The CEO’s Outlook with Riz Khan by HSBC

HSBC Middle East in collaboration with Riz Khan produced a Mini-Web Series highlighting the trials and tribulations of Business Leaders in the Middle East. Here is a look at what to expect. 

(Source: HSBC Global Connections vs YouTube) 

While their western and, in some cases, even eastern counter parts are highly lauded, even regarded as celebrities, Middle Eastern business leaders do not receive the same accolades. HSBC decided to honor these leaders by producing a web mini-series called the ‘CEO’s Outlook’ presented by Riz Khan. Khan is a well distinguished Television presenter most well known for his self titled show on Al Jazeera TV, in which he interviewed Television, Political and Business personalities. This Mini-series follows the similar interview pattern with a spotlight on the CEOs based in the Middle East.

HSBC Presents: The CEO's Outlook with Riz Khan, an online video series featuring the region's leading CEOs speaking about their business, global trends and more.

Preview of the Mini-Series (Source: HSBC Global Connections via YouTube) 

The series features notable business leaders including:

• Imad Sultan, Vice Chairman of the WJ Towell Group who features in the episode titled “Leadership: success, family business & future – WJ Towell”
• CS Badrinath, CEO of the Zubair Corporation who features in the episode titled “Money barriers – Zubair”
• Iyad Malas, CEO of Majid Al Futtaim who features in the episode titled “Managing change – Majid Al Futtaim”
• Jayant Ganwani, CEO of Lals Group who features in the episode titled “Growth & getting to market – Lals Group”
• Pakinam Kafafi, CEO of TAQA Arabia who features in the episode titled “The right advantage – TAQA”
• Dr Alaa Arafa, CEO of Arafa Holding who features in the episode titled “Taking the leap – Arafa”

The topics Riz Khan discussed with these CEOS range from successes and the future to family involvement and bipartisan participation. Each episode provides an insightful look into the operations and intricacies of being a CEO in their unique environment. 

Imad Sultan talks about how family businesses best manage the process of bringing in the next generation based on personal firsthand experience. He discusses the unique challenges of running a fifth generation family business, including the need to restructure, separating ownership from management and priming the next generation to continue the legacy.

The CEOs featured on the show (Source: HSBC Global Connections vs YouTube) 

CS Badrinath discusses the challenges of accessing and managing capital in the context of a growing business.  He considers the vital importance of access to capital – ‘the bloodstream of any organisation’. He goes into detail about how a company faces a delicate balance of allocating capital to projects while, at the same time, managing the risks.

For Iyad Malas, understanding the consumer is the key to success in any new market. Moving into a new market demands flexibility and the ability to change your approach as he explains. It is a dynamic process as the company continues to take on new information when it is established in the market and continually adapts its offering to meet consumer demand.

Jayant Ganwani, discusses how his company has achieved its regional expansion and managed local differences. He highlighs the importance of in-depth market research even for neighbouring countries that may be considered familiar.

Pakinam Kafafi, CEO of TAQA Arabia, talks about the challenges and excitement of expanding into new markets. She considers helping a local company expand globally as an exciting process. However, expansion can be challenging and requires experienced employees, know-how and persistence.

Moving into new markets can be like leaping off a cliff. The right information, support and leadership is vital, according Dr Alaa Arafa, Riz Khan and Arafa go into more detail on the challenges his company faced while entering new markets. 

With all these insights, the various challenges local companies faced in an open and international market were highlighted. Ria Khan was an engaging host and kept the conversation going forward. This is definitely a must watch for a business insider. 

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Full Disclaimer: HSBC did not intend to constitute any advice or an offer with this Web series. Any forecasts or projections are indicative only. HSBC or any of its affiliates accepts no liability, whether express or implied, arising out of or incidental to contents forming part of the Web Series.

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Here's the Lituation

The next big gold rush is for a material that is considered one of the more easy to obtain elements. So then why is there a rush by nations worldwide to stockpile as much Lithium as possible?

