For 30 years, American businessman Andrew S. Grove (born 1936) has served in a variety of high-level posts at Intel Corp., considered one of the most powerful microprocessor manufacturers in the world.
From humble beginnings in Hungary, Grove went on to become chief executive officer (CEO) and chairperson of one the most powerful microprocessor manufacturing companies in the world, Intel Corp. He is highly regarded both as a physicist in the field of semiconductors as well as an expert in management. With Intel, he has helped to usher in an information revolution unmatched by anything since the invention of the printing press. As noted by Walter Isaacson in Time: "Time chooses as its 1997 Man of the Year Andrew Steven Grove, chairman and CEO of Intel, the person most responsible for the amazing growth in the power and innovative potential of microchips."
Andrew Steven Grove was born András Gróf in Budapest, Hungary, on September 2, 1936. His father, George, was a dairyman, and his mother, Maria, worked as a bookkeeping clerk. The family was of Jewish descent and World War II proved to be a difficult time; Grove would see nothing but trouble until he departed from Europe. At the age of four, a wave of scarlet fever swept through Hungary. Grove was not spared, and over the course of the illness, his hearing was seriously damaged. The following year, his father was removed to a Nazi work camp. Grove and his mother changed their names and moved in with Christian acquaintances, who hid them during the Nazi pogroms of 1944. After the war, his father miraculously reappeared, though weakened by typhus and pneumonia. Grove, hoping to attend college in a few years, dabbled in journalism and took voice lessons, dreaming of perhaps becoming an opera singer. Political circumstances again intervened, however, in 1956, when Soviet tanks arrived in Budapest to put down the Hungarian Revolution. His father's occupation, as a private business owner, made Grove a potential dissident in the eyes of the communists. So, rather than face the possibility of prison, Grove and a friend fled to Austria.
From there, Grove made his way to the United States, where he moved in with an uncle who had immigrated to New York in the early 1930s. He enrolled in the City College of New York (CCNY), studying chemical engineering and waiting tables to pay his tuition. In the summer of 1957, he met a woman named Eva, who became his wife the following year. Grove graduated from CCNY in 1960, after which he and Eva relocated to California, where he entered the Ph.D. program at the University of California, Berkeley. There, as at CCNY, he performed spectacularly. Upon his graduation in 1963, he went to work for Fairchild Semiconductor, a small company which had recently been created by a few of the more forward-thinking engineers on the West Coast. He also began teaching at Berkeley, a side career he has continued to the present day.
At Fairchild, along with the head of the research department, Gordon Moore, and two other colleagues, Bruce Deal and Edward Snow, Grove helped create the first marketable silicon-based integrated circuit. This was a major step for the computer industry, which, until then, used transistors as switching elements in their products. To be sure, transistors were far better than their predecessors, vacuum tubes. Vacuum tubes were bulky, and they generated a tremendous amount of heat and consumed an equally large amount of electricity. The transistor was considerably smaller, and required no heating element. The drawback was that they had to be used individually. In order to move forward, the industry required that more than one transistor occupy a single unit. The solution to this dilemma came as early as 1959, but it would take several years, and the particular combination of talents that existed at Fairchild, under the leadership of general manager Bob Noyce, to create a reliable, mass-produced integrated circuit. That accomplishment stood poised to revolutionize the industry, and thereafter, the world.
Grove Moves to Intel
None of this made much of an impact on the top executives of Fairchild-they displayed the same lack of vision that kills so many high-technology companies even today. So, in 1968, frustrated with the state of affairs, Noyce secured the support of Arthur Rock, a prominent high-tech investor, and with Gordon Moore's help, started a company called Intel (short for Integrated Electronics). With these three men, the company looked unsinkable. Their decision to employ Grove as director of operations was, however, in the words of Tim Jackson's history of Intel, "so bizarre that it mystified most of the people who were watching the new business take shape." Up to that point, Grove had virtually no manufacturing experience at all, plus he was decidedly unusual. Jackson continued, "Grove spoke English with an accent that was almost incomprehensible. Over his head, he wore an awkward hearing-aid device that looked like a product of Eastern European engineering." Furthermore, he had a severe temper, and an equally severe manner of maintaining discipline and control. None-the-less, Noyce and Moore admired his intelligence and drive, and they believed he was the right man. Grove tacitly agreed, leaving Fairchild almost immediately.
The doubts held by onlookers concerning his abilities were quickly put to rest. Grove guided the development of manufacturing processes first for the company's computer memory products, then for its first general-purpose microprocessor (the component that serves as the "brain" of modern desktop computers), outstripping all competitors and even the company which had licensed their technology to provide the "second-source" so important to computer companies at that time. The early years of the company were particularly hectic, as the demands of the high-tech sector tended to change dramatically and unpredictably. Thus, despite the concentrated talent at their disposal, Intel found itself constantly changing gears, and struggling to keep up with the latest developments. Grove's force of will aided the company greatly during this period, but an insight of Moore's was necessary for long-term stability. Moore's Law, as the insight came to be known, was that chip power would continue to double roughly every 18 months for the foreseeable future. Thus, Intel was able to chart its course ahead of the fact rather than leaping after changes in demand.
