Afternoon Tea in Jerusalem Archives - Page 44 of 75 - Michael Horesh Business Coach and Mentor

21 January 2013

1 Comment

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

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

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

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

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

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

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

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

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

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

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

18 January 2013

No comments

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

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

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

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

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

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

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

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

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

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

21 December 2012

No comments

Categories: Business, Israel

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

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

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

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

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

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

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

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

20 December 2012

1 Comment

Categories: Afternoon Tea in Jerusalem, Business, Israel

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

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

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

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

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

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

11 December 2012

No comments

Categories: Business, Israel

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

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

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

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

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

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

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

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

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

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

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

9 December 2012

No comments

Categories: Afternoon Tea in Jerusalem, Israel, Jerusalem

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

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

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

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

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

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

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

7 December 2012

1 Comment

Categories: Blog, Business, Israel

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

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

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

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

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

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

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

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

6 December 2012

1 Comment

Categories: Business, Israel

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

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

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

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

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

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

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

5 December 2012

No comments

Categories: Business

In my professional life, I am proudly associated with an organisation which has created wealth for tens of thousands around the globe. And yet for all of its proud history over decades, that same group is having going through a difficult patch. Names and details are irrelevant, but the question arises if the current leadership has got what it takes to deal with the issues and move ahead?

As a business mentor, it is a question that you are faced with every week. You face clients doubting themselves because of whatever mess they find they are in. At other times, I am left wondering if customers have the necessary skills to take charge. Is there a generic check list to help people through these situations?

With some degree of ironic timing, three very different postings have come my way in the past 24 hours on this very topic.

The Financial Times newspaper asks “when should a company founder step down?”. Focusing on the CEO of Groupon, the column offers advice from an investor, an academic and an executive. Much of the discussion revolves around the phrase “what is the best for the organisation”.

Interestingly, as somebody involved with start ups, I was also struck by the last sentence. “Are they (the founders) willing to build a company that could function without them or do they still want to be the centre of the universe?” For the record, one of the first great leaders on the planet was Moses. And his reputation was not just built on leading a cantankerous people around the desert. He knew when his time was up and then deliberately helped to groom the next generation.

The second item comes from a TED talk by Boone Pickens, an octogenerian business magnate, who started life in a small town in Oklahoma. Mr Pickens keeps things simple and concise. And he drew up a 10 point leadership programme.

I speficially liked the first two items; Have a good work ethic and make a plan. In his chat, Pickens elaborated on the idea of a plan. For me he should have exchanged it for the word ‘vision’. As I encourage people to understand; if you know where you want to end up, you will then endeavour to find those tools and the correct environment that will secure your dream. Success may not be guaranteed, but you will have a great chance of achieving it.

And the third story comes from Australia. As a lover of English cricket, I am no fan of Ricky Ponting. In the same breath, I will add what is obvious to lovers of the sport; this is a person who as played cricket at its best. In a tribute to Ponting, Justin Langer, a former co-player, described his captain as a legend. “He walks the talk and wouldn’t ask anyone to do something he doesn’t do himself.”

It would be petty of me to relate these items to my original problem. Yes, I fnd some parallels. However, these are issues that impact on all organisations, wherever you are located. So, if I am looking for a basic guide in leadership, I will start by offering that we may need to consider how Moses behaved a mere 5,000 years ago.

1 December 2012

No comments

Categories: Business, Jerusalem

It is generally accepted that the word mentor comes from a story in Greek mythology. The character Mentor was foremost a teacher, who was entrusted by King Odysseus to bring up his son, Telemachus. The professional relationship with the student developed. As in the story, today a mentor is seen as someone who imparts wisdom and shares knowledge with a less experienced person in order for that person to become independent.

Great reading, but I suggest that Mentor was not the first of his kind. There is a biblical story, which in many way is more enlightening.

The episode was brought to my attention, when I was reading an article by Zvi Weinreb, ordained rabbi and qualified psychotherapist. He referred to a discussion initiated by a student by the name of Carol during a course that he was presenting on leadership in the book of Genesis.

Carol spoke about Deborah, not the famous judge but the handmaid of Rebecca (who in turn was the wife of Issac). Weinreb described what provoked Carol’s detailed research in to this seemingly very minor character. The Bible recalls that when Deborah died, Rebecca and Jacob and his sons all wept. Carol wanted to know what provoked this specified outpouring of grief.

It turns out that when Rebecca had wanted to summon her son Jacob back from exile – Genesis, chapters 27ff – she had a dilemma. Jacob had been living amongst the family of Laban. Although he was Rebecca’s father, Laban was simply dishonest, corrupt. The prime reason that Rebecca had survived her childhood, physically and morally, was due to the efforts of her maid……….Deborah.

