Why CSR is great for smart SMEs

Why CSR is great for smart SMEs

  • Small businesses can immensely benefit from incorporating CSR as a part of their overall business strategy.
  • CSR activities can give a powerful message to your employees and in turn get a higher sense of belonging and loyalty to your project from them
  • While it might not always be possible for SME’s to donate cash for such initiatives, many companies are deploying winning strategies to bolster their own contribution in kind, either through barter or by volunteering time to an existing CSR project initiated by another organisations.
  • Engaging your suppliers can also amplify the impact of your CSR initiatives, while helping strengthen your relationships with them.

Should an SME owner embrace the concept and opportunity of getting involved and supporting Corporate Social Responsibility projects?

Some of you may have followed the news when it was announced last year that the US government was on the verge of defaulting on their debt. For average people around the world, this was one of the most confusing topics in recent times, considering the three tumultuous years of financial storms, earthquakes and tsunamis and let’s not forget, scandals.

What got my attention was that Apple Computer had within its own arsenal, stockpiled more cash in-house than the entire US government. Could it be that Apple CEO, Steve Jobs, once a scrawny geek of a kid who scrapped conventional wisdom to go out and innovate as an SME, to fulfill a dream that everyone should own a computer, could ride in like a white knight and save the whole country? Does charity begin at home?

Innovation and courage make it possible for an entrepreneur like Steve Jobs to support social programmes with millions of dollars each year. But what if you have a small business, and your focus is just on survival? What if you are struggling for loans or investors for your own project, and cannot even conceive the possibility of crossing the threshold of success and being able to give back?

When does it make sense to get involved as a small business and give back to your own cause or community? Well, for my part, and for many of the consultants on my team, we believe in looking for opportunities even before rolling out a start-up and building that into the mix as an integral part of the holistic structure of the entire business strategy.

To understand these reasons, one should reflect on some of the advantages of actually shaping your company culture with this type of commitment.

Powerful message

For a start, think of the message you will be sending out to your employees who will begin to realise that they are part of something more than just a 9.00 am to 5.00 pm job. This will often give them a higher sense of belonging and loyalty to your project and endeavor that makes them proud to say to total strangers, family and friends, what they do, who they are and why they love what they are doing now.

This, HR managers will tell you, is a powerful factor in human capital retention, and a recruitment magnet is always more powerful, when the team within, are all ‘game on’ and buzzed about the company. Among your clients, there is a percentage who will appreciate that some part of your margins which they contribute to, are recycled in a place that has a ‘feel good’ or worthy cause impression, again amplifying another good reason to do business with your company. This can grow to the next level, namely getting clients involved in social action projects, which are miracles of good CSR work in so many communities.

So, how much do companies need to invest in a CSR project, and how is it possible to do this before making a profit? The answer that I propose is that, although it’s nice to be able to donate cash, often, in the lifecycle of young start-ups, it’s not feasible. Many companies are, however, deploying winning strategies in order to bolster their own contribution in kind, either through barter or by volunteering time to an existing CSR project initiated by another organisation.

In the MENA region there are dozens of such organisations that have created CSR projects that would appreciate the focus and participation of one hour of someone’s time. This could range from having your team agree to spend half a day repainting a home for the elderly within your community, hosting a car wash to donate money to a needy school, creating a used book drive to donate to an orphanage. In fact, subject areas are endless and there is never enough. The unseen advantage in all of this is, there is a magical, intangible and yet amazing feeling of giving back to something or someone.

We, as business people, are able to feel a little taller in the process of this work, and at the same time, we have the advantage of not only putting a smile on the receiver’s face, but also spreading pride and significance amongst our teammates and our network for our participation.

Brand recognition

This is not thankless work either. Many participating SMEs are able to elevate their brand recognition and perception, by associating with causes that speak to their audience. This is a key factor of creating a strategy that works for your company. Find a CSR synergy that fits to the services or products that you deliver to the market. Build this into your overall business plan and connect with people on various levels as a result of your winning strategy. Be warned that there is a fine line between being genuinely involved in a CSR project and exploiting it so that you purely get a part of cash rewards.

It is better when companies form committees where employees and officers are part of the steering process, to make the best case scenario recommendations to the shareholders, about not only installing a CSR department, but guiding it and sustaining it. Another helpful hint if your SME adopts this practice is your key secret agents who can make your efforts even more powerful – your suppliers.

You will be amazed that when your team is committed, and has the ability to share a clear vision about what, why, and who, your suppliers will ask when and how they can help. Therefore, you, as the owner of an SME, are able to light a candle in your own store and by the power of passing the torch, ignite second and third party attention and support all around your organization’s CSR wagon.

And yes, remember, charity begins at your front door.

The article is written by Michael J. Tolan for Arab Business Review

To read more thought-leadership stuff by leaders from Arab Region, please visit Arab Business Review

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BYOD in the Middle East

BYOD in the Middle East

  • The rise in IT spending is fueling the increased adoption of the bring-your-own-device (BYOD) culture in the region, and given its inherent advantages for employees and employers, BYOD adoption is bound to grow further in the coming years.
  • However, BYOD adoption is accompanied by IT security risks arising out of lack of awareness about device security among employees. The situation is compounded by insufficient network resources and the lack of formal BYOD policies at organizations to manage security risks emanating from use of personal devices on official servers and networks.
  • CIOs in the region need to respond by preparing IT networks and formulating a BYOD policies, which are designed to manage this increased demand for BYOD and mobile diversity in the region.

An Employee Engagement Tool or an IT Threat?

