Bob Swan talks with EE Times about having a job he initially didn't want and what it's like for a finance guy to lead a company with 70,000 engineers.
The job is among the most prestigious in the semiconductor industry, and it doesn’t open up all that often. And Bob Swan was pretty sure that he didn’t want it.
It was June 2018. Brian Krzanich had just resigned in disgrace after five years as Intel’s CEO, following revelations of an extramarital affair with a subordinate. The news gripped the company, from its employee base all the way up to the boardroom and beyond, sending shockwaves through the financial community, Silicon Valley, and the broader semiconductor industry.
In the throes of crisis, Intel’s board turned to Swan, who had joined Intel as chief financial officer in October of 2016. Swan was a veteran businessman with more than two decades of experience in executive management, but his exposure to the chip industry was somewhat indirect, having served on the board of directors of semiconductor manufacturing equipment supplier Applied Materials for seven years.
At the very least, those were solid qualifications for an interim CEO, someone who could hold the reins while Intel’s board (with the help of an executive search firm) searched for a new permanent CEO. Swan recognized the importance of giving the board the time that it needed to do a thorough search and was willing to step into the breach and lead the company on a temporary basis, and so he agreed to do that. But he wasn't interested in the job.
“The reason I wasn’t interested is because I loved my day job,” said Swan in an interview with EE Times. “I said I wasn’t interested and that my primary focus would be with the somewhat abrupt exit of my predecessor to pull the team together, focus on the business, and give the board the time to do a thorough search for what I considered the best open job in the world. And that was my focus.”
No one anticipated that the search for a permanent CEO would last more than six months.
What happened between June 2018 and January 31, 2019, when Swan agreed to drop the "interim" affixed to the title? Why did Swan change his mind?
He admits that it sounds a little bit corny, but Swan maintains that he had fallen in love with Intel during his time at CFO. Upon taking the reins on an interim basis, his respect and admiration for the company grew. He had the opportunity to see firsthand how important Intel was to the success of its customers. Meanwhile, he said, he and the rest of Intel’s executive leadership gelled as a team.
“During that six- or seven-month timeframe, I think my peers and I, we all kind of rallied around each other,” Swan said. “And I think collectively, during that time, we built a really strong bond.”
Like a lot of CEOs, Swan believes that running a company is really a collective effort. The person in the corner office may garner the lion’s share of the headlines, but ultimately, the big decisions are rarely, if ever, made by a single figure. “Anybody going into a CEO job is prepared on several fronts and maybe not prepared on others. The question is whether you have the people around you that complement your skills such that one plus one plus one equals something much greater than three. I’m surrounded by good people, first and foremost, and they view it as a team sport. And they have very complementary skills to what I have with a common thread of maybe intellectual curiosity.”
Swan’s experience prior to joining Intel in 2016 included 15 years at General Electric in various finance roles. He later served in CFO roles at a number of tech firms, including Electronic Data Systems, TRW, Webvan (where he was also briefly the CEO), Northrop Grumman, HP Enterprise Services, and eBay, where he held the role for nine years.
In 2015, Swan became an operating partner at a growth equity firm. He might have stayed there indefinitely, but in 2016, he was lured back into the CFO role at what he says is one of only a handful of companies that he would have considered joining — Intel.
Ironically, it was Krzanich who convinced Swan to take the job. About 10 minutes into his first-ever meeting with Krzanich, over dinner, Swan felt the need to be clear with Krzanich that despite his time on the board at Applied Materials, he wasn’t an expert on the semiconductor industry and didn’t consider himself an expert on Intel by any stretch.
“And Brian had the perfect answer,” Swan said. “He said, ‘I’ve been in this company for 30-some-odd years. I know this company extremely well. I know this industry extremely well. And the team around me has been with me for almost as long. What we need is not to know more about our company and the industry. We need to have additional thoughts and complementary capabilities from somebody who’s been in different experiences, with a proven track record every step along the way, that can get us to think a little bit differently about the opportunity set.’”
Swan said that just being asked to consider the CFO role at Intel was humbling but that he wasn’t going to take the job unless he felt from his vantage point and the Intel leadership vantage point that his addition would be valuable to the team. He felt very early on that he meshed well with Krzanich and the rest of the leadership team. “They weren’t looking to me to be something I’m not.”
Among the things that Swan admired about Intel from afar long before joining the company are Intel’s long and distinguished history and the company’s ability to reinvent itself several times along the way. And while he declined to characterize the transformation currently underway at Intel as its most important reinvention, it’s clear that Swan is leading the company through another transitional moment.
Intel has for several years been undergoing a metamorphosis from a supplier almost purely of microprocessors mostly for PCs to what it calls a “data-centric” company with a broader focus — including IoT, automotive, and data centers. This has and will continue to pit Intel head to head against a broader set of semiconductor players. But it also gives Intel a much larger addressable market.
Though this evolution has included its share of missteps along the way, it has largely been successful. Intel has gone from deriving more than 70% of its revenue from PC processors at the beginning of this decade to just about a 50/50 split between its “PC-centric” and “data-centric” businesses today (53% to 47% in favor of PC-centric during the second quarter). In the years to come, Swan said, Intel expects to continue growing its data-centric business to eventually make up 70% of the company’s revenue as PC sales decline.
As Swan sees it, the evolution of Intel gives the company a lot more room to spread its wings and grow. In the age of perpetual PC shipment declines, it has gone from deriving 70% of its revenue from a declining business in which it had a dominant market share position to creating new products for emerging markets in which, in some cases, it has nowhere to go but up.
“We no longer see the world where we have 90% of the market with nowhere to go,” he said. “The way we look at it now, we have more like 30% of the market, where the prospects for growth are endless.”
Overcoming the ‘bean-counter’ stigma
To further its quest, Intel has both invested heavily in R&D and made a string of acquisitions.
“We’ve made organic investments and inorganic investments to expand the role we can play in the success of our customers,” Swan said. “And we have leading positions in the key technology inflections of 5G, AI, and autonomous driving. It’s awesome. It’s not a bad hand. But now, our challenge is to play that hand the best that we possibly can.”
Swan is just the seventh CEO in Intel’s 50-year history, and he is not the first non-engineer to lead the company. That distinction goes to Paul Otellini, Intel’s chief executive from 2005 to 2013.
Nevertheless, anytime a non-engineer gets promoted to lead a semiconductor company — especially one of the most prestigious semiconductor companies — it draws a certain amount of scrutiny. Engineers, after all, often seem to trust only engineers.
Swan doesn’t spend a lot of time fretting about his lack of a technical background. Philosophically, he said that he believes the role of a CEO is to inspire greatness in the people around him or her but to be clear-eyed about their own strengths and weaknesses and surround themselves with good people that have the knowledge and experience that they may lack.
“We’ve got about 70,000 engineers,” he said. “I don’t need to be the best engineer. We’ve got the best engineers in the world. Having 70,001 might not be what the company needs.”
For Swan, a finance guy by trade leading the world’s biggest chipmaker, that has meant surrounding himself by great technical people. “My challenge is to learn from the brilliant engineers that I’m surrounded by. Also, I think inquisition through a different lens sometimes can bring something new to the table rather than maybe the same way of thinking about a problem. Naiveté can be extremely helpful in the quest for greatness.”
This is an installment in a series of EE Times articles that profile the CEOs and other top executives who lead many of the semiconductor industry’s most important companies. These stories will focus on what makes the leaders of the industry tick and what initially drew them to electronics.