WORLD ECONOMY - Stanton Chase
WORLD ECONOMY - Stanton Chase
WORLD ECONOMY - Stanton Chase
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OCTOBER 2010<br />
Executive News<br />
for Corporate Leaders<br />
Regional Newsletter<br />
for Middle East<br />
5<br />
Contents<br />
Editorial<br />
World Economy still improving<br />
but at a slower pace<br />
p1<br />
Regional News<br />
p2-3<br />
Connect, Align, Score<br />
Step, Strech, Leap<br />
p4<br />
Family business also score<br />
in times of crisis<br />
p5<br />
CFO role Middle East<br />
p6<br />
To build or not to build<br />
p7<br />
The information revolution<br />
in the Middle East and<br />
North Africa<br />
p8<br />
Mea Culpa!<br />
p9<br />
Contact us:<br />
<strong>Stanton</strong> <strong>Chase</strong> international<br />
Office 206, Bldg. 17<br />
Knowledge Village<br />
P.O. Box: 500195<br />
Dubai, United Arab Emirates<br />
T: +9714 36 93 529<br />
F: +9714 36 04 480<br />
E: dubai@stantonchase.com<br />
Visit our site<br />
www.stantonchase.com<br />
Newswire<br />
Executive<br />
Dear Partners,<br />
Entering the last quarter of 2010, the markets in the GCC and the broader Middle East region seem quite active<br />
and vivid, with many initiatives being implemented and many projects under way. Taking a closer look in the<br />
UAE, Abu Dhabi is finally moving on at higher speed with the plans that lead to the achievement of the 2030<br />
vision,while Dubai,having restructured part of its dept,seems ready to make new,bolder moves on its pending<br />
projects. Saudi Arabia continues to be a strong market with significant potential, while Qatar is also leaving a strong<br />
footprint with its ongoing new projects and international investments.<br />
Of course, both the international as well as the regional markets are still unstable, thus companies and executives are<br />
cautious about the next steps. The last crisis caused indeed a shift in the priorities, in the strategic planning<br />
and the processes used, with an enhanced focus on careful cost and liquidity management, but also,<br />
with new attention on the importance of qualified human talent. As a result, major executive consultancy<br />
firms like <strong>Stanton</strong> <strong>Chase</strong> International, with their enhanced services and deeper understanding<br />
of the local and regional challenges, become more attractive and valuable partners, in order<br />
to match the needs of the companies with the aspirations of the professionals.<br />
We welcome your comments and feedback, while we would be glad to host your ideas in our next<br />
newsletters.<br />
Warm regards<br />
Panos Manolopoulos<br />
Vice Chairman Regions - <strong>Stanton</strong> <strong>Chase</strong> International<br />
The world economy continued its rebound from the<br />
worst recession in decades, according to the quarterly<br />
ICC/Ifo World Economic Survey released in August 2010.<br />
However, some regions, notably North America and Asia,<br />
saw slowing growth and there was a marked difference in<br />
growth prospects among regions.<br />
Worldwide, the economic climate indicator fell slightly,<br />
from 104.1 in the second quarter of 2010 to 103.2 in the<br />
third quarter.<br />
This was largely the result of a decline in the indicator numbers<br />
in two important regions, North America and Asia. But<br />
the overall figures still show a substantial gain from the<br />
third quarter of 2009, when the world economy indicator<br />
stood at 79.6. Western Europe, which appeared to be<br />
slowing in the previous survey, showed surprising<br />
strength in the latest one. Germany, spurred by surging<br />
exports, was the engine of Euro zone growth. The country,<br />
whose economy grew by 2.2%, experienced its<br />
strongest quarter since German unification in 1990.<br />
However, the future outlook for Europe is tempered by<br />
a deepening recession in Greece and continuing<br />
restructuring programmes in Spain, Portugal and Ireland.<br />
In North America, by contrast, the last quarter saw growth<br />
losing momentum. Stubbornly high unemployment in the<br />
US, coupled with weak private consumption and capital<br />
expenditures, led to an outlook rated less than satisfactory<br />
by the experts polled. The US Federal Reserve, having al-<br />
<strong>WORLD</strong> <strong>ECONOMY</strong><br />
still improving but at a slower pace<br />
ready lowered interest rates to near zero, recently indicated<br />
it may now reinvest the proceeds from maturing securities<br />
in long-term government bonds, a reversal of its previous<br />
policy. The Canadian economy, while currently rated<br />
satisfactory, is expected to slow later in the year.<br />
The news from Asia is dominated by indications of a slowing<br />
in the Chinese economy. While China’s growth rate<br />
remains impressive, a recent slackening in retail sales and<br />
a weakening of imports, along with the government’s<br />
withdrawal of an expansionary monetary policy, point to a<br />
cooling economy in the months to come. Elsewhere in<br />
Asia, a favourable economic climate prevails in Thailand,<br />
Malaysia and Sri Lanka, with capital expenditures, private<br />
consumption and exports in these countries projected to<br />
pick up further.<br />
The African economy shows sharp contrasts between a<br />
positive outlook for South Africa, Kenya and other countries<br />
and a weakening scenario for Tanzania, Gabon and<br />
Madagascar. South Africa received a boost from hosting<br />
the World Cup, and its private consumption and exports<br />
are expected to show further improvement, though capital<br />
expenditures, which were largely linked to World Cup<br />
construction, are projected to level out.<br />
(*) Results of the Survey were compiled from questions submitted to 1,103<br />
experts in 116 countries. The questionnaire focused on assessments of<br />
a country’s general economic situation and expectations regarding<br />
important economic indicators.<br />
p1
OCTOBER 2010<br />
p2<br />
>> Upcoming EVENTS<br />
><strong>Stanton</strong> <strong>Chase</strong> International will hold<br />
its 41st Global Partners’ Meeting in<br />
Düsseldorf / Essen-Germany on 11-14<br />
November, 2010. Under the motto<br />
“Connected to the World for 20 successful<br />