  • Middle East is among the fastest growing IT markets in the world, with IT spending in the region expected to exceed $32 billion in 2014. As per the latest IT forecast by IDC, spending on IT products and services in the Middle East will increase 7.3% year on year and will cross $32 billion in 2014.  Nearly 75% of this expenditure is expected to come from individual customers, the public sector, and the communications and financial services verticals. The key growth driver will be public sector investments in improving government services, education, and healthcare services in the GCC region.
  • The rise in IT spending is fueling the increased adoption of the bring-your-own-device (BYOD) culture in the region, as the increased proliferation of smartphones and tablet PCs, as well as increased mobility of workforces is forcing a shift in the way that companies operate on a day-to-day basis. A survey by Aruba Networks found out that employers in the Middle East were more likely to say Yes to BYOD, as compared to companies in other parts of the world.  The study found that 70% of EMEA enterprises allowed some form access from personal devices, a figure backed by Cisco’s 2013 Middle East ICT Security which found that almost two-thirds of employees in the region are allowed to use their own devices to access the company server or network.

Percentage of Companies saying Yes to BYOD across Regions

BYOD in the Middle East1

 Source: Aruba Networks

  • Given its inherent advantages for employees and employers, BYOD adoption is bound to grow further in the coming years. BYOD allows workers to operate on devices that they are comfortable working on, and in some cases from a location of their choice (e.g. home), thus extending flexibility in working environment.  Therefore, the BYOD culture benefits employees and bossts their motivation and engagement levels.  But its benefits are not limited to employees are alone.  Employers too stand to benefit considerably. As per Cisco Consulting Services estimates, the annual cost benefits of BYOD range from $300 to $1,300 per employee, depending on the employee’s job role.  In addition, happier and motivated employees have higher productivity, and are more likely to focus on innovation rather than just dealing with daily chores at workplace, thus contributing to the overall growth of the organization.
  • However, BYOD adoption is accompanied by IT security risks arising out of lack of awareness about device security among employees. The use of mobile devices like smartphones and tablets is expected to grow over the next few years, as the region is expected to have 850 million mobile users by 2017.  And most of these devices will also be used by employees at workplace as BYOD adoption increases – this is corroborated by the Middle East ICT Security Study that found that nearly 64% employees are allowed to use their own devices to access the company server or network. However, 65% of employees their own devices in the workplace currently do not understand the security implications of using personal devices in the workplace, thereby exposing the company server or network to high degree of IT security risk.
  • The situation is compounded by insufficient network resources and the lack of formal BYOD policies at organizations to manage security risks emanating from use of personal devices on official servers and networks. As of 2013, only 55% companies in the Middle East have a plan or a formal policy to manage the use of personal devices for work related purposes.  As a result, cyber-criminals are increasingly attacking internet infrastructure rather than individual computers or devices, with password and credential theft, infiltrations, and breaching and stealing data.  Therefore, it is not surprising that businesses in the Middle East are facing a growing risk of cyber-attacks as per the 2014 IT Security Study in the Middle East.

As per the Aruba Networks survey, the IT security challenge is accompanied by  insufficient network resources to support the influx of multimedia-rich devices, as 35% organizations claimed that they did not have enough wireless coverage and capacity for supporting BYOD.

  • Overall, the key challenges and concerns highlighted by businesses considering or implementing BYOD in the region are:
    • Securely connecting devices (especially mobile) to corporate networks
    • Avoiding an increase in IT resources and expenses
    • Ensuring wireless coverage and capacity
    • Ensuring device security
    • Establishing corporate policies and acceptable uses
    • Enforcing access rights to resources based on user, device, and app
  • CIOs in the region need to respond by preparing IT networks and formulating a BYOD policies, which are designed to manage this increased demand for BYOD and mobile diversity in the region. As a first step, CIOs need to develop IT infrastructure that is capable of supporting a broad array of devices without overburdening their IT staff. With mobile devices leading the BYOD adoption, this would mean increased investment in wireless infrastructure in the coming years. The requisite IT infrastructure development needs to be complemented by developing and implementing organization-wide BYOD strategy and policy. To develop an effective policy, organizations need to define and understand factors such as which devices and operating systems to support, security requirements based on employee role and designation, the level of risk they are willing to tolerate, and employee privacy concerns.

The key characteristics of a good BYOD policy are:

  • Balances security requirement vs. employee experience and privacy. It is important to develop policies that have minimal impact on employee’s experience, while maintaining the required security levels. Equally important is defining and communicating the level of vigilance/monitoring that IT department plans to implement to monitor device usage. Given that BYOD is an employee-driven phenomenon, a policy that is too restrictive or invades user privacy might prove counter-intuitive to the whole concept (and related benefits) of BYOD. So mapping the security requirement based on employee role is critical.
  • Supports multiple devices and operating systems: It is important for CIOs to factor-in all types of platforms and operating systems used by employees. While iOS is a natural choice due to the high level of in-built security, Windows (phone, PC, tablets) and Android (phone, tablets) have also gained immense popularity and can no longer be overlooked.
  • Is flexible (semi-BYOD): for organizations that have high degree of data security risk (e.g. financial services firms), CIOs can opt for semi-BYOD policies which allow their employees to use their own devices so long as they comply to a list of company-approved devices, so that IT departments don’t have sleepless nights over what devices their networks might have to accommodate.
  • Most importantly, a good BYOD strategy is focused educating employees about BYOD policies and ensuring compliance to alleviate related risks. It is important for organizations to not just develop such policies, but also provide guidance on ‘Do’s and Don’ts’ and best practices on using personal devices for official purpose. Conducting company-wide roadshows and training/counselling sessions, followed-up by online tests around the company’s BYOD policies is another way to driving home the message of the company’s seriousness about such initiatives and IT security at the same time.

We believe designing and implementing BYOD policies is important not just for organizations that either adopted or are considering BYOD, but for others as well since BYOD adoption is a question of ‘when’ and not ‘if’ for businesses in the region.

