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.

In a world deluged by irrelevant information, clarity is power .

21 Lessons for the 21st Century – Yuval Noah Harari

This powerful statement was written at least two years before corona broke out. Surprisingly, it is the very first line of his book. And while most of us believe that the pandemic will eventually come to an end, have you begun to think what your business will look like afterwards?

As I write this, many of us are emerging from lockdown, while some are facing its threat for a second time. Small business, the heart of all economies, are hurting bad. Civil servants, who have never run a commercial set up, are launching policies suited for a previous era. Who can think straight in this time of distress and uncertainty?

I have spent much of the 2020 summer talking to decision makers of corporates, service providers, retailers and more. And my starting premise is a blog written back in March 2019.

When it comes to disruption on the modern business landscape, company size is no safeguard. 88% of Fortune 500 companies in the 1955 -2017 period have either gone bankrupt, merged with other firms, or dropped off the list for other reasons. What’s more, it’s estimated that digital disruption will wipe out 40% of today’s Fortune 500 companies in the coming decade.

Titans of Transformation – Samul Medley

The takeaway? Even in the good times, you cannot afford to stand still. Corona is merely forcing you to lead and manage your company as you should have been doing in the first place.

So, what can you do? I commend you to three exciting and doable challenges, all employed successfully by my clients.

First, let’s rephrase the question: What is going to make the difference that places you ahead of the rest of the pack?

Corona allows us all a one-time opportunity to press the ‘reset button’. All those horrendous health and financial stress factors are actually pointing you towards a wonderful ‘exit strategy’. Put all the pervious restrictions to one side and go for it!

Just consider: You are in the clear to do what you want – to activate your dream.

How? Your first step should be to place yourself in an environment that allows for a growth mindset. Gravitate and reach out towards those people who can make that difference. After all, many will have started out from a similar place to you.

Challenge number 2: Look at your business and divide it (figuratively) into two sections; your market and your support structure.

Regarding the market, take your guidance from The Great Depression of the 1930s, when America’s farm lands turned into dustbowls. These were the same years when companies like Boeing, Proctor and Gamble, 3M et al changed direction. They did not hang around for a Roosevelt to save them. As others cut back, they pivoted and also invested in advertising.

That lesson still holds true nearly 90 years on. Early on in the pandemic, MacDonalds had a rethink.  Many of the stores that remained open received a new menu. My clients have adopted a similar assertive approach. They have identified what their core clientele want, shouted loud about it, and seen the rewards in increased sales.

Third, consider your ‘back office’ departments. You will already have discovered which positions are needed or not. While working from home, which of your ‘comfort zones’ have you honestly missed? I bet the answer is not what you would have predicted initially!

Installing focus – That is my profession, as a skilled business coach and mentor. Over the years, I have facilitated countless entrepreneurs in establishing their new business. I have formulated strategy creation with service providers, manufacturers and techies. I have created soft landings for clients setting up overseas’ operations.

Corona is a reminder that we cannot take our position for granted. My role is to show leaders how to initiate their own changes. And because of Corona, that job of providing lucid, practical steps towards growth is more pertinent than ever before.

In some ways, the title is contradictory. I seem to be saying: ‘stop reading this and just get on with it’. Before you do so, hear me out. It’s in your interest.

I have been meeting with a Jerusalem-based client as his business mentor, when I realised that I was making all the suggestions. Effectively, I was acting as a consultant. This is against the rules and the progress has been minimal.

I had to find a way to motivate him so that he can think for himself.

Today has been my opportunity to catch up with some work on digital media. By chance, I began to realise that I was looking at material that continuously hit on the very theme of motivation. And all the posts seemed to share the same message.

This hour long conversation features two amazing stories – standing in freezing ice for ten minutes and finishing an ironman competition against the odds.

This is a story of war hero being told that he was not good enough because of his background and having the wrong accent.

  • ITEM NO’ 3: It is only impossible until it has been achieved.

I have tried to find the origins of this remark – maybe Confucious? Whatever. I posted a short video, emphasising this motto. Featuring two cute animals, the message is very sharp and immediate.

  • ITEM NO’ 4: How did our schooling condition us towards appreciating achievements?

Emmy-Award winning director Nick Nanton has created a film, featuring six unenterprising individuals and how they came from nowhere to become international role models. (H/T to cleantech entrepreneur, Sonya Davidson.)

There is a line that Nanton emphasises and one that I cannot get out of my head. So many of us are taught – no, we are commanded…..

“Get your heads out of the clouds. Come back down to earth.”

How boring! How devastating! What for? To conform?

And when I think about it, it is so often the people who have this methodology drilled into to them that they are afraid to move ahead and to experiment. I see that weekly as a business coach.

You are allowed to dream. Correction – you should be encouraged to dream. And then go and do your utmost to fulfill that crazy ambition. That is where we need to focus and emphasise our emotional efforts. Go for it.

Now; stop reading and get down to some ‘doing’.

The wife of a top Israeli politician posted yesterday that the Prime Minister, Bibi Netanyahu, “could go through an economic holocaust as long as nobody is loved more than he is,”.

