Afternoon Tea in Jerusalem Blog

Life in Israel

Israeli commercial life and society

In addition to my work as a business coach, one of my interests is blogging about life in Israel. This is a country full of contrasts – over eight million citizens living in an area the size of Wales. You can see snow and the lowest place on the globe in the same day. Although surrounded by geopolitical extremes, Israel has achieved a decade of high economic growth. My work brings me in contact with an array of new companies, exciting technologies and dynamic characters. Sitting back with a relaxing cup of strong tea (with milk), you realise just how much there is to appreciate in the Holyland. Large or small operations, private sector or non profit, my clients provide experiences from which others can learn and benefit.


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Do you have a goal for your business?

In recent weeks, I have come across an interesting pattern with some of my clients. They do not seem to have a set goal, a financial target. When challenged, they even show resistance to the idea. As a business coach and mentor, I have been intrigued to find out why.

First, let me take a step back. The Facebook page of Goalcast often throws up some inspiring videos. A classic example is the boy who stuttered, grew up, left England for Los Angeles without a penny, and is now a billionaire singer by the name of Ed Sheeran.

However, the caption that captured my imagination is “I said yes, when I wanted to say no“. The video clip refers to story of a lady who has been physically abused.  What intrigued me is how I see her catch phrase inscribed – so to speak – on the faces of many of the people I meet. As I listen to them speak, whether in the comfort of their own businesses or challenged in the presence of my Jerusalem office, I see them holding back.

These are people with all kinds of backgrounds: educated or otherwise, experienced or less so, financially literate or not. What links them is a fear to set tough yet attainable monetary goals. And the key one here is a revenue target.

For example, assume you want sales to grow by 10% in the next year. In order to achieve that you have to identify potential new customers. This requires resources – time, manpower, materials. Creating that effort requires dedication, teamwork, extra coordination. And so the chain of events unfolds, as you commit yourself to the target. You begin to “own” it.

And hidden in the back of the minds of many a person is that nagging phrase “what if I do not succeed”? (One client twisted it and asked what would happen if they over-achieved?)

As I explain, there are at least three outcomes:

A) The organisation stagnates. At least you tried something.

B) You reach say 6% instead of the full 10%. That is still progress to be proud of.

C) Nothing much is sustained, but new and bigger opportunities emerge.

Given that set of potential opportunities, there should be no problem for a CEO to agree to the challenge. So why the push back? Reasons vary. What I am finding is that there can be a mismatch between intended vision and true commitment. Thus, the CEO never really intends to follow through, because they “just do not want to be there”.

To prove the point, I can relate to one young client, whom I met this morning. I told them about this posting that I was preparing. He had been asking me to set him stiff targets, because it fits directly with what he wants to do. “Yes”. He is up for it!

Business is burning brightly in Jerusalem

President Trump’s statement over Jerusalem seems to have caused those European and Arab countries, who are seen as friendly towards Israel, to shiver in their diplomatic pants. And the near-jerk reaction has been to take out their frustrations on the politicians in the Holy Land.

All Trump said was that Jerusalem is the capital of Israel. No change there. He went out of his way to say that he is not fixing the final borders. Why so many countries have a problem with that goes towards the heart of the Arab-Israel conflict. Why they have reacted coldly to Israel, when this is at the first level an internal American issue, is also beyond me.

However, I am more interested in how this will impact on commercial links between trading partners? For example, I was supposed to moderate this morning a networking session, hosting a delegation from New York. The overseas participants were officially warned by the State Department not to leave their 5 star hotel.

Somehow, I think that all countries concerned are far too interlinked to go round boycotting each other. Just look at recent economic news emerging from Israel.


It is barely two weeks ago that Amazon announced that it is to open a large warehouse in Israel. This is on top of other investments in Israel, such as the purchase of Annapurna Labs in 2015 for US$360 million. Yesterday, the Hebrew newspaper “Yediot” described details of Amazon’s collaboration with the Swedish company Assa Abloy, the key supplier of products for the Amazon Key project. In order to meet Amazon’s specifications, Assa Abloy established an r&d project with Multilock in Israel, which has resulted in a sophisticated smart lock for the home.

Israeli gas exports to Europe

Yesterday in Jerusalem, the Israeli government approved the laying of a subterranean gas line. It will stretch along 2,100 km and cost around US$7 billion, with financing led by the European Bank. The aim is to take the natural gas from Israeli’s newly discovered fields into Cyprus, Greece and eventually Italy. From there, it can reach the rest of mainland Europe.

European cars in Israel

Just looking around the streets of Israel, you can see how people are gradually shifting towards cars of greater complexity and value. To date this year, 165 Porsches have been sold, along with 21 Aston Martins and 9 Ferraris. Not much compared to other countries, but a massive revolution for the desert nation. Joining in from 2018, Bentleys – German owned and British made – will be seen on the streets of Jerusalem and Tel Aviv.

Clearly Trump’s words are not going trading between Israel and the rest of the world. If any recent political angst has resulted in a commercial shift, I did observe a comment this week that European banks have reduced their exposure to the British market by 20% since the Brexit vote. Can Israel also be blamed for that?

Israel’s medical system: The Palestinian interface

During the month of December, the UN is expected to pass 15 resolutions condemning Israel. This is five less than in 2016, when the UNGA did find the time to tick off four other countries. Just how fair is this castigation of the modern Jewish state?

To answer the question in depth would take a book, of several volumes. So let us concentrate for three minutes on the medical sector.

