What the Paranoid Got Right -- The Unlikely Legacy of Andy Grove's Intel

As the world remembers Andy Grove for shaping Silicon Valley into the somewhat paranoid and confrontational powerhouse it is today, there is a much softer undertone of his legacy that is largely missing from the dialogue today.
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As the world remembers Andy Grove for shaping Silicon Valley into the somewhat paranoid and confrontational powerhouse it is today, there is a much softer undertone of his legacy that is largely missing from the dialogue today. "Only the paranoid survive" is a sound bite we use over and over again yet it doesn't adequately capture the more well-rounded ethos of leadership that Grove and Intel embodied.

By all accounts Grove was feared and revered as many great CEOs are. Just like Bill Gates he was brainy but in a brilliantly inspiring way. With his slight frame, wiry intensity, intellectual rigor, and his signature Hungarian accent he was uniquely unassuming yet charismatic. Stories abound about his confrontational style and "take no prisoners" attitude, but one did not have to look hard to witness a different side of him and his Intel as well.

I started my career at Intel in the nineties, and toward the tail end of Grove's reign I had an assignment that allowed me to act as a fly on the wall on the executive floor for almost a year. I was in my mid-twenties then yet I was able to attend and observe quite a few Executive Committee meetings with Andy Grove (the CEO at the time), Craig Barrett (future CEO), and sometimes even Gordon Moore (former CEO), representing my boss, Paul Otellini (future CEO). I watched these peers relate, debate and make decisions and what stuck with me the most is how they interacted--as equals and peers. There were no outsized egos getting in the way even in the most heated moments-- it was all about their collective and intense focus and desire to keep Intel great.

Grove only chewed me out once (quite forcefully I might add) and at the very first time we had ever met. It was during the first week of training for my new position at Intel, which was my first job out of college. I was about to become an Architecture Manager (a sort of business development specialist) and join the skeletal crew at Intel's newly opened Budapest office. Hungarian by birth, Grove was curious to meet me and one day he stopped by my temporary cubicle just down the aisle from his own. He started speaking to me in Hungarian but I was so shocked to see him there that I could barely utter a coherent word of my own (even though I was born in and grew up in Budapest). Operating on a short fuse he barked at me for "not speaking Hungarian" and stormed out of my cubicle.

By our next encounter all was forgotten and forgiven though, and a couple of years later I was in a position to observe him confront many others as well. I can't recall a single instance when there was no valid reason for the confrontation (from what I observed, this was often due to the perceived lack of intellectual rigor) however the force of the outburst was rarely in line with the actual issue at hand. Partly because of this tendency, some accuse Grove of creating the beginning of a culture that gave rise to bullies at the company...but I suspect Grove would have been horrified even just by the thought of this and so would be those employees who knew him well.

Grove's book "Only the Paranoid Survive" was an analogy for his beliefs based on his life and work experiences. It took the business world by storm and created a meaningful mindset shift across Corporate America in the late 90's. Even today many still use it as a manifesto, although the concept is no longer fashionable in leadership development circles today as more recent works have moved on and embraced much "softer" approaches. I remember watching the San Francisco 49ers in the 2013 Super Bowl facing off against the Ravens wondering why Jim Harbaugh thought it was a good idea to push Grove's paranoia onto the 49ers. As a corporate advisor I see all too often the costs a primarily fear based culture can have on morale and performance, and as a novice to the world of football it was too easy to argue that the 49ers cracked under that pressure.

But that got me thinking - how could this "paranoid culture" make Intel so successful in the 90's while it is no longer considered the most effective way to lead and govern? And what can we learn from this shift?

I haven't been involved with Intel in decades nor do I have much insight on how the corporation has evolved, but as an advisor I work with many companies across industries and I study and guide their work around culture and organization. With the emerging body of work related to the "new type" of leaders, whether it be the "transformational", the "centered" or the "balanced" leader, it is easy to characterize Andy Grove as a flawed leader. Yet, he had the ability to instill fierce loyalty across the organization in a way that only the best leaders are capable of.

