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Leadership the
Hard Way

Why Leadership Can’t Be Taught and
How You Can Learn It Anyway

by Dov Frohman

with Robert Howard

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More Praise for Leadership the Hard Way

“Dov Frohman is a giant of Israeli high tech. His book isn’t only
about leadership, it is about the human spirit and how high it can
soar. Frohman and Howard capture the expansive vision and non-
stop creativity that have made Israel one of the most advanced
centers of high-tech innovation in the world.”

—Yossi Vardi, chairman, International Technologies;
founding investor, Mirabillis Ltd., creator of ICQ

“From an early age, Frohman learned to transform fear of survival
into courageous action. Some lessons for leaders: stick to your
principles, welcome intelligent dissent, take time to daydream but
then make your dreams real. This book will stimulate you to refl ect
on your practice of leading people.”

—Michael Maccoby, author of The Gamesman and The Leaders
We Need, And What Makes Us Follow

“Dov Frohman distills thirty years of experience on the front lines
of the global economy—from Silicon Valley to Israel—in this
beautifully written and compelling narrative. His wisdom is not
just for business leaders, it’s for anyone seeking to lead in today’s
tumultuous environment.”

—AnnaLee Saxenian, dean of the School of Information,
UC Berkeley; author of The New Argonauts: Regional

Advantage in a Global Economy

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Leadership the Hard Way

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A W A R R E N B E N N I S B O O K
This collection of books is devoted exclusively to new
and exemplary contributions to management thought
and practice. The books in this series are addressed to
thoughtful leaders, executives, and managers of all
organizations who are struggling with and committed
to responsible change. My hope and goal is to spark
new intellectual capital by sharing ideas positioned at
an angle to conventional thought—in short, to publish
books that disturb the present in the service of a
better future.

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Books in the Warren Bennis Signature Series

Branden Self-Esteem at Work
Mitroff, Denton A Spiritual Audit of Corporate

America
Schein The Corporate Culture

Survival Guide
Sample The Contrarian’s Guide to

Leadership
Lawrence, Nohria Driven
Cloke, Goldsmith The End of Management and

the Rise of Organizational
Democracy

Glen Leading Geeks
Cloke, Goldsmith The Art of Waking People Up
George Authentic Leadership
Kohlrieser Hostage at the Table
Rhode Moral Leadership
George True North
Townsend Up the Organization
Kellerman/Rhode Women and Leadership
Riggio The Art of Followership
Gergen/Vanourek Life Entrepreneurs

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Leadership the
Hard Way

Why Leadership Can’t Be Taught and
How You Can Learn It Anyway

by Dov Frohman

with Robert Howard

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Copyright © 2008 by Dov Frohman and Robert Howard. All rights reserved.

Published by Jossey-Bass
A Wiley Imprint
989 Market Street, San Francisco, CA 94103-1741—www.josseybass.com

No part of this publication may be reproduced, stored in a retrieval system, or transmitted
in any form or by any means, electronic, mechanical, photocopying, recording, scanning,
or otherwise, except as permitted under Section 107 or 108 of the 1976 United States
Copyright Act, without either the prior written permission of the publisher, or authorization
through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc.,
222 Rosewood Drive, Danvers, MA 01923, 978-750-8400, fax 978-646-8600, or on the Web
at www.copyright.com. Requests to the publisher for permission should be addressed to the
Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030,
201-748-6011, fax 201-748-6008, or online at www.wiley.com/go/permissions.

Readers should be aware that Internet Web sites offered as citations and/or sources for further
information may have changed or disappeared between the time this was written and when it
is read.

Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their
best efforts in preparing this book, they make no representations or warranties with respect
to the accuracy or completeness of the contents of this book and specifi cally disclaim any
implied warranties of merchantability or fi tness for a particular purpose. No warranty may
be created or extended by sales representatives or written sales materials. The advice and
strategies contained herein may not be suitable for your situation. You should consult with a
professional where appropriate. Neither the publisher nor author shall be liable for any loss
of profi t or any other commercial damages, including but not limited to special, incidental,
consequential, or other damages.

Jossey-Bass books and products are available through most bookstores. To contact Jossey-Bass
directly call our Customer Care Department within the U.S. at 800-956-7739, outside the
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Jossey-Bass also publishes its books in a variety of electronic formats. Some content that
appears in print may not be available in electronic books.

Library of Congress Cataloging-in-Publication Data

Frohman, Dov, 1939-
Leadership the hard way : why leadership can’t be taught and how you can learn it anyway /
Dov Frohman, Robert Howard. — 1st ed.
p. cm. — (The Warren Bennis series)
Includes bibliographical references and index.
ISBN 978-0-7879-9437-2 (cloth : alk. paper)
1. Leadership. I. Howard, Robert, 1954- II. Title.
HD57.7.F757 2008
658.4’092—dc22

2008000874
Printed in the United States of America
FIRST EDITION
HB Printing 10 9 8 7 6 5 4 3 2 1

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ix

Contents

Foreword xi

Introduction: Flying Through a Thunderstorm xiii

1. Insisting on Survival 1

2. Leading Against the Current 17

3. Leveraging Random Opportunities 35

4. Leadership Under Fire 53

5. The Soft Skills of Hard Leadership 69

6. Making Values Real 85

7. Bootstrapping Leadership 99

Epilogue: Knowing When to Let Go 111

Notes 115

Acknowledgments 119

The Authors 123

Index 125

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To the memory of my three sets of parents:

Abraham and Feijga Frohman, Amsterdam
Antonie and Jenneke Van Tilborgh, Sprang Capelle

Lea and Moshe Bentchkowsky, Tel Aviv

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xi

Foreword

Every now and then, a person of great wisdom and integrity comes
along with a story that everyone needs to hear. Dov Frohman is
such a person. As a maverick in the fi eld of technology from the
earliest days, Dov has been an innovator, a questioner, a radical,
a champion, a sage, a survivor, and above all, a leader. He’s never
backed down from responsibility, and he’s faced some hair-raising
crises with unconventional methods and achieved undeniable
results. Under his guidance, Intel Israel became a key part of the
global company’s success and helped make Israel a real player in
the world’s high-tech market.

Even if this were solely a book of his personal stories, it would
be a very worthwhile read. These stories are highly engaging and
provide an insider’s view into one of the most competitive indus-
tries in the world, not to mention harrowing tales like his child-
hood spent in hiding in Nazi-occupied Holland or his decision
to keep Intel Israel open during the fi rst Gulf War, as Scuds were
raining down around the country. It was a highly risky and contro-
versial move, yet one characteristic of Dov’s commitment to his
company and his country.

Fortunately for us, however, this book is much more than a
memoir. Dov’s unique experiences have given him a perspective
on leadership you won’t fi nd anywhere else, and he’s spent many
years refl ecting on the most critical issues any leader or leader-to-
be might encounter. This book is like having a personal mentor—
someone who tells the truth about leadership, the good and the
bad, the easy calls, and the thorny dilemmas. Dov has stood in

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the trenches, weathered the loneliness along with the accolades,
and really dug deep into the role, and now we the readers get the
benefi t of his insights, which are by no means rote and always
authentic. We rarely see this kind of transparency from our leaders,
so take advantage of it while you can.

WARREN BENNIS
Santa Monica
January 2008

xii F O R E W O R D

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xiii

Introduction:
Flying Through a Thunderstorm

Few subjects have so preoccupied the business world in recent
years as that of leadership. Witness the explosion of articles,
books, training courses, and programs purporting to teach man-
agers how to lead. Since the early 1990s, for example, the Harvard
Business Review has published some 350 articles on the subject of
leadership — 135 of them since 2000 alone. Recently, one of the
world ’ s leading fi nancial – services companies, Merrill – Lynch, began
publishing an entire magazine devoted to the topic. 1 Initially
targeted at the company ’ s senior – management ranks, the magazine
aims eventually to attract a broad senior – executive audience.
And where business is going, the academy is never far behind.
Leadership has blossomed into a whole new fi eld of study. At some
universities, you can even get a Ph.D. in it! 2

I ’ m sure there is at least some value in all these efforts. But I ’ m
skeptical that they will produce more or better leaders. Indeed,
at the very moment that we are seeing so many efforts to teach
leadership, we are also experiencing widespread and continuous
failures of leadership — and not just in business but in politics,
education, and other institutions of modern society. Corporate
fraud brings down high – fl ying companies such as Enron. CEOs are
driven from offi ce due to unethical, and probably illegal, practices
involving the backdating of stock options. In the United States, at
a time of new and unprecedented global crises, a so – called “ MBA
president ” oversees what many see as one of the most incompetent

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xiv I N T R O D U C T I O N

and corrupt administrations in modern history. And in my native
Israel, polls suggest that leading politicians and military lead-
ers have lost the confidence of the nation over the way they
sleep – walked into the 2006 summer war with Hezbollah. In short,
there is a growing disconnect between our celebration of leader-
ship and what appears to be our systematic inability to practice it.

In my opinion, a major reason for this disconnect is that most
of the conventional wisdom about leadership today is, not wrong
exactly, but surprisingly irrelevant to the true challenges and
dilemmas of leading in today ’ s economy and society. The claim
of so many of the articles, books, and programs on the subject
seems to be that leadership is largely a matter of technique, a set
of skills that can be taught. If you read the right books or take
the right training courses, it should be relatively easy — indeed,
straightforward — to become a leader.

My thirty years on the front lines of the global economy have
taught me that precisely the opposite is the case. I believe that
learning how to lead is more in the nature of cultivating per-
sonal wisdom than it is of acquiring technical skills. No matter
how much training you have or how many books you have read,
nothing can fully prepare you for the challenge. In this respect,
leadership isn ’ t easy; it ’ s diffi cult, necessarily diffi cult. And the
most essential things about it cannot really be taught — although,
in the end, they can be learned.

Thunderstorm Over Greece

I ’ m an active pilot, so allow me to draw an analogy with learn-
ing how to fl y. When I decided in my fi fties to become a pilot,
I took lessons from the retired former head of Israel ’ s Air Force
A cademy. He was in his late sixties at the time; he is still fl ying
today in his eighties! A daredevil fi ghter pilot but a strictly by –
the – book instructor, he taught me the basics, what I like to think
of as “ Flying 101 ” : how to take off, navigate, read the instruments,
make a landing, and so on. He gave me the confi dence that I could
actually do it. But he would never let me make my own mistakes.

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I N T R O D U C T I O N xv

Whenever I did something wrong, he would immediately take
over and tell me what I needed to do to take corrective action. As
a result, I may have learned the basics of fl ying, but my knowledge
was abstract, and I was far from being an experienced pilot.

Later, when I bought a more advanced and technologically
complex airplane, I had a second teacher who trained me on the
avionic systems of my new plane. In contrast to my fi rst teacher, he
took a far more intuitive approach. When we went fl ying together,
he seldom intervened in the process. Rather, he stressed a set of
simple decision rules — and then let me go ahead, make my own
mistakes, and fi gure out how to recover from them. This taught me
how to start integrating the theory of fl ying with the practice of
actually piloting a plane.

Yet neither of these teachers really prepared me for the moment
I experienced a few years later when I was caught unexpectedly in
a sudden thunderstorm over the southern coast of Greece. I was
traveling with my family from our home in Jerusalem to our vaca-
tion home in the Dolomite Mountains of Italy. I had had my pilot ’ s
license for about four years and at the time was fl ying frequently,
at least once or twice a week. So I felt confi dent about making
the long trip. In addition, my son, who was twenty – five at the
time, also had his pilot ’ s license (although he was not qualifi ed to
fl y the particular model of plane that I owned, a single-propeller
Beechcraft Bonanza).

The first leg of the trip from Israel to the Greek island of
Rhodes was uneventful. And when we took off from Rhodes en
route to Corfu, where we were planning to spend the night, the
weather was fi ne. But as we headed toward Athens, we encoun-
tered an unanticipated obstacle. The air traffi c controller at the
Athens airport informed us that there were fl ight restrictions for
small planes over the Athens metropolitan area. So we had to
change our fl ight plan and take a more southwesterly route skirt-
ing the southern coast of Greece ’ s Peloponnesian peninsula.

My plane is equipped with a device known as a stormscope — an
avionics instrument that looks like a radar screen and uses data
from electrical discharge signals generated by lightning in the

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xvi I N T R O D U C T I O N

atmosphere to create a 360 – degree map of areas of severe weather
in the plane ’ s vicinity. We began to notice indications on the
stormscope of a major storm almost directly in our path, about fi fty
miles to the southwest and approaching quickly.

In a matter of minutes, the sky started clouding up. Soon
heavy rain, and then hail, began hitting the windshield. Thunder
pealed and long streaks of lightning shot across the sky. Before we
knew it, we were in the middle of the storm. Enormous updrafts
and downdrafts grabbed the plane, pulling it up and down two
thousand to three thousand feet at a time. The turbulence was gut –
wrenching. Helpless, I watched the altimeter circle furiously, fi rst
in one direction, then the next.

In his classic 1944 book about fl ying, Stick and Rudder, test pilot
Wolfgang Langewiesche makes the observation that “ what makes
flying so difficult is that the flier ’ s instincts — that is, his most
deeply established habits of mind and body — will tempt him to do
exactly the wrong thing. ” 3 The fi rst impulse of an inexperienced
pilot facing a sudden thunderstorm is to turn around and go back.
Sometimes that can actually be the right thing to do — if you have
suffi cient advance warning. But if a storm comes up quickly, turn-
ing back can be dangerous. Turning requires banking, and banking
accelerates the plane with the nose down. If the storm winds are
strong enough, they can force you into a dive, causing the plane to
stall and go into a spin. Without really thinking about it, I realized
immediately that it was far too late for us to turn back. There was
really no choice but to plow ahead.

Another common impulse when flying through a thun-
derstorm is to fi ght the turbulence, to try to correct the violent
updrafts and downdrafts by pushing down (or pulling up) on the
controls. But that is a critical mistake, because it can lead to such
stress on the wings as to cause the breakup of the plane. Rather,
surviving extreme turbulence requires another counterintuitive
trick: instead of fighting the turbulence, a pilot needs to let it
happen. Believe me, it is extremely diffi cult to consciously make
this choice. We were fl ying over high mountains. I had no idea

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I N T R O D U C T I O N xvii

how low the downdrafts would take us. But there was nothing to
do but just let it happen. I struggled simply to keep the wings level
as the violent updrafts and downdrafts took their course.

After about fi fteen minutes (which seemed like a lifetime)
on this aerial roller – coaster ride, my son, who was monitoring the
stormscope, saw a break in the storm to the northeast. We radi-
oed Athens for a change in course, and within about fi ve minutes
things began to calm down. Then, with no warning, we shot out
of the clouds, and almost as quickly as the storm had developed,
it passed. We fl ew on, chastened but relieved, to Corfu. That night
we learned from the news that a small Greek passenger jet, also
caught in the storm, had experienced an especially violent drop of
more than ten thousand feet. Five passengers who had neglected
to fasten their seatbelts were killed.

In the years since, I have often wondered precisely how I got us
through that storm. The answer is: I don ’ t really know. To be sure,
I had taken courses about fl ying in bad weather and had learned
what to do and what not to do. But once I was in the middle of the
storm, those lessons were far from my mind. There were too many
contingencies to handle in too short a period of time to apply those
lessons systematically. Instead, my reactions were immediate —
rapid responses to the developments of the moment, driven by my
realization that our very survival was at stake. We were skirting
the brink of disaster, and all my energy and efforts were focused
simply on getting us through. And, to be honest, there was also an
element of luck involved.

An Environment of Turbulence

My point: leadership in today ’ s economy is a lot like fl ying a plane
through a thunderstorm. More and more organizations fi nd them-
selves in an economic environment of nonstop turbulence. The
social, economic, and technological sources of that turbulence
are broadly familiar, but let me review them briefl y here. First and
foremost is the unrelenting pace of rapid technological change. “ We

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xviii I N T R O D U C T I O N

live in an age in which the pace of technological change is pulsating
ever faster, causing waves that spread outward toward all indus-
tries, ” former Intel CEO Andy Grove wrote more than ten years
ago. “ This increased rate of change will have an impact on you, no
matter what you do for a living. It will bring new competition from
new ways of doing things, from corners that you don ’ t expect. ” 4

With the rapid expansion and evolution of the Internet in
the years since Grove wrote those words, they are more true than
ever before. It ’ s not just that business value increasingly fl ows to
innovation — the ability to take risks and create fundamentally new
ways of doing things. Even the most innovative companies sooner
or later face what Harvard Business School professor Clayton
Christensen has termed the “ innovator ’ s dilemma ” — the supreme
diffi culty for those organizations that have succeeded at one gen-
eration of technology to continue to surf the wave of change and
remain successful over subsequent generations of technology. 5

Technologically driven turbulence is exacerbated by the ongo-
ing globalization of the world economy. In one respect, of course,
globalization is nothing new. Until quite recently, the world econ-
omy was probably more global in the fi rst decade of the twentieth
century than it has been at any time since. But whereas traditional
globalization was dominated by a few centers of economic devel-
opment that ruled over a vast periphery, today ’ s globalization is
different. Increasingly, the periphery is becoming the center. New
players have sprung up in places that used to be on the far edge of
the global economy. As they do, established companies are sud-
denly encountering new competitors that seem to come out of
nowhere and appear almost overnight. Ten years ago, who would
have thought that the world ’ s largest steel company, Arcelor
Mittal, would be owned by an Indian conglomerate? That IBM ’ s
PC business would be bought by a Chinese fi rm, Lenovo? Or that
a tiny country like Israel would have more than seventy compa-
nies listed on the U.S. NASDAQ stock exchange — and attract
twice as much venture capital investment as the entire European
Union?

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I N T R O D U C T I O N xix

Since September 11, 2001, business leaders have become
familiar with a third source of turbulence: new levels of geopo-
litical instability associated with global confl ict, environmental
catastrophe, terrorism, and war. The challenges that this insta-
bility poses for political leadership are dramatic (and, in my
opinion, our political leaders — whether in the United States or in
Israel — have not been equal to them). But they pose challenges
to business leadership as well. The distinctive features of today ’ s
turbulent economy include not just rapid change but also grow-
ing uncertainty. Companies across the economy face new kinds
of risks and new kinds of threats — not only to their organizations,
but sometimes to the very lives of their employees.

It is precisely these forces of increased turbulence that have
fueled the growing preoccupation with leadership. In such an
environment, leadership isn ’ t a luxury. It ’ s a matter of survival.
Yet the very forces that make leadership more critical also make
teaching it extremely diffi cult (and, in its essentials, impossible).
What it takes to successfully lead an organization through that
turbulence is neither simple nor straightforward. There are too
many contingencies to take into account, too much uncertainty.
By defi nition, it can ’ t be done “ by the book. ” This is due in part
to the inevitable gap between theory and practice. I believe there
is always something of a disconnect between how we actually do
leadership and how most so – called experts in the fi eld talk about it.
This gap is made even greater by the reality of turbulence. When
circumstances are changing rapidly and outcomes are uncertain,
planning, analysis, and theory can only take you so far.

In his book, Langewiesche describes a similar gap in most
attempts to understand fl ying. He puts it this way: the problem
with the so – called “ Theory of Flight ” is that “ it usually becomes
a theory of building the airplane rather than of fl ying it. It goes
deeply — much too deeply for a pilot ’ s needs — into problems of
aerodynamics; it even gives the pilot a formula by which to calcu-
late his lift! But it neglects those phases of fl ight that interest the
pilot the most. ” 6 One of the purposes of Langewiesche ’ s book is

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xx I N T R O D U C T I O N

to bring the theory of fl ying closer to the actual practice. In these
pages, I want to do something similar for leadership.

Another reason leadership can ’ t be taught is that it is highly
personal. At the moment of truth, when survival is at stake (liter-
ally, in that thunderstorm over the Peloponnese; fi guratively, in
the struggles of global business competition), leadership is a matter
of courage: a willingness to take risks and do the unexpected; to
make judgments with no data or, at best, inadequate data; to face
one ’ s fear of failure. Summoning up such courage is a highly
personal act. Each leader does it differently — and you never know
if you will be able to do it until the moment of truth arrives. For all
the talk about “ managing risk ” (if I had known in advance that we
wouldn ’ t be able to fl y over Athens, maybe I would have checked
the weather on the southwesterly route more carefully, been fore-
warned about the storm, and taken steps to avoid it), every leader
knows in his gut that you can ’ t anticipate everything. Sometimes
risks can ’ t be managed; they simply must be lived.

Put simply, I believe that any genuine leader today has to learn
leadership the hard way — through doing it. That means fl ying
through the thunderstorm; embracing turbulence, not avoiding it;
taking risks; trusting (but also testing) your intuitions; doing the
unexpected. This is not to say that there are no basic principles to
orient you to the challenge (indeed, I will describe some in this
book). But there are no simple recipes. Until you have lived it, you
don ’ t really know how to do it. I call this perspective “ leadership
the hard way. ” It is the subject of this book.

A Self – Taught Leader

Despite the fact that leadership cannot be taught, some individuals
do fi nd a way to learn how to become leaders. In effect, they are
self – taught. And one of the most useful resources for that self –
teaching is the life stories of those who have already made the
journey.

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I N T R O D U C T I O N xxi

I never planned to become a leader. I never went to business
school, and I never expected to run a business organization. And
yet, perhaps precisely for that reason, I believe that my experience
makes me especially well suited to describe what it takes to lead in
a turbulent economy. For more than thirty years, I worked as an
inventor, entrepreneur, manager, and global pioneer in one of the
most volatile of global businesses, the semiconductor industry, and
in one of the most dangerous regions of the world, the Middle East.

University of California researcher AnnaLee Saxenian has
recently identifi ed a new category of global business leaders. She
calls them the “ new Argonauts ” : individuals from the traditional
periphery of the global economy who have migrated to developed
economies, learned the disciplines of global business, and then
returned to their home countries to build dynamic, state – of – the –
art, globally competitive businesses. 7

Without knowing it at the time, I was one of the first new
Argonauts. I left Israel in the early 1960s to get a Ph.D. in elec-
trical engineering at the University of California at Berkeley.
I got in on the ground fl oor of what would come to be known as
Silicon Valley, working fi rst at Fairchild Semiconductor ’ s R & D lab
(a famous breeding ground for high – technology startups), then
as one of the early employees at Intel Corporation after Robert
Noyce and Gordon Moore left Fairchild to found the company in
1968. I even made my own contribution to the computer indus-
try with my invention in 1971 of the EPROM (erasable program-
mable read – only memory). The EPROM was the fi rst nonvolatile
but reprogrammable semiconductor memory — an innovation that
Moore termed “ as important in the development of the micro-
computer industry as the microprocessor itself. ” 8

But my dream had always been to bring back a new body of
knowledge to Israel and help found a new fi eld of innovation and
industry there. So in 1974 (after a detour teaching electrical engi-
neering in Ghana), I returned to Israel to set up Intel ’ s fi rst overseas
design and development center in Haifa. Few people know it, but

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xxii I N T R O D U C T I O N

we designed the microprocessor for the original IBM personal
computer. And in 1985 we opened the company ’ s first chip
fabrication plant (or fab) outside the United States, in Jerusalem.
Through the cyclical ups and downs of the semiconductor busi-
ness and through at least two wars, I helped grow Intel Israel into
a key global outpost of the Intel Corporation and an important
player in Israel ’ s high – tech economy. In the process, I helped spark
the development of Israel ’ s high – tech economy, which is cur-
rently the home of some 4,500 technology companies, more than
300 venture capital funds and investment fi rms, and a collection
of startups that is second in size only to Silicon Valley itself.

I retired from Intel in 2001. Today, Intel Israel is the head-
quarters for the company ’ s global R & D for wireless technology (it
developed the company ’ s Centrino mobile computing technology,
which powers millions of laptops worldwide) and is responsible for
designing the company ’ s most advanced microprocessor products.
It ’ s also a major center for chip fabrication: although Intel Israel ’ s
original fab in Jerusalem fi nally closed its doors in March 2008,
Intel has two major semiconductor fabs in the city of Qiryat Gat
in the south of Israel on the edge of the Negev desert. With some
seven thousand employees (projected to reach nearly ten thou-
sand by 2008), Intel Israel is the country ’ s largest private employer.
In 2007, Intel Israel ’ s exports totaled $1.4 billion and represented
roughly 8.5 percent of the total exports of Israel ’ s electronics and
information industry (which themselves equaled about a quarter
of Israel ’ s total industrial exports — the highest percentage for high
tech anywhere in the world).

But my story is not really about technology. As the interna-
tional economy becomes more volatile and uncertain, I believe
that my experience in the semiconductor business and in running
a global business from Israel is relevant to managers across the
economy. True, I can ’ t teach you to be a leader. But I believe
I can show you how to learn to become one: by describing my
personal, hands – on encounter with the turbulence of the global
economy.

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I N T R O D U C T I O N xxiii

A Different Kind of Leadership Book

Leadership the Hard Way is a different kind of book about leader-
ship. First, it offers a perspective not from the center but from the
dynamic edge of the new global economy. Second, it is a view of
leadership from within, not from the top, of the global corporation
(I don ’ t believe you necessarily have to be a CEO to be a leader).
Finally, and most important, it avoids simple recipes in favor of
what the anthropologists call thick description : life stories that crys-
tallize the lessons of one leader ’ s lifetime learning how to lead.

For example, I will tell you how my childhood as a Jewish
boy in hiding in Nazi – occupied Holland during World War II, my
experience of the Berkeley counterculture in the 1960s, and the
serendipitous process I went through to invent the EPROM all
helped shape my approach to leadership. And I will use the story
of the creation and development of Intel Israel to describe how
I refi ned my approach and put it into practice. I tell these stories
not to blow my own horn, but rather because no discussion of the
challenges of leadership is complete without somehow communi-
cating the daunting complexity of situations and the bewildering
variety of contexts that real – life leaders face. It is only through
such stories that one can begin to approach the fundamental para-
dox of leadership: the fact that, while it cannot be taught, it can
nevertheless be learned.

The fi rst part of the book explores three general principles
of “leadership the hard way.” In an environment of constant
turbulence, where survival can no longer be taken for granted, the
fundamental responsibility of the leader is to ensure the long – term
survival of the organization. Chapter One explains why insisting
on survival has become so central to the role of the leader — and
how I tried to create a culture at Intel Israel in which the impera-
tive of survival became a powerful catalyst for improvisation and
innovation.

Survival in a fast – changing environment requires what
I call “ leading against the current, ” or constantly challenging

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xxiv I N T R O D U C T I O N

an organization ’ s conventional wisdom and preconceptions. In
Chapter Two , I describe how I acted against the current to make
Intel Israel into a distinctive counterculture within Intel Corpora-
tion and how, paradoxically, our counterintuitive perspective on
the edge of the corporation allowed us to move to the very center
of Intel ’ s global strategy and operations.

Turbulence is also changing the very nature of opportunity —
making it increasingly less predictable. Leadership the hard way
therefore also requires the leader to be alert to the often random
opportunities that exist in the midst of crisis and to move fast
to exploit them. Chapter Three uses the story of how I created
Intel Israel in the fi rst place to describe the special qualities that
leaders must cultivate in order to leverage random opportunities
systematically.

Sooner or later, every leader faces a moment of truth, what
Warren Bennis and Robert Thomas call a “ crucible ” experience
that shapes you defi nitively as a leader. 9 Chapter Four tells the
story of what was, without question, the biggest leadership test of
my thirty – year career: my decision to keep Intel Israel open dur-
ing the early days of the First Gulf War in 1991, when Saddam
Hussein ’ s Iraq was raining Scud missiles down on Israel and busi-
nesses across the country were closing at the recommendation of
Israel ’ s civil defense authority. The story may be an excellent case
study of leadership under conditions of extreme turbulence. In the
way that it illustrates the three principles described in the preced-
ing chapters, it is also a compelling conclusion to the fi rst half of
the book.

Leadership the hard way is a demanding way of life. It demands
a lot from the leader as an individual. It also demands a great deal
from people in the organization. The second half of the book
describes the support infrastructure that the leader and the orga-
nization need to put in place to meet these demands. For example,
Chapter Five addresses some rarely discussed “ soft skills of hard
leadership ” — distinctive habits of mind and modes of interaction
with people that need to be in place for leadership the hard way to

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I N T R O D U C T I O N xxv

work. Chapter Six takes a fresh look at the much – discussed subject
of values, arguing that perhaps the most important precondition
for an organization to stay true to its values is the leader ’ s openness
and honesty when he himself falls short of them. Finally, the book
concludes with some general refl ections on the key resources for
you, as an aspiring leader, to bootstrap your own leadership skills —
despite the fact that no one (including me) can really teach you
how to lead.

A beginning pilot at least has the advantage of using a fl ight
simulator to approximate the turbulent conditions that occur
during a thunderstorm. But it ’ s impossible to create a simulator for
leading a complex organization. No book can substitute for the live
ammunition of actually leading through turbulence and crisis.

Yet my hope is that this book will get you thinking and give you
some ideas for how to become a self – taught leader. Think of it as your
own personal stormscope, alerting you to the challenges, dilemmas,
and pitfalls — but also opportunities — ahead. Happy fl ying!

