The bad news is that if you own Intel stock, you are no doubt aware of the challenges that that iconic processor maker Intel has been facing, especially considering AI and companies like Nvidia. It’s recently laid off 15% of its workforce, suspended dividends for the first time in 32 years and has lost 2/3 of its market value under the latest CEO.
The good news? Intel has been in this situation before. Most of us think of Intel as a designer and maker of CPUs, but that was not always the case. Forty years ago, then CEO Andy Grove was running the world’s dominant memory chip maker. He realized that foreign competition might damage the company beyond repair and made the incredibly gutsy move of focusing instead on manufacturing microprocessors.
Grove’s decision seems obvious in hindsight, but it faced significant opposition internally and externally at the time. It was truly a “bet the company move.” Intel survived and thrived because it had a leader who was willing and able to face reality.
Mr. Grove understood that “People who have no emotional stake in a decision can see what needs to be done sooner” and that he had to force himself and his team to see a “situation from the perspective of an outsider.” (This is why every CEO needs a peer advisory group of fellow C-Level executives who aren’t emotionally triggered in the moment of a crisis, resulting in a dramatic but temporary loss of IQ).
Mr. Grove’s legendary redirection of Intel 40 years ago is summarized in an executive summary from the Farnam Street blog: “Andy Grove and the Value of Facing Reality.” For a deeper dive on his extraordinary career, check out the Wikipedia entry on him. Finally, I hope you’ll take the time to read his short but profound book Only the Paranoid Survive: How to Exploit the Crisis Points that Challenge Every Company and Career.”
If this helps you see the value of a peer group and you’ve not been invited yet to join one, perhaps we should talk?
