Intel

"Andy made one-on-ones mandatory at Intel. The point of the meeting, he wrote, is mutual teaching and exchange of information. By talking about specific problems and situations, the supervisor teaches the subordinate his skills and know-how, and suggests ways to approach things. At the same time, the subordinate provides the supervisor with detailed information about what he is doing and what he is concerned about. . . . A key point about a one-on-one: It should be regarded as the subordinate’s meeting, with its agenda and tone set by him. . . . The supervisor is there to learn and coach.* The supervisor should also encourage the discussion of heart-to-heart issues during one-on-ones, because this is the perfect forum for getting at subtle and deep work-related problems affecting his subordinate. Is he satisfied with his own performance? Does some frustration or obstacle gnaw at him? Does he have doubts about where he is going?"

"Altogether, we averaged 62.5 percent (or a raw score of 0.625) on our KRs for this objective, a respectable grade. The Intel board judged it below expectations but not too far below, because they knew how aggressively management set our goals. As a rule, we’d enter a quarter knowing we wouldn’t achieve all of them. If a department so much as approached 100 percent, it was presumed to be setting its sights too low—and there would be hell to pay."

"Larry and Sergey were good at listening to people who knew what they were talking about. I’m sure they argued with John, but they listened. They had never run a company or even worked in a company before. John came in and said, “This is a way you can run your business, and it’s measurable and trackable.” Measurables were intuitive to Larry and Sergey, and they had to be impressed by the fact that Intel used OKRs. Intel was such a great company, and we were so small by comparison."

"Two thousand design wins equated to one win per salesperson per month. Management was asking our field reps to triple their numbers for a chip so unpopular that longtime customers were hanging up on them. The sales force was beaten down and defeated, and now it stared up at Mount Everest. When I recently asked Bill Davidow about setting such a steep objective, he replied, “I picked the two thousand because I thought we needed a rallying point. And that was a rallying point.” The company incentivized the reps with a trip for two to Tahiti for all who reached the mark. Then Jim Lally added an ingenious stipulation: If a single individual failed to make the quota, the straggler’s entire district office would lose out on the trip. Early on, the numbers badly trailed the target, until the task force began to think about relaxing the design win criterion. But that summer, full-color Tahiti brochures mysteriously found their way into every salesperson’s home mailbox. By the third quarter, peer pressure on the laggards was enormous. At year’s end, the design win tally exceeded 2,300. The 8086 reigned supreme in the marketplace; Intel’s future was assured. Virtually the entire sales force went to Tahiti. And a stretch goal had made all the difference."

"Intel treasured calculated risk takers. It was the place I learned to stretch and to dare to"

"“If it’s okay to peak in 30 years, a single brand, single business model is the most efficient. But even Microsoft has already started slowing down in growth now. Even Intel, we can’t predict how much it will survive in fifty or a hundred years. That’s the danger of the single brand, single business model.”"

"Investment in research and development of equipment and software positions Free as one of the most advanced operators in the implementation of innovative technological solutions. Over time, the group has become a recognized interlocutor of all major global equipment manufacturers such as Intel, Cisco, and Alcatel-Lucent. The brand image is so strong in France that the best French technicians fight to join its teams. With the emergence of the internet in the daily lives of the French, the number of access providers has multiplied. In addition to independent operators for local coverage, promising competitors with particularly strong support include Wanadoo from the France Telecom group, Club Internet supported by the German T-Online after being created by Lagardère, the Italian Tiscali, LDCom, and cable operator Noos."

"as internal subcontractors, provide services to all the business units. Intel is a hybrid organization: balancing to get the best combination of responsiveness and leverage. Some two thirds of Intel’s employees work in the functional units, indicating their enormous importance. What are some of the advantages of organizing so much of the company in such groups? The first is the economies of scale that can be achieved. Take the case of computerized information processing. Complex computer equipment is very expensive, and the capacity of large electronic machines can be best used if all the various business units draw from them. If each unit had its own computer, very expensive equipment would be sitting idle much of the time."

"the true output of the planning process is the set of tasks it causes to be implemented. The output of Intel’s annual plan, for instance, is the actions taken and changes prompted as a result of the thinking process that took place throughout the organization. I, for one, hardly ever look at the bound volume finally called the Annual Plan. In other words, the output of the planning process is the decisions made and the actions taken as a result of the process."

