But then we are told from an on-line news agency, known to be close to the government in Jerusalem and citing a senior Israeli official that: “the full opening of the economy will probably be in March”.
Just who are they trying to fool, and why?
First of all, Israel is an economy, which is dependent on trade. The USA and the UK are barely starting their inoculation programmes. Australia is unlikely to open its borders fully before the end of 2021. So, thousands of people in the travel and tourism industry as well as those people who need to get overseas for work are still going to face restrictions. Ooops.
But you may argue, Israel has a successful inoculation campaign, fully claimed by the Prime Minister. True, but at the moment many European countries and the WHO are playing down the importance of the ‘green card’ and who can travel with it. Another oops.
Then there is this niggling problem called corona. Despite the inoculations, the death is at 4,000 and rising. Because of a 9.1% infection rate – a stat the PM will not be seen quoting – the hospitals are full. Staff are at breaking point. Years of starving the system of new beds and trained teams are now beginning to show.
Though successful in its rollout of the COVID-19 vaccines, the country has been unable to fight the spread of pathogen among the population, thanks to mishandled policies, politically motivated decisions and unkept promises
I could not have put it better myself. The commentator emphasises how the government has failed to install social discipline in two large communities, which (ironically?) are those who have valued for their voting power.
For an economy to get back to a “full opening”:
Scores of boarded up shops will miraculously have to finance new stock and reopen.
At least 4,000 families will have to shake off the loss of loved ones and just return to work as normal.
The need for medical procedures, postponed during corona, will no longer be deemed necessary.
The increased social suffering behind closed doors – violence, drugs, etc – will no longer impact on people’s lives.
Unemployment – around 4% before corona and 15% today – will simply flitter away.
Just who is this ‘senior Israeli’ trying to fool, I asked. Who cares? There is an election due in two months. Every extra vote may count in a close contest. So the end – the fake news – must justify the means, no?
So it’s official. In 2020, Israel’s economy imploded by 3.3% and left a budget gap of nearly 160 billion shekels, devastation not seen since the 1980s.
No doubt the optimists, which are by chance often proponents of the ruling Likud party of Mr. Netanyahu, will argue that 3.3% down is brilliant – nothing compared to the sufferings in many other members of the OECD. (An interesting piece of spin, as Israel slouches towards another general election). And I should point out that Israel’s tech stocks are “bubbling“, as the country’s hightech sector has closed another brilliant year of investments.
There are some technical stats that drive a vast hole in the attempt to be positive.
12% unemployment, and a state aid system that encourages people to stay at home.
Inner cities abandoned by hundreds of small establishments
Approx 30% of businesses have not taken up available government aid, primarily because of bureaucracy or …….
………Around 75,000 businesses have shut up shop this year.
It is the last point that is particularly worrying. Over the period 2013 to 2019, around 55,000 operations opened up every year, about 12,500 greater in number than those that closed. That means the failure rate for 2020 has shot up around 75%.
This means that government aid has at least been partially misdirected. It also means that the government can collect less taxes. Local councils will receive less in revenue from rates. And more needs to be paid out in welfare.
Who will fund all that budget deficit? (I suppose that is not a question that the Likud politicians need to answer until after the general election).
History may give us a hint of what could happen to the Israeli economy, and here there is an excuse for a small smile. There have been dark spots before, notably after the 1973 Yom Kippur war or following on from the 2008 global credit crisis or after the military escalations in Lebanon. On each occasion, somehow ‘things worked out’ much quicker than had feared.
In other words, when challenged, the Israeli economy has demonstrated resilience and flexibility. Where could that come from in 2021, I will not predict here. Stay tuned.
This time last week, international media sites were reporting how Israel is leading the world in inoculating its population. The BBC, The Washington Post et al discussed how the Holy Land had already handled 12% of the first round and is pressing ahead.
I could be cynical and say that it was the week of New Year and before the ‘coup fracas’ in Washington DC. There was little else to write about. In Israel, the Prime Minister made sure that his face was seen next to this positive statistic.
Israel has certainly pulled out all the stops to ensure that just about all those over the age of 16 and who want to be vaccinated will have been jabbed by the end of March. Deliveries from Pfizer and Moderna have been stepped up, but is this just because of our Prime Minister?
As we learned in the weekend press, tt seems that there are two key reasons why these companies have upped their cooperation levels with Israel. First, it has been explained to the companies that the four health funds in the country provide an amazingly efficient platform for a national inoculation campaign. After a few teething issues, that has proved to be the case.
Second, because of the nature of this strategy, the country can monitor the effectiveness of the inoculation. This is medical data of the highest quality. The results – not private information – will be shared with the manufacturers.
What we also learned from the press is that Israel has been forced to enter its third lockdown from Friday. Actually, this was originally set for two weeks ago, but few listened and there was no police enforcement. So as shop owners were forced to close, the infection left to over 6%. Serious cases currently stand at nearly 1,000, while the overall death rate is galloping towards 4,000.
Why was a lockdown was never enforced properly until now? Certainly, this would have impacted directly on some of the PM’s core coalition constituencies. And so I am writing this from home and not my office.
But what really disgusts me was how certain interest groups have been prioritised – or not – when it comes to receiving the inoculations. I read on the weekend that employees at the office of the Prime Minister have been placed towards the top end of the queue. However, special ed teachers – the one section of the education system still operating this week – have not!
Are you surprised? This is a country that has already had three election campaigns in two years. In the first, the Arab community was mocked by the leading party of government. Then it was the turn of women, and after that those with speech defects.
It will be election number 4 on 23rd March. Take a bow all those wonderful educators for stepping forward to be the latest whipping kids of the government.
