Andrew Grove — The greatest leader of the decade

Credit to Intel.com

Andrew Grove survived both the Nazi and the communist regimes in Hungary before arriving in the United States. He attended City College of New York while working at a restaurant and obtained a B.S. degree in chemical engineering in 1960. In three short years, Grove received a Ph.D. in chemical engineering from the University of California, Berkeley. He then worked at Fairchild Semiconductor and later co-founded Intel — the company introduced the world’s first microprocessor in 1971. Intel attributes its success greatly to Andy, which was Grove’s preferred name. Andy was one of the most respected managers in the industry. In 1997, he was named Time magazine’s “Man of the Year.” Then-Intel Chairman Andy Bryant said, “Andy approached corporate strategy and leadership in ways that continue to influence prominent thinkers [such as Steve Jobs and Bill Gates] and companies around the world. He combined the analytic approach of a scientist with an ability to engage others in honest and deep conversation, which sustained Intel’s success over a period that saw the rise of the personal computer, the Internet and Silicon Valley.”1

Andy adopted and practiced an egalitarian philosophy called “constructive confrontation,” where workers of any rank can propose ideas but need to withstand vigorous examination. Andy once waited outside of the classroom of Professor Al Xavier Schmidt, who taught a crucial course that Andy was unable to get admitted into. After expressing his intent to join the class, he was interrogated on his background and capacity. “He cross-examined me on the spot,” Andy recalled. “He was testing me, testing my background.” Professor Schmidt admitted Andy to his class after the vigorous interrogation.2 From surviving Holocaust to withstanding Schmidt’s examination, a pattern frequently appeared in Andy Grove’s life: converting a negative situation into a positive one through resourcefulness. The pattern persisted during the crisis in early Intel Corporation under his management.

In order to talk about what made Andy Grove a great leader, we need to ask the question, “What do managers do?” Managers form authority, with their status leading to interpersonal relationships within and without the organization. These relationships provide access to information. The information enables the manager to make decisions and conduct strategies that solve problems. 3 Andy’s leadership success came from openness to truth, hyperawareness of threats, and risk mitigation. These three attributes intertwine and complement each other.

Processing information is a key part of a manager’s job. Warren Buffett, known for his investment and management skills, spends 80% of his workdays reading. According to studies, CEOs spend 40% of their time on activities related to the transmission of information, and most of them are solely informational activities that require no response.4 These CEOs absorb information from meetings, reports, emails, and more. Andy’s managerial philosophy of constructive confrontation established a transparent culture at Intel. If a leader is required to process information to make a decision, yet the information is meaningless, insignificant, or even false, can the leader still make a good decision? No. When management puts themselves above the value and practice of the business, people of lower ranks do not question them and thus do not behave beneficially for the value and practice of the business. Managers do not confront other managers, and subordinates do not oppose wrong ideas. People become disillusioned. Ultimately, the bureaucracy deteriorates, which reduces operational efficiency and performance. One early ex-Intel employee described constructive confrontation as a license for assholes to be assholes and express themselves.5 Andy allowed ideas, feedback, and criticism flow horizontally and vertically in Intel. That way, whoever had the best idea could express it, and others could examine it freely. Andy’s willingness as the highest ranking member of the organization to build an open confrontation culture helped Intel to maintain its global status. “In today’s world, it’s simpler to let people speak their mind. We’ve got to get their ideas out, that’s got to happen. If we’re going to invent the future and then build it we’ve got to let everybody speak their thoughts and their minds,” said current Intel CEO Brian Krzanich at Fortune’s The CEO Initiative conference.

This openness to truth led to Andy’s second attribute that made him a great leader: hyperawareness of threats. This trait enabled Intel to move from avoiding problems to confronting them. According to Richard Neustadt, who studied the information-collecting habits of Presidents Roosevelt, Truman, and Eisenhower: “It is not the information of a general sort that helps a President see personal stakes; rather it is the odds and ends of tangible detail that pieced together in his mind illuminate the underside of issues put before him.”5 In Charlie Rose’s interview, Andy stated, “people too often accept a passive role in the face of environmental changes, too often accept that it happens to us, something happened to us, instead of saying, ‘Things are changing around me. How am I going to navigate to get throughout of it better off than I went in?’ That attitude is what I want out of it.”6 A good leader is like a good shepherd. A good shepherd stays alert to the dangers to their flock and processes information from all angles, including the expressions and feelings of their flock. They lead their flock to where the grass is green and the weather is warm, and they keep the flock safe and healthy so they can grow and move forward. At the beginning of the Pentium microprocessor crisis, Andy insisted normal users would not be affected by the faulty chip, although Intel’s stock plunged and the media attacked the chipmaker. The scandal led IBM, Intel’s largest partner, to stop all shipments that contained Pentium chips. After careful survey and examination, Andy changed his mind and replaced all the defective chips, sequentially pioneering the development of memory chips and microprocessors.2 “The Lesson is, we all need to expose ourselves to the winds of change,” Andy said in his book, Only Paranoid Survive.7

