Afternoon Tea in Jerusalem Archives - Page 15 of 75 - Michael Horesh Business Coach and Mentor

6 March 2018

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About three weeks ago, I wrote about the strong and deepening trade connections between the UK and Israel. Since then, tearing up 70 years of protocol, it has been announced that Prince William will make a formal visit to Israel in June. To be blunt, royal travels are almost invariable followed by an increase in trade between countries.

However, what drew me to these comments was my visit yesterday to a small start up in Tel Aviv, as part of the delegation of the Israel Britain Chamber of Commerce. We were hosted by Eitan Attir, CEO, and Gal Levin, business development, at the Milk and Honey Distillery.

Some background is required. The distillery was created on the whim of some entrepreneurial spirit – pun intended – back in 2012. The idea was to make Scottish whisky in the Holy Land. Yes, the origin of the word whisky is the “water of life”, possibly associated with Medieval monks creating a passionate drink.

As Eitan carefully explained his passion, it was clear how his start up is linked to Britain, and far beyond the basic concept. For example:

They contracted Dr. Jim Swann, who before his untimely death last year, was a pioneer in setting up distilleries in hot climates. His knowledge has proved to be invaluable.
Second hand equipment was purchased from Scotland.
Malted barley is imported from Yorkshire.
Of the four main export markets to be targeted later this year, UK is on the list.

For the IBCC, the event was labelled as a power networking breakfast. Certainly, sampling tastings so early in the day did take some extra effort from the participants.

As for the distillery, last year, Milk and Honey became the first Israeli distillery to release a 3 year old whisky. The 300 or so bottles, or what is left of them, are apparently already available on the sites of ‘hard to find’ whiskies. It is currently expanding its floor space by a further 20%. This will allow it to produce to around one million bottles a year, placing it alongside some of the smaller Scottish producers.

1 March 2018

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Israeli start-ups raised US$500 million in February 2018. There are apparently ten overseas stock exchanges looking to possess that Tel Aviv establishment. Intel is considering a US$5 billion expansion plan in the Holy Land.

Yup, overseas investors are still flocking to Tel Aviv and to Jerusalem in order to discover what goodies are available, even when (or because of?) there are uncertainties caused by Trump and Brexit.

To make my point, earlier today, I watched a fascinating 30 minute documentary highlighting the strengths of Israeli innovation. Introduced by Jonny Caplan of the Tech-talk show, the script introduced several companies that were dominating new industries overseas, despite having emerged from the backwaters of the Middle East.

China has been a country looking to muscle in on the ‘start up nation’. Although the IVC Research Center feels that the ‘day of the dragon’ has yet to happen, there has clearly already been an impact to date. Jack Ma of Alibaba is due in Israel in May. About 12% of all overseas capital raised has come from China for the years 2015 to 2017. Times are changing.

What follows is a full copy of the IVC report:

In recent years there has been a lot of buzz about Chinese investment in Israel’s high-tech sector. Not a day goes by without reports in the Israeli media about economic cooperation between Israel and China. All the associated hype gives the impression of China being a major factor in Israel’s high-tech sector. IVC’s data suggests otherwise: the world’s most populous country and second largest economy in fact remains a relatively minor player, with its focus almost exclusively on strategic investments. One Israeli insider with years of experience with the Chinese dubbed their strategy as “drain the brain.” Put simply, Chinese companies invest in innovative Israeli technology that they can utilize for their own specific needs.

The most recent story to receive banner headlines is a planned visit of Alibaba founder and chairman Jack Ma to Israel in May. His company recently finalized a relatively small deal to acquire Visualead, a QR codes startup and announced plans to set up an office in Tel Aviv as part of a $15 billion global R&D initiative. The Chinese retail giant has also invested in several other Israeli startups in the past two years that focus on strategic technologies for Alibaba. Two years ago, Alibaba also invested in Israeli VC JVP’s $160 million seventh fund. No exact amount was given at the time, but it was thought to be around $20 million.

Alibaba is typical of Chinese investors who are primarily interested in Israeli innovation, while the local high-tech sector views China as a huge potential and largely untapped market. An apparent win-win situation for both sides, the data paints a very different picture. In recent years China has become a more significant player in Israel’s technology sector, though IVC data shows that its role is still relatively minor. Chinese direct investments and M&A and buyout activity accounts for at most 5% of the total, and while the percentages and dollar amounts have risen from 2013 levels they have changed little over the past few years (see graph). While for Israeli high-tech companies, few have successfully cracked the Chinese market.

According to IVC’s data, the actual number of Chinese entities that invested in Israeli high-tech companies has gone from 18 in 2013 to 30 in 2015 and to 34 last year, and they invested on average annually in about 40 startups. The dollar amount invested in those startups ranged around $500 to $600 million in 2015–2017. This represented on average around 12% of the total capital raised by all Israeli startups in the corresponding years (see graph)

Startups generally raise from several investors during a round. They also do not usually detail dollar amounts invested by each participant in a round. In fact, the lion’s share of the investments was by Chinese venture capital funds or high-tech companies and were in startups described as having strategic importance. Even if the Chinese accounted for 50% of the funding in those startups (which is highly unlikely), that would still only translate into 6% of the total.

