Business Archives - Page 32 of 67 - Michael Horesh Business Coach and Mentor

29 August 2014

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Categories: Afternoon Tea in Jerusalem, Business, Israel

Israel’s economy has recorded an average annual growth rate of about 4% since the trough of 2002. So this week’s announcement that GDP had dipped to 1.7% – which after allowing for population changes means zero change in reality – is a real shocker. The concern has led the Bank of Israel to slice unexpectedly its interest rate down to a historic low of 0.25%.

Many analysts are questioning if the bubble has burst.

The Economist has focused on the damage caused by a strong shekel and its impact on exports. The BBC has examined how the war with Gaza is devastated parts of Israel’s blossoming tourism sector. There was always going to be a tremendous strain juggling the demands on the 2015 budget, as the Minister of Finance is refusing to raise taxes (for now).

As one commentator surmised, Israel’s economic star may be waning.

The pressures are immense. The military needs money to replenish its arsenal and pay for the 80,000 reservists called up. The army is developing sophisticated yet expensive technologies to detect invasive tunnels as well to counter the rocket threat of Hizbollah in Lebanon. Add in the threat from the Syrian border and Iran, you have billions to find for defense needs alone.

This is just one facet. The mandarins of the treasury must fathom out rapidly how to relieve small businesses, whose cash flow has been knocked by the war. And there remain outstanding structural issues such reforms of the ports and the Electricity Corporation. Very challenging times.

Challenging, but not doom nor despair. As mentioned above, the economy will face these onslaughts from a position of strength, following a decade of polished performance. For example, foreign currency reserves are at a record high. Israel’s high-tech sector still attracts the attention of overseas investors. And Israel’s new-found gas reserves are starting to pull in a staggering amount of revenue, including from Egypt. Even the shekel has depreciated about 4% against the dollar in the past month.

What this adds up to is a problem for the politicians. Evidently, the Gaza war exacerbated the issues of an economy that was already beginning to slow down. In parallel, the Israeli economy continues to demonstrate the signs that key fundamentals remain secure and in place. It is for the Prime Minister and his relevant cabinet colleagues to show professional skill in handling the fine balancing act when allocating budgetary resources, rather than caving in to the pressures of the obvious selfish interest groups around them.

That is a whole new campaign in itself.

28 August 2014

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Categories: Afternoon Tea in Jerusalem, Business, Israel

For all the wonderful programmes like power point and emaze, it is incredible how many of us still sit through really bad presentations. Internal end-of-year reviews, appeals to investors, business plans and more – time after time we flop at them.

Over the past two weeks in Israel, I have read through business proposals and been asked to comment on logo designs. Although submitted by experienced commercial operatives, the submissions have been wide of the mark.

Very few of us reach the heights of Steve Jobs. About a year ago, I read somewhere of a CEO of a Californian start-up. Along with several others, he had been summoned to pitch to investors. The candidate in front of him was going overtime, and he garnered from outside the room that there had been a lot of smooth talking. Our CEO began to panic. He felt that he was about to forget all his lines that he had been rehearsing for days.

When his turn came up, he was in such a state that he found that all he could do was to throw his prototype on the table with no explanation. Amazingly, the hosts took an interest in the unusual object, and started to discus the product amongst themselves. Mr. CEO walked out with a healthy promise of support, having never given a formal presentation.

With hindsight, our hero had tapped into a key rule. When preparing your presentation – otherwise known as a marketing document – check out your audience beforehand. What are they looking for? What do they want to hear and in what format.

What the CEO only appreciated afterwards was he was meeting a group of people, who did not want to be lectured to. Nor did they want to hear another talk about “unique product, with mega market size and best team since the World Cup”. They wanted to be allowed to think for their arrogant selves.

As a follow up to the previous point, this is the key reason why many advocate that presentations slides should contain the minimal amount of words. Cluttered slides turn into a passive form of lecturing. It also detracts away from what you, the speaker, need to add.

My second key rule is to remember who is in charge of the presentation – you! It is not the person who has invited you to turn up.

Now this may sound surprising, especially to those who are nervous before such occasions. However, consider that the audience want to listen to you. They are looking for somewhere to place their support. They are dependent on you providing the right kind of information.

You, the presenter, are the one in control and you can allow yourself to wear that responsibility with pride as you enter the room.

(For further tips, I point you to an excellent article featuring Donna Griffit)

24 August 2014

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Categories: Afternoon Tea in Jerusalem, Business, Israel

Israel barely has eight million citizens. For nearly seven days, it is created a defensive strategy based on short, sharp wars, as it’s army is dependent on the manpower of reservists. So, how can it continue to support a war with Hamas that has been continuing for over a month?

The truth is that economic growth was already slowing down in the first half of 2014. The second quarter revealed GDP rising by only 1.7%, barely in line with population change. Import and export figures are also pointing towards a reduction of economic activity. Clients of mine in Jerusalem have been disclosing lower sales since the winter.

And then the war comes along. How will this impact on the economy?

“Israel’s central bank made comments to the effect that 0.5% may be shaved off the economic growth forecast for the year.” I read of an estimate that a billion or two shekels (say US$0.35 – 0.7b) could be lost in revenues to the government. Businesses in the south of the country near Gaza have reported a 40% downturn in activity. Maybe most importantly but lost amongst the number crunching, reservists will not be able to run, operate and service their own small enterprises.

So can we expect a further knock on the GDP figures? In the short term, absolutely. There again, many analysts have recalled that after previous such military operations in Gaza and in Lebanon over the past 15 years, the economy rebounded back very quickly and into much stronger positions. It is certainly fair to say for now that the economy has demonstrated resilience. Note that foreign direct investment from the likes of GoDaddy continues to turn up.

There is much empirical evidence why Israel’s economy is likely to be a key position for global investors after the guns have ceased shouting at Hamas leaders. “Many of Israel’s most amazing contributions to the world – from the DiskOnKey to the PillCam –result from its existential need for innovation in the military.”