years”, about 100 partners and senior consultants<br />
from all over the world will gather<br />
in the metropolis Ruhr in order to explore<br />
the paths for long-term growth.<br />
Events / Initiatives of the past quarter<br />
S T A N T O N C H A S E I N T E R N A T I O N A L<br />
R E G I O N A L N E W S<br />
1 2<br />
Executive<br />
Newswire<br />
><strong>Stanton</strong> <strong>Chase</strong> International - Middle<br />
EastispartnerintheLuxuryForumConference<br />
to be held in Dubai, November<br />
1-3, 2010. The Forum’s mission is to create<br />
a market-focused platform for all players of<br />
the regional luxury space to meet, discuss<br />
strategiesandshareviewsandopinions. Panos<br />
Manolopoulos, Vice Chairman Regions of<br />
<strong>Stanton</strong> <strong>Chase</strong> International and Managing<br />
Partner, Middle East, will act as speaker,<br />
focusing on the alignment of the human<br />
capital with the brand image.<br />
| 1. <strong>Stanton</strong> <strong>Chase</strong> International- Middle East participated as partner in the Luxury Forum Business Breakfast, held in Dubai on the 28th of<br />
September, 2010. | 2. <strong>Stanton</strong> <strong>Chase</strong> International- Middle East participated in the 2010 Commencement Ceremony of Hult International<br />
Business School, offering the Action Learning Project Award to one of the graduating students. | 3. <strong>Stanton</strong> <strong>Chase</strong> International- Middle East<br />
offered a workshop on Personal Branding to the Emiratization Committee in Dubai. The Emiratization Committee is an initiative<br />
developed by vigorous and ambitious Emiratis that focuses on the development of opportunities for UAE Nationals, in order for them to<br />
become even more competitive within the international business arena.<br />
News from the Dubai office<br />
><strong>Stanton</strong> <strong>Chase</strong> International - Middle<br />
EastincollaborationwithDukeUniversity,<br />
is organizing on the 19th of October<br />
2010 an exclusive Business Breakfast,<br />
hosting as key note speaker Dr. Gregory<br />
Jones, Vice Provost for Duke University.<br />
The topic of the discussion will be the economic<br />
development in the 21st century and<br />
the capacities/skills<br />
that people are going<br />
to need to be both locally<br />
competent and<br />
globally engaged.<br />
Aziza Dada<br />
has joined <strong>Stanton</strong><br />
<strong>Chase</strong> as Research<br />
Associate in<br />
August 2010.<br />
Meliza Colaco<br />
has moved to an<br />
enhanced role, including<br />
the administration<br />
of the database and<br />
the development<br />
of the CRM system.<br />
3<br />
Charisse<br />
Monserat<br />
is the new<br />
administrator<br />
assistant.
OCTOBER 2010<br />
p3<br />
S T A N T O N C H A S E I N T E R N A T I O N A L<br />
O t h e r N e w s<br />
Collaborationwith“Connections”<br />
Executive<br />
Newswire<br />
<strong>Stanton</strong> <strong>Chase</strong> International - Middle East has initiated a collaboration with Connections for Businessmen Services, in order to enhance<br />
its presence in the Abu Dhabi market, as well as in the whole GCC region. Based on the expertise and experience of its two partners, Mr<br />
Mubarak Al Amry (Founder & Managing Director) and Mr Omar Al Busaidy (Co-Founder and CEO), the company’s mission is to create successful<br />
partnerships between buyers and suppliers in the UAE and broader GCC market, maintaining a strong reputation that supports long<br />
term collaborations and loyalty building among the collaborating parties<br />
Omar Mohammed Al Busaidy is the one of the founders and<br />
Managing Partner of “Connections for Businessmen Services”.<br />
A young Emirati with over 6 years of experience in corporate<br />
UAE, Omar has expanded his skills’ set and has grown in the<br />
sectors of banking, tourism, trade and investment. From<br />
being an advisor to business development, to diplomat relations<br />
to marketing strategies, Omar has worked in both the<br />
public and private sector in prestigious organizations such as<br />
the National Bank of Dubai, the Dubai Shopping Festival to<br />
the British Embassy. Having a strong entrepreneurial and<br />
business acumen, Omar has been involved with several<br />
start-up businesses in the UAE and neighboring country Oman. Omar’s passion<br />
to delivering back to the community and focus on the service industry has<br />
been instrumental in his growth and learning capacities. Omar graduated in<br />
2009 with a B.Sc. in Marketing from the American University in Dubai.<br />
Abu Dhabi<br />
ataGlance<br />
General Facts<br />
Language Arabic (official)<br />
English (widely used)<br />
Religion Islam<br />
Geographic coordinates 24 28 N, 54 22 E<br />
Area 67,340 sq km<br />
Climate Tropical, semi-dry climate,<br />
with hot summers, warm winters<br />
and scanty rainfall<br />
Currency UAE Dirham<br />
Rulers HH Sheikh Khalifa bin Zayed Al Nahyan<br />
is the President of the UAE and the Ruler<br />
of Abu Dhabi.<br />
HH General Sheikh Mohamed bin Zayed<br />
Al Nahyan is Crown Prince of Abu Dhabi<br />
and Deputy Supreme Commander<br />
of the Armed Forces of the UAE.<br />
Demographic Indicators<br />
Population (mid 2008 estimations) 1,572,906<br />
Population Growth Rate (2001-2005) 4.38%<br />
Life expectancy at birth (2008) Male: 74.4<br />
Female: 74.8<br />
Crude Birth Rate /1000 population (2008) 18.1<br />
Crude Death Rate / 1000 population (2008) 1.9<br />
Mubarak Al Amry is the co-Founder of Connections ME. He<br />
also acts as the Business Development Manager of the Al<br />
Amry Group of Companies, and he is involved in several entrepreneurial<br />
initiatives as well. Mubarak has extensive business<br />
experience in the UAE, both as an executive as well as<br />
an entrepreneur. He started his career as real estate sales<br />
and investment consultant for Better Homes, which led to<br />
starting up his own real estate agency. Additionally, he has<br />
acted as the Managing Director of Parking Specialist FZE, a<br />
parking company focusing on servicing the UAE officials. Educated<br />
in Canada during his high school years, Mubarak is a<br />
graduate of the American University in Dubai, and he has<br />
