Bahrain turns extreme!

Bahrain has always been the most moderate of the GCC countries. Not extreme in being liberal, not extreme in being conservative -- they have always held the middle ground. This image has all shattered when they proposed a Six year cap to expatriates in the Gulf. Have they lost their minds?

While I highly doubt that this would be approved by all GCC countries, it is an interesting trend that makes expatriates consider making alternative plans to countries that are more appreciative of the contributions they make. GCC countries do not have a history of banding together in policies, and this one is not going to be an exception.

It is, however, worth noting this:

“In some areas of the Gulf, you can’t tell whether you are in an Arab Muslim country or in an Asian district. We can’t call this diversity and no nation on earth could accept the erosion of its culture on its own land,” he added.

Makes you wonder.

Flexibility is high priced

You always want to be flexible. You always want to do what's best for your client. The problem with this, is that the more flexible you are, the more the client will treat you badly. This is especially true to those in the services industry. You agree to provide certain services, the paperwork is stuck somewhere, the client implores you to go ahead and get started.. you do, because you care for your client.

Wrong!

Never, ever, deliver a service without all the formalities being done. You will get complaints and you will be called names. That's okay. Resist the temptation. It is easy to say: they are X Inc., of course they will honor their agreement, verbal as it may be. Absolutely not. The bigger the organization, the less likely you would get paid for your work if the formalities are not taken care of first.

So, my fellow entrepreneurs, get them to sign the dotted line. Make it very clear that if they don't sign, you don't deliver. Period. It has been my (bitter) experience, that clients simply ignore all the emails and telephone conversations and maintain that they have not entered into a contractual agreement and as such are not willing to honor their financial responsibilities to you.

Once they are a client, be flexible. Until then, stick to your guns.

Managing for Efficiency -- Part II

Frustration would be the best way to describe it. I have just spent the past 2 hours going through sheets upon sheets of non-sensical numbers. Only one person managed to enter all the relevant information in the corresponding column. Everyone else seems to think it's an essay format!

It has been a very frustrating summer period. I did my spring cleaning and fired two people I found to be incompetent. So there goes my 'Spring Cleaning' (done in the summer!). Now I need to help the survivors reach their potential.

Motivation seems to be a problem, since I do a very poor job at it. So, I will have a couple announcements to make:

1. You screw-up in a way that costs us time to fix a problem, you will have to fix it yourself, on your own time. Small mistakes are understandable, but we are not going to waste 3 hours to fix a mistake that shouldn't of have happened. You come in during your weekend and fix it yourself.

2. A cash-prize will be given every month for the 'employee of the month'.

Hopefully this will provide some motivational juice.

As for the efficiency evaluation, I am still working on it. Hopefully by the end of this week, I will have a clear picture of how many hours are being wasted. I can aready see quite a few wasted man hours. I'll be back with the results soon!

eCommerce adoption: What's the hold up?

Security worries are the primary reason for low adoption rates of e-commerce, say the professors of Wollongong University. Of course this study does not cover SME's in the
region. The article simply goes to say that the study should help us figure out what to do and what not to do.

Here's a tip: currently, this is not why e-commerce is not even adopted in the region. The reason is quite simply that it is prohibitively expensive for a business to set it up. Oh yes, I have gone through the motions. It is terrible!

First, you start asking the guys at etisalat how to go about doing it. They tell you that you need to talk to a list of banks. You talk to the banks to find that they don't all offer these services. There are only 3 that do. Only 2 of them can actually help. National Bank of Dubai is naturally the useless one. They only offer their services to government and semi-government organizations. How about that? There is Emirates Bank and National Bank of Abu Dhabi. Emirates Bank are clueless. They had no idea what to do with us and I simply gave up trying to talk to someone who had anything between their ears. NBAD was to the rescue.

AED 50,000/- deposit (refundable) + AED 5,000/- annual fee. This goes to the bank. Then you have to pay the eCommerce folks at etisalat some of your money too. The bank also charges you a commission (a pretty heavy one if I can remember).

I asked one of the bankers in the department why it was so expensive. His answer was: the POS credit card machines they use at retailers are a lot cheaper and their commission is much lower. So they make up for the cost this way. My next question was, how many clients do you have for this service? 14. FOURTEEN! Granted, this was last year, but come on!

So, instead of making any money, they decided that it should cost so much that it would put any young entrepreneur off completely.

Give us the tools and we'll deal with the security issues.

Drop it like it's hot!

