With Clay Christensen, Andy Grove and Walter Kiechel. Where is Intel on its voyage today? Andy Grove: We are in the midst of a structural transformation in the computer industry. The Internet is redefining software, communication, interaction. People, including ourselves, made some horrible miscalculations. Computing is going to be subordinated to the communication task. Intellectual property created and stored in digital form is also an important shift. Computing subservient to the connection role, product lines need to be refined to reflect. Can no longer rely in a business model on the fact that content will be analog. Publishing, newspapers -- the whole ecosystem is affected. Turning to accountability: how do you respond to current concerns? Andy Grove is waiting for someone to come out with the new book, The Management Secrets of Tony Soprano. Tony's nemesis is Junior, his Uncle. Tony is constantly beset by management challenges. Their product is a little different than ours. Junior's advice to Tony is to take your bumps, make your mistakes. None of us has a real understanding of where we are heading. Investment, personal decisions don't wait for the picture to be clarified. Take your shot, clean up the bad ones later, bump of the managers you need to bump off, try not to get too depressed in the process. Try to keep your spirits up. How do you achieve that management of emotional response? Part of that is self-deception, and deception becomes reality. After a while if you act confident, you become more confident. Act on your temporary conviction, and when you realize you were wrong, address it. [Grove quips in response to a Clay Christensen question that he admires the sleight of hand of an accomplishe academic: when given a complex question he nods his head and puts another question back.] Christensen asks a follow up on the confidence issue. Comes in part from the confidence placed in you by your own staff, their assurance that your interest is the interest of the corporation. Secondarily, if you have founded a business, you understand it implicitly, it's in your skin. If you're an outside manager, knowledge of the business didn't get you where you are, so you have to derive your confidence elsewhere. Christensen: consider multidivisional companies like HP, Johnson & Johnson. Christensen is increasingly uncomfortable with their teaching model for MBA students. We exalt the virtues of data driven decision making; if a student posits something unsupported by the data, the instructor tears them to shreds. Maybe you can't teach intuition, but maybe you can. Grove: [I'm missing alot here; Grove's mic situation is less than great.] The leader needs understanding and confidence in his convictions. A degree from Harvard, whether you learn anything or not, is invaluable to your income stream. Christensen: present wave of corporate accounting scandals, consider in light of idea of principal-agent relationships "widely embraced by attorneys." Grove: The unstated supposition in your question is that stock options are the means to solve the agency problem, line up the interests of management and agents. People who own 20% of the company don't need to overcome any more hurdles before they confront the agency problem. When you look at the use of stock options, you get different pictures depending on how many options are given to whom. This is the variable that distinguishes how they work. Bit by bit, boards are moving in the right direction. Began acting as consultants, advisory bodies. Corporate governance principles are exactly the other way around. The pro forma statement of corporate governance and the real life version are diametrically opposite. There's a movement from the advisory body model to the corporate governance model is happening. Hard to say how fast, how far. In general, Chairman and CEO are the same (85% or so of time). Christensen: The data is always down in the company. Managers have to have intuition to find it, they know only what people choose to disclose. How to expect them to govern under those circumstances is a very big problem. Grove: There's a lot of things you can do, all you have to do is speak up. Board of directors should be graded on participation. Chairmen need to stress getting a more active board. I smell a new software technology coming that is going to make corporate governance a nightmare: governance by shareholder proposition. For instance, if today somebody says I don't like Intel being in X, get out, decisions may get made which are directionless. Institutional shareholders average 11 months in a stock, and own a large portion of all corporate shares. We're facing the business equivalent of day traders running corporations. Q&A: Richard Owens runs a corporate branding company, and asks about the notion of Intel as a brand, and an ingredient brand. How was that created, and where does it stand today? Will there always be an Intel Inside, or will it gravitate to something else? Grove: It started 12, 13 years ago by a Harvard B school grad, director of corporate marketing, who recognized their point of differentiation was the microprocessor but they had no way to brand it. There's always going to be an Intel Inside, in my opinion, my forecast. There may be other things for us besides the microprocessor. The expenses related to the creation of the brand are one of the first on the chopping block; many times this has caused me to throw myself in front of the speeding train to prevent money from being cut. It was like herding cats at various times. Now the challenge that we have is people take it for granted, so refreshing it and giving it additional buzz is what we need to address. Audience member: following up on the data predicting the trend, does the panel think we're seeing a trend toward deference to the science of managment replacing a founder's passion, intuition, the art of leadership? Christensen: Yes, it's a problem. People are reacting to the data. We've had alot of bad intuition in the past, but you need to foster that to look into the future. Grove: That is all true, and your question was asked in the context of business strategy. You're right, but there's more to running an enterprise, small or large, than strategy. The revolution in manufacturing techniques in the last 15 years has benefitted the U.S. economy incredibly, without changing strategy, by changing the manufacturing science. Strategy is important, but doing it is important as well.