A poor use of words in my view, to say the least. However, it came just 24 hours after a leading newspaper, Ha’aretz – a perennial critic of the PM – surmised that Israel’s democracy is faltering as a result of an increasingly direct-rule-of-law approach from the top.

Israel’s corona numbers this week are now worse than those during the initial winter crisis. Bibi has always been seen as the on in charge of all corona issues, if only because the previous Minister of Health was out of his depth. (And it must be remembered that in the coalition negotiations during the Spring months, Bibi insisted on keeping the Health Portfolio for his party.)

So what is really driving Netanyahu, during this time when Israel’s top public health official resigns and its citizens are being asked to consider non-emergency hospitalisations?

I argued during the first phase of Covid-19 that the country’s economic response was pathetic. It featured populist measured, proposed by people who did not how to run businesses. Was I right? The Bank of Israel has just downgraded its growth forecast for 2020 from 4.5% in May to 6%. Of the 10 billion shekels (US$2.85 billion) promised 3 months ago in a country thirsty for liquidity, only 47% has been spent. 20% of loan applications for businesses have been rejected.

Has anything been learnt since?

This week, the Bank of Israel announced monetary measures that propped up the banks, which are already making a fortune out of other people’s debts. For example, tens of thousands of people have been allowed to delay mortgage payments for 3 months. You think that the banks lost money on that one? Think again.

Unemployment had peaked at just over 27%. It slid back down. It is now on the rise again, with meagre measures in place to incentivize employers retain staff. For example, I heard an interview with a CEO of a cosmetics factory south of Tel Aviv. They have burnt through their emergency fund of 4 million shekels, which allowed him to retain all of the 150 employees. He now has to release 40. Not a hint of support from the elected officials.

In contrast, the Hong Kong model for dealing with their economic problems is worth studying. The bottom line is that money has been handed out in grants to commerce and to residents. It may still be a tough economic climate there, but not like in Israel.

Over the past 72 hours, Bibi has led the Israeli government in taking new measures to fight the spread of the virus. This includes not using air conditioners on buses – in the Mediterranean summer. For the record, due to security measures, buses in the West Bank must drive with the windows closed. Again, do the law makers really know what thy are talking about?

But what brought me back to the fear addressed in the comment on the ‘economic holocaust’ was the policy regarding Yeshivot (religious seminaries for men). These are known to be one of the main epicentres for the spread of the virus. Bibi wanted to close them.

Before I continue, take a moment to recall the leader of Jewish communities in China, who in March reported no illness in his following, because people adhered to the strict health warnings. A similar story can be told of a young rabbi in London, who threw people out of a Yeshiva and locked the doors.

In Israel, in July 2020, a key member of Bibi’s coalition, Moshe Gafni threatened to abandon his partner if the Yeshivot were closed. Against his better judgement and the clear advice of the officials at the Ministry of Health, Bibi gave way.

If politics is the art of compromise, let us understand what Mr. Netanyahu’s sterling creativity achieved. If the government had fallen and thus if he had lost his job, he would find it more difficult to delay his trial of corruption on several counts.

How many Yeshiva students and their families will now be infected unnecessarily? How many people will have to delay hospital treatment? How much extra cost will be placed on the health and social services? How how many could……..? Holocaust it is not, but it is utterly repugnant.

June 2020 was another stunning month for Israeli startups, raising US$700m despite covid-19. So what could be wrong with Israel’s economy?

Last week, one of the main TV news stations showed an item, detailing how the middle class in the Holy Land is finally cracking. Many of the frills like extra curricula activities are being eliminated. Housing and flats are being put up for sale.

The response from senior Likud minister, Tzachi Hangbi, a confidant of the Prime Minister?

This nonsense that people have nothing to eat is bullshit. Bullshit. There are a million people who, most of them, until now, have received unemployment payments… There are businesses that were hurt and they’re in serious distress. [But] saying ‘there’s nothing to eat’ is populism.

While the PM has acknowledged that this comment is unfortunate, it does force us to recall his own remarks in mid June that nearly 90% of the Israeli economy is up and running again!

In the words of a senior editor of “Globes“, an independent financial daily:

The intentions of Israel Aerospace Industries, Amdocs, and The Phoenix Holdings to lay off hundreds of employees each has torn away the mask: the economic crisis is not temporary, leave without pay is not a bridging measure. The State of Israel is not rumbling towards the most severe economic crisis in its history; it is already at the height of it. And no-one is taking responsibility. All that surrounds us is chaos and emptiness……The only significant economic decision since the crisis started – to put the country on furlough – was made by the director general of the National Insurance Institute, and not by the policy makers, and even that turned out to be a disaster.

To go to the punchline of that article, it is time for the decision makers to wake up, right now!

Around 20% of the workforce remains unemployed. For example, El Al has furloughed about 7,000 of its workers. This has impacted on thousands of others in ancillary industries. I wonder how these people would calculate “90%”!

The Prime Minister, Mr Binyamin Netanyahu, has promised his country a “6 month program of economic renewal”. This is a man, who for much of the past 25 years has thrived and succeeded on slogans. After all, his original fortune was made as a marketing executive where catchy slogans are a core part of your ammunition. But as for the details….?

