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Afternoon Tea in Jerusalem Blog

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

3 reasons why the Gaza economy is suffering, but….

26 May 2016
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Categories: Afternoon Tea in Jerusalem, Business, Israel, Palestinians

As I have stated on more than one occasion, the Palestinian economy could and deserves to be so much stronger. Yet, in the words of that great political American commentator, Britney Spears, it is a case of “oops, I have done it again“.

Here is what I mean: –

  1. It turns out that Hamas continues to use its resources to invest in a creating a war economy to fight Israel.Weapons are still smuggled into Israel, diverting investments away from social needs.
  2. Israel has just started to allow concrete imports back into Gaza, despite the fear that it will used to build more offensive  tunnels rather than new homes, as conceded by the UN. And while the tunnel economy continues to thrive, Hamas has managed to bulldoze away some of the last vestiges of Christian history in Gaza.
  3. And then there is the question of financial aid …or taxes? We know that the Palestinian economy receives 70% of its funding from overseas. And we know that much of the UNRWA budget is neither transparent nor accountable. But given all that, why does Hamas still need to impose higher taxes on those very people who should be benefitting from such large handouts from Western taxpayers?

Samir Abu Mudallala, an economics professor at Al-Azhar University, echoed Ajala’s assessment. In a March 19 statement to Kofia Press, Mudallala said, “Forcing new taxes on the Gaza Strip is a form of economic piracy and may worsen the current economic situation. It will also deepen the people’s scourges and increase poverty rates and food insecurity.”

Gazans deserve better. It is time for donors to face the truth.

Looking for Israel’s economy – May 2016

25 May 2016
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Categories: Afternoon Tea in Jerusalem, Business, Israel

It has been a notably busy week for Israel’s Prime Minister, as he stitches together yet another coalition government. And while this predictable political farce is played out in Jerusalem, the economy is taking yet another hit.

I wrote last week that “proactive government financial initiatives are sorely lacking“. We now know that there has been a 55% increase in requests for bankruptcy proceedings over the past three years. To summarise a report from Bloomberg, Israel seems to be “catching up at falling behind“. Not very complementary.

You can blame the global economy. Others shout that the shekel is considerably over valued. All very true to some extent. However you spin it, even Moody’s is hinting that it may be time to lower Israel’s credit rating.

The below-par growth outcomes add uncertainty to the authorities’ 2.8% growth assumption and in turn the 2.9% of GDP fiscal deficit target for this year. In turn, a worse fiscal outcome would imperil the continued improvement in the government’s debt metrics.

And that could mean that it will be more expensive for the Finance Ministry in Jerusalem to raise money on the world’s financial markets. That impacts on everyone. Ouch!

So, quarterly growth for early 2016 came in at 0.8%. Exports slightly decreased in the same period. Production has dropped off by over 10%, even though unemployment at 4.9% has not seen such a low level since 1983. And the housing market, one of the core bench-markers for Finance Minister Moshe Kahlon, has seen prices rises of 8% – double the rate of the previous 12 months.

And what is the Prime Minister Netanyahu doing about all of this? The financial newspaper Globes believes that he is avoiding core financial issues. Ha’aretz newspaper sees the successes of the past going up in smoke, while the Emperor is fiddling around. Not very encouraging.

The cheerful news for the Prime Minister is that with the new coalition deal, his job is safe for the new few months if not next few years. As for the rest of us………….

Reporting the Palestinian economy – some good news

19 May 2016
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Categories: Afternoon Tea in Jerusalem, Business, Israel, Palestinian Society, Palestinians

Reporting accurately on the Palestinian economy has never been easy. If you look carefully at the documents of the World Bank or the IMF, they often contain statements that data collected from Ramallah and Gaza is not of the most reliable standards. That said, various news items more recently have given the outside world a better understanding as to how revenues are used by the Palestinian Authority and by Hamas.

Why is this important for outsiders? Because according to the OECD, approximately 70% of Palestinian expenditure comes from overseas aid. And the overwhelming majority of that aid comes from the generosity of Western taxpayers, who in turn are suffering from their own economic uncertainties.

The OECD estimates that the Palestinians receive around US$2.5 billion in direct aid annually. Ostensibly, the USA is the largest single donor, but much of UNRWA’s support comes from the pockets of European citizens. 49% of the total sums are designated for ‘other social infrastructure’, whatever that may mean. (BTW, total annual contributions to global aid peak above $130 billion. Thus, per capita, the Palestinians receive a very healthy share of the total pool).

And where specially does this money end up? Here are four quick case studies:

  1. A few weeks ago, I discussed how in spite of the checks in place, monies from the UK and from the EU seep through to political prisoners and terrorists. Coblogger Arnold Roth has expanded on this theme. He believes that “the perpetually financially strapped PA spent $144 million paying salaries” in 2014 alone.  Thus, using the 70% factor, donors (including British taxpayers) paid about US$100m towards helping these ‘deserving people’.
  2. On a similar note, the Palestinian commentator Khaled Abu Toameh observed this week that “The Palestinian Authority has used international funds to build prisons and detention centers in the West Bank where torture has become the norm.” He outlines how the Independent Palestinian Commission for Human Rights (ICHR) has received 782 complaints concerning torture and similar abuses. Again, the money to maintain this state of affairs primarily came from overseas.
  3. Moving away from direct political issues, even culture is not immune to the misuse of funds. The New York Times revealed that a spanking new museum in Ramallah was opened on the basis of a US$24m budget. This is to be a great celebration of Palestinian history and art. However, due to internal wrangling, there is not one exhibit for inspection. So, I am forced to ask, where did the budget disappear to and how was it accounted for in front of the donors?
  4. And there is UNRWA, where the EU is proud to show off its contribution. VP Mogherini announced on 4th April:

Since 2000, EU has provided over EUR 1.6 billion to UNRWA out of the European Neighbourhood Instrument (ENI) allocation for Palestine. The bulk of EU aid for UNRWA, EUR 82 million per year for the period 2014-2016, has gone to finance its General Fund (or  Programme Budget)………On top of this, there are ad hoc temporary projects financed via other instruments. Humanitarian funding to UNRWA amounted to EUR 5 million both in 2015 and 2016 (of which, EUR 4 million for shelter assistance in Gaza)……….

