Israel Archives - Page 39 of 67 - Michael Horesh Business Coach and Mentor

6 February 2013

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Categories: Afternoon Tea in Jerusalem, Business, Israel

I was posed the question: “Should I open a shop? After all, margins are being squeezed as economies are tight and as internet shopping becomes increasingly popular.”

In Britain, three mega chains – Jessops (cameras), HMV (CDs) and Blockbuster (DVDs) – have folded in recent weeks. Parts of some inner city retail centres look like ghost towns. Sky TV has been running an item on how Obama’s America has still to recover from the credit crisis. In my country, “a quarter of Israel’s clothing and shoe stores are in danger of going out of business.”

So why should anybody want to enter the retail business, this apparent jungle of doom? How can you do battle with a virtual enemy, the internet, which allows people to browse with a tasty mug of coffee in their hands and to find the best price from a source that does not even have a shop? To start up or not?

I read a great article on the subject, mainly referring to the chronic problem in the UK. As Graham Ruddick observed: “….retailers have been adapting and investing to meet the demands of the modern consumer.”

There appears to be five key tips for turning your shop into a success in the current commercial climate:

1) If you develop an online presence, allow the customer the option to pick up the valuable booty. It will ensure greater communication and maybe even lead to an extra sale in passing.

2) Identify your threats and do not ignore their challenges. Steimatzky, Israel’s leading book seller for years, had a dominant position in the market. It nearly killed off the little shop. However, as if to be predicted, they did find new ways to help people buy books, which can easily be purchased over the web via Amazon. For example, there was rarely a corner to sit down and read a chapter in a store.

3) Know your customer. Provide a niche product. People are people and we all have needs that must be serviced. As HMV closes down, I know of several record shops that have sprouted up in different countries. These are shops that have adapted with the times and thrive, despite lowish margins.

4) Partner up. There is no global law of commerce that says a shop front of 50 sq m has to be occupied by the same owner. Why not put two or three vendors under the same roof, offering tasters of a larger range, which would be available on-line or at larger outlet away from town centres?

5) Simply make your shop look attractive. Invest in appearance. Two years ago, the City of Jerusalem heavily subsidised shops in the heart of the city which modernised signs and shop fronts. The results have helped to make a difference in the atmosphere, encouraging more visitors.

As Ruddick observed: “With investment and the right strategy, therefore, it is still possible to thrive on the high street.”

4 February 2013

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Categories: Afternoon Tea in Jerusalem, Business, Israel

A staggering piece of information:

Researchers have found two peak years when the richest 1% (in America) earned nearly a quarter of the nation’s total income; 1928 and 2007.

And we all know what happened to the global economy in the years following on from these points in time. Disaster!

I garnered the facts from a review of a new film “Inequality For All“, which is fascinating, if not bizarre. How can a 90 minute documentary on income inequality become a commercial hit? And it intends to do just that by launching as its star a 66 year old diminutive ex-politician, Robert Reich, who was Bill Clinton’s Secretary of Labour.

The figures that Reich supplies are simply gobsmacking. In 1978, the typical male US worker was making $48,000 a year (adjusted for inflation). Meanwhile the average person in the top 1% was making $390, 000. By 2010, the median wage had plummeted to $33,000, but at the top it had nearly trebled, to $1,100,000…….Reich’s thesis is that since the 1970s a combination of anti-union legislation and deregulation of the markets contrived to create a situation in which the economy boomed but less of the wealth trickled down.

Reich has strong words of warning for policy makers in America, in the UK and elsewhere. As somebody living in Israel, his words have special meaning. This is the country where many analysts argue that the significant change in the recent general election was that the middle classes refused to ‘buy the arguments’ of the outgoing government. People swopped parties. Jerusalem will have a new coalition, where at least initially economic issues will count for more.

So what social miracle happened in the Holy Land?

It is easy to dwell on the social protests of two summers ago. The 25-40 year old bracket took to the streets, moaning that the cost of raising a young family in Israel is prohibitive. For decades, many parents have run away from the work market as child care has remained exorbitant. And the list of complaints is long.

Back in December 2011, the OECD summed up the position very clearly. “….the gap between the average income of the richest 10% of earners in Israel and the United States was 14 times that of the bottom decile, compared to 10 times in Britain and six times in Germany and Denmark.”

Barely four months later, the Bank of Israel confirmed the problem. “Income inequality grew faster in Israel than in other developed countries………. adding that over the last 20 years, the salary gaps between educated and uneducated workers grew while salary gaps between men and women narrowed.”

Since 2002, Israel has seen average annual economic growth of 3-5% almose every year. Tel Aviv is full of tall buildings. Despite warnings of a bubble and despite a global dowturn, the price of new housing continues to rise. The stats for internal tourism remain firm. Money is available,………. but for whom?

There is a growing impression in Israel that just as “the Bush crowd” blossomed just before the 2008 credit crisis, Bibi Netanyahu’s friends are in a similar position today. In parallel, there is no shortage of charities in Israel that collect means and money for the less well-off. This misfit is a red warning sign in any society, and that is an inconvenient truth that needs to be addressed right now.

3 February 2013

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Categories: Afternoon Tea in Jerusalem, Business, Israel

In the bible, we learn that Jethro was the father-in-law of Moses. Shortly before the story of the Ten Commandments in Exodus, Jethro cautions Moses that he cannot be the permanent judge to hundreds of thousands of wandering people. The solution would be to appoint a council of seventy wise elders.

There is an old Jewish joke – if there are two Jews in a room, you will receive three opinions. Yup, Moses had to put up with a cantankerous lot, never ready to take criticism.

So, how did Jethro manage to ensure that his suggestion was accepted? Why was Moses so appreciative that he asked the old man to stay with the wandering tribes?