As Israel seemingly emerged ‘quite well’ from the first corona wave, Netanyahu concentrated his efforts on his beloved ‘annexation plan’. Whatever may eventually emerge from that, it will not be what he initially declared with pomp and ceremony. Further, it has detracted his attention to something even more core – ensuring his voters can put bread and butter on the table every day.

Israel does not need slogans nor action items hastily thrown together over a couple of weeks.

Israel demands carefully thought out long term radical policies that meet the cruel demands of a totally new financial and economic scenario. As I wrote frequently at the beginning of the corona crisis, most of the current crop of decision makers – politicians and senior civil servants – are totally out of their depth.

This is not a task suited for sales reps.

90 percent of our economy is working again and we continue to move forward.

Thus spoke Prime Minister Netanyahu on 15th June. This amazing statement demands some justification. After all, unemployment which had peaked at 27% is assumed still be north of 20%. Walk around any city centre, and you cannot fail to see the many properties simply abandoned.

International flights are few. In fact, El Al today even grounded its cargo trips. That automatically impacts on tens of thousands of jobs. New mortgages, a reflection of the property market, are described as ‘sluggish‘. Even the accounting giant EY is laying off people.

The newspaper “Ha’aretz“, no friend of the Prime Minister, has called for a rethink. Netanyahu personally is well-positioned. His wealth is valued way above US$50 million. In addition to his healthy monthly salary, last week he was voted a tax break by his allies to the tune of around 1 million shekels.

So what is on the increase?

  • The Tel Aviv Stock Exchange, which had fallen by about a third since the beginning of the Covid-19 crisis, has made up half of those losses.
  • The price of housing is on the move upwards, as there are fewer building starts.
  • Large chains and supermarkets are enjoying a spike in sales, as fewer people are prepared to eat outdoors.

None of this is particularly inspiring. At least, Israeli tech companies have raised over $4.7 billion in the first six months of 2020, close to half the figure for the whole of Covid-19 free 2019.

In previous blogs, I complained how the mandarins of master planners seem to be out of touch with what is happening in the economy. I know of so many good businesses crying out for support, but do not meet the criteria of the ‘professionals’. Is that surprising?

Well some senior decision makers are on record of declaring that 90% of the country is back on its economic feet. Hmmmm!

Three months of various stages of lockdown and Jerusalem’s tech scene has not stopped buzzing.

To quote an item from Forbes magazine last month:

There are currently 405 active tech companies in the Jerusalem ecosystem, a 102% increase over 2012. In 2019 alone, $233.5 million were invested in Jerusalem-based companies and startups, a 21% increase from the prior year. Over the years, Jerusalem-based companies have seen 22 exits and total investments of $1.6 billion, according to Start-Up Nation Central’s Finder.

Only yesterday, I was on a zoom call linking a serial investor group from the holy city with a team in Hong Kong.  The previous week featured a bunch of us talking with an Israeli scale up and a partnership from the heart of the Muslim block.

Yes, finally if belatedly, the Arab side of the sector will receive its share of the glory.

The Silicon Wadi project entails the construction of approximately 200,000 square meters (2.1 million square feet) of commercial area, with an emphasis on the high tech, trade, and hotel sectors. Among the goals of the initiative are to create 10,000 jobs in east Jerusalem, increasing the participation of east Jerusalem women in the job market, and to bolster support for the Israeli school curriculum in east Jerusalem schools.

And come Jun 22nd, OurCrowd, arguably Israel’s largest investor fund and located in Jerusalem, will host its “covid summit”.

It is interesting to note that part of the international impact of corona has seen more Jews seeking to move to Israel, particularly Jerusalem. Keep watching folks!

 

Economists around the globe are threatening us with a major depression. Shops are simply disappearing from the malls. Individuals and corporates are thinking three times before any new investment.

So what can the business owners and sales strategists do?

I was going over the notes of a webinar presented on behalf of Invest Hong Kong by Conway Inc. They encourage overseas agencies and companies to set up shop in the territory. (By the way, I can tell that despite corona et al, several more Israeli organisations have done just that in the past six months).

On slide in particular caught my eye: “3 ways to redirect marketing strategies”. And I quote:

  • Go virtual…..or get left behind
  • Brand building………with impactful content
  • Develop partnership opportunities (+ stay alive)

Let’s be honest. After 2-3 months with corona, there is not a lot of new stuff there. Yet, when presented together and on the same page, you suddenly enter ‘wake up time’.

In fact, reflecting on how I have tried to help my clients change and pivot, this is exactly what thy have all been struggling to make happen. That is the very role of a business coach and mentor.

The take away. Maybe it is time to give up on what you see as your main poles to hold on to. They may not be so relevant or even that stable today. It is not important what others will think of you. Find that way to change, or “get left behind”.

 

It is relatively straight forward to connect the dots in the trail of the demise of modern retailing.

  • Ever higher rents are forcing shops away from city and town centres.
  • Humongous food shops are driving local supermarkets to despair.
  • Amazon has sapped the strength of large retailers, who have often reacted with the speed of dinosaurs.
  • And now Covid-19 has taken people off the streets. The shops are left with rent to pay, but no sales.

Last week, my wife ventured into the centre of Jerusalem, as Israel emerges from lockdown. She reported back how several shops had just disappeared – shut and no stock inside. This included some leading local chains.

