Hard-nosed business advice for Bush

by DG Martin

‘“Okay, we’ve got ourselves into more than we bargained for. It’s draining our resources and keeping us from realizing our potential in other areas. So, what do we do now?’”

Could these be President Bush’s New Year’s ponderings?

Probably not.

But, according to the Dec. 12 issue of Fortune magazine, good business leaders ask this kind of question when they find themselves in a business ‘“hole.’”

Andy Grove was the legendary leader of Intel, the successful computer chip maker. But back in the mid 1980s Intel was about to be on the ropes. The computer memory chip, its ‘“core business,’” had become a commodity. Intel had drawn a worldwide group of excellent competitors. From annual profits of $198 million in 1984, Intel’s profits slipped to $2 million in 1985.

At Intel, Grove was then second in command to Gordon Moore. (Moore is known as the creator of Moore’s Law, which says that the number of transistors that can be put on a single computer chip doubles every two years or 18 months).

Richard Tedlow, author of an upcoming book The Life and Times of Andy Grove, writes in Fortune, ‘“By all odds, Intel should have failed. It should have been destroyed by the same brutal international competition that has killed apparel companies, tire companies, and television companies’….’”

According to Tedlow, Grove asked Moore, ‘“If we got kicked out and the board brought in a new CEO, what do you think he would do?’”

Moore said, ‘“He would get us out of memories.’”

Moore and Grove had a strong emotional attachment to these ‘“memories’” that had made the company great. But Moore was suggesting that under fresh leadership Intel would abandon the memory chip product line.