As Weinreb relates Carol’s description: “Rebecca had to send someone who could pay a role in Jacob’s life and in the lives of his children, her grandchildren, akin to the role played by Deborah in her own early childhood. Hence she beseeched the frail, old lady to courageously undertake the mission“.

What Carol was arguing is that here we have a different kind of leadership than what we are used to seeing. We are not looking at a person who succeeds through charisma or authority. This is a tender soul, nurturing the good in people.

(As a historical sidebar, Deborah was buried under a tree near Beth-El, located just north of Jerusalem. Centuries later, the judge Deborah was considered a compassionate person, who delivered many rulings from under a tree near Beth-El.)

As per the theme of Weinreb’s course, Carol spoke about Deborah in the context of leadership. I suggest that these biblical figures offer much to modern-day business mentors and how they can approach their work with their clients.

30 November 2012

No comments

Categories: Israel, Jerusalem, Palestinians

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

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

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

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

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

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

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

29 November 2012

No comments

Categories: Business, Israel

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

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

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

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

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

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

;lkch;lad

28 November 2012

5 Comments

Categories: Business, Israel

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

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

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

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

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

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

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

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

25 November 2012

No comments

Categories: Business, Israel, Palestinian Society, Palestinians

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

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

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

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

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

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

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

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

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

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

24 November 2012

2 Comments

Categories: Business, Jerusalem

As I was contemplating writing this posting, somebody asked me why they should consider using a business mentor.

Sometimes, it is difficult to give a direct answer. And much depends on where your issues are centred – sales, production, admin, manpower – or at least where you consider them to be. Certainly, a mentor can be that professional shoulder to lean on, when you are searching for direction from a neutral source. Some argue that the mentor becomes a member of your board, forcing you to consider issues that you have preferred not to ask or have tried to avoid.

A recent case study illustrates what I mean.

A couple of months ago, a bank asked me to take on a growing client of theirs in Jerusalem, who effectively greeted me with the line: “I have built up this business for 25 years. It is something that you know nothing about. What on earth can you do for me?” He was right, it was the kind of operation that I have no clue about.

Well, we shortly established that his cash flow planning was ineffective. This was forcing him to take loans and at bad rates. Further, his time management was poor, leading to spend too much effort being spent in his office rather than creating new sales. Not a bad start, but not the “wow factor” that he was looking for.

So, I suggested a trip to his accountant, who knows all teh numbers. The company has been using the same expert for decades, but ususally only meets up once or twice a year. Our CEO agreed, although without much faith. The accountant himself was also initially sceptical and tried to put off the meeting. As for the result of this 60 minute encounter……………?

After some polite introductions and light questions, I threw out a ‘tester’. Turning to the man of finance, I merely asked him what our CEO could do to improve his income. The slightly sarcastic response referred to better sales. However, I persevered. Cautiously, the accountant suggested two technical adjustments to how specific costs are registered in the books.

And the value of these brief sentences? It is estimated that over twelve months, these changes will lead to tens of thousands of dollars entering the pockets of our CEO rather than donating them to the tax man as in the past. Not a bad return for the CEO for some prodiing from a man he had never met until recently.

19 November 2012

1 Comment

Categories: Business, Israel, Palestinians

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

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

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

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

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

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

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

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

17 November 2012

No comments

Categories: Business, Israel

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

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

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

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

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

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

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

13 November 2012

No comments

Categories: Blog, Business, Israel

Small and medium-sized enterprises (SMEs) make up over 95% of all businesses in just about all economies around the world; America, China, Mongolia et al.

A quick google search shows just how many positive central government schemes to promote this sector have been released in the past few months alone. Singapore is providing more cash and defraying costs. Italy has initiated a series of tax reliefs, which will replace bank loans that have dried up. In the UK, there are numerous private and public initiatives to help fund SMEs. Even Skype has launched a new networking platform.

As a business mentor, based near Jerusalem and who works with many SMEs, these initiatives can be readily logged in the “good news” folder. And yet, imagine my concern and frustration when I read about a recent survey. “Israel’s small and medium enterprises (SMEs) employ a lower number of workers, are hindered by more constraints and have lower productivity rates than their OECD counterparts…..”

Apparently, SMEs in the Holy Land are responsible for 99% of all businesses, but are handed barely two-thirds of all bank credit facilities. According to a senior government official:

Figures show that small and mid-sized businesses in Israel are a particularly weak sector, stemming from three main reasons: Extreme regulation, hard to obtain bank credit and loans, and the absence of knowledge due to the lack of a professional managerial rank in small businesses.

However, here’s the real sting. Two months ago, the Israeli government slashed without warning its mentoring budget. For years, the public sector had subsidised an extremely unusual and successful programme that allowed hundreds of new and established SMEs owners to receive the support of professional consultants at minimal rates. In other words, that same ‘lack of knowledge’ mentioned above was deliberately targeted. Today, that hole has been savagely exposed anew.

