Killer Results Without Killing Yourself

At 36, Intel's David Marsing suffered a near-fatal heart attack. Now he's running the world's largest semi-conductor factory -- and trying to save Intel from itself.

"As far as I'm concerned," says David B. Marsing, "having to change your life when you arrive at work each morning is tantamount to slavery."

Revolutionary words from a professor or labor organizer? Not exactly. Dave Marsing, 41, sits in one of the highest pressure jobs in U.S. industry: plant manager of Intel Corp.'s http://www.intel.com $2 billion Fab II near Albuquerque, New Mexico, the largest microprocessor fabrication plant of the most successful electronics company in the world.

Marsing is an agent provocateur -- he calls himself a "transformational virus" -- in a company legendary for long hours and "creative confrontation." Marsing knows that "if I'm too aggressive, the corporate immune system will kick in" and consume him. He also knows that if he can successfully infect Intel, he will save it.

The medical analogy is no accident. Five years ago, at age 36, while trying to pull an Intel fabrication plant out of a crisis, Marsing suffered a near fatal heart attack. Lying on a gurney in the hospital, he remembers thinking, "How can I live my life as meaningfully as possible?" To this day, he visits cardiac units every six months, "just to look at the gray faces and remember."

It's tough to be a rebel in any business. But this is the semiconductor industry, a take-no-prisoners battle among silicon killers, hardly the kind of place to find a soft-spoken nice guy -- especially one who's using a multibillion-dollar facility to experiment with new management theories.

Intel corporate knows only a little about the intensity of Marsing's views. But it does know the bottom line -- and here Marsing excels. According to Marsing's boss Mike Splinter, 45, vice president and general manager of the company's components-manufacturing group, Marsing is one of Intel's best fab managers. Throughout his career, he's surpassed every target and quota set for him; every plant Marsing has run has ranked number one on the company's productivity charts.

That's why Intel's management has selected Marsing to help train its next generation of fab managers as the company prepares to springboard off the success of the Pentium chip into the greatest expansion in its history. By the end of the decade, Intel will have at least 10 giant new fabs directed by as many as 300 newly trained managers. Intel also expects to be the most profitable company in the world.

By placing Dave Marsing in charge of its next generation of leaders, Intel, long known for its business brains, may unwittingly have made its smartest move yet. And if Marsing succeeds, he may not only transform his own company but also set the model for the new breed of manager who will lead U.S. industry into the next century.

The Road to Damascus

Like most apostles of change, Dave Marsing had an awakening on his own road to Damascus.

Until five years ago, his had been a typical career for a young manager in high tech. After earning a degree in physics from the University of Oregon in 1976, Marsing followed his interest in thin-film technology and solar power to Texas Instruments to work with industry legend Jack Kilby on that company's then-secret solar-panel project. Marsing got the job he wanted, only to see the project collapse a year later.

But that was long enough for Kilby to be impressed by the young man and to recommend him to his Intel counterpart (and integrated circuit coinventor) Robert Noyce, who sent Marsing to work in development at the company's plant in Portland, Oregon. By 1986, at just 32, Marsing became the product engineering manager at Intel's Fab 3 in Livermore, California. Fab 3 was an older plant with established production levels, but by the time he was done, the plant was the company's leading manufacturer of the 80386, setting new standards for productivity.

Tired of the pressure of fab life, Marsing took a three-month sabbatical at the end of 1989. When he returned, he accepted an assignment as director of the company's Chandler, Arizona factory automation group -- only to find a new kind of pressure, learn a new kind of lesson. "I saw how fab treats support," he recalls. Now I was the enemy. And it was obvious neither group knew how to deal with the other." In the world of semiconductors, where the construction of a single chip is as complex as the Manhattan Project, processes developed in the lab must be copied exactly on the factory floor. What were the odds of making mistakes if the two sides were locked in combat?

The more conflicts Marsing saw between department and department, between employee and company, and between employee and supervisor, the more conflicted he became. Without realizing it, Marsing internalized Intel's civil war. But to others it was obvious. As Mike Splinter later noted, during this period Marsing was summed up by the car he drove: a nondescript Volvo, "very meek on the outside, but with a big monster engine under the hood." Marsing even suffered the requisite divorce, brought on in part, he admits, by the stresses he was feeling on the job.

Still, if the work was frustrating, Marsing's career remained meteoric. On July 1, 1990 he returned to running a fab, this time Intel's seven-year-old Fab 9-1 (now part of Fab 9) in Rio Rancho, a suburb of Albuquerque.

