Updated Jan. 17, 2021
Intel Believes It Can Do Well by Doing Good
Last week, Pat Gelsinger came back to his alma mater to take the helm from Bob Swan. When Swan took over as CEO of Intel in 2019, he began to steer the company toward doing more activity directly in the public interest. This was not the sort of behavior one normally expects from a for-profit company in a capitalist society, but he seemed to be making some headway when the board replaced him with Gelsinger.
Gelsinger has deep knowledge of semiconductor technology (in comparison to Swan, who is a finance guy). While I have no doubt that Gelsinger is the right choice now for the company, which has lost its crown as the silicon process-node leader, I do hope that he retains some of Swan’s programs.
Whether any private company has an obligation, other than paying taxes, to look after the public interest is a matter for debate.
When asked by the City of Cupertino to put up free WiFi for residents in return for a building permit for the new headquarters, Apple cofounder Steve Jobs once said, “See, I’m a simpleton. I’ve always had this view that we pay taxes, and the city should do those things. That’s why we pay taxes. Now, if we can get out of paying taxes, I’ll be glad to put up WiFi.” And the room guffawed.
That is the traditional division of labor in this country. Companies make money, satisfy shareholders, and pay bills, employees, and taxes. Public entities take in taxes, decide what to do with the money, and pay for public works. But as anyone can see, this system has led to rich companies and an impoverished public sector, rather than something more balanced.
Initially surprising, Intel’s public-minded stance under Swan began to make more sense over time. In November, the company held its annual Industry Analyst Summit, this time virtually, and leaned into the theme of doing the right thing for sound business reasons, rather than because some regulator is telling you to.
Swan touched on this theme in his opening remarks, but left it up to Sandra Rivera, executive vice president and Intel’s Chief People Officer, to lay out the case. Note that Rivera is female, a second-generation American whose parents were born in Colombia, and a senior officer of the company. That alone speaks volumes. But just in case you got the misimpression that she’s a “diversity hire,” Rivera has actually been at Intel for 20 years, and not just ran the Network Platforms Group with its 3,000 employees, but expanded its market presence dramatically, making Intel into a global player in network products.
Rivera made the argument that a strong culture is a force multiplier for business outcomes, that people care about social issues, and that younger employees entering the workforce are more likely to join a company that promotes altruism, fairness, diversity, and social responsibility. If you want the best talent, you have to get with the new program.
She drew a direct link between harnessing different points of view and business value, noting that diverse teams come up with better solutions. One only has to look at how artificial intelligence has failed to recognize Black faces as well as white faces to see how a more-diverse team might have found a better way.
And Intel is putting its money where its citizenship values are. Rivera described a virtual internship program that the company ran this past summer (when no one could travel because of Covid-19). More than 5,700 interns from 32 countries participated, and Intel employees dedicated a lot of time and energy to mentoring this group. She noted that nearly half of them would be joining the company full time.
With a mantra of RISE (responsible, inclusive, sustainable, enabling), Rivera pointed out that these values also help drive Intel’s customers to make their products more accessible. Other ways the company is adhering to RISE include a willingness to share with other companies data that might otherwise be hoarded and a commitment to transparency, even when the company might look better eliding some unpleasant reality.
Aside from data, Rivera said the company hoped to share its goals with partners, suppliers, and customers. For this task, Intel has created a Global Inclusion Index (GIX), a way of measuring and publishing progress on defined and quantified goals. She noted that the index might not always show progress, and that it was important to accept this information and use it to improve future outcomes.
During Q&A, Rivera described how relationships in a company environment can progress from coaching, through mentoring, and finally to sponsorship if all the right elements are in place. Analysts wondered about hurdles to this idealistic plan, and she pointed to institutional inertia as something that needs to be overcome. She noted that cultural differences between newcomers to the company and longtimers can be an issue and that people need to “be comfortable with not being comfortable.”
One skeptic doubted that the company’s position on such issues as diversity, inclusion, and fairness could be squared with the culture of winning inculcated by Andy Grove, Intel’s formidable former CEO, who wrote, among other works, “Only the Paranoid Survive.”
Rivera must have heard that one before because she had a ready answer. She asserted that a diverse organization can compete effectively and that ultimately “the market is the arbiter.”
Under Gelsinger, we may have an opportunity to see Intel prove that the Swan philosophy will lead to better business outcomes. The lopsided competitiveness of the U.S. private sector has not led to the best outcomes for society as a whole. If the company shows that it can do well by doing good, then maybe such beliefs will spread further afield.
While Gelsinger is a highly competitive individual, he has also shown a certain religious and philosophical mindset. This disposition may lead him to respect at least some of Swan’s initiatives.