Pages

A Place for Business Mentorship in Jerusalem

1 June 2022
No comments
Categories: Blog, Business, Jerusalem

After two years of corona lockdowns, and when hightech has taken on an even greater importance in the domestic economy, is there still a role for business mentoring in Jerusalem?

This week, I have been writing a series of posts for LinkedIn on business coaching and mentoring. I have explored core issues such as the role of the mentor, how to find a suitable candidate and what are the potential benefits.

Today, it can seem that everything is so instant. If you have a problem, ‘google’ the solution and someone will deliver it within an hour. Just launch a marketing campaign on social media and your sales will leap forward in a jiffy. Simple, eh!

The reality is frequently otherwise. CEOs and decision makers are inundated with so much info that it is hard for them to reach a conclusion and then also act on them with authority.

And this is where the business coach / business mentor suddenly becomes so necessary, allowing the client to see the wood for the trees.

I woke up this morning to find an unsolicited compliment on my WhatsApp feed. It was from a geek in her branch of tech, yet slightly clumsy when it comes to interpersonal relations. I am enhancing her reach to create a social media strategy, plugging her achievements in Jerusalem and in Europe. The initial bait was a conference in the USA. Her blogs have called on interested parties to DM her. And guess what? They have done so!

Then this afternoon, an upcoming food distributor just blurted out in the the middle of our zoom conversation how I “have really helped” him to grow his business.

Pardon the messages of self-congratulation.

What I am saying is that business mentors, by asking and the right questions and by challenging the seemingly obvious – can boast sales just as much as a 60 second glance on Google. Contact me to learn how.

The unexpected ‘fall out’ of the Ukrainian war on Israel’s economy

7 March 2022
No comments
Categories: Blog

It was only a few weeks ago that the Ministry of Finance in Jerusalem was celebrating the highest annual growth in the country for years – over 8% in 2021. Today, after nearly two weeks of the fighting around Ukraine’s nuclear plants and other sensitive areas, 2022 does not seem so radiant.

Or does it? What actually might be the fall out from this human tragedy?

Early commentators have focused on Israel’s heavy reliance on wheat from the Ukraine and oil from Russia. Last week, I pointed out how tens of thousands of Ukrainians are employed directly by the Israeli high-tech sector, and no small number of many others are indirectly reliant on that success continuing. Assumedly, each of the three factors will not have positive consequences for the economy of the Holy Land.

Arguably, the most important impact on Israel’s economy could be felt in the microchip industry. For Israel, with 15% of the workforce employed in hightech, 3 large Intel plants and nearly 300 overseas incubators, this could be a big red light!.

According to research firm Techcet, Ukraine supplies more than 90% of the U.S.’s semiconductor-grade neon, a gas integral to the lasers used in the chip-making process, while Russia supplies 35% of the U.S.’s palladium supply, a rare metal that can be used to create semiconductors

VentureBeat

The Financial Times newspaper noted that there are global stockpiles for up to about two months, but then what?

BMO Capital Markets analysts say the motor industry could again be hit hard, both from chip shortages and a lack of wire harnesses. The latter bundle up the miles of cable in every car and Reuters reports production at Volkswagen, BMW and Porsche is being affected. Twenty-two car companies have invested more than $600mn in 38 plants in Ukraine — many, though not all, producing wire harnesses — and they employ over 60,000 people. Right now, being in a war zone, they are the motor industry supply chain’s weakest link.

Financial Times

One surprising piece of news is that the oligarchs may try to use Israel as a place to secure some of their families and / or even their wealth. The picture is less clear on this point, and the banking system led by London and New York will be looking to close off such loopholes.

And all this leaves us with one little beam of hope.

Ukraine is home to around 200,000 Jews. At the beginning of this week, it was announced that over 2,000 had already arrived in Israel, with more on the way. Historically, most waves of immigration place a strain on local resources, but only initially. Afterwards, the GDP figures receive a kick upwards.

Fasten those belts. More twists and turns are surely on the way.

Israel’s inflation; What you don’t see, does not hurt, correct?

