800-CEO-READ Excerpts

Spies Inc. - Part V

While critical discussion has surfaced in recent years about the erosion of the IDF’s mission in light of the Israeli occupation of the Palestinian territories and its long-term characterization as the “people’s army,” undeniably the military continues to play a crucial and central role in the life of the country. Its influence is an enduring one in ways both obvious as well as latent. From amplifying and refining national character traits such as risk-taking, creativity, and ingenuity to instructing the problemsolving skills of generations of thinkers to creating the backbone of technological innovation, an entire world-class industry is built around the military.

Rafael Eitan’s one-year directive has stretched into nearly a quarter of a century. By 2003, nearly 21 classes of more than 440 soldiers have called themselves elite Talpiot alumni. In recent years, the IDF has expanded the Talpiot initiative, creating similarly conceived programs. Although Talpiot remains at the pinnacle, some of the other spinoffs include P’sgot, which focuses on physics and electronics, and Atidim , which finds recruits with strong potential who come from disadvantaged or overlooked schools and neighborhoods across the country, and who haven’t been deeply exposed to science and engineering but have the aptitude for it.

Only a handful of Talpiot soldiers have become military careerists. There are 2 colonels, 14 lieutenant colonels, and 1 brigadier general (as of 2003). “I’d like to have more brigadier generals or plane squadron commanders coming out of Talpiot,” said Colonel Nagel. However, Talpiot has served as an important graduation to prosperity. During their years of service, recruits have all been involved intimately in some of the military and defense’s most important systems. Although, for the most part, their achievements are left unpublicized, their fingerprints can be lifted off of Israel’s UAV program, the Arrow anti-ballistic missile system, and scores of communications, wireless technology, and weapons systems.

Upon entering the civilian world, Talpiot alumni have made equally important contributions. Many have continued to develop technology in the commercial realm, and the program’s graduates include a significant list of players in Israel’s high-tech world. Marius Nacht, one of the co-founders of Check Point Software Technologies, the company that virtually created the commercial Internet security firewall, came out of Talpiot, as did Jonathan Silverberg, who took his Talpiot background in developing locations systems in the Israeli Air Force to Decell Technologies, a mobile traffic information company. Before co-founding Provigent, a maker of chip systems for fixed wireless broadband, Dan Charash developed digital signal processing telecommunications applications in elite Ministry of Defense and IDF units following his graduation from Talpiot.

Spies Inc. - Part IV

Talpiot is like a military Mensa. The soldiers of Talpiot begin their military service at Hebrew University. They are housed apart from the main student population, living instead in specially built barracks on the Givat Ram campus in Jerusalem. During the academic portion of the program, they study for their bachelor’s of science in physics, mathematics, and computer science, and they take technological courses at an accelerated rate, covering about 40 percent more material than they would in a regular BS degree program . These soldiers are also trained in military strategy and complete an officer’s training course. “We expect them all to become officers,” said Colonel Yaacov Nagel, the acting head of research and development. “If after three years they fail the officer’s class, they won’t be Talpiot graduates. In the last class we almost lost one,” he said. “It would be very shameful if we lost one after three years. However, until now they’ve all become officers.”

They spend their summers doing 12 weeks of basic training. It is the same tough, no-holds-barred program given to the paratroopers. They train in the desert, hiking with 10 to 20 kilos and rifles on their backs, and they learn to jump out of planes. “We put them through a tough course, the same as paratroopers, because we want them to be strong and brave too,” explained Zadik.

Talpiot soldiers take special courses rotating with each force of the army: intelligence, navy, and air force. They learn about the weapon systems from the inside. They sit in cockpits of fighter jets and shoot off weaponry to gain a real understanding of its operational and technological needs. “It’s not just theoretical,” explained Zadik. “They know what it means to spend cold nights for one month in the Negev in a tank.” During the second year, they devise a project of their own choosing for three months. After all, Lieutenant Colonel Poleg reiterated, “The idea of Talpiot is to raise the next generation of R&D.;” The last six years of the program are divided between two years in field units and four as an R&D; officer.

The idea behind Talpiot was to create a unique group of men and women with extremely high IQs and aptitude for performance, and provide this group with an equally unique environment. Talpiot members are exposed to multidisciplinary studies in military strategy, the sciences, computers, math, and physics, and they receive instruction from the nation’s elite such as Nobel prize-winning economists. They participate in top-flight security systems both in the field and in the lab— establishing fields of inquiry. “There are many brilliant ideas,” said Major Barak Ben-Eliezar, Talpiot’s commander. “Most of them have ideas, but not just ideas—they bring about change.”

