The Executive #27

• The Strategic Significance of Managing RiskJohn Schembri

• Prepare yourself for a Tax Compliance Unit InvestigationJoe Gauci

• Getting the Competitive Edge - the Standards way

Francis Farrugia

• The Importance of Productivity MeasurementDavid Dingli

• How to work with your family and still enjoy Sunday LunchMario Duca

• The Employment Dimension of Economy GreeningMark Causon

• SuperstarRichard Clarke

• Q&A: Interview with an Entrepreneur - Lorenzo Mule’ StagnoJason Attard

• Q&A: An Interview with Entrepreneurs - Uve Schoenfeld, Ray de BonoJason Attard

• Q&A: Interview with an Executive - Sergio Gauci

Jason Attard

• IT Review: Fronter - a dedicated eLearning PlatformKeith Vassallo

27 - 2010

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In “The Strategic Significance of Managing Risk”, the journal explores which risk management procedures are typically made use of, with particular focus on the needs created by industry changes. The article also ponders self-analytical questions.

The journal then explains that if a call is received from the T.C.U., though not all is lost, chances are that reasons would have been given for the investigation to have been started. “Prepare yourself for a Tax Compliance Unit Investigation” strives to guide us on just that, thus mitigating the risk faced by an organisation during such times.

It then argues that the adoption of standards generates ROI, and, more than doing the right thing, in implementing standards, one protects the organisation’s investments.

We are confident that the issue’s other articles too are worthy of your scrutiny. An I.T. review, and articles highlighting matters pertaining to Succession Management, Operations Management, the EU, and self-improvement are herein presented to you. A select group of entrepreneurs and executives have moreover provided us with their insights on how to conduct business.

Thank you, as always, for your timeand attention.

Jason [email protected]

© All rights reserved. The Publisher’s written consent must be obtained before any part of this publication may be reproduced in any form or by any means whatsoever. Opinions expressed in The Executive are not necessarily those of the editor or publishers (except where otherwise stated). Whilst every care has been taken in compiling the contents of this publication, the editor and publishers cannot be held responsible for errors or omissions in articles, advertising, photographs or illustrations. You are reminded of your right to refuse receipt of this publication by sending such requests in writing to Effective Marketing Ltd., signed by the person refusing receipt.

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Some years ago I was dining in a restaurant of good repute when a cockroach hopped into my lap! Having refrained from doing likewise into my wife’s arms, I promptly asked for the bill, please, which was given to me without so much as a mumbled apology. And, truth be told, as the incident had happened in the restaurant’s outer premises, the restaurant surely was not to blame. But there I was, wine glass in shaking hand, in a very, very disappointed mood. The chances of the restaurant having our custom again were very slim indeed.

I believe that the risk of having vermin in your venue can be minimised to the maximum levels possible by adhering to the right standards. I also believe that repercussions to customer retention must always be combatted by handing out reparative measures at will, and to each his own.The journal discusses in-depth both risk factors as well as standardization. A component as innocuous (and indispensable) as flour will create severe risk to one’s staff at a bakery. Which business then has nothing to fear? The answer to this rhetorical question, dear readers, is none. One must beware of risk at all times and in all places. Risk management must be thoroughly planned in advance.

Villa ArrigoTechnical Editor Joe Vella Bonnici

Publisher & EditorJason AttardPrintProgress Press

Design & LayoutJason Attard

PhotographyFoto-ish the Studio

DaviD Dingli Mario Duca Mark causon richarD clarke

John scheMbri Joe gauci Francis Farrugia

keith vassallosergio gaucilorenzo Mule’ stagno uve schoenFelD,ray De bono

07. The Strategic Significance of Managing RiskJohn Schembri

11. Prepare yourself for a Tax Compliance Unit InvestigationJoseph Gauci

19. Getting the Competitive Edge - the Standards wayFrancis Farrugia

29. The Importance of Productivity MeasurementDavid J. Dingli

39. How to work with your family and still enjoy Sunday LunchMario Duca

43. The Employment Dimension of Economy GreeningMark Causon

47. SuperstarRichard Clarke

49. Q&A - Interview with an Entrepreneur - Lorenzo Mule’ StagnoJason Attard

53. Q&A - An Interview with Entrepreneurs - Uve Schoenfeld, Ray de Bono

Jason Attard

57. Q&A - Interview with an Executive - Sergio GauciJason Attard

61. IT Review - Fronter - a dedicated eLearning PlatformKeith Vassallo

Issue No. 27 - 2010Editor’s Letter

IT Review

Effective Marketing Ltd. | Tel: +356 2142 4724 | Email: [email protected]


iManage, in collaboration with Newtech Ltd, has organised a business event on the 26th of October. This event addressed matters pertaining to strategy, finance and IT within the context of Risk Management. The event was hosted at Villa Arrigo, which once again

delighted its audience with impeccable ambience and service.

The discussions are “The Strategic Significance of Managing Risk” by Major John Schembri, “Preparing for the Tax Compliance Unit” by Mr. Joseph Gauci, and “Manage your Data Safely” by Mr. Alan Alden. The speakers are all renowned experts in their

respective fields of Risk Management, Management Accountancy, and IT Auditing.

Mr. Chris Demicoli from Newtech Ltd also provided a brief highlight on how Symantec products can facilitate data Compliance and Security.

During the event, ample networking opportunities were made available. Food and drink was then served at De Robertis in Valletta, where the guests also enjoyed the beautiful

views this unique venue offers, as well as Montes wines from Cleland & Souchet.

Certificates of attendance were made available and a gift was given to a guest at the restaurant. Mr. Ian Farrugia, IT Executive at Makeezi Ltd., went home with a consultancy session from Newtech Ltd. , a consultancy session from Kyte Consultancy , a latest release

software product from Newtech Ltd., and a hamper from Cleland & Souchet.Villa Arrigoat

in collaboration with

Issue No. 27 - 2010Events


there are two types oFrisk ManageMent: -

Strategic, which deals with assessing both speculative and downside risk; and

Operational, which usually involves managing downside risk. And there are a number of ways in which you can ensure that risk to your organisation will be minimised.

These are known as Risk Mitigation Strategies, which are as follows: -

Spreadso that your eggs are not all in one basket;

Transferso that a measure of your risk is shared with willing third parties at an agreed cost;

Acceptso that you accept risk as an operational given;

Avoidso as to avoid risks identified as unacceptable to operational continuity; and

Reduceso as to take measures to reduce identified risk on their basis of probability and their consequence.

This contribution has been extracted from a discussion held by Major John Schembri during the business event of the 26th of October organised by iManage, in collaboration with Newtech Ltd.John is a founding partner of Shield Security Consultants Ltd. and the Senior Consultant and Facilitator. John comes from a military background rich in security training, administration and routine management. He graduated from the Royal Military Academy Sandhurst in 1988 and subsequently acquired vast experience on specialist training courses and operational duties abroad in the United States, the United Kingdom, Italy, Austria, France, Germany and Lithuania. Major Schembri may be contacted on2144 6980 or at [email protected].

soMe selF auDit questions…..

• When was the last time you conducted a business impact Analysis of critical business functions?

• Do you regularly evaluate your company’s legal compliance?

• When was the last time you conducted an information security audit?

• Is your OHS Policy up to date and endorsed by Top Management?

• Does your organisation operate an Integrated Security Plan?

• Are all your organisation’s stakeholders mapped and their interests clearly understood?

• Have you conducted a training needs analysis and identified key areas of competence?

• Does Top Management conduct annual management reviews and set risk objectives?

Issue No. 27 - 2010Risk Management

it will becoMe even More iMperative For your organisation to aDopt the risk ManageMent approach, as it is possible anD likely that the Following

inDustry changes will occur: -

• Operational health and safety become stricter

• Environmental guidelines become stricter

• Corporate Social Responsibility begins to emerge

• Business Change Management strengthens as an assurance tool

• The security of supply and infrastructures emerges

• Fire regulations in Malta are updated

• Knowledge Management emerges

• Intellectual property and Contract risk emerge.

The Strategic Significance of Managing RiskJohn Schembri

This discussion has aimed to highlight the recent trends in organisational risk management so as to demonstrate that its application, whether driven by market forces or regulatory enforcement, impacts significantly on operation management practices in all types of organisations; public or private.

size fit all process and it will not completely solve all problems that your organisation may face. You have to understand it and make the cultural adjustments that are necessary so that it is tailored to best suit your situation. As it is based on openness, it gives to greater inclusivity to all those involved and as it also appeals to rationality there is more acceptance, accountability and opportunity to review your organisations processes. At the end of the day, a sound knowledge of Risk Management principles has become a must for executive management within private (and public) sectors.

organisation may face, it gives you the opportunity to plan strategically so that you are better equipped if any of the situations you have identified were to arise. It enables you to know what your limitations, constraints and restraints are, and to better understand what to do about them which in turn enables you to deliver a better service. Understanding Risk can also improve your Change Management, whereby employees are empowered to accept changes in their current business environment so that your organisation can progress in the desired way. It also enables the improved use of resources, more resilient project management, and promotes innovation and change by making people think ‘outside the box’. Another benefit is that it promotes stakeholder acceptance and inclusivity.