The article was originally published at: Arab Business Review

To read more thought-leadership stuff by leaders from Arab Region, please visit Arab Business Review

Thinking Small

 

 

Thinking Small

 

  • Marketing executives often look for that one big brand building activity that will catapult the company’s reputation into the stratosphere, such as names on sports arenas, pricey event sponsorships, and broad reaching brand campaigns.
  • But before you even begin thinking about investing in big ticket items, I recommend you begin by thinking small and invest your limited resources looking at your company’s reputation from the perspective of your current or prospective clients.
  • Go online. Do your homework. Encourage your team to do the same. Then document the results put a plan in place to clean up your online reputation before you start thinking big.

I am always surprised at the amount of money companies invest in brand campaigns while completely ignoring fundamental brand enhancing strategies that cost virtually nothing to execute.  I’m equally awestruck at the minimal attention paid to a number of easily accessed postings on web and social sites that if left unchecked can completely destroy a company’s reputation.

All too often executives look for that one big brand building activity that will catapult the company’s reputation (as well as their careers) into the stratosphere.  Names on sports arenas, pricey event sponsorships, and broad reaching brand campaigns are just a few examples of the big ticket plays that more often than not leave brand managers scratching their heads or worse yet, unemployed.  It happens time and time again.  Why?  We want to believe in the brand illusion. Like a mirage in the desert, many big ticket brand plays look like a much needed oasis in the desert from a distance. Unfortunately, and usually too late, when we reach that oasis it’s nothing like we expected.

I’m not saying that all big ticket brand building activities should be ignored.  Sometimes that oasis is just that – an oasis!  With the right research and insights, a brand manager can realise excellent returns on these investments.  But that assumes time and effort is invested in researching the opportunity and understanding the target audience prior to making the investment, a step too often ignored or underplayed.  It also assumes your marketing team knows how to leverage the event to extract maximum exposure and goodwill from the investment.

But before you even begin thinking about investing in big ticket items, I recommend you begin by thinking small.  Rather than send your marketing team or agencies scouring for some major event to sponsor, first invest your limited resources looking at your company’s reputation from the perspective of your current or prospective clients.  Start by simply going to Google and typing your company name. Look closely at what comes up.  Is it your company or some other brand? Also look at the paid search sections to see if any of your competitors are targeting you and how.  Now click on the news section at the top. What are reporters saying about your company?  Click on the articles and read the comments. Now click on the images.  What images are associated with your brand? Finally, go to the video section.  And once you’re done with Google, go to Yahoo, YouTube, Facebook, Twitter, and as many of the highly visited and viewed social sites as possible. Do your homework and document the results.

Next, take the time to visit your own web site or sites and sign up for all of your own marketing and social media programs.  Add your name to all of your company’s contact lists.  Then monitor the quality and quantity of the communications you receive.  Watch your company through the eyes of your customer. What you’ll likely find out about your company may surprise you.

We went through this exercise and discovered numerous misrepresentations and misleading information about our company.  In cases where we signed up for our own programs, we discovered that nothing was being communicated.  Apparently our Marketing and Customer Relations Management teams were not communicating with each other so the events we were sponsoring, the ones in which we created cool web applications inviting guests to sign up and learn more, were actually doing more harm than good by creating an expectation that was not being fulfilled.

As we looked closely at all our findings, we also uncovered a number of difficult but true facts about our customer service that had been in our corporate blind spot for years.  We had always thought our company’s brand was second to none and that our customers’ perceptions of our company were nothing less than spectacular.  By investing a little time and almost no money, we discovered the true was far from our reality.

Immediately we jumped into action cleaning up misinformation and contacting companies that had incorrectly posted false images, videos or statements about our company.  Sometimes the effort paid off and sometimes it didn’t. Not every company or person we contacted was willing to work with us, but most were and we found the improvements we achieved in the quality of information about our brand to be well worth the time invested.

We also began formulating new practices and policies to improve our customer service to stay on top of future issues. We also connected our Customer Relations Management and Marketing teams and we improved our coordination with our customer relations and PR teams to resolve issues before they became viral problems.

This process wasn’t nearly as exciting or newsworthy as sponsoring a football league, which incidentally we also did, but it was probably the most important and least costly investment to ensure our brand building activities were structured upon a solid foundation.  Yes, big ticket items can provide big returns. But it’s the little things that too often go unnoticed that can have a negative impact to a company’s image and completely negate all of the positive equity that has been built through years and years of good brand building activities.

So my recommendation is to always start by thinking small.  Look at your company through the eyes of your clients and prospective clients.  Go online. Do your homework. Encourage your team to do the same. Then document the results put a plan in place to clean up your online reputation before you start thinking big.  I’m confident you’ll eventually find the returns of your big investments to be much better and less risky if you do.

The article is written by Don Romano for Arab Business Review

To read more thought-leadership stuff by leaders from Arab Region, please visit Arab Business Review

Case Studies: Corporate Governance in the Middle East

Case Studies-Corporate Governance in the Middle East

  • Numerous companies in the Middle East improved their governance practices in ways that boosted their performance and growth, highlighting that corporate governance is not a one-size-fits-all concept, but a customized approach.
  • The Nuqul Group case study highlights the role played by corporate governance in the decentralization of power and creation of higher level of accountability among all layers of management.
  • On the other hand, adoption of corporate governance by the Sorouh Group helped improve the credibility of its Sukuk issuance in the eyes of credit rating agencies, thereby resulting in one of the largest and most successful debt issuance in the region.

In part one of our corporate governance article series, we had talked about the meaning of corporate governance and the factors driving the implementing of corporate governance reforms in the Middle East. In the second part, analyzed the progress made on corporate governance implementation by various Middle East nations. And in this third and final part, we share two specific case studies of Middle East-based companies that implemented corporate governance practices to boost business performance and growth.

