Column: Searching For True Innovators

BURLINGAME, Calif. -Mirror, mirror on the wall, who's the most innovative of them all?

Google?

Apple?

The answer to that question will be measured in the hundreds of millions--hundreds of millions of consumers, devices and eventually dollars--or, more appropriately, some other currency that isn't falling through the floor.

The device of this generation is clearly the mobile phone. Every company worth its market cap is scrambling to figure out how to make itself fundamental to the delivery of information via a handheld device. We are at that sweetly transitional moment in an industry when innovation truly counts, when consumers buy a product because it delights or serves them--not just because sticking with what they have is far easier than switching to something new.

Both Google and Apple have whole new categories of products. But the phone industry already exists: The type of innovation required in this case goes by the catchy name of "cross-boundary disruption."

I can't take credit for the phrase. There's a wily guy over at the Stanford Business School who is giving some 30 graduate students a tutorial on how to break into somebody else's business. His name is Andy Grove. (You thought Grove had retired? Guess again. He just has different intellectual stomping grounds these days.)

A few days ago, I slipped into the class Grove teaches jointly with his longtime Stanford collaborator, Robert A. Burgelman, to get an earful of what it means to innovate in a field that already exists. Their class is scrutinizing a number of industries: energy--particularly the automobile industry--media, health care and telecommunications.

Grove and Burgelman offer up a checklist of symptoms of an industry ripe for disruption. Among them: Is it a slow-growth industry? Is there little business model innovation? Are there incumbents who have established "rules" for the industry.

"Disrupters" to that status quo typically show up from other industries. They need to have enough scale and resources to make a real difference. This isn't a game for low-budget startups; you've got to have enough muscle to make a dent in a field where there are giants. Disrupters are hungry. They're risk takers. And most important, they are not prisoners of their own prejudices and past decisions--a newcomer to a field can see the problems of a static old industry differently.

Both Apple and Google were enormously innovative during their early days. Both created industries.

But only Apple, so far, has shown it can hurdle industry boundaries and shake up a staid market--namely, the market for portable music.

The secret weapon Apple brought to music? Putting all the pieces together seamlessly using the power of software.

Other companies, starting with Sony, made portable music players. They made tiny ones, pretty ones, powerful ones. But all those differences were based largely on the look and feel of the device.

Apple's iPod is lovely to hold. But Apple's deep insight was that the innovations that could reshape music players weren't based in mechanics or hardware. It's software that lets people sync their iPod to their computer, to shuffle songs, to manage playlists and so on. "Software" becomes a code word for describing the way we organize information in our world.

Fast-forward to mobile phones: The fundamental difference between the iPhone and everyone else's phone, once again, has also been in how Apple organizes the myriad of functions and resources on the phone--again, software. The rest of the device--even the lovely big screen--is just a window into how Apple thinks about organizing the world.

Google thinks about--and organizes information--differently than Apple. Next week, we're likely to see how Google would organize the world's information and deliver it to a small device, formerly called the "cellphone." Google also likes to move with a caravan of developers and fans around it. Certainly the company's recent announcements about building an open environment for those who develop applications on social networks underscores Google's desire to capitalize on the power of the crowd.

Grove's class hasn't finished analyzing the emerging phone market. They have some good ideas of what helped Apple triumph in one new market, but the school year will be over before we have data that reflect what consumers deem the most compelling innovations in this arena.

But one element is clear: Consumers will benefit from such cross-boundary disruptions, in mobile communications and elsewhere.

http://www.forbes.com/technology/2007/11/02/apple-google-iphone-tech-cx_ec_1105innovate.html

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Column: Andy Grove's Re-entrance

Letter From Silicon Valley

12.18.06, 6:00 AM ET
Burlingame, Calif. --Andy Grove understands how to make a re-entrance like no one else.

Not the pop-star flounce onto a stage, heralded with flashing lights and throbbing background music. But the kind of entrance that matters--the ability to look at a growing problem that surrounds him, step away--then come back in with a fresh solution.

I was reminded of this skill recently when the retired Intel chairman joined Harvard Business School professor Richard S. Tedlow onstage recently here in Silicon Valley to discuss Tedlow’s newly published biography, Andy Grove: The Life and Times of an American.

At 70, Grove is still wiry and hip enough to sport a black leather bomber jacket, even though his hands tremble slightly due to Parkinson’s disease. He smirked as Tedlow described how Grove originally told him that the idea of someone writing his biography was the “stupidest idea” he had ever heard. But Grove quickly relented and gave Tedlow his full cooperation.