What is lithium ion? How do lithium ion batteries work? Lithium batteries work just like lead acid batteries, except they allow for the flow of lithium ions between the anode and cathode of the battery, as the electrons flow through the conductive connection.

(Source: Engineering Explained via YouTube)

The answer is Batteries. There is growing need for batteries and battery power devices. Hybrid cars, Cellphones, Tablets and more recently, smart watches all require batteries. Nevada is home to the only operating lithium mine in the U.S., which likely played a part, however small, in Tesla Motors Inc.’s decision to locate its much-talked-about battery factory in the state.

The U.S. still imports most of its lithium, with Australia, Bolivia, and Chile among the top exporters of the mineral. But one Nevada mine has been churning out the stuff since the 1960s, and other lithium deposits in the state could come in line depending on demand.

(Source: Unknown)

According to Carl Nesbitt, an associate professor of metallurgy at the University of Nevada, U.S.

“Tesla is likely to be ‘a very large consumer’ of lithium, and will likely need to find new sources of the metal. From a purely technical standpoint, it would make sense for Tesla to be near a lithium source such as the mine in Silver Lake, Nevada The mine is about 250 miles southeast of Reno, near Tonopah, Nevada. Most lithium is refined in China, which ships the resulting lithium carbonate to all the corners of the world.Tesla will likely stick with China as its main source of refined lithium, at least for the time being. After a considerable investment and depending on volume, some of the lithium could be processed in the U.S.”

However according to detractors in the commodity market, such as Brian Jaskula, a commodity specialist with the U.S. Geological Survey, Lithium ‘plentiful’ in the world. 

“Lithium costs about AED 24,026.66 per metric ton, or AED 10.9 a pound. Prices have been stable after a dip in 2009, when lithium and all commodities suffered the effects of the Great Recession.There’s no public market for lithium, and transactions are hammered between private sellers and buyers. Prices can vary quite a bit depending on the length of contracts and location to be shipped. The world is unlikely to run out of lithium, It’s quite plentiful. (miners and refiners) right now have a lot of extra capacity they are not using.”

New sources are coming in line in Canada and Argentina, to name a few, in anticipation of higher demand with electric car batteries. “Current demand can easily be met,” he added.

(Source: ProvinceofBC via YouTube)

However the Canadians aren’t taking any chances. Funding of the British Columbia Budget 2015 (Canada) will establish a Major Mines Permitting Office to improve the co-ordination of major mine permits across government, add staff to conduct more inspections and permit reviews, and maintain improved turnaround times for notice of work permits. Government has used contingency funding since 2011 to significantly increase geotechnical staff and inspections and improve permit turnaround times.

“Up to 10 new mines are expected to proceed in the next few years and this new funding will make sure we are ready to support these projects and ensure the safety of this important industry as it continues to grow,” said Premier Christy Clark. “B.C.’s mineral exploration and mining industry is a great comeback story and today we have a significant opportunity to create thousands of jobs by opening new mines and expanding existing ones.”

Premier Christy Clark at the announcement on Monday, January 26, 2015 at Vancouver, Canada 

The Canadian government has used contingency funding since 2011 to significantly increase geotechnical staff and inspections and improve permit turnaround times. The funding announced will make these improvements permanent and create additional capacity to support the major mines permitting process.

The base budget of the ministry will be increased by about AED 22.18 million, a portion of which will go towards making current contingency funding permanent. Also, new permit fees for mines in B.C. (British Columbia, Canada) are expected to raise an additional AED 11.09 million per year. The new fees will not be charged to exploration companies.

The Lithium wars are just beginning. Aggressive development in battery technology is only catalyzing the growth in the demand of Lithium. It will be only a matter of time before more players step in to fill the void, resulting in an OPEC like price regulation or possible trade sanctions. The rush for Lithium is the new ‘Gold Rush.’

The Gamification of Shopping

There is an ever growing number of malls in the U.A.E. How can their growth be sustained in this ever changing economic climate with cannibalizing each other? Barbara Küch from Münster University who recently authored a paper on Gamification explains how Gamification Systems are the solution to this conundrum. 

