Archive for January 2010

Seeking new clients in a recession

January 31, 2010

I have written about companies needing to be agile. I have commented on the importance of providing a quality service. But how do you actually go out and win new clients, especially when the economy is not buzzing in your sector?

Well here are 3 very concrete tips.

First up is a strategy that I have suggested to people in my circle. All of us have a list of good customers of old, whom we no longer service. Take your five major former clients, call up the contact and invite them out for coffee. No obligations.

The aim? Obviously, you want to keep in with them. But they will also tell you why they are not working with you anymore. That is your key to improving what you are offering. And it is your opportunity to correct possible false impressions.

In turn, you can offer some help, advice or something more substantive. That is what quality networking is all about. And that is what eventually leads to sales .

Next, consider the well-tried “entry level pricing” tactic. How does this operate? Offer an unbeatable price just to get a foot in the door – no, not a freeby, because you need to make ensure that they recognise that your service has a price. Assuming that you will prove you have a value-for-money offering, they will repeat the order, accepting a more realistic costing policy.

Finally, look at your sector and analyse which areas have been left alone by the big players. There are always pickings to be had, often very large ones. For example, in the UK sofa.com realised that they could undercut others using internet sales. Ironically, 2009 turned out to be a boom year for them.

Bottom line: A downturn is a time to look for new opportunities and methods, a willingness to accet change.

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Customer service – Comsign gives this a new meaning

January 30, 2010

I recently wrote about delivering quality service. Fail, and customers will desert you quickly. Respond, and you are likely to see increased revenues.

Simple no? And then into my lap fell the story of ComSign, comfortably located in one of Tel Aviv’s most bubbly commercial zones. Why is this company so central to the domestic economy?

Since the beginning of January 2010, Israel tax authorities require all large  companies to use an electronic signature on government transactions. This means hundreds of thousands of companies must register their electronic signature in advance. And as ComSign has announced:

ComSign is the only Israeli company authorized to issue legally binding electronic signatures approved by the law and by the Justice Ministry.

So, my source, as finance officer of his high tech company makes an appointment to visit ComSign. Call him Joe. The meeting is set for 10.00am, which gives Joe plenty of time to move on to the next call, an hour later. Also simple? No!

When Joe arrived, he found a massive queue; 4 clerks with tens of people waiting. You see, the company policy is ask 4-5 people to come in for each clerk at the same time! So Joe waited. And waited.

Joe entered into conversation with somebody, who had come in from Kyriat Shmona. That’s almost on the border with Lebanon – a 4 hour journey to sign a form and pay a cheque! If you did not realise it, ComSign has only one office in the country for this service – although they are now about to open a second branch in Haifa.

Joe grew impatient. He started to look for the manager, who kindly sent in another clerk. Could this be  a major triumph for efficiency? No, because several more customers had turned up in the meantime.

Joe had to decide whether to stay or leave for a commercial appointment. And then he found out a vital piece of information. That room was only the first stage in a 2-part process. Once he was to finish with the clerks, who really were trying to work quickly, he had to pay. That aspect would be in a different part of the building, several minutes walk away.

Joe left. And as he wandered off, he found himself outside the cashiers’ department. He smiled, with despair. If the previous queue had been long, there were double the number of people waiting to pay.

So, what’s the postscript? I am happy to give extra publicity to ComSign and the unique way they have decided to treat people. I will not comment about the tax authorities, who as they are in the public sector do not have to be concerned about such queues.

I will mention that I read about a Jerusalem company, located just a few miles away from the tax offices, which offers customized electronic signatures via a web service. If this were to be used, I wonder how much collective time it would save the Israeli economy. But who cares?

Palestinian economy – moving ahead?

January 29, 2010

Is the Palestinian economy finally showing real signs of improvement? There is cause to believe that it is moving away from conflict-driven scenarios, while looking to create sustained growth.

The World Bank has documented that between 1968 and 1999, Palestinians averaged around 5.5% real growth per year, a brilliant achievement by any standards.