"because you must coordinate your work with that of other managers, you can only move toward regularity if others do too. In other words, the same blocks of time must be used for like activities. For example, at Intel Monday mornings have been set aside throughout the corporation as the time when planning groups meet. So anybody who…"

"OPERATION REVIEWS This is the medium of interaction for people who don’t otherwise have much opportunity to deal with one another. The format here should include formal presentations in which managers describe their work to other managers who are not their immediate supervisors, and to peers in other parts of the company. The basic purpose of an operation review at Intel is to keep the teaching and learning going on between employees several organizational levels apart—people who don’t have one-on-ones or staff meetings with each other. This is important for both the junior and senior manager. The junior person will benefit from the comments, criticisms, and suggestions of the senior manager, who in turn will get a different feel for problems from people familiar with their details. Such meetings are also a source of motivation: managers making the presentations will want to leave a good impression on their supervisor’s supervisor and on their outside peers. Who are the players at an operation review? The organizing manager, the reviewing manager, the presenters, and the audience. Each of these players has a distinct role to play if the review is to be a useful one. The supervisor of the presenting managers—an Intel divisional marketing manager, let’s say—should organize the meeting. He should help the presenters decide what issues should be talked about and what should not, what should be emphasized, and what level of detail to go into. The supervisor should also be in charge of housekeeping (the meeting room, visual materials, invitations, and so on). Finally, he should be the timekeeper, scheduling the presentations and keeping them moving along. Though it’s hard to judge in advance the time needed for any discussion, the supervisor has presumably had more experience running meetings. In any case, he should pace the presenters using inconspicuous gestures, so that the manager talking doesn’t suddenly find himself out of time with only half his points covered. The reviewing manager is the senior supervisor at whom the review is aimed—like the general manager of an Intel division. He has a very important although more subtle role to play: he should ask questions, make comments, and in general impart the appropriate spirit to the meeting. He is the catalyst needed to provoke audience participation, and by his example he should encourage free expression.…"

"Examples of high negative leverage abound. After going through the annual planning process, an Intel manager saw that, in spite of successful cost reduction efforts in the prior year, his division was still not going to make any money in the coming year. The manager became depressed. Though he didn’t realize it, he almost immediately began to affect people around him and soon depression spread throughout his organization. He snapped out of it only when someone on his staff finally told him what he was doing to the people under him. Another example is waffling, when a manager puts off a decision that will affect the work of other people. In effect, the lack of a decision is the same as a negative decision; no green light is a red light, and work can stop for a whole organization."

"Let’s now look at Intel’s organization form, as shown on the next page. We are a hybrid organization. Our hybrid nature comes from the fact that the form of the overall corporate organization results from a mix of the business divisions, which are mission-oriented, and the functional groups. This is much like the way I imagine any army is organized. The business divisions are analogous to individual fighting units, which are provided with blankets, paychecks, aerial surveillance, intelligence, and so forth by the functional organizations, which supply such services to all fighting units. Because each such unit does not have to maintain its own support groups, it can concentrate on a specific mission, like taking a hill in a battle. And for that, each unit has all the necessary freedom of action and independence. The functional groups can be viewed as if they were internal subcontractors. Let’s take a sales organization as an example. Though a lot of companies use outside sales representatives, an internal group presumably provides the service at less expense and with greater responsiveness. Likewise, manufacturing, finance, or data processing can all be regarded as functional groups, which, as internal subcontractors, provide services to all the business units."

"Whenever a person becomes involved in coordination—something not part of his regular daily work—we encounter a subtle variation of dual reporting. Remember Cindy, the know-how manager responsible for maintaining and improving a specific manufacturing process? Cindy reports to a supervising engineer, who in turn reports to the engineering manager of the plant. In her daily work, Cindy keeps things going by manipulating the manufacturing equipment, watching the process monitors, and making adjustments when necessary. But Cindy has another job, too. She meets formally once a month with her counterparts from the other production plants to identify, discuss, and solve problems related to the process for which they are each responsible in their respective plants. This coordinating group also works to standardize procedures used at all plants. The work of Cindy’s group, and others like it, is supervised by another more senior group (called the Engineering Managers Council), which is made up of the engineering managers from all the plants. Cindy’s various reporting relationships can be found in the figure below. As we can see, as a process engineer in the production plant, where she spends 80 percent of her time, Cindy has a clear, crisp reporting arrangement to her supervising engineer, and through him, to the plant engineering manager. But as a member of the process coordinating group, she is also supervised by its chairman. So we see that Cindy’s name appears on two organization charts that serve two separate purposes—one to operate the production plant, the other to coordinate the efforts of various plants. Again we see dual reporting because Cindy has two supervisors. Cindy’s name appears on two organization charts—coordinating groups are a means for know-how managers to increase their leverage. Cindy’s two responsibilities won’t fit on a single organization chart. Instead, we have to think of the coordinating group as existing on a different chart, or on a different plane. This sounds complicated but really isn’t. If Cindy belonged to a church, she would be regarded a member of that organization as well as being part of Intel. Her supervisor there, as it were, would be the local pastor, who in turn is a member of the church hierarchy. No one would confuse these two roles: clearly operating on different planes, each has its own hierarchies, and that Cindy is a member of both groups at the same time would hardly trouble anyone. Cindy’s being part of a coordinating group is like her church membership. Our ability to use Cindy’s skill and know-how in two different capacities makes it possible for her to exert a much larger leverage at Intel. In her main job, her knowledge affects the work that takes place in one plant; in her second, through what she does in the process coordinating group, she can influence the work of all plants. So we see that the existence of such groups is a way for managers, especially know-how managers, to increase their…"