In the past, I have written extensively about the Wolfson Hospital in south Tel Aviv, which hosts the Save A Child’s Heart scheme. Offering high level medical services for thousands of infants around the globe, roughly 50% have come from the Palestinian territories. For the record, the aid includes training for local doctors and hosting families of the children on site.

In the north of the country, Israel has treated a similar number of refugees from Syria since 2013. It is an operation that has no equivalent for all the world effort that has been distributed to tackle this humanitarian disaster. And it is even more remarkable considering how the two countries have no diplomatic relations.

And then there is little-known and near heroic story of Dalia Bassa. She is the health care coordination officer of the Civil Administration in the West Bank and Gaza (COGAT) , and is one of the few officials of either side to win the praises of just about everyone. Now 66 years old, Dalia has been working in this field for 47 years.

It is estimated that she is responsible for coordinating the medical attention received by around 5,000 Palestinians every year in Israeli hospitals. These are mainly life-threatening situations. Just as significant, COGAT makes strenuous efforts to ensure that Palestinian doctors are also trained. Hundreds of training sessions take place annually.

To make the point, the Israeli newspaper “Yediot Ahronot” was allowed to accompany Bassa last week on a visit to a 150-bed private hospital just outside Ramallah. 14 floors high, Istishari was opened in 2016 and has treated such notables as President Abbas. A further 850 beds are planned.

During the trip, Bassa sought to help a doctor extend his visa. She also looked for ways to extend cooperation. After all, the hospital lists several doctors who have been trained in Israeli hospitals, such as Hadassah in Jerusalem. Its PGD unit is so advanced that a few Israelis have found their way there to test the state of difficult pregnancies.

And meanwhile, this week, you can expect further condemnation of Israel at the UN. Makes sense, don’t it?

Evaluating success in business mentoring

In theory, it should be relatively easy to discern the level of success in business mentoring or coaching. Sales – or some other key performance indicator (KPI,) such as production – has improved. However, what happens in a case when the client has not achieved the results originally dreamed about? Has the effort boiled down to a resounding failure?

I have several clients based in the Jerusalem area, who are classic one or two-person businesses. They are the boss, the chief of sales and also clean the floors. They are desperate to up the tempo of sales, but are still spending half their work days putting out irrelevant fires – which are frequently ordinary domestic problems.

Dena is a typical example. She came to me with the idea of exploring how to set up a new service enterprise. She certainly had solid background knowledge. Explaining her pitch to others would not be a problem.

However, circumstances have combined to foil Dena at the set up stage. To be blunt, all the initial targets have been missed, mainly as a string of personal issues that have forced Dena into unforeseen and time-consuming activities. The debts have mounted. Sales have remained minimal.

So has Dena failed? Is there any hope left?

Admittedly, Dena has not succeeded, but that does not mean she has failed. Certainly, much of the initial set up is in place, ready for a launch at a future opportunity.

There is something more. Regular readers will be aware that I encourage my clients to develop hobbies in parallel to their new commercial challenges. I usually look for a physical response like running. Dena, though, took to poetry, a former passion of hers.

I asked Dena to come up with two new poems. She wrote four, and now cannot stop writing. Today, she read out two of them to me. On completion, she then did something that I had not seen her do in all of our prior sessions. Dena laughed, out loud, almost embarrassed by her own triumph.

Shortly afterwards, Dena left the room. She strutted out with a nervous confidence, determined to find that new level of success.

The one big generic mistake when starting a business

Next week, I am onboarding in Jerusalem a new client, as their business mentor and coach. My role as ever will be to identify core problem areas that they have missed and then to help them to learn new skills. As ever, I will base my initial work around the questions:

What is the question that you do not wish a business mentor to ask you,……and why?

This particular company was only recently set up. Initial sales are coming in. However, there are a string of inconsistencies. These include no cash flow planning, lack of clear strategy, poor communication with contractors and much more.

Ironically, this subject relates to a talk I am preparing – 10 mistakes a CEO makes when starting out. I will not only refer to the above issues, I will also consider procrastination, the ability to choose the correct staff, and time management. These and other challenges impact directly on accurate decision-making, which is so critical in those early stages when you cannot afford mistakes.

However, if there is one core mistake that I see repeated by so many CEOs from the outset it is that they try to do things by themselves. For reasons of pride or maybe they are too embarrassed to ask or possibly becasue they do not know any better, they seek to act (and rule) on their own. If they would just open their eyes, that should never be the case.

The fact is that any commercial organisation is dependent on a bank, accountant, suppliers and more. Further, fewe of us are experts in all of these fields. And when you factor in additional demands of each individual set up, this creates pressure on the CEO. If they cannot manage, what is the solution?

A business mentor (or consultant) guides you through those initial stages, challenging you to ask the right questions and to seek out alternatives. They provide a strong and valuable shoulder to lean on.

I admit that this sounds self-promoting, but just consider my new prospect. Just as a result of our phone conversations, they have already begun to set up new controls and take a different approach to a core service provider. These moves will significantly improve the running of operations.

There is nothing wrong in asking for help in business, even if you are a CEO, and especially when you at the beginning of your commercial dream. Actually, it is oh-so the right thing to do.

Reviewing Israel’s hightech economy, November 2017

Having been away from my desk for much of the past two weeks, it has been an interesting experience taking a peak out at how the Israeli economy has been performing. The bottom line is that despite the enforced rudderless approach of Prime Minister Netanyahu, the numbers are still looking healthy. How and why?

