Archive for May 2011

Israeli econmy and its Mediterranean neighbours

May 31, 2011

Over the last two years, a revolution has occurred in the way Israel manages its economy, the focus of which is changing over to a bi-annual budget. Within a few years we will see many western countries, including the US, adopting the option of a bi-annual budget.

Thus boasted the Finance Minister of Israel, Dr Yuval Steinitz. He has a point, and I have said as much in some of my previous blogs.

It is interesting to compare Israel’s economic progress to that of the other smaller members in the OECD. For example, a recent analysis of relations with Greece explains that “Sick of their ailing economy and IMF meddling, many Greeks see the Israeli model of economic growth as the one to emulate.”

The situation was eloquently reviewed by Dr. Michel Strawczynski , a senior researcher at the Bank of Israel:

The economy managed to lower the ratio of public debt to GDP during the crisis, at a time when many countries increased their debt, thereby hampering their recovery from the economic crisis.

Time for a few European finance ministers to make a trip to the Holy Land and discover an economic miracle?

“Just do it” ordered the consultant…. but how?

May 30, 2011

“Just do it” is a brilliant catch-all phrase, powered by Nike.

So simple. If you want to get on with any task, just go ahead and do it. Succeed with “us”, Nike. And for many people, the slogan is an extension of what they were taught incessantly in the home and at school. Innovators and entrepreneurs clearly see themselves in that bracket. Just do it.

But what if……

What if you cannot “just” do it? For some reason you are stuck. You cannot carry out the nonchalant task, glaring right at you. Shy, scared of failure, scared of succeeding, laziness, or whatever – as a business mentor, these are frequent problems you have to overcome.

Here’s what I mean. I was sitting today in a restaurant in Jerusalem, hosting two separate sessions with very capable individuals.

The first is young, commercially inexperienced and raring to implement his idea. And he is very focused. “So what’s stopping you”, I asked. “You tell me,” was his response. Playing devil’s advocate, I observed that I did not know what was needed for his business. And he dutifully rattled off a list of equipment.

“And how much does that cost?” I questioned, and followed it with some prodding about marketing.

“So where does that get me?” he pondered. And when I told him that he is now half way to a basic business plan, his eyes lit up. He will spend the next week, confirming the basic facts  and the business model, and then begin to look for a small loan.

Bottom line? For some reason, he cannot motivate himself to move ahead. But once prodded in the right direction, he will “just do it”.

Meeting number two was a different affair. Every question of mine was met with a question. Everything was analysed in detail until the person was sure of what to do next. Fair enough. But what will prompt him to move over from words towards action? He demands to know that he is doing the right thing before he has done it, just like so many of us.

I took a chance and wondered out loud: “How do I motivate you to carry out these tasks?” The reply brought a smile to my face.

“It’s not for you to do anything. I have to do it myself.” By George, he’s got it.

Will it be easy? Possibly not. It will not be a case of “just” getting on with it. But moving ahead is what he will be achieving.

Israel’s economy – does the boycott argument make sense?

May 29, 2011

Appreciate it or not, the Israeli economy is on fire.

  • The OECD has altered upwards 2011 growth predictions to 5.4%, well above the group’s average.
  • Unemployment is close to an all-time low, around 6%, and falling.
  • Marvell is significantly increasing its investment in the country.
  • 2 of the top 6 companies at TechCrunch 2011 were Israeli.
  • Etc, etc, etc

And then along come the party-poopers. No, I am not talking about the pessimists. Fitch has warned that Israel needs to guard against higher debt. The gap between rich and poor is seen by many as too large and growing. (I agree).

People want to boycott Israel because of the Palestinian question. The latest profile story comes from Scotland. It is not just the actions of the Kirk, but “several districts in southwest Scotland will expand their boycott on Israeli products and bar stores from carrying English translations of Israeli books.”

All sounds very politically correct. But like with most spin, once you test it, you realise how feeble and hypocritical it is.

First, is such a ban practical? Obviously, the councils involved cannot disperse their decision by use of computers, because their machines are using an Intel tech developed in the Holy Land. They cannot ask London areas to join in, because this will send water bills through the roof. And they are ironically sending a sign to their national football team not to compete in the next world cup in Brazil, where stadiums are being built with Israeli tech.