And yet………..

Covid-19 has taught us a lot of things. Sociologists will have a field day, when their research kicks in. For example, Israelis, known for their paranoia to watch news programmes, have began to steer away from the media featuring current events.

Similarly, much has been made of how ‘community spirit’ is coming back into play around the world. People are going out of their houses, together praising workers in the front line, praying or just creating social-distanced silly dances.

As retail expert Paul Brooks remarked in a classy podcast with Jonathan Gabay, Covid-19 is bringing about a “transformation” in how we approach our lives. In an effort to readdress the balance between ‘work, rest and play’, Brooks argues that we are focused on “authenticity”.

And nowhere is this more true than the return to prominence of the local neighbourhood corner shop – food, clothes, books or whatever. How come?

Covid-19 started out when somebody let a horrendous virus escape from a man-made lab. All the clever algorithms and the internet gadgets in the world could not stop it from spreading. In fact, man-made devices like travel had the opposite effect.

Time for a return to basics? Time to reject the offers from big companies, that often represent an attempt to dump dead products. Time to downsize.

And this, ironically, is where the small retail trade could look to a revival. They represent everything that has been turned away over the past few decades; available nearby, a human voice, no preset script, and a feel of ‘made for me’.

For example, earlier to today I was talking to the owner of a shop that sells ladies’ fashion. Now that she is out of location and readjusted her approach to selling, she told that Sunday had been one of her best days ever.  One anecdotal story? Yes, but surly it is no coincidence that many of the latest entrepreneurs that have come my way in the past two weeks have also chosen these principles?

What next? Too early to tell. However, I assess that there is a move towards small is beautiful. Retail, encouraged by local authorities, have a chance to lead the selling revival.

 

Today, President Rivlin received the 2020 Statistical Yearbook from the Jerusalem Institute for Policy Research.

A press release detailed some selected statistics for 2019:

*Jerusalem is the largest Jewish city in Israel with 569,900 Jewish and other residents, and the largest Arab city in Israel with 349,600 Arab residents.

*For a second consecutive year, there is negative migration of -6000, the lowest level for a decade. Of those leaving the city, 46% have left for communities in the Jerusalem metropolitan area.

*The number of those moving to Jerusalem is the highest ever: 12,800 people.

*There is a wage differential of 20% between men and women in Jerusalem, as opposed to 33% nationally, 32% in Tel Aviv-Yafo and 35% in Haifa.

President Rivlin noted that:

Jerusalem is the largest ultra-Orthodox city, and also the city with the largest Arab population. Jerusalem is also ‘young demographically: the percentage of young people in Jerusalem is large, in part as a result of Arab and Ultra-orthodox growth in numbers. These young people are our future.

Jerusalem is a microcosm of our existence here, its population a representation of the demographic diversity of the state of Israel. We must find a way to create a conversation, to connect, to build partnerships. I thank the Jerusalem Institute staff for their dedicated work to depict our reality. Their ongoing and determined efforts to understand our reality and to make it accessible to the public are extremely important. 

This is the week, when the Israeli economy is cautiously returning to work after ‘lockdown’.

The immediate damage can be measured in a dismaying 27% unemployment rate. We have yet to learn how many businesses have collapsed and to what level production has fallen. Nor do we know how many surgical procedures have been delayed and at what cost.

On a brighter side, if you look at today’s front page of the financial newspaper “Globes“, you will see headlines referring to around US$200m worth of investment into start up companies: Nexar – US$52m, Cheetah – US$36, Otonomo – US$46, etc etc.

In fact, “Israeli tech companies, which raised a record $8.3 billion in 2019, have raised $3.7 billion in the first four months of 2020.” And if it had not been for corona……. your guess is as good as mine.

And is the puff running out of the start-up nation drive? Just look at the news in the past 24 hours.

  • Intel Corp. (Nasadq: INTL) is set to acquire Israeli company Moovit for about $1 billion. The company has developed a public transport and mobility journey planner app. Intel Capital, the venture capital investment arm of Intel, is one of the shareholders in Moovit.
  • Mastercard and Enel X have won a tender to establish a new fintech-cybersecurity laboratory in Beersheva, with NIS 13 million (approximately $3.7 million) in funding over three years.

Back on the Israeli high-street, the shopping malls have yet to reopen. Politically, the country maybe heading for a new government next week or a fourth general election. Yet none of this seems to bother the entrepreneurs, who are continuing to have a field day in the Holy Land.

As I write this Sunday, demonstrations are taking place in Tel Aviv and Jerusalem. The self employed are disgusted at the government’s response, or lack of, in helping small businesses survive the corona fall out. To give some perspective, on Friday, the Ministry of Finance had announced a third set of proposals, which like its predecessors seemed to be designed to help as few people as possible.

These measures were prompted by a heart breaking appeal from a falafel booth owner in Ashdod. His video had gone viral: He explained that he has paid taxes all his life, that corona has destroyed what he built up with his bare hands, but that the criteria for financial support means that he will receive zilch.