Primarily, tax collections continue to be way ahead of expected levels. This is enabling the government to hand back around 15 billion shekels through reduced corporation and individual taxation, without impacting on the deficit. Foreign currency reserves continue to improve, while the levels of car imports – an indicative sign of consumer confidence – remain high. The customary issues of non-involvement of the ultra-orthodox Haredim in the workforce and also sectorial restrictive practices remain as unwanted abnormalities, but still the economy grows.

It is the high-tech sector that is leading the growth. Multinational car manufacturers such as Toyota and Seat are continuing to source their latest techs in the Holy Land. Start-ups are raising much larger sums that ever before. And Corephotonics is even suing Apple for alleged infringement over its lens tech.

The story of the week for me belongs to Compass. It has raised US$100m, effectively doubling its valuation to  to around US$1.8 billion. Founded in 20,13 by Dr. Uri Alon and Robert Rifkin, the company now employs around 3,000 people in Israel and in the USA. In a nutshell, Compass provides a tech platform to enhance the buying and selling of real estate, a product that has been around for thousands of years.

The message here is clear. The Prime Minister has not created an impression on the economy, but entrepreneurs are not waiting for him to emerge from the welter of police investigations. In parallel, the Finance Minister seems inhibited by the weightings of coalition policy, but there is no reliance on significant change. For me, local innovation is overriding the meanderings of the typical Israeli politician in Jerusalem.

Palestinian economy; and the good news is…….

The World Bank’s latest report on the Palestinian economy points describes 2% growth rate in Gaza, trying to support an unemployment rate of over 40%. Clearly this is unsustainable. What can be done?

The recent moves of reconciliation between Hamas and  the Palestinian Authority (PA) offer some hope. According to Doron Peskin from Concordmena, The agreement should lead to an extra US$165 m of support from the UAE. This will be in addition to the current annual payments of:

  • US$140 m from Iran
  • US$120m from the PA, primarily for salaries and electricity
  • US$100m from Qatar
  • US$50m from Turkey

Tax revenues are rarely revealed but Hamas leaders clearly find a way to finance their own lavish life styles, assumedly from willing local contributions.

Clearly all of these amounts are fickle. For example, the UAE contribution is apparently dependent on former Gaza bully and aspiring successor to President Abbas, Mohammed Dahlan, being handed some level of power in the territory. So, what other revenue sources can emerge?

One possibility is the extraction of the estimated 32 billion cubic meters of national gas just off its coast line. There are rumours that an agreement has been signed with a Greek developer and a contractor called CCC. However, concrete details remain sketchy.

A second source of relief could come from “impact investing“. For example:

A project to produce tablets for schoolchildren and their parents, a company that reduces the need for pesticides, an IT development centre in a crisis-ridden location and a bond to fight type 2 diabetes….They are all cited by investors and entrepreneurs as examples of impact investments in Israel and the Palestinian territories.

Yet again, the question remains if political stability will allow enough such entrepreneurs to come forth? There are already reports of the PA arresting Hamas representatives.

Another angle could be a hoped for relaxation of central control of the Palestinian economy. One small indication of change is entrance of a second mobile provider in Gaza. The hope is that prices will drop, service will improve, and thus improved corporate taxation will allow the exchequer to benefit.

The reality is that Gaza needs open borders with its neighbours. This is unlikely to happen so long as Hamas considers Israel to be a pariah state and wages war against it. This policy was most clearly indicated last week, when the Israeli army destroyed a tunnel from Gaza. Those Palestinian soldiers killed had crossed the border, underground. (It should also be noted that it takes considerable investment and raw materials to construct such tunnels.)

The unfortunate bottom line is that the Palestinian leaderships can always blame Israel for their woes. With a willing international community and a supportive set of UN institutions, this stance absolves them from any form of responsibility. Hoorah!

And meanwhile most people in Gaza will continue to be dependent on handouts.

Coaching and leadership – the workplace and at home

In a brilliant article in the Harvard Business Review “turning potential into success“, the three authors succinctly detail why so many large companies fail to nurture a culture of leadership development.

The paper details eight levels of competence that an organisation may look for in a potential leader, the importance of each variable depending on the type of business in question. Crucially, each variable is then measured against four additional factors: curiosity, determination, engagement and insight.

With this information, the paper discusses how to turn potential leaders into the true drivers of their companies. As they note from one survey, only 13% of executives have confidence in their own rising leaders.

I suppose the reasons for this are many. They can include:

  • lack of training
  • lack of ability in the top levels to perceive the talent just underneath them
  • a desire to maintain power – to keep control of the existing hierarchy

A fourth factor is what I call ‘the benevolent dictator’ syndrome. That is when a ruler – a.k.a. a top executive – is dominant. He or she believes that only they can do things properly, and that includes most tasks. Assignments have to be carried out their way, as it is for the best, at least according to their logic. They cannot let go. They have to be involved in all aspects.

This is a process I see so often during my mentoring and coaching in Jerusalem, Israel. Yes, sometimes the same top CEOs do possess genuine and multiple skills for running a corporate. However, their overall outlook stifles, if not crushes, innovation. An employee will cease to question, as their motivation has been destroyed.

And the ironic result? Quite often more work and confusion is created. The dictator fails to appreciate all the angles of the project, and there is nobody to update them.

