Andrew Stephen Grove (András István Gróf) / 1936–2016 / Budapest, Hungary / Chemical Engineer, Entrepreneur, CEO of Intel Corporation
Note: Grove escaped from Communist Hungary in 1956, when he was 20 years old, and lived in the US from 1957 until his death.
Business Cycle
I have this vague feeling that, just as every generation thinks it invented sex, every generation thinks it created a new economy. The economy has always had cycles of supply and demand, undercapacity and overcapacity, boom and bust. Maybe a year ago someone could have argued that we have eliminated cycles. Well, that’s obviously wrong now. All you can argue is different is that this new technology has increased productivity and therefore nudged up the noninflationary growth rate.
Interview with John Heilemann, “Andy Grove’s Rational Exuberance,” wired.com, June 1, 2001.
Business Philosophy
Your career is your business, and you are its CEO.
Statement from 1999, reported by George M. Dupuy and David H. Dupuy in Career Preparation: A Transition Guide for Students (2003).
You need to try to do the impossible, to anticipate the unexpected. And when the unexpected happens, you should double the efforts to make order from the disorder it creates in your life. The motto I’m advocating is—Let chaos reign, then rein chaos. Does that mean that you shouldn’t plan? Not at all. You need to plan the way a fire department plans. It cannot anticipate fires, so it has to shape a flexible organization that is capable of responding to unpredictable events.
High Output Management (1983).
You have no choice but to operate in a world shaped by globalization and the information revolution. There are two options: adapt or die.
High Output Management (1983).
A corporation is a living organism; it has to continue to shed its skin. Methods have to change. Focus has to change. Values have to change. The sum total of those changes is transformation.
Reported by Mike Sager, “Andy Grove: What I’ve Learned,” esquire.com, January 29, 2007.
I think it is very important for you to do two things: act on your temporary conviction as if it was a real conviction; and when you realize that you are wrong, correct course very quickly.
Interview with Clayton M. Christensen, press conference, Harvard Business School, October 3, 2002; cited by Roger Martin and Karen Christensen in Rotman on Design: The Best on Design Thinking from Rotman Magazine (2013).
Growth is kinda built into everyone’s genes. It’s built into management’s genes, the salesman’s genes, the investors’ desires. People expect companies to grow. Management measures its performance by growth. Employees measure their opportunities by potential to grow. Growth is the fertilizer for the tree that a company becomes. Why do you get up in the morning if all you do is serve exactly the same market with the same customers and the same products? It’s not a healthy state not to grow—from the investment, employee, or strategic standpoint.
Interview with John Heilemann, “Andy Grove’s Rational Exuberance,” wired.com, June 1, 2001.
Challenge of Success
Success breeds complacency. Complacency breeds failure. Only the paranoid survive.
Reported by William J. Baumol, Robert E. Litan, and Carl J. Schramm in Good Capitalism, Bad Capitalism, and the Economics of Growth (2007).
Crises
Bad companies are destroyed by crisis, Good companies survive them, Great companies are improved by them.
Statement from 1994, reported by Albert Yu, Creating the Digital Future: The Secrets of Consistent Innovation at Intel (1998).
Dot-com Bubble
In the 1980s, the Japanese almost buried the US manufacturing industry. Belatedly, the US manufacturers embraced the Japanese manufacturing techniques—just-in-time techniques, inventory-control techniques, supplier relationships, quality control—and escaped extinction. But it only happened after the better part of a decade of denials. So now here come the dotcoms, and the same US management reacted a lot quicker, because it’s still in our memories that not reacting to the Japanese nearly cost us our livelihood. I really think there is an instinctive relationship between what happened in the 1980s and what happened in the 1990s. The threats were only 10 years apart, so it’s still the same generation of managers. Clay Christensen’s disruptive technology concept—the attack from below destroying existing businesses and technologies—really resonates with everyone, if imprecisely and vaguely, because that’s what happened to so many of us in our businesses in the 1980s. And now it was about to happen again! And people said, By golly, we are not going to let that happen again, and so we all reacted a lot more aggressively.