The Prime Minister called the man. The politician assured him that he would personally ensure that he would get through. Hmm. Anything to do with the fact that the stall owner comes from the boss’s core voting caucus? But lesson number one, albeit learned sub-consciously, go viral and embarrass the top!

My work as a business mentor has led to talk to tens of organisations in the past month, particularly in the Jerusalem region. Part of this effort has been sponsored by the Ministry of Immigration, seeking to help those newcomers who have been enterprising enough already to launch a business.

These people know long before I voice my suggestions that the government’s main support is through loans, which only encourages more debt! And even if you were to qualify for one of the schemes – for example, you can only claim up to 16% of the previous year’s sales(!?!?) – but you go broke, the bank will come looking for you. What’s wrong with that? The government guarantees at last 85% of each loan.

With hindsight, the operations that I have been dealing with have come to an understanding; 3 sentences that can be uttered in the same breath.

  • Yes, we all recognise the tragedy that the virus has forced on thousands around the globe.
  • No, we are not waiting around for public support, usually espoused by well-meaning bureaucrats, who would not know a VAT form if it was stuck to their face.
  • Yes, and here’s the difference. Corona is not a challenge. It is an opportunity! Just test your ideas faster and move on out quicker!!

Everyday, I am involved with more and more examples of this approach.

  • A studio for the performing arts has launched an online mentoring course to improve self-confidence and self-awareness, core elements of what it teaches anyway.
  • A book publisher, which relied on a third party distributor, is now rapidly creating an alternative solution via digital marketing.
  • Two separate financial advisory services have identified niche markets that probably have always existed, but they now realise how these can be approached.
  • A national NGO has overhauled its procedures, ensuring staff and beneficiaries are better protected against layoffs.

Last week, I caught the headline of a large cinema (in America?), which opened its car park for drive-in movies. They are sold out most nights.

Israel is known as the start up nation. The high-tech boom in the early 1990s emerged in spite of the government, before the mandarins realised what was happening (and could claim credit). Over the past decade, countries like the UK have tried to copy that format.

It would seem that the same thing is about to happen again, “thanks” to corona, a change led from below.

POSTSCRIPT: Yesterday morning, my wife and I went for an early morning walk to catch the sunrise overlooking Jerusalem. It was drizzling and there were few around at that hour. One exception was a short,75-year old religious lady, speed walking.

She told us she was just turning back to go home…..which would take her another hour or so. She then explained that she has to do something as corona has closed her beloved public swimming pool. And then with a broad smile described how she has also invested in a piece of apparatus …….. a trampoline!

In a week where we celebrate Israel’s 72nd Day of Independence, I am proud of the spirit of the “start up nation’, which lies in the people themselves!

 

 

 

 

A month or so from now – say early June 2020 – it is possible to envision the Israeli economy trotting back towards a semblance of normality.

But what does that mean in reality? Before corona, unemployment was around 4%, people had been ignoring the price index for years, and the GDP was set for a 3.25% or so growth for 2020. Very healthy, but in the past.

Let’s face it, a big chuck of society, especially in Jerusalem and peripheral areas, revolves around the tourism industry. Hotels, airlines, tour guides, tour sites are all ‘out of position’ and will almost certainly need to lower prices for a year or so. In Eilat, where 70% unemployment has been recorded, the good times will not be returning tomorrow morning. Nationally, 26% of the workforce currently does not have a job to go to on Sunday morning, and the number is growing.

It is not all doom and gloom. Some commercial sectors have held up well. For anecdotal evidence, juts look how all the building projects in Tel Aviv and Jerusalem have leapt ahead. On the high-tech front, overseas investment continues, although at a slower rate:

  • Smart LD lighting firm, Juganu, has raised US$18 million.
  • Hargol, foodtech, secured a further US$3 million.
  • Entrée Capital venture capital fund announced this week that it had closed a US$100 million seed fund.

However, none of that has stopped the IMF forecasting a 6.3% drop in Israel’s GDP for this year. The Governor of the Bank of Israel sees a 5.3% dip ‘only’. Sure, these are predictions, but in this case there is no prior model to make such estimates. To make the point, both teams foresee a relatively quick rebound, but how much and when is up for debate.

My main concern for the future lies in the economic policy, or lack of, for the next six months. First, much of the immediate central government help for businesses has been built around loans. Allow for the fact that old-fashioned bureaucracy is delaying their approval. Once eventually in play, companies will be depending on sales rising quickly in order just to pay off loans.

If that does not happen, the government will have printed money for no good reason. That is a trigger for inflation. In parallel, more companies will simply go under. More unemployment!

And second, the government is effectively paralysed. The country has held three general elections in 12 months, and a potential fourth is looming. The Minister of Finance is a political has-been. In other words, there is no fiscal direction from the centre, and neither is their likely to be soon. Commerce is being told to get by, on your own.

I am not kidding you when I say that a 6.3% tail off might actually turn out to be too optimistic, especially with this current government in charge.

Corona has brought out some black humour this week.

This is a joke going around Israel. Which is the higher number- the average count of daily tests for the virus, the number of eggs available for sale or the number of general elections the country has to face every twelve months? (Quick explanation – the first is far too low, the second has seen a ‘scramble’ by the government to import the difference, and the third is three, for now).

