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.

My friend Seth Vogelman, a commercial connector from Jerusalem, sent me an intriguing blog called “The unintended consequences of a too-nice work culture” by Jonah Sachs. Bottom line? Lower level colleagues are so afraid of offending others that vital information is not passed on and upwards.

In other words, the corporate outlook may be chummy and pally, but the opportunity for increased profits is dulled.

As a business mentor, I have seen this scenario played out several times, when entrepreneurs approach investors. As the former try to endear themselves to the person authorizing the cheque, they become over charming. All well and good, but what is of more interest to the target is whether the business owner can be hard enough to drive a new enterprise. A smile may get you some of the way, but only so far.

I recall that in one of my former positions in a large corporate in Jerusalem, I did everything I could to curry favour with the top team. And yes, I was appreciated. However, the colleague  – a really nice guy, I add – who secured the advancement was the one who reported in straight terms as to what needed to be changed.

Some people see business mentors and coaches as having the role of playing “Mr. Nice Guy”. I have long since picked out such potential clients as the ones that I am unlikely to sign with. My role may be to show empathy, but not to hide the sometimes painful facts.

Just this week, I met up with some young entrepreneurs with an interesting idea for a innovative app. By the end of the conversation, I had demanded a rethink. The market was too narrow and they had not conducted a reasonable survey of consumer expectations, amongst other issues. They looked a bit numb, but appreciated the frank approach.

And today, I encouraged yet another client to go back to their accountant and demand that they produce financial statements that have meaning. Why book keepers so often have to forced into making their reports functional is beyond me.

And for those who do not like confrontation on the work floor? Just think of the damage caused by not sorting out the mess, firmly yet with a smile.

 

 

Jack Ma, CEO of Alibaba, has described Israel as “incredible“, a very neat follow up to a recent post, where the question was posed “what makes Israel so different?”.

I raise the issue because this week the Holy Land is yet again forced to defend itself against its verbal protagonists. The Israeli act is one of the leading contenders in the Eurovision Song Contest, which will be screened this week to hundreds of millions of people globally. Those haters of the Jewish State from the BDS campaign are reportedly targeting the event, demanding a boycott of Israeli culture.

I do not intend to spend yet more time, explaining why BDS is so segregationist. Certainly, its proponents spend little time on the evils of North Korea or elsewhere. What is of more interest is how Israel is having such a positive role in the world’s commercial and cultural life. Just look at this series of events, all news items over the past few days.

  1. Giro d’Italia. For the first time, part of this magnificent race was held outside Europe, hosted for three days this month in Israel. 175 riders competed from 22 teams. The exposure of hundreds of journalists, as well as the TV scheduling into millions of homes in cycing enthusiasts was a phenomenal achievement.
  2. Whisky Live, Tel Aviv. For the fourth time, Tel Aviv played host to numerous distilleries from Scotland. Israel is proving to be a small but growing part of their export industry, as imports have risen over 300% in the last five years.
  3. Also coming to Israel is a Beetle, Ringo Starr. He has just added a second date to his June schedule in Tel Aviv.
  4. Arriving in Israel this week are the delegates to Israel’s premier Agritech exhibition. Israel is a country with over 750 start ups in the agri-food sector. No wonder that there will be representatives from over 100 countries, which means several are based in places which do not recognise Israel officially.
  5. Frutarom is an Israeli company that has sought to grow through acquisitions. Now the boot is on the other foot, as International Flavors & Fragrances Inc. jumped into a rush of dealmaking in the food-flavoring industry, agreeing to buy Israel’s Frutarom Industries Ltd.for $7.1 billion including debt.
  6. And for the last item, I run off to Indonesia, the largest Muslim country in the world. The authorities have agreed to issue visas to Israeli tourists, a complete slap in the face for BDS.

I have not had time to mention the three embassies that are about to move to Jerusalem.  And so the list goes on.

By the way, if for one moment you thought that all of these changes only applied to one sector of the population, I caution you. Just see who are the prime buyers in the new luxury car market in Israel!

