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?

Orange, Israel, fails 101 “service for dummies” course

With the click of a button, an unhappy client could send your company or its sales into a tailspin. “Don’t underestimate the power of a disgruntled customer,” says Rebecca Morgan, who authored Calming Upset Customers.

Isn’t that obvious? Well, apparently not. We all know the stories of Dell and other multinationals who lost mega sales and many branding points by treating customers with arrogance. It would seem that bigger you are, there is a greater danger that you are less responsive to your income source.

Take the Israeli mobile operator, Orange, or Partner as it is sometimes known. It has a large and enticing website, with even larger profits to match. I called them to verify my latest monthly bill.

Do you think that I could get the customer service team to admit that there was a mistake? You must be joking. I asked for an explanation of how I was being charged. She responded. I said that her words did not match the line-by-line items. She said that her words also appeared on the bill. So what? What did that help me?

Her solution: Would I like to hear about a better deal? Nothing about how to resolve the discrepancy. So much for being a help desk.

In fact all my questions and comments were treated with the same kind of answer. In other words, the lady was well-trained and found a textbook response to each issue. Her problem was that she sounded just like… a textbook. Has nobody taught Orange staff that formalities do not work? In fact, they are offensive!

Anyway, I accepted the chance to hear about a different pricing system. So sexy voice number two comes on the phone to stroke my wounded ego. Yes, I deliberately use mixed metaphors, because I assume that this is part of “their” game. In effect, this was an insult to my intelligence, but they did not seem to understand that.

The new offer was clear. No penalty clause for changing programmes. But when pushed, she did admit that I had to commit to being on the scheme for 18 months. Why? Because “we are trying to help you”.

Sounds caring, yes? No, a thousand times, NO. If they wanted to help, they would just move me over to the new scheme immediately, no strings attached. Genuine assistance is something you learn about in the first lesson of  the service for dummies course, which it would appear that Orange employees are not allowed to study.

As for the 18 months commitment, which other retail brand demands such loyalty from you? Does Safeway say that you can only shop with them, if you make all you purchases at their outlets for the whole month? Does your bank demand that you keep all your accounts with them? Do have you have to service your car at the same garage every time?

The 18 month rule is an abuse of the consumers right to freedom of choice, and it encourages Orange and their competitors to offer out lousy customer service.

And who is to blame? Well, let’s start with the regulators, but that is another blog altogether.

Customer service – Comsign gives this a new meaning

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?

Can’t get customer satisfaction?

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………..