From October 2016 to March 2017 the team is joined by Guest Kats Rosie Burbidge and Eibhlin Vardy, and by InternKats Verónica Rodríguez Arguijo, Tian Lu and Hayleigh Bosher.

Friday, 13 May 2016

Remembering Andy Grove, and maybe just the most audacious trademark ever

Not all Kat readers may have noticed the passing away on March 21st of hi-tech titan, Andy Grove of Intel, whose direct influence was most felt just before many millennials came of age. While technically not one of Intel’s two founders (that distinction went to Gordon Moore and Robert Noyce), he became the first employee of the company on the day of its incorporation in 1968. It was Grove, more than anyone else, who was responsible for the rise of the company as the leading force in the microprocessor industry. He became Intel’s president in 1979 and its CEO in 1987. He stepped down from the CEO position job in 1998, but he stayed until 2004 on as its chairman. At his zenith, Grove, who was named Time magazine’s Man of the Year in 1997, was virtually synonymous with Silicon Valley.

Grove was a superb engineer (he had a Ph.D. in chemical engineering from the University of California—Berkeley), but it was his skills at management and organization that truly distinguished him. Most notable was his decision in the mid-1980’s to refocus the company from producing memory chips to microprocessor chips. That decision paved the way for the company’s ultimate success as part of “Wintel” (short for Windows and Intel), which enjoyed a dominant position as the operating system and microprocessor of choice for PC’s, respectively.

Grove’s personal biography was no less compelling. After having survived occupied Budapest, as a young Jew, in World War II, and then spending his teen years in post-war communist Hungary, he immigrated to America at the age of 20 in 1956, penniless and not knowing a word of English. Dogged determination and intellectual brilliance took him from the City College of New York to Berkeley to Fairchild Semiconductor [Merpel urges all Kat readers to learn more about this company, so crucial to the rise of Silicon Valley] and then to Intel. His cubicle at the company was no larger than any other employee and he had no reserved parking spot.

But for this Kat, wearing his trademark hat, one of Intel’s greatest achievements under Grove’s leadership was the adoption and use of the tagline— “Intel Inside”, as a key strategic asset of the company. We tend to take the “Intel Inside” branding achievement for granted, thereby forgetting the enormity of the challenge Grove and the company had set out for itself. First, how to build goodwill among retailers (who are sometimes forgotten as part of this process) and consumers in a product that is under the hood of the PC. Most consumers were (and still are) unaware what a microprocessor does, so why it should it matter who is the ultimate source of the product? Intel’s goal was to create an awareness among consumers, whereby they would come to prefer the unseen Intel microprocessor.

As for PC manufacturers, who obviously did understand what a microprocessor is, they still needed a reason to buy into, and even more importantly, take part in, Intel’s attempt to brand its microprocessor product on the back of the PC, this in the face of increasing product commodification, where price mattered more and more. The solution has been described by Apo Bordin as follows:
“Intel licenses the “Intel Inside” name/logo to any PC manufacturer who’s willing to participate in the co-op marketing program. In addition to producing its own brand advertising, Intel contributes money to manufacturer campaigns if they include Intel Inside. Intel goes to publishers and media companies and negotiates volume discount for everyone who participates in the Intel Inside co-op marketing program. Intel understands the importance of reach and mass awareness, so they develop a system to amplify their own advertising by giving their OEM partners the ability to advertise on Intel’s behalf.”
More broadly, innovation guru Gary Shapiro has identified three take-aways from the “Intel Inside” success story:

1. There are virtually no limits to what can be successfully branded. Who would have ever thought that a tagline regarding a computer chip would become a successful brand?

2. Intel was a master at using trade shows to give a here-and-now meaning to the brand. They did this by “capturing” the approval of “critical influencers”. [Merpel says, this sure sounds like Malcolm Gladwell’s “The Tipping Point.]

3. The role of the CEO can be critical in conveying the message embodied in the brand.

There are two slogans that will be ever-identified with Andy Grove. The first is “Intel Inside”, while the second is “Only the Paranoid Survive”, the title of his 1996 book in which he emphasizes the importance of a company to avoid complacency, if it hopes to stay ahead of its competitors. The Economist magazine, in its remembrance of Andy Grove, could have chosen either slogan as best capturing Grove’s legacy. It chose to entitle the piece-- “The man who put Intel inside”.

This Kat thinks that The Economist made the correct choice.

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