Hooking Up

  So Noyce had the chance to run a new company from start-up to full production precisely the way he thought Shockley should have run his in Palo Alto back in the late 1950s. From the beginning Noyce gave all the engineers and most of the office workers stock options. He had learned at Fairchild that in a business so dependent upon research, stock options were a more powerful incentive than profit sharing. People sharing profits naturally wanted to concentrate on products that were already profitable rather than plunge into avant-garde research that would not pay off in the short run even if it was successful. But people with stock options lived for research breakthroughs. The news would send a semiconductor company’s stock up immediately, regardless of profits.

  Noyce’s idea was that every employee should feel that he could go as far and as fast in this industry as his talent would take him. He didn’t want any employee to look at the structure of Intel and see a complex set of hurdles. It went without saying that there would be no social hierarchy at Intel, no executive suites, no pinstripe set, no reserved parking places or other symbols of the hierarchy. But Noyce wanted to go further. He had never liked the business of the office cubicles at Fairchild. As miserable as they were, the mere possession of one symbolized superior rank. At Intel executives would not be walled off in offices. Everybody would be in one big room. There would be nothing but low partitions to separate Noyce or anyone else from the lowliest stock boys trundling in the accordion printout paper. The whole place became like a shed. When they first moved into the building, Noyce worked at an old, scratched, secondhand metal desk. As the company expanded, Noyce kept the same desk, and new stenographers, just hired, were given desks that were not only newer but bigger and better than his. Everybody noticed the old beat-up desk, since there was nothing to keep anybody from looking at every inch of Noyce’s office space. Noyce enjoyed this subversion of the Eastern corporate protocol of small metal desks for underlings and large wooden desks for overlords.

  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. Back East, in New York, executives treated lunch as a daily feast of the nobility, a sumptuous celebration of their eminence, in the Lucullan expense-account restaurants of Manhattan. The restaurants in the East and West Fifties of Manhattan were like something out of a dream. They recruited chefs from all over Europe and the Orient. Pasta primavera, saucisson, sorrel mousse, homard cardinal, terrine de legumes Montesquieu, paillard de pigeon, medallions of beef Chinese Gordon, veal Valdostana, Verbena roast turkey with Hayman sweet potatoes flown in from the eastern shore of Virginia, raspberry soufflé, baked Alaska, zabaglione, pear torte, crème brûlée—and the wines! and the brandies! and the port! the Sambucca! the cigars! and the decor!—walls with lacquered woodwork and winking mirrors and sconces with little pleated peach-colored shades, all of it designed by the very same decorators who walked duchesses to parties for Halston on Eaton Square!—and captains and maître d’s who made a fuss over you in movie French in front of your clients and friends and fellow overlords!—it was Mount Olympus in mid-Manhattan every day from 12:30 to 3 p.m., and you emerged into the pearl-gray light of the city with such ambrosia pumping through your veins that even the clotted streets with the garbagemen backing up their grinder trucks and yelling, “’Mon back,’mon back,’mon back,’mon back,” as if talking Urban Chippewa—even this became part of the bliss of one’s eminence in the corporate world! There were many chief executive officers who kept their headquarters in New York long after the last rational reason for doing so had vanished … because of the ineffable experience of being a CEO and having lunch five days a week in Manhattan!

  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, with 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 forty-one 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 Gary Cooper! 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.

  By the same token, there were sermons and homilies. At Intel everyone—Noyce included—was expected to attend sessions on “the Intel Culture.” At these sessions the principles by which the company was run were spelled out and discussed. Some of the discussions had to do specifically with matters of marketing or production. Others had to do with the broadest philosophical principles of Intel and were explained via the Socratic method at management seminars by Intel’s number-three man, Andrew Grove.

  Grove would say, “How would you sum up the Intel approach?”

  Many hands would go up, and Grove would choose one, and the eager communicant would say, “At Intel you don’t wait for someone else to do it. You take the ball yourself and you run with it.”

  And Grove would say, “Wrong. At Intel you take the ball yourself and you let the air out and you fold the ball up and put it in your pocket. Then you take another ball and run with it, and when you’ve crossed the goal you take the second ball out of your pocket and reinflate it and score twelve points instead of six.”

