“It’s unbelievable that, just a few years ago, we were designing something that no one wanted,” says Friedman, who is still based in Haifa but now leads development teams for Intel around the world. “Now we’re doing processors that should carry most of Intel’s revenue—we can’t screw up.”
What began as an isolated outpost an ocean away had become Intel’s lifeline. As Doug Freedman, an analyst for American Technology Research, put it, the Israeli team “saved the company.” Had midlevel developers in the Haifa plant not challenged their corporate superiors, Intel’s global position today would be much diminished.
Intel Israel’s search for a way around the power wall also produced another dividend. We don’t think of computers as using a lot of electricity—we leave them on all the time—but, collectively, they do. Intel’s ecotechnology executive, John Skinner, calculated the amount of power that Intel’s chips would have used if the company had kept developing them in the same way, rather than making the “right turn” toward the Israeli team’s low-power design: a saving of 20 terawatt hours of electricity over a two-and-a-half-year period. That’s the amount of power it would take to run over 22 million 100-watt bulbs for an entire year, twenty-four hours a day, seven days a week. Skinner noted, “We calculated about a $2 billion savings in electricity costs. . . . It’s equivalent to a small number of coal-fired power plants or taking a few million cars off the road. . . . We’re very proud that we are dramatically reducing the carbon dioxide footprint of our own company.”[41]
The significance of the Intel Israel story is not, however, just that the team in Haifa came up with a revolutionary solution that turned the company around. A good idea alone could not have carried the day against a seemingly intransigent management team. There had to be willingness to take on higher authorities, rather than simply following directives from the top. Where does this impudence come from?
Dadi Perlmutter recalls the shock of an American colleague when he witnessed Israeli corporate culture for the first time. “When we all emerged [from our meeting], red faced after shouting, he asked me what was wrong. I told him, ‘Nothing. We reached some good conclusions.’ ”
That kind of heated debate is anathema in other business cultures, but for Israelis it’s often seen as the best way to sort through a problem. “If you can get past the initial bruise to the ego,” one American investor in Israeli start-ups told us, “it’s immensely liberating. You rarely see people talk behind anybody’s back in Israeli companies. You always know where you stand with everyone. It does cut back on the time wasted on bullshit.”
Perlmutter later moved to Santa Clara and became Intel’s executive vice president in charge of mobile computing. His division produces nearly half of the company’s revenues. He says, “When I go back to Israel, it’s like going back to the old culture of Intel. It’s easier in a country where politeness gets less of a premium.”
The cultural differences between Israel and the United States are actually so great that Intel started running “cross-cultural seminars” to bridge them. “After living in the U.S. for five years, I can say that the interesting thing about Israelis is the culture. Israelis do not have a very disciplined culture. From the age of zero we are educated to challenge the obvious, ask questions, debate everything, innovate,” says Mooly Eden, who ran these seminars.
As a result, he adds, “it’s more complicated to manage five Israelis than fifty Americans because [the Israelis] will challenge you all the time—starting with ‘Why are you my manager; why am I not your manager?’ ”[42]
CHAPTER 2
Battlefield Entrepreneurs
The Israeli tank commander who has fought in one of the Syrian wars is the best engineering executive in the world. The tank commanders are operationally the best, and they are extremely detail oriented. This is based on twenty years of experience—working with them and observing them.[43]
ON OCTOBER 6, 1973, as the entire nation was shut down for the holiest day of the Jewish year, the armies of Egypt and Syria launched the Yom Kippur War with a massive surprise attack. Within hours, Egyptian forces breached Israel’s defensive line along the Suez Canal. Egyptian infantry had already overrun the tank emplacements to which Israeli armored forces were supposed to race in case of attack, and hundreds of enemy tanks were moving forward behind this initial thrust.
It was just six years after Israel’s greatest military victory, the Six-Day War, an improbable campaign that captured the imagination of the entire world. Just before that war, in 1967, it looked like the nineteen-year-old Jewish state would be crushed by Arab armies poised to invade on every front. Then, in six days of battle, Israel simultaneously defeated the Egyptian, Jordanian, and Syrian forces and expanded its borders by taking the Golan Heights from Syria, the West Bank and East Jerusalem from Jordan, and the Gaza Strip and Sinai Peninsula from Egypt.
All this gave Israelis a sense of invincibility. Afterward, no one could imagine the Arab states risking another all-out attack. Even in the military, the sense was that if the Arabs dared attack, Israel would vanquish their armies as quickly as it had in 1967.
So on that October day in 1973, Israel was not prepared for war. The thin string of Israeli forts facing the Egyptians across the Suez Canal was no match for the overwhelming Egyptian invasion. Behind the destroyed front line, three Israeli tank brigades stood between the advancing Egyptian army and the Israeli heartland. Only one was stationed close to the front.
That brigade, which was supposed to defend a 120-mile front with just fifty-six tanks, was commanded by Colonel Amnon Reshef. As he raced with his men to engage the invading Egyptians, Reshef saw his tanks getting hit one after another. But there were no Egyptian enemy tanks or antitank guns in sight. What sort of device was obliterating his men?
At first he thought the tanks were being hit by rocket-propelled grenades (RPGs), the classic handheld antitank weapon used by infantry forces. Reshef and his men pulled back a bit, as they had been trained, so as to be out of the short range of the RPGs. But the tanks kept exploding. The Israelis realized they were being hit by something else—something seemingly invisible.
As the battle raged, a clue emerged. The tank operators who survived a missile hit reported to the others that they’d seen nothing, but those next to them mentioned having seen a red light moving toward the targeted tanks. Wires were found on the ground leading to stricken Israeli tanks. The commanders had discovered Egypt’s secret weapon: the Sagger.
Designed by Sergei Pavlovich Nepobedimyi, whose last name literally means “undefeatable” in Russian, the Sagger was created in 1960. The new weapon had initially been provided to Warsaw Pact countries, but it was first put to sustained use in combat by the Egyptian and Syrian armies during the Yom Kippur War. The IDF’s account of its own losses on both the southern and northern fronts was 400 tanks destroyed and 600 disabled but returned to battle after repairs. Of the Sinai division’s 290 tanks, 180 were knocked out the first day. The blow to the IDF’s aura of invincibility was substantial. About half of the losses came from RPGs, the other half from the Sagger.
41
“Energy Savings: The Right Hand Turn,” video presentation by John Skinner, Intel Web site, http://video.intel.com/?fr_story=542de663c9824ce580001de5fba31591cd5b5cf3&rf=sitemap.