Grove: From Intel to health care and beyond

Andy Grove urges the health care industry to adopt some of the same practices as the microchip industry.

6 min read
In case you missed it, Andrew S. Grove has an article in this week's issue of the Journal of the American Medical Association.

In his 68 years, Grove has written six books, including a management classic, "Only the Paranoid Survive"; a beautifully rendered memoir, "Swimming Across"; and a new book, published last month, composed of case studies that he uses in the class he teaches with Robert A. Burgelman, a Stanford University professor, entitled "Strategic Dynamics: Concepts and Cases." But it's not every day that he makes an appearance in an eminent medical journal like JAMA.

The article, "Efficiency in the Health Care Industries," was labeled commentary, but it was more akin to a jeremiad. Grove took dead aim at the lack of efficiency in health care--the amount of time it takes a research lab to turn an idea into a working drug, for instance; and the extent to which medicine lags behind other industries in using technology to store and retrieve data, to the detriment of doctors and patients. He compared it unfavorably to an industry he knows rather intimately, microchips, which has turned efficiency into an art, thanks in no small part to Grove.

The article signaled that Grove's obsession with the problems in the health care industry, problems he first explored in a 1996 Fortune magazine article about his battle with prostate cancer, has not waned. It signaled something else as well: Grove has been keeping plenty busy in retirement.

Did you know that Grove, one of Silicon Valley's most iconic and influential figures, has retired from Intel? Well, OK, retirement may be a bit strong: He still has a desk at Intel, where he describes his current role as "internal agitator." (His official title is senior adviser to executive management.) But on May 18, at Intel's annual meeting, Grove resigned as chairman of the board. For the first time since 1979, when he was named its president, Intel's fortunes are not Grove's responsibility. Although the meeting was, in part, a public retirement party for Grove, the news garnered surprisingly little attention in the East Coast business media.

One of the great joys of being a business journalist over the last quarter century has been the chance to listen to Andy Grove. As president, chief executive and finally chairman of Intel, he would periodically make the rounds of the business magazines and the business sections of the big newspapers, where he would sit in a conference room and take questions from the reporters and editors. Yes, of course, he gave us the Intel spin. But unlike most CEOs, programmed like robots to stay on message, Grove was willing to share his thoughts on all manner of things.

With his wide-ranging intellect and his engagement with the world, he broadened our understanding of technology, strategy, the fall of communism (he escaped from communist Hungary at the age of 20), and dozens of other topics.

One on one with Grove
I last sat in on one of his jam sessions maybe three years ago, and I've missed them. So a few weeks ago, I decided to bring the mountain to Mohammed. I went to visit him in Silicon Valley, to see what he was up to.

It turns out that he's up to quite a bit. "My mind is spinning as fast as it did then," he said, comparing his new life to his old in his mellifluous Hungarian accent. "But I'm not in meetings all day. I have the ability to pick and choose what I do, which I never had in my life. The penalty is that I deal with issues that are mammoth."

We met at the office of his foundation, which, among other things, is financing stem cell research ("We are helping to keep U.S. stem cell programs limping along," he said), and trying to develop programs that will help people who are not college-bound acquire vocational skills to allow them to earn a decent living.

He talked about his quest to find what he called "the Rosetta code" for the health care industry. By that he means the development of software

"that takes incompatible systems and translates them into each other, so that one system can automatically read the other." He thinks there are few things more important for patients than to have any doctor, anywhere, be able to access their medical records, but because the industry is so fragmented, with so many records still in paper form, that is currently impossible.

At Intel, most of his time is spent with a new health care group, where he pushes and prods and argues with its members as they try to figure out how to bring this laggard industry into the technological age--and with any luck, make some money for Intel in the process.

We talked a bit about the central ideas in his new book, which examines what happens when a particular business environment suddenly changes and industries collide, as when, for instance, digital technology turned the music industry upside down. Grove, not surprisingly, had mainly contempt for the music industry's early efforts to keep the digital wave from coming to shore.

"If the new technology is compelling enough," he said, "it will win out. When the railroads came, Wells Fargo was in trouble. When the printing press came along, the monks didn't stay around very long." Music, telephony, media: They've all faced the same disruptions, and in Grove's view they are all going to have to adapt - or else.

At the annual meeting last May, he laughingly described the line "Technology will always win" as "Grove's Law."

Then he moved to the subject of his latest obsession: globalization. Will it surprise you to know that this refugee from Hungary, whose company derives 70 percent of its revenue from places other than the United States, is a bear on the potential consequences of globalization on this country? He is.

"I don't think there is a good outcome," he said. "I looked up a quote for you. 'If you don't believe that (globalization) changes the average wages in America, you believe in the tooth fairy.' Do you know who said that? Paul Samuelson, age 90."

Although mainstream economic thought holds that America's history of creativity and entrepreneurialism will allow it to adapt to the rise of such emerging economies as India and China, Grove thinks that is so much wishful thinking. In his view, globalization will not only finish off what's left of American manufacturing, but will turn so-called knowledge workers, which was supposed to be America's competitive advantage, into just another global commodity.

"There is an increasing trend towards lathroscopic surgery being done with robots," he said by way of example. "Once you are doing it with robotics, why do you have to be there?" The procedure might just as well be done from India. Or China.

What particularly bugs Grove is that he can't see a way that this country can find the equivalent of a disruptive technology that will allow it to retain is current place atop the economic heap. He's always been someone who liked to generate big, gnarly solutions that may take years to work through, and though it may seem a tad grandiose on his part to think that he should be able to devise a way to solve America's globalization problem, it is also part of what makes him such an appealing character.

"I think Intel and me and the JAMA article can move health care a few pebbles forward," he said. "This last one, I will be happy just to have some people talking about it, and legitimize it. There are no clear answers."

Toward the end of the interview I asked him whether he liked his new life. "I love it," he said. "I was very ready for it. I have liked all phases of my career. I liked the technological side. I liked management. I liked discovering strategy." He likes being able to read history now, something he rarely had time for in his previous life. He likes not having to worry about every minute twist and turn in the technology industry, and how it might effect Intel.

Did that last annual meeting have any special meaning? I wondered. "Nothing emotional happened that day," he replied. But, he added, he has been having dreams lately about Intel. "It is as if I'm reliving an event that happened when I was operations manager 25 years ago. It is not speeches, not limelight, just factory visits and arguments, which didn't really happen. I didn't used to have these dreams. So I have a lot of feelings.

"I see a lot of Intel retirees," he added. "They keep company with each other. There is some nostalgia. I don't know if it is for the Intel of those days, or my younger self.

"But not on May 18," he said. "That was just a nice event."