December 13, 2011 at 1:51pm
On December 12, Google's home page noted the birthday of Robert Noyce, co-founder of Intel. Noyce used his upbringing in the Congregational Church as a model for his management approach at Fairchild Semiconductor and Intel.
Based on a June 1997 article by Tom Wolfe in Forbes ASAP
Intel was an early pioneer in Silicon Valley and is the dominant supplier of microprocessors. It is driven by innovation: CEO Paul Ottelini says that 90% of sales in December of a given year are from products that weren't available in January of that year.
Noyce was brought up the son of a Congregational minister, The Congregational Church has no hierarchy and practices a participatory model. The structure and management behavior of Intel, as influenced by Noyce, have a clear linkage to his religius roots.
Key Innovations & Timeline
ROBERT NOYCE, INVENTOR OF THE silicon microchip and co-founder of Intel, grew up in Grinnell, Iowa, one of countless small towns in the Midwest that had been founded in the 19th century as religious communities by so-called Dissenting Protestants: Congregationalists, Presbyterians, Baptists, Methodists, and many others. What Dissenting Protestants dissented from was the Church of England and its elaborate ties to British upper-class life. The founder of the town of Grinnell (1854) was a young New England Congregational minister, Josiah Grinnell, who was weary of the decadence of the East Coast and wanted to establish a City of Light out on the virgin plains.
The Congregational Church had no hierarchy. Each congregation was autonomous. A minister was a teacher rather than a holy shepherd with a flock. Each member of the Congregation was supposed to be his own priest, in direct communication with God.
When Noyce, whose father was a Congregational minister, was growing up in the 1930s and 1940s, there were still people walking around in Grinnell who had known Josiah Grinnell personally. They were getting old -- Grinnell had died in 1891 -- but they were walking around, and Josiah's hand still lay heavily upon his town of 7,000 souls. There were subtle gradations of status in Grinnell, and it was better to be rich than poor, but the important thing was not to show it. To all intents and purposes, there were only two social classes: those who were hard-working, God-fearing, church-going, and well educated and those who were not.
When they were in their teens, Noyce and his brothers made their pocket money by mowing lawns, raking leaves, and babysitting. In Grinnell that was socially correct behavior. To have devoted the same time to taking tennis, golf, or riding lessons would have been regarded as a gaffe of the genus Conspicuous Indolence. There was no Country Club set in Grinnell or anything approaching one. Josiah Grinnell had made sure that his City of Light turned its back on the European-based social lines that prevailed Back East.
This attitude had a fascinating corollary in education. Back East, as in Europe, engineering was an unfashionable field for any truly gifted student to go into. It was looked upon as nothing more than manual labor elevated to a science.
There was "pure" science and there was engineering, which was merely practical. Back East engineers, no matter how gifted, ranked below doctors, lawyers, Army colonels, Navy captains, business executives, and professors of English, history, biology, chemistry, and physics. This piece of European snobbery never reached Grinnell, however, nor did it turn up in many of the thousands of small towns in the Midwest and the Far West. An extremely bright student, the one possessing the quality known as genius, was infinitely more likely to go into engineering in Iowa, Illinois, Michigan, or Wisconsin than anywhere Back East.
As a result, the way to today's online, connected world was paved entirely by geniuses from the Midwest and farther west. The inventor of the lightbulb, which started it all, was Thomas Edison from Port Huron, Michigan. The inventor of the vacuum tube, which made possible the development of the high-speed electronic computer, was Lee De Forest from Council Bluffs, Iowa. The three engineers at Bell Laboratories who won Nobel Prizes for inventing the transistor, which replaced the vacuum tube, were John Bardeen from Madison, Wisconsin, Walter Brattain from Seattle, Washington, and William Shockley from Palo Alto, California. The chief of the fabled Bell Labs in those palmy days was Oliver Buckley from Sloane, Iowa. The two inventors of the integrated circuit or "microchip," the very heart of the Revolution, were, first, Jack Kilby, from Jefferson City, Missouri, whose chip was made of germanium, and, six months later, Noyce, whose chip was made of silicon and became the standard for the industry and gave the Silicon Valley its name.
When he reached California, Noyce had set up the two famous Silicon Valley corporations he headed, Fairchild Semiconductor and, subsequently, Intel. He discovered that Grinnell had come west with him, as if sewn into the very linings of his clothes. Without even knowing it was happening, he had become the Josiah Grinnell of the Silicon Valley's corporate culture.
