Business under Fire: How Israeli Companies Are Succeeding in the Face of Terror -- and What We Can Learn from Them / Edition 1

Business under Fire: How Israeli Companies Are Succeeding in the Face of Terror -- and What We Can Learn from Them / Edition 1

by Dan Carrison
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Business under Fire: How Israeli Companies Are Succeeding in the Face of Terror -- and What We Can Learn from Them / Edition 1

"from Israel’s experience. Despite facing the constant grim reality of terrorism, the Israeli economy is surprisingly robust.

How do businesses in Israel stay viable in a chaotic environment, and how do they rebuild in the wake of destruction?

Based on in-depth personal interviews conducted in Israel by the author, Business Under Fire offers inspirational and instructive stories about the techniques Israeli companies have used to thrive in the face of extraordinary adversity.

Readers will learn how to:

• prepare for the worst

• find new markets and customer bases

• motivate in a stressful, uncertain environment

• make a profit under previously unimaginable conditions

• make quick, intuitive decisions

• build flexibility into long-term plans

Packed with fascinating first-person accounts from CEOs, managers, and in-the-trenches employees who have been through it all, Business Under Fire contains hard-won insights every business can learn from."

Product Details

ISBN-13: 9780814408391
Publisher: AMACOM
Publication date: 11/01/2004
Edition description: New Edition
Pages: 256
Product dimensions: 6.20(w) x 9.10(h) x 1.00(d)
Age Range: 17 Years

About the Author

Dan Carrison (Los Angeles, CA) is a partner in Semper Fi Consulting and the author of Semper Fi: Business Leadership the Marine Corps Way (0-8144-0413-8) and Deadline! (0-8144-0726-9).

Read an Excerpt

Business Under Fire

By Dan Carrison


Copyright © 2005 Dan Carrison
All right reserved.

ISBN: 0-8144-0839-7

Chapter One

The Unique Role of the Business Community

"I hate the idea that only generals and politicians are handling these issues. It's time for us businesspeople to take part." -BENNY GAON, CEO, GAON HOLDINGS

The best weapon the Israeli business community has in the fight against terror is, unquestionably, continued high performance in the marketplace. Every business success denies the terrorists their victory and thereby adds sweetness to every new contract, sale, and customer. Although, as we have seen, Israeli businessmen do frequently fight terrorism in a literal sense, as activated reservists, the greatest contribution a manager can make is to maintain, and hopefully enhance, precrisis levels of production and service while the military prosecutes the actual defense of the economy. That said, there are other ways in which only the business community can combat terror. The measures taken have not been robust, like those of the Israel Defense Forces (IDF), and they have not made headlines, but they have been quietly effective, raising the hope that the terrorist problem will one day quit Israel-in the words of T. S. Eliot-"not with a bang, but a whimper."

Interview with Ram Caspi, Advocate, Caspi & Company

"This isn't a PR exercise. We mean business."

During my two interviews at Egged Bus Company, I had expressed the hope of meeting with the legal firm representing Egged in its lawsuit against the terrorists. I was told with a smile of commiseration that Ram Caspi is the busiest attorney in the country, and that it was very unlikely an interview could be arranged in a few days or even weeks. I took my case to Yoram, hoping the good offices of the Ministry of Industry and Trade would help, but I was told it would be easier to arrange a meeting with Prime Minister Ariel Sharon himself than the most famous lawyer in Israel. Yoram promised to try, however, and I crossed my fingers. The very evening of the second Egged interview, I returned to the David Intercontinental and made use of the gym. There was another guest, besides myself, in the weight room, so I struck up a conversation. As it turned out, he wasn't a guest but a legal clerk whose office was nearby. I knew Ram Caspi's office was in Tel Aviv, so I asked, as casually as I could, for the name of the firm. He responded: "Caspi & Company." At that point, I nearly jumped for joy and began talking rapidly and earnestly. The young man, whose English couldn't keep up, politely backed away. I happened to catch myself in the workout-room mirror and realized what an unusual image I presented: a perspiring American in shorts and T-shirt talking a mile a minute and gesticulating wildly. I said, "Wait here," and ran to my room for my briefcase. Moshe, for that was his name, very fortunately remained in the gym and eventually listened to my story. He promised to talk to his boss on my behalf and, sure enough, I was granted an interview the next day with the legal lion of Israel.

