Ido Aharoni is Consul General of Israel in New York. That makes him responsible for interacting with communities in the tri-state areas of New York, New Jersey and Connecticut. But Aharoni has a larger role. He is responsible for building the Israel brand. This initiative — to treat the country as a brand and create an augmented product — is his own brainchild; he saw the process in action in New York during a previous stint from 2001 to 2005. Aharoni successfully sold the idea to his superiors in Jerusalem and, in September 2007, was appointed to head a newly created Brand Management Team for the country. His eclectic educational background — he has majored in film and television, sociology, anthropology and mass communications — gives him a deep understanding of diversity, necessary in his nation brand-building assignment. He spoke about his efforts to build Israel’s brand in this interview with Knowledge at Wharton.

An edited transcript of the conversation follows.

Knowledge at Wharton: Countries, like companies, have brands that need to be managed. How is Israel’s brand perceived today and why?

Ido Aharoni: Well, 10 years ago when we embarked on this new endeavor, new enterprise, new direction, Israel’s brand was solely defined by Israel’s problems with its neighbors. So when people thought of Israel, Israel’s DNA almost universally was about the conflict, specifically the conflict with the Palestinians, but also about the conflict with neighbors in the region. Israel was perceived as a relentless producer of bad news. Whether you agree with Israel or not becomes irrelevant when you are not attracted to the context.

About six years ago, when we completed the first phase of research, we started to communicate to the world Israel’s attractive facets by engaging in very effective niche conversations with influential audiences worldwide, emphasizing quality over quantity. The results were almost immediate. So today, when you look at independent indexes such as the [FutureBrand] Country Brand Index, Israel has made tremendous progress. We started way down there at the very bottom of the list. Then two years ago [we were] No 45, last year No 30, and this year No 28.

Israel is a place of tremendous resolve and resilience and creative spirits. So the combination of Israeli innovation and Israeli creative spirit is the new added dimension to the existing dimension. And we are more interested today in broadening the existing conversation than anything. It’s the most important thing we can do for Israel and Israel’s economic interest and Israel’s image.

Knowledge at Wharton: We can come back in a little bit to what you are doing today, but let’s go to the time when you became the sort of head of Israel’s Brand Management Team in Jerusalem. I believe that was in September 2007. How did you define your challenge and what exactly was your mandate?

Aharoni: The challenge was defined earlier than that. I started the program back in New York after 9/11. The process started with the creation of the Brand Israel Group, which is a group of marketing specialists based in New York. That happened in 2002. The first thing that we did — we actually did two things — was to add Israel to the Brand Asset Valuator which is the world’s largest database on brands maintained [by BrandAsset Consulting] out of New York. The second thing that we did was to conduct our own independent research. With these findings, we came up with the strategy.

“We are more interested today in broadening the existing conversation than anything.”

The No 1 challenge we had was to change the mindset among Israelis and Israel’s well-wishers, Israel’s friends, mostly in the Jewish community, that the task at hand was not necessarily to win a debate, which is the conventional wisdom. We said that to win a debate is an important thing. But it is no less important to build relationships. So you change; it’s a different approach. Instead of trying to win a debate using cold clinical historical arguments, what we’re trying to do today — and that’s the challenge — is to build relationships that are meaningful to both sides and serve the interests of both sides. So, to answer your question, the mandate was to broaden the conversation. That was the mandate given to me by the foreign minister at the time. I have to say that all the foreign ministers I worked with, five of them since 2001, since 9/11, were extremely supportive of the concept of broadening the conversation. This, by definition, will help Israel with its tourism industry, to attract more foreign investment, to expose its culture all over the world, and obviously to improve its image and garner more and more political support.

Knowledge at Wharton: It’s a very interesting strategy — focusing on relationship building. Could you tell us a little bit about how you came up with the strategy and how you measure your progress along this strategy?

Aharoni: We measure our progress using several research instruments. As I mentioned before, we’re using a very well known database. We’re using our own independent research being conducted with funds raised by local Jewish organizations as well as the Israeli government. Recently, we conducted a global study by TNS, which is part of the WPP family, in 14 different nations from China to Mexico. And we’re looking at other independent resources that were not commissioned by us. We’re looking for something that will tell us more about what people feel toward Israel? It’s about the emotional tie, the quality of the emotional tie. I can tell you that the city of New York did a great job. When Israelis say “I love New York”, they actually mean it. Israelis have a real relationship with New York.

Knowledge at Wharton: In addition to the strategy, what do you think were some of the tactical steps that you took to implement the strategy and what lessons have you learned about what works and what doesn’t?