One day John Carter came to Mountain View for a close look at Noyce's semiconductor operation. Carter's office in Syosset, Long Island, arranged for a limousine and chauffeur to be at his disposal while he was in California. So Carter arrived at the tilt-up concrete building in Mountain View in the back of a black Cadillac limousine with a driver in the front wearing the complete chauffeur's uniform -- the black suit, the white shirt, the black necktie, and the black visored cap. That in itself was enough to turn heads at Fairchild Semiconductor. Nobody had ever seen a limousine and a chauffeur out there before. But that wasn't what fixed the day in everybody's memory. It was the fact that the driver stayed out there for almost eight hours, doing nothing. He stayed out there in his uniform, with his visored hat on, in the front seat of the limousine, all day, doing nothing but waiting for a man who was somewhere inside. John Carter was inside having a terrific chief executive officer's time for himself. He took a tour of the plant, he held conferences, he looked at figures, he nodded with satisfaction, he beamed his urbane Fifty-Seventh Street biggie CEO charm. And the driver sat out there all day engaged in the task of supporting a visored cap with his head. People started leaving their workbenches and going to the front windows just to take a look at this phenomenon. It seemed that bizarre. Here was a serf who did nothing all day but wait outside a door in order to be at the service of the haunches of his master instantly, whenever those haunches and the paunch and the jowls might decide to reappear. It wasn't merely that this little peek at the New York-style corporate high life was unusual out here in the brown hills of the Santa Clara Valley. It was that it seemed terribly wrong.
A certain instinct Noyce had about this new industry and the people who worked in it began to take on the outlines of a concept. Corporations in the East adopted a feudal approach to organization, without even being aware of it. There were kings and lords, and there were vassals, soldiers, yeomen, and serfs, with layers of protocol and perquisites, such as the car and driver, to symbolize superiority and establish the boundary lines. Back East the CEOs had offices with carved paneling, fake fireplaces, escritoires, bergres, leather-bound books, and dressing rooms, like a suite in a baronial manor house. Fairchild Semiconductor needed a strict operating structure, particularly in this period of rapid growth, but it did not need a social structure. In fact, nothing could be worse. Noyce realized how much he detested the Eastern corporate system of class and status with its endless gradations, topped off by the CEOs and vice presidents who conducted their daily lives as if they were a corporate court and aristocracy. He rejected the idea of a social hierarchy at Fairchild.
Not only would there be no limousines and chauffeurs, there would not even be any reserved parking places. Work began at 8 a.m. for one and all, and it would be first-come, first-served, in the parking lot, for Noyce, Gordon Moore, Jean Hoerni, and everybody else. "If you come late," Noyce liked to say, "you just have to park in the back forty." And there would be no baronial office suites. The glorified warehouse on Charleston Road was divided into work bays and a couple of rows of cramped office cubicles. The cubicles were never improved. The decor remained Glorified Warehouse, and the doors were always open. Half the time Noyce, the chief administrator, was out in the laboratory anyway, wearing his white lab coat. Noyce came to work in a coat and tie, but soon the jacket and the tie were off, and that was fine for any other man in the place, too. There were no rules of dress at all, except for some unwritten ones. Dress should be modest, modest in the social as well as the moral sense. At Fairchild there were no hard-worsted, double-breasted pinstripe suits and shepherd's-check neckties. Sharp, elegant, fashionable, or alluring dress was a social blunder. Shabbiness was not a sin. Ostentation was.
During the startup phase at Fairchild Semiconductor there had been no sense of bosses and employees. Everyone had internalized the goals of the venture. They didn't need exhortations from superiors. Besides, everyone had been so young! Noyce, the administrator or chief coordinator or whatever he should be called, had been just about the oldest person on the premises, and he had been barely 30. And now, in the early 1960s, thanks to his athletic build and his dark brown hair with the Campus Kid hairline, he still looked very young. As Fairchild expanded, Noyce didn't even bother trying to find "experienced management personnel." Out here in California, in the semiconductor industry, they didn't exist. Instead, he recruited engineers right out of colleges and graduate schools and gave them major responsibilities right off the bat. There was no "staff," no "top management" other than the eight partners themselves. Major decisions were not bucked up a chain of command. Noyce held weekly meetings of people from all parts of the operation, and whatever had to be worked out was worked out right there in the room. Noyce wanted them all to keep internalizing the company's goals and to provide their own motivations, just as they had during the start-up phase. If they did that, they would have the capacity to make their own decisions.