also obtained a post-graduate Real Estate Diploma.<br />
Economic Indicators<br />
Ports Mina’ Zayed<br />
Gross domestic product (2008) 519,921 Million<br />
Contribution of the oil sector (2008) 63%<br />
Contribution of the non-oil sector (2008) 37%<br />
Gross domestic product by economic activities in 2008<br />
(Million Dirham)<br />
Mining and quarrying 330888<br />
Manufacturing 49761<br />
Less: imputed Bank services 47651<br />
Construction 26793<br />
Real estate and business services 18801<br />
Wholesale and retail trade and repairing services 17548<br />
Transportation storage and communication 13194<br />
Electricity, gas and water 7209<br />
Agriculture, livestock and fishing 4350<br />
Restaurants and hotels 3726<br />
Agriculture and Natural Resources Indicators<br />
Cultivated area 560,294 Donum (2008)<br />
37% fruit trees | 33% field corps| 2% vegetables<br />
Natural resources (2008)<br />
Proven oil reserves 92 billion barrels<br />
Proven gas reserves 212 trillion cubic feet<br />
Water and Electricity<br />
Electrical Energy Generated 34,452,127 MWH<br />
Electrical Energy Distributed 26,786,967 MWH<br />
Desalinated Water Produced 172,565.33 M. Gallons<br />
Desalinated Water Consumed 172,099 M. Gallons<br />
Agriculture<br />
Dates, vegetables, poultry, dairy products, fish<br />
Live stock (2008)<br />
Sheep and goats: 1,998,280 | Cattle: 42,596 | Camels: 336,901
OCTOBER 2010<br />
p4<br />
Connect, Align, Score,<br />
Step, Strech...Leap!<br />
So you have been promoted to a new leadership position,<br />
or you just accepted a leadership role at a totally new organization.<br />
Your most worrying thought is about how you are going to<br />
go about succeeding in this new role. Of course that comes with<br />
a number of other questions like, how long do I have to prove myself<br />
in the role, what does success look like and how do you start<br />
pouring value back into the organization through this new role. In<br />
essence, one of the most important issues that you need to consider<br />
and aim for, as an objective in your new role is to get to what<br />
I call the “Personal Value Point” or PVP, the moment in time<br />
when you start pouring value back into the organization, after that<br />
period of time that the organization invests in you to get you up<br />
to speed.<br />
It is very difficult to get leaders to join an organization and “hit the ground running”<br />
so to speak despite all the technical knowledge and previous experience<br />
that this new leader has had in the field and in other, probably directly competitive,<br />
organizations. This is mainly due to the difference in organization cultures<br />
between the previous and new employer, the new people that you need<br />
to get to know and align with in order to achieve your successes such as your<br />
boss(es), your peers, and your team. You also need to take into consideration<br />
the differences in the organization’s strategic goals and the tools and resources<br />
available for use in order to steer the organization from one point to another<br />
and in the right direction.<br />
I like to simplify things, though at depth these three simple steps have a number<br />
of underlying sub-issues that you need to navigate through in order to<br />
achieve this 3-leveled trilogy for success, I believe having a big picture in mind<br />
and room for creative execution is key to having a paramount strategy that can<br />
work for you in different environments. The three steps that you need to keep<br />
in mind are 1) connect, 2) align, and 3) score.<br />
Connect with Informationand People. Your first order of the day, on<br />
day one, or in some specific cases, before you even join the organization, is to<br />
connect with information and people. You need to gather as<br />
much intelligence as possible about the organization, the<br />
product, the market, the numbers, the competition, the people<br />
that are running the organization, the talent that is competing<br />
with your people in other organizations. Additionally,<br />
you need to identify the people within the organization that<br />
are in your 360 Feedback scope, as per your role’s description.<br />
While your official evaluation is actually 90 days down the<br />
S T A N T O N C H A S E I N T E R N A T I O N A L<br />
The views, comments and opinion highlighted in this article are solely the personal views of Mr Wassim Karkabi.<br />
Executive<br />
Newswire<br />
By Wassim Karkabi<br />
Managing Partner of <strong>Stanton</strong> <strong>Chase</strong> Qatar and UAE & EMEA Regional Practice<br />
Leader, Industrial at <strong>Stanton</strong> <strong>Chase</strong> International<br />
road, your real evaluation will start on day one, and you can even kick-start it a<br />
few days before day one, if you have the opportunity to do so, and create a<br />
great pre-impression.<br />
Some information you will need to connect with before you connect with the<br />
people, and other types of information can wait until afterwards. Connecting<br />
with people can also be in itself a source of information if you know how to ask<br />
the right questions that will help you understand some raw data, or incidents,<br />
or past failures or even successes of the organization at different points in time.<br />
Learning about the organization’s past performances and the reasons for its<br />
successes and failure will later help you learn what subjects and strategies your<br />
new employer is touchy on.<br />
Getting aligned with the people and the organization.<br />
A simple connection is not enough, and getting<br />
aligned with the organization, and aligning the key people<br />
with your vision of how you say the way forward for the company<br />
or even just the division or department, is a critical step that requires a lot<br />
of careful discussions with key individuals, who will either support your cause<br />
and follow your lead, or will be the virtual sticks in the wheels of your strategic<br />
vehicle. Depending on the role that you will be taking on, as a leader, you will<br />
have different kinds of people to align yourself with, but inevitably this will be<br />
a number of people who will vary between peers, team members, and bosses.<br />
Expressing your vision, and aligning it with the strategic direction of the organization<br />