DOV FROHMAN
December 2007

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Leadership the Hard Way

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1

1

INSISTING ON SURVIVAL

In a turbulent economy, the fi rst task of the leader is insisting on
survival — that is, continuously identifying and addressing poten-
tial threats to the long – term survival of the organization. At fi rst
glance this statement may seem obvious, even trivial. Doesn ’ t it go
without saying that no organization can be successful if it doesn ’ t
fi rst survive? Yet the rapid increase in the pace of change in busi-
ness has made survival more problematic than ever before. The
frequency with which organizations face major challenges to their
survival is growing.

In the days when most established companies had relatively
stable markets and competitors, survival was only rarely an issue.
To be sure, every now and then a company might face a major cri-
sis, but once that crisis was addressed, things went back to normal.
Few companies today have that luxury. Threats to survival aren ’ t
occasional; they are nearly continuous. If an organization waits for
a full – blown crisis to develop, it may fi nd that it is already too late.

The growing frequency of threats to survival is especially
evident in technology – or innovation – based businesses. In such
businesses, success at any one generation of technology is really
only buying an option on the future. It wins you the right to com-
pete at the next level of technology, but offers no guarantees of
continual success. Indeed, quite the opposite: often it is those com-
panies that are most successful at one generation of technology that
have the most diffi culty in adapting to subsequent generations.

I believe it was the increasingly problematic nature of survival
that Andy Grove had in mind when he claimed famously that
“ only the paranoid survive. ” As Grove describes in his book of
that name, sooner or later, every business reaches what he calls

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2 L E A D E R S H I P T H E H A R D W AY

a “ strategic infl ection point ” — that “ time in the life of a business
when its fundamentals are about to change. That change can
mean an opportunity to rise to new heights. But it may just as
likely signal the beginning of the end. ” 1 Grove makes clear that
such strategic infl ection points can be caused by technological
change but they are about more than just technology. They can
be caused by new competitors, but they are about more than just
the competition. “ They are full – scale changes in the way business
is conducted. ” As such they “ can be deadly when unattended to. ”

Despite the proliferation of such threats to survival in business
today, most people in most organizations avoid engaging squarely
with the issue. This is partly a result of the complacency that
comes with success. But even more, there is something in the very
nature of an organization that leads its members to take its ongo-
ing existence for granted. In this respect, an organization is a lot
like an adolescent. It assumes it is going to live forever!

It ’ s easy to understand why most people would prefer not to
think about potential threats to their survival. It ’ s scary, and fear
can be paralyzing. Nobody wants to consider the possibility that
“ I might not survive! ” What ’ s more, threats to survival generate
massive uncertainty. To survive such threats means to take risks.
But risks are by defi nition uncertain. What if we try and fail? What
if things don ’ t work out? No wonder people avoid the issue of sur-
vival, if they can get away with it.

The job of the leader is to make sure they don ’ t get away with
it. A leader must represent to the organization the imperative of
survival, the challenge of survival, and the reality of threats to sur-
vival. By constantly asking “ What will it take to survive? ” leaders
in effect force people to anticipate in advance the potential threats
facing the organization. In this way, they become the catalyst for
continuous adaptation that allows the organization to avoid a gen-
uine crisis of survival.

To do this effectively, you must take a position consciously “ in
opposition ” to the organization and its identity and systematically
resist the taken – for – grantedness that one fi nds in any organization.

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I N S I S T I N G O N S U R V I VA L 3

The leader has to embody the possibility that the organization can
fail and fail disastrously — precisely to make sure that it does not.

A Wartime Childhood

In retrospect, I realize that my preoccupation — some might say
obsession — with survival is, at least in part, a by – product of my
experience as a child during the Second World War. My parents,
Abraham and Feijga Frohman, were Polish Jews who emigrated to
Holland in the early 1930s to escape the rising anti – Semitism in
Poland. I was born in Amsterdam on March 28, 1939, just months
before the start of the war.

After the German invasion of the Low Countries in 1940, we
continued to live in Amsterdam. But in 1942, as the Nazi grip on
Holland ’ s Jewish community steadily tightened, my parents made
the diffi cult decision to give me up to people they knew in the Dutch
underground, who hid me with a family in the Dutch countryside.

Antonie and Jenneke Van Tilborgh were devout Christians,
members of the Gereformeerde Kerk or Calvinist Reformed Church,
the most orthodox branch of Dutch Protestantism. They lived on
a farm on the outskirts of Sprang Capelle, a small village in the
region of Noord Braband, in southern Holland near the Belgian
border. The Van Tilborghs had four children. Their oldest daugh-
ter, Rie, was twenty – one but still living at home. Another daughter,
Jet, was fourteen. And the two boys, Coor and Toon, were ten and
six. The Van Tilborgh family hid me from the Germans for the
duration of the war. Only a few close neighbors knew that I was
staying with them.

I was only three when I arrived at the Van Tilborgh household,
so it is diffi cult to differentiate between what I actually remember
and what I was told later. But one thing I do recall was feeling dif-
ferent. For example, I had dark hair, and the Van Tilborgh children
were all blond. I had to wear a black hat to hide my black hair.

I also remember hiding when the Germans would search
the village. Sometimes I would hide under the bed, sometimes in

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4 L E A D E R S H I P T H E H A R D W AY

the root cellar (I have a warm memory of treating myself to the
apples that were stored there), sometimes with my “ brothers ” and
“ sisters ” out in the surrounding woods. To this day I have a scar on
my wrist that, according to the Van Tilborghs, came from a time
when we were running through the woods and I tried to jump over
a creek and got caught by some barbed wire.

Other memories are more disturbing. One day, looking out
the cellar window, I saw German soldiers execute a fellow soldier.
I don ’ t know why they were doing it; perhaps he was a deserter,
perhaps he himself had helped some Jews who were in hiding.
Whatever the cause, I have the image seared in my mind of seeing
him hit by the bullets and falling to the ground in a heap.

My parents did not survive the war. They were taken in one
of the many roundups of Jews by the Nazis. Much later, I learned
that my father died in Auschwitz. I never learned for sure where
my mother died, although it ’ s likely she was taken to Auschwitz
as well.

I see now that my experience during the war inculcated in me
a stubborn conviction that nothing is truly secure, that survival
must never be taken for granted — but also that the actions of
determined individuals can “ achieve the impossible ” and have a
literally heroic impact on events. If it weren ’ t for my parents ’ abil-
ity to make the excruciatingly diffi cult choice to give me up to the
underground and for the Van Tilborghs ’ willingness to take me in,
I wouldn ’ t be here today.

Who knows what motivates human beings to do something
truly heroic? In the case of the Van Tilborghs, it is clear to me
that a major source of their motivation was their deep religious
faith. Without such bedrock convictions, they wouldn ’ t have been
able to do what they did. I also suspect that their own experience
as members of a minority religious sect in Holland allowed them
to empathize and identify with the plight of Holland ’ s Jews and
develop a compelling urgency to do something about it. Orthodox
Calvinists made up only about 8 percent of the population of the
Netherlands in the 1940s. Yet they were responsible for helping

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I N S I S T I N G O N S U R V I VA L 5

roughly a quarter of the approximately twenty – five thousand
Jews who went into hiding. Thanks to the help of people like the
Van Tilborghs, some sixteen thousand Jews who went into hid-
ing survived the war, including some four thousand children like
myself. 2

In agreeing to hide me, the Van Tilborghs took unimaginable
risks. They endangered not only themselves, but their own chil-
dren as well — to a degree that, seen from the outside, may appear
almost irresponsible. In contemplating their example over the
years, I learned something essential about leadership: survival
requires taking big risks, and sometimes the risks a leader takes,
when viewed from a normal or conventional point of view, can
appear crazy. But it really only looks that way. Often, genuine lead-
ership is the result of the leader ’ s commitment to a transforming
vision and to a set of values that follow from that vision. A key
challenge of leadership is to live with the tension between two
incommensurate sets of values, perspectives, and commitments —
in this particular case, the Van Tilborghs ’ responsibilities to their
children and the responsibilities they took on in protecting me.

I also learned something else from the Van Tilborghs ’ behavior.
If a leader is too focused on personal survival as head of the orga-
nization, he or she may end up, paradoxically, undermining the
organization ’ s long – term capacity to survive. A lot of ineffective
leaders become so focused on their own survival in their leadership
role that they avoid taking necessary risks and, in the long run,
end up damaging the organization ’ s survival capacity. Much like
the Van Tilborghs who saved me during World War II, sometimes
visionary leaders must risk themselves to do the right thing.

After the liberation of southern Holland in 1944, my father ’ s
sister, who had emigrated to Palestine in the 1930s, somehow was
able to locate me. She had a friend who was serving in the Jewish
Brigade — the volunteer fi ghting force of Palestinian Jews raised by
the British that had fought in North Africa and Europe and that,
at the time, was stationed in nearby Belgium. She sent the friend
to meet with the Van Tilborghs and convince them to place me in

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6 L E A D E R S H I P T H E H A R D W AY

a Jewish orphanage, with the intention of eventually emigrating
to Palestine.

The Van Tilborghs were hesitant to let me go and, to be
honest, I didn ’ t want to leave. By that time I barely remembered
my parents. For all intents and purposes, the Van Tilborghs had
become my family. But after all that had happened to European
Jewry during the war, the Jewish community was determined to
recover those children who had survived. Eventually the Van
Tilborghs were persuaded that it was the best thing for me and,
reluctantly, they gave me up. I lived the next few years in orphan-
ages for Jewish children whose parents had died during the war,
fi rst in Antwerp and then in Marseilles, before sailing to the newly
created country of Israel on the Theodore Herzl in 1949.

Eventually I was adopted by relatives in Israel. But I never for-
got the Van Tilborghs, and over the years I have kept in touch
with my Dutch family. Antonie and Jenneke are dead now, as are
two of their four children. But the families continue to keep in
touch. The children of my Dutch brothers and sisters know my
children. We have attended their weddings in Holland, and they
have visited us in Israel, where Antonie and Jenneke ’ s names are
enrolled on the list of the Righteous Among the Nations in the
records of Yad Vashem, Israel ’ s offi cial memorial to those who died
in the Holocaust.

“ The Last Operation to Close in a Crisis ”

It may seem absurd, or perhaps even inappropriate, to compare the
threats I faced as a young Jew in Nazi – occupied Europe to the compet-
itive threats that most companies face today. Yet, in part because of
my childhood experience, I ’ ve always believed that an organization ’ s
survival can never be taken for granted — in bad times certainly, but
also even in good times. For this reason, it is essential for an organiza-
tion to accept complete responsibility for its own survival.

When you ’ re working in a startup, this responsibility is obvi-
ous. Every day you live with the possibility that you might not

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I N S I S T I N G O N S U R V I VA L 7

succeed. But when you are working in a large global corporation,
it ’ s easy to become passive, to assume that the company will be
around forever, even to start thinking that your own fate relies
on decisions made at corporate headquarters far away. When I
founded Intel Israel, I was determined to fi ght this tendency, to
cultivate the atmosphere of a precarious startup, even though we
were part of a successful and fast – growing company. I wanted peo-
ple not only to avoid complacency but also to feel that they — and
they alone — were responsible for their own fate.

For that reason, my vision for Intel Israel always emphasized
survival in a highly volatile industry and region. After all, semi-
conductors is a highly cyclical business, with dizzying booms often
followed by extremely painful busts. And in the 1970s and ’ 80s,
when we were building Intel Israel, Intel was passing through
some of the most important and most dangerous strategic infl ec-
tion points of its history — in particular, the company ’ s exit from
the memory business in the mid – 1980s. If that wasn ’ t turbulence
enough, we were also trying to build an outpost for Intel in the
Middle East, a region wracked by political tension and war and
that, despite moments of hope in the 1990s, still has not found its
way to a defi nitive peace.

So I saw threats to survival everywhere and was determined
to make sure we were tough enough to survive them. As I used to
put it, I wanted Intel Israel to be “ the last Intel operation to close
in a crisis. ” To be honest, many employees, including some of my
direct reports, didn ’ t much like this vision. They thought it was
too negative. “ Is that the best we can do, ” they would ask, “ just
avoid being closed down? ” Eventually we came up with a simple
slogan: “ Survival through success. ” And I used that slogan to drive
our behavior in every area of the business.

Take the example of layoffs. Layoffs at Intel were relatively
rare — but they did happen, especially in the company ’ s early years.
In 1970 the company had had to lay off 10 percent of its (then
still quite small) workforce after the market failure of its very fi rst
product. In 1974 the fi rst big downturn in the industry caused the

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8 L E A D E R S H I P T H E H A R D W AY

company to lay off 30 percent of its workforce, about 350 people.
And in 1986 there were plant closings and layoffs associated with
exiting the memory business.

From the moment I helped establish Intel Israel, I simply
refused to accept the idea that we would lay people off, and I went
out of my way to make sure that whatever layoffs did occur at Intel
as a whole happened to others, not to Intel Israel. Of course, the
only sure way to avoid layoffs was to make sure that our operations
were so competitive that they were “ the last to close in a crisis. ”
But sometimes more extraordinary measures were necessary.

In the 1990s, for example, we had a small software develop-
ment group at the Haifa design center. But in 1994, in a move
aimed to cut costs, the global head of Intel ’ s systems software
unit decided to close it down. To avoid losing what was a cadre of
highly skilled software programmers, I immediately traveled to the
States and met with Intel ’ s then – CEO Andy Grove to see whether
there was any way to fund their positions, at least temporarily,
until other more long – term opportunities opened up.

I argued that these were highly skilled employees and to lay
them off now, although it might be penny – wise, was certainly
pound – foolish. Come the next upturn, we would need these peo-
ple, so we should keep them with Intel. Grove agreed to commit
some $ 700,000 to keep the people at Intel, and we distributed them
among other engineering groups. The decision paid off three years
later when, with the ramp – up to the Internet boom in the late 1990s,
we found ourselves facing yet another shortage of software engineers.
As a result of such efforts, there were fewer than ten employees who
had to be laid off during my entire tenure at Intel Israel.

Containing Fear

Earlier I mentioned that people don ’ t want to think about survival
because it is scary. In fact, there is a complex relationship between
survival and fear. To insist on survival, a leader must know how
to navigate fear. The goal is neither to exaggerate fear nor to
eliminate it, but rather to contain it.

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I N S I S T I N G O N S U R V I VA L 9

It can be difficult for leaders to maintain this delicate bal-
ance. Take an example that is top of mind for so many people
today — the fear of terrorism. In my opinion, many political leaders
in both the United States and Israel aren ’ t containing fear over
terrorism so much as exacerbating it. Indeed, they exploit fear to
further their political agenda. When you think about it, their mes-
sage is completely contradictory: on the one hand, they exaggerate
the “ existential threat ” of terrorism to keep people in a state of
constant anxiety; on the other, they promise perfect security — on
the condition, of course, that the public support their policies.
Both are illusions. In a turbulent world, there is no such thing as
perfect security. But at the same time, extreme fear leads only to
passivity and paralysis, making it all the more diffi cult to address
the genuine challenges that we face. Whether for terrorism or any
of the other threats we face in today ’ s world, it is more true than
ever that “ the only thing we have to fear is fear itself. ”

Yet it is impossible — and unwise — to eliminate fear completely.
I disagree, for example, with the famous advice of quality guru
Edward Deming that leaders must “ banish fear ” from the organi-
zation. This viewpoint strikes me as unrealistic. In situations in
which survival is at stake, a certain degree of fear is inevitable.
Indeed, a healthy fear of failure can be a good — indeed, even an
essential — thing. It helps break through organizational compla-
cency (it certainly kept me focused when confronting that thun-
derstorm over the coast of Greece). With the right amount of fear,
people perform better because nobody wants to fail.

So leaders have to master a delicate balancing act. On the one
hand, they must acknowledge the inevitable fear that survival situ-
ations engender; admit that, in a turbulent world, perfect security
is not achievable; and, indeed, use that realistic fear to keep people
on their toes. But at the same time, they also must contain the fear,
keep it from paralyzing people, encourage risk taking, and mobi-
lize the organization to rise to the occasion when its very survival
is threatened. I call this “ worst – case thinking ” — always trying to
anticipate what can go wrong. A lot of people can mistake this
for simple pessimism, but it has none of the sense of passivity and

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10 L E A D E R S H I P T H E H A R D W AY

futility that often come with pessimism. A determined focus on all
the things that can possibly go wrong can be extremely mobiliz-
ing and galvanizing. (Would that the Bush administration had
embraced this kind of fear in the run – up to the war in Iraq!)

To understand how this worst – case thinking can play a con-
structive role in an organization, let me give you what may seem
like a trivial example. At Intel Israel, as at most companies, when-
ever my managers would propose a new strategic initiative, they
would put together the inevitable slide presentation. And equally
inevitably, almost like clockwork, they would delay any discussion
of potential risks to the project until the very last slide — at which
point, of course, we had already run out of time.

So I developed a simple rule in order to make the reality of
risks to our survival very real to them. “ Don ’ t wait until the last
slide to tell me about the risks, ” I told them. “ Put a ‘ hand grenade ’
icon next to every point where there is even the least question of
potential jeopardy. ”

People hated it. They didn ’ t want to draw attention to where
the land mines were. They assumed that by identifying potential
obstacles they would ruin their chances for getting their project
approved. In fact, the precise opposite turned out to be the case.
The more they surfaced the key risks and uncertainties, and the
more we discussed them in our management team, the more we
increased our comfort level with the proposal and the more likely
it became that it would be approved. The long – term result was
to create an atmosphere in which people were aware of potential
threats to the business but also comfortable with taking the neces-
sary risks to meet those threats and continue to succeed.

Setting “ Impossible ” Goals

It ’ s one thing to get an organization focused on survival when it
faces a serious crisis; it ’ s quite another when things seem to be
going well. In such situations, one of the most effective ways to
insist on survival is to set not just stretch goals, but impossible goals.

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I N S I S T I N G O N S U R V I VA L 11

Especially in good times, when the organization doesn ’ t seem to
face any clear external threats, asking for the impossible creates a
kind of “ virtual ” survival situation. Almost by defi nition, it poses
the likelihood of failure; odds are that the organization will not
succeed. But what often happens is that people become so engaged
in doing what ’ s necessary to meet the impossible goals that they
reach levels of performance they never thought possible — thus
strengthening greatly the organization ’ s long – term prospects.

For example, when we established the Jerusalem fab in the
mid – 1980s, I was determined to do something that had never really
been done inside Intel before: to compete on costs. At that time
Intel was still a relatively young company, and the lion ’ s share of
focus had always been on innovation and product performance —
not cost competitiveness. We already had a labor – cost advantage
in Israel of about 15 to 20 percent compared to Intel ’ s U.S. fabs.
But I didn ’ t want to rely on that wage differential alone. Rather,
I wanted our productivity to be so good that we would be able
to compete on costs with any semiconductor fab anywhere in the
world. To achieve this goal, I set an “ impossible ” target of cut-
ting the average cost per die of the EPROM (our fi rst product)
by roughly fourfold — from $ 2.50, the best performance in Intel at
the time, to sixty – six cents. I christened this program “ Sixty – Six
Cents or Die. ”

To be honest, I had absolutely no idea whether we could
reach this goal. But I wanted to set a dramatic target to get people
focused on cost. We created a pirate fl ag with the campaign slogan
and fl ew it from the fl agpole in front of the fab. We came up with
new metrics to track our progress — for example, complementing
the traditional industry focus on “ die yield ” (the number of usable
integrated circuits per wafer) with a new focus on what we called
“ line yield ” (the number of usable wafers that moved through
the production line during a given period of time). We col-
lected these statistics daily and communicated the results broadly
through the fab workforce. I wanted everybody to feel that if we
didn ’ t meet the goal, we would be sunk.

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12 L E A D E R S H I P T H E H A R D W AY

The campaign had an impact. Employees in the fab started
to focus relentlessly on costs. They would put off purchasing new
equipment until it was absolutely necessary. They reduced parts
inventory signifi cantly and improved productivity through effec-
tive and innovative debugging of new equipment. People worked
so hard and were so creative in fi nding ways to save money and
improve productivity that they did not even realize just how
extraordinary their performance was.

The fact is, we never quite achieved the sixty – six cents tar-
get. But we came close. And as a result, we were able to bring
the costs of the fab down so much that as Intel ’ s microprocessor
production ramped up in the late 1980s, we were able to win the
lion ’ s share of production for the 286 and subsequent generations
of Intel ’ s microprocessor product line. Because we were so focused
on potential failure, we were able to survive through success.

A Catalyst for Innovation

I mentioned earlier that when I fi rst began talking about being
the last Intel operation to close in a crisis, many people at Intel
Israel thought the message was too negative — especially for an
innovation – driven business like semiconductors. They didn ’ t
want to just survive; they wanted to thrive! But in my experience
there is a highly synergistic relationship between survival and inno-
vation. For one thing, the imperative of continuous innovation in
today ’ s global economy is a key factor in creating the turbulence
that makes long – term survival more diffi cult. But perhaps even
more important, threats to survival can become a powerful stimu-
lus for new innovation.

For an example of this synergy between survival and innova-
tion, consider a threat that Intel Israel faced in the early 1990s.
Typically, a semiconductor manufacturing facility has a relatively
limited life, usually somewhere between ten and fifteen years.
Rapid advances in chip design tend to rely on parallel advances
in manufacturing and process technology. As innovation moves

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I N S I S T I N G O N S U R V I VA L 13

forward, a fab designed for one generation of technology can
quickly fi nd itself obsolete.

We faced this situation in 1993, when we began to realize
that the Jerusalem fab was nearing the end of its useful life. The
fab had been designed in the mid – 1980s to manufacture prod-
ucts with channel lengths of one – and – a – half microns (a micron
is one millionth of a meter). Channel length defi nes the distance
between the two terminals (known as the source and the drain ) in
a transistor. It ’ s a key metric of a chip ’ s performance, because the
shorter the channel, the more transistors can be placed on a chip,
and the better the performance in terms of speed and reliability.
One – and – a – half microns was adequate for Intel ’ s 386 microproces-
sor, the product we were running at the time, but the new 486
had a minimum channel length of one micron. If we hoped to
compete for the 486 and subsequent generations of Intel ’ s micro-
processor technology, we would have to retool the plant. Specifi –
cally, we would have to completely replace the fab ’ s laminar – fl ow
air – conditioning system, because the smaller the channel length,
the purer the air would have to be in the fab ’ s cleanroom.

The looming obsolescence of the Jerusalem fab was actually a
quite serious threat to my vision for Intel Israel at the time. In the
early ’ 90s we had started planning to build a second, more techno-
logically advanced fab in Jerusalem, and by 1993 we had reached
agreement with the Israeli government about an incentives pack-
age for the new plant — only to be informed at the last minute
by Intel corporate that they had decided to build the next fab in
Arizona, not Israel. So unless we could fi nd a way to extend the
life of the original Jerusalem facility, we would lose our foothold
in semiconductor manufacturing. What ’ s more, because nobody in
corporate was asking us to modernize the fab, we would have to
fi gure out a way to do it without stopping production — not even
for a single day.

My facilities people said it was impossible. A semiconduc-
tor fab ’ s air – conditioning system is critical for continuously
filtering the air of the cleanroom and making sure impurities

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14 L E A D E R S H I P T H E H A R D W AY

don ’ t get introduced into the chip – making process and ruin the
semiconductors. There was no way we could build a whole new
air – conditioning system while keeping the plant open. It had never
been done anywhere — not at Intel or at any other semiconductor
manufacturer.

I tried to explain that this wasn ’ t a satisfactory answer. “ Don ’ t
tell me why it can ’ t be done, ” I said. “ Tell me how we can do it and
what the costs will be. I don ’ t care how crazy the ideas are; just come
up with something. Take a month and see if you can fi gure it out. ”

Three weeks later, the team returned to tell me, “ We think
we ’ ve found something, but you won ’ t buy it. ” The basic idea was
to “ raise the roof ” of the Jerusalem fab ’ s cleanroom by adding a new
structure on top and turning the existing roof into a false ceiling.
Above this false ceiling we would install the new air – conditioning
system in modules, section by section. As each new section of
the system became functional, we would then break through the
false ceiling and connect the new air – conditioning system to
the existing one, in effect creating a hybrid system. By the end
of the process we would have a completely new system, able to
handle Intel ’ s new one – micron technology. Retrofi tting the entire
plant would take time — about a year and a half — but it would have
the advantage of allowing us to introduce the new system piece by
piece without stopping the production line. The team estimated
the cost of the project at about $ 10 million.

It wasn ’ t the money that I was worried about. The fact is, from
Intel ’ s point of view, $ 10 million was a relatively small amount of
money to extend the life of the fab — certainly far less than the
roughly $ 1 billion it would have cost at the time to build a brand
new fab. But could we really pull it off? Despite the risks, I took
the plan to the company ’ s senior executives, who would have
to sign off on the capital expenditure. “ Are you sure you can do it
without affecting current production? ” asked Craig Barrett, who
had recently become Intel ’ s chief operating offi cer. To be honest,
I wasn ’ t completely sure that the plan would work. But I told him
that we had the risks under control.

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I N S I S T I N G O N S U R V I VA L 15

It took three or four months of trial and error to fi gure out the
best way to build the new ceiling, install each module of the new
air – conditioning system, and connect it to the existing system. You
can ’ t imagine the facilities team ’ s pride when they fi nally fi gured it
out and took me to see the fi rst successfully working module. Over
the next eighteen months we proceeded step by step, installing a
new module, linking it to the existing system, then moving on to
the next area of the fab. The project had a galvanizing effect, not
just on the facilities team but on the entire fab workforce. Because
everyone was so worried that production might suffer, they went
out of their way to maintain and even improve on our perfor-
mance. The paradoxical result: our output was even better during
and after the project than before.

This approach to modernizing a cleanroom ’ s air – fi ltering sys-
tem had never been done before — and I suspect it has never been
done since! Yet it is an excellent example of how focusing on
survival and asking the impossible can stimulate risk taking and
innovation. The modernization of the Jerusalem fab was not only
key to our winning a signifi cant part of Intel ’ s global production
for the 486 microprocessor, but it also contributed to our winning
the next round in the global competition for investment in Intel ’ s
expanding production facilities: the creation in 1996 of a second
Intel Israel fab in the town of Qiryat Gat.

In March 2008 the Jerusalem fab fi nally closed down, after
twenty-three years of operation (which in the fast – changing semi-
conductor industry must be some kind of record). Yet despite
the closing of the facility, semiconductor manufacturing at Intel
Israel couldn ’ t be healthier. In 2005, Intel announced that it would
build a second fab at Qiryat Gat. The $ 3.5 billion investment, the
largest ever by a private company in Israel ’ s history, will fund what
will be one of the largest and most technologically advanced semi-
conductor manufacturing facilities in the world. At the new Qiryat
Gat plant, channel length will be forty – fi ve nanometers (a nano-
meter is one thousand – millionth of a meter), allowing transistors
so small that thirty million can fi t on the head of a pin.

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16 L E A D E R S H I P T H E H A R D W AY

Of course, I ’ m now completely retired from Intel and had
nothing to do with the decision. Yet I have to believe that this
investment didn ’ t happen by coincidence. It happened because we
created an organizational culture that, in good times and in bad,
never took its survival for granted. It happened because we created
an organization determined to be the last place to close in a crisis.

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17

2

LEADING AGAINST
THE CURRENT

Survival requires risk taking. Taking risks often involves doing the
unexpected — and sometimes the seemingly impossible — even in
the face of considerable opposition. For that reason, leadership the
hard way means leading against the current — for example, com-
peting on costs at the Jerusalem fab when the rest of Intel was still
focused exclusively on product innovation and performance, or
replacing the fab ’ s air – fi ltering system without shutting down the
production line.

I believe that leading against the current is a general principle
of leadership in an environment of high turbulence. In my experi-
ence, often the best thing to do in the middle of a crisis or when
facing major uncertainty is precisely the opposite of what seems to
be the safest or most commonsensical thing at the time. I don ’ t
mean to suggest that leaders should simply be contrary for con-
trariness ’s sake. But I do believe that acting against the current is
an extremely effective way to turn a crisis situation inside out and
reframe a threat as an opportunity.

Once again, an analogy to fl ying is appropriate. When a plane
loses lift and goes into a free fall, the fi rst inclination is to pull on
the controls to regain altitude. But it ’ s precisely the wrong thing
to do. A plane at the beginning of a free fall has very little veloc-
ity. In that state, trying to lift the nose and pull out of the fall only
slows the plane down even more, leading to a stall. Instead, the
counterintuitive action a pilot needs to learn is to push down on
the controls — in other words, to make the free fall even worse.
It ’ s the only way to acquire suffi cient velocity to regain lift and
come out of the dive.

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18 L E A D E R S H I P T H E H A R D W AY

Leading against the current is the equivalent of making the
free fall worse. By embracing turbulence and not taking the easy
way out, a leader is in a better position to jar the organization out
of its collective rut. In this respect, leading against the current can
be an excellent way to mobilize an organization.

To effectively lead against the current, however, a leader has
to have some distinctive characteristics. First, you must be simul-
taneously an “ insider ” and an “ outsider ” in the organization you
are leading. To do things differently, you fi rst must be able to see
things differently. Only the leader who remains something of an
outsider can see around the corner of the latest crisis to perceive
the potential opportunity hidden in the midst of a threat. And
only from a position on the edge of the organization can the leader
effectively challenge followers ’ conventional wisdom, instincts,
and initial impulses and impressions.

