the people you made original contacts with. Don’t forget about them and they won’t forget about you. Get involved. Join a business networking organisation – there are a few around, but beware as some may not turn out to be all they promise, and some are more like social gatherings. If they are an international business network, check to see if the local meetings operate as others in other countries do, as that is not always the case in this region. Talk to members, and try to find ex-members to ask them why they left, before you commit. Remember, some of them are just run as franchises to make money,

Business growth

so perhaps a non-profit organisation might be better. Another avenue is to use social media and the Internet. Not that long ago it was thought that putting a photo or a real name online might lead to having an Internet “business friend” turning up uninvited on the doorstep. Maybe a slight exaggeration, but social media has come out in the open in recent years, and people are getting used to the idea that interacting with other business people online is not that different to real-life after all. This mix of virtual and real world interaction is becoming the norm in modern business. The key to social media is that it is more a conversation than a one-way broadcast, where people must engage regularly and genuinely to get the most out of it. Websites should promote this interaction though, as people only get back what they give out, and they soon tire of self-publicists. When an SME owner begins the process of becoming a hub for their business community, the first step is to develop a careful plan to begin developing the network of outstanding people that can solve problems in times of need. You need to get to know these people by telling them that you have an outstanding clientele that may from time to time need their services and getting to know these people will build a network of experts that are likely to need your services too. You should get to know these people and develop a method that requires little work but will keep you in contact with these people. The best methods are to send them

Greg Pogonowski

When an SME owner begins the process of becoming a hub for their business community, the first step is to develop a careful plan to begin developing the network of outstanding people that can solve problems in times of need

articles that pertain to their interest clubs, running clubs, basketball or to issues related to you being teams, or podiatrists. able to refer the right people to Now create a referral programme them – Twitter and blogs are that pays referral fees for people ideal for this. that are sent to you by your referral As it will take some time partners. To make this system more to build this list of referral effective, give your referral partners sources, I suggest making a customised coupons, tickets, or cards list that prioritises what you Top tips for building your referrals business believe your clients Set a target: In business, measure the results to improve most likely performance. Set a clear goal with a time line. For example, a 10% needs will be and increase in referral business over the next ten weeks. to then make a Timing: Conventional sales wisdom claims the best time to ask schedule to get to for the referral is immediately after the close. This tactic is far too know at least 17 aggressive. Give your clients time to experience your service or product of these referral opportunities before asking for a referral. Ask for the referral at close only if your client each year. is already delighted with your business. How do you Top 20: Not all customers are referral candidates. Find the top 20% become an SME that are happy with your business and ask them for referrals. Make hub? You start sure their network has the type of clients you want. by researching Give and you’ll receive: Give your clients extra service and followand contacting up support before asking for referrals. When you give willingly to the one hundred your customers, they will return the favour. most important Type of customer: Inform your referring clients of the type of professionals in customers you can help. Provide a clear picture of the customer your geographic area, and the demographics will help your referral marketing. areas where your Rewards programme: Provide special rewards to your referring clients live. These customers on a regular basis. If a customer provides you with five experts should sales, offer them something special, for example discounts. work in a number Thank you: The three traits for business success are: turn up on of disciplines time, do what you say you are going to do, and say please and and industries, thank you (especially when you get the business). including accounting, real estate brokers, architects, business brokers, that the referral brings with them computer experts, insurance to your business so that you can professionals and so on. correctly track each referral source. In addition, you should know These tips are simple but when presidents of local banks, presidents executed on a regular basis they of local universities, council can drive your referral business and members, leading merchants and build sales revenue. Start today and you should also try to get to know watch your referrals grow. the chairpersons or executive directors of the major local charities. ABOUT: Make a list of people Greg Pogonowski is an independent financial or the businesses that sell adviser with over 27 years experience in the complimentary products and financial services profession, he works with services to your own product or Pinnacle Asset & Wealth Management. He can service. If you sell athletic shoes be contacted at greg@yourmoney-matters.com, or by calling +971 (0) 50 8769035. your list might include health

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SME ADVISOR MIDDLE EAST

Business growth SWOT analysis <<<

Know thy business If you are a fan of Greek philosophy then you will have pondered over the teachings of Socrates. you may HAVE taken the time to know thyself but are you taking the time to truly know thy business, asks Vikram Venkataraman, Director, Salvus Strategic Advisors.

Socrates was one of the greatest philosophers the world has ever seen. He was a pathological questioner of everything – life, the stars, morals, the status quo, his friends, and anything else that could possibly be questioned. He was also one of the greatest teachers that mankind has had and followed a unique method of teaching – he questioned his students in a manner that would eventually reveal the truth to themselves. He never pontificated or made definitive statements of “truth”. He made his students reconsider what they already knew, to consider

SME ADVISOR MIDDLE EAST

issues from different angles and question their beliefs till truth presented itself. His tenet was, “Know Thyself”, to be wise and to live a better and more fulfilling life. He also believed that the unexamined life was not worth living. This, I confess, is a bit extreme. He was also condemned and put to death for being a menace to society. But we don’t want to go down that road now! Know thyself. What you are, your strengths and weaknesses, what you can do, and what or who might prevent you from fulfilling your dreams. In other words, do JULY 2011

SWOT analysis is a diagnostic tool which can help you ascertain what is wrong with your company and point towards solutions. It can also tell you about outside forces that present opportunities and threats to the firm

a modern day SWOT analysis. Know your strengths, weaknesses, opportunities and threats. Millions of SMEs have found this an excellent, simple and effective tool in conducting a brutally honest self-analysis, to come up with action plans to move forward and to grow. Looking inwards and analysing the state of your firm will reveal your strengths and weaknesses. Further brainstorming, discussion and consultation should give you the answers to handle these issues. Looking outwards, at opportunities and threats, will tell you how to defend yourself against market forces.

Business growth What is SWOT?

So, know thyself and what lies within. And know what lies without and what affects you. This is the essence of the SWOT analysis. It is a diagnostic tool which can help you ascertain what is wrong with your company and point towards solutions. It can also tell you about outside forces that present opportunities and threats to the firm. It is also a flexible tool that can be applied to your business as a whole, to a particular division within the company, or a line of business. The SWOT basically can give you: A holistic diagnostic analysis of your firm, a particular problem, or, even an opportunity that you wish to deeply analyse; An opportunity to involve others in your company and solicit feedback from all levels; A great basis for bringing people together to “fight a common enemy”, especially if they have been part of the SWOT process.

Where to start? Firstly, identify the issue(s) you would like to analyse (slow sales, poor productivity, customer complaints, or falling margins) and conduct a SWOT of the firm/department, keeping the issue in mind as the backdrop to the whole exercise. Basically, the perspective must one from the vantage point of the problem at hand. Secondly, do your own SWOT analysis and ask select team members to do their own, individually. Thirdly, aggregate all the ideas and create a master list. Fourthly, gather everyone in a room for a brainstorming session on the master list and narrow it down to what really matters.

Lastly, decide a timetable to drill down into each of the problems (or opportunities) thrown up, to come up with an action plan and to sort it out.

A real life example The SWOT is not some academic tool meant only for textbooks. We have, for example, used it very effectively to do a very quick analysis of the problems one of our clients was facing – tardy growth. This SME owner runs an extremely profitable company and felt that he had a hit a “growth ceiling”. A very quick SWOT analysis revealed some very fundamental problems with the company. A few of the issues were: The owner had too many people reporting to him – 18 employees across all levels. This resulted with the owner involved in petty and administrative issues, leaving no time for serious business development. The sales team had no manager – all the salesmen reported directly to the owner who had no time to monitor and measure what they were doing. The company had three divisions but no financial information on any of them, i.e., they did not know what the contribution of each division was. The sales team spent 80% of their time on administrative issues, leaving little time for sales. Sales staff was inadequately trained, so they concentrated on selling the simpler, low margin products, resulting in low productivity.