I am truly fascinated by the 1% client base we have that is costing us 20% of our income to maintain. Yes, I am talking about the excessively demanding clients. I didn't even finish writing the sentence and I already can see an email coming in from one of them. A day doesn't go by without something to be done for them. Sometimes they are right, often they are not. Mostly they are not. And it takes a lot of time to figure out what the problem is, to later realize that they are just wasting our time chasing after things we shouldn't be chasing after.

Then I read about Sprint Nextel and how they were axing their clients, because of their complaints.

"While we have worked to resolve your issues and questions to the best of our ability, the number of inquiries you have made to us during this time had led us to determine that we are unable to meet your current wireless needs," the letters said

.

How about that! My favorite is this:

Singleton said the review also found that the subscribers often were calling about the same problems over and over after Sprint officials felt they had resolved the issue. She said some callers were repeatedly asking for information from other customers' accounts, which customer service workers aren't allowed to divulge.

I feel the same way about our 1%. There is a difference in philosophy though. I think of the time we spend dealing with the difficult clients as part of improving the service. Consider it practice for the next customer. It is an investment in fine-tuning how you do things to avoid some of the issues that arise. Perhaps clarify some things before you start with a customer. Manage expectations better. Because, at the end of the day, the complaining customer is one whose expectations were not met. Dropping them is like passing on an opportunity to learn.

I would never pass on such an opportunity.

Emirates NBD -- the merger

When news of the merger between NBD and Emirates Bank first surfaced, I was baffled by it. Having never dealt with Emirates Bank, I only know that they are aggressive with their loans/facilities/etc. I also have dealt with NBD and know how conservative they are. It seems like a merger between the most aggressive and the most conservative. What could possibly be the outcome?

My company account has been with NBD (still is). They have provided us with absolutely no facilities. We have requested them at some point and were denied. The impression I was left with was simple: If you are not a UAE national, we are not going to give you any money. We further inquired to find that you have to have been established and profitable for a minimum of three years, etc. Quite simply not the bank for a start-up.

An NBD staffer told me point blank that national banks generally will not give you money and I am better off talking to one of the international banks (Standard Chartered, Citibank, etc.) I left with that plan in my mind.

Luckily I am not in need for loans or facilities today. I was only contemplating buying out one of the competitors and thought that a bank could assist. That plan was shelved. I have recently opened an account with an international bank. However, I am keeping the NBD account to see what would come out with Emirates NBD's merger. Maybe they will be more of a bank than a chest of money under the bed.

Managing for efficiency

I have always liked to give people freedom to move, freedom to create... but then I realized that this would only work when the work culture has an appreciation for this freedom. In this region, it appears that this is not the case. Freedom means you can sit around as the walls around you come down and do nothing.

Slight change. I have just instituted the most rigorous procedure for accountability. No, I am not trying to catch people screwing up. We have an operation that is very time critical. Everybody's output matters. Every second makes a difference (literally). The problem has been that something would go wrong and nobody would care to do anything about it. They do the minimum effort. Not good enough for me. The minimum effort may be minimum at my competitor's, but to me that is below acceptable.

So, in comes the task sheet. Everyone is instructed to write down every single task they start. This is done of course with the start time and end time, etc. Naturally this is not the kind of thing you give to every member of your staff. However, if you have a very time critical type of operation, you might want to consider giving this a go (to the department involved in this process only of course). I would never advocate giving such a task to a receptionist for instance.. there are better ways of dealing with that.

This has resulted in the following:

• Grumbling. Everyone's unhappy with having to 'waste' precious time in writing down pointless figures (all of a sudden people are aware of time!)
• Behind my back cussing (everyone thinks I've either gone mad or have just begun to show just how mad I am) -- they certainly think they can do my job better by now

Of course, I am expecting this. What I am expecting to follow is this:

• Everyone will be intimately aware of how much time they spend performing any given task
• Everyone will be able to determine if they are doing a good job, better job, worse job, etc. without having to have someone else tell them
• I will be able to identify areas where productivity can be improved

I actually expect to have an improvement of 70% of productivity from my own calculations. Currently, our productivity is sitting at about 350% compared to our competition. This is great for us of course, but I think we can do sooooo much better.

These numbers may be fine today, but as we grow, scalability must come to mind. In any operation such as ours (or any service-based firm), being able to scale your services is extremely important in a growing market. Remember, most of your expense goes in compensation packages to your staff. So that's probably a good place to make as efficient as possible.

In a month, I will be reporting back if what I have done brought back the results I am expecting or not.

Retaining employees (or firing them)

Ever since I started my company, I have had people criticize my turnover rate. It was quite high. Mostly it is because I keep firing people. Today, this is no longer the case, because I am retaining the good staff and cutting lose the dead weights.

