Former Alvarion CEO savors time to spare

Tzvika Friedman: I had a responsibility to the thousand families that Alvarion supports, to the board of directors, and to shareholders.

Former Alvarion Ltd. (Nasdaq: ALVR; TASE: ALVR) president and CEO Tzvika Friedman is still getting used to his new situation. After four years of intensively managing the WiMAX systems and equipment company, he handed over the reigns to former NICE Systems Ltd. (Nasdaq: NICE; TASE: NICE) chief business officer Eran Gorev, and now Friedman has a bit of time to spare.

Instead of flying to Mexico for a one-hour meeting, and then immediately returning to Israel, as he did as CEO, he now flies for a ski vacation with his wife and four daughters. "It warmed the heart," he says with a smile.

Friedman had been the COO at Floware, which merged with BreezeCOM to create Alvarion. Alvarion currently has a market cap of $245.7 million on Nasdaq.

Friedman says, "At some point you have to say, 'enough'. I gave all my time to the company. I worked 18 hours a day, and 14 hours a day on weekends. There is actually no limit to what can be done. I had a responsibility to the thousand families that Alvarion supports, to the board of directors, and to shareholders."

Besides the total dedication, Friedman describes himself as a manager who demands a lot from his employees ("With me, people work hard, but I don't stand with a whip" he explains), knows most of the workers, and gets down to the small details.

"A CEO needs to understand that in every sector there is someone who is more of an expert. In finance, it’s the CFO. In operations, it’s the COO. The CEO needs to bring added value, the direction, and advice," says Friedman.

There were difficult times during the crisis. A partner, Nortel Networks, went bankrupt, you lowered forecasts, and were forced to cut nearly 200 workers. Did you feel any pressure?

"I wasn't pressured, because it doesn't help. There are times when it is hard to get orders, the customers are facing difficulties, and worker motivation drops because of the layoffs.

"A manager who doesn’t find it difficult to lay off people should go home. It was difficult because I had to cut veteran workers, some of them personal friends, when you are not sure that they will find work. But it was necessary financially. In a crisis like this, when no one knows when it will end, there is an importance to financial stability so that customers will continue to do business with us."

Another type of difficulty Friedman faced was with the capital markets. Alvarion trades on both the Tel Aviv Stock Exchange (TASE) and Nasdaq, and didn't always satisfy investors. At one stock exchange conference two years ago, an investor got up and complained about Alvarion's lack of profitability.

"Most investors ask proper questions and understand the challenges. There are times, and I will put it politely, that a short term investor is not interested in where the company is going," says Friedman. He adds, "In 2007 it was a big challenge to explain to the market that our goal was not to profit, but to gain market share. Not that we didn't want to profit, but it was important to us to invest in the future. Today, Alvarion has 250 WiMAX deployments out of 550 around the world. But the shallow view is 'earn a profit in the quarter'."

Looking back, would you have done some things differently?

"We could have been more aggressive with a number of projects, such as the one in Japan, where the competitor made promises that we could not make. That company (Airspan SH-V) won, and then flew.

"Perhaps I had to make certain decisions quicker, with issues regarding organizational changes and strategy, despite the fact that compared with competitors we are fast."

What are you most proud of?

"Of many things: Of success against the biggest competitors, of becoming one of the market leaders with technology developed in Israel, in a staff of people that grew with time, of operations in Romania that grew from 20 people to 180, and of the fact that Alvarion, from "downtown Tel Aviv", is the company that every telecommunications operator in the world recognizes and identifies as a leader in the WiMAX market.

"Alvarion is a very strategic company. It didn't flow, but led steps in the market. We got into WiMAX knowing that giant companies would enter the field. The greatness was that we identified the challenges and knew how to translate them into strategy and action.

"It is the main weakness of Israeli high-tech companies. The big mistake is to think that it is enough that you have the best technology. There has to be a complete strategy and the ability to translate it into action."

How do you see the future of high tech in Israel today?

"Despite the transfer of human resources to China and India, Israeli high tech has a future. There are assets in the Israeli culture - the dedication to success, the energy, the thought that nothing is impossible. But the government must be more aggressive in maintaining high tech, and it begins with investment in education.

Friedman tells that as CEO, he set up a program of giving to the community, in which workers teach sixth graders in Or-Yehuda. "The most important thing is to show children that there is a chance, and that if they invest they will succeed. We also were not born into high tech."

"Education is a strategic problem of the state. Every prime minister cares about education, and then other burning issues come up. Its crazy that Israel is behind Iran in math tests. What saves us is the army and Israeli audacity (chutzpah).

Friedman believes that the government must support high tech with regard to the shekel-dollar exchange rate as well. He has only good words for Governor of the Bank of Israel Prof. Stanley Fischer: "The dollar exchange rate is murderous for industry. In 2007, an Israeli engineer was more expensive than an engineer in Boston. It is not logical. The solution is to grow outside Israel, and the state loses. I don't see government help as a subsidy, but rather defense of industry."

According to Friedman, the government must concern itself with high tech because "for every dollar in high tech, there are five dollars in the supporting environment." The government can also "be more aggressive", as he calls it, in helping fund overseas deals, by extending credit lines to companies.

Do you have plans to stay in high tech? To invest, to consult?

"Perhaps I will invest in start-ups, but I won't be chairman of 5-6 companies. I won't turn it into a career. I can help start-ups through connections to the telecommunications world and in building a large company. In any case, I won't do anything that competes with Alvarion, which is close to my heart.

Published by Globes [online], Israel business news - www.globes-online.com - on January 10, 2010

© Copyright of Globes Publisher Itonut (1983) Ltd. 2010

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