I attended the Intel Alumni Network event celebrating 45 years of Intel. It was a fascinating chance to look back at the foundation of the Silicon Valley, and some of the huge successes and mistakes made by this technology giant, and imagine what it told about the future of technology in the U.S. and the rest of the world. It was 45 years, told in the period of a few minutes, and I was struck with how many current CEOs could have learned from the successes and failures of Intel’s aging power elite.
Let’s talk about some of the more interesting moments.
Gordon Moore: How Intel Almost Invented the PC
One of the more interesting sections of the presentation was a video interview of Gordon Moore, who followed Robert Noyce as the second CEO of Intel. Moore is best known for Moore’s law, which has pretty much driven processor development since it became a business. He talked about how Intel almost invented the PC and how he had been approached by an engineer wanting to fund the project long before Apple existed.
When asked what someone would use a personal computer for, the engineer responded that housewives could use it to keep recipes. Moore, who couldn’t imagine a housewife wanting to do this on a piece of technology, passed on the project.
Here is the interesting lesson: The person pitching the idea clearly wasn’t a housewife, and that showcased the classic reason why many products fail. They are imagined not by someone who has the problem but by someone who believes someone else, who is very different (at the time, women were mostly homemakers) might need the product. Over the years, there have been a number of attempts to introduce computers into the kitchen, some even built into refrigerators. All have failed. Apple and Microsoft succeeded initially because they built to solve a problem the founders had -- a lack of computer access for programmers. They then moved to replace typewriters, calculators, and rolodexes, which were office problems, not home problems. And their products coexisted with computers like the Atari and Commodore, which provided entertainment and solved similar problems for students.
Lesson one: Develop for a need you know, not one you imagine.
Andy Grove: There Is Such a Thing as a Beloved CEO
As they went through the list of past CEOs in the room, one stood out, receiving a resounding ovation: Andy Grove. What was fascinating was the number of things he did, both good and bad, that form lessons for other CEOs to avoid or emulate. One of the huge mistakes was a program called “Back to Basics,” which was lampooned on the stage. You’ve seen similar moves by other large companies recently, when they cancelled work at home and telecommuting programs. Intel, in the late 1990s, became concerned that too many people were screwing around and arriving late, or leaving early. They weren’t collaborating and this was thought to be the core reason things weren’t being done. So senior management actually set up logs and people were expected to come in at 8 and not leave before 5. If they broke this rule, their names were taken down and reported. It was a disaster.
At any company, you have some people that are slackers and, if the company is successful, a lot of people that put in far more hours than they should. The folks most visibly affected were the high performers who basically said screw it, stopped working the long hours, and started working 8 to 5. Productivity tanked and the program was scrapped. CEOs that attempt to manage collaboration and productivity as if employees were equipment tend to make this mistake. They fail to realize that this is the job of the manager, who can better tune programs like telecommuting to assure both the employee’s and the firm’s needs are met. Top executives just don’t have the granularity to get this done.
On the success side, Grove did fun things that endeared him to the employees. One was a rap video (I kid you not) that was actually well done and was used to get the employees fired up during a particularly difficult product launch. A lot of CEOs seem to feel and act like they are above the employees. Grove was always seen as one of them, granted with a tad more clout, but he wasn’t royalty over serfs. He was a part of the team. He also led, and this important difference is what made him not only one of the most beloved but also one of the most successful CEOs Intel had.
Dennis Carter: Doing the Impossible
If Andy Grove stands out as the CEO most remembered, Dennis Carter stands out as the CMO no one will ever forget. Carter created the Intel Inside program and the most beloved corporate icon this side of Mickey Mouse and Ronald McDonald: the Bunny Men. (Apple even spoofed it.) His successors killed the Bunny Men off, not realizing the huge asset this was (small children still come into the Intel store asking for the dolls).
A program emphasizing the component of a piece of personal technology was thought to be impossible because OEMs would never let a parts vendor promote its part. But apparently, Carter missed that meeting, not realizing it was impossible created the most effective ingredient branding program that has ever existed. Today, you don’t know who makes the motor in your car (often they come from other plants or factories), who makes the electric engine in your home appliance, or who makes the processor in your phone (though NVIDIA and Qualcomm are both trying to change that). You know who makes the processor in your PC and that’s largely due to Dennis Carter.
Carter taught us the difference between difficult and impossible and that, sometimes, doing the impossible can be massively rewarding.
Wrapping Up: Lessons in Mastering a Market
What I find particularly fascinating is that Intel itself does not participate in these events and thus appears to miss out on this amazing brain trust. The top sponsors for the Intel Alumni association are Applied Materials, LSI, Citrix, SVCP and WCP, all of which are staffed with ex-Intel employees. Another interesting tidbit is the number of ex-Intel execs who now own wineries, with David House of House Wineries the most active.
The future of Silicon Valley and the technology industry will likely depend on people who learn that successful products are best developed by people who understand the target market; that you can’t direct collaboration and productivity but you can enable and assure it; that the best companies are run by CEOs who are part of, not above, the team; and that doing the impossible can be extremely rewarding.
Now I think I’m going to look for my old Bunny Man costume because suddenly I know what I’ll be wearing for Halloween!