Last week’s demonstration by approximately 2,000 Jews in central London against overt anti-Semitism in the British Labour Party provoked one very definitive outcry by observers of all religions. To summarise: How is it possible that in the year 2018, in a country that prides itself on accepting differing cultures and where Jews have made such a contribution for hundreds of years, they feel threatened and unsafe?

Seasoned journalist and commentator, Melanie Phillips, penned the penetrating observation that:

What the left cannot grasp is that the new antisemitism uses almost identical tropes against Israel, the collective Jew…..Labour will never rid itself of antisemitism while it supports Palestinianism. The choice it faces is said to be between Corbyn and the Jews. In fact, the choice is between Palestinianism and the Jews.

I connect these remarks to a small yet pertinent stat that I read this morning. This coming Wednesday evening, for 24 hours, Israel will commemorate the annual Memorial Day for the Fallen Soldiers of Israel and Victims of Terrorism. 23,645 people make up this number (so far), including 3,134 civilians, while the total population today is about 8.1 million.

However, what shook me was that of the 101 names added to the list during the past twelve months, 12 of them were civilians killed….just because they are Israelis. It shows most candidly how the one Jewish country in the world remains an anathema to so many and thus becomes an excuse for anti-Semitism.

A nickname for an Israeli is “sabra”. This is a fruit indigenous to the Holy Land, known to be prickly on the outside yet sweet inside. However, Israelis do not forget too readily. Yesterday was Holocaust Day, where the sirens sound at 10.00am for two minutes. People stand in silence. Drivers stop their cars and briefly step outside.

There is even a video on Facebook of Israeli tourists in Thailand, standing in remembrance at 10.00am local time around the pool. That is the meaning of the sanctity of life for Israelis.

And elsewhere in the Middle East? Should I write about chemical attacks on innocent civilians in Syria? Should I contemplate the public executions of homosexuals in Iran? Or the fact that today, the Palestinian protesters along the Gaza border with Israel will continue their peaceful spontaneous protest with all the violence they can muster, planned in advance.

I’ll stick with the values of Israel, 70 years old this week and still going very strong, for the benefit of its citizens, the UK and the rest of the world.

 

In order to change the world, you need to change your mind.

This is a line, which is almost lost in the finale of a great musical by the name of Kinky Boots. I can assure you that once you think about it, you will realise how powerful it is. I often incorporate it into my work as a business mentor.

I was reminded of the phrase earlier this week for two reasons. First, on a personal note, I have had to overcome a personal challenge. Things were not going right. I looked around for external inspiration. Nothing has really fitted the ticket.

It was only when I appreciated that the change had to come from me, somehow, did I begin to edge forward. All very painful, and not so simple.

At about the same time up popped a commentary on one of Will Smith’s little videos. He has a knack of summarizing complex subjects in a couple of minutes.

Self discipline is the center of all material success. You cannot win the war against the world if you cannot win the war against your own mind.

It is not that people are born with more self-discipline. It is that others have learnt to adopt more resilience to outside pressures and interference. For them, those grey clouds in our minds barely exist. Why? Well that can be to do with our upbringing or otherwise, but it is something that can be learnt and adapted.

I would like to take this concept one stage further. Ironically (?) yesterday, I was reading about exercises or postures that will either make us feel or be perceived as more confident. It could something as basic as smiling more often or listening to a motivational song.

The tip that most strikes a cord with me is that so many of us hold ourselves incorrectly, and I am not writing as a chiropractor. We tend to slouch when sitting or drop our shoulders as we walk. The truth is that when you sit or walk tall, you feel better. You talk more positively. You radiate an aurora of confidence, which impact on others.

Now I challenge you. Just how much are these tips worth to you in generating more value out of what you are trying to achieve at work or elsewhere?

Almost everyday, I find myself inundated with motivational videos and blogs. Some work, and some….well, they are a bit weak.

So, I am going to spoil you dear reader. What follows are four links to some of the better pieces of content that have come my way in the past few days, with the message summarised for you. They are primarily targeted at the owners of small or medium sized enterprises. I hope you find them not just interesting, but useful and applicable as well.

