What can we learn about innovation and leadership from Gelsinger’s Intel exit?

The forced departure of Intel CEO Pat Gelsinger last month is an excellent demonstration of the oft-quoted and misattributed Peter Drucker adage: “culture eats strategy for breakfast.” 

Until now, the lofty ambitions of tech CEOs – Elon Musk and his rockets, Mark Zuckerberg and his Metaverse, even Marc Benioff’s woke capitalism – had emerged from 20 years of software dominance, in which social media and software-as-a-service companies profited from the explosion of data and cloud computing. 

With Gelsinger gone, the hardware foundation for all this business innovation is showing cracks. There is little hope that an American tech leader can reclaim the vision and optimism that marked an earlier era of big ticket infrastructure. 

The mix of swagger and smarts that previous chip company characters mobilised to their advantage – Intel founders Robert Noyce and Gordon Moore, for example – is sadly elusive. Engineers have taken the helm of some of the world’s most profitable companies of late, but their technical focus seems to prevent them from creating pleasurable or stable places to work. 

Looking back

Gelsinger’s leadership was marked by nostalgia from the start. Given his earlier 30-year tenure at the company, the shift to Intel from VMWare in 2021 was often couched in the terms of a prodigal son’s return. Out of the gate, a muscular call to revive “Grovean culture” reinstituted OKRs – objectives and key results – for performance. The nod to previous CEO Andy Grove was a calculated effort to awaken a competitive spirit among employees, many of whom were still around when Grove held tenure. Grove’s bestselling management memoir, Only The Paranoid Survive, captures the elements of this workplace, where brash interactions are legitimated in the interests of productivity and growth. 

Working at Intel during this period, I was graded on how well I showed attributes like “constructive confrontation” and “results orientation.” These criteria were intended to provoke discipline and loyalty in everyday dealings, but had the effect of encouraging aggression and combat in meetings. My career at the company stalled when a psychological test showed that I was off the scale on empathy. 

Intel values have gone on to inform the performance expectations of other companies in the Silicon Valley diaspora, most famously, Amazon and Netflix. At Intel, the reassertion of a homogenous, homophilic and heteronormative leadership culture was poorly timed. During the worldwide pandemic, when Black Lives Matter protests erupted in local streets, newly hired employees were expected to adopt ’70s values in a work setting that was not only more inclusive in make-up, but entirely virtual in practice. To this day, workers in a variety of job functions continue to uphold principles derived from a 50-year-old factory production line.   

Working at Intel during this period, I was graded on how well I showed attributes like “constructive confrontation” and “results orientation.”

The Grovean renaissance didn’t fix the problems of execution in the chip fabs, which are as much to do with resource management and communication skills as they are technical feasibility. Nor did it address the intolerance to minority views that led to some of the biggest errors in judgment from previous executives. Instead, when Gelsinger’s strategy was approved, the company experienced a rise in voluntary exits from senior technical talent. This left Gelsinger in the position of having to deliver on a messianic mission without the engineering prowess he had taken for granted. And since job cuts were one of the primary means available to fund the turnaround, he was preaching a dated gospel to a dwindling congregation. 

Enter the CHIPS for America Act, the bipartisan $52 billion infrastructure investment so central to Gelsinger’s agenda. In the same week that its Board removed Gelsinger as CEO, Intel won $7.865 billion in direct funding  to build more domestic manufacturing under the CHIPS Incentives Program. In an earlier era, schmoozing with politicians and accepting military contracts were par for the course for maintaining a market monopoly. Similar companies that had blurred the line between public utility and private entity, like AT&T, at least provided significant research funding for genius factories such as Bell Labs as part of the bargain. Intel has done nothing of the sort. 

Fanning patriotic political interests has been the main line of argument legitimating Intel’s massive subsidies from the CHIPS Act. Such a parochial agenda is ill-suited to the complex challenges facing global business leaders today, such as the accelerating threats of climate change and geopolitical instability. Both problems are especially relevant to the supply chain for silicon.

Gelsinger’s strategy ignored the former and stoked the latter. His infrastructure build-out doubled down on the already parched landscape of northern Phoenix, Arizona. In celebrating the announcement of a new facility in Ohio – the newly branded “Silicon Heartland” – he routinely referenced the number of cement trucks he was keeping in business. In the broader ledger, beyond quarterly earnings, the biggest problem with Gelsinger’s manufacturing strategy was always the environmental impact. It was an affront to the company’s fledgling net zero pledge, leading to even more departures by the many qualified individuals who contributed to its existence.  

The next generation

After Pat, perhaps there will be room for a new generation of leaders. These successors will need humility to acknowledge and foster the delicate trade routes that hold the tech industry, and our common modern conveniences, together. It’s not that engineers can’t be great CEOs. But the responsible management of people and resources requires broad, dynamic, and critical perspectives. This rarely comes from hiring friends who hail from the same multi-million dollar neighbourhoods. 

The lessons from Intel are enough to inform many future business and engineering school programs. While we can recognise that technology innovation is critical to our planetary survival, managing human and planetary resources well demands more from executives than a return to past principles. The companies we need for the future will prosper from setting inspiring goals in places physically capable of supporting them long term. They will also prioritise high-quality, secure jobs, with a healthy dose of psychological safety. 

This path may not “make Intel great again”, as the red cap on a former colleague’s desk used to goad me. It may actually make something better.