The legendary Lego brand has just officially immigrated to Israel. Of course Lego was already here before but the veteran Danish toy maker has just opened its first store in the country. The person who persuaded the Danes to work with him and come to Israel is entrepreneur Eran Tor, who 12 years ago was behind the establishment of the iDigital retail chain for Apple products.
I have known Tor for years and I have seen his ups and downs and years of waiting for the right opportunity then realizing it. But throughout he has been characterized in my eyes by his passion and his constant search to fulfil it.
Since 2013 and last week's official Lego store opening in Israel, Tor has undergone a long and thrilling journey. He was offered the chance to head Israeli telecom company Partner Communications during its better days but turned it down and moved to the US where he managed an international sugar alternatives enterprise. A transformative experience caused him to abandon the high life and return to Israel and start anew, this time as an entrepreneur behind games and toy giants Nintendo and Lego.
You're probably not the first person who has tried to bring Lego to Israel and you worked a long time on it. How did it happen in the end?
"Since childhood I have loved Lego. I grew up with their products, and my children also grew up with them," he responds and adds that it was indeed a long process. Very long.
"Lego is first and foremost, in my opinion, one of the most amazing brands that there is in the world," Tor says. "I told them that I think that there is an anomaly in the Israeli market and they need to be here and how it is worthwhile for them to do it. And this took time, eight years."
Tor recalls that he began his career in advertising. After studying at Tel Aviv University he worked for an ad agency and hoped to work in marketing. Even then he was thinking big.
"I wanted to be in the world of international marketing and I traveled to New York to do a master's degree," he recounts. "Very quickly I understood that I wanted to manage and to build and I joined a company called Best Food, a US food giant, on the international management track. There I worked in just about every position possible that you can think of in the world of consumer products.
"Then Unilever acquired Best Food, so I joined them and I worked there for many years. Among other things I launched the Dove brand and others. But all this was as a salaried manager. I learned a lot about building a brand."
Adventures with Apple begin
When he was a little over 30, Tor returned to Israel and at first was appointed CEO of Reckitt Benckiser Group Israel, the importer of cleaner Vanish, dishwasher tablets Finish and much more. He established operations for them in Israel. He looks back on this period as a great success and said that he had planned to return abroad and take a senior managerial position with Reckitt in Europe.
But that didn't happen. "In the end I met the people from the Pitango venture capital fund and they told me that they planned bringing Apple to Israel." Tor recollects that at about the same time partner was looking for a CEO and David Avner, the then CEO proposed that he replace him. "I knew that I didn't want to do it but you don't immediately say no to such an offer. I deliberated a lot between continuing on the international track with Reckitt and Partner."
This was 2005, the golden days of Israeli mobile phone companies and Partner in particular. What made you choose a different option?
"I won't forget it. I traveled to Europe, mainly to look for a school for my daughter Maya and on the way I met the person who was the Apple EMEA CEO. An amazing man called Pascal Cagni. After the meeting I understood that was what I wanted to do - bring Apple to Israel."
And this was before the iPhone revolution
"That's right. But I saw the difference between Israel and abroad. I knew this would be a revolution."
You aree in practice the franchisee of Apple but you don't work there. What did you learn from their management?
"I personally with my management philosophy, don't connect with many things, among other things their relationship to employees. Apple is focused on the end consumer and with creating for them value and maximum convenience. But if you look at the distribution chain, they want to earn as much as possible. And they don't see their partners along the route in the same way. Also regarding employees, they are like soldiers in certain positions. You only do your job and nothing beyond that. Those are the guidelines."
But he says he was impressed by their sense of order and long-term thinking and spirit of innovation that filters down to all parts of the organization."
How can you be innovative when you relate to your employees like that?
"I never checked that out, but most of the people who worked at Apple at the time I was working are no longer there. It is not a company that knows how to keep its employees for the long-term, in contrast to Microsoft, for example, but generally it is an exceptional company. The way that they manage the brand at the world level. There is nothing else like it."
7,700 employees working in 104 countries
Tor's spell at Apple ended after just over seven years - and he marked out his next target. "I got a call from a man called Ronald Perelman - a very well- known businessman in the US. He was the owner of Revlon (which recently went bankrupt) and a lot of other companies. It was on the eve of the Shavuot holiday and he offered me a job as number two to him at Revlon. I turned him down. I said that I was no longer prepared to be a number two."
But despite that Tor collaborated with him. "I told him that my dream was to manage a large international company or a company traded on Wall Street, and if there was something like that we could talk. Eventually we acquired Merisant, the world's biggest company in the sugar alternatives market.
"My family stayed in Israel and I moved to New York. We developed into a company with 7,700 employees working in 104 countries. I was always traveling. I would sometimes wake up and not know if I was in Mexico, Australia or Israel.
"It was very tough. On the one hand I had apparently achieved my dream. I had created a long-term vision and acquired a company for $830 million. And then I understood that it wasn't what I wanted and it wasn't for me at all. It's not my DNA and it's not what I do well."
When was the moent that you understood this?
"I went with my daughter Maya to the beach in Herzliya on Christmas Eve. We went and there was the quietness of distance between us. She was 14 and I had never spoken to her about this but suddenly I felt that I had received a deep punch in my soul. I had come to work for one of the strongest people in the business world, lived in an apartment near Beyonce and I wasn't happy. My children wanted to visit me only to see Beyonce in the elevator but they didn't really want to see me."