Case Study 1: Nuqul Group | Jordan   

Founded: 1952 | Conglomerate of over 30 companies                                           

Company Overview: Nuqul Group is a Jordan-based producer of manufactured goods. In 1985, Ghassan Nuqul, the vice chairman of Nuqul Group, took a leading role 33 years after his father founded the company.

Situation: After taking over the leading role, Ghassan Nuqul realized that the firm’s head office had to process all purchase orders, as well as account and audit documents from its four plants. As a result, little accountability existed outside the head office. Also, such a strong concentration of power in one office made the Nuqul Group unattractive to investors. To correct the situation, Ghasan Nuqul took a series of corporate governance steps to institutionalize processes, allocate tasks, and develop accountability mechanisms.  The steps were aimed at increasing accountability at all levels, and also to ensure that all family members understood their roles, responsibilities, and rights within the organization.

Corporate Governance Measures Taken:

  • Over a period of five years, Nuqul headed the firm’s decentralization process. He separated and delegated tasks, created job descriptions, measures of accountability for managers and employees, established key performance indicators (KPIs), balanced performance scorecards and evaluated the company against competitors in the industry.
  • The firm established a strong board composed of both family and non-family members. It now includes board members who are employed by the firm, board members from outside the firm, and board members with relevant specializations.
  • Being a private, non-listed, family-owned company, Nuqul Group is not required by the government to publish financial statements. However, the company publishes an internal annual report voluntarily disclosing information including staff turnover, corporate social responsibility indicators, community service participation, and philanthropy operations in the family foundation.

Impact: Nuqul Group has expanded from four subsidiaries in 1985 to 30 today, and as per vice chairman Ghassan Nuqul, this level of growth would not have been possible without the improved corporate governance practices.

  • As a result of the corporate governance measures taken, Nuqul Group increased accountability among managers, employees, and the family, which ensures the company’s sustainability.
  • By implementing a 10-year business plan, with forecasted budgets for every year, the company was able to create benchmarks and measure itself against global best practices.
  • Since the implementation of these practices, Nuqul Group has continued to grow in terms of size and level of profits.

SOROUH | U.A.E   

Founded: 2003 | Real Estate company                                           

Company Overview: Located in Abu Dhabi, Sorouh Real Estate PJSC is one of the largest real estate developers in the UAE, and currently has over AED 70 billion worth of projects under development.

Situation Faced: From 2006 to H1 2008, Sorouh did not make any major borrowings; however, it wanted to finance its growth. For this, it issued Sukuks to help finance the development of 170 hectares on Al Reem Island and the Saraya development in Abu Dhabi’s central business district. However, as part of this process, Sorouh’s corporate governance practices had to be assessed by external credit agencies responsible for rating the Asset Backed Securities (ABS) transactions that Sorouh used to raise the money.

Corporate Governance Measures Taken: The company’s successful Sukuk issuance is rooted in the improvements it made in its corporate governance framework, in compliance with the UAE Securities and Commodities Authority’s standards. Sorouh had adopted these regulations and implemented all its material requirements in 2007, two years ahead of the compliance deadline.

  • Sorouh developed an Employee Disclosure Policy to ensure that employees are able to “blow the whistle” whenever and wherever they have adequate reasons to believe that ethical conduct has been breached.
  • The company has developed an Insider Share Dealing Policy in order to ensure that directors and employees do not misuse their possession of the company’s stock price-sensitive information.
  • In 2007, the company implemented an enterprise-wide risk management system, which has been initiated to structure and formalize existing risk management practices.

Impact: According to Sorouh’s Chief Corporate Officer, Afshar Monsef, “The actions we took for our corporate governance had a direct impact on the rating we received for our Sukuk and ultimately the interest rate premium, which resulted in paying a lower premium compared with other companies in the region.”

  • Sorouh’s corporate governance practices allowed it to issue more than US$ 1 billion worth of securitized Islamic certificates (or Sukuks), to be used for growth and expansion purpose
  • Moody’s rated the majority of the notes “AA3” while S&P rated them “A”.
  • The high ratings helped Sorouh to gain market acceptance for the Sukuks, resulting in millions in savings for the company.
  • The debt issuance was the first of its kind and size for a Middle East and North Africa (MENA) region corporation.
  • In 2009, Sorouh was ranked 1st in Abu Dhabi and 3rd regionally by the BASIC2 GCC-wide study of corporate governance.

We hope you have enjoyed our coverage on Corporate Governance in the region. Please free to comment and share your views and other relevant examples on this increasingly important issue for businesses in the Middle East.

The article was originally published at: Arab Business Review

To read more thought-leadership stuff by leaders from Arab Region, please visit Arab Business Review

A good Player needs a good Coach

A good Player needs a good Coach

  • A Business is a person who actively listens to you; who explores options with you, and who can provide you with effective feedback to grow, and deliver better results in life.
  • The Business coaching is a very personalized development program, focusing on the current burning issues that business Leaders face, which enhances their ability to gain personal insight into the real issues in their real world and in real time
  • Being egoless is the key to continue developing, progressing and evolving. Having an Executive Coach watching from distance, guiding the player is a must if we are to evolve as High Performance Leaders.

How many times do we get overwhelmed with small stuff here and there, how many times do we find ourselves out of focus on the right things, how many of us have a clear vision and know exactly where is he or she heading, how many know how to conquer key moments, how many know how to confront harmful behavior, how many have clear boundaries and live by them, how many can say NO to certain people or situations …. So many questions in mind.

