…and calling it pulling off a comeback “that will be studied in business schools for generations to come“.
Lip-Bu Tan from Intel has an incredible job at the moment.
He’s taken over Intel, a struggling chipmaker – a legendary tech giant which continue to power many if not most of our personal computing devices.
Rolling back the years
Intel and I go way back. As a child, my father, an engineer-turned-systems-analyst was responsible for IT procurement at his company, and would bring gadgets home for me to tinker with. My first real computer that wasn’t a retired Intel 286 or 386 on MS-DOS was an Intel Pentium – a custom build with a 133Mhz clock speed miniscule by today’s standards – assembled by my cousin, a computer science freshman at Carnegie Mellon, during his summer holidays. This was preloaded with basic games, like Minesweeper, Pacman and a nascent 3D racing game.
Despite my father’s job, my family was always very late to new tech – while all my friends had the early iterations of gaming PCs that ran sophisticated Command and Conquer games, it was only much later that we upgraded our computer.
As a teenager, I would then go on to assemble my very own PC – a Pentium 4 with 2.26Ghz processor. One afternoon, Dad decided it was time for us to get a new family PC and brought me shopping.
2.26Ghz – a clock speed with two decimal places – I still think it strange. I didn’t ask Dad why we didn’t go for the more conventional but marginally more expensive 2.4Ghz version. We weren’t broke but we were far from wealthy either. Money certainly wasn’t easy to come by, and we were grateful for his job.
But I did ask him one question – why wouldn’t we buy AMD parts instead?
After all – chipmaker AMD, which stands for Advanced Micro Devices, had just released its Athlon XP series of processors. The marketing moniker “XP” fit so nicely with the launch of Windows XP with its sleek, customisable desktop interface. It sounded so cool. The best part? The AMD Athlons seemed like great value. The top-end processors were even cheaper than mid-range Intel parts, and they were marketed as being faster.
(Source: Wikipedia)
Dad said we’d go with Intel – not just for the processor, but we also bought an Intel motherboard to go with it. Intel represents quality, he said. Let’s buy the best Intel we can afford.
That was one of the happiest moments of my childhood, before the dark days that lay ahead with mum’s impending cancer. I was happy to own and build my first computer with my father, which served us well for many, many years to come – surviving all my tinkering and plenty of incremental “upgrades” which I would purchase with any leftover pocket money from the neighbourhood IT store. I would then go on to build many custom PCs throughout my youth and adulthood, but my interest in AMD was already piqued from that one buying decision. I never bought an Intel processor again since my first – only AMD from then on.
AMD simply seemed to get better, and better, and better. When they acquired the ATI, the GPU company in perpetual competition with the A.I. superstar, Nvidia, I was stoked. That meant I could have an all-AMD system: both processor and graphics cards. And for much cheaper than a comparative Intel system – which tended to be faster, but a lot more expensive. I was happy with “good enough”. As far as I was concerned, they were great performers at a value price point, and most lasted for years without issue.
My journey of building computers from parts and the dichotomy of picking competing brands mirrors the duelling between Intel and AMD – best encapsulated in its stock price movements over the years.
I won’t go into the details of Intel’s decline and its incredible reversal of fortunes, juxtaposed against the meteoric rise of AMD. There’s plenty of literature on this detailing the strategic missteps, missed market opportunities, and intensified competition that has led to its current state –including AMD’s incredible rise coupled with another industry giant, TSMC.
Most crucially, Intel never took GPUs seriously, badly lost their pole position on advanced manufacturing, and failed to capitalise on the rise of A.I. When it had an early opportunity to invest in OpenAI, it declined.
Intel’s corporate culture, which prioritised margins over market opportunities, has been criticised for hindering innovation and adaptability. Most importantly, it is seen to have completely lost cost effectiveness. They are still a highly innovative company with brilliant engineers. But as the word “organisation” suggests, running a company is more than a collective of individual talent, but indeed, how we organise ourselves to work.
Here’s some additional research with some help from Gen A.I.:
Erosion of Engineering-Driven Focus: Historically, Intel’s culture was deeply rooted in engineering excellence and technical innovation. Some argue that a shift towards a more sales and marketing-focused approach, particularly with the appointment of non-engineer CEOs, led to a decline in the prioritisation of fundamental technological advancements. This shift has been perceived to result in a slower response to emerging technological trends and a decreased emphasis on long-term, groundbreaking innovation. For example, some analysts point to the decision to prioritise more profitable segments over the mobile chip market as a consequence of this shift.
Internal Politics and Siloed Structure: Reports and anecdotes from former employees suggest that Intel’s internal environment became increasingly political and siloed. This could lead to power struggles between different departments, hindering collaboration and slowing down decision-making processes. When technical decisions are overshadowed by political maneuvering, genuinely innovative projects that don’t offer immediate financial benefits might be sidelined or canceled. This stifled the free flow of ideas and created inefficiencies.
Risk Aversion and Bureaucracy: There was a growing risk-averse culture within Intel, coupled with increasing bureaucratic processes. This can make it difficult for new ideas to gain traction and resources. A culture that demands guaranteed massive returns with minimal risk might struggle to foster the kind of bold experimentation needed for disruptive innovation. The need for numerous approvals and adherence to rigid processes can slow down product development and make the company less agile in responding to market changes.
Complacency from Past Dominance: Having enjoyed a long period of market leadership, Intel’s culture might have developed a degree of complacency over emerging competitors and a slower adaptation to changing market dynamics. The belief in their manufacturing superiority might have made them less receptive to the rise of fabless chip designers and the importance of power efficiency in new markets like mobile. Missing the significance of the mobile revolution is often cited as an example of this.