The first one is for those who sometimes find themselves feeling a bit down – rejected is often a phrase that comes to mind. You have lost a contract. A trusted employee has walked out. You know that these things happen, but ………

Dr. Robert Brooks reminds his clients, when they talk about not receiving a work interview: “They didn’t reject you, they rejected your resume. . . . “. He develops his argument by noting that just because we see something right now as ever so excruciatingly important for ourselves, maybe it is actually merely a nice diversion. You learn to appreciate that there are many different paths that contribute to a life filled with satisfaction, hope, caring, compassion, and resilience.

My second item refers to that employee, who you have rejected and fired. Or maybe you did not realise they had been unhappy and they decided to leave. Do you know how much it will cost you to replace them?

Never mind the loss of knowledge of knowledge. Typically,

Employee turnover results in costs (internal and outside services) to the employer, including those for employee separation/departure, lost productivity, recruiting and hiring replacement employees, orientation and training of new employees, etc.

Put that into dollar terms, and you are finding you are starting to pay an extra half month’s salary just to keep you from moving backwards. Hefty on the cash flow of a SME. Do you want to go there?

Moving on to long-time entrepreneur, Richard Branson. I was referred back to an interview with him from 2015. He was asked what kind of people he recruits to run his businesses. The core of the answer referred to demonstrate that they can lead through ‘motivation’.

However, Branson prefaced his response by admitting how important it was for him not to run those new business units he had created. His experiences taught him that the day-to-day operations should be left to somebody else with a fresher approach. His added value is that of chief strategist, and that did not require him to be on centre stage 24-7.

Finally, but definitely not last, are arguably the ten greatest business bungles of all times. They are astounding to recall. They certainly put into perspective mistakes I have made or seen others carry out. My all-time favourite remains Number 2.

Nevertheless, for all the smirking, the video highlights a vital message, one that has not changed over the centuries – even if so many of us keep ignoring it. Know your market! And if you think you know what that is, go and check yourself again!.

I feel that all four items do come together under on theme. My role as a business coach and mentor is show my clients how their failures or those of others are not something to laughed about nor to be ashamed of. They are the basis for your next successful endeavor.

On the surface, it is that time of year when the Israelis and Palestinians are about to strike up another round in their war of rhetoric. Tomorrow, residents of Gaza are threatening to march on the border fence with Israel. The week has already witnessed a series of illicit border crossings.

And meanwhile, the USA is ready to impose financial sanctions on the Palestinian Authority if it continues to use its budget to support convicted terrorists in Israeli prisons. Sweet news for Israelis, who have been campaigning on this issue for nearly two decades, to the understandable disgust of their opponents.

So, the summer Mediterranean heat is nearly upon us. The politicians are becoming more agitated. The peace process is looking more and more like a stagnant pond.

And yet………

Just over a month ago, the Israeli Minister of Finance, Moshe Kahlon, paid a visit to Ramallah. Press reports indicate that this was his third meeting since June 2017 with the Palestinian Prime Minister, and the next one is planned to take place in Jerusalem. Evidently both Abbas and Netanyahu are fully aware of all the details.

What has been on the agenda?

  1. Setting up a joint industrial zone near Modi’in Illit. Not solely designed for Palestinians, it will also target finding employment for around 2,000 ultra orthodox Jews.
  2. Reaching an understanding so that the tens of thousands of Palestinian labourers in Israel receive full pension rights, which are also paid out accordingly.
  3. Further improvement of the sewage systems, as the polluted drain offs have made its way into Israel.
  4. Improvements to the Palestinian mobile phone infrastructure.

Kahlon is not the only Israeli minister who has visited the Palestinian territories. Eli Cohen, the Minister for the Economy and a colleague in the same political party, has been looking at ways to improve the road system around a Palestinian new city.

I would not leap into the air too much over these moves. However, they do show what can be accomplished when there is good will on both sides. They also reveal the level of nonsense surrounding the public rhetoric of the negotiations from both sides.

This weekend, Jews around the world celebrate the festival of Passover, when Moses led the Jewish people out of Egypt. May senior politicians of both sides find the strength and wisdom to create more such talks, rather than guide their followers towards violence along border fences.