What I have learned from this inoculation campaign is that it is going well, and this has little to do with the efforts of the Prime Minister. His role has been to delay other decisions – ie, the enforcement of what should have happened 12 months ago and could have saved countless lives and businesses.
March 23rd 2021 is election day in Israel – for the fourth time in two years.
If you take into account the extra finance for the parties, the cost of maintaining the booths and the counting, and the lost productivity as it is always a general holiday, the country is expected to “invest” about two billion shekels (approx US$600 million) into putting on this jamboree. Aha!
As I ask, who is listening, especially when this is round 4? What else is left to say?
Well, there are some new parties, breakaways from the bigger players. And there are some genuinely new parties, formed by people over the age of 70. So nothing overtly inspiring. As many people have been telling me, they have cut down on the number of newspapers they buy and the TV news they used to watch. i am part of that section of the electorate.
If that two billion shekels is not enough, the government has finally started to formulate a plan to help the small and medium sized business community. The official plan is called and I quote: ‘From blocking to growth”. (This of course raises the question as to who or what has been doing the blocking until now?)
Today, the Finance Minister and I (Prime Minister Netanyahu) are submitting a proposal to give over NIS 2 billion in additional grants to the self-employed and to business owners. This is thousands of shekels more for every business owner who has been hurt during the coronavirus period. We are also extending the period for paying local property taxes. The money will – immediately – make it easier for businesses and within a short time we will open the entire economy and we will emerge from the crisis once and for all.
So we can afford to spend 2 billion on unwanted elections, because the governors cannot govern, but all the SMEs together are only worth that same amount.
Interesting. Ironic? Sad! To be fair, money has previously been made available. And what is helpful is that the conditions of the programme today are much improved. But why of why wait until an election campaign has been started?
This coming Friday, Israel is likely to commence another full lockdown. None of the previous three have been properly enforced, which raises another question: How can a person vote for a government that has not blatantly done its utmost to protect your safety?
However, one benefit of the lockdown should mean that more eager voters will be at home…………. with time to watch their favourite politicians on the news, no?
Israel’s economy will start 2021 with no budget for over two years, a third lockdown (with as many holes as a piece of Swiss cheese) ,and an election looming on March 23rd. That means no full approved central planning will emerge until the early summer at best.
Netanyahu did not proactively undermine Israel’s national resilience, he just didn’t do anything about it. Considered one of the most intelligent leaders in the world, Netanyahu failed to take advantage of the immense opportunity to attract future human and financial capital to the country……..The fossilized economic thinking of Bibi’s ministers and advisors is firmly rooted in the 20th century……
Yesterday, I had the good fortune to be part of a forum, led by MATI Jerusalem. There were about 30 business mentors and coaches and a further 6 staff members on the discussion. MATI has been promoting business generation in the Jerusalem area since the late 1980s.
The core take away from the session was definitely one of optimism.
So why can 2021 be a year of opportunity for small businesses in Israel, especially when the government will be providing precious little direction and leadership initially?
And maybe that ‘rudderless’ factor is also part of the answer. Business owners are learning to rely on themselves. After all, the loan schemes and employment benefits have been riddled with anomalies. What is left is self initiative and resilience.
Here is a cute anecdote to illustrate my point. At least for this week, restaurants in Israel are only allowed to sell via a delivery service. Take-aways are prohibited. One cafe owner explained in front of TV cameras that he has informed all his regular clientele to approach his premise, call him from 100 meters away with their order, and he will “deliver” to them.
As Eisenberg wrote, Israel’s current economic decision makers are stuck in the past. Let us hope and pray that 2021 will bring in a series of new recruits.
So Israel is heading towards its fourth general election within 24 months. The Kenesset (Parliament) failed to pass the 2020 budget and thus the government automatically fell. In other words, despite controlling the Finance Ministry since December 2014, the Prime Minister has failed to deliver a budget since December 2018, and nothing serious is planned for 2021.
How can the economy carry on?
Earlier this morning, I listened to a seasonal wrap up of the global economy from the Economist Podcast Unit. (Recommended). Overall, the participants were cautiously optimistic for 2021. I could not offer the same prognosis for Israel.
I agree with S&P’s analysts that there are still strong fundamentals, like the balance of payments. And yes, Israel is riding the global trend, where investors are ploughing big money into hightech.
However, hightech represents about 15% of the economy. Around 95% of the economy is made up of small or medium sized businesses that are struggling.
Last week, I was shopping in the centre of Jerusalem. In what is known as “the triangle”, a key retail area, I would estimate that around 15% – 20% of the premises had shut up shop and gone. I asked one well-known shop owner if he had been visited by local or central bureaucrats or politicians. As he said to me with a wry smile, “they are too busy”.
The government budget provides direction and guidance. No budget means that everyone is left to fight for the themselves. With healthy fundamentals, you can get away with that for a while. However, sooner rather than later, you end up destroying what has been created in the past.
It does not take two years to pass a budget. That is a sign of incompetence – politicians playing politics with the health of people’s finances – and those of their children – setting lives back years. I hope that those responsible for this negligence will be thrown out of power.
To receive your free 20-minute consultation with Michael (in English or Hebrew), call on 052 344 8453, or send an email to firstname.lastname@example.org
Not sure about reaching out to me? Have a look at this blog, a case study of a client who was in your position.
For all the advice on offer: What is that one key lesson small business owners need to learn from corona?
Until Corona emerged, many of us had predictable or standard modes of working. We did not allow for major hiccups. Then along came February 2020 with the bat virus from a third-grade lab in Far East Asia. Boom! Everything turned upside down, and we had nothing to cling on to.