Well that is clear. However, less than a month later, we learnt of an event that took place at the UNRWA refugee camp in Aida, near Bethlehem. This celebrated a violent attack on Israeli buses a few days previously. And it would appear that this abuse of funds is not one isolated party.

I could list other items. For example, Hamas has returned to building offensive tunnels to fight Israel. Such an operation can only be carried out by syphoning off raw materials meant for the reconstruction of the area.

If there is good news it is that more and more of this misuse of Western generosity is being reported. However, sadly, Western governments, the EU and others are failing to take serious action. Meanwhile, the instigators of the verbal and military war against Israel grow richer.

Give aid by all means, but make sure you can check where it is going in a transparent and accountable manner. Otherwise, send it to those who do not just need it but will…………..actually receive it.

Netanyahu prepares to say goodbye to his economic achievements

17 May 2016
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Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem

The success of the Israeli economy is well documented. The GDP of the Holy Land has more than doubled since the beginning of the millennium. And for much of that time, Binyamin Netanyahu has either been Minister of Finance or the Prime Minister.

For at least a year, I have been warning that this achievement is going to become a dream of the past, unless politicians wake up. However, with current coalition politics determined by a majority of one vote, proactive government financial initiatives have been sorely lacking.

This week, we learnt that:

On top of this gloom, it was revealed that leading domestic companies  such as Check Point and Teva have benefitted from billions of shekels in tax rebates. All legal, but the announcement comes at a time when the Finance Ministry is threatening that the public will have to put up with more cutbacks in key social ministries.

The only clear visual response from Netanyahu so far is that he is demanding a budget based on a 24 month, and not a 12 month, cycle. He faces opposition from the Minister of Finance and the Bank of Israel. However, there is no clear structure to suggest what the move could achieve, but this is what the Prime Minister has set is eyes on.

Are there any bright spots? Well, the economy of the start up nation is beginning to reach the Arab sector. And The Calcalist newspaper was still able to identity 50 leading Israel start ups to watch in 2016.  But more than that……..?

What next? Who knows? Even the proposed in flow of cash from new offshore gas reserves has slowed down.

And where is Netanyahu? Telling off his generals in public, trying to create new political coalitions, or arguing with American presidents. That is no way to run a largish and successful economy.

Israel’s economy Spring 2016: The good, bad and ugly.

11 May 2016
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Categories: Afternoon Tea in Jerusalem, Business, Israel

The recent news emerging from the Israeli economy is quite mixed.

Superficially, all seems well. Fitch has affirmed Israel’s grade A credit rating, mainly as a result of the strong fiscal picture and excellent tax collection performance. On the high-tech front, overseas investors are very prominent. For example, HP is launching a new group to seek relevant start-ups for partnerships. Part of that focus will include the Holy Land. Similarly, the CEO of Oracle, Safra Katz, has publicly announced that her company will be seeking more Israeli acquisitions.

Very promising. However, there is a very gloomy side to the picture. It is dangerous to rely on one-off stats, although the 22% drop in exports for the first four months of the year is a major concern. What worries me more is the way politicians are driving the economy without due notice of the warnings of others.

The most prominent issue is the bizarre desire of the Prime Minister, Benjamin Netanyahu, to secure a budget for a 24 month period. For the record, there is a barely another country in the world that does not keep to a 12 month planning period. In fact that rule generally applies to commercial companies as well.

The world economy is considered unstable. Thus, long term planning is problematic. On a micro level, Israel is constantly embroiled in military fights with neighbours – another reason why accurate forecasting can be erratic. In fact, other than allowing for an strengthened government coalition, there is no obvious need for a two year budget. This seems to be a policy which has been created to bolster short term political interests rather than the future growth of the economy.

And what have a nasty smell to it are the continuing and developing strengths of vested interest groups. The national lottery – Mifal Hapayis – has seen a near doubling in contributions from the public over the past year. However, handouts have remained at a similar level, while salaries have left up. Additionally, more and more Israeli names are coming to the fore in the Panama papers, which somewhat explains why the middle class is forced to pay more and more taxes. And those government ministers with the ear of the Prime Minister seem to be ending up with sweeping 1984-type powers of the directive. Nothing illegal, but you have to look hard to find ‘good governance’.

Yes, the Israeli economy is steady. My business mentoring clients with retail outlets feel that sales are on the up. And yet, underneath something smells wrong. The signs are worrying to say the least.

The mobililty in Israel’s mobile high-tech scene

9 May 2016
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Categories: Afternoon Tea in Jerusalem, Business, Israel

Via is the latest in a lengthening string of Israeli mobile services that are changing the way we move around cities, or further. Operating primarily in the New York City and Chicago regions, the application enables tens of thousands of passengers each day to share their ride with others heading the same way.