Spies Inc. - Part III

The process of selection and retention has always been a brutal intellectual survival of the fittest. Each year, tens of thousands of names are submitted to the IDF for Talpiot consideration by school principles and science teachers. Each September, this group is narrowed down to about 5,000 potential candidates who for a period of about six months are rigorously screened. Very quickly, this number dwindles down to 1,000, and then it drops to 180 after written examinations. Another 60 are cut after personal interviews. At the end of the testing period, only 50 candidates are invited to sign up. Among this group, however, only 35 to 40 make it through the entire program and graduate.

With notable exceptions (Orthodox Jews and Arabs), nearly all Israeli men and women are called up to serve in the military. While in recent years the overall number has decreased for a variety of reasons, it still holds in principle, and that means the military has its hands on the nation’s entire high school population, which is then scrupulously vetted and sorted. Over the years, the IDF has developed its own methodologies to select, sort, and direct the top conscripts into the most elite and challenging units. Intelligence, above all other military units and branches, has first pick of all of the nation’s conscripts.

Talpiot is in a class by itself. It takes about the top 1 percent of the top 1 percent. Without question, it is the most vaunted of the IDF’s elite programs, and it demonstrates how Israel’s military system in many ways performs the kind of sifting function that academia serves in the United States—and offers the same unparalleled cachet for those who graduate. It is somewhat akin to the Ivy League and other universities, such as MIT and Stanford, that draw the top-tier American high school students. As Professor Shimon Shocken explained, “In America the best and the brightest go into academia. In Israel, the army attracts the top talent.”

However, in the case of Talpiot, conscripts don’t exactly apply—they are chosen. “I got a letter that said come to be tested in Jerusalem,” recalled Yuval Shalom, who was recruited in 1984 at age 17. “Usually nobody believes they will make it. There is a very high prestige, and nobody thinks they are good enough. This is not something you can prepare for.” A little more than a dozen years after his Talpiot invitation, Shalom co-founded the wireless technology firm Wiseband communications. Among its initiatives, Wiseband helped pioneer digital signal processing amplifiers for 2.5 and third generation cellular networks.

Once chosen for Talpiot, candidates must prove themselves through a grueling series of tests. One test, developed with a math professor from Hebrew University, required the creation of a new language using words and signs—in half an hour. There is also a battery of questions—more like riddles (for instance, “How long before a cup of coffee turns cold?”). These questions were designed not to be solvable, but to analyze how a candidate would problem-solve, a super-selective filter intended to separate the true genius from the exceptionally gifted. By the end, barely 1 percent of the candidates make the cut. The only mitigating factor a recruit has for selection is his or her ability to perform under the accelerated and pressurized atmosphere of the program. No outside influences impact the selection process. Talpiot goes for quality over quantity, and there is no quota to fill. If someone is not suitable at any point, his or her training is halted.

Lieutenant Colonel Avi Poleg, himself a graduate of Talpiot and the program manager of the IDF’s technological manpower, described the testing process as one in which it’s not so much the end goal that is emphasized, but the journey in getting there. “There are mainly two instruments, and they are improving all the time,” he explained. “The first is the pencil and paper exam for general excellence and thinking in math and physics. Second, we’re looking at how candidates think about solutions. Not necessarily that they got the right solutions but that they have an interest in the field and they are curious about things. We pick people who know how to think. There are dozens of criteria. Candidates have basic knowledge in math and physics and the basic potential to be leaders, and they are good at teamwork. They must cross the threshold of each field. We know that not all of them will reach over the prime level, but everyone should excel in one field and in the other fields know at least the threshold level. We profile and do psychiatric tests where six to eight people sit together, and we give them tasks intended to see their social and teamwork capabilities, like is one person dominant? Does he or she have good ideas but can’t convince the group to take them?”

The IDF says it is difficult to assess the success of Talpiot in the normal kind of considered, qualitative measures—for instance, outside of the number of its graduates. It does say, however, that the fact the program continues to exist more than 20 years after its inception speaks volumes, as does the fact that the IDF allocates $1 million annually toward it (it is run under the authority of the Israeli Air Force) . 5 As Lieutenant Colonel Poleg suggested, “For every one Talpiot graduate, there are five units asking for him.”

Spies Inc. - Part II

Following the hardfought and hard won Yom Kippur War of 1973, the Israel and its military was looking for new approaches. The Talpiot program was established as the Israel Defense Forces elite brainpower summit, tasked with changing the language of technological warfare.

The professors submitted their proposal to the Chief of Staff’s Office in 1975. A small think tank was formed, drawing from the army, the Chief Scientist’s Office, industry, and military R&D; to come up with a full-blown concept that might make this idea a viable reality. Hanoch Zadik, a civilian working in the air force with a background in economic statistics and human development systems on the organizational level, was approached two years after the group was formed. He was giving a lecture on creative thinking at the Israeli air force academy when he was asked to join up with the men grappling with this endeavor. It was dubbed Talpiot , named for the biblical Hebrew word meaning “to build something strong, impregnable, and impressive.” For a year and a half, a committee of 12 met once a month to kick around the Talpiot project. They laid out the objectives and detailed the possibilities of executing what would eventually become the IDF’s most elite brainpower summit.