14 February 2022
1 Comment
Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel, Jerusalem

Our inflation (in Israel) is 2.8% and still within our target range. Even if we see indices that bring inflation above the range, our expectation is that inflation in the second half of 2022 will fall in the direction of the target range.

Andrew Abir, Deputy Governor of the Bank of Israel

And the experienced economist makes a fair point. Israel’s inflation rate is still relatively low. Look at America, which has just announced the highest set of price hikes in decades. It is now assumed that planned interest hikes will be brought forward. The Europeans are still trying to work out how temporary (or otherwise) this period of inflation is likely to be.

If you ask the average person on the street in Israel – if there is such a creature – they will tell you that the distinguished economist obviously does not do the shopping in his household. The government has just been forced to apply enormous pressure on major food manufacturers and food importers to postpone or delay previously announced price hikes. In addition, Israel’s Minister of Finance has proposed a series of measures to put extra spending money into the pockets of the less financially secure.

The irony of many of these measures is that much of the extra cash will serve to boost the profits of the large retail grocery outlets. That is where it is assumed that much of the money will be spent.

However, few of these measures will dent what is called inflationary expectations. There are two reasons for this. First, however strong the shekel is against many of the major currencies, the prices of imported raw materials are soaring. Similarly, even if the cost of international freight comes down from its peak, it will remain way above pre-corona rates. All the shops are stuffed full of overseas products.

What can the policy makers in Jerusalem do?

There are two fundamentals that determine what happens in the economy. And throughout the country’s history since 1948, few politicians have dared to tackle these vested interests.

First, the price of land and the hidden costs of planning a new building remain high. Why? Because between them, they bring in to the treasury vast amounts of tax revenue. Eventually and inevitably , shop owners pass on these expenses to their customers.

Second, the country is full of protected interests. High import duties on fruit and vegetables protect the farmers, even when products may not be in season. Antiquated union practices ensure that the ports of entry are expensive to run. Importing procedures are complex (bureaucratic) and thus also expensive, prohibiting new entrants into the markets. (It would take me a separate blog for me to explain the procedures to import tinned food into Israel – labels, samples, approvals from at least 3 ministries, and more).

The common denominator of the two factors is the lack of competition. And thus the cost of living in Israel remains high – absolutely and comparatively. And now you know why Israel has some of the greatest differences in wealth between those who have and have not.

But just who can and wants to see that?

What makes Israel’s budget a ‘cut’ above the rest?

4 November 2021
2 Comments
Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel

Apart from a little bit more mud-slinging (almost literally), Israel’s Kenesset has passed the budget for 2021. What should be a normal a normal parliamentary procedure has turned in to a ground-breaking event, not seen for 44 months!

The government has touted this as a budget of reform and change. Um, sorry, but no.

The total of NIS 609 billion ($194 billion) does not allow for significant reforms such as how fresh produce reaches the shops or tax relief for the bulging self-employed community. In fact, due to two years of political instability during Netanyahu’s hold on power, it remains just the budget for 2021 – whichnow has less than 60 days to run.

So, what is so impressive about Israel’s new budget?

First, the budget was passed. The assumption is that the 2022 numbers will also be approved by the end of the week. That is major positive news for Israel on the financial markets, allowing the country and corporations to raise money more readily and at a lower cost. This was the core message of the Bank of Israel earlier in the week,

Second, the budget was passed despite the government operating with a majority of just one vote and acting as a coalition of no less than 8 diverse parties. The opposition did its utmost to find the weakest links, but failed. That may point to some hidden internal strengths (for now) of the various partners.

And yes, there are some positive pieces of news at a macro level. The unions have agreed to a new wage freeze for a year in the public sector. Import restrictions on certain products like cosmetics will be lifted, resulting in (hopefully) lower prices in the shops. And the government is promising action over the paperwork citizens are still forced to complete in the age of digitalisation.

What next? In a country facing the threats from corona and Iran as one, mixed with the slow fallout of the labourious legal trials of Netanyahu, predicting the economic-political future is never so straight forward. Does it matter? “Israeli tech companies have raised $20.8 billion in the first ten months of 2021, more than double the record $10 billion raised in all of 2020.”