However, the joke forces us to ask the questions: Why after a month of planning are the number of tests low by any standards? And why are eggs flown in from Europe, when local farmers are destroying produce as the price they are paid makes it uneconomical for them to sell locally?

No straight answers are available. And that is why business mentors are rarely employed by public authorities. It is the job of the outsider to raise problems in such a manner that they force out the painful truth, which in turn will hopefully result in changes.

I recently read two blogs on why or why not to work with business coaches and mentors. The first is an excellent summary of the pros and cons of hiring a coach. Maybe not surprising as it is written by a business owner, the author ignores my key point. The second explains how “a business coach can help no matter where you are in the process of developing your business…”

A great example of this issue was released in clip, produced by Jay Shetty. He observes correctly that so many of us stubbornly hold on to our bad moments in life. He latches on to that well-known fact that we all typically host 60,000 thoughts in an average day.

So, why don’t we also recall and keep those good times – our successes? Isn’t that more important? Ouch – he has a point!

How does this work in practice? Along with about a dozen other mentors in the Jerusalem area, we have been asked to reach out to the community of new immigrants, who have set up a business. ‘Just talk to them for an hour. See what you can do.’

I have already linked up with several such people. Typically, they initially sounded down, even surprised that I should be showing concern. I prod and encourage and prod more and ask about something else.

All have come out of the sessions realising that they do not have to let corona beat the proverbial out of their hard-earned enterprises. They have more options than they had first accepted. To quote one gentlemen who wrote to me:

Thanks for reaching out to me today. I actually feel like it was some kind of boost I really needed.

What will the Israeli government do? Who knows. The Health Minister has been uninspiring (at best) and is now ill with corona. Most of his other colleagues can be heard via their silence.

I admire the Israeli business owners, who are showing resilience and thus learning to ask their own questions. To end on a positive note, just dive into this most motivating of stories from the Carlton Hotel in Tel Aviv.

Be well. Keep safe.

The first night of Passover is now in the past. For others, Easter is approaching. Whatever your religion, corona does not discriminate. Businesses around the globe are in a mess.

Large or small, high-tech or retail, established or new – what can owners and senior management do?

For no obvious reason, yesterday, I found myslf reaching out for a book I had long forgotten about: “Success under stress” by Sharon Melnick. I challenged myself. What can a seasoned business coach and mentor can find that will have additional value for his readers?

Melnick wrote her bestseller back in 2013. That said, she makes several key points that are essential to our lives today. You get the point when tackling one of her first sentences in the introduction.

71% of senior executives around the globe reported that resilience to turn obstacles into opportunities is “very” to “extremely” important in determining whom to retain.

Makes you think – both as employer and employee. 20 pages later and we discover anotehr line that takes on added importance in the corona era.

Stress occurs when the demands of a situation exceed you r perceived ability to control them. The key is that the more you perceive you can control, the lower your stress, and vice versa.

(and then…….) Stress is not external. It’s internal.

Guys – reread that and internalize that message.

Melnick goes on to discuss subjects such as prioritising, basic muscle relaxing exercises, and self worth, amongst much more. And in an age when corona is making many of us question our values and capabilities, she reminds us that:

The stress of self-doubt is essentially a gap between how you evaluate yourself now and how you want to view yourself and experience your life.

I do appreciate that each enterprise has its own unique issues. And I am sure that we have yet to see the full global economic fall out from this crisis.

However, as I was going through the book, I found the Melnick had enabled me to rethink how corona impacts on business. If we ignore the panic, it allows us to focus on what our core skills are. More and more of enterprise owners are telling me that they now have an opportunity to try to establish what they really want to do.

In other words, they are onboarding Melnick’s key concept of “changing your perspective”. These people are saying that if the road to commercial success is very bumpy just now, they  are realising that it was never smooth. So let’s get on with it.

So let me leave you with this question. In order to benfit from the havoc casued by corona, how can you alter your own perspective?

Governments around the world have had to tackle the corona virus on two – at times, seemingly contradictory – fronts; the protection the health of its people and protecting their economy.

The former started through trial and error. It would be unwise to criticise the mistakes of some leaders. Who was to know better? But when it comes to the economy, some nailed it from the get go, and some did not. Sadly, Benjamin Netanyahu’s team in Jerusalem is firmly positioned in the second grouping.

A table in an Israeli weekend newspaper surveys 13 countries, including the USA, UK, Germany, Hong Kong and South Korea. All have pumped cash directly to companies and individuals. Keep people employed. Enable them to purchase from shops. So far, that tack has had an effect, without being able to stave off a recession.

The prime Israeli response revolves around handing out loans. Listen to leaders of Israel.Inc, business pundits, head of a Kenesset supervising committee, my clients, C-Class execs I have spoken to and they all repeat the same four points:

  • Why loans? They still need to be paid off
  • The paperwork is cumbersome
  • The banks have not stuck to government interest rates
  • The approval process is taking too long.

And after approximately six weeks into the crisis, not one special loan has been approved.

The government has also promised a two-phase grant to self-employed traders. Sounds good. There are tens of thousands of such people in the country, so I do not know them all. However, as a business mentor and coach in the Jerusalem area, not one of my clients is eligible, including myself.

