Intel: Optimas Award Winner for General Excellence

hat’s inside Intel? A workforce management philosophy that, in many respects, is as cutting-edge as the computer chips it makes.

    The Santa Clara, California-based company has proved itself to be a leader in areas ranging from ethics to leadership training to fostering a global perspective among employees. And it keeps taking steps to make sure its size--100,000 employees and counting--doesn’t hijack this mandate from co-founder Robert Noyce: "Do not be encumbered by history. Go off and do something wonderful."

    Intel has taken hits from critics on labor matters such as its use of foreign guest workers. Still, the company has made Fortune’s list of the "100 Best American Companies to Work For" eight of the past nine years. And its financial results speak volumes about its employee management. In 2005, the company posted record revenue of $38.8 billion, and net income rose 15 percent to $8.7 billion.

    Intel wins the 2006 Optimas Award for General Excellence for workforce management strategies that have helped the company stay atop the rough-and-tumble tech industry and prepared it for a knowledge-based future. Here are highlights of Intel’s work in six Optimas categories:

    Competitive Advantage. Intel gets two benefits for the price of one with its Leadership in Action program. Through it, Intel trainers gather data about emerging market trends. Then they lock three dozen senior managers from different locations and functions in a hotel for several weeks to develop possible business moves. The resulting reports have led to several company initiatives. Thus, the three-year old program acts both as a way to hone leadership skills and set smart strategy.

    Global Outlook. Some 70 percent of Intel’s revenue comes from outside the United States. What’s more, Intel’s focus on software and hardware "platform" products for markets like the digital home requires a better understanding of customers around the world. So when Intel created a new leadership program for midlevel managers in 2004, it made firsthand exposure to different cultures a cornerstone. Under the Leading Through People program, 800 midlevel leaders will fly to weeklong seminars outside their home region over the next seven years.

    Innovation. Intel consistently has come up with fresh ways to manage employees soundly--including letting them go over managers’ heads to speak their minds. This year, the company is planning to hold an internal Innovation Conference. Employees were asked to submit ideas for doing things better in their group or the company generally. The top 10 creative ideas were to be showcased at the late-winter conference.

    Ethical Practice. Doing the right thing matters at Intel. The company helped form a tech industry group that’s establishing a code of conduct for members and their suppliers. That effort led to an award last year from Business Ethics magazine. Internally, Intel created an ethics training program over the past few years with tricky hypothetical situations. "The issues are never black-and-white," says Dave Stangis, Intel’s director of corporate responsibility. "We want people to think about it."

    Managing Change. One way Intel handles change in the high-tech world is through low-tech communications with employees. When the firm made its shift to a "platforms" strategy last year, chief executive Paul Otellini traveled to major Intel sites in the United States and abroad to meet with workers. And when the company changed its compensation plan last year to include grants of restricted stock, managers told employees in person.

    "Intranet and e-mail channels aren’t always the best ways to communicate important information," says Larry Shoop, Intel’s director of employee communications.

    Vision. The company realizes that nurturing employee talents and tapping into them are crucial in a knowledge-based economy. In 2004, Intel invested almost $3,700 per employee in training and development. It ranked 17th last year in Training magazine’s "Training Top 100."

    And company values of risk taking and open communication aren’t just slogans, says Kevin Gazzara, who heads the Leading Through People program. A few years ago, he came up with a method of matching employee work preferences with their job, and he asked Intel to try it. In the wake of some pilot programs, Intel is about to use the system in China.