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Lebanon

Connecting rural areas

by Executive Staff January 24, 2008
written by Executive Staff

One of the greatest complaints by Lebanese living outside Greater Beirut is that they are left out of many development plans. Especially in the IT sector most attention is focused on Beirut where the lion’s share of action normally takes place. Rural areas, however, are left out and not thought of as places where information technology or connectivity means much. But these days this is changing, as a small micro financing program is under way. Al-Majmoua — The Lebanese Association for Development has received a $150,000 grant from the International Executive Service Corps (IESC) to support rural area entrepreneurs in the ICT sector.

This is the first time a microfinance program is aimed at businesses in IT in rural communities, according to Mahmoud Elzein, deputy country director of IESC. “Since IT businesses in rural areas are small, there are many obstacles for them to get financing through a bank whereas microfinance is much more appropriate for them.”

The program provides short-term loans of up to $15,000 to micro and small business entrepreneurs to secure the capital needed to start, as well as for established businesses to expand. The interest rates are subsidized, leaving the borrower with a 1% interest rate and the administration and other fees are waived. “The loans are dependent on the entrepreneurial spirit and a viable business plan,” said Mohammed Bensouda, country director of IESC.

To further encourage interest in the loans, Al-Majmoua has limited the loan guarantees to business capital and excluding personal assets and mortgages. “We wanted the guarantee to be flexible to encourage start-ups to take loans, so that it’s not a barrier,” said Alia Farhat, business development manager at Al-Majmoua.

Value-added program

“If it is a new client we might ask for fixed-asset collateral, which would mean if they were using the loan to buy computers, Al-Majmoua would then own the computers or office equipment during the term of the loan. We don’t go into mortgages or hold personal collateral.”

Borrowers may also get added value of the loan program through technical assistance and training from IESC. The organization already provides ICT-training programs in many rural areas and announced its support and provision of expertise to borrowers. As Bensouda pointed out, “In our program we have several local volunteer experts to assist in rural centers.”

IESC has brought several other ICT initiatives to rural areas, such as affordable wireless ICT access to 20 areas through the establishment of wireless internet service providers (WISPs) and technical training for entrepreneurs. In addition, it announced an e-tourism initiative for rural tourism establishments through internet aggregators.

In just under three months the program has lent to over 35 entrepreneurs in the South, the Bekaa and northern Lebanon. The majority of business start-ups have focused on opening internet cafés and connectivity centers.

The program is sustained through the recycling of funds as loans are paid off and reused for new lending schemes to other IT businesses. “After five years, we would have almost 25% extra capital to use in the future,” said Farhat.

For Ali Nazar, mayor of Arabsalim in the Nabatieh region, one of the major difficulties his village faces is the lack of job opportunities. According to USAID figures, unemployment and underemployment in rural Lebanon is estimated at 25%. While the program is rather small in its range and scope, Nazar is excited about the job creation possibilities as well as the opportunity to keep families connected to their children abroad via the expanded internet centers. Bensouda concurred, “The great part about it is that the program brings greater connectivity to these areas in that the local community will go to these places and use their facilities.”

At a recent press conference in Saida on the micro financing program, one of the recipients told the audience about how she, as a widow in South Lebanon with four children, was able to get a loan and open an internet shop, and is now supporting her family through the business. The loan paid for the computers and also allowed her to hire an additional employee to work in the evenings. “It’s very small scale but it adds up and makes a difference,” commented Farhat.

This program is operated in conjunction with other micro-lending efforts by Al-Majmoua, which in 2006 boasted a loan portfolio of $7 million and over 8,500 beneficiaries all over Lebanon. Since its foundation in 1994, Al-Majmoua has dispersed over $75 million through 80,000 loans. Their 2006 distribution included 37% for services and 44% for trade. Al-Majmoua began operations as the micro-credit arm of Save the Children Lebanon. Since then, it has grown considerably and now has eight offices throughout Lebanon providing not only financial services but also entrepreneur training and exhibition space. Two years ago Al-Majmoua began offering a variety of business development services focusing on gender and women’s economic empowerment.

As Bensouda summarized it, “At the end of the day, this program is about job and wealth creation for people in rural areas.”

January 24, 2008 0 comments
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Lebanon

Prospects for prosperity?

by Executive Staff January 24, 2008
written by Executive Staff

The ongoing political instability in Lebanon has taken an economic toll on the embattled nation, but it seems that foreign companies in the Mediterranean country have not been dissuaded. The recent removal of the barricades opposite the downtown branch of Sir Richard Branson’s Virgin Megastore in Beirut not only brought improved access for shoppers, but also an announcement that the company foresees expansion in the near future.

The major international electronics brand Sony has beat them to the mark, however, with their new 170 square meter Sony World showroom in the ABC Ashrafieh Mall. This showroom comes in addition to the previously established Hamra branch. Ziad Asmar, responsible for Sony at Fattal Holding, the sole distributor of the brand in Lebanon, said that despite the current situation Sony saw growth this year in Lebanon. He suggested that an “expanding line-up of products” has helped the brand stay competitive. He also noted that Sony caters to “financially secure customers, meaning that people delay rather than cancel their purchases.”

Other foreign product lines in Lebanon have also been expanded or will do so in the near future. AZElectronics has opened a 400 square meter store in Sami Solh Avenue to exclusively showcase their Whirlpool and Phillips home appliances. They also expect to open another store in Kaslik in early 2008. Commenting on the difficulties in the country, the chairman of AZElectronics, Andre Zalum, said, “Here in Lebanon, we are used to instability. Life goes on and so does business.” He added that profits remained stable from 2006 to 2007 and that the overall volume of sales has increased. Due to the weak dollar the company has been trying to source products from the United States and the Far East as they are now cheaper than goods from Europe.

Total number of registered foreign companies

Source: Lebanese Ministry of Economy and Trade

Anticipation and expansion

The German automaker Volkswagen has joined the expansion trend as well with their new 800 square meter showroom on the Dora Highway. Inaugurated in October 2007, the new building makes for a larger, flashier venue than the previous structure. The sales manager at Volkswagen, Gergi el-Murr, stated, “Volkswagen believes in Lebanon and expects further expansion in the future.” He said that despite the instability, business has been stable for the past three years and that growth is anticipated in 2008.

But it’s not just previously established foreign products that see a future in Lebanon. According to a report from the Lebanese Ministry of Economy and Trade, 44 foreign companies registered to do business in Lebanon in 2007. That’s up from a wartime low of 34 in 2006 and a year-on-year growth of 29%. It should be noted, however, that this growth only brings the foreign company registration rate back to its pre-July War levels. Twenty-six of the companies are non-Arab and many of those are from the United States and Europe, including the American television news station NBC News and the UK airline British Midland International (BMI).

The Lebanon route came to BMI as part of a packaged take-over of 17 destinations, according to BMI sales manager Maria Sabbah. “We have daily flights from London to Beirut, which is more than any local carrier.” She explained BMI optimism over the deal, saying “this proves that we have faith in Lebanon. We are excited about expanding into the Middle East and Lebanon is high on our priority list.”

While sellers of locally produced products quietly wait for their leaders to usher in the next phase of Lebanon’s never-ending political drama, foreign product vendors and companies have adopted a somewhat more optimistic approach. They seem to speak with a unified voice: Business must go on.