A UK blogger pointed out tens of of other Israeli applications widely available in many homes and offices around the globe. Eg:

  • Before accepting any printed material, check that the supplier has not used the Israeli device that might have saved up to 50% of the ink used.
  • At home, do not use Facebook as many in-built and add-on applications are Israeli-developed.
  • Only senior staff may retain mobile phones for emergency situations.  However the use of SMS (Texting) is expressly forbidden as this facility was developed in Israel.
  • Council restaurants and canteens must dispose of cherry tomatoes, which were developed in Israel.  Employees must ensure that no cherry tomatoes are included in sandwiches brought into office premises. 
  • No agricultural products from the following areas must be consumed as they use water irrigation and agricultural technology provided directly from Israel.
      • Most of Africa
      • China
      • India
      • Indonesia (a Muslim country)
      • Nepal
      • Many others – please check

Clearly, the councils of Scotland will have their work cut out to be consistent. But why just Israel?

In terms of democracy, freedom of religion, tolerance of others, dozens of countries do not exactly rate strongly. Can you imagine Scotland banning the import of all plastic goods from China? How about not playing against teams with football players from several African countries? And what about the comments from Obama and Cameron on the oppression by Hamas in Gaza. Oops!

So again, why boycott and why boycott Israel? Will it bring peace to Palestinians AND Israelis? Will it damage Israel’s economy significantly?

A couple of years ago, a theatrical trades union from Eire proposed a similar move. A few weeks later, some of their representatives were taken through a Holocaust museum. One of the first exhibits reveals how the Nazis banned and burnt Jewish books. The message was not lost.

If we return to the Israeli economy, one of the reasons for its strength and stability is the role of Stanley Fischer, governor of the Bank of Israel. He is now considered a potential candidate for the vacant top job at the IMF. So, Fischer were to be chosen, he too would be boycotted because he is…….?

Why innovative managers stop innovating

May 27, 2011

Looking back at my mentoring experiences this week, I realise that I have seen quite a few companies being choked of their vibrance and innovation. However, the explanations vary as to why this is happening. Drilling down, the case studies reveal something about the hidden flaws in may of us.

Let’s start with a very simple story that you can find in any town or city around the world. A husband and wife team abandon their comfort zones and known territories in order to set up a small shop in Jerusalem. They have called me in because the set up costs had mushroomed before they realised what had happened. And although sales are now on the up, the cash flow is going “west”.

What can be done, I was asked. To which I promptly asked them:” what can you do?” And once forced into the challenge, there was no shortage of good ideas. Yet, one partner was all for their implementation. The other launched into a mantra of “manjana”. It could all be put off until………well, whenever – another issue, another excuse.

I do not know them well enough. But it was interesting. Here is a business, starved of cash and struggling to save its future. Two young and talented people in charge. But one of them appears so overwhelmed that all suggestions for improvement are smothered. Is that person afraid? Too tired after months of struggling? Do they not want to be there?

Time will tell. I found a similar set up near Tel Aviv. An established family business in the building industry is being threatened by new entrants. The husband wants to carry on as normal, yet the banks are closing in.

I realised that he saw me as a “threat”. What could I know or help, when he had been the CEO for over 20 years? But I understood that his experience was key to the future.

So, I engaged him through his wife. I started to sit down with her, stadily going over the problem areas.  At the end of each meeting, I would leave her “homework”. She began preparing the tasks with her husband. This week, I heard that he is now looking forward to the next assignment.

What has made him wake up? Not sure. Maybe I was able to convey indirectly that his business has a value and is worth saving. That message jolted his ego and the “old him” is coming out of the closet. This bodes well for his company and family.

And finally, I was asked to look at a previously vibrant software firm, where the parent company has become involved in the day-to-day decision-making. Spin letters from the top have been a constant.  Profits have been maintained, as wages have been near frozen. 

And guess what, when the top guys, all smiles, turned up recently for a presentation to the managers, they were greeted with a cold reception. All efforts to rouse the troops ended up …you can guess where.

There comes a time where rhetoric, supported by false empathy and a weak reward system, is seen for waht it is: false. Staff will simply stop going “that extra mile”.

Obvious to my reader? Yes, but not if you have received your own bonus at the expense of those you are trying to encourage. Few new projects are on the horizon at this stage.

Choosing between Assad, Obama or progress – Israel’s economy

May 22, 2011

Until recently, the centre of Jerusalem looked like the political map of the Middle East and North Africa. The roads had been ripped up and replaced by a light railway. It was a mess and few are certain that the new train system will improve transportation in the holy city. Confusion.

Meanwhile, shopkeepers have had a rough time. Walking along the pavements has been a nightmare. And yet, the centre of town is rocking along, somehow.

