Strategy Is Destiny: How Strategy-Making Shapes a Company's Future
(How did a pioneering company in the semiconductor industr...)
How did a pioneering company in the semiconductor industry not only survive but thrive in the face of the explosive change and upheavals that forced it to transform itself twice in the course of its thirty-year history? The answer lies in the quality of its strategy-making process, contends leading strategic management scholar Robert A. Burgelman in this extraordinary book based on an exhaustive twelve-year study he conducted inside Intel Corporation.
Granted the opportunity to track Intel's strategy-making through his close teaching collaboration with its chairman, Andy Grove, at Stanford Business School since 1988, Burgelman has written a definitive and far-reaching account of how highly educated top managers groped their way through strategic conundrums. His account of the evolution of key events in Intel's history is illustrated with extensive quotes from its cofounder Gordon Moore, Andy Grove, current CEO Craig Barrett, and dozens of other Intel executives. His study allows these leaders to speak for themselves in scores of highly rendered executive portraits.
Using thoroughly tested conceptual tools, Burgelman first documents the key role played by mid-level managers in transforming Intel from a memory company into a microprocessor company during the late 1970s and early 1980s, which led to the heartbreaking decision to abandon the business on which the company had been founded in 1968. He then makes readers eyewitnesses to the complex set of complementary strategic thrusts orchestrated by Andy Grove to make Intel capi- talize on the extraordinary opportunities associated with the phenomenal growth of the PC industry during the late 1980s and the 1990s. He reconstructs Grove's resolution of the struggle between two competing micro- processor architectures within Intel that caused civil war to erupt, and he shows how Intel's superbly run strategy-making process in the core business, paradoxically, made it difficult for internal entrepreneurs to extend the company's strategic reach. This allows him to link the strategic leadership challenges, faced today by Craig Barrett, to Intel's illustrious past and to provide suggestions for how these challenges can be met.
At once a history of strategy-making at Intel as well as a strategy-making field manual that any high-technology manager will need to consult frequently, Strategy Is Destiny truly describes strategy-in-action as the way of life of senior executives in the corporation of the future.
Physics and Technology of Semiconductor Devices (Wiley International Edition)
(Provides a comprehensive treatment of semiconductor devic...)
Provides a comprehensive treatment of semiconductor device physics and technology, with emphasis on modern planar silicon devices. Physical principles are explained by the use of simple physical models and illustrated by experimental measurements.
(In this legendary business book and Silicon Valley staple...)
In this legendary business book and Silicon Valley staple, the former chairman and CEO (and employee number three) of Intel shares his perspective on how to build and run a company.
The essential skill of creating and maintaining new businessesthe art of the entrepreneurcan be summed up in a single word: managing. Born of Groves experiences at one of Americas leading technology companies, High Output Management is equally appropriate for sales managers, accountants, consultants, and teachers, as well as CEOs and startup founders. Grove covers techniques for creating highly productive teams, demonstrating methods of motivation that lead to peak performancethroughout, High Output Management is a practical handbook for navigating real-life business scenarios and a powerful management manifesto with the ability to revolutionize the way we work.
Andrew Stephen 'Andy' Grove was a Hungarian-born American businessman, engineer, author and a pioneer in the semiconductor industry.
Background
Andrew Steven Grove was born András Gróf in Budapest, Hungary, on September 2, 1936. His father, George, was a dairyman, and his mother, Maria, worked as a bookkeeping clerk. The family was of Jewish descent and World War II proved to be a difficult time; Grove would see nothing but trouble until he departed from Europe. At the age of four, a wave of scarlet fever swept through Hungary. Grove was not spared, and over the course of the illness, his hearing was seriously damaged. The following year, his father was removed to a Nazi work camp. Grove and his mother changed their names and moved in with Christian acquaintances, who hid them during the Nazi pogroms of 1944. After the war, his father miraculously reappeared, though weakened by typhus and pneumonia.
Education
Grove, hoping to attend college in a few years, dabbled in journalism and took voice lessons, dreaming of perhaps becoming an opera singer. Political circumstances again intervened, however, in 1956, when Soviet tanks arrived in Budapest to put down the Hungarian Revolution. His father's occupation, as a private business owner, made Grove a potential dissident in the eyes of the communists. So, rather than face the possibility of prison, Grove and a friend fled to Austria.
From there, Grove made his way to the United States, where he moved in with an uncle who had immigrated to New York in the early 1930s. He enrolled in the City College of New York (CCNY), studying chemical engineering and waiting tables to pay his tuition.
Grove graduated from CCNY in 1960.
