Business Under Fire

Ben Rothke writes "In Outsource: Competing in the Global Productivity Race , Edward Yourdon examined the plight of displaced workers who find their jobs outsourced to cheaper workers overseas. The reality is that American technology jobs are being outsourced by the tens of thousands, with no end in sight. Workers who once envisioned a bright future now only see grim possibilities. In a fascinating book, Business Under Fire: How Israeli Companies Are Succeeding in the Face of Terror - and What We Can Learn from Them, author Dan Carrison focuses on a different sort of crisis resulting in lost jobs: terrorism." Read on for Rothke's review. Business Under Fire: How Israeli Companies Are Succeeding in the Face of Terror and What We Can Learn from Them author Dan Carrison pages 256 publisher AMACOM rating 10 reviewer Ben Rothke ISBN 0814408397 summary Businesses learning to cope with a depressed economy and violence can find unexpected lessons in adversity.

Since the revival of the Palestinian intifada in October 2000, hundreds of thousands of jobs have been lost in Israel -- a situation made worse by the NASDAQ meltdown of the same period. With an Israeli population of only 6.2 million, these lost jobs have had a catastrophic effect on the economy.

As a management consultant, Carrison wondered how any company, let alone an entire economy, could survive in an environment ravaged by terrorism and a recession. He questioned -- from a business perspective -- how businesses in Israel were able to stay viable in such a chaotic and destructive environment. He concludes, after spending time in Israel and interviewing many business leaders there, that even with all of the terrorism the Israeli economy is surprisingly robust.

Without getting into the politics of the middle-east conflict, nor taking sides, the book shows both technology and business managers how they can deal with the most adverse of situations.

Carrison interviews a cross section of CEOs and managers from industries hurt the hardest; namely tourism, hotel, hi-tech and biotech. What emerges from all of the stories is that every manager claims that the intifada not destroyed his company, but has actually made it a leaner and more efficient organization and one that will be ready to go into overdrive when normal economic times resume.

The five chapters have the same format: interviews with CEOs and senior directors, and a checklist for managing a business under fire. Each interviewee offers his own observations and strategies on how to deal with the current situation and work towards future growth. These strategies run from redefining the market, sharing the risk, to contingency plans and more.

One significant difference between Israel and America is demonstrated by the way Israeli citizens deal psychologically with terrorism. In an interview with financial consultant Danny Halpern, Carrison asks how many people would rent office space in the World Trade Center in New York City, were it completely rebuilt and reopened tomorrow. Halpern doubts the World Trade Center would have the same occupancy level as before 9/11. But he notes that in Israel, office are repopulated after they are bombed, and customers frequent bombed cafes and restaurants as soon as they are repaired.

Another telling difference that Halpern observed is that in Israel is more concerned with the quality of security, whereas in the U.S., more is invested into the mechanics of security. In the U.S., because of the huge numbers involved, the investment in security by default is in the mechanics, and the system. With that, minimum wage workers are hired to carry out what are supposedly important security functions.

The hotel industry has been hit hard. Hotels operate with large staffs, and require high occupancy rates to break even (roughly 75 percent). Carrison interviewed a number of hotel managers who saw their occupancy rate average about 25 percent. By any account, those hotels should have closed its doors and declared bankruptcy. But what happened is that the hotels discovered many correctable inefficiencies. In fact, Raphy Weiner, General Manager of the five-star Daniel Hotel, noted that he learned how inefficient the hotel had been before the crisis and "we'll never go back to the old way. The intifada has been a school for us."

The lesson that American IT managers can take from Weiner are that even the most adverse situation can be a fulcrum for change. Those in danger of having their jobs outsourced -- a significant number of us -- can take those lessons to heart, and hope that their managers and CEOs do too.

Carrison found that every manager had been challenged in cataclysmic ways, but refused to be run out of business by terrorists. Their defiance to the terrorists led them to streamline operations, reduce staff and determine a method to ride out the economic storm. That cutting back leads to a cruel irony: the people most heavily hurt from an economic perspective are the many Palestinian workers who -- before the intifada started -- had good jobs in Israel. The severe cutbacks in many firms resulted in Palestinian workers losing their jobs as a direct result of terrorist activities by their compatriots.