Vikram Venkataraman

With increased corporate responsibility aligned with environmental practices, it has been shown that operational costs can be reduced and, with more strategic corporate responsibility and engagement with the community, risks can be minimised

JULY 2011

This exercise took one hour of pointed questioning. When you start out, it will take you longer, but the key is asking a series of “whys” until you can ask no more. The real keys for you SME owners are mind set and time. If you recognise there are fundamental issues with your business, you simply have to take the time to get to the bottom of them, and then the time to fix them. In almost 100% of the clients we deal with, the owner knows there is a problem, but it stops there. Owners just do not get off the treadmill of running after that next sale, to step back, take a deep breath and to sit and think. To build a sound organisation, one needs to do a lot of thinking and analysis, to get to the root of problems, and then to fix them. The SWOT is a tool that can help you get to the root. Know thyself, know thy company. Know thy strengths, weakness, opportunities and threats. And thou shalt have solved half thy problems.

ABOUT: Vikram Venkataraman is a career banker with 25 years of experience in banking in India and the Middle East with various banks. Some of the key senior positions he held are: • Executive Director, Regional Head of Credit Structuring ABN AMRO Bank, Middle East and Africa. • Founding Member of Management Team and Head of Corporate & Institutional Banking, Dubai Bank. • Head of SME Business, Transaction Banking and Factoring, Mashreq Bank, Dubai. • Various assignments in Corporate Banking in HSBC India. His most recent experience in banking has been as the Head of the SME Business at Mashreq, which he left in 2010 to co-found an SME focussed investment banking firm – Salvus Strategic Advisors, JLT in Dubai and Salvus Capital Advisors Pvt. Ltd. in Mumbai. Salvus advises SMEs with the objective of helping them grow. Raising equity and debt capital is an integral part of Salvus’s activities. Vikram has also been an entrepreneur in the wellness business, giving him a unique perspective of SME issues, both from a banking and entrepreneur’s points of view. He holds a BA from Loyola College, India and MA from Oxford University, UK. He has served as the Secretary of the Oxford University Economics Society.

SME ADVISOR MIDDLE EAST

Technology for business Online backup solutions <<<

Who is backing you up? There’s a lot of noise out there about online backup solutions, specifically online backup solutions aimed at small businesses. In most cases, however, business owners are quick to see past the hype and examine how and what they are being offered really fits their needs, says Rik Ferguson, Director Security Research & Communication EMEA, Trend Micro. With the majority of solutions available today promising “enterprise-class” data centre storage with “high capacity fibre links”, many solutions will also offer financial or even “military grade” encryption services and redundant data centres. All of these characteristics are important and an essential part of an effective and secure backup solution, but, as far as SMEs are concerned, online backup is not a must. While that may seem a counterintuitive statement let’s look at some of the objections I found online, from real business owners, while researching this piece: “Even with cable service, I had a “vendor x” recovery take over 10 days to complete. You need to look carefully at your Return to Service projections before you commit to “vendor x” as your main or only back-up option” “Restoration speed - has to be slow and at 2:00 am – I am not in the mood for slow restoration speed over an Internet connection. And what if the Internet connection itself is at fault?” “As stated before, if I need to do a restore, I want it NOW. I can’t wait days.”

SME ADVISOR MIDDLE EAST

Every business has to accept the fact that they may lose one day’s worth of data should the worst happen. In many cases, weekly backups are still the norm in smaller businesses which will amplify the effect should an outage occur

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Best practice for disaster recovery In the event of a catastrophic event or just a simple hardware failure then every business has to take into account two key factors: “Recovery point objective”, in plain language “how much data am I prepared to lose” and “Recovery time objective” which translates as “how quickly do I want to be up and running again”. If a business is relying on traditional hardware backups, such as copying all important files to tape or other external storage, then reasonably the best that can be expected is that this will be done once per day. Therefore, every business has to accept the fact that that they may lose one day’s worth of data should the worst happen. In many cases, weekly backups are still the norm in smaller businesses which will amplify the effect should an outage occur. When we consider how quickly a business can be up and running again, a lot depends on the nature of the disaster. If the whole area was affected by a natural disaster it’s going to take a lot longer to restore normal service than if a single computer expires. However, the concept of recovery time objective continues to be a strong argument against

online backup services. Restoring data from tapes can be a very time consuming process, sometimes taking days and the arrival of high speed external drives means that this time can be reduced by orders of magnitude, taking maybe just a few hours to restore lost data. Another factor to consider is what exactly are you backing up? Are you taking an image of every machine so that whichever piece of hardware fails, a computer can be reimaged in a single operation, or, are you backing up the mission critical files stored on local hard drives and company file servers? If it’s the former then each machine can restored to a functional state very rapidly, but, if you are backing up only data, then

Technology for business

of course the time to recover must also factor in the time it takes to rebuild the affected machines. In an ideal world a business wants to lose the minimum of data and be fully functional as soon as possible in the event of a disaster.

If you always do what you’ve always done, then you’ll always get what you always got If we continue to focus on backing up data, whatever the medium, then we will always have to

Rik Ferguson

contend with the problems posed by restoring it. SMEs don’t need backup; they need access. In the event of a catastrophic failure, the ideal solution would enable a business to simply boot up an alternative computer, tablet, or SmartPhone and carry on working. If we continue to concentrate of how often we back our files up, or, how quickly we can download them all again then we are missing the real power that cloud based services are capable of offering to business. Of course you need your data to be securely stored and accessible for download, should the need arise and you certainly want to ensure that the data is safely encrypted when someone else is looking after it for you. It’s great if your provider is also ensuring that your backups are backed up in turn but these should all be the foundation of a service, not the service itself. The overriding need of business, particularly smaller businesses who cannot afford dedicated in-house teams of IT and security specialists is simply the ability to carry on doing business. The next generation of “online backup solutions” will no longer be called by that name; it’s not about recovery, it’s about continuity. The new paradigm isn’t backup, it’s storage, synchronisation and access. Every time a file is changed synchronisation should occur immediately with the cloud, ensuring that the latest versions

The next generation of “online backup solutions” will no longer be called by that name; it’s not about recovery, it’s about continuity. The new paradigm isn’t backup, its storage, synchronisation and access

of files are always available. Access to that data should be possible from any device at any time without a requirement to go through a process of retrieval and restoration first. Each employee should have their own login to the secure service, ensuring that data is not inappropriately accessed and yet can still be shared across teams. Of course business often relies on the ability to share data outside of the organisation, with partners and customers alike. Any effective business continuity solution needs to also address that requirement, even while systems and data are being rebuilt and repatriated. If your files are synchronised with a secure online service provider you shouldn’t need to wait for them to restore to get on with your business. If a solution can provide all that and you still get online backup as a sideeffect, then why not? The way we do business has changed and is continuing to change. An employee being constantly restricted to a workstation will often seriously impact on the agility of a company and their ability to respond quickly and effectively to customer and company demands in the mobile. Business continuity is no longer a requirement in the event of a disaster; it’s a requirement to do business, competitively and securely.

ABOUT: Rik Ferguson brings more than 15 years of security and information technology experience to his role as Director of Security Research & Communication at Trend Micro. In this position, Rik is engaged in threat research, with a particular focus on social networking attacks. As EMEA spokesperson for the company, he is frequently interviewed about international security threats and issues by trade, national and international media. Prior to assuming his current role, Rik was a solutions architect at Trend Micro, having also previously served as Security Infrastructure Specialist at EDS and as a Senior Product Engineer at McAfee. He is a Certified Ethical Hacker and is CISSP-ISSAP in good standing.

JULY 2011

SME ADVISOR MIDDLE EAST

Technology for business Multi function devices <<<

Minimising exposure Every organisation has a different risk profile based on their industry, organisation size, IT infrastructure, profile of their workforce and many more variables. However, the most common threat they all face on a day-to-day basis is data leakage, says Naoshi Yamada, Deputy Managing Director, canon Middle East.