The problem in this region it seems, that people are very reluctant to fire people. Incompetent or not, they put up with it. I remember a conversation I've had with a colleague who had a rather questionable accountant. He had no intentions of firing him. I asked him why he would keep someone so clearly unable to perform the task he was hired to do. His rationale was: at least we know his shortcomings and his strengths.

Right. I don't agree with this philosophy. Your company is your staff. They are everything. They define the company. If you expect your customers to think that way, think again.

I have very little tolerance for incompetence. I make it very clear from day one. I did have exceptions. I later regretted not taking immediate actions. I have another colleague who's advice has stuck with me from the very beginning: if you are thinking about firing someone, do it immediately.

The problem here is that finding good talent is exceptionally difficult. This is especially the case in Dubai. So, people tend to compromise. My advice to any aspiring new entrepreneurs is: do not compromise on the talent you hire.

Customer Service (or lack thereof)

I have been seeing an orthodontist for my wife. One of the the wires broke while brushing her teeth and began to bruise her lip. We called the good doctor up to let him know that we needed to see him soon. He didn't pick up. This was thursday evening. We then sent him an SMS. No response.

I called him again on Friday and he picked up. I told him that we would like to set up and appointment the next day if possible. He said sure, he will call us tomorrow and confirm a time for the same day. Saturday came along and he never called.

The orthodontist is good at what he does. He has a good understanding of his field and knows what he's doing. What he lacks severely is organizational and customer service skills. When he failed to call to confirm an appointment, I decided to find another orthodontist who can. We are now dropping him altogether for someone else to carry on the rest of the treatment.

This was not the first incident that he displayed a complete lack of understanding for customer service. I gave him a long lecture on why communication is important and that even if he were unable to make an appointment, at the very least letting us know in advance would be fine. It seems that my pleas fell on deaf ears. His rationale is, this is Dubai and besides, his profession is a 'relaxed' one.

Right. It's not acceptable to drop the ball on your customers, regardless of what your 'profession' of choice is. I seriously don't understand why such a simple problem is so hard for people to appreciate. It makes the difference between keeping or losing your customer. It also has a rather marginal (if any) cost. So, what gives? Can anyone shed light to this?

The cost of doing business on the rise

Nothing new there. However, what's new is that companies are starting to consider moving out of Jebel Ali Free Zone, DMC, DIC, etc. JAFZA routinely fines companies for the silliest of reasons and continuously increases fees to services. Generally this follows a trend in Dubai, but for companies who opened up in JAFZA, they are turning into a list of reason for re-allocation.

Interestingly, Dubai Media City have recently started sending one of their people around to companies to develop a better understanding of what they do and how DMC can help become.. well, what it was originally designed to be. They are at the very least aware that DMC is a landlord to the companies operating there. They are not really 'Business Partners' as they claim. There is no real community between companies. No communication. The DMC directory is not updated and it takes over 5 calls to get them to add the right numbers. Yes, this has actually been the case.

So, if anything, when comparing JAFZA and DMC, I would say DMC is showing a sincere interest in trying to do things right. JAFZA on the other hand couldn't care less. Companies are starting to look at Dubai proper. This is especially true as rules related to 100% foreign ownership are starting to relax. JAFZA is losing its competitive advantage and their management are on vacation.

Acknowledging the Client

Today, I gave our client services team an earful. I don't like doing it, although I know some would swear that it is one of my most enjoyable things to do. This seems to be a problem a lot of people can't quite grasp.

The client calls/emails with a complaint/request. You see it. You know you can't do anything about it immediately. You wait until you are able to do something about it. The wait is about 2 days. Two days later, you do it.

The client may even expect this task to take a week. "I've done a great job!", you think to yourself. Wrong! You have done a terrible terrible job!

The first thing to do is to acknowledge the client's request. You may not have an answer or anything worth saying. It doesn't matter! You MUST, ALWAYS and CONSISTENTLY acknowledge that you are aware of the issue. If you don't, the client thinks you are ignoring him/her for the two days you spent working very hard getting the job done.

Imagine having a conversation with a friend. "So, what do you think the rent around the Greens costs these days?", you say. Your friend looks into the distance. Says nothing. Nothing. He remains silent the entire time you are together. He goes home and calls you back two days later giving you a well-researched answer. How would you feel about that? I know I would think my friend is crazy.

A simple, "Thank you for your request. I will look into it and get back to you tomorrow afternoon." will suffice.

So, please please, fellow entrepreneurs, do make sure the people who deal with your clients always acknowledge the client. It could potentially cost you the business.