There have been relatively few financial investments by Chinese entities. Chinese participation as investors in Israeli venture capital funds peaked in 2014 and has dropped considerably since then both in actual numbers of investors and actual dollar amounts. The rule of thumb is investors in venture capital funds usually take a maximum position of around 10%. In this category as well, Chinese investment clearly played a relatively minor role.

In the fields of M&A and buyouts of Israeli tech companies, Chinese firms have taken a backseat position to American, European, and even Japanese firms. The only exception was in 2016 when China’s Giant Interactive paid $4.4 billion for Israeli gaming company Playtika, which accounted for 44% of all M&A activity that year. The year before and after, Chinese interest waned sharply, accounting for 8% and 1.1%, respectively. Even if the huge Mobileye-Intel deal is excluded from 2017’s record tally, the percentage would only rise to 3.5% and three M&A deals done by Chinese.

Few would dispute the fact that the Chinese market represents a huge potential for Israel’s high-tech sector and specifically startup companies. However, this market is extremely complex for Israeli high-tech companies, far more familiar with the US and European markets, where they face far fewer cultural and language barriers and more familiar business practices.

The $64,000 question is whether this will change. In November, ten Israeli startups were selected to take part in the first-of-its-kind accelerator program in Beijing. They were chosen from 100 startups that applied, based on their chances of cracking the Chinese market. The accelerator was established by Israel’s Economy Ministry and ShengJing Group, one of China’s largest management consulting and private equity firms, and DayDayUp, a group that focuses on connecting international and Chinese investors. This represents a small but significant change that could start a trend, which could have long-term impact on the China Israel high-tech equation.

23 February 2018

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

It is one of those subjects that keeps coming up with my clients. How can they lock on and retain their better employees, even when pay rises are not available?

One obvious way is to call somebody in for a chat. Talk about all the good things they are doing. Chuff them up. However, this perfectly obvious solution, is not so perfect in itself. According to James Adonis, an expert on employee engagement:

Research shows the majority of performance appraisals have zero impact on performance. One reason for this is that appraisals are often laborious. When both employees and managers dread them, they can’t ever be effective.

Adonis goes on to point out that few receive a 100% score card. What is important to note is whether the final score is handed to somebody, who feels that they will not achieve the top result, or to a colleague who understands that have outperformed most others. If the latter, that person will probably continue to do well.

Adonis offers some advice for handling employees in either category. A common theme between the two groups is the need for a senior manager or owner to ask questions. They should show that they are genuinely engaged and that they care. They will also be able to find out work makes a person ‘tick’, thus allowing them to manage the expectations of colleagues.

Personally, I find that there is a further issue that is all too often forgotten by employers. They are required to find a method that allows their employee to feel that they are respected; that they are valued. In the past few weeks, I have seen two key workers in the Jerusalem area just up and leave, the energy and innovation previously sucked out of them by superiors seeking more while withholding positive feedback.

And had they been handed an extra few percent as a bonus or a monthly salary increase, it would not have done it for them. They had been shoved around for too long. In other words, they simply could no longer bear the thought of coming into work every day. How depressing!

I suspect that many readers may find the last two paragraphs a touch obvious. So, here is the challenging question: Why is it that we hear about such stories all the time? And, if we are really honest with ourselves, how often have we also been guilty of such crimes and lack of consideration?

To be blunt, if you invest in a few minutes of showing your appreciation, it may save a fortune compared to the cost of replacing an employee.

19 February 2018

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

Nearly a week has passed since Israel’s police recommended pressing charges against Benyamin (Bibi) Netanyahu, the country’s longest standing Prime Minister. This is not the first time that he has faced charges. And as ever, he denies them all, firmly.

Many political analysts in Israel have long felt that Bibi looks at most issues in terms of how he will be perceived by his supporters at the polls. To understand the full story, we have to remember Bibi’s core strength as a politician.

A former soldier in a crack unit, Bibi is a master communicator. He was a brilliant success at the UN in the early 1990s. On at least two occasions, he has snatched victory at the polls, when he was facing defeat. He is fully bilingual in English and in Hebrew. When briefly out of politics, he was a sought-after speaker in the private sector.

And this is the irony. Most of the police investigations into Bibi involve the media in some form or another. For example, in Case 1000, Bibi is suspected of helping Arnon Milchan to secure his commercial role in the world of Israeli TV. In Case 2000, Bibi is accused of seeking a deal with the owner of Yediot Ahronot, the country’s leading newspaper, and at the expense of its major rival.

Yesterday, Sunday, the police finally announced it was formally pushing ahead with Case 4000. Here, the Prime Minister has yet to be summonsed for an interview. However, following an investigation by the Stock Exchange, seven close associates of Bibi and / or his friend, Shaul Elovitch are in custody.

