Barrett, Craig R.

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Barrett, Craig R.

(1939-)
Intel Corporation

Overview

A recruit from academia nearly four decades ago, Craig Barrett has never really been able to shake his nickname of "the professor" at Intel Corporation's headquarters in Santa Clara, California. As Intel's president since 1997 and chief executive officer since 1998, the tall, scholarly–looking Barrett saw the company's stock soar in value to record highs in the late summer of 2000, only to see it plunge precipitously in the months that followed as the American technology sector suffered through an agonizing shakeout. Outside observers who had long credited Barrett for Intel's impressive technological and manufacturing advances of the 1980s and 1990s began to wonder whether Barrett had what it took to lead the company into the twenty–first century. After all, Barrett's predecessor as CEO, Andrew Grove, had achieved near legendary status during his years at the helm of Intel. Closer analysis of the company's reversal of fortune in 2001 revealed that much of Intel's problems could be traced to flawed decisions and misguided strategizing, a fair amount of which had occurred before Barrett ever took command. Magnifying the drop in Intel's stock price was the general plunge in tech sector equities that followed the bursting of the dot.com bubble. Grove himself suggested that part of Intel's problem in recent years has been the absence of Barrett's input as chief operating officer since he'd been kicked upstairs to CEO. For his part, Barrett expressed confidence that Intel could fight its way back to the top by slashing its profit margins in an effort to regain some of the market share it had lost in the company's most recent downturn. Barrett also made it clear that Intel was determined to stay on track in terms of technology development. The CEO does his best to monitor the product development progress throughout the company, meeting occasionally with engineering groups he fears may be falling behind. He told Brett Schlender of Fortune: "If you or anyone at Intel asks me what keeps me awake at night, I'll say the same thing I've been saying for more than ten years: I worry about the internal execution of our product road maps. If we do that, we win. If we stumble there, we give the competition a chance."

Personal Life

Barrett and his wife, Barbara, an attorney, live in Paradise Valley, Arizona, outside Phoenix. Barrett commutes between there and Intel headquarters in Santa Clara, California. The couple also owns Triple Creek Ranch in Darby, Montana, in the southwestern part of the state. The 333–acre Montana property, purchased by the Barretts in 1993, is a widely popular guest ranch with 18 cabins that can accommodate up to 42 adults. When the Barretts decide to spend some time at the ranch, they book their stay there just like the resort's paying guests, who pay all–inclusive nightly rates of $510 and up. When they can fit it in, the Barretts enjoy entertaining friends and family at the ranch, in the heart of the Bitterroot Mountains. Family includes Barrett's two grown children—Scott and Dawn—from his first marriage.

Barrett's wife, Barbara, serves as president and CEO of Triple Creek Ranch. She previously served as an executive with the Greyhound Corporation and in the early 1980s was named vice chairman of the Civil Aeronautics Board by President Ronald Reagan. She later served as deputy administrator of the Federal Aviation Administrator, the first woman ever to have served in that post. The couple met in 1980 after they had hiked separately to the top of 6,167–foot Squaw Peak near Phoenix. They were married in 1985. Barbara Barrett earned her bachelor's, master's, and law degrees from Arizona State University. In 2001, she completed a two–year term as president of the International Women's Forum, a global organization made up of women of high achievement.

One of three children in a lower–middle–class family, Barrett was born in San Francisco on August 29, 1939. After graduation from high school in 1957, he spent the next seven years at Stanford University in nearby Palo Alto. There he earned his bachelor's, master's, and doctoral degrees in materials science. Academia in general—and Stanford in particular—obviously appealed to him, because after winning his doctorate in 1964, Barrett signed on as a professor at Stanford, teaching there for most of the next decade. In 1969, Barrett, a member of National Academy of Engineering, was honored with the Hardy Gold Medal from the American Institute of Mining and Metallurgical Engineers. In 1973 he took a one–year leave to work for Intel, which was then a small start–up company developing memory chips for use in personal computers. He found the transition from the relative calm of academia to the hectic pace of the business world somewhat unsettling and happily returned to Stanford after his year at Intel was completed. However, within six months, Barrett had to admit he'd been bitten by the business bug, and in 1974 he returned to Intel as technology development manager.

Away from Intel's corporate headquarters, Barrett spends much of his free time engaged in outdoor sports, including hiking, cycling, skiing, horse riding, golfing, and snowmobiling. His greatest love of all among the outdoor sports is flyfishing, a pastime he enjoys particularly when he and his wife spend time in Montana. In addition to serving on Intel's board of directors, Barrett sits on the boards of SEMATECH, Qwest Communications, the Semiconductor Industry Association, and the National Forest Foundation.

Chronology: Craig R. Barrett

1939: Born.

1961: Earned B.S. degree in materials science at Stanford University.

1964: Earned Ph.D. degree in materials science at Stanford and joined faculty.

1974: Joined staff of Intel Corporation as manager of technology development.

1984: Named a vice president at Intel.

1990: Promoted to executive vice president at Intel.

1992: Elected to Intel's board of directors.

1993: Named chief operating officer of Intel.

1997: Named president of Intel.

1998: Given added responsibility of CEO.