However, for an army that fed off of innovative thinking, even this was a somewhat radical notion. “There were a lot of objections that this was a waste of money,” recalled Zadik. At the time, the national discussion centered around closing the gap between those of means and those less fortunate in society. “The idea was equal education for all,” Zadik continued. “It was rooted in the county’s deep socialist roots. Nobody spoke about taking excellent boys and girls and accelerating their learning and doing something good.” There were other concerns as well. “People feared that if we took such brilliant people it was dangerous,” he explained. “There could be a military junta. It was against the basic value of Israeli culture to take people and separate them and say ‘you are the best,’ and if you put the best in the army like this there was a danger of a coup. I was quite sure that they wouldn’t do anything with this.”

Nevertheless, Israel has always had resourceful military leaders willing to make giant leaps of thought along razor-sharp edges. One such man was Rafael Eitan, the IDF’s chief of staff. Sometime in the late 1970s, Eitan launched an education initiative that took kids from disadvantaged circumstances, many living on the periphery, and made sure they had an education—particularly in the basics. Instead of leaving them sidelined, this program greatly improved their future prospects. Talpiot was on the opposite end of the same spectrum; it would take the intellectually elite and enhance their already considerable opportunities with enormous educational and institutional advantages. In 1979, Eitan took that leap and green-lighted Talpiot, although initially he gave it one year. Zadik and Dr. Dan Sharon, who received his PhD in innovation sciences, were asked to look for people to run the project. However, they were so enthusiastic about Talpiot, the pair decided to head it up themselves. To do so, they both reenlisted in the army more than a dozen years after their own compulsory services had been completed. “My wife and I had two kids, and she couldn’t believe this move,” said Zadik. “It was crazy.” For the first seven years of the program (until 1986), Zadik served as Talpiot’s deputy commander and chief trainer. Nearly two decades later, he became a management coach at the High-Tech Management School at Tel Aviv University.

The project was daunting from two significant vantage points: A military corps of geniuses was nearly unprecedented, and the military had very little to go on. Most of the recruits, for their part, were just finishing high school and had even less to go on. For the privilege of signing up for this new frontier, they were staring down the barrel of eight years of military duty— five years longer than the standard term (later it would extend to a total of nine years). The inaugural Talpiot class began with a group of 26 high school graduates out of an initial pool of 1,000 potential candidates, and only 20 made it to the end. All of them were male. In the second year, 30 recruits were selected, and 20 graduated. In the third year, the Talpiot class started with 28 soldiers and finished with 20. Talpiot began recruiting female candidates in the mid-1980s.

Spies Inc. - Part I

Spies Inc.: Business Innovation from Israel's Masters of Espionage
by Stacy Perman
Pearson - September 2004
204 Pages - ISBN 0131420232

Summary:

In Spies, Inc. former Time and Business 2.0 writer Stacy Perman reveals the spellbinding story of the Israeli military and 8200, the ultra-secret high-tech intelligence unit whose alumni helped create a number of the groundbreaking technologies behind today's information revolution. An incredible tale in its own right, 8200 is also a remarkable case study in innovation, offering compelling lessons for every business.

Likened to the NSA in the U.S., 8200 was established to capture, decipher, and analyze enemy transmissions. But unlike the NSA, 8200 did not have an endless font of resources at its disposal...and, due to secrecy, it couldn't generally buy "off-the-shelf" as a matter of procedure. Instead, it invented and customized many of its own technologies around the unique challenges of a nation that exists on a constant war-footing.

Along the way, its soldiers learned to come up with breakthroughs under crushing pressure and challenges. They brought this same sense of purpose under fire and creative improvisation in creating complex systems to the civilian world where they created top-line technology companies in a number of areas, including wireless communications and security.

Whispers of these secret Israeli electronic warriors swept venture capital circles in the 1990s, as a stunning number of Israeli tech startups bore fruit...many founded by 8200 veterans. Now, Stacy Perman tells this incredible story...revealing the techniques of entrepreneurship on the fly, when failure is not an option.

Read it as a spy story. Read it as a history story. Read it as a business story. However you read it, you won't be able to put it down.

• An ingathering of geniuses
• Organizing to win based on cunning and intellect—not pure force
• Connecting the dots: details, knowledge, and imagination
• The role of brilliant intelligence: from counterespionage to entrepreneurship
• Pure innovation, relentless improvisation
• Doing the impossible—on a shoestring budget
• "Are you from the unit?"
• How venture capitalists discovered one of the world's top sources of innovation
• Competing for the best
• Practical lessons on finding, nurturing, and keeping talent