One of the most successful incubators for hightech companies in Israel is a military unit called 8200. Their core starting point for analysing anything is to take all known assumptions and to disconnect from them. That is how you create a disruptive tech that investors must have.
Corona is not a ‘must have’ factor, when it comes to health. But in business and trade, it is. For millions of enterprise owners across the globe, they have been forced to think again about their core business model. They have had to get up and lead, as if from scratch. And now it is your turn.
Let’s look at the story of Debbie (named changed), a client of mine in the field of personal welfare in Jerusalem. Mid 30s, she took on a loan to back her new enterprise in late 2019, and it quickly showed signs of progress. A few months later, lockdown killed the trade almost overnight. The debts began to mount alarmingly.
I was called in to help.
Debbie’s first reaction was one of skepticism, to put it mildly. After all, I had to admit that I did not know much about her line of work. However, I convinced her to go through a couple of sessions with me. I had identified something from our first few minutes of chatting that Debbie had not appreciated.
Until then, Debbie’s thoughts had focused on rescuing the “what”, the final product. However, I concentrated on “how” she approached selling. Debbie had told me that she has a track record in sales, setting higher targets from year to year. And by early 2020, she had become a true genius in e-commerce.
I encouraged Debbie to coordinate her energies around her core talents. Rapidly, out went the product. It was replaced by an offer of a package of advisory services. More importantly, she developed alternative revenue streams to pay off the loan. Debbie has become the ‘must have’ for others!
This story is not unique. I was listening to the CEO of a large plastics factory, describing how his order book had dried up. He had refused to lay off loyal, highly-qualified staff for as long as possible. Just as the first lockdown ended in Israel, he received a solitary order to make a couple of panels to protect workers at a check out till. Bingo! Suddenly, production went back into high gear, as he twigged that this was about to become a mass market.
The lesson is that if you run a business, never be complacent. Lead and lead again, with resilience and also clarity of vision. Leadership is not just about being the person that your team can identify with. It is about you – finding the skillset to identify what can be done differently in order to haul in the profits.
It is that skill of leadership that I install in my clientele. And I believe that it is one of the main reasons that none of my customers have shut up shop during 2020.
To find out more about my business mentoring and coaching services, contact me on 0523 448453 or via email@example.com
Other blogs can be found on my website, via this link
To receive your free 20-minute consultation with Michael (in English or Hebrew), call on 052 344 8453, or send an email to firstname.lastname@example.org
While you are here, look over this blog that I prepared for my customers.
Corona has been with us for nearly a year. As a business coach and mentor, not one of my clients has shut down during that time. And I have even on-boarded several during 2020, who have registered new enterprises.
Is there a magic formula to their success?
If we look back to the end of the winter earlier this year, economies around the world went into panic mode. In Israel, the core government action was to try to make loans available. In other words, the politicians came up with a plan to beat debt ……. by encouraging small business owners to take on more debt!
As one cash-strapped CEO observed to me, you should only take on a loan if you know how (and when) you are going to pay it off. The time of corona has taught us once again just how little certainly there is in commerce.
To state the obvious, there had to be another way from the direction of Jerusalem central government. During 2020, many of my clients adopted three basic principles. As a package, these measures have allowed their operations first to survive and then to go on to develop new sales’ channels.
So what can your team learn from these experiences?
Sounds obvious, no? Recall the woeful sight of the owner of a shoe shop in Tel Aviv just throwing his stock on the pavement and telling people to take. They would not even leave 20 shekels for an item. If you are contemplating giving stock away for free, there has to be an alternative.
I point to tour guides, who from the get-go embraced the suggestion that they offer virtual tours. I recall the book shop that brought forward plans to set up a website. I am working with a boutique fashion operation that established a VIP service. They meet with customers on a one-by-one basis and thus maintain social distancing.
You have a business. You have something to sell. Go find a medium so that your customers will run back to you.
Again, this may sound dumb. Actually, I am staggered how few business owners appreciate that this is the time, when your customers want to hear from you. They need to know that ‘you have got their back’, now more than ever. They may not buy on the spot, but your are building up kudos points for later on. For example, the quick-thinking gymnasiums have been creating online classes for their members. I have a number of clients in the medical / wellness business, who spent time phoning or emailing their own clients base.
One of the most encouraging stories I heard came from El Al, a company which is arguably positioned in the heart of the industry most impacted by corona. And they have a pretty dodgy reputation at the best of times. The airline was bought out during the summer. One of the initial decisions of the new owners was to guarantee repayment of prepaid tickets for flights that had been cancelled. I value that commitment.
Your business is founded on core skills and the ability to deliver. Those strengths do not disappear just because of a bat-related virus.
It is not just high-tech companies on international stock exchanges that have been doing well. Building contractors and design companies cannot stop selling. Wealth management practices have been flooded with clients. Where is your mojo?
Have a look at Bizzaabo. They design technologies for international conferences. They could have panicked back in February, when their market evaporated. Instead, they pivoted, creating “a platform that would have 10 functions that were until then in the hands of 10 different suppliers’. They have since raised US$138 million.
You are in business to sell. I coach executives to test and improve their business model, consistently. Corona has only sharpened that message – for all of us.
I have provided mentoring, coaching and consulting services for 15 years to a range of industries. To learn more about how I can transform your business, call on 0523 448453, or via email@example.com
Other blogs can be found on my website, via this link
To receive your free 20-minute consultation with Michael (in English or Hebrew), call on 052 344 8453, or send an email to firstname.lastname@example.org
Thank you for clicking through. I always try to provide additional support for my clients. For example, have a look at the blog below.