What comes through in the biography and in the discussion onstage with Tedlow is how Grove made his biggest decisions: by stepping outside himself and viewing the situation coolly, at a distance.

Case in point: a fateful decision in 1985. At the time, Intel was reeling from losses in its memory chip business due to sharp competition from Japanese manufacturers. Grove had spent months wrestling with the problem, including petitioning the U.S. government to take action. Frustrated, he asked Intel co-founder Gordon Moore, "If we got kicked out and the board brought in a new CEO, what do you think he would do?" Moore’s answer: quit making memory chips. "Why shouldn’t you and I walk out the door, come back and do it ourselves?" Grove responded. So they did.

Intel faced an similarly crucial juncture in the early 1990s when Grove had to bet the company on a single chip design direction: Should Intel continue making its x86 class chips or should it follow a more technologically elegant approach called “reduce instruction set computing” or RISC? Intel’s engineers split into warring camps; RISC was the hipper choice, the one that seemed to prove that Intel’s engineers were the best. Grove even took part in a jocular in-house Intel video in which he wore dark sunglasses and rapped about the virtues of RISC chips.

Still, Grove listened when colleagues approached him with a nonengineering-based argument: Abandoning the x86 architecture, they said, would leave Intel’s huge base of existing customers stranded. None of the software written for x86 chips would work smoothly on the newer design. “They saw through all the technical mumbo jumbo,” Grove recalls, “and focused on the most important, basic factors.” Grove stepped away from his own inclination to pick a more technologically sweet solution and stuck with the x86 design. Intel’s value soared.

Grove was slower to step outside his own beliefs when customers discovered a subtle flaw in the ability of Intel’s Pentium processor to carry out certain types of arithmetic functions. Grove dragged his feet on apologizing to customers until the howling both inside and outside of the company was deafening. In his book, Tedlow describes the Pentium gaffe as Grove’s biggest mistake.

Onstage with Tedlow, Grove was impatient with that choice. Yes, a mistake. But his biggest? Grove says he agonizes every day that he didn’t leave Intel with a clearer road map for the future. Intel’s most recent track record has been mixed. Its high-end chip, Itanium, which took root during the end of Grove’s tenure, proved too ambitious and left the company vulnerable to competitor Advanced Micro Devices. Intel is also still seeking a clear path in a world where countless little handheld electronic devices are emerging as the next new thing.

Tedlow countered that Grove was asking too much of himself. “Every generation has to solve the problems it faces,” he told Grove and the audience. “It’s hard to solve the problems that will happen 10 or twenty years out.”

“That attitude brings an anti-investment, pro-short-term perspective,” Grove snapped back. “Some problems take longer than the tenure of a CEO,” he added.

These days, Grove has taken on a couple of other big problems, ones that will certainly take more than a few years to right: improving the U.S. health care system and preserving America’s separation of church and state.

Once again, Grove is trying to step outside his personal concerns to see the problems in a clear light. Almost a third of all Americans lack adequate health care and increasingly turn to hospital emergency rooms for simple medical care--a disaster in the making, worries Grove.

Existing technology can help, he believes. Grove is a fan, for instance, of walk-in medical clinics at drugstores instead of emergency rooms for many procedures. He advocates keeping people’s medical records in PDF files on the Internet to cut costly mistakes and unnecessary procedures. Wireless sensors that kept elderly or infirmed patients in close contact with medical providers could help them stay in their own homes instead of heading to nursing facilities. “We’re using technology to achieve extraordinary care for a few people. What intrigues and motivates me is the idea of using mass technology to help many more,” he says.

Just as important, Grove believes, is protecting the U.S. from the kind of sectarian strife that has ravaged so many other countries, including his native Hungary, where he saw relatives suffer first at the hands of the Nazis and later under the Communists. A clear separation of church and state--as set forth in the U.S. Bill of Rights--is essential for creating an environment in which people can believe what they choose and tolerate differences among their neighbors. Grove is supporting an online petition drive calling for the renewed separation of church and state.

Stepping outside your own concerns and pride, finding a new solution and then reentering is tough for any of us. It’s far easier to pontificate on other people’s problems than to see our own clearly. But as Grove has shown, true self-awareness can be our most valuable asset.

http://www.forbes.com/2006/12/16/intel-andy-grove-tech-cz_ec_1218valleyletter_print.html

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Book Review: Andy Grove, The Life & Times of an American

The driven life of Intel titan Grove
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Reviewed by Elizabeth Corcoran
Sunday, November 26, 2006

Andy Grove: Life and Times of an American

By Richard S. Tedlow

PORTFOLIO/PENGUIN; 568 Pages; $29.95

Over the past few decades, we've seen a parade of business archetypes: There's been the chief executive as stubborn rebel, as domineering whirlwind, as greedy crook. Now in "Andy Grove: The Life and Times of an American," Harvard Business School Professor Richard S. Tedlow takes us backstage to see the human jitters, foibles and strengths of a legendary boss.