And this is why the start-up has just raised a mere US$100m in funding. Not bad for a four year old outfit!

Truth be known, Via is merely following on from other successful Israeli firms, who have found a niche in the field of transportation. For example: –

  • Waze is a highly practical application that allows even the most inept driver to plan a route, discovering traffic jams and police traps in advance. The company is backed by a billion dollar investment from Google.
  • Moovit enables its customers to calculate which is the best form of public transport to use. The company value is assumed to be around US$0.5billion.
  • Gett, the major competitor to Uber, is now valued at about US2 billion.

And so the list goes  on, even extending to international sea freight.

Barely four months ago, top analysts were predicting that one of the key trends in 2016 would be the onset “of more investment in sharing economy companies to reduce the environmental footprint of various industries”. Any guesses at this stage how Israeli start ups are preparing for 2017?

3 things a business coach can learn from British sport

5 May 2016
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Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem

It has been a crazy and somewhat successful few weeks for British sport. And amongst all the fuss, TV reporting and ticker-tape, when you look closely enough, there have been some big take-aways for those involved in business coaching or mentoring.

I live near Jerusalem, Israel, which is thousands of miles away from the action. And yet, I have seen clear deliverables that I can pass on to my commercial clients as their coach.

For example, you can barely find a snooker club in Israel. On Monday night, in the wonderful Yorkshire city of Sheffield, Mark Selby beat Ding Hanjui in the final of the world snooker championship. For Selby, heralding from nearby Leicester, this was his second such triumph. Years ago, his parents did not have enough money to help him learn the craft.

Ding was born in China. He has been living in Sheffield since he was a teenager. Sheffield has been hosting the finals for years and will continue to do so for another decade at least. In other words, the Ding family had internalized from an early stage where their ‘target audience’ is located. They then deliberately targeted the region in order to be near the money. LESSON NUMBER ONE.

A few hours previous to his triumph, Selby’s home football club, Leicester City, secured the English Premiership title. Never an easy achievement, these players were 5000 – 1 rank outsiders at the beginning of the season. What was their secret to success?

There have been many analyses. Several have pointed to the qualities of their manager, Claudio Ranieri, which just seemed to fit the moment. I looked at their squad. On paper, they are shambolic load of misfits, which you may find in lower leagues – a kind of Dad’s army outfit. They had no obvious-looking international stars.

However, they played and fought together as a team, which is what any business owner or manager needs to understand. You cannot do it all by yourself. LESSON NUMBER TWO.

And then there is the English cricket team. For all their glorious history, in the one day format of the game, the squad was considered a joke on the international circuit. However, with a new coach and a slight tinkering of the team members over six months, England oh-so-very nearly became world champions in April in India.

One of the key changes the coach had introduced was to allow players to express their natural talents more freely. In other words, they had been selected not only because of their skill-set. They had a natural belief in themselves, which had been too stifled in the past. It was time to release that strength.

Creativity is important on a playing field and as well as in a commercial environment. LESSON NUMBER THREE.

The beauty of all this for me? I have given myself the perfect excuse not to do any more business mentoring, but to go and watch some more sport. Will some people call that an excuse to procrastinate?

5 Unexpected tips that help improve our business lives

1 May 2016
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Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem

Last week, I was annoyed by the blog “10 daily habits that will radically improve your life“. Full of interesting ideas, I found most of them slightly irrelevant.

And this prompted the question: What is it that we should be doing to improve our commercial lives – usually something incredibly obvious and practical – but we feel we do not need to have time for it?

First, let me refer to the original article. Amongst the topics, it referred to wearing better clothing, reading more often and moving house. It also encouraged people to write. From my standpoint, none of this is bad advice. However, I feel my work as a business mentor in the Jerusalem area allows me to offer more direct and useful tips. Within in a few minutes, I had come up with about 12 counter points, and here are my leading five: –

  1. Create a balanced diet. So many people that I meet from across the globe try to cheat the system, claiming they rarely have time for breakfast, let alone lunch. Let me be blunt. Your body is an engine. If you do not feed it quality oil, it will become tired and start polluting the surrounding environment. You will not function effectively with your colleagues, and eventually clunk out.
  2. Develop a hobby. We all concentrate so much on our immediate work surroundings, devoting beyond 12 hours a day, that we leave little time for our own pleasures. Time and again, I have shown clients that by pursuing an outside activity – sport, charity, theatre, etc – you not only feel of more value. Incredibly you introduce additional skills that can be taken back into your place of work.
  3. Choose something from your wish list and go for it. A couple of years ago, I wrote out a short wish list of things that I would love to do. It is multi-purpose, cutting across themes, continents and groups of people who know me. More than just putting it down on paper, I have started slowly to implement the ideas. Life now has added zest,  and that new motivation finds its way into the office space.
  4. Set a time in the day to check your emails and another time for Facebook and digital chit-chat. I suggest the morning and the evening respectively. Such a policy will save you potentially hours every day. And you will not miss out on too much. Life will continue, just as it has done for tens of thousands of years previously.
  5. Learn to smile more. The effect can be stunning. You will encourage others to be more proactive on your behalf. Check it out today.

Have a great week at work!

UK taxpayers’ contributions to Palestinians – more about the true beneficiaries

28 April 2016
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Categories: Afternoon Tea in Jerusalem, Business, Israel, Palestinian Society, Palestinians

My post earlier this week about “UK taxpayers’ contributions to the Palestinians – Who benefits? ” has proven to be very timely.