Aharoni: Well, the one thing that we know for sure that doesn’t work is a self-congratulatory message. The media consumer nowadays is very suspicious of institutions in general and specifically governments. The reason is that the consumer is well aware of the fact that we’re trying to sell him something. That’s why we don’t think the term “nation branding” is an accurate depiction of what we’re doing. We’d rather use the term “place positioning” or “country positioning”. What we’re trying to do is maximize our competitive edge. When you do that, you realize that people who passionately care about something — let’s say wine, architecture, medicine — will set aside political differences and are willing to listen to what you have to say.

There was a book that was published about two years ago called “Start Up Nation”. Start Up Nation started a whole new conversation about Israel. Why? Because it was relevant to many Americans struggling with economic crises. Start Up Nation talked about how, for example, Israel successfully incorporates military veterans into the high-tech sector. So one of the practical ideas that came out of that book was: let’s train human resources directors in America how to read a CV of a military veteran. When HR directors in Israel see a CV of a military veteran, they know exactly what it means. They know the skills, they know what to expect and, therefore, the transition from military to high-tech is far smoother.

Knowledge at Wharton: Which countries do you think are doing a good job with country positioning and are there any lessons that Israel can learn from them?

Aharoni: I can tell you that in our own process we studied no less than 80 case studies of cities and countries. I would say that by far the most successful and well-documented process is actually what the city of New York did from the early seventies. They changed the overall position of a city that was synonymous with crime and police corruption. They completely overhauled the image of New York. Another great example of an extremely successful place positioning effort is what happened in Spain post Franco. Spain went from being the most unattractive country in Southern Europe to the most attractive country in Europe and a tourism magnet with 50 million tourists a year if not more. Another great example in Europe is Croatia. When you’re talking about cities today in Asia, you can look with admiration on what is being done in Shanghai and Hong Kong.

“The No 1 challenge we had was to change the mindset among Israelis and Israel’s well-wishers … that the task at hand was not necessarily to win a debate, which is the conventional wisdom.”

Knowledge at Wharton: Despite all the efforts that countries make to improve their own brands, some obstacles obviously continue. In Israel’s case, what would you say are the principal obstacles and what can be done about them?

Aharoni: Well, obviously the geopolitical situation is the No 1 obstacle. The good news is that we can never assume that the entire world is interested in geopolitics. We went to France and conducted a study among the French elite. We wanted to know where they stand on the Israeli-Palestinian conflict. What we discovered was something very interesting: 16% of the French elite supported the Palestinians. Only 9% supported the Israelis. Traditionally, we would have tried to convert people from the group of 16 and move them over to the group of nine, change the inner balance between the two groups. But branding people would look at it and say, “Wait, you have to do something else. Nine and 16 put together gives you 25. [Only] 25% of the French elite have bothered to take a stand on this issue.” You have 75% not interested in the geopolitics of the Middle East. This is Israel’s room to grow in France. The same number — 75-80% is the Palestinian’s room to grow in France. Now, what is it that you can bring to them? There’s a lot that we can share with them. We can talk to them about business. There’s money to be made in Israel. We can talk to them about innovation. Israel is the No 1 producer of conceptual products in the world. We produce more scientific papers per capita than any other nation. We lead the world in the amount of money invested and reinvested in R&D. There’s a lot of stuff that we can talk to them about. But we didn’t do it [earlier]. Once you engage in such a conversation with those elites, you discover that they are very responsive. Why? Because it’s relevant to them.

Knowledge at Wharton: Interesting. That’s really interesting. David Reibstein is a marketing professor here at Wharton and he’s done a lot of work on nation-branding and has also talked about Israel. We interviewed him for Knowledge at Wharton sometime ago on this issue and he said something very interesting. He said that in his view, Israel is a very self-confident nation; it has had to be for its own survival. But, at the same time, this self-confidence can sometimes get in the way of learning. Do you agree with that view?

Aharoni: Well, I wish we were as self-confident as Mr. Reibstein describes us. Israel has to do a better job communicating its assets to the world. To me, country positioning is all about two things. It’s about the ability to identify your own competitive edge and then it’s about the ability to communicate that competitive edge to relevant audiences. For many, many years we thought that our job was to convince the world that we were right and our adversaries were wrong. That’s an important thing to do. But there is a new thing today, in the age of the internet. It’s called the Power of Attraction. If you’re not attractive, it becomes very difficult for you to be competitive. Traditionally, we thought of Jerusalem as a city in competition with Cairo. Jerusalem’s competition should not be Cairo. It should be Paris. Tel Aviv’s competition should be Barcelona. Israel’s competition should not be Syria or Lebanon or Jordan. Israel’s competition should be Spain or Korea. And that’s the new mindset that we need to introduce to the conversation.