2020 has been bitterly cold and cruel to many business owners like yourself – in fact, doubly so.
We know that stats reveal that small business owners have been hurt harder than most. On the one hand, markets have shrunk, if not disintegrated. And then you look around. You see stock exchanges booming or renovation companies enjoying success. Unemployment pay encourages people to stay at home. It just does not seem fair.
Permit me to show off for a moment.
Most of my clients have learnt how they can boost sales, because of or despite corona.
Several clients have opened new operations since the early summer.
I have developed overseas markets on three continents in 2020.
The difference? How can you have a piece of this change? Start by abandoning the ‘corona mentality’!
Corona encourages us to think small. We go into survival mode. We stop looking for where the big money is. I assume that without wanting to sound greedy, you are in business to obtain your fair share of that jackpot.
The challenge is to realise that you too are good enough hold a mountain in your own hands.
Take two examples of clients from the past week alone in the Jerusalem area. Joey has for months threatened to launch a Facebook campaign, based on a free consultation. Meantime, he rested his laurels on miserly amounts of passive income. The moment he rejected this attitude, his posts began to go viral. His calendar has filled up and the bank account is starting to tick over again happily.
Alternatively, Susan had actually developed a full marketing campaign on a whim for a Fortune 500 company, but never had bothered to send it off for consideration. It remained filed away, until I convinced her to release it. She is now planning similar coups.
Thinking big commercially does not make you an immodest person, and it can improve your lifestyle. That is what my business mentoring programme is all about – clients rediscovering their thirst for success and my helping them turn on the proverbial tap.
To learn more about how I have taken businesses through corona, emerging with higher sales, call on 0523 448453, or via email@example.com
Other blogs can be found on my website, via this link
I encourage you to read on and learn how they overcame the roadblocks:
No sooner had the year begun, when IoT security company Armis (fourth place) announced on January 7 that it was being acquired by venture capital fund Insight Partners for $1.1 billion. It was an unusual model for an exit being acquired by a venture capital fund. In effect it was a large secondary deal with the founders and employees realizing some of their shares and the company continues to operate independently.
Armis was forced to develop a product that could be installed remotely and after a weak second quarter, activities recovered and they are set to end 2020 more or less realizing their original forecasts.
Last year’s top ranked startup of the year was DriveNets, which has developed cloud software for communications networks infrastructure. DriveNets, founded by CEO Ido Susan and chief strategy officer Hillel Kobrinsky also had to find alternative ways for installing its solutions on customer’s networks. But the company enjoyed high demand from the start because of the changing ways in which Internet networks were being used – the shift to home working and studying made existing networks inefficient because they were built on the major part of capacity being within the office.
DriveNets made it possible to manage networks more flexibly and communication companies understood that this solution was needed by them. DriveNets also announced during 2020 that the core network of AT&T would be based on its technology.
Last year’s most promising startup runner-up JoyTunes, which has developed an app for learning the piano, also benefitted from the Covid-19 crisis from the very start. By April, JoyTunes had surpassed its annual target and in a June interview with “Globes” CEO Yuval Kaminka said, “Coronavirus uncovered something that in fact we knew that people really want to learn.” It’s clear that they will invest less time when they return to routine, he added, but somebody who has discovered that they love to do something will invest more time afterwards.
Third placed Fabric also benefitted from the pandemic. The company builds urban supply chains for retail in city center warehouses operated by robots. Fabric said the company enjoys high demand but operations are still in the relatively early stages although it has opened its first warehouse in New York.
Fifth placed Verbit, which develops technology for automatic transcripts and captioning, raised $60 million last month, to bring the total it has raised to $126 million and said that revenue has risen 400% over the past year.
Sixth placed Trigo, which develops technology allowing stores to dispense with checkout tills, said that it has met its targets in 2020 despite Covid-19, despite the shift in purchases from brick and mortar stores to online, in part because people are reluctant to wait in link at checkout because of the need to social distance.
Seventh placed Papaya Global, which has developed a payroll and payments automation platform, completed a $40 million financing round and has raised $95 million since it was founded.
Eighth placed Logz.io, which has developed an open code based data analysis system for programmers that can identify errors, raised $23 million, after raising $52 million in 2019, and has raised a total of $120 million.
Ninth placed Wiliot, which has developed a battery-free Bluetooth chip, has also enjoyed heightened interest during the Covid-19 crisis because of the increased amount of deliveries and the need to track the consignments that are sent. Medical deliveries for example require tracking to ensure that chilled temperatures are maintained.
Tenth placed Duality Technologies, which has developed technology for analysis of encrypted data, said that it continues to grow and has imposed no layoffs or salary cuts.
Unless there is a last minute compromise – which could only look pathetic and ugly in the eyes of the public – Israel is spluttering, repugnantly and embarrassingly – to its fourth general election in 24 months. To illustrate how paralysed the decision-makers appear, current estimates do not assume a poll could be organised for at least 45 days, and possibly not until mid May!
It gets worse.
Sure, you are probably wondering, should not politicians be thinking about protecting people from corona rather protecting their own pensions? Yes, some public health officials have declared that the ‘third wave’ is already with us. There again, whatever his reasons, Prime Minister Netanyahu will not be summoning the corona cabinet to meet this week. Is he too busy with other matters?
As for the economy, I cannot be optimistic. No budget was passed for 2020. No budget for 2021 can be approved before February next year, and that in the most hopeful of scenarios. Amazingly, the Treasury, which has been weakened by the departure of senior staff, has predicted 5% growth for the year ahead.
