Survival of the Suspicious

Reading between the lines.
Nov. 12 1997 3:30 AM

Survival of the Suspicious

Andy Grove and the rise of Intel.

Inside Intel: Andy Grove and the Rise of the World's Most Powerful Chip Company
By Tim Jackson
Dutton; 424 pages; $24.95

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"You will leave no heritage for your children. Your name will be forgotten. You will fail. You will fail in everything you do." One can easily imagine these words hurled by a feudal lord at an errant knight. It's harder to imagine them uttered by a boss to a worker who had decided to leave his company. Business isn't supposed to matter that much. Nothing is supposed to matter that much. But the words do help explain what has made Andy Grove one of America's most powerful chief executive officers and Intel, the microprocessor-manufacturing company he runs, the technological cornerstone of the personal-computing revolution.

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Grove has became famous--or notorious--for the phrase "only the paranoid survive." These words served as the title of his most recent book and Intel has by all accounts adopted them as a company ethos. Gentler interpretations see the slogan as a mandate to keep careful watch on competitors and to anticipate the possibility of sudden, dramatic change. But as Tim Jackson, the weekly technology columnist for the Financial Times, shows in convincing detail, at Intel, paranoia means more than technological vigilance. It means a lack of forgiveness for departing workers, a willingness to use surveillance and intimidation tactics against the remaining employees, and an approach to patent law that at one point required the company's general counsel to file "a fixed number of new lawsuits every quarter." Not coincidentally, perhaps, it's also meant breathtaking gains in the speed and power of Intel's chips, steadily rising profits, and a de facto monopoly on the market for the processors used in PCs.

Certainly Jackson thinks that Intel's success in the marketplace is linked to the company's corporate culture. Jackson adeptly balances tales of Intel's excesses against the story of its rise, making a strong case for the inseparability of one from the other. The fact that any Intel employee who arrived at work after 8:00 a.m. had to sign what came to be known as the Late List certainly smacked of authoritarianism, but it also created a company-wide standard of performance. One detects a similar obsessiveness in Intel's endless legal campaigns--more than a few based on the flimsiest of evidence--against any company it could construe as a rival.

Jackson ascribes most of Intel's competitive ferocity to Grove himself. "Intel," Jackson writes, "has been built in his image"--that of a man who is, as he puts it, "brilliantly intelligent and articulate, driven, obsessive, neat, and disciplined." Grove has united a forward-looking approach to technology with a taskmaster's approach to production; the combination has been unbeatable. You might wonder what made Grove this way. Unfortunately, Jackson can't provide any answers, because Grove and almost all his close associates refused to be interviewed. Instead, Jackson is left to speculate about Grove's childhood and adolescence as a Jew in Hungary, where he survived the Nazi occupation in World War II and the Russian invasion in 1956, and to sprinkle into his narrative whatever Grove stories he could convince former Intel employees to tell. We hear about Grove's memo insisting that employees not leave work early on Christmas Eve, and about his penchant for verbal tirades that left their recipients scarred for months, though we don't really see why he believes these tactics to be necessary.

W e do see how, in shaping Intel after himself, Grove has subtly altered the climate of a company co-founded by men very different from him, Gordon Moore and Bob Noyce. Members of a generation of Silicon Valley engineers that tended to favor the freewheeling exchange of ideas over hard-nosed efficiency, Moore and Noyce first made history as members of the "Traitorous Eight"--a group of engineers who, in the 1950s, helped the inventor of the transistor, William Shockley, to set up his own laboratory, then abandoned it and him to start Fairchild Semiconductor. Fairchild was the first company to mass-produce the integrated circuit--which means it was the first to put more than one transistor onto the same piece of silicon, accelerate the speed of computing, and propel us into the information age.

Nine years after founding Fairchild, Moore and Noyce left again to start Intel, opening their doors in the summer of 1968. It is safe to say that their legacy has been further-reaching in its effects on everyday life than the Summer of Love. Intel advanced the development of the integrated circuit and pioneered the production of memory chips, which are what allow computers to store and access ever larger quantities of information. The company invented the first microprocessor, the miniaturized chip that processes the instructions given to a computer. In obedience to Moore's Law--which states that processors will double in power every 18 months--Intel turned out ever faster chips that have made the mundane use of applications like the Internet possible. Intel also helped spur the growth of the computer industry by accepting as its mantra the implacable formula "falling prices and rising volumes"--making chips both faster and cheaper.

Jackson gives Grove the credit for most of this, which is not an obvious conclusion. Recently, Grove has ascended to national prominence, adorning the covers of financial magazines and consulting with world leaders. For years, though, it was Moore who was seen as the real brains of Intel. Grove was considered the "ultimate details guy." But Moore's gradual yielding of power has allowed Grove to reinvent himself as a managerial and technological visionary, a cultural reinvention matched by a stylistic one. In the '70s, Grove wore gold chains and mutton chops while sporting thick glasses and an even thicker Hungarian accent. Now he looks the way a Silicon Valley elder should: tanned, lean, and stylishly dressed in subdued colors. Despite these superficial changes, Jackson says, Grove has played a consistent role at Intel throughout his tenure there: He's been the one to ensure that Intel delivers.

Inside Intel is the first book-length study of the company, which is remarkable when you consider how many books come out every year about Microsoft or Apple, which are both smaller and, in certain ways, less influential than Intel. This book is not a comprehensive history, though it does take the form of a chronological narrative. There are frustrating gaps and omissions, probably related to Jackson's lack of access. Under Moore, for instance, Intel was often resistant to technological change. Moore initially dismissed the personal computer as unimportant; the company also remained committed to the memory-chip business long after it should have realized that it couldn't compete with the Japanese. Only recently has Intel sought to be more farsighted in the development of the next generation of technology. Jackson fails to develop this theme, just as he sheds no new light on key decisions such as the unprecedented attempt to build a brand name around a microprocessor, a strategy so successful it led to Intel's domination of the world market.

In the end, whether we grasp his innermost feelings or not, Grove turns out to be strong enough to carry Jackson's narrative. Whenever he appears, he is riveting in the way that any brilliant obsessive is riveting, which is to say that you dread what he might do as much as you long to hear about it. The really interesting question, though, is whether Grove's style of business leadership will be the norm in the so-called New Economy, where the speed of change demands perpetual vigilance. Unfortunately for those of us who thought technology would create a world of leisure, he does seem like the CEO most likely to be imitated.

James Surowiecki writes the "Motley Fool" column for Slate.