Cover Story

Pilots look at turbulence as something to be avoided. Many business leaders feel the same about a turbulent business environment. But not so fast—there may be something to be gained by flying straight into the storm.

The storm is, of course, caused by the increased pace of technology and the threat level from companies your executives have never heard of. Less obvious is what type of leaders are needed to help your company survive and thrive in this setting.

One possibility is a leader that eschews virtually all of today’s commonly accepted wisdom, and that’s exactly what Dov Frohman offers in his just-released Leadership the Hard Way: Why Leadership Can’t Be Taught—And How You Can Learn It Anyway (Jossey-Bass).

Frohman is the inventor of EPROM and the founder of Intel Israel, where he spent 20 years establishing and running two state-of-the-art wafer fabs and a high-tech design center. His experiences as a child during World War II, as a student in Berkeley in the ’60s, and as an entrepreneur within Intel led him to some interesting conclusions.

For example, Frohman believes today’s leaders should deal with turbulence by applying a survival mindset, freeing up more of their time, and hiring people for their ability to think, rather than their education. If all this sounds counter-intuitive, you’re heading in the right direction.

“The test of leadership is how you act during a crisis,” Frohman said in an interview. “In a crisis, there’s an uncertain environment, there is turbulence. You have to embrace that—embrace change and turn the crisis into an opportunity.”

Shock value
Frohman’s parents were Polish Jews who emigrated to Holland in the 1930s. At the age of three, with the Nazi grip on Holland’s Jewish community tightening, Frohman’s parents made the difficult decision to hide him with a Dutch family. His parents did not survive the war, and he was eventually adopted by relatives in Israel.

Frohman said his belief that an organization’s survival can never be taken for granted stems from his experiences as a child during the war. “I saw threats to survival everywhere and was determined to make sure we were tough enough to survive them,” he wrote.

This approach served Frohman well in his efforts to grow Intel Israel from a startup to a highly successful operation, making the operation so competitive that it was able to avoid layoffs that plagued other areas of the company. But the biggest test of this theory (and the greatest opportunity) came during the Gulf War, when Frohman decided to keep the fab open while Iraqi Scud missiles fell and the Israeli Civil Defense authority instructed businesses to close and everyone but emergency personnel to remain at home.

Once Intel Israel’s employees got over the shock of being asked to work under these circumstances (although not ordered to), they rose to the occasion, with roughly 80% showing up to work during the war.
“Thanks to their heroic performance, Intel Israel was one of the few businesses in Israel to remain open the entire six weeks of the war,” writes Frohman. “Not only did we keep our commitments to global Intel, we also established the reputation that, over time, would allows us to grow Intel Israel into an important center of excellence for the corporation.”

Gut-wrenching change
As controversial as Frohman’s decision to keep the fab open was, it was the decision to do away with admins that he describes as “gut wrenching.” Frohman is a proponent of leaders having time to think and the ability to step back. “If a leader does not reserve 50% of his/her time for thinking, strategizing, looking at the environment, and being outside the organization, they are missing a highly competitive tool,” he said.

You might think that admins are the ones who help free up executives’ time, but Frohman found just the opposite. “It’s counterintuitive, but once I started working on my own, I started seeing what some of the problems were,” he said.

The idea came from the widespread distribution of laptops, which were new at the time. “What with e-mail, calendaring programs, and the like, I began to think that we could do without assistants completely,” he wrote. Managers were furious, and Frohman was criticized in loud, contentious meetings. He realized the only way to push the idea through was to move his assistant to another job.

Almost immediately, Frohman found himself with more time to talk with people. “When you’re too busy, you don’t have time to walk around, stop someone in the hall and ask them how they are. When you can do that, you hear all kinds of interesting things,” he said.

He also found himself highly motivated to solve problems on the spot, rather than scheduling them for later. “When people would come up to me in the cafeteria and say, ‘I need an hour of your time,’ I would respond, ‘I have five minutes right now. What’s on your mind?’” He estimated his availability and efficient use of time increased by at least 50% from this mode of operation.

“The idea of free time is one of the most neglected in business. It goes back to Marcus Aurelius’s idea that most people think about what they should do, but few people think about what they should not do,” he said. “I think if you don’t have free time, you’re not a leader.”

Impossible goals
Frohman used three highly unusual methods when it came to the personnel at Intel Israel, all of which contributed greatly to the fledgling company’s success. First, he instructed hiring managers to throw out the idea that only engineers should be considered for jobs involving chip design. “I believed that people trained in more science-based disciplines—physicists, chemists, and the like—would make just as good chip designers as people with traditional engineering degrees.”

Today, he goes one step further, saying he believes that over the next decade, a huge number of organizations will hire like this as the pool of qualified people shrinks. Sure, his managers thought he was crazy at first, but he proved again and again that counterintuitive ideas like this are the way to drive change and succeed.

“I told them to find people with the ability to think—regardless of their educational background,” he said. “If someone can think, they can acquire the knowledge you need them to have.”

Second, he made sure employees were challenged, often by setting “impossible” goals. “If you challenge an employee, he or she can work for three or four days nonstop. They’re excited, and you leverage that excitement,” he explained. “In contrast, if an employee is frustrated, they won’t last even a day on a serious assignment.”

For skeptics, Frohman tells the story of setting an impossible target of cutting the average cost per die of the EPROM from $2.50 to $.66. The program was called Sixty-Six Cents or Die. Rather than becoming frustrated, employees began to focus relentlessly on costs, reducing parts inventory and improving productivity.

Although they fell slightly short of the target, they brought the price down to unheard-of levels, winning the division a large share of subsequent generations of microprocessor production. “If you don’t set impossible goals (in the sense that they look impossible when you set them), you don’t really excel above the average,” Frohman said.

Third, Frohman encouraged people to move laterally within the company. The idea for this stemmed from three months spent in Intel’s Oregon fab to learn about manufacturing, with the aim of starting up manufacturing in Israel (at the time, there was only a design center).

“I realized during those months that the fact that I came from science and development gave me some interesting perspectives on manufacturing that someone who was brought up in manufacturing wouldn’t realize,” he said.

As usual, when Frohman later announced that the heads of the Haifa design center and the Jerusalem fab would switch jobs, people thought he was crazy. And, indeed, the former manufacturing manager did not do well as head of design. (The former design head took his time learning the new culture and eventually thrived in the manufacturing environment.)

Frohman wrote about this mistake in the book, pointing out that this is an inevitable part of this style of leadership—what’s important is knowing how to recover. “We realized that when you make transfers like that, you have to have a lot of management support.” With that in place, lateral transfers became common at Intel Israel. “We started telling people that the best way to be promoted in the organization was to first move laterally and then go up.”

Not taking a risk for fear of making a mistake is something leaders today cannot afford to do, Frohman said. “The only way to turn a crisis into an opportunity is to go against the current,” he said. “You’re taking a risk—you don’t necessarily know you’re right, but you don’t want to fly on autopilot. You have to be able to look around and see what storms are coming up.”