And this conflict is no different. For example, until July 2014, the Iron Dome system against short range rockets had not sold one unit overseas. The interest has been so great in the past month that visiting defense officials have literally been able to watch it function in real-time. And consider the start-up eVigilio, whose 35 workers have developed an application that can warn entire populations about incoming threats within seconds. This can apply to Kassam missiles in Israel, as well as earthquakes in California or erupting volcanos in Iceland.

So where to now? During the fighting, an exciting conference took place 10 days ago in Jerusalem, often considered a backwater for innovation. The Jerusalem Business Networking Forum bestowed awards on outstanding Jerusalem-based startups Brainsway, Glide, Revelator, Freightos and Abe’s Market. The message is clear. The overall Israeli economy may dip briefly, but it will be back and better than before.

20 August 2014

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Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem

Mention Jerusalem to an outsider and they will often associate the city with the bible, modern day conflict and religious tourism. All very true, but there is another totally different side to this Holy City. As demonstrated at the first annual conference of the Jerusalem Business Networking Forum (JBNF), Israel’s capital possesses a nucleus of new technology that is already making an impact around the globe.

At a time when Israel’s overall growth is slowing down and the war with Hamas is having a dire effect on small businesses, Jerusalem is managing to take a lead in a more positive direction. Just taking the first seven months of 2014, there are at least 122 new start ups. Consider Orcam that received US$15m from Intel to perfect glasses for the blind and severely visually impaired. At the other end of the spectrum, Mobileye’s recent IPO on the New York Stock Exchange raised over US$1 billion, the largest ever for an Israeli company.

The JBNF conference summarised the ten or so incubators, hubs, and accelerators that have sprung up, each with its own niche community: women, young entrepreneurs, Arab, ultra orthodox, and plain boring ‘mixed’. For example, Shaindy
Babad, director of Temech, announced the opening of an incubator for observant women. Ziv Barcesat, presented Yerushalab, a community centre for artisans in Musrara neighbourhood, with their own 3D printers. The list is too extensive to present here in detail.

Hanan Brand, from Jerusalem Venture Capital and which specialises in new media, observed that the level of known funding of Jerusalem-based startups has almost tripled in as many years; from US$45m in 2012 to US$110 million in 2013, and now has already reached US$122m for 36 start-ups in the first 8 months of 2014.

The Jerusalem Development Authority (official sponsors of the conference) via BioJerusalem is deliberately targeting the pharma sector. It is estimated that 50% of the start ups can be found in the field of biotech and nanotech. Marx Biotechnology and NDT Ultrasonics are two fine examples of this entrepreneurial trend featuring disruptive technologies.

Where to next?

Evidently, Jerusalem has moved on since the days of the prophets, the siege of 1948 and even the Intifada of 2000. Mobileye can be mentioned in the same breath as Glide, Revelator, Brainsway and many more whose Jerusalem-based technologies can be seen on the mobile phones of tens of millions, promoting the pop music as countless talented artists and enhancing the health of the previously untreatable. It is time for the world to welcome the Jerusalem economy.

17 August 2014

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Categories: Afternoon Tea in Jerusalem, Business, Jerusalem

Last week I wrote how Robin Williams “allowed us to consider a “whole new way of thinking” about ideas”. As business mentors, we feed off his absurdities to encourage people to change.

I have just returned from sessions in Jerusalem with two different clients; a high-tech start-up and a family retail business. Both have solid core positions, yet I contended that neither were asking a basic fundamental question. “What is it that I need to do in order to enable my potential customers – angel investors or consumers – to change their minds and thus buy into what I am selling?”

Yochi Slonim recently gave an excellent presentation on this subject to the annual conference of the Jerusalem Business Networking Forum. No stranger to JBNF meetings, Slonim challenged the large audience to answer whether we should be selling products and services or ideas. Let me elaborate.

The art is to understand how products have been turned into a commercial success. The company often plays on an idea that conflicts with established understandings and is then lodged in the mind of the intended target. Remember the highly provocative adverts of Benetton, which placed beautiful jumpers over dead bodies in former Yugoslavia? Slonim invoked the advert of Volkswagen in the 1950s, which asked people to think small – just when large cars were the order of the day. In both cases, sales boomed.

Slonim argued that Jack Trout came up with the concept of “Positioning – The Battle for your Mind” over thirty years ago. A more recent adaptation of the same theme can be read in “Made to Stick“, authored by the Heath brothers. The trick is to find an emotional link or idea between your target audience and what you are selling.

Slonim was scathing of the much-used phrases such as innovative, unique, qualitative, platform, etc etc. They are repeated so often as to be near meaningless. Just find that golden idea, promote it and your product will began to stand out from the crowd.

13 August 2014

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Categories: Afternoon Tea in Jerusalem, Business

I apologise if I may appear to be jumping on a bandwagon, but I feel obliged to say something about Robin Williams, who I simply adored. See him in concert, on TV or in a film, you come away aware that you were ‘better off’. You had learnt something.

It is difficult to know just how many were impressed by his talents. I have seen one analysis, explaining that the number of tweets about his suicide was almost as prominent in non-English speaking countries.

And this point brings me to my profession of business mentoring. Robin Williams was able to impact on nearly all of us. How?

Well, I want to stay clear of any psychoanalysis of his talents. To borrow a phrase from a recent blog, I believe he allowed us to consider a “whole new way of thinking” about ideas, almost any idea. For example, as a result of his film work:

Brilliant mathematicians are no longer seen as freaks
Old works of English literature have taken on a new meaning
We have begun to enter the minds of those who appear incapable of thought
And genies may not be real, but he taught us how we can trust in our dreams.

What these ‘case studies’ add up to is the concept, which represents some of the core values of business mentoring. My colleagues and I are approached by individuals and organisations, who are frequently set in the ways, yet looking to move beyond. They are stuck, yet we show them a new line of self-discipline that allows them and encourages them to change.

