Gil Amelio on Steve Jobs, Woz, Apple, Corporate Governance, Integrity, New Companies, AI, and why humans should add mechanical switch to every robot.
As told by Gil Amelio on Oct 2 himself at UNR. I have personal permission from Gil to publish this.
( From Wiki) Gilbert Frank Amelio is an American technology executive. Amelio worked at Bell Labs, Fairchild Semiconductor, and the semiconductor division of Rockwell International, and was also the CEO of National Semiconductor and Apple Computer.
Apple is the world’s largest company by market capitalisation with a valuation of $2.6 trillion. At its peak in January 2022, its market cap was in excess of $3 trillion. Apple became the first company to reach $3 trillion in market value, which is more than the GDP of India, the UK and France.
Gil has lived a dual life as a physicist/scientist and a businessman. Amelio is an Italian name from the south of Italy region — Calabria. His mom was born in Napoli. They came to the US in the early 20th century. Gilbert Amelio, grandfather of Gil Amelio, was a businessman. When he came to New York, he opened a barbershop, it flourished; he opened a flower shop, and it was prosperous again. He bought an apartment building to house people coming to America from Italy. Gilbert heard about a new invention called “automobile” and thought, ‘If I have a car and take them to work and they rent my apartments, it’s a win-win.’ The first “bus” in the United States was made for Gilbert Amelio in New York, who used it to take workers to work and return to his apartment building. The workers would stop for a drink after work, so he also bought a saloon. At the salon, he needed an entertainer. So he hired one: Jimmy Durante (a famous Italian singer), and gave him a room at the back of the saloon. The story goes when he got famous and had his own TV show, he would always close the show with the words “Goodnight to Mrs. Calabash, wherever you are.” That was Gil’s grandma! Gil’s dad participated in WW2 under General Patton. The army occupied Hitler’s place, and his dad bathed there. Gil said he knows it is true for sure because his dad’s friends took pictures. Gil currently has it in his home theater.
When Gil was a Senior in high school in 1947, his family moved from New York to Miami, Florida. In school, they gave them an aptitude test; according to his, he was going to be good either at engineering or law. He did not want to be a lawyer, so he went to Georgia Tech and got his Ph.D. in physics. He did his dissertation on silicon, as he joked, at that time, he was the smartest guy in the world on silicon, and that’s why Bell Labs( currently AT&T) hired him. Bill Shockley (inventor of the transistor and the Nobel Prize winner) took him under his wing. He told him ‘Gil, you are the smartest guy I ever met.” Bill was invited to give lectures at Stanford in Palo Alto, Bill was the one to tell Gil to go West. Gil asked him, why, what is there? ( in Palo Alto) and Bill answered, ‘Something amazing is going on there, you have to go’. That’s where Gil met other prominent Founders of Silicon Valley, such as Bob Noyce ( founder of Intel and a “Mayor of Silicon Valley”) and others. Shockley was a wonderful inventor but a horrible manager. The “traitorous eight” left him to form a Fairchild, and the human history was changed…
Gil recently spoke at the World Governments Summit, and they asked him to talk about Silicon Valley. “The way the world is going now, technology is the future. All the easy things had been done ( i.e. inventing the transistors and microchips), now comes the hard part — AI. By the end of the 21st century, the world will not look like it looks today at all.”
Since this is a Seminar on Corporate Governance, the story above reflects how important it is to understand the ecosystem. How important it is to know the history.
Gil was at the Fairchild Research Center, heading the RnD division. His boss came to him and said, there is a broken department, and it is losing money, can you fix it? “I am a research scientist, not a businessman.” Gil went to Stanford and asked the dean of the business school of what he should do. The dean said — get an MBA! He told him to read Peter Drucker, he adopted Drucker’s model and, within two years fixed the division. The word got around, and Rockwell wanted him to fix their broken company. Rockwell had over 25 divisions, Gil got Telecom and made it the best. Then he got a call again, this time it was a National Semiconductor calling, they have had not such good times and asked him to come to do a turnaround. When he came to National Semiconductor, there was no money in the bank, the company could not meet payroll, and they could not ship their products. He went to the bank and said, “ I have no money, no collateral, and I need 75 million dollars to ship my product.’ The banker was an Italian guy, and he gave him the check for $75 mil. Gil fixed the company and paid back $500 mil later.
