Sales techniques: http://www.michaelhoresh.com/enchanting-pink-sales/
Communicating with the ‘enemy’: http://www.michaelhoresh.com/mentoring-humans-communicating-a-treasured-skill/
Sales techniques: http://www.michaelhoresh.com/enchanting-pink-sales/
Communicating with the ‘enemy’: http://www.michaelhoresh.com/mentoring-humans-communicating-a-treasured-skill/
New postings can be found on:
El Al – the problems of an open economy: http://www.michaelhoresh.com/holy-lesson-in-high-flying-openess/
Why Israel hosts 260 research centres form overseas corps: http://www.michaelhoresh.com/260-overseas-research-centres-in-israel-cant-be-wrong/
The full article can be seen at: http://www.michaelhoresh.com/obama-technology-and-the-jerusalemmindset/
Where do you find a good manager? Who are the best strategic leaders? What’s provides a solid grounding for running a business?
In the world of commerce, there is a rule of thumb which answers these questions as follows: Go straight to the private sector, where they know how to get the best out of a business. Failing that, look for a successful captain of a large public organisation. However, do avoid the non profits at all cost, because they are grounded in poor management, always seeking the next donation.
Yes, this statement is full of crude generalisations. To expose this myth fully, I want to share and sum up what I learnt from this past week in the world of Israeli commerce.
The Forbes list of 2012′s worst CEOs has gone round the internet and back several times. Israel has its own set of fallen heroes, led most prominently by Nohi Dankner. His holding company has controlling interests in the world of banking, retail, petrol, and more. For all that, his debts are almost equivalent to the size of the hole in Israel’s fiscal accounting. This week’s news of his lack of progress is further testimony to that financial disaster.
What is interesting is that one of the key problems I face as a business coach is the matter of planning cash control in small companies. So few people know about it, and take it seriously and have adequate mechanisms in place. It would appear that what is good enough for the top guys has a direct influence on those at the bottom of the pile.
Switching over to the public sector, I was fascinated by the observations that emerged from a conference organised by the “Calcalist” – Economist in English – debating and discussing predictions for the economy in Israel in 2013. With a general election less than a month away, many of the top politicians were given a platform to blurt out their words of wisdom. Slogans won out over direction, content and clear policy.
There is a feeling of Nero and his fiddle in Rome. What do I mean? Well, while the Minister of Finance, Dr Steinitz believes that taxes will not need to be hiked too much, the international renowned Governor of the Bank of Israel, Professor Fischer, argues that “according to expenditure restrictions we will be about NIS 15 billion (US$4 b) above the real rise of the permitted budget.” In other words, Houston we have a problem. Another example of mismanagemenet? Possibly the largest public sector monopoly, the Israel Electricity Corporation, reported last month that it is short of a billion shekels in cash. This is after announcing that it had repeatedly miscalculated its cash balances, still offers its workers free electricity, and is over staffed by around 2,000 employees who in turn are amongst the highest paid groups in the country. Now, do you blame the directors or the politicians who appointed these wise men?
I ask my readers to balance this quick review against the efforts of Elwyn Israel, a non-for-profit organisation, based in south-west Jerusalem. The charity seeks to place back in to society people with special needs, allowing them to work and live near independently. It operates nationally and across ethnic divides.
I was invited to a meeting earlier this week with the CEO and head of finance. They offered two simple guidelines to their success at Elwyn; a clear vision, combined with a refusal to commence a new project before it had been fully budgeted. So it was no surprise to learn that the work programme for 2013 includes expanding services and continued building.
There are probably many reasons for the successes and failures of each grouping. What maybe makes the Elwyn Israel stand out is a dedication that extends beyond the regular duty of management and leadership. The question is how others can learn to copy that.
Every year, around about late December, the international media is full of comments about the state of Christianity. Often there is heavy reference to the plight of the various denominations in the Middle East and specifically to those in Israel.
For example, a report from Civitas is concerned that Christians may be wiped out in the Middle East in years to come. As just one example of this trend, ABC Television commentated in July this year of the forcible conversions to Islam in the Gaza region. In Bethlehem, where the situation is complicated by Israel’s security barrier, Christians now number less than 20% of the community.
