30 Oct 2006  Research & Ideas

The History and Influence of Andy Grove

In a soon-to-be-released biography, Harvard Business School professor Richard S. Tedlow profiles one of the most influential business leaders of our time—Intel's Andy Grove. Tedlow discusses his research on the Silicon Valley legend and how Grove altered much more than the chip industry. Key concepts include:

  • A key to Grove's success was his ability to look at issues dispassionately, like an outsider.
  • Grove's experience growing up in Hungary became a foundation for the "Intel way." What Hungary was, Intel was not. Intel culture emphasized knowledge over power, common sense, and respect for ideas.
  • Trained as an engineer, Grove taught himself how to run a business and has since made lasting contributions to management education with books such as Only the Paranoid Survive.

 

Almost fifty years ago, nineteen-year-old Andy Grove stepped off a boat in New York City, a poor immigrant from Hungary who barely escaped Nazi occupation. A decade later he co-founded Intel, the chipmaker that would help invent the PC industry. But Grove was more than a talented engineer. As his biographer Richard S. Tedlow puts it, Grove was "one of the master managers in the history of American business."

A new biography, Andy Grove: The Life and Times of an American, will debut next week, written by Tedlow, the Class of 1949 Professor of Business Administration at Harvard Business School. Tedlow spent several years researching and interviewing Grove, to the point of inhabiting a small cubicle in Intel's Santa Clara, California headquarters. Although Grove participated with Tedlow, he did not review the manuscript until it was in print, Tedlow says.

Tedlow discusses the book and Grove in this interview. Next week, HBS Working Knowledge will offer a video podcast with Tedlow, as well as a book excerpt.

Sean Silverthorne: Why is your book subtitled "The Life and Times of an American"?

Richard S. Tedlow: The subtitle highlights the central theme in Grove's professional life. His odyssey epitomizes the fulfillment of the American dream. A penniless immigrant from an environment entirely unlike that in the United States comes here and winds up at the center of the industry which is at the center of the future.

Grove was astonished by America. Nobody ever held against him the fact that he is an immigrant. Nor was he held back because he is of Jewish origin. When he graduated first in his engineering class at the City College of New York in 1960, he was quoted in The New York Times to the effect that "Friends told me that all I needed was ability. Americans don't know how lucky they are."

Q: You explore in detail his early years growing up a Hungarian Jew who was threatened not only by the Nazis but also by the Soviet invasion of his country. What do you think this upbringing contributed to his development as a man and a leader?

A: I devote a good deal of attention to Grove's childhood, boyhood, and youth because I think an appreciation of the first two decades of his life is essential to understanding his development as a manager.

Until 1945, anti-Semitism placed Grove's physical survival at risk. His father's mother was killed in Auschwitz, and other members of his (and his wife's) extended family lost their lives in the Holocaust and because of the fighting in World War II. In 1944 and especially early in 1945, young Andy was a hunted child.

Life under the Communist regime which followed the Soviet defeat of the Germans Grove came to find hateful. Everything about Communist Hungary elevated the lie at the expense of the truth.

Both during the Nazi and Communist eras, knowing what really was going on—finding out the actual truth—was more than once a matter of life and death for the Grove family. Think about it. No wonder Grove's search for the truth in the business world was so intense, so passionate.

He has an uncanny ability to abstract himself from a decision in which he is deeply, emotionally involved and view the problem as an outsider would.

More than anyone else, Grove created "Intel culture." If you look at some of the principles by which he ran that company, you can see that in an upside-down way, he learned them in Hungary. Everything Intel was, Grove's experience in Hungary was not.

Here are a couple of examples. "Knowledge power" trumps "position power." It is, in other words, what you know, not what title you have in the organization that matters. "We argue about issues, not the people who advocate them" was another of Grove's beliefs. Once again, this is the opposite of his experience in Hungary, where people were stapled to the ideas they put forth. If you were stapled to an idea that lost favor in Hungary, it was worth your life.

"Put common sense on a pedestal," says Grove. Once again, the direct opposite of the "uncommon nonsense" epitomized by the "virtual" cheering at parades and the show trials of Andy's youth.

Q: Grove was also a prolific writer on the art and science of business management, including the books Only the Paranoid Survive and High Output Management. How does he stack up as a thinker in this area? Why do you think someone with such a great engineering and technology background became so interested in strategy and the intricacies of running a business?

A: Grove made the transition from technologist to technologist/manager because he had no choice. When Intel was founded in July of 1968, he was employee number three. Employees number one and two, Bob Noyce and Gordon Moore, were older than Andy. They were established and well fixed financially. Neither of them liked business management at all.

