COPYRIGHT
Fourth Estate
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First published in Great Britain by HarperCollinsPublishers 1997
Copyright © Tim Jackson 1997
Tim Jackson asserts the moral right to be identified as the author of this work
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Source ISBN: 9780006387977
Ebook Edition © DECEMBER 2016 ISBN: 9780008240615
Version: 2017-01-05
PROLOGUE
A Half-Billion-Dollar Mistake
ARTHUR ROCK WAS PROBABLY standing staring out of the floor-to-ceiling windows, gazing at the evening lights of the December city skyline, when the call came in.
His office suite, on the twelfth floor of a tall tower in San Franciscoâs financial district, had a group of comfortable sofas at one end dominated by a collection of bold modern pictures. But Rock, who had suffered a bout of polio as a child, liked to take calls standing up. Next to his desk stood a light-coloured wooden reading lectern, which allowed him to work on his feet â like a clerk in a nineteenth-century government office.
It was hard, though, to imagine anyone further removed from the nineteenth century. Rock was a billionaire venture capitalist, who had made his money by investing in some of the most successful technology companies in history. He saw his job as doing more than simply picking winners and then sitting back to watch them get on with it. When Arthur Rock invested money in a company, he sat on its board of directors and helped to guide its strategy. In times of crisis, when his investments might be at risk, heâd be ready if needed to step in with firm advice on how the company should recover its correct course.
The incoming phone call gave no clue that today might be one of those occasions. As Rockâs secretary put the call through to his speakerphone, he heard the soft-spoken voice of Gordon Moore, chairman of Intel Corporation, opening the proceedings with his customary calm. Ever methodical, Moore would often start Intelâs board meetings by checking that all the participants had received the appropriate papers from Jean Jones, his trusted secretary for nearly thirty years.
Rock didnât need to be told why the Intel directors were holding todayâs board meeting by conference call instead of at the companyâs headquarters in Santa Clara, just over an hourâs drive south of the city. Like the other Intel directors, he had read all about the crisis in the New York Times and the Wall Street Journal.
Intelâs heavily advertised flagship product, its new Pentium microprocessor, was flawed. The company had known about the flaw for some months and kept quiet about it, believing that only a tiny fraction of the millions of users of the chip across the world would ever be inconvenienced by the problem. But the flaw had been discovered by a mathematics professor, whose data had been posted on the Internet. Intelâs attempt to play down the issue had angered customers, worried investors, and ultimately provoked a storm of criticism in the media, culminating in a damaging report on CNN.
As the problem escalated, Intelâs response had been doggedly consistent. The company had kept repeating that the flaw was unimportant, and kept insisting that it required no corrective action from most owners of computers equipped with a Pentium chip. Intel had admitted that a small number of specialized users, mostly scientists or mathematicians, might need their Pentiums replaced. But Andy Grove, the companyâs combative chief executive officer, insisted that the people best equipped to decide who was in this category were Intelâs own engineers. As a result, customers who wanted to return a flawed Pentium would have to call Intel and convince the company that they really needed a replacement.