So what? Through holding companies, Elovitch controls Bezeq, which has a near monopoly of regular phone lines throughout the country. While Bibi served as Minister of Communications, there were clear attempts by the ministry to ensure that Bezeq received financial and commercial benefits to the tune of hundreds of millions of shekels, although not all succeeded. Further, there are claims that Walla, an online news agency owned by Elovitch, deliberately provided favourable coverage of the Prime Minister and his family.

As Bibi sits in his office in Jerusalem, one can understand why he feels that there is a media witch hunt against him – and his wife, who has also faced charges as to how she runs their official home. Bibi has never been prosecuted. And his standing in the polls is little damaged, for now.

For all that, there is another point here, which I will describe in three parts. First, I did not forget Case 3000, where the police believe that many close confidants of Bibi secured a large military submarine contract unwanted by the navy. Second, there are numerous other politicians and civil servants under investigation, such as Ari Harrow ,Danny Dannon and Dudu Bitan, who are or who have been part of the Prime Minister’s closest circles.

And finally, let me revert back to Case 1000, where the suspicion is that the Prime Minister and his wife received gifts to the value of one million shekels. As asked by the Minister of Education, Naftali Bennett, why would a politician need such a benefit?

At the very least, it is ethically unacceptable.

15 February 2018

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According to the Bank of Israel, the outlook for the economy in the Holy Land remains very positive.

GDP is expected to grow by 3.4 percent in 2018 and by 3.5 percent in 2019. Inflation is expected to converge to within the target range during 2018 and reach 1.1 percent at the end of the year. The Bank of Israel interest rate is expected to remain at its current level until the third quarter of 2018, and rise in the fourth quarter.

While much is told about the impact of the start up economy for the past three decades, I would like to focus on one area where for years Israel has not featured so well, but times are a changing. And that is the area of international trade.

Historically, Israel has run a balance of payments deficit. In recent times, the figures have become more even. In 2017, for the first time, Israel’s exports topped the US$100 billion, a 5% growth in dollar terms over twelve months.

One continuous part of this change around has been the trading relationship with the UK. Combining both exports and imports, this was valued at almost US$8 billion in 2016.

Recent news explains why there is such a strong commercial bond, which is not just based around the dramas of the Brexit debate.

First, as was mentioned this week in the House of Commons:

The British Government helped to establish the UK-Israel Tech Hub, a non-profit organisation based in Tel Aviv and London, to help British companies looking for cutting-edge innovation or Israeli start-ups seeking to grow through the UK. Over the last 5 years the Tech Hub has generated deals worth £62 million.

Second, as reported by Reuters, the British embassy in Tel Aviv “launched a programme designed to help incorporate Israeli digital health technology into the UK and its National Health Service”. Three times a year, IBM’s Alpha Zone accelerator program and DigitalHealth, London will seek to seek out and mentor those Israeli companies, which can best service the HNS.

Barry Grossman, the British embassy’s Director of International Trade in Tel Aviv recently observed that “in the year following the referendum, Israeli financial institutions invested over £150 million in the UK”. Evidently, this bilateral partnership has much more to offer both countries.

14 February 2018

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More than a few years back, when I was involved in student politics, us sophisticated hacks had a phrase called the ‘the three biggest lies’. The most prominent statement was that ‘the payment is in the post’ – a line that could never be proved and thus ensured a few extra days of financial credit were secured.

Today, as a business coach and mentor, I have come to learn that I am faced by a similar ritual, only this time played out by my clients, typically those who are owners of small or medium sized enterprises. They set themselves tasks – call them homework assignments – but I know that there are never going to be completed.

As of old, there are three tales that frequently repeat themselves. Here’s what I mean.

Lie no’ 1: I am going to create a budget.

Everyone (just about) accepts the need for a budget. Far fewer understand what that means. In one sentence, a budget centralises on one page all the assumptions of both revenues and expenses over a future fixed period of time.

This challenge comes with two requirements: First, the effort forces leaders to ask questions about what they really want to do and to prioritise. Second, they need to verify their numbers.

Some people have these skills, and patience. Many a CEO does not, but refuses to recognise the fact, until it is too late.

Lie no’ 2: I am going to create the content for my website

Similar story here. In a small set up, typically the CEO is the founder. So he or she wants to be the one to describe the operation for the website or Facebook page and in their own way. Fair enough.

This implies that they know what they want to write and also how to write it. It assumes that they have set aside the time to write it. All three conditions apply in parallel. Appreciating this fact – that writing content is a talent that not everyone possesses – is evidently not so easy for people to internalise.

And the result is that as inertia. Actually, it is worse. A poor social media presence often implies lost sales.

Lie no’ 3: I am sure that they – the potential target – will buy once they have heard my pitch

Like every other part of a business, selling is an art form. It can be learnt. However, it is not that simple. Many a CEO seem to feel that their targets will just fall into place. Sales will happen, growing slowly but surely.

I find it staggering to consider the number of clients who come to my office in Jerusalem, explaining that for them, a sales meeting is a chance to talk and show off. It is the very opposite. It is session where they should spend most of their time listening.