The North Food Court at Mirdiff City Center owned by the MAF group

Dubai has over 65 malls that are in operation and over 10 under construction projected to open within the next 5 years. Majid Al Futtaim has claimed a growth in revenue by almost 11 percent to AED 25 billion in 2014. Yet, contrary to this news, new research is indicating a steady decline in the footfall of tourists and local shoppers. How is the MAF group able to achieve such high numbers? And how can future establishments sustain themselves in an ever changing environment?

The answer lies in an Economic/Marketing theory known as Gamification. Dubai is considered to be the fourth most attractive retail destination. Implementation of the Gamification theory, which are termed as Gamification Systems, or GS for short, is essential to the revitalization of the retail sector and possibly gaining the throne in being the ‘Most attractive retail destination.’ But what is Gamification? Barbara Küch explains,

"Gamification is a relatively new phenomenon. I think the term as it is used today was first mentioned 2003 and in 2007 the first Gamified website was been launched. But it wasn’t until 2010 maybe that more people got into it and more people got to know about it. So to speak it is still in the innovator phase and it will take some time that imitators catch up."

The UAE does have a lot of firsts, perhaps the successful implementation of Gamification could be among their many accolades. But how would one implement GS in Dubai? Would the existing ‘Monetary rewards’ via draws and Raffles be a viable option? 

"I would not suggest to use monetary rewards as tangible rewards have a negative influence on intrinsic motivation and a GS only driven by extrinsic motivation is not recommendable." 

Suggests Barbara. According to Psychology by About.com Intrinsic motivation being the motivation to engage in a behavior arises from within the individual because it is intrinsically rewarding. And extrinsic motivation being which involves engaging in a behavior in order to earn external rewards or avoid punishments. Here’s Barbara again on the possibilities to implement a GS. 

"There are several possibilities to implement a GS. For example, you can do something like a treasure hunt combined with an app. You could use it to discover new things in the mall. And once you visited a new place or identified something new about the mall you get points or badges and once you received a certain amount of points you reach the next level with new quests. And to add new elements you can hide things in the mall that have to be found. In order to include a social network you could include quests you need to do in a group. Additionally you could include a newsfeed were you can comment other people's achieved quests and write reviews of stores or places." 

The development of a social network based around visiting venues and achieving badges isn’t a recent idea. Foursquare has long been using gamification to connect people with similar propensities. Presently in Dubai, the mall with the most visitors is considered to be Dubai Mall. Dubai Mall’s app however has a lot to be desired. 

The Dubai Mall Application is lackluster at best. (Source: Apple App Store/iTunes)  

"I think malls need to keep changing some things or adding new things. Like with a new game, the sensation is high and you are eager to discover and play it. But once you already know everything, and played it up to the last level you might lose interest as it cannot offer anything new. So even within a GS you need to add new things to it otherwise people might lose interest after a while. Assuming there is a book store, with a new book release from a possible bestseller then you could have a reading and signing session there. Or other similar kinds of events that attract people to the mall." 

Barbara does provide a fair warning in the implementation of a GS to a mall. Implementation of a GS is a sustained prospect. In today’s environment most malls in the Middle East do not provide a cohesive branding experience to the individual stores. The stores generally have sales pertaining to city wide events such as the Dubai Shopping Festival or the Ramadan/Eid Festivals.   But the introduction of GS in a store also has some interesting side effects according to Barbara;

"This could lead to an enhanced loyalty to the mall, not simply, for a single store in the mall."

Barbara Küch at Talanx in 2012 after her presentation at the regional cup for Enactus, formerly known as SIFE (Source: Barbara Küch)

(Rahul Sakkia) "This is interesting Barbara, however; why is this the case?" 

"You cannot try to increase brand or firm based loyalty, when you try to implement it on a mall level. This would mean that the variable you want to improve is time spent in the mall, not necessarily how much is spent in a specific shop. One can assume though that consumers who stay longer in the mall are more likely to also buy more." 