Challenges in Talent Retention and Motivation: Some reports suggest that stagnant wages, periodic layoffs, and a perceived lack of growth opportunities have impacted employee morale and retention. When talented engineers and technical staff feel undervalued or demotivated, it can lead to a decline in innovation and make it harder for the company to attract and retain the best talent needed to drive future success. The perception of Intel as merely a “stepping stone” job reflects a deeper cultural problem affecting long-term commitment and innovation.
So let’s talk about culture.
Cue Lip-Bu Tan’s entrance in March 2025.
He was the CEO of Cadence Design Systems for over a decade and also served as its chairman until 2023. Tan has a background in nuclear engineering and venture capital, with experience in both the semiconductor and software industries. He is also known for his involvement with Walden International, a venture capital firm he co-founded. Under Tan’s leadership, Cadence’s revenue doubled and its stock price rose by over 3,200%.
What caught my eye apart from Tan’s Singaporean roots (as a Johorean Malaysian who studied in Singapore) – is the way he addressed employees in a recent memo, which, apart from suggesting deep-set cultural problems at Intel, is also very galvanising in nature.
I did a bit of sentiment analysis that I’ve recapped below along with his note, ad verbatim. The key learning here is that he has not glazed positive sentiment – every line is dripping with both implicit and explicit negations (i.e. directly calling out pain points), and in a highly critical tone-of-voice. Despite speaking to the current challenges – the message is invitational, rallying, and assures he will be here to see it through.
Key Positive Sentiments:
- Decisive Action and Urgency: Tan clearly communicates a sense of urgency and a commitment to taking “important changes” to address perceived issues, by using phrases like “we need to change” and “move as quickly as possible”.
- Return to Engineering Roots: Tan suggests a renewed prioritisation of innovation and technical expertise, with an emphasis on “Becoming an Engineering-Focused Company” and empowering engineers. The biggest proof point? Returning its core engineering operations to the top of the organisation – the Executive Team.
- Organisational Flattening: Removing bureaucracy is presented as a way to increase agility and speed, which is viewed positively as a necessary step to compete effectively. In my view, there is no point hiding this fact from the outset. Might as well address the elephant in the room. Directness appreciated.
- Streamlining Processes: A renewed focus on simplifying processes, reducing unnecessary meetings, and improving data insights is more than an attack on inefficiency, but also about reshaping ways of working. Very brave to make “formal insights and OKRs optional” – these have likely become blockers.
- Cost Reduction for Investment: The announcement of reduced operating expense and capital spending targets is framed as a necessary step to free up resources for crucial engineering investments.
- Direct Communication and Transparency (Intended): While workforce reduction is mentioned, it’s framed within the context of necessary changes, and Tan commits to keeping employees “regularly informed,” suggesting an intention for transparent communication during a difficult period.
- Customer Focus: The memo explicitly mentions maximising time spent focusing on customers, indicating a commitment to better serving their needs.
- Learning from the Past: The acknowledgement of “valuable lessons from past actions” suggests a thoughtful approach to the changes being implemented.
Neutral/Potentially Negative Aspects (Mitigated by Positive Framing):
- Workforce Reduction: The statement that the “critical changes will reduce the size of our workforce” is undoubtedly negative for those affected. However, in the context of the memo, it’s presented as an unavoidable consequence of necessary restructuring for long-term health.
- Acknowledgement of Past Issues: The direct acknowledgement that Intel has been “too slow, too complex and too set in our ways” highlights past shortcomings but is framed as a necessary step towards improvement.
In Conclusion
I don’t own Intel stock, and the past few computers I’ve bought into had chips from Qualcomm (Snapdragon) and Apple Silicon (TSMC/Samsung). In non-geek speak – I’m neither a shareholder nor a customer. I’m very happy with the high efficiency, low power products that I’ve bought from the competition. My desktop PC and my Xbox are AMD.
Am I optimistic about Intel’s prospects? Not really. I don’t think anybody really is, and while I’m really just a layperson and not a chip scientist or engineer, my guess is they might not really be too-big-to-fail.
But what I’m closely watching, as a HR professional, is how its new CEO will turn around the company. Tan has made some really bold statements about what he will do in his tenure – which he has already started to execute in force.
Tan insists that Intel needs to humbly learn and co-create solutions with customers. This is not just about discussing contracts but involves in-depth collaboration between engineers and architects.
“I am willing to stay as long as needed—five, ten, even twenty years,” said Tan at a recent event in Taipei.
Whether that materialises or not depends on the results that lie ahead, and his tenure, like many things Intel, might not be within the control of its CEO. But it is undeniably galvanising (or annoying, depending on who you ask) to know that the new guy says he’ll be in for the long haul.
It reminds me of a time when I joined the business side of a consulting firm to turnaround a team that had just lost its key account. My new direct reports were demoralised, disengaged and out of work. In my second month working there, the entire management team incuding myself got a delayed paycheck due to crimped cashflow as we sought to pay our teams and suppliers first.
This dire situation meant that I had to build new capabilities in a short span of time, fix gaps in ways of working, while re-engaging and re-training the team. Change resistance, politics, and back-biting? Experienced them all. I often ate lunch in my car alone for the first few months, but I stuck it out. Soon enough, we were selling and delivering innovative new services and became a top-billing team globally. Without having to let a single person go.
In any change, communication is key, and I always feel like I could’ve done better with my teams. And so, I’m closely following what Intel’s Lip-Bu Tan is doing, and saying. Everything he says is brimming with reflection, intention, and punch. Tan has attacked Intel’s current lack of customer focus, its stifling ways of working, and just like in my own experience, there is a foreboding sense that things will get much worse before it might even get better.
But that’s where people and culture intersects with the business – and that’s why I love doing what I do. Thankfully, the bar’s much lower for me! Good luck, Lip-Bu Tan. It’s make-or-break season, and I certainly hope you avoid a Kodak moment.