will be key. Getting people to buy into your way forward is detrimental<br />
to your new role’s success.<br />
People are not the only element that you need to get aligned with. Every organization<br />
has a set of unwritten rules, codes of conduct, and procedures of<br />
getting things done effectively without breaking it. The new leader needs to<br />
align with those unwritten rules. Because the organization will take so much<br />
time to bend to the will of the individual, the individual needs to learn “the way”<br />
of the organization in order to navigate his “strategic vehicle” into the right direction.<br />
One of the most important elements that the new leader needs to<br />
align with, is the organization’s elasticity to change. Elasticity to change is the<br />
breaking point to which you can apply change on an organization before it either<br />
breaks, or rather, snap back at you. You can learn about this Elasticity to<br />
Change by learning about previous change initiatives and what worked, how<br />
long did it take to achieve, and who was involved in negotiating these changes.<br />
Align yourself with those people; they will be a source of invaluable coaching<br />
and mentoring throughout your tenure. Under the title of change, I want you<br />
to consider any minor or major initiative that you want to organization to sustain,<br />
as small as buying a new office desk and as large as firing or hiring one<br />
person or a whole team of people, that will be detrimental to your and the organization’s<br />
success and failure.<br />
Score. Once you have learned and aligned yourself, now you<br />
need to start scoring. Early on, you need to take on small successes<br />
even in your first 90 days with the organization. You<br />
need to score, with people, and with the organization as a<br />
whole. Remember that no one is expecting radical change in 90 days, but they<br />
need to be reassured that you as a leader are capable of making sound decisions<br />
on the organization’s behalf and that your decision will affect the organization<br />
positively, in the beginning, on small, operational matters, eventually<br />
on tactical issues and finally on strategic directional change initiatives. Remember,<br />
operational, tactical and then strategic. These are your three cups of<br />
tea, through which you will slowly earn trust and become part of the family.<br />
Keep in mind this 3-level trilogy strategy of success in a new role when you join<br />
your next employer: Connect, Align, Score; operational, tactical, strategic; (in<br />
subject matter) step, stretch, leap (in pace).
OCTOBER 2010<br />
p5<br />
F R O M S T A N T O N C H A S E I N T E R N A T I O N A L<br />
S T A N T O N C H A S E I N T E R N A T I O N A L<br />
Family businesses also<br />
score in times of crisis<br />
By Gert Herold<br />
Executive<br />
Newswire<br />
Whilst some analysts and consultants do not necessarily attribute long-sighted operations, professional<br />
management and use of modern tools to owner-managed companies, in particular family businesses,<br />
they rather mention weaknesses in qualification and succession, recent figures show otherwise. In the<br />
past years owner-managed or family businesses not listed on the stock exchange and regardless of size,<br />
created seven times more jobs in Germany and worldwide, than companies listed on the stock exchange.<br />
On average the largest family businesses also grew in terms of turnover during the crisis<br />
of the past year, whilst the largest listed players almost stagnated.<br />
Personal<br />
Reasons for this are obvious. Whilst listed corporations have to comply<br />
with short-term result expectations, owner-managed companies<br />
can follow long-term strategies – personal short-term profit<br />
expectations take a “back seat” in favour of long-term company<br />
protection interests. Key personnel will also not be laid off as quickly<br />
in crisis situations, due to a personal sense of responsibility. Hereby<br />
a know-how loss can be got around and with the next upturn, reaction<br />
to market demands is faster and, besides having positive effects<br />
on company climate, high restructuring costs can also be avoided.<br />
Frustrated managers in listed companies often throw in the towel<br />
because their conscience does not allow them to share responsibility<br />
for reduction scenarios in favour of short-term result optimization<br />
– in the interest of profit expectations of anonymous owners<br />
any longer- and thereby are lost by the company. In contrast coworkers<br />
and managers in owner-managed business are more<br />
likely to show understanding for difficult decisions in crisis situations<br />
and remain loyal to their employer. Here local bonds and<br />
long-term, personal contact of owners to their employees inure to<br />
their benefit.<br />
Owners are trustworthy. In addition, companies where ownership<br />
and management coincide, often grow organically less through<br />
takeovers. Mergers and takeovers lead verifiably to staff reductions,<br />
often intensified by managers leaving due to demotivation and uncertainty.<br />
The views, comments and opinion highlighted in this article are solely the personal views of Mr Gert Herold.<br />
Managing Partner <strong>Stanton</strong> <strong>Chase</strong><br />
Vienna Office, VP EMEA 2006-2009<br />
Invest<br />
Whilst the “red pencil” also affects investments for developments<br />
and plants in the listed market segment, medium-sized business in<br />
Germany have invested heavily in the past year and have significantly<br />
increased their investment volume compared to the previous<br />
year. The opposite applied to colleagues listed at the stock exchange.<br />
This also relates to acyclic investments in know-how and<br />
therefore their employees and managers.<br />
For this reason owner-managed companies are an important stabilizer<br />
of the economic cycle and an economic driver. This is part<br />
of the reason why family businesses prefer to invest in the future of<br />
their business rather than to distribute profits to shareholders.<br />
Another success factor: Decisions can be taken faster when owners,<br />
decision makers and board of director functions are one.