While the cause of the Israeli programmer losing his job is not the same as that of the American programmer; the manner in which they both can rebuild can be the same. Nietzsche's observation that "what does not destroy me, makes me stronger" is the attitude in interview after interview in the book. There is a lot that American programmers and managers can learn from those under fire in Israel.

You can purchase Business Under Fire: How Israeli Companies Are Succeeding in the Face of Terror - and What We Can Learn from Them from bn.com. Slashdot welcomes readers' book reviews -- to see your own review here, read the book review guidelines, then visit the submission page.

Comments

err

[TechnologyX]

Why is it that the US is all gungho about a world economy and taking over every 3rd world country out there, but then when it starts to happen and our job market spreads out, they cry foul and pump up the patriotism?

Seems outdated

[Anonymous Coward]

While at the time this book was written I'm sure it was quite accurate. However, now it is at best interesting fiction. While many jobs are continuing to be outsourced, it at a rapidly declining rate. Things are starting to turn around in the IT field. Much of this outsourcing caused immediate increased revenue because plainly, it was cheaper, however, in the long run it turns out its not the best for companies, so many have come back to America for these jobs. In 5 to 10 years, those in the IT profession are going to have a real good situation, especially those in the computer engineering field.

Diminishing Returns

[nebaz]

What emerges from all of the stories is that every manager claims that the intifada not destroyed his company, but has actually made it a leaner and more efficient organization and one that will be ready to go into overdrive when normal economic times resume.

I wonder, just because in "crisis mode" more efficiency and productivity can be gained, does this necessarily transfer to normal times. The US rationed materials in WW2, they did not do so later. Also people go at a certain pace, faster in emergency mode. I don't know if it is sustainable in the long term.

Re:Diminishing Returns

[archen]

The efficiency will transfer for a while. But then it will revert to whatever levels is "normal". The big impact that this WILL have is that people will be able to cope with hard times easier when they come again. My grandmother rationed during WWII, but that was peanuts compaired to getting through the great depression - so in her experience it wasn't really as bad as it could have been. A side effect is that no matter how good times were thereafter she never let much of anything go to waste for the rest of her life.

A company will regain the fat levels, but they'll know exactly where to trim the fat next time around, unlike some businesses that cut their core employees to suppliment overpaid worthless middle managers...

Americans are pussies

[DogDude]

I like the way the reviewer (and the book, apparently) say that Americans are pussies:

One significant difference between Israel and America is demonstrated by the way Israeli citizens deal psychologically with terrorism. In an interview with financial consultant Danny Halpern, Carrison asks how many people would rent office space in the World Trade Center in New York City, were it completely rebuilt and reopened tomorrow. Halpern doubts the World Trade Center would have the same occupancy level as before 9/11. But he notes that in Israel, office are repopulated after they are bombed, and customers frequent bombed cafes and restaurants as soon as they are repaired.

I tend to agree (and yes, I'm an American).

Re:Americans are pussies

[Tablizer]

[Halpern doubts the World Trade Center would have the same occupancy level as before 9/11. But he notes that in Israel, office are repopulated after they are bombed,...] I tend to agree (and yes, I'm an American).

To be fair, Israel's population tends to be "filtered" for those who put "religious pride" above safety. Many Israeli's come to Isreal for religious or ethnic pride reasons and they have dual citizenship with other countries in Europe, US, etc. Thus, those heavily afraid of terrorism probably would not come to Israel to begin with.

Unfortunately, it also tends to bring in a lot of Jewish fanatics, who tend to block the peace process because they want the holy lands at ANY cost.

Similarly, the US immigration system tends or has tended to select for certain personalities, such as those who want to run their own business, those who don't like government interference, and/or those who want religious freedom (especially earlier in our history).

Re:Bullshit propaganda

[Tablizer]

It is probably a bit off-topic, but why doesn't Israel just give the fucking land back? Somebody has to stand up and make the first move toward peace. People are more important than dirt. It is not even that much land. If terrorism continues AFTER they give the land back, then play eye-for-eye: if a Pali terrorist kills 7 Israeli's, then launch a strike to kill 7 Pali's. Their standing in the world would greatly increase if they simply gave the post-66 land back. It would put the ball back in the Pali's court.

Re:Maturity

[Marxist Hacker 42]

There is also the factor of the tax laws which encourage outsourcing, and the lobbyist cabal which curry our legislators, and the legislators themselves... it's all one big circle of money. But I'm more interested in the effect of inhuman pressure on economic engines.

