Five Things I've Learned From Andy Grove

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Richard Tedlow's new biography of Andy Grove has a thoughtful subtitle: "The Life and Times of an American." Our brains have been conditioned to expect one more oversaturated word at the end of phrases like that: American hero, American journey, American icon. But Tedlow, a Harvard Business School professor, does us a favor with his understatement, reminding us that Grove was ordinary before he was extraordinary.

Grove, the former CEO of Intel, is often cited as one of the lead characters in the story of America's glory years: the post-World War II era, when the world's brightest and most industrious people flocked to the United States and helped build a remarkably vibrant economy. Grove certainly has lived an epic life. Born a Jew in Hungary in 1936, he survived first a Nazi, then a Communist, takeover of his country. He arrived in the United States penniless in 1956, bused tables while attending community college, and went on to earn a Ph.D. in chemical engineering from the University of California–Berkeley. Grove headed for Silicon Valley before most of us had ever heard of silicon, and 30 years later he was CEO of Intel, one of the most successful companies in history. Along the way, he enriched himself and thousands of others.

Many people today worry that the Andy Groves of the world are no longer coming to America, heading instead for places like China, India, Scandinavia, and even Singapore, where there's more government support for science and there's more hunger to succeed. And, of course, we could always use more business leaders with Grove's integrity, driven to excel first and fatten their paychecks second. On the same day that disgraced Computer Associates CEO Sanjay Kumar was sentenced to 12 years in prison for $2.2 billion worth of accounting fraud, I went to hear Tedlow talk about Grove at a small gathering in New York City. Here are five things Andy Grove's story can teach us all:

The most enduring power comes from knowledge, not from status. Grove is legendary for gathering data until he has his brain around a problem, then making a decision based on what the data tell him. Throughout his life, that has given him the confidence (and, occasionally, the arrogance) to excel in a foreign country, choose a career that was out of the mainstream at the time, and challenge some of the biggest names in business. Perhaps more famously, it helped him choose his own treatment when he got prostate cancer in the 1990s. Grove studied outcomes data for various kinds of treatment and ultimately chose radiation therapy–based on facts he found in the data–even though most doctors recommended surgery.

Knowledge helps you know when it's time to change. The most pivotal moment at Intel came in 1986, after a decade of spectacular growth and profitability. Japanese manufacturers had started gobbling up market share for memory devices, Intel's specialty up till then, which led that year to the company's first major loss. Grove became CEO in 1987 and promptly made the decision that Intel needed to become a microprocessor company, not a memory company. Profits bounced back in 1987, and another decade of record growth followed.

Certainty is deadly. "Andy doubts constantly," Tedlow says. Grove is well known for driving subordinates ruthlessly–but helping them get it right in the end. And Tedlow insists that Grove challenges his own assumptions as rigorously as those of others. When it finally comes time to make a decision, Grove likes to say, "Dive deeply into the data, then trust your gut."

Fear is highly motivating. Grove earned his maverick reputation for, among other things, challenging W. Edward Deming's maxim that good managers should banish fear from their organizations. "That's absolutely wrong," Grove has said. "I want fear in my executives." But he also recognizes the vast difference between the kind of fear necessary to survive in a Darwinian world–described in his own book, Only the Paranoid Survive–and the petty intimidation practiced by insecure managers. The fear that Grove wants his employees to feel is the fear of lurking problems you can't yet see, of cutthroat competitors, of somebody with a better idea. Whether Grove is right or wrong, Tedlow points out that fear has been a powerful force in his life since the beginning: "If he wasn't paranoid in the first 20 years of his life, he would not have survived."

Even geniuses make mistakes. Grove blew it, Tedlow says, in 1994 when a scientist at Lynchburg College in Virginia found a flaw in the brand-new Pentium processor. At the precise moment that Intel was becoming feared and disliked for aggressively cornering the market for microprocessors, Grove chose to have a public, technical argument with his critics. What he should have done, Tedlow insists, is issue a prompt apology and pledge to replace every Pentium. To Tedlow, the huge controversy that mushroomed showed that Grove erred twice: He failed to understand the power of the emerging Internet to rapidly disseminate information, and he failed to realize that Intel had become a consumer-products company answerable to everyday consumers.

Tell ya what, Andy: I'll overlook that one. Just don't let it happen again.

--Rick Newman

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  • Rick Newman

    Rick Newman is the author of Rebounders: How Winners Pivot From Setback to Success and the co-author of two other books. Follow him on Twitter or e-mail him at rnewman@usnews.com.