Teh truth is that Jethro came with several core qualities:

He was recognised as a judge, a Midianite priest.
He was an outsider. Thus he had no ‘axe to grind’. He was not out to prove a point.
He was experienced

In addition, it was worth noting how Jethro conveyed his message. He explained and cajoled rather than dictated and demanded. Modern studies show that under such circumstances, people are more likely to retain the instructions and to take on new responsibility.

That said, a successful coaching pattern also demands something from the client. As Moses demonstrated, you need an open-mind, one that is prepared to accept and embrace change.

While Joseph is often considered the world’s first accountant or economist, Jethro blazed a trail for modern-day coaches or mentors. And thousands of years later, we are still trying to comprehend fully the simple and practical lessons of millenia gone by.

2 February 2013

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

Israel’s Prime Minister, Netanyahu, took a chance on going to the polls nearly a year early.

Never mind the external challenges – Iran, Syria, peace process – the economy was closing in. By the end of the campaign, everyone knew that the average voter was about to face a wave of price hikes: water, gas, electricity to name just a few. Further, during the campaign, government supporters stopped trying to pretend that taxes would not rise (again) to cover a nearly US$4 billion extra and unplanned fiscal deficit.

So as the politicians spend the customary dithering time trying to form a coalition government with people they had castigated days previously on the election platforms, what is going to happen to the economy?

On the positive side, there is still much to shout about. In December 2012, the economy kept moving ahead, this time by 0.1%. This stat is in line with the estimate of nearly 3%, predicted for the whole of 2013. Similarly, unemployment has crept up to 7%, which is relatively low compared to many in the Mediterranean zone.

FDI remains fairly resilient. For example, in an extensive analysis in the Hebrew press with Hamilton Lane, it is evident that this private equity group intends to extend its 6 year position in the Holy Land. And while there may be a slackening in the number of buy outs, even during 2012 US$5.5 billion was invested in Israeli high tech by outside positions. No wonder that the Israeli pavilions are so prominent at the Las Vegas gadget show last month and the upcoming mobile / app bonanza in Barcelona.

That said, the country faces critical structural issues that are continually being brushed under the carpet. Delaying serious change will only make the inevitable more painful. Specifically: –

The budget deficit needs to be reduced, immediately. That means higher taxes for all. And that also means the defence establishment has to take a hit.
Israel’s sea ports, specifically Ashdod, are over-staffed. In parallel, the average workers receive wages that are simply scandalous. These facts add up to an unecessary strain on the taxpayer. And similar observations can be made about the Electricity Corporation, which is unlikely to be privatised in the near future, due to a strong workers committee.
The farming sector is set up to protect the producer at the expense of the consumer. For example, it is extremely difficult to import fruit, even when the subject matter is not in season. Again, this is the fault of a government not wishing to challenge strong vested interests.
And finally, there is the high tech arena, the back bone of Israel’s economic success for over a decade. As the country’s Chief Scientist has just warned, Israel is failing to find ways to maintain its competitive advantage in the field of “innovation”. This needs a full and immediate rethink at the highest levels of government.

I could also mention the need to extend immediately land reforms that the previous administration introduced with more fanfare than substance. And there is the disgraceful wastage over positions as directors on the board of government jobs. A recent survey showed that 400 postings – each carrying an expense to the same taxpayer – had to be fulfilled, but life was carrying as normal. etc etc.

Israel’s governement has a strong economic base to correct these anomalies. Delay for too long or become sucked down by coalition politics, and then Israel’s ruling elite will soon find themselves abandoning the economic achievments of the past two decades. Now that really will hurt.

31 January 2013

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Categories: Afternoon Tea in Jerusalem, Business, Israel

So Professor Stanley Fischer, renowned international economist and governor of the Bank of Israel, is to leave his post after eight years.

As he is departing midterm and just after a general election, some newspapers smell a rat. Others concentrate on whether he did a good job. Fischer himself ticks off a list of successes.

I had a list of goals in front of me….. including the Bank of Israel Law which was passed by the Knesset, the bank workers’ wage agreement with the Treasury, the Bank of Israel’s reorganization………..The new system of corporation governing within the institution is very strong. There is an executive council with a chairman, which will take care of the bank’s administrative management, and the governor will not be involved in this issues. And we have the Monetary Committee, with three professors who are not part of the bank, which ensures that we don’t make any mistakes………….

On the less positive side, Fischer has noted that “I am also leaving the economy in a good shape, but with serious challenges. The challenges are to pass a budget which will allow a reasonably limited deficit and handling bureaucracy problems.”

And he added:

It’s a fact, a troubling fact, that in the past few years Israel’s average level in international surveys has gone down. We were in the 26th place six years ago, and now we’re in the 38th place. It’s not because the situation here deteriorated, but because the situation elsewhere improved. But in a competitive economy there is competition with other countries, and so problems in the decision-making system in Israel must be dealt with. We saw it happen in many measures taken by the government in terms of housing prices.

Fischer has his critics, such as Avi Temkin at the newspaper “Globes”. However, for me the issue is more straightforward. Did Fischer, for all his brain power, show leadership, resist political pressures, preserve the independence of Israel’s central bank and present a working monetary policy to the world? That is the core role of any central banker.

An initial review from Bloomberg reveals that overall Fischer got it right. Quoting Amir Kahanovich, chief economist at Clal Finance Brokerage Ltd. in Tel Aviv: “There is no doubt that foreign investors trusted him and the policies he put in place.” Despite wars and global recessions, Israel has been achieving 3-5% growth over the past decade. Prime Ministers and Finance Ministers may laud the praise amongst the electorate, yet it is the top civil servants who lead and guide them to those positions.

And that is the lesson for Netanyahu as he seeks Israel’s next king (or queen) of monetary policy. Whether or not they will be a person he knows personally, and Netanyahu seemingly has a habit for picking those around him, that same person has to have the strength of character to be able to say “NO”, yet do so in way the retains the confidence of others.