ConclusionRisk management is not a one

W hen pondering Risk Management the first question to ask is: Why

and when is a Risk Management approach essential? The answer to this is that it is essential if you want to stay within the legal boundaries which are in existence for your specific industry; risk enables organisations to meet the regulatory and statutory compliance obligations within their respective fields of interest.The regulatory demands and requirements cover areas such as the Supply Chain (maritime, aviation and transportation), Health & Safety, Environment and Critical Infrastructures; whilst statutory compliance covers Corporate Governance, Corporate Social Responsibility and Business Continuity Management.

The concept of Risk is that it is an evaluation of uncertainties in order to determine outcomes; positive or negative. The positives are termed as speculative risks and the negatives are downside risks.

the beneFits oF unDerstanDing risk

If you understand the Risks that your

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T he first thing you may think if you are being investigated by the TCU is ‘Why me?’. However, it

is pointless asking yourself this question. The fact is that you are being investigated by the TCU so you simply have to prepare yourself.

how Do you prepare yourselF?If you find out that you are being investigated by the TCU, the first thing you should do is immediately call your accountant or auditor. You need to check whether you keep proper books of accounts and whether you have relevant documentation in an orderly manner. It is important that you draw a detailed account from 1998 onwards of all capital expenditure including purchase of property and luxurious items through your

Issue No. 27 - 2010Financial Management

• It is important that you draw a detailed account from 1998 onwards of all capital expenditure through your company, or personally, and any movement in personal bank accounts.

• If you are self employed, it is you who is responsible to keep books of accounts.

• By asking an experienced accountant to review your financial statements using various methods and ratios, you will be in a better position to establish whether the financial statements are credible or not.

• Never go to meetings with TCU officials alone or sign any documents before you ask for advice.

• You must re-draw the financial statements including all new financial data. Ensure that your accountant will tell you your maximum tax liability.

• Knowing your position will make you stronger to defend your position and in putting forward your arguments.

• Keep in mind that any undeclared income may mean additional tax bills, tax penalties, tax interest, higher professional bills and possible bankruptcy.

Prepare yourself for a Tax Compliance Unit InvestigationJoe Gauci

Henley Advert for Executive2 10/13/10 10:48 AM Page 1

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company, or personally, and any movement in personal bank accounts. Preliminary tests are able to give a simple assessment of your tax situation since 1998 and this will show whether you will need to carry out further investigations.

who is responsible oF keeping books oF accounts?This is neither your accountant nor your book keeper. The answer is that if you are self employed, it is you who is responsible. If you are employed by a company, it is the directors who are responsible. The companies act states that accountants are not responsible to keep your book of accounts but they are responsible for their professional work. Auditors are not responsible to keep your books of accounts but they are responsible to certify the financial statements.

so, what is it that the tcu is looking For?They are looking for the following: undeclared sales, excessive bank deposits, omitted purchases or imports, how your capital expenditure was financed, your personal assets growth, any increases in


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Prepare yourself for a Tax Compliance Unit Investigation.

accountant you should find one, and make sure you do this quickly if you have not kept proper books so that a proper assessment of your situation can take place. And remember, always take a second professional opinion if you feel insecure about anything, and make sure you have all relevant documents in hand.

analyse results

You now need to analyse the results of your investigations and see whether any tax liability exists. You need to see if the results showed up any of the following:Excess bank deposits over sales, fictitious credits to cover expenditure, an increase in the shareholders’ loan without any justification and undeclared sales and purchases and so on. This way you can immediately assess immediately your maximum tax liability by asking your accountant whether you had filed the spontaneous declaration or whether you had filed the tax concession application. Ask for their copy and official receipt.

Move to the thirD phase

The next step is to estimate any undeclared sales and purchases and work

the tcu will investigate by:

• Checking Gross profit margin

• Checking Insurance policies versus stock value

• Checking Stock records movements and verifying them against invoices or cash till sales

• Looking for Fictitious liabilities

• Verifying Expenses

• Contacting your local and foreign suppliers to verify purchases made.

• Contacting local or foreign customers to verify sales made

• Checking whether banks deposits exceeds sales or daily takings

• Making sure that total cash generated covers all capital expenditure and bank loan repayments

• Looking into movements in shareholders’ loan.

Obviously such tests are basic audit tests and these may increase depending on the findings. The Commissioner of Inland Revenue has very wide powers to collect data and information.

shareholders’ loans, the overall credibility of financial statements, gross profit margins, profit and loss expenses and bank movements.

If you operate through a company check whether you have a qualified or unqualified audit report from your auditor/s in the annual audited accounts. You need to check credibility of your financial statements and make sure they are being presented in a professional way. By asking an experienced accountant to review your financial statements using various methods and ratios, you will be in a better position to establish whether the financial statements are credible or not.

go into action – plan your Moves

You must now decide whether you need external assistance from an experienced tax consultant or not. Whatever you decide you should never go to meetings with TCU officials alone or sign any documents before you ask for advice. If you are asked to hand documents over do not do so unless they have been reviewed by your accountant or by whoever assists you. If you do not have an experienced



year to assess financial and tax positions and finally never sign any financial statements unless you have properly reviewed them.

You should keep in mind that any undeclared income may mean additional tax bills, tax penalties, tax interest, higher professional bills and possible bankruptcy.

As a country economy gets more complex and society more sophisticated the government must collect more tax to be sustainable, and ultimately they have the power and financial muscle to organise themselves and improve tax collection. Also remember that the introduction of VAT has given a good audit trail to the Inland Revenue and the TCU - so, it’s time to forget the past…and organise yourself !

This contribution has been extracted from a discussion held by Mr. Joe Gauci during the business event of the 26th of October organised by iManage, in collaboration with Newtech Ltd.Joe is Managing Partner of KSI, a local leading firm of Accountants and Auditors. He may be contacted on 21226176 or at [email protected].

out how much capital expenditure was not financed properly. You must then re-draw the financial statements including all new financial data. Ensure that your accountant will tell you your maximum tax liability. Knowing your position will make you stronger to defend your position and in putting forward your arguments.

Remember to always act professionally and do not take things lightly. TCU officials are well prepared professionally and have the law backing them! It is better to negotiate than litigate with TCU officials.

so, how can you iMprove the way you run your business?Start by keeping a more personal interest in your accounts department, and learn how to properly analyse your financial statements. You should endeavour to pay adequate professional fees, as keeping proper books of accounts takes time and costs money. You should use professional, well trained accountancy employees and these should be backed by experience. Also, make time for regular meetings with your accountant and auditors during the

you shoulD check the Following Financial inForMation….

• Do you have a qualified or an unqualified audit report (for companies only)?

• Check whether bank deposits exceed sales recorded in the books .

• Check increases in shareholders’ loan.

• Are your VAT returns reconciled with the audited or declared income in your tax return?

• Are your VAT and tax returns filed?

• Did your business generate enough profits and cash to cover all loans?

• Have you personally bought property or luxurious items like cars, boats…? Where they properly financed?

• If you have over expenditure ask your tax consultant to prepare a capital accretion exercise.



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I t is difficult to argue against standards. After all, on the demand side, corporate and consumer buyers consistently

point to the need for standards-based solutions to ensure that they are not tied to any one supplier’s proprietary technology and the resulting potential for predatory pricing tactics. Nor do they do want to be limited to working in de-facto technology islands where their implementations are limited to a single supplier’s products to ensure that employees, partners, and suppliers can communicate and conduct business successfully.

Standards are published technical documents that stipulate the desirable characteristics of products and services such as quality, environmental friendliness, safety and reliability. They are developed by technical experts mainly coming from industry, academic institutions, professional bodies, public institutions, consumer associations and other interested parties to meet the requirements of business and society at large.

For businesses, they aim at protecting and making the best of corporate capital

investment in new technologies and select state of the art solutions that support core corporate objectives. This requires products manufactured by many different suppliers to interoperate with each other. Standards specify the hardware and software actions that, if implemented as specified, provide for a ‘plug and play’ buyer experience. A good purchase experience is proven to spur market development and brand loyalty and to trigger market share, revenue, scale, and margin levers among all suppliers.

GSM, Ethernet, TCPIIP are typical traditional good examples of this effect. One can include user interfaces like the telephone keypad and QWERTY keyboard in this mix. They work everywhere in the world without any special training or knowledge other than the ability to push clearly-labelled buttons. So, a standard and accompanying business model that drives these conditions can have tremendous monetary value and can, in turn, drive

market capitalisation. Shareholders like this value chain; increasing the value of equity is the one quantifiable measure by which a Board and its management team can be measured in objective terms.

Standards then make sense also on the supply side. They can and do provide a clear path to universal, volume deployment, and Return on Investment (ROI). One can identify three parallel ways to enable these conditions. Standards come into being through “brute force/right place/right time/right solution” factors and achieve de facto status (for example: Windows, Linux, and Macintosh operating systems). Then there are the more successfully accepted standard that achieve consensus status through formal ratification processes as defined by entities like the International Standards Organization (ISO), International Electrotechnical Commission (IEC) and International Telecommunications Union (ITU), that act through national technical bodies. Finally there are the consortium based standards that can be obtained through the creation of a collaborative community of companies dedicated to developing missing standards and specifications or improving those that exist as a means to an end, namely market pull for innovative products

Getting the Competitive Edge -the Standards wayFrancis Farrugia

• Standards are published technical documents that stipulate the desirable characteristics of products and services such as quality, environmental friendliness, safety and reliability.

• Standards specify the hardware and software actions that, if implemented as specified, provide for a ‘plug and play’ buyer experience.