He relocated to California, where he entered the Ph. D. program at the University of California, Berkeley. There, as at CCNY, he performed spectacularly.
Grove received honorary degrees from the City College of New York (1985), Worcester Polytechnic Institute (1989) and Harvard University (2000).
Career
Upon his graduation in 1963, he went to work for Fairchild Semiconductor, a small company which had recently been created by a few of the more forward-thinking engineers on the West Coast. He also began teaching at Berkeley.
At Fairchild, along with the head of the research department, Gordon Moore, and two other colleagues, Bruce Deal and Edward Snow, Grove helped create the first marketable silicon-based integrated circuit. This was a major step for the computer industry, which, until then, used transistors as switching elements in their products. To be sure, transistors were far better than their predecessors, vacuum tubes. Vacuum tubes were bulky, and they generated a tremendous amount of heat and consumed an equally large amount of electricity. The transistor was considerably smaller, and required no heating element. The drawback was that they had to be used individually. In order to move forward, the industry required that more than one transistor occupy a single unit. The solution to this dilemma came as early as 1959, but it would take several years, and the particular combination of talents that existed at Fairchild, under the leadership of general manager Bob Noyce, to create a reliable, mass-produced integrated circuit. That accomplishment stood poised to revolutionize the industry, and thereafter, the world.
None of this made much of an impact on the top executives of Fairchild-they displayed the same lack of vision that kills so many high-technology companies even today. So, in 1968, frustrated with the state of affairs, Noyce secured the support of Arthur Rock, a prominent high-tech investor, and with Gordon Moore's help, started a company called Intel (short for Integrated Electronics). With these three men, the company looked unsinkable. Their decision to employ Grove as director of operations was, however, in the words of Tim Jackson's history of Intel, "so bizarre that it mystified most of the people who were watching the new business take shape. " Up to that point, Grove had virtually no manufacturing experience at all, plus he was decidedly unusual. Noyce and Moore admired his intelligence and drive, and they believed he was the right man. Grove tacitly agreed, leaving Fairchild almost immediately.
The doubts held by onlookers concerning his abilities were quickly put to rest. Grove guided the development of manufacturing processes first for the company's computer memory products, then for its first general-purpose microprocessor (the component that serves as the "brain" of modern desktop computers), outstripping all competitors and even the company which had licensed their technology to provide the "second-source" so important to computer companies at that time. The early years of the company were particularly hectic, as the demands of the high-tech sector tended to change dramatically and unpredictably. Thus, despite the concentrated talent at their disposal, Intel found itself constantly changing gears, and struggling to keep up with the latest developments. Grove's force of will aided the company greatly during this period, but an insight of Moore's was necessary for long-term stability. Moore's Law, as the insight came to be known, was that chip power would continue to double roughly every 18 months for the foreseeable future. Thus, Intel was able to chart its course ahead of the fact rather than leaping after changes in demand.
Moore's Law did not, however, eliminate all difficulties. The first major crisis began in the mid-1970s, when Japanese companies, who could manufacture memory chips at much lower costs, began dumping large quantities of cut-rate chips on American markets, seriously reducing demand for Intel's products. This was a major blow for the company, whose business relied at that time primarily on the sale of memory. They responded by shifting their emphasis to microprocessors, but many rival American companies collapsed under the pressure. In 1981, the chip market took another nosedive, and once again, many companies were caught unprepared. Grove, rather than laying off employees, ordered them to work 25 percent overtime for free. The strategy succeeded, and Intel survived.
Grove's hard work and demanding management style, while criticized by many, brought ever-increasing profits for Intel, and in 1979, he was made president of the company. Four years later, he published his second book, High Output Management, which was subsequently translated into 11 languages (his first volume, Physics and Technology of Semiconductor Devices, was published in 1967 during his tenure at Fairchild). His third book, One-on-One with Andy Grove, was published in 1987. He also wrote a regular management column which appeared in several newspapers, as well as occasional pieces for the Wall Street Journal, Fortune, and the New York Times. He became the CEO of Intel in 1987. The decade of the 1980s brought him recognition outside of the company as well.
Intel's biggest stumbling block came abruptly in 1994, with the release of the company's Pentium processor. The chip was flawed slightly, performing math calculations incorrectly. The error was small, and would not have affected the vast majority of users-only people running math-intensive programs like those required for nuclear research or astrophysics. Grove decided that there would therefore be no reason to order a recall. Those who called in to ask about the problem were simply told not to worry. Intel's customers didn't see the matter the same way, and in short order, the flaw was suddenly the topic of technology columns in newspapers around the world. After much deliberation, Grove backed off his position, and Intel began replacing the faulty chips. The crisis cost the company half a billion dollars, but in the end the decision to switch courses wound up bolstering their image. Intel was stronger than ever.