We, human beings, share exactly the same issues, and we face similar situations in life. But looking at things from distance has a totally different meaning. I had no idea that finding the right person, who actively listens to you; who explores options with you, and who can provide you with effective feedback to grow, and deliver better results in life do exist and it’s called a Business Coach.

After spending more than 25 years in the corporate world; assuming different positions from a simple cashier to a group CEO of a multimillion company; where I learned things the hard way. And as most of us, acted stupidly in certain disruptive situations, letting my ego control, or even my emotions and wrong beliefs rule. I decided to get out of my comfort zone, and challenge my purpose in life, to find out that there is untapped potential we all have, but it needs to be unleashed at the right time, and with the right approach.  Hence, I left the corporate world, and started my own business focusing on empowering others.

While developing different leadership programs, I started reading and researching about what make good CEOs succeed, and why some CEOs excel in their Organizations, while others fail miserably despite their strong abilities, my findings were very simple, summarized by A good player needs a good Coach.

Business Coaching facilitates and supports leaders discover their excellence and strength to move them to peak performance, while opening their eyes to some potential beliefs impacting their success.  It is targeted oriented, and provides leaders the framework to stay focused on doing the right things, not only doing things right. In other way, the Business Coach provides and charts the pathway to success.

Unlike the regular training programs we all attend. The Business coaching is a very personalized development program, focusing on the current burning issues that business Leaders face, which enhances their ability to gain personal insight into the real issues in their real world and in real time. Moreover, while being Coached, Business Leaders clarify their vision, and get encouraged to be fearless while translating their vision into reality, leveraging their unique qualities in service of positive change.

In the Arab World, the idea of business coaching to top management is still not entirely supported, as the “We know it all phenomena” still dominates. Being egoless is the key to continue developing, progressing and evolving. Having an Executive Coach watching from distance, guiding the player to do more of this, and less of that, challenging the beliefs and the actions; and enabling personal transformation is a must if we are to evolve as High Performance Leaders.. I keep saying I wish I had a coach when I was a CEO; my life would have been much easier.

The article is written by Majd Shweikeh for Arab Business Review

To read more thought-leadership stuff by leaders from Arab Region, please visit Arab Business Review

Being an Entrepreneur in the Gulf

Being an Entrepreneur in the Gulf

  • There are numerous challenges in the Gulf blocking the entrepreneurship path for development.
  • Entrepreneurship is about leading, accepting high levels of risk and living up the challenge.
  • Gulf governments are not doing enough to support gulf entrepreneurs; albeit some good initiatives.
  • Entrepreneurship should be looked at as an integral part of the economy, leading to innovation and job creation.

For those of us who have studied abroad, being an entrepreneur in the Gulf has its own set of challenges. I still remember the first six months I spent in Kuwait after coming back from Denver in 1999. Everything was so different from what I had become used to. It felt like being in another universe. Not only was I suffering from reverse culture shock, but I was also surprised at how different my expectations had become. Coming from a place where you can get anything done over the phone or by email in a matter of hours or days to a place where getting anything done takes months, requires your personal presence, and involves a lot of paperwork. I had to completely readjust to my new reality and reassess my priorities.

At the time the best way to grow was to join a large company. Starting a business was very risky at the turn of the millennium and you couldn’t do it as your main source of income. I literally made good use of the phrase “Don’t put all your eggs in one basket.” If I learned anything about diversification it was to mitigate the risk of a high probability of failure for startups. As I uneasily joined the rest of the country in looking for a secure job, I began to wonder how I could pursue my own personal dream without the necessary ingredients to do so. Having a good idea simply wasn’t enough. The lack of the necessary entrepreneurial infrastructure and a clear path for startups meant that even the best of business plans would face enormous risks. But what is an entrepreneur if not someone who has a proclivity for risk-taking?

Entrepreneurs are contrarians by nature and always go where everyone else says there is nothing to go to. But even contrarians have their limits. Entrepreneurs are generally creative, extroverted, risk-takers by nature and they tend to see opportunity where others do not. The only way to have more of them is to reduce the impending risks that they have to overcome. This is where governments need to step up their efforts. The Gulf countries have undergone a drastic modernization phase over the past sixty years to catch up with the rest of the developed world. Obviously there are still significant issues in the developed world that remain to be overcome—one of them being the lack of a sound ecosystem for entrepreneurs to thrive in.

The Gulf countries that control the largest oil reserves in the world—with billions of dollars in revenue—certainly have no shortage of funds. With such huge surpluses accumulating over the years, there was no urgency to cultivate the private sector or free enterprise. People who traditionally had small businesses saw a better opportunity in a safe government job. When the governments provided more than people’s needs while the cost of living was cheap it tipped the risk-return equation in the favor of a safe job. Those with larger businesses were better positioned to take part of the growing petro-economies. The result is a huge government sector with a few very large family oligopolies controlling the rest.

The Gulf, for the most part, is tax-free. Therefore, the governments have no real incentive in maximizing tax revenue. Cultivating small businesses was low priority because there was no added value. As the population grows, with the biggest chunk under the age of 25, the cracks in the system are beginning to show. The increase of cost of living over the years through inflation as well as an increase in jobless figures means that the only way governments can sustain the storm is through the proactive development of SME’s. More importantly the governments need to provide the right ecosystem for entrepreneurs. A focus on the needs of entrepreneurs would lead to job creation and, eventually, a good tax revenue source that would benefit the whole economy.

Four essential elements are needed:

  1. Ease of setup
  2. Funding
  3. Skilled labor
  4. Real estate

Entrepreneurs can’t be created out of thin air. It takes time to cultivate entrepreneurship. But reducing barriers to entry and risk levels would be taking huge steps toward cultivating that entrepreneurial spirit. However, there are some very good initiatives in the Gulf such as Thukhur for Entrepreneurship & Corporate Innovation, the national program for entrepreneurs in Kuwait and Dubai SME, a Department of Economic Development agency in Dubai. These programs not only build the foundations for entrepreneurs, but also serve to motivate new entrepreneurs by highlighting the success stories and the importance of entrepreneurship in society.