OCTOBER 2010<br />
p6<br />
CFOrole Middle East<br />
Globalization has caused a paradigm<br />
shift in the thinking of business owners<br />
in the Gulf which in turn has put new<br />
pressures on the C-Suite of the Gulf’s biggest organizations.<br />
The hinge pin to these changes can<br />
be found in the finance division of these companies,<br />
as they are now commonly interacting<br />
with International Fortune 100 companies and<br />
dealing with increasingly complicated projects.<br />
This requires a more sophisticated approach<br />
and in particular a seasoned and experience<br />
Chief Financial Officer.<br />
Times are changing, previously multi-million<br />
dollar companies could operate with a finance<br />
team led by a strong Controller or Finance Manager;<br />
today many organizations recognize the<br />
strategic advantage in having a seasoned Chief<br />
Financial Officer in the board room. As businesses<br />
grow and become more complex they<br />
now require their finance teams to manage<br />
M&A’s, divestments, global expansions, complex<br />
tax strategies, Sukuks, IPOs, and the internal complexities<br />
of highly diversified family businesses.<br />
While this growing need is great news for the<br />
hand full of seasoned CFO’s in the region, it is increasingly<br />
creating a talent gap which could potentially<br />
knee cap the regions ability to compete<br />
globally. Historically the GCC has not developed<br />
a talent pool of strategic CFO’s as most family offices<br />
and owners prefer to handle the financial<br />
strategic decision making themselves; thus stripping<br />
the CFO of his autonomy on critical business<br />
decisions. With a lack of exposure to some<br />
of the most difficult decisions in the business the<br />
Controller, Finance Manager or CFO is never developed<br />
to international standards. For example,<br />
as it relates to acquisitions the tip of the spear is<br />
generally the head of the family or one of the<br />
family members supported by the CEO and a<br />
team of Consultants. These efforts may be underpinned<br />
by the diligent work of the finance<br />
team in house but rarely will the in house CFO<br />
get the opportunity to lead the vanguard.<br />
To further dilute the CFO’s influence in the gulf is<br />
the role of the expatriate in the region. To a large<br />
extent the CFO is bound by an employment<br />
agreement which gives the employer a tremendous<br />
amount of power. Specifically the right to<br />
S T A N T O N C H A S E I N T E R N A T I O N A L<br />
ban the employee from the right to work for six<br />
months should the employee and employer<br />
leave on bad terms. Under western employment<br />
conditions the CFO is often in a position in<br />
which he would be comfortable aggressively<br />
challenging the board and other C-Suite executives,<br />
however in the MENA region this type of<br />
behavior can prove fatal. With out the safety net<br />
of being able to walk across the street and find a<br />
seat at a competitor the CFO can be held<br />
hostage. This often reduces the amount of candor<br />
the leadership of a company can bring to its<br />
owners and makes employees think twice before<br />
raising a red flag. The only solution under<br />
this premise lies in the development of strong<br />
local talent which is not bound by the limiting<br />
employment visa of the expat. As more local<br />
CFO’s emerge the CFO will have a more aggressive<br />
voice within the organization.<br />
The development of strong local talent requires<br />
an effective knowledge transfer, which is happening,<br />
however at a snails pace. There are<br />
many reasons for the slow pace of change in the<br />
CFO role in the Gulf. To start with the region is already<br />
starved for CFO’s, making it difficult for an<br />
emerging star to identify a suitable mentor. The<br />
issue of CFO succession planning is compounded<br />
by global trends which find the jump<br />
from Controller or Finance Manager to CFO very<br />
difficult even in mature markets. In fact at <strong>Stanton</strong><br />
<strong>Chase</strong> International our research shows that<br />
less than 40% of the CFO’s promoted from within<br />
come from the Controller position. This is be-<br />
Executive<br />
Newswire<br />
By Shane Phillips<br />
While local businesses were once content maintaining front rank in the domestic markets which they<br />
operated, their thirst for success is no longer satiated by national leadership; they are now driven to<br />
emerge on the global stage and take a seat on the podium.<br />
The views, comments and opinion highlighted in this article are solely the personal views of Mr Shane Phillips.<br />
Consultant with <strong>Stanton</strong> <strong>Chase</strong> UAE for Financial Services<br />
& Member of the Board of Directors of the Canadian<br />
Business Council, Dubai & Northern Emirates<br />
cause there is a significant gap in the skills required<br />
by a Controller versus a CFO, and few<br />
companies have a training and development or<br />
mentorship program in place to bridge it. Given<br />
this gap and the immediate pressures the<br />
emerging markets place on an organization,<br />
most clients prefer to hire a CFO from outside<br />
who can hit the ground running rather than take<br />
the time to grow their Controller or Finance Manager<br />
into the role.<br />
That said there are new local CFO’s emerging<br />
across the region who represent the seeds of<br />
change and a new generation of leaders who are<br />
beginning to sprout up across the landscape.<br />
Mr. Mohammed Al Qatari, Chief Financial Officer<br />
at Dr. Sulaiman Al Habib Medical Group represents<br />
this new generation of local talent.…<br />
“The role of finance within organizations is evolving, where<br />
as previously they required a Finance Manager, they now<br />
require a true CFO who can be second to the CEO, helping<br />
set the strategic direction of the company, reaching out to<br />
capital markets, creating sukuks, creating new areas of<br />
financing. The type of manager required is becoming more<br />
sophisticated.”<br />
In a market where the only constant is change,<br />
the Middle East has made huge strides forward in<br />
the last decade and organizations and executives<br />
have struggled to keep pace. The rate of change<br />
within an organization must be greater than the<br />
rate of change within the market; otherwise they<br />
will find themselves in an uncompetitive position.<br />
Change is managed by the senior leadership<br />
team of an organization, this means the rate<br />
of change at which the executive team is developing<br />
must also be greater than the rate of<br />
change in the market.<br />
This requires a commitment by locals to develop<br />
themselves and to operate outside of their comfort<br />
zones. A trend we can see on a macro-level<br />
with programs like the Sheikh Mohammed Bin<br />
Rashid program for young leaders and Saudi Arabia’s<br />
recent colossal investments in education,<br />
which is currently the highest in the world. While<br />
the commitment from local leadership is mirrored<br />
by the dedication from GCC nationals, the<br />
effects of these efforts is still to be felt and I am<br />
sure in the long run the Middle East will reap the<br />
benefits.