What so many of us fail to appreciate is that we often become that proverbial dictator back in our own homes. For me though there is a subtle difference. Up to 6.00pm, clock out time, the pain can be measured in the lack of growth in the corporate’s bottom line. In your own house, the fall out can be heartbreaking.

When you need to let go of a valued client

Frequently, one of my first requests as a business mentor is to help my client ‘sort out’ one of their own customers. And the reality is that this is a customer that they do not need. Thus my issue becomes one of explaining why they need to let go of something that is supposedly the proverbial jewel in the crown.

In a classic case study a few years ago, I was asked by my client in Jerusalem to meet with his customer. The aim was to convince them to keep working with my client and to pay a higher price. And as the discussion progress, it was clearly evident that the customer had no loyalty to my client. For him, it was a cheap ride.

The core of the problem was that my client has made the classic mistake. He had been so determined to take on the customer that he had ignored some basic rules of running a business. And as he himself knew only too well, you cannot get away with that play too often.

However, there is the opposite scenario. What happens when your customer starts out as a ‘fat fish’, but implodes? Typically, this arises in a long-standing situation. Personnel on both sides may change. The deliverables alter, even if this has not been officially documented. Externalities, such as regulatory issues, creep in. Maybe the remuneration becomes fixed for too long.

In other words, the joy of that once special relationship has evaporated, and without both sides comprehending how or when. Such a situation is known as the ‘golden cage’ scenario. It looks like a great deal for one or the other side – maybe both – but actually you are trapped.

This is a story that many of my clients face. One area where it comes up is in support services for digital media. Payment is determined by a fixed number of monthly hours. However, these are rarely sufficient. The work is carried out and the revenue seems healthy. At the same time, my client wakes up to the fact that they have less resources for more lucrative contracts. Ouch!

It is at this point, where a business mentor steps in and forces the service provider to answer a painful question. Is the effort truly worthwhile? And the determining factor may not just be financial reward. Other elements, such as brand creation, interest, training of juniors, and more may come into play. Yet, whatever the issue, hard decisions do need to be made.

And sometimes you just have to let go, for the peace of mind of both sides.

(Dedicated to my mother, who passed away this week).

When the business mentor practices what he preaches

Yes, there are differences between a business mentor, business coach and a business consultant. And yesterday I was offered a wonderful opportunity to illustrate them.

I was asked to deliver a presentation near Tel Aviv to the 9th Annual gathering of the Israel Small and Medium Sized Business Association. It was a surprisingly wide variety of 700 people. For me, one of the highlights was the panel featuring Jamilia Hier, a Druze lady whose soaps are now sold in dozens of countries around the world.

Jamilia started from next-to-nothing, in a society that does not necessarily enhance the status of women. As she explained to a captivated audience, 95% of her staff are female. And she employs Druze, Christians, Jews and Muslims, and nobody checks to see who is who.

My own talk featured six key reasons why people should seriously think about engaging a business mentor, as a person who sees what is not said or is overlooked. This outlook is neatly surmised in the following two questions:

“What is the question that you do not wish a business mentor to ask you,……and why”?

Yes, a mentor is a person who sets out to challenge; to drive beyond the accepted boundaries. He looks for an entrepreneurial spirit.

In contrast a business coach, can be compared to a sporting analogy. He is looking to improve core skills. And the consultant has a more hands-on role, often becoming involved in the decision making process.

Preparing the presentation proved an interesting challenge. Most of my work is with those who were born in English speaking countries, usually in the Jerusalem region. This time, I was confronted by a more natural Israeli audience, where a Jerusalemnite was the rare exception.

So, I had to mentor myself by considering: –

  • What was going to be the wow factor?
  • What is the hook to the main point?
  • What would make them laugh?
  • How could I deliver something new?
  • What would be the closing punch line, and how to deliver it?

It was a fascinating process. In each instance, the differences were not huge, but subtle and important enough to force me to change my patter. And I had to practice, repeatedly, my delivery, exactly as I encourage my clients to do so.

If there is one tip I can leave you with, it is as follows. The talks that appeared to be more successful – and I hope that includes mine – included a personal element. The presenters hid the boring commercial message behind a story that contained human insight.

Guess what? In those cases, I believe that fewer people in the audience were “just checking their mobile phones…..yet again”.

Hate negotiating? Try this tactic

So, me, business mentor and coach in the Jerusalem area, had to enter some quick, hard core, negotiations the other day. I could see it coming up. I had prepared my tactics in advance.

When it comes to negotiating, many people just cringe back with the very thought. It touches on all their vulnerable emotions. I used to be in that category. Nowadays, I play the game very differently.

The background was ostensibly straight forward. My wife and I needed the help of a third party in order to carry out some necessary work on the household. The unofficial guidelines used to say that the fee was  – let us call it – 10%. We had done our homework, and we knew that the market allowed for as low as 2.5%.

After the general chit-chat, the moment of truth drew upon both sides, ourselves, junior salesperson (JS) and senior salesperson (SS). Nothing was going to happen, until we had signed a paper saying 10%, or otherwise.

My wife opened the bidding. Softly and encouraging, she argued that the market rates demanded a figure lower than 10%. She was politely rebuffed by SJ. She pleaded again, and again firmly but politely she was told that a lower fee would not be possible.

My wife than upped the emotional talk. She announced that she was prepared to sign, but felt she was being made a fool of. To that, SS jumped in. He assured us that we had the backing of his whole team and this was of considerable value to the project. To be blunt, this is an extended version of the gambit called “blame the higher authority”.  In other words, I do not make up the rules, and therefore YOU have to agree to them.