To rephrase: Before you educate somebody about your own game – i.e. try to sell them something – you yourself are required to undergo a learning process conducted by the potential customer.

So, why the lies? Why do people not want to own up to what they do not know?

There is no simple explanation. Partly arrogance. Many of us are taught, incorrectly, that it is wrong to seek help. And another reason is that the business owner is trying to save time and, more importantly, money.

And with most other cases, if you lie, it costs you in the end.

6 February 2018

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I often have the feeling that when I sit down with a client for a session of business mentoring or coaching, they seem to expect that I am going to click my fingers and their worries will disappear into cupboard – just like in a Mary Poppins film. Add in the magical spiritual air of Jerusalem, where my office is located, and surely it has to be as simple as that?

They may sound a little arrogant, but that is how life can appear from my side of the table. Naturally, the truth is very different. However, what I do like is to post occasionally on twitter eminently helpful blogs from alternative sources that can inspire the CEOs of the small-to-medium sized enterprises (SMEs), who form an integral part of my working day.

What follows are three typical examples of what I mean:

Let us start with Facebook. First, the scope of this medium often escapes leaders of SMEs. They do not have time for the game. As I am used to hearing, cash flow and problem solving come first. What they are missing was succinctly explained to me yesterday by an Israeli expert in just one case study. By carefully defining the target market and launching a new video, he has provided over a dozen quality leads for a single Jerusalem restaurant in less than a month.

The changing rules of social media in 2018 were set out in a blog by Adam Hutchinson a couple of weeks ago. “Share all” on face book or a few extra stats no longer cut it. Paid ads, although the “P” word can sound painful to those on a tight budget, are the clever and brave way to go.

My second pick comes from Spencer Waldron, one of Israel’s marketing gurus. He has just written a worringly obvious blog entitled “6 storytelling mistakes to avoid“. As I commented back to him, what concerns me is the fact that while none of the points are spectacularly new, business leader after business leader repeat these faux pas. After all how many of us set off for a conference, expecting to be delivered a sleeping pill?

Here lies a clear takeaway for a business owner. Whether in a one-on-one session or addressing a larger audience, have something interesting and personable to say. Ensure that you stand out!

Finally, there is that well-worn adage that we must expect to fail in order to succeed. It is astounding how many people think that the opposite of success is failure, when that linkage only applies in a narrow context. Nick Foles, who led the Eagles to victory in the Superbowl, took the subject of failure one notch higher in a post match interview.

When you look at a struggle in life, that is just an opportunity for your character to grow…..If something is going on in your life, embrace it.

Just about every owner of a small organisation knows that leading and managing present a wealth of daily challenges. It is tough. However, as Noles has demonstrated, that is your very chance to do your best and to triumph.

31 January 2018

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Exports jumped 6% in 2017. Inflation hovers at around 1%. Unemployment remains low at under 5%. GDP growth pushes 3% or more. These are great overall indicators for the Israeli economy.

It is not too difficult to find stories of good news about what is happening in Israel vis-a-vis commerce and industry. For example, last week Prime Minister Netanyahu met with Chairman of the Board of Mitsubishi Corporation, Ken Kobayashi at Davos. According to the press release afterwards:

Israel is a major player on Mitsubishi’s map and added that they are now starting to consider investments in cyber and other areas. He noted that he intends to send a delegation to Israel soon in order to evaluate possibilities for investment and cooperation.

Looking at investments, 2017 was an excellent year. The US$5.2 billion figure represents a 9% upturn on 2016. Interestingly, Israeli venture capital was at its highest level since 2013.

Specific sectors are recording some spectacular growth. “420 Israel-based cybersecurity companies raised $815 million in 2017, up 28% from 2016.” In the medical arena, 13 of the most significant breakthroughs of 2017 were based in Israel, as reported by Tom Gross.

However, what I find most encouraging is the continuing development of the Jerusalem economy and how it strives to become more pluralistic. Labs/02, a startup incubator operated by Jerusalem-based equity crowdfunding company OurCrowd Management Ltd., plans to invest in around 100 early stage startups.

More significantly for me is how more and more Arabs are gradually integrating into the greater economic basin of the capital city. According to Bloomberg, this is one of the prime reasons why there was relative calm in the Jerusalem following President Trump’s recent declaration on the Middle East. While everything may not be perfect as yet, salary gaps are narrowing.

It is this acceptance and transparency that is at the heart of the success of the concept of the start-up nation. Unfortunately, and in contrast, American diplomats were violently chased away yesterday from a meeting held at the Bethlehem Chamber of Commerce.

Once Israel’s neighbours learn mutual acceptance and embrace it in full, then peoples of all backgrounds will be the direct beneficiaries.

26 January 2018

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

The Palestinian economy has never been large. Advocates of the cause of the Palestinian Authority (PA) have ritually blamed Israeli occupation for the financial woes of the people of the streets of Gaza and Ramallah. The threatened sanctions of the USA this month now force us to confirm the facts hidden behind the rhetoric.