The tax laws, lobbyists, and the legislators themselves are all bought & paid for slaves of the MnCs. Take away the limited liability corporation, and the rest collapses in on itself from a lack of investor money- or better yet, we put the investors in jail for bribery.

$2NATO != $2Israel

[cmholm]

As a percentage of local GNP, what Israel gets in aid dwafts what various NATO nations got in aid during the Cold War (not including the despoiled Europe of the late 40's).

I think what the previous poster was alluding to is the idea that Israeli policy is more intransigent with billions in US economic and military aid to prop up their economy than it would be without. Whether this is strictly true, or if the Israelis would just suck it in and damn the torpedoes is beside the point: most Israelis and their neighbors assume it's true.

Re:How Israeli Companies Are Succeeding...

[grcumb]

"Clearly the U.S. was being belligerant and arrogant when Russia put its nukes on Cuba."

I'm no historian, but yeah, the Cuban Missile Crisis is widely perceived to have resulted from escalating threats/counter-threats, set off by US tactical nuclear build-up. Wikipedia thinks so, too.

But don't trust just me and a bunch of amateur editors, go read the history yourself, and supplement the flag-waving pap that schools dish out these days, when they do at all.

Re:How Israeli Companies Are Succeeding...

[IgnoramusMaximus]

Wow, you are remarkably short-sighted, after all the boogey man was busy blowing up night clubs in Bali

The muslim fundamentalist extremists are a law enforcement problem not a military one. Furthermore lets tally things up here so we have clear understanding: total deaths due to terrorism, combining PLO, Hamas, IRA, Al-Qeida, and every other terrorist on the planet, including Iraqi resistance (most of whom are freedom-fighters), years 1950-2005 = less then 10,000. On the other hand: 2 years of US anti-terrorism operations: 100,000 deaths and counting. A yearly deathtoll due to car accidents in USA: over 40,000.

You were saying something about Bali and boogeymen, no?

Rerun

[Yonder Way]

As I mentioned in another recent Slashdot headline, Ed Yourdon is our modern day chicken little. He made a zillion dollars selling books and talking about how we were all going to die when Y2K hit. He was wrong on all counts. Now he's looking for his next paycheck. Don't buy into this quack.

Re:Bullshit propaganda

[tezza]

Thank you! I'm glad there's at least one other person that sees what the real problem is.

Okay. I have been to Israel. I am Jewish. I think that the Palestinians should be given their land back.

But clearly you do not understand the whole picture.

There are issues of The Right of Return for Palestinian exiles, say.
There is the issue of whether the region is a Two State solution or a One State, although Two State is almost definitely the case that will happen.
There is the issue of how to deal with some amazingly fanatical Right Wing Jewish Settlers who illegally occupy that land. This is but to touch on some of the issues.

But the BIGGEST issue that is ALWAYS discussed is that, with ALL these suicide bombings and murders, if the land is given back under these current conditions, it will APPEAR to validate terrorism and the demonisation of the Jewish state Israel, as a successful negotiating tactic. Because that, is what Israel and the World cannot afford to let happen. Then whenever someone had a Beef, this could be a resort, and not even the last one.

So your solution is quite simplistic and completely flawed. Never mind that I disagree about yor view of their ethnic cleansing of Palestinians

economics is complex

[Tzinger]

The author's comparison of Congressional inaction vis a vis the US dependence on oil to outsourcing jobs is an interesting one. It's quite clear that the reason for the US dependence on oil is so great is that the price of oil is so low. In fact, for most of the time since the Carter administration, it has been so low that it was too expensive to take it out of the ground in the US. The analogy, then should not be Congressional inaction, but rather what are the economics to the owners and what are US workers trying to sell? Not every decision that company executives make is based on price. Some are actually based on value. This is not to say that companies always operate in an ethical manner. For example, many companies accept TIF and other tax incentives to establish a local business. They really ought to be accountable for direct losses to the economy when they terminate the agreement before the local investment pays off. The owners should not escape with their shirts in these circumstances. Let's not forget. The reason the "state" provides limited liability to corporations is because there is a complex 3-way contract involved between consumer, employee and owner. Such a contract is too complex to be managed fully by common law. At the moment, laws and courts do seem to favor the owner. It will change again.