Leading as a principle of management

Andy Grove, Intel’s former legendary leader who oversaw this company in the time of its rising to its prominent position, has a remarkable leadership style. His style is really democratic, but forceful and demanding. As a result, a unique culture of “constructive confrontation” arose at the company that is a direct result of Grove’s managerial traits (Intel Corporation). He allowed his subordinates to insist on their views and arguments at the time of the discussion, but once a decision was reached, everybody was expected to demonstrate the highest level of commitment.

As a leader, Grove is remarkable for several major traits that make him stand out from other leaders. First, he is superb in his skill to “align strategy and execution as the forces of globalization were creating enormous discontinuities in the business environment” (Garten 2005). He was always on the alert for whatever actions the competitors might take to challenge Intel’s dominance and kept a hold on the treacherous IT business environment. Managing the external environment of the business is an important skill that does not come easily to leaders; it takes years of experience and a highly focused personality able to keep an eye on what’s going on in the marketplace.

In relationships with employees, Grove excelled in striking an important balance between disciplinary action and support of initiative. In giving his employees freedom to act, he maintained their zest for innovation that can only flourish in a democratically arranged corporate environment. At the same time, Grove maintained rigid discipline in terms of performance evaluation. He demanded measurement of every detail of the performance and was relentless in his requirements. The company executives introduced the so-called “management by objectives” in which an employee’s performance is evaluated against about 10 objectives all of which are gauged with quantifiable measures (Intel Corporation).

Grove can also be applauded for his ability to preserve the flexibility in Intel’s operations at the time when the company was experiencing dramatic growth. Sheer size is often the problem for major corporations who lose market to more nimble competitors. Grove created a company that remains highly adaptable despite its mammoth proportions. Grove also built Intel’s corporate culture on values that have turned it into “very strong immune system” (Pandya et al. 2004).

Grove is the kind of leader who does not get depressed in the tough times and continues to see the silver lining even in the times of a serious recession. In an interview with Business Week reporter he advocates the sizzling future of the tech industry despite temporary difficulties, insisting that “we can’t even glimpse the potential” of the IT industry, even in the aftermath of the tech bubble and the general downturn in the business (Andy Grove: We can’t…).

Grove’s optimism stems from his ability to manage change at the company. A particular instance of change at Intel involves the switch from memory chips to microprocessors in the 1980s. The field was entirely new for Intel, and yet the company emerged with dazzling success, turning into the global leader. Another example relates to the large-scale recall of Pentium chips after problems with their functioning surfaced in 1994. Andy Grove dealt with the issue with efficiency and initiative that worked to save the company’s damaged reputation. Andy Grove led the company towards success in the market for microprocessors and was able “to build the Intel brand (through the famous “Intel Inside” campaign) and used his savvy in managing risk to steer the company clear of antitrust regulators” (Pandya et al. 2004).

Andy Grove spent an impressive 11 years as chief executive officer at Intel, continuing his leadership stance as chairman. Financial data confirm the success of his leadership style and his ability to manage the company, taking it to a level of state-of-the-art perfection. A 31.6% annual rise in stock price, twice the speed of S&P 500, growth in revenues from $1.9 billion to $25.1 billion, doubling of the workforce to 64,000 people demonstrate the achievements of Andy Grove as a leader (Garten 2005).

These are only dry numbers, and the main breakthrough was qualitative. Intel has been fully transformed into a leader of the global IT industry. First, it has become a truly international corporation, deriving a major portion of its revenues from abroad. Second, the corporation “became central to the growth of personal computers, cell phones, genomic research, computer-aided design, and virtually everything else that characterizes this age of digitalization and the Internet” (Garten 2005). Intel succeeded in a highly competitive environment of the IT industry, becoming an icon of success for many beginning companies. Intel’s name is a brand worth millions of dollars, and its products like Pentium chips remain the symbol of the industry.

Andy Grove has done a lot to translate his convictions for the board operation into real changes in its work. It took Grove six years to “make Intel’s board exemplary” (Shlender 2004). In his own words, he highly evaluates his role “in developing the work environment and culture at the company and with the directors” (Shlender 2004). Andy Grove firmly believed in the independence of the board and the separation of the functions of the CEO and chairman. He put his burning conviction that the board should have an important role in making the good governance principles work in his books and lectures on the topic. His work as Chairman of the Board has made Intel’s board a reliable safeguard against management’s sloppy or immoral actions.

Thus, Andy Grove was a great leader able to combine rigor with attention to others’ opinion and balance between giving his subordinates freedom to innovate, combined with the need to commit to the already taken decisions. His emphasis on discipline, strategic vision for growth, handle on the market and ability to manage change account for his personal success as a leader and impressive performance of Intel Corporation.

Bibliography

Andy Grove `We can`t even glimpse the potential`. Business Week 3846, Aug 25, 2003. 19 Sep. 05 <http://www.businessweek.com/magazine/content/03_34/b3846612.htm>.

Garten, Jeffery E. “Andy Grove Made The Elephant Dance”. Business Week 3928, April 2005. 19 Sep. 05 <http://www.businessweek.com/magazine/content/05_15/b3928036_mz007.htm>.

Intel Corporation: The Evolution of an Adaptive Organization. 19 Sep. 05 <http://www.aom.pace.edu/meetings/1999/INTEL1.htm>.

Pandya, Mukul, et al. Best of the Best: Inside Andy Grove’s Leadership at Intel. Prentice Hall PTR, Dec 10, 2004. 19 Sep. 05 <http://www.informit.com/articles/article.asp?p=345010&rl=1>.

Schlender, Brent. `Inside Andy Grove`s Latest Crusade` Fortune 150.4, Aug 23, 2004. 19 Sep. 05 < http://www.fortune.com/fortune/ceo/articles/0,15114,678520,00.html>.