How Intel won the microprocessor wars

Andy Grove's OKR system enabled Intel to snatch victory over Motorola from the jaws of defeat.

by John Doerr
Last Updated: 11 May 2018

Andy Grove was arguably the greatest CEO of his era. Named as Time’s Man of the Year in 1997 for being ‘the person most responsible for the amazing growth in the power and the innovative potential of microchips’, he was famed for his results-focused management style.

At the heart of his approach were what he called OKRs – Objectives and Key Results. The idea was simple. You agree the broad, bold objective (‘Become the bestselling widget company in Scotland’) then identify a handful of measurable results for that quarter that will help you get there (‘Write a sales pitch’; ‘Sign two new retail clients’; ‘Get adverts in four major newspapers’).

It had numerous advantages, as Silicon Valley VC, former Intel executive and Grove protégé John Doerr writes in his book, Measure What Matters: How Google, Bono, and the Gates Foundation Rock the World with OKRs.

For a start, everybody was clear about not only their own objectives, but also everyone else’s. There was no ambiguity or complication. The clear key results encouraged rigour, but because they were overly ambitious no one was blamed for failing to meet them. Because bonuses weren’t tied to key results either, the OKR system avoided the fatal traps of disincentivising risk-taking or incentivising corner-cutting.

Binding it together was a culture of ‘ruthless honesty’ and company loyalty, which flowed from Grove himself (Doerr writes that Grove had several rubber stamps on his desk, one of which was engraved ‘Bullshit’).

In the following adapted extract from Measure What Matters, Doerr tells the story of how OKRs saved Intel from the existential threat of Motorola, 40 years ago.

It all started in November 1979, when a district sales manager called Don Buckout sent an incendiary message to the senior management, informing them that Motorola’s easy to use 68000 16-bit microprocessor was wiping the floor with Intel’s 8086...

The communiqué set off a five-alarm fire. Within a week, the executive staff had met to confront the bad news. One week after that, a blue-ribbon task force convened to map out Intel’s counteroffensive. Motorola, an industry Goliath and international brand, posed a clear and present danger.

[Grove’s right hand man] Jim Lally set the tone for the war to come: We have to kill Motorola, that’s the name of the game. We have to crush the f—king bastards. That became the rallying cry for Operation Crush, the campaign to restore Intel to its rightful place as market leader.

By January 1980, Crush teams were dispatched to field offices around the globe. By the third quarter, they were on their way toward meeting one of the most daring objectives in the history of tech: two thousand 'design wins', the crucial agreements for clients to put the 8086 in their appliances and devices. By the end of that calendar year, they’d routed the enemy and won a resounding victory.

Not one Intel product was modified for Crush. But Grove and his executive team altered the terms of engagement. They revamped their marketing to play to the company’s strengths. They steered their customers to see the value of long-term systems and services versus short-term ease of use. They stopped selling to programmers and started selling to CEOs.

Goals were Grove’s secret weapon. They turbocharged a large and multifaceted organization, then propelled it with surprising agility. Up against OKRs and a unified, goal-driven Intel, Motorola never stood a chance.

Led by Andy Grove, top management rebooted the company’s priorities in four weeks, and we had approval for a ninepart program—including a multimillion-dollar ad spend, something Intel had never done before. Within a week after that, the strategy went out to the sales force. OKRs allowed Intel to execute its battle plan with clarity, precision, and lightning speed. The entire workforce shifted gears to focus together on one prodigious goal.

Motorola was extremely well run, but it had a different sense of urgency. A manager there told me, 'I couldn’t get a plane ticket from Chicago to Arizona approved in the time you took to launch your campaign.'

 Intel was close to a billion-dollar company at the time, and it turned on a dime. To this day, I have never seen anything like it. I can’t tell you how many times I’ve seen people walk out of meetings saying, 'I’m going to conquer the world' . . . and three months later, nothing has happened. You get people whipped up with enthusiasm, but they don’t know what to do with it. In a crisis, you need a system that can drive transformation—quickly. That’s what the key result system did for Intel.

Andy Grove was accustomed to having the last word, so let’s give it to him here. 'Bad companies,' Andy wrote, 'are destroyed by crisis. Good companies survive them. Great companies are improved by them.' So it was for Operation Crush.

This is an adapted extract from Measure What Matters: How Google, Bono, and the Gates Foundation Rock the World with OKRs, by John Doerr, which is published by Porfolio Penguin. Copyright 2018 John Doerr. All rights reserved.

Image credit: Jakub Jankiewicz/Flickr (Creative Commons)


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