As noted by Isaacson in Time, Intel controls 90% of the microprocessor market. They also face little in the way of competition, although the combined efforts of IBM, Apple, and Motorola are beginning to have some effect. Grove, certainly not one to rest on his laurels, has made the 1990s a productive decade for himself as well. His fourth book, Only the Paranoid Survive: How to Exploit the Crisis Points that Challenge Every Company and Career, was published in 1996, and several more awards have been forthcoming as well.
The company's revenue increased from $2, 672 in its first year to $20. 8 billion in 1997. Grove was Intel's president in 1979, its CEO in 1987 and its Chairman and CEO in 1997. He relinquished his CEO title in May 1998, having been diagnosed with prostate cancer a few years earlier, and remained chairman of the board until November 2004. Grove continued his work at Intel as a senior advisor and had been a lecturer at Stanford University.
Grove is credited with having transformed Intel from a manufacturer of memory chips into one of the world's dominant producers of microprocessors. During his tenure as CEO, Grove oversaw a 4, 500% increase in Intel's market capitalization from $4 billion to $197 billion, making it the world's 7th largest company, with 64, 000 employees. Most of the company's revenues were reinvested in research and development, along with building new facilities, in order to produce improved and faster microprocessors.
He died at his home on March 21, 2016; the cause of death was unspecified.
Achievements
Andrew Stephen 'Andy' Grove was one of the founders and the CEO of Intel, helping transform the company into the world's largest manufacturer of semiconductors.
As a result of his work at Intel, along with his books and professional articles, Grove had a considerable influence on electronics manufacturing industries worldwide. He has been called the "guy who drove the growth phase" of Silicon Valley. In 1997, Time magazine chose him as "Man of the Year", for being "the person most responsible for the amazing growth in the power and the innovative potential of microchips. " One source notes that by his accomplishments at Intel alone, he "merits a place alongside the great business leaders of the 20th century. "
He was honored in 1987 with the Engineering Leadership Recognition Award.
In 1993, he received a Medal of Achievement from the American Engineering Association. The following year, he was awarded the Heinz Family Foundation Award for Technology and the Economy.
In 2004, the Wharton School of Business recognized him as the "Most Influential Business Person of the Last 25 Years. "
The 1st Annual Heinz Award in Technology, the Economy and Employment.
Grove received the award in 1995, and he was honored by the foundation for representing a story "as old as America: the story of a young immigrant rising to great success. " The donors of the award added that Grove "has played perhaps the single most pivotal role in the development and popularization of the twentieth century's most remarkable innovation – the personal computer. "
On August 25, 2009, California Governor Arnold Schwarzenegger announced that Grove would be one of 13 California Hall of Fame inductees in The California Museum's yearlong exhibit. The induction ceremony was on 1 December 2009 in Sacramento, California.
Quotations:
“The Lesson is, we all need to expose ourselves to the winds of change”
“Businesses fail either because they leave their customers or because their customer leave them !”
“Strategic changes doesn't just start at the top. It starts with your calende. r”
“If you're wrong, you will die. But most companies don't die because they are wrong; most die because they don't commit themselves. They fritter away their valuable resources while attempting to make a decision. The greatest danger is in Standing still. ”
“The person who is the star of previous era is often the last one to adapt to change, the last one to yield to logic of a strategic inflection point and tends to fall harder than most. ”
“How can you motivate yourself to continue to follow a leader when he appears to be going around in circles?”
“In Technology, whatever can be done will be done”
“People in the trenches are usually in touch with impending changes early. ”
“Altogether too often, people substitute opinions for facts and emotions for analysis. ”
Membership
In March of 1994 he was elected a Fellow of the Academy of Arts and Sciences.
He was also a Member of the United States National Academy of Engineering.
Personality
He had a severe temper, and an equally severe manner of maintaining discipline and control.
In 2000, he was diagnosed with Parkinson's disease; he became a contributor to several foundations that sponsor research towards a cure.
Quotes from others about the person
Jackson continued, "Grove spoke English with an accent that was almost incomprehensible. Over his head, he wore an awkward hearing-aid device that looked like a product of Eastern European engineering. "
Connections
Soon after arriving in the United States, in New York, in 1957, he met his future wife, Eva Kastan, who was a fellow refugee. They met while he held a job as a busboy and she was a waitress. They married in June 1958 and remained married until his death. They had two daughters.