Sounds impressive? That estimate reeks of ‘election economics’. Maybe the OECD has a more realistic term of reference. It believes that it will not be until 2022 that the economy will return to ‘normal‘.
The Bank of Israel has noted that the economy will have contracted by around 4.5% this year. Under the best of circumstances, unemployment will not be less than 8% by the end of 2021. (The current figure is about 20%, as furlough assistance actually encourages many to stay at home!). And government financial incentives are still determined by bureaucrats, which will keep the potential beneficiaries in long-term debt.
The key politicians in the spheres of health and economics are members of the Prime Minister’s Likud Party, which he totally controls. You do not see too many of these apparatchiks, walking around the streets of the main cities, being photographed outside the rows of shops that have shuttered up (or down).
To date, the electorate is repeatedly told by the PM that we are in a better position than other countries. Maybe encouraging, but hardly helpful when looking to pay your basic bills.
As we approach 2021, I do not find the current leadership of the country one that I can identify with, especially when it comes to core issues such as looking after my family’s health and finances.
For the third time within a year, Binyamin Netanyahu claimed this March that he had won a phenomenal victory at the polls. And for the third time. he ended up forming a coalition that could not last.
Jump forward to November 2020 and we see the inevitable beginning of the end of the current Italian comedy. The difference this time is that Bibi, as the Israeli PM is affectionally known, has discarded so many former allies that next time round, they may be able to form a government without him. (This assumes that their hatred and distrust of him is enough to bind them together, despite their clashing egos).
Politics in Israel has been dominated this year by first and obviously how to handle covid-19, and secondly the sensational development of relations with Gulf States. Bibi has been at the forefront of both.
During the Spring, Bibi was seen on TV constantly. By May, he was claiming that covid-19 was under control and that society could start a process of normalisation. He had risen to the task.
The summer brought……… hot weather. Economic hardship set in, especially for the sectors not tied in to hightech. Over 20% unemployment, a fiasco over loans for small businesses, a government budget that has yet to be passed even today and a series of arrogant statements by Bibi’s supporters that appeared to play down the woes of the common people. As a second lockdown then kicked in, Bibi was no longer seen making Churchill-like appearances on the telly.
The Autumn brought a flood of good news from overseas. The UAE, Bahrain, Sudan and with assumedly more to come countries established diplomatic links with Israel. Nobody doubts that Bibi has led the way on this matter. Equally, nobody also doubts that he has kept this credit from his coalition partners (or enemies), who actually hold the important portfolios of Defense and also Foreign Affairs. They were kept in the dark on key developments.
We must not forget that underneath all of these events lies the volcano of Bibi’s trial next year. He has been indicted on three counts, and only an oversight in the constitution allows him to remain as Prime Minister. That is what drives nearly all of his decisions. And his need to cling to power is what will lead the country into another unwanted election.
What’s wrong with that? S&P recently confirmed Israel’s high credit rating. However, in interviews on the radio, the author of the report indicated that internal political uncertainty will soon jeopardise that position. It will cost the country more money to finance its growing debts.
So if Bibi has led Israel to this point, what can he deliver in the future? Despite the rhetoric, he is a man who neither unifies nor shows compassion. Is he a person with you can identify with, even if you disagree with his politics? Multiple opinion polls suggest not.
So what does Bibi have to offer the Israeli electorate in 2021, other than revelations from his trials? We wait to see.
According to Channel 12 news last night, 54% of the new unemployed were working for SMEs – small medium sized enterprises, which comprise over 90% of most global economies. It is estimated that 25% of these SMEs lost 80% of their sales, as opposed to 5% for large firms.
How does this play out on society?
ERAN is a charity, which provides ’emotional first aid’. They received 40,779 request for help during their first lockdown in the early Spring. 732 were related to suicidal conditions. For the second lockdown, the equivalent numbers are 31,583 and 820!
Many have pointed out that during the first lockdown, while the deaths mounted, there was an atmosphere of hope. ‘We will overcome’. Today, the formula is far more frightening:
Return of lockdown + government’s perceived incompetence + lack f leadership = depression (both the economy and the individual).
Channel 12 also referred to such details. According to their unnamed sources, during the previous 11 days alone, there had been 252 records of attempted suicide. Continuing the theme, there has been an 18% increase in reported domestic violence during the year.
There was no budget for 2020. Planning for 2021 is lost in the vagaries of coalition politics. Seven key civil servants in the Finance and Health Ministries have left their positions since April. And our exalted leaders can be heard, shouting at each other. However, I could find no pictures available of senior politicians visiting city centres or struggling businesses.
You sense that the PM along with the heads of those two ministries have abandoned the people who elected them. Meantime, Israelis are left to suffer – financially and emotionally. That costs the country, big time and long term!
In a podcast at the end of last week, The Economist Magazine examined how communities in the west are altering their views of preparing for death. Pardon the pun, but we are being more proactive since the onset of covid-19.
Last Tuesday, the Israel Psychiatric Association, warned that the second lockdown “took away all of our normal coping mechanisms for such an emergency.” Up to 20% of Israelis could be suffering from emotional and psychological distress as a result of the coronavirus pandemic.
When I now have an opportunity to see friends and family, I have noticed a change amongst those who are stuck at home with little work. A fizz and bubble is missing from them. Disturbing.
Covid-19 has dominated news coverage since February and continues to do so around the world, including in America during election week. The reporting continues to emphasise that around 1.2 million have died, globally. Businesses have been destroyed. Political leaders, together with health and finance ministers, offer platitudes but no substance.
Interestingly, few have admitted that the mental health costs of covid-19 could be just as great as the immediate economic fall out. It appears a subject too hot that it must be ignored, at last in public statements. And yet it is right in front of us.