In the 2011 Global State of Information Security Survey commissioned by PricewaterhouseCoopers, CIO Magazine and CSO Magazine, which includes poll results from executives in the Middle East and South Africa, 48 % said that the downturn has significantly increased threats to the security of corporate information assets. Office multifunctional devices or MFDs can play an important role in minimising exposure to risk. To ensure the MFD is a valuable asset in the battle to keep information safe. There are a number of common pitfalls which can be easily avoided by implementing the following configuration options on the MFD. This will help to lower the risk to exposure to potential threats, including malicious attacks and accidental leakage.

Printers are no longer just printers Multifunctional devices are actually servers in their own right, providing a number of networked services; for example email, file transfer

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(ftp), Web and eFax servers, with some having significant hard drive storage as well. As such, they need to be treated in the same way, but are often not controlled to the same degree as corporate email servers or company web servers. Organisations of all size should produce a configuration guide and ensure it is adhered to at all times. This will ensure all functions on the MFD are looked at critically, and can be enabled or disabled as required. It will also mean third parties fully understand the configurations and no not disrupt them.

Password protect your organisation Social networking has experienced explosive growth in the Middle East. The Facebook site alone has more than 15 million members from the region, far exceeding the subscriber base of all newspapers in the MENA area combined. With the popularity of social networking in people’s lives, password theft has become even easier for malicious attackers. For example, password stealing JULY 2011

Trojans and other malware can use fake password reset messages, which when activated then install on people’s machines. It has then been widely reported that one third of people use the same password for all websites and corporate accounts, meaning once the attackers have it they can access not only the individual’s personal data but also their professional information. To ensure the MFD is a secure link in the information flow, organisations should disable default passwords and ensure employees have strong, unique passwords which are changed every 90 days for accessing their print jobs. These should ideally be between eight to ten characters long, and include a mixture of letters, numbers and symbols, rather than a dictionary word which can easily be remembered.

Paper-based leaks Nearly a quarter of security breaches are paperbased. It is really important for organisations to make sure their MFD is not a key contributor to this. How frequently are printouts left in the output tray or dropped into the recycling bin, without being shredded? Organisations can minimise the risk by using secure job release, a function which means print jobs are locked in a queue on the device until the corresponding user PIN is entered. This will minimise the number of printouts left on the output tray, as documents will only be printed when they are required.

Minimise the insider threat One of the ongoing risks for security professionals is not just the threat of malicious attacks, but the insider threat. Whether it’s disgruntled ex-employee leaking information for money, or a well-meaning current employee, or simply human error, the risk of someone who has access to confidential information can be difficult to protect against. For example, many organisations use subcontractors who require access to the most up-to-date data to complete their work. By enabling the secure print options including secure job release outlined above, it protects from people stumbling on printed documents left on the output tray or illegally gaining access to an employee’s mailbox. A further configuration which can help protect against this type of threat is job log conceal. This hides the details of recent print jobs so people can’t watch them, and also removes all traces after confidential jobs are printed so no data trail is left. Lastly, it is very important to consider what happens to the device at the end of its life. Would you simply throw away a laptop once you’d finished with it, or would you clean the hard drive to remove all your data such as photos and music? The hard drive of a printer must be erased and securely disposed of at the end of its life.

Notes 1 http://www.pwc.com/gx/en/ information-security-survey/pdf/giss2011-survey-report.pdf 2 http://www.suite101.com/content/ social-networking-surges-in-middleeast-a241274

Business pin up of the month Tala Badri <<<

Business in harmony Tala Badri, Founder of the Centre of Musical Arts, is a woman on a mission. Her unassuming and modest manner is complemented by an underlying determination. she won the 2010 sme advisor stars of business awards in two categories. A lover of music, this Emirati entrepreneur proves to Mike Byrne there is more than one definition of success.

Looking at the list of Tala Badri’s accomplishments one wonders how she manages to remain so humble and, yet, she does just that. She is not only musically talented, but confesses to playing tennis for the UAE, can speak fluent French as well as Arabic and English, and dabbles with photography while balancing running her centre and family life. She swept to victory at the SME Advisor Stars of Business Awards 2010, taking the trophy for Admirable Woman Entrepreneur and Emirati Entrepreneur of the Year. In April this year, Tala’s passion for musical arts was recognised and honored at the Sheikh Mohammed Bin Rashid Al Maktoum Patrons

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of the Arts Awards 2011, when she was awarded with the Friend of the Arts award. Witty and quick to laugh at every opportunity, it’s clear this lady just isn’t going to take herself too seriously. “So this dictaphone picks up everything? Oh, I’d better be careful then,” she remarks, before bursting into laughter. Tala took a decisive step towards a musical career when she went to Royal Holloway, University of London, to study music. “I got a full scholarship from the Dubai Government – at the time they would give scholarships to nationals studying abroad if they couldn’t study what they wanted within the country,” she recalls. After three years she returned to Dubai in search of a teaching position but recalls that at the time it was only the British schools in the city that offered music classes and they already had well established staff. “They couldn’t reconcile how an Emirati, with a British degree, could possibly teach music,” she rolls her eyes. It was at JULY 2011

this time that Tala verged off the path of music, albeit only temporarily.

Temporary divergence “I did what a lot of graduates do when faced with unemployment – I went back to study for a second degree. But this time I studied business and management, again at the Royal Holloway in London. It was a case of me becoming a little disillusioned as to whether I could carve a career out of music, so I thought practically and went back to get qualifications in something that would get me a stable job.” After graduating she took a job with Barclays Bank, working in a training scheme in London. Was she content to stay in the UK or was it a case of staying simply for the job? “It’s funny you should mention that! After the training, Barclays requested that I go to Dubai to work for them because of my languages and because they wanted to set up a risk assessment branch in the UAE. I’m a Dubai girl – it was perfect – I got to come home and with a secure job.”

So how does one go from a potential career in music to risk assessment for a bank? “It was a great experience but it didn’t take me long to realise I didn’t want to do finance. I kept having to tell people no, but at the same time I worked on some fantastic accounts.” Again Tala starts chuckling and tells the story of how she was involved in negotiations with Carrefour to open up in Deira City Centre. She concedes to questioning the need for 20 checkout counters and couldn’t see the justification for them. “But they certainly had better foresight than me! Deira City centre opened in 1996 and Carrefour was packed all the time,” she says smirking. It was also at Barclays that Tala met her husband. “We had to let the company know that we were seeing each other and policy forbad this so I made the decision to leave,” she recounts. Admitting it was actually a blessing in disguise, Tala then found a job with Mars. “Oh, I loved that job so much!,” she says, beaming from ear to ear, the memory obviously still clear in her mind. “I spent seven years with Mars, starting off in payroll and worked my way up to HR Director for the MENA region, where I was in charge of practices and policies, recruitment and training and eventually managing a factory with over 200 people.” It was with HR that she found her calling. It’s at this point that she starts to smile again and you know she is ready to reveal

Business pin up of the month

yet another surprise decision. “I left Mars after seven years because I had a baby girl. I tried going back after her birth but the travel demands proved too much and as my husband just received a great job offer, I made the choice to put all my energy into my family.”

