Recently the news hit home that Pat Gelsinger, former CEO of VMware, will become CEO of Intel, the company he worked for already between 1979 and 2009. He himself even called it “coming home to Intel”. This reminded me that I left Intel nearly exactly 15 years ago after having worked there for 16 years. I was really glad to hear about Pat’s move, because I always had a lot of respect for him and I am sure he will be able to bring Intel back to its leadership position. I am confident about that because for me Pat still represents the Intel culture which made the company so successful especially during the 1990s. During the last 15 years, since I had decided to leave the company, purely for personal reasons, I have often realized how strongly this Intel company culture has influenced me and is still guiding a lot of my decisions and actions.
The American way of doing business
Several times in the past years, whenever I carefully made a proposal based on my experience as a manager at Intel, I heard comments like “we are not a US company and we do not want to be like that”. I understand that especially during the past four years there might have been some good reasons to be skeptical about what comes from the US. But crazy tweets from a now ex-president have absolutely nothing to do with American companies and their way of doing business and managing their organizations. I clearly cannot speak for all American companies, but I can speak for one, which is probably a good representation for most of them. I also can only speak for the company which I got to know between 1990 and 2006. I cannot speak for the last 15 years. So, what did I learn from that? First of all, a strong focus on results does not exclude great team work and team spirit. Surprisingly enough, there is still a widespread opinion that results orientation does not combine with having fun at work. At Intel at that time “Results Orientation” was written down as one of the company’s values, but so was “Have Fun”. And I can confirm that me and my teams had a lot of fun. We really liked our job and at the same time we always reached or even exceeded our challenging goals.
Re-investing in the future
Intel at that time made tremendous profits. For sure there was a dividend for the shareholders, but most of the profit went into R&D and also building new wafer fabs which cost billions of dollars. Moreover, Intel also invested in its employees. Not only by paying good salaries and sharing profits in form of employee bonuses and stock options, but also by offering great trainings and personal development plans to provide career paths and keep good people in the company. This included a formal succession planning process for potential new managers or existing managers to take the next step. The employee review process at midyear and at the end of the year was pretty intense for the management team, but looking back, it was absolutely worth the effort in order to build high performance teams and provide individual development opportunities. I personally had 9 different jobs in 16 years at Intel and finally served as Managing Director for the German subsidiary and Regional Sales Manager for Europe. Did I have to work more than 40 hours a week for that? Definitely yes, but I simply liked it, and when I like my job I always do that – as long as I feel rewarded, first of all emotionally, but yes, also financially.
During my employment at Intel Corporation I had the chance to work for eight years under Andy Grove as the CEO. Sure, I was not directly working for him, but at that time you could feel his leadership in all levels of the organization and when you met him, you knew why people still call him a charismatic leader. Andy was certainly not an easy character. He was very demanding and he very often was brutally direct, especially when it came to any kind of low performance. But aren’t all successful company leaders, who have continuously driven their companies forward, very demanding? Today everybody talks about OKRs (= Objectives and Key Results). The OKR method actually is based on the iMBOs (Intel Management by Objectives) introduced by Andy Grove at Intel. One of Andy’s other favorite topics, which I do not only remember, but which has also strongly influenced my professional career until today, is the theory about the “Strategic Inflection Point”. Andy writes about it in his book “Only the Paranoid Survive”, which despite having been published already in 1996, has not lost its relevance at all.
The strategic inflection point
The IT industry is a very fast moving and fast changing industry and there are countless examples which put the theory of the strategic inflection point right in front of us. One famous example is Nokia, once having been the market leader for mobile phones. When the Nokia management was still celebrating the record year of 2007, Apple already had started the success story of the smartphone introducing its first iPhone. This was the beginning of the end for Nokia’s mobile phone business. Like many other people at that time, I used one Nokia model after the other and it was unimaginable that already a few years later nobody would remember Nokia as a mobile phone brand. It was the new revolutionary technology from Apple that completely changed the market. In general Apple has (almost) always been very good at anticipating strategic inflection points by creating completely new markets. Instead of fighting the competition in a “red ocean”, Apple discovered new “blue oceans”. iPod, iPhone and iPad are very good examples for this.
However, a new idea, a new product or the development of a new market alone is not enough. Almost always, a change in business strategy is accompanied by profound changes in the organization. I do not remember any longer how many change processes I went through at Intel and also how many I actively had to manage in my respective teams. This was not always easy, but it was necessary to keep the company on a steady growth path and in a leadership position. A lot of these changes were simply driven by innovation. I hear and see a lot of companies today talking about innovation, but Intel during those times lived innovation everywhere and every day. In technology research, product development, marketing, sales, internal IT – simply everywhere in the company. Sure, a lot of the ideas also failed and where thrown into the trash bin, but others became milestones in the company’s history like the Centrino mobile technology, the Xeon server processor line or the famous Intel Inside program. It was fascinating to see how Intel reinvented itself several times and always used the next strategic inflection point as a start for the next period of exponential growth. From memory chips to processors to platforms. As Andy Grove said: “Success breeds complacency. Complacency breeds failure. Only the paranoid survive.”
The American way of doing business – why not?
At the end, I would like to come back to the comment I quoted before about “not wanting to be like a US company”. Why would somebody really say that? Why would somebody not like to work for an innovative and successful company which strives to be a leader in its market segment? Why would somebody not like to have a personal career path in the company he likes to work for? And why would somebody not like to participate in the financial success of the company? Again, I cannot really judge how Intel’s culture changed between 2006 and today, but from my point of view the company did a role model job during the time when I was there. I am still very glad today that I could be part of it.
I am sure Pat Gelsinger will bring some of this old spirit back, at least I could read that between the lines in his recent statements. I wish him and Intel all the best for the coming years!