With the onset of Intifada, those figures went in to reverse. Blame Palestinian terrorism or Israeli aggression, the average Palestinian’s income dropped off the scale. Tax collection was almost a non-entity. The Funding For Peace Coalition estimated that 25% of the Palestinian budget came through external donations. And who knows which elements grafted off the top?

So what’s changed? First, the European Union finally began to realise that the billions of aid distributed annually had to be more transparent. In parallel, there is a growing awareness that a dependency on handouts will not create an independent economy.

One example is this new approach occurred this week. The Palestinian Administration has demanded that Hamas pay for electricity used in the Gaza Strip. This is in response to the European demand for greater accountability.

Tom Gross, an established commentator on the Middle East, reported on how Palestinian security forces in the West Bank may finally be turning to formal policing and not actions against Israel. One effect of this change has been the opening of a new cinema in Jenin, until recently known as a centre of the Intifada violence.

At a macro level, a high level Dutch delegation met with the Palestinian minster of the economy and 50 companies in order to discuss investment possibilities. Abraaj Capital has co-sponsored a US$50 million investment fund, primarily aimed at small and medium sized Palestinian enterprises.

All very encouraging. But what next? It is very much up to the leadership of the various factions. The Palestinian Authority, controlled by President Abbas, is still perceived by many as corrupt. And Hamas in Gaza is little better.

Greater transparency and more local projects out of the grasp of politicians. And a continuous uplift to the economy is probably the best method to turn people away from the supporters of violence.

Agile businesses – who needs them?

January 28, 2010

My friend, Julian Weiss, will be giving a talk at the Fourth Techshoret Conference about agile software. For the non-geeks like me, this means new software that has evolved through teamwork to ensure rapid delivery to the customer. It is the inverse of the established regulated methodology, which is perceived as slow.

In a country like Israel, where growth has become dependent on innovation, agility is a major contributing factor of that commercial evolution. For example, part of the raison d’etre of the country’s successful cleantech industry has been the rush to market; quickly converting back-of-the-envelope concepts in to actual revenue streams.

The Financial Times newspaper picked up on this same theme in a management blog. Agility, “how well a firm anticipates and responds to environmental changes”, is not purely about IT changes.

Fast decision-making is the engine of agility. The EIU survey found that “rapid decision-making and execution” was the most critical trait of an agile organization, while in a separate question slow decision-making was cited as the biggest obstacle to increasing agility. McKinsey found that “overly centralized, slow, or complex decision-making/approval processes” were cited by 50%  of respondents as the barrier most likely to hamper agility, a factor cited twice as frequently as next most common barrier. Two of the three elements cited as promoting agility in the McKinsey survey also dealt with decision-making., including decision-making authority pushed as far down the organization as possible (cited by 39%) and clearly defined decision-making authority (30%)

The blog goes on to describe the importance of agility; securing better revenue and stronger employee engagement.

In my view, much of this is obvious. Find a way to be quick, without compromising on quality, and get the completed job out to the customer.

But there’s a big hidden snatch: Many organisations, big or small, come filled with historical internal hindrances. Identifying those issues and resolving them is an important prerequisite to greater flexibility. Creating agility is a process in itself.

British – Israel trade relations

January 27, 2010

Yesterday, I met up with Richard Salt, Director of Trade and Investment at the British embassy in Tel Aviv. A career diplomat, Richard has a focused appraisal of what works in international trade. 

At a purely statistical level, he revealed that trade between the two countries continues to expand. Annual bilateral trade is close to US$2.4 billion, split fairly evenly between the two countries. Even during the disastrous year of 2009, the fall off was slight compared to other trading partners.

Richard described a very interesting model, which the embassy has for promoting British companies that are looking to enter the Israeli market. For a nominal charge, his staff runs due diligence on a series of potential partners and then lends support during the negotiations stage. The result is that completion levels have risen substantially in recent years.