As Yoram and I waited in the wood-paneled boardroom at Caspi & Company, I watched the front-office activity through the open door. Everything-the activity and the office layout-seemed to lead to a shut, massive, mahogany door, occasionally tapped by tiptoeing, deferential secretaries. Suddenly the door opened, letting out a cloud of bluish tobacco smoke. I saw a small man in his fifties in a blue double-breasted suit pacing about the thick office carpet, energetically puffing on a cigarette, and having a conversation in Hebrew with a speakerphone. The conversation ended and the door closed, then just as suddenly reopened, as if in afterthought, and Ram Caspi walked straight to us, offering cigarettes. I politely declined, and he shared a story with us.

Caspi: King Hussein and [Yitzhak] Rabin were both heavy smokers, you know. A few years ago, Rabin told me of a big meeting they both had with President Clinton and Hillary. As the meeting wore on, they looked in vain for the ashtrays. But there were no ashtrays. These two world leaders were afraid to ask, especially in front of Hillary, so they drummed their fingers on the table and fidgeted. After the meeting, King Hussein said to Rabin, "Quick, let's go to my room and smoke." And that's what they did.

Q: I'm so glad you've spared some time for me. Egged Bus Company's lawsuit against the terrorists, to the degree it is being reported in the United States, is described as a PR gesture, with little hope of collecting for damages.

Caspi: Not at all. This isn't a PR exercise. We mean business. And we're collecting.

Q: How did all this start?

Caspi: First of all, let me say that I'm a lefty when it comes to Israeli politics. I'm for peace. To some people, it might seem strange that a person with my political views is handling this case, but the surest way to further the cause of peace is to fight terror.

Except for Tel Aviv, where there is a competitor bus company, Egged handles about 90 percent of the Israeli passengers. They have been targeted by all the terrorist groups who are trying to intimidate the population.

We were instructed by Egged to see if a legal course of action could be pursued. But against whom? Can you sue someone who has blown himself up, along with innocent men, women, and children? No, he's dead. Can you sue his father and mother? No. Legally, you can fight only the Palestinian Authority. But that wasn't enough for us. We realized we had to hit the personal pockets of those who are responsible for sending terrorists into Israel. So I told the judge that we would also be suing Mr. Yasser Arafat personally.

The judge asked me why? I told him, you don't sue the corporation-you sue the CEO personally, because only then do you get his attention. He realizes, "They're going to attach my bank accounts, my house, my properties, etc." The judge agreed.

Q: Was it a hard case to make?

Caspi: You must be prepared. You may think you know everything, but when you come to a court of law, you have to produce evidence. And if you do not have the evidence, you will lose the case, even if the court believes you are right.

We had a number of things to prove. One, we had to prove the Palestinian Authority did not assume the responsibilities it agreed to assume by signing a number of international agreements, including the Oslo Accord. Two, we had to prove that either they were directly responsible for the terror, or that they did not prevent it when they easily could have-and, in fact, aided it through television broadcasting, the speeches of their leaders, etc.

Three, in order to show that Yasser Arafat was responsible personally, we had to show the court that he either instructed, financed, aided, or abetted terrorist activities. We were greatly helped by original documents, which have been captured-documents that show the movement of the money, with instructions as to how to carry out the terrorist attack, along with checks that were signed by Yasser Arafat. Do you remember that ship the Israeli navy captured in January 2002, with all of the weapons and bombs? That's where many of the checks, personally signed by Mr. Arafat, were found. There is a book by Dani Neveh, which goes into great detail of Arafat's sponsorship of terrorism. Unfortunately, I believe it's only available in Hebrew.