Stanley Fischer did that. We thank you.

22 January 2013

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Categories: Afternoon Tea in Jerusalem, Business, Israel

Yesterday, I observed how experienced Israeli politicians had simply failed to prove to a waiting electorate that they possessed the ability to govern.

Balance that with a listing posted by the financial newspaper “Calcalist” – which translates as ‘Economist’ – detailing the top 50 commercial leaders in Israel during 2012. The survey, which was released two weeks ago, makes for fascinating reading, because each candidate was graded according to four categories; credibility, actions, openness, and ability to please shareholders.

Please note before I carry on: These subjects can also be ascribed to voters and how they perceive politicians.

It is impossible to pick out one item that identifies those at the top of the commercial ladder. Most are male, aged between 45 and 60. That said, they have been in their jobs for decades or for short periods of time. They come from a wide range of industries. Their comments and tips as to why they are successful are multiple and varied.

So, what makes you a good leader in business, at least according to this survey?

Well let’s return to those four basic elements. Each of our top business leaders scored strongly in all of the sections. In other words, instinctively, by luck or through training and combined experience, they have learnt the importance of applying multiple skills to their enterprises, without cutting corners on any one factor.

So where does that leave the up-and-coming executive? It is not just about good management, surrounding yourself with team players or knowing your market – yes, all important factors. What these four elements add up to is the phrase ‘detail’. As one successful entrepreneur, Ed Mlavsky, explained to me last year, “the devil is in the detail”. In other words, find the devil before it finds you. Then your organisation has a good chance to prosper.

21 January 2013

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

Everyone knows that general elections everywhere are a chance for politicians to show off just how much they understand about their electorate. In other words, we are ignorant and we should just let them get on with it.

Tomorrow, Tuesday 22 January, Israel goes to the polls. For the uninformed, Israel operates a system of strict PR. Win around 2% of the vote and your party gets in! This means that for over 60 years, Israel has been governed by coalitions of smallish political parties, each trying to prove to a growing electorate that they are not egocentric.

Yes, I am cynical, but for all that, I will be voting bright and early. And I will walk into the polling booth with a smile on my face, knowing that the leaders of most of the factions have totally misread what has happened in the country over the past few months.

First, while the Likud under Netanyahu started the campaign with the largest number of seats in the Kenesset (Parliament), it was always going to suffer. Netanyahu is no great leader, but he has been able to govern for four years through the weakness of others. And suddenly, he has had to face the challenge of two charismatic opponents, Arie Deri (Shas) and Naftali Bennett (Bayit Hayehudi). Both have asked their supporters to “return” to their natural base and this is what the polls indicate is happening, especially with Bennett.

Where does this leave the Prime Minister? The voting is liable to reveal a king, who was never actually wearing any clothes but covered by an aura of arrogance.

Second, economic and social policy has become a factor in this election. Until now, this was rarely the case in the political history of the Holy Land, as defense issues and foreign affairs were dominant in a country surrounded by geopolitical threats. However, social protest of two years ago have left a scar. The financial demise of the middle class has left its mark on many. The blatant ‘handouts’ given to ultra-orthodox groups, Netanyahu’s natural coalition allies, have offended swathes of people.

Possibly, the final straw has been a wave of price rises in the public sector that will only be felt immediately after the election period ends. The media have ensured that this ‘secret’ has made its way into the public domain. The point is that while the government has rightly claimed that its policies has created economic growth – over 3% per annum – this achievement has not been felt by enough of the electorate!

Third, people have tended to vote for decades according to right or left, religious or pluralism. In 2013, there are ploiticians who cut across those definitions. Bennett wears his religious views on his sleeve, but I know of those who barely visit a synagogue once a year and are still prepared to vote for him. Yair Lapid is categorised a man of the centre-left, even though he is clearly capturing voters who are disillusioned with Netanyahu, who himself is located on the right of the map.

I do not know who will win. I have no idea which block will form the coalition. Lurking in the background is a fourth and possibly the most persuasive factor. Netanyahu has positioned himself as man who understood America and who could prevent the creation of a Palestinian state. In the past three months, the UN upgraded the status of its Palestinisn delegation, as relations between Obama and Netanyahu dropped to below freezing. What does this say about ‘ability to deliver’?

I saw the Prime Minister smiling on tonight’s news programme. I wonder what his face will be saying in another 24 hours.

18 January 2013

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

As this is my first post, writing on my new website, I wanted to refer to the themes that I blog about more often than not; management, the Israeli economy, and mentoring.

Actually, I was prompted to write this blog, as I watched the news of several large chains in the UK suffering from sales figures that had frozen in the snow outside their shops. With some ironic timing, this week I visited three small retail outlets in the Jerusalem area, all with ambitions to expand sooner rather than later. I admit that at least one of them is a client of mine. All of them have one related management problem, but they have reacted in a different manner.

CASE STUDY 1: Adam sells toiletries. His shops are in areas with lots of passers-by, although his specific locations just misses out on the main buzz. When he set out around five years ago, he had great ambitions to “stock ’em high, price low” and have a rapid turnover. What he was left with was large stocks of unsold goods. His advertising constantly missed the target groups. Jerusalem did not seem so golden.

Adam brought in a business mentor, who first of all structured a long-term cash flow chart. Rule numero uno – Stock could not be bought if sales did not reach set targets. Although this was a painful process – setting targets, learning to live with excel charts, losing the ‘freedom’ to purchase at will – Adam persisted. Times were tough, but gradually the debts were reduced. He even bought in a design specialist, who restructured the interior set up of the selling space. Despite snow in the Holy City in January, sales are up over 25% for the past 6 weeks.