He was now halfway through the worst year of his life. And it was about to get worse. Fab 9-1 was in turmoil. Marsing had been parachuted in to save the plant, and surveying the scene, he saw it had all the earmarks of a suicide mission. The new Intel microprocessor, the 80486, the company's hope for the future, depended on this plant more than on any other -- and Fab 9-1 couldn't get the chips out the door. Yield rates were disastrous: a failure in the plant's diffusion furnaces, a critical piece of equipment in the processing of silicon wafers, was turning half of the plant's chip production into worthless scrap each day. And it was growing steadily worse. Two weeks after Marsing arrived, the plant had wasted $50 million worth of chips.

Intel headquarters demanded an immediate end to the red ink; employees at the plant confronted Marsing with their frustration and fear. Caught in between, Marsing found himself crushed under pressure like he'd never known. Being diabetic didn't help. He'd drag himself home late at night barely able to sleep from worry. Even
his morning exercise, which had always renewed him in the past,
couldn't calm him. In fact, all Marsing was getting for his morning efforts was a stiff neck.

That was Monday. On Tuesday the stiff neck came back again. By Wednesday his neck hurt even when he walked fast between buildings. But the urgency of putting the fab back on its feet obscured a little physical discomfort.

Then at 5:26 a.m. on August 11, 1990, 36-year-old Dave Marsing found himself on a hospital gurney suffering a heart attack. Coronaries at that age are usually fatal, but Marsing was lucky. He had made it to the hospital in time. Within hours he was out of bypass surgery and on his way to recovery.

The Big Lie

in the weeks of recuperation that followed, Marsing had time to think. The heart attack had not permanently damaged his heart, but Marsing knew he could no longer live as he had.

He began to take stock. The first and most obvious question was whether he should continue working for Intel. After all, this was a company that prided itself on demanding superhuman contributions from its employees. Back in 1981, during a severe industry recession, Intel had become famous (and notorious) for instituting the "125% Solution," a six-month program in which employees were asked to work an extra two hours each day without pay -- "voluntarily."

As Marsing thought about the people with whom he worked, he realized that he wasn't alone: "It hit me that most of the people around me were also exhibiting stress-related or stress-enhanced problems, either physically or emotionally." They were living a kind of lie, caught between who they were and who they had to be. And it was destroying their lives.

Every morning, Marsing realized, he and most of the people around him put on their work faces in the parking lot and played their roles as employees all day. The long hours, in which overtime often became a goal in itself, meant that most of each day was spent trapped in this fraud. And when they finally got home, the sheer intensity of the day -- the disappearing edges between work and play, and the inevitable late-night and weekend crisis calls -- sealed off any chance of escape into their true selves.

Intel, as much as any high-tech company, sought to create and enforce a homogeneous employee personality. The company had long recruited engineers right out of college, who wouldn't be tainted by having worked at other companies. And, fulfilling CEO and president Andy Grove's famous words, "Only the paranoid survive," the company promulgated a siege mentality among its people. Changing this attitude could mean challenging what lay at the heart of Intel's phenomenal success.

Yet in the face of those reasons to run away, Marsing chose to stay. He realized that he was committed to Intel and proud of its achievements. His mission, he saw, was to help the company prepare for a new century: "I wanted to try to develop the next generation of fab managers so that they could create an operating environment where balance exists. There had to be a way to work in this environment without being killed by it."

But what was that way? Marsing had no idea; he'd never heard of any alternative management model. So he turned to philosophers and some of the most outré management thinkers. He started with the economist and philosopher Joseph Schumpeter. Then on to Zen Buddhism. Next, physicist David Boehm.

He was still looking for answers when, in early 1992, he got the call: Marsing was named plant manager of the soon-to-be-constructed Fab II, the largest capital investment any chip company had ever made. The pressure to succeed would be immense. But this was the chance that Marsing had been waiting for.

He would go out in the hot sun and sit in the middle of the vacant field where the plant would stand, and dream: "The people who worked for me thought I was going crazy," Marsing recalls. "But I could just imagine that building rising up around me."

Now he could conduct his experiment in the greatest laboratory on earth.

The Human Test

in the world of fabs, the ultimate test comes at startup, when the fab is trying to convert diagrams and flow charts into real-life mass production. And this is also the ultimate test of Marsing's management philosophy. The product is an eight-inch silicon wafer covered with a grid of several hundred integrated circuit chips (ICs) -- each worth as much as $1,000. One mistake on a wafer can cost $250,000 or more. And mistakes are easy: each of those hundreds of ICs contains millions of individual circuits, none much larger than bacteria. Billions of them must be made correctly each day.

With so much that can go wrong, nerves are frayed, tempers explosive.

So we visit Marsing just two days after Fab II "went to silicon."

Almost everything -- meetings, telephone calls, interviews -- seems to take place in a subdued tone. Marsing moves through the day calmly, his voice sometimes so soft as to be unintelligible. It's only later that it hits you: in one of the toughest manufacturing environments anywhere, in the center of its most stressful period, there are no raised voices, no barely controlled outbursts. The man whose heart once exploded over bad yield rates now navigates a far tougher management challenge without breaking a sweat.