How to build up a new team; how to resist procrastination; how to prepare a clear presentation for investors – these are just a small range of issues that I deal with on a weekly basis. And while much of my work is conducted in a bland setting over cups of tea, I have been known to get my clients to ‘act out of the box’ – just as Williams did with his co-thespians. The results are almost invariably enlightening, a game-changer if you wish.

Captain Williams – we will miss you, but your work will survive in so many guises, beyond what even you may have dreamed.

10 August 2014

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Categories: Afternoon Tea in Jerusalem, Business, Israel, Palestinians

On either side of the Gaza-Israel divide, hundreds of thousands have fled their homes. That means countless livelihoods destroyed or close to ruins.

Because of the greater loss of life and larger physical destruction, the focus has been on the Gaza side. After all, in recent years Israel’s high tech economy has seen it become a member of the OECD and enter the top rung of stock exchange indexes. And by this reasoning, the harm done towards Israelis has a lower social value to news followers overseas.

Read any economic report on Gaza since 2000, when Chairman Arafat launched the Intifada, and there is very little positive information. That ranks in stark contrast to the three previous decades, when the World Bank estimated that under Israeli rule real annual average GDP growth was around 5.5% .

Today, unemployment is in the tens of percents. The border with Egypt has been sealed shut for nearly a year, and around 95% of the smuggling tunnels have been destroyed. On the Israeli side, hundreds of trucks still deliver provisions daily, even during the war, as many locals depend on food hand-outs. It is an accepted fact that by mid summer 2014, the Hamas junta was bankrupt and could not even pay its supporters. (It should be pointed out although most factories were barely operating, the military underground complex continued to be funded and extended).

There are those who argue that Gaza can return to its better days, especially by leaning on the Egyptian economy. What people forget too readily is that up to 1967, Egypt ensured that Sinai and Gaza had remained a pathetic economic backwater. The irony is that the World Bank has confirmed that the main commercial boom for Gaza in the past century emerged during Israeli governance after 1967.

However, for one strong minority, this analysis is irrelevant. Since 2007, a nouveau elite has come to the forefront in the Gaza Strip, as described by the BBC. For the all the squalor, a Pan-Arab newspaper, estimated that there were around 600 millionaires in the area.

Many of the party and military elite are rumoured to live in the Rimal district. There you can find the Palestinian Presidential Palace, the Governor’s Palace, the Gaza Mall, the Roots Club (frequented by most overseas journalists), and the United Nations beach club. Interestingly, the quarter also hosts the Al-Shifa hospital, which is considered the HQ of Hamas military operations. It is nearby that the Prime Minister of Gaza, Ismail Haniyeh, purchased his four million dollar home in 2010.

Rimal has not escaped the attacks of the Israeli air force. For example, one assumes that Haniyeh has now sought the help of the local insurance companies for what happened to his own property. There again, one wonders just how many times the area needed to be targeted, assuming that Hamas was not readily prepared to use this specific community as a cover to launch Kassams.

I have previously cited Doron Peskin from Infoprod. For Peskin, Raed Al-Atar symbolises this new group of Gazan yuppies. Today, Al-Atar is head of the southern command of the Hamas military wing. This gives him direct control over the tunnels going out towards Egypt – there were probably over 1,000 at heir peak, creating annual revenues estimated between three and nine billion dollars. Somewhat unsurprisingly, given his biography on Wikipedia, Al-Atar would make an excellent occupant of Broadmoor or Alcatraz.

It was through these tunnels that new cars entered the district and the fashionable shops of Rimal could be stocked. Peskin estimates that this micro-economy was controlled by between 600 to 1,200 cohorts. I assume that many of these people have ensured that they have remained hidden away from the war in the underground labyrinths built for them………..by underage slave labour.

I live in Israel. I see my commercial clients cry, as the war dampens local sales. And from my comfortable chair, I read the reports of the suffering of 1.5 million people in Gaza, where a military oligarchy has invested billions in violence and hatred rather than in its own people. And that is the tragedy of the two economies of Gaza.

4 August 2014

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Categories: Afternoon Tea in Jerusalem, Business, Jerusalem

At least once a week I come across somebody who works hard, but never actually catches up with their backlog. They seem to expect me to wave a magic wand so that by tomorrow evening their desk will be clear. It is as if I am tackling a secret international crisis on time management that only business mentors can overcome.

There are many tools available to resolve such issues. Much revolves in ensuring that the client is familiar with their key priorities, and thus responding accordingly. Delegation is another subject to be explored. And there is the familiar topic of procrastination, which – pardon the pun – many of us like to shy away from.

Here is an additional consideration. I recently had a follow-up session with somebody in Jerusalem, who was clearly not very alert during our meeting. It emerged that she worked most evenings towards midnight. However, many of these late hours were brought upon herself by the fact that she could not work effectively during the afternoon.

In other words, our subject matter was devoting 12-14 hours per day to work, of which only ten or so counted. That means the bodily machine was recording approximately a 25% rate of inefficiency. Now, if that was just metal and wires, my client would have thrown herself out ages ago.

So what was missing? Simple, she had tried to cheat and had been caught out by the body police. How so?

First, she skips breakfast most mornings. In contrast, nutritionists teach us that this is the time of day when we most need to pump ourselves with some sugars. This is when we have to be alert, racing to work and flying off new ideas at our colleagues.

Additionally, lunch is a must. The body is like an automobile engine. If it does not have food (petrol), it will not function. And in that case, it is shut-eyes time (siesta) in the middle of the afternoon, as my client knows several times a week.

A balanced diet is also a must. Eat your carbs, because you need internal energy. Buy protein, like a tin of tuna. Try to restrict bread intake to the morning hours. And drink – this makes you feel fuller in your stomach.

One final tip: Nobody can rush around non-stop for over 12 hours, and carry on like that most days a week, every week.

Have a break. Have a proper break during the day. You will feel more relaxed. Your productivity will go up. And you will find yourself allocating your evening hours to more fun activities, which you will be awake for. Want to risk trying the new technique?