Mall designers frequent innovate ways in which to keep consumers in the malls for longer. IKEA is perhaps the main culprit. They have been well documented to confuse their shopper in a maze like system when a customer enters their store to purchase a product. Similarly malls also restrict views to the outside world and eliminate time measuring devices such as clocks and hourly time calls. This creates a vacuum in which the shopper is in a cocoon of safety from the elements and carefree with regards to time management. (The Video below goes into further detail on this effect.) Dubai residents frequent malls as the outdoors aren’t very permissible in the summer and the proximity of the malls close to places of work and residences.  

Marc Fennell investigates how shopping malls are designed to make you buy things...

'How Shopping Malls Make You Buy' (Source: Hungry Beast via YouTube)

Dubai needs Gamification and Gamification needs Dubai. Another interesting prospect is the niche that Gamification offers. Perhaps new business could be created centered on Gamification. Pay heed to this new rising trend. 

Lesson to be learned from the European Union

Niño Gojiashvili is an Editor at Caucasian Business Week based in Tbilisi, Georgia. She completed her High School in Georgia and posses a degree in Political Science from Bard College, NY, U.S.A. Caucasian Business Week is an English Language Weekly Print and online based business newspaper which caters to the business demography of Georgia and other Caucasian regions. More information can be found here.

Niño with her associates from Caucasian Business Week (From Left to Right; Niño Gojiashvili Levan Kalandadze, Nuca Galumashvili and Tamar Kakabadze) (Image Courtesy Facebook)

The European Union is undergoing dramatic change. States such as Greece, Italy and Spain have barely been sustaining by the slimmest margins thanks to their alliance with the European Union. But nations such as France and Germany are thriving due to the same Union. The Middle East is considering one such prospect, an Arab League of its own. However would the Arab league actually work? Would the European Union survive the current state of turmoil? And how would it protect its partner states from political and economic turmoil? 

"Yes, I think it will survive but it doesn’t have much interest in protecting countries like Ukraine and Georgia against Russia."

Says Niño Gojiashvili. The European Union still lacks an organized army, established common trade agreements (only individual ones exist) and sanctions against nations such as Russia. Certain member states even have business agreements with Russia. Why would the Caucuses still want to join the EU?  

"The entire Caucuses won’t be part of it, Georgia at best. I don’t think Azerbaijan has the same aspirations. Georgia just signed the association agreement with the EU and now it has to satisfy some of the basic economic/political standards that EU wants to see done in order for Georgia to movie to the next level. These go down to very specific things like insurance. MTPL was one of the requirements but we still don’t see that happening." 

The parallel to be drawn here is the smaller nations presently in conflict such as Syria and Lebanon joining the Arab League. While sanctions against Iran have been supported by all the nations of the GCC, the countries still remain divided on their stance of Iraq which is partially controlled by rebel factions. But how would a state such as Iraq differentiate between politics and state? 

"I would say it is an interesting interaction between politics and economy, in a small country like Georgia no business can practically evade being political to some degree. Business here really reflects the collective nature of our society - the way networking is done. One can say that the Russian nomenclature style of getting things done is still in place."

This is true for other established players such as the GCC nations. UAE for one does have the government investment arm which is involved in a lot of private businesses. This would involve networking and interacting with government officials. Large business owner in UAE can even directly appeal for policy changes and be involved in the process. 

Going back to protecting the economies of smaller nations, what has the EU done to alleviate such issues? Niño explains;

"EU did very little to protect Ukraine. It is a means to imply that they don’t want to jeopardize relations with Russia over small states like Ukraine and Georgia, Which is sad for the aspirations of our country. However Azerbaijan has been doing interesting things in the oil sector like building pipelines bringing Caspian oil to Turkey visa Georgia, hence evading Russia via the BTC Pipeline (Baku-Tibilisi-Ceyhan Pipeline.) This self-sustenance has what has kept Azerbaijan away from any such EU aspirations."