Marsing, in a job that once nearly destroyed him, has made the day look effortless. He is not a philosopher but an extraordinarily adept businessman; his vision is his actions.

What Can I Do for You?

It's a hot summer New Mexico morning as Marsing sips the last of his coffee. He's already spent a half hour meditating, as he did before going to bed last night. Marsing's youngest child, one-year-old Hannah, is still asleep, but three-year-old Elliot is up and wandering grumpily through the house. He is ushered into the kitchen for breakfast by Marsing's wife, Vicki, who is also on her way to work at Intel, where she is an engineering manager. The atmosphere is casual and relaxed.

So is Marsing. He's wearing chinos and a work shirt. Combined with a shock of unruly brown hair and wire-rimmed glasses, he looks less like a high-tech executive and more like a high school civics teacher who also coaches the wrestling team.

At 7:40 a.m. he climbs into the family's new Toyota Land Cruiser and starts down the hill to the wide plateau below. Even from here, 10 miles away, it's hard to miss the Intel plant. The two giant fabs, along with a third, Fab 7, stretch across a ridge above Rio Rancho, dominating the view.

At 7:56 a.m. Marsing pulls into a nonreserved parking place. He looks up at the immense white building, and it's clear that he's still in awe of Fab II: five stories and 170,000 square feet of clean room, the ultrapure area where chips are made; 1,400 employees with nearly 500 more soon to be added; equipment that can draw lines on silicon wafers just 1/500,000th of an inch across; the potential to generate revenues in excess of $5 billion per year. And it all works.

Marsing sprints up the five flights of stairs to his office to start the day. He had assumed that running such a facility had no precedent. Then a few months ago he taped a documentary on cable about life on an aircraft carrier: an immense structure costing billions of dollars, filled with a couple thousand highly trained specialists focused on a vital mission, with no room for error. The similarities were stunning. The only difference Marsing could see was that the captain of the carrier had to cope with a 40% annual turnover from completed enlistments, retirements and transfers. And then it struck Marsing that, given Intel's expansion plans for the next few years, the change among his employees would be just as dramatic.

He watched the tape over and over and showed it to his subordinates. He even used a company meeting in San Diego as an excuse to tour a U.S. Navy carrier. The result was a subtle shift in command to imitate the Navy captain/executive officer model: Marsing took on a more external, strategic role, and his assistant, factory manager Brian L. Harrison, moved into position as the internal, executive officer, a role roughly equivalent to a full plant manager in the rest of the industry.

"Marsing just thinks differently from other fab managers," Harrison says. "There is a mold for fab managers. They're hired as engineers and then pass through a series of filters as they come up. Somehow Marsing went through those filters, got to this level, and still sees things from a different perspective: more holistically, I guess, where others think in discrete details."

Marsing's morning is spent in one-on-one meetings with his direct reports, discussing various plant activities. After each presentation, Marsing asks, "OK, now what can I do for you?"

The late morning is spent in a teleconference with other Intel plant managers around the country, planning how to deal with upcoming products and expansion plans. During this hour, little of the rebel is on display. Still, there are moments when Marsing frowns, runs a hand through his hair, and looks like he's ready to cut loose. But in this meeting, at least, he never does. The Zen training helps.

Later there's a meeting with a new hire, a retired military safety officer, who's been brought on board to set up a crisis management program at the plant. The man is visibly nervous and expects a grilling. But Marsing puts him at ease by turning the tables and asking what he can do to help. The new safety officer looks relieved. Not only has he been put at ease; without knowing it, he's been given a first glimpse of the Marsing style.

At 5 p.m. the day comes to an early finish; Marsing returns phone calls, and reads and writes e-mail messages. In between, he tries to explain his management philosophy -- something, he admits, he's never really been asked to do.

"Look," Marsing says, pushing his glasses back onto the bridge of his nose, "if you had equipment running at only 10% efficiency, you'd apply engineering to get that performance up. It's the same with people. If your employees are showing up at work with only a fraction of their possible efficiency, then you need to ask yourself: What is it about their job, their attitude, and their work environment that's doing that to them?"

To Marsing, the point is not only productivity but also diversity: the more disparate the experiences and skills of team members, the more adaptable and dynamic the organization. But that's not the way most companies look at it. "What most companies want is homogeneity," Marsing says. "They want 150 trumpets playing in unison. But homogeneous teams have blind spots; they move like a herd and often in the wrong direction. What's needed instead is complexity, the team as a jazz band that both harmonizes and improvises."