25 July 2014

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Categories: Afternoon Tea in Jerusalem, Business, Israel, Palestinians

Call it a war or an operation. Support whichever side you want. What cannot be denied is that the lives of hundreds of thousands of people on both sides of the Gaza-Israel divide have been shattered.

In Gaza, one estimate is that barely 100,000 people had employment with a regular salary. As most of that was in the government sector, the number could be about to drop sharply. Today, whole neighbourhoods are deserted. 700 hundred have died to date and around 5,000 are wounded. (To give that some perspective, approximately half those numbers are assumed to be men in arms. And in Syria, this week, 700 were slaughtered in two days.)

France, the USA, the UK, the UAE and others have all promised initial aid for Gaza. However, something more substantial will be needed.

Over in Israel, the international press cannot (thankfully) report such casualty figures. And yet, for years around 1.5 million people in the south of the country have lived in daily fear of their lives from Kassam rockets. Understandably, yet again, many have fled northwards this July. Reports from the retail sector and other businesses in these districts report a 30% drop in revenues. Tourism across the country is also down by around 30%. At least four significant offerings planned by Israeli companies on the USA stock markets have been postponed. And now that 50,000 reservists have been called up, small businesses are bound to suffer.

There are some bright spots. The Israeli shekel has actually improved its position against other leading currencies. The Tel Aviv Stock Exchange has hauled back the sharp losses felt at the start of the battles. The Bank of Israel has described the economy overall as “resilient“.

In Gaza, there is not too much hope. The Hamas economy was dependent to the tune of billions on smuggling tunnels, which Egypt had blocked months ago. Daily aid still comes through from Israel. The private wealth and homes of Khaled Mishaal, Haniyeh and other leaders has not been obviously touched, while the average citizen has to wait for a new dawn.

Moving forward, historically Israel’s economy has tended to emerge from wars in an improved position. Simply put, the pick up afterwards helps to generate a mini boom. And the IMF deputy spokesman William Murray explained how he expects this phenomenon to continue: “However, we need to make clear that once the conflict ends, we expect growth in Israel to rebound relatively quickly”.

Meanwhile, the Hamas has already made it perfectly clear that it expects to be bailed out by the international community. In a fascinating comparison, CNBC financial news summarized that:

Just since 2001, Israel’s GDP has grown 1,000 percent and its economy is now larger than Egypt’s economy despite the fact that Egypt has 10 times Israel’s population. At the same time, the Palestinian Authority and Hamas have received billions of dollars in foreign aid and support. But instead of joining in Israel’s modern economic boom and encouraging partnerships, the political leaders have clearly invested in rocket launchers and terror tunnels instead.

Where to now, especially for Gaza? They cannot blame the so-called Israeli blockade, because goods come through, yet not from Egypt. They cannot complain about the density of the population, because places like Singapore have shown how this can be turned to an advantage.

I was struck by three developments this week, which possibly indicate how the respective governments will seek to look after their peoples after the guns have stopped firing. As noted by the Ma’an news agency, the Israeli army set up a field hospital in Gaza to treat the wounded. Further north in Jerusalem, a brand new centre was opened to treat people with Alzheimer’s, whatever their ethnic background. Third, no such equivalent initiatives could be found from the leaders of Gaza.

21 July 2014

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Categories: Afternoon Tea in Jerusalem, Business, Israel, Palestinian Society

An outsider looking in on the Middle East must be wondering why Israel and Hamas are fighting a war over a series of tunnels. After all, if Gaza is so poor, as its supporters maintain, how could they afford to build such a network?

It is an open secret that for at least a decade how the tunnel economy has funded Hamas, even before it came to power. Before Egypt shut down the Sinai side of the operations last year and sealed up its side of the border, it is estimated that via taxes and sales the trade was valued in billions for the Hamas exchequer.

So how much does it cost to build a tunnel?

I have already cited Doron Peskin last week. Yesterday, writing in Hebrew, he estimated that one meter costs about US$200, and tunneling work can achieve about 20 meters per day. The cement used to be smuggled through from Egypt. More recently, it has come in ‘regular’ lorry-loads via Israel. Since 2011, Qatar has replaced Iran as the prime paymaster.

Israeli reserve Col.Miri Eisen – former deputy head of IDF’s combat intelligence corps and former assistant to the director of Military intelligence, commented in an interview: –

It is a lucrative economic job in the Hamas. It is their top-tier unit, which is called the tunneling unit. They have put an enormous amount of money when they saw that the tunneling itself was something which Israel has intelligence challenges in finding the tunnels themselves while they’re building them. They put an immense amount of money and effort. They put the best into the tunneling units. They’ve built tunnels from the Gaza Strip into Israel that are a mile, a mile and a half, a mile and 800…I mean incredibly long tunnels and we’re not talking about a little mole tunnel which is dug and a person goes through like in [Shawshank] Redemption… We are talking about tunnels that are done in the tunneling mode, the way you would build nowadays trains, roads, anything that goes underground into a mountain. They are tunneling out, they are using their money, their capabilities, with little Caterpillar tractors that go in and dig out the dirt, covering it with an enormous amount of cement, and you’re all aware of the issue of cement going into the Gaza Strip.

However, in economics, for every cost, there is an alternative cost. In other words, if you can spend on X, that means you did not invest in Y. And therefore, those needed the benefits of Y lose out.

I have no idea how many tunnels exist in Gaza or how long they are. The IDF claims that it has already found 13. So, let’s assume conservatively there are only 20 in total and each one is 2 kilometers long. By my wobbly maths, that is close to a US$100m investment. The alternatives?

Point 1: 13 tunnels may have been found so far. There is no record of a one public bomb shelter being discovered in Gaza. In contrast, history has forced Israel to build one in every one of its homes in order to protect its citizens.

Point 2: BBC journalists and others decry the lack of medical services in Gaza. Now this is compounded by Hamas fighters using ambulances for transport. On the other hand, how is it possible that Israel has managed to establish a field hospital for Gazan citizens during the battles (as it has done for Syrians), while Hamas officialdom is nowhere in sight?