January 24, 2008 0 comments
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Office ArchitectureSpecial Section

Executive health

by Executive Staff January 24, 2008
written by Executive Staff

Executives and office workers are suffering from work-related health problems. Sitting at desks for extended periods of time, frequent travel, in-between-meals, junk food and minimal exercise are taking their toll.

Recently, health facilities in Lebanon responded to this problem with programs specifically designed for corporate executives and management, and nutritionists are developing special meal packages.

Work-related health problems can manifest themselves in a myriad of ways. Some of the most common complaints are neck pain, backache and eye strain, all mostly from 8-plus hours of staring at computer screens and slouching in chairs. And then there’s the so-called “killer” — stress — which can lead to more serious health concerns like heart disease, heart attacks, digestive disorders, autoimmune diseases and more.

Contributing to the problem, of course, are hectic work schedules. Most executives and businessmen are reluctant to schedule appointments for check-ups, which are usually done during the workday and often involve lengthy waits in doctors’ offices. As a result of this, visits to the doctor are generally put off until obvious symptoms show up, according to Dr. Nabil Nassar, director of the American University Hospital (AUH) Executive Health Program. To address the issue of time AUH set up the Executive Health Program as a way to expedite check-ups and preventative tests for busy executives and corporate managers.

The AUH program opened in 2004 and had immediate success with mainly Gulf and Lebanese expatriate clientele. Since the hospital is a non-profit organization there is minimal press about the program, save a description in Middle East Airlines’ in-flight magazine Cedar Wings. The aim of the Executive Health program is patient-focused. “Our main focus is on the executive and his personal needs,” Nassar pointed out. After an analysis of the patient’s existing health, the doctors run a number of patient-specific tests, which are followed by a briefing and recommendations for future health care, like nutrition and exercise guidelines. “The main idea is that every program is personalized, from the basics like gender, age and family history, to anything else that may show up.”

The program

The program essentially consists of a number of packages, each designed to address the specific needs of the individual patient. Prior to scheduling an appointment, the executive is asked to complete a confidential medical questionnaire, which is then reviewed by an executive health physician who will recommend an appropriate package. These differ on the number and type of tests required. A patient with a family history of heart disease, for example, would be advised to take a number of cardiologic exams in addition to basic screening tests. The patient (‘client’ might be more appropriate) then books an appointment with the hospital, which means one or, maximum, two nights in the program’s Executive Suite, which comes equipped with internet service so the executive can send and receive work-related emails, a television with satellite, a private bathroom, and a mini bar stocked with non-alcoholic drinks and healthy snacks. Indeed, the executive treatment begins upon arrival, with a quick call to the program’s office so that an elevator can be reserved and sent down for the client.

After the series of tests and checkups, the executive is offered a choice of additional services, some of them catering to the region’s trends and tastes. “For example,” said  Nassar, “one woman asked and was able to have a plastic surgery procedure done through our program as well.”

Some out-of-town clients will even have the program book hotels for them. It is in this sense the AUH program shows its Lebanese side. While the number of clients has declined due to the July War of 2006 and the unsteady political situation, the primary selling point, even with a university hospital like AUH, is providing outstanding service coupled with a reputable hospital and relying on the Lebanese tourism sector. Many of the clients are Gulf executives who swing by while on their way up to Faraya’s snow with their families. News of the program has largely spread through word-of-mouth, with high-up executives from international companies booking appointments after hearing about it through colleagues. One such company (the name of which has been withheld for confidentiality) had a manager book appointments for all of its employees. “Absenteeism from work is becoming a problem, and this particular manager found it to be more cost-effective to invest in preventative health,” explained Nassar.

So how much does an appointment at AUH’s Executive Program cost? Given the personalized nature of the program, the final bill can run from $1,000 to $4,000, with additional costs for extra procedures.

Clemenceau’s Medical Center (CMC) also offers a similar program, the Premiere Executive Health Check. Here, clients who book appointments are also promised strict confidentiality, and sign up for one full day containing several health care screenings, thereby accommodating overloaded work schedules. Clemenceau’s program is arguably more posh than AUH’s, with valet parking and dinner with a spouse included in the package. 

Beirut’s St. Georges Hospital also offers an Executive Medical Health Assessment Package, which, according to director Dimitri Haddad, is a “complete package of visits and checkups.” At St. Georges, clients will go to a preliminary appointment with a family physician, and then have the option of a range of personalized health tests, with an emphasis on work-related risks, like cardiologic, pulmonary, and vision tests. The St. Georges package can cost anywhere from $600-$1,000, again depending upon the individual and health needs.

Dietary options

The three hospital programs all have an emphasis on preventative medicine. Following their allopathic methods, the standard procedure is to screen for any unseen symptoms and then recommend either medicine or surgery. Nutritional guidelines are offered, but are not an integral part of any of the programs.

There are, however, options for the health-conscious on-the-go executive. One of these is NutriFit, a company consisting of dieticians and cooks who offer a broad-range of culinary and delivery choices for busy office workers.

NutriFit’s services begin with a one hour consultation with a dietician to assess the quantity of fat present in the client’s body, followed by weighing, measuring, and checking bone mass. “The primary concern is to lose or to maintain weight,” said NutriFit dietician Zeina Scheib. “Most of our clients are single men with long working hours. They eat out a lot and when they’re home they don’t like to cook. Their only options are delivery, which is full of fat, and they often don’t have time to exercise.” NutriFit’s aim, therefore, is to provide healthy options for lunch, and all other meals if the client requests, provided in the form of full-day catering. Healthy breakfasts, lunches and dinners will all be delivered to the client in the morning, eliminating the need for even thinking about what to eat and and, more importantly, what to avoid. NutriFit tries to diversify and, according to Scheib, meals are as close to “regular” as possible, while avoiding added sugar and anything fried. A typical meal might be cheese manakish with snacks of fruit and sugar-free cake, a Lebanese home-cooked lunch platter like loubiya, and a dinner of healthy pizza. Another choice is the Tailor Made Diet, which “respects each person’s nutritional requirements and daily caloric expenditure.” After a thorough consultation, the dietician creates a diet suitable for busy executives to follow, including restaurant order recommendations for business lunches. So far, feedback has been positive, with at least 50% of the clients being busy executives.

There are two other aspects of office-related health problems that remain to be fully addressed in Lebanon, although their increasing popularity and incorporation in the American corporate world might mean replication in the Middle East. The first is ergonomics, the science of the study of the human body relative to office objects, like desks and chairs. Ergonomics is derived from the Greek words ergon meaning work and nomos meaning natural laws. Ergonomics is typically used by companies as a way to design tasks and work areas to maximize the efficiency and quality of employees’ work. It is an applied science that focuses on equipment design to maximize productivity by reducing fatigue and discomfort. An ergonomist will come into an office and inspect employees as they sit at their desks. He or she will then measure the distances between elbows and keyboard, computer monitor to eye level, and the amount of bend in the knees from the floor to the chair. These will all be adjusted to support the body’s needs. Ergonomists can greatly enhance work environments by dealing with and preventing common office-related ailments like carpal tunnel syndrome and chronic neck, back and shoulder pain, and also offer ergonomic keyboards and chairs to preventive recurrence of health problems.