Grove deserves a big biography. As much as any other single person, he built Silicon Valley, bringing the computer revolution into all our lives. He led Intel Corp. to supremacy in the microchip business, enabling powerful computers that are cheap enough to be birthday presents for many people.

Tedlow, who had unfettered access to Grove, goes well beyond the career highlights to present a warm and discursive portrait of a complex man. Grove is unfailingly blunt, quick to engage in sharp confrontation, wickedly funny, brilliant, a thoughtful listener, plagued by fear, achingly critical of himself and others and, at times, simply wrong. What come through most steadily: Grove's insatiable hunger to learn -- and his burning desire to be noticed.

Grove's story has the lyrical qualities of a Broadway show. Born Jewish in Hungary in 1936, Grove fled to the United States when the Soviets invaded Budapest in 1956, earned a doctorate in chemical engineering and became a captain of industry. Along the way, he has confronted some formidable health challenges: scarlet fever as a child, prostate cancer in his late 50s and now Parkinson's disease.

On the job, Grove was beset with doubt from Intel's first day. When he joined in 1968, "I was scared to death," Grove later said. "I literally had nightmares. I was supposed to be director of engineering, but there were so few of us that they made me director of operations. My first assignment was to get a post office box so we could get literature describing the equipment we couldn't afford to buy."

Even so, Grove had the ability to step outside his daily tussle and see himself -- often wryly -- at a distance. In 1969, Grove pasted into his notebook a magazine clipping that described the responsibilities of a motion picture director: "a soother of egos, a cajoler of artistic talent ... [with] the vision and force to make all these elements fuse into an inspired whole." Above the clipping, Grove printed: "MY JOB DESCRIPTION?"

His devotion to Gordon Moore, Intel's co-founder, bordered on filial. When Moore was away from Intel during his time as chief executive, Grove wrote memos to fill in what Moore had missed. In June 1975, Grove wrote: "Welcome home! You absolutely, literally, positively could not have chosen a better/(worse) week (depending on point of view) to be gone."

Grove was much more terse with Intel's co-founder, Robert Noyce, a charismatic leader and gifted scientist who was uninterested in daily management, according to several accounts. "I view the ... situation as Intel's biggest management blunder, with you being the principal," Grove wrote to Noyce in 1971. "I think you should also have to face [your mistakes] like the rest of us have to otherwise you will keep going on making them!"

Such raw comments -- what Grove liked to call "constructive confrontation" -- became a trademark. Yet Grove routinely gave himself a sharp tongue-lashing, too. In November 1976, Grove wrote: "[D]issatisfied w/overall co. performance (hence: me!) ... frequently depressed; thoughts of bailing out."

"Reinvention" has been so overused that it now has the resonance of a sitcom theme song. But Tedlow describes how Grove saw himself as a student at many junctures of his career and refreshed his skills with the same tenacity Intel applied to designing each new generation of computer chips.

Grove held his standards high, sometimes achingly so. Colleague Sean Maloney recalled devoting more than a month to a piece of analysis only to have Grove return it, saying, "I'm bitterly disappointed."

For some, such critiques cut to the bone; others, including Maloney (who is now among Intel's top executives), took it as a goad to excellence. "He would get the best of every individual," Maloney told Tedlow. "He may piss them off, which he frequently did, but he got the best out of [them]."

Tedlow's book veers closer to an appreciation of Grove than to a hard-hitting critique. He concedes as much in his acknowledgements, noting, "the reader should be aware that Andy Grove is a magnetic man. It is impossible, at least for me, to have spent as much time with him as I did and to have immersed myself as completely as I have in this project without developing feelings of admiration and affection that must have colored this account to some degree."

More insight into Grove's jousts with Microsoft founder Bill Gates would have been welcome. Tedlow devotes the bulk of one chapter to the topic but didn't interview Gates. That's a pity.

So many successful people become consumed by vanity or arrogance. Grove certainly wanted to be recognized for his accomplishments. Yet no matter how many times he reinvented himself, he never quite shook the traces of the boy who once hid from the Nazis. His lifelong belief that disaster lurks just around the corner became his constant goad, his strength, his humanity -- and makes for a story well worth telling.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2006/11/26/RVGSUME5VL1.DTL&hw=Elizabeth+Corcoran&sn=001&sc=1000

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