Point 3: Hamas relies on UNRWA to provide a schooling system. And yet the facilities are abused to store weapons. (I understand that UNRWA has since returned the equipment to the government)

The war could have been avoided. As Egypt’s foreign minister said last week: “Had Hamas accepted the Egyptian (ceasefire) proposal, it could have saved the lives of at least 40 Palestinians.”

The pathetic reality is that while Hamas leaders are safely closeted in the tunnels that they have erected for their own means, far more than 40 lives have been lost. The true cost of the Gaza tunnel network, for both sides of the diplomatic divide, has to be measured in terms of emotional loss, a horribly unnecessary evil.

14 July 2014

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Categories: Afternoon Tea in Jerusalem, Business, Israel, Palestinians

Two days ago, I questioned what would have happened if Hamas had invested its capital from the tunnel economy in human resources and social infrastructure rather than in military might. Where would the Gaza economy stand today and would Hamas still thus feel the need to support the frightening cycle of violence?

By way of a follow up, I spied two headlines almost side-by-side in yesterday’s newspaper. The first questioned how Israel will find the money to pay for the additional costs of war. This is expected to top 3 billion shekels or close to a billion dollars. By way of comparison, the annual budget of the Ministry of Defense, the heaviest in the country, already stands at 51 billion shekels.

Now we know that Israel is no longer a third world country. Outside the EU and America, it is one of the UK’s leading trading partners. Many of the world’s high-tech leaders, such as HP and Microsoft, have set up r&d centres in the Holy Land. The Prime Minister, Netanyahu, owns properties in Jerusalem and in Caesarea.

Compare that to the second article, which considered the growing riches of the Hamas leadership. Proportionally, it appears that the Palestinian Prime Minister in Gaza, Ismail Haniyeh, can match the largess of his Israeli counterpart. Back in 2010, Haniyeh purchased a 2,500 sq meter property for around 4 million dollars.

It is not that I am trying to preach a stringent form of Communism. However, we are talking here about Haniyeh, who claims that Gaza is a financial backwater that demands Western taxpayers to support his flagging economy. Haniyeh practices his Islamic religion on his sleeve, branding himself as a man of modest means. And Haniyeh is one of the key leaders of Hamas, which ousted the corrupt fatcats of Fatah from Gaza.

I detect a whiff of deceitful disconnect. You may call it the triumphal return of the pigs from Animal Farm.

For several years, there has been a growing amount of evidence that the Gaza economy can only be explained in a bipolar manner; the poor who have remained desperately poor and the nouveau riche, many of whom have ties with Hamas. There are now hundreds of millionaires in the Gaza Strip. Palestinian commentators have long looked at “the new class of rich“. New cars have been readily available, at least while Egypt kept the tunnels open.

It appears that Haniyeh is not alone in benefitting from the poverty of his electorate. Khaled Mashal is thought to have stashed away over US2.5 billion, according to Egyptian analyst, Dr Ahmed Karima. Chairman Arafat was no friend of Hamas, but the fundamentalists have clearly studied his financial techniques. Arafat took his fortune with him to the grave, and I suspect that the Hamas leaders are also not interested in sharing their gains with their constituency.

The Gabble from Gaza focuses on the numbers of rockets launched or how many people are displaced. Both, from whatever side of the border you come from, are a tragedy. The truth is that not far behind the bloody headlines are pecuniary considerations and personal interests that Hamas is bound to protect, even at the cost of the suffering of its own people.

13 July 2014

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Categories: Afternoon Tea in Jerusalem, Business, Israel, Palestinians

As Israel and Hamas slug it out yet again and as thousands are traumatised, killed, displaced, it strikes me how these two tiny bits of land can afford to keep bombing each other? Together, they are barely bigger than the size of Wales, either in land mass or numbers of inhabitants.

The question is particularly pertinent because resonating through the ‘Gaza Gabble” is one Palestinian argument that repeats itself; Israel’s response is disproportionate. (For the record, when discussing causes of war years ago in school, I do not recall anybody in history saying “we will not fight them because they might retaliate heavily and that would be awfully unfair). So, what allows Hamas to join the fight with Israel?

As I have repeatedly pointed out, until the onset of the Intifada in 2000, the World Bank identified the Palestinian economy under Israeli supervision as one of the fastest growing global economies over three decades. Once Hamas had secured its regime by 2007 and thrown out the former Fatah corrupt figures, the Gaza economy slowly began to make up some lost ground.

The previous economic infrastructure, such as greenhouses abandoned by Israel, was rejected. Instead, the focus was on the underground economy, literally. According to Doron Peskin from Info-Prod and quoted in the Hebrew paper “The Calcalist”, the contraband tunnel economy was worth around US$200m per month for the Hamas treasury. Jazeera says US$700m a year. Peskin cites an Egyptian source that estimates the sums at 9 billion dollars annually!

Either way, this is certainly enough to pay for 15,000 Hamas fighters, finance new shopping malls, encourage the import of luxury items, and see hundreds on new millionaires. Maybe only a top elite could afford this new economy. However, factor in how the cement is provided for free by Israel, and it is not difficult to understand how Hamas could afford to invest in factories that manufacture thousands of missiles that are then lobbed in to and all over the Holy Land.

For the record, Peskin believes these production lines are not very sophisticated, especially as the missiles are not smart devices. (After all, they have also landed in Bethlehem, Hebron and the outskirts of Ramallah). They cost about US$500 each. Accordingly, smugglers may demand about ten times that for an anti-aircraft Sam trajectory.

Last year, the new Egyptian ruler, Sisi, shut down the tunnel economy, flat and simple. Despite the severe financial hardships and even though the Sinai border is now also closed, Hamas does not attack Egypt. This leaves it with a problem – to find a way to pay for its 50,00 employees.

On the other side of the border, the Israeli economy is very proud of its achievements since 1986. Then bankrupt and suffering from hyper-inflation, today the country is a member of the OECD and has a first class stock exchange. Annual growth has rarely dipped below 3% since 2001.

