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

Tips & Learnings from Successful MENA Entrepreneurs

Tips & Learnings from Successful MENA Entrepreneurs

  • Believe in yourself
  • Have a vision
  • Burn the boats
  • Know our business inside out
  • Think big (regional and global) and not small (domestic)
  • View competition as an enabler
  • Focus on creating a structure
  • Have the right mix of talent and attitude in your team
  • Be observant, have an open mind and continue reinventing yourself
  • Surround yourself with positive people, and block your ears to the naysayers

Middle East entrepreneurs, empowered by technology, are ready to take entrepreneurial challenges and improve their lives and society, by launching firms focused on bringing never-heard-of concepts to life. Over hundreds of start-ups make a beginning every year. However, do all of them have the ability and planning to survive or get past the 10 year mark? What is the learning’s from the ones who have been successful in doing so? It will become clear when we discuss the experience shared by some successful MENA entrepreneurs and experts.

Believe in yourself. People will follow you when they believe you and they do believe you when:

  • You believe in yourself.
  • They have to believe in your path.
  • They believe your approach, system, methodology.
  • They believe in your capability to execute the process, system, approach offered.
  • It is tough to re-define reality and hence, having a strong self-belief is the key.

Have a vision of what the market will be like in 5 years or 10 years. An entrepreneur needs to make others believe in their vision and thus, he needs to create that vision. Making a desire into reality is the job of an entrepreneur, not only to push himself to achieve greater heights, but also to make his followers believe in him.

Burn the Boats. The entrepreneur should not leave himself any option other than success. The aim should be to conquer or perish. While executing a project it becomes important to have a plan B; however, for the entrepreneurs, it is not advisable to have a plan B as all it does is hamper plan A. The key is to remain committed and dedicated to one line of action and doing away with all the disturbances. According to JC Butler of Dubizzle, a Dubai-based start-up that offers free classifieds on its web platform, “Rid your heart of ‘I will try my best’ until all that’s left is ‘I have decided’. If one has a deep belief in his vision, then failure is not an option.

Know your business inside out. You may or may not have university degrees but you need to understand your business in and out. It may require spending lot of time and significant investments in learning about your industry and the tricks of the trade. A few ways to understand the industry can be attending trade shows, hearing speakers and being ruthless in the quest of relevant information.

Think big (regional and global) and not small (domestic). The success stories of Middle East entrepreneurs suggest that they had a plan to expand to at least five countries. This has benefited entrepreneurs from the smaller countries such as Jordan and Lebanon who have achieved more success than entrepreneurs from Saudi Arabia. This suggests that not being over-dependent on the domestic market, however large it may be, is a key to success for MENA entrepreneurs.

View competition as an enabler. This is especially true if you plan to launch a venture in a niche market segment, as any competition will help grow the overall market, and will likely bring in more business for you than taking away. However, if the competitor is big firm that poses a real threat, then get flexible and nimble. In such cases, it always helps to have a great company culture, which becomes your brand and cannot be copied.

Focus on creating a structure. Business initiatives revolving around the intangible concepts need a structure to hold them together. The structure helps to add frameworks and tangibility to these ideas. For example, Pharmacy1 stores have same appearance and customer experience with things located in the same place in every store, irrespective of the size of the store. Hence, it is necessary to ensure a structure in all aspects of business, be it action plans, resources or roles. The structure also enables smooth transformations when required.

Have the right mix of talent and attitude in your team.  It is important to pick people who can be groomed as future leaders. According to Tahir Shah, the founder of Pop-up Pakistani street food concept Moti Roti “People make things happen, you cannot learn and do everything. Hence, it becomes imperative to begin with a team with the right talent across right areas”. It is seconded by many other successful entrepreneurs like Amjad Aryan of Pharmacy1 and JC Butler of Dubizzle who believe in hiring people smarter than themselves.

Be observant, have an open mind and continue reinventing yourself. It has been observed that after initial success in the business, the mind tends to get complacent and keeps reveling in the success. Here again, competition play its role in making you realize your position and the potential of the market you operate in. So, continue to reinvent yourself to stay in the game.

Surround yourself with positive people, blocking your ears to the naysayers. That’s the advice from Amjad Aryan, a businessman who wanted to start a pharmacy business when he was a 23-year-old Palestinian immigrant cleaning carpets in Chicago. There, he had a chance to experience the efficiency, expertise and product selection at CVS Pharmacies.

Case Study: Pharmacy-1 & Amjad Aryan’s goal of creating the CVS of the MENA region

While he was studying at the Massachusetts College of Pharmacy in Boston, Amjad Aryan got a chance to do an internship at CVS. He joined there as a manger and became a store manager later. In 1997, he bought his first pharmacy, Roberts Drugstore in Miami, a large self-service store with a supermarket and cash machines. He renamed it as Pharmacy 1 and expanded with four new branches.

He sought to bring this concept to the Middle East, where he found out that the pharmacies were small family-run business characterized by a laid-back attitude towards service and an old-fashioned view of the retail pharmacy. After he had identified the need for quality pharmaceutical healthcare and customer service in the region, he also believed in its success. Using his savings, Amjad opened the first Pharmacy 1 in Amman in 2001. It has now the largest pharmacy chain with over 110 branches in Jordan, Saudi Arabia and Iraq. This has created over 800 jobs and the chain is the largest recruiter of pharmacists in the region.

What has Amjad done?  He had adapted an already successful business model, adopted some of its best practices and customized it based on the regional requirements.

One of the biggest challenges faced was acquiring talent in the region. In order to address this, he started a pharmacy university internship program with a three-month simulated pharmacy at colleges. He also hired people better skilled than him. All his seven VP’s were specialized in their fields. These executives focus on their work, while Amjad looks after the expansion projects.

All the Pahrmacy1 outlets have the same appearance and customer experience. In the first couple of years, Amjad standardized customer care, prevented prescription errors and speed up product replenishment, which brought consistency. Today, Pharmacy1 is known for convenience, professionalism, expertise staff (result of extensive employee training), and excellent customer service.

However, Amjad does not seek to build a successful company only; rather he seeks to build CVS of the MENA region. Amjad’s belief in the power of “I can” and in giving second chances; makes him give time back to society, make difference by empowering youth and change mindsets to promote the potential and ability of youth in Jordan.

Source: Arab Business Review Research

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

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