Why? There are four key criteria, each containing a sting. For example, the starting base has to be less than 240,000nis income in 2018. This is not very high, relatively. Fine. Yet, one customer of mine received much more than that, only their expenses were also very high. They will end up with zilch, despite being in a desperate situation.

To make matters worse, the Israeli government has not allocated handouts to employ people. A company told me after laying off 25% of its staff, their is no immediate nor obvious help in sight from the distributor of taxpayers’ money.

As I wrote last week, these policies have been created by senior civil servants and politicians, who generally have never created a business nor even worked in commerce. They are not living under the threat of having their salary cut, as companies try to save themselves. They have not had colleagues sacked, even though unemployment has crossed the 20% barrier. What do they know about what people need?

Let me offer there practical and effective pieces of advice for any CEO reading this.

  1. Complete you tax returns for 2019 right now. Most of you will be due a rebate. Go and get it now, rather drag out the submission until the second half of the year, as often happens.
  2. If you want to secure a loan, obtain the help of somebody who knows the system. Do not waste your valuable time, by trying to do it by yourself.
  3.  I have written previously about corona offering business owners a chance to “reset” their company. Actually, it is more than that. For many, matters are so bad that this is when you can realise just how free you are to do what you want. You no longer have to abide by the old rules and restrcitions.

I am sure the Israeli government does care. However, we have Prime Minister in Jerusalem, who has to spend as much time fighting corona as he does in preparing to answer four charges of corruption. The Health Minister is deemed inept by all people I know and all media I read. The Minister of Finance has little clout, as he is about to leave politics.

So who in Israel has time for the small independent businesses, that make up 95% of all commerce, and can really make a difference? So far, nobody has answered the call and that is unacceptable.

An international ranking released on 1st April placed Israel as the safest country in the fight against corona. Certainly, it may be that there is a decrease in the rise of new cases in the Holy Land, but it is too early to be optimistic.

On the economic front, the economy is struggling to avoid shutdown mode. It is an accepted fact by most that Israel has not had a strong Minister of Finance for about 18 months. Unemployment has now shot up from 4% to over 23% in a month, but it can be argued that is an effect to be found around the world.

What does really irk me is what I wrote earlier today on Facebook

We all know of somebody who has been laid off, took a salary cut etc.

We have yet to hear of politicians taking a pay cut. In fact, I hear that MKs even got a pay rise from 1.2.20. And guess what? They can’t even meet at their place of work. So what are thy doing all day?

The Israeli government has allocated a massive amount of money to small businesses through loan schemes etc. I have spent much of my time this week explaining to clients why they may not be eligible for help or how slowly the sums might come through. But that pay rise….

One last question. It seems that we may have a new Israeli cabinet / government by next week. These get-togethers of men in suits have been as bloated as a fat whale in recent years. Do you think we have seen any sign of their numbers being cut?

But that pay rise….

Yesterday, I heard a story of a bakery that had ben barely surviving by making deliveries. A small boutique outfit, it employs about four people. The local council turned up without warning, deemed the premise to be an unnecessary business and closed it down on the spot!

That means that all four people are to be added to the jobless total. The owner has to throw out a week’s supply of raw materials. And as the business is relatively new, the loan schemes probably do not apply to him. For good measure, unlike other countries like Australia, there are no grants to keep staffed in employment.

The good news? The powerful men in suits (and a few token women) around the government table will still have their cakes at their next meeting.

It ain’t fun running a small business these days. As a friend of mine and branding genius, Jonathan Gabay, highlighted the point in a powerful short video. You can feel so lonesome, even when there are others around to help.

A few days ago, I wrote about how I had been left disgusted by my landlord, who would not consider lowering the rent of my office temporarily. He is likely to get a discount for municipal rates. And the owner belongs to one of the strongest commercial groups in Israel. (I am still arguing for now). Upsetting.

It makes you wonder if you are fighting by yourself.

And then there is the government – both the politicians and the civil servants. In Israel, we are still waiting for a full package to support the small biz sector that makes up about 95% of commercial activity. What is that taking so long?

I refer to a post from senior Bloomberg correspondent, Matthew Kalman, who posted on LinkedIn:

Why are governments mailing cheques to people who need cash, now? The VAT, sales tax and income tax payments database could be reverse engineered overnight to deposit the emergency cash straight in people’s accounts, using RPA like the systems developed by Kryon and others.
The same goes for farmers now stuck with too much/too little produce due to shattered supply chains. The computers that operate their milking and other systems can be tweaked to talk to other producers’ computers, and then to the computers of logistics, wholesale and retail companies to move local food around fast to the places where it’s needed.

But is any of that forthcoming? When? How? Answers are in short supply from our leaders, who tell us that they know how to govern and from the bureaucrats groomed in the culture of planning (for the sake of planning?).

Meanwhile, you can understand why the small, individual, insignificant biz owner feels a tad upset.

Point 1: There is one clear advantage to lockdown and isolation. You receive a rare opportunity in our 24/7 society to think and ….. to listen. You can reflect on what you have got right and wrong, and how you can make a positive difference. once things are back to normal.

Point 2: Name the country and SMEs – small or medium sized enterprises – comprise about 95% of the economy.