Israel’s Minister of Finance, and his ‘Ides of March’ moment

9 March 2021
No comments
Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel

We are approaching the 15th of March, the day when the Emperor Julius Caesar was stabbed to death by his friends. “Beware the Ides of March” wrote Shakespeare.

Yesterday, we learned that the debt of the Israeli government jumped to 12.4% of GDP, the total of the value of what the country produces.

Obviously, like many countries, the central authority has had to save the economy from the wretchedness of corona. The problem is that the numbers continue to get worse, despite the apparent improvement in the country health stats. (I can only assume that there is a change for the better, as most lockdown restrcitions have been removed.

What is worse, as I have mentioned several before at the risk of being boring, there is no budget. A budget offers you a framework, targets, direction. The Israeli populace has not benefitted from any of these essential elements.

To show how farcical the situation, I repeat what one commentator described on the radio this morning. Apparently, because there is no rule book in place for 2021, any expenditure above 50,000 nis (about US$15,000) requires special approval – even if this is to purchase stationary for a government ministry!

Do not be fooled by any seemingly positive stats.

Sure; average wages by 7% in 2020, primarily because those jobs lost from corona were lower paid positions.

Israel’s international trading account hit a massive surplus last year, more to do with the strength of the Israeli current rather than the discovery of additional markets.

Yisrael Katz, the Ministry of Finance, remains optimistic. He has to be. That is his job, especially just before an election. A better indication of the immediate future comes from his appointee, Prof. Amir Yaron, the Governor of the Bank of Israel. Despite inflationary concerns, he is intent on keeping down rates of interest.

Let me spell it out: The Bank of Israel believes that the government’s policies are unlikely to ease the country out of the fiscal mess. He is worried. After all, as I wrote above, somebody has thrown away the rudder.

Punctuality is not a characteristic associated with Israelis. If you ‘shift’ the 15th by 8 days, you come out at 23rd March, the day of the general election. Israel’s Minister of Finance will turn up at the market of polling booths and will find out if and by how much his electorate believe that he can save their bank accounts.

Beware sir! The social implications of that debt are too hard to hide for ever and a day, ………… although maybe another 2 weeks will suffice.

Can incompetence save Israel’s small businesses?

27 January 2021
No comments
Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel

On Sunday evening this week, Israel’s Prime Minister and the Minister of Finance held a press conference to launch a 15 billion shekel (approx US$4.5 billion) rescue plan, targeting households and small businesses.

The package includes a series of grants, the delaying of statutory payments like VAT, the deferral of loan repayments, and more. Ostensibly, there is much to be commended here. Although you are left wondering why this has taken 10 months to emerge!

And here in lies the rub. According to Israel’s Attorney-General, because the handouts have been delayed so long and appear to coincide with the onset of a general election – scheduled for March 23rd – large parts of the plan will probably be deemed illegal.

If that was the only problem with the ideas, maybe the dynamic duo might have got away with it? Maybe, but there is worse to come.

  1. It appears that core elements of the Ministry of Finance were not involved in the formulation of the project. This was denied, strangely by the cabinet secretary.
  2. As for the Bank of Israel, the Governor is reported to have received a copy of the plan within the hour prior to its release. He was later to reject it, as failing to concentrate on growth stimulation.

We know that the standard of living in Israel fell by over 20% last year, particularly amongst the nebulous middle classes. We know that there has been no budget for three years, as we enter 2021, which endangers the survival of projects, designed to bolster the economy. And we know that the hospitals (for years) are short of beds and lack qualified medical teams.

There again, as one commentator observed with an eye on that date in March, hospitals don’t have a lot of votes.

As for the small business sector, what is required as much as money is clarity of planning, direction and hope. That means a full budget, which a Netanyahu-led government has been unable to deliver for years.

Israel’s economy: How the government deserves a zero rating, despite some success

21 October 2020
No comments
Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel

Eight months into the Covid-19 crisis, and the Israeli government has yet to draw up a clear economic response paper to the crisis. As the country is leaving its second lockdown, we know that:

  • The economy imploded by over 10% in the first half of 2020.
  • In September, unemployment doubled within 30 days.
  • The shekel is still gaining against major currencies, ensuring that exports are less competitive.
  • And at least five senior officials at the Ministry of Finance have quit in protest at the incompetence of their political bosses.

