Taking Stock / Where Netanyahu Failed

The biggest flaw in Netanyahu's great vision is not its impracticable goal, his strategy, or his plans of action. It's that nobody else shares it.

Jack Welch, the oft-quoted legendary ex-CEO of General Electric, used to say that companies should set themselves ambitious, practically impossible goals. Aggressive targets inspire creativity, drive, innovation and motivation, while middling goals inspire mediocrity.

Finance Minister Benjamin Netanyahu has taken Welch's advice to the max, it would seem. On Sunday he convened a hasty press conference in honor of the second anniversary of his economic plan, and presented his vision: within 10 years, Israel would become one of the 10 richest nations in the world, in terms of GDP per capita.

His vision meets many of the criteria of what a vision should be. It is highly ambitious, clear, quantified and inspiring. We may also assume that most Israelis like it, too.

But that 10-in-10 vision is not especially persuasive, given that it's all but impossible.

All we have to do is look at Israel's economic performance over the last 10 years, to understand how devoid of reality Netanyahu's vision is. In the last 10 years, Israel was one of the only countries in the world where the standard of living, measured by GDP per capita, stagnated. In most of the countries we'd like to emulate, it shot up by tens of percent.

But, wait, don't we have this new economic leader, Benjamin Netanyahu, who in the last two years proved he had a real McCoy economic strategy, broken down into plans of action? And didn't he prove he can carry them out, too? Surely the next 10 years will be different from the last 10?

Let's not wallow in illusion. That isn't enough.

Netanyahu has no partners

Most of Netanyahu's achievements as finance minister derive from the sense of emergency that prevailed here two years ago. Financial crisis and a flight of capital loomed large and frightening.

Another part of Netanyahu's achievements derive from the U.S.' unprecedented involvement in the Middle East, and its massive support for Israel.

Without the conquest of Iraq and $10 billion in loan guarantees, Netanyahu probably couldn't have presented that list of achievements at his press conference.

The biggest flaw in Netanyahu's great vision is not its impracticable goal, his strategy, or his plans of action. It's that nobody else shares it.

Netanyahu has won considerable esteem among business circles in the last two years. Among the wider public, he's still one of its favorite politicians.

But in the business sector, his popularity is based on his economic performance, while among the people, he's loved or loathed for political reasons.

Steamrollers are passe

Prof. John Kotter of Harvard University, one of America's foremost gurus of management and strategy, listed eight steps to institute major change in corporations and big enterprises:

1. Instill a sense of urgency. 2. Create a coalition for change. 3. Develop a strategy and vision. 4. Communicate the vision. 5. Empower others to implement it. 6. Plan and create short-term wins. 7. Celebrate successes and create more of them. And finally, 8. Welcome new approaches and plans.

How did Netanyahu do, by Kotter's criteria?

1. He did instill a sense of urgency, but it's ebbing. 2. His coalition for change is short-term: he has no reliable broad support. 3. He has a strategy and vision, though his plans are too vague and littered with slogans and mottos. He needs long-range strategy. 4. The only one to whom Netanyahu has communicated his vision is himself. The public isn't buying it. 5. Empower others - well, the business sector has grasped the general direction, the rest of the people haven't. 6. Netanyahu is a master at creating short-term wins: economic growth, halting the climb of unemployment, rallying corporate results. 7. He's also a master at celebrating these short-term successes, which is not necessarily a bad thing. And finally, 8. There are plenty of ideas, but no long-term coalition to implement them.

Netanyahu cannot count on wide support in the Knesset, or among the workers, or among his political peers, or from social organizations.

Much of the public is convinced that his plans will enrich the rich some more, at the expense of the working class. They believe his privatization drives and reduction of government involvement in economy will just make the poor poorer.

You can dismiss their opposition as economic ignorance, but that's a feeble evasion. Explanation, persuasion and obtaining support are key to the process of consolidating a vision, and executing it in reality.

The sense of urgency, the coalition structure and the power of the Finance Ministry helped Netanyahu achieve a great deal during his first two years in as finance minister, using aggressive means. But aggression as a method is losing its power.

Long-range planning is foreign to Israel's government and political establishment. It is impossible to build an economic program for the long-term based on a vision, Netanyahu's or anybody else's.

Without broad support for a long-range economic program, it can't survive changes in government or at the Finance Ministry, however charismatic, dogged and persuasive this or that finance minister may be.