Sure, it may have been something to do with the golden handcuffs -the soaring stock that made those who held their stock very wealthy--or his brilliant strategic moves. However, a closer look at what made and kept the Intel organization high performing at the end of the 20th century reveals that a lot of its core cultural traits are actually considered key levers of success in the modern leadership thinking of today:

1.Authenticity. Constructive confrontation (one of the hallmarks of the "Intel way") has a decidedly bad reputation today, yet in its purest form it creates a culture where people feel safe speaking up versus holding back. Almost a decade after I left Intel I was talking to a VP at another large Silicon Valley firm who had worked at Intel at the same time I did. I couldn't help but notice similarities between the culture of Intel and his new firm and was curious to hear his perspective. "Yes they are similar", he agreed, "but Intel is much less passive aggressive than this place. I always knew where things stood at Intel, whereas it's a lot murkier here."

2.Alignment. The concept of "disagree and commit" is the predecessor of "alignment". Authenticity is the ability to openly express our opinions and was highly present during my time at Intel because there was not a lot of fear of retaliation AND, this increased the levels of trust across the organization. This in turn enabled people to express their point of view before a decision was made, but then it required them to align to whatever decision was made even if it wasn't their first choice to begin with. This was a cornerstone of Grove's management philosophy and allowed Intel to become the execution machine it was known and revered for.

3.Dealing with change and ambiguity. Grove believed that complacency was a bigger threat than AMD or other competitors, so even though Intel dominated the market, Intel made a habit of reorganizing itself about every 18 months or so just to keep people on their toes. Many employees were put in limbo for months with their jobs eliminated and having to apply and interview for new positions. While there were many drawbacks to this strategy, it created an environment where change was expected and accepted, and innovation flourished through a constant influx of new perspectives and ideas.

4.People matter. Intel was never known for being a touchy feely company, yet I know I and many of my colleagues really felt valued there during the 90's. It was an egalitarian culture that encouraged people to have a voice, created various options for career progression, and provided attractive compensation, which in turn brought the best out of their people. By promoting exclusively from within and being thoughtful about mentoring people as they came up through the ranks, Intel sent powerful signals to the employees that this was indeed a meritocracy. Paul Otellini, who was a champion of diversity at a time when it was not yet a popular topic across corporate America, told me (and showed me through his actions) that he deeply cared about identifying and developing talent and providing opportunities to the next generation the same way his predecessors paved the way for him.

5.Humility. Intel took the concept of a flat organization seriously - in the positions I held there were only four layers of management between me and the CEO - but more importantly it provided relatively easy access to senior management who I generally found kind and approachable. Through a series of chance encounters and hallway conversations with Paul Otellini, then Executive Vice President of Sales, I was invited to pitch a project and within a few months I was on my way to headquarters to help support it. It allowed me to interact with many of the senior leaders of the organization, and initially I did not even realize how senior some of them were because they were so humble and authentic throughout our conversations.

6.Role modeling and walking the talk. Rules and policies applied to everyone across the board with no exceptions. Nobody would complain about the lack of offices because Grove and all the other executives had cubicles just like everyone else albeit a bit bigger. I'm still not sure if it was true or not, but the legendary story that most clearly demonstrated to me the Intel executives' commitment to "walk the talk" was when (then) COO Craig Barrett flew to, I believe, Chicago to negotiate the "Alpha chip deal", an acquisition of part of Digital Equipment Corporation's semiconductor manufacturing operations. According to the story, Barrett took the red-eye United flight and flew in economy, while Ken Olsen (co-founder of DEC) flew in on his private jet.

Andy Grove embodied both a hard edge and intellectual ruthlessness. Despite of all the harshness and aggressiveness of Grove's management style and the resulting norms and practices across the company, Intel during the Grove-era did not have a fear-based culture. His management and leadership legacy, to those who knew him, include much more than "paranoia" and "constructive confrontation". While there is no question that he was not the touchy-feely, highly emotionally attune leader, he was instead a high integrity leader who valued people and their contribution and instinctively shaped a culture where there was humility and people felt valued. Looking through a purely organizational development lens, I can't help but wonder if Andy Grove and his Intel were way ahead of their time and a forerunner to the "modern" organizations (and organizational cultures) of today...

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