For example, I noted that the UK government struggles to fund joint cooperation programmes between Israeli and Palestinian groups. I was encouraged to read a news release yesterday from the House of Commons, which confirmed that:

As many as 25 Conservative MPs and Lord Polak CBE have written a joint-letter to the Secretary of State for International Development, Rt. Hon. Justine Greening MP, calling on her Department to consider Israeli NGO Save A Child’s Heart (SACH) for funding support.

The MPs write: “Having seen the work of SACH at the Wolfson Medical Centre first-hand, we believe that further UK Government involvement in this laudable charity would be extremely worthwhile”.

Over 50% of the 4000 children who have received life-saving heart surgery from SACH live in Gaza and the West Bank, with the rest coming from across the developing world. The charity also trains physicians and nurses from these countries, providing them with in-depth postgraduate training.

At a time, when the Daily Mail newspaper and others have highlighted the loose way overseas aid is distributed, supporting SACH could only improve the lives of thousands. More importantly, it will allow Palestinian children and their parents to see how Israel need not be seen as an evil enemy.

However, as I asked in my original piece, why is the UK government not seen to be fully transparent and accountable in its funding of Palestinians? And I stress: The issue is not if the Palestinians deserve assistance, but who receives it. The repeated stories of corruption are numerous. And there is no doubt that Palestinian terrorists and their families benefit from overseas aid.

On the latter subject, Palestinian Media Watch has just released a 15 page report, detailing how both the Palestinian Authority (PA) and the Palestinian Liberation Organisation (PLO) have repeatedly hidden the truth from Western governments. Bluntly speaking, both the PA and the PLO subvert the generosity of Western taxpayers. Millions end up with those who have carried out acts of violence against ordinary civilians!

This has to stop. And one way to do that is to ensure that all UK overseas aid is fully scrutinized. And that includes knowing who the independent auditors are and what is their mode of operandi. Otherwise, the unworthy will get richer. More people will be harmed or worse. And British taxpayers will end up throwing away yet more money.

UK taxpayers’ contributions to the Palestinians – Who benefits?

26 April 2016
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Categories: Afternoon Tea in Jerusalem, Business, Israel, Palestinians

As declared this year in the British Parliament on February 9th:

The Department for International Development (DfID) provided £349 million in support of Palestinian development from 2011-15 and will provide a further £72 million in 2015-16, of which up to £25.5 million will be provided to the Palestinian Authority. This year, UK aid will support 36,000 children in primary education and support 270 enterprises to improve their annual sales or productivity.

What is the equivalent of such sums for the British taxpayer? Well a £349 million injection would wipe off the debts of the NHS trusts in England. Very useful, if you could get hold of it.

On 30th March, it was further announced that:

As part of this support, between 2011 and 2015, DFID provided over £3 million to the Facility for New Market Development Programme and Palestinian Market Development Programme, which has helped businesses expand into new markets and products, and supported the creation of over 2800 new jobs. DFID also provided £2 million to the UN Relief and Works Agency’s which supported the creation of over 45,000 short-term jobs for Palestinians in Gaza who have been affected by movement and access restrictions.

In this case, the numbers do not appear to be consistent. Could £3 million over 4 years really help to create 2,800 jobs? That works out at about £1,000 pounds per job. Maybe. However, £2 million to support 45,000 short term jobs? That is £45 per position. No way!

So what is the fascination with the UK and its apparent need to give to the Palestinians in such generous and unlimited quantities?

Yes, there is deep poverty in parts of the West Bank and in Gaza. It is generally accepted that until that the economic despair is resolved, it remains a potential cause for renewed conflict with Israel. And some believe that it is the duty of Europeans to redress the imbalance caused by America’s massive military aid to Israel.

Even if that baseline remains unchallenged, there are two questions that dominate the debate about the size of the contributions just described. (And these sums do not include support for NGOs and the massive funding via the EU). First, the Palestinians have consistently received what has previously been described by the World Bank as “the largest amount of money per capita in the history of foreign aid”. So why do they keep demanding so much more? Second, where does the money go? Who benefits?

It is the latter issue that has so concerned me over the years. For example, the recent scandal of the ‘Panama papers’ revealed cited at least two Palestinians, who you would have hoped would not appear.

  • The son of President Abbas, Tareq, and his “holding company worth more than $1 million in the British Virgin Islands”.
  • Muhamed Mustafa, former deputy PM and now head of the powerful Palestine Investment Fund.

A smell of possible kleptocracy? Ironically, around the same time of the leaking of the Panama documents, the Daily Mail newspaper released an expose, which detailed how UK taxation was funding Palestinian terrorists. The item was so intense that it drew an official government response. In fact, much of the denial was forced to focus on the issue of the Palestinians.

Since then, there have been several questions in both of the Houses of Parliament as to what steps Her Majesty’s Government “are taking to ensure that UK aid to Palestine is not given, directly or indirectly, to the families of suicide bombers or to convicted prisoners.” And the answer is often that:

UK aid to the Palestinian Authority (PA) is subject to rigorous scrutiny, with safeguards in place to ensure its being used for proper development purposes. Our financial assistance to the PA is used to pay the salaries of civil servant and pensioners. Our support is provided through a multi-donor trust fund administered by the World Bank, which carries out close monitoring of PA expenditure. Only named civil servants from a pre-approved EU list are eligible, and the vetting process ensures that our funds do not benefit terrorist groups. The process is subject to independent auditing.