OCTOBER 2010<br />
p7<br />
*To Build or NotTo Build<br />
This topic is too long for one article – however the<br />
goal is to give a high level overview of why organizations<br />
are / should be moving transitioning to<br />
Managed Security Services. Information Security<br />
can be defined in many ways but in its simplest form<br />
it spans People, Process, Procedure, Products and<br />
is concerned with Confidentiality, Integrity, Availability,<br />
Privacy, and Compliance of an organization<br />
digital or electronic asset.<br />
The past two decades have brought about a lot of innovation<br />
in software, hardware, intellectual property,<br />
digital rights, etc but it has also introduced an increase<br />
in malware, hacker and organized cybercrime<br />
where our businesses are online all the time 24x7.<br />
Thus emphasis on information security has gone<br />
from nice to have to a must have in most organizations<br />
including some being regulated (PCI-DSS, EU<br />
Data Protection) which has made CxO level executives<br />
responsible and sometimes financially liable.<br />
Until regulators and organizations hold executives accountable<br />
and liable in the Middle East much of the<br />
same problems will continue based on each individual<br />
executives capabilities and beliefs.<br />
The topic of discussion is how we transition in this<br />
E-Era to manage our governance, risk and compliance<br />
(GRC) through security monitoring and management<br />
of our critical assets including our security<br />
devices (firewalls, IDS, IPS, Anti-Virus, etc), Servers,<br />
Network Equipment and Applications. The concepts<br />
of Defense in Depth, Layered Security and Holistic<br />
Security have lead to a lot of security devices<br />
working as silos with very little correlation if any. Over<br />
the past decade I have focused my attention on the<br />
dilemma of managing such large number of disperse<br />
heterogeneous systems from various vendors and<br />
trying to generate meaningful and actionable security<br />
incidents that can be managed by a security department<br />
or Computer Incident Response Team<br />
(CIRT) as well as reports to support compliance and<br />
information dissemination.<br />
An organization typically has three options when<br />
dealing with the need to manage their security and<br />
risk through a 24x7x365 monitoring and management<br />
function. The first is the most recognized form<br />
which is to build an internal Security Operation Center<br />
(SOC), the latest and most robust is to outsource<br />
to a Managed Security Services Provider (MSSP) and<br />
the last is to simply Pray which is what I see a lot of in<br />
the Middle East and North Africa. I will start with the<br />
last one as it is the one that gets most organization in<br />
trouble and is not a sustainable or credible model in<br />
the mid to long term.<br />
S T A N T O N C H A S E I N T E R N A T I O N A L<br />
Prayer is not a strategy for achieving information security;<br />
it doesn’t hurt but doesn’t replace the need to<br />
either build or outsource this critical function. To<br />
Build or Not to Build that is the question or in most<br />
cases the dilemma. There is no clear cut answer that<br />
applies to everyone – it really depends on the situation.<br />
Globally most mature organizations have already<br />
launched a Security Operations Center<br />
(regionally this is limited) and have been benefited<br />
from the pros and suffered from the cons which will<br />
be discussed later. While more organizations in the<br />
last half of the previous decade benefited from the<br />
maturing and more accepted MSSP market by avoiding<br />
the investments and headache of building, operating<br />
and managing a SOC (this is still in its infancy<br />
age in the region). Then there are those who decided<br />
to build and then transitioned to MSS. In most cases<br />
organizations put this requirement off as long as possible<br />
until the problem of managing the security becomes<br />
too obvious or regulation forces them to. In<br />
other cases, organizations adopted best practices<br />
and standards like ISO 27001 which require monitoring<br />
of critical assets.<br />
Whatever the reason and no matter what the size<br />
of the organization if you are connected to the Internet<br />
you are a potential target for a cyber attack.<br />
Hackers or Cyber Criminals typically exploit victims<br />
who are easy targets which unfortunately most of<br />
the region is. Organizations that have ignored best<br />
practices including regular vulnerability scanning,<br />
penetration tests, patch management and maintenance<br />
/ configuration controls on security appliances<br />
are the most likely to experience a successful attack<br />
ranging from being a nuisance to brand impacting<br />
to financial losses. I equate the cyber security challenge<br />
as an on-going war. When a nation goes to<br />
war it typically has a modernized, equipped and qualified<br />
military that is ready to defend the entire nation<br />
– in this scenario a MSSP. We don’t typically see individual<br />
towns, cities, states nor companies have their<br />
own military or militia or in this case Security Operation<br />
Centers. The costs of trying to achieve this<br />
would be much higher than any one organization<br />
could justify in most cases because the cost for Personnel,<br />
Equipment and Operations would be too<br />
high. This is one of the key reasons SOC’s fail; the high<br />
OPEX and CAPEX required to truly meet the functions<br />
that will improve an organizations security. For a SOC<br />
to match a MSSP in functionality it would need to<br />
provide at minimum the following functions: Security<br />
Event Management, 24x7x365 monitoring by a<br />
qualified team of security analysts, incident ticketing<br />
/ workflow, reporting / dashboards, service level<br />
agreements, change management, health monitor-<br />
By Samer Omar<br />
Executive<br />
Newswire<br />
To say we live in an E-Era is probably an understatement. Everywhere, Everything and Everyone is implementing<br />
an E-initiative including E-Government, E-Banking, E-Commerce, E-Health, etc. It is clearthat InformationTechnology<br />
has, is and will always have an impact on our lives. This is what makes the topic of Information Security<br />
pivotal to our E-Future where we will be living in a connected world and are always connected.<br />
The views, comments and opinion highlighted in this article are solely the personal views of Mr Samer Omar.<br />
Co-Founder / Executive Board<br />
Member of I(TS) 2<br />
ing, log monitoring & retention, threat intelligence,<br />
vulnerability management, device management, disaster<br />
recovery and more.<br />
The problem is that most enterprises embark on<br />
building a SOC and only have the first four in mind<br />
which doesn’t provide the appropriate level of security<br />
monitoring and operations. The neglect to really<br />
analyze the TCO of the SOC because they are technology<br />
focused. Combine this with the fact that<br />
80%+ of threats come from insiders – this means<br />
without the appropriate internal controls an organization<br />
is handing over the keys to the kingdom to<br />
those same people who are prime suspects in any<br />
potential security breach. Add to this that organizations<br />
have very little recourse other than termination<br />
of an employee even if a breach is due to their gross<br />
negligence (in some cases there may be legal implications<br />
but the laws and courts in the region are not<br />
yet mature enough to prosecute). Finally, the door to<br />
most SOC’s should probably be replaced with a revolving<br />
one due to the low retention rate of these resources<br />
who are in high demand.<br />
This is why I favor a qualified MSSP; because not only<br />
do you get the other functions listed above but they<br />
are typically backed by professional SLA’s which include<br />
service credits, penalties and insurance for<br />
gross negligence or errors and omissions. Also you<br />
buy security for your size organization based on the<br />
number of devices you have; buy a ticket not the<br />
plane.<br />
There are many other advantages of going with the<br />
MSSP option but you should be careful in selecting<br />
the right one because not all of them are qualified or<br />
focused. My top five recommendations are to:<br />
Select a trusted and recognized market leader<br />
(Gartner or Forrester) with proven experience and<br />
references.<br />
Select a MSSP vendor that has local and regional<br />
support including an incident response capability<br />
to include on-site response in case of emergencies.<br />
Select a MSSP who understands your local laws,<br />
regulations, customs and language.<br />
Select a MSSP who has a firm commitment in the<br />
region in the form of actual infrastructure (SOC, DC,<br />
Resources).<br />
Select a MSSP that has global affiliations or associations<br />
(first.org) that provide better threat intelligence.