However, what always evokes emotion is to observe what happens in Jerusalem, a city central to three world religions. This year, I spent 24th and 25th December walking in the area of the Old City. The YMCA was decorated in lights, as were many other churches. Actually, I found the decorations covered Notre Dame, facing St Stephen’s Gate. As Christmas Night approached, the traffic around the ancient Walls simply snarled up. The noise of the tourists – roughly 75,000 are thought to have travelled for the season – were drowned out by the sirens of angry drivers.
Israel’ statistics bureau has been reporting for years that the Christian community in the Holy Land has been growing. They currently account for 160,000 or nerly 2% of the population. This year, the Jerusalem municipality handed out free Christmas trees for those that wanted.
So, if you are looking for some seasonal cheer, and you want to hear church bells ring out in unison, I suggest you book a package deal to Jerusalem for December 2013
In a month’s time, Israel goes to the polls. Bearing in mind the strict proportional representational system, the trends in the polls and the country’s habit for political coalitions, it seems that Prime Minister Netanyahu will not be moving home after the votes have been tallied up.
Elections around the world are usually decided by social and economic issues. Geopolitics in the Middle East has ensured that most campaigns in Israel since 1948 have been decided on matters related to defence and foreign affairs. However, what if that were not the case? What if Israelis put more emphasis on subjects that concerned the shekel in their pocket? How should the outgoing government be judged?
Since 2008, Israel has ridden out the global financial disasters in relative comfort. The stats of 3-5% growth annually, relatively low unemployment and a stable budget deficit ratio speak for themselves. During the current term of office, the country has been admitted as a full member of the OECD and the Tel Aviv stock market is now in the top ranking. So all is good and nothing needs to change?
Whenever a general election presents itself, the local media is always on the look out for “election economics”. In its simplest form, this means a government announcing a policy – often spending lots of money – in order to secure votes. Now, Netanyahu’s team cannot be accused of that. They have sat tight.
And that’s just the point. The Israeli economy is in urgent need of leadership and direction, but none is forthcoming. Everything is being delayed until after the polls have closed and after a new coalition has been formed. That could still be months away. Meanwhile, the politicians are busy praising themselves and past achievements,
Stanley Fischer, the governor of the Bank of Israel, put the matter out in the open for all to see. There is a gaping hole of 15 billion shekels, equivalent to nearly 4 billion dollars. How will that be tackled? Raising VAT by an additional 1%? Cutting back on child allowances? Cuts in the budgets of government services? According to newspaper reports, all this and more is being considered, but nothing is definitively planned. And so the budget debt will continue to grow.
As for public utilities, many services will announce prices from February onwards, well after the elections on 22nd January. The Electricity Company has been forced for months to buy supplies of gas from more expensive sources, due to crumbling relations with Egypt. Water prices, that have already soared 35% in three years, are due for another hike imminently. And when the middle classes receive their monthly pay cheques in early February, they may notice that their tax brackets have been changed adversely.
So what does this all add up to? The Israeli economy is not broke, but many things need fixing. The current government appears to be saying that it will carry on as normal, although it is obvious that this is short-term posturing. Painful changes will come into effect by Spring 2013, and the average citizens will pay for most of them. However, by then, they will have cast their vote. By default, that is another, yet short-minded and dangerous, form of election economics.
In the past couple of weeks, I have listened to a number of friends and acquaintances moan about what is happening to their countries, be it America or the UK. To paraphrase their arguments, they find that there is no sense of direction, economically or socially. To cite examples about Britain: The Olympics this year were seen as a smokescreen for an economy that lacks hope; the Levenson Report on the media revealed just how shallow life has become; people live in fear.
Bottom line: The 2008 global credit crisis and the threats of warfare have changed the workings of the modern world……for the significant worse.
This was put in to perspective for me last night, when I listened to a talk in English from Israel’s erudite Minister of (Military) Intelligence, Dan Meridor. Speaking in Tel Aviv and addressing the umbrella organisation for the international chambers of commerce in Israel, the politician revealed his full experience of nearly four decades in politics and international diplomacy.