The inner dimension

After an executive is medically screened, well-fed and ergonomically aligned, perhaps the final step is attending to one’s inner dimension. Recently, companies and individuals are turning to ancient sciences like yoga and Sufism, now made palatable to the Western mindset through office-sponsored workshops and retreats. One such yogic science is the ancient practice of meditation and chanting found in Isha yoga practices. These practices, or kriyas, are based on the science of locating and distributing stale or suppressed energies within the body. Like Tai Chi and acupuncture, kriyas remind the individual of his or her inner strength, especially when confronted with the stresses of the corporate world. Whether holistic, allopathic, nutritional or ergonomic, executives now have a variety of options that help them to invest in their own bodies and minds as well.

January 24, 2008 0 comments
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Office ArchitectureSpecial Section

Office supply

by Executive Staff January 24, 2008
written by Executive Staff

The MENA region is seeing an explosion in the construction of office blocs. Without exception there is a strong demand for high grade office blocs throughout the region. Where Grade A office blocs have been constructed occupancy rates are 98% or above. In the Gulf, the explosion of office construction is on such a scale that some are concerned about an eventual oversupply despite the current strong demand. In the Levant demand is also strong.

Beirut

The residential and retail sectors are currently seen as booming in Lebanon, but office construction as, Elias Harb, owner of Real Estate Magazine, told Executive is “non-apparent”. The existing stock of office space in Lebanon, is inadequate, as most of it is old and of an inadequate size. The reason for this, Harb explained, is because most people who built office buildings in Lebanon, built them for their own use and to their own specifications. Harb said that he is “not aware of any new business centers being developed. The BCD [Business Central District] is quite poor right now.” Mohammed Arayssi, of Batimat Architects, believes that it will take some time before offices will come back to the real estate market. However, Arayssi believes that there is a demand for the construction of large, high-end office space. “When you are in such a specific niche you will always have demand, at least what there is now, is insufficient for the companies that could [potentially] come and fill the space.”

Dubai 

Dubai has occupancy rates of  97-99% in most available office buildings and there is limited delivery of new office accommodation, leading to complaints of persistent undersupply. However, construction of office blocs is occurring at a phenomenal pace. There is a commonly held view that very soon supply will match demand and then supersede it. But for the time being the office sector is currently experiencing excess demand. By 2009 a tripling of office space will increase total supply from 1.6 million square meters to 5.6 million square meters. Real estate experts believe, however, that for the meantime demand from companies around the globe that want to locate in Dubai will soak up a lot of this increased office space. A large injection of supply will begin to apply downward pressure on capital values as early as the third or fourth quarter of 2008, as asking rents may fall.

Abu Dhabi

Since 2000 office supply grew 50% to 460,000 square meters of gross floor area (GFA). By 2011 it is expected to increase by 85% to 850,000 square meters of GFA. Currently there is some 415,000 square meters of office space under construction, but there is insufficient supply and this has led to a rental increase of 30%, in most office accommodations between 2005-2006. The main problem on the supply side is that there are few purpose built primary grade office buildings in the city and occupancy rates in purpose built office blocs are 98%. The quality of city’s remaining stock is low, lacking in communication systems, services and floor plate design. All buildings suffer from a lack of dedicated parking facilities.

Kuwait

Currently an additional 300-400,000 square meters of office space is currently being developed in Kuwait. There is 400,000 square meters of office space currently occupied in Kuwait City and the demand is high. According to Harb, it is “the most attractive market, despite the fact it is the most expensive in the region.” This is due to limited supply as the government owns most of the land. Worries about who will occupy the new office buildings under construction are answered with the mantra known from Dubai: “Build them and they will be occupied.”

Riyadh

There is a current market trend of unsatisfied demand for primary grade office space. Commercial rent rose by an annual average of 15%. Legislation has been brought into place to end the practice of converting villas into offices, this has increased the demand for purpose built office space.

Doha

The main feature of Doha’s office market is that government organizations tend to lease rather than owner-occupy space. It is anticipated that companies will look to functional and efficient mixed use developments.

Amman

The Jordanian capital currently lacks a clear Central Business District. Primary grade office space is scarce and demand for high quality office space is on the increase. Current office stock is mainly poor quality.           

Damascus

Demand for class A office space is being driven by entry of private banks and insurance companies. Most office buildings are outdated and so are being replaced with large office parks away from the city center. Demand is outstripping supply.

Khartoum

There is a shortage of primary grade A and general office space. Current occupancy rates are at 95-100% and construction is rapidly expanding.

January 24, 2008 0 comments
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Office ArchitectureSpecial Section

Head of Nabil Gholam Architecture and Planning

by Executive Staff January 24, 2008
written by Executive Staff

E What is the current state of office architecture?

I have worked on a variety of very large and complex projects in Europe. I came to Lebanon in 1994, when the country was an architectural backwater after the war, with apartments being converted to working spaces, with no science or knowledge. Anybody who did any decent floors that had some light and space thought they were doing a fantastic office building. There were a couple of office buildings in Solidere, like Atrium and An-Nahar. These are rather ordinary working spaces that don’t exploit all the potential of the sort of working machine that you can develop when you do an office space, where people can be very effective.

It is obvious that for productivity and the simple human fact that you are going to spend most of your living time inside a box, it might as well offer you certain things. In terms of comfort and architectural spatial delight, where things happen, it is not banal, it is rooted to the place where you are and it works well environmentally.

There is also the intelligence aspect that has been overdone and sometimes makes you miss the more straightforward solutions. What you want are good spaces that are very functional and circulate very well, have a good elevator and consume as little energy as possible.

In Beirut, however, we’ve had little chance to do offices as not many thriving businesses are looking to relocate to Lebanon, especially right now. In the last years, Solidere shifted a lot of its development to residences only to realize that there may be a shortage of offices the moment demand resurges.

Bank Audi is an example of a good office building in Beirut. But compared to the advanced state of the office world, in Lebanon we are far behind. There are interesting office buildings in Dubai and Qatar, but most are commercially driven and there the temptation of the builder and developer is to make something straightforward that sells quickly and yields maximum profit. Sometimes perks that significantly increase work quality can add a bit of cost and require a special design effort. The business culture in the Middle East has not yet fully supported this, but it will come. At the moment we deal with very speculative and very commercially orientated offices.

E What are the key aspects in office design to maximize staff output?

The key design aspects can vary depending on whether it is a speculative office, which will be rented to a variety of companies, or a headquarters or dedicated to one or a group of companies. In the first case, you have to find the highest common denominator and think about efficiency so no space is wasted. Then there is “sexability,” which is to make it a bit sexy and a pleasurable place to be. It becomes a lot more focused when dealing with a headquarters because you know the company quite well, you can research, interview and brainstorm with them until you find what they need and then customize it. But then one day they are going to want to sell this building and move elsewhere, making it necessary to go back to a more generic floor plan from a highly customized one. There needs to be a balance of the customized, spectacular and the more generic that can adapt to everyone.

Some essential factors in designing an office are universal: Light, air and moving in the space. The architect can control this. For example, the underground car park is a space that is often forgotten. Now, the elevator might be third rate but we make the experience of coming into the parking nice by lighting the car park, diverting all the mechanical aspects in a very organized manner and so it does not overwhelm you. Technical things do have their own beauty and can be organized in a way to be displayable.

Office architecture must be done in the most straightforward no-nonsense way. It should be made to serve you, not impose on you. This is how I see architecture in general. It can really contribute in serving a more modest, more humble role. This means that it has a listening capability when you design it.