A totally uninspiring scenario.

Yes, investment in hightech remains buoyant. The peace agreements with Gulf states are brining almost immediate economic benefits, at last for those at the top. The Israeli Prime Minister reminded his nation that the country is ahead of Europe, which is just heading into its ‘second wave’ of the virus.

But so what? The European Union is Israel’s second largest trading partner. It is facing the threat of what is known as ‘double dip recession‘. If so, this will further threaten the ability to buy goods and services from Israel.

Bibi Netanyahu was a Finance Minister, who helped to craft much of the success of the past two decades. Today, he is wedged between the impact of Covid-19, his preparation for three legal trials, and a political constellation that keeps him tied to an ultra-orthodox community that has little immediate interest in economic rejuvenation.

In other words, the Prime Minister has neither the time nor the ability nor the space to lead his country out of its economic mess. There is no “new plan” on offer. There are no suggestions to revamp city centres, which are turning into dustbowls, literally. People are still being paid to stay at home on furlough rather than giving the money the companies to re-employ them. Grants to businesses are still wrapped in confusing conditions and based on one factor and one factor only – did your revenues decrease by more than 25% in early 2020?

This is absolute nonsense. This is a leadership that has walked away from its electorate. This is unacceptable.

Nevertheless, it is amazing how some people have learnt to adapt and to pivot.

  • The clothing shop that offers a private VIP service.
  • A plastics factory that realised how shops and reception areas need screens
  • The bike store that has supplied dozens of home trainers.

None of these small business owners hung around, waiting for guidance from those who have been elected or promoted, because they are supposed to know better!

Is there hope? I leave with a piece of ingenuity from the younger generation. Four kids felt they were desperate for a burger and chips from McDonalds. However, the restaurant chain was only permitted to sell via drive-in takeaways.

Our heroes found some carton boxes and cut them into the shape of a car. With their new ‘attire’, they pulled up (so-to-speak) alongside the check out counter and dutifully ordered. Everyone was a winner and the government regulations were adhered to.

Well, it is easier to formulate regulations rather than dramatic new policies and provide hope for the future.

Who is interested in branding when you have to deal with covid-19?

12 October 2020
No comments
Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel

As Covid-19 is demanding from the world to face up to its biggest economic challenge since the onset of the Second World War, which CEO has the time muck around with the sophistication of branding?

The horrors of this international virus, which has leaped across borders like a virtual internet connection, has shaken up most of the cushy marketing agencies. They and their clientele have had to adopt ‘new’ words or attitudes like:

  • responsibility
  • sensitivity
  • genuine
  • self compassion

Take the airline company, El Al. For decades, the joke was that the letters stood for ‘every landing always late’. The food was rarely brilliant. On one long distance flight last year, my food-board would not hold up properly.

Last month, El Al sent out a brilliant letter to all those would be travellers, who held tickets for flights that had been cancelled. Showing humility and understanding, they created a simple set of ways to retrieve your money. Finally, the company was learning to value its name – its brand.

Many companies are claiming to have rebranded, when all they are doing is treating clients as thy should have done for years previously. For example, click on this list of supposedly great ideas from 33 Israeli outfits. many of which are just marketing corrections. Food manufacturers have been forced to realise that you can no longer stick up a persuasive sign in Tesco or Walmart, as people are no longer visiting supermarkets in such numbers.

A leading branding consultant, Jonathan Gabay, has built a fascinating audio library of how people have responded or adapted to the covid crisis. His “Thought and Leaders” global podcast series has ben most revealing. Decision makers, from all walks of life, have described their reactions to 2020, finding new value and meaning to their business strategies and personal agendas.

Gabay is based in London. He is seen regularly on Sky TV or the BBC, and he has consulted with members of the Fortune 500 club. His most recent podcast is a satirical but ultimately damning look at how the British government expects the unemployed to respond to retraining. Some people have not woken up to the fact that patronising and false empathy is OUT!