"It could also turn out that people who are in a subordinate/supervisory relationship in one plane might find the relationship reversed in another. For example, I am president of Intel, but in another plane I am a member of a strategic planning group, where I report to its chairman, who is one of our division controllers. It’s as if I were a member of the Army Reserve, and on our weekend exercises I found myself under the command of a regimental leader who happens to be this division controller. Back at the operating ranch, I may be his supervisor or his supervisor’s supervisor, but in the Army Reserve he is my commanding officer. The point is that the two- (or multi-) plane organization is very useful. Without it I could only participate if I were in charge of everything I was part of. I don’t have that kind of time, and often I’m not the most qualified person around to lead. The multi-plane organization enables me to serve as a foot soldier rather than as a general when appropriate and useful. This gives the organization important flexibility. Many of the groups that we are talking about here are temporary. Some, like task forces, are specifically formed for a purpose, while others are merely an informal collection of people who work together to solve a particular problem. Both cease to work as a group once the problem has been handled. The more varied the nature of the problems we face and the more rapidly things change around us, the more we have to rely on such specially composed transitory teams to cope with matters. In the electronics business, we can’t…"

"Grove’s Law: All large organizations with a common business purpose end up in a hybrid organizational form. The Breakfast Factory, an army, Intel, and ABC Technologies provide examples. But just about every large company or enterprise that I know is organized in a hybrid form. Take an educational institution in which one finds individual mission-oriented departments such as mathematics, English, engineering, and so on, and also administration, composed of personnel, security, and library services, whose combined task is to supply the common resources that each of the individual departments needs to function."

"the need for dual reporting is actually quite fundamental. Let’s think for a minute about how a manager comes to be. The first step in his career is being an individual contributor—a salesman, for instance. If he proves himself a superior salesman, he is promoted to the position of sales manager, where he supervises people in his functional specialty, sales. When he has shown himself to be a superstar sales manager he is promoted again, this time becoming a regional sales manager. If he works at Intel, he is now not only supervising salesmen but also so-called field application engineers, who obviously know more about technical matters than he does but whom he still manages. The promotions continue until our superstar finds himself a general manager of a business division. Among other things, our new general manager has no experience with manufacturing. So while he is perfectly capable of supervising his manufacturing manager in the more general aspects of his job, the new boss has no choice but to leave the technical aspects to his subordinate, because as a graduate of sales, he has absolutely no background in manufacturing. In other divisions of the corporation, manufacturing managers may similarly be reporting to people who rose through the ranks of engineering and finance. We could handle the problem by designating one person the senior manufacturing manager and having all the manufacturing managers report to him instead of to the general manager. But the more we do this, the more we move toward a totally functional form of organization. A general manager could no longer coordinate the activities of the finance, marketing, engineering, and manufacturing groups toward a single business purpose responsive to marketplace needs. We want the immediacy and the operating priorities coming from the general manager as well as a technical supervisory relationship. The solution is dual reporting. But does the technical supervisor’s role have to be filled by a single individual? No. Consider the following scenario, which could be taken from an ordinary day at Intel. Our manufacturing manager is sitting in the cafeteria having a cup of coffee, and the manufacturing manager from another division (whose boss, the general manager, has a finance background) comes over. They start chatting about what’s going on in their respective divisions and begin to realize that they have a number of technical problems in common. Applying the theory that two heads are better than one, they decide to meet a bit more often. Eventually the meetings become regularly scheduled and manufacturing managers from other divisions join the two to exchange views about problems they share. Pretty soon a committee or a council made up of a group of peers comes into existence to tackle issues common to all. In short, they have found a way to deal with those technical issues that their bosses, the general managers, can’t help them with. In effect, they now have supervision that a general…"

"The third kind of managerial activity with high leverage is exercised by a person with unique skills and knowledge. One such person is an Intel marketing engineer responsible for setting prices for the product line. Hundreds of salespeople in the field can be negatively affected if prices are set too high: no matter how hard they may try, they won’t be able to get any business. Of course, if the prices were set too low, we would be giving money away."