Yesterday, Thursday, the UK announced a series of wide-ranging measures to help the owners of small businesses. Some statutory payments will be waivered. Money will be put into the enterprises. And most loans will be interest free.

All fantastic. However, most of the key benefits will only kick in from the month of June!

Over the pond in Washington, Trump’s men are preparing a US$2 trillion package. Great, and this calls for money for the SMEs. However, there are few concrete or practical details how this will impact or when on small commercial operations.

In Israel, we have been promised a set of measures for most of the past week. So far, the only true policy to have been implemented is a massive loan programme. It has been so successful that thousands have already applied, including those who do not really need the safety net.

How the system will evaluate the really needy cases and rapidly, I have no idea. And many of the loans will require interest to be paid. Ouch again.

So what help do people need? I take myself as an example. I have a small office, in a building owned by one of the richest families in the country.

I asked for a reduction in the rent. My request was refused, politely but firmly. I guess they need the money to finance the construction of yet more offices opposite where I am located! They did offer to delay some of the payments, but this does not really help when you do the long-term maths of a cash flow chart.

Bottom line: I am currently paying full rent in Jerusalem for a premise that I cannot use.

Last night, we learnt in Israel that the Prime Minister had just locked up his short term political future. That means he can continue to sleep at night in his rent-free premises, but not in lockdown. And he is about to appoint a new Finance Minister, who has no obvious track record in business or in helping the community.

Is anybody listening? Does anyone know how to listen?

When decision makers at Israel’s Ministry of Finance first tried to deal with the corona issue, most of the initiative (ie funds) went into creating a new quick-fit loan scheme. Brilliant. All this does is permit extra debt for the SME sector, which is usually already in debt.

Move forward two weeks with unemployment at 20% and nothing much has changed. The Bank of Israel will borrow money, but there is little immediate help for the individual. The government – well, it is a one-person outfit and is not functioning.

Let me give you one example, but so wide-ranging in its implications.

Ami Appelbaum is Israel’s chief scientist and chairman of the Israel Innovation Authority. He is encouraging high-tech companies not to lay off staff, particularly at the small start ups. However, on survey has shown that “five percent of Israeli tech companies have already fired workers, and 64% have frozen new hires”.

But this is what is really crazy. Appelbaum appreciates that overseas sales’ trips are not possible. Much of the FDI has dried up from international VCs. However, monies promised by the government………….?

…….budgets have been put on hold. Indeed, the Innovation Authority in January said it would be halting the grants it provides startups for research and development projects due to the lack of approved funding. Appelbaum said he hoped to soon be able to finance the grants that have already been approved.

You must be kidding! How many people have to be laid off needlessly because the politicians and / or bureaucrats cannot work out a solution?

That approach is unacceptable. The Israeli public deserves better from the people whose salaries are paid for by the public themselves!

I have referred before to a tremendous article called “Titans of Transformation“. I love the opening section, which is so pertinent in the age of corona.

When it comes to disruption on the modern business landscape, company size is no safeguard. 88% of Fortune 500 companies in the 1955 -2017 period 1 have either gone bankrupt, merged with other firms, or dropped off the list for other reasons. What’s more, it’s estimated that digital disruption will wipe out 40% 2 of today’s Fortune 500 companies in the coming decade.

The message is clear. You do not know when something is going to come along that will knock you off your commercial pedestal – competitor or ‘the force’ like a virus.

A prime part of my working life is playing the role of business coach and mentor. I have been rushing around my clients – phone, zoom and the rest – over the past few weeks. The typical conversation starts of with a despondent review from their side but often ends up with a cautiously optimistic outlook.

Why? Well, as someone said to me: Corona is offering us all a chance “to press the reset button”. So true!

For example, I was speaking yesterday with Oded Barel-Sabag from the Jerusalem Development Authority. He told me that there are at least a dozen companies in the city working on a solution for the corona virus, several of them have either switched direction or just opened their eyes what their tech could do.

This morning, I had a new Facebook feed about a fruit seller from Jerusalem’s main street market. As old fashioned as they come. If you had asked him a couple of months ago to contemplate home deliveries via WhatsApp, I can only assume he would have laughed at you. But this week ……

I can give you anecdotes from numerous service providers and high-tech companies who have begun to rethink their strategies. Many of them are using outside consultants. And the reason for this is that it can take a fresh or neutral approach in order to rediscover that spark of hidden genius.

And this applies equally to the field of geopolitics:

Palestinian health care professionals have received training in Israeli hospitals. Israeli labs have analyzed Palestinian COVID-19 diagnostic tests, and doctors on both sides are sharing data…..The collaboration on the Coronavirus includes the health ministries of both governments, along with the Israeli military liaison. Israel in recent days delivered 250 virus test kits to the West Bank and held training sessions for Palestinian medical workers on how to protect themselves. Israel’s Civil Administration, the military-run authority in Palestinian areas of the West Bank, promised to supply medical equipment and training as needed

Corona is awful. The health, financial and social impacts will only be fully understood with the passage of time. That said, we can use the opportunities that it presents to make our commercial lives that bit stronger.

Corona is not an excuse to stop moving forward. It should be your motivation towards further innovation.

 

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