It was only at that stage, once both of our opponents had played their best cards, did I step in. I initially played to their ego, saying that I was sure they had heard all the excuses in the past, to which they agreed.  I let them know that I am a business consultant, and I can argue their side just as eloquently as they can. I also reminded them that they too are familiar with market conditions.

Bottom line, as I said to them, stop fobbing us off with irrelevant comments, that superficially appear so compelling.

In effect, we were hoping to save ourselves a lot of money by applying three rules:

  • Formulating an effective tactic in advance.
  • Letting them assume they are winning
  • Not blinking when you do not have to.

In the end, both parties compromised in the middle.  In other words, we won.

If Israel is for the many, why is its government only looking after the few?

Yesterday, I witnessed a wonderful sight in Israel. A leading team of civil servants from Washington toured a public institution in central Jerusalem. They were impressed by the skill-set of the employees, the passion of the core management, and the deep level of coexistence both from the side of the receivers and those who delivered the sophisticated services.

The Americans concurred. They had rarely seen such professionalism and all round devotion in their site visits in dozens of other countries. And for me, this microcosm of a story represents what is true about so many other parts of life in the Holy Land. Below the radar of the international media and despite all the shouting in the Mediterranean heat, people really try to get on, whatever their background.

However, more and more, I feel the one key exception to this is the government itself.

Just look at these three incidents:

First, this week all the ministers turned up for a vote, which would allow them to install political friends more readily in key public sector jobs. At the same time, one of the saddest annual ceremonies was taking place, a memorial service for those who fell in the 1973 Yom Kippur War. Apparently, the government was not represented at the event, a major break in protocol and an insult to those bereaved families.

Second, for months there has been an effort to promote a parliamentary bill that would restrict how Israeli companies sell financial binary options. It is public knowledge for over a year that many of the companies are fronting a scam. So, the question is why was an already watered down piece of proposed legislation, designed to regulate the industry, opposed in August 2017 by Netanyahu’s Likud, the main component in the coalition government?

As an online newspaper reported: “… family prominently involved in SpotOption are leaders of the Georgian faction of the Likud Central Committee”. (To dummy that down – that means votes and money). A few weeks later, to what I assume was the embarrassment of Jerusalem, the FBI arrested an Israeli CEO, who leads an options company. And this week, Canada banned the industry, as Israel continues to drag its feet (and thus people lose their savings).

Third, there has been the most disgraceful handling of state support for hundreds of thousands of people with physical impediments. It has been known for ages that these people receive less money than the minimum wage, and that is despite the fact that many require expensive medicines and equipment. Proposals to change the system were effectively parried by the Prime Minister. For months, there have been spontaneous demonstrations by the handicapped, blocking key road junctions. The police were powerless and the government’s efforts were reflected in its inertia.

Last week, after the head of the Trade Unions’ movement intervened, an agreement was reached following 24 hours of talks. What had it all taken so long? Why did these people need to be treated so humiliatingly by those who sit in power?

It would be easy for me at this stage to consider how these three instances reflect a method of governance by the few for their own select few. It would be even easier to compare that thought with what I had seen during the visit of the American officials. Here, we saw professionals actively looking embrace a culture of inclusiveness.

However, there is worse. And it needs to be said.

The police are currently involved with at least five files that concern directly or indirectly the Israeli Prime Minister, Binyamin Netanyahu:

  • His wife is about to be charged with abusing the public purse –  inflating private expenses and then receiving reimbursement from the Treasury.
  • His own lawyer (and relative) and other associates are linked with an investigation where they may have received kickbacks for securing the purchase from Germany of a submarine, which the military may not even have required.
  • His former Chief of Staff, Ari Harrow, is being charged with bribery and fraud.
  • He is being investigated for receiving gifts in exchange for political favours.
  • He is being investigated for manipulating the press.

Jews around the globe are about to commence the festival of Succot, the Tabernacles. A core theme is that families and friends come together in booths (Succot), leaving aside for a week the mundane matters of the world.

For too long, the Israeli government – and especially its core leaders – has left aside vast swathes of society. Their raison d’étre appears to be: let us govern in a manner so that we and our friends can stay in power. And thus it is the few well-connected members of society who benefit, as the others have to make do with the crumbs thrown at them.

I do not know who is or is not guilty of what in those five investigations. I do understand the common theme between the first three issues. And thus it is easy for me to find the moral link between the two sets of stories. Sadly, I find this totally repugnant.

The Israeli economy starts its new year, in September

The Jewish calendar ends up placing its new year around about the second or third week of September. In Israel, a country of 8.7 million people of whom 75% are Jewish, this is always a time for reflection on changes in its economy.

According to the country’s Central Bureau of Statistics in Jerusalem:

  • The average income per household stands at 18,671 nis ($5,300) a month before taxes, one of the leaders in the region.
  • Most Israelis own their homes, with 67.6% living in an apartment they own and 39.9% paying mortgage.
  • 88% of Israelis said they were very satisfied or satisfied with their lives. Some 1.1 million (21%) feel stressed always or often. 34% said they have a hard time covering their monthly expenses.

Moving from the individual to the national level, there seems to have been a downturn in the growth figures in the second quarter of 2017. However, given the low rate of unemployment (under 5%) and the encouraging performance of exports. growth for 2017 should still come in at around a healthy 3%.

So where are the weaknesses?