Entrepreneurs have been and will always be the driving force in an economy. I took the rough road to building my business and despite how difficult it was, I would do it all over again without hesitation. It’s not just the money, it’s the satisfaction of creating something out of “nothing.”

The article is written by Basil Al Salem for Arab Business Review

To read more thought-leadership stuff by leaders from Arab Region, please visit Arab Business Review

How to fail like Steve Jobs

How to fail like Steve Jobs

  • Great companies have taken risks and failed. The greatest companies encourage creativity, reward innovation, and see failure as a part of the process.
  • Many people equate success not as a measure of doing great things, but by not making mistakes.  Do you work from a place of creativity or a place governed by fear of failure? 
  • Do you encourage your team to take creative risks in order to achieve greater results?  

Creativity – new competition collateral

When’s the last time you made a mistake at work?   I mean an actual mistake of commission and not omission.  A misstep because you tried something new, something innovative, and didn’t just follow the pack or old way of tackling new problems?  If fear of failure is part of your career DNA, perhaps taking a look at creativity as a method of competing to win and overcoming your fear of failure may just do the trick.

If you remember the story of the genesis of Apple computer, you may recall Apple’s flop the “Lisa”.  Now Lisa failed brilliantly for a host of reasons, but the key is what it was intended to be.  Jobs had a vision for a machine to change the world…..again.  After the many failures, the real win was the refocused efforts that followed and resulted in the first Macintosh.  The rest is history and the stuff of well-deserved legend (he says as he types on his MacBook Air).

The secret Jobs knew way back then is there’s a new competition collateral and its intelligence expressed through innovation and creativity.   This means addressing what you bring to the table; how you think outside the box to help your organization thrive and lead in the marketplace.  Even how your creative solutions may change the world.   It’s a new model in competition to achieve success—overcoming your fear of failure to contribute creatively to success.

It is no wonder why Jobs’ Apple or Google and others foster competition among employees and creativity as critical employee characteristics.  Not too long ago, Google even posted a billboard outside of its one-time rival Yahoo with an equation to solve by applicants interested in jumping ship.   While this tactic clearly tested intellect, it was a creative conversation it initiated as a way of engaging candidates in an interesting way.  And on their commute no less!

Do mega-corporations want smart people? Of course they do. But they and smaller organizations need creativity even more so, because they know thinkers and not robots make the biggest differences within their employee portfolio.  They understand problems are better solved, not when all in the room agree, but when there is heterogeneity within their ranks.  The data proves over and over those groups offering the best solutions are found to be those showing diversity in thinking. Creativity within a loose corporate framework may provide a logical direction when it comes to problem solving with the corporate milieu.

There is, in many organizations, a consensus driven non-creative bias.  These organizations are designed for efficiency and productivity, where process takes priority.  To resist the pull of this bias, I often share what has helped me, the advice I received earlier in my career, when I thought success depended on conformity and compliance.

Shortly after taking on a new role, where I was playing by the rules and felt I was meeting or exceeding expectations, I received one of the best pieces of advice ever.   “You really haven’t messed up yet!  If all you do is follow the rules and you don’t try anything new or out of the box, you will never do anything great.”

All the things I had learned had programmed me to think my success was tied not to doing something creative or great, it was linked most directly to following the rules and not messing up.   It was like playing football— keeping my defense back near the goal the whole game.  They could be helping score; helping to create plays, but I was leaving them back to be sure I didn’t fail.

And though taking creative risks, being innovative, and really trusting others to be on board with new ideas so the great things can be accomplished is scary and hasn’t always worked out, I know failing is a part of learning and I want to fail like Steve Jobs.

The article is written by Jonscott Turco for Arab Business Review

To read more thought-leadership stuff by leaders from Arab Region, please visit Arab Business Review

Countries Leading the Second Wave of Corporate Governance in the Middle East

Countries_Second Wave of Corporate Governance

  • Corporate governance (hawkamah in Arabic) in Middle East is no longer a term that requires defining, or has an unclear business case
  • All Middle East countries except Iraq have issued a General Corporate Governance Code, with Egypt, Saudi Arabia and UAE being the front runners.
  • UAE has emerged as one of the least corrupt and most globalised economies in the Middle East, ranking 26th out of 177th in the Transparency International’s 2013 Corruption Perceptions Index.

Middle East is making consistent progress in the implementation of corporate governance initiatives. In part 1 of our Corporate Governance article series, we had talked about the meaning of corporate governance and emergence of a second wave of corporate governance reforms in the Middle East. And now, in this second part, we will look at the progress made on actual implementation of corporate governance practices by Middle East nations.

Corporate governance (or hawkamah in Arabic) in the Middle East is no longer a term that requires defining, or has an unclear business case. Even from the perspective of a family-controlled business, the case for better governance requires much lesser justification today as compared to a decade ago, as discussed in our first article. Moreover, over the past few years, regional regulators have been abolishing the voluntary nature of corporate governance standards — The Emirati, Saudi, Jordanian, Omani and the Qatari securities regulators have moved to a mandatory corporate disclosure requirement regarding compliance with local corporate governance codes.