Second, to lead against the current, you must be unafraid to
make decisions or take actions that appear “ crazy. ” Sometimes
they may in fact be crazy, but more often than not they will be in
response to emerging imperatives that you as the leader antici-
pate or sense but that the organization as a whole hasn ’ t really
perceived yet. A leader who is anticipating the next challenge
will likely be marching to a different drummer, making choices
that appear unorthodox and that, in the beginning at least, may
be very diffi cult to justify — at least in the terms or logic commonly
accepted in the organization.

Third, a leader against the current has to know how to manage
the tension between, on the one hand, persevering in the face of
opposition, and on the other, encouraging dissent and respond-
ing to it. Leading against the current means not taking “ no ” for
an answer. You need to know how to push back — and not only
“ down ” inside the organization, but also “ across ” and “ up ” inside
the broader hierarchy of which you are a part. But being persis-
tent in the face of opposition does not mean somehow ignoring or
dismissing what others have to say — indeed, precisely the oppo-
site. When leading against the current, it becomes all the more

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L E A D I N G A G A I N S T T H E C U R R E N T 19

important to consider things from multiple points of view,
especially those of people who disagree with you.

This brings me to a much – discussed — and, in my opinion, rou-
tinely misunderstood — theme of the management literature: the
topic of resistance . So – called experts in change management are
always providing advice on how leaders can “ minimize resistance. ”
I couldn ’ t disagree more. Any against – the – current decision worth
its salt will spark considerable opposition and resistance. And
rather than avoiding it or minimizing it, it ’ s far better to welcome
it, seek it out, and engage with it head – on.

Indeed, I think that often the goal of the leader should be to
maximize resistance — in the sense of encouraging disagreement and
dissent, bringing resistance out into the open so it can be debated
and addressed. Doing so can help you understand the fears, con-
cerns, and perspectives of people in the organization. And in some
cases, resistance and dissent can represent an important corrective
when you go too far.

When an organization is in a crisis, lack of resistance can itself
be a big problem. It can mean either that the change you are trying
to create isn ’ t radical enough — and is therefore unlikely to be truly
effective — or that the opposition has gone underground, where it
will be the most effective in blocking your initiative. If you aren ’ t
even aware that people in the organization disagree with you, then
you are in trouble.

Encouraging and engaging with dissent also requires that you
challenge your own personal inclinations. Nobody likes criticism;
nobody likes to be told “ you ’ re wrong. ” Also, sometimes it can
be diffi cult to differentiate between legitimate critique and mere
excuses. Here ’ s a rough rule of thumb that I ’ ve found useful:
constructive critics are often very blunt; it can be extremely
unpleasant to hear their point of view. Excuse – makers, by con-
trast, often phrase their objections in ways that seem reason-
able, even innocuous — but it ’ s just a sign that they are trying to
sabotage your every move. Excuses are superfi cially reasonable but
profoundly undermining. Genuine dissent is the opposite: it can

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20 L E A D E R S H I P T H E H A R D W AY

seem unreasonable at fi rst, but in fact often provides something
that you should take into account.

But although debate, dissent, and constructive criticism
are essential, it ’ s a mistake to seek “ consensus ” before making a
change — especially major ones affecting the fundamental direc-
tion of the organization. The more radical the change, the less
possible it is to develop a consensus in advance. So let all views be
heard, but in the end, it will be up to you to make the fi nal deci-
sion. A genuine leader must always be prepared to act alone.

Leadership as Counterculture

A typical story one often hears about Israeli high – tech entrepre-
neurs involves a couple of guys who meet as offi cers in the Israeli
Defense Forces (IDF), usually in some elite unit, frequently military
intelligence. They forge close bonds in the army ’ s high – pressure
environment, where one ’ s decisions as a leader can literally mean
life or death. After returning to civilian life, they apply the leader-
ship skills they acquired in the military to the challenging task of
building a new business (often, one that commercializes technol-
ogy fi rst developed by the military).

It ’ s a nice story, but that wasn ’ t my experience. Sure, I served
in the IDF in the late 1950s, but I was in anything but an elite
unit. And when I had the chance to become an offi cer, I turned it
down. After all those years in orphanages, the last thing I wanted
was the regimentation of army life.

No, as strange as it may sound, the experience that probably
taught me more than any other about the importance of leading
against the current was my involvement in the Berkeley counter-
culture of the 1960s. In 1962, during my last year as an under-
graduate at the Technion, Israel ’ s equivalent to MIT, I decided
that I wanted to go to the United States for graduate school. I was
taking a course from an Israeli professor who had recently returned
from the States, where he had become an expert in “ switching

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L E A D I N G A G A I N S T T H E C U R R E N T 21

theory, ” which was a relatively new, cutting – edge fi eld in computer
science at the time. The example of this teacher inspired me to
do something similar — that is, to study in the United States and
bring back a new fi eld of technical expertise to Israel. I applied to
a number of American engineering schools, including Purdue and
MIT, but the University of California was the only one to offer me
a stipend for my living expenses. So in the summer of 1963 I found
myself fl ying from Tel Aviv to New York and then traveling cross –
country by car to Berkeley.

It was a turbulent time. Not long after I arrived at Berkeley, John
F. Kennedy was assassinated. That fi rst year, civil rights became a
burning issue on campus as scores of students were arrested at sit – ins
designed to force Bay Area businesses to hire more black employ-
ees. In 1964, I witnessed the rise of the Free Speech Movement,
which briefl y closed the university down, as well as the fi rst stirrings
of the San Francisco Bay Area coun terculture, which culminated
in the Summer of Love in 1967. And throughout the period there
was growing student activism against the Vietnam War. At my
Ph.D. graduation ceremony in 1969, there was a massive walkout
of students in protest against the war.

As a foreigner, I was fascinated by these events. After my
experiences as a child during World War II and growing up in
the constrained circumstances of Israel in the 1950s, the scene
in Berkeley was like nothing I had ever experienced before.
I was drawn to the atmosphere of freedom, creativity, and self –
expression. The old ’ 60s slogan “ Do your own thing ” had a power-
ful impact on me.

At Berkeley, I led a kind of double life. All day long, I lived
in the world of engineering, going to classes, working in the lab,
studying advanced topics in electronics and computer science. But
then, at fi ve o ’ clock, I would leave my circuits behind and enter
the world of the counterculture — distributing leafl ets, participat-
ing in demonstrations, attending rock concerts, experimenting
with drugs, and spending long hours in the bars of Berkeley and

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22 L E A D E R S H I P T H E H A R D W AY

San Francisco discussing everything from the latest developments
in Vietnam to the meaning of life. Even after I started working in
Silicon Valley, fi rst at Fairchild and then at Intel, I had as many
friends in the counterculture scene as I did at work.

I ’ ll never forget one day, walking in the Haight Ashbury, the
center of the hippie movement in San Francisco. Suddenly a guy
drove up in a Corvette, stopped the car, stepped out, took off his
suit jacket and tie, and put on a fringed jacket and beads. In an
instant, the manager had transformed himself into a hippie for the
evening. Forty years later, it ’ s easy to make fun of that image, to
see this transformation as somehow fake, even self – indulgent. But
that ’ s not how I saw it at the time — or even how I see it today.
Rather, I view it as a symbol of the enormous freedom and fl ex-
ibility in seeing things differently, the valuable insight you can
get when you radically shift your perspective, the power of being
simultaneously an insider and an outsider.

In one respect, the events of the 1960s in Berkeley were
uncannily familiar to me. They reminded me of the power of small
groups of committed people to change history — whether it was
to argue for free speech inside a university, to engage in civil dis-
obedience in support of civil rights, or to protest, and eventually
stop, a war. In this, the Berkeley activists were only the latest in
the line of courageous leaders I had been exposed to — like the Van
Tilborghs and other members of the minority Calvinist church
in Holland who had helped save Jews during the war, or the kib-
butzniks and other Zionist pioneers who had played such a central
role in the founding of Israel. These groups were small minorities
in the worlds they lived in. They acted against great odds, took
big risks, persevered in the face of opposition and setbacks, and
accomplished something signifi cant.

What I learned at Berkeley is that unless you are prepared to
see things differently and go against the current, you are unlikely
to accomplish anything truly important. And to go against the cur-
rent, you have to be something of an outsider, living on the edge,
a member of a small but vibrant counterculture.

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L E A D I N G A G A I N S T T H E C U R R E N T 23

Apart from the Mainstream

The model of the Berkeley counterculture was in the back of my
mind when I fi rst started building Intel Israel in the 1970s and
’ 80s. I knew, of course, that for Intel Israel to be successful, we
needed to make it part of the broader Intel culture. In particular,
this meant introducing key Intel practices and disciplines to the
free – wheeling Israeli business culture. At the same time, however,
for Intel Israel to add value to Intel, we also had to fi nd a way to
take advantage of some unique Israeli strengths. And to do that,
the Intel Israel organizational culture needed to be distinctive and
somewhat apart from the Intel mainstream.

It ’ s probably wise not to put too much stock in broad cultural
generalizations. Still, to understand the strengths and weaknesses
of the Israeli work culture, it pays to compare it to that of the
United States and Japan. In some respects, the U.S. and Israeli
business cultures are similar, but they are also very different. For
example, both societies are what I call “ frontier ” cultures. But
whereas the frontier mentality in the United States focuses on the
“ Gold Rush ” — that is, getting rich quick — the frontier mentality
in Israel emphasizes survival in a hostile and extremely volatile
environment. As a result, the U.S. business culture is much more
individualistic; every single individual is on the lookout for his or
her own opportunity. In contrast, the Israeli business culture is far
more team – oriented. This team orientation can have its downside.
For example, Israelis can sometimes become so team – oriented that
they avoid individual accountability. But on the other hand, in my
experience, they communicate, share information, and collaborate
far more effectively than most American teams.

This team orientation is something that Israelis share with the
Japanese. But unlike most Japanese teams, Israelis combine team-
work with a remarkable fl air for improvisation and innovation. Of
course, this impulse to improvise also has its downside — especially
when it comes to enforcing the kind of process discipline for
which the Japanese are famous. Take the example of one of Intel ’ s
most important manufacturing innovations: the “ Copy Exactly ”

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24 L E A D E R S H I P T H E H A R D W AY

program. Developed by former CEO Craig Barrett, Copy Exactly
is a system of methods and practices for training the employees
in Intel ’ s semiconductor fabs to copy exact procedures as a way
to transfer new technologies from one location to another. The
approach has given Intel a competitive advantage in quickly ramp-
ing up production runs for new processes and technologies.

It was extremely diffi cult to get Copy Exactly to take root in
Israel. In the beginning, people saw it as drag on our ability to
improvise — and therefore a potential threat to our competitive-
ness. But over time I was able to convince them that if we could
somehow combine the Israeli fl air for improvisation with the kind
of disciplined execution represented by the Copy Exactly program,
we would be in an even stronger position. Eventually we decided
that whenever we came up with improvements in a particular
manufacturing process, we would go to the fab that had originated
it to get our “ deviation ” incorporated into the standard proce-
dures. We didn ’ t always succeed, but sometimes we did. When we
were successful, the fact that we had originated the improvement
meant that we had a temporary advantage over other Intel fabs.
And as the new improvements rippled through the entire Intel
manufacturing system, our reputation inside the company grew.

I believe that when Israeli teams harness their natural tal-
ent for innovation without sacrifi cing discipline, they can ’ t be
beat when it comes to solving engineering and manufacturing
problems. Once, during the heyday of Japanese manufacturing, a
Japanese journalist asked me which team I would prefer to lead —
a Japanese team or an Israeli team. I told him that there was no
question in my mind: the Israeli team, because although it is pos-
sible to instill discipline in an Israeli team, it is extremely diffi cult
to instill creativity in a Japanese team.

When it came to Copy Exactly, we were able to fi nd a pro-
ductive point of compromise between the Israeli work culture and
Intel ’ s broader culture. But in some cases compromise wasn ’ t pos-
sible. In those situations I was fully prepared to take tough actions
to establish and maintain our autonomy so that we could leverage

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L E A D I N G A G A I N S T T H E C U R R E N T 25

Intel Israel ’ s unique capabilities — even if it sometimes rubbed my
colleagues in California the wrong way.

One of the early challenges we faced in building Intel Israel, for
example, was to establish the principle inside Intel that we were a
genuine center of operations, not just a “ hiring hall ” where Intel ’ s
U.S. operations could come to fi nd good people. If we were con-
stantly vulnerable to having our best people lured away to positions
in the States, we would never be able to build a strong organiza-
tion in Israel. In the long run that wouldn ’ t be in the best interests
of Intel Corporation.

To give that principle some teeth, I instituted a rule that to
many seemed draconian: whenever people from Intel Israel went
on temporary assignment to the United States (which we encour-
aged, mainly for training purposes), they were forbidden to trans-
fer permanently to a U.S. unit. Rather, they had to come back to
Israel, fulfi ll their commitments to Intel Israel, and then transfer.
If they refused to do so, they had to leave Intel altogether and pay
a penalty of $ 50,000.

Many of Intel ’ s U.S. executives had a hard time accepting this
rule. Indeed, it seemed to go against everything the company stood
for. The Intel culture was a meritocracy, the kind of place where
good people were given a lot of freedom. And like many large cor-
porations, Intel encouraged the free transfer of employees across
organizational units. It was a great way for the employees to get to
know the business, build an internal network, and have exposure
to different kinds of responsibilities and skills.

For all these reasons, my no – transfer rule was a source of con-
siderable tension. “ This is a free country, ” some of my U.S. coun-
terparts would tell me. “ How can you tell somebody what to do? ”
Some saw the rule as almost an act of disloyalty. “ Here ’ s this guy, ”
they would say, “ He came here for two years and now he wants to
stay. That ’ s his free choice. Would you rather that he left the com-
pany than work for us? Where ’ s your loyalty to Intel? ”

From their perspective these were perfectly reasonable ques-
tions. After all, wasn ’ t I denying my people the opportunity to do

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26 L E A D E R S H I P T H E H A R D W AY

precisely what I had done when I was in California — that is, to
“ do your own thing ” ? But I was looking at the situation differently,
from the perspective of what it would take for Intel Israel to grow
and develop over the long term. As I knew better than anyone,
the lure of the States was just too great. If we couldn ’ t enforce the
no – transfer provision, I felt, we would never get Intel Israel off
the ground.

Because I was convinced that the no – transfer rule was essential
to our long – term survival, I was prepared to fi ght to enforce it. In
one case, for example, one of my people was working in an Intel
organization headed by Paul Ottelini, Intel ’ s current CEO. At the
end of his rotation, the individual informed me that he wanted to
stay with the unit and that Ottelini supported him. My insistence
that he return led to a confrontation that eventually went all the
way to the very top of the company. At a meeting with Paul, Andy
Grove (then CEO), and Craig Barrett, I explained my logic. If I
couldn ’ t enforce the no – transfer rule, Intel Israel would be reduced
to a recruiting offi ce, not a real operation. I also explained that
I believed the principle was so important that I was prepared to
resign if I didn ’ t have their support. Eventually they agreed to send
the guy back to Israel.

In another case, I took a position that seemed even more
extreme. Remember my efforts, described in Chapter One , to pre-
vent the layoff of our software development group in Haifa? Well,
at the time, one of the software engineers on the team had just
traveled on a rotation to the United States. When he heard the
news that his home unit in Israel was being disbanded, he asked to
stay permanently with the Intel organization that he was working
with there.

This was a much tougher decision. On the one hand, the Haifa
software systems group didn ’ t really exist anymore, and the future
of the team members was uncertain. Under the circumstances,
it seemed unreasonable to refuse my employee ’ s request. On
the other hand, I had just convinced Intel ’ s CEO to throw me a
fi nancial lifeline. And I knew that if I made one exception to my

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L E A D I N G A G A I N S T T H E C U R R E N T 27

no – transfer rule, it would be like opening the fl oodgates. So I said
no. The software engineer was furious — so much so that he quit in
protest and joined a California software startup.

For a long time I felt that I had made a terrible mistake. Per-
haps this time my impulse to go against the current had gone too
far. Here one of my goals had been to save the highly talented
people in the systems software unit for Intel — yet my actions
had led one of the best people in the group to leave the company
altogether.

Two years later, one of my direct reports approached me warily.
He had gotten a call from the software engineer who had left in
a huff. He now wanted to return to Intel. What did I think? My
subordinate probably expected me to be angry, unwilling to even
consider the idea that the software engineer might return. In fact,
I was extremely pleased. I could think of no greater achievement
for our organization than that even after all that had happened, he
wanted to come back. Later, he went on to head the Haifa design
center.

Winning the War for Talent

The no – transfer rule was just one of a whole set of against –
the – current decisions that I took to build a strong organization
at Intel Israel. Others involved the kind of people that I tried to
attract to come to the organization in the fi rst place. In this case
I often had to push not against my colleagues in the States but
against my own people.

Success in the semiconductor industry is largely a “ war for
talent. ” 1 In particular, the relative scarcity of top engineer-
ing talent has historically been a major constraint on a company ’ s
growth. The original establishment of Intel Israel in 1974 was a
direct result of Intel ’ s quest to fi nd fresh sources of talent. The
reason we created the Haifa design center in the fi rst place was to
tap in to the rich vein of technical talent in the Israeli engineer-
ing community. (Few people realize it, but Israel has an enormous

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28 L E A D E R S H I P T H E H A R D W AY

reservoir of engineering talent. Today, out of every 10,000
employees in Israel there are some 135 engineers — compared with
only 70 in the United States.)

Yet I was determined to fi nd ways to expand the pool of poten-
tial hires by moving beyond what I saw as the relatively narrow
focus on engineers that was typical in the industry in the United
States and Israel. In the early days of the semiconductor industry
it was a common assumption that to design chips (the fi eld known
as “ design engineering ” ) you had to be an engineer. I disagreed.
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. To test
that intuition, when I fi rst came back to Israel in 1974, instead of
working full time for Intel I took a teaching job in a new School
for Applied Science at the Hebrew University in Jerusalem (later
I would become director of the school), to start building a cadre of
potential future Intel Israel employees.

The expansion of Intel Israel into semiconductor manufactur-
ing posed another recruiting challenge. By the early 1990s Intel
Israel was growing so quickly and the kinds of jobs we needed
to fi ll had broadened so much that even this expanded techni-
cal labor pool wasn ’ t enough. I was constantly receiving messages
from our recruiting organization about the diffi culty of attracting
good people. “ We ’ re going to have to pay more, ” my HR people
kept telling me, “ to get the people that we want. ” But I was wor-
ried that simply offering more money would end up attracting the
kind of people that we didn ’ t really want. I wasn ’ t looking for indi-
viduals motivated primarily by money. I wanted people who could
get excited about our vision and who wanted to make a differ-
ence. So I responded: instead of paying more money, why don ’ t
we start recruiting nontechnical people with backgrounds in the
liberal arts?

This was long before the wave of “ diversity ” had washed over
the business world. But I was convinced that we could get signifi –
cantly more leverage from a more diverse workforce. My interest

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L E A D I N G A G A I N S T T H E C U R R E N T 29

in employee diversity had nothing to do with any altruistic desire
to make opportunities available to a wider range of people. It was
purely self – interested: we needed to do something different to keep
pace with Intel Israel ’ s rapid growth.

The decision had major consequences for how we went about
recruiting. For one thing, it required a wholesale transformation
in our interviewing and hiring processes. But it called for an even
bigger change at the level of organizational psychology. In effect,
I was saying to my managers, all of whom had technical back-
grounds and had been very successful within the Intel Israel orga-
nization, “ Great job, now go out and start hiring people who are
not like you! ”

Many people didn ’ t like it. Although no one put it quite this
way, I suspect they felt that the new recruiting policy somehow
devalued their own training, experience, and contribution. And
some simply disagreed that nontechnical people could ever make
it in what was, after all, a technology – driven business and com-
pany. Another complication was that, because more women were
represented in the ranks of nontechnical graduates than among
technical graduates, broadening our pool to include nontechnical
graduates would inevitably mean hiring a lot more women into
our professional and managerial ranks — not an easy step for our
traditionally male – dominated high – tech culture. There was a lot of
resistance — some of it due to habit, some of it deliberate. It ’ s hard
for a leopard to change its spots — especially when it is a successful
leopard.

A key moment of truth for me in the campaign to broaden
our labor pool came about two years after I had announced the
change in hiring practices, at a point when Intel Israel was becom-
ing well known for its supposed efforts to reach out to nontechni-
cal candidates. I had been invited by the dean of students at Tel
Aviv University to give a recruiting lecture. After the talk, she
took me aside to say, “ I ’ m very impressed with your philosophy.
But I have to tell you, what you say isn ’ t refl ected in the signals
we are getting from your recruiters. ” She went on to describe how

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30 L E A D E R S H I P T H E H A R D W AY

the dominant recruiting messages coming from Intel were still all
about engineering, computer science, and the like. I realized that
I would need to start intervening systematically in hiring decisions
to push the organization in the direction that I wanted.

In one case, for example, I learned that a woman with fi ve
children had been summarily rejected for a midlevel position in
the HR department in Haifa. When I asked why, I was told “ She
has fi ve kids and lives too far away. It just won ’ t work. ” Not good
enough, I told them, and I simply forced the center to hire her
(today, she is running the HR department).

It took nearly a decade of pushing back against the organiza-
tion to increase signifi cantly nontraditional hires at Intel Israel.
For example, at one point I began insisting that 50 percent of our
new hires must be women. We never quite reached that goal. But
because we had it as a goal, we ended up having many more women
at Intel Israel than one would fi nd at a typical Israeli company — or
even in the semiconductor industry in the United States.

Eventually the pushing paid off. To give just one example:
as of this writing, of the roughly thirty plant managers running
Intel ’ s seventeen semiconductor fabs around the world, only fi ve
are women — and of those fi ve, two are in Israel. One, Maxine
Fassberg, is a former high school chemistry teacher. The other,
Jenny Cohen – Dorfl er, is a former social worker who used to pro-
vide social services to the urban poor. They are responsible for
literally millions of dollars of annual output at some of the most
advanced semiconductor facilities in the world.

Learning from Mistakes

When you lead against the current, inevitably you make mistakes.
The challenge is not so much avoiding these mistakes, which is
impossible, as knowing how to recover from them once they are
made. That ’ s why it is important to listen to dissent. Dissent that
persists or that represents a point of view for which you don ’ t have
a good answer is a signal that a course correction is necessary.

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L E A D I N G A G A I N S T T H E C U R R E N T 31

Take, for example, another against – the – current decision I
made: to institute a comprehensive program of lateral transfers for
senior managers inside the Intel Israel organization. Traditionally,
Intel has always been a pretty functional organization. Especially
in the early days, executives tended to come up either through
the technology and product – development side of the business or
through manufacturing (or, still later, through marketing). By the
early 1990s, however, I became convinced that we needed to pro-
vide our managers with a much broader range of experiences, to
cycle them through multiple functions so that they would acquire
the full range of skills necessary for leading a modern business
organization.

I was motivated in part by my own experience. At heart I was
a researcher, and I had grown up on the research side of Intel. But
when we set up the Jerusalem fab, I had had to go back to square
one and learn how to run a highly demanding manufacturing
operation. My capabilities as a leader grew by orders of magnitude
as a result. I felt that a system of lateral transfers would greatly
increase the fl exibility of our management team. I also believed it
would pay organizational dividends as well. Someone who was a
relative outsider, I reasoned, would bring a fresh perspective, not
take things for granted, ask hard questions, and discover new and
better ways of doing things. The ultimate result would be a step –
function improvement in performance.

To kick off the lateral – transfer program and break through the
traditional assumptions of the Intel Israel culture, I decided to
do something dramatic. I announced that the heads of the Haifa
design center and the Jerusalem fab would switch jobs.

The manager who moved from the design center to the fab
was an extremely cautious and careful manager. He spent the fi rst
three months in his new role simply trying to understand how the
fab worked. Only when he had his feet on the ground did he start
making any changes. As a result, his transition went smoothly.
And as I anticipated, there were major benefi ts in operational
improvement.

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32 L E A D E R S H I P T H E H A R D W AY

The former manufacturing manager who went from Jerusalem
to Haifa, however, was another story. On paper, he was a logical
leader for the design center. He had a strong background in engi-
neering, and one of our strategic goals at the time was to introduce
more process discipline to the innovative but sometimes disor-
ganized practices of the center. However, unlike his counterpart,
he started making big changes right away, which sparked a strong
negative counter – reaction. Soon I began hearing criticism about
his management style — not only from center employees but also
from the executives in California running Intel ’ s global Micropro-
cessor Group, of which the Haifa center was a part. “ You need to
bring in someone who knows how to run a design center, ” they
told me.

At fi rst I ignored the criticisms. I thought they were the typical
response of an inbred culture that didn ’ t want to try new ways of
doing things. I was committed to the principle of lateral transfers.
And I was the last person to back down in the face of criticism or
resistance.

But eventually the backlash caused me to realize that I had
made a big mistake. I had underestimated the clash between the
manufacturing culture and the design culture. I had also under-
estimated the amount of learning that would be required and
the amount of support that at least some of the people placed in
unfamiliar roles would therefore need. Eventually I came to the
conclusion that the design center ’ s new manager just wasn ’ t going
to make it; his relationship with his peers and employees had
deteriorated to the point that he could never be successful in the
role. Reluctantly, I replaced him with someone who had come up
through the ranks of Intel ’ s design organization.

Another thing I underestimated was the human price of fail-
ure. I had taken an extremely successful manufacturing manager
and put him in a situation where he failed. As a result, there was
no real place left for him in the organization, so he decided to
leave. I felt responsible for the loss of a good manager. The failure
wasn ’ t just his; it was mine.

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L E A D I N G A G A I N S T T H E C U R R E N T 33

The failure, however, didn ’ t cause me to give up on my lateral –
transfer plan. Instead, I started stressing the important cultural
dimension of the change. “ Take time to learn the culture, ” I advised
managers moving into new and unfamiliar roles. I also began to
place more emphasis on the need for senior managers like myself
to provide ongoing support to help people make the transition.

Today, lateral transfers of this type are routine at Intel Israel.
And the diversity of experience that managers pick up over the
course of their careers has put them in a good position to succeed,
not just at Intel Israel but in Intel worldwide. For example, Alex-
ander Kornhauser, the manager who fi fteen years ago successfully
made the transition from the design center to the Jerusalem fab,
went on to manage the construction and startup of Intel Israel ’ s
fi rst fab in Qiryat Gat. He was my successor as general manager of
Intel Israel and, until recently, head of Intel ’ s global fl ash – memory
manufacturing group.

From the Periphery to the Center

Every one of these against – the – current actions was designed to
make Intel Israel a distinctive counterculture, with a strong local
identity and esprit de corps. Paradoxically, this powerful local cul-
ture with its inclination to act against the current is precisely what
has allowed the organization to become an integral part of Intel
worldwide today.

Recent events dramatically demonstrate just how deeply lead-
ing against the current has been institutionalized in the Intel Israel
culture. In the summer of 2006, Intel introduced a new generation
of microprocessor technology, known as Core 2 Duo, that Intel
CEO Paul Ottelini has called “ a revolutionary leap ” compared to
Intel ’ s earlier microprocessors. 2 The technology was created at the
Haifa design center — and the way in which it was developed is a
classic example of against – the – current leadership.

Traditionally, Intel ’ s microprocessors were optimized for speed.
The company had always promoted faster clock speed — the rate

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34 L E A D E R S H I P T H E H A R D W AY

at which a chip executes instructions — as the most important
criterion for microprocessor performance. But increased speed
meant higher power consumption and increased heat. A high –
performing microprocessor could generate as much heat as a small
television set.

The Intel Israel designers in Haifa who were charged with
creating a microprocessor for the laptop market decided to take
a different approach. They realized that unless they could design
a microprocessor that consumed less power and produced less
heat, they would never be able to create ultrathin laptops. The fan
would have to be thicker than the laptop itself. So instead of opti-
mizing processor speed, they optimized low power consumption
(which minimized heat).

At the time, the project was so outside the Intel mainstream
that at one point it was actually cancelled. But Intel Israel design-
ers didn ’ t take no for an answer. And as the laptop market grew
and became more important to the company as a whole, having a
low – power, low – heat microprocessor proved to be a distinct advan-
tage. An early version of Intel Israel’s new microprocessor eventu-
ally became a key component in Intel ’ s Centrino package, which
hit the market in March 2003 and was the catalyst for three years
of 13 – percent annual sales growth at Intel from 2003 to 2005.

Today, Intel Israel is the global headquarters of the compa-
ny ’ s all – important mobile computing platform, which is run by
an Israeli senior vice president, Dadi Perlmutter. What ’ s more,
the core competence that the Haifa design center developed —
microprocessors that combine high performance with relatively
low power consumption — is turning out to be critical for other key
Intel markets, such as servers and home entertainment, as well. So
much so that today Intel ’ s global microprocessor design group is
run out of Haifa.

You might say that by leading against the current, we suc-
ceeded in injecting Intel Israel directly into the Intel mainstream.

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35

3

LEVERAGING RANDOM
OPPORTUNITIES

Increased turbulence has a complex impact on the nature of
opportunity. Put simply, the more turbulent the environment, the
more random opportunities become — and the more diffi cult it is to
identify and take advantage of them. Rapid change, sudden disrup-
tions, and high uncertainty all throw up unanticipated threats, but
also unforeseen possibilities. Sometimes the greatest opportunity
lies in the middle of the most threatening crisis, so it can be hard
to distinguish the one from the other. The challenge of the leader
is to seek out such random opportunities and leverage them for the
success and survival of the organization.