There are two issues that cannot be disputed. The Palestinian economy is tiny compared to that of Israel. Exports in July 2017 were valued at a paltry US$8.1m, primarily to Jordan. And the continuing the struggle with Israel, especially through the use of terror from Gaza, understandably enforces the government of Jerusalem to restrict movement from the Palestinian territories.

Statistically, the economy is contracting again. GDP growth in 2017 was down slightly at 3%, and a further slow down is expected in 2018. There are few positives. West Bank residents have finally been allowed to receive 3G internet services in recent weeks. And overseas aid still plays a primary role is supporting key services. To take just one instance, The British Parliament reported in October 2017 that it funds “around 25,000 young Palestinians to get an education, provides up to 3,700 immunisations for children, and around 185,000 medical consultations annually.”

Therefore, it can only be assumed that if the USA is to cut at least US$100 million of aid to the Palestinians, that will be a significant blow for its social services. What is disturbing is how you have the feeling that the Palestinian economy could be managed so much more effectively and efficiently.

The World Bank long ago confirmed that under Israeli supervision the Palestinian GDP grew annually in real terms by 5.5% even beyond the Oslo Accords. That achievement is long forgotten. And corruption has long been endemic in Palestinian politics has closely documented in previous years by the Funding for Peace Coalition.

The evidence indicates that the pattern of poor financial leadership in Palestinian society has continued up to today:

In 2017 alone, despite their meager funds, the PA under President Abbas paid out over US$350 to Palestinians convicted of crimes of violence against Israelis. The sums vary according to the amount of death caused.
Earlier this month, Israeli customs officials:discovered the largest ever consignment – including thousands of items – of military clothing including vests for holding military equipment. Also seized were thousands of pairs of special military boots and winter jackets in camouflage colors. The Gazan importer of the consignment, which originated in China, was due to receive it via the Kerem Shalom crossing.
Presumably, Hamas had paid for the goods.
At the same time, we have learned that due to a power struggle between the PA and Hamas, people in Gaza are being forced to pay taxes. This will include the imposition of 17% VAT.
And of course, there is the near-farcical news item earlier this week that “even as the Palestinian Authority faces major funding cuts from the US, it has purchased a new luxurious $50 million private jet to be used by President Mahmoud Abbas.”

I would love to read a serious analysis of how much the Palestinian economy could grow by over 10 years if (a) the struggle against Israel was political rather than a military conflict, and if (b) transparency and accountability could be truly applied.

19 January 2018

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An article in Inc.Com reminds us all of the well-known lesson from the billionaire Warren Buffet. He can buy almost everything, but he cannot buy time. As Buffet explains, you do not have to have a full and crammed diary in order to be successful.

I believe there is a deeper message here. When I talk about time management, as a business coach and mentor, I am faced with a misconnect. On the one hand, there are those people who are busy , but not with what they should be doing. That is procrastination at its best. And then there are those business owners who are fully occupied, working on the tasks they have set themselves, yet still cannot produce results.

I have met all of these characters this week in my office in Jerusalem. Whenever faced with this topic of time management, my approach is consistent. First, I have noticed how many people these days have abandoned the concept of the old-fashioned diary. At best they use an app of sorts on their phone.

Let me be clear, for most of my clients, it is evident that a diary on the phone rarely works out successfully. And even if tasks are included along with appointments, they are almost never time-framed. That is a major mistake. scheduling a phone call or creating report is the same as having a meeting with yourself!

Second, almost invariably the uncompleted tasks revolve around the issue of money. It is as if the previous generation have educated them that asking for money, billing clients, achieving a positive cash flow are all considered poor qualities in a person.

For example, one of my clients told me that she has always aspired to be a person of modest means. Excellent, I responded. However, she could not explain why this attitude does not allow her to have extra money to spend on hobbies, on children or in the next stage of his business.

Silence! I had hit the raw nerve.

For whatever reason associated with the past, procrastination occurs when we cannot appreciate the full “value” of what we are trying to achieve. Recognise that truth and you will find that the bottom line in your business will start to improve rapidly.

14 January 2018

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Categories: Afternoon Tea in Jerusalem, Business, Israel

A series of stats published a week ago revealed just how successful the Israel economy has become.

Inflation has run at less than 0.5% p.a. for the past four years.
In a country of over 8 million people, there are 3.4 million vehicles on the road.
Incoming and outgoing tourism has never been so strong.

And so the list goes on. From a historical perspective, the numbers are even more stunning. Below is a set of data available from the Start Up Nation Facebook page:

No automatic alt text available.

Israel’s GDP per person is measured at US$40,000. By way of comparison, the numbers for Britain and Germany are US$41,000 and US$42,000 respectively. To emphasise how the economic map has changed, the proposed budget for 2019 reveals that the biggest taker of resources will be the Ministry of Education and the not the defense sector.

So where is the “proverbial” but” in all of this glory? First, the statistical survey also pointed out that 13 senior current or prior politicians and civil servants are now under investigation by the police for various forms of corruption. That includes the Prime Minister and some of his closest aides. In parallel, it has been the case for many years that within the OECD community Israel has some of the greatest levels of disparity between the haves and have nots. Concerning!

