17 November

Intel in the 80's is like the US in 2009

Andy Grove's experience keeps teaching us lessons from decades prior ...

In reading Bob Herbert's column "What the Future May Hold" (on the lack of investment in American infrastructure) in the New York Times, I was struck by Professor Jai Prakash's comment which saw this through the lens of over investment in American power influence rather than domestic infrastructure.

It reminded me of a fascinating parallel with Andy Grove's struggles with the growth of Intel - when he almost lost that company. Professor Prakash is definitely tracking on the American psyche to a "T". Read more.

[This comes from my M&A background which started when I worked in Corporate Strategy for a Fortune 500 firm years back.]

In "Only the Paranoid Survive", Andy Grove tells us of when Intel had to evolve as a company to risk it all on a potentially hypergrowth monopoly of processor chips, but only by doubling down on its successful memory business, knowing it to be a one-way bet that would have unacceptable consequences to take, yet it was the correct move.

He thought he was about to be fired by the board, and that the new CEO would embark on this direction when he walked in through the door the first time. So he chose to take courage and be, in effect, the new CEO. He symbolically walked in his own door!

Like what Professor Prakash calls out for a distracted America, Grove was at the time being distracted by many corporate acquisitions seeking to extend influence of a sort - in the book he describes them as the sign of a company about to go into decline - on the edge. Why were these occurring?

In both the US and Intel (of that time), there were deep internal divisions, where the middle ground had been intentionally eroded. Any attempt to find consensus or build bridges would have the bridges undercut and destroyed - because powerful influences wished to dominate and not share - thus no middle ground was possible. So rather than face the internal (domestic) conflict, an Intel CEO (or President of the United States) could avoid conflict by focusing on external (foreign) opportunities instead.

This is precisely the point - we need to confront head on the issues that injure the ability of the US to lead internationally, by developing its strengths internally. The cost is in enduring the endless ideological battles. By finding the success in reinventing America so that it works effectively once again, it can be relied on as a world leader through its strengths.

Not the supposed strengths of the past administration of fear and intimidation using America's over taxed military. But on investment in country reinvention - next generation infrastructure / energy technologies / industries / space vehicles / software architectures / communications technologies / and more. We have to move the bar higher and become the world's foremost source of the beyond the current state of our industry/technology.

Posted by william at 22:02 | Comments (1) | Trackbacks (0)
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Re: Intel in the 80's is like the US in 2009

Dear William,
I read your post drawing parallels between the Intel struggles of eighties and the uninvited avoidable struggles of the US of nineties with keen interest. It was really heartening to know that my comment on Bob Herbert's column in the NYT has incited a thought relevant for the welfare of your people, and should work as a wake up call to the Obama administration as to what remains to be achieved. Thanks and best wishes.

Posted by: Prof. Jai Prakash Sharma at November 19,2009 16:34
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