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Understanding the process of making a decision is crucial for every executive and most managers.  The formal systems used to come to decisions are usually broken out into smaller bite sized models.  Each person in management must implement these models in their organization in order to move the business forward in a prudent fashion.  After some time, it will become apparent what helps the business in its decision making processes and what does not.  The templates become more refined and the processes become more streamlined as success is focused in on especially in regard to employee management.

For many businesses these decisions are critical to the life of the company.  In one instance, the decision making process for the company was critical to the lives of the employees.  This was the case with the Israeli division of Intel.   Dov Frohman was the executive in charge of the Israeli division of Intel.  Israel was the largest sector of Intel outside of the United States in a multi-billion dollar, global company.  Intel is the manufacturer of semiconductor chips and computer processors.

Dov was faced with the most important decision of his personal and professional life.  During the first Gulf War, Israel came under attack by Iraq and its SCUD missiles.  At the time the Israeli government has asked all non-essential businesses be closed and people prepare for chemical and biological warheads carries by the SCUDS.  Dov and his management team made the decision to remain open and ask their employees to come to work on a full schedule of day and night time shifts.

The decision to remain open was not made on the fly or without input from senior management.  As most companies in unstable areas of the world, Intel Israel had developed a Business Continuity plan.  The plan was developed by senior management and was based on the assumptions of a conventional war.  Yet, the war that was coming for Israel was different than what the plans had been developed for.  “But almost from the moment we finalized our contingency plan, it became clear that this war would be very different. The politics of the U.S.-created anti- Iraq coalition made it imperative that Israel stay out of the war. For that very reason, it was in Saddam Hussein’s interest to provoke Israel into intervening.  By September, U.S. satellites had detected the transport of ballistic missiles to western Iraq – a mere seven minutes’ travel time from Tel Aviv. Israeli defense officials were saying that a chemical attack on the country’s major population centers was likely –“ (Frohman, 2006).

Internal forces came into the decision making process as much as the external geopolitical forces at work. Over the few years before the war, there was a growing rumble from senior executives in the business that Intel Israel was unsafe for travel.  Other issues had arisen over control of key projects for Intel that the Israeli division was overseeing.  All of the forces came together with a strong feeling by Frohman that if the Israeli division saw any interruption in production, even for war, that not only would it spell the end of Intel’s support of the Israeli section of their business, but the tech sector in Israel would suffer as a whole.

Frohman called a meeting with his senior managers and assumed a very tough role as a leader.  “So as I drove to the task force meeting, I formulated what I saw then as an against-the-current decision to assure the company’s survival: We would ignore the civil defense directive. I was going to ask our people to come to work” (Frohman, 2006).

Frohman used a series of decision making tools in order to make a good choice for not only his employees in the sort term, but the business in the long term.  Frohman used a series of planning groups to develop a solid plan for war time business production.  As the new war came into formation, Frohman realized he would have to make a more complicated decision.  Internal company struggles coupled with external issues in Israel forced Frohman to meld a gut feeling of long term success for the business with the well being of his employees in the short term.

Frohman knew if he closed down for war, the Intel executives in the US would be justified in their beliefs that Intel Israel was unsafe and not fit for a development of critical projects.  If the plant was cut from large projects, the prestige of the tech sector in Israel as a whole would falter and the division would certainly face cutbacks and may even be relocated after a few years.  Frohman believed it was in the organization’s best interest to stay open.

The decision was made through careful critical thinking.  Each issue fed into the other and was part of a process in which the ultimate conclusion was clear.  Some of these decisions were made on gut feeling, but were corroborated by a group of senior mangers who helped to form the plan for implementing the overall strategy for the business during war.  Jim Collins believes that good decisions are made with careful thought and participation.  “Mediocre companies tend to make big decisions fast. Instead, the actual process of how great companies make their decisions [is that] they tend to engage in tremendous dialogue and debate. They have disagreements, and it is infused with analysis and fact finding, leading to a point of decision. Sometimes–usually–it is a long dialogue; sometimes it is relatively short” (Greatness, 2006).

In retrospect, the decision to remain open was a key factor to the long term success of Intel in Israel.  The Israeli division proved that it could shoulder the load of Intel it was asked to, even during war.  “Today, Intel Israel is the headquarters or the company’s global R&D and product development in wireless technology, s well as a major center for hip fabrication. The organization is Israel’s largest private employer (and second largest employer overall), with workforce of about 6,600, which is set to reach nearly 10,000 by 2008. In 2005, Intel Israel’s exports totaled $1.2 billion and represented 14% of the total exports of Israel’s electronics and information industry. And in December 2005, Intel announced that it would invest an additional $3.5 billion in a new fab in Israel, the largest single investment by a corporation in the history of the country” (Frohman, 2006).

References:

Frohman, D.  (2006, July).  Leadership Under Fire.  Harvard Business Review, 84 (12), 124-131. Retrieved November 20, 2006, from EBSCO Database

Measures of Greatness.  Associations Now. Retrieved Nov 20, 2006 from http://www.asaecenter.org/PublicationsResources/ANowDetail.cfm?ItemNumber=20825

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