Israel’s exports are led by the world of high-tech (eg Intel), diamonds, and military technology. And as the country has invested in these areas, it has found the resources (just) to create bomb shelters for much of the country and hospitals for most people. The electricity plant in Ashkelon also supplies Gaza, as could the new desalination plant, although both are currently under attack from Kassam.

Undoubtedly, the fragile Gaza economy is taking a hammering. It is still dependent on supplies from Israel, which keep coming despite the hostilities. Back in Israel, the commercial sector continues as best it can, and much depends on proximity to the Kassam launch pads. The stock market, which dropped initially, has rebounded. The shekel is fairly steady. Over the past decade of military campaigns, it has been the small business sector that has suffered, as owners have been called up to the reserves.

So my question is this? If Hamas had invested its capital in human resources and social infrastructure, as its neighbour has done, where would the Gaza economy stand today and would it need to support this frightening cycle of violence?

5 July 2014

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Categories: Afternoon Tea in Jerusalem, Business, Israel, Palestinians

The past week has seen heightened violence between Gaza and Israel. While the timing seems odd, in parallel, the IMF issued its latest survey of the economy under Hamas rule in the territory. Summarising the conclusion, Israel is responsible for a situation of high unemployment and stunted growth.

You cannot fault the logic. Israel does not let workers from Gaza come into Israel. The traffic of goods between the two is carefully monitored. Ergo, Israel is to blame for the demise of the Gaza economy, no?

I did wonder if the IMF wrote similar things about Afghanistan or Iraq – withdraw the troops, which seek to protect the peace, and the economy will boom (sic?).

Leaving sarcasm to one side, jump back a few years and recall how Hamas started out. It was a neighbourhood organisation that provided social services to the poor. It deliberately fed on the nepotism and corruption of the Fatah strongmen led by Mohammed Dahlan. When Hamas violently ousted Fatah from Gaza nearly a decade ago, there was little crying amongst the locals.

Initially, the Hamas economy prospered. While the commercially successful greenhouses left by Israel became military training bases. Gaza thrived via the tunnel economy. Hamas built them, controlled the contraband, and ran the finances as taught by ‘Professor Al Capone’. Shopping malls opened. Car imports soared. Unemployment began to drop.

So why in July 2014 is Hamas apparently so interested in a fight with Israel? I understand that until Thursday, most of the shelling from Gaza towards Israel came from more fanatical groups like the Islamic Jihad factions.

First, remember that President Sisi of Egypt has spent a year closing down the Sinai entrances to the tunnels. If there were around 300 operating at the time of former President Morsi, today barely a dozen are left. There goes the tax collection.

Power supplies, 30% of which comes via Egypt and much of the rest was financed by Qatar. Well, the money from the Gulf ran out some time ago. This week, the region was almost plunged into darkness before President Abbas assured Israel that it would be paid for new fuel supplies.

As for wages, there are reports that 50,000 Hamas workers have not been paid their salaries for about seven months. Given the size of the average family, that lack of liquidity probably impacts on about a third of the Gaza population.

It is difficult to argue that these financial restrictions apply to ‘those at the top’. Corruption and the siphoning off of foreign aid remains endemic. The granddaughter of the Hamas Prime Minister was treated in an Israeli hospital. There are estimated to be over 1,700 millionaires in the area.

So, it appears that the fizz has gone out of the Gaza economic dream. And this deeply restricts the ability of Hamas to care for the poor, its home constituency. When you factor in the growing influence of the Islamic Jihad and Salafists, what is left for the local leadership to do, but to attack Israel?

The Hamas military machine probably includes tens of thousands of trained soldiers. It is assessed that the arsenal contains tens of thousands of Kassam missiles. In other words, Hamas has invested singularly and heavily in military prowess as opposed to the development of human capital.

The IMF targeted Israel for Gaza’s economic woes. Yet have we not just found the missing billions that the IMF has failed to write about……………and why are these brilliant economists so quiet about it?

1 July 2014

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Categories: Afternoon Tea in Jerusalem, Business

It is probably just coincidence, but I have had several people recently ask me what is the most appropriate time of the day to carry out their key assignments.

These tasks can vary from writing up a crucial report to client preparation to interviews and beyond. The key point is that they are the ‘something special’ projects, which must be done properly, efficiently and effectively, within a set time span…..or else.

My general advice is to slot in the important tasks at the beginning of the day, whether a person starts work at 7am or 11am. Usually, that is when we are most alert. The morning breakfast and coffee has kicked in. We have shouted at somebody on the way to work. The body is looking to be creative, assuming no parties from the night before.

(As a side issue, this is why many experts now encourage us not to skip breakfast, and ensure that it contains a healthy portion of sugars. We need that new energy to take us through the day. And cheating on the first meal of the day is a pathetically ineffective way to diet.)

The Harvard Business Review discussed the matter of diary-scheduling last week.

You can maximize your productivity by calibrating activities to the right time of day. If a task requires willpower and complex thinking, plan to do it when you are at your most alert. In contrast, if what you’re after is a fresh perspective, use fatigue to your advantage by looking for solutions when your energy drops.

Yes. This is an individual issue. What works for me does not necessarily apply to somebody else. However, I stand by my initial observation about first thing in the day.

However, here is the catch. Many people schedule meetings for the morning. Thus, when it comes to writing up reports afterwards, they are tired, hungry and clock watching. It is this ‘clash of hours’ that as a business coach, I try to make people aware of and thus change their habits. After all, it can only lead to greater productivity and maybe even greater enjoyment in the workplace.

27 June 2014

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Categories: Afternoon Tea in Jerusalem, Business, Israel, Palestinians

My daughter asked me the other day why the Presbyterian Church voted to divest from Israel. The question was pertinent when you think just who is coming to Israel at the moment.