Chasing sales people

I don't quite understand why people whose only job is to generate new business have to be chased by their prospects to close a deal. I have dealt with several companies now to rarely find people who are able to hold a middle ground. Follow-up without being pushy, but don't drop the ball altogether!

A company we want(ed) to do business with. We called them up. Met with them. Discussed what we wanted in detail. Exchanged emails. Met again. Then, the person in charge went on 'vacation'. That person did not bother to hand-over pending issues, it was just left. I called. Nothing. Called again, found someone else. I asked them to take over.

Then it was just a continuous hassle of trying to get them to send me a lousy proposal. I reply within 3 minutes of receipt. He can come up with 3 excuses for not being able to do something he said he would do.

Then you have the super-eager salesman. He's here today. He'll be here tomorrow. He's got 2 proposals in hand, in case you don't want one or the other. Just a tad too pushy though. You don't feel comfortable dealing with him anymore. He's always in your reception area waiting for you (or someone).

Everything in moderation. Even sales!

Health insurance and benefits

It's becoming harder and harder to retain good employees in Dubai. I would imagine it to be the case everywhere in the Gulf region. Everyone is itching for the next-best-thing. Very few people are actually satisfied with their work.

Do you give staff a pay rise? How much will that cost? How much time will that buy you? The problem with pay rises is that no matter how much you pay, you cannot reasonably keep pace with the inflation levels in Dubai. The situation is getting worse for everyone by the day. Rent arguably eats away half of everyone's income (middle income brackets).

So, aside from the 5-day week, I started looking into health insurance. It is arguably the cheapest thing you can do, with the highest perceived value. Health insurance is a big deal for a lot of people. Especially those with kids. It's worth the investment.

I've seen a few brokers and insurance companies. Problem with most of them is, they don't want to talk to you unless you are bringing in 20-30+ staff members. If you are a small company like ours, this is not going to be an option. You will need to dig deeper. Brokers are usually best equipped to handle this. Avoid dealing with insurance companies directly.

The cost will be anywhere between 1000-2500 per head per annum. It all depends on what kind of coverage you want to give your staff. We are talking about a 100 dhs/month per staff worth of a pay rise. Probably affordable. You also couldn't get away with giving people a 100 dhs pay rise as they are bound to be offended. But, give them health insurance!

It's also worth noting that Abu Dhabi has now made it mandatory for companies to provide their employees with health insurance. Everything indicates that Dubai is about to follow suit. Don't wait for the government to force you to do it. You will get big points with the staff!

Notarization of a loan

So we went to get a loan notarized. We discovered a few things along the way.

Atttempt #1: Only personal loans are to be notarized. You cannot mention what this money is going to be used for. So back to the drawing boards to put together another document.

Attempt #2: Interest is not allowed. They would only notarize a "good loan" (القرض الحسن), which I found rather absurd. However, my guess is that this is a federal thing and not specific to Dubai. Once again, we are back to re-draft the document.

Attempt #3: Third time is a charm! They made us pay 0.0025% of the total value of the loan. Ouch! At least we didn't have to back and re-draft the document.

Documents they require:

• Original passports of all involved
• 1xcopy of every passport
• The actual document you want to notarize

The staff is generally friendly (in Al Barsha, where the Tasjeel is). However, they appear to be all new and still training. Very few people knew what they were supposed to do. I'm guessing that's why we were sent back twice before they were able to process the paperwork for us. I hope this at least helps someone else avoid it.

Also, I have simply assumed there would be a flat fee for the notary public, not a PERCENTAGE! So not only do they deprive the lender from getting interest on the loan, they take a cut! Incredible.

Banks and financing

Time for some practical insights. Banks in the UAE are a curious bunch. They will easily give away their money to provide you with a credit card, autoloan, personal loan, etc. However, almost none of them will give you a loan to finance a business.

In fact, even if you already have a running business, they are rather reluctant to give you any kind of facilities. Mostly, if you are not a UAE citizen, you are on your own. This can be good, but it can also be rather painful.

So pick your bank carefully. Avoid local/national banks at all costs (unless you are a UAE citizen of course, then they would be your best friends). International banks are more inclined to consider a sound investment in your business. Or even provide you with basic facilities, such as overdraft.

Another thing to consider is your staff. Are you transferring to their accounts? Would you like them to be with a bank that will provide them with facilities? Can you get your company 'listed' so the bank would provide them with those facilities?

A listing of banks and experiences with them would be nice. Any takers?

No one knows you exist

When we first started, there were 2 of us. Then 3. 4... and so on. But when I look back to the beginning, I remember distinctly the feeling. I had no idea what I was doing. I knew what I wanted. I just had no idea how to go about doing it.