Interview with John Heilemann, “Andy Grove’s Rational Exuberance,” wired.com, June 1, 2001.
Electric Cars
The drumbeat of the electrical transportation is accelerating like nothing I’ve ever seen in my life.
interview with Ken Thomas, reported in “Ex-Intel head Grove: Electric transportation ‘has to be done,’” usatoday.com, June 30, 2008.
The personal computer… went to individuals first before it went to corporations. . . . The corporations are sitting, wishing this whole friggin’ thing [electric cars] to go away. Which is exactly what the computer companies’ attitude was to personal computers.
interview with Ken Thomas, reported in “Ex-Intel head Grove: Electric transportation ‘has to be done,’” usatoday.com, June 30, 2008.
Grove on Grove
When I came to Intel, I was scared to death. I left a very secure job where I knew what I was doing and started running R&D for a brand new venture in untried territory. It was terrifying.
Statement from 1993, reported by Ian King in “Andy Grove, Valley Veteran Who Founded Intel, Dies at 79,” bloomberg.com, March 21, 2016.
By the time I was twenty, I had lived through a Hungarian Fascist dictatorship, German military occupation, the Nazis’ “Final Solution,” the siege of Budapest by the Soviet Red Army, a period of chaotic democracy in the years immediately after the war, a variety of repressive Communist regimes, and a popular uprising that was put down at gunpoint . . . [where] many young people were killed; countless others were interned. Some two hundred thousand Hungarians escaped to the West. I was one of them.
Swimming Across: A Memoir (2001).
And try not to get too depressed in the part of the journey, because there’s a professional responsibility. If you are depressed, you can’t motivate your staff to extraordinary measures. So you have to keep your own spirits up even though you well understand that you don’t know what you’re doing.
Interview with Clayton M. Christensen, press conference, Harvard Business School, October 3, 2002; cited by Bob Sutton in “Andy Grove Tells the Truth About What Great Leaders Do,” bobsutton.typepad.com, March 11, 2007.
I think of myself as somebody who has the luxury to speak his mind more of the time than many other people in the industry. And with that luxury comes a certain responsibility to say what I think is true, even if it isn’t all what the industry collectively thinks. I certainly wasn’t speaking for the industry when I said that Internet commerce should be taxed in a neutral fashion. I got a whole lot of complimentary emails about that—but not from anyone in the industry! But I just couldn’t hold up my head and argue with a straight face that it’s in the public’s interest to give tax advantages to ecommerce. If I had been a spokesman for the industry, I would have been constrained by the lowest common denominator. On that deal, I was a spokesman only for myself.
Interview with John Heilemann, “Andy Grove’s Rational Exuberance,” wired.com, June 1, 2001.
I’ve had a fantastic life. I arrived in the Valley and my first assignment in my first job, at Fairchild, was to analyze the characteristics of MOS capacitors. In six weeks, I was one of the world’s experts in a field that was a cornerstone of this industry—I mean, how lucky can you get? And it’s gone like that ever since. At Fairchild, in the scientific sense; at Intel, in the industrial sense—I was there at the right moment and I made, if not the most of it, pretty close to the most of those opportunities. So I feel very fortunate to have had those opportunities and very satisfied with what I made of them. But I’m also very mindful that had I made a different choice—had I gone to a different university, or decided to work back east instead of here in the west, or if my timing had been off by just two years—the same me would not have accomplished nearly so much. Oh, I would have had a good career. But I did have certain lucky breaks in terms of timing that was not my merit.
Interview with John Heilemann, “Andy Grove’s Rational Exuberance,” wired.com, June 1, 2001.
Intel Corporation
In various bits and pieces, we have steered Intel from a start-up to one of the central companies of the information economy.
Reported by John H. Sheridan in “1997 Technology Leader of the Year,” industryweek.com, December 15, 1997.
