The ongoing war in Gaza, now in its third month, has presented Israeli companies with uniquely difficult challenges, but at the same time, surprisingly (given the circumstances), we at Nextage can nevertheless see rays of hope and optimism.
While we acknowledge that these challenges may tend to keep people at home, we strongly believe that business leaders, now more than ever, need to be present with optimism and enthusiasm both for their workers and their customers. Businesses need to maintain an attitude of “business carries on.” Leaders need to travel abroad, visit their offices and customers, and show them that the war has stopped nothing. Business delegations must go to conferences and accept high-profile speaking invitations. Israeli business must be present and seen by the world. Companies should not cancel their corporate social gatherings and New Year kick-offs but hold them with appropriate sensitivity and optimism for the coming year. We cannot emphasize the importance of presence enough.
Another area that leaders should emphasize at this time is the idea of “giving back” to the community in this time of need. The business sector has already shown that it can provide logistical and administrative services to support and drive forward the many voluntary initiatives helping our soldiers, war-zone evacuees, and traumatized communities. However, maintaining these efforts over the long term for the duration of the war and even thereafter is now what businesses should be considering; for example, allowing and encouraging employees to use regular work hours to volunteer. This could allow businesses to help with such protracted issues as the thousands of evacuees who are unlikely to go home for a considerable time.
Budgets for 2024 will have been in process at the time the war started. Clearly, budgets will need to be revisited and costs will need to be re-examined closely. Companies should consider shortening their budget horizon from one year to as short as one quarter – the uncertainties in the current market demand more frequent shorter-term financial planning. The potential for the prolonged absence of workers in reserve duty may require consideration of alternative and creative staffing and contracting solutions, such as recruitment of DevOps people to streamline processes. The cost of risk will also need to be reassessed, possibly by finding ways to lengthen the company’s financial runway – streamlining costs, maintaining revenue growth, and considering alternative funding structures (such as shifting away from equity and including some hybrid debt on the balance sheet).
We believe that there are opportunities, too, that will emerge from the adversity we are currently experiencing. Business leaders should assess and consider allocating resources to potential areas of greater need as a result of the war. Clearly, such areas would need to suit existing business capabilities and funds. For example, people who were not active in the market previously (e.g., from the Haredi community) have shown strong willingness to participate and similarly, we believe that there will likely be a wave of aliya from the alarming increase in anti-semitism in the Western democracies, that will bring new people into the economy. We anticipate a further boost in demand for cybersecurity in response to the spike in cyber attacks globally and there is significant need for building reconstruction and security in the areas most affected by the war. Rebuilding communities with enhanced social and psychological services will also be important. And, when this is all over, we hope that Israeli businesses will offer leadership and skills and play an important part in the reconstruction and development of the region as a whole.
In this light, we wish you all a happy Hanukah!