When most managers think about pursuing opportunities,
they usually do so in the context of strategic planning. That ’ s
precisely not what I am talking about here. In fact, leveraging
random opportunities is the antithesis of strategic planning. It has
a different logic and requires different skills. Most large established
organizations are not very good at it.

Don ’ t get me wrong; I know that planning is important. Any
complex organization needs to have a plan. But no plan, no matter
how detailed, is really equal to the complexity and richness of pos-
sibility thrown up by turbulence. The more turbulent a company ’ s
situation, the more diffi cult it is to develop a detailed strategic plan
in advance and then execute it. The environment is too uncertain;
conditions change too rapidly and in unanticipated ways. Once
you enter the eye of the thunderstorm, most plans get thrown out
the window (we ’ ll see a detailed example of this phenomenon
in the next chapter). If you become too wedded to your plan, you
run the risk of losing your ability to adapt to new circumstances.

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36 L E A D E R S H I P T H E H A R D W AY

In the end, improvisation is just as important as planning — and
perhaps even more important. I ’ m even tempted to say that while
managers plan, leaders seek out and exploit random opportunities.

Leveraging random opportunities isn ’ t a linear or system-
atic process. It ’ s not analytical — or at least not in the usual way
that term is understood. It is more akin to intuition; though it
has a logic all its own, that logic is rarely self – evident. To identify
random opportunities requires openness, awareness, and an ability
to see connections that at fi rst glance don ’ t appear to be there. It ’ s
as much a state of mind as a way of behaving or acting.

Take, for example, the modernization of the Jerusalem fab
described in Chapter One . In that situation, I faced a problem —
the looming obsolescence of the fab — which produced a convic-
tion that “ something needs to be done. ” I didn ’ t have a plan. The
fact is, I had no idea what exactly we should do. I just knew we
needed to do something. But that imperative to do something
(in order to survive) became the catalyst for improvisation, an
innovative search for a solution. The result: the highly creative
approach of raising the roof of the cleanroom and incrementally
modernizing the laminar – fl ow air – fi ltering system without stopping
production.

As this example suggests, leveraging random opportunity means
two things: fi rst, reframing a problem or crisis as a potential oppor-
tunity, and second, seizing the moment and committing to act with-
out necessarily having a clear plan of what you are going to do.

In my experience, the capacity to identify and exploit random
opportunities is relatively rare in big organizations. That makes
sense when you think about it. Bureaucracy is about standardiza-
tion, establishing routines and then executing them over and over
again. Being good at recognizing random opportunities, in con-
trast, requires improvisation — breaking routines to take advantage
of an unexpected opportunity.

So how do leaders improve their ability to spot random oppor-
tunities and take advantage of them? Four practices are especially
important: having a long – term vision, staying true to your passion,

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L E V E R A G I N G R A N D O M O P P O R T U N I T I E S 37

seeing the opportunity at the center of every problem, and manag-
ing the delicate balance between “ holding your fi re ” (waiting for a
situation to mature) and “ striking when the iron is hot ” (moving
quickly to take advantage of new developments). In this chapter,
I ’ ll describe some of the experiences that taught me the impor-
tance of random opportunity. And I will fi nally tell the story of
how we created Intel Israel in the fi rst place. It ’ s a great example
of the randomness of opportunity and the long and circuitous
route a leader often has to take in order to realize his vision.

Turning a Problem Into a Product

Sometimes I think that random opportunities are the story of my
life. Take, for example, the decision that was made for me, to leave
the Van Tilborghs and go into a Jewish orphanage, even though
I didn ’ t really want to go. I often wonder: what would have hap-
pened if I had stayed? As a member of a rural family, I probably
wouldn ’ t have gone very far in terms of schooling. Who knows,
maybe I would have become a farmer. At a minimum, I would have
had a very different life — more relaxing perhaps, but certainly less
eventful — than the one I eventually led.

So too with going to graduate school at Berkeley. I had no idea
that this would put me within striking distance of Silicon Valley
precisely at the moment when the semiconductor industry was
about to take off. Would I have achieved as much as I have if I had
chosen to study at, say, Purdue? Who knows?

But the experience that probably more than any other taught
me the power of random opportunity was the one that led to the
most signifi cant technical achievement of my career: my inven-
tion of the EPROM in the early 1970s. That discovery has been
described as a case study in turning “ an intractable technical prob-
lem into a new product. ” 1 I see it as a classic example of taking
advantage of a random opportunity. Understanding why requires
going a bit into the technical details of the early semiconductor
industry — so I ask my nontechnical readers to bear with me.

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38 L E A D E R S H I P T H E H A R D W AY

When I fi rst started at Intel in 1969, there were essentially two
types of semiconductor memories. Random – access memory (RAM)
chips were easy to program, but a chip would lose its charge (and
there fore, the information encoded on the chip) when its power
source was turned off. In industry parlance, RAM chips were volatile .

Read – only memory (ROM) chips, by contrast, were
nonvolatile — that is, the information encoded in the chip was
fi xed and unchangeable. But the process for programming ROM
memories was time – consuming and cumbersome. Typically, the
data had to be “ burned in ” at the factory: physically embedded on
the chip through a process called “ masking ” that generally took
weeks to complete. And once programmed, a ROM chip could not
be easily changed.

Not long after joining Intel, I got pulled into troubleshooting
a serious problem that threatened the release of the company ’ s fi rst
semiconductor memory product, an early RAM chip known as the
1101. The chip worked fi ne at room temperature. But under con-
ditions of high temperature and high humidity (the standard test,
known as “ 85 – 85, ” consisted of running the chip at 85 degrees cen-
tigrade and 85 percent humidity), it became unstable, causing the
information encoded on the chip to be lost. My assignment was to
fi gure out what was causing this major product fl aw and fi x it.

A metal – oxide semiconductor (MOS) is a highly complex
physicochemical device, but for the sake of simplicity we can think
of it as a stack made up of four distinct layers. At the very bottom
is a substrate of semiconducting material, usually silicon. As the
name suggests, semiconductors such as silicon have an electrical
conductivity in between that of a metal and an insulator. Because
it is relatively easy to modify their conductivity, they are a key
component of any semiconducting device.

On top of the semiconducting substrate is deposited a non-
conducting insulator (for example, silicon dioxide), known as the
active insulator . The layer on top of the insulator is known as a gate
(in the 1101, it was made of polysilicon). Finally, another layer
of insulator is put down on top of the gate, and metal lines are

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L E V E R A G I N G R A N D O M O P P O R T U N I T I E S 39

embedded in the insulator to connect the gate to the source of a
voltage coming from outside the semiconductor.

When a voltage is applied to the gate, it generates an electric
fi eld that penetrates the active insulator and modifi es the conduc-
tivity of the semiconducting layer, making it possible to control
the current fl ow between the source and drain of a transistor. This
creates a basic transistor switch, which is the building block of the
logic gates found in an integrated circuit. It is the voltage applied
to the gates of the circuit that determines whether each switch in
a semiconductor is either on or off.

After a few weeks of testing, I developed a hypothesis of what
was going wrong in the 1101. The heat and humidity were chang-
ing the chemical composition at the interface between the top –
layer insulator and the gate, causing the chip ’ s electric charge to
migrate uncontrollably and thus changing the information in the
chip ’ s memory cells.

To test my hypothesis, I was able to take advantage of another
problem with the 1101 that was totally unrelated to the one that
I was troubleshooting. It turned out that due to problems in the
chip fabrication process, the metal lines connected to the gates on
some of the 1101 chips were breaking when they were laid down
on the chip. This ruined these chips, because the metal lines could
no longer carry a current to the gates and thus to all the memory
cells on the device. But when I applied a voltage to these fl awed
chips under the high – temperature and high – humidity conditions
of the 85 – 85 test, I was able to show that the isolated gates were
in fact conducting charges, even though they were disconnected
from the source of the current — proof positive that the charge was
migrating along the interface of the insulator.

Once I demonstrated that charge migration was the source of
the problem, the solution was relatively straightforward. By modi-
fying the chemical composition of the insulator layer above the
gate, we were able to make the interfaces more inert, thus prevent-
ing them from conducting a charge even when the temperature
and humidity around the device were high.

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40 L E A D E R S H I P T H E H A R D W AY

But for some reason the anomalous image of the isolated gates
that, nevertheless, still conducted charges remained fi xed in my
mind. No one knows when the precise moment of inspiration
comes. But at a certain point I began to realize that if you inten-
tionally designed a series of disconnected gates to “ fl oat ” on top of
an active insulator and then found a way to get a charge onto these
“ fl oating gates, ” the charge would have nowhere to go. The result
would be a whole new kind of semiconductor memory, one that you
could program easily (like a RAM) but that would retain its infor-
mation, even in the absence of continuous power (like a ROM).

This initial concept of the fl oating gate, combined with a tech-
nique for charging the gates that came to be known as “ avalanche
injection ” and a technique for erasing them using ultraviolet light,
eventually led to the development of the EPROM — a nonvola-
tile but easily reprogrammable semiconductor memory. It was the
catalyst for a whole line of innovation and development that even-
tually led to today ’ s ubiquitous fl ash memory technology.

The EPROM had an enormous impact on Intel as a
company — and on the evolution of computing. At fi rst, we had
no idea what to do with this new kind of memory, but it soon
became apparent that the EPROM was the perfect twin to another
new Intel product developed at the time: the programmable
microprocessor. Every application using a microprocessor required
read – only memory to store the program that drove the processor.
With the EPROM, engineers could cut the prototyping cycle for
new computer products from months literally to hours, because
whenever they had to make changes to the master program, they
could immediately reprogram the EPROMs that stored it.

At first we assumed that once customers had finalized a
program for a new microprocessor application, they would then
switch to the much cheaper ROMs in the fi nal product. But to
our surprise — and delight — we discovered that once customers
got used to the instant gratifi cation of the EPROM, they didn ’ t
want to go back. They preferred the fl exibility of the more expen-
sive EPROM even in the fi nal product, because it allowed them

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L E V E R A G I N G R A N D O M O P P O R T U N I T I E S 41

to make changes up to the last minute and, over time, to easily
incorporate new upgrades to the microprocessor program.

As a result, the EPROM became a cash cow that contributed
tens of millions of dollars to Intel ’ s bottom line. According to one
estimate, Intel ’ s revenues grew sevenfold, from $ 9 million in 1971
to $ 66 million in 1973, largely due to sales of the EPROM. 2 Well
into the 1980s, the EPROM remained one of Intel ’ s most profi table
products. All of this was because of a new kind of semiconductor
memory that I discovered almost by accident.

The experience of inventing the EPROM taught me that
opportunities will emerge when you least expect them — if you
have the imagination to see them.

Staying True to a Vision

Leveraging random opportunities may be the antithesis of
traditional planning. It does, however, require having a long – term
vision. This may seem paradoxical. If opportunity is increasingly
random, wouldn ’ t long – term vision matter less? Isn ’ t the impera-
tive to focus on the moment in order to adapt continually to new
realities?

It ’ s not that simple. In a fast – changing environment, you need
to have a vision to be able to recognize those opportunities that
really matter. A long – term vision provides the orienting frame-
work that allows you to identify what is a genuine opportunity and
what is not. Otherwise, a leader risks getting fi xated on short – term
perturbations in the environment and becoming trapped in an
unproductive round of constantly fi refi ghting the problem of the
moment. Only when you have a long – term vision can you appro-
priately adapt to short – term changes and recognize the unantici-
pated opportunities created by a turbulent environment.

Let me give an example of how this relationship between a
long – term vision and random opportunities worked in my own
case. The origins of my vision for Intel Israel go all the way back
to that class on switching theory at the Technion. It was then,

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42 L E A D E R S H I P T H E H A R D W AY

inspired by my teacher ’ s experience, that I got the idea to go to the
United States to bring a new fi eld back to Israel. At the time I had
absolutely no idea either of what I wanted to bring back or how to
do it — but I had the example of my professor and the desire to do
something similar.

Once I found myself in on the ground fl oor of the semiconduc-
tor business, I began to think about perhaps building some kind
of semiconductor research operation in Israel. Even when I was
working at Fairchild, before I had completed my Ph.D., I would
occasionally fl oat the idea with my colleagues and bosses about
“ possibly doing something in Israel. ” But at the time it was just a
pipe dream, not a practical possibility. Once I had invented the
EPROM, I began to have the credibility inside Intel to push my
vision more aggressively. But in those early years I also realized
that the time was not yet ripe. Intel was still an extremely young
company. It just wasn ’ t ready to set up an operation halfway around
the world.

In a turbulent environment leaders need to act quickly. Yet
sometimes if you rush to make things happen, you can end up
undermining your ability to recognize an unanticipated random
opportunity as it emerges. It ’ s important to realize that there are
periods in the evolution of a vision when you just can ’ t force
things. It ’ s better to sit back, bide your time, and wait for the right
opportunity to take shape.

That ’ s why in the spring of 1971, not long after I had presented
the EPROM concept at a major industry conference and we had
built some of the fi rst prototype products, I decided to leave Intel
for a time, to teach electrical engineering at the University of
Kumasi in Ghana in West Africa. I was newly married, and my wife
and I had always wanted to travel. “ Do your own thing ” was still my
mantra. I was looking for adventure, something different, an expe-
rience of personal freedom and self – development. The EPROM
concept was proven, so it seemed like a good time to leave.

People at Intel were astounded by my decision. Precisely at
the moment when I had made my reputation at the company,

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L E V E R A G I N G R A N D O M O P P O R T U N I T I E S 43

I was leaving. What ’ s more, Intel had just had its fi rst profi table
year and was about to go public. To leave meant walking away from
considerable stock options that would likely result in a great deal of
money. But perhaps most important, although the basic concept
of the EPROM had been demonstrated, the product was still very
much in development. Many technical challenges had still to be
solved in order to reliably manufacture the new chip. How could I
possibly leave at a time like this?

I remember well a lunch I had with Andy Grove in the days
before I left. He knew he couldn ’ t convince me to change my mind.
Nevertheless, he told me a story about two engineers whom he
termed “ Engineer A ” and “ Engineer B. ” Engineer A was the type
of person who had a passion for discovery but who, once the basic
concept had been proven, more or less lost interest in subsequent
developments. Engineer B, by contrast, not only made great dis-
coveries but also did the hard work of seeing the discovery through
production into a great product. It was pretty clear from Andy ’ s
account which engineer he thought I was — and which created
more value for a startup company like Intel.

In retrospect, I realize that Andy was trying to tell me that my
decision to leave at this delicate moment was a failure of leader-
ship. In one respect, he was absolutely right. At the time, I really
was an Engineer A. My attitude was that with the demonstration
of the EPROM concept, the heavy lifting had been done. Creat-
ing a manufacturing process that could reliably produce the chip
was just a detail, something that could be safely left to others. No
doubt I completely underestimated just how complex and diffi cult
a challenge that would be.

But in another respect, my decision wasn ’ t so much a failure of
leadership as a fundamental choice about how and where I wanted
to lead. Any successful person will invariably have access to more
opportunities than he or she can ever take advantage of. Sooner or
later, you have to decide what your ultimate passion is, where you
really want to put your energy. Otherwise, you run the risk of being
consumed by detours that don ’ t really get you where you want to go.

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44 L E A D E R S H I P T H E H A R D W AY

For Andy, the focus of his passion was clear: building Intel
into a great company. At the time he was completely preoccupied
with the challenge of turning great technical ideas into profi table
products. But I had a different perspective. For me, the task of
building Intel certainly was important — but only if, over time, it
could be a vehicle for me to create something in Israel. Although
I had adjusted quite well to U.S. culture, I wanted to get back to
my friends and social networks in Israel. Even more important, I
was convinced that my opportunity to have an impact and make a
contribution was far greater in Israel than in the United States. In
1971 I knew that the company really wasn ’ t ready to take that step.
And I worried that if I devoted myself to the EPROM, I might go
down the path of a U.S. management career and that would take
me too far away from my vision. So I felt the timing was right to
walk away. In a sense, my decision to spend a year in Africa was
a kind of compromise, a way to detach myself from Silicon Valley
and California, even though I wasn ’ t quite ready to go back to
Israel.

I spent fifteen months in Africa, teaching in Kumasi and
traveling throughout the continent. I suppose one could say
that my time there was a kind of detour. I was biding my time
until conditions were right for returning to Israel. But what-
ever my adventure in Africa represented to me at the time, the
fact is I learned things in Africa that proved incredibly useful in
ultimately realizing my vision — although, once again, there was
absolutely no way to know or predict that in advance.

For example, one of the things that greatly impressed me
about African culture was its rich complexity — in particular, the
way many of the Africans I met seemed to balance comfortably
multiple identities. Kumasi is the capital of the Ashanti people,
one of the key ethnic groups in Ghana, and it wasn ’ t unusual to
meet people who took great pride in their Ashanti heritage with-
out feeling any less Ghanaian. And given the pan – Africanist
ideology of Ghana ’ s founding president Kwame Nkrumah, many
also took pride in their African identity as well.

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L E V E R A G I N G R A N D O M O P P O R T U N I T I E S 45

This experience had a big impact on my thinking about the
kind of organization I wanted to create when I returned to Israel.
I slowly began to realize that I wanted to build a culture that
refl ected the best features of Intel ’ s corporate culture but also lev-
eraged the unique aspects of the Israeli “ tribe ” ! By the time I left
Africa, I knew that I was ready to go back to Israel, for the fi rst
time in nearly a decade.

Striking When the Iron Is Hot

If leveraging random opportunities sometimes means biding your
time, it also means moving quickly and striking when the iron is
hot. For me, that moment came in early 1973, when my wife and
I returned to California from Africa. My plan was to work at Intel
for six months or so in preparation to fi nally return to Israel. But
as it still wasn ’ t clear whether I could convince Intel to start an
operation there, I made arrangements to teach at a new school for
applied sciences at the Hebrew University in Jerusalem.

Once I returned to Silicon Valley, however, I kept hearing
about a severe engineering shortage in the semiconductor indus-
try. Perhaps the time was right to make my move. Immediately,
I went to Intel ’ s senior management team to suggest that we open
a small design center in Israel. There wasn ’ t a lot of discussion
or analysis of the idea. Grove, who was Intel ’ s COO at the time,
simply organized a small group — including board chairman and
leading venture capitalist Arthur Rock, head of engineering Les
Vadasz, and myself — to travel to Israel to look for potential candi-
dates. Our trip had to be postponed because of the October 1973
Yom Kippur War, and I returned to Israel by myself in January, but
the group eventually came to Israel in April 1974 and hired the
fi rst fi ve employees of the Haifa design center.

It would have been logical for me to head the Haifa operation.
Nevertheless, I elected to continue at Hebrew University and work
with Intel as a consultant. I felt that I could serve my long – term
vision better by building a cadre of trained scientists that would be

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46 L E A D E R S H I P T H E H A R D W AY

future Intel employees. I also thought the new center would have a
better chance of being integrated into the company if its fi rst man-
ager were an American. And to be honest, I had my eyes on an even
bigger prize. I knew the real action in the semiconductor industry
was not in just chip design and product development but in manu-
facturing. I wanted Intel Israel to have a semiconductor fab.

Getting Intel comfortable with the idea of setting up a modest
design center was one thing. Convincing the company to invest
in the establishment of a semiconductor fab was a challenge that
was orders of magnitude more diffi cult. Not only was it a major
financial investment — at the time, a typical fab cost in the
neighborhood of $ 150 million (today the investment is around
$ 3.5 billion). It would also be the fi rst time that Intel built a fab
outside the United States — and at a time when it was becoming
increasingly clear inside the company that manufacturing qual-
ity and reliability were essential to Intel ’ s future. So once again
I waited for the moment when the time was ripe.

A key random opportunity emerged in 1978, when I learned
that Intel founder and then – CEO Gordon Moore was planning
a study trip to Israel. I knew that among the many factors the
company considered when choosing a site for a semiconductor fab,
by far the most important was the quality of the labor force avail-
able. So when Moore came to Israel for his visit, I didn ’ t try to sell
him on the idea that Intel should build a manufacturing facility in
Israel. Indeed, I didn ’ t even bring it up. Instead, I organized a trip
that would impress him with the overall capabilities of the Israeli
scientifi c and technical community.

In those days, whenever an Intel senior executive took a
study trip of this sort, he wrote a detailed report for his col-
leagues. I ’ m not a particularly careful reader of memos. But
I pored over Moore ’ s trip report like it was a commentary from
the Talmud. Moore was not a highly demonstrative person; he
was taciturn, a man of few words. Yet I could tell, reading between
the lines, that he had been impressed with what he had seen.
Within days, I was on a plane to California to start lobbying COO

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L E V E R A G I N G R A N D O M O P P O R T U N I T I E S 47

Andy Grove for a manufacturing facility. Without making any
commitments, Grove gave me the go – ahead to start preliminary
negotiations with the Israeli government.

A critical part of the equation was convincing the government
to offer a package of investment incentives and tax breaks that
would make Israel competitive with other potential sites in the
United States or Europe. This was standard practice in the semi-
conductor industry, but it was especially important for Israel, given
the relatively high level of geopolitical instability in the region.
Fortunately, the two senior civil servants in Israel ’ s Ministry of
Industry and Ministry of Finance who were my primary counter-
parts in the negotiations well understood the potential leverage for
the economy of a major investment by Intel. But there was consid-
erable public and political opposition to the incentive package.

Like many countries in the developing world, Israel had a
relatively standard formula for attracting foreign investment in
high-technology industries. Israeli law specifi ed that for certain
advanced, high – tech sectors, the government would provide
a grant of up to 38 percent of the total amount invested. But
the overall size of the total investment in this project — $ 150
million — was the largest ever in the country ’ s history, which made
the government subsidy a relatively large number as well: nearly
$ 60 million.

This number provoked a lot of opposition. Two related argu-
ments loomed large. First, the local electronics industry thought it
was unfair that so large a subsidy was going to a foreign company.
Why not support local fi rms instead? What ’ s more, some critics
argued that instead of subsidizing investment by a large global cor-
poration, it would be better to spread the money among some of
the smaller high – tech startups that were just beginning to emerge
in Israel.

My position was that any deal had to be good for Israel and
good for Intel, in that order. The prejudice against Intel as a foreign
company was something we had encountered even when we estab-
lished the Haifa design center (when there was no question of

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48 L E A D E R S H I P T H E H A R D W AY

government subsidy). People had grumbled then about “ a foreign
corporation taking our elite manpower. ” Now they complained
about subsidizing a foreign company that would “ take all its profi ts
out of Israel. ” I felt that such attitudes were a vestige of an old –
fashioned economic nationalism that was completely out of place
in an increasingly global economy. My attitude was, either Israel
is going to be a player in the global economy or it ’ s not. If it is, it
needs to intelligently leverage investment by global companies.
We had the talent to compete on the world stage. Why not take
advantage of it?

As for the startup argument, I felt that it was critical for Israeli
high tech to have at least a few “ anchor tenants ” — that is, a
critical mass of large established global corporations that would
help stabilize and develop the infrastructure of the high – tech
sector. After all, the success rate of new startups is typically in the
neighborhood of 1 to 5 percent. For the government to focus its
investment subsidies exclusively on startups was just too risky and
would result in a much lower return on investment.

Throughout the negotiation process, of course, I worked
hard to fi nd the leverage points of opportunity in the situation to
create the best deal for Intel that I could. For example, early in our
discussions I proposed that we locate the new fab in an industrial
park in Jerusalem. Most people thought it was an odd decision.
The logical choice would have been Haifa, where we already had
our design center, or the Tel Aviv metropolitan area, which was
becoming something of a center for businesses in the electronics
and computing industries. Unlike these cities, Jerusalem had very
little industrial infrastructure at the time.

But I understood that the very absence of an existing infra-
structure would be an advantage. First, it would cause the Israeli
government to award the maximum in tax breaks and other incen-
tives to win the plant — which would make us all the more com-
petitive in the internal competition against other potential sites
in the United States and Europe. Second, the very fact that there

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L E V E R A G I N G R A N D O M O P P O R T U N I T I E S 49

was little industry in the city meant that we would have more
infl uence in determining prevailing wage rates and more luck in
recruiting employees with minimal experience in Israel ’ s powerful
and, from the perspective of a global high – tech industry, too – rigid
labor unions.

After a series of tough negotiations, I fi nally had a government –
approved incentives package that I thought was competitive. But
I still had to convince Intel to build the plant. Grove declared
that there would be a “ bake – off, ” a competition between the Israeli
proposal and some alternative site. He chose an Intel executive
who was Irish to develop a competing proposal for building a new
fab in Ireland.

The bake – off took place in a large Intel conference room before
the company ’ s senior executives. As I made our presentation, I felt
confi dent. The competing proposal had an assigned champion, not
a real one. As I moved through my presentation, I felt the energy
in the room shift in my direction.

Then, near the end of my presentation, Grove asked suddenly,
“ What about training? ” He meant, how were we going to train our
brand – new workforce to start up and run the new fab? No problem,
I explained. We would send the initial workforce of some 150 to
200 people to the States to work in Intel fabs there. Once trained,
they would return to Israel and train the rest of the staff. Grove hit
the roof. “ Absolutely not! ” he answered. “ Do you have any idea how
much it will cost to bring all those people to the States and train
them? And it will be a major drag on the productivity of the U.S.
fabs. ” With that, the meeting ended. I didn ’ t even get the chance to
fi nish my presentation. After all our effort, the plan seemed dead.

I was completely unprepared for Grove ’ s response. It had never
occurred to me that the training issue would be a deal – breaker. By
this point, however, I knew Grove pretty well. In particular, I knew
that the Andy in public was different from the Andy in private.
I immediately followed him down to his offi ce and caught up with
him just before he was leaving to go skiing for the weekend. “ You

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50 L E A D E R S H I P T H E H A R D W AY

need to give me one more chance, ” I said. We scheduled another
meeting for the following week.

All weekend long, I worked with the training staff to see if
we could fi nd a solution to the high costs of the training program.
After analyzing the data and talking with some of the heads of
other Intel fabs, we came to a new insight. Yes, the impact on
fab productivity of training the Israeli workforce would be nega-
tive in the near term. But over time, as they learned how to run a
fab, their presence would begin to be a major benefi t. By the end
of the six – month training period, they would even be contributing
to the productivity of the U.S. fabs. We created a graph show-
ing how the impact of the trainees would over time contribute to
the U.S. fabs. It was that graph that clinched it when I met with
Grove the following week.

The groundbreaking for the Jerusalem fab took place in July
1981. Jerusalem mayor Teddy Kolleck was there, as were the
two civil servants who had led the negotiations for the Israeli
government, but that was it as far as the politicians were concerned.
To be honest, I think there was still a lot of skepticism that we
could pull this complex project off. Some of that skepticism was
warranted. This was the fi rst time that Intel had ever built a fab
outside the United States. It was the biggest construction project
in the history of Israel up to that time. And we had an entire new
workforce to train. It took roughly three and half years to com-
plete the project. The fab fi nally opened for business in May 1985
and began running — appropriately, but coincidentally — the latest
version of Intel ’ s EPROM chip.

The establishment of the Jerusalem fab also represented a major
step in my own career. Not long after approving the deal, Grove
pulled me aside to say, “ Dov, the design center is one thing, but man-
ufacturing is a much bigger deal. You ’ re going to have to run it. ” So
I stepped down as director of the applied science school at Hebrew
University to rejoin Intel as the Jerusalem fab manager and general
manager for Intel Israel. My evolution into the leader of Intel Israel
was complete. But my education as a leader had just begun.

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L E V E R A G I N G R A N D O M O P P O R T U N I T I E S 51

Going Through the Window

Success always appears inevitable in retrospect. But at any number
of points in this long multiyear process, things could have gone
wrong. Indeed, occasionally they did. For example, a few years
later, in 1993, we negotiated a new package with the Israeli
government to expand the Jerusalem fab — only to see the deal fall
through when, at the last minute, Intel decided to build its next
fab in Arizona, not Israel. (It was that decision that forced us to
modernize the original fab.) But we stayed fl exible, all the while
not taking no for an answer, and we won the next round in 1995
when we got the go – ahead to build a second Israeli fab, this time in
the town of Qiryat Gat, in southern Israel near the Negev Desert.

When we established the Qiryat Gat fab, I had to go through
the same political fight as I had when we were negotiating
for the Jerusalem site. There were the same critiques and the
same opposition — only this time, because the investment (and
therefore the amount of government subsidy) was so much bigger
and the process was so much more public, it was an even tougher
confl ict. But in the end we won. And Qiryat Gat is where Intel is
building its third Israeli fab today.

Andy Grove used to say, “ The thing about Dov, if he can ’ t
come through the front door, he goes through the window. ” It ’ s
true. I don ’ t take no for an answer. I ’ m always trying to fi nd that
opportunity in the middle of whatever the problem or challenge or
crisis of the moment may be — and take advantage of it. Effective
leaders are good at finding random opportunities — and then
exploiting them.