CASE STUDY 2: David operates a series of shops near where he grew up and lives in central Jerusalem. About two years ago, he opened another outlet in a sector that was not familiar to him. Since then, although sales have remained positive, cash reserves have been plummeting.

As David acknowledges, his business coach did not spend too long mapping out the history of the company. One look at the shelves revealed that they were laden with stock, much of which had dust on it. The ratio of stock to monthly sales was absurdly high. And it was impossible to know the true value of the items, because nothing had been entered onto the cash register.

David’s approach was more simplistic than that of Adam. Yes, he did instruct his staff to commence registering stock and also new purchases, a task that became very lengthy, drawn out, and not terribly accurate. In parallel, he simply cut purchases of new items by around 75%. The effect? It is not just that David found hundreds of thousands of shekels remaining in his bank account, while sales continued apace. He is now planning to open another outlet.

CASE STUDY 3: Moshe’s enterprise is set up in a similar fashion to David’s business. At first, Moshe also took a similar approach and re-evaluated his purchasing policy. However, once the cash flow began to improve, Moshe returned to his old ways, and that is when his bank manager started to become very nervous. What is now called for is a new and immediate appraisal of what he really sells in his shop. Moshe will need to establish a way to identify his best sellers, as well as those items that leave him a true profit.

And the lesson? Big or small, a populous country or a city of 800,000 people, selling toiletries or electrical goods, you have got to know your stock – numbers, best sellers, profitable items. Otherwise, you start taking out loans to fimance new purchases. In other words, your money remains on the shelves and not back in your pockets.

21 December 2012

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Categories: Business, Israel

In a month’s time, Israel goes to the polls. Bearing in mind the strict proportional representational system, the trends in the polls and the country’s habit for political coalitions, it seems that Prime Minister Netanyahu will not be moving home after the votes have been tallied up.

Elections around the world are usually decided by social and economic issues. Geopolitics in the Middle East has ensured that most campaigns in Israel since 1948 have been decided on matters related to defence and foreign affairs. However, what if that were not the case? What if Israelis put more emphasis on subjects that concerned the shekel in their pocket? How should the outgoing government be judged?

Since 2008, Israel has ridden out the global financial disasters in relative comfort. The stats of 3-5% growth annually, relatively low unemployment and a stable budget deficit ratio speak for themselves. During the current term of office, the country has been admitted as a full member of the OECD and the Tel Aviv stock market is now in the top ranking. So all is good and nothing needs to change?

Whenever a general election presents itself, the local media is always on the look out for “election economics”. In its simplest form, this means a government announcing a policy – often spending lots of money – in order to secure votes. Now, Netanyahu’s team cannot be accused of that. They have sat tight.

And that’s just the point. The Israeli economy is in urgent need of leadership and direction, but none is forthcoming. Everything is being delayed until after the polls have closed and after a new coalition has been formed. That could still be months away. Meanwhile, the politicians are busy praising themselves and past achievements,

Stanley Fischer, the governor of the Bank of Israel, put the matter out in the open for all to see. There is a gaping hole of 15 billion shekels, equivalent to nearly 4 billion dollars. How will that be tackled? Raising VAT by an additional 1%? Cutting back on child allowances? Cuts in the budgets of government services? According to newspaper reports, all this and more is being considered, but nothing is definitively planned. And so the budget debt will continue to grow.

As for public utilities, many services will announce prices from February onwards, well after the elections on 22nd January. The Electricity Company has been forced for months to buy supplies of gas from more expensive sources, due to crumbling relations with Egypt. Water prices, that have already soared 35% in three years, are due for another hike imminently. And when the middle classes receive their monthly pay cheques in early February, they may notice that their tax brackets have been changed adversely.

So what does this all add up to? The Israeli economy is not broke, but many things need fixing. The current government appears to be saying that it will carry on as normal, although it is obvious that this is short-term posturing. Painful changes will come into effect by Spring 2013, and the average citizens will pay for most of them. However, by then, they will have cast their vote. By default, that is another, yet short-minded and dangerous, form of election economics.

20 December 2012

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Categories: Afternoon Tea in Jerusalem, Business, Israel

We all know the expression: “Yes, I give the best service possible”. Now recall that frustrated client or the potential sales that slivered away or that person who criticised you (seemingly unfairly). Was it all their fault? What could and should you have done instead?

I was drawn to these comments by a blog I read this week from Shmuel Hoffman, a wonderful video and film maker in New York. Writing about a failed package for a Jewish youth group, he recalled how the client’s criticism had hurt him. After some honest self-reflection, Shmuel realised that all roads for the blame led back to him and that he had to change his ways, quickly. A few months down the road, the same client gave him another order.

Whenever I learn about stories like Shmuel’s, I recall the eulogy of a close family friend, George, from South Africa. At the funeral, his son spoke about how he had succeeded in business by always giving his best. George had made it his mission to always provide a client with the best opportunity that he could.

I listened to these words, as I was starting up my mentoring business. Simple and obvious enough I thought to myself. And how wrong I was. You see it is not just that you have to do your best, you have to present the package in a manner that the other side feels and understands is the best. In other words, they will realise that they need to work with you.

This week, I made two pitches. Both were top rate. In one situation, as the phone call ended I realised I had not made the “target” appreciate the benefits of what he was receiving. I am still waiting to hear back. In contrast, I started the second call by empowering the person with new knowledge. In turn, this engendered deeper trust in me. The rest of the conversation was far more positive.

Creating a good honest service takes time and understanding and a wider appreciation of different customers. It is a necessary skill that all of us need to possess. The truth is that few of us strive for it on a daily basis. The result is lost sales. Ouch!

11 December 2012

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Categories: Business, Israel

In the past couple of weeks, I have listened to a number of friends and acquaintances moan about what is happening to their countries, be it America or the UK. To paraphrase their arguments, they find that there is no sense of direction, economically or socially. To cite examples about Britain: The Olympics this year were seen as a smokescreen for an economy that lacks hope; the Levenson Report on the media revealed just how shallow life has become; people live in fear.