Here is a very simple example. Teachers have discovered zoom. Kids are thus learning, at least somewhat. But they are losing the ability to develop valuable inter-personal skills. And as for being cooped up at home with frustrated siblings and frantic parents…….. Don’t tell me, there is no social cost here!
Dr. Robert Brooks addressed the issue admirably in his most recent monthly paper. Citing the ‘Stockdale Paradox’, he notes that the famous POW in Vietnam, despite being tortured, “never lost faith in the end of the story.
In essence, the Stockdale Paradox captures the belief that one must maintain hope while being able to accept and consider options for dealing with existing, often seemingly overwhelming, hardships.
I suppose this is some what similar to the work of the Austrian psychiatrist, Dr. Viktor Frankl. In his ever-so-relevant book from 1946, “Man’s Search For Meaning”, he described how he and others coped with the dehumanisation of Nazi concentration camps.
Jonathan Gabay, an international brand expert and short movie demon, has created a fascinating series of podcasts, entitled “Thought and Leaders”. His talk with former political spin-king, Alastair Campbell, was amazing. You listen to it and you ‘suddenly get it’, when it comes to ineffective leadership.
What do I mean? Politicians like Trump, Corbyn and Netanyahu base their rhetoric on sowing distrust, creating divide, and searching for extreme arguments. At a time of pandemic, surely electorates deserve empathy and mutual compassion? We need each other to get through it.
Leadership in the work environment has also come under scrutiny. When everybody is located on the one site, it is relatively easy for the boss to be seen and felt. The virtual set up does not allow them to abandon that role. Even the most reliable of employee, as they operate from home, needs guidance and support…… and to feel that somebody has ‘got their back’.
Over the past 9 months in Israel, politics and personal aspirations have appeared to have shaped some key parts of the decision-making process. Most people, who I talk to, have simply lost trust in the ability of the government to act, decisively and in a bipartisan manner. It is depressing.
And it is not just me. More and more shops are opening up, in defiance of the lockdown, as the government seems unable to convince even themselves of what they are doing is correct.
But, hey, who cares? Let’s set everyone off against each other. It doesn’t cost anything…… on the surface.
Here’s a scenario that most of us can relate to – either from our own experiences or with our kids.
The child is revising for a crucial exam. Thy do not have the patience for another 30 minutes and just walk off (run away?) from the job. You are furious. Worse is that you cannot find the words to encourage them back.
Belatedly, I found a trick that appealed to children, reaching out to them through their sporting heroes. No matter how brilliant the player, these stars have coaches, who keep them training several days a week. They go over the same materials, despite the intrinsic skill and knowledge of the athlete.
If that is what the hero must do, the hero would expect no less from the kid. But now dear reader, swop the word athlete for business owner.
How many times have I come across a struggling CEO, who refuses to believe that I, a qualified business coach and mentor, can make that difference? After all, they are the ones that know. They are experienced. And I do not know their company’s history.
David Cluttterbuck, author of the classic “Everyone needs a mentor” has a beautiful story. One day, the golf trainers did not turn up to teach their students. Hasty replacements were found in some tennis pros. The trainers returned the following day and discovered to their bemusement that the swing of their clients had improved beyond recognition!
I was reminded of that when last week, I was honoured to receive a long letter of praise from a Jerusalem-based client. My wife suggested that I share the following excerpt:
You may be looking to generate new sales or tighten financial controls or develop strategy or more – but no law told you that you have to struggle on your own. That is rarely clever nor usually cost effective.
The very fact that you may even be considering a business coach and mentor is very often an indication that you could use one, starting right now. Help yourself out and stop trying to deny it!
The shekel is still gaining against major currencies, ensuring that exports are less competitive.
And at least five senior officials at the Ministry of Finance have quit in protest at the incompetence of their political bosses.
A totally uninspiring scenario.
Yes, investment in hightech remains buoyant. The peace agreements with Gulf states are brining almost immediate economic benefits, at last for those at the top. The Israeli Prime Minister reminded his nation that the country is ahead of Europe, which is just heading into its ‘second wave’ of the virus.
But so what? The European Union is Israel’s second largest trading partner. It is facing the threat of what is known as ‘double dip recession‘. If so, this will further threaten the ability to buy goods and services from Israel.
Bibi Netanyahu was a Finance Minister, who helped to craft much of the success of the past two decades. Today, he is wedged between the impact of Covid-19, his preparation for three legal trials, and a political constellation that keeps him tied to an ultra-orthodox community that has little immediate interest in economic rejuvenation.
In other words, the Prime Minister has neither the time nor the ability nor the space to lead his country out of its economic mess. There is no “new plan” on offer. There are no suggestions to revamp city centres, which are turning into dustbowls, literally. People are still being paid to stay at home on furlough rather than giving the money the companies to re-employ them. Grants to businesses are still wrapped in confusing conditions and based on one factor and one factor only – did your revenues decrease by more than 25% in early 2020?
This is absolute nonsense. This is a leadership that has walked away from its electorate. This is unacceptable.
Nevertheless, it is amazing how some people have learnt to adapt and to pivot.
The clothing shop that offers a private VIP service.
A plastics factory that realised how shops and reception areas need screens
The bike store that has supplied dozens of home trainers.
None of these small business owners hung around, waiting for guidance from those who have been elected or promoted, because they are supposed to know better!
Is there hope? I leave with a piece of ingenuity from the younger generation. Four kids felt they were desperate for a burger and chips from McDonalds. However, the restaurant chain was only permitted to sell via drive-in takeaways.
