CEO Gjalt Smit’s first team presentation at ASML had a big impact. One of the attendees looks back, while Smit outlines the background to this historic pep talk.
When it comes to corporate culture, ASML couldn’t have been worse off in its early days. The fifty technicians in the joint venture that had been spun out from Philips were burnt out. Their energy level had hit rock bottom. The team that was formerly part of Philips Science & Industry (S&I) was largely convinced that the litho activities had been separated with the premeditated aim of going bankrupt and thus sparing the parent company a financial blow.
Nevertheless, things turned around quickly. After a few years, many of the original fifty employees returned to the safe environment of Philips, with its generous pension scheme and scholarships for employees’ children. But the other part of the team was keen to get back into the swing of things.
Frans Klaassen was one of the technicians who transferred from Philips to ASML. “There was never money to do development,” he says, briefly outlining the situation at Philips S&I. The litho team was understaffed there and the technicians knew that their machine wasn’t good enough. “No money for development was one of our frustrations,” Klaassen recalls. According to him, his boss Wim Troost told them: just make sure those machines are working and the customers will come.
Interestingly, the people involved point to two striking aspects of the cultural change at ASML. The number of employees more than doubled, but the members of the first Philips team also call attention to one specific event: the first major presentation by the new leader, Gjalt Smit, on the state of affairs and the future of ASML.
The presentation made a big impression on the young engineer Klaassen. “Really, it’s the most unusual thing I’ve experienced in all these years,” he says. “Smit totally won that club over in an hour. I thought that was incredibly clever.” Klaassen explains what made the event special. “Smit was funny. All his slides had cartoons on them showing the stepper as a kids scooter – the Duch word for which is ‘step.’ Just the fact that he’d gone to the trouble of having drawings made – I thought, wow, here’s someone who pays attention to his presentation. I’d never experienced that at Philips.”
That Smit spoke openly about the state of the company and what was about to happen was a revelation to Klaassen as well. “He said, ‘You guys have a nice stepper, a good concept, a nice stage and a nice alignment system. That machine is basically pretty good. Only, a lot still needs to be done with the lenses, the stage, and so on.’ He also said that this development would cost money. I believe he mentioned an amount of 60-70 million guilders. Well, we all fell over.” Klaassen clarifies: “At Philips, it was always a case of putting your back into it: sell a few machines first and then we’ll have money to do some nice developments. Now, there was someone who said: you need to spend some money before it will produce anything. ASML was going to hire people! We couldn’t believe our own ears.”
As a third point, Klaassen mentions the clearly expressed ambition. “During the first meeting, Smit said, ‘We must aim for the top three.’ We were flabbergasted. A few people remained skeptical, but we felt supported. A lot still had to be done, but we were given the opportunity and that’s why the mood changed. The tenor was: we’ll see what comes out, but we’re just going to do it.”
The young engineer also remembers the first sessions with Smit. “He asked everyone where we really stood. I remember a meeting about the wafer stage and its control electronics. He had an attitude of: just tell me. But we were reluctant, not used to putting everything on the table. But Gjalt kept asking: how do you do this, how do you do that? How does the stage work? We timidly admitted that we were working with analog controls and not yet with digital ones. We thought we were way behind, and it was embarrassing to admit this to the boss. We were really afraid that he would say: guys, that’s quite a backlog, we’d better stop.”
The clarity offered relief. “After a while, it was clear to everyone: we did indeed have a backlog, for example with the controllers, the stage and lenses. But a number of things were indeed really on the right track, such as the alignment system. With the recognition that it wasn’t yet good enough in terms of engineering, we were actually very happy.”
Smit was the right man at the right time for ASML. At his previous employer, ITT, an American manufacturer of telecom equipment, he was on the management team with Ben Verwaayen, who would later become the CEO of British Telecom and Alcatel-Lucent and who is now known primarily as a key advisor to Dutch Prime Minister Mark Rutte. While Smit was responsible for commerce, Verwaayen did general business but excelled in public relations.
Smit says he’s learned a lot from Verwaayen in the field of PR. “For that presentation, I also sought contact with the people who did PR for him.” He already knew he wanted drawings. The brand-new ASML CEO eventually ended up with a scientific employee at the University of Amsterdam, who could make them for him. “I had him read my presentation and he translated that into cartoons. That’s how he got to draw the stepper as a kids scooter.”
Smit on his setup: “The central theme for me was: what kind of company will this be? The people had to get the feeling that from now on, they were part of a team. What did I have in mind? Not a top-down, but a bottom-up organization. I would be responsible and would control it well and harmonize it and so on, but the ideas had to come from the people. One of my statements was: this isn’t going to be a walk in the park, this is going to be a rock-hard tussle.”
Smit says he told his people that they were going to make mistakes. “But they were allowed to. If mistakes weren’t made, then something was wrong with the company. That’s why I didn’t want to punish mistakes. Except for one kind: when people didn’t report their mistakes.”
During many interviews, Smit pointed to the ultimate goal. ASML had to go for first place. “My starting point was: there’s a gold medal there, becoming the market leader in lithography for chips. To get it, we have to get there before everyone else. If you guys help me, we’ll get it. It won’t be easy, but it’s possible. If we don’t get that gold medal, then we always have a chance for silver or bronze. But if you say from the get-go, I’m okay with the lesser prize, then you’re gone. You also have to invest in gold to get bronze.”