What is just as shocking is the manner of the decision. Consultants, who had created work plans, were instructed to abandon clients without notice. Sales, production and employment strategies were left struggling without the helping hand of outside support.

The Israeli Ministry of Industry is reportedly planning new schemes, although one must be sceptical if anything can inaugurated before April 2013. (The country faces a general election). In the interim, maybe the local planners will learn from other countries, who are clearly setting the pace for helping SMEs. Of course, I could offer my services as a mentor……..

10 November 2012

1 Comment

Categories: Business, Israel

Flicking through this weekend’s newspaper, I began to realise that the feature sections were surprisingly – and I assume unintentionally – replete with positive stories. There was a theme blaring out at me – believe in yourself.

Start with the article on Cristiano Ronaldo, without doubt one of the top three football players in the world today. His new book reveals another side to this remarkable talent. He was born into poverty on the small island of Madeira. With a drunken father and a druggie brother, growing up was not simple. At 15, he overcame an operation on his heart. He was laughed at in training as a junior. Today, he is rumoured to have a buy-out clause, valued at US$1 billion.

On a more tangible level, I read about Waze, whose mobile app helps people negotiate traffic jams. It was founded in 2008 by three entrepreneurs in a small office just north of Tel Aviv, Israel. Today the firm boasts tens of millions of users globally with a personal endorsement from Tim Cooks of Apple. This is a company that has stuck to keeping things simple and ensuring they are tuned in with latest trends in social media. It is now shaping up to be threat to Google Maps.

Ok, so these are two casse studies are international phenomena. A third item looked at ten individuals in Jerusalem, who had been fired from their jobs. Each then “refound” themselves as self-employed entrepreneurs – photographers, toolsmiths, dietitians etc – when only months previously such a concept would have been alien to them. What happened was that each in their own way discovered a new understanding of themselves

For me, the most remarkable story was an engineer, who had known two decades of success in high-tech. However, after he was retrenched, he realised that he was “too old” to be considered for similar positions. A series of circumstances and a little “chutzpah” created the opportunity for him to fly to a meeting with the heads of a multinational German company that had no presence in Israel.

And off went our engineer with powerpoint presentation in hand. In addition, he also packed fresh fruit, grown in his own garden and then placed the pickings for his hosts to eat. The Germans may have been surprised at this offer, but they munched away happily. And when he was towards the end of his explanations, he added: “You see that tasty fruit of mine? You may be one of the best known companies in the world for what you do, but in Israel you are an unknown. I want to cultivate you like the fruit in my back yard.” The rest is history.

Chose any of these stories, but the message is the same. Know your talents. Understand just how much you are capable of. And there is a great chance that you will succeed way beyond where you are today.

9 November 2012

No comments

Categories: Business, Israel

The world is focusing on America’s looming budget crisis. However, where Washington leads, others have followed. Greece is the classic example. Has Israel also joined the queue?

Yes, Israel with its high growth of 3%, this year and next. Israel, the holy land whose economic miracle economy is seen as a panacea for others like Japan to copy. And it is less than a month ago that S&P reiterated Israel’s A+ rating despite the failures to agree on a fiscal budget for 2013.

The main problem for the Israeli government is its propensity to spend. Tax revenues have moved up a couple of percent compared to 2011, not bad during a global slowdown. However, expenditure is up more than 8%. The net result is that the budget gap has increased 50% in ten months. That is a dangerous ledge to negotiate around.

Part of this deficit could be plugged by a one-off windfall in changing the tax laws for what are known as “trapped profits“. 2014 will see the start of new on-going revenues from gas exploration. In the meantime, the picture is looking worrisome.

In February 2013, Israelis will go to the polls. It will be a shame if the current government fails to act now and leaves the dirty work to its successor. Such a lack of courage merely risks throwing away gains of the past for the sake of a short-term political goal. Will the electorate wish to recognise the folly?

Pages

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

Managing your stock – 3 case studies

Covering up election economics in Israel

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

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

Behind the photo pics in Jerusalem

Business mentor, religious leader or shrink? You choose

Israel’s economy concocts a bitter recipe

Three ways to understand what makes a great leader

What business “mentors” can learn from the (biblical) origins of the word

Buses, a holy city, and our moral responsibilities

Vote of confidence in Israel and her economy

From landing late to great customer service – El Al turnaround

Economic cost of war (2) – Gaza

Why consider using a business mentor

Hamas or Israel? The answer is in the economy

So who benefits from trading with Israel?

Who wants to help small business?

Discovering yourself – from Ronaldo to Waze to Jerusalem

That fiscal cliff – not just an American issue

"Michael transformed the way I think and approach working, and also how to monetize my social media and communal projects."

"Michael helped my high tech company take off."

"Michael has been an invaluable resource to me throughout all of the steps of starting up my business."

“Working with Michael Horesh is like having root canal treatment, marriage counselling and business coaching all rolled into one, successfully.”