Our heroes found some carton boxes and cut them into the shape of a car. With their new ‘attire’, they pulled up (so-to-speak) alongside the check out counter and dutifully ordered. Everyone was a winner and the government regulations were adhered to.
Well, it is easier to formulate regulations rather than dramatic new policies and provide hope for the future.
As Covid-19 is demanding from the world to face up to its biggest economic challenge since the onset of the Second World War, which CEO has the time muck around with the sophistication of branding?
The horrors of this international virus, which has leaped across borders like a virtual internet connection, has shaken up most of the cushy marketing agencies. They and their clientele have had to adopt ‘new’ words or attitudes like:
Take the airline company, El Al. For decades, the joke was that the letters stood for ‘every landing always late’. The food was rarely brilliant. On one long distance flight last year, my food-board would not hold up properly.
Last month, El Al sent out a brilliant letter to all those would be travellers, who held tickets for flights that had been cancelled. Showing humility and understanding, they created a simple set of ways to retrieve your money. Finally, the company was learning to value its name – its brand.
Many companies are claiming to have rebranded, when all they are doing is treating clients as thy should have done for years previously. For example, click on this list of supposedly great ideas from 33 Israeli outfits. many of which are just marketing corrections. Food manufacturers have been forced to realise that you can no longer stick up a persuasive sign in Tesco or Walmart, as people are no longer visiting supermarkets in such numbers.
A leading branding consultant, Jonathan Gabay, has built a fascinating audio library of how people have responded or adapted to the covid crisis. His “Thought and Leaders” global podcast series has ben most revealing. Decision makers, from all walks of life, have described their reactions to 2020, finding new value and meaning to their business strategies and personal agendas.
Gabay is based in London. He is seen regularly on Sky TV or the BBC, and he has consulted with members of the Fortune 500 club. His most recent podcast is a satirical but ultimately damning look at how the British government expects the unemployed to respond to retraining. Some people have not woken up to the fact that patronising and false empathy is OUT!
Business coach, Dave Bailey, asks if you can create an elevator pitch based around just 30 words. You just state the pain, USP and benefit. Difficult for many, but then just think about your logo – zero words. It is merely a clever picture which sums up everything
Branding is as important as ever. What covid is imploring us to understand is that words are cheap. They always were. Corporates (and politicians?) have to prove that their products and services contain true value. The words demand to be accompanied by affirmative actions.
“If you were starting a business right now, what problem would you be setting out to solve, and why?”
Sinek’s response is not an obviously commercial one. He asks people to question how we relate to each other. Leaders today lack empathy. We need to be more human.
So, here I am, a well-known business coach and mentor in my circles in Israel. How can I give this message some meaning to my clients around Jerusalem and beyond?
As I was pondering away, I came across an item from “The Economist” magazine re the importance of humour in the workplace. Can it up productivity? It can certainly bring in additional clientele, when used creatively, as this petrol station in the USA found out.
What Sinek, the Economist and the petrol station team are telling us can be summed up as a lesson in 101 marketing: Find a way to communicate, directly and with clarity, to your target audience.
Revamp seemingly clever pricing policies that offer so many options, and thus your target audience cannot reach a decision.
Remember who you are talking to and what is “their” objective. Whatever you have to sell, it is about them, not you!
Understand this critical dynamic, and you are starting to become that ‘human’ Sinek had referred to! Potential customers will listen to you. Sales will be engaged. You will have hit the commercial soft spot that Sinek alluded to.
Covid-19 has destroyed large parts of most economies in the OECD, much temporarily and some permanently. Most businesses more deeply cursed are SMEs – small and medium enterprises that typically represent 95% of all economic activity.
In the 1930s, Roosevelt introduced the New Deal into the dust bowls of America. A decade later, on a similar basis, the Marshall Plan ignited the economies of Europe after the Second World War.
And in Israel in 2020? This is an economy that has spent much of the past two decades outperforming itself, even after the global credit crisis. And look at the positives of October 2020:
Israeli tech companies, which raised a record $8.3 billion in 2019, have already raised over $7.6 billion in the first nine months of 2020….
The commercial agreements with the UAE and Bahrain will see vast additional monies enter the domestic markets, which gods and services are sent in the opposite direction.
Chevron has chosen to come to Israel, feeding off the new emerging energy industries.
The problem is that this is all top line stuff. It does little to help in the short and medium term the many shops that have fled respective city centres. There are now close to one million people without work, and just 3,000 of the clever ones may be retrained. The evening news reported this work a 30% jump in calls too help the homeless.
To be it bluntly, it will take years to make up this lost ground, nver mind the social aspects.
Billions have been allocated for loans. Never mind the paperwork still involved. This is simply storing up even greater consumer and commercial debt for a latter date. Bad!
Grants are available, if you can prove that your business has suffered a 25% drop in sales. Sounds like a good starting bar, no? But what happens to those operations, where income is always delayed and so cannot register any downturn for a while? Or those who have suffered a 10% fall off, but that is enough to force them to lay off workers? And so I could go on.
What is needed is clarity of vision, combined with sharp, new and refreshing angles – as per Roosevelt and Marshall. (As I write these words, I was struck by the sad irony that the death was announced of the marvellous reggae singer, Jonny Nash. His biggest hit was …… “I can see clearly now”.)
So rather than just complaining, what can be done? What can I suggest? Here are 5 separate tracks that together offer a very powerful impact.
Reduce the immediate pain:
Cut out / slash local rates, including for home businesses.
Ditto re national insurance contributions, which are stopping employers from hiring.
Reduce the income tax for self employed by 50%.
Give out money:
The Israeli government has belatedly realised that it is paying people to be laid off and then to stay at home.