• They can and do provide a clear path to universal, volume deployment, and Return on Investment (ROI). One can identify three parallel ways to enable these conditions.

• The initiative is not about altruism or “doing the right thing”, per se. It is all about enabling the largest possible market as quickly as possible and, most importantly, about hedging risk.


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and services often characterised by fast changing technologies.

stanDarDs Developing process

Standards are often built from the bottom up by one or more interested parties responding to or initiating specific business model drivers. It should be noted that this community approach provides some guarantee of acceptance from the outset because both early and future participants are aligned on the need for a new or replacement standard as a requirement for market development. So, the initiative is not about altruism or “doing the right thing”, per se. It is all about enabling the largest possible market as quickly as possible and, most importantly, about hedging risk.

Experience suggests that a given standard requires heavy investment from industry and other interested parties to create the standard, launch interoperability and certification programs, educate and reach users, and mitigate the fear, uncertainty, and doubt users typically have when conducting trials and deploying new technology. Few companies are willing to place that

size of bet by themselves. These factors explain in part the success many consensus driven standards initiatives developed by international, regional or national standards bodies have enjoyed in recent years.

Standards will continue to be developed, amended, replaced

so as to maintain their relevance to the market place and the state-of-

the-art status as technology develop and changes form. The challenge of standard

users is to stay abreast of developments so the right technology choices can be made to meet internal user and external customer needs as customers validate the appropriateness of standards.

One can therefore see that standards can have high intrinsic value in setting the company’s technology strategy. The markets spawned by standards have the potential to generate large revenue streams and therefore achieve the competitive edge that organisations so yearn for. The realisation of market share and profits will typically be achieved by those companies

which are quick to adopt the technologies that have been standardised. Standards developed by recognised international, regional or national bodies provide the best opportunities to be among the leaders of the industry in a profitable way.

DeMonstration oF coMpliance

Businesses often need to demonstrate their ability to meet and comply with the requirements of standards. Whilst suppliers may suggest that their own declaration of conformity is sufficient, an accredited certification system is a better alternative method of providing assurance to businesses. Third party certification is the process by which written assurance that a product, process or service conforms to specified requirements of a related standard or specification. Today, many products require testing for conformity with specifications or compliance with safety, or other regulations before they can be put on markets.

iMportance oF certiFication

Market acceptance of certification depends upon: how well the standard in question reflects the specified end uses of the products;

Getting the Competitive Edge - the Standards way

© The Executive


the integrity of operation of the certification system and its quality control procedures.Certification of materials, processes, systems, products and people assists businesses in making better-informed purchasing or investment decisions. An accredited third party certification based on consensus-based standards provides impartial evidence to users that they are investing in state-of-the-art products, processes or systems that comply with market accepted standards. This often ensures compatibility of technology, broader choice of offers and lower costs due to the effects of competition among suppliers. An accredited certification system offers the ultimate trust as conformance assessment bodies (CABs) such as certification bodies, testing laboratory and inspection bodies, are assessed by high level independent bodies (known as accreditation bodies) to ensure the true independence and professional operation of CABs to provide certification service. Risks are therefore reduced as it ensures compliance with applicable safety standards, expected performance and fitness for use.

the local (Maltese) situation

Whilst the larger (often foreign owned export-oriented) companies in Malta have

participated in the above standard and certification process, it is only during the last few years that SMEs are starting to realise the potential that standardisation can provide to their business. The recent developments and investment in standardisation and certification by the Malta Standards Authority (MSA) are making these services accessible to Maltese SMEs and micro SMEs. These include, provision of information on and publication of international, European and national standards, development of

national standards to meet the specific needs of Maltese businesses, metrology and calibration services, training on the use of specific standards, and certification services. The portfolio of certification services now include certification on quality management systems (ISO 9001), environmental management systems (ISO 14001), motor vehicle repair garages, language study tour providers, security clearance of personnel, organic farming and the more recently certification on pest control services. The certification arm of MSA is also accredited by UKAS - the largest accreditation body in the world for certification bodies. The list of certification services is expanding year on year as industry is realising its importance to achieve competitiveness in an open economy and MSA responding to their needs.

case stuDy – the pest control inDustry in Malta

By way of demonstration of the typical benefits of standardisation we take a look at a recent example of how the development and employment of a Maltese standard helps a local industrial sector.

Pest control is an industry which may


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Ing. Francis Farrugia occupies the post of Head of the Standardization Directorate of the Malta Standards Authority (MSA). He also lectures at the Henley Management College in Malta. MSA is now offering a certification scheme against MSA 2000:2009. Through this certification, operators can demonstrate to their clients that they are following best practices and their ability to meet customer, regulatory and the organisation’s own requirements. A local SME has already been certified and others are in the process of doing so.

employ the use of pesticides in order to eradicate public health pests. However, the use of these pesticides may also have a negative effect, especially if they are used incorrectly and without due consideration to their application. Following a request from industry to develop a Maltese Standard on this subject, MSA developed and published the Standard MSA 2000:2009 that deals with the professional management of pest control. The standard has been prepared and agreed upon by all key national stakeholders of this industry including the Malta Chamber of Commerce, Enterprise and Industry, GRTU, MHRA and the Health Inspectorate of the Department of Environmental Health.

Organisations complying with the requirements of this standard will improve the integrity of their services and will be able to provide a more professional service to their clients. The standard aims at providing organisations involved in pest control with the elements of effective management system requirements.

conclusion

Standards will continue to be developed, amended, replaced so as to maintain their

relevance to the market place and the state-of-the-art status as technology develop and changes form. The challenge of standard users is to stay abreast of developments so as to ensure that the right technology choices can be made to meet internal user and external customer needs, as customers validate the appropriateness of standards.

One can therefore see that standards can have high intrinsic value in setting the business strategy. The markets spawned by standards have the potential to generate large revenue streams and therefore achieve competitive edge. This realisation of market share and profits will typically be achieved by those companies who are quick to adopt the technologies and methodologies that have been ‘standardised’. Standards and certification schemes developed by recognised international, regional or national bodies provide organisations with the best opportunities to be among the leaders of the industry in a profitable way.

References (abridged):

• Kamlani D., “Standards and Competitive Technology Strategy”, The Standards Edge, 2002

The challenge of standard users is to stay abreast of developments.


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MEGABYTE LIMITEDF4, The TechnoparkMosta MST 3000,Malta

T: (+356) 2142 1600F: (+356) 2142 1590E: [email protected] W: www.megabyte.net

Megabyte Ltd. is Malta’s largest and longest established privately owned computer systems company offering a full range of IT Services and Support. It was established in 1979 and since then Megabyte can boast a long track record of achievements and consistent growth. This has been possible due to an optimal spread of its operations into various business sectors.

The key to the Company’s success lies in the expertise accumulated over the years in the development and implementation of total, cost-effective computerised solutions. Megabyte pioneered the introduction and development of business computer systems in Malta by engaging dedicated and highly qualified staff whose professional capabilities and experience were used in project management, systems analysis, software design, customisation, modification and full support.

Megabyte has built a reputation for quality and has pioneered some of the major developments in the evolution of Information Technology in Malta. These developments have had a real impact on the advancement and application of IT, particularly the number of early clients with whom we continue to work successfully today. Megabyte is proud to have won the loyalty and support of the many major organisations which are currently its clients.

Outstanding ICT expertise with a proven track record


P roductivity is the technical relationship between output produced and the inputs used to

produce that output. Productivity can be measured at 5 different levels; the economy as a whole, the sector, company, business unit and the plant. At the business, unit and plant level it is applicable to both manufacturing and service organisations. Productivity measures the efficient use of input resources and is usually expressed as the ratio of output to input. Productivity measurement is therefore fundamental in understanding operations-related performance.

Being a relative measure, to be meaningful

it needs to be comparative. What can management learn from the fact that they operate a restaurant whose productivity measure last week was 8.4 customers per labour hour? The answer: nothing! If on the other hand they know that the week before productivity measured 7.6 customers per labour hour then they know they have registered an increase in productivity, implying a reduction in costs to serve each customer.

In the cycle of continuous improvement, productivity measurement plays an important role in identifying and tracking progress against organisational goals, identifying opportunities for improvement

and, comparing performance against both internal and external standards. In an organisation, ensuring competitiveness necessitates a built-in mechanism of productivity measurement whereby systematic and timely performance evaluation is fed back into the management process for its fast improvement.Any accountant can determine how to cut costs but it takes really good management insight and talent to increase productivity and revenue at the same time. As much as cost-cutting should be on everyone’s mind all day long, increasing customer satisfaction and revenue are superior long-term survival strategies than simple “cost-cutting.”

proDuctivity MeasureMent

When planning to carry out productivity measurement in an organisation, there are three important issues that need to be addressed;

1. What are the key aspects of the organisation, or of each separate part of the organisation that should be measured?

2. What is the appropriate measure of performance for each aspect?

3. What is the appropriate benchmark, in each case, against which to evaluate performance?

Regarding the first question of what to measure, traditionally, the focus has been on financial performance measurement. Today, a more holistic approach

• Productivity is the most meaningful

measurement in organisations and why

management should not be disillusioned

by assuming that all is well when they

register increases in sales.

• What can management learn from the fact that

they operate a restaurant whose productivity

measure last week was 8.4 customers per

labour hour? The answer: nothing!

• If on the other hand they know that

the week before productivity measured

7.6 customers per labour hour then they

know they have registered an increase in

productivity, implying a reduction in costs

to serve each customer.

