Intel and Outside Perspectives

Lessons for life from Intel's decision to leave the memory business

In 1968, Intel was founded as a computer memory company—and they quickly dominated their competition. In only six years, the young tech business owned 83% of the market share. However, their product soon became a commodity. Companies in Japan applied their innovative manufacturing techniques to outproduce the USA. By 1984, the market share of Intel had fallen to 1%.

Gordon Moore (the Chairman and CEO) and Andy Grove (the President) faced a grueling decision. Should the company continue to compete in the memory business? Many thought abandoning memory would be like Ford ceasing to make cars. The mindset of the entire company fixated on memory as their core identity. Switching to a new business felt like admitting defeat.

After a year of aimless debate on the executive team, Grove met with Moore and asked a question. If the Board fired them and hired a new CEO, what would he do? Gordon answered, “He would get us out of memories.” Then Grove said, “Why don’t you and I walk out the door, come back in and do it ourselves?” As a result, Intel left the memory business and started developing their now-famous microprocessors, saving the company from extinction.

Many technical challenges and business issues had blocked the view of the Intel executives. But the troubles involved in switching to microprocessors were much smaller than the difficulties they faced in the memory business. Why was the decision so difficult, then? Everyone at the company defined Intel as a memory business. Their fixed mental framework hindered their creativity.

When evaluating a problem, we all face this same challenge. We paint ourselves into corners with rigid mindsets. To break out of this self-imposed prison, pretend like you’re coaching a friend. If they faced a similar dilemma, what would you advise them to do? This tactic can help you reframe your problems. You’ll see a little more clearly by practicing an outsider’s view on your own life.

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