  Grove was the most colorful person at Intel. He was a thin man in his mid-thirties with tight black curls all over his head. The curls ran down into a pair of muttonchops that seemed to run together like goulash with his mustache. Every day he wore either a turtleneck jersey or an open shirt with an ornamental chain dangling from his neck. He struck outsiders as the epitome of a style of the early 1970s known as California Groovy. In fact, Grove was the epitome of the religious principle that the greater the freedom—for example, the freedom to dress as you pleased—the greater the obligation to exercise discipline. Grove’s own groovy outfits were neat and clean. The truth was, he was a bit of a bear on
the subject of neatness and cleanliness. He held what he called “Mr. Clean inspections,” showing up in various work areas wearing his muttonchops and handlebar mustache and his Harry Belafonte shirt and the gleaming chainwork, inspecting offices for books stacked too high, papers strewn over desktops, doing everything short of running a white glove over the shelves, as if this were some California Groovy Communal version of Parris Island. Grove was also the inspiration for such items as the performance ratings and the Late List. Each employee received a report card periodically with a grade based on certain presumably objective standards. The grades were superior, exceeds requirements, meets requirements, marginally meets requirements, and does not meet requirements. This was the equivalent of A, B, C, D, and F in school. Noyce was all for it. “If you’re ambitious and hardworking,” he would say, “you want to be told how you’re doing.” In Noyce’s view, most of the young hotshots who were coming to work for Intel had never had the benefit of honest grades in their lives. In the late 1960s and early 1970s college faculties had been under pressure to give all students passing marks so they wouldn’t have to go off to Vietnam, and they had caved in, until the entire grading system was meaningless. At Intel they would learn what measuring up meant. The Late List was also like something from a strict school. Everyone was expected at work at 8 a.m. A record was kept of how many employees arrived after 8:10 a.m. If 7 percent or more were late for three months, then everybody in the section had to start signing in. There was no inevitable penalty for being late, however. It was up to each department head to make of the Late List what he saw fit. If he knew a man was working overtime every night on a certain project, then his presence on the Late List would probably be regarded as nothing more than that, a line on a piece of paper. At bottom—and this was part of the Intel Culture—Noyce and Grove knew that penalties were very nearly useless. Things like report cards and Late Lists worked only if they stimulated self-discipline.

  The worst form of discipline at Intel was to be called on the Antron II carpet before Noyce himself. Noyce insisted on ethical behavior in all dealings within the company and between companies. That was the word people used to describe his approach, “ethical”; that and “moral.” Noyce was known as a very aggressive businessman, but he stopped short of cutting throats—and he never talked about revenge. He would not tolerate peccadilloes such as little personal I’ll-reimburseit-on-Monday dips into the petty cash. Noyce’s Strong Silent stare, his Gary Cooper approach, could be mortifying as well as inspiring. When he was angry, his baritone voice never rose. He seemed like a powerful creature that only through the greatest self-control was refraining from an attack. He somehow created the impression that if pushed one more inch, he would fight. As a consequence he seldom had to. No one ever trifled with Bob Noyce.

  Noyce managed to create an ethical universe within an inherently amoral setting: the American business corporation in the second half of the twentieth century. At Intel there was good and there was evil, and there was freedom and there was discipline, and to an extraordinary degree employees internalized these matters, like members of Cromwell’s army. As the workforce grew at Intel, and the profits soared, labor unions, chiefly the International Association of Machinists and Aerospace Workers, the Teamsters, and the Stationary Engineers Union, made several attempts to organize Intel. Noyce made it known, albeit quietly, that he regarded unionization as a death threat to Intel, and to the semiconductor industry generally. Labor-management battles were part of the ancient terrain of the East. If Intel was divided into workers and bosses, with the implication that each side had to squeeze its money out of the hides of the other, the enterprise would be finished. Motivation would no longer be internal; it would be objectified in the deadly form of work rules and grievance procedures. The one time it came down to a vote, the union lost out by the considerable margin of four to one. Intel’s employees agreed with Noyce. Unions were part of the dead hand of the past … Noyce and Intel were on the road to El Dorado.

  By the early 1970s Noyce and Moore’s 1103 memory chip had given this brand-new company an entire corner of the semiconductor market. But that was only the start. Now a thirty-two-year-old Intel engineer named Ted Hoff came up with an invention as important as Noyce’s integrated circuit had been a decade earlier: the microprocessor. The microprocessor was known as “the computer on a chip,” because it put all the arithmetic and logic functions of a computer on a chip the size of the head of a tack. The possibilities for creating and using small computers now surpassed most people’s imagining, even within the industry. One of the more obvious possibilities was placing a small computer in the steering and braking mechanisms of a car that would take over for the driver in case of a skid or excessive speed on a curve.

