ASML’s ‘Authentic’ CEO Leads Hundreds Of Ph.D.s To Breakthroughs


After the tech bubble burst within the early 2000s and earlier than changing into the ASML CEO, Peter Wennink confronted a wrenching choice. He made the wrong call, and the outcomes stung.




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Then chief monetary officer of ASML (ASML), a provider of chip-making gear, Wennink conferred with the agency’s chief govt concerning the firm’s technique. To climate the downturn, the CEO concluded they wanted to chop workers amid a serious reorganization.

Wennink had his doubts.

“I went along with the then-CEO, thinking we have to fire hundreds of people and do this big reorg,” Wennink advised Investor’s Business Daily. “But my gut told me that after a downturn, there would be an upturn. I was too quiet at the time. I did something stupid” by not arguing against the layoffs.

After the job cuts, worker morale suffered. The lingering uncertainty led to missed alternatives and misplaced prospects.

Wennink took the lesson to coronary heart. When ASML struggled throughout the 2009 monetary disaster, he refused to contemplate layoffs.

“In 2009, I said, ‘Whatever happens, we won’t fire anyone,'” he mentioned. “We didn’t do a reorg, we didn’t fire anybody and we took a 15% market gain after the recovery” due to sensible money administration and coordination with key stakeholders.

Celebrate Your Difficulties

Wennink, who turns 64 on May 30, turned the ASML CEO and president on July 1, 2013. He seems again on the challenges he confronted in 2009 as a pivotal moment in his career.

“We had nine months of no orders and in six months’ time, we lost 80% of our sales,” he mentioned. “So we did something extraordinary. We said to our suppliers, ‘We need you to share part of the burden. We don’t have the cash to pay you now.’ We built bridges among our suppliers, our customers and our employees. And we sailed through those nine months relatively well.”

Drive Performance Like The ASML CEO

Since Wennink turned ASML CEO in 2013, he is commanded the company by way of easy crusing. The Netherlands-based firm supplies chipmakers with {hardware}, software program and providers to mass-produce patterns on silicon wafers by utilizing lithography.

His staff has produced regular and robust will increase in annual earnings per share.

The firm’s revenue is up greater than 260% since Wennink took over in 2013. That’s greater than 20% annualized revenue progress. Meanwhile, the corporate’s income is up greater than 160% throughout Wennink’s tenure as ASML CEO.

As a outcome, its inventory has soared 800%, whereas the S&P 500 is up simply 160%. And ASML is on the IBD Long-Term Leaders list, a set of the top-performing firms over the lengthy haul.

An accountant by coaching, Wennink oversees a whole lot of engineers. While many leaders say they encompass themselves with folks smarter than they’re, he says he has no alternative.

“I have to be authentic,” he mentioned. “We have over 1,000 Ph.D.s here. It’s my job to listen and understand where they’re coming from.”

ASML CEO’s Three Keys To Strong Leadership

Authenticity is one in all Wennink’s three building blocks of effective leaders. The different two: creating readability and fostering loyalty amongst staff members. He continuously cites what he calls “the three cornerstones of leadership” with ASML’s roughly 28,000 staff.

For Wennink, creating readability means defining roles and obligations so that everybody’s in sync when implementing processes to realize finest outcomes. And loyalty amongst cross-functional teams highlights the necessity for staff members to stay collectively and help one another’s success.

“You’ll have conflicts in any hierarchy,” he mentioned. “There may be friction. My position is to handle that and ensure (staff members) are loyal to one another. A frontrunner has to create an environment where people are respected, really feel secure and may communicate their thoughts.”

Gut Instinct Drives High-Stakes Decisions

Wennink locations a lot worth on intestine intuition. It has guided a few of his largest selections.

His longtime colleague, Martin van den Brink, serves as ASML’s co-president and chief expertise officer. Soon after Wennink turned ASML CEO in 2013, he weighed whether or not to double down on a giant wager the corporate was making to transition to a brand new sort of lithography expertise referred to as excessive ultraviolet (EUV).

“At the time, many people said EUV would never work,” Wennink recalled. “So I sat down with Martin, who’s technically a brilliant guy, and asked him, ‘On a one-to-10 scale, what’s your gut feel that this will work?'”

“Seven and a half to eight,” van den Brink replied.

Wennink immediately agreed to plow forward.

“It was a 30-second discussion,” he mentioned. “I could trust Martin. We did not want PowerPoints or spreadsheets. It took us 15 years and price us $13 billion to $15 billion,” however it has confirmed a key to ASML’s torrid progress.

Replace Hype With Humility

Because Wennink manages a brainy workforce, he is desperate to help their intellectual curiosity. This typically requires empathy and endurance.

“When we start a new product line, our field engineers and our service people are under pressure,” he mentioned. “I’ve been here 22 years, and I know what they’re going through. We’ll have a learning curve. So I’ll say, ‘The customer will complain at first. We’re delivering an immature tool. We’ll make it better, and we’ll go through hell to get it right. I’ll be there with you the whole way.’ “

As a outcome, employees are more apt to level with Wennink about their frustrations. And he is extra more likely to perceive and handle their issues.

Let Employees Tinker Like The ASML CEO

Wennink provides staff the liberty to take risks and innovate. To spur them on, he typically says, “Unless it’s unequivocally proven that it cannot be done, it can be done.”

“We do things that are scraping the edges of physics,” he mentioned. “People come in here and say, ‘This is like a university with a factory.'”

Like the most effective college professors, Wennink can take complicated concepts and present them in a captivating way to a broad audience.

For instance, Wennink explains EUV expertise by evaluating it to taking a thick paint brush and shrinking it in order that it produces more and more skinny, exact traces, says Skip Miller, ASML’s vice chairman of investor relations.

“It’s easy to get deep in the weeds, so he uses that analogy,” Miller mentioned. “He brings technical complexity to a level that investors can understand” extra simply.

Miller has labored carefully with Wennink for the previous seven years. In 2014, he admired how Wennink communicated the corporate’s funding in EUV expertise with out hype or overpromising.

“In a very humble way, he said, ‘Here’s what we see as our key challenges and growth opportunities,’ ” Miller remembers. “He laid out various scenarios. That built a lot of confidence in our investors.”

ASML CEO Peter Wennink’s Keys:

  • CEO of ASML, a Netherlands-based provider of chip-making gear.
  • Lesson: To lead successfully, radiate authenticity, create readability and foster loyalty amongst staff members.
  • “A leader has to create an environment where people are respected, feel safe and can speak their mind.”

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