Q: Does somebody actually serve Arafat with papers? I'm trying to imagine that.

Caspi: The legal documents, under the Oslo agreement, are delivered to the Ministry of Justice in Jerusalem, and they deliver them to the lawyers of the Palestinian Authority.

Q: It must have been very gratifying to finally prove the connection.

Caspi: It's not enough to prove that the PA and Mr. Arafat were responsible. We had to establish damages. As far as Egged is concerned, it was rather easy to prove damages, because after each suicide bombing on a bus, the passenger flow dropped tremendously for a period of time, then slowly returned to the average rate. Then another bombing would happen, followed by another valley on the chart. We took the "valleys" and added up the damages. The Israeli government assisted Egged with 50 percent of the lost revenue, and we sued for the remaining 50 percent.

We sued for only one year-from October 2000 through October 2001. We are planning to sue for year two and for year three as well. There are many ways to fight terror. Military force is only one. You must close their accounts, attach personal assets, sue everybody involved.

Q: This is where I think many people, including myself, are surprised to hear that actual money was collected from the terrorists.

Caspi: How do we collect? According to the Oslo agreement, all importation into the Palestinian Authority passes through Israeli ports. Under the agreement, Israel must collect the customs duties and transfer it to the PA. So we are like a tax collector, on behalf of the Palestinians, but all the money goes to them.

We attached that money, up to the amount awarded by the court. The PA has challenged the verdict and will fail to dissuade the court because they don't have the evidence. The evidence has to speak for itself.

There has also been a verdict in Arafat's absence-he wouldn't appear in court-for about $12 million. Now, how do we collect from Arafat? Well, we have to find his personal assets, which will not be hard, and attach them in the amount awarded by the court.

Q: But what if it's in a Swiss bank account or someplace equally hard to access?

Caspi: There are international conventions-one is called the Law of Enforcement of Foreign Judgments. Let's say we found a bank account in Sweden. Sweden will honor the Israeli judgment, just as we would honor a judgment from a Swedish court of law. There is reciprocity among the civilized nations.

Q: Have there been other successful lawsuits against the terrorists?

Caspi: Yes, many of the insurance companies in Israel have joined in a lawsuit against the PA for about $140 million. Huge numbers of cars are being stolen in Israel and appearing in the West Bank. We discovered that thousands of Israeli cars have been registered in Gaza and Ramallah and [are] being used by members of the Palestinian Authority. The PA has admitted that as many as 5,000 Israeli cars have been registered, but the number is probably twice that.

But this is just the beginning. There will be a snowball. After the verdict in favor of Egged, one insurance company filed suit, then all the insurance companies filed suit. Hotels, restaurants, theaters will soon follow. This snowball could result in billions of dollars [of damages].

Q: The collection of damages has to be very satisfying, but are there other benefits to a lawsuit-for example, PR benefits on behalf of Israel?

Caspi: No, I don't think so. We have lost the war of world public opinion. The news reports are too influential.

Q: Before I forget, what did you do in the military?

Caspi: I was an officer in intelligence for three years, then served in the reserves until my fiftieth birthday.

Q: Is this case dangerous for you? I mean, if a U.S. attorney were suing the Mafia, he might be concerned about personal safety. And these terrorists are worse than the Mafia.

Caspi: I am not concerned. Everybody knows my political beliefs and knows I am doing my job.

Q: Aside from this unique case for Egged, has the business activity for even a famous lawyer suffered during this crisis?

Caspi: If anyone tells you they have not been affected by the intifada, they lie. Even this law office has suffered. There has been less investment, less deals made, less business during these last few years.


Before this interview, the very idea of using society's most refined means of redress against murderous outlaws seemed ridiculous. One assumes a lawsuit to have two interested parties, plaintiff and defendant, both of whom show up in court and go through the lengthy process. The image of terrorists surrendering their arms to sit in the dock and answer questions that do not lend themselves to propagandistic replies is absurd. Even if one could stage a trial with appointed surrogates of the terrorists and gain a judgment, what would be the probability of collecting for damages from clandestine organizations that have evaded all attempts at capture?

