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How One Conversation Saved Intel from Collapse. A lesson for business

Tom Hagler by Tom Hagler
07.01.2022
in Business
How One Conversation Saved Intel from Collapse. A lesson for business
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Often we allow subconscious motives to influence the conclusions we draw. When we want something to be true, we ask ourselves: “Can I believe it?” – That is, we look for a reason to believe. And when we don’t want to believe it, we ask, “Do I have to believe it?” – looking for a reason to reject the unpleasant assertion. Prejudice gets in the way – and can be a threat to business. We share Intel’s story from the book Intelligence Thinking.



A scout’s mindset.

***

The first half of 1985 was a “dark and desperate” time for the technology company Intel, according to one of its founders, Andrew Grove. Until then, Intel had been successful in selling the memory modules it specialized in. By 1984, however, Japanese competitors had learned to make modules that were faster and better than Intel’s.

Intel’s top managers watched Japan capture more and more market share while their own share shrank and argued endlessly over what to do. Their company was simply being kicked out of the market. Shall we switch to some other product? But memory module manufacturing was at the core of the company’s very existence. The idea that Intel would no longer make chips seemed blasphemy, almost a distortion of religious dogma.

In his memoirs, titled “Only Paranoid People Survive,” Grove describes a conversation with the company’s second founder, Gordon Moore. That conversation saved Intel. “We were depressed. I stood at the window, watching the Ferris wheel at the Great America amusement park spinning in the distance. Then I turned to Gordon again and asked: “If we were kicked out and the board brought in a new CEO, what do you think he would do?” – “Get out of the memory market,” Gordon answered without hesitation. I stared at him in silence for a long time and then said: “You know what, let you and I go out the door and come back and do it ourselves.”

Once the founders of Intel realized that abandoning the production of once-famous chips from the outside seemed like an obvious choice, the decision was almost made. That was how the company managed to get out of the misery of the mid-eighties by switching from memory production to what Intel is famous for today: microprocessors.

The thought experiment that Grove and Moore did is called the “outsider’s test”. Imagine that some other person was in your shoes. What would he do in your situation? When a difficult decision has to be made, the question of “what to do” is complicated by other, emotionally laden, questions such as: “Is it my fault that we are in this situation?” and “How much would those around me judge me if I changed my decision?” The bystander’s test allows you to remove the emotional complications, leaving only the reasoning of how best to proceed in a given case.

This test has a variation: you can imagine that you are the outsider. Suppose you are a student. You have two more years of study left, but you are realizing more and more clearly that the chosen profession does not attract you at all. You were thinking of dropping out, but the thought that it has spent several years of your life is so painful that you always find a reason to stay at university.

Imagine that you are a different person and your mind has somehow magically been transplanted into the body of someone named (put your name in). You feel no responsibility for his past decisions, you have no need to appear consistent or desire to prove yourself right. You just want to make the best of the situation you find yourself in. It’s as if you have a sign hanging around your neck saying, “Under a new administration. Now tell me, which prospect appeals to you more: losing two more years to get a degree for (put your name in) or leaving and doing something more interesting?

Based on the book “Intelligence Thinking”
Cover of the post – flickr.com

The post How One Conversation Saved Intel from Collapse. A lesson for business appeared first on Business.

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