On 19th June, the Hebrew paper “Calcalist” reported that Coca Cola will invest a further US$0.5 m in Israeli start ups. That will make about 10 young companies in total.
A few days later, the German specialty chemicals group Altana announced that it will take a minority stake in Landa Digital Printing to the value of US$135m.
Final, a rather anonymous company from Herzylia that ‘dabbles’ in algo-trading, is rumoured to be considering a buy out offer, valued at US$4 billion, give or take a dollar.
In the past six months, six Israeli companies have raised a combined US$500 million in share offerings in America. Next to join the list will be Cyber-Ark looking to bring in US$75million.

In other words, at a commercial level, 99% of global commercial leaders are ignoring the calls of Presbyterians and their fellow thinkers.

In other walks of life, the pattern is similar. I mentioned earlier this month how Palestinian leaders take advantage of Israel’s medical services. To that commentary, I could add the story about the Palestinian child, treated in Tel Aviv, at the very time when Hamas had cruelly kidnapped three Israeli teenagers.

In the field of music, no BDS fuss blocked the brilliant appearance this month of the Rolling Stones in Tel Aviv. Hip-hop artist Epicc has just spent a week in the Holy Land and released a special clip to celebrate. Ceelo. Green, Neil Young, and Kylie Minogue are a few of the artists booked to feature over the summer months.

I did mention to my daughter that the Presbyterian Church had been hijacked by a powerful anti-semitic minority. We discussed the stupidity of the boycott; for example, HP has been targeted, because its hardware prints the permit entries for Palestinians coming into Israel. We noted that while Israel is the only democratic country in the Middle East, the Church had been deafeningly silent in its condemnation of abuses against Christians in the region.

However you cut it, once you remove the spin of the BDS movement, two items remain. First, its basic traits and demands and targets have disturbingly similarities with Nazi laws of the 1930s. Second, Israel’s drive towards globilisation remains unhalted, thus ironically ensuring that those who hate the country end up benefitting from its capabilities.

19 June 2014

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Categories: Afternoon Tea in Jerusalem, Business, Israel

It is five since Dan Senor and Saul Singer described Israel as a ‘start-up nation’. They analysed how a desert tariff-based economy emerged from bankruptcy in 1986 to become a force on the high-tech scene.

Whether you put the factors down to better governance, improved access to global markets, the impact of ex-army types moving over to industry or otherwise, the question remains if this triumph can continue to repeat itself.

Yesterday, I visited Beersheba. It is nearly a two hour drive from Jerusalem. There are few good hotels. The area is known as where Abraham sojourned, and where the British passed through in 1917. Actually, despite being on the edge of the Negev the city is geographically almost placed in the centre of the country. So what?

In 2014, Beersheba will open an r&d centre, co-sponsored by Lockheed Martin and EMC. In parallel, CyberSpark will offer a new complex for the blossoming cyber industry in Israel. And separately, the Advanced Technologies Park was officially launched this year.

All very encouraging. However, what I saw yesterday on the Ben Gurion University campus in the heart of the city was even more impressive. Innovation 2014 was the fifth annual event of its kind. It was spread out over several buildings. Aside from keynote lectures by reps from IBM, Microsoft etc, there were several hundred presentations from students. Each stand represented another potential breakthrough in its specific field.

Here is just a preliminary list of examples:

Software to help decision-makers understand if an autistic child is suitable for a course.
Numerous solar powered applications
The ability to detect underwater threats
An app to help small businesses manage queue line
Robotic solutions for industry, operating rooms and more

The human sciences were not to be excluded. Projects were exhibited in the tourism, the branding of Bedouin villages, natural cosmetics companies located in the region, and much more. You left with the feeling that almost every other student has an idea and is determined to commercialise it, as soon as possible.

Years ago somebody commented to me that in America, students come up with an idea, stay in-house until they are ready, and then start a company years later. As shown yesterday, blame the hot Middle Eastern sun if you want, the opposite is true in Israel. Israelis run almost irrationally to register their company.

It is arguable which is a better business model. In Israel, around 40% of new businesses do not make it to Year 5. That said, hindsight reveals that this is the approach that helped to launch the amazingly successful ‘start up’ anthem of Senor and Singer. It looks as if it will be around for some time to come.

17 June 2014

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Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem, Palestinians

Last week was a busy one, even by the bewildering standards of the Middle East. Sunni militants (ISIS) launched a violent offensive in Iraq against the government, slaughtering civilians who objected. America and the UK initiated a bizarre rapprochement with Iran. And on Thursday night, three Israeli teenagers were kidnapped, assumedly by Hamas supporters.

Measuring the posts of the international media, the Israeli story is the least important. In fact, SKY News believes that the key crisis in the Holy Land is not the immoral act of the kidnappers, but the inappropriate reaction of the Israeli authorities.

I believe that the reporters have missed a trick. If they were to focus on Israel, they will be able to appreciate with greater clarity what is happening around the oil wells in the sand dunes. Here’s what I mean.

1) Israel’s economy: Despite on-going geopolitical uncertainty, the economy grew by 2.7% in the first quarter of 2014. And yes, that includes increasing trade between Israel and Palestinian firms.

2) Hightech: Israel’s start up economy has not stopped forging new links. Russian billionaire and owner of Chelsea FC Roman Abramovich has just invested $10 million in StoreDot, an Israeli startup developing electronics based on bio-organic materials. A Jerusalem-based company is (ironically?) developing an app to help prevent kidnapping. And CellBuddy is set to create a consumer revolution which should slash the prices of mobile phone calls.

3) Health care: The medical sector is short of cash, doctors, nurses and more. However, it must be doing something correct. Hundreds of Syrian civilians, wounded in the civil war, have been treated in Israeli hospitals. The granddaughter of the Hamas PM has been operated on in a Tel Aviv hospital. Even the wife of Palestinian President is now recuperating in a private clinic near Tel Aviv.

4) Tourism: Only yesterday, Masada, a World Heritage Centre in the desert, rocked to the sounds of La Traviata. Hundreds of tourists flew in especially for the event. Concurrently, the City of Jerusalem is running its annual Light Festival, which spectacularly winds its way around the different ethnic quarters of the Old City.