Tor recalls that Ronald Perelman still tried to persuade him to stay and made tempting offers but ultimately Tor returned to Israel and the cooperation between them ended.
So you came home and gave up all that power, the private jets, three secretaries, and apartment near Beyonce
"At that very moment I breathed a sigh of relief. But when you leave something like that when it is as if you have reached a peak, you always say perhaps I made a mistake and not necessarily in economic terms."
Today, in addition to his businesses, Tor lectures at Reichman University (IDC Herzliya). "I opened a program five years ago. I made a lot of mistakes along the way and at the age of 50 I decided to pass on my experience."
What mistakes with people or from business can I learn from you?
"First of all you have to know how to pick you battles. From a young age I would fight about everything. I also wasted too much energy and didn't see the other side enough."
The method: A network of influencers
For people who have made ac switch like Tor, one of the major challenges is the change in pace. People who are used to working at a fast pace suddenly need to get used to a different reality.
Getting back to Lego. You wrote an email to them and for sure it took six months until there was any movement> What happened in this time?
"At the same time I did the best I could. I always strive to get to face-to-face meetings. I am a lot more effective that way."
Even if the other side sits in Europe?
"If I can't succeed in getting there myself I work through others. In the case of Lego, for example, there VP marketing worked at Revlon. I needed to get to her through someone in Revlon and then I know that she will connect me to the next person. I always build a map of influencers in the organization in which I am interested and through them try to get across the messages that I want."
Let's hear a bit about these conversations with big brands. How do you bring them to Israel? What did you say to Lego and to Nintendo?
"These stages I always do by myself. I sell the dream. You have to remember that Israel has an advantage in its smallness. It's true that in the list of priorities for Europe they don't see us but on the other hand, it's a great place to try out things, to check out things. There is no flow of products to the countries around us. If you do something in Germany then it immediately influences the surroundings for example." Tor adds that this is true for all aspects of business. "It could be for pricing, logistics or business models."
And with a population of nearly 10 million, we are not so small
"It depends what you are comparing with. Compared to Portugal or Greece we are not so small, certainly in terms of expenditure. If you look at the world of children you'll see that there is no other country in which such a large percentage of the population is so young. Instead of talking about the population, talk about the target population, and then things begin to be very interesting."
Do you have any rivals at this stage?
There always are. Ultimately everybody tries to surpass the biggest international brand. There have been no few players rivalling Lego. But you should never look at competitors or others. I talk about what are my relative advantages, what I bring to the table and what I am working on."
How do you cope with the huge players? Those that operate hundreds of stores, brands and loyalty clubs.
"I do not feel inferior to anybody. Partnership is not only money but also passion, the hunger to succeed and focus. I am personally involved in everything that I do and they know that. I come with passion and emphasize my uniqueness in management. The fact that I will be a loyal partner and they won't just be another brand in a large group."
Lego lands in Israel for the first time
Tor promises that Lego, which is opening in Israel for the first time, will be massive news, even bigger news than the entry of iDigital a decade ago. "I think that this market has two interesting things. The first is that I think Israel has many industries that are first rate in global terms - for example in restaurants and fashion - the Zara stores here are among the top in the world. And in toys we aren't yet. The market here is at a very low level in world terms. Not just Europe, the world.
"Lego's prices in Israel were exceptionally high. As of today (the eve of the opening of Lego's Israel store), 130 products are sold while elsewhere in the world there are over 1,000. There is no happiness, no experience, n service and that has to change."
And just now when everybody is talking about the cost of living, won't it be more difficult? It's not a cheap brand that is imported from China.
"Lego has existed for 90 years and over those years there were economic crises. Things that you buy from China last exactly one month. Lego stays for 20 years. I think that this is the right time, and we are here for a marathon."
How do you see the chain in the future?
"We are going to open Lego stores from the north to the south. We are also opening an online sales website really soon."
Let's jump ahead five or six years. You have Nintendo and Lego. Can you imagine a scenario of merging with one of the large chains?
"I deal with the here and now, with Lego and with Nintendo, which is also an amazing company. We have conducted a revolution over these past three years. We have surpassed Sony which is a huge feat. I am not looking at the moment at mergers and such moves but if there will be offers on the table we will consider it. Mainly and ultimately, I'll think about whether I'm getting enjoyment from this."
How to build a winning team
On the future of the entire retail market, Tor is certain that we are approaching a significant change. The Israeli market, he says, is coming from behind. "In the end, whoever does not provide a customer experience and added value on line won't exist."
Give me a small example of something that is happening today that didn't use to happen in terms of the retail experience.
"I don't want to talk about myself. I want to quote from a customer's letter that made me cry. We recently celebrated our third anniversary in the Nintendo store. I came to the store and they gave me this letter.\ from a customer who came herself with a box of cupcakes that she made for the employees. "Dear Nintendo team, we wanted to wish you a happy birthday. Thank you so much for all the love and happiness you have brought to us. My mother and I wish you a wonderful year, full of joy and happiness and new and rare Pokeman cards.
"In our store we know the names of the customers. No employee has left in the three years since we opened. We have a team that is irreplaceable and it will also be the same with Lego.
"The most important process is finding these people, who are basically a reflection of your supporters, your customers, and who create this loyalty. Do you know how many times the average customer visits the Nintendo store in Dizengoff Center. 5.2 times. In others they come back again every two months. That's how we measure things in my terms."
Eran Gefen is the founder of strategic consultants G^Team
Published by Globes, Israel business news - en.globes.co.il - on July 17 2022.
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