why Intel is a great company (it is all about the engineers)

Companies that go through CEO changes usually degrade over time because the company is no longer innovating at the rate of new competitors. Tech companies usually hire non-technical CEOs to replace the technical founders and innovation invariably suffers.  Intel has been a clear exception to this pattern because of its technical focus.

Since its founding in 1968, the company has successfully navigated stiff foreign competition, shifts in market demand, and changes in strategy and business model. Today, Intel is the world’s largest semiconductor chip maker with 81,000 employees worldwide, revenues of $38 billion, and a market cap of $115 billion.

Its current success is largely the result of adhering to and emphasizing its technical prowess through hiring technical leaders and managing internal talent.

Standing by Core Values

Intel continues to be an incredible company despite having been led by five CEOs.

Innovative companies typically have very technical founders and a technical CEO, who in turn, rely on a technical management team. But over time, sales and marketing take over the company, and often at the expense of its core competency of creating great products.

Intel not only hires tech-savvy leads, but also devotes significant resources towards innovation and research. In 2009, R&D spending rose to 16% of the company’s revenues. And of course, Intel attracts and hires some of the top engineering talent from all over the globe.

Growing from Within

Great companies hire under people, not over them … and Intel is a prime example of this. Over the course of its four decade history, Intel has developed a ton of internal talent and rarely goes outside the company to fill important vacancies. In fact, many of the company’s top executives have spent most of their careers working at Intel (Paul Otellini, the current CEO, joined the company in 1974).

Similarities Across the Pacific

Intel as a company shares many similarities with another powerhouse across the Pacific Ocean – China. Both have undergone incredible growth since the 1980s and are on a path to continued dominance. Additionally, both understand the importance of innovation and are heavily recruiting top talent. Also, both being led by people coming from technology – out of the current 9 standing members in China’s ruling politburo, eight come from engineering. If they continue their emphasis on technical resources, good things will continue to happen.

Given its history and progress to date, Intel is one of those rare companies that will be around for a good while longer. And it can thank its technical roots for that.

Special thanks to Michael Hsu for his research and edits.

2 thoughts on “why Intel is a great company (it is all about the engineers)

  1. Bill

    Interesting article. I just want to point out that Paul Otellini is the first non-technical, MBA-type CEO Intel ever had. All of his predecessors were scientist by training with PHDs.
    I agree with you about Intel’s past. But, I think we need to wait for a few more years to see where Otellini will lead intel to.

    Reply
  2. Julie Chang

    Auren: you hit it on the head. Intel is really a terrific company. You are right. And definitely one of the reasons is that it is run by creators.
    I think a company needs to be run by creators and not managers. Engineers are creators. So are artists. Content companies need to be run by creators and not managers (like CFOs or lawyers).

    Reply

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