All Middle East countries except Iraq have issued a General Corporate Governance Code, with Egypt, Saudi Arabia and UAE being the front runners. Saudi Arabia and the United Arab Emirates (members of the GCC (Gulf Cooperation Council)) and Egypt were among the first few Middle East nations who developed and issued Corporate Governance Codes and Guidelines for companies in their territory. The Egyptian Institute of Directors was the first in the region to launch a corporate governance code targeted specifically at state-owned entities in 2005, based on OECD Guidelines on Corporate Governance of State-Owned Enterprises. While Saudi Arabia published its Corporate Governance code in 2006, the UAE published corporate governance guidelines in 2007 for joint-stock companies and in 2011 for small and medium enterprises. The table below gives a quick snapshot of the region’s progress so far:

Countries_Second Wave of Corporate Governance1Table 1:  Corporate Governance Codes and Guidelines in Various Middle East Countries

Source: OECD

The UAE has emerged as one of the least corrupt and most globalised economies in the Middle East, ranking 26th out of 177th in the Transparency International’s 2013 Corruption Perceptions Index. Qatar followed at 28th, with Bahrain, Oman and Saudi Arabia not too far behind. If we look at the actual steps taken to control corrupt practices, we find that while corporate governance centers and institutes of directors have been established in most countries of the region, UAE has more than one corporate governance institute i.e. the Hawkamah Institute, the Abu Dhabi Corporate Governance Center, GCC and BDI.

Despite progress made by the countries, corporate governance still leads the list of factors required for improving investor trust and confidence. The importance of corporate governance was highlighted in a recent survey conducted by the CFA Institute to evaluate opinions on key issues currently facing investment markets in the Middle East and North Africa (MENA). The results showed that investment professionals believe political stability and good corporate governance can have the most positive impact on MENA’s economy. Similarly, the majority of respondents (70%) reported that improved corporate governance practices can improve investor trust and confidence across markets in the MENA region. Interestingly, this issue garnered the highest support among all issues in the whole survey.

Question: What do you think would improve investor trust and confidence across markets in the MENA region? Select all that apply. (N=188)

Countries_Second Wave of Corporate Governance2

 

Chart 1: Corporate Governance leads the list of Factors for Improving Investor Trust and Confidence

Source: CFA Institute, MEIC Pre-Conference Survey

We believe that growing awareness at a country level, and increasing investor demand for transparent corporate governance practices will drive adoption among corporates in the region. In the next and final part of our coverage on corporate governance in the region, we will look at case studies of companies in the Middle East that overcame hurdles and improved their governance practices in ways that boosted their performance and growth.

 

The article was originally published at: Arab Business Review

To read more thought-leadership stuff by leaders from Arab Region, please visit Arab Business Review

 

 

Apple and IBM Partnership

Apple and IBM Partnership

 

  • The new IBM-Apple partnership targets the missing gap between popular Apple mobile divides, BYOD programs and enterprise applications.
  • The goal is to combine this into a better solution while offering more flexibility to the end users, cheaper administration costs and more efficiency in the daily business operations.
  • With cyber security and data privacy on the rise, this article will take a look on how this partnership will address the needed protection to corporate knowledge and what we can expect in the near future.
 
Apple – IBM Partnership and Impact on Security
 
The much publicized new partnership between Apple and IBM is significant as it positions Apple to increase its penetration into the enterprise business area. The main focus of this partnership will address mobility and the increasing BYOD/CYOD that many companies have implemented. Rolling out a new class of more than 100 industry-specific enterprise solutions including native apps, developed exclusively from the ground up for iPhone and iPad is the key point in this partnership. Unique IBM cloud services optimized for iOS, including device management, security, analytics and mobile integration; new AppleCare® service and support and as well as offerings from IBM for device activation, supply and management will open up a large market opportunity for Apple and put IBMs renowned big data analytics at iOS users’ fingertips.
 
Apple is planning to have iOS become a serious player in the enterprise and with this alliance to develop an enterprise-friendly range of systems on tablets and smartphones. This will ease some serious enterprise concerns around how to manage Apple’s iOS systems and addressing the BYOD issues companies are facing, but how will this address the questions around integration, functionality and security?
 
In the US, around 65 per cent of firms allow iOS usage, according to IDC figures and allow workers access enterprise applications via personally owned devices because of the perceived productivity benefits. Although 98% of employers have a security policy in place for mobile access to corporate data, 21% allow employee access with no security at all. Without properly enforced controls, companies will continue to face serious security challenges.
 
Chief Information Security Officers’ opinions across various industries have been split over whether Apple’s consumer-focused iOS operating system, could be secured and integrated appropriately for business applications and sensitive data and therefore minimizing the risk of data loss and breach. True enterprise mobile apps need back-end services integration, security and identity management. In the last IBM CISO Assessment, mobile security was a top concern, with more than half of interviewed security leaders ranking it as a major technology challenge that needs to be addressed over the next two years; 76% say the loss of a mobile device with access to corporate data could result in a significant security event.

IBM MobileFirst Platform for iOS is planned to address some of these issues by providing the services required for an end-to-end enterprise capability. This will not only include analytics, workflow and cloud storage, but also security and integration while making use of IBM’s unique Bluemix Platform as a Service (PaaS) offering.

Bluemix mobile zone for iOS will enable developers that work with Xcode and inside the iOS environment to benefit from Internet cloud storage, workflows, analytics and many other capabilities, giving them easy ways to plug into SDKs and APIs and take advantage of existing offerings on Bluemix. This alone should contribute to the roll out and implementation of new apps which will address the increasing need for data security and privacy. Although it will not allow the same collaboration and flexibility as in an open source environment, it will allow easy integration of new apps into already existing security features IBM is currently offering such as Security Access Manager (a context based authorization) or its mobile web app and web elements vulnerability scanning. New security features will include complex device fingerprinting of mobile devices, protection against financial account take overs, compromised mobile device detection and a global fraudster database.

