Moving technology forward: An interview with the CFO of ASML

Roger Dassen made the switch from Deloitte to ASML two-and-a-half years ago. “During my job interview, Peter Wennink [ASML’s CEO] told me: ‘If we built airplanes, we would have more accidents than we could count.’ In other words, our risk/reward proposition simply would not work in that industry. There, we would have to perfect each and every aspect of our products, greatly slowing down our rate of innovation. We can benefit from the learning effect because customers actually use the machines we make, greatly speeding up the process.”

Reinventing leadership

“I love innovative companies and companies with a mission, and I also like math and engineering. You need that at ASML, because in board meetings we can have endless discussions about a single component. After all, it only takes one defective component out of hundreds of thousands to paralyze a EUR 100 million machine.” Looking back, the steep learning curve Dassen encountered when he joined the company as CFO was one of the main benefits of his new role. “I knew professional services like the back of my hand, and I relied partly on that expertise in my role as a leader. That disappeared overnight after I moved to ASML, because I will never become an expert in ASML’s core technology. I want to understand it, but there’s no way I will ever know more about a machine than 20,000 engineers. You have to accept that. At the same time, you also have to do everything you can to get your basic knowledge up to par, if you want to do your job properly as CFO at ASML.” After arriving, Dassen spent his first few months keeping his ear to the ground: “Most employees have been here for ages and have experienced for themselves that their approach is tremendously successful. In the past, I would have taken a few hours to draw up some tentative hypotheses before carefully starting to test them. At ASML, I kept my mouth shut for three months and absorbed knowledge wherever I could, after which I could use everything I learned to suggest improvements.”

“ASML persevered where others would have thrown in the towel.”

Critical success factors

So what does Dassen believe to be the reason for ASML’s success? “Compared with other organizations of a similar size, it is decidedly apolitical. Discussions can be extremely tough, but they are always between experts and stay professional at all times, never becoming personal. It’s a culture that ensures that nothing is left unsaid. ASML has several so-called ‘C’ values, including ‘Challenge’ - and everyone here does love to test each other - as well as ‘Care’ and ‘Collaborate’. On top of that, ASML has a significant risk appetite and unparalleled perseverance. I had heard talk of Extreme Ultraviolet Lithography (EUV) back in 2000, when I worked with ASML as an external auditor. Since then, EUV has been declared dead at least 10 times, most recently in 2015. ASML persevered where others would have thrown in the towel and finally achieved results in 2017 and 2018, after fifteen years of major investments and hard work. That persistence and focus on content make it a unique company, a place where bright minds meet. It is also a shining example of ASML’s commitment to problem-solving, which has earned the company a lot of goodwill. The first EUV machines had considerable teething problems, but customers knew that our engineers would do everything in their power to fix them. Our dedication to customers is so evident that we have earned the right to make bold moves: everything goes, as long as the potential rewards outweigh the risk of mistakes. At some level, mistakes have to be accepted, as long as everyone knows that the supplier is fully committed to solving them as well.” ASML's machines produce an incredible amount of data, which the company tries to interpret as effectively as it can, increasingly using this data to distill predictions that may warn of imminent issues with a machine at an earlier stage. Dassen: “We use data science for our support business, to take financial decisions for example, but have increasingly started relying on it for our core product, too, e.g. to make sure that our machines are always configured properly.”

“We are convinced that broad-based access to technology will on balance lead to improvements in society.”

Strategy, purpose, sustainability

ASML’s strategy is laid out in a road map, which is harmonized with its customers’ businesses where possible. “For most customers, we have a fairly good idea of where they will be 10 years from now. For now, we will continue to commit ourselves to lithography. You won’t find us suddenly producing razors or solar panels in two years’ time. Everyone is focused on holistic lithography. It is ASML’s purpose to make technology as widely applicable as possible. Technology can be used for good and for evil,” stresses Dassen, “but we are convinced that broad-based access to technology will on balance lead to improvements in society. Sustainability is a great example, though also a slightly problematic one. ASML contributes to reducing carbon emissions by making more energy-efficient chips, and because data centers depend heavily on fossil fuels, improving the energy efficiency of data processing and storage will ultimately help to reduce the carbon footprint. At the same time, our machines also consume vast amounts of energy, so there is still some progress to be made there. However, it is something we are fully aware of and we have committed ourselves to hard targets.” To reduce its own footprint, the company has implemented more efficient operating practices, as well as setting up its own waste program. “We are also working with our larger suppliers and have started investing in local wind farms and solar parks to make our energy consumption greener.”

"It's about the heroes you celebrate and the behavior you reward."

An anti-compartmentalization culture

Dassen agrees that dedication to one’s own field can sometimes encourage compartmentalization, to the point that one’s own approach is automatically seen as the only right way: “I am deeply convinced that this is true. As an organization, you want to create an environment that encourages people to resist compartmentalization and constantly reinvent themselves. This, however, takes some effort, as professionals are generally taught to operate within certain frameworks, especially in regulated fields. People need space, safety and an incentive to reinvent themselves. Because professionals often derive their value from specific knowledge, sharing that knowledge can be a complicated matter. As such, organizations must cultivate an appreciation for sharing knowledge and show that it’s not a one-way street but a matter of quid pro quo. People will use the knowledge you have shared to improve their products and give back when they can. And that’s another of ASML’s C values: 'Collaborate'. The aim is to create a virtuous circle. It's about the heroes you celebrate and the behavior you reward." The heroes Dassen is referring to are the people who reach out and share their knowledge with others, prompted or unprompted, because doing so will ultimately benefit someone else’s product. “This should be rewarded, not only financially, but also through communication, showing people that this kind of behavior drives progress.”

"We will never revert to the old way of working."

Uninterrupted service

ASML managed to navigate the early days of the COVID-19 crisis remarkably well, though not without the necessary effort. There were three obstacles to overcome, the CFO explains. “We had to gain insight into suppliers and their underlying supply chain to identify potential complications before they could arise, which required quite a substantial data operation. At the same time, we had to keep our own production capacity up and running. The final and most difficult obstacle was to continue our customer service efforts. In the past, we used to solve problems by grabbing a few experts and putting them on a plane. When COVID made that impossible, we moved to 3D technology to support our customers.” All over the world, people could connect with experts in Veldhoven or San Diego, who used the Microsoft Hololens to explain exactly what was happening. As a result, the company’s services to its customers were able to continue more or less uninterrupted, Dassen says. “It took a crisis to finally prompt us to make a change that we’d wanted to make for some time but hadn’t managed to implement – either because it just wasn’t a high enough priority or because customers were hesitant to give us WiFi access. Now, we will never revert to the old way of working. When it comes to solving problems for customers, this technology is here to stay. Customers saw that we weren’t just able to provide uninterrupted service, but that we were even faster than before. Previously, they would have had to wait two days for an engineer from Veldhoven to arrive, and two days of downtime costs a lot of money. Now, experts are available on demand.

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About the author

Roger Dassen is CFO and Executive Vice President of ASML. Dassen is also professor of auditing at the Free University of Amsterdam and a member of the supervisory boards of the Dutch National Bank and the Maastricht University Medical Center+. He holds a Master's degree in Economics and Business Administration, as well as a PhD in Business and Economics from the University of Maastricht.

This interview was conducted by Frans van Helden, Managing Director ORTEC Data Science and Consulting, and Arjan Gras, Interviewer.