Thursday, September 20, 2007

Success Book Reviews: Andy Grove by Tedlow

This is Part 1 of a review of Richard Tedlow’s book Andy Grove: The Life and Times of an American. Andrew Grove is arguably one of the mot brilliant and influential business minds of the 20th century, having been a major force in the success of chip giant Intel, including serving as CEO and Chairman of the Board. Tedlow has written a spellbinding biography of Grove, which is inclusive and enjoyable. However, the purpose of the Success Books blog is specifically to use the information in a biography such as this to determine the answer to an important question: Just what success characteristics does Grove possess that we can imitate and learn from to achieve success in our own lives?

Here are a few of the success secrets that I am uncovering in this biography.

1. Get the data.
On any pressing issue get as much data as you need to address the issue. Now, I am not a scientist, but I do suspect that this habit of mind relates to the fact that scientific, statistical proof requires a lot of data points to make it valid. Grove seems to have applied this key tenet throughout his life. He is not alone among business luminaries to do this. Charlie Munger tells us that Warren Buffett is always trying to increase his opportunity cost. In other words, to become fully aware of as many options as possible so as to invest time, effort, money, etc in the highest-potential activities.

Examples from Grove’s life:

Before joining Fairchild Semiconductor, Grove investigated twenty-two companies.

Grove drove 8,000 miles around California just to decide if he wanted to live there.

Grove, in his drive to improve his managerial skills, read one management book per week.

2. Come to terms with the data as quickly as possible and…

3. Act fearlessly on the data that you find

What we come across in life is not what we either want or expect. Whether the data is a a relationship that goes bad, a quarterly sales report that does not meet expectations, a new competitor destroying your “fiefdom”, or anything else, it takes a lot of mental toughness to take in this data unsentimentally, and act on it. Some executives (such as Grove) apparently come across as brusque and intense. I have a feeling that part of the problem is not so much an affection for volatility , but that it is nature of the executive’s job to remove “entropy” from the system as quickly as possible. That is, to turn chaos into order. To set a path. To craft and implement responses to changing conditions. Often, such a response is not within he comfort zone of people or organizations. That does not make the solution any less valid. So it is the executive that has to bridge that gap between “comfort zone” and “Reality”, no matter how he is painted.

Examples from Grove’s life

Grove Escaped from Communist Hungary s a teenager, in the dead of night. He navigated unknown terrain. He pushed to the front of lines. He pleaded. He did what was necessary to get to America.

Early in his career he analyzed some data about “surface charge” that was met with anger and derision from other engineers. His answer: “look at the data”.

Later he would use this unflinching focus on What Is as opposed to What We Would Prefer”, to save Intel.

One of Grove’s techniques of cleaning up inefficiency at Intel was to create a “Late List” of those who arrived for work after 8:05. Again, this is not out of a desire to terrorize, but to , in effect, reduce entropy: to keep the inputs to the system consistent, so the outputs would be profitable.

Many have called Grove “lucky”. As A.Z.H. Carr has shown, much of what we call luck is explained by a prepared, engaged mind that quickly seizes on opportunity. As we have seen, Grove was highly focused on getting data (preparing) about issues that were crucial to him. There are other aspects of this preparation: he learned English in Hungary and thus stood out among those who were attempting to make it to America. Later, his programming skills stood out in an era when virtually no one knew how to program. But there is a ”part two” to luck: You actually have to take the shot! Grove’s willingness to leave Hungary quickly, his willingness to work with a hot young group at Fairchild instead of a corporate behemoth like Bell Labs, and his willingness to exit the memory business to focus on microprocessors are examples of taking that shot.

Prepare exhaustively.
Get all the data.
Accept the results unflinchingly.

Then, take your shot.


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