It is two decades since I learnt a very valuable lesson in human resources. The incident was painful and embarrassing, but remains hugely insightful even today.

I was attending an extended training session. I was sitting in a circle, amongst my colleagues, one of the more senior members of the team. My assistant complained that I had not listened to him on a certain issue. I answered back. He then proved to me that this had occurred several times previously. And on each occasion, there had been a negative fallout.

Punch line – said in front of everyone. “Michael you cannot keep ignoring all the time what somebody is warning you. And then once the mistake has happened, you blame somebody else.”

In other words, at what point in time was I prepared to take responsibility for my actions, and how I had trained my own unit?

I went home a lot of humble pie.

I have since move on to become a business coach and mentor, primarily in the Jerusalem area. I have frequently confronted by CEOs, determined to shift the focus of their troubles on to the shoulders of their employees. Showing these leaders how they can change and thus an impact a situation is one of my challenges and thrills of my work.

And all of these thoughts can flooding into my mind when yet again I was reading about Jeremy Corbyn, the leader of the Labour Part in Britain. Now, as somebody born and educated in London, UK politics still interests. And to observe the need for British Jewry in the year 2018 to demonstrate against the demonic rise of anti-semitism in the Labour Party is deeply concerning.

We know that Marxists have a fundamental problem with Judaism. They, including Corbyn, claim not hate Jews. However, the religion is also a nation, which emerged long before the modern Israel-Palestinian conflict. That is an anathema; complete no-go territory.

Has Corbyn been warned previously that his words and actions (or lack of) and those of his supporters are offensive, degrading and unacceptable? The answer is a categorical yes, as this link will testify.

How many times? According to Labour MP John Mann:

Seventy-four is the official figure but there is a very significant number of others that have not been properly registered. It is many more than 74. There are around 130 other cases I know of which have been put in. They are going to be resubmitted, and I am asking for them to be properly assessed. What is depressing is that there are so many cases being dealt with officially – and that it had taken so long to deal with them. We are talking the last two or three years.

So Corbyn has been told of the issue. And he has done nothing about it, or next to nothing. That makes him the root of the problem. As per the theory laid our above, he is the one that must change.

Maybe he can start by recognising that Jews pray to Zion, and that is located in Jerusalem. That could be so confrontational, that it might conjure up a painful shout of “oi vay”!

(Just as I finished writing this blog, it emerged that Corbyn has been a member of 5 virulently anti-Semitic Facebook groups).

 

Israel is on the verge of celebrating 70 years of Independence – a massive opportunity for a fun day with the family, as well as mega photo shoots for the politicians of today.

And there are two causes for all of this. First, for all the geopolitical threats over the decades, Israel is here to stay. Even Saudi Arabia is now letting planes fly over its airspace to Israel. Second, Israel has transformed itself from a backward agricultural economy to a high-tech giant. Israel is an OECD member with a stock market that has a top tier ranking.

The question is how has Israel moved from rank bottom to top 25?

Go back to 1948 and the early 1950s. The country was broke. Minimal imports. High unemployment. No industry. War reparations were a miracle gift. Still, the victories of the Six Day War in 1967 were followed by another depression. And nearly twenty years further on, Prime Minister Peres had to freeze prices and wages, while the stock market was temporarily closed.

So the question remains, why is Israel of 2018 a headline-setting example of innovation, entrepreneurship and hightech wonders? What has made the difference?

Sever Plocker is one of the country’s leading economics reporters. Writing in Hebrew last Friday in Yediot Ahronot, Plocker highlighted Israel’s immigration policy. In effect, what he was saying that every economic boom was preceded by a significant amount of new arrivals to the country.

For example, the 1950s were noted for the hundreds of thousands who fled Arab countries such as Egypt and Iraq.  Between 1956 and 1958, 37,000 rushed out of Poland, due to the country’s new anti-semitism. Add in the many who left Russia in the 1990s, and Plocker suggests that over three million people have arrived in 70 years.