But no lists are provided. The independent auditor is not revealed. Even the EU auditors determined back in December 2013 that its own ‘independent’ system by the name of Pegase “needed to be strengthened”.

Significantly, on April 15th, the government conceded that “UK officials meet regularly with the (Palestinian) Ministry of Finance and consistently lobby it at the highest levels on whether prisoner payments can be made more transparent and affordable.” George Orwell would feel vindicated with this double talk.

But what is staggering is that these so-called Palestinian civil servants undoubtedly include the full gamut of the Palestinian security sector – police, the army, Presidential Guard and a vast array of secret forces. All have been linked to terror in the past. And many are on the pay role of Hamas in Gaza, whose is persona non grata throughout Europe, America and elsewhere. In other words, the UK is supporting the very people who are destroying the purpose of what the funds are set aside for – peace and a better society for all.

Where could the funds go instead? Well there is no point in directing them towards UNRWA. Nominally part of the UN, this is probably the largest charity in the world, yet it has no external audit. Words such as transparency and accountability are seemingly irrelevant to its operations.

Disturbingly, on February 10th, there was an admission that there is no direct UK funding of joint Israeli-Palestinian programmes. However, through the Conflict Stability and Security Fund (CSSF), the UK provides a meager £40,000 for the ‘Youth Creating Peace On/Line’ project which encourages educational cooperation between Palestinians and Israelis.

So how about investing resources in key infrastructure projects? And then I hit on this report, albeit from the European Union in Brussels on April 21st.

The Palestinian Authority (PA) awarded in 1999 a 25-year exploration license for the marine area off the Gaza Strip (called Gaza Marine) to a consortium of the BG Group (British multinational oil and gas company) for 90% and the Consolidated Contractors Company (CCC) for 10%. The BG Group, which discovered the Gaza Marine field about 36 kilometres offshore in 2000, has recently merged with Shell. The field has not been developed to date.

And there you have it. In the blue corner, Israel develops its offshore gas resources, thus strengthening its financial base. In the red corner, Hamas ignores a ‘brave new world and cries ‘poverty’. In turn, it receives billions in international handouts and thus develops its ‘tunnel economy’. This fosters exports in the form of terrorists sent to attack Israeli civilians.

Arnold Roth is a well-known blogger on the theme of financial transparency. He has been invited to speak at Parliaments around the globe. He wrote recently that it is an outrage that no professional resources have been devoted to discovering where all this money has disappeared to. And he continues:

The Europeans and the Brits can say what they like about everything being checked and no possible room for malfeasance. But that’s not what the PA says to its own people. The message from the Abbas insiders for internal consumption is that, as bankrupt as their regime is, there will always be money for those “heroic” Palestinian Arab convicted slaughterers of children and of Holocaust survivors.

In that light, you have to ask if the thousand or so tunnel diggers are also considered civil servants as per the list held by the UK government. Similarly, if Hamas is able to devote resources to renewing its tunnel war against Israel, why is the UN surprised that around 75,000 houses in Gaza have yet to be rebuilt? Maybe the leaders of Hamas should direct some of their profits from the foreign currency monopoly or real estate transactions towards helping their own citizens?

And if they did? Hundred of thousands of Palestinians would be better off. And decent taxpayers in the UK might be able to receive greater benefit from their own monies that they have gainfully earned yet have been asked to part with for the ‘greater international good’.

An effective tip to improve your sales, and pretty quickly

25 April 2016
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Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem

Sales, sales, sales. We all want more sales, and right now.

Yesterday, I described a creative and easy-to-implement solution, utilising Facebook. This time, I want to resort to basics.

First, let me quote Lee Frederiksen, a frequent blogger on organizational strategy.

There are essentially two kinds of growth–organic and inorganic. The former is built on a complex blend of expertise, experience, reputation, capability and visibility. The latter is a little more straightforward and based on cash, liabilities, and assets.

When describing sales through organic growth, he refers to five core strategies:

  • Research your clients
  • Focus on a niche
  • Develop strong differentiators (my favourite)
  • Balance out traditional and digital marketing
  • Make your expertise available

This is all very valuable. I urge you to read the blog in full. However, there is a downside to this approach.

My experience as a business coach reveals that many people become bogged down with technical discussions about how and what to do. They never move on to the “doing” itself. To be specific, they hold back from trying to make a deal. The objections to this are varied and usually revolve around a “what if”question. “What if such and such goes wrong?”

The subconscious thought process is that if there is a danger of not achieving a target, that can be considered failure. Failure is bad. Therefore, we should not do anything. In fact, it is better to remain where we are today with lowish sales than to risk moving ahead. Ouch!

Time and again, my role has been to “jolt” or to “shove” clients out from behind their computers and onto the ‘frightening’ streets of the market place. In the past two months alone, I have motivated several companies into abandoning internal discussions, while leaving their words for motivating potential customers.

“Just go out there and look for them, assertively” was the philosophy. It may not be stuff of text books for an MBA course, but it did work handsomely. There has been an impressive shift in the numbers in the bank account.

Care to try it yourself?

 

A practical Facebook tip for all small business owners

24 April 2016
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Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem

Here is a conundrum that often comes up, when I meet with owners of small and medium sized enterprises (SMEs). How can I make my digital media campaign more effective, when I can barely afford to invest in google ads etc?

I am the business coach. I am supposed to mentor them through their crisis. And while many of my clients are based in the Jerusalem area, I know this is a generic problem that goes beyond Israeli SMEs.