"How far ahead should the planners look? At Intel, we put ourselves through an annual strategic long-range planning effort in which we examine our future five years off. But what is really being influenced here? It is the next year—and only the next year. We will have another chance to replan the second of the five years in the next year’s long-range planning meeting, when that year will become the first year of the five. So, keep in mind that you implement only that portion of a plan that lies within the time window between now and the next time you go through the exercise. Everything else you can look at again. We should also be careful not to plan too frequently, allowing ourselves time to judge the impact of the…"

"the true output of the planning process is the set of tasks it causes to be implemented. The output of Intel’s annual plan, for instance, is the actions taken and changes prompted as a result of the thinking process that took place throughout the organization. I, for one, hardly ever look at the bound volume finally called the Annual Plan. In other words, the output…"

"If good decision-making appears complicated, that’s because it is and has been for a long time. Let me quote from Alfred Sloan, who spent a lifetime preoccupied with decision-making: “Group decisions do not always come easily. There is a strong temptation for the leading officers to make decisions themselves without the sometimes onerous process of discussion.” Because the process is indeed onerous, people sometimes try to run away from it. A middle manager I once knew came straight from one of the better business schools and possessed what we might call a “John Wayne” mentality. Having become frustrated with the way Intel made decisions, he quit. He joined a company where his employers assured him during the interview that people were encouraged to make individual decisions which they were then free to implement. Four months later, he came back to Intel. He explained that if he could make decisions without consulting anybody, so could everybody else."

"Examples of high negative leverage abound. After going through the annual planning process, an Intel manager saw that, in spite of successful cost reduction efforts in the prior year, his division was still not going to make any money in the coming year. The manager became depressed. Though he didn’t realize it, he almost immediately began to affect people around him and soon depression spread throughout his organization. He snapped out of it only when someone on his staff finally told him what he was doing to the people under him. Another example is waffling, when a manager puts off a decision that will affect the work of…"

"OPERATION REVIEWS This is the medium of interaction for people who don’t otherwise have much opportunity to deal with one another. The format here should include formal presentations in which managers describe their work to other managers who are not their immediate supervisors, and to peers in other parts of the company. The basic purpose of an operation review at Intel is to keep the teaching and learning going on between employees several organizational levels apart—people who don’t have one-on-ones or staff meetings with each other. This is important for both the junior and senior manager. The junior person will benefit from the comments, criticisms, and suggestions of the senior manager, who in turn will get a different feel for problems from people familiar with their details. Such meetings are also a source of motivation: managers making the presentations will want to leave a good impression on their supervisor’s supervisor and on their outside peers. Who are the players at an operation review? The organizing manager, the reviewing manager, the presenters, and the audience. Each of these players has a distinct role to play if the review is to be a useful one. The supervisor of the presenting managers—an Intel divisional marketing manager, let’s say—should organize the meeting. He should help the presenters decide what issues should be talked about and what should not, what should be emphasized, and what level of detail to go into. The supervisor should also be in charge of housekeeping (the meeting room, visual materials, invitations, and so on). Finally, he should be the timekeeper, scheduling the presentations and keeping them moving along. Though it’s hard to judge in advance the time needed for any discussion, the supervisor has presumably had more experience running meetings. In any case, he should pace the presenters using inconspicuous gestures, so that the manager talking doesn’t suddenly find himself out of time with only half his points covered. The reviewing manager is the senior supervisor at whom the review is aimed—like the general manager of an Intel division. He has a very important although more subtle role to play: he should ask questions, make comments, and in general impart the appropriate spirit to the meeting. He is the catalyst needed to provoke audience participation, and by his example he should encourage free expression. He should never preview the material, since that will keep him from reacting spontaneously. Because the senior supervisor is a role model for the junior managers present, he should take his role at the review extremely seriously. The people presenting the reviews—a group of marketing supervisors, for example—should use visual aids such as overhead transparencies to the extent possible. People are endowed with eyes as well as ears, and the simultaneous use of both definitely helps the audience understand the points being made. But care must be taken, because all too frequently a presenter gets so…"

"The third kind of managerial activity with high leverage is exercised by a person with unique skills and knowledge. One such person is an Intel marketing engineer responsible for setting prices for the product line. Hundreds of salespeople in the field can be negatively affected if prices are set too high: no matter how hard they may try, they won’t be able to…"

