9: The Boss's Favorite Mistake: Brian Krzanich, Intel CEO

After my CNBC interview with Intel CEO Brian Krzanich at CES, we had a longer chat about his path to leadership.

After my CNBC interview with Intel CEO Brian Krzanich at CES, we had a longer chat about his path to leadership.

Twenty-five years ago, the man who is now CEO of the world's largest maker of computer chips was an engineer at the company. And he made an error that almost got him fired.  

"I wiped out the output of an entire factory for a week," Intel CEO Brian Krzanich tells me in the latest episode of the Fortt Knox podcast. "I'm lucky to be employed at Intel, sometimes I say." 

But instead of dooming him, his handling of the problem influenced the company culture, helping to birth a system called "Copy Exactly" that's become a part of its identity. Krzanich went on to make a name for himself as the executive responsible for all of Intel's factories, a job that prepared him to be CEO. 

It happened in the 1990s; Krzanich was in his early 30s. At the time, Intel was just beginning to hit its stride with a strategy that would make it the world's top supplier of chips for personal computers. His job was to transfer the chip manufacturing process from one facility in New Mexico to the one next door.  

It didn't work. Production ground to a halt. And for an agonizingly long time, he had no idea why. 

"It went all the way up to the CEO. And my boss at one point walked into my office and said, 'You have about two more weeks to figure out this issue, and if you don't, I've got to let you go.' And luckily, and friend of mine and I, we said we're just not going to sleep until we solve this. And then, sure enough, we found the problem about a week into that two week time period."

What sets Krzanich apart as a leader isn't just the way he rallied in a situation like this, though our conversation did unearth some gems that should help anyone navigate a career crisis. What sets him apart is the no-frills approach he brings to his work, and the adaptability that has allowed him to push his career – and now, Intel itself – in unexpected directions. Here are just a few of the concepts we explored in a fascinating episode of Fortt Knox:

Reality Beats Résumé

Krzanich grew up in San Jose, California, just miles from Intel headquarters. He didn't go to an Ivy League school: He got his bachelor's degree in Chemistry from San Jose State University. The prestige of a college's brand on a résumé doesn't impress him.

"I've told my daughters this; my older daughter's about to go into college. It doesn't matter what college you go to. The thing that was great about San Jose State was, I got connected with some very good professors," he says. He did research for their projects on the side. "When I went into interviews, I could talk about real work that I'd done, not just textbook stuff."

That informs how he deals with job candidates today. "I ask real simple questions that just tell me, does this person know how to think?"

This Gets You Fired

Krzanich had some more advice. "The other thing I tell my daughters is, I've had to terminate or fire more people for being difficult to work with than being

Now wait, a minute, I say to him. CEOs of Intel haven't exactly distinguished themselves by being easy to work with – the legendary Andy Grove comes to mind. So what does he mean?

"I think if you don't give people the tools and the expectations for success, and yet hold them to some value, then you're difficult to work with. I think the one thing about Andy was, if you listened to him, if you tried to understand him, then you actually understood what the expectations were. They may be hard, and you may not have been able to do it, but you at least had a chance. The difficult bosses – the ones that have been hard for me to work for – have been the ones where, I never knew what success meant."

In other words, it's okay to challenge your team. But it's also important to recognize the value of their different perspectives, give them the tools, and clearly define success.

Use Your Lifelines

In the show "Who Wants to Be a Millionaire," contestants can solve difficult problems by asking the audience or phoning a friend. Moments in Krzanich's career reminded me of that. A friend helped him solve the early puzzle that had brought production to a halt. And when Intel began searching for a new CEO about four years ago, he took an unorthodox approach to competing for it. He teamed up with another Intel executive and presented to the board together; the board ended up naming him CEO and his teammate president.

"It was more important to me that it was an insider, because I felt like anybody from the outside would slow the company down. Even if they were better, it would take them two years to learn how Intel works and to figure out how to make Moore's Law happen," he says. "I was willing to do whatever it took to have an insider, even if that wasn't me, or if it was a group of us, I was going to figure out a way .... By partnering up, I figured that was our best chance. Two of us could beat one outsider."