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 / Summer 2009 / Issue 55(originally published by Booz & Company)


Dov Frohman Leads the Hard Way

Christening the campaign “Sixty-six Cents or Die,” Frohman galvanized Intel Israel’s workforce to hit the target. The team created a pirate flag with the campaign’s motto and hung it from the flagpole in front of the fab. They began tracking production statistics using new metrics, and disseminated them daily.

Although Frohman didn’t know whether the target could in fact be achieved, he wanted it to be dramatic enough to make people stretch themselves. And they did just that. The team focused mercilessly on costs, finding creative new ways to produce more chips for less money. They never did reach the target, but they came so close to 66 cents that Intel Israel was awarded a disproportionate share of the production of Intel’s 286 microprocessor production — the workhorse chip at the heart of the wildly popular IBM PC-XT and a host of subsequent leading computers.

Frohman had created a virtual threat to survival with his “Sixty-six Cents or Die” campaign, but he would be faced with a much more concrete threat just a few years later.

Under Fire
In January 1991, just before the first Gulf War began, Israel was in a state of high alert. Intelligence reports had suggested that chemical-tipped Scud missiles were being assembled in western Iraq — just seven minutes’ flight time from Tel Aviv — and that Saddam Hussein intended to deploy them against the Jewish state. The Israeli government distributed gas masks and ordered every household to prepare a sealed room for use in chemical attacks. Fearing that employees could be killed at work or on the road, the civil defense authority instructed all nonessential businesses to shut down. One by one, business leaders complied — except for Frohman.

Intel Israel would stay open, he decided. It had, after all, been continuously open since its founding in 1974. Frohman felt that, as the country’s largest high-tech enterprise, Intel Israel couldn’t afford to be perceived as cowering in fear. What kind of a precedent would that set for less established players? The very survival of Israel’s emerging high-tech sector was at stake.

The possibility of exposing his employees to danger weighed heavily upon him. But Frohman decided that if safety measures were put in place, the benefits of remaining operational would outweigh the risks.

“There was absolutely no element of Dov coercing anybody,” Fassberg says. “That was never part of his style.” She recalls that Frohman sat down with managers and asked, “What do we need to do to make it better for employees to come to work than to stay home?” They replied, “We need to let them bring their kids.” Intel’s huge bomb shelters — a requirement under Israel’s building code — were quickly converted into day-care centers. As a result, Fassberg says, “employees actually felt better about coming to work, because their children were safer than they might have been at home.”

In the end, nearly 80 percent of Intel Israel’s employees showed up for work, and the company did not miss a single shipment or delivery because of the war. What’s more, Frohman and his team developed a reputation for delivering “no matter what” — transforming a perception of instability into one of reliability.

Two years later, with that strong reputation still intact, the Jerusalem fab began to face technical obsolescence. Although it had successfully produced Intel’s 386 microprocessor, the successor to the 286, the fab was not equipped to produce future generations of technology. For example, without a complete overhaul of its laminar-flow air-conditioning system, the fab could not accommodate the purer air requirements of smaller microprocessors. (The shorter the channel length of a computer chip, the cleaner the air has to be.)

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  1. Dov Frohman with Robert Howard: Leadership the Hard Way: Why Leadership Can’t be Taught, and How You Can Learn It Anyway (Jossey-Bass, 2008): The founder of Intel Israel articulates his brand of non- conforming risk taking in light of his own story.
  2. Amanda Ripley, The Unthinkable: Who Survives When Disaster Strikes — and Why (Crown, 2008): Based on interviews with survivors of disaster, portrays qualities of the risk-taking leader.
  3. Richard S. Tedlow, Andy Grove: The Life and Times of an American (Portfolio, 2006): Highly engaging, authoritative biography of the larger-than-life Intel CEO, champion of innovators and mentor to Frohman.
  4. For more business thought leadership, sign up for s+b’s RSS feed.
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