Back to her first love It was with the birth of her baby daughter that Tala began to reignite her passion for voluntary work, admitting that sitting around the house was simply not an option. “I got involved with the Dubai Drama Group and was asked to sit on a board to help raise funds for a community theatre. So after some time Majid Al Futtaim offered the space in the newly built Mall of the Emirates.” Realising there was extra space, Tala was offered some rooms for her teaching. Until this point she

had been giving music lessons in her spare time, something she maintained even during her corporate stints. “I had built a small music hut at the bottom of my parents’ garden – so when given a chance to take the classes to a larger space it didn’t take me too long to agree.” So after sitting with her husband and brother she made a business plan and decided from a business perspective it could be done.” So, after six months, Tala received a small business loan from a bank and with the help of some very generous donations she opened the Centre for Musical Arts in September 2006. “You meet certain people along the start up process who can help and who have similar ideas and you think its all luck and by accident, but it really isn’t.” Tala recalls how the Centre went from strength to strength

Over 4,000 music students have been trained and nurtured over the last three years and over AED 3.5 million has been invested back into the centre with equipment and facilities

JULY 2011

over the next three years, until the economic downturn arrived in 2009. “We were hit really hard – there was an exodus of students because their families lost their jobs. We are a very familyorientated business; it’s not just the children we teach, but their siblings and their parents too. If you lose one family member you essentially lose them all!” She recalls it led to a 30% drop in student attendance and for the first time since opening the centre is was faced with the situation of having to let staff go. “This definitely made me stop and start taking a more cautious approach going forward. But things have started picking up again over the past year and we seem to be doing okay.” Just okay? Again Tala maintains absolute modesty and admits reluctantly that things are going well – she is cautious about being over confident. “I’m just not

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Business pin up of the month convinced we have seen the worst of it yet; not here or anywhere else.” Tala also talks about the disappointing reality she is faced with on a daily basis. “The Centre for Musical Arts is a non-profit organisation that relies solely on patronage and donations to develop the centre’s resources and expand the facilities it offers to the local community.” She explains that while the centre does not make a profit, they must conduct day-to-day operations like a business in order for it to be run effectively. “There simply aren’t enough people out there who believe enough in what we are doing to make regular and substantial donations.” But her ideals run much deeper – frustration at the distribution of wealth, the wastage of wealth and the simple indifference of so many to even basic charity. She threatens to blow a fuse: “If I hear of one more person bidding thousands of dollars for a stupid car registration plate; such stupidity and wastage!,” she vents. And then you see the determined streak reveal itself; she admits that regardless of such “occupational hazards” over 4,000 music students have been trained and nurtured over the last three years and over AED 3.5 million has been invested back into the centre with equipment and facilities. At present the music centre has 1,300 students on its books and 25 members of staff. Tala takes great pride in the fact that most of her staff have been with her from the beginning and they share a loyal family trust between them. “I am a firm believer in corporate social responsibility – it’s something I picked up at Mars and have never forgotten. “You can’t operate a cohesive business nowadays without looking after your staff. Because of the nature of how we operate, I can’t afford to pay large salaries or give big bonuses, so I try my

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“I am a firm believer in corporate Staff at the Centre for Musical Arts social responsibility best to pay my staff in other ways – it’s – trips away, extra paid leave something and I bought them all iPads last I picked up Christmas.” at Mars and The road ahead have never So is she happy to maintain the forgotten. You status quo or does she have plans can’t operate to expand? Starting in September, Tala is introducing several new a cohesive programmes and schemes – a business Kinder music class, where nowadays children from as young as six months old are exposed to music without special techniques, as well looking after with as a new percussion class, which your staff.” at present no one else is offering in Dubai. “This diversification will definitely expand the business and it will leave me with the dilemma of needing more space; we are already bursting at the seams. Emaar have offered me more space right next door to where we are; it’s just a matter of knocking through a wall.” So what is holding her back? She admits that, as with most things, it’s cost. “The rent we are being offered for the new space is very reasonable but it’s the cost of kitting the place out – you’d be surprised how expensive sound proofing is!” she remarks. JULY 2011

Tala’s Centre for Musical Arts caters to over 1,000 students

But, as always, she laughs and continues, “I am quite ambitious and my dream is to have an all-purposebuilt facility that is 20,000 square feet and which has a performing arts centre, and I already have the plans for it! Now all I need is to find someone to build it for me!” Tala makes no bones about the fact that she needs someone to build this space; she talks about attending meetings, looking for a generous person to lend a hand and exercise tact. “My passion for this lands me in some trouble from time to time and more often than my husband would like, but this is not something that is just for me; it’s for the community, it’s for the promotion of culture and it’s for music,” she concludes emphatically.

SME ADVISOR EDITORIAL BOARD

We are hiring! and adding to our existing board

To ensure that our readers keep getting rich and varied advice, not just in print but also in our various other initiatives like social media and events, we will be regularly reviewing our editorial advisory board. The aim is for our readers to get access to a core group of advisors from our existing panel, and also a rotating group of advisors, who change every year. Are you up for the challenge? Itâ&#x20AC;&#x2122;s not for the fainthearted, but it is a platform to connect with the biggest and most dynamic SME community in the region! Get in touch with us if you are an industry guru who wants to give something back to the business community by sharing your expertise and advice. Mail ketaki@cpidubai.com. For more information on our editorial board members, visit www.smeadvisor.com

Business Pin-Up of the Month Photobooth-me <<<

Say cheese! We look at dynamic companies and entrepreneurs in the region, what makes them tick, and the buzz on their business.

Photobooth-ME is a mobile photobooth based in Dubai and designed by a photographer to bring a fun and interactive dimension to social or corporate events. It offers professional quality images, flattering lighting, and is easy to use. The booth fits up to eight people standing, who can check out the live viewing screen to preview the shot, press the start button and wait for the countdown. After they are done, in under ten seconds, the photo strips appear – complete with the chosen logo or message. Every booth is accompanied by a suited Booth Butler on hand to help and keep the party or corporate event photos flowing. With no photographer looking at you, even the most

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photo-shy guests play up to the camera to produce memorable and often hilarious sequences of images as event keepsakes. Within two days of the event, all guests can go online to view and download free images from a private (locked) online gallery, with the option to upload straight to Facebook. Besides that, it is possible to brand the entire booth, custom brand the background, or have logos and messages on every instant photo. You can also link to projectors to show the live fun on a big screen, or add fun props which could tie into the event theme. Carolyn Deed, Director, Photobooth-ME, tells us more about her fun business.

What is your trademark problem-solving style? Working in the events industry is fast moving and often changing so we live by the ethos “bite off more than you can chew; then chew it.” What is innovative about your approach? Photobooth-ME is a premium photobooth, meaning we do not cut corners and have a product JULY 2011

In a nutshell Name: Carolyn Deed Designation: Director Company: Photobooth-ME Subsidiary of: Blink FZE Industry: Events and entertainment Date it was founded: March 2010 Number of employees: Under 25 Location: Dubai, UAE Website: www.photobooth-me.com Recognitions: Won a Business Opportunities Grant through British Airways

Carolyn Deed

of VIP event level. As photographers we focus on photo output, use professional cameras and the world’s best event printer. Every effort is placed on making events different, offering high energy customer service at the event and for the client, and adding innovations every several weeks to keep it fresh and different

What are your immediate plans, and where do you see yourself and your company five years from now? Within a three month launch period, we’ve been thrilled to work with major name multinationals, top brands as well as VIP

private events. We are expanding both the number of booths and style to cater for a wider range of event needs and through the course of 2011 will be looking to establish a presence in other Gulf centres.

Are your processes ecofriendly? We can cater to the green technology market by having digital only photo processing (no prints). The booth can be “greened” and even covered in grass for environmental events. Which of your processes are IT enabled? The photobooth is software driven and our online gallery also utilises instant Facebook and

Twitter uploads, so we have a team in the USA for software and the UK which handles uploads.

How effectively do you use online and social media? We are active with Facebook, Twitter, and also our own innovation of instant Facebook and Twitter uploads via our Web photo gallery so guests can post to profile. Our photostrips can also uniquely be placed as Facebook profile photos which leads to high ROI for clients and their brand presence. We also run competitions and highlight top photos via our sites and feature photos from each event in our monthly videos. JULY 2011

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A day in the life of... RAW COFFEE <<<

Loco for coffee!

