Andy Grove, RIP

Andy Grove, co-founder and long-time CEO of Intel, passed away on Monday. He was the most well-known CEO in the semiconductor industry, famous for the quote "only the paranoid survive" (also the title of one of his books on management).

He was an immigrant from Hungary (in fact his original name was András Gróf). He is sometimes (mis-)remembered as being one of the "traitorous eight" that left Shockley Semi-conductor (sic) Laboratories to form Fairchild Semiconductor, but in fact he was not that old and joined Fairchild after completing his PhD in chemical engineering at UC Berkeley in 1963. Apart from the founders, he was the first hire. By 1967 he was head of R&D. However, he was early enough in semiconductors (which at some point lost the hyphen) to be involved in basic research. In fact when I was at VLSI, we ended up with the old Intel library for some reason, and you could see books on basic semiconductor physics with Andy's signature showing when he had taken the book out. He also wrote the book on semiconductors. Literally. His first book was not on management, but was Physics and Technology of Semiconductor Devices in 1967, a textbook.

The following year Andy left Fairchild, along with Gordon Moore and Robert Noyce, and formed Intel. He became CEO in 1987 and under his leadership Intel went from less than $2B to more than $26B (today, it is a little more than twice that) when he stepped down as CEO in 1998.

He was not only a skilled manager, he also wrote several very good business books, the best of which I think is High Output Management which came out in 1983. This book had a big influence on me as a young manager. Andy Grove was perhaps the most famous manager in Silicon Valley. Maybe Steve Jobs was more famous, but despite his undoubted strengths, a young manager would be ill-advised to base his or her management style on Jobs. But Andy Grove was a legendary manager of people, not to mention a legendary engineer. Perhaps the most important thing I learned was that when managing a group of people, all that matters is the output of the group. Nobody cares what you did personally. It is a lesson I have taught many junior managers. The natural temptation for a newly promoted engineer is to be a hero and do all the engineering single-handed. After all, they are typically the best engineer in the group. But that is no longer their job, their first priority is to make the other people in the group as good as them.

One of the bravest transitions in any company is detailed in Only the Paranoid Survive. I am quoting from memory since my copy of the book is in a box in my storage in the basement. Andy Grove and Gordon Moore are in Gordon's office. The business is not going well since they are losing a lot of money in memories (if you are not old enough, yes, Intel was originally a memory company). There is a board meeting the following day.

"What will happen if the board fires us tomorrow?" said Andy.

"They'll find a CEO who will get us out of memories."

The two men looked at each other. "Why can't we walk out of that door, come back in, and do that ourselves?"

And they did. Almost never do companies manage to make huge strategic transitions without getting rid of the management team that created and was committed to the previous strategy. But Intel did. The company was transformed from an increasingly uncompetitive memory company to a microprocessor company and the world's #1 semiconductor company that it remains today.

Andy's business philosophy, when he would not let Intel rest on its laurels, is pithily contained in the full quote:

Business success contains the seeds of its own destruction. Success breeds complacency. Complacency breeds failure. Only the paranoid survive.

Andy's obituary on Intel's website is here.