In the 1980s, our existing core business—memory chips—was in disarray. We were putting about 40 percent of our developmental capital spending into a business that represented only 3 to 4 percent of our revenue and in which we had a market share of 3 to 4 percent. There was nothing wrong with that business in terms of growth potential, but we had become marginalized by our Japanese competitors. There really was no viable option for us to work our way out. We had a situation where the defining business of the company had hit not a pothole but an ultimate wall, and we had to make a very desperate move. It was fortunate that we had made investments in microprocessors, secondary though they were, which had been going on for a long time. So we gave up the memory business and committed to microprocessors as our new path. It was a very dramatic, complete shift of emphasis, and it entailed a very major retrenchment to resize the company; roughly speaking, one-third of the company was shut down and laid off, with factories closing and all of that. And then the PC really took off, and we were positioned to benefit from that, and the rest is history.
Interview with John Heilemann, “Andy Grove’s Rational Exuberance,” wired.com, June 1, 2001.
Q: Intel has made more than 30 acquisitions in the past three years. Is there a limit to how big you can get?
A: We can be a lot bigger than we are now. That is the significance of communications as a field. We are probably as big as we can get in computing, approximately speaking. We can pick up graphics in our chipsets and this and that, but we’re not going to double our size, given the size of the computer industry. In communications, we are already a fairly significant player, but our share of that business is a fraction of what it is in computing, and the business itself is as big as computing or maybe bigger. There may be a theoretically derivable size that is impossible to manage—that’s bigger than a $100 billion technology company. I don’t know. It hasn’t been tested. But that’s not what’s limiting us. Had we put the same investment into communications that we put into videoconferencing, and done it at the same time, we probably would be twice the size in communications that we are today.
Interview with John Heilemann, “Andy Grove’s Rational Exuberance,” wired.com, June 1, 2001.
Q: Do you still see yourself when you look at the new generation of leaders of Intel?
A: Yeah, I do. The management team works almost without a conductor instructing them on what music to play. It works almost as well as it ever has.
Interview with John Heilemann, “Andy Grove’s Rational Exuberance,” wired.com, June 1, 2001.
Internet Commerce
I have been quoted saying that, in the future, all companies will be Internet companies. I still believe that. More than ever, really.
Interview with John Heilemann, “Andy Grove’s Rational Exuberance,” wired.com, June 1, 2001.
Scaling Up
Each company, ruggedly individualistic, does its best to expand efficiently and improve its own profitability. However, our pursuit of our individual businesses, which often involves transferring manufacturing and a great deal of engineering out of the country, has hindered our ability to bring innovations to scale at home. Without scaling, we don’t just lose jobs—we lose our hold on new technologies. Losing the ability to scale will ultimately damage our capacity to innovate.
Reported in “Andy Grove: How America Can Create Jobs,” bloomberg.com, July 1, 2010.
Social Responsibility
All of us in business have a responsibility to maintain the industrial base on which we depend and the society whose adaptability—and stability—we may have taken for granted.
Reported by Teresa Tritch in “Andy Grove’s Warning to Silicon Valley,” nytimes.com, March 26, 2016.
Technology
Technology happens, it’s not good, it’s not bad. Is steel good or bad?
Reported by Walter Isaacson, “Man of the Year: Andrew Grove,” Time magazine, cnn.com, December 22, 1997.
Technology will always win. You can delay technology by legal interference, but technology will flow around legal barriers.
Reported by Michael Kanellos in “Andy Grove Coins His Own Law,” cnet.com, May 18, 2005.
A fundamental rule in technology says that whatever can be done will be done.
Reported by Ciarán Parker in The Thinkers 50: The World’s Most Influential Business Writers and Leaders (2006).
Time Management
Just as you would not permit a fellow employee to steal a piece of office equipment worth $2,000, you shouldn’t let anyone walk away with the time of his fellow managers.
Computer Decisions, Vol. 16 (1984).