Representational image.

Sajjad Ahmad, Deputy Business Editor

Businesses in UAE must maintain an agile and flexible approach while growing and gaining market share by constantly improving their operational efficiencies and maintaining lower costs, said Sadek El-Assaad, Founder and CEO of Zeder Group, a business consultancy firm.

Addressing the challenges, Assaad said, “Businesses in the UAE face challenges similar to those worldwide, but with unique regional aspects. One major challenge is intense competition. The UAE’s attractive market draws startups, large corporations, and deep-pocketed investors, all vying for market share. To mitigate this risk, businesses must remain agile and flexible, constantly improving operational efficiencies and maintaining lower costs.”

He added, “Another challenge is attracting and retaining high-performing team members. With numerous opportunities for advancement, headhunters, and competitive firms, keeping employees engaged and motivated is tough. Businesses need to redefine the employer-employee relationship, especially for critical roles, fostering a sense of ownership and partnership. This approach ensures longevity, improves efficiencies, and drives growth and profitability.”

Assaad explained further, “Business development is also a significant challenge. Maintaining a steady flow of customers amid rising competition requires emphasizing differentiation, targeting niche markets, and positioning products effectively. Improving supply chains helps navigate price pressure and boosts customer loyalty. The best strategy for overcoming these challenges is to build a strong foundation while maintaining agility to adapt to market shifts and client demands.”

Explaining the impact of technologies on businesses, he revealed, “Technological advancements have revolutionised business operations, raising expectations for instant execution and high-quality service. Businesses that adopt and integrate technology for growth and innovation thrive, while those that resist fall behind. Agility is crucial to staying ahead, requiring courage, adaptability, and the right personnel.”

He added, “Artificial Intelligence (AI) is set to bring another wave of change. Businesses must strategically integrate AI into their processes, using it as a growth catalyst rather than resisting the change.”

Highlighting factors while structuring a business for growth, Assaad explained, “Identifying inefficiencies is crucial when structuring a business for growth. These weaknesses often cause stagnation. After pinpointing areas for improvement, an intervention plan addresses short-term needs while leveraging organisational strengths for long-term growth.”

He added, “Building a strong foundation involves three high-impact pillars: cost efficiencies and profitability, team enablement, and efficient client acquisition mechanisms. Successful businesses often have these pillars but need upgrades to compete, sustain, and grow as they move to a higher level.”

About raising the effectiveness of employees within a business, he elaborated, “Employee effectiveness isn’t solely driven by monetary compensation. It’s about how employees feel about their contribution and recognition. If they feel valued, they’ll strive to increase their effectiveness. This sense of appreciation fosters ownership and engagement.”

“Competence can be enhanced through human competencies training, in addition to technical skills. This elevates individuals and builds a strong business culture, fostering belonging and alignment towards common goals. A culture of ownership, engagement, and belonging reduces the need for constant leadership intervention and encourages continuous improvement and profitability.”

On determining the cost structure for a business, Assaad explained, “Modern businesses, especially small and medium-sized ones, should focus on their core operations and outsource non-core activities. This approach maintains agility, allowing businesses to scale up or down quickly. Ideally, 60-70% of total operating costs should be fixed, with the remainder variable. This balance ensures flexibility to adjust costs based on revenue while maintaining profitability. Fixed costs should be viable with projected minimum long-term demands. For example, restaurants outsourcing deliveries or logistics companies avoiding vehicle ownership can concentrate on core operations. Similarly, outsourcing services like legal, HR, and marketing keeps businesses agile and taps into external expertise.”

Explaining strategies for rescuing a distressed business, he said, “Rescuing a distressed business requires quick, decisive action. Initially, identify cash leaks and profitable revenues. Then, trim unnecessary expenses, focusing on essential activities. Once the business turns a profit, a more strategic approach can enhance and build a strong foundation for growth. Strategies include defining and positioning products or services, restructuring, aligning the team with new strategies, and instilling a cost and profitability culture.”

Discussing the challenges of  family businesses, Assaad said, “Family businesses often face emotional attachments to their legacy, history, and individuals within the company. Convincing family members to embrace transformation requires effort and respect for their values. The transformation strategy respects emotional attachments and identifies valuable individuals. If a “protected” individual hinders progress, they are moved to a less influential role. Setting expectations and balancing decision-making authority with respect for family history is crucial for successful transformation.”

Addressing the lack of marketing understanding, training, and entrepreneurship knowledge in businesses, Assaad concluded, “Mentorship and guidance are essential for bridging gaps in marketing, training, and entrepreneurship knowledge. Tailored mentorship programs, Mastermind groups, and the Companion Program offer individualized support and collective problem-solving for business leaders. These initiatives focus on skill development, growth mindset, and strategic thinking, fostering business and individual growth in the UAE and the region.”