Israeli Business Leaders Discuss AI Transformation and 'Second Founding'
Translated & summarized from Calcalist by baba
Israeli business leaders at the EY Journey conference discussed the necessity of a "Second Founding" for companies to effectively integrate AI. Gigi Levy-Weiss of NFX argued that fundamental operational overhauls, not just tool adoption, are required to compete. Panelists from EY, HiBob, Bank Hapoalim, and Qumra Capital debated the challenges of transforming existing organizations, the importance of cultural shifts, and the need for speed and executive leadership in AI adoption. The consensus was that incremental changes are insufficient, and a complete reimagining of business processes is essential for success.
The story in 6 lines · by baba
- Companies need a "Second Founding" to integrate AI effectively, not just adopt new tools.
- AI integration requires a fundamental rethinking of operational structures and customer journeys.
- Transforming existing organizations presents significant challenges compared to building new AI startups.
- Employee psychological readiness and cultural shifts are crucial for successful AI adoption.
- Bank Hapoalim is rebuilding entire processes with AI, tripling its AI budget for next year.
- CEO responsibility and adapting incentive structures are key to driving AI transformation.
Companies must undergo a fundamental "Second Founding" to integrate AI effectively, rather than making incremental changes, according to Gigi Levy-Weiss, Founding Partner at NFX. Speaking at the EY Journey conference, Levy-Weiss argued that businesses not built around technology and automation from inception will struggle against those that are. He stressed that the gap between current operational methods and what's possible with AI is widening, and companies must rethink their entire operational structure, not just adopt new tools. The true test, he proposed, is whether the entire customer journey from need identification to solution delivery has been significantly altered by AI, leading to a single metric of speed to customer solution.
Levy-Weiss contrasted AI-native companies with those merely using AI tools, stating that while tools like ChatGPT or Claude can accelerate tasks, they don't change core company management. He advocated for a shift from traditional hierarchical structures to "pods", small, fully responsible teams that manage the entire customer lifecycle. This model, he explained, is now feasible as AI handles many routine tasks, allowing human employees to focus on orchestration.
During a subsequent panel, Shelly Oppenheimer-Levi of EY Israel highlighted the challenge of transforming existing organizations, which is more difficult than launching new AI startups. Roni Zahavi, CEO of HiBob, identified psychological readiness as crucial, noting employee fears of job displacement. He emphasized that cultural and mindset shifts are prerequisites for AI adoption.
Erez Rachamiel, Head of Technology at Bank Hapoalim, described AI as a tool for preserving and leveraging organizational knowledge. He cautioned that partial AI implementations are insufficient, failing to deliver significant gains. Instead, the bank is rebuilding entire processes end-to-end, integrating AI and tracking key performance indicators. This approach has shifted AI budgets from IT exercises to business strategy discussions, with the bank tripling its AI budget for the upcoming year, focusing on speed to market and new business acquisition.
Boaz Dinte of Qumra Capital placed the responsibility for transformation squarely on CEOs, stating it's their primary task, not something to be delegated. He urged companies to update incentive structures away from outdated revenue and profit margins, as "the cheese has moved." Dinte concluded by emphasizing the critical need for speed in today's market, where customer retention requires constant innovation and relevance, rendering long-term SaaS contracts obsolete.
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