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21 Days in Israel – A Personal Diary of Business Awakenings

Having lived in Israel a total of almost 12 years I feel as if I am entitled to consider myself a native even though, for now, I reside in the United States. Visiting here for the past 3 weeks has left me, as I expected it would, in awe and confused. While these may seem to be two sides of the pendulum, they are not completely inconsistent with one another. I am indeed confused at my level of awe and in awe at my degree of confusion.

Perhaps by way of disclaimer I should mention that I have a love/hate relationship with Israel and that I conclude my visit no less emotionally conflicted than I was when I arrived. I am a Zionist. I have tremendous respect and admiration for the people of Israel and their collective accomplishments. When I lived here I was proud to count those accomplishments as my own. Now, living abroad, I leave the credit for those who pay the high taxes, wrestle with the stifling business regulations, and calculate the daily terror risks. Deep inside, part of me calls for rejoining the drama, and I suspect someday I probably will.

This being a business newsletter I will not subject our dedicated readers to the internal psychological torments of yet one more conflicted Jew. What I really want to talk about is the business environment here in Israel and how it is fairing after 1,000 days of war and a worldwide high tech slowdown. More importantly, what I'd really like to do is get started on an industry wide dialogue that defines a series of best practices for U.S. market penetration, and how Israeli companies can maximize their potential in this market. To date our efforts to instigate such a dialogue have fallen on deaf ears, not because people don't believe the dialogue is necessary, but because they believe (falsely) that it is already going on.

I understand the comfort we derive from pointing to our grand successes – and there are enough of them to warrant pride. I also understand the suspicion we sense when someone tries to preach to us the American way, particularly in the light of so many U.S. companies that have brought upon themselves blunder and ruin. Tudog's position is that this is all beside the point. Every Israeli company seeking to enter the U.S. market needs to be treated individually and not as some statistical by-product. We need to carefully consider each company's path into the U.S. market, from point of entry, to positioning, to development of relationships, to marketing and sales, to management and human resource allocation, to financial resources and their allocation, to growth strategies, and finally, to maintenance of relationships.

To say we are engaging in these tasks as good as anyone else might be true. To say we are doing them as well as we could be, would be not only incorrect, but also self-delusional.

This recent trip has shown me that I do not know the Israeli mindset. One might say that I have come to understand that I do not understand. This is a breakthrough of sorts for me, and has allowed me to lessen the level of frustration I have always experienced with regard to the U.S. – Israel business relationship.

For sure there is plenty of responsibility on the American side with regard to minimizing the success of many Israeli companies. Some of the reasons are competitive, and others could be cultural. While my loyalties are shared, I believe the stakes are higher for Israel, and that successful operations in the United States would not only strengthen the U.S. – Israel alliance, but also contribute greatly to Israel's economy and defensive posture.

An Issue of Perception

Years ago I was asked to lecture on the U.S. market to a group of Israeli university students. I began by asking the students what characteristics popped into their minds when I mentioned the United States. Their responses were "powerful", "wealthy", "dominant", and the like. When I asked what came to mind when they think of an American they said "naïve", "dumb", "unimaginative", and so on.
Surely there is a problem with how Israelis view Americans. On one hand it is with an arrogance that minimizes the American potential. One the other hand it is with a sense of respect that leads them to view American power as a sort of arrogance to be countered and neutralized.

All this wouldn't matter much except that it has led far too many Israeli companies to make mistakes in the U.S. market that not only burned up funds, but also lost critical market time and competitive positioning. Many Israeli companies were so convinced of the incompetence of Americans – even when performing on their home turf - that they preferred to send relatively young and inexperienced Israelis to the U.S. to do the job instead. Naturally most were unable to overcome the natural disadvantages they were placed under, and failed to meet the potential their products or technologies should have afforded them.

It is absurd to suggest that the proper leadership for an Israeli company in the U.S. cannot be found anywhere within the United States, but rather must come from Israel. Certainly there are many Israelis capable of managing companies in the U.S., but the odds of a match between the company and the necessary U.S. based skills are far lower than the number of companies that actually attempted it.
The answer to this dilemma is an approach that allows for Israeli input and contribution to strategy and product development. Americans, who are managed by Americans, should handle the business development, marketing, and sales. This would permit each side to contribute their strengths without getting bogged down with power struggles and cultural differences.

Innovation Versus Procedure

Perhaps as a by-product of military service, perhaps due to the need to overcome so many barriers, the Israeli people as a whole are highly innovative. Sometimes they are too innovative. For example, almost every Israeli man has his own "best" way to bar-b-que a steak. Some of these ideas make for great steak. Some make for excellent steak. While all are different, certainly not all are better. Same for software applications or telecom technologies, for while many Israeli companies were able to create technologies and applications that were different in how they processed information, analyzed data or transmitted signals, not all the new applications were better then those in existence. So, in some cases, money was spent on technologies that were different, not better. This is a drawback to a highly innovative environment.

More urgent than knowing how to innovate is knowing when to follow the rules. While Israeli technology innovations demonstrate to Americans a sense of creativity, Israeli efforts to innovate the market penetration process are seen as impatience and inexperience. For better or worse, right or wrong, Americans are procedural and attempts to hasten the process through "innovative" approaches most often backfire.

Just as one knows that the Asian markets require certain changes in our behavior so as to conform to their rigid cultural habits, so too does the U.S. market and how it operates also makes demands on our strategies. They may be less obvious, and we may feel more comfortable with them, but we cannot mistaken our comfort level with the sort of familiarity that allows us to place aside procedure.


But What Would You Say?

Certainly one aspect of American culture that disappoints Israelis is the lack of emphasis placed network. Surely knowing someone gives you an edge when all things are equal, but there is much less preferential treatment awarded in the United States than in Israel. In Israel people build tighter bonds. They create lifelong relationships in youth movements, high school, the army, and university. Also, Israel is a small nation, so even if people move away from their home town or leave a company, they are never too far away from where they once were. The U.S., by contrast, is huge, with professionals that are likely to move from company to company – and coast to coast. Relationships are less intense to begin with, and networking is more complex.

With this in mind, the "who you know" needs to be replaced with "what would you say", meaning that the message is more important than the relationship. Over the years Tudog has been approached by numerous companies asking if we can make an introduction, and our answer has always been, "yes, but what would you say"?

We ask this because we know that even if a company gains a meeting due to our relationships they will succeed only if during that meeting they present their product in a way that is meaningful and appropriate for the recipient company. If the presenting company offers a deal structure that is inappropriate, or speaks of pains that the recipient company does not have, then all the contacts in the world won't push the sale through. Sure whom you know helps, but what you know helps even more. Therefore marketing efforts need to focus on the message and the offering and not on shortcuts provided by network.
Israeli companies need to consider their strategic path in the United States and develop the relationships they need, not allow who they know to dictate the strategic path and put emphasis on personal relationships. They mean less in the U.S. than they do in Israel.

A Call for Dialogue

Tudog is calling for a dialogue within the Israeli business community on best practices for the U.S. market, combining strategies, tactics, communication models, management techniques, and network to improve upon the already impressive performance of Israeli companies. It is more than a matter of business. It is a national imperative.

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