Moore's Law did not, however, eliminate all difficulties. The first major crisis began in the mid-1970s, when Japanese companies, who could manufacture memory chips at much lower costs, began dumping large quantities of cut-rate chips on American markets, seriously reducing demand for Intel's products. This was a major blow for the company, whose business relied at that time primarily on the sale of memory. They responded by shifting their emphasis to microprocessors, but many rival American companies collapsed under the pressure. In 1981, the chip market took another nosedive, and once again, many companies were caught unprepared. Grove, rather than laying off employees, ordered them to work 25 percent overtime for free. The strategy succeeded, and Intel survived.
Grove's hard work and demanding management style, while criticized by many, brought ever-increasing profits for Intel, and in 1979, he was made president of the company. Four years later, he published his second book, High Output Management, which was subsequently translated into 11 languages (his first volume, Physics and Technology of Semiconductor Devices, was published in 1967 during his tenure at Fairchild). His third book, One-on-One with Andy Grove, was published in 1987. He also wrote a regular management column which appeared in several newspapers, as well as occasional pieces for the Wall Street Journal, Fortune, and the New York Times. He became the CEO of Intel in 1987. The decade of the 1980s brought him recognition outside of the company as well. He received honorary doctorates from the City College of New York and from Worcester Polytechnic Institute in 1985 and 1989, respectively. Furthermore, he was honored in 1987 with the Engineering Leadership Recognition Award.
The Half-Billion Dollar Mistake
Intel's biggest stumbling block came abruptly in 1994, with the release of the company's Pentium processor. The chip was flawed slightly, performing math calculations incorrectly. The error was small, and would not have affected the vast majority of users-only people running math-intensive programs like those required for nuclear research or astrophysics. Grove decided that there would therefore be no reason to order a recall. Those who called in to ask about the problem were simply told not to worry. Intel's customers didn't see the matter the same way, and in short order, the flaw was suddenly the topic of technology columns in newspapers around the world. After much deliberation, Grove backed off his position, and Intel began replacing the faulty chips. The crisis cost the company half a billion dollars, but in the end the decision to switch courses wound up bolstering their image. Intel was stronger than ever.
As noted by Isaacson in Time, Intel controls 90% of the microprocessor market. They also face little in the way of competition, although the combined efforts of IBM, Apple, and Motorola are beginning to have some effect. Grove, certainly not one to rest on his laurels, has made the 1990s a productive decade for himself as well. His fourth book, Only the Paranoid Survive: How to Exploit the Crisis Points that Challenge Every Company and Career, was published in 1996, and several more awards have been forthcoming as well. In 1993, he received a Medal of Achievement from the American Engineering Association, and, in March of 1994 he was elected a Fellow of the Academy of Arts and Sciences. The following year, he was awarded the Heinz Family Foundation Award for Technology and the Economy. Finally, Time magazine named him their Man of the Year in 1997.
The challenges in Intel's future are many. The increasing popularity of sub-$1000 computers could prove damaging to the company's flagship product, the high-end Pentium II. Also, Intel has had to cope with increasing scrutiny from the U.S. Federal government, which has grown uneasy with the monopolistic characteristics of Intel and its chief ally, Microsoft. Grove's level of participation in these issues is definitely declining, however. In 1996, he was diagnosed with prostate cancer, and although treatment was successful he began actively grooming a successor, Craig Barrett. In March of 1998, Grove stepped down as CEO, though he remains chairperson. Outside the corporate world, he teaches a class in the business school at Stanford University. A modest man, Grove commented in the Wall Street Journal, "One position says you ought to put some effort into making sure that people know what you do. The opposite is, look, you'll never get 100 percent credit, so just do your stuff. Advertising your achievements will probably make you look like a jerk anyway. I lean toward the second view."
Further Reading on Andrew S. Grove
Grove, Andrew S., High Output Management, Vintage, 1995.
Grove, Andrew S., One-On-One With Andy Grove: How to Manage Your Boss, Yourself, and Your Co-Workers, Penguin, 1989.
Grove, Andrew S., Only the Paranoid Survive: How to Exploit the Crisis Points That Challenge Every Company and Career, Currency Doubleday, 1996.
Grove, Andrew S., Physics and Technology of Semiconductor Devices, Wiley, 1967.
Jackson, Tim, Inside Intel, Dutton, 1997.
Business Week, April 13, 1998.
Fortune, April 27, 1998; May 11, 1998.
Time, December, 1997, p. 46
U.S. News and World Report, April 6, 1998.
Intel Corp., "Executive Bio-Andrew S. Grove, " http://www.intel.com/pressroom/kits/bios/grove.htm (March 31, 1998).