Intel's Dreamers Make Room For A Details Man

Craig Barrett emerges from the shadow of the founding troika to take over as the company's president

Some people think like poets or designers. But Intel Corp.'s Craig R. Barrett thinks like a manufacturer. Back-country camping in Montana a few years back with his friend James K. Allred and their wives, Barrett was treated to homemade berry wine by the caretaker of their rustic cabin. While the others sipped their wine and gazed at the scenery, Allred recalls, Barrett whipped into gear. How many pounds of wild berries were required for each quart of wine, he asked. What was the annual berry harvest? In no time, he computed the daily wine production.

That might not be everyone's idea of fun, but for 57-year-old Barrett, such fascination with detail have paid off handsomely. On May 21, he steps up from chief operating officer to president of Intel, the first person outside the company's famous founding troika of Gordon E. Moore, Robert N. Noyce, and Andrew S. Grove to hold the post. He faces an immediate challenge: On May 13, Digital Equipment Corp. and Cyrix Corp. filed patent-infringement suits against the giant chipmaker. Intel called DEC's charges invalid and said it had yet to review the Cyrix suit.

SPECTACULAR. Barret's new job puts him first in line to succeed Grove when the feisty 60-year-old chief executive retires--though there's no sign that's imminent. A 23-year Intel veteran, Barrett has outlasted or outperformed a half-dozen other pretenders to the title. "He went about it the old-fashioned way--he earned it," quips Grove.

Barrett did far more than win a simple promotion. Since becoming head of manufacturing in 1985 and COO in 1993, he has built Intel into a manufacturing powerhouse that leads the industry in productivity and chipmaking techniques. Just in the past four years, Intel has spent or budgeted more than $15 billion on plant and equipment and opened 6 chip factories, for a total of 11. "Craig was the leader in turning Intel from a 50-pound weakling in chip manufacturing into a 500-pound gorilla," says analyst Daniel L. Klesken of Robertson, Stephens & Co. The results have been spectacular. Since 1993, Intel's revenues have surged from $8.8 billion to $20.8 billion, and its share of the microprocessor market has topped 90%. Says Jack C. Carsten, a former Intel executive who runs a Silicon Valley venture-capital fund: "Barrett has put together a machine every bit as magnificent as [Alfred P.] Sloan's GM in its day, but even more dominant."

Indeed, manufacturing prowess is Intel's not-so-secret weapon. Although the company is most often viewed as a master marketer--thanks to its knack for creating brand identification in the once esoteric world of microprocessors--its success has hinged on the ability to produce hundreds of millions of complex chips better than anyone else. "I had the operations role before Craig and thought I was pretty good at it," says Grove. "But I hang my head in shame at how well he's done."

"BIG BITE." Surrounded by giants such as Moore and Grove, Barrett rose through Intel's ranks mostly out of the limelight. He admits to having felt intimidated when he signed on in 1974 after 11 years as a professor of materials science at Stanford University. But his cool, patrician bearing notwithstanding, Barrett is "one tough cookie," says Jonathan J. Joseph, an analyst with Montgomery Securities. Case in point: Barrett used to carry a baseball bat into meetings--"to direct the discussion in a productive fashion," he jokes. In his annual 360-degree performance review, he recalls with a hint of pride, a subordinate said that "Andy was big bark, little bite, and I was little bark, big bite."

Barrett and Grove have starkly different personalities. Grove is fiery and voluble while Barrett is somber, methodical, and analytical. "Andy has a great sense of the market and a vision for where things are going but not a great feel for how to get there," says Allred, a former Intel manager who heads Eskay Corp., a maker of factory automation gear. Barrett, by contrast, "is the guy who took Andy's vision and got Intel there." Barrett takes a similar view. Grove "focuses on bigger strategic issues, the longer-range, the industry visionary stuff," he says, adding with a smile: "I got stuck with all the operational stuff."

At play as at work, Barrett displays remarkable vigor. He bicycled 575 miles from Utah to Mexico five years ago with his friend Lattie F. Coor, president of Arizona State University, ducking out midtrip for two days of Intel meetings. Coor also recalls a memorable, if brief, vacation the two men and their wives took in northern Arizona a year later. Barrett flew in late at night from Osaka, Japan, rose at dawn and trekked 22 miles through a canyon, stayed up until midnight enjoying a campfire dinner, then flew to New York the next morning. Says Coor: "He has an extraordinary sense of energy in his work and personal life."

That energy helps him survive a punishing schedule. When he's not traveling for business, which is half the time, Barrett lives in Phoenix and commutes once a week to Intel's Santa Clara (Calif.) headquarters. "I'm a poster boy for the mobile electronic office," he says. He and his wife, Barbara, escape once a month to their 350-acre guest ranch in western Montana. There they hike, ride, and entertain colleagues and family, including Barrett's two grown children from his first marriage. Visitors relish his dry wit and sense of fun, but they speak mostly of his abiding passion, fly fishing. Barrett and Gordon Moore once even fished the water hazards in a golf course near Intel's chip plant in Ireland.

Barrett met Barbara on a 110-degree evening in 1980 atop Phoenix' Squaw Peak, where both had hiked. They married in 1985. Now 46, Barbara worked as an attorney for Greyhound Corp. and was named to the Civil Aeronautics Board by President Ronald Reagan in 1982. In 1994, she spent $1 million of her own money seeking the GOP nomination for Arizona governor but got just 32% of the vote.

Life wasn't always so sweet for Barrett, who grew up south of San Francisco, one of three kids in a lower-middle-class family. A scholarship to Stanford in metallurgy led to a PhD and a tenured professorship, but "I wanted to do something that was faster action," he says. After taking a one-year leave to work at Intel in 1973, Barrett returned to Stanford, but soon quit to join the fledgling chipmaker for good. His big break came in 1985, the year Intel decided to exit the memory chip business and focus on microprocessors. Named head of manufacturing, Barrett set out to double output. By 1988, he had surpassed that goal. By 1996, productivity had soared sevenfold.

Barrett's signature innovation is Copy Exactly, a scheme that requires all Intel plants to use precisely the same equipment and procedures to reduce variation and boost quality. "We're pretty extreme about it--even down to the color of the paint," says Gerhard H. Parker, executive vice-president of technology and manufacturing. The plan worked so well that Intel was able to convince customers such as Dell Computer Corp. that they didn't need alternative sources for Intel-designed chips. That led to a near-monopoly market position--and lush profits.

HEIR APPARENT. Grove isn't talking about retiring, but he did battle prostate cancer last year. And some observers think that, having ridden Intel's success to acclaim in the last decade, he may be ready to consider retirement. The only question about Barrett's leadership is how well he'll manage without Grove nearby playing the dreamer. People worry that he "doesn't have the vision and personality that it takes," says one former employee. But "Barrett has kept to himself to minimize any appearance of conflict with Grove," argues Carsten. "Now he will show he has much more vision and insight than people expect."

What Barrett lacks in star power, he makes up for in credibility. After all, he's the one who has driven Intel to deliver on a famous "law" articulated by founder Moore: that the number of transistors on a chip will double every two years. "Barrett made Moore's Law come true," says G. Carl Everett Jr., who retired last January as senior vice-president of the desktop products group. With a legacy like that, Barrett is fast on his way to joining the pantheon that has made Intel a business legend.

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