At a time when many are looking to switch industries or try something different, we bring you first person accounts of the lives of entrepreneurs or senior executives, outlining a typical day in their business. Who knows, maybe the perfect idea is waiting for you. Read on and get inspired. know what he is looking for but will spend some time showing him around, tasting different blends, listening to his vision and matching our coffee to his menu and concept.

Kim Thompson is the owner and Manager of Raw Coffee, which setup its first roastery warehouse in Dubai in 2007. In 2009 Kim won runner-up position in the Inaugural UAE Barista Competition and has recently returned from Colombia where the Raw Coffee team competed in the World Barista Championships.

:15 am I arrive to work, make a coffee and chat to the team

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who are getting ready for the first regulars that pop in and grab a coffee on their way into work. I check my emails and look at the plan Matt and I (my business partner) made at the end of the day yesterday, outlining what we all hope to achieve.

:30 am Our first appointment is with the Operations Manager of a new start up from Abu Dhabi. We have already prepared an initial proposal and we think we JULY 2011

:00 am Our guys have loaded the delivery vehicle with a full espresso fit-out for a new customer who is very excited to finally have his electricity and water connected. We have conducted the first barista training sessions here at the roastery and we are now installing and doing another training session. His café is ready to open and all the preparations and hard work are coming together. We try to ensure we organise everything coffee related for them as it can often be a stressful process.

:15 pm We dash back for lunch and of course an espresso. Matt checks orders that need to be invoiced and delivered, and I start preparing the details for the coffee contract and equipment specifications from our meeting this morning. SJ, our Retail Manager, is working on branding and new coffee packaging and we meet to discuss her progress.

:15 pm Now we take some time to talk with our roaster, make sure he’s happy with all the profiling of coffee beans as we have received a new shipment of new seasons green beans. We roast each origin separately and after we have rested the coffee we will blend and package. We need to keep aside samples for cupping tomorrow.

:00 pm Our business is growing and we are doing a lot of training at the moment. Matt has been working personally with Okku and has formed a good working relationship so he will conduct the training – its important for us that we maintain a good synergy within all our partnerships.

:30 pm Old customers, who have purchased Raw coffee since we started four years ago, contact me as they are finally thinking about buying one of our espresso machines. I see a few more familiar faces out having a drink, savour a little time chatting to them and squeeze in another coffee.

:00 pm We close up the roastery, I head back out to the office and take a call from my husband. He is currently in Ethiopia sourcing some good staff as we import three different varieties of Ethiopian coffee. This is a good time when the front of our business is closed to catch up on communications, make any calls and to plan tomorrow. The filing can wait another day!

SME about town DED Awareness Programme <<<

(L-R) Abdulla Al Shehi, Mohammed Lootah, and Adel Al Helou

Protecting the rights of both sides The Commercial Compliance and Consumer Protection Division at the Department of Economic Development (DED), announced June 14th that it has successfully concluded a consumer rights awareness programme for retailers in Dubai, with participants overwhelmingly supporting broader awareness initiatives including joint sessions with consumers. Nearly 1,700 retailers covering key businesses and trade groups such as gold & jewellery, electronics, automobiles and textiles attended the sessions held across nine malls in Dubai over 25 days in April 2011. The programme aimed to build awareness on the Consumer Law No. (24) 2006 and international policies governing refund, exchange, warranty, invoice and other aspects of retailing. Retailers who participated in the sessions strongly endorsed the idea of a “Blue Book” on

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consumer rights policies and dispute resolution as well as a “hotline” between retailers and DED to ensure quick response to customer requests and complaints. The sessions were led by experts from the Commercial Compliance and Consumer Protection Division. Feedback from the awareness programme conducted in 2010 and insights drawn from the most common consumer complaints over the past year were factored into this year’s sessions. Most of the participants in the programme highlighted demands for exchange or JULY 2011

refund as the major cause of disagreements with consumers. Joint awareness sessions among consumers and retailers, backed by case studies, was suggested as a means of minimising such concerns. Over 80% of the participants expressed satisfaction over the structure, content and delivery of the awareness sessions. DED’s role in consumer rights protection was rated as effective by nearly 94% of the participants. Awareness among retailers on their role and responsibilities towards consumers also appeared to be high and 17% of the participants said they had attended the previous year’s sessions, indicating continuing interest in the programme. “Consumer protection is all the more important for Dubai given the strategic role of trading and retail in our economy. Cordial relations between retailers and customers lead to improved consumer confidence and eventually to better business outcomes. The consumer rights awareness sessions we organise are part of DED’s overall strategy to improve the business environment in Dubai and cement the emirate’s reputation as one of the world’s best shopping destinations in the world,” said Omar Bushahab, CEO of the Commercial Compliance and Consumer Protection Division. Other major recommendations from the

participants this year included expanding the awareness sessions to cover other sectors; developing further retail policy guidelines in consultation with the top management in the sector; case studies on customer complaints and resolution to aid future studies, and awards for best performance in consumer rights protection. “Our effort is to create a retail environment in line with the best international practices in consumer rights protection and dispute resolution. We will continue to organise awareness programmes to promote mutual trust and respect among retailers and consumers,” said Mohammed Lootah, Deputy CEO, Commercial Compliance and Consumer Protection Division, DED. The website of the Commercial Compliance and Consumer Protection Division at DED, www.consumerrights.ae, acts as a reference guide on consumer protection. The website provides specific instructions for consumers, including extracts regarding the UAE’s directives on Consumer Law No. (24) 2006, the responsibilities of consumers, shopping advice, and pointers to consider before making complaints on purchases. The site also includes steps to help resolve consumers’ problems with a retailer or seller. Consumers can also register a complaint at DED by sending an email to consumerrights@dubaided. gov.ae, or by calling Ahlan Dubai on +971 600 545555.

SME about town >>> Reseller Middle East’s 2011 Conference & Awards

Partner up Top notch speakers at the Reseller Conference covered a wide gamut of channel topics including upcoming technology trends, value addition, vendor-partner relationships, cash flow and social marketing. The day was rounded off with a glitzy awards ceremony to celebrate the industries finest. Arun Shankar reports.

Reseller Middle East kicked off its first conference directed at the reseller community. The conference was a day-long, single track event, held at Westin Dubai, UAE. The highlights of the conference were intended to be the wide range of channel issues tackled by a high-level team of experienced industry leaders selected from vendors, distributors and consultants. The conference was kicked off by a short welcome address by

Reseller’s senior editor Arun Shankar, after which the key note speaker was invited to the stage The keynote address for the conference was presented by Nassir Nauthoa, General Manager, GCC, Intel Corporation. There were a number of important highlights in the presentation. Nauthoa drew the attention of the audience to the increasing purchasing power of the emerging markets. The index used to track the changes in purchasing power of the markets is the

number of weeks of income required to buy an average priced consumer laptop. After Nathuoa’s visionary address, there was a round table discussion on the growth dynamics across the Middle East. The participants were jointly made up of speakers from the Reseller Conference and some special invitees. The speakers of the conference who sat on the panel included Nassir Nauthoa, Intel Corporation; Meera Kaul, Optimus Technology and Telecommunications and Hesham Tantawi, Asbis. Continuing on the theme of economical perspective of

