Profile: Andy Grove, Intel

The Washington Post
27 March 1998

A Section
Intel CEO Andy Grove Steps Aside; A Founding Father Of Silicon Valley
Elizabeth Corcoran
Washington Post Staff Writer
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Copyright 1998, The Washington Post Co. All Rights Reserved

At the heart of the computer is a single silicon chip, the microprocessor. And at the heart of Silicon Valley is the man who made the lion's share of those chips, Intel Corp. chief executive Andy Grove.
Now that's changing. Grove, 61, announced today that he is turning over the daily reins of the company he helped create to Craig Barrett, 58. Grove will remain as Intel's chairman.
The change marks an important transition for Silicon Valley and the digital age it helped create.
"We've built an organization that's like an athletic team, tuned to play a particular sport," Grove said in an interview today. "This organization is fine-tuned [to build computer chips] better than anyone else. And we've done that without short cuts or compromises in values and operating style."
When Intel began, computers were a rare species -- hulking machines found largely in government laboratories, tended by specialists in white lab coats. Now, many children use PCs to practice their ABC's -- on small machines driven by Intel chips far more powerful than those technicians dreamed possible.
Just as Ford made it possible for thousands -- and later millions -- of people to own their own cars, Intel turned computers into something that could be bundled in a box and sold at appliance stores to millions of consumers around the world.
As Intel's first official employee in 1968, Grove did more than just run a company. He defined its culture -- and, in the process, helped define the character of the digital age as surely as Henry Ford set the tone for the auto industry. "The whole Intel experience was patterned after Andy," said Barrett, who will become Intel's chief executive in May.
With its partner, Microsoft Corp., Intel has set the standards that define what a personal computer does and how it does it. It dominates its business, reaping almost $7 billion in profit last year on sales of $25 billion. The company mirrored its CEO: a pugnacious, smart competitor, never willing to give an inch, always working to push the edge of technology.
Grove is an unlikely legend. A wiry man with a heavy Hungarian accent who favors casual clothes, he is neither the richest nor the most ego-driven man in Silicon Valley. No one points out Andy Grove's first house in Silicon Valley, the way they do that of Apple Computer co-founder Steve Jobs. Instead, people are more likely to tell stories of running into Grove and his wife waiting in a line to see a popular movie.
Grove said he was stunned when he was named Time magazine's Man of the Year several months ago. "I was utterly incredulous," he said in an interview today. "I mean, look at the list of people -- political people, celebrities . . . starting with Charles Lindbergh. I didn't see myself as being next in that series of figures."
But for all his modesty, Grove has been the drill sergeant at Intel, the one who pushed the company to churn out ever-faster processors, kept strict control of costs and instilled a work ethic that ensures employees are at their desks not a minute later than 8 a.m.
When he wrote his most recent book about Intel, Grove picked one of his favorite quips as the title: "Only the paranoid survive." It has become a refrain in Silicon Valley. "That spirit has permeated the lifestyles and thinking styles of the Valley," said John Seely Brown, who oversees Xerox's Palo Alto Research Center.
At Grove's core is that driven sense of discipline -- the determination to drill down into the details, to persevere, to work not for perks and pizazz but to build a product. And like a gene passed down through generations, it's now part of Silicon Valley. The tech world is filled with executives and leaders who learned their lessons at Intel. Among them are Brian Halla, who runs National Semiconductor; David House, who runs Bay Networks; and John Doerr, the Valley's leading venture capitalist, whois with Kleiner Perkins Caufield & Byers. As they have built their own companies and organizations, they have passed along the Grove discipline and rapt attention to details, every microstep of the way.
In spite of his drive, Grove has a warmer, even goofier side. Years ago, when debuting a prototype of the company's now-famous Pentium chip before a theater packed with engineers and reporters, he found himself at a loss as a glitch brought the demonstration to a halt. Grove appealed to the audience. "Does anybody know any jokes?" he said.