Bottom line: The 2008 global credit crisis and the threats of warfare have changed the workings of the modern world……for the significant worse.

This was put in to perspective for me last night, when I listened to a talk in English from Israel’s erudite Minister of (Military) Intelligence, Dan Meridor. Speaking in Tel Aviv and addressing the umbrella organisation for the international chambers of commerce in Israel, the politician revealed his full experience of nearly four decades in politics and international diplomacy.

Meridor observed that Israel has been forced to change her ways much earlier than other countries and that maybe is the reason the Holy Land can still produce figures of 3% growth annually. He drew on two key themes.

First, Israel’s economy was effectively bankrupt back in 1985 – 400% annual inflation rate, minimal foreign currency reserves, and high interest rates to support an absurdly high public fiscal debt. Today, the economy is driven by the private sector and growth is determined by exports rather than consumption. Israel has embraced the world of high-tech, cleantech and nanotech, resulting in Siemens, Intel, IBM, Google et al with r&d centres of excellence in this part of the Middle East. At the annual GSM mobile tech exhibition in Barcelona in February 2013, Israel will host one of the largest pavilions.

Second, Meridor commented how Israel has to cope with geopolitical threats that no other country in the UN community has to deal with. Iran, Hamas and Hizbollah are just a few of the issues that spring to mind. In the past decade, Israel has fought numerous wars or campaigns along its borders with Gaza and Lebanon, often vilified in the West for what has been seen has the high level of civilian casualties that have resulted.

Meridor stated the obvious. War is horrible and even one death of a civilian is one too many. Israel had to fight these battles. They were fought in the full view of TV cameras, that also includes utube videos and the immediacy of other social media platforms. This cannot be said for what is happening in Afghanistan or Bangladesh or many places in central Africa. The world watches Israel’s every movement.

As Meridor pointed out, in the November 2012 fight in Gaza, the Israeli airforce pounded Hamas positions. Most flouted the Geneva Convention as they were placed in and around civilian locations. However, even using Palestinian statistics, total deaths were around 170. The Israeli army believes that about 110 were military personal.

To put this in proportion: “According to a 2001 study by the International Committee of the Red Cross, the civilian-to-soldier death ratio in wars fought since the mid-20th century has been 10:1, meaning ten civilian deaths for every soldier death.” Israel has adapted to change, whilst other are criticising her under bygone standards. I could not find reliable comparative figures for Afghanistan.

Meridor’s summary point is fascinating. The international leadership of today was brought up to understand that strong countries must follow the principles of the philosophy of the nation-state. However, what is governing and determining life in 2012 are “the states of non-nations“. This includes groupings like Al Qaeda and technologies such as Facebook. Just consider how the Arab Spring germinated under the bewildered noses of the most sophisticated of Western Intelligence agencies. The world has shifted, significantly, and it is time to wake up.

When countries learn to understand these changes – factors that are not nation specific or coordinated – then they will be able to take on the new economic and diplomatic challenges presented over the past decade. Deliberately or accidentally, Israel seems to have taken some concrete steps along that path.

9 December 2012

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Categories: Afternoon Tea in Jerusalem, Israel, Jerusalem

Jerusalem – the city of peace, a centre for three major religions – has been dividing peoples and nations for thousands of years. The title of my blog, Afternoon Tea in Jerusalem, shows just how much I care and love and admire the pleasures of the place.

However, my personal passion cannot hide that again Jerusalem has caused more argument around the globe in the past week. At the United Nations, Israel has been lambasted for planning to build extra housing in what she sees as the capital of her country. Meanwhile, in Gaza, Hamas leaders have celebrated twenty five years of armed struggle against Israel, declaring that they will never recognise the modern Jewish state and its capital. Impasse, no?

I remain hopeful. The reason is that away from the news and the mass media, life in the city is really pretty good indeed.

Sharon reminded me of this picture of hope. She runs a growing blog called “The Real Jerusalem Streets”, which uses photography to illustrate the real facts. Take for example her feature earlier this year on Arab women in Jerusalem, working and roaming freely. A similar montage back in August was equally enlightening.

These are no isolated moments captured through a lens. This weekend I read a feature on a small dairy restaurant in the centre of the city called Tmol Shilshom. It is boutiquey, if such a word exists. It is frequented by writers and poets. It has won the 2012 “certificate of excellence” from Tripadvisor. All very nice, but there is one very crucial factor to this success, that is ignored by even the most cosmopolitan of overseas journalists.

The chief chef of this outstanding restaurant is Ma’azan Shwicki, an Arab who started in the culinary profession back in 1982 doing the washing up. Not only is his work now recognised by Tripadvisor. His breakfast is also considered one of the top ten in the world by “Lonely Planet“. And all this effort is soon to be combined with being the Muchtar of Abu Tor in the south east neighbourhoods of Jerusalem.

Jerusalem may not be perfect. It may not have reached the visionary standards of so-called moral politicians around the world. And for all that, despite the stress and the tensions, today’s Jerusalem has much to teach others about how to co-exist together.

7 December 2012

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Categories: Blog, Business, Israel

Nearly every time I describe to people what I do as a business mentor, I am asked if I feel that I am acting as a psychologist for financial or commercial issues.

It can seem that way. In fact, it is not just that you have to allow for a person’s personality in how they do or do not make decisions. You also have to be aware of “background noise”. A classic example of this can unfortunately be a divorce of a key player in the organisation.

That said, I am always clear about two things. I have never even studied psychology 101. And, I am not a professional marriage guidance counsellor or similar. If those are your issues, they need to be dealt with by a professional.

