The success of Intel was greatly influenced by Andy Grove.
When I consider Intel, Andrew Grove immediately comes to mind. This might be partly because of my age and the fact that in 1968, when Gordon Moore and Robert Noyce left Fairchild Semiconductor to create Intel Corporation, I was too young to know about it. Nevertheless, I believe that my association between Grove and Intel is mainly due to his substantial influence on the company as both its official and unofficial manager of internal operations since its beginning.
Despite not joining Intel’s executive committee until 1976 and not becoming CEO until 1987, it is evident that he has been the leader at Intel from the start. He consistently challenges the company to achieve ambitious goals in order to develop superior and faster chips, which have ultimately played a significant role in driving the computer industry forward.
Intel’s initial objective was to replace magnetic-core computer memories with semiconductor memories. Their early vision, influenced by Gordon Moore, was to dominate any market they entered. They aimed to achieve this through internal exploration of various alternatives by “buying options”. This approach provided flexibility but also fostered internal competition, which greatly influenced Intel’s culture. I believe that Grove, influenced by Moore’s belief that the semiconductor business was constantly on the verge of disaster, continued to uphold “Moore’s Law”. This law stated that a new generation of chips with four times the capacity of their predecessors must be developed approximately every three years.
The company’s initial SRAM chip, the 1101, was released in 1969. However, Intel was continuously motivated to revolutionize the industry. Moore, Noyce, and Grove consistently sought more. They instigated an effort within the company to create a DRAM chip with four times the capacity of the SRAM. This led to the introduction of the 1103 in 1971, a 1K chip that swiftly gained universal preference over magnetic core technology and became the industry standard. After two other significant advancements in 1971, “Operation Crush – an all-out combat plan” was launched to establish the next generation 8086 chip as the industry standard. Subsequently, the development of the 432 project took place. The 8086 and 432 epitomize Intel’s strategy of “buying options,” where one product is developed using an evolutionary approach while another follows a revolutionary approach. Noyce noted that although Intel may not always find what they were initially looking for through these R&D projects, they often stumble upon something equally significant.
Andy Grove, characterized as a “detail-oriented pragmatist,” differed from Gordon Moore, who was a “technology driven futurist.” While Grove tirelessly worked to accomplish Moore’s visions, this dynamic played a crucial role in Intel’s prosperity. Grove recognized the emergence of the “Two-in-a-Box” management philosophy as a result. This approach involved pairing two individuals with complementary skills, resembling Grove and Moore, in the same managerial role. Its purpose was to stabilize transitions, startups, or reorganizations, as well as to cultivate successors or maximize positions’ value. Although some viewed this method as inefficient, Intel continued its victorious trajectory.
According to one executive, Grove is known for his “aggressive brilliance” and his powerful, confrontational style. His talent for “constructive confrontation” influenced Intel employees to see themselves as the industry’s “Marine Corps”. Under his leadership, Intel fostered a culture of bright, opinionated, macho, rude, arrogant and impatient, and informal employees. While this negative personality trait may have led to a lack of concern for the means of achieving results, it likely contributed to their resilience during the 1980’s recession and the semiconductor price wars in 1986-87 which caused significant losses for U.S. manufacturers.
Despite Grove’s tough leadership style, his focus on individuals and his ability to put people where they were needed played a significant role in helping Intel survive, although not without setbacks. Throughout his tenure, Grove reorganized and rebuilt the company multiple times, including the exits from the DRAM and SRAM businesses in 1986. The open culture he fostered allowed for flexible movement of personnel during these reorganizations, and he implemented strategies such as his “125%” and “90%” solutions to maximize employee productivity during challenging times. Grove firmly believed in the fast-paced nature of their industry, stating that “there are the quick and there are the dead”. He embraced constant learning and adaptation within the company as its focus shifted, especially during the transition into microprocessors where protecting intellectual property and making choices between CISC and RISC became crucial. Grove also advocated for rapid product introduction and pressured computer manufacturers to keep up with Intel’s pace. He was instrumental in developing The Intel Inside slogan. The organizational renewal and transformation process at Intel appears to align closely with the exhibit we examined in the Charlotte Beers case, titled “The Process of Renewing and Transforming Organizations” by Kotter.