But what prevents this "true-to-yourself" model from producing as much stress as the "two-faced" model it replaces? One answer can be found in Marsing's own career. After all, he had to learn to balance his own maverick streak with the greater benefits of becoming a team player. And that is precisely the attitude he tries to convey to those around him. They are free to be themselves on the job, to work regular hours, to spend time with their families and their community. But the bottom line is Intel's competitive success. And if that means they have to compromise to deal with workmates, they know that those workmates are also bending halfway to meet them.

It's neither an elegant model nor an empirical one. It doesn't even have a name, though "Middle Path" conveys Marsing's belief that the organizational solution for the future is one that steers between Taylor's model of employees as identical cogs in a machine and the anarchy of rampant individualism in a Balkanized company in which people have no sense of common cause.

Here's how Marsing looks at it: "If the goal is to maximize profits, then it seems obvious to me that the best way to get there is to have happy people who are motivated to work. And the way you do that is to bring together different types of people, allow them to be themselves, get them behind the larger corporate vision, and then give them room to create. Above all, if you want breakthrough thinking and innovation -- and you definitely do in this business to survive -- then you have to cultivate those aspects of each employee's personality where it will come out."

Dave Marsing's Dance

It's early evening when Marsing pulls into the carport of his home. As he stands on the driveway amid Elliot's scattered toys, he rejects on the path he's taken since those terrible days in the hospital.

For the first time, his voice betrays excitement: "Imagine if you could build a company that was capable of learning from all its experiences, as well as from other companies' experiences. What you'd get is a new kind of asset: corporate wisdom. Now, combine that with the kind of compassion that accepts employees for who they really are, that motivates them to reach their potential, and you'd have something truly extraordinary. Just think what a company like Intel, 35,000 highly intelligent people, could do if it ever reached that combination."

Is Marsing the model for the future of Intel? "Well, I'm not sure if it's possible for everybody to be like him," Mike Splinter says. "But I will say that if he keeps challenging the way we do things, he will have a large influence on future management methods at Intel."

For his part, Marsing has no doubt he will succeed. "This is the perfect place to do all this because the risks are so great. I think of it as an interesting dance. If you sit on the sidelines, you don't do anything. But once you're on the dance floor, you have a chance to change the steps."

And no one is better motivated than Dave Marsing to practice the dance, to find and follow the Middle Path. For him it is a matter of life and death.

Michael S. Malone (msmalone@aol.com) is one of Silicon Valley's most prolific and respected journalists.

Sidebar: Electronic Rorschach

Perhaps no technique better exemplifies Dave Marsing's management style than his creative use of e-mail.

For most managers, e-mail has become at best a quick communications technique and at worst an extra burden.

In Marsing's hands, e-mail is a compelling tool for dispute resolution, for getting employees to think about the processes at work in their relationships with others, and for team building among different types of people. In some cases, it can even work as therapy, an electronic Rorschach test to help employees and managers better understand their motives and behavior.

After an important meeting, for example, Marsing has been known to send out a common memo to every attendee asking not the standard questions ("How did it go?" or "What decision did the group reach?") but something entirely unexpected, such as, "Explain the dynamics of the meeting." Such a question forces the participants not merely to parrot the end result but actually to consider how they got there.

Was the decision really a consensus? Or did some senior manager or strong personality simply push through a predetermined result? Did anyone suggest an intelligent alternative that might actually be better -- or serve as a backup? Did you have an idea you were afraid to express?

"I want people to think about how they got to a decision," Marsing says, "because in the long run, their understanding of the process, of how they related to one another, is more important than a single result."

Marsing's concern with relationships is particularly acute when it comes to the interaction between employee and boss. Technology companies such as Intel tend to promote engineers into management positions. Some prove to be natural leaders, many have latent management skills, and still others are wholly unsuited for the task.

"You often get a new manager who is very detail oriented, who wants to study everything forever before making a decision," Marsing says. "Other times, you'll get a very bright person with limited people skills who already knows the answer and never thinks to consult the people who work for him."

To determine what's really going on, Marsing has sent out as many as 40 identical e-mails asking a simple question such as, "Is your boss dealing with you in the way that works best?"

"I try to make the question as unthreatening as possible," Marsing says. "I want to create a dialogue, not a get-even session." And dialogue is what he gets: sometimes as many as five rounds of e-mail will pass back and forth as Marsing, the manager, and the employees feel their way to a solution.

Finally there is the delicate matter of a boss and an employee who simply cannot get along. It's the ultimate test of Marsing's belief that opposite personality types can learn to work together.

In such situations, Marsing sends a memo to the employee that reads, "Do you think your boss is getting the most out of you?" and one to the boss that reads, "Do you think you are getting the most out of this employee?" Then he sends each the other's reply.

Says Marsing, "It usually leads to a very interesting conversation."

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