"The first is the most obvious example. Consider Robin, an Intel finance manager, responsible for setting up the annual financial planning process for the company. When Robin defines in advance exactly what information needs to be gathered and presented at each stage of the planning process and lays out who is responsible for what, she directly affects the subsequent work of perhaps two hundred people who participate in the planning process. By spending a certain amount of time in advance of the planning activities, Robin will help to eliminate confusion and ambiguity for a large population of managers over an extended period of time. Consequently, her work contributes to the productivity of the entire organization and clearly has great leverage, leverage that depends, however, on when it is performed.…"

"be. Process-Oriented Meetings To make the most of this kind of meeting, we should aim to infuse it with regularity. In other words, the people attending should know how the meeting is run, what kinds of substantive matters are discussed, and what is to be accomplished. It should be designed to allow a manager to “batch” transactions, to use the same “production” set-up time and effort to take care of many similar managerial tasks. Moreover, given the regularity, you and the others attending can begin to forecast the time required for the kinds of work to be done. Hence, a “production control” system, as recorded on various calendars, can take shape, which means that a scheduled meeting will have minimum impact on other things people are doing. At Intel we use three kinds of process-oriented meetings: the one-on-one, the staff meeting, and the operation review. ONE-ON-ONES At Intel, a one-on-one is a meeting between a supervisor and a subordinate, and it is the principal way their business relationship is maintained. Its main purpose is mutual teaching and exchange of information. By talking about specific problems and situations, the supervisor teaches the subordinate his skills and know-how, and suggests ways to approach things. At the same time, the subordinate provides the supervisor with detailed information about what he is doing and what he is concerned about. From what I can tell, regularly scheduled one-on-ones are highly unusual outside of Intel. When I ask a manager from another company about the practice, I usually get an “Oh no, I don’t need scheduled meetings with my supervisor [or subordinate]; I see him several times a day…” But there is an enormous difference between a casual encounter by a supervisor and a subordinate, or even a meeting (mission-oriented) to resolve a specific problem, and a one-on-one."

"Each time a manager imparts his knowledge, skills, or values to a group, his leverage is high, as members of the group will carry what they learn to many others. But again, leverage can be positive or negative. An example of leverage that I hope is high and positive is my talk in the orientation course. During the two hours I have, I try to impart a great deal of information about Intel—its history, its objectives, its values, its style—to a group of two hundred new employees. Besides what I say specifically, my approach toward…"

"A Day from My Life Time and Activity Explanation  (Type of Activity) 8:00–8:30   Met with a manager who had submitted his resignation to leave for another company. I listened to his reasons (information-gathering), felt he could be turned around and saved for Intel. Encouraged him to talk to certain other managers about a career change (nudge), and decided to pursue this matter with them myself (decision-making). Incoming telephone call from a competitor. Call was ostensibly about a meeting of an industry-wide society, but in reality he was feeling out how I saw business conditions. I did the same. (Information-gathering.) 8:30–9:00   Read mail from the previous afternoon. I scribbled messages on about half of it, some of which were expressions of encouragement or disapproval, others exhortations to take certain types of action (nudges). One was the denial of a request to proceed with a particular small project (decision-making). (Of course, information-gathering took place in all of these cases, too.) 9:00–12:00   Executive Staff Meeting (a regular weekly meeting of the company’s senior management). Subjects covered at this particular one:   —Review of the prior month’s incoming order and shipment rates. (Information-gathering) —Discussion to set priorities for the upcoming annual planning process. (Decision-making) —Review of the status of a major marketing program (scheduled subject). This came about through a prior decision that this program was faltering and required review. We found it was doing a little bit better than before (information-gathering), but the presentation still elicited a lot of comments and suggestions (nudges) from various members of the audience. —Review of a program to reduce the manufacturing cycle time of a particular product line (scheduled subject). The presentation indicated that the program was in good shape. (It represented only information-gathering; no further action was stimulated.) 12:00–1:00   Lunch in the company cafeteria. I happened to sit with members of our training organization, who complained about the difficulty they had in getting me and other senior managers to participate in training at our foreign locations (information-gathering). This was news to me. I made a note to follow up with my own schedule, as well as with my staff, and to nudge them into doing a better job supporting the foreign training program. 1:00–2:00   Meeting regarding a specific product-quality problem. The bulk of the meeting involved getting sufficient information on the status of the product and the corrective action that had been implemented (information-gathering). The meeting ended in a decision made by the division manager, with my concurrence, to resume shipment of the product. 2:00–4:00   Lecture at our employee orientation program. This is a program in which senior management gives all professional employees a presentation describing the objectives, history, management systems, etc., of the company and its major…"