Gil got on the board of directors at Apple. It was a mess. The CFO came to the meeting and said, “We are broke, and we will be bankrupt in 75 days.” The board looked around and asked Gil — Would you fix it? ( It = Apple Corp. Fix = become a CEO). He said, ‘Well, why would I do that? I am cool at National.’ They said, “You are on the board of directors, it is your duty, you have to do it.” Gil went to National Semiconductor and told them he was taking Apple’s gig. In 75 days he raised around 1 BILLION dollars on nothing but his reputation ( of turning companies around).
At that time, Apple had 10% of products returned, which negatively impacted the bottom line. The returns were due to Quality Control issues. Gil does not like quality control issues. He told us back when he was at the Fairchild, Steve Jobs called him and asked him to sell him ( at a deep discount) scrap chips. Gil asked why in the world you need scrap chips? Steve said so that I can build a portable computer. That’s cool, Gil said. Job said that Woz believed they would fix scrap chips, and Steves would build their computers on it. Gil declined, “Steve, why would I do that, you build a bad computer which won’t work, and I will get the blame for selling you bad stuff. It will be on me.” Steve Jobs remembered it years later.
When Gil became CEO of Apple, he instilled discipline. Apple was an extremely undisciplined organization. He expected everyone to know what their job is. He sat them ( managers) down, asked them to write what they thought their job was, and then gave them his edited version. It allowed him to align the organization on a management level.
Gil also fixed Apple’s manufacturing because this is what he was good at and knew how to do it. And once that was done, he worked with Helem from IBM to redesign the operating system (the Macbook Air this text is written on still runs on the parts of the OS Gil built). The OS was based on what was developed at Bell Labs “Because that stuff was the best.”
Gil told us that Stanford and Harvard have classes on him. When he walks at the airport, someone might recognize him and ask, “Are you Gil Amelio?” And if he said yes, they would talk about the class they took at Harvard about his management style.
Question: Why do we need a board of directors?
Answer: To protect the investors, The board oversees the management: their strategies, work, etc, has to be consistent with the best interests of the shareholders. Gil has sat on many boards. SEC once asked him to give them a presentation on Corporate Governance ( because he was a Chairman). It is extremely important to have a disciplined board, strong management, and good practices in order for the company to succeed. Gil had seen too many companies that were in trouble, and when he got on their boards, he fixed them. How? The magic word is INTEGRITY. In business, you never compromise your integrity. The highway to hell is to compromise your integrity. So, his first rule is to see if the company’s board adheres to integrity. The second one is to develop your ( company) talent. At National Semiconductor, Gil created a National Semiconductor Univeristy to develop talent. “I wanted to teach them ( 34 thousand employees) what was important to me.” Mediocre managers went to be extraordinary after attending the training. It transformed the whole company. People from all rungs came to training events. Gil remembers one lady from the production floor and how she showed up on the first day. And how his training had changed her during the course of two weeks. The lady went on to have a very successful career. EDUCATING your people is extremely important.
Gil’s recipe to a successful company: Integrity, Attention to Details, Education, and Have Fun!
You also have to know your subject matter. When you put your board together, listen to them, and make them part of your team. The board is not your adversary, it is your team, do not create unnecessary friction because of how YOU want to do things.
Question: What was it like to work with Steve Jobs?
Answer: How do I say this, the word “bipolar” is not the correct word to describe him, but it is very close. Steve, The Brilliant Man, you could show him a product, and he will tell you if people would buy it or not. He would study it, he would tell you what was good and bad about it, he would tell you who would or would not buy it. It was amazing. He was very candid in his feedback. Here is a story about an iPhone. The question was — can we help a healthcare community? Nurses have to go around all day long taking notes on paper and then spend an unnecessary amount of time entering the data into the workstations. Wouldn’t it be cool if we created a little device in which they punch things in, and it goes automatically to the workstation? Steve looked at him and said, “Why don’t we make a phone?” So we made a phone. An iPhone.
