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The One Man Who Could Save Intel

Sometimes I wonder if boards think CEO is a throwaway job. Considering that boards used to have a ton of ex-CEOs on them, and given the historic bad choices that have badly hurt or destroyed companies, you’d think someone would have developed a decent process to pick a good CEO.

IBM, which just reported impressively good earnings, might be a good place to start if you were looking for one, given that it has done this, largely successfully, for a century. It identified candidates early, and you can see the impressive results from its training in Lisa Su’s execution at AMD.

You’d think that firms at least would learn from their mistakes. Old HP picked Carly Fiorina, who was a train wreck for the firm, then went to Mark Hurd who (before being fired) showcased that relevant skills were critical, and then followed him with Leo Apotheker and Meg Whitman — neither of whom had the requisite skills. (Ironically, when HP was spun out from HPE, Dion Weisler, Whitman’s pick, turned out to be excellent.)

Yahoo went from disaster CEO to disaster CEO and finally was sold for a small fraction of what it was worth.

Intel now seems to have the second bad CEO since founder Andy Grove left the company, and I can’t imagine what the heck Andy Bryant (Intel’s chairman), was thinking in selecting and keeping Brian Krzanich at the helm.

In addition to Andy Bryant, there are three people on Intel’s board who should know better: Aneel Bhusri, who runs an HR firm; Reed E. Hundt, who provides strategic advice; and Gregory D. Smith, CFO and EVP for performance and strategy at Boeing. I wonder if they think they won’t be held accountable if Intel fails?

Sqoop sent me an alert on Krzanich’s SEC 4 filing for his problematic US$25M stock sale confirming he massively changed the amount of stock he was going to sell after he knew of the huge Intel security problem but before it was disclosed to the rest of us.

With an increasing number of folks suggesting Brian Krzanich should step down, I think it’s likely he will be gone by mid-year, and I have a suggestion for who should replace him.

I’ll close with my product of the week: a new (to me) tool that helped me write this piece: Sqoop. In an era of fake news, it is a reliable public data search and alerting service.

Avoiding the Psychopath CEO

There has been a high correlation between folks who become CEOs and a mental deficiency termed “psychopath.” The incidence rate is around 4x the general population. (As a group, CEOs have more than any other job title.)

Psychopaths lack the behavior controls and tender feelings the rest of us take for granted. This behavioral problem actually can be an asset if the firm is on the ropes and large numbers of folks have to be laid off in order for it to survive. The guilt could cripple a normal CEO.

However, if the firm isn’t in distress, this behavioral problem can put the firm in distress. The problematic CEO can focus excessively on personal benefits, elimination of perceived rivals, and cost cutting until the firm fails.

Because of this, I think executives with this behavioral problem should be weeded out of the executive pool, as they’ll likely do their firms more damage than good over the course of their careers.

Empathy is critical to any effective manager, and layoffs should be hard. Doing a lot of them can crush a company culture and destroy the firm’s ability to execute.

Psychopaths tend to revel in being cruel and often are defined by angry outbursts that are triggered if anyone questions their status. Natural rule-breakers, they often get in trouble with affairs, are caught doing insider trading or misappropriating company assets, and tend to be scandal magnets. They are known to cover up past indiscretions and inflate their accomplishments.

What is problematic is that when they become CEOs, they often think that whatever controls they used early in their careers no longer apply, and they go off the rails.

Sadly, this means that their psychopathic behavior may not be that obvious while they are working up in the organization but can be incredibly obvious once they are in the job of CEO.

You’d think that boards would have a process to weed out psychopaths from their CEO pools so that rather than being 4x the norm, psychopaths would be even less common in CEO ranks than in the general population.

However, psychopaths are good at getting rid of the CEOs above them and eliminating any competition for the job. Finally, they are extremely good at dodging blame. Wherever the buck stops, it never stops at their desk — particularly when the problem is their fault.

Warning Signs

While there are psychopath tests (by the way, if you just look at this test you can see the kind of mindset that quickly identifies as a psychopath), it is doubtful you’ll be able to get a candidate to take one honestly rather than game it. You can game psychiatrists as well, so that isn’t a reliable measure (though I sure would use one just to protect my own butt were I on Intel’s board).

Red flags include things like an open marriage, no kids or a lack of connection to their children, history of infidelity or multiple marriages, a lack of loyalty to their current employer, a willingness to break rules to get the job, excessive focus on compensation, and a near psychic ability to tell you what you wanted to hear. You might also look to see if they mentored subordinates or protected superiors.

Once in the job, if you get a CEO who was hired to take the firm to smartphones and diversify, but instead kills the related efforts (smartphones, wearables, makers etc.) and then sells every share of stock he has in a sequence that looks both like insider trading and total lack of confidence in the company he is running, then it is time for a new CEO. Just saying.

Wrapping Up: The CEO Who Could Save Intel

Intel is a mess, but it got there largely due to bad CEO choices. What I think is particularly sad is that Paul Otellini, Brian’s predecessor, was a far better CEO for Intel than Brian Krzanich is. Sadly, like many CEOs forced out of their jobs, Paul died last year. Something else that should concern us more is the number of CEOs who decline rapidly after they leave that job.

Intel needs its heart back. The last few years have seen a massive purge of loyal Intel employees and executives, the destruction of much of Intel’s support structure, and an excessive focus on litigation over execution (Qualcomm and threatened against Microsoft).

Intel needs someone who can come in and restore the company’s ability to execute without further disruption.

There is only one person who has both the experience and the pedigree to do this. That person is Pat Gelsinger, whom I’ve often thought of as the heart of old Intel.

Gelsinger was Intel’s first CTO. He drove much of the initial wave of cool PCs, and developed one of Intel’s iconic processors. I know him, and he is both one of the most capable and conscientious executives I’ve ever met.

Currently he is running VMware, and given how he was treated at Intel I have my doubts whether his wife would support his returning — but I know Pat still cares about the company, and he has both the experience and compassion to get Intel back to becoming a firm that can execute rather than one that is being destroyed from within.

I can almost hear every existing and past Intel employee chanting, “Help us Pat Gelsinger, you are our only hope.”

Rob Enderle's Product of the Week

We are surrounded by fake news. For a lot of us who write and invest, fake news can get us in a ton of trouble.

When I was thinking about what to write this week, I got an alert from Sqoop that provided the actual Form 4 disclosures for Brian Krzanich that showcase what may be insider trading. (I’m an ex-internal auditor, and things like this really torque me off).

Once you set up your profile, Sqoop emails you alerts on litigation, stock filings, and other documented information on the companies you cover or invest in.


Given how many top executives have been losing their jobs due to sexual abuse, often related to filed law suits, just the litigation coverage alone is incredibly helpful and can lead to a better story or better protected investment.

Today, more than ever, we need good sources for real facts, not fake news. That’s what Sqoop is, and that makes it my product of the week.

Rob Enderle

Rob Enderle has been an ECT News Network columnist since 2003. His areas of interest include AI, autonomous driving, drones, personal technology, emerging technology, regulation, litigation, M&E, and technology in politics. He has undergrad degrees in merchandising and manpower management, and an MBA in human resources, marketing and computer science. He is also a certified management accountant. Enderle currently is president and principal analyst of the Enderle Group. He formerly served as a senior research fellow at Giga Information Group and Forrester. Email Rob.

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