Leadership Under Fire Middle of War

www.hbr.org FIRST PERSON It may seem irresponsible to think about business in the Leadership Under Fire middle of war. But your leadership is really tested only when you come under attack. by Dov Frohman • Reprint R0612H It may seem irresponsible to think about business in the middle of war. But your leadership is really tested only when you come under attack. FIRST PERSON Leadership Under Fire by Dov Frohman For me, the recent events in the Middle East business point of view, in anticipation of the have been a painful reminder of one of the missile strikes, the Israeli civil defense author- most important lessons for any leader: You ity directed all nonessential businesses to close VED. don’t really know what it’s like to run a busi- and their employees to remain at home. The ness until you’ve had to do it amid the turmoil radical uncertainty of the situation—not know- of war. ing how many missiles would fall, where they In 1991, I was the general manager of Intel’s would fall, what kind of destruction they ALL RIGHTS RESER operation in Israel, which at the time was (and would inflict—threatened to bring our busi- TION. still today is) the company’s largest unit out- ness to a halt, even before a single missile had A OR side the United States. During the First Gulf been launched. ORP War, I faced what was the most difficult test of It would have been easy to follow the civil my entire career: whether to keep Intel Israel defense directive and close down. Everyone up and running during Iraq’s Scud missile was doing it, and we were not part of the war strikes against Israel or close the operations effort. Intel’s senior executives in California OL PUBLISHING C until the crisis passed. would have understood. Many of our employ- Of course, many businesses keep function- ees would probably have appreciated the op- ing during wartime. But in the days before the portunity to focus on preparing their families First Gulf War, Israel confronted what ap- for the attacks. BUSINESS SCHO D R peared to be an unprecedented threat. The Is- And yet I chose to ignore the government di- A V raeli military assumed that Iraqi missiles would rective, keep our operations open, and ask our be carrying chemical weapons. The govern- employees to continue to come to work. Some ment distributed gas masks and ordered every people thought I was being irresponsible. household to prepare a special sealed room in What right did I have to risk people’s lives in case of chemical attack. Most serious from a time of war? Others thought I was crazy. What OPYRIGHT © 2006 HAR C harvard business review • hbr.org • december 2006 page 1 FIRST PERSON•••Leadership Under Fire if any of our employees were killed? What if actly new to Israel; we had had plenty of expe- the government took legal action? What if dis- rience with what it would mean for our busi- gruntled employees went to the press? ness during Israel’s incursion into Lebanon in Despite these risks, I decided to move ahead, 1982. As a result, we made plans for replacing and Intel’s employees responded. In the first key personnel called up to the military and for days of the Scud attacks, when businesses operating the plant with a skeleton crew. throughout the nation were closed, roughly But almost from the moment we finalized 80% of Intel’s employees showed up, day in our contingency plan, it became clear that this and day out, night shifts included. Thanks to war would be very different. The politics of the their performance, Intel Israel was one of the U.S.-created anti-Iraq coalition made it impera- few businesses in Israel (and our Jerusalem tive that Israel stay out of the war. For that semiconductor fabrication plant the only man- very reason, it was in Saddam Hussein’s inter- ufacturing operation) to remain open through- est to provoke Israel into intervening. By Sep- out the entire six weeks of the war. Not tember, U.S. satellites had detected the trans- only did we keep our commitments to global port of ballistic missiles to western Iraq—a Intel, we also established the reputation that, mere seven minutes’ travel time from Tel Aviv. over time, would allow us to grow Intel Israel Israeli defense officials were saying that a into an important center of excellence for the chemical attack on the country’s major popula- corporation, Israel’s largest private employer, tion centers was likely—a belief that prompted and a cornerstone of Israel’s dynamic high- them to lease two batteries of Patriot antiair- tech economy. craft missiles, adapted for use against ballistic missiles, from the United States. Instead of A Different Kind of War being behind the lines of the war zone, which I had left Israel in the early 1960s to get a we were used to, we ran the risk of being the PhD in electrical engineering at the Univer- war zone. sity of California at Berkeley, but my dream In October, tensions mounted when the gov- had always been to bring back a new body ernment issued every Israeli a personal protec- of knowledge to Israel and help found a new tion kit, complete with gas mask and atropine field of innovation and industry. So in 1974, I injectors, to combat chemical poisoning. There returned to set up Intel’s first overseas unit, a was something about receiving those kits, small chip design center in Haifa. Few people being instructed to carry your gas mask with know it, but we designed the microprocessor you wherever you went, and having to prepare for the original IBM personal computer. And a sealed room in your house or apartment that in 1984, we opened the company’s first chip brought the uncertainty and potential danger fabrication plant outside the United States, of the situation home in a palpable way. in Jerusalem. By the turn of the year, as the U.S.’s January By the early 1990s, Intel Israel was a key 15th deadline for Iraqi withdrawal from Kuwait outpost of Intel’s global production system. drew near, my disquiet had grown. Many air- The Jerusalem fab was responsible for about lines suspended flights to Israel. The govern- three-quarters of the global output of the 386 ments of the United States and Great Britain microprocessor, at the time the company’s advised their nationals to consider leaving the best-selling product. Meanwhile, our develop- country. Then on Tuesday the 15th itself, the ment center in Haifa was hard at work on new Israeli government announced that all schools products that would be critical to Intel’s fu- would be closed for the rest of the week. ture, including key components of what would Slowly it was dawning on me that our contin- A former general manager of Intel Is- become the Pentium microprocessor. gency plan might be irrelevant to what was rael, now retired, and one of the pio- When Iraq invaded Kuwait in August 1990, likely to be anything but an ordinary war. neers of Israel’s high-tech economy, we knew there was a good chance there would And yet, despite all these warning signs, it Dov Frohman is also the inventor of be a war. So I appointed a task force of senior still came as a surprise when I woke up on the EPROM, the first reprogrammable managers to develop a contingency plan in Wednesday, January 16th, to the news on the computer chip. His book Leadership case Israel was drawn into the conflict. At the radio that, in anticipation of the start of hostili- the Hard Way (written with Robert time, we were assuming it would be a conven- ties and likely missile attacks, the Israeli civil Howard) will be published by Jossey- tional war, and we were confident that we defense authority was directing businesses to Bass in 2008. could handle it. That kind of war was not ex- close and everyone but essential emergency page 2 harvard business review • hbr.org • december 2006 Leadership Under Fire•••FIRST PERSON personnel to remain home. It was only then ual fight for resources. When we first pro- that I fully understood: We were facing a com- posed setting up the Jerusalem fab in the pletely different kind of problem than the one early 1980s, we were put in competition with we had anticipated. This wasn’t just a matter Ireland to see which country could develop of calling up reserves. The government was the better proposal. We won that round and telling us that nobody should come to work. I by the early ’90s were already starting the immediately called a meeting of the task force process of negotiating and lobbying inside at the Jerusalem fab. Intel to persuade senior management to ex- pand the Jerusalem fab. A Question of Survival I knew Intel’s leaders well and had good re- In the 20 minutes it took me to drive from my lations with them. I had worked with Andy home in the historic village of Ein Karem, on Grove at Fairchild and been among the first the southwestern outskirts of Jerusalem, to generation of employees after he, Gordon the plant in the Har Hotzvim industrial dis- Moore, and Bob Noyce founded Intel in trict, I kept revisiting in my mind the logic of 1968. I was confident that if we had to inter- what I was about to do.

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