When he discovered he had prostate cancer several years ago, Grove threw himself into researching the possible treatments and ultimately chose the course that seemed to have the best odds. Afterward, he wrote an account of the experience for Fortune magazine. "The thing that got to me . . . was I was sitting around in the meetings with largely middle aged males . . . and I knew stuff that they didn't know. I wanted to grab them by the scruff of their necks and say, "Do you know what your PSA is?' " (PSA levels are an indicator of possible prostate cancer.)
If he were anything but an engineer, Grove's story would be the stuff of a Broadway musical. He was born Andras Grof in Budapest on Sept. 2, 1936, son of a Jewish dairyman. During World War II, his father vanished. Andras and his mother successfully hid from the Nazis, and they stayed in Hungary until December 1956, when the Soviet Red Army invaded. Then Andras fled.
Although he initially spoke no English, Grove enrolled in City College of New York, and three years later he graduated at the top of his engineering class. After graduation, he headed for California and the fledgling semiconductor industry.
Intel was founded by the late Robert Noyce, one of the inventors of the integrated circuit, and Gordon Moore, a well-respected scientist. Grove, who had worked with them in a research laboratory at Fairchild Semiconductor Corp., was the first official hire. Unlike the two founders, he needed a regular salary. So he became the first on the payroll but ultimately walked away with a smaller percent of Intel options, which ultimately put Moore and Noyce into the ranks of billionaires. (Grove's estimated net worth, by contrast, is a mere $300 million).
Brilliant and obsessed with details, Grove wound up overseeing manufacturing, which turned out to be the key to Intel's success. The best chip design in the world was worthless unless a company could figure out how to churn out thousands and thousands of chips that worked. Any time a problem occurred, Grove drove his people to attack it like a virus until it was cleared up. In 1987, after Moore and Noyce retired, Grove became CEO in 1987.
Over time, Grove became known for his management principles. (He would later write a newspaper advice column on management and a book, "One on One With Andy Grove.") Among the practices that are still in vogue both at Intel and in many other companies in Silicon Valley is something dubbed "constructive confrontation." Translation: Cut the niceties and rely on data and facts to solve a problem. That didn't make Intel the easiest place to work.
"Occasionally we . . . suggest [to Grove] there may be an alternative to grabbing someone and slamming them over the head with a sledgehammer," Barrett said in the 1996 interview.
As smart, hard-working and attentive as he was, Grove made mistakes. In 1995, when a flaw was discovered in the Pentium processor, Grove insisted the problem was minor. Although he was statistically correct (Intel says it has still not encountered a real-world problem miscalculated by one of those flawed Pentiums), consumers did not want to be told they had spent thousands of dollars on a product that just might not calculate properly. After considerable pressure, Grove agreed to take the chips back.
"I was thick-headed. I don't know how to say that differently," Grove said in a 1996 interview.
More recently, Intel moved slowly to realign its chip strategy to build low-priced microprocessors for the so-called $1,000 PCs.
"Did we wait too long before we took appropriate actions? Yes," Grove said today. But he said he didn't think the $1,000 PCs marked a fundamental change in the business of chip and computer companies. "It's true we didn't take that phenomenon seriously, but it's not a break in the business models. PCs used to cost $5,000 apiece; now they cost $2,000, and the industry hasn't changed. Prices are going to come down to $1,200 . . . and I don't think it will change the business."
Other pundits aren't so sure. But even if Grove was wrong, he is confident that over the decades he has built an organization with the strength to change. "We've taken a company that was an excellent broad-line semiconductor company and made it into an even more excellent manufacturer of microprocessors. We did it at a time when the use of the microprocessor was about to blow sky-high," he said.
Grove said today that moving out of the chief executive's chair will give him more freedom to explore how people can use the computing power offered by Intel's chips and how the company can continue to serve up new products more efficiently. "It's not a new activity for me," he said. "But I've been limited by the obligations of being CEO."
The move will help him address what he says is one of his own regrets about Intel -- that the company could have played a more aggressive role in stimulating how people use its technologies: "We were too cautious, too small scale, too late."

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