Interview: Richard S. Tedlow

Tedlow is the Class of 1949 Professor of Business Administration at the Harvard Business School, where he is a specialist in the history of business. He received his BA from Yale and his MA and PhD in history from Columbia. He came to the Harvard Business School on a fellowship in 1978 and joined the faculty in 1979. From 1979 through 1982, he taught First Year Marketing. His involvement in marketing has continued, and he has been a member of the faculty of the “Strategic Retail Management Seminar,” the “Top Management Seminar for Retailers and Suppliers,” “Managing Brand Meaning,” and the “Strategic Marketing Management” executive education programs.

From 1978 to the present, he has been involved in the HBS’ Business History program. In 1992 and 1993, he taught a course entitled “Business, Government, and the International Economy.” He has also taught in numerous executive programs at the Harvard Business School as well as at corporations, including programs in marketing strategy and general management. His published works include Giants of Enterprise: Seven Business Innovators and the Empires They Built, The Watson Dynasty: The Fiery Reign and Troubled Legacy of IBM’s Founding Father and Son, and more recently, Andy Grove: The Life and Times of an American. His latest book, Denial: Why Business Leaders Fail to Look the Facts in the Face — and What to Do About It, was published by Portfolio/The Penguin Group (2010).

Here is an excerpt from my interview of Tedlow. The complete interview is also available.

Morris: Let’s discuss your biography, Andy Grove. The subtitle refers to “the life and times of an American.” To what extent is Grove an exemplary American?

Tedlow: In some ways, Grove is the classic American success story. He was a refugee from oppression. Born in Hungary in 1936, he first had to survive the Nazis and then the Communists. He arrived in the United States at the age of 20 and discovered it to be a true meritocracy. It is the meritocratic element of his story which makes Grove an exemplar of America at its best.

Morris: Grove has frequently used the term “inflection point.” In a business context, what is it?

Tedlow: For Grove, an inflection point is a turning point in the history of a business. It is a moment of truth. If you make the right decision, you put your company on the path to future growth. If you make the wrong decision, you face decline.

Morris: In your opinion, what was the most significant “inflection point” for Intel?

Tedlow: My choice is the decision to serve as the sole source for the 80386 microprocessor in 1985 and 1986. Up until that time, it had been mandatory in the computer industry that component suppliers to the dominant firm (which was IBM at the time) licensed their technology to competing manufacturers. This process allowed IBM to play one supplier off against another and to control prices. When Grove took the leap of informing IBM and the rest of the industry that Intel was not going to license the technology for its 80386 microprocessor, this was a genuine inflection point. It was a “bet the company” decision. Because Grove made it and made it work, Intel became one of the leading firms in computing.

Morris: Grove is often identified as being one of the most effective corporate CEOs in the 20th century. Why?

Tedlow: Andy Grove became the CEO of Intel in 1987. At the end of that year Intel had a market capitalization of $4.3 billion. Grove stepped down as CEO of Intel in 1998. At the end of that year, the company had a market capitalization of $197.6 billion. This increase in value represents a compound annual growth rate of 42 percent over an eleven year period. Few if any other CEOs can point to such a record.

Morris: Of all that you learned about Grove during your extensive research on his life and times, what do you consider to be most revealing of the man?

Tedlow: It was very interesting for me to discover that although he drove the people who worked for him very hard, he drove himself harder. He well understood the old saying that the speed of the boss is the speed of the gang.

Morris: To those who are preparing for or are only recently embarked on a business career, what lessons in leadership and management can be learned from Andy Grove?

Tedlow: Grove’s method of decision-making combines both discipline and creativity. He makes “data-driven gut decisions.” I believe that combining those two facets of decision-making is more than merely valuable. I believe it is essential.

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If you wish to read the complete interview, please contact me at interllect@mindspring.com.