4 case studies in management from Israel

We all believe that we know better than the guys at the top.

Last year, it emerged that US Presidential candidate, Mick Romeny, and Israeli Prime Minister, Bibi Netanyahu, had been colleagues three decades back at the Boston Consulting Group. Reminiscing together, they recalled how they had concluded that the big chief at the time was simply out of his depth. Today? Well just look at the strength of that same company.

This is all very relevant when you consider 4 management stories that were reported in the Israeli press in the past week. Be honest – could you have done any better in the situations done below. And what can we all learn from these real life commercial scenarios?

ITEM ONE: Teva

Teva is considered a global giant in the sphere of generic drugs. The outgoing CEO, Shlomo Yanai, has seen sales nearly treble under his five-year leadership to over US$20 billion – albeit partly through acquisitions. Rumours persist if he left or if he was forced to jump by investors concerned about weak are performance.

For me the issue is elsewhere. When the news broke this week, Yanai was partnered at the press conference with his successor, Jeremy Levin. As the Jerusalem Post and Globes observed:

This time, Teva made every effort not to repeat the mistakes that it made at the retirement of its previous CEO, Makov, in 2006. Then, Teva’s announcement that Yanai was replacing Makov was perceived as earth-shattering, an unexpected and disorganized event. The result was an overworked rumor mill about disagreement between Makov and then-chairman Eli Hurvitz, now deceased….The (new team) all stood as one man at the press conference, perhaps in an effort to show unity and support for the change.

The share price rose 3% on the day.

ITEM TWO: Bank Leumi

Galia Maor has been the head of Israel’s second largest bank for close to two decades – a female rock of stability in a male environment. When she announced her retirement, within 24 hours of Yanai’s departure above, the Hebrew press were quick to praise her achievements.

And yet, this very move appears a contradiction to what she has been striving for. Yes, she has given three months notice. But why quit at a time of global financial  turmoil? Why not quietly help to groom a successor with the Board of Directors? Above all, her own explanations for going now – she had just installed a development plan – were not fully believed by the markets.

Strange – a bank demands conservative strategic management from its clients. In this situation, it is possible to argue that there is an obvious lack of ‘leadership by example’.

ITEM THREE: “Tiach Ha’aretz”

Tiach Haaretz is a small time company in Ashkelon. Supplying raw materials for the renovation industry, it was about to go into receivership and throw its employees on to the street. Up pops 35 year old Ronen Shaharabany from a nearby Kibbutz and who has worked his way up the company tree.

On learning of the impending news, he acted on a gut feeling. Within a few hours, he had raised 1 million shekels (just over US$0.25m) and saved the company.

It is reasonable to assume that Ronen’s commercial pedigree does not match that of Yanai nor Maor. There again, who is to say that he will not make a success. As he says, “he believes in his product”. Look at Mr Gates and co.

ITEM FOUR: Israeli phone companies

Now, Israel has at least 9 mobile and phone companies. And in contrast to Ronen, each has a very powerful and experienced top team. On Thursday, Yediot newspaper published a fascinating survey, comparing the time one had to wait on the phone to obtain a response from the respective customer service departments as opposed to a call to the sales’ operation.

Quelle surprise! For each of our mega profitable telecom monoliths, you had to wait longer for customer support service.

But that was not what struck me as the most disappointing part of the article. The companies were asked for their response. Instead of apologising or trying to do better, the newspaper quoted a series of meaningless excuses.

Now, if you were in charge, what would you be doing?

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