No country is perfect and that includes Israel. Yet, for all the threats surrounding it and for the morose horror of the kidnapping of the school children, Israel continues to thrive though a policy of inclusion and pluralism where possible. You have to ask: Why is this theme so hidden by the media giants?

The boys have disappeared, feared murdered, and their families are helpless. Unlike the poor girls in Nigeria, Michelle Obama has not published a post in support of the three missing religious Israeli teenagers. Catherine Ashton, EU foreign affair supremo, has yet to find time to comment on the matter.

And what else has been kidnapped? The openness and success of Israeli society, which should be promoted to serve as a light to the Iraqs and Irans of his world. Where has the world media hidden these triumphs and why?

13 June 2014

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Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem

Four gentlemen are walking around Jerusalem looking for a business mentor. It almost sounds like an opening line to a long joke.

The truth is the opposite. Over the past 6 weeks, I have become acquainted with four people from the Jerusalem area. I do not believe they know each other. They grew up on three different continents. Their social backgrounds reveal no obvious synergy. Academically, their skills range from the ultra brainy down to school drop out. Two are quiet types and two will not stop interrupting.

On the commercial front, they are all trying to set up in Israel for the first time, but again in four diverse fields; publishing, internet, trade and home services. Their prior experience ranges from decades down to months. If you were to put them all in a room together, you would come up with a list of talents several lines long.

So why have they sought out a business mentor? What is the common theme?

While chatting with one of these gentlemen earlier this week, I suddenly realised that there was a trait or characteristic that the four of them possessed in equal amounts. For all their vision, none of them allow themselves to focus on achieving their key ambitions. It is as if they deliberately try to sidetrack themselves.

Here is what I mean:

Adam (not his real name) looks to discuss grand theories of life, avoiding the specifics of his business.
Bryan talks of his competitors, and at length, but not about what he should be doing.
Colin comes up with new ideas, often good ones, at every meeting, but does not try to consolidate what he has achieved to date.
David likes to contemplate his next move, for hours, but rarely crosses over to the conversion side of this thought process.

And that is where classic business mentors can make the difference. They can break the mold of these patterns of behaviour, which may seem brilliant to the incumbent. It is the mentor who can bring them to understand and to internalise that these ‘business models’ only result in minimal income

It is the role of a business coach to show clients that something has to change and why. The question is whether these gentlemen or other people like them are up for that challenge.

12 June 2014

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Categories: Afternoon Tea in Jerusalem, Business, Israel

Apps are supposed to improve the lives of people. The taxi protest in London, Paris, Madrid and Berlin yesterday against the success of Uber seemed to have the opposite effect. The lives of millions were disrupted for hours.

I am not convinced that these demonstrations will lead to much. On Friday, Uber “revealed that its latest funding round had raised another $1.2bn (£700m) at a valuation of $17bn (£10bn), and its backers now range from Google to Fidelity Investments”. That is a lot of financial clout.

While Uber may be the largest player around, it faces competition. Besides Hallo, Lyft and My Taxi, the next largest is arguably Get Taxi from Israel. While Uber’s sales are estimated at about US$500 million, the start up from the Holy Land rakes in about US100m. The founders of Get Taxi expect a fourfold growth by 2015.

Again, big bucks however you look at it. And Get Taxi is also looking to raise money, maybe on a valuation of US$3 billion.

What’s next. All the competitors will be looking to expand their reach, and Uber is already active in nearly 40 countries. There are also indications that the size of the taxi market is growing, as more people are able to play the role of ‘driver’. In turn, this should allow the consumer to benefit from better prices.

The joke is worth repeating. taxi drivers tried to disrupt lives of million, because their industry – protected from change for decades – is now forced to respond to a classic disruptive technology. Yeah for the software engineers of America and Israel.

11 June 2014

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Categories: Afternoon Tea in Jerusalem, Business, Israel

We have all been there; sitting through minutes and hours – which seem like years – of time wasted in meetings, where the point of them has been…..well to put it politely, ‘difficult to discern’.

Yesterday, I attended 5 separate meetings. I ended two of them early, as we had accomplished all that needed to be said. Unfortunately, one session, ironically sprinkled with reps from leading areas of Israel’s commerce, left me bewildered. Why, after all these years, do people still not know how to behave in meetings so that they are efficient, effective and even fun.

It is some years since the British comedian, John Cleese, issued a series of videos, using humour to illustrate the problems of modern management. From a more sober angle, a blog on the Harvard Business Review this week argued “Yes, you can make meetings more productive.” Steve Jobs was renowned for ensuring that participants were reduced to a bare minimum.

For me, there are three key factors for ensuring that a meeting has great purpose.

First, the chairperson has to issue a firm agenda, preferably circulating it in advance

Second, participants must know what they want to obtain from the discussions. The contra of this is that the chairperson is left to do 90% of the talking and thus the meeting turns into a dialogue. Creativity is stifled.

Third, arguably the most important factor, time limits are critical. The chairperson should ensure that the meeting starts on time and that the meeting finishes by an hour agreed in advance. Otherwise, participants will know that they can arrive late – in Israel this is know as “Jerusalem Mean Time” – and leave whenever they want to.

So, why do we not learn? Why do we continue to waste countless minutes in our fast-paced lives in rooms filled with hot air?

Pages

Game up for the Israeli economy, or maybe….?

How to make a presentation – HELP!

Can Israel’s economy stomach the fight with Hamas?

Jerusalem – biblical ecocentre or thriving economy?

So what are you selling – a product or an idea?

Business mentoring and Robin Williams – the connection

The tragedy of Gaza’s dual economy

How a break can help you to get more work done

Gaza and Israel – the economies after the war

What is the cost-benefit of building a tunnel?

The economics of the Gaza-Israel fighting – Part 2

The economics of the Gaza-Israel fighting

Can the IMF alone find economic relief for Gaza?

What is the best time of day to do my most important work?

Look who is investing in Israel – June 2014

How Israel remains a ‘start-up nation’

Who kidnapped Israeli society?

Why 4 gentlemen need a business mentor

The new economics of hailing a taxi

3 tips for a successful business meeting

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