The main waves occurred just before an economic boom. The current GDP per person is about US$40,000, twenty times that of 1948. And today’s total population is a little over 8 million, roughly equivalent to the size of Wales. It is the talents of these people, who support the phenomenal changes realized at companies like Checkpoint, Mobileye, Elbit and others.

Where are today’s core economic problems to be found? The OECD finds that Israel’s roads are amongst the most congested in the world – ironic for a country that was subject to an oil embargo. There is a chronic shortage of beds in hospitals. And large members of the potential workforce, particularly in the ultraorthodox and Arab communities remain just that – potential participants only.

To that list, I would add the centralisation of certain sectors; the lack of reforms at Israel’s ports and the restrictions on food imports are just two obvious examples. And these are opportunities to be exploited by vested interests. From here, it is only a short jump to cries of corruption amongst senior politicians.

That said, Israel has done phenomenally brilliantly in 70 years. I raise my glass to the next few decades of economic freedom and triumphs in the Holy Land.

It happens to all of us from time to time. Suddenly you realise that everything is going wrong at work – Out of nowhere, an argument has erupted with a key customer; your next project is cancelled; that key worker passes away unexpectedly; and much more.

What do you do?

In truth, all of these happened to various clients and acquaintances of mine this week. You could claim that I have jinxed them. From the depths of their despair, they turn round and say: “You are my business coach and mentor. What do I do now?”

It is not so much a request as a demand for you to wave a magic wand and to make it all better in a jiffy. I suppose it is somewhat ironic that as I wrote this, I happened to be listening to R.E.M. play “It’s a bad day“!

Motivating is rarely the easy task as television and the cinema portray. We all wish that we had a Herb Brooks speech ready-to-go at the drop of a hat. You can hear him now urging on his ice hockey troupe –  “You were born for this”.

It ain’t that easy. I was running in the Jerusalem marathon a couple of weeks ago, and was in desperate need of some choice words just past the half way mark. Nobody was around. I had to make a determined effort to change my line of thought.

This assertiveness is a trait that some prefer to ignore. It is seemingly easier to be placid and friendly. I suggested to one CEO this week how it can be applied at work. However, by the end of the day he had written a brief email, describing how the advice had backfired. I actually believe that he may have blinded by immediate setbacks, which will be replaced by longer term achievements.

Hollywood actor Will Smith in a recent video put this very succinctly.

When you get to the gym and work out, you are seeking failure.

Now there’s a thought. Yup, he is right. He could even have said that we want to fail in order to succeed. And that is why is went on to state:

Get comfortable with failure……….because that is where growth is.

Remarkably, a few hours after listening to Smith, I came across a quote from an old man with a strange bushy haircut. “Anyone who has never made a mistake has never tried anything new.” (Albert Einstein).

So, next time you have a “downer” at work,……………

 

Getting into and around Jerusalem these days is no fun. The construction work for extending the light railway reminds one journalist of a siege situation. Improved public sector travel services in recent years has not resolved the rush hour congestion. New buildings are considered ugly if not gothic. And mass sell offs of real estate by the Greek Orthodox Church have sent land prices tumbling in some neighbourhoods.

Not all is doom and gloom. The Fattal chain is looking to open its fourth hotel in the holy city. Facebook recently held on of its first international events on behalf of small businesses in the capital. And in three months time, Jerusalem will be graced by the presence of Prince William from the British royal family.

Jerusalem continues to attract key high-tech investments. Mobileye, sold to Intel for US$15 billion, is located to the north of the city. OrCam, “which has developed a visual aid for the blind and has completed a funding round that values the company at $1 billion”, was created in Jerusalem. The expected opening of the American and probably other embassies in Jerusalem is likely to promote a spike in housing prices and also a need for additional support services.

The next few years look like to be a messy yet exciting growth path for Jerusalem’s economy. This will not just be featured in traditional sectors like tourism. Even a distillery is planned to open in the south of the city – the first round of funding is near complete.

In the meantime, the local populace and visitors will just have to put up with those awful traffic jams.

Every couple of months or so, I give a lecture in Jerusalem on the theme of “time management”. It is usually held at the MATI innovation centre in south of the city, directed primarily towards new immigrants to the country looking to set up an enterprise.