The Arab League could face similar issues, mixing politics with business. In the draft, a common currency is being considered. Economists believe this is one of the causes for the downfall of the EU. The question still remains though - Would the Arab League pan out with all the business and political incongruence at hand? Only time will tell.

Source (1), Source (2), Source (3)

Education - A Business

Naseem Zamel is an Education Coordinator at Modern American School in Amman, Jordan. He completed his High School in Jordan and posses a degree in Philosophy from Drexel University in Philadelphia, PA, U.S.A. Modern American School is accredited by AdvancED, the College Board and follows an American syllabus. More information about the school can be found on their website. 

Naseem Zamel during an educational trip to the Dead Sea (Image Courtesy Rahul Sakkia)

Education is big Business in the Middle East. This is because the Middle East is a unique region in terms of educational requirements. A majority of the citizens in GCC countries are expatriates, whereas a majority of students in non GCC countries do not have access to many higher education options. 

The expatriate population are dependent on schools that cater to them in terms of educational systems. Indians prefer the CBSE board, alternatively Europeans prefer the IB system. One of the primary reasons for them to continue in their homeland’s education system is the lack of citizenship opportunities. Staying in a Arab country for decades does not ensure citizenship, which means expatriates have a higher turnover on entering and exiting the country. A secondary reason is the lack of higher education opportunities. Until recently there were not many options for expatriates as Naseem Zamel explains;

"Expatriates are used to systems back home. Some of them are far more rigorous and comprehensive than what’s available here. These education systems date back centuries and are well established. While local education boards are fairly recent propositions and don’t have the same hold. Carnegie Mellon only recently established an outpost in Qatar. "

NYU in Abu Dhabi was the first international outpost in the region. Prior to this the only access to an American college experience would be to enroll oneself in the local American University. The name behind a university is a huge selling factor. The more prestigious the name, the more parents are willing to spend, which brings us to the second and third factor; funding of one’s education and what do the local middle easterners want? 

Most Students in the middle east are self sponsored and do not rely on scholarships or external sources of funding such as grants, loans or other means. This is due to a culture difference, where Asians consider education in their child an investment, thereby sponsoring them and even with the other expatriates its a sign of prestige that their child is enrolled in a prestigious university. As Naseem reiterates;

The first factor most parents consider is the brand of the institution. They simply wouldn’t enroll a child based on merit but rather how the rest of their family and friends look at the university or school. Although this approach is shallow minded, one must consider that these institutions have this repute to their higher standards of academic excellent therefore do hold some merit. 

The third factor being the local arab population. They consider the same factors while picking an educational institute however they also consider they skill set they acquire from foreign institutions. As Naseem explains;

“While the local not for profit institutions do have decent standards of education and work culture, the foreign based institutes offer more such as Exchange programs, globalization and the integration of technology. Take MAS (Naseem’s school) for example, we have a Model UN, We host and coach students for the SATs and our primary medium of communication is English. This helps our student better integrate with international students and is beneficial when they travel outside the country to pursue their higher education. Students these days cannot just be academically focused but also focus on wholesome development.” 

All this however does come at cost. An average price for a school computer is AED 4,392.06 per student, inclusive of software. If ‘Bring-your-own-device’ solutions are implemented then the price is far lesser on a hardware front but higher in terms of additional support systems such as WiFi networks and system security managers. Additionally international accreditation is an expensive process requiring huge investment in staff, training and infrastructure. This cost is then borne by the student.

Looking back at all this, makes one realize, perhaps after all Education is not a bad investment. No economic downturns or crisis prevent students from attending classes. This is perhaps one of the most stainable and high reward investments, Naseem amused by this explains;

“Indeed it is a high reward investment but there is a lot of work that goes into it to get it to that level of high reward and maintain it as such.”

This applies to many facets of business. High risk equals High reward. The education business therefore is not for the faint hearted. Which explains why in the land of the brave, Education is such big business. 

Source (1), Source (2), Source (3)