| Issue 50 |

Edith Padan, CEO of Ofakim Travel and Tourism Ltd.

• Number of company employees: 150 employees, in the entire Ofakim Group: 300 employees.
• We provide: Travel and tourism services in Israel and abroad for private and corporate travelers (including flights, hotels, travel insurance, cruises, local tour guides, organized tours, and more).
• I have been in my position for: One year, eight months.
• History: I have a B.A. in Linguistics and Statistics from Tel Aviv University. After 25 years in the IDF, I retired with the rank of Colonel from the Planning and Personnel Department. This has been my fourth position since I retired from the IDF. My first job was with a consulting firm called AMAN, which was part of the Amenet Group, where I managed a logistics project for Clalit Healthcare Service Provider. I was there for three years. Afterwards I became Manager of the Licensing Department at the Ministry of Transport for 3 years. Then I was appointed CEO of MIT of the Manpower Group, which deals with high-tech job placement, a position that I filled for 7 years. In October 2007, I became CEO of Ofakim Travel.
• What I like about the job: The actual field of Travel and Tourism. It’s a fun field that makes people happy. We sell leisure, fun and vacation products. In addition, I also love the business challenge as CEO. The challenge in this field is immense because it works mainly on revenues that are commissions and therefore a lot of thought and wisdom goes into how to increase profitability. Most of the money (flights, hotel payments, taxes, etc.) goes to the suppliers, and then we are left with the commissions of a few measly percents. The business challenge is to identify what the most profitable products are in a highly fluctuating market in Israel and worldwide, and to achieve business success. This is extremely thought provoking and requires an understanding of business processes and the market, and making decisions (sometimes in situations of uncertainty). I really enjoy all this.
• The most difficult part of the job: Our company needs to organize and optimize work processes, define organizational goals, and determine annual and perennial plans. It is difficult to do things at the pace I would like. In practice, things take much longer. I have a hard time with the fact that I cannot meet expectations that I set for myself regarding pace of progress. Another difficulty is that my vision sees the entire group working more synergistically, and this is also happening slower than I would like.
• Goals I want to attain: For Ofakim to be ranked as the number 1 company in the market for its professionalism, service, and profitability in Tourism. A second goal – to try to create a situation where the entire Ofakim Group (several wholesale and retail companies) works synergistically so that we can all earn more money. We are on our way.
• Our vision: In the long term – to be number 1 in the Tourism market, in the short term – to increase profitability and revenues.
• An original product in the field: Ofakim Group encompasses several travel and tourism companies. We sell all of the companies’ products, as well as other companies in the market’s products (we have agreements with all the companies). This makes it possible for us to tailor a unique package to every customer according to his specific needs. Unique products include jeep tours, roots tours, and geographic journeys to interesting places in the world (The Geographic Company, which is also a part of the Ofakim Group, is responsible for the Queen of the Desert project). Every year we try to find the most appealing new destination. For example, this year the new destination was Albania: we organized tours and flights to the region along with accompanying ground services (tour guides, hotels, etc.). Other special things we do include specializing in women’s tours, and in the summer – we emphasize family trips. We always try to characterize things that are suitable for special populations. Another innovation of ours is launching two websites, where the customer defines a budget for a trip and we find the destinations that suit his given budget. We are constantly looking for special products that we can offer according to population groups and seasons (we try to predict the next market trend, a new product or a new destination for a specific market). This year, for example, we identified a trend that less Israelis are flying abroad, so we are focusing on internal tourism.
• Sources of innovation: Sources of innovation come from the desire to satisfy the customer. Ofakim has been around for more than 30 years, and we have experienced and skilled agents that interact with regular customers who expect to find a new destination each time. The Geographical Company, for example, has set an explicit goal for itself to find a new destination every year. In general, our innovations manifest in finding new destinations around the world, special sites, countries that suddenly develop relations with Israel and open their doors to tourism form Israel. The subsidiary directors have a great deal of experience and they all understand that without something new you cannot survive in this market.
• Recommended professional book: Freakonomics / Steven Levitt and Stephen Dubner / HarperLargePrint. This book gives a completely different insight and explains phenomena that seem totally trivial. It is seemingly an economics book but explains certain phenomena from a completely different perspective. For example, in a certain kindergarten the teacher noticed that parents always came late to pick up their children, and almost all were prepared to pay more money to come when it was convenient for them. Levitt’s explanation – as soon as you started to pay for overtime, all guilt feelings disappeared, and the kindergarten teacher achieved a completely opposite goal to what she wanted. The book is filled with dozens of such examples, which gives completely different answers to all sorts of strange (freak) questions. The book opens your mind to thinking differently and shows how much human nature eventually affects economics.
  
    
• Send feedback to edith@ofakim.co.il
• The recommendations presented above belong to the interviewee (the interviewees of this section often recommend processes that they underwent with other companies)
• Would you like to be interviewed?: contact us
  

The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies and Nations / James Surowiecki / Doubleday Publishers

Published in The Marker Magazine, July 2007, in "The Management Bookworm" column written by Ari Manor, CEO of ZOOZ.

The accepted convention is that the most common denominator is … too low. In other words, that the masses do not have refined tastes (to say the least) and therefore, when a large crowd is asked to make a decision – in most cases a mediocre compromise of inferior quality is made.

The book The Wisdom of Crowds shows that often when discussing extremely complex issues and under uncertain and ambiguous conditions, the opposite is true. When several independent groups of experts solve a difficult problem, the average solution that they propose is better than the solution of everyone in the group separately. Moreover, it turns out that a group of laymen is capable of solving problems that are even more complex and making clever and more calculated decisions than specific content experts, as smart as they may be.
 