Business coach, Dave Bailey, asks if you can create an elevator pitch based around just 30 words. You just state the pain, USP and benefit. Difficult for many, but then just think about your logo – zero words. It is merely a clever picture which sums up everything

Branding is as important as ever. What covid is imploring us to understand is that words are cheap. They always were. Corporates (and politicians?) have to prove that their products and services contain true value. The words demand to be accompanied by affirmative actions.

The best pot of tea in Jerusalem?

11 August 2020
2 Comments
Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel, Jerusalem

Those who know me will tell you that I rarely start my day without a decent cup of tea. My children have labelled it as my daily brain massage.

It’s the ‘cuppa’ that gets me going. And ever since I left England for Israel decades ago, I have always managed to maintain a decent supply of English tea bags. They are rarely sold in the Holy Land and only at the most disturbing of prices.

Corona has interrupted the regular deliveries. There are few international travelers these days to top me up, armed with gifts from Waitrose et al. My favourite brand is Yorkshire Tea, strong without being too bitter, although PG Tips is an excellent second choice. However, we all have our own individual taste buds.

So, a few weeks back, as I could see that I was running down towards the last of my precious stock, I resorted to eBay. The picture above is the result of my efforts.

Immediately, sanity and calm was restored to the household.

To add to my joy, I read this week that an “English Tea” will soon be served again in Jerusalem. That wonderfully exotic and historical hotel, The King David, will offer a “three-tiered tray” of goodies between the hours of 4.00pm and 6.00pm, six days a week. Champagne is an optional extra.

We live in a year, when corona has shaken up all of us. Most politicians have failed in their primary task of providing leadership. It is at times like this when we need to rely on our core resilience, sternly and most nobly sustained by a pot of tea, in Jerusalem. Enjoy!

“Economic holocaust”? The true motives of Netanyahu’s corona politics

8 July 2020
No comments
Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel

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

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

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

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

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

Has anything been learnt since?

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

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

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

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

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

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

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

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

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

Amazing Jerusalem tech moving ahead of covid-19

12 June 2020
No comments
Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel, Jerusalem

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

To quote an item from Forbes magazine last month:

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

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

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

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

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

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

 

3 mega-obvious ideas for businesses to create a post Covid19 strategy, but ignore at their peril

26 May 2020
No comments
Categories: Afternoon Tea in Jerusalem, Blog, Business

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

So what can the business owners and sales strategists do?

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

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

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

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

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

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

 

The financial stress of corona: How retail could provide some ironic relief for economies

19 May 2020
1 Comment
Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel, Jerusalem

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

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

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

And yet………..

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

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

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

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

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

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

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

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

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

 

Jerusalem in Statistics: May 2020

18 May 2020
No comments
Categories: Afternoon Tea in Jerusalem, Blog, Israel, Jerusalem

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

A press release detailed some selected statistics for 2019:

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

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

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

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

President Rivlin noted that:

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

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

Corona? Overseas investment into Israel continues at pace

4 May 2020
No comments
Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel

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

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

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

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

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

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

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

What you can learn from Israeli businesses in order to overcome the corona economic recession

26 April 2020
No comments
Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel, Jerusalem

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

 

 

 

Israeli economy after corona? You must be joking!

17 April 2020
No comments
Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel, Jerusalem

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

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

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

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

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

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

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

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

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

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

Corona asks tough questions in Israel

14 April 2020
No comments
Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel, Jerusalem

Corona has brought out some black humour this week.

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

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

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

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

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

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

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

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

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

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

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

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

Be well. Keep safe.

A stressed business? The one thing you must remember to do

9 April 2020
1 Comment
Categories: Afternoon Tea in Jerusalem, Blog, Business

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

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

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

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

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

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

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

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

Guys – reread that and internalize that message.

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

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

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

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

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

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

Why Israeli business feels abandoned by its government, and what the CEO can do

4 April 2020
1 Comment
Categories: Afternoon Tea in Jerusalem, Blog, Business, Israel, Jerusalem

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Client Feedback

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

CEO of digital media company

"Michael helped my high tech company take off."

CEO of clean energy start up

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

Art Studio owner

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

CEO of digital media company
CEO of clean energy start up
Art Studio owner