So if Intel were going to be managed—and if it were not it was doomed—the responsibility flowed down to employee number three. Grove knew nothing about managing a business and, in his own words, "I was scared to death. It was terrifying. 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."

Grove is the ultimate "autodidact," the ultimate self-taught professional. He started at the bottom—"My first assignment was to get a post office box so we could get literature describing the equipment we couldn't afford to buy"—and worked his way up to the rank of one of the master managers in the history of American business.

What Grove learned, he has also taught. This he has done through his course at Stanford's Graduate School of Business during the past quarter century, through the half-dozen books and innumerable articles he has written, and through his hundreds of speeches. But most of all, Grove has taught and continues to teach by example. What he has done and what he has communicated have exercised a profound impact on business schools and business executives. This impact will prove lasting.

Q: You note that "Andy Grove's Intel was a pressure cooker." Grove's management style was intense and demanding, and Intel was not necessarily the most fun place to work. He guided the company through one of the great transitions in tech history, changing a maker of memory chips into a microprocessor powerhouse, but also had failures such as Intel's response to the floating point issue. What do you think managers in general can learn from Grove's management and leadership?

A: Grove's career has innumerable lessons for the business executives of today and tomorrow. But if I had to select one, it would be "point of view." He has an uncanny ability to abstract himself from a decision in which he is deeply, emotionally involved and view the problem as an outsider would.

It is this ability to view issues that for others would be fraught with emotion in a clinical fashion, which has led to some of his most astute decisions. The devices he employs to disentangle himself from the heat of the moment can be of use to anybody running a business today.

Q: Grove's notebooks, which you had access to, are fascinating. Why did he keep such detailed journals and what did you learn from them?

A: I mentioned previously that Grove is an autodidact—a man capable of teaching himself a remarkable variety of new skills. Writing down his thoughts plays an important role in this process of teaching himself. The act of writing contributes an important element of discipline to his thinking.

What I learned from those notebooks is that as hard as Grove drove others, he was harder on himself. He is unsparing in self-criticism. He knew that the speed of the gang is the speed of the boss. No faster.

Q: Most of the titans of industry you have studied in the past are deceased. Andy Grove is very much alive. As an historian, what were some of the professional challenges you faced writing about a living legend?

A: The great advantage of being an historian is the perspective provided by the passage of time. You have a frame in which you can place events. The historian is willing to sacrifice, for that priceless asset, immediacy and access. We have a lot of perspective on Napoleon. However, we can't ask him or anyone who knew him, or anyone who knew anyone who knew him, any questions.

I took a chance. I decided that for this one time in my professional life I would sacrifice perspective for access. It is not a decision I regret.

As I observe in the book's acknowledgments, I have spent my career at a university the motto of which is Veritas. I tried to provide a truthful, objective account of Andy Grove's life and times in this book. However, the reader should be aware that Grove is a magnetic man. It is impossible, for me at least, to have spent as much time with him as I did and to have immersed myself as completely as I did in this project without developing feelings of admiration and affection which must have colored the account to some degree.

Q: How did the idea for the book come about, and how did your personal relationship with Grove evolve over time?

A: I first met Andy Grove when I made a presentation at Intel in 1993, and we stayed in touch in a desultory fashion ever since. Andy believes in "strategy by speechmaking." Because he has a sense of history, he often uses analogies from the past to illustrate his arguments.

I am an historian, so either he or one of his technical assistants would occasionally ask me for examples of past occurrences which might shed light on current events and on the future. During one such e-mail exchange early in 2003, I made a suggestion about a biography.

Specifically, I wrote that, as Andy approached the end of his chairmanship of Intel's board of directors, there was a good chance that someone was going to try to make money off his name by writing a quick and cheap book about him. I suggested that he consider cooperating with an historian who wanted to write a genuine, truthful account of his career which aimed at the highest scholarly standards.

I said that I did not want to write the book. However, I knew everyone who did this kind of work; and I would be happy to select a couple of candidates worthy of the challenge. There would be no charge. My goal was the advancement of knowledge about a key man in a key company in a key industry in a key part of the world.

His technical assistant forwarded this e-mail to Grove. His immediate response to her was that this was the stupidest idea he had ever heard. A half hour later, he sent her another e-mail asking why I didn't want to write the book. That is how it all began.

Q: What are you working on next?

A: I am at work on the centennial history of the Harvard Business School.

About the author

Sean Silverthorne is editor of HBS Working Knowledge.