We are talking about a highly motivated section of the community. They seek to make that extra difference to society. Their ideas include the food industry, apps, journalism, retail and beyond. And yet……

And yet, almost invariably, most of the participants arrive late for the start of the talk. I cannot understand it. Here I am, an experienced coach and mentor, looking to impart free advice for their new start, and they miss the most important part of a talk – the beginning.

The question is why.

When I ask the guilty parties, the reply is frequently limited to a shoulder shrug. Neither very helpful nor inspiring. Blame the heat of the Mediterranean climate is what I am told to accept, which I reject on the spot.

During the talk, I look for a volunteer. I tell them to consider one task that they have put off carrying out for some time, even though they know it is important. I then engage them in a question and answer session for 60 seconds or so.

I ask them to consider what would happen if they were to carry out the assignment. When they respond, I ask the same the same question. The next response draws the same question, and so it continues.

The scenario comes to an end, almost invariably, when the person mentions that as a result of everything, they can make a sale and so earn extra income. It is almost as if they have been programmed to believe that making money is an evil – an abomination, which they should be very wary of.

Somewhat immodestly, I then link this thought process back to the reason why people are late for my seminar. Consider: If they were to turn up on time, they might learn something. Implementing that advice could result in additional revenues. Ouch!

Why are people so afraid of extra commercial value?

 

When it comes to SMEs – small medium sized enterprises – around the globe, two themes repeat themselves. First, they comprise over 90% of all commercial activity. Second, all governments claim to support them, while the civil servant often takes a different attitude.

And in Israel?

If you are looking for a miracle from the Holy Land, I am sorry to disappoint you. My experience as a business mentor and coach in the Jerusalem area throws up story and story, a veritable reservoir of material, as to how officials insist on being small minded when it comes to “helping” SMEs.

Just look at these instances faced by clients and associates just recently.

  1. An owner of a launderette has just opened a second outlet in North Jerusalem. He excitedly posted a notice on his glass door, announcing the premise was open for business. A few days later, two officials from City Hall turned up unexpectedly and declared that the A4 piece of paper was a “sign”. That requires a full license, which he did not have. He was duly fined about 1,100 nis – say US$300. By the way, if the notice had been placed on the outside of the door, the sum would have been around 1,500 nis!
  2. My client was busy with some administrative tasks in his Jerusalem premise, when in walked two officials from the income tax authority. They found that he did not keep a diary of all appointments, apparently a foul crime. He had also not managed to receipt two cheques from the previous day. Their value was around 4,000 nis. His total fine was close to 5,000 nis for his heinous crimes against humanity, about half his take home pay per month.
  3. My office is in an area, known for a chronic shortage of parking. Last week, I could not find one spare spot for my vehicle. After all, due to new construction, lorries were parked in some of the spots. And road works ensured that another 30 places had been dug up. With pressing appointments waiting for me, I parked illegally. And you have guessed the next line – one 500 nis parking fine was waiting for me several hours later.
  4. I am furious on behalf of one of my clients. Due to a technical issue, the income tax authorities demanded additional paperwork. This held up vital procedures at the bank. The pieces of paper were rapidly delivered. However, a glitch meant that the bank could only see on the computers that they were not allowed to process their work. Despite protests over weeks, the tax officials could not fix the problem. My client was asked to pay a large fine – thousands of shekels – and suddenly everything was fixed!

I could go on. It is assumed that in some of the instances, the officials are paid some for of bonus or success fee for their efforts. And you are reading this and shouting out “appeal, appeal”, I have to ask: “Have you got the time and effort”? In one case, the person involved was explained the process and cautioned that it could end up with a stiffer fine.

The good news is that……………the government believes in supporting SMEs………assumedly via the extra taxes that collect through situations as described here.

 

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

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

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

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

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

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

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

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

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

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

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

What follows is a full copy of the IVC report:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

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

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

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

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

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

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

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

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

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

At the very least, it is ethically unacceptable.

 

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

What follows are three typical examples of what I mean:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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