Meridor observed that Israel has been forced to change her ways much earlier than other countries and that maybe is the reason the Holy Land can still produce figures of 3% growth annually. He drew on two key themes.
First, Israel’s economy was effectively bankrupt back in 1985 – 400% annual inflation rate, minimal foreign currency reserves, and high interest rates to support an absurdly high public fiscal debt. Today, the economy is driven by the private sector and growth is determined by exports rather than consumption. Israel has embraced the world of high-tech, cleantech and nanotech, resulting in Siemens, Intel, IBM, Google et al with r&d centres of excellence in this part of the Middle East. At the annual GSM mobile tech exhibition in Barcelona in February 2013, Israel will host one of the largest pavilions.
Second, Meridor commented how Israel has to cope with geopolitical threats that no other country in the UN community has to deal with. Iran, Hamas and Hizbollah are just a few of the issues that spring to mind. In the past decade, Israel has fought numerous wars or campaigns along its borders with Gaza and Lebanon, often vilified in the West for what has been seen has the high level of civilian casualties that have resulted.
Meridor stated the obvious. War is horrible and even one death of a civilian is one too many. Israel had to fight these battles. They were fought in the full view of TV cameras, that also includes utube videos and the immediacy of other social media platforms. This cannot be said for what is happening in Afghanistan or Bangladesh or many places in central Africa. The world watches Israel’s every movement.
As Meridor pointed out, in the November 2012 fight in Gaza, the Israeli airforce pounded Hamas positions. Most flouted the Geneva Convention as they were placed in and around civilian locations. However, even using Palestinian statistics, total deaths were around 170. The Israeli army believes that about 110 were military personal.
To put this in proportion: “According to a 2001 study by the International Committee of the Red Cross, the civilian-to-soldier death ratio in wars fought since the mid-20th century has been 10:1, meaning ten civilian deaths for every soldier death.” Israel has adapted to change, whilst other are criticising her under bygone standards. I could not find reliable comparative figures for Afghanistan.
Meridor’s summary point is fascinating. The international leadership of today was brought up to understand that strong countries must follow the principles of the philosophy of the nation-state. However, what is governing and determining life in 2012 are “the states of non-nations“. This includes groupings like Al Qaeda and technologies such as Facebook. Just consider how the Arab Spring germinated under the bewildered noses of the most sophisticated of Western Intelligence agencies. The world has shifted, significantly, and it is time to wake up.
When countries learn to understand these changes – factors that are not nation specific or coordinated – then they will be able to take on the new economic and diplomatic challenges presented over the past decade. Deliberately or accidentally, Israel seems to have taken some concrete steps along that path.
Less than three weeks ago, the OECD published a healthy review on the Israeli economy – 3% growth running through to the end of 2014. This outperforms many other countries in the organisation. So, why is the Israeli media full of depressing financial reports? The answer lies in a mixture of issues that have come together at once.
First, it has been known for around six months that tax revenues has not been hitting targets set. However measured, the gap stretches to billions of dollars. Raising VAT has helped, but not enough. So, the government merely changed the proposed fiscal deficit from 2% to 3% of GDP.
Clever political accounting maybe, but now 3% looks like breaching the 4% mark. The defense budget was never fully covered from the outset of 2012. The activities over Gaza last month have added around half a billion dollars in extra bills – reservists, ammunition, etc. And that very military campaign has resulted in a severe drop in tax revenues from businesses in the south of the country. To give one piece of anecdotal evidence – one of my clients had a prospective customer cancel on him at the last moment because his income from the south had evaporated.
The politicians have another problem to deal with – themselves. They have called a general election for the 22nd January. That means that the government is trying to devolve all sensitive issues until after that date. For example, the prices of many milk products, staple items for much of the public, are regulated. Changing an earlier announcement, they will only rise by 5% at the end of January. Bread will go up by 4% in early February. Electricity charges will jump by 10% in April, once many consumers have finished heating their homes for the winter.