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c03.indd 52c03.indd 52 2/2/08 10:49:23 AM2/2/08 10:49:23 AM

53

4

LEADERSHIP UNDER FIRE

Sooner or later, every leader faces a moment of truth — a crisis or
challenge that tests his or her leadership ability to the utmost. For
me, that moment of truth came in 1991 when I had to guide Intel
Israel through the crisis of the First Gulf War and the Scud missile
attacks of Saddam Hussein ’ s Iraq on Israel. In the days before the
start of the war, I had to make a critical decision with potentially
life – threatening consequences for our employees: whether to keep
our operations open, despite the threat of the missile attacks, or to
close down until the crisis had passed.

Of course, many businesses remain open during wartime.
But in the days before the First Gulf War, Israel confronted what
appeared at the time to be an unprecedented threat. The Israeli
military assumed that Iraqi missiles would be carrying chemical
weapons. The government distributed gas masks and ordered every
household to prepare a special sealed room in case of chemical
attack. Most serious from a business perspective, in anticipation
of the missile attacks the Israeli civil defense authority instructed
all nonessential businesses to close and their employees to remain
at home. The radical uncertainty of the situation — not knowing
how many missiles would fall, where they would fall, what kind of
destruction they would infl ict — threatened to bring our business
to a halt, even before a single missile had been launched.

It would have been easy to follow the civil defense instruction
and close down. Everyone was doing it. Intel ’ s senior executives in
California would have understood. Many of our employees would
probably have appreciated the opportunity to focus on preparing
their families for the attacks. Yet I chose to ignore the government
directive, keep our operations open, and ask our employees to con-
tinue to come to work.

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54 L E A D E R S H I P T H E H A R D W AY

Some people thought I was being irresponsible. What right
did I have to risk people ’ s lives in time of war? Others thought
I was crazy. What if any of our employees were killed? What if
the government took legal action? What if disgruntled employees
went to the press?

Despite these risks, I stuck to my decision because I was con-
vinced that shutting down our operations was a direct threat to the
long – term survival of Intel Israel. And Intel ’ s employees responded.
In the fi rst days of the Scud attacks, when businesses throughout
the nation were closed, roughly 80 percent of Intel ’ s employees
showed up for work, day in and day out, day and night shifts
included. Thanks to their heroic performance, Intel Israel was one
of the few businesses in Israel (and our Jerusalem semiconductor
fab the only manufacturing operation) to remain open throughout
the entire six weeks of the war. Not only did we keep our commit-
ments to global Intel, but we also established the reputation that,
over time, would allow us to grow Intel Israel into an important
center of excellence for the corporation.

The story of our actions during the First Gulf War is a dramatic
example of the challenges to leadership in an environment of
extreme turbulence. Believe me, you don ’ t really know what
turbulence means until you have had to run a business during a
war! The experience taught me a lot of lessons: about the limits of
even the best – laid plans, the impossibility of anticipating risks, the
imperative of radical improvisation, the necessity of trusting your
instincts.

But even more important, the story also effectively illustrates
the three key principles of leadership the hard way described in
previous chapters. Because I was so focused on our survival and
continuously wary about potential threats to it, I was able to
recognize that whatever else the Scud attacks represented, they
were also a potential threat to the long – term viability of our busi-
ness. Because I was committed to leading against the current, I was
able to make the unconventional decision to stay open — despite
the many risks involved and despite the fact that most businesses

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L E A D E R S H I P U N D E R F I R E 55

in Israel were taking the prudent route and shutting down. And
although it may sound unfeeling, because I was always on the
lookout for random opportunities, I understood intuitively that
the First Gulf War was not only a threat but also an important
opportunity. If we could meet our commitments despite the Scud
attacks, we could establish Intel Israel ’ s reputation in the company
for years to come.

A Different Kind of War

By the early 1990s, Intel Israel had grown from a small outpost of
chip designers to become a major part of Intel ’ s burgeoning global
production system. In 1986, not long after the introduction of the
386 microprocessor, Intel ’ s senior executives had made a critical
strategic decision: instead of licensing the 386 design to another
semiconductor company in order to provide customers with
a second – source supplier (a common practice in the semiconductor
industry at the time), Intel would be the sole supplier of the prod-
uct. This gave the company the potential to maintain a highly
profi table monopoly on supply of the 386 — but it also put intense
pressure on Intel ’ s fabs to keep up with soaring demand.

By the early 1990s, our Jerusalem fab, Intel ’ s fi rst outside the
United States, was a key player in executing this single – source
strategy. We were responsible for about three – quarters of the global
output of the 386 and were gearing up to compete inside Intel for
production of the new, more advanced 486 chip. We were operat-
ing seven days a week and running two twelve – hour shifts in order
to keep up with customer demand. Meanwhile, our design center
in Haifa was hard at work on developing new products that would
be critical to Intel ’ s future, including key components of what
would become the next – generation Pentium microprocessor.

When Iraq invaded Kuwait in August 1990, I knew that
war was likely. So I appointed a task force of senior managers to
develop a contingency plan in case Israel was drawn into the con-
fl ict. At the time, we were assuming it would be a conventional

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56 L E A D E R S H I P T H E H A R D W AY

war, and we were confi dent that we could handle it. We had had
experience with what war would mean for our business from the
call – up of reservists during Israel ’ s incursion into Lebanon in 1982.
We had contingencies for replacing key personnel who were called
up to the military, for operating the plant on a skeleton crew, and
for scaling back the private transportation service we used to bring
our employees to work at the Jerusalem fab (a typical arrangement
at most large Israeli companies).

But almost from the moment we finalized our contingency
plan, signs began to accumulate that this war would be very dif-
ferent. The politics of the U.S. – created anti – Iraq coalition made it
imperative that Israel stay out of the war. Yet for that very reason
it was in Saddam Hussein ’ s interest to provoke Israel to intervene.
By September, U.S. satellites had detected the transport of bal-
listic missiles to western Iraq — a mere seven minutes ’ fl ight time
from Tel Aviv. Israeli defense offi cials were saying that chemical
attacks on the country ’ s major population centers were likely, a
belief that was confi rmed when the government leased two batter-
ies of Patriot anti – aircraft missiles (adapted for use against ballistic
missiles) from the United States. Instead of being behind the lines
of the war zone (something we were used to), we ran the risk of
being the war zone.

In October, tensions mounted when the government issued
every Israeli a personal protection kit, complete with gas mask and
atropine injectors to combat chemical poisoning. Families were
also instructed to create sealed rooms in their houses and apart-
ments with plastic sheeting and masking tape. There was some-
thing about receiving those kits, being instructed to carry your
gas mask with you wherever you went, having to prepare a sealed
room, that brought the uncertainty and potential danger of the
situation home in a palpable way.

By the turn of the year, as the U.S. – set January 15 deadline for
Iraqi withdrawal from Kuwait drew near, my disquiet had grown.
Many airlines suspended fl ights to Israel. The governments of the

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L E A D E R S H I P U N D E R F I R E 57

United States and Great Britain advised their nationals to consider
leaving the country. Then on the fi fteenth itself the Israeli govern-
ment announced that all schools would be closed for the rest of
the week. Slowly it was dawning on me that our contingency plan
might be irrelevant to what was likely to be anything but an ordi-
nary war.

Yet despite all these warning signs, it still came as a complete
surprise when I woke up on Wednesday, January 16, to the news on
the radio that in anticipation of the start of hostilities and likely
missile attacks, the Israeli Civil Defense authority was instruct-
ing businesses to close and everyone but essential emergency
personnel to remain home. It was only then that I fully under-
stood: we were facing a completely different kind of problem
than the one we had anticipated. This wasn ’ t just a matter of a
call – up of reserves. The government was telling us that nobody
should come to work. I immediately called a meeting of the task
force at the Jerusalem fab.

A Question of Survival

In the twenty minutes it took me to drive from my home in the
historic village of Ein Karem on the southwestern outskirts of
Jerusalem to the plant in the Har Hotzvim Industrial District,
I kept revisiting in my mind the logic of what I was about to do. It
seemed almost irresponsible to be worrying about business in the
midst of potential physical danger. Yet if I didn ’ t think about
the possible consequences, who would?

I was convinced that a complete shutdown of our operations
threatened the long – term survival of Intel Israel. Managing a major
unit in a global corporation is a continuous fi ght for resources.
When we fi rst proposed setting up the Jerusalem fab in the early
1980s, we were put in competition with Ireland to see which
country could develop the better proposal. We had won that
round, and by the early ’ 90s we were already starting the process of

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58 L E A D E R S H I P T H E H A R D W AY

negotiating and lobbying inside Intel to convince senior manage-
ment to expand the Jerusalem fab.

I knew Intel ’ s leaders well and had good relations with them.
I had worked with Andy Grove at Fairchild and had been among
the fi rst generation of employees after Gordon Moore and Bob
Noyce founded Intel in 1968. I was confi dent that if we had to
interrupt production due to the war, executives in Santa Clara
would understand. I wasn ’ t worried that there would be a negative
impact in the short term.

But as Intel grew larger, decision making was becoming more
decentralized. The key stumbling block to further investment in
Israel was the lingering impression of geopolitical instability in the
region. Indeed, we had already had a number of struggles inside
the company over the transfer of strategic technologies and criti-
cal products to the Israeli operation. Therefore I was convinced
that if we had to interrupt production, even for a brief period of
time, we would pay a serious price over the long term.

I had had a glimpse of the risks during a phone conversation
with Intel ’ s then executive vice president, Craig Barrett, the pre-
vious September. Barrett was on a stopover in Amsterdam on his
way to Israel for a routine annual operations review. But he called
to tell me that he was considering canceling the trip. “ Grove [then
Intel ’ s CEO] is worried about my coming to Israel, ” he told me.
“ He thinks it ’ s too dangerous. ” Although I convinced him that it
was safe, and he continued his trip as planned, the call provoked a
twinge in my gut. If Intel ’ s senior executives were seeing Israel as
unsafe, what would that mean for our business?

My concern wasn ’ t only for the survival of Intel Israel. It was
also for the survival of Israel ’ s emerging high – tech sector. Intel
Israel was a key anchor of Israel ’ s still small high – tech economy.
If we couldn ’ t operate in an emergency situation, the trust of
multinationals and venture capitalists in the stability of the Israeli
business environment might crumble.

So as I drove to the task-force meeting, I made a quick decision.
We weren ’ t going to take the easy way out. We would ignore the

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L E A D E R S H I P U N D E R F I R E 59

civil defense instruction. We were going to ask our people to come
to work.

Thinking Differently

“ This is a completely different situation, ” I said at the start of the
task-force meeting on Wednesday afternoon, “ so let ’ s think dif-
ferently. ” The fi rst thing we did was to throw out our contingency
plan. The next was to ask how we could keep operations going
despite the civil defense directive.

In Israel, there is an offi cial category of businesses known as
MELACH (an acronym for Meshek Lishe ’ at Cherum ’ or “ economic
infrastructure in a state of emergency ” ). These companies — for
example, utilities, defense contractors, the national telecommuni-
cations network, and the like — are designated as essential for the
ongoing functioning of the economy and are allowed to operate
even during offi cially declared national emergencies. But we didn ’ t
have that legal status. The fact is, we had thought about applying
for it in the past but just never gotten around to it. It had been
pushed aside by more immediate and, at the time, more pressing
concerns. And even if we applied for this essential – industry status
right away, under the current circumstances who knew how long it
would take to receive it? We decided we were going to act like we
already had it until and unless somebody told us otherwise.

For three hours, we discussed the full range of risks that
remaining opened entailed. The main risk, obviously, was the
potential injury of any of our employees on their way to and from
work. People had sealed rooms at home, and we had created them
in all our main facilities, including the Jerusalem fab. But what
about during their daily commute? This was complicated by the
fact that we had a contract with a private transportation com-
pany to bring our employees to work at the Jerusalem fab, so if
we were going to remain open, not only our own employees but
also the transport company ’ s employees would be at risk. I weighed
the physical risk to our employees and contractors heavily, but

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60 L E A D E R S H I P T H E H A R D W AY

in the end concluded that if it was safe enough for employees at
the utility company and the phone company to travel to work,
there was absolutely no reason why we shouldn ’ t risk it as well.

At the Wednesday task-force meeting there were few
objections to the idea of remaining open. To be honest, the whole
prospect of missile attacks seemed so theoretical as to be literally
impossible to imagine, almost unreal. In the end we decided that
we would issue a “ call ” for Intel employees to continue to come to
work — a recommendation, not an order. No one would be pun-
ished if they decided to stay home. I made it extremely clear to my
direct reports that there would be no coercion. No manager was to
pressure employees to come to work who did not want to do so.

This prohibition was especially important to me — and not
just for ethical reasons. The problem with coercion is that it often
leads to backlash, creating the very resistance that it is meant to
overcome. When you order people to do something, their fi rst
reaction is often “ Wait a minute, if they have to force me, there
must be a problem with the whole thing. ” I knew that I couldn ’ t
control every single action of all my managers. But I could make
it clear that there would be no direct pressure. At the same time,
I was confi dent that we had embedded a strong instinct for sur-
vival in our organizational culture and that people would respond.
“ Let the Intel Israel culture do its work, ” I advised. After all, peer
pressure is the most powerful motivator.

We would also make it clear that keeping Intel Israel open for
business was critical to the future success not only of the organiza-
tion but also of Israel ’ s high – tech economy. I believed strongly that
the only way I could expect Israelis to take a risk was if doing so
was critical to the country, not just to the company.

We communicated our decision to the workforce on Wednes-
day. On the following day, with still no sign of missile attacks,
turnout was relatively normal. But that Thursday, January 17, was
also the start of the allied bombardment of Iraq. What only one
day earlier had seemed like a theoretical possibility would very
quickly become reality.

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L E A D E R S H I P U N D E R F I R E 61

The First Attack

At 2:00 in the morning on Friday, January 18, I was awakened
by the sound of an air – raid siren. I joined my wife and teenage
children in the sealed room of our Jerusalem home and listened to
the radio for the news. Eight missiles had landed in Tel Aviv and
Haifa; as far as the authorities could tell, there were no chemical
warheads. I got on the phone to the members of the task force
and told them to meet me at the plant. I grabbed my gas mask and
headed out into the night for the Jerusalem fab.

When I arrived around 3:30, work in the cleanroom had already
resumed. At the sound of the alarm, the employees had evacuated
to the sealed room, except for a few who agreed to stay behind to
operate some etching machines that needed continuous human
presence to keep the fl ow of materials going. After the report that
the missiles had landed, employees were given the opportunity to
call home before returning to the cleanroom. Things were tense,
but relatively normal.

When the task force convened, we reaffi rmed the decision to
call people to work. Managers had to be contacted and instructed
what to say to their staff. Employees had to be called and told that
the plant would indeed be open. The transportation company
needed to devise alternate routes to get around police roadblocks.
In the chaos of a crisis situation, clear communications are
especially important. So we spent the bulk of our time planning
exactly what to say to our workforce and coordinating our commu-
nications with our counterparts in Intel in the United States, who
would be wondering what impact the missile attack was having on
our operations.

Some 75 percent of the employees on the 7:00 AM shift made
it to the plant. Although I hadn ’ t told anyone, I had been expect-
ing maybe 50 percent. The relatively high turnout was a major
endorsement of our decision.

That night, after being at the plant for nearly sixteen hours
straight, I called Intel senior executives in Santa Clara. I stayed at

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62 L E A D E R S H I P T H E H A R D W AY

the plant because I didn ’ t want to call them from my home. I had
no idea what their reaction was going to be, and I wanted them
to see that Intel Israel was operating as normal — or as close to
normal—as possible under the circumstances. I explained that we
had decided to remain open, but we weren ’ t forcing any employees
to come to work who didn ’ t feel comfortable doing so, and that
so far turnout was quite good. They asked a lot of questions; we
discussed the potential risks. But in the end they were 7,500 miles
away. Under the circumstances, they simply had to trust us.

“ Scud Business as Usual ”

The second Scud attack came the following night, early on
Saturday. No one was killed, but some people were injured. And
Intel ’ s employees kept coming to work. When the design center in
Haifa opened on Sunday (the fi rst day of the normal Israeli work-
week), turnout was up to 80 percent.

After the first few days, we entered a period that I took to
calling “ Scud business as usual. ” Attacks continued to happen. On
Tuesday night, for example, after two days with no Scuds, there
was an especially destructive attack outside of Tel Aviv that led to
the deaths of four people, wounded ninety – six, and left hundreds
homeless. But we carried on as if everything were normal, and no
one tried to stop us. By the middle of the week, the civil defense
authority was urging all Israelis to go back to work, so the fact
that we were open for business was no longer so unusual. Still,
because the schools remained closed, absenteeism at most busi-
nesses remained extremely high. The stress was enormous, and
I and my team did all we could to boost employee morale.

As our actions on the night of the fi rst attack suggest, constant
communication was essential. The task force met daily to assess the
rapidly changing situation and plan our communications for
the day. We used every means we could — phone, email, on – site
meetings, face – to – face conversations — to keep our employees
informed of the latest developments. I was traveling continuously

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L E A D E R S H I P U N D E R F I R E 63

among the three Intel sites in Israel — the fab in Jerusalem, the
design center in Haifa, and our small sales – and – marketing opera-
tion in Tel Aviv — to meet with managers and employees in caf-
eterias and on production lines. I felt it was essential that I, as
the organization ’ s leader, be present to employees “ in the fl esh. ”
Over and over again, I tried to make three points: fi rst, to rein-
force employees ’ sense of pride at what they were accomplishing;
second, to remind them that we weren ’ t out of the woods yet — as
far as we knew, the worst might still be yet to come; and third,
to stress that this largely unforeseen crisis was also an enormous
opportunity and we had to take advantage of it. It was time to
show Intel and Israel what we could do.

We also took great care in our communications to global
Intel to keep senior executives informed of the developments on
the ground in Israel. After the fi rst few days of attacks, I sent a
comprehensive email to Intel senior management describing
how we were meeting the “ war challenge ” and delivering on our
commitments to the corporation. Andy Grove sent us an extremely
supportive letter in response, which I had posted on bulletin boards
throughout the organization. His strong public endorsement had
an enormous positive impact on employee morale.

Today, some fi fteen years later, the decision to continue with
business as usual may not seem so radical. At the time, however,
it was pretty controversial. In the white heat of the fi rst few days
of crisis, everybody operated on instinct. People were so busy that
they barely had time to think. But once things settled down into
“ Scud business as usual, ” some doubts and questioning began to
emerge.

Some saw the decision to remain open as an act of courageous
leadership, but others viewed it as an unnecessary risk, literally
playing with the lives of employees. Some wondered how we
could justify risking people ’ s lives for a company that wasn ’ t even
Israeli. Relatively few people actually refused to come to work, but
some were bitter for quite a while. And one individual, who did
refuse to come to work — and not only during the fi rst week, but

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64 L E A D E R S H I P T H E H A R D W AY

also in subsequent weeks after the civil defense directive had been
withdrawn — eventually had to be let go.

But these complaints never really cohered into full – fl edged
opposition to the decision. For one thing, whatever doubts some
people had, there was the basic fact that the vast majority of
employees had indeed shown up. A successful risk is seldom chal-
lenged in retrospect.

In the years since the war, I have often wondered why so many
answered the call. Partly, I suspect, it was because coming to work
was a welcome alternative to the psychological paralysis brought
about by first the prospect and then the reality of the missile
strikes. One of the advantages of doing the unexpected is that it
can have a galvanizing effect. It shakes people out of their passivity
and helps mobilize them for action. At Intel Israel, our bias to go
against the current made it natural to decide to remain open even
though most businesses in Israel suspended operations. It was the
perfect antidote to terror.

Another part of it, I think, is that the call didn ’ t come in a
vacuum. We had been talking for years about the imperative of
survival and the need to do whatever it takes to be the best. So
though not everyone may have agreed with the decision to keep
operations open, most understood why we were doing it and trusted
that we had the best interests of the people and the organization
at heart.

Another important lesson I learned during this period was
that when it comes to leading in a crisis, good instincts are a lot
more important than good planning. The problem with cha-
otic situations like war is not so much that you can ’ t anticipate
everything — it ’ s that you really can ’ t anticipate anything. All you
can do is trust your instincts, embrace the chaos, and then deal
with the consequences as they emerge.

One issue, for instance, that I completely underestimated was
the impact of my decision on our employees ’ families. To her credit,
my head of human resources had raised the issue early on. The only
woman on the crisis task force, and a mother, she was sensitive

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L E A D E R S H I P U N D E R F I R E 65

to the implications of our decision for our female workforce
(about half of the employees at the Jerusalem fab were women).
I remember her asking, at the task-force meeting when we decided
to remain open, “ Can we really ask mothers to be separated from
their children during the threat of missile attacks? ”

At the time I didn ’ t exactly dismiss her question. But in the
total scheme of things, dealing with the family fallout was not my
highest priority. I felt that such separations were inevitable in a
situation in which the “ front ” was potentially everywhere.

Her concerns, however, turned out to be prescient. A few days
into the attacks, a manager at the Jerusalem fab reported that the
lobby was crawling with young children. Some of our employees,
especially women, were bringing their kids to work. After all, the
schools were still closed and, just as my HR head had predicted,
people didn ’ t want to be separated from their children in case of
an attack.

But here is the great thing about embracing the chaos. Faced
with this unanticipated development, the organization responded,
almost automatically, by temporarily entering the child – care busi-
ness. Local managers in Jerusalem set up a day – care center in a
support building of the fab. It had never occurred to anybody on
the task force (including my HR head) that establishing a tempo-
rary day – care center for employees ’ children might be a good thing
to do. But once faced with the fact that concerned parents were
bringing their children to work, it was an obvious step to take.
Throughout the Scud attacks, on any given day as many as fi fty
children were in the center.

Throughout the war, there were a lot of examples at Intel
Israel of this kind of improvisational everyday heroism. For me,
one story best captures the way the organization rose to the occa-
sion. A team from the Haifa design center was on a conference
call with its U.S. counterparts when the alarm signaling a Scud
attack began to sound. To the amazement of their U.S. colleagues,
they calmly asked for a brief interruption in the meeting so they
could move to the site ’ s sealed room, located in the computer

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66 L E A D E R S H I P T H E H A R D W AY

center, then resumed the call a few minutes later as if nothing had
happened.

Delivering — No Matter What

The last Scud attack took place on February 25, not quite six
weeks after the bombardment of Iraq had begun and one day
after the start of the ground war. On Thursday, February 28, the
Israeli state of emergency offi cially ended. All told, some thirty –
nine Scuds in eighteen separate attacks landed on Israeli territory
during the five and a half weeks, none carrying chemical war-
heads. Although only one person was killed directly by an attack,
seventy – four people died of indirect causes — for example, from
heart attacks brought on by the missile strikes or by suffocation
due to improper use of protective gear. More than two hundred
were wounded by blasts, flying glass, and shrapnel. Property
damage to some 4,000 buildings was in the millions of dollars. And
some 1,600 families had to be evacuated. 1

The war had indirect economic costs as well. According to
the Israeli Ministry of Finance, industrial output during the war
was at about 75 percent of its normal level. The costs to the Israeli
economy in lost output totaled approximately $ 3 billion.

At Intel Israel, we were extremely fortunate. None of the Scuds
landed in the Jerusalem area where most of our people worked.
No Intel employee or family member was injured or rendered home-
less by the attacks. And in terms of the economic impact, both the
Jerusalem fab and the Haifa design center were able to meet all of
their manufacturing and product development commitments.

The thing about chaos is that there is no good information.
We had spent a lot of time and energy during the crisis trying to
anticipate the legal ramifi cations of disobeying the government ’ s
instruction to close down. Imagine my surprise when I learned,
weeks after the attacks began, that the civil defense directive to
stay home from work had the status of only a recommendation,
not a legally binding order. At the time, most people, ourselves

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L E A D E R S H I P U N D E R F I R E 67

included, had assumed exactly the opposite. So our decision to
keep operations open was, from a legal point of view, not so risky
after all.

To this day, I ’ m convinced that meeting our commitments to
Intel during the First Gulf War was critical to the future evolu-
tion of Intel Israel — and, indeed, of the entire Israeli high – tech
economy. A few years later, in 1995, Intel invested in its second
semiconductor plant in Israel, at Qiryat Gat. In 1999, the Haifa
design center won the assignment to develop Intel ’ s Centrino
mobile computing technology, which was launched in 2003. And
in subsequent years, whenever we got any push – back about doing
major projects in Israel, it was always helpful to remind our col-
leagues that, as the experience during the war had demonstrated,
“ Intel Israel delivers, no matter what. ”

What ’ s more, the culture of survival that we created during
the First Gulf War has shaped Intel Israel down to the present day.
After the initial version of this chapter appeared in the Harvard
Business Review in December 2006, 2 I received an email from
Shuky Erlich, a former Intel Israel colleague and general manager
of the Haifa design center during the confl ict between Israel and
Hezbollah in the summer of 2006. (By the way, Erlich is that
software engineer who quit Intel in protest over my no – transfer
policy, only to return a few years later.) The war with Hezbollah
was especially costly in terms of loss of life and economic disrup-
tion to the area along the Lebanese border, including Haifa. And
the challenge Erlich faced to keep the business going in the midst
of that disruption was similar to the challenge we faced during
the First Gulf War. “ I found myself looking back more than once
to the 1991 crisis and trying to fi nd answers based on what was
done in those days, ” Erlich wrote me. “ Even just to set the path
for future generations, it was important and dramatic to make the
decisions you made at that time. You were my role model during
the [recent] crisis. ”

On the one hand, I was gratifi ed to hear that the leadership
lessons we learned during the First Gulf War had taken root in the

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68 L E A D E R S H I P T H E H A R D W AY

Intel Israel culture — so much so that they were still operative after
I had retired. On the other, I was sad that due to longstanding fail-
ures of political leadership on both sides of the Israeli – Arab con-
fl ict, my colleagues still had to confront the challenges of doing
business in the middle of a war.

The situation I faced during the First Gulf War was extreme.
I sincerely hope that you will never have to face the equivalent in
your career. That said, the principles of leadership that the story
illustrates are relevant even in more ordinary and less dramatic sit-
uations of turbulence. The job of the leader is to insist on survival,
act against the current, and leverage random opportunities. In the
concluding chapters of this book, I ’ ll discuss some of the supports
you need to put in place in order to do so.

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69

5

THE SOFT SKILLS OF
HARD LEADERSHIP

As the story of the First Gulf War suggests, leadership the hard
way can be a demanding way of life. It asks a lot of the leader,
and it asks a lot of the organization. To meet those demands you
need to develop a support infrastructure that will allow you to rise
to the occasion. In this chapter, I want to focus on a key part of
that infrastructure: what I call the soft skills of hard leadership.

I was trained as an electrical engineer, and for more than thirty
years I worked at a no – nonsense high – tech company founded by
scientists and engineers. Intel ’ s culture values hard data and objec-
tive analysis. It believes in constructive confrontation and “ may
the best idea win. ” This is the hard side of business leadership. It ’ s
absolutely necessary for success in today ’ s environment.

Yet one of the most important things I learned during my career
is that leadership the hard way also requires some extremely soft
skills. These skills are so counterintuitive that they can appear to
be irrational. As a result, they are easy to devalue and dismiss. Most
discussions of leadership ignore them. But in my experience they
are just as important as the more readily accepted hard skills of, say,
strategic management, process discipline, or quantitative analysis.

Some of these soft skills have to do with what I call the inner
life of the leader. The fact is, to lead in the ways that I have been
describing so far — insisting on survival, acting against the current,
leveraging random opportunities — you need to develop a parti-
cular frame of mind, a distinctive way of perceiving and acting.
You must free yourself from habitual ways of looking at things,
cultivate an independent and questioning perspective, and be
ready to embrace alternative and counterintuitive points of view.

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70 L E A D E R S H I P T H E H A R D W AY

Other soft skills concern how leaders interact with their people.
To lead the hard way, you need to develop a close bond with your
people. In particular, you must know how to use your own behav-
ior as a mode of strategic communication to guide the organization
in the direction you want it to go.

Like leadership itself, these soft skills cannot be taught. But
once you are aware of their importance, you can begin to learn
how to develop and use them.

Freeing Up Time

Now that I am retired, I finally have the opportunity to read.
Recently I came upon the following passage by the Roman
philosopher Marcus Aurelius. “ The greatest part of what we say
and do is unnecessary, ” the philosopher writes in his Meditations .
As a result, “ on every occasion a man should ask himself, is this
one of the unnecessary things? ” 1

That ’ s good advice for leaders. Unless you can shed all the
unproductive activities that tend to fi ll up a manager ’ s schedule,
you will never have the mental shelf space to develop a fresh per-
spective on the organization and its challenges. For that reason,
the fi rst soft skill is the ability to free up time.

In my opinion, too much unproductive busyness is the bane
of the modern manager. Most managers spend a great deal of time
thinking about what they plan to do but relatively little time think-
ing about what they plan not to do. As a result, they become so busy,
so consumed by the daily round of meetings and reviews, so caught
up in fighting the fires of the moment that they cannot really
attend to the long – term threats and risks facing the organi zation.
So the fi rst soft skill of leadership the hard way is to cultivate the
perspective of Marcus Aurelius: avoid busyness, free up your time,
stay focused on what really matters.

Let me put it bluntly: every leader should routinely keep a
substantial portion of his or her time — I would say as much as
50 percent — unscheduled. Until you do so, you will never be

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able to develop the detachment required to identify long – term
threats to the organization or the fl exibility to move quickly to take
advantage of random opportunities as they emerge. Only when you
have substantial “ slop ” in your schedule — unscheduled time — will
you have the space to be able to refl ect on what you are doing,
learn from experience, and recover from your inevitable mistakes.