"To apply the basic principle of production, you need to build the sequence here around its most expensive feature, which is the students’ trip to the plant, thanks to the cost of travel and the time that Intel managers spend with the candidates. To minimize the use of this step per final college hire, we obviously have to increase the ratio of accepted offers to applicants invited to visit the plant, which we do by using phone interviews to screen people before issuing invitations. The technique saves money, substantially increases the ratio of offers extended per plant visit, and reduces the need to use the expensive limiting step per hire. The principle of time offsets is also present here. Working back from the time the students will graduate, the recruiter staggers the various steps involved to allow time for everything—on-campus interviews, phone screening, plant visits—to take place at the appropriate times during the months preceding graduation."

"About twenty middle managers at Intel were once asked to be part of an experiment. After pairing up, they tried some role-playing in which one manager was to define the problem most limiting his output and the other was to be a consultant who would analyze the problem and propose solutions. The most common problem cited was uncontrolled interruptions, which in remarkably uniform fashion affected both supervisory and know-how managers. Everyone felt that the interruptions got in the way of his “own” work. Interruptions had a common source, most frequently coming from subordinates and from people outside the managers’ immediate organization but whose work the managers influenced. For those in manufacturing, the interruptions most often came from production operators, and for marketing people, from outside customers: in short, from the consumers of the middle managers’ authority and information. The most frequently proposed solutions were not very practical. The idea mentioned most often was to create blocks of time for individual work by hiding physically. But this is a less than happy answer, because the interrupters obviously have legitimate problems, and if the manager responded by hiding, these would pile up. One “solution” was a suggestion that customers not call marketing managers at certain hours. No good. There are better ways. Let’s apply a production concept. Manufacturers turn out standard products. By analogy, if you can pin down what kind of interruptions you’re getting, you can prepare standard responses for those that pop up most often. Customers don’t come up with totally new questions and problems day in and day out, and because the same ones tend to surface repeatedly, a manager can reduce time spent handling interruptions using standard responses. Having them available also means that a manager can delegate much of the job to less experienced personnel. Also, if you use the production principle of batching—that is, handling a group of similar chores at one time—many interruptions that come from your subordinates can be accumulated and handled not randomly, but at staff and at one-on-one meetings, the subject of the next chapter. If such meetings are held regularly, people can’t protest too much if they’re asked to batch questions and problems for scheduled times, instead of interrupting you whenever they want. The use of indicators,…"

"because you must coordinate your work with that of other managers, you can only move toward regularity if others do too. In other words, the same blocks of time must be used for like activities. For example, at Intel Monday mornings have been set aside throughout the corporation as the time when planning groups meet. So anybody who belongs to one can count on Monday for that purpose and be free of scheduling conflicts."

"As president of a company, I can affect output through my direct subordinates—group general managers and others like them—by performing supervisory activities. I can also influence groups not under my direct supervision by making observations and suggestions to those who manage them. Both types of activity will, I hope, contribute to my output as a manager by contributing to the output of the company as a whole. I was once asked by a middle manager at Intel how I could teach in-plant courses, visit manufacturing plants, concern myself with the problems of people several levels removed from me in the organization, and still have time to do my job. I asked him what he thought my job was. He thought for a moment, and then answered his own question, “I guess those things are your job too, aren’t they?” They are absolutely my job—not my entire job, but part of it, because they help add to the output of Intel."

"Making certain types of decisions is something managers frequently delegate to subordinates. How is this best done? By monitoring their decision-making process. How do you do that? Let’s examine what Intel goes through to approve a capital equipment purchase. We ask a subordinate to think through the entire matter carefully before presenting a request for approval. And to monitor how good his thinking is, we ask him quite specific questions about his request during a review meeting. If he answers them convincingly,…"

"In my experience, nowhere has the stagger chart been more productive than in forecasting economic trends. The way it works is shown in the figure below, which gives us forecasted rates of incoming orders for an Intel division. The stagger chart then provides the same forecast prepared in the following month, in the month after that, and so on. Such a chart shows not only your outlook for business month by month but also how your outlook varied from one month to the next. This way of looking at incoming business, of course, makes whoever does the forecasting take his task very seriously, because he knows that his forecast for any given month will be routinely compared with future forecasts and eventually with the actual result. But even more important, the improvement or deterioration of the forecasted outlook from one month to the next provides the most valuable indicator of business trends that I have ever seen. I would go as far as to say that it’s too bad that all economists and investment advisers aren’t obliged to display their forecasts in a stagger chart form. Then we could really have a way to evaluate whatever any one of them chooses to say."