First of all, much of the growth is led by a continued sharp expansion in personal consumption. There was a 6.5% in the last quarter alone. In laymen’s terms this means that the economy is being powered by the consumer and not by the creation of new wealth (through production).

Next, vested interests still dominate key sectors of the economy. I have written in the past about how the powerful unions at the docks ensure that the costs of imports are forced upwards. This week an exposure on the cost of kosher authorisation determined that this was a 2.4 billion nis annual ‘market’ (US$0.7 billion). This includes the supervision of slaughter houses, restaurants, imports and much more.

The key players here are the various rabbinical houses in the public sector or those affiliated with political parties. There is a strong whiff of ‘jobs for the boys’. A relatively new orthodox organisation called Tsohar is trying to challenge these closed practices. If it were to succeed, this could allow food prices to drop by anything up to 10%.

And finally there are the 120 members of the Kenesset, the Israeli Parliament. If you are not a minister, you are allocated a budget of 94,000 nis annually to do what you want, so long as it helps connect you with potential voters. However, there is no law that says you have to detail where that money goes. And if you are one of the few, like Miki Zohar, who overspent, there are no emphatic sanctions.

Thus, individual parliamentarians spend tens of thousands of shekels on Facebook advertising, sms announcements, surveys, entertainment and much more. A near carte blanche, where there is little transparency. It is like clerks in a company having ready access to the petty cash box.

And as we all know, except for those who do not want to admit it, when the petty cash box becomes open territory, the rest of the establishment becomes the victim in all kinds of other ways. A pathetic slippery slope. Sad for the other 8.7 million people.

Bidding all my readers a SHANA TOVA and a happy new year.

A most noble “Afternoon tea in Jerusalem”

A SPECIAL guest in Israel last week was Roderick Lord Balfour, who is the fifth Earl of Balfour. He was here for the From Balfour to Brexit conference, which was held at Mishkenot Sha’ananim in Jerusalem (in honour of the late Sir Naim Dangoor.)

At a dinner on the first night of the conference, Balfour, who has a delicious sense of humor, said that he’d been overwhelmed by the number of selfies for which he had been asked to pose, and then told of his first visit to Israel in the mid-1990s. A friend was driving him around, and he told his friend that he had an appointment and gave him the address. The friend did not immediately put two and two together, and when the car drew up outside the President’s Residence, the friend asked him if he was sure he had the right address. Balfour replied that indeed he did and that he was having afternoon tea with the president, who happened to be Ezer Weizman, the nephew of Israel’s first president, Chaim Weizmann, who had influenced Balfour’s ancestor Arthur James Balfour.

The younger scions of the Balfour and Weizman dynasties were having a great time talking on many subjects, when their conversation was interrupted by a phone call. The president excused himself, saying: “I would like to talk to you all afternoon, but there’s this new Prime Minister Netanyahu, who’s not behaving very well, and I’ve to call to tell him he must do something, because he’s not running the country well.” The revelation was met with howls of laughter.

(As reported by Greer Fay Cashman in the Jerusalem Post:

Jerusalem’s business scene – how times are changing

The past month has seen some exciting progress in Jerusalem’s business climate. What is really encouraging is that many of the initiatives are coming from the ground up.

Jerusalem has been the united capital of Israel since 1967. Yet for decades, it had just two key sectors for employment – the civil service and tourism – and little else. Around the turn of the century, along came a few sparse giants such as Intel and Teva, providing a much needed base for employment. And in recent years, start-up successes like Mobileye and dozens in the bio sector have also made an impact.

What has been lacking has been the opportunity for the independent entrepreneur to make their mark in the holy city, which is also the capital of Israel.

As I have written before, the Jerusalem Business Networking Forum (JBNF) has been trying to challenge that status quo for about a decade. Last night, I moderated their annual speed-dating session, attended by around 50 people. For over two hours, there was deafening noise as entrepreneurs and innovators from a vast score of backgrounds swopped business cards and elevator pitches at a frightening pace.

MATI, a Hebrew title for the “Jerusalem Business Development Centre”, has just released a fascinating set of statistics. In the past twelve months:

  • It has helped and supported around 3,800 entrepreneurs and businesses.
  • It has conducted 120 seminars and courses
  • It has written over 300 business plans
  • It has helped  business owners raise over 60 million shekels, approaching US$20 million, which does include grants of a further 1.5 million shekels.

As one of MATI’s business mentors and coaches, I can confirm just how invigorating this pattern of commercial rejuvenation really is.

More specifically, I was delighted to learn that a former client of mine, Yuval Wirzberger, is one of the main figures behind 200Apps. This now boasts over 30 employees – religious, secular, Arab, and a cross over of many other cultural divides. Equally impressive was their launch this week to promote a new studio and incubator.

Now I come to think of it, it would be interesting to learn just how much of the new iPhoneX is also dependent on Jerusalem brain power!

Innovation – Why a small business owner should bother

Innovation is one of the commercial buzz words of the moment. It is usually found in the high-tech scene. It is often associated with the X, Y , Z generations. The question is should us other mere mortals, perched outside these categories, need to bother?

In the UK, the piercing role of innovation in SME growth was detailed in the Unlocking UK Productivity report, co-produced by Goldman Sachs, the Enterprise Research Centre (ERC) and the British Business Bank (BBB).

Across all sectors, it found that innovation boosted productivity and facilitated substantial growth in sales. Survival rates were also higher in SMEs that innovate, for the simple reason that they are better able to adapt to challenging market conditions.