In parallel, there are over 3,000 Israeli firms operating in the UK. About a tenth of these are supporting significant manufacturing and distribution services, a clear benefit to the local economy. And while much is made of Israel high tech and IT contributions, the uplift goes much further.

For example, HSBC in London has made a significant investment this week in Shai Agassy’s “Better Place” electric car company. In the list of the top richest Britons, there are at least 5 Israeli-born nationals. Bolton, Portsmouth and Liverpool football clubs are benefitting from talent, natured in the Holy Land. And for all the troubles of 2009, Israel still claims around 40 of the 600 companies on the AIM financial market.

The good news for both countries? There are more benefits to be reaped from this growing bilateral partnership.

Black gold in Israel?

January 25, 2010

There is an old joke in Israel. When Moses wanted to enter in to the promised land, he pointed the children of Israel towards the West and not the to the East. He chose Mount Moriah over oil. Imagine how the world geopolitical map would have looked if it had been otherwise.

For decades, people have been looking for fuel reserves in Israel. In commercial terms, zilch, nothing; but the commentary has filled out many lines of the newspapers. Is that all about to change?

It is almost a year to the day, when large quantities of gas were discovered off the coast of Haifa. Due to reach the consumer in a further 2-3 years and with potential export orders on the cards, this find alone will substantially alter Israel’s balance of payments.

In parallel, the past year has seen a string of reports about potential oil finds. Each time, the region is a different one, pointing to an alternative geological base. The most recent discovery focuses on land north of the Dead Sea. It also involves the Delek Group, which is leading the gas development near Haifa

Other reserves under consideration include a site near Rosh Ha’ayin, east of Tel Aviv, and on the Carmel mountain, close to Haifa. Although Israel’s total annual need is around 80m barrels, barely 0.1% of world consumption, none of the finds have proven conclusive.

Shares in local energy companies, such as Avner and Zerach, have catapulted hundreds of percentage points since early 2009. Some warn that this is a bubble

The fact is that significant gas reserves seem a real possibility. That gives real belief to hope that oil will be found. In any event, Israel’s economic development will shoot forward. The questions are how fast and how will the change be managed?

And the immediate moral? Time for others to re-examine what made Moses such a great leader.

Can’t get customer satisfaction?

January 24, 2010

A few years ago, I went to the funeral of a close friend of the family. In his eulogy, one of the sons of the deceased praised his father: The man always sought to give his best. In business that meant offering a quality service.

Quality service! A simple phrase, often thrown out blandly. But in the setting of a berievement and self-inspection, it was very penetrating.

Last week, I was directed to a video click put out on utube by Domino’s Pizza, and fronted by their CEO. You find 2 messages in the four-minute roll. First, they admit that they have been feeding customers tasteless rubbish. Painful, but they admitted it, in public. Second, look out because Domino’s is about to change, big time.

Was this a lesson in internal conglomerate decision-making? Yes, but it was also a clever bit of marketing. The company is visibly determined to serve up (literally) a good product.

So what? Well competition is always strong in the pizza market. Even amongst Israel’s 7.5 million holy people, most of the international chains are present. In fact, Domino’s has to try even harder, as most of its stores do not meet the kosher eating requirements and there is a similar named firm. So the American brand needs to stand out well and good.

Stefan Stern recently wrote about SAS, an American software concern. Fortune magazine described SAS as the best company to work for in 2010. The trick to success is “benign management”. The result?

The 34 year old company had revenues of $2.3bn in 2008, and remains a leading player in the “business intelligence” market.

Simple, isn’t it? No. My wife told me about her troubles with a financial computing package, possibly in the same field as SAS. The upgrade for 2010 came with a built-in bug. The supplier is not telling its customers, as they all blindly pay for the new version. 3 weeks into the new year, there is no immediate solution in site.

It is not just the problem. Nor even the overtime. My wife was played for a fool and that leave’s a lousy, long-lingering taste.

Do you think that she will be looking to buy any add-on products from this global provider of software? Send your answer to their CEO at………..