the market, the next topic was on the dynamics of exports out of UAE was discussed at the conference. Dr Ashraf Ali Mahate, Head of Export Market Intelligence talked about the need to export out of UAE in the face of growing entry of low cost players and development of production scale. Dubai is ideally suited to be a hub for exports. All countries can be reached by shipping within 30 days and by air within 24 hours. Exports have been consistently growing at close to 30% for the last five years. However, Mahate warned that an exhaustive due diligence of a planned export strategy should be completed before project roll out is initiated. The due diligence should cover Reseller Middle East 2011 Awards target countries, WINNERS, Prestige IP protection, Readers’ Choice, Vendor: Advanced Micro Devices (AMD) distribution partners, Reader’s Choice, Distributor: ASBIS Middle East and marketing Best Partner Excellence, Vendor: Microsoft Gulf plans amongst Best Partner Excellence, Distributor: Redington Gulf others. Outstanding Executive, IT Channel: Madhav Narayan Outstanding Executive, IT Channel: Lee Reynolds The Reseller Editor’s Choice: Kaspersky Lab Conference concluded with a WINNERS, VENDOR vigorous question Networking Vendor: Cisco Software & Security Vendor: Blue Coat Systems and answer session Storage Vendor: Western Digital directed at a panel Peripherals Vendor: Genius made up of speakers Components Vendor: Intel Corporation again. Speakers Printing Vendor: HP IPG Middle East participating in the Systems & Hardware Vendor: Dell Middle East end of day session WINNERS, DISTRIBUTOR included Meera IT Distributor: Aptec Holding Kaul, Managing Components Distributor: FDC International Director, Optimus Networking Distributor: Westcon Middle East Technology and Specialized Distributor: FVC, Inc Value Added Distributor: Optimus Technology Telecommunications, and Telecommunications Hesham Tantawi, Software & Security Distributor: COMPUTERLINKS Vice President, Peripherals distributor: Logicom Asbis and John WINNERS, RESELLER Andrews, Director Enterprise Reseller: help AG of Marketing SMB & Consumer Reseller: Accent Office Supplies Trading MEA and APAC, Super Retailer: X-cite by Alghanim Electronics Computerlinks. Systems Integrator: Gulf Business Machines JULY 2011

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SME about town DMC Breakfast Club & The Big Start <<<

a chat about Personal finance As part of their on-going Good Morning Breakfast Club, Dubai Media City held a casual discussion session on June 2nd, where SME owners and entrepreneurs had an opportunity to come along to discuss personal finance issues and take away some simple yet effective advice. Nina Abu-Wardeh, BBC journalist started the discussion with a brief introduction outlining her efforts to create awareness and address personal finance in the region. “Personal finance, even as opposed to your businesses’ finance issues,

is something that people are uncomfortable talking about and often reluctant to take a hold of and tackle – I want to try and address that,” she said. Through social media, forums and other online tools we have to let the community know if a company is bad at paying and delivering – as a

community we have to police each other,” she said. Nina has created www.campuscashy.com and www.cashy.me in an effort to create a platform for discussion, where communities can talk about worries and where solutions can be offered. Articles on topics ranging from explaining what APR is to finance for females are also on the website. Sarah Lord, a consultant from Killik & Co., a financial advisory firm, was also on hand and opened the floor to questions from audience members – advice about documenting your debt, both personally and for your business, was given as well as advising on how best to receive payments for work completed. This proved a particularly

Entrepreneurial dreams become reality Nine months after applications opened for a second season, venture capital company Al Tamimi Investments (ATI) announced the winner of its student entrepreneur competition The Big Start.

Stefanie Ost

The Big Start attracted submissions from students representing 40 universities from across the UAE, with both finalists coming from Middlesex University. The

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competition increased in popularity this year with business idea submissions nearly doubling from the inaugural competition, which started in 2009. JULY 2011

Stefanie Ost’s idea for a professional modelling school took top honours in the competition and she is set to receive full funding, mentoring and support to establish her business idea in partnership with ATI. Ost’s winning business idea is a professional modelling school and agency representing top female modelling talent in the UAE. The business will also offer personal development and beauty courses designed to foster talent, beauty and style among all women. Under the guidance of ATI, Ost has spent the last nine

hot-topic with attendees and it was clear this is one of the biggest problems with businesses at the moment. “The only real effective way to receive money is with deposits in advance – if you actually manage to receive the last 10% upon completion of your work then that is a bonus – this is the sad reality,” said Lord. One last point of interest was the advice from Ludmila Yamalova, a legal consultant from HPL Yamalova & Plewka, whereby she encouraged the audience not to accept that a single and final postdated cheque was absolutely necessary for all payments. “Things are changing rapidly; there is no longer a need to give one post dated cheque and instead you should be trying to negotiate as much as possible and where possible,” she said.

months shaping her initial idea into a comprehensive and viable business plan. Competing against an initial 71 other business ideas, she has progressed through a series of evaluations set by ATI, including a business plan workshop, intensive and practical feasibility studies, and one-on-one presentations. At the same time, Ost has been completing her final year at Middlesex University - she is set to graduate in November with a BA Honours degree in Media and Communication Studies. “Making it into the final two of the competition was one of my proudest moments. I have worked so hard over the last nine months to put together a workable business plan for my idea. To actually become the winner is an absolute dreamcome-true,” said Ost.

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Industry watch Operating models <<<

Time for a remodel The construction industry in the GCC region is going through a dynamic shift. Although overall growth in the industry has allowed market participants to succeed, they must start adapting their strategies and operating models to the demands of the new environment, or risk losing out to others, says Fadi Majdalani and Ahmed Youssef, Partners, booz & co.

There have been marked changes in the type, complexity, and size of construction projects. Financing requirements are higher and more rigorous, while the complexity of projects is placing new demands on supply chains, equipment needs, and human capital capabilities. The construction industry in the GCC region is consumed with the demands of delivering governmentsponsored infrastructure and other large-scale projects. “Considering the industry’s overall upward swing, reflected in its 35% plus compound annual growth, during the past decade, it appears that the

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industry is in a position of continued growth, despite a recent short-term slowdown and decreasing activities in selected segments and cities,” said Fadi Majdalani, Partner, Booz & Company. The construction industry is undergoing a significant structural transformation, attributable in part to the business cycle. The growth spurt driven by megaprojects across the GCC region is forcing the industry to rapidly develop specialized expertise and to expand operations throughout the region. At the same time, the residential and commercial megaprojects that defined the industry’s growth spurt earlier in the decade have

JULY 2011

been replaced in many cases by government-sponsored infrastructure projects, mostly in Saudi Arabia, UAE, and Qatar. This change in the mix of projects has presented the first of many shifts in the industry. Yet the structural changes facing the industry are driven by factors far broader than project mix and shift in geographical concentration of projects. They emanate from five critical areas: project size and budget, customer expectations and sophis¬tication, competition, suppliers and the supply chain, and investors and financing.

The residential Project size and budget and commercial In the past decade, the industry’s megaprojects watchwords have changed from small, simple, and single to colossal, that defined complex, and coordinated. Rather the industry’s than the typical small to mediumgrowth spurt sized projects of up to USD 100 earlier in the million, contractors are looking at decade have multibillion-dollar projects, often involving complex civil works, been replaced electromechanical systems, and in many cases vital infrastructure. by government- other “As a result, contractors now sponsored carry portfolios of projects far larger infrastructure than they did just ten years ago. projects, mostly For example, in 2005, one of the in Saudi Arabia, largest GCC contracting companies UAE, and Qatar managed a project portfolio of

approximately USD 1-2 billion; by the end of the decade, the same company’s portfolio was over USD five billion” said Majdalani. Finally, project complexity requires contractors to be far more reliant on an array of highly specialised subcontractors, which they often need to manage under challenging deadlines and high expectations for quality. Other changes are also burdening contacting companies. As customers’ stakes have grown and capital has become more scarce, customers are taking a more active interest in their projects and contractors’ activities creating a rise in customer expectations. Meanwhile, shifts in the competitive landscape have blurred the boundaries between large companies and mega companies, and have driven many small and medium-sized companies to reevaluate their position in the market to continue to grow. The supply chain has also evolved. As customers exert greater control over project management, they are pushing contractors to assume greater levels of risk. For example, moving from cost-plus to fixed-price contracts and thus making contractors absorb increases in the costs of raw materials. This change is further exacerbated by growing volatility in the environment for raw materials. Finally, financing has fundamentally changed. Previously, contractors could obtain working capital for projects either through internal cash flows or through bank loans secured on the basis of their brand name and reputation. The recent financial crisis and increased size and scale of projects now preclude contracting companies from using only cash flow for projects; indeed, some projects require preapproved financing as part of the bid. Companies are now seeking larger

and more complex financing structures involving several banks.