Leaders without such free time end up tackling issues only
when there is an immediate or visible problem. When they free
up considerable portions of their time, by contrast, leaders have
the capacity to identify and begin to address problems before they
blossom into a full – blown crisis.

Managers ’ typical response to my argument about free time is,
“ That ’ s all well and good, but here are all the things I have to do. ”
Yet we waste so much time in unproductive activity. It takes enor-
mous effort on the part of the leader to keep time free for the truly
important things.

When I was running Intel Israel, I did a variety of things to
force managers to free up their time. One of the more contro-
versial was to get rid of their administrative assistants. This may
sound paradoxical. After all, isn ’ t the whole point of assistants to
help executives manage their time, to make sure that they do not
get overwhelmed by the press of daily demands?

That ’ s what I used to think myself. But by the mid – 1990s, I was
becoming aware that assistants, the very people whose role was to
facilitate productive interaction, had actually become an obstacle
to it. It wasn ’ t their fault, of course; it was the managers ’ fault.
They saw their assistants as gatekeepers to control the demands
on their time. So they gave over control of their schedule to their
assistants. But the paradoxical result was that my people were so
overscheduled, so busy, that one could barely get any time for
meaningful interaction with them! At a certain point, it suddenly
dawned on me that the best time to reach my people was in the
evening, because they were all booked solid during the day.

At about the same time, laptop computers were just beginning
to become a common tool in business organizations. I had been the

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72 L E A D E R S H I P T H E H A R D W AY

fi rst executive at Intel to distribute them widely throughout the
organization. Every employee at Intel Israel had one. What with
email, calendaring programs, and the like, I began to think that
we could do without assistants completely. I felt that if I forced my
managers to take responsibility for the decisions about how they
used their time, they would make better use of it.

When I made the announcement that I was getting rid of
administrative assistants, my managers were furious. We had many
loud, contentious meetings in which people roundly criticized my
decision. Those meetings were tough; I think the only thing that
made them bearable was that people didn ’ t really believe I was
going to go through with it.

Eventually I came to realize that the only way my managers
would give up their assistants was if I gave up mine. I needed to
model the kind of behavior that I was asking of my people. So
I announced that my assistant of many years was transferring
to another job.

Giving up my assistant was the catalyst for a fascinating change
in my behavior. I became more direct, more focused on what
really mattered. I began interacting with people immediately — in
the moment — rather than scheduling formal times to meet with
them. When people would come up to me in the cafeteria and say,
“ I need an hour of your time, ” I would respond, “ I have fi ve minutes
right now. What ’ s on your mind? ” I estimate that my own availabil-
ity and effi cient use of time increased by at least 50 percent.

Not that being without an assistant didn ’ t cause problems. Of
course it did, but that was precisely the point. Confronting those
problems forced me to innovate. The result was a transformation
in the way I interacted with my people. For example, not long after
I got rid of my assistant, I encountered a problem that I had never
had to deal with before. I was about to leave on one of my frequent
long trips to Intel sites in the United States, and for the fi rst time
I faced the prospect of having to manage my voicemail by myself.
These trips usually lasted anywhere from ten days to two weeks,

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T H E S O F T S K I L L S O F H A R D L E A D E R S H I P 73

and during the period I was gone I would typically receive hundreds
of voicemail messages. My assistant had been an enormous help in
categorizing these voicemails for me and fi guring out which were
really important and needed to be answered right away. How to
avoid being overwhelmed by the sheer quantity of messages?

The solution I fi nally came up with was elegantly simple. I
changed my voicemail message to say that I would be out of the
country for a couple of weeks and to please “ leave only urgent mes-
sages. ” Suddenly my voicemail traffi c plummeted from hundreds of
messages to a handful — and with no discernible degradation in the
performance of the Intel Israel organization!

The moral of this story is how easy it is for the time of the
leader to be consumed by busy work and that once the busy work
is eliminated there is the space for more productive interactions,
more long – term thinking, and real work. Some of my managers
were never convinced that jettisoning their assistants was a good
idea. Yet over time many came to see the value of the change.
Interactions among the management team became more direct.
Much less time was wasted on non – value – adding activities. Slowly,
people began to realize that both their effi ciency and their avail-
ability went way up.

What happened to the assistants? Freeing up my managers ’
time resulted in freeing them up for more productive work as well.
Many of the assistants had considerable education; some even had
advanced degrees. In the vast majority of cases, we were able to
place them in more responsible positions in functional areas such
as logistics or purchasing.

Of course, an even bigger challenge than freeing up time is
fi guring out what to do with it once you have it. Most man agers
are not used to not being busy. In the rest of this chapter, I ’ ll dis-
cuss the kind of activities that managers should be focusing on.
But the starting point for all these activities is freeing up your
time. Remember Marcus Aurelius and always ask: “ Is this one of
the necessary things? ”

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74 L E A D E R S H I P T H E H A R D W AY

The Discipline of Daydreaming

I ’ m not sure why, but daydreaming has always been a big part of my
personality. I suspect it has something to do with the fact that as
a child I spent so much time on my own. Whatever the reason, it
is a powerful personal inclination. Some people fall asleep during
meetings. I daydream. And I have found the habit to be a compel-
ling resource in my role as a leader. That ’ s why I call the second soft
skill of leadership the hard way “ the discipline of daydreaming. ”

Nearly every major decision of my business career was, to some
degree, the result of daydreaming. The fi rst inklings of the vision
to “ bring something back to Israel ” emerged while daydreaming in
my professor ’ s switching – theory class. The concept of the EPROM
occurred to me while musing on the anomaly of the fl oating gate.
The decision to locate our fi rst fab in Jerusalem, not in Haifa or Tel
Aviv, was the product of blue – sky, “ what if? ” thinking very close to
daydreaming. And the origin of our subsequent decision to locate
Intel Israel ’ s second fab in Qiryat Gat was the product of a similar
vague impulse to help “ develop the South ” of Israel. To be sure, in
every one of these cases I had to collect a lot of data, do detailed
analysis, and make a data – based argument to convince superiors,
colleagues, and business partners. But all that came later. In the
beginning, there was the daydream.

By daydreaming, I mean loose, unstructured thinking with
no particular goal in mind. Daydreaming requires letting your
mind go, releasing all constraints — including the constraint of
logic! By defi nition, it ’ s not a linear process. But it can be highly
purposeful — an intensive (although unconscious) targeting and
then distilling of an idea.

In fact, I believe that daydreaming is a distinctive mode of cog-
nition especially well suited to the complex, “ fuzzy ” problems that
characterize a more turbulent business environment. Daydream ing is
a way of knowing, one that is essential for the kind of reframing nec-
essary to perceive and take advantage of random opportunities — as
I did when I redefi ned the fl oating gate problem as the potential

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T H E S O F T S K I L L S O F H A R D L E A D E R S H I P 75

solution for a whole new type of semiconductor memory. It is only
when you release your thinking from the constraints of present – day
reality that you can come up with truly radical solutions to seem-
ingly intractable problems. In this respect, daydreaming is intimately
linked with innovation and improvisation of any kind.

Daydreaming is also an effective means of coping with com-
plexity. When a problem has high degrees of complexity, the
level of detail can be overwhelming. The more one focuses on
the details, the more one risks becoming lost in them. There are
a lot of very smart people in business today who are so detail –
oriented that not only can ’ t they see the forest for the trees, they
can ’ t even see the trees for the leaves! It ’ s impossible to solve a
complex problem only analytically. To see the big picture, some-
times you just have to let your mind go free.

Every child knows how to daydream. But many, perhaps most,
lose the capacity as they grow up. Most institutions of society tend
to devalue daydreaming. The schools punish students who do it.
And in contemporary managerial culture (at least in the West),
daydreaming is too often equated with laziness and seen as an
unproductive waste of time. Given all of society ’ s taboos against
daydreaming, it took me a long time to get comfortable with the
idea that daydreaming is a critical discipline of leadership.

You can ’ t really teach someone to daydream, any more than
you can teach someone to be a leader. Nor can you schedule it or
otherwise plan for it. All you can do is try to be aware of it when
it happens — and, when it does, to appreciate it and cultivate it.
At Intel Israel, for example, one of the reasons that I sought out
people with unusual and, specifi cally, nontechnical backgrounds
was because I felt that diversity would encourage daydreaming.

It ’ s also useful for a leader to make room for experiences
designed to jump – start personal refl ection and learning. These
don ’ t necessarily have to be work – related in any simple or obvious
sense. In today ’ s turbulent economy, you never know what kind of
input is going to trigger a key insight or idea. Take time to prime
the pump for daydreaming.

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76 L E A D E R S H I P T H E H A R D W AY

In my own experience, a variety of activities have been effec-
tive catalysts for daydreaming. Some were traditional, like taking
time to go to lectures and conferences. For example, it was a
lecture by the MIT economist Lester Thurow on global competi-
tiveness that sparked the idea to get rid of administrative assistants
at Intel Israel. To be honest, I don ’ t remember exactly what it was
that Thurow said that gave me the idea. But his general descrip-
tion of the kind of organization that tended to be successful in the
new, more competitive global economy defi nitely got me thinking
of ways to make our organization leaner and more effective.

Another way I stimulated my thinking was to make an effort
to stay in touch with environments and subcultures that were
outside the usual circles I traveled in as a business executive. For
instance, at one point I agreed that Intel Israel would sponsor a
classical music series in the Red Sea town of Eilat. And for a time
I served on the board of an Israeli non – profi t foundation that used
government money to fund documentary fi lm projects through-
out the country. I made these commitments only partly because I
was interested in music and documentary fi lm – making. They were
also a way for me to interact with types of people that I would
never meet on the job — artists, musicians, fi lm – makers, and the
like. These interactions helped stimulate my own creativity and
my capacity to see my own situation in fresh ways.

Finally, I always tried to make time for a few personal avoca-
tions that would take me completely away from my day – to – day life
at Intel and put me into a totally different space. I think that is
partly why I took up fl ying at midlife. I have also been an avid
motorcyclist. And to this day I am an active bicyclist. I fi nd that
alone in the cockpit at ten thousand feet or out on the road cycling
through the Judean hills or in the Italian Dolomites is one of my
best times for letting my mind go free. I often come back with
unexpected new ideas or crazy notions that I want to explore more
systematically.

So my advice is this: try to be aware when you are daydreaming,
and instead of fi ghting it, nurture it. And try not to discourage or

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T H E S O F T S K I L L S O F H A R D L E A D E R S H I P 77

suppress it in your organization. The next time you ask a question
at a meeting and nobody answers, don ’ t automatically assume that
no one is paying attention. Maybe they ’ re daydreaming. Who
knows, some good may come from it!

Trusting — and Testing — Intuitions

Daydreaming gives birth to intuitions, ideas, or conclusions that
arise with seemingly little effort and with little or no conscious
deliberation. A third soft skill that leaders need to learn is how to
trust their intuitions and use them more actively as the basis for
decisions. When you are fl ying through a thunderstorm, you have
to act quickly, in the moment, and without necessarily analyzing
what you are doing.

A great deal of recent cognitive science research on how the
mind processes information has shown that much of our every-
day thinking, feeling, and acting operates outside our conscious
awareness. 2 Our explicit analytical knowledge is just the tip of the
iceberg. Below the surface there is a vast realm of tacit knowl-
edge that we develop without even being aware of it. Especially in
innovation – based businesses, this tacit knowledge — the kind that
can ’ t be easily codifi ed (nor, therefore, easily copied by competi-
tors) — turns out to be far more important than most organizations
think. 3

Yet in most business organizations, intuitive thinking still has a
bad rap. At Intel, for example, people tended to mistrust intuitive
decision making — what they termed, disparagingly, “ seat – of –
the – pants ” management. The common attitude was “ Show me the
data. ” I would never argue for a manager to ignore data. But leaders
increasingly face situations in which they don ’ t have all the data,
or the data are ambiguous, or the change they are contemplating
is so radical that it ’ s not yet clear what would even qualify as data.
In such situations, it ’ s important to let intuition be your guide. As
Albert Einstein once said, “ Not everything that can be counted
counts, and not everything that counts can be counted. ” 4

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78 L E A D E R S H I P T H E H A R D W AY

Of course, not all intuitions are necessarily good ones. Just as
intuition can easily be a source of new insight, it can also lead us
astray. So in addition to trusting your intuitions, you must also
test them rigorously. Indeed, I would say that systematically test-
ing intuitions is a big part of the process of trusting them. If you
don ’ t value your intuitions enough to bring them into the cold
light of day and confront them with reality, then maybe they are
not so sound after all. To effectively harness intuition, you need
a double loop. You need to test your intuitions and continuously
revise them in the light of what you learn.

Take, for example, the story that I told in Chapter Two about
switching the heads of the Haifa design center and the Jerusalem
fab. I had an intuition about the potential value of developing
more well – rounded, multidisciplinary managers through a program
of lateral transfers. I was right to trust that basic intuition. Yet
I didn ’ t really test it in advance. For example, I made the job
change without consulting any of the Intel managers back in the
States who were responsible for running the company ’ s design and
manufacturing functions worldwide. I was worried that if I started
consulting people, that would be an open invitation for them to
come up with reasons not to make the change.

It took the failure of the manager assigned to run the Haifa
center for me to realize the important elements that I had left
out of my plan — specifically, the need for extensive senior –
management support to help the transferred managers learn the
culture of the new units they were running. To be sure, I learned
from this mistake and changed the transfer program accordingly,
but that knowledge came at a very high cost: the failure (and, ulti-
mately, the loss to the company) of a good manager. In retrospect,
it would have been far better to find ways to test my intuition
before plunging ahead with the transfer program.

One way to make sure you test your intuition is to create and
encourage a culture of dissent. By promoting strong people who
will stand up to you and say no, you can create an environment
in which your intuitions have to run the gauntlet of constructive

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T H E S O F T S K I L L S O F H A R D L E A D E R S H I P 79

criticism. For example, there was one veteran employee at the
Haifa design center who was challenging me all the time. To be
honest, I had extremely ambivalent feelings about this individual.
It ’ s no fun to be constantly challenged and criticized. Yet in the
end I was glad he was there. He kept me on my toes.

Encouraging and welcoming challenges to your intuitions
doesn ’ t necessarily mean always backing down. It ’ s a balanc-
ing act — remaining true to your core intuitions even as you take
into account disagreement and adapt your ideas to criticism and
dissent. Indeed, the stronger you are as a leader, the less likely it is
that you will back down and the harder it will be for your people to
challenge you — which is all the more reason to surround yourself
with strong people who will push their own points of view just as
persistently as you do your own.

By defi nition, intuitive knowledge cannot be taught. Rather, it
is the product of an individual ’ s specifi c experiences. But it is pos-
sible to educate your intuitions — for example, by actively seeking
out feedback, by exposing yourself to new situations and new envi-
ronments that will spark your learning, by systematically exploring
the connections between seemingly unrelated phenomena, or by
carefully considering the trade – offs between alternative courses of
action. 5 But the fi rst step is to trust your intuitions and use them to
inform your actions.

Communicating Through Behavior

So far, the soft skills I have discussed concern the internal mind –
set of the leader. But leadership the hard way isn ’ t just personal; it
is also interpersonal. It requires close bonds with your people. Take
the example of my experience during the First Gulf War. There
was no way the people of Intel Israel would have responded to my
call and kept working if they didn ’ t already trust that I had their
best interests at heart.

How does the leader build that trust? One important way is by
staying true to shared values. Indeed, values are so important that

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80 L E A D E R S H I P T H E H A R D W AY

I will discuss them in a separate chapter. Another way is through
continuous communication — like the high – bandwidth communi-
cation we engaged in during the First Gulf War. But what I want to
focus on here is something different: the way leaders must use their
behavior strategically in their interactions with their people.

Leadership is about action. A leader needs to act in order to
get things done. But action is also a form of communication. There
are many situations in which a leader acts in a certain way to com-
municate his vision and values for the organization. The fi nal soft
skill you as a leader must cultivate is becoming aware of the impact
of your behavior on the organization — and using that behavior,
strategically, to move the organization in the direction in which
you want it to go.

One of the most difficult things for most leaders to under-
stand is just how sensitive the organization is to every move that
the leader makes, every perturbation of style or mood. The eyes
of the organization are always on you. People will watch your every
step and emulate what you do. This is a powerful tool in the sense
that the leader ’ s behavior helps create the organization ’ s culture.
Everything you do will be refl ected in the organization. But unless
you cultivate a double awareness about your behavior, you can end
up doing things that inadvertently contradict what you say and
what you intend.

It took me years to realize just how powerful an impact my
actions could have on employees at Intel Israel. Once, for exam-
ple, I chewed out a subordinate at a team meeting for some error
(I forget what). At the next meeting of the group, the individual
didn ’ t show up. I asked a colleague where the missing manager
was — only to be informed that he had been so upset at my criti-
cism that he had become ill!

Another time, lost in thought, I passed a colleague in the
hallway without saying hello. It was only later that I learned that
my silence had caused him considerable anxiety. Had he done
something wrong? Was he no longer on my good side? My non-
response, which was completely inadvertent, made him genuinely

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T H E S O F T S K I L L S O F H A R D L E A D E R S H I P 81

worried that he had done something to damage his standing in the
organization.

Or consider my decision to eliminate administrative assistants.
When I fi rst announced the change, I couldn ’ t understand why
nothing was happening. As strange as it may sound in retrospect,
it took me three months to fi gure out that until I removed my own
assistant, nobody else was going to make the change. They just
didn ’ t take it seriously. It was only by acting that I could make real
the seriousness of my intention.

As I became more aware of the impact of my behavior, I tried
to use it consciously not just to get things done but also expli-
citly to send a message. In 1982, for example, during the construc-
tion of the Jerusalem fab, I arranged for a three – month stay at an
Intel fab in Beaverton, Oregon, to learn the ins and outs of semi-
conductor manufacturing management. Because the stay would be
relatively long, my wife and children were coming with me, and
we had rented an apartment in Beaverton. A few days before we
left, however, I heard news from Intel corporate that complicated
my plans.

The early ’ 80s were a diffi cult period for Intel. The semicon-
ductor industry was mired in recession, and the downturn had
had a strong negative impact on Intel ’ s fi nancial health. In 1981,
for example, sales and profi ts had declined precipitously, for the
fi rst time in the company ’ s history, and Intel ’ s market cap was cut
nearly in half. And in 1982 Intel ’ s key customer, IBM, bought
20 percent of the company on the theory that a major cash infu-
sion was necessary to ensure its survival. As part of the internal
effort to deal with hard times, Intel instituted an across – the – board
10 percent pay cut. The announcement of the new plan was sched-
uled for a few days after my departure.

The timing posed a personal dilemma. I felt it was essential
that I, as Intel Israel ’ s leader, deliver the bad news myself — not
fob the task off on my subordinates. Yet if I delayed my depar-
ture, especially without explaining why, people would know that
something was up. I suppose I could have organized a conference

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82 L E A D E R S H I P T H E H A R D W AY

call and announced the news to the Intel Israel staff from Oregon,
but frankly I didn ’ t even consider it. At this moment of uncer-
tainty and crisis, I strongly believed I needed to be present “ in
the fl esh. ” So, much as I hated to admit it to myself, what I had to
do was clear: I fl ew to Oregon with my family, as scheduled, got
them settled in our apartment there, and then immediately fl ew
back to Israel to personally make the announcement of the pay
cut. After informing my people and dealing with all the fallout,
I got on a plane again and returned to Oregon to take up my
assignment there.

Another way in which I would frequently use my behavior
strategically was to intervene selectively in decisions and processes
down in the organization on issues that I considered of strategic
importance. I ’ m not particularly detail – oriented and am prob-
ably the last person anyone would describe as a micromanager.
Yet at certain key points in my time as the leader of Intel Israel,
I chose to go deeply into aspects of the organization ’ s manage-
ment to communicate the importance of a particular initiative or
plan. One example was the decision, described in Chapter Two ,
to hire a more diverse workforce. There was a period of time in
the mid – 1990s when I was regularly reviewing — and sometimes
reversing — hiring decisions.

Another area in which I felt it was essential to be actively
involved was the negotiations with the Israeli government for
both the Jerusalem and Qiryat Gat fabs. Especially in the latter
case, where I had a full team to support me, I could easily have
left the negotiations to the team until things had reached the
ministerial level. Instead, I handled them personally. It wasn ’ t
that I didn ’ t trust my team. It ’ s just that, given the importance
of the investment to the future of Intel Israel, I felt my presence
as the leader was essential in order to communicate to everyone —
the organization, the Israeli government, municipal authorities,
Intel corporate — just how committed I was to completing the deal
successfully.

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T H E S O F T S K I L L S O F H A R D L E A D E R S H I P 83

Sometimes a leader ’ s symbolic actions need to be dramatic —
and maybe even a little bit crazy. For instance, I am viscerally
opposed to the idea of using compensation as a means to motivate
people. I get suspicious of anyone who seems to be in it primarily
for the money. I wanted to attract people to Intel Israel who could
really get excited about our values and our mission, not just look
on us as a place to make more money. In fact, I felt so strongly
about this principle that I instituted a policy of never discuss-
ing salary with a potential new hire until we were ready to make
a defi nitive offer to bring the person on board. That was normal
practice in the high – tech industry for most professional jobs,
but it was highly unusual for the hourly jobs in semiconductor
fabrication plants.

One time, we made an offer to someone for a senior leadership
position at Intel Israel. Before accepting, he said that he wanted to
talk directly to me. When we met, the individual explained that in
principle he accepted the offer. But he had a lot of questions about
“ fringe benefi ts. ” For example, what about transportation? Could
he have a company car? His list went on and on. When he fi nished,
I responded simply: “ I appreciate your concerns — so much so that
I ’ m withdrawing the offer. I just don ’ t think you ’ ll fi t in here. ”

Of course, my response wasn ’ t purely symbolic. I really did
believe that the new hire wouldn ’ t fi t in at Intel Israel. Still, I acted
the way I did, at least in part, to deliver a message to the organiza-
tion about the kind of culture we wanted to create and the kind of
people we wanted to hire. I was keenly aware that my behavior was
a powerful form of organizational communication.

A leader has to be careful with this kind of symbolic action. If
you become too conscious about always trying to make an impres-
sion, you can risk becoming inauthentic — even manipulative. If
the organization believes that your actions are “ just an act, ” they
are likely to have the opposite effect of what you intend. But as
long as your actions are consistent with your vision and values,
then they are likely to be perceived as genuine.

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84 L E A D E R S H I P T H E H A R D W AY

Freeing up time; the discipline of daydreaming; trusting, but
also testing, one ’ s intuitions; using one ’ s behavior strategically — all
these soft skills will rarely show up in the typical course on lead-
ership. Yet in my experience they are essential for becoming the
kind of leader who can succeed in turbulent times. Without them,
I wouldn ’ t have been able to lead Intel Israel in the way that I did.

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85

6

MAKING VALUES REAL

In a world characterized by turbulence, every organization needs
a solid anchor, some unchanging core that remains the same no
matter how disruptive the environment gets. That anchor is the
organization ’ s values. Markets and competitors, technology and
business models — all may change, some even radically, over time.
But once an organization defi nes its values, those values should
not change. They are an important reference point for orient-
ing the organization to the long term. They provide the stabil-
ity and continuity that allow an organization to adapt to new
circumstances.

With the increasing turbulence of the world economy, more
and more attention has been paid to the critical role of values in
driving competitive success. 1 Yet at the same time that so many
business leaders are talking about values, we are also seeing
massive breakdowns of ethical behavior at many large corpora-
tions. Witness the widespread corporate fraud of a few years ago
that brought down companies such as Enron, or the more recent
scandals involving the backdating of stock options by CEOs and
other senior executives. Apparently, at the precise moment when
companies are fi nding values so essential they are also fi nding it
more diffi cult to live up to them.

It is really not so paradoxical when you think about it. The
same forces that are making values so important are also increas-
ing the pressures to violate them. In an environment in which the
rules are always changing and threats to survival are frequent, it ’ s
natural for people to start thinking that they must “ do anything ”
to survive. There is an enormous temptation to cut corners, take
the easy way out, or look the other way when behavior enters that

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86 L E A D E R S H I P T H E H A R D W AY

murky gray area where value violations tend to happen. In the
middle of a thunderstorm, it becomes far easier to imperceptibly
cross over an ethical line.

The problem is, such shortcuts often bring about precisely the
opposite of what leaders intend, trapping companies in a vicious
circle. An inclination to “ do anything, ” for example, not only
tends to mire an organization in short – term thinking, but sooner
or later it also becomes a convenient excuse for more everyday
vices such as greed, power, and corruption. As a result, the very
actions taken to ensure survival end up making it less likely, not
more. If more executives at Enron had had genuine integrity, the
company might still be around today.

This vicious circle doesn ’ t occur only in the business world.
Consider the U.S. government ’ s so – called war on terror. The Bush
administration used the American public ’ s fears about survival,
stimulated by the attacks on 9/11, to argue that we live in a differ-
ent and more dangerous world, one that requires taking shortcuts
around long standing traditions and practices: shortcuts such as cur-
tailing civil liberties, creating a special extrajudicial legal regime
for detainees, ignoring the Geneva Conventions, even embracing
torture. But these shortcuts have ended up violating some of the
fundamental values of the U.S. Constitution. Not only have they
been ineffective, they have also been used as the cover for rampant
political opportunism, corruption, and abuse. As a result, the much
vaunted war on terror has ended up degrading many of the very
values that it was supposed to protect — and, I fear, caused serious
long – term damage to America ’ s standing in the world.

So although I believe that staying true to an organization ’ s
values is an essential tool for navigating the turbulence of the
current economic environment, I ’ m also realistic enough (and
perhaps pessimistic enough) to realize that value violations are
not rare, but common. Therefore leaders must be relentless — and
sometimes even obsessive — about making the organization ’ s
values real. Not only must they establish the highest ethical stan-
dards; they must also create a culture of transparency that surfaces

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M A K I N G VA L U E S R E A L 87

such violations when they occur, so the organization can recover
from them.

Being Relentless About Values

At Intel Israel we had a values statement that, like the value state-
ments at most organizations, rounded up all the usual suspects. It
was full of high – sounding but generic phrases about “ respect for
people, ” “ results orientation, ” “ quality, ” and the like. I believe that
words matter if for no other reason than that they highlight the
distance between the way things are and the way they are sup-
posed to be. But even the best words can become so corrupted that
they get turned inside out and end up encouraging behavior the
very opposite of what they intend.

Take, for instance, the idea of an “ orientation to results. ” If a
company isn ’ t careful, having an orientation to results can quickly
end up meaning “ the ends justify the means. ” As soon as there
is any problem with producing results, people are immediately
tempted to start sandbagging their plans, falsifying performance
data, and the like. When a leader lets such behavior go on, an
organization will lose its competitiveness over the long term.

So my approach was always to focus on what it would take
to make the words real as refl ected in the behavior of our people.
I took this task so seriously in part because one of the biggest chal-
lenges in creating Intel Israel was implanting Intel ’ s high levels
of integrity in a country where the traditional business culture
involved a lot of cutting of ethical corners. The Israeli business
environment is pretty freewheeling. There is a much greater ten-
dency on the part of companies there than in the United States
to engage in activities that skirt the law. In my experience, for
example, an Israeli company is far more likely to try to get around
the laws governing corporate taxation than a typical American
company. The basic attitude is “ let ’ s try it; the worst thing that can
happen is we get caught — in which case, either we pay the fi ne or
try to fi ght it in court and see what happens. ”

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88 L E A D E R S H I P T H E H A R D W AY

I refused to engage in such practices. My attitude was that Intel
Israel would follow the very highest standards, no matter what the
practices of the local business culture might be. In the early days
I had many clashes inside Intel Israel over this issue. People would
ask, “ Why don ’ t we do things like other companies do? ”

Let me give you what may seem like a relatively minor exam-
ple. It ’ s common practice in Israel for companies to give employees
gifts on major holidays such as New Year ’ s or Passover. Typically,
the process works like this: a company cuts a deal with a big depart-
ment store that, in exchange for major discounts on a range of
products, has a monopoly over the gift selections at the company.
The department store brings the range of qualifying gifts into the
workplace and employees select the ones that they want. Although
the gift is clearly an employee benefi t (and sometimes worth con-
siderable amounts of money), the employee pays no taxes on the
gifts, and the company writes off the cost as a business expense.

We participated in this practice for a while, but it always made
me uncomfortable. Finally, at a certain point I simply said, “ Let ’ s
stop this circus and just give people money instead ” (which, of
course, would have to be declared as income). It was a big shock
for people, both inside and outside the company. “ Intel doesn ’ t
give presents! ”

Other ethical dilemmas were not so minor. My uncompro-
mising approach to the organization ’ s values could affect major
business decisions on which millions of dollars of investment
were riding. When we were defi ning the Qiryat Gat fab incentive
package, for example, the government negotiators asked for some-
thing that from their perspective was perfectly innocuous. A key
raison d ’ ê tre of the deal was to encourage economic development
in Israel, so the government asked us to commit to certain targets
for “ local content ” (that is, coming from Israel – based companies)
in both the construction budget for the plant and the third – party
supplier budget once production commenced.