Again, maybe a nifty political tactic, but what about the public coffers? The treasury will have to subsidise some of the differed costs. And that will bring us back to the story of the worsening fiscal deficit. It all makes for a nasty and bitter recipe of problems.
The OECD was fundamentally correct. Economically, the country has much to look forward to. For example, by late 2014, Israel’s new-found gas reserves will start to come on tap. These will ensure cheaper gas for consumers. Relatively expensive imports will be eliminated, thus improving Israel’s standing vis-a-vis overseas creditors. And there will be extra tax revenues available to finace public projects. A great main course for the mouths of the whole country.
Until then, Israelis deserve to be served a better first course by its leaders. Specifically at the time of elections, what is required is responsible financial measures rather than verbal spin.
And yet right beneath those one-off headline items is a major piece of commercial joy that bodes well for the future of the country. To paraphrase statements from Bill O’Neill, Merrill Lynch’s Wealth Management chief investment officer for Europe, Middle East and Africa; the Israeli economy is in good shape.
It is not just that growth of 3% still puts it towards the top of the OECD pack. Nor that unemployment is remains well below many other countries. And we can already see multinationals looking to invest in Israel’s new offshore gas reserves.
Look at the level of exits in Israel during 2012. This is one of the ways that large overseas financial players judge the strength of the country’s performance. In the previous peak year of 2006, the figure reached $10.1 billion. This year, at a time when money is supposed to be tight on the global scene, $9.3 bilion has already been counted up. (Figures released at an MIT seminar in Tel Aviv on Wednesday). Cisco’s purchase of NDS is responsible alone for $5 billion.
The story does not end there. This morning’s press reveals that ”NCR Corp, a supplier of automated-teller machines and payment systems, agreed to buy Retalix Ltd, Israel, for about $650 million, gaining software and services used in supermarkets.”
I wonder who else has yet to complete their Christmas shopping amongst the Holy Land’s high tech treasure trove.
In an era of global economic slowdown and when airlines are known to be suffering, it worth noting that El Al, Israel’s main airline, has posted profits soaring by tens of percentage points. Increased passenger revenue and the control of costs have combined to produce a 79% leap in profits before tax.
This was not always the case. For years the El Al anacronym was known as “every landing always late”. Passenger service was not just bad, but you had to think twice before asking a stewardess for assistance. Pricing was inconsistent. Losses and strikes were standard.
So what has changed? Obviously, one major effect was the privatisation process that kicked off nearly a decade ago. In addition, as the Israeli economy has become a success story and tourism has taken off, more airlines are turning up to compete for the rising passenger traffic. For example, Easy Jet has a couple of crowded flights every day to Tel Aviv.
However, there is something more to it than this. Last month, I flew El Al. Now let me be clear. I do not feel duty bound to fly by this carrier and I checked out several other possibilities beforehand. I boarded in Ben Gurion Airport in Israel, itself a recent winner of the Airport Council’s International roll of excellence award.
I could see the stewardess prepare her mandatory strut up the aisle to see that everyone was buckled in. “Here we go again” was the thought that entered my head. But no. She went from side to side chatting with people. How are you? Why are you flying? Looking forward to your holiday? She spread an atmosphere of relaxation at the potentially critical moment of tension. And yes, on the quiet, she was clearly and professionally ensuring that all seatbelts were in place. I hate flying, but on this rare occasion, my trip started with a smile.
Travel and Leisure is one of the premier observers of the global travel business. Its new rankings place El Al at 18th out of 76 airlines surveyed. Not only is this a quantum improvement from 31st position last year. Most of those ahead of El Al on the list specialise in long haulage flights, a field where the Israeli company has comparatively little chance to show off its capabilities.
El Al has become an interesting case study for turning round a company based on serving the customer. As the review of T&L states:
Better cabin comfort and greatly improved service in the air and on the ground were key factors. Readers gave EL AL’s food winning marks this time out and think the airline now offers better value. In an innovative twist, the EL AL Upgrade program enables you to submit a bid to upgrade your flight from economy class to business class.