Career Details

At Intel, one of Barrett's early mentors was the company's future CEO, Andrew Grove, who helped the former professor to learn about the various processes of chip manufacture. Only three years earlier, in 1971, Intel had invented dynamic random–access memory chips, known as DRAMs, but the company had been surpassed in the chip market by Japanese manufacturers who produced a much faster, more efficient chip. Barrett worked tirelessly to find out what it was that made the Japanese memory chips superior, visiting the U.S. manufacturers of equipment used to manufacture chips and questioning them about how their products differed, if at all, from those of their foreign competitors. He inspected the manufacturing facilities of Intel's Japanese partners and pored over published information about the design and operation of chipmaking equipment, all to no avail. In the end, Intel discontinued production of DRAMs in the mid–1980s, forcing a layoff of about one–third of the company's workforce.

After phasing out its production of memory chips, Intel began concentrating more heavily on the manufacture of microprocessors, which are computer processors on microchips, each of which can run a personal computer. The company had landed a big contract from IBM to produce microprocessors for Big Blue's line of personal computers. These tiny engines, which are capable of running arithmetical and logical calculations, drive the operation of a computer, and the mid–1980s saw a frenzied race to turn out ever faster microprocessors that could be used to produce faster computers.

Intel's microprocessor chips were each assigned a number to indicate its generation. The earliest Intel chip, introduced in 1971, was the 4004, followed shortly thereafter by the 8008. By the early 1980s, the Intel family of microprocessors had grown to include the 8–bit 8088 and the 16–bit 8086. Subsequent generations of Intel chips were known as the 80286, 80386, and 80486, or the 286, 386, and 486 for short. With its production of reliable, efficient microprocessors, Intel made a major name for itself. The 80486 chip was followed by Intel's Pentium microprocessors, including the Pentium II, III, and IV.

One of Barrett's most significant contributions at Intel was his introduction of the "Copy Exactly" production system. The system mandated that each Intel manufacturing facility use the same equipment and production standards in an effort to maintain high quality standards and eliminate product variations. Barrett was promoted to vice president in 1984. The following year, he embarked on a campaign to double Intel's production of microprocessors by 1988, a goal he far exceeded. As Intel's production continued to climb, Barrett climbed the ladder within the company's management structure, becoming a senior vice president in 1987, executive vice president in 1990, and president and chief operating officer in 1993. By 1996 the company's output of microprocessors had increased sevenfold.

Ever watchful against inroads made by its competitors—both at home and abroad—Intel adopted a tougher management style. In an interview, Barrett told Christian Science Monitor, "We accept that people are coming after us. That just permeates our entire management style. Only the paranoid survive." The mid–1990s brought booming business for Intel, a period of unparalleled growth overseen by Barrett as chief operating officer. The company captured more than 90 percent of the microprocessor market, and sales rocketed from about $8.8 billion in 1993 to nearly $20 billion in 1996. All was not rosy, however. Intel suffered an embarrassing setback in 1994 when reports surfaced that its new Pentium microchip had difficulties correctly processing certain complex mathematical calculations. Barrett campaigned to have the chips recalled, while CEO Andy Grove argued that the chip's flaw was so narrow in scope that it was unlikely to affect many customers. In the end, Barrett's argument prevailed.

Although the mid–1990s witnessed a surge in business for Intel, it also saw a sharp rise in competition from Advanced Micro Devices (AMD) and Cyrix. In 1995, Barrett helped to head off a lawsuit by AMD, which wanted to begin marketing chips comparable to Intel's 80386 microprocessors. He also kept close tabs on Intel's growing international operations, making frequent inspection tours of overseas manufacturing facilities.

In March of 1998, Intel announced that Barrett would succeed Grove as the company's CEO. Grove, however, would remain Intel's chairman. Although the company continued to dominate the microprocessor market, price pressure began to gnaw into its profits. Barrett moved aggressively to diversify, engineering a number of acquisitions in the telecommunications and networking fields. Analysts later questioned the wisdom of these acquisitions when the new companies failed to contribute as much to Intel's bottom line as had been anticipated.

Social and Economic Impact

Although the timing of Barrett's accession to the helm at Intel hasn't been the greatest, given the plummeting fortunes of the tech sector in the early years of the new millennium, "the professor" seems confident that the good times will return—and hopefully sooner rather than later. Barrett has an ambitious, long–term plan to make Intel's microprocessors as indispensable in other high–tech products as they already are in personal computers.

Barrett's vision calls for reducing Intel's vulnerability to the sudden ups and downs in the personal computer market by getting Intel's chips into a wide variety of other products, including mainframe computers, hand–held computers and personal digital assistants (PDAs) like the Palm, cell phones, and data networking equipment. In order for Barrett's plan to work, Intel will need to make a lot of changes, but the overall benefits should prove worthwhile. New classes of microprocessors and hardware architectures will have to be invented, and Intel will undoubtedly need to make some big acquisitions.

It's an ambitious plan to reinvigorate Intel's business, and it will take a lot of work and a lot of time, but given Barrett's track record, companies in the businesses Intel is eyeballing would do well to watch the company's moves closely. In the meantime, Barrett is expected to keep paring profit margins on the company's core product in order to win back market share in microprocessors.