Compare Chapters 2 and 5
What the Best CEOs Know
Written by Jeffery A. Krames
The purpose of this paper is to compare and contrast two very successful corporate
leaders within the IT industry based on the book What the Best CEOs Know (Krames, 2003).
Chapters two and five cover Michael Dell from Dell Computer Corp and Andy Grove from Intel
Corp, respectively. We will look at five topics including their main contributions, resistance
encountered, similarities, differences, and significant factors.
Michael Dell knew as a young man it was critical to focus on customer needs. His
concept of cutting out the “middleman” to improve information flow was genius and not
common ...view middle of the document...
135). Grove occasionally used history to forecast the future. He focused on three
primary areas: technology, manufacturing, and marketing. The CEO believed execution and
strategy were critical: both bad strategy and failure to execute good strategy can bring a company
down (Krames, pp. 136-137). Quality, and its perception, are hugely important to gaining and
keeping customers especially in the volatile computer industry. Grove advocated looking at
things from the outside looking in and not to assume a company can’t fail (Krames, p. 139).
He talked about a SIP-strategic inflection point (10X change) which can offer promises and
threats, but early detection of SIP is key (Krames, p 143). He mentioned three warning signs:
listen to alarmists, encourage rigorous discussion and debate and experiment early and often.
The CEO required managers to communicate from bottom to top (Krames, pp. 145-146). Grove
also encouraged broad use of the Internet and decisive leadership. Having a healthy amount of
fear caused Grove to watch the market closely, anticipate changes in the tide, and respond.
All leaders encounter resistance. Michael Dell responded to resistance of his direct
model by experimenting with third party marketing and distribution. His first attempt was
unsuccessful and he swore it off for several years (Krames, p. 59). The approach was
ultimately modified to support other distribution channels such as today’s Best Buy. Although
his goal was to move 100% of his business to the Internet, there is still resistance to do so
(Kramer, p. 66). Some did not agree with Grove’s decision to leave the memory business,
but he and his partners knew the company had to (Kramer, p. 138). He also met resistance
when he directed the $500M recall of the early Pentium microprocessors, but he did so to ensure
Intel quality and to protect the company’s image. Both CEOs dealt with resistance effectively.
Despite different business models and challenges, both Dell and Grove learned from
botched projects and bad strategy. They learned to respond quickly to changes in the
market and generated huge profits. Their leadership also enabled each company to thrive in
bad times as well. Dell and Grove appreciate effective use of technology like the Internet. By
modifying strategy and execution, Dell and Grove produced revolutionary change and created
new standards within their respective sectors.
Though they share some similarities, Dell and Grove differ in leadership philosophy.
Michael Dell focuses exclusively on the customer and delivering the best value. He believes
getting every employee involved in satisfying the customer prevents guessing what the...