In fact, help is not so far away. Facebook promotional efforts are often based around placing clever photos or videos on your page. Alternatively, you are encouraged to find other like sites and to place your content there. However, this is way too passive.

An interesting article about the company U.S. Cotton reveals an open secret. In order to brand their new line called “Swisspers”, the firm asked clients to send in selfies of themselves “naked in bed”. That is to say, the product is about makeup removal, and the picture had to show yourself without makeup, just before you go to sleep.

The campaign went viral. Even celebs sent in some photos. Excellent from the point of view of the company. What was clever was that U.S. Cotton had encouraged people to be pro active. They had made Facebook page something others wanted to be a part of and to “improve”.

Here is another example. A tourist attraction in Israel asked visitors to post unusual pictures of their experience. A panel would judge the best entries, who were to receive a prize. What is so great about this campaign is that every person who entered the competition is automatically letting their other Facebook friends know where they have been and why.

Free and direct advertising. There is nothing better! And again, this is making Facebook proactive.

The bottom line here is that companies who own a Facebook page still have to create their own content. However, Facebook is all about the community. So, involve as many people as you can in composing that information, thus making it interesting and exciting for countless others.

Israeli high-tech – the freedom to pass over the controls of regulation

21 April 2016
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Categories: Afternoon Tea in Jerusalem, Business, Israel

For at least two decades, Israel has excelled in latest industrial revolution, which has loosely been called high-tech: internet, mobile, cleantech, nanoteach and more. Simply, this is all about grasping the freedom and the opportunity to push back the established boundaries of what was considered an untouchable norm.

This week, Jews around the world prepare to celebrate the festival of Passover, when the Children of Israel fled Egypt after the story of the Ten Plagues. In Hebrew, this period is often referred to as the festival of freedom. With some ironic sense of timing, the positive higtech news from Israel of recent days illustrates the connection between the religion and finance.

Take the headline that GM is likely to double its r&d presence in Israel over the next few years. Gil Cohen, the local CEO, observed that: “The expansion is a central component of our investment in the idea of the autonomous vehicle.” The campaign will aspire to mimic the human mind, allowing the vehicle to make real time decisions instead of a human driver. Regulation cannot control such progress.

Meanwhile, based in central Tel Aviv, Apester has just raised a further US$12million to support its operations, which provides publishers and brands with tools for telling stories and encouraging user engagement. The company has been around for barely two years, yet it has offices throughout Europe, as well as in America and in Japan.

What is really clever is not only does Apester allow companies to predict accurately the tastes of its clients. The same techniques can be applied to politics. Thus, in recent weeks, this start up has predicted with increasing detail and accuracy just why Hilary Clinton was going to win the state of New York from Bernie Sanders.

In the field of biotech, many of the world’s leading conglomerates are now seeking Israeli partners, who are directed to source them the next mega technology. Roche, Novartis and Bayer are three prime examples. The reason is very simple. These commercial giants have long realised that their own teams cannot keep up with every single area of new technologies. To power to create a change in the status quo lies elsewhere.

What next? There had been plans to regulate Israel’s cyber industry. This policy was scrapped earlier in the week, and instead the local authorities will rely on an international standard. Freedom, so long as it is not abused in the name of political correctness, is a most valuable tool. We should cherish it. We should understand what freedom provides both in terms of added commercial value and also in our way of life.

3 reasons why small businesses fail – & why do we never learn

18 April 2016
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Categories: Afternoon Tea in Jerusalem, Business, Israel

Last week, Dan and Bradstreet in Israel (D&B) issued its annual survey of local SMEs, small and medium sized businesses.

  • Over the past five years, roughly 50,000 operations started up each year, while 40,000 closed their books.
  • For the period of 2013-2015, there has been a 27% rise in those filing for bankruptcy.
  • Meanwhile, the country’s economy grows steadily at around 2.5% annually.

There seems to be one stand out conclusion from this. First, while the big guys generally continue to do well, the SMEs are prone to struggle.

D&B point to three central causes of failure when trying to learn to swim in rough financial waters.

  1. 20% – poor cash flow.
  2. 50% – weak business model / lack of profitability.
  3. 30% – bad decision making skills/ questionable management technique

(It is interesting to note that the fact that many business leaders in Israel have to commit time each year to military reserve duty was not designated as a key reason for failure.)

I have not carried out a thorough search, but these finding are similar to several other countries, such as in the UK.

What surprises me is that if these are facts that are so generic and been around for years, why do the founders / senior partners in SMEs not take more steps to prevent such follies in advance? Why do they wait until the last moment or close to it, before they call in the help of a consultant or business coach?

I guess that the fault lies in people like me, the blog writers. The next time we write a piece on “the three part checklist to set up a new business”, we should include a promo for ourselves. Find yourself a neutral external business mentor or consultant, who you can rely upon for some practical advice.

Motivating employees – key practical hint for employers

14 April 2016
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Categories: Afternoon Tea in Jerusalem, Business, Israel

The ritual is familiar in organisations around the world. How can you motivate employees, day in and day out, to ensure that they deliver their very best?

For years, human psyche demanded that the answer lay in the size of the pay cheque. More recently, blogs are full of alternative solutions. For example, this article from a human resources agency, ADP, refers to nine useful approaches.

  • Challenge and train
  • Make people feel appreciated
  • Give employers autonomy
  • Create winning teams
  • Ensure they have similar goals to you
  • Just talk to them
  • Be flexible
  • Give time off at key moments
  • Be fair, and not just right

I am sure my readers can add to this list. And when you consider it, many of these things are incredibly obvious. As a business coach in Israel, I encourage my clients to adopt much of the above. But this subject raises one very difficult question.