I am prompted to raise the discussion by two articles I read in a Hebrew publication last month. Tzohar is a group of rabbis, who try to relate orthodox opinions with modern life, without being afraid of modernity. Rabbis Aviner and Ariel argued that people with deep personal issues can receive full help by turning to a religious leader rather than visiting a shrink. (For the record, I have clients, who confirm what they have learnt with me by afterwards visiting their favoured rabbi.)

Nomi Wolfson, a specialist in marital problems, wrote a detailed response ,which I feel deserves a wider audience. As she writes (and I translate): “The main point is the lack of understanding (by non-experts) that handling emotional issues demands a wider appreciation of life.” This is an appreciation that goes beyond showing a basic love of mankind and exuding empathy.

Wolfson goes on to analyse what she sees as the central point of dispute with her rabbinical associates. Her field of expertise is often seen as one of “words”. Speak wisely and you can do it also, no? No, cries Wolfson. And the reason is simple. In psychology, every word and every sentence can have a sub meaning. These implications need to be identified immediately. Just as it takes a rabbi – and also presumably preachers from other religions – years to learn the texts, so it takes analysts years to be certified by their professions.

In Wolfson’s last penultimate paragraph, she delivers her sternest warning. Rabbis are perceived as being most active in household disputes. They are seen as a place to seek neutrality, which is understandable. However, the professional spends many a session in training, role-playing the multiple different scenarios. That is extremely valuable background knowledge, actually working with individuals.

So who is correct? As Wolfson observes, if you need a toothache dealt with you go to a dentist. The final decision will depend on the issues involved and where a person feels confident that they will find a solution.

6 December 2012

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Categories: Business, Israel

Less than three weeks ago, the OECD published a healthy review on the Israeli economy – 3% growth running through to the end of 2014. This outperforms many other countries in the organisation. So, why is the Israeli media full of depressing financial reports? The answer lies in a mixture of issues that have come together at once.

First, it has been known for around six months that tax revenues has not been hitting targets set. However measured, the gap stretches to billions of dollars. Raising VAT has helped, but not enough. So, the government merely changed the proposed fiscal deficit from 2% to 3% of GDP.

Clever political accounting maybe, but now 3% looks like breaching the 4% mark. The defense budget was never fully covered from the outset of 2012. The activities over Gaza last month have added around half a billion dollars in extra bills – reservists, ammunition, etc. And that very military campaign has resulted in a severe drop in tax revenues from businesses in the south of the country. To give one piece of anecdotal evidence – one of my clients had a prospective customer cancel on him at the last moment because his income from the south had evaporated.

The politicians have another problem to deal with – themselves. They have called a general election for the 22nd January. That means that the government is trying to devolve all sensitive issues until after that date. For example, the prices of many milk products, staple items for much of the public, are regulated. Changing an earlier announcement, they will only rise by 5% at the end of January. Bread will go up by 4% in early February. Electricity charges will jump by 10% in April, once many consumers have finished heating their homes for the winter.

Again, maybe a nifty political tactic, but what about the public coffers? The treasury will have to subsidise some of the differed costs. And that will bring us back to the story of the worsening fiscal deficit. It all makes for a nasty and bitter recipe of problems.

The OECD was fundamentally correct. Economically, the country has much to look forward to. For example, by late 2014, Israel’s new-found gas reserves will start to come on tap. These will ensure cheaper gas for consumers. Relatively expensive imports will be eliminated, thus improving Israel’s standing vis-a-vis overseas creditors. And there will be extra tax revenues available to finace public projects. A great main course for the mouths of the whole country.

Until then, Israelis deserve to be served a better first course by its leaders. Specifically at the time of elections, what is required is responsible financial measures rather than verbal spin.

30 November 2012

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Categories: Israel, Jerusalem, Palestinians

Here is a story posted this week on Facebook by a friend of mine. He quotes a lady called Sarah B, who was riding a bus in Jerusalem.

On the number 13 bus this morning. An ultra-Orthodox lady entered the bus from the back door, because she had a stroller with her. She needed to get to the front of the bus to pay, and needed someone to hold her baby so she’d have the use of both hands. She asked the elderly Muslim woman across from me to please hold her baby. The baby continued sleeping, and the Muslim woman was extremely pleased. “I have 31 grandchildren!” she told all those of us around her, and we smiled. The Jewish woman came back and thanked the Muslim woman profusely, and brought the baby back to the middle of the bus where the stroller was, and the Muslim woman got off the bus a couple stops later.

In most other cities around the world, that incident would barely command a snort of interest. However, this is Jerusalem. This is a city where the only known issue that the leaders of the three great religions cooperated in recent years was when they protested of a gay rights’ march. This is a city where its unity is opposed by most world leaders. And it is the place that journalists flock to in order to learn how Jews, Christians and Muslims bicker with each other, while ignoring the often larger divisions within each individual community.

For all the simplicity of the above tale and the hope it raises, it is not a solitary incident. This spirit can be found elsewhere in Israel, daily. Consider the micro-algae educational project at Kibbutz Ein Shemer, where school children of different backgrounds learn together in order to protect the environment. There was the programme sponsored by the Prime Minister’s office in June 2012 to encourage employers to hire workers from minority groupings. And the Max Rayne School in Jerusalem is one of three bilingual schools in the project, ensuring how kids of all religions can learn together in this challenging city.

Last night, President Mahmoud Abbas secured Palestine’s upgraded status at the United Nations. Analysing the text of his speech in the Palestinian media, at no stage did the Palestinian accept the State of Israel, under any borders or circumstances. The Jewish state was referred to hate and loathing.

It is not just that Abbas has now effectively rejected these successful projects of cooperation. The UN exists to encourage mankind to welcome each other. The international body demands that all members actively embrace such a responsibility. Yet the means and the language of Abbas reveal how and why he rejects the core raison-d’etre of the United Nations.