The Importance of Productivity Measurement (Part 1)David J. Dingli

It is important to realise that it is possible for productivity to fall when output increases if a disproportionate increase in input resources are needed to produce that extra output. This is why productivity is the most meaningful measurement in organisations and why management should not be disillusioned by assuming that all is well when they register increases in sales.

Issue No. 27 - 2010Operations Management

considering key underlying factors in both the internal and external environment of the organisation, that influence the organisation’s goals and strategies are considered.

Regarding the second question of how to measure, it may be quantitative and/or qualitative, financial and/or non financial, and absolute or relative. In determining the benchmark to be used, it may be based upon time trend of performance, comparative data from similar organisations, a budget, target or standard set by management.

iMproving proDuctivity

Measurement of productivity is thus very necessary to serve as a systematic and definite way of assessing an organisation and facilitating it to appreciate the need for change towards better performance. It is only through a systematic and

specific performance evaluation that effective and efficient decisions can be made.To improve productivity, one need to develop productivity measures, determine critical (bottleneck) operations, develop methods for productivity improvements, establish reasonable goals, measure and publicise the improvements.

At firm level, productivity measurement is especially important as there are wide performance variations in productivity levels within and among organisations. There is a relatively high level of resistance to change aimed at enhancing performance yet there is almost always room for improvement.

huMan resource c o n t r i b u t i o n to proDuctivity iMproveMents

HR has traditionally taken an “it’s not my concern” view towards productivity. HR managers don’t measure or track employee costs (often


things hr can Do to increase proDuctivity

HR tools that usually have the highest impact on employee output and productivity include:

a. Retention tools

b. Referral programs

c. Metrics (to increase accountability) and rewards that are tied to performance and productivity

d. Identifying what motivates, challenges and frustrates employees

e. Performance management programs that drop poor performing

managers and employees

f. Incentive systems that reward for great “people management” performance

g. On the job learning and growth opportunities (job rotations and special projects)

h. Rewards for sharing best practices

i. Forecasting and workforce planning.

proDuctivity coMparisons can be MaDe in two ways:

(1) Compare your measures with similar operations within your industry, or

(2) Measure productivity over time for the same operation in order to create internal comparisons and progress reports.

The Importance of Productivity Measurement (Part 1)

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A N E X C L U S I V E L O O K , A U N I Q U E T O U C H . . .

18849 - C.Delia The Executive Ad FINAL.indd 1 29/10/2010 15:29

called labour costs) as a percentage of production costs.

When HR is confronted about their lack of “accountability” with regards to employee productivity, they respond by stating that they “don’t have control over all the factors that contribute to productivity,” or that “it’s too complex an issue for HR.” When HR does decide to become more accountable for productivity, the next step will be to move beyond the current “doing things” and “running program” approach and

instead provide managers with easy to use tools that will ultimately enable them to manage employee productivity more accurately. HR should reposition itself as a “productivity consulting centre” where managers can come for productivity improvement answers.

conclusion

For a firm to remain competitive, all of the activities that make up the operations core must buttress the firm’s strategy. Many new technologies and

especially the Internet have an impact on operations capabilities. The firm must actively explore changes in operations strategy to take advantage of these new technologies. Productivity measures provide the benchmarks for how well a company is doing, and are useful for measuring improvement. HR can also provide tools to managers in such a way that they are easy to use and understand. Next, HR needs to define a set of productivity metrics and measures so it can continually refine and improve the productivity tools it offers to managers.


the home of luxury livingValley Road, Birkirkara T: 2388 9200 Email: [email protected] Web: www.bigbon.com

Part of Big Bon Group

A N E X C L U S I V E L O O K , A U N I Q U E T O U C H . . .

18849 - C.Delia The Executive Ad FINAL.indd 1 29/10/2010 15:29

De. David J. Dingli is the managing consultant of Resource Productivity Consulting Services, a management consulting firm specialising in strategic planning, operational efficiency improvements and management development & training. (www.rpcsmalta.com). He is also an Assistant Professor with Maastricht School of Management, The Netherlands and has lectured at MBA level in 25 countries throughout Asia, Africa, South America and Europe. He may be contacted at: [email protected]; or Tel: 99430196.

HR should

reposition itself as a“productivity consulting center”

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The Importance of Productivity Measurement (Part 1)

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© The Executive

Until 1964, the Maltese Islands belonged to Britain, and old colonial accoutrements popped up everywhere. Just like the phone booths, so are our mailboxes bright scarlet! Tiny police stations have the same blue lamps that hang outside British police stations. Notwithstanding, the interest and curiosity of Queen Victoria statues is worldwide. It is a known fact that many a city around the world has commissioned various sculptures of the statue of the “Queen Empress”, upon whose empire the sun is said never to have set and who holds the record for the longest reigning monarch – 63 years and 7 months from June, 1837, to January, 1901.

Valente was the Sicilian sculptor who completed Malta’s Queen Victoria statue work in Palermo. Paid for by public subscription and erected in front of the

National Library in 1891, the monument was intended to commemorate the Queen’s fiftieth jubilee, and shows her with a lace shawl, in reference to the fact that she had ordered “eight dozen pairs long and eight dozen pairs short mitts, besides a scarf ” of Maltese lace. Apparently she did so in an attempt to revive this ancient craft. Victoria is arguably also the ruler with the most statues, everywhere from a prime piece of London real estate outside Buckingham Palace, to a more modest plot in the Ghanaian town of Cape Coast where a flock of goats grazes at her feet. She sits in Toronto, stands in Hamilton and lost her head, quite literally, in Quebec City.

Across from Valletta’s Café Cordina, Queen Victoria’s statue gazes sternly upon shoppers thronging Republic street, the main street of the city. At first glance she looks solemn but her crown is at a bit of a rakish angle and her lips seem almost to be breaking into a Mona Lisa smile. ‘Honouring our past successes we look towards the future with enthusiasm and endeavour both as a reputable economic organization and maintaining a sense of social responsibility in different philanthropic activities.

Corporate Social Responsibility (CSR) is a form of corporate

self-regulation integrated into a business model. Ideally, CSR policy would function as a built-in, self-regulating mechanism whereby business would monitor and ensure its support to law, ethical standards, and international norms.

Consequently, business would embrace responsibility for the impact of its activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere. Furthermore, CSR-focused businesses would proactively promote the public interest by encouraging community growth and development, and voluntarily eliminating practices that harm the public sphere, regardless of legality. Essentially, CSR is the deliberate inclusion of public interest into corporate decision-making, and the honoring of a triple bottom line: People, Planet, Profit. The practice of CSR in Malta and overseas has been subject to much debate and criticism. Critics argue that CSR distracts from the fundamental economic role of businesses whilst others argue that it is nothing more than superficial window-dressing. Corporate Social Responsibility has been redefined throughout the years.

The M. Demajo Group is one of Malta’s leading private owned businesses, spanning 7 sectors and 26 individual subsidiaries. This year the M. Demajo Group celebrates 100 years of continuous operation, and it is this special milestone in its history that has driven the initiative to adopt a corporate responsibility perspective among other activities being organized during 2010. The Group’s head office based in Valletta, originally in Frederick Street and for the past few decades has been relocated to a beautifully restored palazzo in Archbishop Street. The organisation’s history is closely tuned to the capital city and it was befitting to focus the Group’s interest in this direction. Following discussions with one of Malta’s leading heritage NGO’s, Din L-Art Helwa, it was considered appropriate to invest in and to restore the famous Queen Victoria Statue situated in Pjazza Regina, Valletta. Din l-Art Helwa, National Trust of Malta,

is a non-governmental, not-for-profit, voluntary organisation founded in 1965 to safeguard the historic, artistic and natural heritage of Malta. Since its foundation, Din l-Art Helwa has restored and managed numerous cultural sites of immense historic and environmental importance.

• Essentially, CSR is the deliberate inclusion of public interest into corporate decision-making, and the honoring of a triple bottom line: People, Planet, Profit.

• The M. Demajo Group is one of Malta’s leading private owned businesses, spanning 7 sectors and 26 individual subsidiaries.

• Following discussions with one of Malta’s leading heritage NGO’s, Din L-Art Helwa, it was considered appropriate to invest in and to restore the famous Queen Victoria Statue situated in Pjazza Regina, Valletta.

• The Queen Victoria monument was intended to commemorate the Queen’s fiftieth jubilee, and shows her with a lace shawl, in reference to the fact that she had ordered “eight dozen pairs long and eight dozen pairs short mitts, besides a scarf ” of Maltese lace. Apparently she did so in an attempt to revive this ancient craft. Rachel Balzan Demajo is Group Marketing Director

of the M. Demajo Group.

A Strategic Perspective on CSR

Rachel Balzan Demajo


Issue No. 27 - 2010Company Highlight

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© The Executive

well as, formal qualifications, you might want to require ‘applicants’ to have

worked outside the business before returning, and to have

perhaps achieved a specific goal such as a promotion.

DepenDing upon the type oF Job,

how is FaMily to be treateD?The difficult issues are in relation to interview and appraisal processes and grievance and d i s c i p l i n a r y p r o c e d u r e s . Should a direct relative of a family

member be involved in these decisions or

should an outsider be involved in some way?