You could say much the same for the whole of the Israeli economy. Goldman Sachs has warned of the aftershocks from Assad’s clampdown. Growth, which has been sailing along at over 4%, may suffer. And there’s the Obama-Netanyahu spat, which could upset investors looking for stability.

Yet the economy continues to progress along towards its next station. Take these three pieces of current news items.

  • Reed Elsevier plc is in talks to buy Israel healthcare software company dbMotion for $250-300 million.
  • Applied Materials Israel Ltd. will hire 100 more employees for its R&D Center
  • The governor of the Bank of Israel, Stanley Fischer, is one of the main candidates to take over at the IMF.

It is now five years since Israel fought Hizbollah in Lebanon. Reservists were called up. The economy in the north of the country almost dryed up for 6 weeks. And yet, by the end of the same year, the country was on an economic high. Why?

Because, as people of Jerusalem have demonstrated, there is something intrinsic in Israel which ensures that hardships do not automatically get in the way of progress. The catch phrase of “thinking outside the box” becomes a subconscious day-to-day reality. I wonder if Moody’s have factored that intangible in to their analysis.

So you’re not motivated..

May 20, 2011

….a student’s sense of belonging, security, and self-confidence in a classroom provides the scaffolding that bolsters the foundation for enriched learning, intrinsic motivation, more effective coping abilities, self-discipline, and caring.

Thus writes Dr Robert Brooks in his latest monthly posting on empowering children, and regular readers will know that I have referred to this gent in the past.

What I find interesting about this quote is that what applies to the classroom (and, dare I mention it, to homework) also applies to the workplace. We look to our superiors to provide an environment that will help us enjoy our workday. In return, we will want to find a way to add our own positive contribution.

Are we solely talking about money here? Sure, a pay rise helps us to smile. But that’s not all. Here’s a short list of other conditions that are also essential to securing a happy employee: –

  • Encouraging innovation / initiative
  • A manager employing genuine empathy
  • Meaningful channels which allow for discussion (and maybe change)
  • A reward scheme not just based on money

So, if that is so simple to write down, why do so many employers miss “it”? Think how many times in the past month alone that you have heard from colleagues and friends and family who are desperate for a change by the way their comapny is run?

At the end of his article, Brooks quotes David Brooks (no relation), who notes:

Many of our public policies are proposed by experts who are comfortable only with correlations that can be measured, appropriated and quantified, and ignore everything else.

Replace the phrase “experts” with “senior decision makers”, and maybe we have an answer to my question as to why the workplace is often a disaster spot.

What is a business mentor?

May 17, 2011

“What does that mean?” is the response I frequently receive when I explain that I am a business mentor. “Is that the same as consultancy”?

If you were to google mentoring, you will come up with numerous different explanations. And some of them are very similar to consultancy. I can only vouch for myself and what works for my clients. 

I see mentoring as a method to help the client attain, or at the very least draw closer to, their vision. The way I do that is to try to understand what makes them tick and, in parallel, to understand what may be holding them back.

A classic situation is the person looking for more sales. How many times do I discover that this is not simply a call for improved use of social media or brighter business cards. A more fundamental issue frequently emerges, such as time management – the CEO is always busy but complains that they never have enough spare hours for their customers. That is a complete misfit.

Drill down, and you might find a casue linked to a problematic parent-child relationship going back decades or a blind fear of handling responsibility. Yup, you start looking for your notes from “shrink 101” lectures, as you abandon your Harvard biz school textbooks.

So the next question I hear is do I have to be an expert to be a mentor. Well, there are specific subjects, where it helps or is even essential: clients who want to set up a facebook marketing campaign or who seek help in running a restaurant. Fair enough.

But take the example of somebody who I spoke to the other day. He imports and distributes mushrooms. He now believes that he can grow them near Jerusalem and export them. How can I help him set up the business?

I explained my experience in small businesses. I told him about my background in international logistics. He heard about my overseas sales contacts. “But what do you know about mushrooms”, he countered. I did not try to hide my zero knowledge, but I encouraged him to accept how that was not the main issue here.

However, for him, it was all about mushrooms and not the business model. I did not hear back from him. And I suppose that he was left in full control of his new business, wondering how to set it up and still drawing no income.

Business mentoring is all about helping people. Mentoring is about listening to people, latching on to what they do not see, and then recreating the issue in a way that they can respond to. It is frequently enjoyable  and usually very rewarding for all parties.