The Wisdom of Crowds was written by James Surowiecki, who writes a popular financial column in the New Yorker. Surowiecki states that in order to properly activate the collective brain, you have to make sure that it is a diverse group of people, and to enable every participant in the group to make an independent decision that is not influenced by the other group members. Under such conditions of diversity and independence, and when there is a mechanism for collecting the decisions of each member of the group, the average choice of the entire group will not only be a faint compromise, but will even lead to a more complete, comprehensive and wiser solution. For example, when a random crowd at a country fair was asked to guess the weight of a specific bull, the average result of 787 participants was almost identical to the bull’s true weight, and much more accurate than the average opinion of several experts.

The book describes how it is possible to utilize the wisdom of the masses (or the expertise of independent groups) to solve three different types of widespread problems, and demonstrates this using dozens of diverse and fascinating examples. There are defined solutions for problems of the first type, such as the weight of the bull, which the country fair attendees managed to accurately guess. Another interesting example is locating the American submarine, Scorpion, which drowned in 1968. Three separate groups of experts recommended looking for it in three different spots that were remote from each other. The submarine was surprisingly located exactly in the middle of the three points that were proposed

Problems of the second type require crowd coordination. For example, the movement of hundreds of thousands of pedestrians on the crowded streets of New York during lunch hour. Traffic is well managed, smooth and flowing, thanks to dozens of small decisions that each of the pedestrians that swarm the streets makes independently. Another example is the popular El Farole Restaurant & Lounge in Santa Fe, whose clientele feels that when the place exceeds 60% capacity it is too crowded and not as enjoyable. In practice, on some Friday nights the bar exceeded 60% capacity, and on other nights it was less than 60% capacity. However, surprisingly, El Farole’s average capacity (over 100 Friday nights that were measured), was exactly 60%, meaning the maximum capacity that was still enjoyable. The coordination between the pub goers was orchestrated perfectly, even though each of them made an independent decision every Friday.

Problems of the third type require cooperation. For example, cooperation between 11 different laboratories (that usually compete with each other), made it possible to isolate the coronavirus within a month, which was responsible for the SARS epidemic that broke out in China and Hong Kong in February 2003. According to the book, in the three types of problems that were outlined, a variety of independent perspectives leads to a more rapid and effective solution of complex problems.

The Wisdom of Crowds is an easy-to-read book that contains examples from numerous additional fields. The book also presents practical mechanisms to harness the wisdom of the masses or the power of independent groups of experts for the benefit of business and organizational success. For example, the book describes management mechanisms that enable decentralization and mass choices of employees in order to make wiser decisions, and political stock markets where the general public benefits from choosing practical political solutions. This management bookworm, who usually shies away from tastes that are too common, and is apprehensive of making “average” decisions, discovered that it has a lot to learn, and recommends that you do as well!

• Buy the book at: Amazon
• Note: The books in this section are a personal recommendation, and the link to purchase the book is for convenience purposes only (it is not an advertisement and we do not profit from the recommendation)
• A list of other must-read books for managers

Latte!

In 1683, the Turkish army laid siege to Vienna for several months in an attempt to conquer the city. When winter arrived, the Turkish army, which was not prepared for the Austrian cold, was forced to retreat, and left behind its supplies and gear, including several sacs of coffee. One of the Viennese that survived the siege was Franz Kolshitsky, a commercial translator/interpreter that served as a spy during the siege. In light of his successful performance as a spy, Franz was awarded the title Imperial Interpreter, and he also received first dibs on the loot of the war. Franz wasn’t interested in the gold, the weapons, and other equipment that the Turks left behind, and made a beeline for the sacs of coffee. Since he knew the Turkish leaders and their affection for the black beverage, he decided to make use of the coffee, and in 1686 he opened the first café in Vienna, The Blue Bottle.

Unfortunately, customers did not flock to the café and it was left empty and deserted. The Viennese did not like the bitter taste of the coffee; they were not familiar with its invigorating attributes, and refused to pay for a hot beverage that cost much more than the tea that they were accustomed to drinking during the winter. Franz made different attempts at improving the taste of the coffee, but to no avail. The coffee remained bitter and unpalatable.

One day, while wandering restlessly around his deserted café, Franz accidentally spilled a bowl of milk into an adjacent pot of boiling coffee. Franz was irritated by his carelessness, but he decided to taste the result of his accident. To his surprise, the resulting beverage was delicious. After adding sugar to it, (some claim it was honey) he arrived at the winning combination. So rumor has it, the first café latte was invented. The new beverage became very popular. Within one year, approx. ten cafés opened in Vienna. Within a few years, dozens of cafés were open and running in the region, some already outside the Austrian borders. From that point onward, coffee culture became mainstream, in the Western world as well.

P.S. Thanks to Dan Urieli, who told me about the invention of the latte. Dan is the Training Manager of one of our clients, Options Coffee (Danesi importers in Israel). You are invited to join one of Dan’s coffee workshops, free of charge, to celebrate the opening of a new coffee events company, Urban Pause Café. Each workshop includes a fascinating lecture on the history of coffee, tips for preparing coffee at home, coffee tastings, and toasting with a celebratory coffee cocktail. The workshop takes place in the training room of Coffee Options in Netanya (Poleg) on Wednesdays, and lasts two hours. The workshop is designed for potential business clients – CEOs, Marketing Managers, Producers, and Personnel and HR Managers. So if you fall into the right category - try it and enjoy!
 

• To register for the coffee workshop: Contact Sharon Bridky, Manager of Urban Pause Café / events in Israel - 09-8658851 | 054-6677772 | cafeveod@017.net.il
• An article on the Six Inventive Thinking Tools can be found here.