Reflections: Israeli secret to business success: Don’t fear failure

Amy Hirshberg Lederman

I recently returned from a fantastic trip to Israel — an interfaith business and leadership delegation sponsored by the America-Israel Friendship League. Our group consisted of 29 dynamic Tucsonans — a vibrant mix of faiths, ethnicities and professional backgrounds.

Together we explored the religious, archeological, business and cultural sites that make Israel so unique. Toward the end of the trip, each participant had the opportunity to experience a day-long “counterpart exchange” with Israelis in their fields of interest, sharing expertise and innovations in medicine, art, technology, education and venture capitalism.

I lived in Israel in 1974-5 when I was a junior in college and Israel was only 26 years old. It’s hard to reconcile the Israel of today with the one I knew back when my apartment had no hot water or heat and in order to call home, I had to take a bus to the central post office in downtown Jerusalem where a row of public phones lined the wall.

Over the past 37 years, I have watched Israel develop from a Third World adolescent country to a robust, maturing, high-tech nation. At 63, Israel is the most innovative and entrepreneurially successful country in the world. According to journalists Dan Senor and Saul Singer, authors of “Start-Up Nation,” Israel has the highest per capita density of start-ups in the world and has more companies listed on NASDAQ than all the companies from the European continent combined. In 2008, per capita venture capital investments in Israel were 2.5 times greater than those in the U.S., 30 times greater than in Europe, 80 times greater than in China and 350 times greater than in India.

What are some of the secrets to Israel’s success? Why, despite all of the hardships she faces daily while struggling to remain a genuine democracy, is Israel able to outshine all other countries in the development of innovative business practices and enterprising entrepreneurial efforts?

There are three significant reasons Israel is number one on the hit parade of entrepreneurs today: attitude, relationships and the failure factor.

Israelis develop an attitude about authority in the Israeli Defense Forces that transfers beautifully into the business world. Since most Israelis serve in the military immediately following high school (men for three years, women for two), a common culture is established among Israeli youth that binds them together, literally for life. Soldiers are taught to work together as a team; it is imperative for their safety, the nation’s security and the success of their mission. But unlike many other military models, the Israeli army has an informal quality among its ranks that has been described as “anti-hierarchical.”

IDF commanders are given nicknames by their units; they make coffee for their troops and hang out with them, telling jokes and stories. Soldiers are encouraged to assert themselves, to voice their opinions and ideas, in a respectful way that fosters debate and the rethinking of strategies. We might see this as arrogant or insubordinate, as totally unacceptable in the U.S. military, but Israelis view this type of chutzpah (“nerve” in Yiddish) as positive. A soldier with chutzpah, who respectfully disagrees with his commander, is not punished, but applauded.

Israelis take this attitude into the work force where it serves to promote original thinking, encourage respectful debate between employees and their superiors and challenge old paradigms that are no longer working.

The Israeli attitude inspires less formal and more trusting relationships between employers and employees. Because of the informality that is accepted and the chutzpah that is expected, people at every level of business are more willing to debate and disagree with one another without fear of recrimination. This reduces the amount of back-      biting, gossip and negative competition because disagreements are aired openly and freely. Relationships at work are built on the same principle as those in the army: group members must work together and trust one another in order to accomplish the end goal.

What is most impressive, however, is the Israeli reaction to failure. In many countries, including our own, there is a tendency to view failure as negative.

But in Israel, when a drug trial fails or an idea falls short, the failure is seen as value neutral if it is grounded in intelligent, well-reasoned assumptions. If the risk taken is rational and not reckless, the failure will be seen as valuable information that can become the springboard for the next generation of assumptions. The question is not “What did we do wrong?” but “What have we learned and what do we need to know to take this idea to the next level?”

Israel has made many mistakes and has much to learn in its trajectory from Third World country to start-up nation. But we stand to gain much, as individuals and as a country, if we consider the attitudes that have served her so well in her success as frontrunner in the entrepreneurship race.

Amy Hirshberg Lederman is an author, Jewish educator, public speaker and attorney who lives in Tucson. Her columns in the AJP have won awards from the American Jewish Press Association, the Arizona Newspapers Association and the Arizona Press Club for excellence in commentary. Visit her website at