It’s not always desirable to state that family will always

be treated exactly the same as non-family, if that results in

someone appraising their relative or deciding whether or not to fire them.

reMuneration

Remuneration can become confused by a lack of distinction between what part of income is salary for a job, what perks are received and what the return on investment is if the family employee also holds shares. It is useful to clarify these distinctions even where, for tax reasons, income is drawn from the business by various means.

Discussions on this topic between the senior and younger generations of a family (if they ever take place) can sometimes become confused by the notion that “one-day this will all be yours” which, when mixed with a bit of “we made sacrifices in our day” from the seniors can translate into a lower current salary for the younger generation. It is easier for the younger generation to accept these arguments if it is clear when ownership will transfer.

It should also be borne in mind that family is usually expected to be more committed to the business and contribute more than other employees, which may justify family members being paid more.

We would always recommend obtaining

M ario Duca


One of the advantages of having your own business is the

opportunity to work with your nearest and dearest. On the plus side it is difficult for any other type of business to match the commitment and flexibility, in pay and other conditions, that can result from employing family. However, decisions about employing and r e m u n e r a t i n g your relatives can easily become stressful, to the extent that family relationships are harmed.

Since the possibility of family joining the business is hardly unpredictable, if you would like to work with your family and still enjoy family get-togethers, like Christmas, we suggest you create a policy that sets everyone’s expectations about how these decisions will be taken. The following suggestions are distilled from policies that have already facilitated such matters successfully.

purpose oF the policy

The policy should begin with a clear statement of its key aims and objectives. It could be to encourage family members to join the business so that the advantages and enjoyment of working with your relatives are secured. It might state that every family member is entitled to a job in the business at some level, or that employment will only be offered to family members with skills and experience that satisfy the current needs of the business.

who is aFFecteD by the policy?Will the policy apply only to your nuclear family (children and grandchildren) or will it cover a wider family group including nieces and nephews and cousins? A key decision is whether or not spouses and partners will be covered by the policy.

what types oF Jobs are available?It is helpful to distinguish between managerial positions, non-managerial full-time positions and part-time/casual/

summer of jobs way.

DepenDing upon the type oF Job, what qualiFications/experience Must FaMily MeMbers have?The policy could state that certain jobs require a degree or other equivalent qualification, while others require no specific qualifications. Instead of, or as

• It’s not always desirable to state that family will always be treated exactly the same as non-family, if that results in someone appraising their relative or deciding whether or not to fire them.

• Family is usually expected to be more committed to the business and contribute more than other employees, which may justify family members being paid more.

• If as a parent you want to guarantee family members a job in the business because it will help the family to remain connected, then do that, but it’s better not to justify the decision as being solely business -induced.

will usually be managed in a differentwork because access to these types

Issue No. 27 - 2010Succession Management

benchmark information on market rates for various jobs, so that if someone is being paid more or less than market rate it is acknowledged and understood why this is the case.

eDucation anD training

Some policies provide for education and training of family members. Financial assistance towards an MBA ,or skills-training for the role to be filled by family members, including directorships, are apt examples of this. Education ought to be linked to the requirement for specific experience or qualifications mentioned earlier.

aDoption anD review

This type of policy should be discussed by the family and the owners and board of

a company or partners in a partnership. Even if these are the same people (which is often the case), you should distinguish your needs and expectations as a family member from those as a business person, in order to make the right decisions for the right reasons. As an example, if as a parent you want to guarantee family members a job in the business because it will help the family to remain connected, then do that, but it’s better not to justify the decision as being solely for business reasons.

An employment policy needs to be reviewed reasonably regularly to make sure it is achieving its overall purpose and is keeping in step with the changing needs of a growing family and a growing business.

Being in business for yourself gives you many advantages and opportunities, but when business needs and family duty and desire cross over it can become difficult. It is then very useful to have in place clear polices that have been created calmly, rather than hoping that you can navigate these issues in a way that balances the needs of your business with the desire to be able to enjoy Sunday lunch with your family.

Mario Duca is the Managing Director of FBS2M, an international consulting and teaching organisation that works with enterprising families, family businesses and family offices. For more information email: [email protected].


How to work with your family and still enjoy Sunday Lunch


E urope 2020, successor to the Lisbon Strategy and the European Economic Recovery Plan,

focuses on collective actions and stronger collaboration between EU structures and Member States in order to ensure greater ownership and simpler and more efficient governance. It proposes an ambitious action plan to deliver tangible outcomes.

The EU has two main approaches: one for countries with little or no experience with green economy (e.g. Malta, Slovakia, Czech Republic, Hungary) so as to focus on improving the knowledge base, and one for countries where green economy has been in place for some time (e.g. Denmark, Germany, Sweden) in order to improve skills development. As the EU economy wants to become a green economy and

especially in time of economic crisis, there are lots of employment opportunities in this regard.Europe 2020 puts forward three mutually reinforcing priorities. Smart Growth aims at developing an economy based on knowledge and innovation; Sustainable Growth at promoting a more resource efficient, greener and more competitive economy; Inclusive Growth at fostering a high employment economy delivering social and territorial cohesion.

Countries with little or no experience with green economy need further research, further education and improved competitiveness of national companies. The EU mainly supports the further research in these countries, because nowadays it is extremely difficult to

assess the labour market consequences of the green measures and the transitions toward a more environmentally-friendly economic growth.

The EU has a number of headline targets. These include raising the employment rate of 20- to 64-year-olds to at least 75%; investing 3% of GPD in research and development and developing a new indicator to track innovation; reducing CO2 emissions by at least 20%, increasing the share of renewable energy to 20% and increasing energy efficiency by 20%; reducing the share of early school leavers to less than 10% and increasing the share of 30 to 34-year-olds having completed tertiary education to at least 40%; as well as reducing poverty and social exclusion by lifting 20 million people out of poverty.

The Employment Dimension of Economy GreeningMark Causon

Europe is currently facing a moment of transformation. The recent crisis has wiped out years of economic and social progress and exposed weaknesses in Europe’s economy. Can Europe nonetheless succeed? If it acts collectively – as a Union, then it can. A strategy is needed to help it emerge from the crisis. A new economic model needs to be built, based on knowledge, a low-carbon economy, high growth, employment levels and social cohesion.

Madam Europe,from Tore Strindberg’s fountain in

Gothenburg, Sweden (1927), has yet a long way to go until she reaches her greener destination.

Issue No. 27 - 2010International Business

In countries where green economy has been in place for some time, the focus is on training systems and monitoring the effects of green policies. These countries need to pay attention to retraining and large scale training, particularly linked with environment protection and energy efficiency to ensure the growth of the environmental sector. The skills development in response to the greening of the economy should be based on the development of

comprehensive skill identification and forecasting systems which also reflect the changes arising from the growth of green jobs.

Meeting our energy goals could result in €60 billion less in oil and gas imports by 2020. Further progress with

the integration of the European energy market can add an extra 0.6% to 0.8% GDP. Meeting the EU objective of 20% of renewable sources of energy has potential to create more than 600,000 new jobs in the EU. Reaching

the 20% target on energy efficiency could create well over 1 million new jobs.

Common policies support transitions and mobility between jobs, activity sectors and geographical areas, with the active involvement of social partners. They incorporate green components into the active labour market policy schemes. Some examples are green job training, preferential support for the creation of jobs in green sectors and shifting support to public transportation. The social and economic effects of green restructuring processes are minimised via a

mix of policies. Common policies address existing rigidities, segmentation and the mismatching of skills demand and supply already existing in the labour markets.

As for job quality, national reports focus primarily on the quantitative effects of climate change and climate policies. However, it is important to note that qualitative labour market effects also have important impacts on employment and social cohesion.

There is much talk of the current economic downturn and of climate change; however it can also be argued that the current economic crisis should be used to open up new possibilities for green job, innovative ideas and sustainable businesses.

Mark Causon has worked as coordinator and project manager on various projects in Ireland, Spain, Brussels, Germany, France, Sweden and Norway, and is also a visiting lecturer and tutor at Master’s level at several European universities.At present Mark is the manager of the Europe Direct Mosta office of the European Commission DG Communications office. He provides consultancy services on EU funding calls, project selection, application and project management. Mark may be contacted on tel. 79232635 or [email protected].


The Employment Dimension of Economy Greening

So how do you become a superstar employee? Employers don’t mind upsetting hard workers, but they fear losing stars. Imagine, for example, a programmer in a web development shop. Becoming known as a world expert yields more impressiveness than if she had invested the same hours into simply working overtime on her existing projects.

An employee working for a charity may decide to be passionate about the unexpected but vital part of the business - the website. By taking on responsibility for tracking the organisation’s web site visitors, and then mastering enough Google Analytics skills to present beautiful analyses to the board, the employee will be seen as the technology guru of the organisation — a star who is helping them understand their audience in new ways. This aura of stardom outstrips what’s achievable if he had instead invested his efforts only into being a conscientious, efficient, hardworking, and replaceable employee.

Apart from passion, doing the unexpected and taking advantage of opportunities - you need one more key ingredient in your recipe for becoming a star: confidence. But not misplaced confidence.To follow through you need confidence in your success; otherwise, your efforts will diminish over time. Are you willing to bet €1000 that you will be successful within 6 to 12 months?