If these concepts are so intuitive, why do many of us simply fail? We do not apply them. Is it that we are too lazy? Or that we are caught up in the day-to-day running of our companies or departments that we forget? Are we so scared that “bonuses” will reveal that the staff may actually know something we do not or possess a skill that we do not have?

What these questions highlight is that our approach to motivation often lacks the appropriate balance. We tend to start from a premise of “why are they not motivated?”.

Instead, I suggest that managers and leaders first ask themselves what they can do differently. How do they need to change their own approach in order to encourage and motivate their colleagues and employees further?

How the Israeli economy could really outperform its OECD friends – 3 suggestions

13 April 2016
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Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem

The latest OECD predictions for the Israeli economy forecast a growth rate of 2.8% for 2016.

On the down side, this is way less than the average for the past decade and it barely matches the current natural increase in population. However, it is similar to what Israel’s own Finance Ministry has begun to predict. And compared to many other members of the OECD – USA 2.3% and the EU 1.6% – this is a relatively healthy stat.

For me, these predictive models raise a far more important issue. Over the past 18 months, I have become increasingly critical and worried over the way the government has been handling (or more precisely, not handling) the changes in the Israeli economy. So I would like to present here three practical proposals that could make a significant and positive difference to the structure of the economy in the Holy Land.

First, I will borrow the conclusions of John Chambers, the CEO of Cisco, a company which has purchased 12 Israeli start-ups in recent years. Speaking at a convention in California, featuring the achievements of the Israeli start up scene, his thoughts are pertinent.

Chambers is adamant that for Israel to remain at the forefront of the high-tech revolution, it must ensure the more members of the ultraorthodox Jewish community and also the non-Jewish sectors have clearer opportunities to become entrepreneurs. For this to happen, the education system has to become more adventurous. To date, while there are some moves on this front, it is evident that the government needs to do a lot more. It is drastically behind the ballgame, as others like France catch up.

Second, at the same conference, the mayor of Jerusalem, Nir Barkat, spoke of the plans to treble the number of start ups in Jerusalem. He also spoke of his aim to ensure that the number of tourists visiting the city leaps from two million annually to ten million.

A great vision. And this is a man with many talents. However, Mr. Mayor if you were to drive around key parts of the city, you will notice that the road system is antiquated. In an average working day, the flow does not….well, does nor flow! For example, if you want to enter or leave the Har Hotzvim industrial zone, which includes a large Intel factory, there are invariably traffic jams at many hours of the day. That is not sustainable. There must be a better approach, as this is costing time and money.

And my third category is that old subject of bureaucracy. As a business mentor with many SME clients, I see how they suffer. Just today, one customer was seeking a change to his banking arrangements. He was asked to supply a wad of signed documents from his accountant. This cost him hours. And I myself was told yesterday, in the age of notarised digital signatures, that a new client will not work with me until I hand in some paperwork with an original signature.

Such demands are pathetic and restrictive. Change them and small businesses will begin to breath that bit more easily. And remember that SMEs comprise over 90% of the economy.

Is the Israeli government looking to do anything serious about these three issues? For all the talk, nothing definitive is likely to happen. The demands of coalition politics forces those at the top not to decide. It is safer that way.

And that is why Israel’s economy will continue to plop along at around a weak 2.8% annual growth rate, …..until somebody has the courage to shout “enough”.

Key tip for those who want to lie to their business coach

8 April 2016
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Categories: Afternoon Tea in Jerusalem, Business, Jerusalem

I know that I have written about this in the past, but I felt I had to return to the subject.

Some weeks ago, I met three people in the Jerusalem area, who turned round to me, politely yet firmly, and “No, I do not do that”.

Left hanging in that manner, it sounds as if I had made an indecent proposition. Actually, as their business coach, what I was trying to do was to encourage each of my clients to  carry out a task, which they had believed is at the wrong end of their list of core competences. So, unsurprisingly, my request was met with heaps of negativity.

And then the fun started.

For each client, I immediately began to focus on a different issue challenging their organisations. Seemingly, these problems were more appealing to the individual. This was the stuff they loved working on, and I knew that. The smiles returned. However, what I did not tell them was that they would have to use the same skills to resolve what was in front of them, as with the previous task.

A couple of weeks went past, and I met up with them all again. Each one was happy and each one appreciated the trap I had set. More importantly, they were not upset when I called them ‘liars’, and that I was not prepared to accept such unnecessary resistance in the future.

It is easy for all of us to say ‘no’. Nobody explains this better than “Nick Vujicic, the 32-year-old president of motivational speech marketer Attitude is Altitude,” ………….who was born without arms or legs. When it comes down to it, what many of us are afraid of is failure. It sounds so bad, if not humiliating.

As Vujicic explains, failure is often the start of the road towards success. If only, the previous generation had understood that 30 years ago! How much more would many of us be accomplishing today?

Israel’s economy in 2016: Ignoring the warning signs?

7 April 2016
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Categories: Afternoon Tea in Jerusalem, Business, Israel

Earlier this week, the Bank of Israel (BOI) released a report on the outlook for the domestic economy.

There is much to be thankful for. Growth will continue in a similar manner as in the previous two years at around 2.8%. Unemployment is expected to remain low at under 6%, even if the figures only include those actively looking for work. Stability looks to be the name of the game.