Woz is a truly brilliant man. He does not have a lot of common sense. If it is not about technology, he is clueless. If you talk to him about the deep tech — his brain goes into high gears. Gil and Woz are still keeping in touch, however, due to age Woz “slowed” down. They all have had their ups and downs. “Steve was all about Steve. Altruistic was not a part of his vocabulary. Definetly one of the smartest peopel I have met in my lfie. Brilliant, but… Woz on another hand is too nice, but if you get into tech and make a minor mistake he will find it. When we were working on OS, Woz was the one to do the last QA on the system before it went on sale.”
Question: How to turn the company around? What is your secret?
Answer: Before I came to National Semiconductor, I was actually hired six months before I came on board. I have had time to simply walk around and understand what is going on. I sat down, and I wrote down the plan, and every manager had to adhere to that plan. No ambiguity, 8 divisions, who does what, and where to go. I told them to follow the plan, and if things got bad, how do we bring it back to the plan and if needed, adjust it. I asked each manager to sit with me in 2–3 week time period and show me the plan and what progress they had made according to the plan. Eight divisions, eight managers. They were reporting to me, and I was educating them on the vision, it was a mutual work. I also believe in writing everything does, it eliminates ambiguity.
Question: What is your biggest accomplishment?
Answer: Charge-coupled device. ( Gil also spoke about the products he developed for the government agencies, which are in a James Bond domain, so I will leave it as is.)
Also, in my current companies, we are working on cool stuff. How do you do things better than Google? There will be an announcement coming out soon. It is very exciting.
AI: We ( humans) need to make sure we do not lose control. We do not want robots to lose control. I was in the Vatican recently, and I gave a speech concerning AI developments. Robots will be great, but make sure EACH ONE OF THEM HAS A MECHANICAL SWITCH. On-off switch you can flip. Not an electronic one. A lot of weird stuff is emerging from AI. Make sure AI has ground rules, but in the end, we ( humans) will be ok. Just don’t get carried away. I am a big fan of human life. Jobs was a loner, he did not know how to work with humans.
Question: How did you make changes to the board(s) you were on?
Answer: Some of them I asked to resign, some of them I asked to stay, for some I would bring more people. Most of the time I was trying to be diplomatic, but in some cases, I needed to be more brutal to make changes.
Question: How AI will effect decisions making on corporate boards?
Answer: A lot. The habit of running AI before making any decisions is not a bad idea. For example, compare it to the eye surgery, the doctor will run AI and get ideas and suggestions from AI — it will lead to more positive outcomes.
Question: How do you find a mentor to help you ( get on the board)? To evaluate your opportunities?
Answer: Bill Shockley was a person like this for me. A close friend, he was my sounding board. Have a small set of friends who can help you. I am not a “money” person, but I have friends who are very wise at it. I listen to their advice. When I got out of Apple, I got some money. They all thought I will retire, but I flunked retirement. ( laughing)
Question: You are so well connected. How can we replicate it?
Answer: Have a habit of having a broad portfolio. ( Lists a number of famous people). Work with people, buy them dinner, listen to them. Take on opportunities. One time, there was a Governors Conference. I am in California, and I got a call from one of my friends, somehow South Dakota did not have a representation, would you be interested in representing South Dakota? I got to be their governor for a few days. Don’ turn invitations like that. Who said, “90% of success is showing up?” ( Woody Allen!)
Question: What about Bill Gates?
Answer: We are friends. We were competitors, but we were friends. Bill is smart. When his daughter was born he called me. Steve was just too disruptive. A lof of bad decisions. It is not a way to run a business like that. A lot of smart people come and say, you can do it that way, listen to your smart people. Take the ego out of your way.
Question: What are your thoughts on Apple?
Answer: I have mixed emotions. With Steve, he did not even mention my name when they released the product I worked on. That was a bit negative. But the positive: I have met a lot of smart people working at Apple. I was blessed with the opportunities. ( Tells a story about visiting Japan, Sony, Australia, etc and how he was treated by the chairman of Sony, congressman, etc).
You can be a businessman and a nice person.
Wow, that was a long conversation. There is a book I wrote, it is out of print by now, but you can probably find it.
Question: How do you find a “quality” person ( for the corporate board)?
Answer: INTEGRITY. Look for integrity.
To Be Continued…