The young engineers who came to work for Fairchild could scarcely believe how much responsibility was suddenly thrust upon them. Some 24-year-old just out of graduate school would find himself in charge of a major project with no one looking over his shoulder. A problem would come up, and he couldn't stand it, and he would go to Noyce and hyperventilate and ask him what to do. And Noyce would lower his head, turn on his 100-ampere eyes, listen, and say: "Look, here are your guidelines. You've got to consider A, you've got to consider B, and you've got to consider C. But if you think I'm going to make your decision for you, you're mistaken. Hey...it's your ass."
Back East, in the conventional corporation, any functionary wishing to make an unusually large purchase had to have the approval of a superior or two or three superiors or even a committee, a procedure that ate up days, weeks, in paperwork. Noyce turned that around. At Fairchild any engineer, even a weenie just out of Cal Tech, could make any purchase he wanted, no matter how enormous, unless someone else objected strongly enough to try to stop it. Noyce called this the Short Circuit Paper Route. There was only one piece of paper involved, the piece of paper the engineer handed somebody in the purchasing department.
A decade later at Intel, Noyce decided to eliminate the notion of levels of management altogether. He and Moore ran the show; that much was clear. But below them there were only the strategic business segments, as they called them. They were comparable to the major departments in an orthodox corporation, but they had far more autonomy. Each was run like a separate corporation. Middle managers at Intel had more responsibility than most vice presidents Back East. They were also much younger and got lower-back pain and migraines earlier. At Intel, if the marketing division had to make a major decision that would affect the engineering division, the problem was not routed up a hierarchy to a layer of executives who oversaw both departments. Instead, "councils," made up of people already working on the line in the divisions that were affected, would meet and work it out themselves. The councils moved horizontally, from problem to problem. They had no vested power. They were not governing bodies but coordinating councils.
Noyce was a great believer in meetings. The people in each department or work unit were encouraged to convene meetings whenever the spirit moved them. There were rooms set aside for meetings at Intel, and they were available on a first-come, first-served basis, just like the parking spaces. Often meetings were held at lunchtime. That was not a policy; it was merely an example set by Noyce. There were no executive lunches at Intel.
At Intel lunch had a different look to it. You could tell when it was noon at Intel, because at noon men in white aprons arrived at the front entrance gasping from the weight of the trays they were carrying. The trays were loaded down with deli sandwiches and waxed cups full of drinks with clear plastic tops, and globules of Sprite or Diet Shasta sliding around the tops on the inside. That was your lunch. You ate some sandwiches made of roast beef or chicken sliced into translucent rectangles by a machine in a processing plant and then reassembled on the bread in layers that gave off dank whiffs of hormones and chemicals, and you washed it down with Sprite or Diet Shasta, and you sat amid the particle-board partitions and metal desktops, and you kept your mind on your committee meeting. That was what Noyce did, and that was what everybody else did.
If Noyce called a meeting, then he set the agenda. But after that, everybody was an equal. If you were a young engineer and you had an idea you wanted to get across, you were supposed to speak up and challenge Noyce or anybody else who didn't get it right away. This was a little bit of heaven. You were face to face with the inventor, or the co-inventor, of the very road to El Dorado, and he was only 41 years old, and he was listening to you. He had his head down and his eyes beamed up at you, and he was absorbing it all. He wasn't a boss. He was here to help you be self-reliant and do as much as you could on your own.
This wasn't a corporation...it was a congregation.
Challenges & Solutions
Noyce saw the speed at which the Valley was moving and knew he had to have a mechanism to match or exceed that speed. He chose to minimize status and hierarchy, while equiping and challenging engineers to own their part of the business.
Benefits & Metrics
Intel sets the standard for innovation in the semiconductor industry. WIth revenues over $40B and a market cap of $120B, it defines the direction of much of the microelectonics worldwide.
Hierarchy inhibits comunication
Long communications paths slow things down, a deal-breaker in a world where innovation is a primary driver.
Limits on authority seem merely common sense, but it can drain ownership
Hierarchy slows human development
Particularly true in young industries, where business growth is the result of each person's growth
Hierarchy is binary
You either have one or you don't. At Fairchild, Noyce cut through hierarchy; at Intel, he eliminated it.
Tom Wolfe wrote this story for the June 1997 edition of Forbes ASAP, a bi-monthly supplement to Forbes. The quality of the writing in ASAP was extraordinary. Its cancellation, a victim of the 2000 dot-com bubble, leaves a vacuum of coverage in the technology sector that has yet to be filled.