OKR Example: Operation Crush

John Doerr on Intel’s Microprocessor War

I’d like to tell you the story of how one person realigned a billion-dollar company.

Near the end of my time at Intel, the company faced an existential threat. Led by Andy Grove, top management rebooted the company’s priorities in a span of four weeks. OKRs allowed Intel to execute a battle plan with clarity, precision, and lightning speed. The entire workforce shifted its gears to focus together on one prodigious goal.

It was back in 1971 that Intel engineer Ted Hoff invented the original microprocessor, the multipurpose “computer-on-a-chip.” In 1975, Bill Gates and Paul Allen programmed the third-generation Intel 8080 and launched the personal computer revolution. By 1978, Intel had developed the first high-performance, 16-bit microprocessor, the 8086, which found a ready market. But soon it was getting beaten to a pulp by two chips that were faster and easier to program, Motorola’s 68000 and upstart Zilog’s Z8000.

In late November 1979, a district sales manager, Don Buckout, shot off a desperate eight-page telex to headquarters. Buckout’s boss, Casey Powell, sent it on to Andy Grove, then Intel’s president and chief operating officer. And that communiqué set off a five-alarm fire and a corporate crusade. Within a week, the executive staff met to confront the bad news.

One week after that, a blue-ribbon task force convened to map out Intel’s counteroffensive. Zilog, everyone agreed, wasn’t a serious threat. But Motorola, an industry Goliath and international brand, posed a clear and present danger.

Only one company was competing with us, and that was Motorola. “The 68000 is the competition. We have to beat Motorola, that’s the name of the game. We have to crush them.”

OKR Example: Operation Crush

The company created this OKR: “Establish the 8086 as the highest performance 16-bit microprocessor family.”

That OKR became the rallying cry for Operation Crush, the campaign to restore Intel to its rightful place as market leader. By January 1980, armed with Andy Grove videos to spur on the troops, Crush teams were dispatched to field offices around the globe. By the second quarter, Intel’s sales organization had fully deployed the new strategy. By the third quarter, they were on their way toward meeting one of the most daring Objectives in the history of tech, namely, two thousand “design wins.” The crucial agreements to adopt the 8086 were in customers’ appliances and devices. By the end of that calendar year, Intel had routed Motorola and won a resounding victory.

Not one Intel product was modified for Crush. But Grove and his executive team altered the terms of engagement. They revamped their marketing to play to the company’s strengths. They steered customers to see the value of long-term systems and services versus short-term ease of programming. They stopped selling to programmers and instead sold to CEOs.

The lesson here? Culture counts.

Andy Grove expected people to bring problems to his attention. When a field engineer brought a glaring problem to management’s attention, there was just two weeks to realign across the entire company. It was terribly important that Don Buckout and Casey Powell felt they could speak their minds without retribution. Without that, there’s no Operation Crush.

Andy Grove was accustomed to having the last word, so let’s give it to him here. “Bad companies,” Andy wrote, “are destroyed by crisis. Good companies survive them. Great companies are improved by them.”

And so it was for Operation Crush. By 1986, when Intel dumped its formative memory-chip business to go all-in on microprocessors, the 8086 had recaptured 85 percent of the 16-bit market. A bargain-priced variation of it, the 8088, found fame and fortune inside the first IBM PC, which would standardize the personal computer platform.

And as we’ve seen, none of this would have happened without OKRs.