Coincidence it may be, but this week also saw the leak of a video showing the son of the Prime Minister at a strip club. The film was taken surreptitiously by his chauffeur, who is paid for by the state. He was chaperoned by a body guard, also provided at the expense of the taxpayer. The haves and the have nots.

The initial impressive stats do not lie. However, the reason why more people are not benefitting from this additional growth is all too apparent and very disturbing to see. Time for a change.

12 January 2018

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Over the next few weeks, I have been asked to give several talks in the Jerusalem area on the theme of setting up a new business. And as I have put together the presentations, one strong central theme comes through. Can you make the impossible possible?

Psychologists teach us that starting anything new is not easy. However much you plan ahead – market strategy, cash flow, team recruitment, et al – a new enterprise is full of unknowns. One single unforeseen event, such as an unexpected change in government policy or a new local competitor, and all that prior effort could be seen as irrelevant. Time to give up?

Well, not necessarily. This is when we are all required to recall the theory of “the second wind”. Yes it really does exist. Coined by William James and described in fascinating terms by Maria Popova, we can learn how to transcend our perceived limits.

Compared with what we ought to be, we are only half awake… We are making use of only a small part of our possible mental and physical resources.

There is a sporting equivalent. Matthew Syed, writing this week in the Times of London, discussed how we can become so much stronger, almost ironically, at the moment when adversity is striking us (literally?) in the face. Arguably like a new commercial enterprise, Syed states that:

When you walk into an arena, you are naked. If you have weaknesses, they are likely to be exposed. If your resolve is lacking steel, it is likely to fray just when you need it most.

Syed goes on to cite specific cases of sporting heroes who initially dived, such as Andy Murray who was humiliated by Roger Federer at Wimbledon in 2012. And Michael Jordan made a video of his defeats, so that he could succeed even faster.

As a business coach and mentor, I am often called in by those, whose ventures are struggling in their initial stages. I find that very often, they know what needs to be done to alter course towards achievement, but they lack that extra layer of confidence. I would suspect that some call this resilience. And that is where an outside voice can show them that they have what it takes.

However, they have to learn to dig oh so deep to find it. That is the point when they stop allowing the seemingly impossible to get in their way and when the business begins to thrive.

5 January 2018

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

The first week of 2018 has been a challenging one for my clients. Several of those who have braved to venture into my office in Jerusalem have been forced to come up with some specific targets for the coming twelve months….and then create an action plan to reach the goal. Not so simple as it sounds.

While this is a fairly common strategy for us business mentors and coaches, I was prompted into enforcing this line approach by two very different items that came my way recently. First, Dr. Robert Brooks wrote a fascinating piece, arguing that it is never too late to set ourselves challenges. Although he did not say so, I could add this is something we should be able to apply as managers and business owners.

And then I was privileged to watch an mazing documentary entitled “Impossible Dreamers”. It revealed how pensioners in the USA, right into their 90s, wake up every morning to run, walk, or swim competitively. They seek to break records every time they hit their sporting arena.

Back in my office, I have offered these inspiring stories to my clients. Set a target. If the target is too timid, I encourage them to raise it significantly. No excuses permitted.

What is interesting to observe is the frequent push back that I receive. It is a sense of panic, almost as if they have been “instructed” or conditioned never to go beyond what others had once defined as acceptable. Yes, you could have once cast me in that category as well.

A typical objection is the ‘what if’ statement. What if I reach that extra level of sales, then this, that and the other bad thing will happen. Of course they might be right, but I explain to them that those problems can be solved downstream, not today. Either you stay where you are with low sales and thus poor profits but relative safety – the proverbial comfort zone, or you can move upwards. CHOOSE!

To be practical, let me suggest the following four steps. First, identify what income you really want to take out of your business. Second, calculate those sales that are required to drive that income. Third, create the resource model – staff, hours, advertising, etc – that will deliver your target. If the business model is sound, investing in additional equipment or whatever should not be a problem.

Finally….do not be put off by the challenges involved. Only you are the one who can define the meaning of the word “possible”. May 2018 be a year of success, health and happiness for you and those around you.

4 January 2018

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

Last week, Lorde, a talented singer from New Zealand, cancelled a trip to Israel, fearing it would be seen as an act that supports the actions of the Israeli government against Palestinians. In an ironical twist, she actually ended up highlighting just how open Israeli society is.

Lorde’s justification of her decision, encouraged by BDS – the campaign which supports a boycott of Israel – is filled with hypocrisy. For example, she is still committed to travelling to Russia, whose leader has sent war planes to massacre thousands in Syria. In fact think about it. Can you imagine artists of any kind refusing to perform in …well let’s say France, because of that country’s policies in parts of Africa? And what about the UK or the USA or……? Hypocrisy!

At the same time that Lorde was speaking out, it emerged that the Israeli economy had grown by 3% in 2017. This achievement lies in parallel with the OECD average for the period. Estimates for 2018 expect a slightly improved result.