Internal weaknesses “Despite the significant changes in the construction

Fadi Majdalani, Partner, Booz & Company

industry, few contract¬ing companies have evolved their operating model to accommodate this change and position themselves for future growth,” said Ahmed Youssef, Partner, Booz & Company. Many have outgrown their organisations and are not taking full advantage of their scale; many have invested in the right systems but fallen short of their goal of fully implementing them. And in their relentless focus on meeting customer demands for greater cost control and on-time delivery, they have not yet expanded their attention to other critical issues such as construction quality and contractual relationships. Indeed, these companies are executing projects using the same project structures and procedures used a decade ago, with little attention paid to the new demands of the marketplace. As a result, even successful companies have developed internal weaknesses in their operating models. In order to properly prepare themselves for the next inevitable surge in demand, contracting companies must address this problem with a systematic review

and re-evaluation of their organisation, systems, talent, and priorities. To do these companies have to re-evaluate and redirect their fragmented operating models, their underused systems and information technology and their underdeveloped human Ahmed Youssef, Partner, Booz & Company capital strategies. In order to make the necessary adjustments to their operating model without losing momentum in their current operations, companies must approach change in a synchronised manner.

To identify and address these weaknesses, companies will need to conduct a comprehensive review of their strategic focus, identify where they can dominate the market for their products and services, develop performancebased processes, focus on priority projects first, deploy technology selectively, and fully train and integrate new and more senior workers

JULY 2011

Conclusion The GCC construction industry, although buoyed through the economic crisis by a significant influx of government megaprojects, nevertheless faces several challenges stemming from strategic and operational weaknesses. These weaknesses crept unnoticed into the firms during a period of rapid growth, but they represent a long-term risk to their ability to prosper further. To identify and address these weaknesses, companies will need to conduct a comprehensive review of their strategic focus, identify where they can dominate the market for their products and services, develop performance-based processes, focus on priority projects first, deploy technology selectively, and fully train and integrate new and more senior workers. The end result will be far more streamlined operations, more competitive positions in key markets, and a stronger foundation on which to build. “Those that adjust their organisations to close any existing gaps will be well rewarded as the overall market strengthens around them and they emerge as market leaders,” concluded Youssef. SME ADVISOR MIDDLE EAST

Industry watch Recruitment <<<

Homegrown talent A study of S&P 500 non-financial companies over 20 years (1988-2007) shows that businesses that exclusively promote CEOs from within the organisation outperform companies that recruit CEOs from outside. In the international study 36 companies outperformed others across seven measurable metrics: return on assets, equity and investment, revenue and earnings growth, earnings per share (EPS) growth and stock-price appreciation according to A.T. Kearney, a global management consultancy. “Middle East companies, boards and company owners very often end up going outside the organisation to fill the CEO top spot and as organisations mature it is becoming increasingly important to focus on leadership development and creating a pool of internal qualified candidates. Unfortunately the stakeholders more often than not pay a big price for this star search. Companies in the region could benefit by an increased focus on CEO and leadership succession planning within an overall talent management strategy,” said Dan Starta, partner and managing director, A.T. Kearney Middle East. The study, Homegrown CEO: The Key to Superior Long-Term Financial Performance is Leadership Succession, was recently released by The Kelley School of Business at Indiana University and the global management consulting firm A.T. Kearney. The 36 companies identified in the study represent 25 different industries and include international names, such as Abbott Laboratories, Caterpillar, Colgate-Palmolive, DuPont, Exxon, FedEx, Honda, Johnson

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While sometimes the situation requires the unique skills that an external CEO brings, such candidates often are significantly more costly to attract than homegrown, internal candidates

JULY 2011

Controls, McDonald’s, Microsoft, Nike and United Technologies, among others. While sometimes the situation requires the unique skills that an external CEO brings, external CEO candidates often are significantly more costly to attract than home grown, internal candidates. Median compensation – salary, bonus, and equity incentives – for external CEOs is 65% higher than for those promoted from within. Moreover, 40% of CEOs recruited from outside last two years or less and almost twothirds are gone before their fourth anniversary. Fred G. Steingraber, chairman emeritus of A.T. Kearney and leader of the study, said, “The dramatic results of this research show that responsibility for managing leadership succession is among the most important duties of a board of directors. This responsibility cannot be left to the CEO, the Chief Human Resources Officer, or to chance, where all too often it currently seems to reside. Boards need to develop relationships with CEOs that enable them to monitor, advise and, when necessary, adjust the process to ensure that a talented executive is ready to step in, whether in an emergency or over a three- to fiveyear transition.” The study concludes that an effective process of succession planning and fully-engaged boards of directors is critical to selecting the right future leader. The process must be comprehensive and institutionalised in the company,

and must include a long-term understanding of candidates’ records, references, leadership style and values under various conditions and in different roles. The study provides four specific recommendations: Involve the board early – A key component of the talent-pipeline process is for directors to have access to internal talent, both informally and formally, on a regular basis. Directors need to rely not only on their CEO for talent information, but also on lower-level leaders. Boards should be involved in, or at least exposed to, the benchmarking of potential leadership and gaps in leadership, and in overseeing the development of action plans to close the gaps. Find the proper fit - The CEO leadership-screening process should begin early in a candidate’s career. The assessment should evaluate the candidate’s recruitment record; promotion of top-quality talent in prior roles; sharing of topquality talent across functions, geographies and business units; and the potential candidate’s success in growing and promoting internal talent in prior roles. Establish a nominating committee - Boards willing to embrace primary responsibility for succession management should establish an effective Search and Nominating Committee, made up exclusively of independent directors. Engage the incumbent - It is critical that incumbent CEOs are actively engaged in and committed to the CEO succession-planning process. Together, the board and the new CEO should regularly review key tasks, including leadership development and the candidateidentification process, with program reports submitted both to the board and the nominating and search committee.

sme speak

Annual Leave Survey <<< their annual leave, while a further 6% worked intermittently during their annual leave.

TIME OUT?

SME Advisor Middle East, in conjunction with Tickbox Surveys Middle East, conducted a survey of its readers to find out their views on annual leave within their company. The aim of THESE MONTHLY surveyS Is to provide a snapshot of the current practices in the MARKET. Working for an SME has a number of advantages but there are also some disadvantages, a notable one being that they usually work in isolation. On average most typically consist of less than 20 employees and hence the level of interaction can at times be limited. Another important aspect is that SMEs tend have very different work trends or patterns compared to larger companies. Evidence shows that larger firms have more specialised staff, each focusing on a certain area of responsibility. However, such luxury is seldom afforded by SMEs and employees tend to cover a number of responsibility areas. The wide coverage implies that they are spread rather thin on the ground and may have to work a lot harder than peers in larger organisations. Such a work pattern may impact greatly on the employees’ work life balance. The work life balance essentially implies that an employee should be able to adjust work with their other responsibilities or aspirations. This balance is especially important for SMEs due to the fact that 98.5% of firms in the UAE fall under this category. Also, their dominance in the employment market implies that if they are to retain and attract the best employees and hence lead to a

SME ADVISOR MIDDLE EAST

growth in the sector as well as the UAE economy this is one area that needs to be addressed. Anecdotal evidence suggests that the work life balance becomes increasingly important at certain times of the year when an employee’s personal life issues become more important than those in the work place. Despite the importance of this issue very little research has been carried out in the UAE looking at the work life balance for SMEs. In order to address this serious deficiency in the current knowledge of practices, Tickbox Surveys Middle East conducted an extensive study using the readers of SME Advisor Middle East as their sample. The survey was sent to SME Adviser readers between May 15th and June 15th. The results of the survey are as follows: Working during annual leave The first question that was asked was whether employees worked during their annual leave. The survey found that almost two thirds of the employees carried out some form of work related activity during their annual leave. An incredible 42% of employees worked every single day of their annual leave. On the other extreme, a third of employees never worked during JULY 2011

Are you expected to deal with work related matters while on annual leave?