C’est la vie for the proponents of peace and for safe bus journeys in Jerusalem.

29 November 2012

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Categories: Business, Israel

Unemployment jumps to 7.3%. Housing starts down. OECD marginally lowers growth forecast. Not the greatest series of economic news that Israel has seen in recent weeks.

And yet right beneath those one-off headline items is a major piece of commercial joy that bodes well for the future of the country. To paraphrase statements from Bill O’Neill, Merrill Lynch’s Wealth Management chief investment officer for Europe, Middle East and Africa; the Israeli economy is in good shape.

It is not just that growth of 3% still puts it towards the top of the OECD pack. Nor that unemployment is remains well below many other countries. And we can already see multinationals looking to invest in Israel’s new offshore gas reserves.

Look at the level of exits in Israel during 2012. This is one of the ways that large overseas financial players judge the strength of the country’s performance. In the previous peak year of 2006, the figure reached $10.1 billion. This year, at a time when money is supposed to be tight on the global scene, $9.3 bilion has already been counted up. (Figures released at an MIT seminar in Tel Aviv on Wednesday). Cisco’s purchase of NDS is responsible alone for $5 billion.

The story does not end there. This morning’s press reveals that “NCR Corp, a supplier of automated-teller machines and payment systems, agreed to buy Retalix Ltd, Israel, for about $650 million, gaining software and services used in supermarkets.”

I wonder who else has yet to complete their Christmas shopping amongst the Holy Land’s high tech treasure trove.

;lkch;lad

28 November 2012

5 Comments

Categories: Business, Israel

In an era of global economic slowdown and when airlines are known to be suffering, it worth noting that El Al, Israel’s main airline, has posted profits soaring by tens of percentage points. Increased passenger revenue and the control of costs have combined to produce a 79% leap in profits before tax.

This was not always the case. For years the El Al anacronym was known as “every landing always late”. Passenger service was not just bad, but you had to think twice before asking a stewardess for assistance. Pricing was inconsistent. Losses and strikes were standard.

So what has changed? Obviously, one major effect was the privatisation process that kicked off nearly a decade ago. In addition, as the Israeli economy has become a success story and tourism has taken off, more airlines are turning up to compete for the rising passenger traffic. For example, Easy Jet has a couple of crowded flights every day to Tel Aviv.

However, there is something more to it than this. Last month, I flew El Al. Now let me be clear. I do not feel duty bound to fly by this carrier and I checked out several other possibilities beforehand. I boarded in Ben Gurion Airport in Israel, itself a recent winner of the Airport Council’s International roll of excellence award.

I could see the stewardess prepare her mandatory strut up the aisle to see that everyone was buckled in. “Here we go again” was the thought that entered my head. But no. She went from side to side chatting with people. How are you? Why are you flying? Looking forward to your holiday? She spread an atmosphere of relaxation at the potentially critical moment of tension. And yes, on the quiet, she was clearly and professionally ensuring that all seatbelts were in place. I hate flying, but on this rare occasion, my trip started with a smile.

Travel and Leisure is one of the premier observers of the global travel business. Its new rankings place El Al at 18th out of 76 airlines surveyed. Not only is this a quantum improvement from 31st position last year. Most of those ahead of El Al on the list specialise in long haulage flights, a field where the Israeli company has comparatively little chance to show off its capabilities.

El Al has become an interesting case study for turning round a company based on serving the customer. As the review of T&L states:

Better cabin comfort and greatly improved service in the air and on the ground were key factors. Readers gave EL AL’s food winning marks this time out and think the airline now offers better value. In an innovative twist, the EL AL Upgrade program enables you to submit a bid to upgrade your flight from economy class to business class.

25 November 2012

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Categories: Business, Israel, Palestinian Society, Palestinians

Initial estimates suggest that Israel’s economy will shrink by 0.2% as a result of the recent fighting with Gaza. Last week, I detailed some of that potential impact. But what of Gaza? How can over 1.5 million people recover from the severe pounding (literally) handed out by Israel?

A recent IMF report detailed that unemployment was still over 30% in the strip of land, locked between the Bedouin of Sinai and Israel. Much of the Gaza economy is supported by external sources, often smuggled in via the tunnel system. A video from AlJazeera illustrates this very well, filmed shortly after the current fightng had stopped. Palestinian sources imply that 140, maybe two-thirds of all operating tunnels, were destroyed. Not only does this limit the supply of goods, it removes Hamas from a very healthy supply of revenue from permits for these activities.

However, in some ways, these sketchy details highlight a deeper problem. Obtaining reliable and professional figures for Gaza in most fields is consistently difficult. Just one simple example – the number of minors killed in last week’s fighting: It will take an expert to point out that whatever the stat, and even one death is a tragedy too many, Hamas recruits fighters to its ranks from the age of 16. Thus are these deaths to be recorded as military or civilian?

Now consider the on-going poverty in Gaza, which many people take for granted. The same IMF report also mentions that the Gaza economy grew at a “high rate” in early 2012,“mainly on account of a booming construction sector that benefits from lifting of some Israeli restrictions on imports and Gaza’s tunnel trade that benefits from easing of restrictions owing to political change in Egypt“.

Statistics from the Israeli press and based on information from military sources confirm this trend. Hamas probably benefits by around US$500 million annually from the tunnel economy. While the GDP per person stands at a paltry US$1,500, it has leapt upwards by 30% since 2010. And the Israeli army has ensured that building materials, food and medica supplies continue to enter Gaza in quantity, even during the fighting.

I have commented in the past how Gaza has seen a new millionaire elite emerge in the past couple of years. New cars, often imported from China, are now common in the area. An interesting item from Eric Cunningham and dated from the beginning of the recent hostilities observed how Gaza has much wealthier base than in previous hostilities.