Over the last 20 years, most people have been moving towards open offices and now there is a tendency to be careful about privacy. However, there is only a certain amount of privacy you can give to the employees so that they don’t spend all day on Facebook. Yet, if you make it too public there are certain business aspects that suffer. The ability to work in an open space has to be acquired. Sometimes you do need privacy for business matters. Thus, the open spaces have to be carefully designed.

Then there is the light aspect. It is nice to have natural light but direct sun light can be a problem, so the screening, the intelligent skin of the building is very important. Also, noise is important, so you need absorbent surfaces. Architecture is about the environment around you, the non-reflective surfaces on the walls, floor and ceiling. These are factors that are not often thought of but for me they are primary and add to quality of life. Then there are the electro-mechanical systems, heating and cooling. If you don’t achieve the right temperature you get all sort of funny reactions.

The next stage is the more poetic aspect of architecture, the more enchanting aspect of being in a place. You can bring in things that can relax and make life in the office more comfortable. Right now we are designing an office space in Barcelona that is only five stories and the client wants very large floor plates, of 4,000 square meters, which is 6 tennis fields, and the client demands to come up with something very special. He cannot articulate what that special thing is, as most often people cannot. So we have to think and create a working environment that can relate to Barcelona.

The other aspect that is important in the office is what are the facilities offered to the employees, not only the meeting rooms and lounges but things such as daycare, gyms and restaurants. The cafeteria is very important: If you have great food, the employee won’t leave the office. Like architecture, food can be done well or poorly.

E How has technology changed the way offices are currently designed?

When it comes to technology it can assist to a certain degree in automating things and simplifying your life in theory but sometimes technology can backfire and make your life more complicated. I believe in common sense and am not a great fan of systems that control everything. What happens when the system needs maintenance? You come to Lebanon, you install the system, it breaks down, the client does not want to pay for the maintenance, they have an argument with the tenants, and thus, after two years half of the blinds are not working. But it is all relative. There are other examples, some funny and some worrying. You can have a badge that tells the receptionist where you are, but are you entitled to a certain degree of privacy in the office? Technically, the company you work for can see where you are in the office. But things like this I find a bit dubious. I need technology to get the temperature right, to make sure the comfort is right, to make sure the kind of glass we are using will diminish the need for energy. But I do not want to be a slave of the technology we are using and have to wrestle with it all the time.

Now things are going wireless and this is changing the design of the office because before the cabling was an important factor and now you can do without some of it. Another technological development is that now people can work from home, which means they don’t need as much space in the office so you have “hot desking” and you just come into the office and plug in or with wireless you don’t even plug in. Conference calls and video conferencing have meant that you need small, quiet rooms.

The most fundamental thing is that the technology does not change very much. I think the question is: Have you designed intelligently and carefully? There is good architecture with technology and there is bad architecture without technology. There is good design where people are thoughtful and move out of the banal, boring thing that we are pushed into, by having to design very quickly to build very quickly for people who are living very quickly. Like everything, the technology is just one more factor that an intelligent decision making process can harness and get something out of. It is not that it changes any of the fundamentals. You take in stride the technology, whether it be an elevator or a very complex system with sensors and you try to use it with common sense thinking about what it is going to cost, how is it going to serve, how is it going to be maintained, what is the point in having it, what it is going to cost and if the answers are positive, you implement it intelligently. Architecture is a decision making process and everything is a variable in the equation.

E Is there any move away from glass and steel construction and are local materials used more?

Well, we are a bit tired with the luggage that you have to take with you every time you work with glass and steel. It’s an easy way out for architects, although not when you want to do a very good building. In terms of our buildings, we do have a few that are completely glass but they are usually built with a pretty sophisticated skin: they have double skins with many layers, with shutters and screens that make the best out of the glass exposure. But I think that it should be reserved to very particular cases and clients. More and more, I feel there is some interest to reintroducing solids. The problem is that if you go with a large building or a tower, the solids fight your views. As you want more views, you want more glass and then you end up caught.

We have been using local materials since we were established 14 years ago and we insist on using local material as much as we can. A project that we are doing in Faqra digs the stone out of the land across the street, which is owned by the client. When it comes to wood, as Lebanon does not produce wood we have to import. But you would be surprised how things fit and integrate when you use local material. When they are done intelligently they just belong.

E Will the Gulf move to more suitable materials for the climate?

I think that the tendency should go there. It’s hard to say because there is so much money and so much excess money. Every extreme is allowed these days and it is actually encouraged to show off. People become more thoughtful in moments of need and when you have to manage the resources. I am not optimistic in the immediate term but may be in the medium and long-term.

E What is more desirable, single or mix-use offices?

There is a tendency to say mix-use is the solution. In New York, for instance, they found that Wall Street was deserted at night and a sinister, scary, dead neighborhood. So you create synergy by mixing, not necessarily in the same building but the neighborhood, which is beneficial in a hot climate like Dubai. Mixed use buildings often do not mix elevators and stairs so everyone can live without feeling the pressure of having other kinds of tenants in the building. You can also do neighborhoods that are closely knit together with single use. When you want to brand certain areas like Internet City and group certain uses and certain type of tenants for marketing reasons and practicality because of location, you then have to create with them the support and the services that go from parking to food, shopping, pharmacies, whatever is needed, to allow such a population of workers to have a minimum feeling of comfort and humanity instead of making them feel they are in work camps. In this sense mix-use helps. But it is not necessarily always the answer, and it is not a question you can answer with yes or no. It depends on what, where and what sort of thing.    

E What is your opinion of the development of office parks?

One must always remember that they make money. There is demand and a good or average developer can put five office parks and put the perks in there. It doesn’t necessarily make a great environment but it is not always an urban failure either. It depends how well it is done, how pleasant it is. It appears that when you get to a certain scale, when you employ 30,000 people, you need around you another captive market of consultants and suppliers, so all those operate in the region. Naturally then it is very polarized and very “officey”. Thus, it depends on what type of company you are and your size.

My preference is a mix-use environment. I find that some of the richness of Europe comes from the layers and layers of urban life stratified in the given city center. You want to be in Berlin, Barcelona, London, Paris, New York. When you go down in the street it is vibrant with life, there are lots of choices. If you are in an office park, great! You get to go back to your wife in the evening if you are lucky and commute for two hours. Sexy it is not.

January 24, 2008 0 comments
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Office ArchitectureSpecial Section

Designing space

by Executive Staff January 24, 2008
written by Executive Staff

The stunning building boom taking place in Dubai has also made it the cutting edge for office design and interior products.

Office Exhibition 2008 is taking place next month to showcase the latest trends and product lines. The exhibition is hosted by Cityspace, one of the largest interior design firms in Dubai and will showcase the latest in office design and furniture.

With such a vast addition of office space in the region, the office design and furniture market is expanding proportionately. The market for office furniture is estimated between $190 and $272 million and expected to triple as the new high-rises are built.

“The double-digit growth of Dubai’s economy has already propelled the development of the Office Exhibition,” said Paula al-Chami, exhibition organizer for DMG World Media.

Cityspace will also be offering a number of seminars on transforming your office to make a powerful statement. One such seminar is a two-day workshop entitled “Business by Design,” hosted by the Association of Professional Interior Designers and another is “Workplace Freedom” hosted by Eames Demetrios, grandson of Charles Eames, one of the most iconic designers of the 20th century.