Nothing specifically remarkable in that, except when you begin to look at two of the key growth sectors. I shall start with exports, which shot up 5% in the year and topped the significant mark of US$100 billion. Two interesting facts emerged from an analysis of the figures. Israeli companies have made a massive return to the European scene, an area where BDS is historically strong. Second, of that US$100 billion, 3.5% includes items sent to the Palestinian territories.

In other words, the very people that Lorde feels she is helping are doing the opposite to her. They are sticking with the old adage that peace is usually achieved when two sides find a way to cooperate.

The other sector, which I wish to highlight is tourism. 2017 was another boom year for the industry with over 3.6 million overseas visitors to Israel. Over 50% as ever were not Jewish, and nearly 60% were first-time visitors. That is a lot of people not just rejecting the calls of BDS, but then also then sharing their stories back home afterwards. Just as pertinent is the fact that around 200,000 locals are employed directly by the industry, a relative large proportion of whom are not Jewish.

Less than three decades ago, Israel economy was relatively insular, protected by tariffs. Today, it is a start-up success, whose model is copied by France, the UK and others. Artists from all over the world continue to perform in the country, happily and openly, including the group Queen, Bryan Adams, Culture Club. Lorde’s misguided gesture only emphasised these positives, while ensuring that she remains bound up in an argument of hatred.

29 December 2017

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Categories: Afternoon Tea in Jerusalem, Business, Israel

Professor Leo Leiderman is the chief economist at Israel’s largest bank, Hapoalim, and has held senior positions at Deutsche Bank, The Bank of Israel and elsewhere. So when he says that the Israeli economy is starting off 2018 in its best position since 2006, that is a statement worth listening to.

Leiderman was speaking at a conference earlier this week in Israel. And the core stats speak for themselves. The OECD has already predicted that growth will remain steady and bullish for the next two years at over 3%. This is due to the impact of new gas reserves and low unemployment. The ‘start up” sector remains strong. Exits in 2017 were worth more than double the 2016 at US$7.4 billion, and these numbers do not include Intel’s purchase of Mobileye for US$15.3 billion nor Mitsubishi picking up NeuroDerm for US$1.1 billion. And key commercial sectors like tourism are bubbling away with record numbers.

So is there a catch? It is interesting that 2017 was a year when many big Israeli financial moguls were sent packing. The most glaring story is the demise of Teva, previously the country’s largest private company. The greed and misjudgment of the board brought the conglomerate humiliation. In turn, this has led to a new CEO implementing a draconian rescue plan. It is evident that a new generation of business leaders is emerging, such as Nati Saidoff: quieter, less demonstrative, whose ambitions do not require (for now) bank loans that cannot be repaid.

That is positive.

What about the housing market. While inflation is barely recognizable, the price of accommodation is still rising by around 5% per annum. The population continues to grow. Not enough land is released by the government, which continues to benefit from huge taxation on real estate transactions. New couples just cannot afford to buy. Liederman is vocally concerned.

However, the most crucial factor for me is where all the new wealth is going. Israel has one of the highest levels in the OECD of discrepancy in between the best and worst off. Now, weigh that fact against the corruption issues encroaching on the current government, the Prime Minister and senior civil servants. Only this week, it was claimed that the PM’s wife, Sara Netanyahu, insisted on receiving expensive gifts from tycoons such as Arnon Milchin.

There is something inherently imbalanced in the way the rulers are looking after (or not) those under them. There is a feeling of the few rich people getting richer, while the rest………

Is that far fetched? Just consider the vested interests. Here are just three examples. The workers at the ports and airports that enforce restrictive practices, as their wages remain high (for the most). Fruit and vegetables from abroad are heavily taxed, even at times of year when the items are not available in the Holy Land, thanks to the farmers’ lobby. And car importers, Unilever and many companies are allowed to maintain monopolies so that others cannot compete, ensuring their prices remain unchallenged.

Where is the government on all of these issues? I am not sure. I am subjected to a vast amount of information about potential corruption, but I see so little reported about new genuine reforms on behalf of the man in the street. That is what really worries me (and Liederman) about the economy in the Holy Land in 2018.

25 December 2017

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

Israel’s Prime Minister is currently under police investigation in at least four different cases. In parallel, Teva, until recently the largest company in the Holy Land, has seen its power melt away in a sea of corporate debt. Although there is no substantial connection, the two subjects are connected, unfortunately.

Let me start with the Parliamentary scope. In recent years, several Israeli politicians, including a former Prime Minister and a President, have landed up in prison. Now the fact that the serving PM, Benjamin Netanyahu, has been questioned may be seen as the new norm. His party’s rating in the polls has barely dropped, for now.

Bibi, as the PM is known, claims innocence on all counts. And there are still no recommendations to press charges, to date, even if he has been visited several times by the police. In no order of preference, it is claimed that:

he received favours from a local press baron.
he received favours from people of wealth, possibly in return for legislative support.
his lawyer and other confidants ensured a submarine was bought from Germany, when it may not have been needed and this then resulted in substantial commissions paid out.
a friend was able to run Bezeq, the national telephone company, while he remained as acting Minister of Communications.