What the survey tends to find is that although the employee may have taken time off work, the tasks are not covered. Half the sample has their pending tasks waiting for them on their return

Reduced leave The survey shows that not only are employees working during their annual leave and in most cases each day of their holiday, but they are also required to forego their holiday entitlement. The survey found that almost two thirds of the sample did not take up their full entitlement of annual leave. In fact, 19% of the sample never took their full entitlement of annual leave, while a further 40% of the sample at some point in the recent past were not able to take their full entitlement of annual leave due work related issues. Only 38% of the sample took their full annual leave entitlement each year. Length of annual leave The smaller size of an SME implies that staff may not be able to take long periods of annual leave. The survey found that three quarters of the sample plan to take a three weeks or shorter leave during this summer. Just over 53% plan to take between 20 and 30 calendar days of annual leave while 26% plan to take only up to ten calendar days annual leave this summer. If the employees have children in school then it implies

sme speak

Leave cut short Planning for an annual leave is considered to be something that most people look forward to however the survey finds that two thirds of the sample were asked to cut short their annual leave in recent years. In addition to this, a further 28% reported their annual leave to be cut short a regular occurrence. Only 32% of the sample has never had their annual leave cut short.

that they are not able to spend the entire summer with them. The survey found that only 9% is able to take one month annual leave while 11% plan to take more than a month. How many calendar days leave do you expect to take between 1st June and 30th September 2011?

Are the tasks covered? One normally assumes that annual leave is exactly that; a break away from work. However, what the survey tends to find is that although the employee may have taken time off work, the tasks are not covered. Half the sample has their pending tasks waiting for them on their return. The survey found that 49% of the sample had all or most of their tasks covered. Interestingly, 9% did not have any cover during their annual leave and were required to complete all outstanding tasks on their return. Are your tasks/duties covered during your annual leave?

Technology and annual leave The survey sought to identify the manner in which employees keep in contact with their place of work while on annual leave. The most common mode of communication for keeping in contact with the office was the email with a combination of a messenger service. In fact, 83% used email and messenger services largely due to the cost and availability of handset systems. To a certain extent this result is supported by the fact that only 8% use a combination of email and telephone. Although not directly questioned in the survey, anecdotal evidence suggests that companies provide their employees with email and messenger enabled handsets so as to induce them into working while away from their place of work. Such handsets also allow for informal conversations that normally take place on the telephone to take place via the messenger system. The survey found that 9% used other methods which include only telephone calls, fax or a combination of both of these methods. The survey sought to understand if technology has improved the working life of employees in SMEs. The survey JULY 2011

revealed that a little over two thirds found that modern technology allowed them to keep in touch with the office while on leave. Therefore, modern technology may have eased some of the work pressures while on annual leave. Interestingly the survey found that a quarter of the sample found that modern technology has forced them to work while on annual leave and viewed it as an unnecessary evil. The Tickbox Surveys Middle East study shows that employees in SME are certainly working during their annual leave and may also have to cut short their holidays. Even if they tend to have a break it appears that the non-important tasks are waiting for them on their return. Modern technology has gone a long way to ease the process of employees keeping in touch with their place of work. In some sense this may be a realisation that in the modern commercial world employees are expected to be contactable and may need to respond to urgent issues even if they are on annual leave. The real question, however, is what is the long term impact of such behaviour on the individual employee and their personal relationships as well as on the ability of the SME sector to retain and attract talented employees who also value their personal life? For more “SME Speak” Surveys, visit www.smeadvisor.com.

ABOUT: Tickbox Surveys Middle East specialises in market research surveys for the consumer, B2B, inviestor, community and employee segments. Tickbox Surveys Middle East specialises in helping companies to identify appropriate interventions for improving customer and employee satisfaction as well as loyalty through using surveys and statistical analysis.

SME ADVISOR MIDDLE EAST

Corporate wellness Stress <<<

BREAKING point You’re probably feeling excited about your summer vacation but in the mad rush to tie up loose ends before you go, have you also noticed the increased stress this might have on you and your work, asks occupational health specialist Dr. Sarah Peeters

The stress you will be feeling before escaping the summer heat will probably only be temporary. Once you’ve reached your destination and you’ve had time to unwind, everything will go back to normal. But what if this doesn’t happen? What if the stress and pressure don’t disappear? Unfortunately, this is the case for many employees – for such people the stress at, or from work, never goes away. The definition for stress is very broad. One way of explaining stress is the effect we feel from failing to cope adequately with stressors When the body experiences too much pressure and is unable to cope with the external demands or pressure, it will become unbalanced and respond with physical, emotional and mental reactions such as high blood pressure, ulcers, headaches, depression, anxiety and many more. The stressors can be very different for everyone. Some people can’t cope with ringing telephones or deadlines and most people don’t respond well to fear or pain. Let us now focus more

SME ADVISOR MIDDLE EAST

specifically on work- related stress. By this term we mean the process that arises where work demands of various types and combinations exceed the person’s capacity and capability to cope. And again, this can vary greatly between individuals. Workload, deadlines or expectations that make some employees thrive, will be detrimental for others. Where the first employees will experience the pressure as a motivating factor, the latter will feel it as excessive pressure and soon it will turn into a negative and stressful situation. If this situation continues, it will not only take its toll on their health but also on their ability to work productively. Work-related stress is proven to be a significant cause of illness and disease and is known to be linked with high levels of sickness absence, staff turnover and other indicators of organisational underperformance, including human error. But how serious is this work-related stress? According to the statistics from The Health and Safety Executive in the UK, approximately one in seven people say that they find their work either very, or extremely, stressful. JULY 2011

Since 2001/02, stress has consistently been the second most commonly reported type of workrelated illness in Great Britain, with musculoskeletal disorders being the most commonly reported illness. When stress leads to absence, the average length of sick leave is 30.1 days, much higher than the average length of sick leave for work-related illness in general (21.2 days). Studies show that in 2005/6, a total of nearly 11 million working days were lost to stress, depression and anxiety. Therefore, work-related stress is a problem for the individual, the company and society. And it is worth managing stress. On an individual level, you can look into improving your timemanagement. A lack of proper time management is often a leading cause for stress. But also think about your lifestyle, social life and support. Stress at work will have an impact on your life outside of work, and vice versa. So if you want to deal with it, make sure to look at the broader picture. And don’t forget to get help if it all becomes too much for you. Your GP should be able to advise you further. There are also a number of factors companies can manage to reduce risks from workrelated stress. Promote trust, positive working and an open communication with support between from the organisation, line management and colleagues, and avoid conflict and deal with unacceptable behaviour. Set guidelines, goals and expectations and create job descriptions, thus increasing predictability.

Dr. Sarah Peeters

Since many people experience change as stressful, manage and communicate large and small organisational changes with care. Make sure you have regular evaluations to discuss performance and expectations and to provide the employee with the opportunity to discuss any issues. Evaluate the job demands such as workload, work patterns and environment and be open to job redesign if issues are identified. Ensure employees understand their role within the company and don’t have conflicting roles. And finally, consider participative decision making and allowing employees to have some control over how they do their work.

ABOUT: Dr. Sarah Peeters is a trained occupational health specialist physician, based in Dubai. She received her training at the Catholic University of Leuven in Belgium, in 1990 and has since been working in Belgium and Dubai as a specialist in occupational health and safety. She has been serving a vast number of different small to large companies, both corporate and industrial, which allowed her to gain extensive experience in her field. The OHS areas of specific interest to her are offshore health, travel health and office ergonomics. For more information conatct Dr. Sarah at occmeddubai@hotmail.com or call +971 (0) 50 859918.

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