Open, flexible spaces

“As of now we have 23 countries participating in the show. The largest groups are coming from Spain, Germany, UK, Italy, Turkey, US and UAE.”

In attendance are the major international office furniture design companies and visionaries such as Bene, Herman Miller — who created the Action Office (better known as cubicles), Steelcase, Vitra and Frezza.

According to Cityspace, office layout is going more and more toward open, flexible spaces in Dubai. With office space in short supply and organizations adding more people to their already constrained environments, the need for flexibility to change the environment is paramount.

The new modular systems coming out are multi-functional and flexible as the focus of the latest trend in office furniture. They combine storage areas with soft seating and data connections. The ability to transform the workplace to suit individual needs and then be quickly and easily grouped together for team meetings is what is needed in Dubai. Also, flexible partitioning systems that are easily movable within the workplace are becoming a key trend. As the office environment needs open areas that can easily have additions for new staffing needs and collaboration areas for large teams of people, the balance between privacy and interaction is key and maintained by the flexible partitioning systems. Acoustical materials and sound-masking systems embedded within furniture or partitioning systems further reduce office noise to allow workers to concentrate on their tasks. New materials used in these systems are manufactured from recycled materials offering a smaller environmental footprint.

However, the region lags behind in the use and incorporation of ergonomics in the office space. Comfort in the office is more than just a luxury — it is a necessity. As professionals spend longer hours in their offices, health and safety must be taken into consideration. Carpal tunnel syndrome and repetitive stress injuries are on the rise and cut into production and time off work. Investment in chairs and ergonomically designed furniture is a must and will payoff in less work-related injuries and discomfort.

The emphasis on using recycled materials and more environmentally-friendly designs has been slower to catch on. “It’s going to be forced on them very soon,” said Mehdi Moazzen, managing director of Point of Design in Dubai. At the moment he estimates that environmentally-friendly projects are in the range of 5-6% of his total projects.

However, it is argued that these concepts must first be in the consciousness of the designers themselves. According to Gregory Gratserelia, head architect for Gratserelia Design, “We are trying to inform ourselves of all of the technology available. There is not a high demand in this part of the world but it will happen. You have to give it an example. Once there is a project that is the most environmentally-friendly, it could start a chain reaction.”

Outside the multinational corporations in Dubai, open horizontal office designs are less important where the regional focus is on hierarchy. The modern floor plan of open working areas with flexible work stations has yet to catch on in most of the offices in the region today. Hierarchy is still dictated by design of individual offices for management. Moazzen doesn’t see the end to hierarchical designs anytime soon. “Unfortunately, we are going more towards the cellular offices in the region. The ratio is usually one office to six people working outside the office. There was a plan in Kuwait where the ratio was one to two with one person in an office and two sitting outside.”

While Dubai offers the latest in manufacturing trends, Lebanon historically was the style capital of the Middle East. “Lebanon used to be the showcase where all of the other Arabs looked at Lebanon and tried to implement what they saw,” explained Gratserelia. “Lebanon offices are simple but they demand quality, yet the Gulf demands quality and top of the line in everything, which I respect.”

Divergence of style

But there is a divergence now between Lebanon and the GCC in terms of where they look for style, according to Dori Hitti, architect designer of Le Cercle Hitti Projects. Stylistically, Lebanon has traditionally followed European trends either classic French or sleek Italian designs. The Gulf, however, tends to have more American tastes with its larger furnishings and solid wood tables.

Several factors must be taken into consideration when designing an office because office design is more than just how the office looks. “I don’t believe in decoration — I believe in space. I don’t decorate. I know how to create volume. This is what is important. Decoration is subjective. But if the space is nice and if you feel good, — if the space is symmetrical, there is good lighting, and proportion, then whatever you put you will like it because it feels good and that reflects on productivity,” said Gratserelia.

The client-designer relationship has to be one based on trust to enable the designer to interpret the aims of the company or corporation and come up with a workable design. According to Moazzen, “It’s an architect’s job to educate the client on what he wants. Unfortunately, there are a lot of ‘yes’ architects and designers.”

What goes into an office design is more than simply arranging the office and following the latest in style and trends, the objective a designer can bring is a workable space that is organized and efficient but also to make everyone feel at ease.

For Sari el-Khazen, an architect in Beirut, the client-architect relation is “an intelligent combination of the needs of the client and the designer’s expertise. The office environment should reflect the corporate identity of the business, the nature of the business within the office environment.”

For Moazzen, “The problem with trends is that they creep in from Europe and then everything has to be glass and stone for example — especially in the banking sector. Sometimes their corporate identity and the interior are designed by a graphic designer rather than an interior designer and it feels more like a McDonald’s than a bank. You want, esthetically, to feel the strength and the stability of the environment but what you get is a fast food shop.”

However, not every designer’s approach or way of working is the same. “We are sort of arrogant in our approach. Seventy percent of the time, we don’t show the client what they are going to get, we just finish the office and then give them the key,” said Moazzen. This can lead to some pleasantly surprising results such as the Dubai Islamic Bank’s interior style with its Zen appearance with the incorporation of bamboo, river rocks and sleek designs. “It’s very un-Islamic. The reason for it is that the Dubai Islamic Bank is the partner of Millennium Capital. There are two areas so that when you begin at the door it’s very traditional and then you enter a catwalk that is a modern area of glass and metal so as you walk through the door you are walking through the centuries.”

It’s all about space design

For Dori Hitti, architect designer of Le Cercle Hitti Projects, the main concerns in designing interiors are space design and management with lighting making up to 50% of the decor. He describes his style as more European in flavor with a focus on contemporary, with clean lines and geometric shapes combined with luxurious furnishings to lend a comfortable and up-to-date professional state of mind to the organization. He designed the offices for Investcom (now MTN) in Lebanon in which there was a clear distribution of spaces and offices separated by wood paneled walls and an array of lighting “to explicitly engage the visitor to feel as if already attending an event, something grandiose, something memorable.”

Most organizations opt for contemporary styles that give a feeling of progression and organization. While some offices still use traditional styles and oriental designs to reflect the region, these offices are few. According to el-Khazen, those that are trying to create neo-Lebanese or Oriental styles are constrained by the histories they are trying to incorporate.

However, for organizations on a tight budget or new entrepreneurs, industrial is the way to go, according to el-Khazen. Lightweight concrete on the floors, exposed duct work and innovative ways of using industrial substances keep the cost down though still making a statement of innovation and resourcefulness. Industrial doesn’t have to be cold, corkboard on the walls is an inexpensive way to cover surface area and the natural color of the materials make the room lighter.

In the end, it’s all about organization and comfort with style and trends coming secondary. As Gratserelia explained, “You are no longer subject to a style like we used to have that lasted 10 years like the 50s, 60s, and 70s and so on. Now, you can incorporate styles that reflect your taste.”

