Outstanding book, and I give it two thumbs up. I don’t get a chance to read many books these days, and this was a book that I wanted to get my hands on and read ever since it came out. No disappointments either. So let me do a run down of what inspired me, and how this book relates to our industry.
I also want to mention that I realize that the US has given aid to Israel. So you could easily say that their economy and war machine has benefited from that infusion of aid. But the return on investment in Israel, has been phenomenal for the amount of patents, inventions, and business innovation that has come out of that small country. How is it that Israel– a country of 7.1 million, only 60 years old, surrounded by enemies, in a constant state of war since its founding, with no natural resources– produces more start-up companies than large, peaceful, and stable nations like Japan, China, India, Korea, Canada and the UK? How can anyone look at how much has come out of Israel, and not be inspired or curious as to the ‘why’? With that said, lets get started.
If I was to sum up the theme of this book, it would be the Hebrew word ‘Davka‘, or ‘to succeed in spite of’. The Israelis are surrounded by people and countries that hate them and want nothing more than to destroy them. In turn, the Israelis have to be smart to survive and they have to have a strong military that can deal with multiple threats. Do to such a small population, everyone must serve in the military too. They also need a vibrant economy to pay for it all. And like Dan Senor and Saul Singer have so eloquently spelled out in their book, the Israelis know exactly what it takes to survive.
It is a country filled with entrepreneurs who are not afraid to fail, and they all have gained valuable leadership and innovation experience at an early age while in the military. The companies in Israel are extremely innovative and are resilient in the face of war, because of this military infusion in their culture. It’s not because they want to be a militaristic society, it’s because they have to be, do to a shortage on manpower. It is that dynamic, that has helped produce such highly resilient economy filled with entrepreneurs.
So let me cover some points as a teaser that really stood out for me. The Oracle of Omaha, Warren Buffet, actually invested in an Israeli firm, and that was something he promised he would never do. At face value, investing in a company located in such a volatile part of the world, doesn’t make sense. But because the companies in Israel are driven by Davka and have a supreme dedication to the customer and delivering on their promises, that during times of war, production levels actually increased.
During the Gulf War 1, the Israeli economy persevered, because the thinking was that Saddam would not get the best of Israel or impact it’s economy negatively. The production levels increased during that war, just because they wanted to succeed in spite of the attacks. The same thing happened during the Second Lebanon war, and production levels increased.
These companies were also run by reservists or former IDF, and that battlefield resolve translated into economic resolve in the face of crisis. Buffet recognized this, and that is why he invested there. Cisco has bought nine companies in Israel, and the list goes on. Everyone knows that the Israelis produce the most innovative stuff, and they are extremely resilient in the face of crisis. Investors love that stuff.
Israel also has a culture in which the military veteran is highly regarded, and business recognizes the value of that veteran. It is much like how after WW 2 in America, where if you were applying for a job and ‘weren’t a veteran’, you were an oddball. In today’s America, it is the other way around. We have one half of the society that has never served in the military, and really doesn’t understand the benefits behind hiring veterans, and then we have the other half of society, that does serve or has served, and understands those benefits clearly. We are not taking full advantage of this leadership resource. Today’s business is also missing out on the innovation capabilities of this abundant resource, and continue to think that they will get better leaders out of ‘universities that produce book smart kids’, but certainly fall short in the leadership manufacturing department.