Despite believing in the importance of keeping work and leisure separate, Grove started to reconsider this stance in order to address employee burnout. He aimed for a more supportive work atmosphere and introduced sabbaticals for long-serving employees. In the early 1990s, as Grove continued to shape the company according to his own vision, his perspective had only undergone slight modifications.
“Our aspiration is to become the central driving force of the computer industry by leveraging our leading position in semiconductors.”
2. The Creation and Culture of Intel
Intel began as a functional organization focused on research and development and accomplishing the necessary tasks to produce innovative and superior chips. Andy Grove and Gordon Moore initially desired an unorthodox approach, aiming to diminish obstacles and encourage an unrestricted exchange of ideas and information within Intel.
A physical example of this was the cubicles in one large hall where all employees, including executives, sat together. The walls were short, and executives were not grouped in one section but dispersed throughout. Meeting rooms and parking spaces operated on a first-come, first-served basis. The dress code was casual. These instances exemplify how Intel executives served as role models and greatly influenced the company culture. Such practices likely instilled confidence in all employees to contribute to meetings, even in the presence of high-level executives, as they were encouraged to do so.
Since 1976, divisions have been established to focus managers’ attention on emerging business segments. These divisions have led to the emergence of “matrix-relations” where functional and business lines intersect. To bring ideas to fruition, task forces, councils, and other “cross-boundary devices” were created alongside informal relationships. The origin of these ideas can often be traced back to small, highly motivated, and innovative teams. These ideas are then carried by product champions through Intel’s corporate hierarchy for approval or rejection. This process has contributed to the development of a company with a very sharp and well-defined sense of history and identity.
At Intel, there are remarkable instances of secondary embedded mechanisms, exemplified by the narratives surrounding the transformation of dreams into extraordinary products by product champions. These tales, continuously recounted, have resulted in the developers and champions achieving legendary status and becoming integral to the company’s mythology.
Additionally, the company culture showed signs of becoming more formal with the introduction of a Strategic Long Range Planning (SLRP) process. This initiative, advocated by Gordon Moore, mandated that middle managers develop formal strategies for their respective business segments.
The embodiment of the “way we do things around here” was Gordon Moore’s belief:
“If something cannot be measured, it is not understood” – this is one of the unwritten principles at Intel. Unsurprisingly, Moore was responsible for overseeing various key aspects of Intel’s culture, such as measuring profitability and setting targets that influenced employee bonuses. He strongly advocated for incentives based on performance, in contrast to Grove’s emphasis on individual-oriented approaches.
Intel made an effort to avoid bureaucracy, but one executive believed that the company was undergoing too many reorganizations in its pursuit of maintaining that culture. As a result, there was a decline in employee retention and loss of valuable expertise. The focus on creating new organizational structures seemed to overshadow the human element. Those who stayed felt unique, as Intel was not perceived as a stable work environment.
The lack of stability played a role in the socialization process. The continuous activity resulted in numerous internal meetings where employees were urged to discuss the advantages and disadvantages of various matters. This approach resembled a trial by fire, but it helped individuals develop the ability to defend their opinions.
In 1988, a survey was carried out to assess employees’ comprehension of Intel’s culture. The objective was to gain insight into the human relations aspect and find ways to align the company’s entrepreneurial spirit, which occasionally caused instability, with the human aspect. However, some long-time managers showed indifference towards this concern since they believed that things had been functioning well and did not require any modifications.
This survey resulted in the creation of a formal document that elucidates Intel’s values. I firmly believe that the values stated in the document closely align with the actual values of the company. Among the six categories – risk taking, quality, discipline, customer orientation, results orientation, and a great place to work – only the last one truly emphasizes a significant consideration for individuals, and Intel was not primarily focused on people. The essence of Grove’s vision is encapsulated within these values.
Intel’s culture has been shaped by their frequent navigation of strategic crossroads and their ability to continuously renew and revitalize themselves. This culture will persist as long as Intel remains committed to staying ahead. However, according to the October 16, 2000 Chicago Tribune, Intel will not meet their planned pre-Halloween release of the Pentium 4. As a result, they will lose holiday sales in the consumer market. It is crucial for Intel to keep pushing forward.