"Hard-liners in Beijing had viewed Apple as an exploitative power because through their conventional lens, it looked that way. Samsung had several dozen formal partnerships in the country; Apple had none. Samsung had its own manufacturing plants; Apple had none. But Guthrie’s argument turned this logic on its head. He emphasized that Apple was embedding its top engineers into more than 1,600 factories, making a few dozen partnerships look paltry. The difference was that the likes of Intel and Samsung were trumpeting their joint ventures and investments in the country, while Apple was silent. Worse, Apple was allowing Foxconn to take credit for all manner of investments that ultimately traced back to iPhone and iPad demand."

"The Apple-Samsung partnership was more intimate than is widely known. The Korean company even had separately badged engineers working full time at Apple’s Infinite Loop campus, on the bottom floor of De Anza 3. The top two floors housed Apple’s semiconductor team, led by Johny Srouji, a chips savant who’d worked at IBM and Intel before Apple hired him in 2008. The two companies jointly worked on the design of the subsequent iPhone chips, so when Samsung then copied the iPhone with an Android-enabled device, Apple wanted to distance itself."

"With no regulatory oversight of what was happening, a shift in where all this work was being performed was inevitable. The cofounder of Intel, Andy Grove, would later diagnose the problem as “a general undervaluing of manufacturing—the idea that as long as ‘knowledge work’ stays in the US, it doesn’t matter what happens to factory jobs.” But as Grove warned: “our pursuit of our individual businesses, which often involves transferring manufacturing and a great deal of engineering out of the country, has hindered our ability to bring innovations to scale at home. Without scaling, we don’t just lose jobs—we lose our hold on new technologies. Losing the ability to scale will ultimately damage our capacity to innovate.”"

"To Balsillie, meetings were corporate theater. You had to memorize your part before the curtain rose. Usually, Balsillie was the leading man, but he was willing to take on any role his team required for customer meetings. He could play the flinty, ice-veined negotiator or maintain a quiet presence, depending on what was needed. Tyler Nelson, who led several key business development initiatives after being hired by Balsillie in mid-1998, says: “Jim would say, ‘If you bring me into a meeting, use me for effect. What do you want me to do?’—but you had to make sure he was 100 percent [onside]. If not, a meeting could go sideways fast.” Once Balsillie approved a meeting agenda, everyone on his team was instructed to stick to the script. “I hate being thrown off by others in a meeting,” Balsillie says. “I get edgy when people are not prepared.” Even though Intel was a RIM partner, Balsillie was wary. You could never be certain of any customer, supplier, or competitor. Meetings were a potential minefield. “You learn quickly that this is serious business,” Balsillie says, “and you don’t make an independent move unless you know all aspects of the plan and exactly what you’re doing, because the penalty for a misstep is severe.” Overprepared and inexperienced, Klimstra knew his role: to answer technical questions. Otherwise, Balsillie had told him, say nothing. While Klimstra viewed Intel as a friendly ally, RIM’s chief saw the semiconductor giant as a dangerous, tricky heavyweight whose every employee lived by former CEO Andy Grove’s mantra, “Only the paranoid survive.”"

"Single Business Focus. The protagonist of Strategy and of a strategy is each strategically separate business by itself, even if they exist within the same corporation, a common occurrence. In the case of Intel, memories and microprocessors were essentially separate businesses, posing two unique orthogonal…"

"Barrier. The Benefit must not only augment cash flow, but it must persist, too. There must be some aspect of the Power conditions which prevents existing and potential competitors, both direct and functional, from engaging in the sort of value-destroying arbitrage Intel…"

"Examining Intel through this lens, we can identify a large-scale market (M0g) for both memories and microprocessors. So what accounted for the utterly different value outcome? Under Andy Grove, operational excellence was the norm, so it was Power that made the difference: over time competitive arbitrage drove m in…"

"The Mantra3 For Intel, microprocessors had Power and memories did not, and this made all the difference. Intel’s enduring triple-digit billion market cap reflects this Power applied across a large revenue stream. Such an outcome is the goal of any business and this allows me to define strategy (a company’s strategy) in the following way:           strategy: a route to continuing Power in significant markets I refer to this as The Mantra, since it provides an exhaustive characterization of the requirements of a strategy."

"Following a line of reasoning common in Economics, Strategy can be usefully separated into two topics: Statics—i.e. “Being There”: what makes Intel’s microprocessor business so durably valuable? Dynamics—i.e. “Getting There”: what developments yielded this attractive state of affairs in the first place?"

