Andrew (Andy) Grove died on March 21, 2016, aged 79. He leaves behind his wife, 2 daughters and 8 grandchildren. But he also leaves behind an incredible footprint.
Born in Europe, he survived Nazi occupation and escaped Communist controlled Hungary at age 20. He moved to the United States where he finished his education. Later he joined Fairchild Semiconductor where he worked together with Gordon Moore (of Moore’s law). Moore left Fairchild Semiconductor in 1968 to found Intel. Grove was the first hire and subsequently became Intel’s president in 1979 and CEO in 1987. He played a critical role in Intel’s shift from memory chips to microprocessors.
Intel paid tribute to Grove in a press release: “Grove led the firm’s transformation into a widely recognized consumer brand. Under his leadership Intel produced the chips, including the 386 and Pentium, that helped usher the PC era.”
During Grove’s tenure, Intel increased annual revenues from $1.9 billion to more than $26 billion and its market value increased by 4,500 percent! But Grove was more than a business pioneer.
Grove was a visionary, he contributed and shaped the future of leadership and management.
Andy Bryant, Intel’s current chairman put it: “Andy approached corporate strategy and leadership in ways that continue to influence prominent thinkers and companies around the world. He combined the analytic approach of a scientist with an ability to engage others in honest and deep conversation, which sustained Intel’s success over a period that saw the rise of the PC, internet and Silicon Valley.”
The term “Management by Objectives” (MBO) was first coined by Peter Drucker in his book The Practice of Management (1954). But it is Andrew Grove who first spoke about “Objectives and Key Results” (OKR) in his book High Output Management (1983). In less than 5 pages he was able to simplify MBO and describe the essence of OKR, which still is its essence today. Grove became the father of OKR and his thinking plays a key role in the philosophy and values behind Perdoo.
When Grove is talking about MBO in his book, he is actually talking about OKR. This is explained when he says:
“A successful MBO system needs only to answer two questions:
Some companies and software vendors approach OKR as a tool for management to put an extra layer of control over employees. We see OKR as a tool for employees: to help them focus, align their efforts toward a shared goal, and best of all: learn. This is also reflected in Grove’s description of OKR.
Here are some quotes from Andrew Grove’s book that nail it:
“MBO is largely designed to provide feedback relevant to the specific task at hand; it should tell us how we are doing so we can make adjustments in whatever we are doing if need be.”
“The one thing an MBO system would provide par excellence is focus.”
“We see a nesting hierarchy of Objectives: if the subordinate’s Objectives are met, the supervisor’s will be as well.”
“Key Results can come in like clockwork, but the Objectives can still be missed. So it is entirely possible for a subordinate to perform well and be rated well even though he missed his specified Objective.”
“The MBO system is meant to pace a person – to put a stopwatch in his own hand so he can gauge his own performance. It is not a legal document upon which to base a performance review, but should be just one input used to determine how well an individual is doing. If the supervisor mechanically relies on the MBO system to evaluate his subordinate’s performance, or if the subordinate uses it rigidly and forgoes taking advantage of an emerging opportunity because it was not a specified Objective or Key Result, then both are behaving in a petty and unprofessional fashion.”
Andy Grove goes on to explain how a good Key Result should look like:
“To be useful a Key Result must contain very specific wording and dates, so that when the deadline time arrives, there is no room for ambiguity.”
Grove also explains the cascading and alignment effect that naturally follows from working with Objectives and Key Results:
“A manager’s Objectives are supported by an appropriate set of Key Results. His Objectives in turn are tied to his supervisor’s Objectives so that if the manager meets his Objectives, his supervisor will meet his.”
Andrew Grove passed away but his thoughts on leadership will continue to inspire our team.