The new class of “made-for-business apps” which Apple and IBM are working on now, will target industries such as healthcare, banking, telecommunication and insurance and will be made available fall 2015. Considering that Trend Micro estimates that 1 in 10 Android apps are malware with the number of mobile apps nearly quadrupled between 2011 and 2013, the Apple-IBM team can certainly build on the relatively low apple app infection rate plus their developed apps with the enterprise touch for end point protection and security.
 
The corporate world will get the best out of this partnership. Using IPads with IBM software, and central management will make it easier for companies to go mobile as well as manage these devices and provide the adequate protection needed. Deploying and managing Apple devices in volumes should have cost reductions over conventional PCs given the industrial-strength AppleCare that will be in place.
 
Considering the constantly increasing BYOD programs and many employees using their own Apple products – although with limited enterprise connections and tools – consumers might benefit from this partnership as well. BYOD programs with Apple products should get better, be better supported by corporate IT departments and cause less headaches for CIOs on how to secure corporate data on the on the so popular but not really enterprises compatible hardware.
 
 

The article is written by Dasha Deckwerth for Arab Business Review

To read more thought-leadership stuff by leaders from Arab Region, please visit Arab Business Review

Understanding the Second Wave of Corporate Governance in the Middle East

Understanding the Second Wave of Corporate Governance in the Middle East

  • Over the past few years, awareness about- and adoption of- corporate governance has picked up pace worldwide, including the Middle East.
  • The need to attract foreign investors and improve access to capital resulted in the first wave of corporate governance awareness in the region in early 21st century.
  • The second, and the current, wave of corporate governance adoption is being driven by the need for family-owned businesses to diversify their boards to improve strategy and decision making, in wake of increased competition from global organizations entering the Middle East. 

Over the past few years, awareness about- and adoption of- corporate governance has picked up pace worldwide, including the Middle East. In this first article of a two part series, we will talk about the meaning of corporate governance and the reasons driving the implementing of corporate governance reforms in the Middle East. In the second article, we will look at the progress made on actual implementation of corporate governance practices by the Middle East companies.

Before we analyze the factors driving corporate governance in the Middle East, let’s understand what the term really means. The Cadbury Report in 1992 offered the simplest and most concise definition of the term: “Corporate governance is the system by which companies are directed and controlled”. It essentially means balancing the interests of all stakeholders in an organization – shareholders, management, customers, suppliers, financiers, government and the community.

Now, let’s understand the business conditions in the Middle East that have created the need for improved corporate governance in the region.

The need to attract foreign investors and improve access to capital resulted in the first wave of corporate governance awareness in the region in early 21st century. Middle East was faced difficulty in attracting foreign investors due to a perceived lack of transparency and accountability among businesses in the region, which hampered FDI inflow and corporate partnerships from investors and corporates in the US and the UK. In fact, the first wave of corporate governance awareness occurred in the Middle East about a decade ago (early 21st century), primarily fuelled by the drive to garner foreign funds particularly by countries having no petrochemical resources and requiring substantial funds for developing their infrastructure. The fact that businesses which lacked corporate governance practices had to face higher funding costs and enjoyed a limited access to capital markets compelled the local companies to adopt corporate governance reforms.

However, Transparency International’s 2013 Corruption Perceptions Index, that ranks 177 countries and territories on a scale from 0 (highly corrupt) to 100 (very clean) based on how corrupt their public sector seems to be, lists five Arab countries in the bottom ten of the list. Also, according to PwC’s 2014 Global Economic Crime Survey, 21% of Middle East companies have been the victims of some form of economic crime.  Therefore, corporate governance reforms are far from complete and there is still a lot that needs to be done to improve the attractiveness of the region for foreign investors.

Understanding the Second Wave of Corporate Governance in the Middle East 1

Transparency International’s Corruption Perceptions Index 2013 

Source: Transparency International

The second, and the current, wave of corporate governance adoption is being driven by the need for family-owned businesses to diversify their boards to improve strategy and decision making, in wake of increased competition from global organizations entering the Middle East.

The presence of a large number of state-owned and family businesses in the region, especially in the Gulf Cooperation Countries (GCC), is characterized by extreme ownership concentrations. With 90% of Middle East companies being family-owned, they tend to be run by a single person or group of persons (appointed by the family). Even majority of the non-listed companies (also SMEs) are controlled by family business founders or their descendants. However, while the family-owned structure results in greater control, it creates challenges as the business passes from one generation to another, and faces hurdles in the form of increased competition from big multinationals entering the region.

As per S&P, “Government-related entities tend to make decisions that serve the interest of state policies rather than minority shareholders or creditors. Similarly, in the case of family-owned businesses, one person often holds both the chairman and CEO position, which combined with a strong appetite for investments, risks creating diversified companies ‘that are based more on opportunism than a clearly articulated strategy’”

Understanding the Second Wave of Corporate Governance in the Middle East 2

Family-owned Businesses & the Need for Corporate Governance in the Middle East 

Source: EY Family Business Yearbook 2014

As a result, governance challenges have multiplied, and leaders have come under public pressure to professionalize their boards and management. The above factors have created a compelling case for companies in the Middle East to restructure their boards and adopt advanced corporate governance principles. According to research conducted by the Pearl Initiative (GCC-based organization into corporate governance) and PwC in 2013, there is growing appreciation amongst family-owned companies in the region about the importance of a strong well-functioning independent Board. About 55% of the surveyed GCC-based family firms had Board members from outside the family, and 42% of firms had at least one non-family non-executive director on the Board.

Visionary companies across the region have adopted corporate governance practices as a strategic advantage in their search for growth and profitability. We will look at the progress made by the region’s countries as well as companies in the next part of our article. Watch this space!

The article was originally published at: Arab Business Review

 To read more thought-leadership stuff by leaders from Arab Region, please visit Arab Business Review