Monday, February 22, 2010

A Must Read - "Start-Up Nation " by Dan Senor and Saul Singer

Almost exactly a year ago, my phone rang. "Hi, this is Dan Senor. I am writing a book about the impact of the military on the economy of Israel. I was told that as part of my research, I needed to talk with you. Is this a good time for a conversation?" And so began my involvement with the watershed book, "Start-up Nation: The Story of Israel's Economic Miracle."

Dan Senor was told to contact me - not because I know anything about the Israeli economy - but because I have strong opinions about how American military veterans are impacting - and will in the future impact - the U.S. economy. Senor and his collaborator, Saul Singer, have written a book that I now consider a "must read" for anyone who has an interest in innovation and entrepreneurship. By almost any reasonable metric, the Israeli economy has emerged as the most innovative in the world. This book explains the complex reasons behind this unlikely success story.

Using carefully reasoned argument and convincing case studies, Senor and Singer tell a compelling story about the unique qualities that allow Israeli Defense Forces (IDF) veterans to perform at a very high level in the business world. Some of the factors that they describe in detail involve the process by which promising Israeli high school students are selected and trained for elite military units, the unique sense of camaraderie that develops within those units and perpetuates through years of military reserve service, the willingness to challenge authority, and the sense of urgency that is part of every day life in Israel.

Early in the book, the authors compare these characteristics with the U.S. military:

"Former West Point professor Fred Kagan concedes that Americans can learn something from the Israelis. 'I don't think it's healthy for a commander to be constantly worrying if is subordinates will go over his head, like they do in the IDF,' he told us. 'On the other hand, the U.S. military could benefit from some kind of 360-degree evaluation during the promotion board process for officers. Right now in our system the incentives are all one-sided. To get promoted, and officer just has to please more senior officers. the junior guys get no input,'" (Page 53)

A culture that embraces an assiduous commitment to thoroughly debriefing every aspect of performance is a hallmark of Israeli business culture that has its roots in the shared IDF experience of many Israeli entrepreneurs:

"Israeli air force pilot Yuval Dotan is also a graduate of Harvard Business School. When if comes to 'Apollo vs. Columbia,' he believes that had NASA stuck to its exploratory roots, foam strikes would have been identified and seriously debated at the daily 'debrief.' In Israel's elite military units, each day is an experiment. And each day ends with a grueling session whereby everyone in the unit - of all ranks - sits down to deconstruct the day, no matter what else is happening on the battlefield or around the world. 'The debrief is as important as the drill or the live battle,' he told us. Each flight exercise, simulation, and real operation is treated like laboratory work 'to be examined and reexamined [is subjected to] rich - and heated - debate. That's how we are trained'" (Pages 93-94)

Leave it to me to see evidence of Renaissance Men at work and "intersectional thinking" in operation in the way in which Israeli entrepreneurs conduct themselves. Here is one such example:

"I was working on a creative project with an art graduate from Bezalel. He looked the part - long hair, an earring, in shorts and flip-flops. Suddenly a technological problem erupted. I was ready to call the techies to fix it. But the Bezalel student dropped his graphic work and began solving the problem like he was a trained engineer. I asked him where he learned to do this. It turns out he was also a fighter pilot in the air force. This art student? A fighter pilot? It's like all these worlds come colliding here -- or collaborating - depending on how you look at it." (Page 183)

The authors compare the performance of the Israeli educational system, which encouraging vigorous questioning to that of neighboring Arab countries, where rote memorization is the model
for teaching:

"This emphasis on standardization has shaped an education policy that defines success by measuring inputs rather than outcomes. For example, according to a study produced by the Persian Gulf offices of McKinsey & Company, Arab governments have been consumed with the number of teachers and investments in infrastructure - buildings and now computers - in hopes of improving their students' performance. But the results of the recent Trends in International Mathematics and Science Study ranked Saudi students forty-third out of forty-five." (Page 213)

Israeli focus on outcomes versus the Arab world's emphasis on inputs reminds me of a recent conversation with my friend, USN Vice Admiral (Ret.) Wally Massenburg. While he headed up Naval Aviation, he pushed a paradigm shift within the naval community to begin measuring outcomes rather than inputs, and the result were dramatic. At the end of his career, he had transformed a very tradition-bound part of the U.S. Navy into an entity no known as "Naval Aviation Enterprises."

I have not touched with any detail on the results of my conversation with Dan Senor. He was gracious enough to include several quotations from that interview in one of the book'ss chapter. Those quotation will be the subject of a separate upcoming Blog post.

I have been recommending this book to anyone who will listen. If you have any stake in leading innovation in any form, you will find challenge and inspiration in the pages of this book and in the practices it describe among Israeli start-up companies.



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