In addition, his Likud party has pushed through, although not always succeeded, a welter of legislation that is heavily biased towards key sectors of the electorate. And that sectorial effort had been led until two weeks ago by another confidant, David Biton, who himself is now being investigated for possible financial misdemeanours in his home city of Rishon Lezion.

I have no idea if Bibi is or is not guilty. At the very least, he seems to be surrounded by advisors, who have evidently slipped over the line of what is acceptable in public governance. In my view, that is equally unacceptable . This demands his immediate acknowledgement of responsibility, which has yet to be admitted.

Teva is (was?) the largest generic pharmaceutical company in the world. It grew from modest beginnings. It was to hit on a wonder drug called Copaxone and made a fortune from it. Based solidly in the Tel Aviv and Jerusalem areas, most of its workers and profits are located overseas. Shares in Teva were considered “shares in the State”. You could not go wrong!

When no replacement was found for Copaxone, the directors decided to expand through acquisition. After several successes, they approved the takeover of Allergan for over US$40 billion, and thus draining most of its US$5 billion reserves.

That debt has proved too much to bear. The company is to lay off 25% of its workforce, which will include the closure of two flagship factories in Jerusalem.

And who are the directors? A small group of leading industrialists, who have grown up together in the business world, many of whom have no experience of the pharmaceutical industry. They are the ones who made rash decisions, impacting on the lives of thousands of relatively poorly paid workers, while they received payment for their services way above the average wage. And this privileged group will apparently face no payback for their recklessness.

My point is as follows. Both those elite politicians and those secretive leaders of finance felt that they were so elite and secretive that they had the right to do what they want, and that they could not be touched. Ironically, in an electronic age when we have heard of news before it is made, they all simply felt they could “get away with it”.

Greed, avarice, lack of care – call it what you want, it is generation of leaders that have simply misunderstood what leadership really means. Alternatively, they knew but power corrupted their decision making. They all need to go – both lots of them – and go now.

14 December 2017

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

It is an accepted fact that in most countries, small and medium sized enterprises (SMEs) make up over 95% of the economy. Israel is no exception to that rule. What makes Israel a case study to analyse is many a successful high-tech starts up has emerged from this grouping.

Just recently there have been several articles on the subject in the Hebrew press. I have pulled the numbers together and they reveal much.

According to CofaceBdi, of the 0.5million enterprises in the Holy Land, 51.5% are self employed or 1-person companies. A further 172,000 have up to four employees. Barely, 3,582 employ over 100 people.

To show how emphatic is the role of the small operation in the economy, 110,625 set ups have annual revenues of under 100,000 nis (almost $30,000). By way of comparison, the average wage is about 9,000 nis per month.

There are probably two key areas where small businesses suffer. The first is the level of bureaucracy and / or paperwork. Here the banks have made big improvements in recent years. And last week, the government announced that receiving a business license should become an issue of weeks rather than 12 or more months.

The second issue concerns local taxes. Most municipal authorities fix rates without any due consideration for SMEs. They are seen as fair game rather than a way to generate life into a suburb. For example, a business may have to pay for a sign outside their shop, fire license for the premise, and even a security tax. And if you are a food outlet, you have to add in the costs of supervision from “both” the Ministry of Health and the local rabbinate. There is even a by-law, still enforced, not allowing to prepare dough and bake on the same premises.

It is worth considering that Israel is a country of immigration. Many entrepreneurs were born overseas. Thus they have a problem with both the language and also a lack of understanding of the local corporate culture of mentality. This will be especially true in centres such as Jerusalem, where the sector of business mentors and coaches is rightly prevalent.

A positive note was struck by a report from the department for small businesses within the Ministry of Economics. In 2016, there was a 28% increase in the number of SMEs reporting an increase in profits. Just as significant, there was a 2.6% increase in the total number of businesses, an encouraging indication of the future growth expected in Israel’s economy.

10 December 2017

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

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

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

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

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

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

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

As I explain, there are at least three outcomes:

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

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

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

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

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

7 December 2017

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

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

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

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

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

Amazon

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

Israeli gas exports to Europe

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

European cars in Israel

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

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

2 December 2017

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

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

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

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

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

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

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

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

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

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

Pages

UK – Israel trade links

So who is investing in Israel? The Chinese?

Business coaching – keeping the good employees

Making sense of the criminal charges against Netanyahu

Israel’s strong economy – the UK connection

The 3 lies of small business owners

3 amazingly useful postings for small businesses

Israel’s economy doing well, and here’s why

The Palestinian economy’s core problem

Time management: Finding the value in procrastination

Israel’s economy: growing and changing for the better

The art of setting up a new business: Making the impossible possible

Setting yourself a goal for the new year

What Lorde revealed about the Israeli economy

As Israel’s economy enters 2018, what next?

Is Netanyahu guilty, of the Teva syndrome?

Small businesses in Israel: How many and just who succeeds?

Do you have a goal for your business?

Business is burning brightly in Jerusalem

Israel’s medical system: The Palestinian interface

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