"All of this begs the question, “Why did Intel succeed in microprocessors but fail in memories?” Both enjoyed numerous shared advantages. Intel was first mover in each market, for instance, and both were large, fast-growth semiconductor businesses, each enjoying the considerable benefits of Intel’s managerial, technical and financial prowess."

"Intel’s current $150B market cap reflects not only investors’ expectations of high returns but also those which…"

"Statics—i.e. “Being There”: what makes Intel’s microprocessor business so durably valuable? Dynamics—i.e. “Getting There”: what developments yielded this attractive state of affairs in the first place?"

"Yingdai’er is Intel (Intel), *My View of Yingdai’er*, 1995, Commonwealth Publishing"

"Yingdai’er is Intel (Intel), *My View of Yingdai’er*, 1995, Commonwealth Publishing."

"Brother Yu Youcheng invited me to write a preface for his new book, “I See Intel” (published by CommonWealth Publishing) [1]. He said, “About two thousand words will"

"Many of the United States’ most storied companies have been ailing. Detroit’s automakers, having limped along for decades, are now stumbling through the transition to electric vehicles. US Steel, General Electric, and IBM are shadows of their past selves. Intel, mired in cycles of blown product timelines and layoffs, went from a semiconductor trailblazer to a clear laggard behind Taiwan’s TSMC. After two of Boeing’s 737 MAX jets crashed in 2017, the company promised strenuous efforts to guarantee the safety of its aircraft. Then a door blew off midair in 2024. Boeing, like Intel, is constantly delaying the launch of long-planned products."

"Most forms of low-end manufacturing aren’t as bad as that, but the United States was just as willing to let them go, with little understanding of how much it would hurt the country. It’s hard, I admit, to draw a straight line between the loss of, for example, television manufacturing in the United States through the 1980s to the stumbles by Boeing and Intel over the past decade. But if we think about technology ecosystems as communities of engineering practice, it makes sense that factory closures accelerated as process knowledge dissolved, prompting production problems and more job losses. And it also makes sense that Chinese workers went from merely assembling iPhones to producing some of their most valuable components as well. As one country lost its process knowledge, the other gained whole industries."

"The American imagination has been too focused on the creation of tooling and blueprints. [Andy Grove, the legendary former CEO of Intel](private://read/01k3jwt46q240aq6fe12mqkyr0/16_Notes.xhtml#_idTextAnchor369), said it best in 2010: that the United States needs to focus less on “the mythical moment of creation” and more on the “scaling up” of products. Grove saw Silicon Valley transition from doing both invention and production to specializing only in the former. And he understood quite well that technology ecosystems would rust if the research and development no longer had a learning loop from the production process."

"It’s rare for blueprints to encode enough information to be technologically valuable. Imagine if we were able to send the most detailed instructions for building any modern technology back to the past. The lead chariot engineer of a Roman caesar would get nowhere with the most detailed manual and finely drawn blueprints on how to produce a Model T. Nor would many of us in the present be able to do much if we got our hands on the instructions for producing an Intel processor or ASML lithography machine. I am not proud to have struggled with putting together a footrest from IKEA."

"in 1985 Apple’s new chairman, John Sculley, gave in to Gates’s demand to discontinue development of the MacBasic language for Macintosh and sign over rights to the MacBasic name to Microsoft. According to Sculley, Gates indicated that if Apple did not give up the project, he would suspend Apple’s license to use the competing Microsoft language on its popular Apple II computer. “[Gates] insisted that Apple withdraw what was an exceptional prod¬ uct,” claimed an Apple software engineer. “He held the gun to our head.”70 In a similar vein, internal documents of Intel indicated that at an August 1995 meeting, Gates made “vague threats” to support com¬ petitors of the semiconductor producer if it did not cease development of software that he viewed as a danger to Microsoft’s interests. Intel did in fact, delay the project. Chairman Andrew Grove characterized that decision by saying that his company “caved in” to Microsoft’s de¬ mands.71"

"In early 1972, with his cash balance growing and acquisition multiples still high, Singleton placed a call from a midtown Manhattan phone booth to one of his board members, the legendary venture capitalist Arthur Rock (who would later back both Apple and Intel). Singleton began: “Arthur, I’ve been thinking about it and our stock is simply too cheap. I think we can earn a better return buying our shares at these levels than by doing almost anything else. I’d like to announce a tender—what do you think?” Rock reflected a moment and said, “I like it.”4 With those words, one of the seminal moments in the history of capital allocation was launched. Starting with that 1972 tender and continuing for the next twelve years, Singleton went on an unprecedented share repurchasing spree that had a galvanic effect on Teledyne’s stock price while also almost single-handedly overturning long-held Wall Street beliefs."