Being somewhat of a cynic, I don’t have many engineering heroes.  But the inspirational engineer - Andy Grove, the former chief of Intel, the microchip maker must surely be one of them. His wrote a well known book entitled “Only the paranoid survive” reflecting on the difficulties in surviving and growing in business.

 

Dear Colleagues,

Being somewhat of a cynic, I don’t have many engineering heroes.  But the inspirational engineer - Andy Grove, the former chief of Intel, the microchip maker must surely be one of them. His wrote a well known book entitled “Only the paranoid survive” reflecting on the difficulties in surviving and growing in business.

Andy was a poverty stricken refugee from Hungary and he attended New York’s City College. He subsequently gained his doctorate in engineering from the University of California at Berkeley. A book he wrote at the time on semiconductors is still a standard text. He then joined Fairchild Semiconductor, where he became the protégé of Robert Noyce (co-inventor of the integrated circuit) and Gordon Moore (the proponent of the law that the amount of computing power available at a given price doubles every 18 months). He joined them after they founded Intel in 1968, becoming CEO in 1987 and finishing off as chairman in 2004. During Andy’s reign, Intel was once the most valuable company in the world.

Why Bother About Andy Grove
Why should we bother about Andy Grove? Well; I believe no matter whether you are a manager, engineer, technician or tradesperson, he has some important lessons for our careers and businesses. Although he is an outstanding engineer, he will be remembered as a daring businessman who applied engineering to business with incredible success.

Andy felt that every firm will be confronted at least once with the perfect storm with internal and external forces conspiring to make its existing business unviable. In a word; if something isn’t done quickly with your business, you are “busted”. Probably true of our careers as well as business. In Intel’s case, their core business was in manufacturing memory chips but the prices had fallen to such an extent (with Japanese competitors driving them down) that it was uneconomic to produce them. The entire company (and indeed the two key founders) couldn’t break from the memory chip business.

But Andy Grove decided to “bet the company” on microprocessors and change what they were doing. This not only saved his company but transformed the industry with low cost microprocessors which drove (amongst other things) the low cost ubiquitous PC.

His second critical decision was to sell microprocessors directly to consumers rather than through the computer makers, as Intel had been doing. You may vaguely recall the “Intel Inside” campaign. This drove the computer makers into an unhappy frenzy but the Pentium chip ended up being a best seller. Some of you may also recall the minor flaw in the Pentium for certain mathematical calculations. Downplaying the problem was a major PR disaster for Intel; costing them a half billion dollars. Although, Andy Grove reckoned this episode actually ended up supporting Intel’s transformation into improving the quality of manufacturing dramatically to avoid this happening again. But overall, turning Intel from a component maker into a consumer brand was also a stroke of genius.

Andy felt that his early experiences as an undergraduate student at City College shaped his ideas in life and business. Hard work was rewarded and students and professors were equally treated. Questioning everything was encouraged. He felt that his first job at Fairchild, was a disaster with a dysfunctional “elitist, backstabbing and lax corporate” culture. Senior executives strolled into the office late; whereas blue collar workers were fired for the slightest transgression. At Intel, he created a highly disciplined environment which attracted the best and rewarded results with no double standards. As an aside, somewhat controversially, he feels that today, companies should use the patents they are granted rather than sitting on them.

Some Lessons
So what are some of the lessons from Andy Grove?

  • Ensure that you watch for the “point of inflexion” of your business and career. There is a time to change what you do if what you are doing is becoming uneconomic. Research carefully what the market is doing and then “jump ship” as far as your current product and service is concerned. This is certainly what we have done in moving holus bolus into online web conferencing and production of online courses; supplementing our old traditional method of presenting of courses.
  • Hard work, discipline and rewarding results in business and indeed, life still generates enormous rewards. (although one would question this with the travails of Wall St over the past few years).
  • Encouraging a culture of questioning everything and treating everyone fairly is still a key to success for business.
  • A high degree of intensive knowledge and expertise is absolutely vital in building a great business.
  • Never accept the status quo, but concentrate on being a maverick in industry doing things differently and always questioning what you are doing.
  • When things go wrong, it is best to “come clean” soonest and use this as an opportunity to improve your processes and business


In this massively information rich and confused world, surely William S. Burroughs comment is valid: A paranoid is someone who knows a little of what's going on.

Thanks to the Economist and Dr Andy Grove’s book: “Only the Paranoid survive” for reference sources.

Yours in engineering learning,

Steve

Mackay’s Musings – 13th January’15 #547
125, 273 readers – www.idc-online.com/blogs/stevemackay

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