January 24, 2008 0 comments
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Office ArchitectureSpecial Section

Horizontal flexibility

by Executive Staff January 24, 2008
written by Executive Staff

The MENA region is currently experiencing a boom in office construction, as every country in the region lacks the prime grade office space that is so sought after by large companies. In Dubai alone, according to Colliers International, there is currently 4 million square meters of office space under construction. The office, and the way the office is thought about, is transforming just as fast as it is being constructed. The computerization of offices, from the internet to wireless, is completely restructuring the layout of the office. This has resulted in the fundamentals of good office design today meaning that much of the current stock of offices in the MENA region are unsuitable and even the current stock under construction may soon become dated for design savvy clients. Santa Raymond, a leading interior design consultant and co-author of “Tomorrow’s Office — Creating effective and human interior’s,” explained, “If you look at offices in the Middle East there will be a boss who sits at the top of the room in an open plan or in his own office, with everyone else in rows in front of him. There is a very hierarchical situation.” It is this office hierarchy that is changing out of all recognition, with the onset of computerization, in cutting edge office design. “In the brightest offices they are now saying that offices must not reflect your seniority or your pay package but the layout of the office must reflect your task.” Firms have realized that to be as innovative and efficient as possible they have to rid the office of the traditional hierarchical layout and keep things as horizontal as possible.

Open plans and flexibility

A horizontal layout not only allows a more efficient design with regards to employee’s tasks but it also means that the office can be subject to change and is given – what has become the new buzz word in office design – “flexibility”. The ability to change the layout of the office itself with relative ease is increasingly important for many offices. Flexibility translates into offices being designed open plan, with boards as partitions, and structurally to have as few columns as possible. Tarek Sinno, of Nabil Gholam Architecture and Planning (NGAP), told Executive, “the layout of the office with the greatest efficiency is the one with open space where people would come and go … You now don’t have an office but an open space.” Flexibility in time, with the introduction of such concepts as flex-time, has meant that staff can log into work from home, through the internet, or work in cafes and even different countries. Office staff are not tied to their desks as they used to be and office design has responded to this transformation in work practices through flexible and horizontally designed offices. “You go into offices and they are empty 75% of the time, so why have a desk when you are out most of the time?” Raymond rhetorically asked. Sharing desks or ‘hot desking’ is the latest way in achieving office efficiency, in which staff can book a desk before they come into the office, with their belongings in individual trays. “In the brightest offices, such as Bloomberg, they have big open spaces and the CEO has his desk on the floor, he has a meeting room that anyone can use when he is not there. But he does not have his own office,” said Raymond.

With the space that has been created by reducing the number of desks, small meeting rooms and single person concentration rooms have been created. As the open plan office gets rid of any possibility of privacy these small rooms around the perimeter of the office solve this dilemma. Also, with the death of the individual office, rooms for private meetings are essential. Small ‘concentration rooms’ are now essential in open planned offices, designed so people are able to make private phone calls or read quietly. Lounges in offices are also becoming increasing important where employees can just relax with a few colleagues. According to Raymond, “The ambience of the office is very important, as staff are now getting fussier.” Other issues of central importance in satisfying design conscious staff involve ensuring that the light levels are correct, having good furniture, art and plants, and also to ensure that the air quality is good. Getting the right ambience also entails providing the right services. Companies now offer services to their staff such as gyms, daycare, and dry cleaning. Big firms are seeing great benefits in investing in their cafeterias, as staff are then less likely to go out of the office and staff are also happier as they maximize their time off.

As to whether the move to flexible and horizontal offices is permeating the Middle East, Mohammed Arayssi, an architect at Batimat Architects, told Executive, “What has changed the most for us is the way the spaces are partitioned, giving much more control to the people inside with curtains or blinds, using different ways to filter between spaces. Rather than actual differences in the distribution of people in the office, the manager still has 12-16 square meters. The real democratic open spaces [have not arrived] and I don’t think it will come.” However, Arayssi stated that you can see the more open and horizontal trend in office furniture. “The type of actual furniture they design, you see a trend done in that orientation, for example, you have one long table with small partitions that you can remove very easily, if you want to work for a few hours you come in, move the partition and use the space and then move out.” With international companies increasingly occupying much of the office space being constructed, at least in the Gulf, the shift to horizontal offices will no doubt occur eventually. Just as elements of horizontal design have crept into offices in the Middle East, the pressure to attract a highly skilled staff, which is always at a premium, will no doubt force companies to have horizontal layouts. Especially, as various companies compete among each other to have to the most attractive, prestigious and cutting-edge offices.

Iconism

One other way companies have achieved prestige is to create ‘iconic’ buildings. Tarek Sinno explained that “companies are keen to design their buildings so it is not just another office bloc. There is the trend of the high-rise that we now see in the Gulf, a symbol of presence, a symbol of power.” The desire to build the tallest tower in the Gulf is creating intense competition and three towers — Burj Mubarak al-Kabir in Kuwait, Al-Burj in Dubai and Burj Dubai — are all jostling to become the tallest building in the world. The Burj Mubarak al-Kabir in Kuwait is currently poised to win the much sought after title, reaching a structural height of 1,001 meters. Elie Harb, head of Real Estate Magazine, told Executive that “there is a lot of excitement about building the new Mubarak towers, there will not be a problem in filling that space, as people will want to be part of that scene.”

Dubai, in particular, has seen a spate of so-called ‘iconic’ buildings rise across its horizon. The drive to have ‘iconic’ architecture in Dubai and the Emirates has been very profitable, for Iraqi born and AUB educated architect, Zaha Hadid, who is currently designing two new office buildings in Dubai, the Signature Towers and the Opus. These office blocs are just two among many projects being designed by Hadid in the Emirates. The Opus office tower, a $470 million project, is another attempt by the architect, in her post-modernist repertoire, to re-think the office bloc. The project is comprised of separate towers that are strung together to give the appearance of a solid cube that seems to hover off the ground with a, “distinctive void in the middle [of the building].” The Opus ensures that the offices have a high level of ambience and areas for relaxation, executive dining, exercise, and “nap shell” rooms all designed into the office space, so “occupiers need not leave the office.” The Signature Towers, also planned to be built in the Business Bay Development in Dubai, are three towers that intertwine with each other and are designed to share ‘pragmatic’ elements and to rotate to maximize the views towards the creek. The towers, unusually for the general trend of the region, mix offices with residential space.  

Offices of Glass and Steel

Both of Zaha Hadid’s office bloc’s use glass and steel as the main construction material, in what is a firmly entrenched trend in the construction of office space in the MENA region. The reason for this, according to Tarek Sinno, is because “glass and steel is sexy, trendy and contemporary. Glass gives you this image of modernity.” However, using glass on a mass scale in the Middle East causes many problems, especially in the Gulf. To solve the problem of letting too much sun in you have to put in double or triple layers of glass and it also means that the air conditioning is on all the time. Despite these draw backs, the sex appeal of glass and steel buildings remains strong. The rising cost of steel and glass caused by the demand in China and the slump of the dollar, as most of the glass is imported from Europe, has meant that developers are beginning to think of alternatives but when building tall the dominance of glass and steel is inevitable. “Glass will always be a part of architecture but I hope that it will not stay as just an aesthetic material as it is now,” Arayssi said. There is a search for methods to use glass and steel in a more environmentally friendly and cost effective way. He sees a future in which glass will be used in a smarter way, outlining that, “Now what is happening is that there is a cross-over between technology and construction materials. You have materials that are working for the building, so it is not something that is very passive.” Innovations constantly occur in the way materials are being used, especially with glass, to make the use of the material more energy efficient and even generate energy. The major obstacle in using these innovative materials is that they are expensive and untested, so a push is needed to encourage developers to use these ‘smarter’ more efficient materials.