It wasn ’ t an unreasonable request. After all, in arguing for
government support for the plant, I had made a big deal myself

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M A K I N G VA L U E S R E A L 89

about the benefi ts to the Israeli economy. Yet I had a big problem
with the proposal. At Intel, one of our values is that when we make
a commitment, we keep it. In other words, whatever we commit
to, we do. But it wasn ’ t at all clear that committing to local con-
tent to the extent the government wanted made economic sense.
For example, at that point we didn ’ t yet know whether the Israeli
construction industry could handle a complex construction proj-
ect like that of the Qiryat Gat fab. As for the supplier budget, we
didn ’ t even know what product we would be making. It was simply
too early to determine how much local content we could use. If it
made business sense to use local suppliers, of course we would be
inclined to do it. But at that stage of the game I wasn ’ t going to
commit to hard – and – fast numbers. So I refused.

As an alternative, I proposed language to the effect that Intel
would use its “ best efforts ” to fi nd, develop, and do business with
local suppliers. Moreover, I argued that emphasizing “ best efforts ”
would be more effective than any defi ned targets in stimulating
the organization to work with local suppliers.

The government negotiators weren ’ t buying it. They insisted
on clearly defi ned targets and commitments — so much so that the
impasse threatened to undermine the entire negotiation. But I
remained steadfast in my refusal because I knew that if I brought
such a commitment back to the organization, my people would
know that it wasn ’ t realistic — and this would undermine the orga-
nization ’ s commitment to delivering on its promises.

In the end the government backed down. The negotiators
agreed to the softer language — on the condition that the govern-
ment could closely monitor our performance over time. As I had
initially suspected, we ended up exceeding the proposed targets
that the government had demanded within the fi rst fi ve years of the
fab ’ s existence. But the key point is this: I was fully prepared to walk
away from the deal if the government had insisted on its proposal.

Another issue over which I clashed with the government (and
with my own people) concerned temporary employment incen-
tives. At a number of points during the period that I was running

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90 L E A D E R S H I P T H E H A R D W AY

Intel Israel, the Israeli government set up temporary programs to
give companies fi nancial incentives to hire people. For every new
employee a company took on it would receive a subsidy from the
government. These subsidies could add up to substantial sums
of money.

I refused to accept them. My people couldn ’ t believe it, but
as far as I was concerned, my logic was clear: we didn ’ t hire any-
body unless there was a clear business need for hiring them. And
if it made economic and business sense to hire someone, then
I was willing to pay whatever it took to get them. If Intel Israel
accepted the government ’ s employment subsidies, then soon
enough we would start hiring people we didn ’ t really need — just
to receive the subsidy. But at some point in the future, I knew, the
subsidies would disappear, and we would be left with employees
that would be an economic burden on the organization and that
we would have to let go. That wasn ’ t ethical — either for Intel
Israel or for the individuals involved. It certainly did not display
respect for people.

People thought I was being rigid. But the thing to understand
is that in Israel at the time, the government ’ s policy had led to a
lot of shady dealings — and, in some cases, outright cheating — on
the part of companies to maximize the subsidy they received. We
weren ’ t going to play that game.

It wasn ’ t that I was opposed in principle to the idea of govern-
ment incentives. After all, we had received incentives to locate
our fabs in Jerusalem and Qiryat Gat. I believed strongly (and still
do) that such incentives were both a legitimate means for Israel
to compete effectively with other countries in the competition for
multinational investment and a kind of necessary risk premium
to compensate for the geopolitical instability of the region. But
when a company starts using temporary incentives to lower the
effective wage rate of its operation, that undermines long – term
competitiveness.

A funny thing happened with these employment incentives.
In one case, it turns out that even though we refused them, the

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M A K I N G VA L U E S R E A L 91

government paid them to us anyway. So we found ourselves with
over half a million dollars that we didn ’ t quite know what to do
with. “ Should we return the money? ” my fi nance people asked me.

In this case, I decided that I had made my point and wasn ’ t
going to be a fanatic about it. If the government was going to
go out of its way to pay us, despite my refusal to participate in
the subsidy program, we weren ’ t going to return the money. But
I wasn ’ t going to let it fl ow to our top line either. Instead, we used
the money to set up a special fund to provide our employees with
low – interest loans, mainly for housing.

Saying “ No ”

As these examples suggest, in many situations the key to staying
true to your values is not so much doing something as not doing
something — saying “ no ” to behavior that you know in your gut is
inappropriate but for which refusal may also carry some real costs.
Often, however, what appears to be the easy way out is actually the
more costly option.

For example, there was a period in the early days of the
Jerusalem fab when we had a pretty serious problem with employee
pilferage and theft. “ The only way we are going to solve this
problem is to install surveillance cameras, ” my security director
told me. I objected to that approach because it felt antithetical to
the kind of open organization we were trying to create. Instead of
focusing on surveillance, I proposed that we focus on values. We
started talking about the theft problem in every employee forum,
explaining in detail the costs of pilferage both to our competitive-
ness and to our values. Within a matter of months, the losses from
pilferage declined dramatically.

On another occasion, I received a phone call from an offi cial
at Shabak, Israel ’ s internal security service. The agency was setting
up a network of people in the business community to supply
economic intelligence about companies doing business in Israel,
and it wanted Intel to be involved. I unequivocally refused.

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92 L E A D E R S H I P T H E H A R D W AY

It was a risky move. The security establishment in Israel is
highly infl uential, and I ’ m sure many people would believe that
it was our responsibility as loyal Israelis to participate in such a
network. But my attitude was, Intel is in the semiconductor busi-
ness, not the intelligence business. I felt it was inappropriate to be
providing such information to the government. What ’ s more, we
were an open organization. Anything that smelled of covert activ-
ity would be a violation of our values.

When we were negotiating the incentives package for the
Qiryat Gat fab with the Israeli government, there was a tough
impasse on a couple of the terms. In an effort to improve their
leverage, some of the negotiators on the government side leaked
details to the Israeli press. The selective leaks put Intel in a bad
light and we were pummeled by the press. Things got so bad that
I got a message from Intel CEO Craig Barrett saying that he was
considering killing the deal.

Some people on my team thought that the solution was to
fi ght fi re with fi re and start leaking ourselves. But I refused to carry
out our negotiations with the government via the press. I simply
contacted the leader of the government negotiating team and told
him that if the leaks continued, the deal was off. There were no
more leaks after that.

Later, after we had built the Qiryat Gat fab, I got a call from the
offi ce of Israel ’ s Chief Rabbi. Semiconductor fabs are 24/7 opera-
tions. All plants in Intel, no matter where they are located, operate
seven days a week. Therefore we needed a permit from the local
Rabbinic association to allow the plant to operate on Friday, or
Shabbat, the Jewish Sabbath. But we were having a hard time
getting the permit. Without it, the Ministry of Labor could close
us down.

“ The Chief Rabbi would like to meet you, ” the representative
from the Chief Rabbi ’ s offi ce told me. “ He would like to help you
get the permit for Shabbat. He ’ s sure we can work things out. ”
Again, I refused. Either we were going to get the permit or we
weren ’ t going to be able to operate legally. But I wasn ’ t going to get

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M A K I N G VA L U E S R E A L 93

involved in any kind of negotiation with the Chief Rabbi, who, as
far as I was concerned, had no legitimate role to play in the deci-
sions of a global business organization, and I refused to be depen-
dent on him for any favors. What ’ s more, I calculated that after
all the money that the Israeli government had put into the Qiryat
Gat fab, the Rabbinate couldn ’ t very well go to the government to
close us down. Once they saw that we weren ’ t going to budge, the
local Rabbinic association yielded.

In my experience, when you stick to your values, you get
rewarded — whatever the risks involved. Indeed, in the spirit of
leadership the hard way, often the more diffi cult or riskier path
turns out to be the easiest one in the end. Developing strong val-
ues and allowing yourself to be guided by them simplifi es things. In
an uncertain environment, values provide a clear path to follow.

Transparency, Not Purity

In insisting on the importance of staying true to an organization ’ s
values, however, I ’ m not saying that the goal should necessarily be
to eliminate any and all value violations. No large complex organi-
zation is ever going to be pure as the driven snow. Rather, the goal
should be to create a system in which the inevitable value viola-
tions that do occur quickly come to people ’ s attention, are iden-
tifi ed, and then are corrected. The way to stay true to values is to
elevate issues, make people feel comfortable in dealing with them,
bring things into the open rather than covering them up. Put
another way, the goal isn ’ t purity, it ’ s transparency — and recovery.

This lesson was brought home to me in an experience I had not
long after the establishment of the Jerusalem fab. I was traveling
to Israel ’ s Ben – Gurion airport to pick up a senior Intel executive
who had come from the States to tour the site. Because I was late
for his arrival, I left my car parked illegally in the pick – up zone and
hurriedly rushed to meet him inside the terminal. Sure enough,
when we returned to the car, there was a ticket on the windshield.
Later in the day, as we moved from meeting to meeting in the fab,

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94 L E A D E R S H I P T H E H A R D W AY

I quickly stopped by the offi ce of my fi nance director, explained
why I had gotten the ticket, and asked him to take care of it. At
the end of the day, he stopped by my offi ce. “ Dov, we need to talk, ”
he said. “ Your parking ticket is not the company ’ s business. If you
violate the parking regulations, then you have to pay for it. ”

Of course, he was absolutely right. I had been so preoccupied
that I hadn ’ t really taken in what I was doing. When he pointed
it out to me, I was chagrined that I hadn ’ t lived up to my own val-
ues. It is precisely such small, everyday actions — like my assuming
that the company would pay my parking ticket — that establishes a
general tone. It upset me that, in the rush and pressure of the day,
it had been so easy for me to neglect the very values that I talked
about all the time.

Yet at the same time I felt enormously gratifi ed that my fi nance
director had felt confi dent enough to challenge me on it. That
was a sign that the Intel Israel culture was working, that we had
begun to create an environment where people took the values seri-
ously enough to act on them. Creating such an environment is
the biggest achievement you can have. I paid the ticket without
argument.

Acknowledging Mistakes

As the parking – ticket example suggests, the importance of values
puts a special burden on an organization ’ s leader. On the one hand,
you have to try to live up to the values in your own behavior. But
even more, you have to be open and honest when you fail — as you
inevitably will. The true test of your integrity as a leader is not in
the moments when you stay true to the organization ’ s values but,
rather, in those when you discover that you have violated them.

It ’ s a key moment of truth. Either you cover up your own
inability to live up to the organization ’ s values or you bring it out
into the open for people to see. In my experience, covering up
only makes things worse, because it ’ s impossible to keep things
secret for any length of time. Sooner or later the cover – up fails,

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M A K I N G VA L U E S R E A L 95

things come out, and the result is often increased hypocrisy about
values in the organization.

Being open about your own value violations can have many
positive effects. For one thing, it tends to humanize you as a leader
and strengthen the bond with your people. It shows that you
struggle just like they do to live up to the organization ’ s values —
and sometimes fall short. It also can lead to a constructive conver-
sation about the inevitable tension of staying true to values in a
high – pressure business organization.

Once Intel Israel reached a certain size, we began to have
formal orientation and training programs for our new employees. I
made sure that one of the orientation sessions was devoted to Intel
Israel values. But instead of having the typical lecture or class,
I insisted that the session be organized as an informal discussion
in which I myself, the organization ’ s leader, would participate.
I would come to the meeting, project the organization ’ s val-
ues statement onto the screen, and then ask the new employees
present (most of whom had already been at the company for six
months or so) to identify any values that they believed, based on
their experience so far, we were not living up to.

It was never an easy conversation to get started. Often
people would hesitate to speak freely. Yet eventually some brave
soul would tell a story about something he or she saw, and that
would get the ball rolling. Then we would discuss — were these
really value violations? If so, how? What were the extenuating
circumstances? How did we think various participants saw the
situation from their perspective? What should you do about it if
you confront a similar situation?

Once I arrived at one of these orientation sessions at the Qiryat
Gat fab about half an hour late. As I was entering the site, I found
myself thinking about an old Israeli saying, “ Menahel lo marcher
hu rak mit ’ akev ” (A manager is never late, only delayed). How
convenient, how self – protective for the manager, I thought. So
when I walked into the room, the fi rst thing I said was, “ This is a
session on Intel Israel values. And by arriving late, I have violated

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96 L E A D E R S H I P T H E H A R D W AY

at least three of the values we espouse. I haven ’ t shown respect
for people. I didn ’ t display a results orientation. And I defi nitely
wasn ’ t committed to quality. ”

Acknowledging my own failure to live up to the organization ’ s
values made the conversation very real. We talked about how
diffi cult it can be to stay true to our values given the daily demands
and pressures of the business, yet how important it was to the long –
term success and survival of Intel Israel. In my opinion, it was one
of the best sessions on values that we had ever had.

Maintaining the Tension Between
Values and Behavior

The battle to establish high ethical standards in an organization
never ends. Again, the goal should not be some impossible purity
but rather a willingness to embrace the necessary tension that
making values real entails. People don ’ t like it when there is a gap
between their behavior and the values they espouse. On the one
hand, they are right: the ultimate goal is to align behavior with
values. But sometimes, in an effort to eliminate that gap, people
rush too quickly to close it. Put simply, they change the values, not
the behavior.

Let me conclude with an example of what I mean. Not long
before I retired, I found myself in a meeting with my senior staff to
revisit the language of the organization ’ s values statement, some-
thing that we did routinely every few years. One of the values on
our list was “ integrity without compromises. ” A number of people
at the meeting thought that defi nitely needed editing. Put simply,
they wanted to remove the phrase “ without compromises. ”

They worried that this strong language promised more than
the organization could deliver. The fact was, we were continu-
ously finding ourselves in somewhat compromising situations,
dealing with boundary issues for which the imperatives of integrity
seemed to confl ict with good business practice. One manager gave
the example of how we handled overtime pay. There was some

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M A K I N G VA L U E S R E A L 97

language in Israeli labor law, albeit somewhat vague, mandating
employers to pay extra for overtime. But at Intel Israel, we fol-
lowed the U.S. practice of distinguishing between exempt (that
is, supervisory) and non – exempt (that is, hourly) employees. For
the non – exempt hourly employees, we of course did pay overtime.
But for the exempt group, who were on salary, we didn ’ t even keep
track of the hours they worked. Their responsibility was to get the
job done, and from the perspective of the company, it didn ’ t matter
if they worked more than eight hours a day — or less.

It wasn ’ t at all clear that our policies violated the law. Cer-
tainly no one, neither employees nor government offi cials, had
ever complained. But the critics argued that it was a bit of a gray
area. Weren ’ t we perhaps compromising our integrity? Better to
avoid the issue by simply eliminating the “ without compromises ”
language. “ Isn ’ t ‘ integrity ’ good enough? ” they asked.

I had a different perspective. The fact that we constantly faced
situations that might compromise our integrity wasn ’ t a reason to
eliminate the “ without compromises ” language. Quite the contrary:
it was a reason to keep it. If we eliminated those two words, we ran
the risk of becoming complacent. We would start taking such situ-
ations for granted instead of continuously question ing them and
asking whether we were in fact doing the right thing. Emphasizing
the ideal of “ integrity without compromises ” created a tension. It
forced us to think about things and to address them pragmatically.
Who knows? Maybe we should reconsider our policy. Or perhaps
we should be working to get the government to revise the law.

I refused to make the change. The values statement remained
as written. I suspect it probably made some of my people nervous.
Could we really live up to the value as written? I wasn ’ t so worried,
because that was exactly the question that I wanted them to keep
asking.

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99

7

BOOTSTRAPPING LEADERSHIP

At the beginning of this book I argued that the essentials of
leadership are more akin to wisdom than they are to knowledge.
Because leadership is not really a skill, it cannot really be taught.
Rather than hoping to learn in the classroom or from some training
program how to lead, aspiring leaders need to take on the hard work
of bootstrapping leadership — that is, learning how to lead by doing
it. In the body of the book, I have tried to show how this process
played itself out in my own career as I pursued my life project of
creating a new high – tech business in Israel and taking it from the
periphery to the very center of a major global corporation.

It ’ s all well and good to say “ learn by doing. ” But how does
a potential leader learn from doing? In this concluding chapter,
I want to describe four resources that an aspiring leader can use to
learn how to lead. Reading these pages won ’ t necessarily turn you
into a leader any more than any other book on the subject will.
But they just might give you some ideas for where to start your
own bootstrapping once you fi nish this book.

Staying True to Your Passion

No leader can be effective who does not identify 100 percent with
the organization ’ s mission. A leader doesn ’ t have the luxury to be
equivocal. You have to make sure that your personal mission and
the organizational mission are perfectly aligned. After the First
Gulf War, for example, someone at Intel Israel said to me, “ You
were behaving as if your own personal survival was at stake, not
just the survival of Intel Israel. ” It ’ s true, because by that time I had
completely identifi ed with Intel Israel and its future.

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100 L E A D E R S H I P T H E H A R D W AY

Because this identifi cation between leader and organization
is so important, it ’ s critical for you as an aspiring leader to iden-
tify your passion — what really drives you — and to stay true to that
passion through the course of your career. If you do, you will fi nd
that this passion is a powerful resource for guiding you through the
challenges of leadership the hard way.

There are many sources for identifying your passion. One is
your early life experiences. Your fundamental approach to leader-
ship is set long before you ever reach a position of authority. In
my own case, the experiences of my World War II childhood, of
being an observer of and participant in the Berkeley countercul-
ture of the 1960s, and of developing a breakthrough innovation
in the computer industry with my invention of the EPROM all
profoundly shaped the kind of leader I wanted — and was able — to
become. Fortunately, these experiences nurtured an approach
to leadership that turned out to be highly effective in the fast –
moving and highly turbulent economy in which I found myself.
Aspiring leaders need to understand the origins of their individual
leadership styles and how those origins map to the specifi c chal-
lenges of business competition today.

Another key part of staying true to your passion is to defi ne, as
early as possible, a vision or mission to which you want to dedicate
yourself. It doesn ’ t matter how unrealistic or even crazy that vision
might appear at the time. Even the vaguest plan — like my early
desire to “ bring something back ” to Israel — has the value of being
a reference point that orients would – be leaders and helps guide
their choices, actions, and decisions.

Over time, as you gain experience, the vision will become
more concrete. At that point, one of the most important ways to
stay true to your passion will be knowing when to say no. Once you
gain some success, it is extremely easy to get swamped by oppor-
tunities that may seem attractive at the moment but don ’ t really
take you where you want to go. To avoid getting knocked off track,
it ’ s important to always be asking, will this opportunity take me
closer to my goal?

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B O O T S T R A P P I N G L E A D E R S H I P 101

For example, at the time of my conversation with Andy Grove
about Engineer A and Engineer B, I dimly realized that my passion
wasn ’ t really to become an American – style manager at Intel, that
I wanted to do something else: to create something in Israel. Say-
ing no to the role that Andy was holding out for me was a way of
saying yes to my core passion, even though I didn ’ t quite know
then how I would realize it.

Finally, as a leader you must learn how to renew your passion
over time. In the course of an entire career there are bound to
be times when your passion will fl ag. You will lose touch with the
mission that energized you before. Or you may feel that you have
already accomplished what you set out to do. That is the time to
refl ect on the original passion that had brought you to this point
and, if possible, to reframe your mission so that it puts you back in
touch with that passion.

I ’ ll give you an example from my own experience. By the time
I approached retirement, I felt like my dream — to bring something
back from the United States and build a new fi eld of industry and
technology in Israel — was largely fulfi lled. Intel Israel was well
established and thriving. And a dynamic high – tech industry had
grown up around it, making Israel a genuine global center for
high tech.

Yet now I realize that my mission wasn ’ t really over. More
recently I have found myself engaged with the critical question of
what it will take for Israel ’ s high – tech sector to survive and thrive
into the future. And that concern has led to an unanticipated
encounter with Israeli politics and the confl icts of the Middle East.

At the time of the Oslo Accords (1993), there was a lot of hope
that high tech could be a powerful focus for future collaboration
between Israelis and Palestinians and a driver of economic devel-
opment in the entire region. But as of this writing, with the pros-
pect of peace growing increasingly dim, I worry that the worsening
political instability in the region is a serious strategic threat to high
tech ’ s future. The current status quo in Israel, which combines
extraordinary economic dynamism with extreme political stasis,

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102 L E A D E R S H I P T H E H A R D W AY

is neither acceptable nor sustainable. Unless Israel can fi nd its way
to a defi nitive settlement with the Palestinians and the broader
Arab world, Israel ’ s high – tech industry won ’ t be fully secure. Try-
ing to address that challenge is turning out to be a new phase of my
mission and a new focus of my lifelong passion.

The Invisible Mentor

In ancient times those in search of wisdom sought out a guru.
Today we talk about mentors . Mentorship has become a big theme
in the management literature in recent years, and many organiza-
tions have established formal mentorship programs. Having read
this far, you won ’ t be surprised to learn that I ’ m skeptical of their
value. A lot of these mentorship programs, much like formal lead-
ership programs, are pretty formulaic. Sure, they can be useful in
helping new executives enter smoothly into the organizational
culture and develop networks with colleagues and superiors. But
they don ’ t really turn people into leaders.

Other experts emphasize close personal relationships with
senior leaders that last over many years. For example, in his recent
book True North, former Medtronic CEO Bill George argues that
what many aspiring leaders fail to recognize is “ the importance of
the two – way relationship with their mentors. Lasting relationships
must fl ow both ways . The best mentoring interactions spark mutual
learning, exploration of similar values, and shared enjoyment. ” 1
Such two – way relationships are great — if you can fi nd them. But
not every aspiring leader is so fortunate as to forge such a close
personal relationship with a senior leader.

I want to suggest a different approach; call it invisible mentor-
ship . As an aspiring leader, you shouldn ’ t wait to be assigned a
mentor or simply hope for someone in a senior leadership position
to tap you on the shoulder and take you under his or her wing. Be
more active: choose your own invisible mentor, someone whose
behavior you study from afar. It doesn ’ t really matter whether that
individual knows you are doing this or not.

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B O O T S T R A P P I N G L E A D E R S H I P 103

In my career, the most valuable mentors were individuals
who weren ’ t playing the formal role and didn ’ t know I was using
them in that way. I was extremely fortunate, of course, to work at
a company that had some of the best business leaders of the late
twentieth century. Long before anyone was talking about human
capital, Intel founder Robert Noyce understood the centrality
of people to an innovation – based business. And I will always be
grateful to Gordon Moore for his extraordinary technical vision
and for his willingness to take risks and place big bets — whether
on the EPROM as a revolutionary new product or on Israel as a
place where Intel could successfully do business. But the individ-
ual who, more than any other, shaped me as a leader was, as you ’ ve
probably gathered by now, Andy Grove. For many years, Andy
functioned as my invisible mentor, even though neither he nor
I was really aware of it at the time.

I first met Andy in 1965, when I was a graduate student at
Berkeley and he interviewed me for a job in his lab at Fairchild
Semiconductor. In some respects our relationship got off to a rocky
start. Although Andy offered me a job, I chose to work in another
Fairchild lab, not his. And when Andy taught a course for new
employees on solid – state physics at what was to me the ungodly
hour of 7:00 AM, I was the one who complained about his giving us
quizzes before we were even awake (I once overhead him complain-
ing to a colleague about this kid who had barely arrived and was
already giving him trouble). Later, of course, after I had joined Intel,
invented the EPROM, and then decided to give it all up to travel
in Africa, it was Andy who made it clear that he thought the proper
thing for me to do was to stay on and see the prototype through to a
fi nished product.

Andy and I had an odd relationship. We knew each other, of
course, but our relationship was always somewhat distant. In all
my years at Intel, I never reported directly to him. I was always one
or two levels down in the hierarchy and, once I moved to Israel,
thousands of miles away. Despite the widespread belief inside Intel
that we were in constant communication, I would see him, at most,

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104 L E A D E R S H I P T H E H A R D W AY

maybe three or four times a year. In the roughly thirty – fi ve years
that we worked together, we never had a single in – depth personal
conversation. For example, we never discussed our Jewish roots
or our parallel experiences as Jewish children in Nazi – occupied
Europe during World War II. 2

On the other hand, over the years Andy and I developed a
highly productive working relationship. My impression always was
that whenever I asked for a meeting to discuss some new project
or initiative for Intel Israel, Andy already half – knew where I was
going and what I was up to. And although we didn ’ t always agree,
I always found him remarkably open and extremely supportive of
what I was trying to do.

This openness, which was even a kind of generosity, was cap-
tured for me by an incident that happened after I left Africa to spend
six months at Intel in Silicon Valley before finally returning to
Israel. Just before I left Santa Clara for Israel, where I would teach at
Hebrew University, Andy threw a farewell party for me at his house.
At one point I found myself sitting in an extremely comfortable
rocking chair on his front porch. “ What a great chair, ” I told him.

“ Do you want it? ” he asked immediately. My wife was pregnant
at the time, and I answered, “ My wife would love it. ”

“ Take it, ” he said. That chair was one of the few artifacts that
I brought back with me from Silicon Valley to Israel.

Andy ’ s support gave me enormous leverage inside Intel, and
I was happy to exploit it. He was the Intel senior executive respon-
sible for operations, so he was always the key decision maker for
many of the initiatives that I wanted to undertake. Whenever I got
involved in a confrontation with colleagues, they would have to
be careful because they thought that if push came to shove, I might
get Andy involved. I tried not to abuse our relationship, but on a
few critical occasions — the confl icts over Intel Israel ’ s no – transfer
rule, for example, or the bake – off that led to the decision to build
the Jerusalem fab — I didn ’ t hesitate to use it.

My relationship with Andy bothered some people at Intel.
They thought I was short – circuiting established lines of authority.

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B O O T S T R A P P I N G L E A D E R S H I P 105

“ The problem with you, Dov, ” Andy once told me, relatively late
in my career at Intel, “ is that nobody knows whom you report to. ”
He was right. Of course, I did have a formal reporting relationship.
But I never let it stop me or constrain my own sense of my power
or room for maneuver. I treated the Intel hierarchy like a “ fuzzy
network ” in which I had many, many points of interaction. Some
were based on formal reporting relationships, but others were based
on a shared history, personal relationships, and practical alliances
that I had built up over the years.

To be sure, I had the distinct advantage of being a country
manager in an operation that was far away, physically, from
corporate headquarters. Yet a lot of country managers I knew at
Intel seemed to defi ne their role as dependent on corporate. Early
on, I made a conscious decision to take the opposite tack — that is,
to assume that I had the freedom to act, and then to let the chips
fall where they may.

Something about the very distance in my relationship with
Andy seemed to invest small things with large signifi cance. For
example, when I was a young manager at Intel Israel, I sent Andy
a fi ve – page proposal for shifting the Jerusalem fab production line
from memories to microprocessors. He returned it, unread, with a
stamp reading “ Please respect my time. ” His message: the proposal
was way too long. He wanted one page, not fi ve. Grove ’ s request —
“ Please respect my time ” — had an enormous impact on me. Indeed,
it sparked a lifelong refl ection on how leaders use — and abuse —
their time that eventually led to my focus on freeing up time, which
I described in Chapter Five .

I learned a lot of things from Andy over the years: the impor-
tance of integrity and modesty, of finding and following your
own passion, of paying attention to detail (not my strongest suit,
I admit), of not taking no for an answer but instead always asking
“ Why not? ” Indeed, I would say that to the degree I had a model
for leadership the hard way, Andy was it. But again, his example
worked on me only from afar. In all the years we worked together,
we never discussed it.

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106 L E A D E R S H I P T H E H A R D W AY

Recently, I was surprised to learn that Andy had had an
invisible mentor of his own. In his recent biography of Grove,
Harvard Business School professor Richard Tedlow describes
how Charlie Sporck, the legendary semiconductor manufactur-
ing manager and founder of National Semiconductor, was a key
role model for Grove in his transition from scientist to operations
manager. Sporck, Grove told Tedlow, seemed to epitomize
“ the operations guy that I aspired to become. Without my knowing
him particularly well at the time, he became my role model. He
cast a big shadow over my life without ever knowing that he did
so. ” 3 Although the situations are obviously different, I could say
pretty much the same thing about Andy: he cast a big shadow over
my life as a leader without ever really knowing that he did so.

My point: no aspiring leader has to wait to be assigned a men-
tor or has to depend on developing a close personal relationship
with one. Look around you. Choose someone whose leadership
style you relate to and admire. Study that person closely. It will
help you bootstrap your own leadership capacity.

Becoming a “ Refl ective Practitioner ”

A would – be pilot always has the option of using a fl ight simulator.
But there is no effective way to simulate leading an organization.
Instead, aspiring leaders face the difficult challenge of learn-
ing from their own experience at the very moment that they are
experiencing it.

This is different from what usually passes for learning from
experience in the business world. Most management education is
built around the ideas of the success story (think of the typical case
studies produced at places like the Harvard Business School). More
recently, some management thinkers have begun to focus on the
idea of learning from failures as well. 4 But both success stories and
failure stories suffer from two critical limitations. First, they are ex
post facto — that is, they tell the moral of the story after you already
know how the story ends. And second, they are inevitably one

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B O O T S T R A P P I N G L E A D E R S H I P 107

step removed from the would – be leader ’ s own experience. The
kind of learning that is really of value is the learning that happens
in the moment. It ’ s the kind of systematic refl ection on one ’ s own
experience that organizational theorist Donald Sch ö n captured in
his term “ the refl ective practitioner. ” 5

In my experience, there are a variety of ways to develop this
capacity to refl ect systematically on one ’ s own experience in the
moment. One is to realize that although leadership is a public act,
to be effective a leader also has to have an active inner life. In
Chapter Five , I described some of the ways of stimulating habits of
refl ection that worked for me: freeing up time, daydreaming, intui-
tive decision making, and the like.