While thousands of Gazans flocked to the territory’s short but stunning coastline this summer, when relative peace still reigned, the abrupt bang of hammers and whir of power-drills could be heard on almost every corner of the capital, Gaza City.

Sky-scraping apartment complexes, glitzy new shopping malls and extravagant hotel retreats were sprouting up amid the rubble, and unemployment had dropped to 28 percent from a record-high of 45 percent at the height of the blockade.

Cunningham’s piece even displays a picture of the new funfair. Pointedly, he concludes by citing a second IMF analysis, posted this October. Gaza’s economy is set to grow by 7% in 2013 and 6.5% in 2014.

You are left wondering. Why does Hamas and its allies would want to jeopardise this prosperity that benefits for the Palestinians and replace it with an on-going bloody fight with Israel?

19 November 2012

1 Comment

Categories: Business, Israel, Palestinians

Pick up any UN analysis or a report from a relevant NGO, you will find details of how Gaza’s economy is struggling. The facts seem overwhelming – how unemployment, low exports, little private sector growth.

For all the pages of statistics, something does not add up. According to the World Bank, under 30 years of Israeli sovereignty, the Palestinian economy grew by 5.5% annually in real terms until 1999. That is phenomenal by any standards, and Gaza was part of that achievement.

If you look for current information about Gaza, which has not been tampered by officials with an agenda to grind, then there is much anecdotal evidence. I have reported on the new cars from China that have become very popular in recent months. These have probably been purchased by the new elite of millionaires club, identified by the Arab media. And all this has been reported by corporate journalists staying in some very comfortable boutique hotels.

Life for people in Gaza is not simple. Israel limits travel on its side, although even in times of war passage is not totally closed off. The Egyptian border is open, but Bedouin tribes control the territory beyond. And the Hamas government runs an agenda that bothers little with principles of democracy and pluralism.

If the citizens of Gaza complain that Israelis live in a secluded paradise, one can understand their frustration. Since freeing up the economy from tariffs in the mid 1980s, Israelis has experienced a leap forward in standards of living. Today, the economy is growing at around 3% annually, one of the better performers in the OECD. JVP in Jerusalem is one of the world’s most successful venture capital groups in the world, reinvesting profits in cross-ethnic projects. to take a specific industry, the biotech sector has boomed in the past decade, creating thousands of jobs and billions in wealth.

Historically, Gaza has been known as a fertile territory with an educated populace. When Israel departed in 2005, it left behind and intact a thriving greenhouse industry. Not only has that been ransacked and confined to the sand dunes or converted to military training grounds. The leading export in 2012 has been the 1,200 rockets hurtled towards Israeli civilian areas.

The Palestinian leadership in Gaza would have the world believe that the poverty of the territory is caused by the Israeli military. The pain of that fallacy is most felt by the residents themselves. However, if only the problem was a few gross inexactitudes over economic policy.

As Hamas has proven, if you can lie during peacetime, it does not take too much effort to cover up the self-inflicted horrors of war.

17 November 2012

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Categories: Business, Israel

Brighton is a picturesque seaside resort in southern England. About three months ago, the Israeli company, Sodastream, opened its first UK branch in the city. This sparked a constant flow of anti-Israel demonstrations. The protesters demand that the public boycott Israeli-made products. And their prime argument is that Israeli aggression against whoever should not be rewarded.

Why this protest on behalf of peace should see just today 15 demonstrators take on the police, I do not understand? I note that the same people are happy to buy plastic products from China or drink Russian vodka, governments not known for their delicate handling of protests. And I gather that there were few words uttered on the picket lines against the 1,000 plus rockets that have landed on Israeli civilians from Gaza during 2012.

Hypocrisy? Let’s go one step further. If the organisers were to boycott all Israeli associated products and technology, the soldiers of the seafront would not even have received their marching orders. You see in 2012 vast parts of Microsoft, Intel and mobile technology emanates from r&d centres inside Israel. That’s right, your computer and cell phone are full of made-in-Israel code.

And just how much does the world look to, support and need Israeli products and services? Just peek at these news items from last week.

Protalix, which has proven a unique treatment for Gaucher’s Disease, is to sign a major agreement with Brazil.
Sanofi-Aventis, one of the world’s largest pharmaceutical companies, has authorized Sanofi-Aventis Israel Ltd. to acquire a consumer healthcare products company for several tens of millions of dollars.
LiveU, which provides live video transmissions from any location with wireless networks and played a significant role in the global coverage of the London Olympics and American elections, has raised a further US$27 million.
P2W (pollution to water) has signed a major contract with in South Africa for purifying water in a large mine.
By the end of this decade, Israel will be a net exporter of gas and maybe oil energy.

And so the list goes on. In the words of the governor of the Bank of Israel, Israel’s economic growth for 2012 and 2013 is expected to beat current predictions of around 3%.

So, while the vocal and violent proponents of open speech voice their concerns on the coast of Britain, the world as a whole is benefitting from the successes of the one democratic country in the Middle East. Now, what kind of person would want to boycott that?

Pages

Why the interenet has not killed the retail business

An Inconvenient Truth – USA & Israel

Moses and his father-in-law: First business coach relationship in history?

Israel’s economy: post January election

Bank of Israel and leadership

What makes you a leader of industry?

Israel’s general election – 4 points that the politicians missed

Managing your stock – 3 case studies

Covering up election economics in Israel

Be honest – do you really give the best service you can to your customer?

Change: The new rules for nation building – a case study

Behind the photo pics in Jerusalem

Business mentor, religious leader or shrink? You choose

Israel’s economy concocts a bitter recipe

Buses, a holy city, and our moral responsibilities

Vote of confidence in Israel and her economy

From landing late to great customer service – El Al turnaround

Economic cost of war (2) – Gaza

Hamas or Israel? The answer is in the economy

So who benefits from trading with Israel?

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