‘Greener’ materials

In October 2007, the ruler of Dubai, Shaykh Mohammed bin Rashid al-Maktoum, issued a resolution mandating that all new buildings built in Dubai must meet certain standards regarding energy efficiency, water conservation, the usage of renewable material and recycled products. This has reportedly caused some companies to go back to the drawing board and re-think the way they are constructing their buildings. Another ‘green’ push that the Emirates are attempting is through the creation of a rating system — styled on the Green Building Council in the US — Leadership in Energy and Environmental Design (LEED). Atkins Architects, designer of the ‘iconic’ Burj al-Arab in Dubai, has been involved in the creation of LEED rating system and is leading the way in the construction of ‘green’ buildings in the Emirates. Dalia Ajrami, a senior architect at Atkins, extolled to Executive the ‘green’ virtues of their latest projects in the Middle East. “The Bahrain World Trade Centre is the first commercial building to harness wind power for energy and the DIFC Lighthouse tower is set to be the first commercial tower in Dubai to reduce its total energy consumption by up to 65%.” The DIFC Lighthouse tower, to be located in the Dubai International Finance Centre (DIFC), will be a single use office tower, with 64 floors of prime office space, with the top 120 meters of the tower having three horizontal-axis wind turbines to harness the northwest wind for energy use. Although glass and steel are still the primary construction materials this new project is leading the way in showing how those materials can be made to work with the building. Its glass exterior will have an integrated photovoltaic mesh that harnesses the sun’s energy and provides shade to the façade. This will subsequently reduce the solar glare, which will in turn cut the building’s cooling requirements. As for the future of ‘green’ buildings, Ajrami thinks Dubai will be a leader in the shift to sustainable buildings, but problems remain in the production of locally manufactured building materials. Raymond, however, does not hold the optimism that Ajrami displays and sees Dubai as an “embarrassment”, because most of the buildings being constructed will not last more that 20 years, which of course is anything but sustainable. “In construction there is the idea of embedded energy, which means trying to demolish as little as possible. That is why Dubai is so terrible.”

The Importance of Good Office Design

It is the lack of thought put into the office that has been the main ailment which much of the Gulf has suffered from in the design of the interior and exterior of office buildings. This lack of thought being put into an office space has been the consequence of the pace and speculative nature in which office developments have been constructed in the region.

There is a chance for the second wave of office building projects currently underway in the region to break the prevailing mode, and to move to a more progressive method of office design and construction. “The relationship between how well your company performs and what your building is like, is strong,” says Raymond, “Executives need to engage, good design has a monetary value in performance now, if the building is energy efficient it costs less to run and well designed buildings keep their value.”

January 24, 2008 0 comments
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By Invitation

The doctor and the pharmacist

by Ramsay G. Najjar January 24, 2008
written by Ramsay G. Najjar

The other day I was faced with a dilemma. I had a terrible cold, but I wasn’t sure whether I should merely ask my pharmacist for advice or go to the doctor. I decided to start by visiting the pharmacy, and I ended up leaving with a big bag of decongestants, Paracetamol and vitamins.

After a few days, I started to feel better, while knowing that it could have simply been my allergies. In retrospect, I could have saved myself a lot of unnecessary pill-popping had I gone straight to my doctor for a proper diagnosis and the right prescription.

My dilemma can easily be compared to the one faced today by organizations in the Middle East when communicating with their stakeholders. Just as I referred to my pharmacist, most companies are used to referring to advertising agencies for advice, and when the agencies’ campaigns fail to deliver the desired results in terms of their bottom line or stakeholders’ reactions, they merely decrease their advertising spending and declare the advertising business in the region ineffective. Yet, it is paramount to point out that the problem certainly does not lie in advertising, without which the client would undoubtedly miss out on significant opportunities to build a brand and fulfill key goals. The real problem is efficiency and effectiveness in communication — choosing the right messages that answers the proper diagnosis.

In order to understand the communication scene in our part of the world today, it is best to take a look at the evolution of communication in the West. Only a few decades ago, reference to “communication” was reserved to the realm of telephony and telecommunications, whereas advertising was limited to commercial publicity and promotion. Soon the lines began to blur, in which we consume what is essentially one type of content coming at us in different forms, through different channels, with no clear categorization of the “serious” versus the “commercial”.

A big brand name like Coca-Cola, for example, began in the late 1800s by promoting its carbonated soft drink’s “secret formula” and continued to focus on the drink’s original taste throughout the 20th century. As Coke’s clout grew into an international symbol of American lifestyle. Coca-Cola’s image and brand equity became dependent on a variety of factors, including its public relations, social responsibility as well as its marketing and advertising.

The “ad agencies” that were purely dedicated to advertising and serving their clients under one roof as a one-stop-shop of communication solutions realized the evolving communication needs of consumers and the public were becoming more mature and demanding. They began to set up standalone units that are specialized in a specific discipline of communication and can thus offer specific solutions in advertising, public relations, corporate social responsibility, corporate identity, media planning and buying, and later online and digital media.

In the Middle East, big communication agencies originally entered the immature market at the time with their eyes fixed solely on the “cash cows” of advertising and marketing communication, selling “communication cures” over the counter without any prescription.

This approach has had its downside despite the original ‘boom’. With agencies prescribing and selling the medication, companies in the region soon became wary of the obvious conflict of interest. Balancing out this conflict meant always negotiating hard and pushing for reductions in the proposed advertising spending budgets. This has lead to a losing situation, with the client not getting the desired communication results and the overall sector seeing low per capita advertising spending.

In such a situation, we are in dire need of a fresh perspective that can tackle organizations’ communication issues and benefit both the client and the industry. This perspective is provided by the extra pillar that the West has long since added: the strategic communication consultancy. Going back to our analogy, the consultancy, like the doctor, has the objective perspective, free of any conflict of interest, which allows it to properly diagnose the situation and recommend just the right amount and type of medication needed to effectively address it and fulfill the client’s goals. The addition of this pillar makes the triangular relationship between the client, consultancy and advertising or other communication suppliers a winning one, whereby the clients’ objectives are met, meaning only that they will come back again and again, to both doctor and pharmacy, leading ultimately to catalyzing the ad sector in the region.

Furthermore, strategic communication consultancies treat communication holistically. This does not mean that they merely view public relations, marketing communication and advertising as connected but rather that they look at all communication messages and channels as part of a larger strategy to interface with external and internal stakeholders and achieve a set of defined objectives.

Since corporations and the public sector today have their image under the microscope and many organizations have faced demise because of a tarnished reputation, strategic communication consultancies offer advice that can build an organization’s image and immunize it by helping build a “trust bank” with its stakeholders to draw on during crisis.

By brining together the added value of these complementary elements to the organization’s communication, a synergistic effect is created — one that is in the service of the client’s interest, leading to a win-win situation for all.

Ramsay G. Najjar, Chairman S2C

January 24, 2008 0 comments
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By Invitation

The road to riches

by Imad Ghandour January 24, 2008
written by Imad Ghandour

Dear very successful executive,

You have been working so hard lately, making sure that your company is heading in the right direction, meeting and exceeding your targets, and making sure you distribute healthy dividends to shareholders.

You are probably getting a good base salary, a healthy annual bonus, and some sort of profit sharing. After all, the shareholders want their interests to be aligned with yours as you are a critical pillar for the success of the company. As you are a star in your industry, the shareholders do not want to lose you to the competitors.