It’s not about making a start or any of that nonsense - it’s about a complete focus on your goal - even if at the expense of the more normal diligence that those around you focus on. When conquering your uncontested niche, it can be tempting to divide your attention. Maintaining a relentless focus on your conquest maximises your total overall reward.Is there an uncontested corner in your own working life where you could apply this to gain a huge return on investment?

www.the-executive.biz 47

I support Coventry City. Have done since a small boy - and boy have I paid a high price! Virtually no success

(apart from that beautiful day in the May of 1987), but hey ho. Our players get paid around £200,000pa - not bad at all, until you realise that Wayne Rooney is about to be paid £5m pa.

He is not 25 times better than the average Coventry player but as in many fields, it pays disproportionately well to be not just very good, but the best.

The problem is that reaping this advantage of being the best requires staggeringly difficult feats — and so this is not that applicable to most of us. Is there another way? One which does not require a rare natural talent or years and years of grinding work?Well, being the best in a field makes you disproportionately impressive to the outside world. This effect holds even if the field is not crowded, competitive, or well-known.

In my field of education, students who get the best scores in the world achieve this fame and rewards of job offers. Those who come

fifth in the world much less so. However, there’s another type of student who get an equal amount of fame and rewards - those who are genuinely interesting. For example, a recent student of mine has decided to row the Atlantic! Schools and universities want that diversity - interesting students to talk about in promotional materials and alumni magazines. Students who will make campus more exciting simply because they are there.

The courage to do something contrary to parental, societal and cultural expectations and stereotypes is what makes you this sort of superstar. Only twenty years ago, Apple was facing extinction and an almighty competitor in Microsoft, yet Steve Jobs had an unnerving passion and belief in their “Think Different” slogan and Apple is today the second biggest company in the world.

so - how Do you becoMe a superstar without that natural talent?

The answer is:

1 Have a passion2 Have an ability to take advantage of opportunities3 Do the unexpected.

SuperstarRichard Clarke

Richard Clarke was the International Director for Europe’s largest financial training company before going on to open his own successful accountancy training company with branches in Malta, Ireland and online, the Richard Clarke Academy. Having 10 years full time lecturing experience, specialising in Financial Reporting and Management Accounting, he also researched neurology and social economics and their affect on the learning process giving his lectures an extra dimension. He co-devised and ran train the trainer courses for ACCA in Europe, Africa and the Far East. Richard is writing innovative Financial training books which he hopes will break the death grip of tired, dull textbooks.

Issue No. 27 - 2010Personal Management

Why invest with LandOverseas?LandOverseas was conceived to give the opportunity to its investors to tap

and exposure.

Malta’s most respected and leading business people, our hands-on management of developments ensures that investments are nurtured by a professional and open approach.

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www.the-executive.biz 49

Can we have your background please?I originally started as a Mathematics teacher, graduating from the University of Malta in 1988. After a short stint living in Berlin, I returned to Malta in 1991 and founded a small business with some friends, an enterprise I manage to this day. In 2004 I obtained myMBA (with distinction) from Grenoble-EM, France. And in the last decade I’ve been involved in the setting up, acquisition or turnaround of various organisations. One of these, Allied Consultants Ltd, thrives as a leading player in Business Education and Market Research, and as a niche operator in the Management Consulting industry. I am also the associate and programme director of Henley Business School for Malta and other Mediterranean regions.

So who is Lorenzo?Firstly, I spent the first quarter century being known with the informal version of Renzo. This created some confusion with bank cashiers and to be identified on official documents, not completely devoid of embarrassment for me. Hence I gradually got used to making myself known as Lorenzo. However, when I get to a familiar level I almost always revert to my informal name.

For those who believe in astrological signs, I am a Leo, which I am often told, fits me like a glove. I am generally very passionate about things and hold strong opinions.

Interview

with an Entrepreneur -

Lorenzo Mule’ Stagno

Lorenzo Mulè Stagno was chosen as Malta’s Entrepreneur 2010 by the

European Commission earlier this year. This was done as part of the

Commission’s SME week celebrations, where one entrepreneur from each of 36

European countries was selected. The factors for Lorenzo’s selection included

his past history as a civil servant taking the leap into private enterprise, his

experience in the establishing or developing of a number of enterprises, and

his involvement in the teaching of Business and Entrepreneurship.

The journal delves into Lorenzo’s history.

This interview was conducted by Jason Attard.

Issue No. 27 - 2010Interview

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Combining this with high levels of expressiveness and directness, often positions me as assertive to some people and aggressive to others. What tends to surprise people, who don’t know me well enough, is that I can instantly re-assess or dismiss my arguments as soon as I see flaws in them. My original stand would have made them think I am going to defend my position to the death, or at least be embarrassed about my recapitulation. When I see the value in the idea or argument, I re-assess and re-align my position, and move on.

I tend to set very high standards for myself, something I have occasionally been criticised about. But I rarely get angry at people for making one-off mistakes. However, bad attitudes frustrate me immensely. I really blow my top at people who do not own up or refuse to take responsibility for their actions. I believe people should be honest with themselves and others, which is the only basis of good working relationships.

Some other values I hold dearly include loyalty, which combines well with the attitude mentioned earlier, and humour or wit, which I consider to be both therapeutic and an art form.

What made you go into the world of business?Although I still see myself as an educator, I do not enjoy the routine of doing it every day. But teaching was a safe job, in a safe environment. All that changed in 1990, when I moved from this sheltered life in Malta to a large, hectic city in Germany. This roller-coaster adventure lasted for only one year, but it taught me some important lessons, including not taking things for granted, to be proactive rather than reactive,

not to give up at the first hurdle, but also to feel ok about quitting when you should. When I returned to Malta I set up my first company with two friends of mine. One could say I have done a full circle since, after many years I am now back into the world of education, even if it is now higher education. The fact that I have so many other duties besides teaching makes a difference. Having a small firm with a varied portfolio makes it very difficult to get bored.

What businesses have you been involved in?I have been involved in six different businesses, not counting the varied business units within some of the organisations I have led. For example, Allied Consultants has three business units: Market Research, Management Training and Business Consulting. We are currently considering alternative business models, but more about this in the future. My other company, Business Marketing Services, used to offer Advertising and Publishing Services. After performing a due diligence exercise, I discovered that publishing was taking too much of my resources, increasing the opportunity cost. I therefore decided to refocus my energies on more rewarding ventures.

Some of my projects thrive, others fail. The important thing is to learn from them and move on. There were many more cases where I was tempted to invest, but after doing a feasibility study decided against it. When I think about it, all the businesses I have been involved in were in the services sector.

What are your companies’ competitive advantages?I would tend to say my staff, clichéd as that may sound. With the right people you manage the impossible. Without them, one would be better off doing something else. And to continue in cliché mode, I would say our customer-in-focus approach. This implies being more focused on what the customers need, avoiding being technical or theoretical unless required, being part of their team and not external to the organisation. I believe that whether we provide consultancy, training or research, we need to give effective and practical advice.

What about your flagship product?Having the top-of-the-range Henley MBA as part of our portfolio definitely helps to give us an added competitive edge. This programme provides a flexible learning environment which is unparalleled, with a high level of tuition from some of the best tutors in their niche subjects. The learning environment is further enriched through the students’ interactions in their teams and the back up support from the local office. Over and above, students are supported throughout their learning journey by a personal tutor. The networking opportunities that Henley enjoys in Malta and worldwide are also incomparable.

What advice would you give to our readers?If you want to start a business, do it with equal doses of passion and reason. Start small, aim high and do not be afraid to fail. Take the plunge. When you face a crisis, do not panic. Use your creative brain power and find opportunities, even in a crisis.

Jason Attard is the Managing Editor and Publisher of the journal.


learning FroM lorenzo’s experiences: -

•When you see the value in a different idea or

argument, do not be reluctant to re-assess and re-

align your position.

• It is important to learn from those business which do

not thrive, and to move on.

•Be focused on what the customers need.

•Avoid being technical or theoretical unless required.

•Be part of your customer’s team.

• Whether providing consultancy, training or research,

you need to give effective and practical advice.

Interview with an Entrepreneur - Lorenzo Mule’ Stagno

Speaking with Uve Schoenfeld…

Who is Uve Schoenfeld?Uve is a Masters graduate of Economics, with a special field in the theory of crisis. Most of my work life has been spent as the Financial Controller of bigger companies such as H.Y.Y., one of the biggest Finnish companies. Or Teles AG, another huge plc.

So, from student to Financial Controller?Whilst I was a student, the head of the I. T. faculty at the University in Berlin appointed me as his personal assistant. And as from my second year at university I was giving lessons. So as you can see, being deemed to be the best could well be a stigma affecting

A combined focus on I.T., Finance, and Design might not seem to create core competence, at first value. DMAX Studios however have done just this.Dmax’s two champions; Uve Schoenfeld and Ray de Bono, have combined these areas of specialisation so as to provide a different product.

The journal explores.


yourself and those you work with. There is nothing necessarily wrong with this, but it is a responsibility which one must pay tribute to.

I had wanted to get some initial exposure to work, so as an intermediate period I worked as a project manager with a leading scientific institution in the USA. My history therefore is - student, the Smesosian Institute, then a Financial Controller for over ten years.

In Germany the Financial Controller is typically also responsible for I. T., hence my dual focus on Finance and I.T. Thus I became hooked into business-assistive technology and in 1997 I became a freelance entrepreneur.

An Interview with Entrepreneurs-

Uve Schoenfeld, Ray de Bono

This interview was conducted by Jason Attard.


