Archive for May 2009

Emblaze – a story of what could have been

May 31, 2009

Emblaze used to be a symbol of Israel’s hightech success. It provides a plethora of technologies to telecom and mobile operators. It was one of the first Israeli companies to launch itself on London’s AIM financial market. Within 3 years, it had been upgraded to a full listing on the London Stock Exchange.

Just over 2 years ago, I met with a VP in biz dev in the Emblaze Group, offering him an attractive media package. Young, and proud of his arrogance, my host told me that the company had no need to push itself forward, as journalists constantly sought out Emblaze.

I was told that the company had raised around a US$1 billion in recent years. Despite continuous losses, the company was still cash rich. And out I walked.

Jump forward to this week’s news. Eli Reifman, the founder and president of Emblaze, owes around US$60 million and has been placed under temporary receivership.

Surprise? I checked the companies market data. The reports for 2008 show a 50+% rise in revenue, matched by a 700% drop in net income! Stunning. The share price has managed to regain its former level of a year ago, despite attacks from corporate raiders.

When I left Emblaze’s corporate offices after my meeting, you did not need to be genius to see that something was fundamentally wrong. I was accompanied by a savvy international business person, who was simply disgusted by what they had witnessed.

I sincerely hope that Emblaze will see better days. They have exciting new products, already on the market and generating interest. Elements of the software section of the group are performing very well. 

And yet, you really get the feeling that if the top team had led with a little less pride and with more respect for old fashioned commercial practices, Mr Reifman and his colleagues would be in a far more healthier position today.

Funny how this story reminds you of many former giants who have diasppeaered recently from the global commercial map.

Managing HR and the Israeli ant

May 28, 2009

Bibi Netanyahu, Israel’s Prime Minister, has a master’s degree from MIT Sloan School of Management.

Last week, a close friend of mine sent me a satirical presentation on how successful companies often wither through poor management of human resources. In brief: –

An ant was known to be happy and productive working on its own. So the lion boss wondered how much more could be achieved with a supervisor, providing direction. So the cockroach supervisor, oh and its secretary, drew up wonderful and pretty reports, helped by the new IT department.

The lion decided that the whole structure needed to be controlled, which led to the recruitment of further staff and resources. But nobody was happy as there was too much paperwork and too many meetings to attend, while production levels remained static.

So the lion turned to the owl for its suggestions. And the wise old bird declared that the organisation was overstaffed. So guess who was the first to go and why???? The ant…for lack of motivation, which had impacted on others.

And what is the connection to the Israeli mouse? For all Bibi’s experience as former leader of the opposition and a previous term as Prime Minister, he has appointed a government of 30 ministers and 9 deputies – for a population of 7.5 million and 120 members of the Kenesset.

This large team, in the space of less than 3 months, has managed to: –

  • Oversee a serious deteriation in realtions with the USA, Israel’s most important ally
  • Watch placidly as economic and academic boycott’s of Israel continue to sprout up
  • Initiate a strong budget, which was replaced at the whim of Bibi’s own economic advisor and with the connivance of the trades union organisation. 

The result? Well, no result. Confusion, fear, lack of leadership.

It is time, now, for Bibi to show the country what management skills he really posseses. In the months ahead, the choices and the decisions will only grow far more difficult. Either Bibi puts his team to better use, replacing rhetoric with actions, or he dumps them. Then we will see if Bibi really knows how to handle the ants of Israel.

Boosting the Palestinian economy, or not

May 27, 2009

Believe it or not, Israel sells nearly US$4 billion of produce and services to Palestinians every year. In return, Israel imports about US$1 billion, as well as employs tens of thousands of labourers.

Ofir Gendelman is the CEO of the new Israel Palestinian Chamber of Commerce. In a recent interview, he noted how the 2 economies are very much inter-related.

Most of the products sold in Palestinian markets are Israeli. West Bank supermarkets stock mainly goods made by Israeli companies such as Osem, Strauss and Elite. For the Palestinians, most trade at the end of the day is with Israel.

Personally, I have seen this cooperation in practice. This week, I was asked to speak to a Palestinian, developing a finance project. And earlier this month I attended the Agritech exhibition in Tel Aviv, where there was clear interest in the Palestinian sector.

This mutuality is a great way of creating trust and of building towards peace. One of the factors stopping this exciting prospects is…… wait for it…. academics. Yes, the university champions of this world see this progress as dangerous.

How so? Take the UK union of lecturers. It wants to propose a boycott of Israel and encourage divestment. The potential net result?

Well, you could imagine the flow diagram: The Israeli economy would suffer. This will have a knock-on effect, firstly on Israel’s neighbours. And Palestinian militants will see that if they attack again, not only will they not be punished, it will be the Israelis who will be told off for retaliating. And round we go again.

Now, that explanation may be too complicated for your average intellectual delegate of university lecturers. But their pensive decision-making is going to hit adversely the dinar in the pockets of Palestinians, the very people they want to help.

How would I grade that policy? F for failure. 

Helping the Palestinians will require joint efforts and not one-way messages of hate.

How SMEs create wealth in a recession

May 26, 2009

Stats show that from Israel to Chine to America, SMEs – small and medium sized enterprises – make up over 95% of a country’s economic activity.

Last night, I moderated the monthly meeting of the Jerusalem Business Networking Forum. Over the past 20 months, this group has seen new businesses expand, secured employment for members, garnered contracts for attendees, and much more. The classic use of a small network group!

Last night’s meeting was no exception. The event was hosted by Paula Stern, the CEO of Writepoint, who spoke about the commercial potential of social networking. Twitter or join LinkedIn or prepare this blog, for most of us these are vital tools today in marketing strategy.