This message was brought home to me earlier today, when I met up with a client in central Jerusalem. Now this was early days as their business mentor. However, they were eager to stress: –

  1. They constantly seek to learn about new techniques available in their profession.
  2. They look to boost sales via this acquired knowledge.
  3. Further, the knowledge appears to empower the business owner, who is totally committed to what they do. they love their job, and try to motivate others around them.

Interestingly, without having ready numbers available, it would appear that their sales have just about held their own, at a time when local competitors are struggling.

A few hours later, I received an email from another client of mine, Sonya Davidson, who is developing her start up company in the field of alternative energy. Summarising her trip to France, where she met up with potential investors, Sonya effectively spelt out how her technique to be innovative is beginning to pay off. What she stressed was that entrepreneurship does not just refer to new technology. It applies to all aspects of a business – client management, financial planning, logistics et al – and for all types of commerce.

Remember the lesson of the great manager of Manchester United Football Club. Even when he had a team conquering the best opponents in Europe, he was looking to recreate it around a small successful core of key players. Why? He was always aware that his opponents would catch him up quicker than could be anticipated.

There is an obvious lesson in this posting. Be you a shop, service provider, high-techy or otherwise, whatever your size, you cannot afford to rest on your laurels for too long, in any aspect of your business.

Glasgow and Jerusalem: What they taught me about business coaching

My second week in the UK has been based in Glasgow, thousands of miles away from the bustle of Jerusalem and many of my clients. On reflection, the holiday has reminded of a valuable lesson in business.

While my wife has been biking around the wonders of Glentress, I have had the thrill of visiting some amazing places. I took a guided tour of Stirling Castle with its fascinating history and stunning views. I booked a hired tour to Loch Lomond. I could have sat there for hours, contemplating, taking in the amazing scenery. And if you check my Facebook postings, you will find out just how many distilleries I visited.

And it struck me that there was a common feature running through all the site visits. The staff I met were without exception incredibly friendly and helpful, with a smile. This applies right down to the student parking attendant at the castle, even if he was clearly bored out of his mind with his summer job.

Another feature was that many of the people I encountered had been in their jobs for several years. They loved working where they are. To prove my point, the guide at Edradour Distillery, shall we say a touch mature in age, admitted that he had only been there for 12 months. However, he was full of anecdotes and extra information, as if he had been employed since birth.

And there was Saturday in Glasgow itself. In the bustling Buchanan Street, I visited the stand of the Glasgow Friends of Israel, engaging with passers-by and gently informing dozens of Israel’s pluralistic society. In contrast, 200 metres away, a Palestinian solidarity group was pouring out hatred in a contrary direction. Whenever I passed by, it was noticeable that they drew less people to their table.

Later that evening, we visited the famous pub, The Pot Still. The lady who served us knew her whiskies and could offer professional advice on each one. After we left, we popped in on The Central Hotel, where the desk manager took five minutes out of his valuable time to give us brief yet brilliant history lesson of the place – Sinatra, Marilyn M, Harry Lauder, Gene Kelly et al.

As a business coach and mentor, I am often asked by corporate decision makers how they should react to issues involving staff and personnel. I always try to stress the difference between managing situations as opposed to motivating individuals. And this encouragement can come in many forms – not just financial; a smile, a carefully chosen word of empathy, the addition of a more interesting task, or just simply listening to their advice.

Evidently, all but one of the above cited examples feature people thrilled by what they are doing and imparting that to others with a smile. You want to go back. I assume that they are well supported or cared for by seniors with invisible faces to you and to me. In the case of the exception, I recall few instances where bile is able to promote long-term success and achievement.

Loch Lomond, Arran, Edradour, et al has turned out to be an incredibly motivating adventure for me. Maybe this wee picture can enlighten you as to what I mean and thus encourage others to learn this valuable lesson.

Know your market – what I learnt from Looe

Looe is a quaint small town, located on England’s southern Cornish coastline. Yes, it is pronounced the way you might fear to call it. And yes, while it might seem just a quiet, idyllic spot for tourists, there is a lot of commerce going on in the former smugglers’ coves.

My wife and I are camped down in the village, putting about 2,500 miles between me and my business mentoring clients in Jerusalem and its surrounds. And yet, I just cannot escape the subject of coaching.

For example, we set ourselves up in an airbnb and turned on the TV. Struggling with lousy reception, we hit upon the programme “Dragons’ Den”. Here, budding entrepreneurs pitch their start ups to investors. The anti-hero of this story has a very clever idea for monetizing public sports’ facilities.

However, when questioned about the distribution of profits to date, it became very evident that he was hiding something. It turned out that he had incurred a fine to the tax authorities, which he was seemingly reluctant to disclose.

And that was silly, to say the least. In reality, those investors were his market. And he had deceived them, when all he was required to was tell the truth openly. He had broken that relationship of trust with his market. They rejected him flat, despite his clear talents to build up a new business from scratch.

As I was checking in the newspaper for what to watch next, I hit upon an article about James Timpson. He has 1,925 sites in the UK. He reheels shoes, duplicates keys, prints pictures, and he makes a huge fortune in a depressed market.

What’s his skill? It would seem that he knows where his market is located. First, as he observes, these are not exactly services that will lose out to the internet. As for site placement, favourite choices are next to McDonalds. Failing that, they try to be as close to public toilets as possible. For good measure, the journalist accompanied Timpson to one of his most successful franchises…..a prefab structure in a car park of a large supermarket!