The Mall | Floriana FRN 1478 | Malta | T [email protected] | www.phoeniciamalta.com

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You seem to have been doing rather well for yourself as an employee. Yet you took the plunge into the unknown. What led you to this?The last CEO I had worked for was such a beast of American hire-and-fire style that I was fed up with the system. I recall a board meeting wherein the CEO had retorted “Anyone else who does not like the way I do things may stand up and leave”. So I did. And I’ve never looked back.

How did you succeed in your entrepreneurial efforts?I think that one of the most important things is to stick to your roots, and maintain your targets, your ambitions. And the other thing is to never do what you don’t want to do.Oh and never panic – whatever happens. There is a positive element in all happenings.

How did you end up in Malta?This was my next big step in my career. I was always responsible for tax-optimisation, so Malta came across my radar several times. In the eighties, a friend of mine had wanted to consolidate and relocate his consultancy business as a ‘SAP’ and ‘Infor’ consultancy firm, and he had asked for my advice on the matter. And if you want to set-up a company, then somebody has to be present to run that business and that was me. I really liked it here. I had moved over with my family. For ten years, it was enough. I was blessed with a lovely home in Mdina – what more do you want in life?

How had you met DMAX?I was a client. In 2000 I was very happy with the work. In 2005 I helped Ray out with his management buy-out. He then offered me share holding in the company, so as to fuse branding with IT.DMAX in the beginning was purely branding-focused. Today it combines services to both IT and branding.

Does this translate into competitive advantage?A simple example is that from a design point of view, the ‘GUI’* is far more user-friendly than the typical product. A weak GUI, we stress, is the main reason behind non-acceptance from the user; the biggest case of failure of all IS implementations.

I will assume therefore that DMAX’s product portfolio is somewhat different from the norm.The uniqueness lies in the merging of both schools. It is therefore a unique product portfolio of (1) Marketing and Branding Consultancy, (2) DMAX epaper (a personalised email marketing turn-key tool), (3) Software Development, and (4) Strategic IT Consultancy, which is the development of an IT strategy for the next five years for clients.

Is it then correct to assume that DMAX’s core competitive advantage is in providing a far more solid technical back-bone than the typical service provider?Yes, and also far more efficiency in the automation of core functions.

Speaking with Ray de Bono…

A brief history of Ray de Bono…I had started off with a large Malta local agency during my University years, in which I had graduated in Communications, with a special focus on Marketing. This is a matter which I have continued nurturing till to-date; fashion magazines, international news, and lifestyle publications are my daily bread.Today I have over fifteen years of experience in front-line marketing & design.

Working in Germany was a very intense experience. Spuetz AG, a public listed equity firm, gave me a chunk of international experience. I handled all their identity creation, financial and annual reports; a long-term assignment in Berlin which opened the door for international projects that today constitute over 60% of company turnover, including international publications, international organisations, leading brands…

I also worked in real estate as an estate agent, for two years. There I realised that combining my sales skills with this passion for design was the way for me; that I should go freelance and form my own design company. And so I did. Actually, my first company was in a partnership with a leading plc in Malta, and there I also gained thorough knowledge on how to integrate complex IT systems involving payment solutions and so forth, into intelligent and user-friendly GUIs.

Can you give us an example of such work?There is an element of creativity behind me. In 1998 I had created a video for a shoe company which till today is still banned by the Broadcasting Authority; I’ve created campaigns which whilst being banned in Malta would probably go ‘viral’ outside our shores. My point being that a high element of creativity forces people to stop and think; call-for-action ads must get noticed. And we have thus been involved in the launch of Microsoft Windows XP, Windows Vista…

* A GUI (pronounced GOO-ee) is a program’s graphical (rather than textual) user interface to a computer.



The Mall | Floriana FRN 1478 | Malta | T [email protected] | www.phoeniciamalta.com

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learning FroM uve anD ray’s experiences: -

• Do not accept unethical behaviour from your superiors.

• Stick to your roots.

• Maintain your targets, your ambitions.

• Never panic – whatever happens.

• Optimum service provision could even translate into solid business partnerings.

• Fusing separate yet supportive specialisations will create competitive advantage that is most difficult to clone.

• A weak GUI is the main reason behind non-acceptance from the user; the biggest case of failure of all IS implementations.

• a high element of creativity forces people to stop and think; call-for-action ads must perforce get noticed.

An Interview with Entrepreneurs - Uve Schoenfeld, Ray de Bono

ISL Financials Executive 2 10/27/10 9:41 AM Page 1

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C M Y CM MY CY CMY KISL Financials Executive 2 10/27/10 9:41 AM Page 1

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What is your

history?Both my father and myself

believe that entrepreneurship, particularly today, must be complemented

by a strong technical back-bone. The University of Malta provided me with my base degree, and I am furthering

my studies via a Masters course. From the business side of things I was involved in Ideacasa’s management for the two years following university. Responsible for the outlet’s operation, this was a two-year long fountain of knowledge for me – my introduction to the industry; particularly so, as I was taken completely under the wings of my father Clement.I had then the opportunity to co manage a distribution office in Italy, selling upholstered furniture to the Italian furniture outlets. This gave me the opportunity of experiencing the whole process rather than solely the selling part, with production, distribution, logistics, and their varied sub-segments, such as design, after-sales and so forth, all being parts of the process. With different outlet mentalities, along with a very, very different Northern-Italo culture, which is more of a German mentality than a Mediterranean one, we have learnt to instil this culture of operational perfection directly into the heart of the Vivendo Group.After another year in Italy, I co managed one of the outlets of the Group, followed by the opening of Quadra; one of the recent offsprings of the Group. And my role is now that of Group Managing Director.

Malta’s market leaders experienced a shift from manufacture towards importation. What is Vivendo’s experience in this regard?Ideacasa went for importation immediately – before others. Though we were doing assembly and some manufacture, we were already building on the importation operational aspects, thus embedding ourselves into the future direction well in advance. And as soon as the levies wore off, we switched to full importation – with all operations already in place.

Vivendo has undergone brand restructuring…Vivendo did not undergo a brand restructuring, but it was decided from the beginning of the Group’s birth that all outlets are to be managed separately. And so they now are, yet the logistics remain shared. Thus, economies of scale

Every unit

held unde

r the wings

of the Vivend

o Group is a

market lead

er in itsel

f. Yet Vivendo Group

was

established

in 2008 and

encompasse

s the entire

range.

In interviewing the Group Managing Directo

r, the journal exp

lores the nature of

the Group, its raison

d’être, and operative e

lements behind its running..

This intervi

ew was conducted by J

ason Attard.

Interview

with an Executive -

Sergio Gauci

www.the-executive.biz


The Executive 57

.

consulting | software | solutions www.theaccessgroup.com

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The Access package represented excellent value for money, delivered a good range of functionality and was user friendly.

Access launched a variety of products this year including iPhone, iPad and Blackberry apps. It has also added more than 150 web services and worked closely with Microsoft,

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are nonetheless exploited whilst allowing completely different strategies for each brand. Different outlets with a logistical capacity shared by all. In truth, there is sacrifice to this. Costs are much higher than when using umbrella branding. But in so doing, higher flexibility and the ability to micro manage the right product in regards to its exact audience are thus procured.You need to focus. And you simply cannot risk confusing your targeted demographic segments and competencies.And so the Vivendo mother group was set up. We then opened new outlets for Dex, Quadra, Krea and Idea Casa. We then created Vivendo Projects, so as to assist the entire group at various levels. This is how we were awarded the prestigious George Hotel project, handling all from parquet flooring, to lobby, to pool-side water furniture, etc. Lufthansa Technik? A 4-week turnaround in Ferragosto from design to implementation. Vivendo Projects in fact ensures that turnaround for projects is very, very competitive.

What is your primary edge?Our edge is derived from several factors, perhaps the primary one being that of economies of scale. And so our suppliers invest in us, through better deals, better service, better training, better software. We are extremely keen on our business partners, and we really do choose the best quality providers, providers keen on innovation, those who are most customer-oriented. Such relations facilitate our giving a six-year post-production guarantee. You can only get this through solid business relations. We are also very committed to the customer. Kollox idur mieghu. So in a nutshell, our edge results from significant economies of scale, a focused customer-driven attitude, a tight and highly efficient management structure, a team of dedicated and loyal employees, and a brilliant supply chain.

Could you give us an example of your commitment towards the customer?Yes. That we call all the customers of the day, every day, matching the installers’ reports with those directly sourced from client, is a just example of our dedication and focus. We ask the client, Was the experience positive? Negative? And in case of a negative expression, action is taken. Also, we conduct mystery shopping exercises in all our outlets. Results obtained permit us to constantly maintain an alert and efficient front-line.

What is it like to work for Vivendo Group?It’s all very informal. We want our organisation to be as flat as possible. We’re all very hands-on, focused. I believe this to be the right culture. Through our open-door policy, the people around us can become part of us. This is a stance which we have adopted externally as well as internally; we strive to keep the small business affinity which gives us that certain personalisation.

How important is Education to Vivendo Group?What is most important for us is that the profile must match our mentality, and there must be a cultural fit. A shared attitude too is a prerequisite to joining up with us. The job can be taught, learnt. This notwithstanding, especially for the higher-level posts, specialisation is a must.Quite a good number of people have started off with us on the lower rungs, and are climbing up, having learnt the ropes through personal capability, time, will, and studies, and some today occupy our senior management posts.Furthermore, as a norm, we conduct constant customer care, communication skills, and full product training programmes. We will encourage training dependant upon the added-value to be

generated both to the business and to the individual.