Pay companies to bring back workers for 3 months.
Offer a grant to SMEs to pay for a marketing campaign on social media or revamp their website.
Pay for free / heavily subsidized business mentoring hours, and pay the mentors properly.
Convert part of loans into grants – against deliverables.
Training – pay for companies to do it in house. They know what they want better then anyone else.
Reduce the paperwork:
The kind of help described above requires public money to be spent. There so many checks and controls involved these days that entrepreneurs give up seeking help. (Maybe I should blog my own case studies).
RETHINK! Just say a few additional scams get through (sadly) becasue of weaker controls, what could be the much greater communal benefit?
Rezone empty retail properties
If a shop or similar lies empty for more than 6 months, maybe the local authority can force the landlord to accept a new tenant. (Yes – controversial).
Subsidise new businesses that have to pay high rents.
Where rows of shops lie empty, issue a compulsory purchase order, offer the owners a compensation rent, allow in on short-term minimal rents retail or service businesses. (Again , controversial).
If you can have incubators or accelerators for high-tech, can a similar concept not be developed for the retail and service sectors?
To date, the Israeli government has failed in this task. You may not like all of my ideas, but they offer a way out of the current mess.
Trust matters in a pandemic—not only trust in the scientific and medical advice the government provides but trust among citizens. Perhaps the single greatest responsibility of leaders in times of a crisis is to inspire such trust.
In a previous post, I referred to a series of articles on the 1973 Yom Kippur War. For me, the stand out item shared the reflections of two 25-or-so years old students. Miki and Gideon were not heroes in a tank or paratroopers. Their job every night was to supply food and petrol to Israeli troops, along a 15km stretch in the Golan Heights.
They were dodging the fire of both sides. No maps. No GPS. And in the morning, they would rest. Occasionally, they would wonder over to the communications tent to hear the voices, belonging to those who could not be ‘got out’ from the battle field – literally uttering their final words to a helpless wire operator.
As in many of the stories, the soldiers ignored the fear of the moment, but returned home with unforgettable pictures and sounds. Essentially, they had been happy. They remained proud of their country. You did what you had to do, because you could trust your leaders to be honest, even when their judgement was askew. (The various intelligence services shouldered the blame for the mistakes of the war).
Over the past 24 months, Israel has seen:
3 general elections – all inconclusive.
3 indictments issued against the Prime Minister.
2 budgets that have not been prepared. There is hope that the numbers for 2020 will be approved in December – I kid you not!
1,682 Covid-19 related deaths, so far.
2 lockdowns, the second of which is currently in place!
With the hindsight of 72 years, Israel has coped very well with the existential threats. But, last night, Saturday night, as the first part of the Festival of Succot (Tabernacles) came to an end, the country opened up to a new reality.
On the one hand, demonstrations, which had theoretically been severely curtailed by the lockdown, took on a vast new dimension. Instead of thousands located in a couple of positions. Hundreds turned up at hundreds of separate locations. Arguably, the effect of the protest was even more telling in this new incarnation. (I have little compassion for those few idiots who broke the law and fought with the police – MH).
The common theme of the shouting: ‘Bibi go home’. Why? Your party controls the Finance Ministry, when the economy has partially collapsed. You hold the Health Ministry, whose directives lack clarity and political support. And you Mr. Prime Minister have no moral ground to remain in office, when serious charges of corruption hang over your head.
To put that last sentence in another format: Most political analysts directly ascribe the political uncertainty in the country to Bibi’s desire to cling to power. This is not just an issue of ego. By doing so, he is seen by many as trying to ensure that his trial will never commence in January 2021, as he tries to weaken the powers of the judiciary.
Also last night, in some ultra-orthodox neighbourhoods, the police were attacked. Here, the socio-religious-political dynamic is more complex. However, it boils down to a simple component. There are sections of the community that have for decades not been encouraged nor forced to adopt the core cultural fabric of the State of Israel. So why should they start now, even when 40% (and growing) of new corona sufferers are from these very areas?
Uncannily, the wilder protesters from both groupings share a major dynamic. It is the same thought echoed over the dinner table or whatsapp groups or phone calls or any opportunity, when I can communicate with others. To be blunt:
Dr. Sandel is correct! No inspiration. No trust.
Back in the early 1970s, Netanyahu was a young soldier in a crack unit. His brother was to give his life at the famous Entebbe Raid in 1976. Impressive and sad. But these historical interludes do not allow his entourage to characterise the demonstrators as anarchists. In effect, they (we) are looking for those values that got the country through the 1973 war.
The Netanyahu family does not provide those values today.
That same war led to the resignation of much of the top echelons of the political establishment. They had got it wrong. They found the guts and wisdom to accept responsibility. By 1977, their party was thrown out of power, rarely to return.
So let me leave you with the story of Geula, seen in the picture below protesting yesterday. I assume that at the age of 91, she would be flattered to be considered as a trouble-maker. Back in 1948, she was a fighter in the Yiftach Unit of the Palmach, as Arab armies attacked the newly declared State of Israel.
During training, she met her husband to be. He came from a family with roots in Austria and who was responsible for the initial building of much of old Tel Aviv. One of Geula’s sons, who I know, has an army record that can probably match that of Netanyahu. And he too is an active protester.
Yesterday was the 3rd October. The picture was shot around 6.00pm. The Yom Kippur war was launched at 2.00pm on 6th October 1973. How has leadership changed in Israel over 47 years?
Bibi: When the Geula’s of this world are prepared to risk their health during a pandemic and take to the streets, it is “cry out” to you! Either you prove to us what is so divine about yourself or you leave the political stage, immediately.