  In Ted Hoff, Noyce was looking at proof enough of his hypothesis that out here on the electrical frontier the great flashes came to the young. Hoff was about the same age Noyce had been when he invented his integrated circuit. The glory was now Hoff’s. But Noyce took Hoff’s triumph as proof of a second hypothesis: If you created the right type of corporate community, the right type of autonomous congregation, genius would flower. Certainly the corporate numbers were flowering. The news of the microprocessor, on top of the success of the 1103 memory chip, nearly trebled the value of Intel stock from 1971 to 1973. Noyce’s own holdings were now worth $18.5 million. He was in roughly the same position as Josiah Grinnell a hundred years before, when Grinnell brought the Rock Island Railroad into Iowa.

  Noyce continued to live in the house in the Los Altos hills that he had bought in 1960. He was not reluctant to spend his money; he was merely reluctant to show it. He spent a fortune on landscaping, but you could do that and the world would be none the wiser. Gradually the house disappeared from view behind an enormous wall of trees, tropical bushes, and cockatoo flowers. Noyce had a pond created on the back lawn, a waterscape elaborate enough to put on a bus tour, but nobody other than guests ever saw it. The lawn stretched on for several acres and had a tennis court, a swimming pool, and more walls of boughs and hot-pastel blossoms, and the world saw none of that, either.

  Noyce drove a Porsche roadster, and he didn’t mind letting it out for a romp. Back East, when men made a great deal of money, they tended to put a higher and higher value on their own hides. Noyce, on the other hand, seemed to enjoy finding new ways to hang his out over the edge. He took up paragliding over the ski slopes at Aspen on a Rogolla wing. He built a Quicksilver hang glider and flew it off cliffs until a friend of his, a champion at the sport, fractured his pelvis and a leg flying a Quicksilver. He also took up scuba diving, and now he had his Porsche. The high-performance foreign sports car became one of the signatures of the successful Silicon Valley entrepreneur. The sports car was perfect. Its richness consisted of something small, dense, and hidden: the engineering beneath the body shell. Not only that, the very luxury of a sports car was the experience of driving it yourself. A sports car didn’t even suggest a life with servants. Porsches and Ferraris became the favorites. By 1975 the Ferrari agency in Los Gatos was the second biggest Ferrari agency on the West Coast. Noyce also bought a 1947 Republic Seabee amphibious airplane, so that he could take the family for weekends on the lakes in northern California. He now had two aircraft, but he flew the ships himself.

  Noyce was among the richest individuals on the San Francisco Peninsula, as well as the most important figure in the Silicon Valley, but his name seldom appeared in the San Francisco newspapers. When it did, it was in the business section, not on the society page. That, too, became the pattern for the new rich of the Silicon Valley. San Francisco was barely forty-five minutes up the Bayshore Freeway from Los Altos, but psychologically San Francisco was an entire continent away. It was a city whose luminaries kept looking back East, to New York, to see if they were doing things correctly.

  In 1974 Noyce wound up in a situation that to some seemed an alltoo-typical midlife in the Silicon Valley story. He and Betty, his wife of twenty-one years, were divo
rced, and the following year he “intramarried.” Noyce, who was forty-seven, married Intel’s personnel director, Ann Bowers, who was thirty-seven. The divorce was mentioned in the San Francisco Chronicle, but not as a social note. It was a major business story. Under California law, Betty received half the family’s assets. When word got out that she was going to sell off $6 million of her Intel stock in the interest of diversifying her fortune, it threw the entire market in Intel stock into a temporary spin. Betty left California and went to live in a village on the coast of Maine. Noyce kept the house in Los Altos.

  By this time, the mid-1970s, the Silicon Valley had become the late-twentieth-century-California version of a new city, and Noyce and other entrepreneurs began to indulge in some introspection. For ten years, thanks to racial hostilities and the leftist politics of the antiwar movement, the national press had dwelled on the subject of ethnic backgrounds. This in itself tended to make the engineers and entrepreneurs of the Silicon Valley conscious of how similar most of them were. Most of the major figures, like Noyce himself, had grown up and gone to college in small towns in the Middle West and the West. John Bardeen had grown up in and gone to college in Madison, Wisconsin. Walter Brattain had grown up in and gone to college in Washington. Shockley grew up in Palo Alto at a time when it was a small college town and went to the California Institute of Technology. Jack Kilby was born in Jefferson City, Missouri, and went to college at the University of Illinois. William Hewlett was born in Ann Arbor and went to school at Stanford. David Packard grew up in Pueblo, Colorado, and went to Stanford. Oliver Buckley grew up in Sloane, Iowa, and went to college at Grinnell. Lee De Forest came from Council Bluffs, Iowa (and went to Yale). And Thomas Edison grew up in Port Huron, Michigan, and didn’t go to college at all.