Vivendo thus has a heart…People do move on, and anything they learn from us, with us, becomes part of their skills-set. We are conscious of our responsibility in this regard.We also socially responsible from a general corporate view. Physical assistance from pre-allocated labour, environmental responsibility throughout our supply chain, are some of the ways in which we strive to take care. We have been collecting our packing well before doing so became a legal requirement. And we choose products with certified minimal environmental impact. Water-based varnished products have been our staple choice for several years.

And what is your way forward?All companies are in line with each other, so as to consolidate each unit’s market hold whilst yet remaining in line, and in synch. The way forward is to remain doing so, thus becoming the absolute market leader in every sector, thereafter utilising our structure to nurture the Projects division.For these objectives to be reached, to be maintained, we indeed must focus on remaining as closely-knit to our core competences as possible. We know how to import finished furniture and interiors. Anything related to a home or office interior? We’re your man. We would very much like this message to be instilled in everyone’s understanding.

Words of Advice?The person at the helm must look with enthusiasm towards the future. This becomes the company’s way of vision. Without this you have no stamina, no edge over the industry. If you don’t have this vision, you will not reach destination before the others.Also, think ten years ahead. And stick to your roots whilst paying tribute to the infinite importance that the customer holds.


learning FroM sergio’s experiences: -

• Manageallbrandsseparately.butkeepthelogisticsshared.insodoing,strategisingindividuallyisMadepossible, whilst econoMies of scale nonetheless

reMainexploited.

• you siMply cannot risk confusing your targeteddeMographicsegMent.

• econoMiesofscalecoercesuppliersintoinvestingMorecoMMittedlyintheircustoMer,throughvariousMeans

includingpricing,service,training,software.

• MysteryshoppingexercisesperMitonetoconstantlyMaintainanalertandefficientfront-line.

• lookwithenthusiasMtowardsthefuture.

• thinktenyearsahead.

• sticktoyourroots.

• pay tribute to the infinite iMportance that thecustoMerholds.


Interview with an Executive - Sergio Gauci

M any of us confuse the terms VLE/LMS with a School Management System. To explain the difference, a VLE is a set of online tools used by teachers and

learners to enhance teaching and learning opportunities and to get access to resources such as lesson plans and learning activities etc, anytime and anywhere. On the other hand, a School Management System is generally a management information system adapted to meet the needs of schools. It allows the school to manage student details, attendance, records, next of kin details etc. and simplify reporting; an administrative back-end system used primarily by administrative staff.A VLE such as Fronter integrates with school management systems to import student data (for quick account creation) as well as show attendance and other personal records related to students. By integrating the two systems, activities carried out in the school management system are automatically reflected in the VLE.

Fronter integrates with leading school management systems, such as SIMS (used locally at University of Malta). In the UK, there are 3,000 Fronter installations integrated with SIMS.

owneD by the worlD’s leaDing publishing coMpany

In 2009, Fronter was acquired by Pearson - a reputable and established company with 35,000 employees and £5.6 billion in revenue. This joining of forces seems to have been a very natural transition, one that has proven very fruitful for both companies and hence the customers.An apt example of the Pearson acquisition is that Fronter boasts excellent integration with Pearson’s Phoenix e1 and many other leading school management systems.

Fronter’s aDvantages over open source solutions

Several free and open-source tools are in existence, notably Moodle, which provide a free VLE. Fronter’s edge over such free competition is that, whilst Moodle is indeed a great tool - it allows individual teachers (or school departments) to provide online resources for students, such as notes, online quizzes, wikis and more, Fronter incorporates such functionality and much more, but offers it on a school-wide level. Unlike Moodle, which focuses on a particular course, Fronter can operate at the governance level (i.e. the Department of Education locally) and then be provided to schools. This provides a tightly integrated system which allows

IT Review: Fronter - a dedicated eLearning Platform

This review was conducted by Keith Vassallo.

Fronter, represented in Malta by Computer Domain, is a 100% online tool used by educators to enhance teaching and promote collaboration within the classroom and with parents. In this issue, the journal interviews Nils Olav Sundsteigen, Director Business Support, Pearson Education, Platforms and Services Group so as to assist in the assessment of the system.


Issue No. 27 - 2010IT Review

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Fronter is also a closed environment. For example, an e-mail system can be implemented within Fronter which only accepts/sends e-mail within the school, or within domains allowed by the administrator. This allows students, even at young primary age, to communicate via e-mail with all the safety of a privately operated environment.

Fronter’s Main Features

Fronter provides all the standard features which both teachers and students have come to expect from a virtual learning environment. Student collaboration, notes, virtual class rooms, multimedia, communication, single sign-on - it’s all there. However, there are certain features which make Fronter stand out.

One such feature is visual e-mail. As discussed, Fronter allows students to send each other (or teachers) e-mail within a safe and secure closed environment. However, the e-mails sent are visual - the student can embed drawings, sound files and images very easily within the e-mail without the need for any software to be installed on their computer. Another important aspect is the Individual Learning Plan (ILP). ILPs are a mandatory requirement in Norway, where Fronter was developed, as well as in Sweden. The ILP is a tool used by teachers, students and parents. In it, a teacher sets goals for students on an individual basis and then keeps track of how the student is progressing in relation to their goals. This progress can then be tracked by parents and students. The system is so successful that many schools in the UK have adopted the system, despite not being a legal requirement.

Fronter is built for education providers by education providers. Once up and running, Fronter provides the teacher with virtual rooms and a large number of tools. The teacher then chooses which tools should be available in which rooms. This empowers the teacher to take ownership of the system and provide content and environments for students. It allows the teachers to easily catch up to their ICT savvy students and employ their talents for education.

schools to share content and resources, and allows greater control over the system by the governors. Fronter is also strong in being an end-to-end solution. With Fronter, you can of course manage an individual subject, department or faculty - but you can also manage other activities through the ‘virtual room’ concept. A virtual room expands Fronter to be much more than a delivery and management platform for courses; it allows inter-school collaboration, the creation of a school intranet as well as website and can also be used for extra-curricular activities such as the football team, drama etc... More so than a strict focus on the academic side, Fronter is providing schools with a virtual school, wherein all the school’s activities can be followed up online, or indeed take place entirely online.

Fronter can easily pay for itself in a variety of ways - one simple way is by reducing the printing requirements of a school, which can run into thousands a week for larger schools. With Fronter, circulars, notices and teaching material can be delivered electronically, helping the move towards a paperless school. This also instils the value of responsibility within the student, who can login to the system to check circulars and new resources. It also involves parents, who will be encouraged to use the system to check on their child’s progress.

security Measures

Fronter’s typical customer is a primary or secondary school. And particularly within such environments, the security measures which such systems take to safeguard the safety and security of the student is of paramount importance.Fronter is a hosted solution kept in a state-of-the-art data centre which no individual school could run. The environment is protected by credentials and all traffic is securely encrypted via HTTPS. So far, the data centre hosting Fronter has achieved 99.98% availability and Fronter itself is certified under ISO/IEC 27001 [a standard for Information Security Management published by the International Organisation for Standardisation].


Fronter allows students to interact with each other and with the teachers, and access to the internet; all within a protected infrastructure

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The teacher can even make students co-administrators of virtual rooms, allowing content to be created by the students themselves.Schools tend to have many systems - video conferencing, management information systems, internal intranets, documents stores... With Fronter, all these systems can be integrated into a single sign-on. The teacher will be able to sign in to Fronter and automatically gain access to all the other school resources, needing to remember only one password. This also reduces burden on school support staff and administration.Other small refinements significantly contribute to a great Fronter user experience. For example, virtual lessons (with video and audio feeds, as well as shared whiteboards) can be held at specified times during the day. The teacher can then use Fronter to automatically send an e-mail or SMS to students informing them that the lesson is about to start. With a feature called Webfronter, teachers can choose to publish certain class/course content to the Internet - effectively creating an instant website for the class/course/school at no extra cost. Also, being a secure web-based system allows teachers and other support staff to work from home.

conclusion

Built from the ground up as an education system, Fronter is not based on a corporate toolset but has been in development for twelve years in close collaboration with its users. Development is driven by reference groups, who meet up every year to discuss learning platform requirements. The most requested features constitute what the Fronter team will be working on the year after. The reference group

also allows Fronter to keep up-to-date with legislation across the world and national peculiarities, and to implement those features actually requested globally by the schools.

Anyone following a BTEC qualification through MITA’s Second Step Programme already uses Fronter to retrieve their course materials and follow online lessons. Fronter is also being used by St. Edward’s School, Computime and Computer Domain

Keith Vassallo has worked as a Test and Support Engineer as well as a Software Developer. He develops for the web and consults local businesses on low-cost IT infrastructure implementations. Keith is passionate about the latest in technology and has a keen interest in open-source matters and operating systems.


.


extracted from Fronter’s‘Staff Room’ section

Trusted Partner of The George Hotel Project for Furniture and Finishes

The George Hotel - FaÇade by Tekno Floor

Table & Chairs by: Calligaris

Kitchen in Self Catering Apartment by: Aran Cucine

Carpets by: Calligaris

Boardroom by: Quinti / Solid Parque by: Skema

Mattresses, Bed Bases, Quilts and Visco Elastic Pads by: Bellona

Rolling Wall and Movable Partitions by: Arcadia

The Executive #27

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Transcript of The Executive #27