In the export market, there is concern. High tech sales are stagnating. Overseas sales in the electronics sector have slowed from an annual growth of 10% to only 5%. And yet, in the defense sector, mainly as a result of the “ISIS pull”, there has been a 120% upturn in European demand for Israeli products.

In parallel, the level of foreign direct investment, particularly in start ups, sees no sign of trailing off. 81 companies pulled in about US$1.0 billion in the first quarter alone of 2016. Encouraging.

And yet, there is a feeling that something is not quite right. The stats seem to be hiding some warning signs. And it was noticeable that two of the three leading Hebrew economic financial newspapers, “The Marker” and “The Calcalist” wrote long summaries, and neither were particularly warming.

“The Calcalist” – Economist in English – observed how the price of housing, particularly for newly marrieds was refusing to budge downwards. Further, for all the economic success, stretching over two decades, Israel still lags behind the OECD average in work productivity. Large sections of the population do not benefit from formal education up to the age of eighteen. And the country still invests comparatively little in infrastructure, including transportation and health.

“The Marker” was more specific. Quoting Karnit Flug, the Governor of the Bank, it wrote: “If we were to close the productivity gap with the average for the OECD, we would be able to raise our standard of living by about a third.” That to me is fairly damning.

And what is worse is that is no apparent plan to achieve that target and thus capture that dramatic improvement for all!

Exports were down last year by over 1%, at a time when the global economy was finally moving ahead. The positive change in the GDP, the main measure of economic growth, was caused by an upsurge in consumer spending (as opposed to investments or exports). That could create an economic bubble. Even the upturn in government revenues was caused by a 30% surge in taxes on real estate – another explanation for spiraling house prices.

And so the list goes on. As for the big white hope, taxed profits from new offshore gas industry, the government’s inept handling of the issue has almost brought overseas investment in the sector to a halt.

Is there a way out? Surely -, a strong government that replaces meaningless one-off populistic statements with solid and fully thought-out long-term measures. However, the current Netanyahu administration, which has the largest numbers of ministers in years, lacks the combined ability to set out such a policy towards renewed growth.

Sad. There again, politicians are amongst the highest paid people in the country.

It is time to wake up…….. right now!

Israeli Cleantech remains ahead of the game

5 April 2016
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Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem

It has been a week of stunning success for Israeli Cleantech.

For a start, the U.S. Energy Secretary, Dr. Ernest Moniz, coincided his trip to the Holy Land with a visit to the EnergyTech Conference in Tel Aviv. This linked up the new challenges facing the defense industry in the field of energy, both from overseas as well as the demands posed by green technology. Moniz went on to sign a new cooperation agreement with his Israeli counterpart.

However, for me, the highlight has been the Cleantech 2016 Conference in Jerusalem. Arguably the most important display featured an agreement between Israel and China to create an clean, green city. However, at a micro level, I also found myself interested in SMEs like Green Power Management, which have devised a transparent and practical solution to save energy costs for companies with multiple buildings.

Israel is no stranger to the world of cleantech. It pioneered drip irrigation back in 1959. Around 80% of waste water is currently recycled. Desalination plants provide about 40% of the country’s water needs. And next-stage technologies include:

  • Suction scanning, ensuring a full flow of filtered water
  • Laser analysis to detect solids in water
  • Microbial fuel technology to produce electricity from water
  • The conversion of hydrogen in energy and then its complete storage

Etc, etc, etc

I often mention that Israel is a small country, barely the size of Wales and 50%  arid. And yet, I seriously urge you to watch this link, which brings out visually just how much Israelis of all backgrounds have to offer the world to make it a cleaner place in which to live.

That question – that annoying business coach

1 April 2016
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Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem

The key line on my website reads: “Michael asks you the questions about your business that you do not want to ask yourself”.

That is one of the classic roles of a business coach or mentor. That may seem straight forward enough. However, when I describe this challenge to people, some question the importance of the proposition. This week, I was given several opportunities to take explain in detail what I meant, and I would like to share a couple of those experiences with you.

Case study number one:

I am mentoring a very commercially experienced lady, who is trying to set up a new opportunity in Jerusalem. She is doing this while not having deep financial reserves. The proposed structure will involve her using her background as a CPA to investigate new companies. Meanwhile, she knows that her own bank account is not too healthy for now.

I asked why she does not check up on her bank statements to make sure that everything is all right. To cut to the point, she answered that she was too afraid. And then I posed the following conundrum: How can you present yourself as competent to run the finances of others if you do not look after your own books in a professional manner?

Silence.

I reassured her that I understand how the numbers may not be pretty. They may even make the body shudder, briefly but involuntarily. Yet, experience dictates that when you take control of yourself, it has a positive knock-on effect with how you handle potential customers. It is as if they can trust you. (She later told me that she started checking her account that same evening).

Case study number two:

I was required to ensure that a client pay me some extra money. That is often a touchy subject, and not just for one party. Naturally, I was asked to justify my request. And then it occurred to me.

The client was not just concerned about their own cash flow, understandably. There is another factor at play. If they agree to what I request, they have to recognise that they have made serious progress.

Amazingly, that cognitive step is often very daunting for people. the default position is to be reticent. And so I questioned why they did not want to appreciate the success of what had been achieved to date.

Silence.

And it is that silence that leads to a lot of internal chatter – just above the eyebrows of my clients. And it is that mental process that suddenly jolts them forward towards their commercial vision……all of which highlights the value of top questions from a testing business mentor.

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