Intel’s decision to exit the semiconductor memory business, is usually attributed to a conversation between former CEOs Gordon Moore and Andy Grove. But Grove, in his book Only The Paranoid Survive, lays the credit elsewhere.
“Over time, more and more of our production resources were directed to the emerging microprocessor business,” writes Grove, “not as a result of any specific strategic direction by senior management, but as a result of daily decisions by middle managers.”
“Bit by bit they allocated more and more of our silicon wafer production capacities to those lines which were more profitable, like microprocessors, by taking production capacity away from the money-losing memory business,” recounts Grove.
“By the time we made the decision to exit the memory business, only one out of eight silicon fabrication plants was producing memories,” recalls Grove.
It’s a message for all big company management: head office strategising is all very well so long as the guys at the coal face can adjust the needs of the business to the real world.
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