The best question a leader can ask: “What would my replacement do?”
- Intel’s 1985 annual report opened with the words: “It was a miserable year for Intel.”
- CEO Gordon Moore and president Andrew Grove had to make a momentous decision: double down on memory chips or pivot towards microprocessors?
- To crystallize their thinking Grove posed a hypothetical question: “If we were replaced, what would our replacements do?” The rest is history.
In the early 1980s, there was an air of optimism in the United States. Paul Volcker, the chair of the Federal Reserve at the time, had licked inflation, and the stock market was rising after seventeen years of going sideways. Madonna and Michael Jackson were burning up the charts, and a new TV station focused on music videos was revolutionizing the entertainment industry and youth culture.
But at Intel, CEO Gordon Moore and president Andrew Grove were not along for the ride. Their 1985 annual report opened with, “It was a miserable year for Intel and the semiconductor industry.” Both Moore and Grove had been with the company since its inception in 1968, Moore as cofounder and Grove as head of engineering. Since then, they had built Intel into a highly successful tech behemoth with twenty-three thousand employees and $1.6 billion annual revenue (about $4.6 billion in 2024 dollars).
Moore and Grove could rightly be proud of the company they had built. Their decisions, designs, and approach in running Intel had made the pair wealthy and famous, at least in Silicon Valley and the wider business world. Additionally, Moore was a technology thought leader known for “Moore’s law,” which postulated that the number of transistors on an integrated circuit doubles every two years.
Intel’s success rested on its main product: memory chips, an essential component of every computer. But they had also developed the 4004 microprocessor. While memory chips store data, microprocessors process it, analyzing inputs and information. They are more complicated, expensive, and harder to manufacture. Although a small part of the company’s business, the 4004 had been commercially successful. What was pressuring Intel, however, was that the market for memory chips had become commoditized. Competition on price and quality from Japanese and Korean manufacturers shrank Intel’s revenues and reduced earnings to nearly zero.
Moore and Grove had a decision to make: stick with memory chips or shift their firm to microprocessors. The company did not have the resources to do both. The decision would determine the future and fate of the company.
For a year, Moore and Grove debated what to do. Despite the uncertainty, it seemed like a straightforward strategic decision to go all-in on microprocessors. The complex design and manufacture would play to the strength of the company’s technological prowess, and Intel had already demonstrated their capabilities with the 4004. The IBM personal computer (PC) was built with Intel’s microprocessor, and the demand for IBM PCs was increasing, along with the proliferation of additional PC manufacturers, which also used the Intel microprocessor. In fact, they could not keep up with demand. Nevertheless, Moore and Grove were paralyzed. They maintained the status quo — in essence, deciding by not deciding. They could not bring themselves to walk away from their legacy product.
As Grove explained, “Our priorities were formed by our identity; after all, memories were us.” Based on years of experience, the people of Intel, including Moore and Grove, had two strongly held beliefs about how their business ran and how to be successful. First, memory chips were the technological driver of all their products. Second, Intel needed to offer clients a full product line, which would always include memory chips. Because of these beliefs, the only acceptable question at Intel was, How are we going to make memory chips?, not What should we make? Their decision-making was unnecessarily restricted to the concrete choices around how they should make memory chips, not whether they should make memory chips.
Even when they allowed themselves to ask the question in an abstract way, their minds could not seriously entertain any answer other than continuing as a memory chip company. It was just too painful to walk away from their flagship product. The attachment was too strong, and it would have meant admitting that somewhere in the past, they had made a wrong turn.
Then, in one meeting, Grove posed a hypothetical question: “If we were replaced, what would our replacements do?” Instantaneously, with this reframe, the answer became clear. Grove tells the story:
I remember a time in the middle of 1985, after this aimless wandering had been going on for almost a year. I was in my office with Intel’s chairman and CEO, Gordon Moore, and we were discussing our quandary. Our mood was downbeat. I looked out the window at the Ferris wheel of the Great America amusement park revolving in the distance, then I turned back to Gordon and asked, “If we got kicked out and the board brought in a new CEO, what do you think he would do?” Gordon answered without hesitation, “He would get us out of memories.” I stared at him, numb, then said, “Why shouldn’t you and I walk out the door, come back and do it ourselves?”
In 1985, Intel shifted focus to producing microprocessors. That same year, C++ launched, Nintendo came out, and Michael Dell founded his PC company. The computer revolution was on.
After being stuck for a year, the jump to the self-distanced state resulted in a flash of insight.
When Moore and Grove metaphorically walked out the door and came back as “their replacements,” they each exited their self-immersed state, became someone else, and looked at their situation from a distance. That neutral and objective perspective allowed them to detach from their ego, along with the need to defend it and all their past decisions. They dispelled the social threat and the threat to their identity by removing the oldest and most persistent barrier to seeing the situation clearly: themselves.
After being stuck for a year, the jump to the self-distanced state resulted in a flash of insight, triggered by frustration and a gaze out the window at a Ferris wheel. The distanced perspective instantly unlocked the answer to their problem.
In the self-distanced state we have an objective, external, third-person view from which we see ourselves and our situation without bias. By temporarily removing ourselves from the singular first-person point of view, which is inextricably informed by our memories, prejudices, hopes, and hurts, we are able to see and think more clearly, unencumbered by our personal experiences and feelings — and our need to look good or defend ourselves. The distanced self is not preoccupied with image preservation but is focused on the task. In this state, we are open, aware, relaxed, and curious. This creates a clarity that is often lost in a world where it is all about me, myself, and I. The distanced self is the opposite of egocentric. There’s no need for the distanced self to be defensive because, well, that wasn’t me making those decisions, so I am not attached to them.
This approach may seem to fly in the face of a popular sentiment, in which we are often urged to “be yourself,” “be present,” or “be in the moment” — but if we are present in the moment while being self-immersed, we can lose sight of the bigger picture, unnecessarily restrict our freedom of choice, fail to notice we are passively deciding, or just plain make the wrong decision.