OCTOBER 2010<br />
p8<br />
S T A N T O N C H A S E I N T E R N A T I O N A L<br />
TheInformationRevolution<br />
in the Middle East and North Africa<br />
The Middle East was once home to the world’s most advanced<br />
societies, its people skilled at mathematics, astronomy, science,<br />
and medicine, and renowned for their poetry and arts.<br />
The region is again becoming more closely integrated with the global economy,<br />
its people are traveling more widely and continuing to emigrate to the<br />
West in record numbers, social unrest brought about in large part by poverty<br />
continues, and the spread of information and communication technology<br />
(ICT) continues to encourage economic development. The ability and willingness<br />
of these countries to allow, encourage, and invest in their own information<br />
revolutions may have positive impact in the Middle East and North<br />
Africa. The wealthiest countries in the region will continue to expand their<br />
already-substantial networks and offer a greater variety of value added<br />
services in order to continue to increase their profitability. Unconstrained by<br />
finances, the ultimate shapes and uses of these networks will depend almost<br />
entirely upon the governments’ continued efforts to control information access.<br />
In countries such as Bahrain, Kuwait, Qatar, and the UAE, government<br />
will likely limit its control to other illegal activity, besides wealth, these countries<br />
have in common reasonably stable and secure governments. The big<br />
exception is Saudi Arabia, where the long-established social contract will<br />
continue to be renegotiated with an increasingly restive polity.<br />
The middle-tier countries, Egypt, Jordan, Lebanon, Syria, and Tunisia, for<br />
example,willcontinuetoexpandtheirphysicalinfrastructures,andICTpenetration<br />
will continue without any fundamental changes in the societies. The priority<br />
in all these countries will be to maintain the peace according to local<br />
interpretations of the social contract. The governments of Tunisia and<br />
Lebanon, for example, will be fully occupied with economic-development<br />
initiatives while the ruling parties attempt to maintain control. Egypt will<br />
continue to appear at once as a police state and a burgeoning free-for-all.<br />
The current rapid pace of technological change is expected to accelerate<br />
over the next 15 years. In addition to increasing the digital divide between the<br />
world’s richest countries and those that even today cannot keep pace with<br />
change, rapidly changing technology and its associated industries will place<br />
a premium on education and training. Education and training are already<br />
front-burner issues for every government in the region.<br />
“<br />
According to Anton et al. (2000), Cultural adaptation, economic<br />
necessity, social demands, and resource availabilities will affect<br />
the scope and pace of technological adoption in each industry<br />
and society over the next 15 years. The pace and scope of such<br />
change could in turn have profound effects on the economy, society,<br />
and politics of most countries.<br />
“<br />
The views, comments and opinion highlighted in this article are solely the personal views of Mrs Pascal Baz.<br />
By Pascal Baz<br />
Consultant with <strong>Stanton</strong> <strong>Chase</strong> UAE<br />
for Technology, Life Sciences & Healthcare<br />
Executive<br />
Newswire<br />
This cannot be good news for MENA countries, which have shown a proclivity<br />
for resisting any form of cultural adaptation. Furthermore, variations in the<br />
degree of economic necessity, social demands, and resource availability will<br />
tend to continue the increase in wealth, health, and modernity in general<br />
throughout the region. There is no single model for an information revolution.<br />
And, just as MENA countries are starting from different baseline conditions,<br />
the IR will play out differently in each country and the near- and midterm end<br />
states will vary widely. Differentiation among countries of the region is<br />
expected to grow, however, as some countries respond more effectively to<br />
the challenges of the information revolution and of globalization more<br />
generally. The effectiveness of their responses will be limited by the<br />
availability of investment funds and the conservatism of ruling elites.<br />
The countries that will have made the most progress toward an information<br />
- centric future are Bahrain, Kuwait, Qatar, and the UAE. These countries are<br />
“post-industrial,” having skipped directly from an agricultural or nomadic base.<br />
With a foundation of oil, the Arab countries rely heavily on the financial sector<br />
and international trade as their sources of wealth. All are seeking to reduce<br />
their dependency upon oil, thus hastening the expansion of non-extractive,<br />
non-industrial activities. The guaranteed country that might experience an<br />
information revolution is Lebanon. Its culture is more open and cosmopolitan<br />
than elsewhere in the MENA region, and commercial competition is keen.<br />
Then there is the gray area: countries that continue to increase the use of<br />
information technology without really achieving anything revolutionary. Chief<br />
among these is Egypt, for which continued development is critical for<br />
economic expansion, which is in turn critical for regional peace. All of<br />
Egypt’s disaffected cannot be arrested and will not stay at home forever. Syria<br />
hasthepotentialtocontinuetobeaspoilerinregionalpolitics,fuelingandhiding<br />
from international crises. Its large and aggressively commercial trading class<br />
urgently seeks any and all tools to further their interests, but it is in the end a<br />
country of traders and small manufacturers (carpets, sugar, pasta) rather than<br />
“information workers.” Jordan, Morocco, and Tunisia will probably continue<br />
modernizingtheirinfrastructuresandperhapsenjoysomeeconomicresurgence,<br />
but are unlikely to achieve anything revolutionary. None of these countries<br />
contributes significantly to regional politics or economy. Oman, too, is likely to<br />
remain a backwater. It could be a major player in regional geopolitics if it could<br />
figure out what to do with its position opposite Iran in the Strait of Hormuz.<br />
However, Information Revolution is not on their critical path.<br />
The Information Age is not dawning in the Middle East or North Africa, but<br />
significant changes will occur. Some of the changes will be affected by the<br />
proliferation of information technology, and some of the changes will affect<br />
the future of ICT development in the region.<br />
The information revolution is not a zero-sum game: All countries, cultures,<br />
religions, and peoples can ultimately benefit. But the very core values of the<br />
information revolution are at odds with the implicit and seldom-stated<br />
national goals of every MENA country.
