| Issue 56 |

Benny Bachrach, Chairman of S.Z.P

• Number of company employees : Around 60.
• We provide: Plastic packaging made primarily from PET and also from recyclable raw materials, mainly for the food and consumer goods industry.
• I have been in my position for : Since the company was founded 27 years ago.
• History: I’m an economist by education. I got my Bachelor’s degree at Hebrew University and my Master’s degree at Chicago University (where I taught as well). After my studies, I came back to Israel and worked at Koor Industries and Koor Commerce as VP of Business Development, for 10 years. After that, I partnered with economist Prof. Haim Ben Shahar and we had a business consultation firm for 13 years. Throughout the 90’s I worked vis-à-vis the World Bank and the European Bank to develop the private sector in developing countries (especially Eastern Europe, as well as in Asia and Africa). I concurrently worked with industry in Israel, particularly the kibbutz industry regarding developing models of organization, separating economy from community, establishing management systems for factories separate from the kibbutzim, and in regular industry regarding strategic development and business development. In the year 2000, I established a financial and business consulting firm called Olesh, on Kibbutz Yakum. I am currently the chairperson of several companies, serve as Director and also deal with mergers and acquisitions with various companies and entities in Israeli and foreign economies.
• What I like about the job : Working with people, learning new things, enjoying the challenge of entering different fields that everyone is launching, business development management processes, and the ability to generate economic value.
• The most difficult part of the job : Working with people – to pull people out of rigid thinking. On the one hand, it’s challenging but on the other hand, it can be difficult, especially when people have become accustomed to doing the same thing in fixed patterns for years.
• Goals I want to attain : That in hindsight it will be possible to see the difference between the day that I started at the company and the day that I left it (which will of course happen thanks to the staff, the management, managers, and the board of directors).
• Our vision: To produce more sophisticated products in the packaging industry (packaging of medical equipment, electronic packaging and more). We want to deal less with things with a low entry threshold, because they are less interesting and have less added value.
• An original product in the field: We generally manufacture customized packaging according to customer requirements. We are able to give our customers products at reasonable costs and with an element of design. We are currently pursuing active packaging that can give the product added value beyond the actual packaging, such as longer shelf life, using various elements in the packaging that generate a process and not just package the product.
• Sources of innovation : An important source is our employees, who read a lot of professional literature and are always up to date. If you’re not an innovator, you’ll always trail behind everyone else. It’s important to keep up and do what the leading competitors are doing. When a need is defined, I’m always there. We understand the market needs even though the market in our industry is very sophisticated and always becoming more complex.
  
    
• Send feedback to bbachrach@olesh.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
  

Who Says Elephants Can’t Dance? Inside IBM’s Historic Turnaround / Louis V. Gerstner Jr. / Collins

Lou Gerstner, CEO of the legendary IMB’s book Who Says Elephants Can’t Dance? describes how he managed to save IBM from ruin and restore it to greatness. This is a must read not only for high tech managers, but also for anyone interested in learning about how large corporations operate and are led.

The first part of the book focuses on “stopping IBM’s bleeding” in 1993. Gerstner’s famous declaration that “the last thing IBM needs right now is a vision” – is explained at length in this part. The lesson from this declaration is important: when an organization is in a deep and serious cash flow crisis – there’s no point talking about vision. Instead – the company needs to be stabilized and work its way from crisis to profitability by means of optimization and a focus on the customers. During his first year in the job, Lou Gerstner focused on cutting costs by selling unnecessary assets and obliterating overlapping jobs and superfluous bureaucracy.
 

Concurrently, he made a bold decision to lower the prices of his mainframe computers (even though he had “captive” customers and it led to significantly lower revenues) and to invest in technologies that lowered the costs of the mainframe computers. He did all this in order not to lose the customers’ faith in the long term. Retaining and fostering customers, even at the height of the crisis, was made possible with additional bold steps (including – keeping the company united, one that provides a comprehensive solution, and making the organization global and customer-focused). In this context, IBM also consolidated the advertising budgets and was one of the first to launch an international campaign (Solutions for a Small World).

The second part of the book describes the strategic change that IBM later underwent – from a company that sells mainframe computers to one that provides computer services (and solutions), including an emphasis on software (mainly intermediate software) and networks (inventing and leading e-business). In order to move forward in this direction, more daring decisions were made (in contrast to the old IBM spirit), including acquiring the company Lotus, supplying services for equipment that was not IBM manufactured, to make IBM software compatible with competitors’ hardware, and selling IBM technologies and solutions to competitors (to expand the distribution channels).

The third part of the book focuses on the change in corporate culture (from a product-focused approach to a customer-focused one, from a “it wasn’t made here” approach to a learning organization, from internal politics to goal-oriented management, from position dependent compensation to outcome-dependent compensation, and much more). Lou Gerstner is portrayed as a real leader in these chapters, and explains how he succeeded in leading a conservative and rigid organization to a deep and encompassing cultural change. “In the end”, Lou says, “management doesn’t change culture. Management invites the work force to change the culture”. The other two parts of the book present Gerstner’s lessons and observations from his years at IBM, including his forecast for the future of the computer industry.

Who Says Elephants Can’t Dance? is an important and surprising book that lets us get a rare peek at the heart of the world of multinational corporations, and outlines and explains complex management topics (optimization, strategy, culture) in a simple and captivating manner. The book is also written in a flowing and easy to read style, using direct, forthcoming and honest dialogue with the reader. You are urged to read it. You won’t be sorry!

Dual-Purpose and Multi-Purpose…

 This time we will feature an Israeli success story, in which we played a part.

When we embarked on an innovation process with Gamal Sarid, we were unsure of being able to complete the task we were given. We were supposed to develop “the next big thing” with the company’s management– an innovative product line that would lead to significant sales. However, after discovering that Gamal-Sarid had more than 10,000 catalogue numbers of cutting and grinding discs, we weren’t sure we would be able to do the job. How can you invent a significant innovation in a company with such a wide variety of products? At first glance, it seemed that Gamal-Sarid’s products met every possible need...

The breakthrough came during the second workshop we gave them. At the beginning, a discussion was conducted about the difference between discs used for cutting and discs used for grinding. It turned out that a disc for cutting (metal pipes, for example) cannot be used for grinding as well (such as the rough edges created at the ends of the pipe during cutting). If you try to grind with a cutting disc, it may explode and severely injure the user. At this stage, we raised a significant question, which turned out to be the key to the success of the process: “What does it take to create a disc that can be used for both cutting and grinding?”.

In the discussion using thinking tools, it turned out that if we double the number of the disc’s reinforcement nets and ensure the right size – relatively thick and not too large a diameter – we will get a cutting disc that can also be safely used for grinding.
Subsequent to this workshop, Gamal-Sarid’s R&D team developed a disc with three reinforcement nets (instead of one that was used up to that point), in the right sizes. Later, Gamal-Sarid received approval from the Israeli Standards Institute to use this disc for both cutting and grinding.
 











The marketing team then launched the first line of discs in the world that are approved for both cutting and grinding, under the name CamelFlex Triple (triple – for the three reinforcement nets in each disc). Using the discs from this line made it possible to save work expenses (save the time used to change discs or the cost of carrying two discs). The Triple, to our delight, became Gamal Sarid’s best selling line in Israel and worldwide.

Almost 12 years have passed since the Triple was launched and it’s time to innovate once again. Gamal Sarid recently launched another innovative line, called 3-in-1, whose discs can cut, grind, and polish! (for a smooth finish). We wish Gamal-Sarid the best of luck with their new 3-in-1 line!