There is always a difference between theory and practice. In theory, I would have had enough money to advertise and market for my service. In practice though, this money was not available. I had to make do with what I had.

The most important thing to understand is, marketing does not have to be prohibitively expensive. Advertising does not have to be a TV advertisement. There were areas where I invested money that I wouldn't now, if given the chance to revisit. But, overall, I am happy with most of the decisions I have made.

1. Public Relations:

PR is a very cost-effective marketing tool. The only difference between advertising and PR is that you, not your agency, must also be creative. You have to be able to create stories that would interest readers. You have to participate in building the image of your firm. Whatever you do, never ignore PR.

2. Sales (cold calls):

Sales is a numbers game. Input X, output Y. Your sales people have to be motivated. No, don't expect them to come to you as motivated individuals. Don't think that when they sell your service they will become more motivated. No. YOU have to do the motivation. Part of the motivation is to identify clear goals and steps in achieving those goals. A mistake I have made was to give sales people free reign and give them targets only.

Part of sales is also attitude and dress. Remember, if you are not confident that your sales person is going to be able to represent you, then you have the wrong sales person. Put a dress code in place. Make sure the attitudes and values of the firm are clearly communicated. Do you sell at whatever cost? Do you sell only if the client needs your service? Do you create the need even when you know it's unnecessary but nice? What is your value. I am not judging anyone here, but whatever value you have (wrong or right), needs to be clearly articulated to the people representing your firm.

Working hours (5.5 vs 5 day weeks)

I have always fundamentally rejected the concept of waking up in the morning to go to work six days a week. That just sounded wrong to me. But, like many people in this region, I did what I saw everyone do. I started the business with 6 day weeks. Of course everyone had a day 'half-off'. However, that day is ruined anyway. It's gone.

Two things made the switch to five days easy for me:

1. Government switch to Fri-Sat weekends, synchronizing with the banking sector and the most globally friendly weekend for business. Most of our clients ended up with Fri-Sat off. This means that half of Thursday was wasted (we are off while our clients are at work). It also meant that when we are working on a Saturday, none of our clients are. So, we are doing a lot less than what we are supposed to do.

2. Salik - yes, Salik was rather persuasive in cutting the costs of transportation. So, why would you go out to your office six times a week instead of five? Why pay for the toll when you really shouldn't?


There are great benefits too. The staff are rested and can be more productive. In fact, if you are so concerned about the 4-5 hours they usually put in on Thursdays, you can rest assured that most of them will work extra just to get the job done. They have their time, they are now more inclined to give you their all.

For the skeptics, you can even add an additional hour to the day (9 hours/day). Give them the option:
- Work the same hours (Sat-Thur) with thursday half-off
- Work Sun-Thur, but instead of 8 hour days, you get 9.

I guarantee you, the staff will pick the second option. You also get your 5 extra 'idle' hours that you so desperately need. The point is, you have to give them 2 full nights of rest.

I have seen it lift morale and we have had far less incidents in the past 2 weeks (since its implementation) than we normally have. It's been great for me.

Moving on from marketing to management

I don't come with the most flattering background, in terms of business education. I have always been a bit of a hustler in school, selling pirated games to the kids. This was back in the day when games were saved on 5.25" floppy disks.

Aside from those fond memories, I have had a fairly technical education. Having said that, a lot of what I learned about marketing was a result of my own reading (in which I did put a real effort) as well as people I have been lucky to cross paths with.

However, I have lately started realizing that my management skills have been rather lacking. The staff feared me more than respected me. We have grown to a little less than 20 people, but I have yet to get a firm grasp on managing the most valuable (if not the only) resource a services-based company has. Its people.

I reluctantly parted with my AED 49/- to purchase a copy of the tiny 'The One Minute Manager' book. I don't know if I regret this purchase or not. However, it did give me some insights into what I have been doing as a manager and what I could and should be doing.

I held a meeting earlier today and explained to the staff what I intended to do and how I planned to go about it. I am not getting much reaction from the staff. So, let's hope this 'one minute manager' stuff works. I really want it to.

First, but not so first post

I posted this earlier on another blog that I was unable to get to (seems I forgot the user I registered the blog under). This is my second attempt at keeping this blog while maintaining anonymity.

Friday, June 02, 2006

I came to Dubai to take advantage of the opportunities afforded to everyone (as advertised). This blog will hopefully chronicle my experiences in attempting to establish a service-based business with a customer-comes-first attitude.

It will also shed some light on my thoughts on the business environment around me. I will try to share my opinions on the challenges involved in the process, in the hope that it will help others who are considering setting up a business in Dubai.