OCTOBER 2010<br />
p9<br />
S T A N T O N C H A S E I N T E R N A T I O N A L<br />
MEA-Culpa!<br />
By Ali Borhani<br />
Director of Corporate Strategy<br />
& Business Development for Bosch & Siemens<br />
Home Appliances in Middle East & Africa<br />
Executive<br />
Newswire<br />
Yes you guessed right, MEA is Middle East & Africa! Yet it rhymes very well with Mea culpa!<br />
Mea culpa is a known Latin phrase that translates into English as "my mistake" or "my own fault". If you<br />
want to add to the gravity of the mistake, "maxima" can be inserted, resulting in "mea maxima culpa,"<br />
which then translates as "my most [grievous] fault."<br />
Interestingly enough this term, applies to MEA for not having fully utilized the potential of a unique, rich and fertile<br />
region to diversify beyond its legacy business culture & model. With the exception of Dubai, which has really stretched<br />
itself in leaps and bounds, bursting on fiscal seams, the rest of the region have very little to show when it comes to the<br />
topic of diversification. Even Dubai and UAE at large still have a long way to go to become a fully diversified economy.<br />
This is clearly obvious in markets like Qatar, Bahrain, Kuwait, and even KSA in Middle East and with the exception of a handful<br />
of countries in Africa you will find very little “Bang for the Buck”! The vital important key to the future for this large region<br />
is diversification, which lack of it continues to haunt these economies. Diversification is most of the time associated<br />
to a departure from Oil & Gas to other revenue streams for the economies in Mid East and GCC in particular. In case of Africa<br />
it refers to a move from commodity driven and mismanaged state run business models that unfortunately rest solely on<br />
export of their natural resources, without harvesting the hidden yet, real value of the downstream industries.<br />
Yet the real chance for MEA rests and lies with the ability, willingness and determination to diversify more than anything<br />
else, the Mind-Set of how the region is functioning and how it plans to poise itself for a new decade. The biggest asset,<br />
the major differentiator and yet the most unique winning card in this process for MEA is its young population & demographic.<br />
However, the same advantage can be its Achilles’ heel. The recent challenges to region’s economy are not<br />
only a byproduct of slowdown in Real Estate sector, the escape goat in GCC, or the periodical changes in commodity<br />
prices. But more so a result due to the absence of a cohesive plan in building the blocks of talent, cross regional harmony<br />
in investment and decision making process.<br />
If you canvass the GCC you will find in flying time of a maximum one hour Academic Cities that are all boasting Placards<br />
of some of the best International Universities, yet the scale, the research capacity and the necessary incubation infrastructure,<br />
organization around these campuses, collectively all together, can be eclipsed by one of the universities that they<br />
all represent! MEA is suffering from a Legacy Thinking Model in which the states have not realized the huge harnessing<br />
power that can arise from a cohesive, consistent and transparent policy of opening their economies, at a regional<br />
level and eventually globally. GCC for that matter is still hampered by overlap and cross investments in competitive<br />
industries for which their individual state egos are not sufficient to win. In other words, what’s missing is the realism in really<br />
putting together a long term, cross regional strategy as to what the region has to become and what is the role and<br />
contribution of each stake holder.<br />
Yet what I refer to as opening of the economies, is to create, a business culture in which the existing potentials can manifest<br />
in successful business models, a comprehensive and cohesive and conducive mindset that is supportive of talent development.<br />
Competition is going to be more and more defined and based around how economies develop, poach and<br />
support talent. No matter how many so called “ Cities” like Technology City, Biotech City, Health Care City and likes the<br />
states open at astronomical costs, the reality is that at large all these expenditures, since hardly you<br />
can call them investments, will struggle to bear the necessary fruits and results. MEA will continue to<br />
remain a magnificent and high potential region, plagued with haphazard policies, unless there is a collective<br />
and perhaps genuine soul search as to how as an economical block it has to strategically position<br />
itself in the global economy at large. The number of F1 circuits in GCC is more than China or Brazil<br />
for that matter. But are we as fast as these economies on the circuit of diversification?<br />
If MEA is to win the coming decades, it has to think of preparing a Talent Attraction, Development,<br />
Nurturing, Integration and Support Strategy (TADNISS). I believe that there is a more important figure<br />
in any society than Gross Domestic Product. It also has the same abbreviations, GDP but is called Gross<br />
Domestic Participation. The more conducive, supportive the pillars of TADNISS the higher will this figure<br />
be. No matter how high the oil prices go, the real growth of the Gross Domestic Product figure will<br />
remain to be very low for years to come unless the Governments really “Diversify their Mindsets”!<br />
CEOs and key decision makers in the region are best positioned to lobby, consult and assist the governments<br />
and to collaborate for bringing these essential changes if MEA is to harvest its true potential.<br />
Between now and that day, we shall continue to say MEA-Culpa!<br />
The views, comments and opinion highlighted in this article are solely the personal views of Mr. Borhani.