But another key aspect is to build systematic refl ection into
your everyday activity. I think the organizations that do this best
are found in the military: the “ after action review ” has become
a routine activity after every military engagement. Once, rather
late in my tenure at Intel Israel, I hosted a group of offi cers from
an Israeli air force base in the Negev at our fab in Qiryat Gat.
They were interested in the practices that we had put in place to
ensure quality and continuous improvement in our manufacturing
process. But for me the most interesting moment in the meeting
came when the offi cers described a practice of their own. It was a
system for analyzing what they called “ near accidents ” — that is,
any close calls between maneuvering planes that could easily have
led to disaster but, in the end, did not. Later, I visited the base
and observed the intensive video analysis that pilots did of their
near accidents.

I am intrigued by this concept of the near accident as a poten-
tially useful analogy for leaders – to – be to encourage learning from
experience. Anything a leader does consists of multiple near acci-
dents in which success or failure hangs in the balance. Take for
example my invention of the EPROM. In retrospect it was defi –
nitely a success story. But any number of things could have gone
wrong — and nearly did — along the way. For example, it was a real
challenge getting my colleagues to see the potential value of my

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108 L E A D E R S H I P T H E H A R D W AY

new approach to designing a semiconductor memory. It was like
nothing they had seen before, and they had a hard time getting
their minds around it. What ’ s more, when I fi rst came up with the
concept, I had yet to demonstrate it defi nitively, so it was easy to
dismiss as a crazy idea. What I learned from that experience was
the absolute importance of persistence, of insisting on the impossi-
ble, even in the face of disagreement and resistance. And doing so
gave me the confi dence to follow my dream no matter how “ unre-
alistic ” it might appear and no matter where it might lead.

I learned all this haphazardly, in retrospect, almost by chance.
I think that with a little effort aspiring leaders could engage in
such learning systematically — by regularly exposing their experi-
ences to some version of an after action review.

Learning from Your People

A prominent theme in this book has been the imperative of leaders
to forge close bonds with their people. That close bond is essential
for getting an organization to meet the demands of leadership the
hard way. But it also has another advantage: a close relationship
with your people can give you a tremendous resource for bootstrap-
ping your leadership capabilities.

There are a variety of ways that an aspiring leader can develop
that close bond. In previous chapters, for example, I ’ ve dis cussed the
importance of the leader being present to the organization — in
the way I tried to be present during the First Gulf War or when
we instituted the 10 percent pay cut. It is precisely at difficult
moments, when unpalatable decisions have to be made, that you
need to expose yourself to your people ’ s reactions and input. The
less you insulate yourself from these reactions, the more you learn,
and the better a leader you become.

Another way, frankly, is through self – criticism — not being
afraid to expose one ’ s own mistakes to the organization, as I did
when I discussed the ways that I was violating our values by com-
ing late to the values training session. A would – be leader needs

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B O O T S T R A P P I N G L E A D E R S H I P 109

to get comfortable with the idea that his own actions will be
exposed to the organization. Don ’ t be afraid to reveal yourself, to
talk about your failures and your mistakes. It will humanize you in
the eyes of your people and build a stronger bond. What ’ s more,
it will encourage honest feedback and openness throughout the
organization — organizational characteristics that are essential for
leadership the hard way to work effectively.

A third way — again, much discussed in previous chapters — is
by welcoming dissent. It can be diffi cult, sometimes, to navigate all
the various points of view and to distinguish genuine dissent from
simple excuses. But the more you create an atmosphere in which
all points of view are welcome, the more you will be empowering
your people to contribute to your own capacity to lead.

Finally, leaders form close bonds with their people by using
their own behavior strategically. Aspiring leaders should get in
the habit of thinking of their actions as a form of communication.
Remember, the organization is always watching you. What are the
lessons you want to impart through your behavior?

When you do all these things, you will fi nd that not only does
your own infl uence grow, but you will also have created a two –
way communication with your people that will help you grow and
develop as a leader.

To become a truly effective leader, of course, it isn ’ t enough
just to bootstrap your own leadership capacity. You also have to
bootstrap the next generation of leaders. A lot of companies these
days are setting up formal succession – planning programs. But what
I am talking about is so much more than succession planning. In
effect, leaders are planning for succession every day — in the way
they function as role models, in the way they communicate their
decisions, in the mistakes they make and how they react to them. It
is through everyday behavior that aspiring leaders institution alize
their leadership approach in the organization.

At Intel Israel, many of the decisions I made regarding
people — the no – transfer rule, recruiting a more diverse workforce,
lateral transfers among managers — all had to do with expanding

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110 L E A D E R S H I P T H E H A R D W AY

the pool of potential next – generation leaders and providing them
with the experiences they needed to develop their own leadership
capacities. How they responded to the challenges I set for them
taught me who had the capacity to develop into a genuine leader
and who did not. Over time I was able develop a cadre of leaders
that were empowered to make important decisions without my
direct involvement. Once I had achieved this, succession planning
more or less took care of itself.

In the process, one of the things I learned is that leaders are
found in the strangest places. Often the best candidates turn out
to be people from outside the mainstream — the misfi ts, the critics,
sometimes even the naysayers — who at first glance one would
never expect would have leadership potential. So be prepared
to look for new leaders in unexpected places and to give them
the opportunity they need to bootstrap their own learning. You ’ ll
become a better leader as a result.

Passion, mentors, in – the – moment refl ection, people — these
are some of the key resources that an aspiring leader can use to
bootstrap leadership. What you will learn from using them is not
so much the skills of leadership but the wisdom of leadership: that
ineffable but essential dimension of leadership that cannot really
be taught.

But in the end you will have to fi nd your own way, and, no
doubt, it will be different from my own. You will have to take the
principles outlined in this book and make them come alive in a
way that makes sense for you, given your own history, personality,
and organizational context. When you do, you will have embarked
on the lifelong journey of becoming a self – taught leader — just as
I did more than thirty years ago.

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111

Epilogue:
Knowing When to Let Go

The ultimate act of leadership is knowing when to let go. In
my experience, many leaders, even quite successful ones, stay
on far too long in positions of authority. They don ’ t step down
until they realize that they have begun to fail. But the damage
to the organization is already done, because by the time a leader
recognizes that he or she is failing, chances are it has already been
the case for many years. Better to leave at a point of time that may
seem to be too early. No individual is indispensable. Sometimes,
leaving is the most effective act of leadership there is.
In 2001, I retired from Intel and let go of the reins of leadership
at Intel Israel. I left because I had begun to feel like I was repeating
myself. Often, in meetings with my staff and subordinates, I
found myself thinking “ I ’ ve heard all these questions before. ” And
I distrusted my sense that I also knew all the answers. When you
get to the point that you are fl ying on autopilot most of the time, it
is high time to land.
People were surprised at my decision. I was leaving at the
height of our achievement, much as I did when I fi rst left Intel
after inventing the EPROM to go teach in Africa. Many people
thought it was “ too soon. ” Some even wondered whether Intel
Israel could continue to succeed without me running interference
for the organization with Intel corporate.
I wasn ’ t worried. I felt it was time for the organization to have
new leaders who would bring fresh perspectives on Intel Israel ’ s
challenges and opportunities. I saw my retirement as yet another

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112 L E A D E R S H I P T H E H A R D W AY

way to break through the complacency that can develop in any
successful organization, to force the organization to stay on its
toes and to step up and take responsibility for Intel Israel ’ s future
survival.
My attitude was, I had created the Intel Israel culture and
institutionalized a distinctive style of leadership; now it was time
for me to get out of the way. If I stayed to the very last minute, tried
to maintain my control, the new generation of leaders wouldn ’ t be
able to express themselves, to take on more responsibility, and to
become leaders in their own right. And I was confi dent that they
were ready to lead.
Subsequent events proved me right. Intel Israel ’ s actions dur-
ing the 2006 summer war between Israel and Hezbollah (which, for
the Haifa design center, was far more dangerous than anything we
faced in the First Gulf War) demonstrated that the organization is
still insisting on survival. The development of the innovative Core
2 Duo family of low – power microprocessors, introduced in 2006,
showed that Intel Israel continues to lead against the current. And
the 2005 announcement that Intel would invest $3.5 billion to
build a new state – of – the – art semiconductor fab in Qiryat Gat (the
biggest construction project in the history of the state of Israel,
the new fab is taking shape, as I write, next door to the existing
plant) illustrated that Intel Israel is still leveraging random oppor-
tunities to win the global competition for investment.
I made a clean break when I left Intel Israel. Indeed, the fi rst
time I returned to an Intel Israel site was some six years later, when
I was in the midst of writing this book. For years, people would ask
me, “ When are you coming back? ” They still do. But it was clear
to me that there was no need. They are doing far better than I
could have done if I were still around.
Another question I often hear from former colleagues is “ So,
what are you doing these days? ” Usually I respond, “ Trying to fi gure
out what I am going to do when I grow up! ” The real answer is,
spending time at my vacation home in the Dolomite Mountains of
northeastern Italy, a country and culture that I love for its delightful

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K N O W I N G W H E N T O L E T G O 113

randomness and fl air for improvisation that is very much in the spirit
of leadership the hard way; writing this book to capture and share my
thinking about the lessons of my life and my career; and looking for
new creative ways to push my ideas beyond the realm of business
and to address the crisis of leadership in our world.
Back in the 1990s, when we were looking for a site for what
would become the fi rst Qiryat Gat fab, I developed a passion for
Israel ’ s south — a passion that continues to this day. Israel ’ s fi rst
prime minister, David Ben – Gurion, was convinced that the future
of the country would be found there — so much so that when he
retired from politics he went to live at Kibbutz Sde Boker, near
Wadi Hawarim, deep in the Negev Desert. One of my retirement
projects is to create what I call a “ center for alternative thinking ”
on a high plateau above Sde Boker. The purpose of the center is to
expose the next generation of Israelis to unconventional ways of
seeing the world and to promote innovation and creativity. It will
be a place where people from all walks of life can come together to
explore fresh solutions to some of the most intractable problems
facing our society. What will it take to fi nally realize Ben – Gurion ’ s
vision for the development of the south of Israel? How can we
meet the challenges of Israel ’ s failing educational system? And,
perhaps most important, what are the alternatives to the by now
thoroughly exhausted paradigms of “ security ” and “ terrorism ” in
our relations with the Palestinians?
Some people think the idea is crazy. Why would anyone want
to come to the middle of nowhere just to discuss tough, and maybe
even impossible, problems? But I ’ m used to such skepticism.
Thirty – fi ve years ago, who would have imagined that the world ’ s
most advanced microprocessors would be designed and built in the
Middle East?
As I ’ ve said many times, leadership the hard way means not
taking no for an answer.
If you can ’ t go through the door, go through the window.
Sometimes the best way to survive a thunderstorm is to fl y
right through it.

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115

Notes

Introduction

1. See 360° : The Merrill Lynch Leadership Magazine , inaugural
issue published Sept. 2006 at http://mag1.olivesoftware
.com/am/welcome/360TheMerrillLynchLeadershipMagazine/
Dec2006/

2. See, for example, the description of Gonzaga University ’ s
Ph.D. in Leadership Studies at http://www.gonzaga.edu/
Academics/Colleges�and�Schools/School�of�Professional
�Studies/Ph.D.�-�Leadership�Studies/default.asp

3. Wolfgang Langewiesche, Stick and Rudder: An Explanation of
the Art of Flying (McGraw – Hill, Inc., 1972), p. 3.

4. Andrew S. Grove, Only the Paranoid Survive (Doubleday
Currency, 1996), p. 5.

5. See Clayton M. Christensen, The Innovator ’ s Dilemma: How
New Technologies Cause Great Firms to Fail (Harvard Business
School Press, 1997).

6. Langewiesche, Stick and Rudder , p. 5.
7. See AnnaLee Saxenian, The New Argonauts: Regional Advan-

tage in a Global Economy (Harvard University Press, 2006).
8. As quoted in A Revolution in Progress: A History of Intel to Date

(Intel Corporation, 1984), p. 22.
9. See Warren Bennis and Robert Thomas, Geeks and Geezers:

How Eras, Values, and Defining Moments Shape Leaders
(Harvard Business School Press, 2002).

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116 N O T E S

Chapter One

1. Grove, Only the Paranoid Survive , p. 3.
2. These fi gures come from Bob Moore, Victims and Survivors:

The Nazi Persecution of the Jews in the Netherlands, 1940 – 1945
(Arnold, 1997), pp. 146, 164 – 165.

Chapter Two

1. See Ed Michaels, Helen Handfi eld – Jones, and Beth Axelrod,
The War for Talent (Harvard Business School Press, 2001).

2. See Ian King, “ Intel ’ s Israelis Make Chip to Rescue Company
From Profi t Plunge, ” Bloomberg News , Mar. 27, 2007.

Chapter Three

1. Robert A. Burgelman, Strategy Is Destiny: How Strategy – Making
Shapes a Company ’ s Future (Free Press, 2002), p. 90.

2. Tim Jackson, Inside Intel: Andy Grove and the Rise of the World ’ s
Most Powerful Chip Company (Dutton, 1997), p. 106.

Chapter Four

1. The statistics in this section are from “ The Gulf Crisis in Israel:
A War for the Age of Uncertainty, ” Israel Yearbook and Almanac
1991/92 (IBR Translations/Documentation Limited, 1992).

2. See Dov Frohman, “ Leadership Under Fire, ” Harvard Business
Review , Dec. 2006, pp. 124 – 131.

Chapter Five

1. Marcus Aurelius, Meditations, Book IV (Dover Publications,
1997), p. 23.

2. For recent reviews of this research, see Robin M. Hogarth,
Educating Intuition (University of Chicago Press, 2001); David

bnotes.indd 116bnotes.indd 116 2/2/08 10:46:51 AM2/2/08 10:46:51 AM

N O T E S 117

G. Myers, Intuition: Its Powers and Perils (Yale University Press,
2002); and Malcolm Gladwell, Blink: The Power of Thinking
Without Thinking (Little, Brown and Co., 2005).

3. For the classic description of the role of tacit knowledge in
innovation, see Ikujiro Nonaka and Hirotaka Takeuchi, The
Knowledge – Creating Company: How Japanese Companies Create
the Dynamics of Innovation (Oxford University Press, 1995).

4. As quoted in Myers, Intuition , p. 1.
5. For a comprehensive set of guidelines for educating intuition,

see Hogarth, Educating Intuition , pp. 207 – 212.

Chapter Six

1. For a by now classic statement on this issue, see Robert Howard,
“ Values Make the Company: An Interview with Robert Haas, ”
Harvard Business Review , Sept. – Oct. 1990, p. 134.

Chapter Seven

1. Bill George, with Peter Sims, True North: Discover Your Authen-
tic Leadership (Jossey – Bass, A Warren Bennis Book, 2007),
pp. 120 – 121.

2. For Grove ’ s experiences during the war, see Andrew S. Grove,
Swimming Across: A Memoir (Warner, 2001); and Richard
S. Tedlow, Andy Grove: The Life and Times of an American
(Portfolio Penguin, 2006).

3. Tedlow, Andy Grove , p. 151.
4. See, for example, Sydney Finkelstein, Why Smart Executives

Fail (Penguin Putnam, 2003); and Jeffrey A. Sonnenfeld and
Andrew J. Ward, Firing Back: How Great Leaders Rebound After
Career Disasters (Harvard Business School Press, 2007).

5. See Donald Sch ö n, The Refl ective Practitioner: How Professionals
Think in Action (Basic Books, 1983).

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119

Acknowledgments

This book is the product of a lifetime ’ s work and learning, and
many people have contributed to my perspective on leadership
along the way. I would like to thank, fi rst, all my colleagues at
Fairchild Semiconductor and at Intel Corporation with whom I
shared the challenges of leadership over more than three decades;
in particular, the late Bob Seeds, my fi rst boss in the Digital Elec-
tronics department at Fairchild ’ s R & D laboratories; Les Vadasz,
my fi rst boss at Intel; and Intel ’ s former CEO and current chair-
man, Craig Barrett.

I also want to acknowledge the extraordinary contribution and
achievement of Intel ’ s founders, Gordon Moore and the late Rob-
ert Noyce. Not only did they support me in my endeavors from
the early days of the development of the EPROM, but they also
created an organization and a culture in which I was continually
encouraged to take risks, pursue my dreams, and bring them to
fruition. They were truly inspiring leaders.

As the preceding pages make clear, I owe a special debt of
gratitude to Andy Grove. From that fi rst moment when I turned
down Andy ’ s offer to work in his lab at Fairchild, Andy has been
an important fi gure in my life. It was Andy, more than any other
single individual, who made possible the creation of Intel Israel. I
could not have achieved what I did without his support, advice, and,
sometimes, criticism. He is my model for leadership the hard way.

I would also like to thank all my former colleagues at Intel
Israel and, in particular, the fi rst generation of leaders who helped
build the organization: the late Moshe Balog, Marek Sternheim,
Eli Porat, Rafi Nave, Alex Kornhauser, and Dadi Perlmutter.

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120 A C K N O W L E D G M E N T S

When I first began to think about writing this book, I
approached the well-known Israeli writer and Yedioth Ahronoth
columnist Meir Shalev. I would like to thank Meir not only for
encouraging me to pursue my project but also for having the good
sense not to tell me just how diffi cult writing a book would be.

My Jerusalem friend Bernard Avishai, author of The Tragedy
of Zionism and contributing editor at the Harvard Business Review,
read an unwieldy early version of my manuscript and helped me
fi gure out what to do with it. I want to thank Bernie especially for
the delicacy and fi nesse with which he persuaded me that I needed
a writing partner and for putting me in touch with one.

This book would not have been possible without the engage-
ment, skills, and experienced counsel of that writer, Robert
Howard. I was always amazed by the way that Bob would
completely change what I had originally written and yet in the
process succeed in capturing exactly what I wanted to say. I want
to thank him for what has been an efficient — and extremely
enjoyable — collaboration. I will remember fondly our working
sessions in the Dolomites, Boston, and Jerusalem. (A special
thanks to Bob and his wife Leslie Schneider for their hospitality
during my visit to Boston in the summer of 2006.)

I also want to thank the various editors who have helped
shepherd the book into publication. Diane Coutu, senior editor
at the Harvard Business Review, championed an early version of
Chapter Four and expertly guided it into the pages of that impor-
tant resource for managers and leaders. Susan Williams saw the
potential of this project and has made a wonderful home for it
at Jossey – Bass. And Rob Brandt has ably managed the editorial
process. I am especially grateful to Warren Bennis, distinguished
professor of business administration and founding chairman of the
Leadership Institute at the University of Southern California ’ s
Marshall School of Business, for choosing this book as a title in
the Warren Bennis Signature series at Jossey – Bass. My thanks to
Warren for this singular honor.

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A C K N O W L E D G M E N T S 121

My heartfelt gratitude and appreciation also go out to my
family — my wife, Eilat, my son, Eran, and my daughter, Lora. For
many years, their sacrifi ces allowed me to pursue with unstinting
focus and engagement my passion to create Intel Israel. They
have graciously put up with my daydreaming and my risk taking
( including in that thunderstorm over the Peloponnese!). And they
have read and commented on early versions of my manuscript.
They have been partners throughout this venture.

Finally, I have chosen to dedicate this book to the memory
of my three sets of parents who, at great sacrifi ce in a dark and
dangerous time, helped launch me on my life ’ s path: my birth par-
ents, Abraham and Feijga Frohman; my temporary war time
parents, Antonie and Jenneke Van Tilborgh; and my adoptive par-
ents in Israel, Lea and Moshe Bentchkowsky.

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123

The Authors

Dov Frohman

Dov Frohman is a pioneer of the global corporation. A former
executive at Intel Corporation, he was the founder and gen-
eral manager of Intel Israel, the company ’ s operations in Israel.
For nearly thirty years, he created and led a highly successful
organization in one of the most demanding and competitive
industries and in one of the most dangerous regions of the world.

During his time at Intel, Mr. Frohman was a leading innovator
in the semiconductor industry. An Israeli citizen, he was trained in
electrical engineering at the Israel Institute of Technology
( Technion) in Haifa, Israel, and received his Ph.D. in electrical
engineering and computer science from the University of
California at Berkeley. As a new employee at Intel, he invented
the EPROM — the fi rst reprogrammable read – only semiconductor
memory — an innovation that Intel founder Gordon Moore has
termed “ as important in the development of the microcomputer
industry as the microprocessor itself. ” For this singular achieve-
ment, Mr. Frohman received the IEEE Jack Morton Award in 1982
and the prestigious IEEE Edison Medal in 2008.

Mr. Frohman spent most of his career building Intel Israel into
a fl agship of the Intel Corporation and a cornerstone of the Israeli
high – tech economy. He helped found Intel Israel in 1974, became
its general manager in 1981, and ran the organization until his
retirement in 2001. In recognition of his scientifi c and techni-
cal achievements and of his contributions to the development
of Israel ’ s high – technology sector, Mr. Frohman was awarded the
Israel Prize for Engineering and Technology in 1991.

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123

The Authors

Dov Frohman

Dov Frohman is a pioneer of the global corporation. A former
executive at Intel Corporation, he was the founder and gen-
eral manager of Intel Israel, the company ’ s operations in Israel.
For nearly thirty years, he created and led a highly successful
organization in one of the most demanding and competitive
industries and in one of the most dangerous regions of the world.

During his time at Intel, Mr. Frohman was a leading innovator
in the semiconductor industry. An Israeli citizen, he was trained in
electrical engineering at the Israel Institute of Technology
( Technion) in Haifa, Israel, and received his Ph.D. in electrical
engineering and computer science from the University of
California at Berkeley. As a new employee at Intel, he invented
the EPROM — the fi rst reprogrammable read – only semiconductor
memory — an innovation that Intel founder Gordon Moore has
termed “ as important in the development of the microcomputer
industry as the microprocessor itself. ” For this singular achieve-
ment, Mr. Frohman received the IEEE Jack Morton Award in 1982
and the prestigious IEEE Edison Medal in 2008.

Mr. Frohman spent most of his career building Intel Israel into
a fl agship of the Intel Corporation and a cornerstone of the Israeli
high – tech economy. He helped found Intel Israel in 1974, became
its general manager in 1981, and ran the organization until his
retirement in 2001. In recognition of his scientifi c and techni-
cal achievements and of his contributions to the development
of Israel ’ s high – technology sector, Mr. Frohman was awarded the
Israel Prize for Engineering and Technology in 1991.

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124 T H E A U T H O R S

During his long and illustrious career, Mr. Frohman also served
as visiting professor at the University of Science and Technology in
Kumasi, Ghana, and as professor of applied physics at the Hebrew
University in Jerusalem, Israel, where he directed the School of
Applied Science and Technology.

Today, Mr. Frohman divides his time between his two homes,
one in Jerusalem and one in Selva di Cadore in the Dolomite
region of Italy.

Robert Howard

Robert Howard is a veteran writer on work, technology, and man-
agement. He is the author of Brave New Workplace (The Viking
Press, Elisabeth Sifton Books, 1985) and the editor of The Learn-
ing Imperative: Managing People for Continuous Innovation (Harvard
Business School Press, 1993).

Mr. Howard ’ s writing has appeared in a number of national
publications including the Harvard Business Review , MIT ’ s
Technology Review , the New York Times Book Review , and The New
Republic . He has been the recipient of an Award for Distinguished
Investigative Reporting from Investigative Reporters and Editors
(IRE) and the Jack London Award from the United Steelworkers
Press Association.

Mr. Howard has been a senior editor at Technology Review and
at the Harvard Business Review . He also worked for ten years as
director of idea development at The Boston Consulting Group,
a major international management consulting fi rm.

Mr. Howard is a summa cum laude graduate of Amherst
College and has done graduate work in sociology and history at
the University of Cambridge in England and the Ecole Normale
Sup é rieure in Paris, France. He has been a visiting scholar in the
Program on Science, Technology, and Society at the Massachusetts
Institute of Technology and an affiliate scholar at the Boston
Psychoanalytic Institute.

Mr. Howard lives in Newton, Massachusetts.

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125

Index

A

Administrative assistants, 72–73
Anchor tenants, 48

B

Barrett, Craig, 14, 24, 26, 58, 92
Behavior: communicating through,

79–84; using strategically, 109; and
values, 96–97

Being present in the organization, 108
Ben-Gurion, David, 113

C

Chaos, embracing, 64–65
Child care, 65
Cohen-Dorfl er, Jenny, 30
Communication, through behavior,

79–84
Contingency plans, 55–56
Copy Exactly program, 23–24
Core 2 Duo, 33, 112
Counterculture, 20–22
Crazy action, 18
Criticism, 19–20; self-criticism, 108–109

D

Daydreaming, 74–77
Deming, Edward, 9
Dissent, 109; encouraging, 18–19;

listening to, 30
Diversity, 28–29

E

Einstein, Albert, 77
Emigrating to Israel, 6

Employee theft, 91
Employment incentives, 89–91
EPROM, invention of, 37–41
Erlich, Shuky, 67
Excuses, 19

F

Failure, human price of, 32
Fassberg, Maxine, 30
Fear, containing, 8–10
First Gulf War, 53–68
Freeing up time, 70–73
Frohman, Abraham, 3, 4
Frohman, Feijga, 3, 4
Frontier cultures, 23

G

George, Bill, 102
Goals, impossible, 10–12
Grove, Andy, 1–2, 8, 26, 43–44, 47,

49–50, 51, 58, 63, 101; as mentor,
103–106

H

Haifa design center, 8, 27, 34, 67.
See also Intel Israel

Hiding from the Nazis, 3–5
Hiring, 27–30
Hussein, Saddam, 56

I

Identifying with the organization’s
mission, 99–100

Impossible goals, 10–12
Innovation, 12–16; and daydreaming, 75

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Insiders, 18
Instincts, 64–65
Intel Israel, 7–8; Haifa design center,

8, 27, 34, 67; Jerusalem fab, 13–15,
46–50, 51, 55; letting go, 111–113;
no-transfer rule, 25–27; Qiryat Gat
fab, 15, 51, 67, 88–89, 112; staying
open during First Gulf War, 53–68

Intelligence, 91–92
Intuitions, 77–79
Invisible mentors, 102–106
Israel: Chief Rabbi of, 92–93;

engineering talent, 27–28; the
future of high-tech industry in,
101–102

J

Jerusalem fab, 55; establishing, 46–50;
modernizing, 13–15, 51. See also Intel
Israel

K

Kolleck, Teddy, 50
Kornhauser, Alexander, 33

L

Lateral transfers, 31–33, 78
Layoffs, 7–8
Leaders: characteristics, 18–19;

inner life of, 69
Leadership: bootstrapping, 99–110; as

counterculture, 20–22; under fi re,
53–68; letting go, 111–113

Leading: apart from the mainstream,
23–27; against the current, 17–20

Leaks, 92
Learning from your people,

108–110
Letting go, 111–113
Local culture, 33–34

M

Marcus Aurelius, 70
MELACH, 59
Mentorship, 102–106
Microprocessors, 33–34
Mistakes: acknowledging, 94–96;

learning from, 30–33
Moore, Gordon, 46, 58, 103

N

Nkrumah, Kwame, 44
No-transfer rule, 25–27
Noyce, Bob, 58, 103

O

Opportunity: leveraging random
opportunities, 35–37; not taking no
for an answer, 51; striking when the
iron is hot, 45–50; turning a problem
into a product, 37–41; and vision,
41–45

Orientation sessions, 95–96
Orientation to results, 87
Ottelini, Paul, 26, 33
Outsiders, 18

P

Passion, 36; staying true to, 99–102
Perlmutter, Dadi, 34

Q

Qiryat Gat fab, 15, 51, 67, 88–89, 112.
See also Intel Israel

R

RAM, 38
Recruiting, 28–29
Refl ective practitioners, 106–108
Resistance, 19
Responsibility for survival, 6–7
Risk-taking, and survival, 5
Rock, Arthur, 45
ROM, 38

S

Schön, Donald, 107
Scud business as usual, 62–66
Self-criticism, 108–109. See also

criticism
Slogan, 7
Soft skills, 69–70
Sporck, Charlie, 106
Strategic infl ection point, 2
Survival: individual vs. organizational, 5;

and innovation, 12–16; responsibility
for, 6–7; and risk-taking, 5; in Second
World War, 3–6; threats to, 1–3

126 I N D E X

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T

Team orientation, 23; Israeli compared to
Japanese, 24

Tedlow, Richard, 106
Terrorism, fear of, 9
Thurow, Lester, 76
Transparency, 93–94
True North (George), 102
Trust, 79

V

Values, 5, 79, 85–87; acknowledging
mistakes, 94–96; and behavior, 96–97;

being relentless about, 87–91; saying
“no” to inappropriate behavior, 91–93;
transparency, 93–94

Van Tilborgh, Antonie, 3–6
Van Tilborgh, Jenneke, 3–6
Vision, 5, 36; staying true to, 41–45
Voicemail, 72–73

W

War for talent, 27–30
War on terror, 86
Worst-case thinking, 9–10

I N D E X 127

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