Archive for December 2012

Management styles – corporate, public sector and non-profits

December 28, 2012

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.

 

 

Christmas 2012 in Jerusalem

December 26, 2012

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

 

Covering up election economics in Israel

December 21, 2012

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.

Be honest – do you really give the best service you can to your customer?

December 20, 2012

We all know the expression: “Yes, I give the best service possible”. Now recall that frustrated client or the potential sales that slivered away or that person who criticised you (seemingly unfairly). Was it all their fault? What could and should you have done instead?

I was drawn to these comments by a blog I read this week from Shmuel Hoffman, a wonderful video and film maker in New York. Writing about a failed package for a Jewish youth group, he recalled how the client’s criticism had hurt him. After some honest self-reflection, Shmuel realised that all roads for the blame led back to him and that he had to change his ways, quickly. A few months down the road, the same client gave him another order.

Whenever I learn about stories like Shmuel’s, I recall the eulogy of a close family friend, George, from South Africa. At the funeral, his son spoke about how he had succeeded in business by always giving his best. George had made it his mission to always provide a client with the best opportunity that he could.

I listened to these words, as I was starting up my mentoring business. Simple and obvious enough I thought to myself. And how wrong I was. You see it is not just that you have to do your best, you have to present the package in a manner that the other side feels and understands is the best. In other words, they will realise that they need to work with you.

This week, I made two pitches. Both were top rate. In one situation, as the phone call ended I realised I had not made the “target” appreciate the benefits of what he was receiving. I am still waiting to hear back. In contrast, I started the second call by empowering the person with new knowledge. In turn, this engendered deeper trust in me. The rest of the conversation was far more positive.

Creating a good honest service takes time and understanding and a wider appreciation of different customers. It is a necessary skill that all of us need to possess. The truth is that few of us strive for it on a daily basis. The result is lost sales. Ouch!

Change: The new rules for nation building – a case study

December 11, 2012

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.

Behind the photo pics in Jerusalem

December 9, 2012

Jerusalem – the city of peace, a centre for three major religions – has been dividing peoples and nations for thousands of years. The title of my blog, Afternoon Tea in Jerusalem, shows just how much I care and love and admire the pleasures of the place.

However, my personal passion cannot hide that again Jerusalem has caused more argument around the globe in the past week. At the United Nations, Israel has been lambasted for planning to build extra housing in what she sees as the capital of her country. Meanwhile, in Gaza, Hamas leaders have celebrated twenty five years of armed struggle against Israel, declaring that they will never recognise the modern Jewish state and its capital. Impasse, no?

I remain hopeful. The reason is that away from the news and the mass media, life in the city is really pretty good indeed.

Sharon reminded me of this picture of hope. She runs a growing blog called “The Real Jerusalem Streets”, which uses photography to illustrate the real facts. Take for example her feature earlier this year on Arab women in Jerusalem, working and roaming freely. A similar montage back in August was equally enlightening.

These are no isolated moments captured through a lens. This weekend I read a feature on a small dairy restaurant in the centre of the city called Tmol Shilshom. It is boutiquey, if such a word exists. It is frequented by writers and poets. It has won the 2012 “certificate of excellence” from Tripadvisor. All very nice, but there is one very crucial factor to this success, that is ignored by even the most cosmopolitan of overseas journalists.

The chief chef of this outstanding restaurant is Ma’azan Shwicki, an Arab who started in the culinary profession back in 1982 doing the washing up. Not only is his work now recognised by Tripadvisor. His breakfast is also considered one of the top ten in the world by “Lonely Planet“. And all this effort is soon to be combined with being the Muchtar of Abu Tor in the south east neighbourhoods of Jerusalem.

Jerusalem may not be perfect. It may not have reached the visionary standards of so-called moral politicians around the world. And for all that, despite the stress and the tensions, today’s Jerusalem has much to teach others about how to co-exist together.

Business mentor, religious leader or shrink? You choose

December 7, 2012

Nearly every time I describe to people what I do as a business mentor, I am asked if I feel that I am acting as a psychologist for financial or commercial issues.

It can seem that way. In fact, it is not just that you have to allow for a person’s personality in how they do or do not make decisions. You also have to be aware of “background noise”. A classic example of this can unfortunately be a divorce of a key player in the organisation.

That said, I am always clear about two things. I have never even studied psychology 101. And, I am not a professional marriage guidance counsellor or similar. If those are your issues, they need to be dealt with by a professional.

I am prompted to raise the discussion by two articles I read in a Hebrew publication last month. Tzohar is a group of rabbis, who try to relate orthodox opinions with modern life, without being afraid of modernity. Rabbis Aviner and Ariel argued that people with deep personal issues can receive full help by turning to a religious leader rather than visiting a shrink. (For the record, I have clients, who confirm what they have learnt with me by afterwards visiting their favoured rabbi.)

Nomi Wolfson, a specialist in marital problems, wrote a detailed response ,which I feel deserves a wider audience. As she writes (and I translate): “The main point is the lack of understanding (by non-experts) that handling emotional issues demands a wider appreciation of life.” This is an appreciation that goes beyond showing  a basic love of mankind and exuding empathy.

Wolfson goes on to analyse what she sees as the central point of dispute with her rabbinical associates. Her field of expertise is often seen as one of “words”. Speak wisely and you can do it also, no? No, cries Wolfson. And the reason is simple. In psychology, every word and every sentence can have a sub meaning. These implications need to be identified immediately. Just as it takes a rabbi – and also presumably preachers from other religions – years to learn the texts, so it takes analysts years to be certified by their professions.

In Wolfson’s last penultimate paragraph, she delivers her sternest warning. Rabbis are perceived as being most active in household disputes. They are seen as a place to seek neutrality, which is understandable. However, the professional spends many a session in training, role-playing the multiple different scenarios. That is extremely valuable background knowledge, actually working with individuals.

So who is correct? As Wolfson observes, if you need a toothache dealt with you go to a dentist. The final decision will depend on the issues involved  and where a person feels confident that they will find a solution.