I also glanced at an article about Generation Z. These are people who are so determined to have everything, and immediately, that they actively look for apps that provide delivery services even at 3am in the morning.

This reminded me of a true story a couple of years back, when I was offering some pro bono advice to a friend of my son, both of whom had just finished three years military service in Israel. The friend wanted to set up a sandwich delivery service, at night, in Tel Aviv. I could not understand the concept. Surely, there were not enough people awake at those hours to justify any initial injection of resources?

The 21 year old entrepreneur was quick to explain himself. In my naiveté, I did not know that after taking certain drugs, people need to eat, immediately. In other words, his  business model was based on the growing abuse of young Israelis of their own bodies.

Sad, but clever thinking. It will be interesting to see if he goes on to emulate J Timpson. Meanwhile, Sitting in Looe has been very educational for me.

Connecting Charlottesville and Barcelona

The cities of Charlottesville and Barcelona are both steeped in history. They are also connected because this week outsiders ensured that innocent bystanders suffered horrific acts of violence. However, the links between the two go beyond these facts, drawing in Brussels and Jerusalem along the way.

Throughout much of August Thursday 17th, much of the free world was occupied in condemning President Trump for his seeming refusal to condemn outright the march of Nazi thugs in Charlottesville. Trump was understood to be appeasing the right-wing demonstrators, who had terrorised locals, shouting out racist and anti-Semitic expletives as they walked along undisturbed by the authorities.

The attack in Barcelona targeted tourists. And yet in a city full of visitors from overseas, few members of the foreign press have commented on the fact that the ISIS-linked terrorist chose to commit his act of multiple murder close by to a Jewish kosher restaurant, Maccabi.  (For the record, the manager of the establishment is a Turkish Muslim, whose immediate actions may well have saved the lives of many more.)

Is the Jewish connection a coincidence? Recall for a moment the awful incident in Brussels airport in March 2016. Of all the spots in the area to pick, the attack took place right close to the El Al check in counter.

Trump’s actions this week were interpreted as partially justifying the bigotry. They began to remind me how for years since the 1990s, Western leaders have partially excused Palestinian terror on Israeli citizens. In this case, the ‘get out of jail package’ seems to stem from an understanding that in some way Israel has been acting illegally / prohibiting peace.

What these pacifiers forgot and still forget is that terror is terror is terror. Terror breeds off funding, sensational and inaccurate reporting, and politicians who do not apply the rule of zero tolerance.

Trump’s response opened the door for poor coverage. He did not state that the Ku Klux Klan and its associates are an abomination. He did not condone as he should have done, unequivocally. As for the Barcelona tragedy, the press have failed to connect the dots. The act was perpetrated by a person indoctrinated in hatred., where he was bale to target Jews, Israel, Christianity and the West in one.

For over a decade now, the authorities in Jerusalem have hosted numerous delegations of politicians as well as senior police teams and emergency services from the West, who have come to learn how cope with terror. There are two themes to the visits  – how a democratic society should defend itself and how can authorities react speedily to any incident.

For all the repulsive hatred of ISIS inspired attacks, they can neither hide nor eliminate the fact that there is a reason why over 300 conglomerates have R&D centres in the Holy Land. There is a reason why Israel is the one country in the Middle East, where the number of Christians is rising or where the new senior doctor in the army is a Druze. And there is a reason why Israeli incubators increasingly provide room for Muslim centric start ups.

The acts of hatred in Charlottesville and Barcelona are a rejection of societies based on pluralism and mutual understanding. These are the key components of countries with strong economies and where opportunity is offered to almost all. Trump and Europe’s leadership are advised to recall how Israel has shown what can be gained by denying such forces of evil their supplies of ‘air and water’.

Backing Israeli hightech

In a week which saw considerable political instability in Jerusalem and Israel’s largest company, Teva, lose 20% of its share value, the international commercial community still saw fit to back the country’s high-tech sector, and in no uncertain terms.

Neuroderm was founded in 2003 and is located in the heart of Israel’s biotech industry in Rehovot, south of Tel Aviv. It develops treatments for Parkinson’s Disease. And it caught the eye of investors , when it announced a cash take over by Japan’s Mitsubishi Tanabe Pharma Corp for nearly US$1.1 billion.

What is amazing is that much of the previous investment also came from external investors. That is to say, according to Neuroderm’s CEO, Dr. Oded Lieberman, with a few minor exceptions, local VCs ignored his approaches for years. As they say, look who is smiling now.

Also licking their lips are the founders of Plarium, a social gaming platform. The company, founded in 2009 and today employing 1,200 people, has been purchased by Aristocrat for US$500 million. They are based in Australia and the largest manufacturer of gambling machines. Significantly, the deal could be worth an extra US$200 ,illion dpeneding on future sales’ growth.

These are no isolated exits. Two weeks ago, six Israeli start-ups, including SimilarWeb, Iguazio and PermimeterX, announced on the same day that they had raised a combined US$142. “EMK Capital LLP announced that it has agreed to acquire a majority shareholding in Luminati, the enterprise proxy network division of Hola Networks, at an enterprise value of $200m.” And in a separate move, “US shared workspace company WeWork has acquired Israeli B2B sales and market intelligence developer Unomy.”

You have to wonder. If Israel was managed better – better politicians and better strategists in some of her larger companies – just how much more well off would the country be? In other words, how much is the country missing out because of ineffective leadership at the top?