Andy also mitigated and managed risk in such a way that Intel only progressed when it was prepared for the risk. No organization or person has the ability to consider every situation in an uncertain environment in advance. The bigger an organization is, the higher the risk it exposes itself to. A crisis rises not only because poor leadership exposes the organization to the risk. It also rises because leadership does not anticipate the possible consequences of its action.3 “I am a very cautious risk-taker,” Andy said. “And I mitigate. I push, but I mitigate the risk by over-preparation. Push, but mitigate. It’s like trust, but verify. I am comfortable with risks that I am prepared for.”2 When Intel was getting ready to introduce a new microprocessor, Intel’s legal department warned him of the potential antitrust actions. Andy and his colleagues carefully examined the two examples before them: AT&T’s and IBM’s antitrust litigations. They chose “not to push it to the line” (Pandya et al., 2004). Under Andy’s conservative business philosophy, Intel never pushed it to that “last ounce.” This philosophy helped Intel to manage the unexpected public hostility during the Pentium crisis and to recover from the market’s retaliation. Andy wrote in Only Paranoid Survive, “there are waves and then there’s a tsunami. When a change becomes an order of magnitude larger than what that business is accustomed to, then all bets are off.”7

Andy’s successful leadership stemmed from openness to truth; constructive confrontation provides an environment where information is transmitted freely horizontally and vertically and is examined vigorously. The flow of information enables decision-makers to piece tangible details together, and Andy was able to illuminate the potential threats put before him.

A leader is a person whom we follow; we follow their ambition, or we are inspired by them. Andy’s case was neither of these. People followed him because they trusted him. They trusted him because he was not afraid to confront an issue. Andy was open to receiving bad news and did not take risks that the organization was not ready for. He did not put his interest or pride before Intel’s practices and values. He understood that his responsibility was to nurture the organization and not his authority. Every person is either a leader or a follower in any moment. We take the lead when we are bold enough to make a decision for the betterment of the group when no one else is willing to. Thus a leader, at the minimum, must have the most crucial information. Whether through gut feeling or rational thinking, a leader has to be able to be open-minded and has to expose themselves to all opinions and facts. That is humbling. As a leader, I shall be humble. However, with any decision, risk comes along. A leader is a person we can rely on during crises. I shall be reliable because not every day is sunshine and rainbows and people especially need a strong leader during a difficult time. I shall prepare for every step forward and even more for an unexpected setback. “I can better trust those who helped to relieve the gloom of my dark hours than those who are so ready to enjoy with me the sunshine of my prosperity,” said Ulysses S. Grant.8 Regardless of ambition or inspiration, strong leadership is humble and trusting; it endures difficult times and puts the wellbeing of the unit before its own interests.

Reference

1. Andrew S. Grove 1936–2016. (2016, March 21). Retrieved from https://newsroom.intel.com/news-releases/andrew-s-grove-1936-2016/#gs.xiepgv
2. Pandya, M., & Shell, R. (2005). Lasting leadership: what you can learn from the top 25 business people of our times. Upper Saddle River: Pearson education.
3. Mintzberg, H. (2014, August 1). The Manager’s Job: Folklore and Fact. Retrieved from https://hbr.org/1990/03/the-managers-job-folklore-and-fact
4. Cain, Á. (2017, September 1). Inside the daily routine of 87-year-old Warren Buffett, who loves McDonald’s, spends 80% of his workday reading, and unwinds by playing the ukulele. Retrieved from https://www.businessinsider.com/warren-buffett-daily-routine-2017-8
5. Coleman, B., & Shrine, L. (2006). Losing faith: how the Grove survivors led the decline of Intels corporate culture.
6. Chairman and C.E.O. of Intel Andrew Grove shares his book, “Only the Paranoid Survive.”. (n.d.). Retrieved from https://charlierose.com/videos/6939
7. Grove, A. S. (2002). Only the paranoid survive: how to exploit the crisis points that challenge every company and career. London: Profile Books.
8. Grant, U. S. (2016). The complete personal memoirs of Ulysses S. Grant: all volumes, with illustrations and maps. Place of publication not identified: Pantianos Classics.