What specifically impressed me was the dynamism of the participants. The world is in the depths of a recession, and Jerusalem is part of that economic cycle. Each and everyone of those present is in the process of creating something new, all staring at the level of SME.

A visitor from Canada is launching a mobile advertising solution on the net. An American has created a small team, successfully involved in mining raw materials in Israel. A new immigrant had launched a photography business which is thriving despite private incomes being cutback. And there was a senior rep of a new foreign currency trader in Herzylia.

My message is simple. In order to create wealth in a recession and in order to enter commercial food chain, a necessary ingredient is the initial dynamism of the founders of an SME.

My question is: If most of us in social networking and outside know that, why has the Israeli government and the Finance Ministry missed this basic point? 

(Disclaimer: I am an associate of the Institute of Independent Business, whose Business Support Programme is designed to offer practical advice and support to senior execs of SMEs).

Israel in China

May 24, 2009

My previous posting, signalling Ken Loach’s hypocritical attitude on Israel, picked up some good pull.

It is classical socialist ideology, so desperate to protect the purity of its spirit, that it misses the true story. Thus, in looking to protect human rights of one side of the conflict, Loach resorts to racist spin of previous epochs.

So, it came  as a refreshing change to see what China, of all countries, is doing to promote Israeli culture, and big time at that.

Next year, China will host the Expo exhibition in Shanghai. Brand Israel has opted for a major display, coordinated by Haim Dotan Architects. One of over 200 exhibits, this promises to be one of the most adventurous.

See the following futuristic clip.

With 70 million people expected to look into Israel’s golden offering to the world, Loach must be feeling very unhappy. (Oh dear! How sad!)

Ken Loach locks out George Orwell

May 22, 2009

Ken Loach is a brilliant British film director. That is a precious skill, because cinematography is a key medium to ensure that holders of differing opinions communicate with each other. And Loach has an excellent history of bringing difficult subjects to the attention of big screen viewers.

This week, Loach spat in the eyes of his own profession. He actively and successfully campaigned to ensure that the Edinburgh International Film Festival did not receive a small grant to feature an Israeli film.

The film is a romance set in a sex-therapy clinic, and makes no reference to war or politics. It recently won an award for Best Film at Israel’s International Women’s Film Festival. The film is produced by a Tel Aviv University student

So what? Loach was looking to ban Israeli participation.

EIFF had commented that: “Not accepting support from one particular country ‘would set a dangerous precedent by politicising what is a wholly cultural and artistic mission. We are firm believers in free cultural exchange, and do not feel that ghettoising filmmakers or restricting their ability to communicate artistically on the basis that they come from a troubled territory is of any benefit.”

A few days later, the organisers capitulated, pathetically.

The actions of Loach are detestable. He claims that his argument against Israel is based on the country’s excessive force. If that were true, why does he not complain about Palestinians to the same degree? With true irony, as he was campaigning, rockets landed on people’s homes in Sderot, southern Israel.

Loach is a hypocrite. By isolating one group of people in the global society to relieve his hatred, he opens himself to the accusal of racism. He copies tactics employed by those who have hated Jews over the centuries, and wraps in acceptable 21st century spin.

The acclaimed director has learnt how to control the communication of others.

I bet that Ken Loach cultivated his political activism partially on the works on George Orwell, the author of 1984.

One key message of Orwell’s philosophy was the need to speak out when people try to clamp dows on freedom of expression. Loach has crossed that line of human decency.

Obama meets Mike Wallace in the Middle East

May 20, 2009

So you think that Obama’s policy is new and exciting? You believe that Bibi Netanyahu is not talking about a 2-state solution? Scrap the spin and let’s get real.

Over 50 years ago, before Obama was even born, TV legend Mike Wallace took on Abba Eban in a powerful interview. Ebanwas one of the diplomatic greats of the Twentieth Century and who represented Israel for decades.

It is compulsive viewing. Despite taking place before the Arabs launched the 6 Day War, when Israel gained control of the West Bank, the arguments are directly paralleled to those of the present. Israel is aggressive, does not seek peace, is an economic disaster, and all the rest.

In response, Eban set out the cold truths. Seek peace with Israel and we can all live together in prosperity. No rhetoric. That’s how it should be.

In effect, this is the commitment that Obama was seeking from Netanyahu. This is what Obama will tell the Arab world and Israel in Cairo on June 4th, almost 42 years to the day when Nasser declared war on Israel.

Bibi can bluster that he did not cave in during his visit to Washington. However, he has already accepted the Road Map of Bush. Everybody knows that includes a 2-state end game. The media is left to quibble over the semantic finesse.

So where is the difficult bit in the peace puzzle? It is called the Palestinian leadership.

President Mahmoud Abbas is the next politician expected to catch a flight to the White House. To get a state with territorial continuity, all he has to do is:- (A) Say yes to Obama and (B) Deliver on his promises, eliminating terror and that includes controlling Hamas. 

(The Iranian nuclear threat is serious but is a side issue in this context,  even though Tehran will do its utmost to confuse matters through its proxies in Hamas and Hizbollah).

And this is where Abba Eban may have the last word. In 1983, he wrote:

They (the Palestinians) have never missed a chance of losing an opportunity. They have persistently rejected proposals conceived largely in their interest…

Obama has learnt well from Eban and from Wallace. for all the poor analysis of the press, the American President has quietly placed all the real pressure on the Palestinians. They have to deliver in the name of international peace. 

Well that was simple enough, wasn’t it?