Knowledge at Wharton: We talked about conversation. Conversation implies both speaking and listening. Do you think Israel needs to become better at listening to world opinion?

Aharoni: I think we are getting better and most of those conversations are taking place today online. I can tell you that the foreign ministry itself is one of many agencies in the Israeli government that is hosting groups from all over the world on a regular basis, not only Jewish groups. We just had in Israel a group of very influential Latino leaders. We had a group of very influential union leaders. A group of very influential evangelical leaders. And we’re willing to listen to what they have to say. We’re engaged in a productive conversation with them and I can tell you that one of our strengths is the fact that the Israeli system is so open. It’s so pluralistic and it’s so eclectic. I think we’re second only to the U.S. in terms of our immigration policy and our willingness to embrace various different ethnic groups and engage in conversation with them. So when a big part of your DNA is diversity and the embrace of variety, I think it’s very easy for you to contain criticism and to effectively cope with it.

Knowledge at Wharton: You alluded to the fact that you did some work reaching out to different groups of people. Specifically, what has been your strategy in terms of reaching out to non-Jewish populations in countries like the U.S. and to other non-Jewish populations elsewhere?

“To me, country positioning is all about two things. It’s about the ability to identify your own competitive edge and then it’s about the ability to communicate that to relevant audiences.”

Aharoni: Well, our research showed that in the U.S. Israel was all about conflict, mostly conflict and a little bit of orthodoxy. Religious orthodoxy. And we said Israel is way more than that. What can we do in order to change that? The first thing that we did was identify the areas. And again, this was done through research. What is it that Americans are interested in? What is it that interests the American people? And it was a big surprise to us that the American people were not so interested in what we have to say about the geopolitical situation. We discovered, much to our surprise, that while Americans are very supportive of Israeli policies, they’re not very attracted to Israel’s personality. So we said, “Okay, the reason is because they don’t know who we are. All they know about us is that we’re engaged in this bloody dispute with our neighbors. They have no idea what else we can bring to the table, so let’s expose that to them.”

We started to identify the areas in which we possess a clear relative advantage that is relevant to the American people. For example, the environment. A huge conversation is taking place online about the environment. Israel has three areas under the environment that are clear relative advantages. One is agriculture — Israel is a world leader in that field. The other is water desalination. And the third is renewable energy, emphasizing solar energy.

Then after the environment, Israel is a powerhouse when it comes to architecture, product design, fashion design, the emerging Israeli cuisine… Even here in Philadelphia, you have one of the greatest Israeli restaurants in North America. The third area we identified was the heritage. Israel is a place that brings together many ethnic groups, many languages, many religions, many beliefs and so on. The fourth area was culture and the arts.

Knowledge at Wharton: How is the changing perception of Israel effecting the branding of Israeli companies?

Aharoni: Sadly, most Israeli companies have shied away from the super brand. If you look at these successful Israeli companies, they have international names. Check Point, Amdocs, Comverse… these are all Israeli companies, but you will never know [from their names]. When we started the process 10 years ago, when I first came up with the idea of “Let’s look at Israel the same way you look at a product,” the No 1 sub-brand of Israel was the Israel defense forces. I would say the second most recognized brand name was the Mossad and the third was Uzi, a submachine gun. So everything — all the beacon sub-brands under the super brand — were related somehow to the conflict. They all supported the DNA of the brand. Today, the new emerging sub-brands come from the municipal level, most notably the city of Tel Aviv and the city of Jerusalem, which is doing a great, great job, and other places like Haifa.

Knowledge at Wharton: All the efforts that you have made over the past decade to burnish Israel’s brand, is there anything that you would have liked to try but you haven’t been able to as yet?

Aharoni: I would have loved to have brought the Olympic Games to Israel. I don’t think it will happen soon, but we have to work on it. We need to bring to Israel some major conferences. You have to put Israel on the map in the area of wellness and business tourism. We’re not getting enough business people to come and work in Israel and have fun at the same time. So this is an area that we have to improve. I think the most important thing that we need to do as a nation is to restore the kibbutz as a point of attraction. Not the old kibbutz which is a collective communal agricultural farming community, but the new kibbutz which is a center of wellness. I think the new kibbutz, the kibbutz of the future, can be a great addition to the Israeli tourism industry.