But something still seems not right. Are you getting your fair share of the profits? Can you do better financially? Can you grow the business more aggressively? Why can’t the shareholders re-invest the profits instead of taking dividends? Why not get a financial institution to back an aggressive expansion and acquisition plan?

Management buyouts are becoming more common globally and regionally. With a backing of a private equity fund with deep pockets, you may buy your company from your shareholders. You can then go about your ambitious plans with the backing of a shareholder that can speak your language and share your vision. Both of you have their interest aligned and focused on making your company as profitable as possible as quickly as possible. And PE funds don’t lack the ambition: they probably want to triple or quadruple the size of the company over the next few years.

If your shareholders don’t want to sell, how about locating, in your industry, another company to acquire. I am sure you can manage that company as successfully as yours. And the private equity funds will still be interested to partner with you in what they call “management buy-ins”.

Four Seasons, Aramex, Boots-Alliance, Kinder Morgan and others were bought out by their respective management with the backing of private equity funds. The respective CEOs grow their business more aggressively with the backing of the private equity fund, realizing excellent returns for the fund and for them.

But be prepared to put some money where your mouth is, as strategy presentations and business plans alone will not work. The private equity fund will only back those that are willing to risk their own fortunes to make their dream come true.

And be prepared for early retirement after a few years of hard work. The PE firm (and you) will only make money by selling the firm. You will then be rich, but most likely unemployed.

Aramex was taken private by its CEO in 2002 with the backing of a regional private equity firm. In 2005, it was re-listed on Dubai Financial Market tripling the investment for the private equity backer. The CEO and his management team bought 25% of the company and more than quadrupled their money at exit, and they remained on the helm of the company after listing.

Kinder Morgan was bought by a group led by its CEO in 2006, and the CEO automatically made more than $1.8 billion, increasing his stake from 18% to 31% of $15.2 billion company without paying a cent. This was not highway robbery. The deal was done with the consent of Kinder Morgan happy shareholders! Shareholders got the price they want — which was 27% above market price — and the CEO got the company.

Some fresh ideas for a momentous new year’s resolution?

May 2008 be prosperous on all of us.

Imad Ghandour is head of Strategy & Research, Gulf Capital and Board Member of the Gulf Venture Capital Association.

January 24, 2008 0 comments
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By Invitation

The old curse of sectarianism

by Octavia Nasr January 24, 2008
written by Octavia Nasr

I was 14 at the time. Lebanon’s civil war was in full force. One afternoon the shells began raining down on our neighborhood in Beirut. We ran from school screaming. Out of breath, my knees giving way, it seemed to take forever to reach our local shelter — a dark humid room at the back of our apartment block.

The memory of that terrifying afternoon receded — until recently. After more than a decade of relative peace and reconstruction, the bombings and assassinations have returned to Beirut. Every time I hear of a new explosion, I think of a frightened child sitting in darkness.

In 1988, I watched the last throes of Lebanon’s civil war firsthand. Now I watch from another continent, but I find those same emotions resurfacing.

The actors are like shadows from a long gone past. They are grayer perhaps — those who have avoided assassination. But the cast in Lebanon’s tragedy has changed little in two decades. Then, as now, a presidential election is the setting, and the struggle where religion and clan play the main roles threatens to set Lebanon back 20 years.

In 1988, the president’s term was coming to an end and the warring factions were unable to agree on a new candidate. Militias prevented parliament members from reaching the assembly building. Compromise was nowhere in sight. The West had abandoned Lebanon to the manipulation of its neighbors. Syria had its choice for president; Israel had its own allies — a foil for growing Muslim radicalism. The country was awash with weapons.

In his last act as president, Amin Gemayel named fellow Christian and army chief Michel Aoun as prime minister. At a stroke, he shattered the convention that a Muslim hold that position. Muslims refused to serve in the Cabinet and the country ended up with two governments. Aoun famously declared: “I am prime minister and six ministers in one.” Aoun’s “War of Liberation” against Syria turned into defeat. Then, he turned on fellow Christians of the Lebanese Forces in the “War of Elimination.” When that failed, the Syrians drove Aoun to take refuge at the French Embassy.

I came to CNN as a World Report panelist in 1990. I tried to explain Lebanon’s chaos, the bewildering array of factions and the horrors of civil war for ordinary civilians. I was offered the opportunity to stay at CNN and gratefully accepted the chance to escape the anarchy.

But almost as I left, the civil war was being laid to rest. The various factions had fought each other to a standstill; Arab governments helped negotiate a new constitutional framework overseen by Syrian influence. Peace came to Lebanon, but it would be five years before I returned.

I went back in 1995 and was stunned. I kept looking around for checkpoints manned by militants. I couldn’t believe that I could go anywhere without being harassed or kidnapped. No longer did identity — Christian, Muslim or Druze — define where Lebanese could go. People mixed freely in chic coffee shops and laughing at the same jokes. It was as if Lebanon’s divisions had been wiped away.

Downtown Beirut, once rocked by explosions was rocking to Lebanese pop music. The dusty sandbags had given way to boutiques carrying the latest fashions and deluxe hotels. Lovers had returned to the Corniche, overlooking the Mediterranean, for romantic strolls at sunset.

But the agreement that ended the civil war was more a truce than a real settlement — and was overseen by a “pax Syriana.” As anti-Syrian sentiment grew, so did political tensions. On Valentine’s Day 2005, the Corniche was once again rocked by an explosion. Former Prime Minister Rafik Hariri was killed.

The symbolism left me speechless. On the day of love, Lebanon was thrown back into its most hateful history. It had been widely expected that Hariri would run for office again and demand the withdrawal of Syrian troops. Suspicion fell on Damascus, which vehemently denied involvement. On March 14, Martyrs’ Square became a human sea of demonstrators: Muslims, Druze and Christians alike, demanding the “truth.”

But Hariri’s death also exposed the fault lines that had broken Lebanon a generation previously. Even after it withdrew its troops, Syria still had allies in Lebanon. One is Hizbullah, accused of the suicide attacks against US Marines over 20 years ago. The other is Gen. Michel Aoun; back from exile, the same person who had defied Syria in 1989, but who now made common cause with Hizbullah.

Earlier this year I visited Martyrs’ Square. The spirit of the Cedar Revolution had evaporated. The place looked like a morgue. Anti-government Hizbullah squatters had brought life there to a standstill. As I passed through, business owners stood silent in the sun and shook their heads at me in despair. I wondered if they sensed my disappointment, my pain at watching Beirut bleed again.

Lebanon’s political actors now find themselves re-enacting scenes from the final act of the civil war 19 years ago. Once again, the term of the president is at its end with no agreement on his successor.

And the question haunts me: Will the country’s brief renaissance that so amazed me in 1995 be snuffed out by the old curse of sectarian rivalries?

Octavia Nasr is CNN’s senior editor for Arab Affairs.

January 24, 2008 0 comments
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Since its first edition emerged on the newsstands in 1999, Executive Magazine has been dedicated to providing its readers with the most up-to-date local and regional business news. Executive is a monthly business magazine that offers readers in-depth analyses on the Lebanese world of commerce, covering all the major sectors – from banking, finance, and insurance to technology, tourism, hospitality, media, and retail.

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