Well, as I learned from Ram Caspi, the probabilities are rather high. How much damage a judgment really does to terrorists-considering the inexhaustible financial support they seem to enjoy, and the very low cost of assembling belt-bombs stuffed with nails and bolts-is open to question. But even without the prospect of collecting for damages, a lawsuit against the terrorist has great merit. As I left the offices of Caspi & Company, I couldn't help thinking that Ram may have underestimated the PR benefits of the Egged lawsuit and others like it. As an American, I certainly did not agree with Ram that Israel has "lost" in the court of public opinion. I thought he was being a bit hard on himself.

The beauty of a lawsuit against terrorists who harass Israeli society is that it returns the favor. There are few processes in life more harassing than legal action, especially if joined by numerous plaintiffs in a kind of national class-action suit. The Palestinian Authority represents itself as a legal institution; it cannot simply ignore the papers it's served with if it wishes to be taken seriously in other official matters, such as border disputes and peace negotiations. Attorneys must be hired and paid throughout the interminable processes. The prospect of endless litigation has prompted many a corporation, in its own mind innocent of the charges, to settle nevertheless, just to stop the bleeding. The most powerful corporations in the world tremble at the prospect of a major class-action suit. Why shouldn't the Palestinian Authority as it contemplates defending itself against numerous complaints from Israeli insurance companies, hotel associations, and restaurants? Egged's pending cases for the years 2002, 2003, and 2004 must give the PA cause for worry after the litigation proved successful on the first pass. The PA is in a somewhat unique position in that it is vulnerable to collection via customs fees. Monetary awards aside, the ordeal of litigation without end can be exhausting. Attorney jokes aside, the terrorists may have met their match in the Israeli trial lawyer.

Lawsuits also become self-perpetuating news stories. Every step in the legal process merits another entry in the press, another mention on the air, another retelling of the grievance before the public. From a media standpoint, lawsuits have legs.


Excerpted from Business Under Fire by Dan Carrison Copyright © 2005 by Dan Carrison. Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

Table of Contents

"Author's Note

Introduction Writing a Book on Business and Terror

Chapter 1 The Assault on the Economy

"Very simply, the people stopped coming." Ari Marom, Israel Ministry of Tourism

Chapter 2 Meeting the Threat

"I learned how inefficient we were before this crisis. When business returns, we’ll make a fortune here. We’ll never go back to the old ways. The intifada has been a school for us." Raphy Weiner, General Manager, Daniel Hotel

Chapter 3 Managing Through the Crisis

"We understand that we have to excel and be better than in more normal times. We can't allow the red lights to start blinking in the minds of our customers." Moti Boness, President, Israel Aircraft Industries

Chapter 4 Eleven Months Annual Leave

"There are days when tensions are particularly high, when I call my managers and ask them to bring their guns." Baruch Peled, Managing Director, Mango DSP (manufacturer of digital signal processors)

Chapter 5 The Unique Role of the Business Community

"I hate the idea that only generals and politicians are handling these issues. It’s time for us businesspeople to take part." Benny Gaon, CEO, Gaon Holdings (capital investment firm)

Conclusion Preparing for the Long Haul

"We don’t even refer to it as a 'crisis' anymore; it is normal life for us now." Janos Damon, Director, Israeli Hotel Managers Association"

What People are Saying About This

From the Publisher

"Every so often a book comes along that is truly important and says something compelling about the business world that isn't being said in the more 'popular' business literature. When such a book comes along — and it's a rare occasion — I feel the need to write about it Carrison's book contains exhaustive interviews with prominent business leaders, managers and employees in a variety of Israeli industries, and offers a powerful, pragmatic and urgent guide for American business owners."

Succeeding in Your Business column by Cliff Ennico, nationally syndicated"

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